Crazy For Tech - Gadgets,Cell Phones,Cameras » money

Yelp Ads Are Not A Rip-Off, You Pay To Seal The Deal

jos — Tue, 07 Feb 2012 05:29:22 +0000

Yelp built its ad business by attracting users that know what they want, just not who to buy it from — exactly when ads are most effective. That’s why I find today’s VentureBeat piece by Rocky Agrawal titled “Yelp advertising is a rip-off for small advertisers” to be ridiculous. His sources say Yelp charges a $600 CPM, or 1,000-times the standard online CPM rate. Yes, these ads are expensive, especially for low-end restaurants. But for lawyers, dentists, jewelers, and mechanics with a high lifetime average revenue per customer, turning someone searching for their services on Yelp into a loyal customer is no rip-off, it can drive big ROI. Yelp sits at the end of the purchase funnel in the demand fulfillment stage. Users often already have a need for a business’ services and are prepared to spend. They go to Yelp to determine which service provider will get their money. When a user searches for “dentists in San Francisco”, Yelp local ads let advertisers put their own search result with a link to their Yelp profile at the top of the results. For restaurants, a conversion could bring in $20 to $50 in revenue, and that customer will eat somewhere else tomorrow where they could get hooked. For a high CPM to provide ROI, restaurants need lots of customers to be swayed by their ads and turn into regulars. However, for more expensive financial, medical, automotive, real estate, travel, home, and professional services, these stakes are much higher. A single visit from a customer could earn an advertisers hundreds of dollars, their long-term business could be worth thousands, and they’re unlikely to switch if satisfied. If their local ads on Yelp net them just a few or even 1 new customer, they could earn significant long-term ROI. Agrawal compares Yelp ads to Facebook ads, which doesn’t make sense because Facebook users aren’t actively looking for the service the advertiser is selling. He also says Yelp is overcharging advertisers. It’s only overcharging if the ads don’t produce results, not just because they’re priced much higher than less-targeted display ads. If you want proof that Yelp provides value to advertisers, just look at Yelp’s S-1 filing to go public . It notes the massive growth and return-customer rate for its local ads business: from the quarter ended December 31, 2010 to the quarter ended December 31, 2011, the number of active local business accounts increased by 109% from approximately 11,300 to 23,700. Of the approximately 23,700 total active local business accounts for the quarter ended December 31, 2011, approximately 15,800, or approximately 67%, were existing advertisers from which we recognized local advertising revenue in the immediately preceding 12-month period. (Page 56) Yelp had a 67% return advertiser rate, and that would have been much higher if it hadn’t DOUBLED its local advertiser count in that year. If Yelp ads are such a rip-off, why are advertisers coming back for more? Yelp can’t say because it’s in its pre-IPO quiet period. It shouldn’t need to, though. It charges justifiably high CPMs, and is going to IPO , because its ads appear at the perfect time. And they work.

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Yelp Ads Are Not A Rip-Off, You Pay To Seal The Deal

Can Startups Learn Anything From Linux?

blogger — Tue, 07 Feb 2012 00:51:13 +0000

Linux is the world’s largest collaborative software development project. People from all over the world have influenced the Linux kernel code, and it runs on everything from mainframe computers to wristwatches. Linux, and free software development in general, provides some tremendous insights into what makes a successful project. Can today’s startups learn anything from the history of Linux? The history of Linux proves that collaborative development speeds true innovation. If Linus Torvalds were left to work on Linux alone, there’s no way it would be the success it is today. A great many of the things that Linux does today are a direct result of people scratching their own itches , and then contributing their work back upstream to Linus. Many people focusing on their own little (and not-so-little) problems have made Linux the powerhouse that it is today. It might not make sense for every startup to develop their project in public, but they can certainly avoid reinventing many wheels by using existing free software projects wherever possible. Many smart people are working all day every day to improve the building blocks of innovation, and startups should be a part of that communal effort. Certainly startups should focus on their own “secret sauce”, but they can also participate in the larger free software ecosystem. For example, there’s no long-term competitive advantage to a startup if they make improvements to Apache, or MongoDB, or other “plumbing” aspects of the Linux stack. Any such improvements can — and, in my opinion, should! — be shared upstream to benefit everyone. In a similar vein, though, if there’s some home-grown technology that helps your startup but isn’t fundamental to its success, why not release it in order to leverage the global body of free software developers? Facebook releases free software . LinkedIn releases free software . Google releases free software . All of these releases are obviously used internally, but they’re not fundamental to the success of the company. I think there’s a lot to learn from the big players in this respect. As Ubuntu ‘s Technical Architect Allison Randal said , “Free Software is a fundamentally superior model for developing software.” Jim Zemlin, the Linux Foundation ‘s Executive Director, says, “Free your technology and see it spread and do things you never even imagined were possible.” Another lesson that startups can learn from Linux: when you disrupt the status quo you attract enemies. When Linux was gaining traction through the 90s, it was the target of intense attack from established industry players. Many of those early detractors are now contributing to the Linux kernel, as well as many other free software projects. Zemlin points to Facebook as a shining example of what “the Linux community has been practicing for years: first – don’t do it for the money, second maintain the hacker way. And, the money follows.” He goes on to observe that there “is no coincidence that one of the greatest entrepreneurial success stories of the last decade is deeply rooted in one of the greatest technology innovations of the last two decades: Linux and open development.”

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Can Startups Learn Anything From Linux?

I Use Wikipedia More Than Makeup

A D M I N — Sat, 04 Feb 2012 08:27:07 +0000

I just donated $40 to Wikipedia, because I promised myself I would every time I poked fun at its holiday donation drive and then just never got around to it. Did you know that you could actually donate during the off-season (Via the covert “Donate to Wikipedia” link at the far left of each individual entry page)? I didn’t, before I asked Wikipedia founder Jimmy Wales whether it was possible to donate in the off-season. Spoiler alert, it is. My 40 bucks got me, in addition to the very sweet ‘Thank You’ letter below, the satisfaction of paying duly for something I use all the freakin’ time. Dear Alexia, You are amazing, thank you so much for donating to the Wikimedia Foundation! This is how we pay our bills — it’s people like you, giving five dollars, twenty dollars, a hundred dollars. My favourite donation last year was five pounds from a little girl in England, who had persuaded her parents to let her donate her allowance. It’s people like you, joining with that girl, who make it possible for Wikipedia to continue providing free, easy access to unbiased information, for everyone around the world. For everyone who helps pay for it, and for those who can’t afford to help. Thank you so much. I know it’s easy to ignore our appeals, and I’m glad that you didn’t. From me, and from the tens of thousands of volunteers who write Wikipedia: thank you for helping us make the world a better place. We will use your money carefully, and I thank you for your trust in us. Thanks, Sue Gardner Wikimedia Foundation Executive Director This year the Wikimedia Foundation raised $20 million during its high gear donation drive, to cover a total budget of $28.3 million — the deficit is made up in grants and off-season donations. Money raised is spent on things like servers, bandwidth, maintenance and staff. Here are the financials if you want to dig deeper. During the online encyclopedia’s blackout protest of SOPA , many off us felt the pang of “You don’t know what you’ve got until its gone” when we wanted to know something about, let’s say, Exponential Growth and that info wasn’t readily available. Google would be a bunch of spam if not for Wikipedia. I personally use Wikipedia more than I use makeup, multiple times a day. And I spend a good amount of money on makeup, AT LEAST $40 on a mascara/lippy combo. What do you use Wikipedia more than? Do the math …

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I Use Wikipedia More Than Makeup

Google Adds A New Security Layer To The Android Market… A “Bouncer,” If You Will

Budowniczy425 — Fri, 03 Feb 2012 01:29:04 +0000

Android malware has been an issue over the past year. Granted, most of the numbers we see out of security software companies are inflated — including malicious apps from third-party sources and ignoring small download figures — but that’s not to say that we can just brush that dirt off our shoulders. Google knows this, and has for a while. Despite the fact that downloads of malicious apps are down 40 percent between the first and second half of 2011, seeing that 14,000 , 30,000 , or even 260,000 devices have been affected by this or that malicious app requires action. That said, Google is adding a new security layer to the Android Market: codenamed Bouncer. Originally, the Android market implemented three different methods for ridding the market of malware: sandboxing, permissions, and malware removal. Sandboxing keeps one app from infiltrating another, with one very important exception: permissions. Google sees its permissions system as a layer of security in and of itself, but permissions can actually be seen as a vulnerability. In some cases, the reasons behind the permissions a developer asks for aren’t immediately obvious to the user, and it can be tough to check everything, especially to the novice user. Past that, Google’s always been good about removing malware from the market as soon as the company becomes aware of it, and in some cases, has even remotely wiped affected devices of malicious apps. The tool is a useful one to say the least, but it’s not enough. Bouncer adds another level of security to the platform, automatically scanning new and existing apps for known bits of malicious code. Google has actually been scanning apps whenever new malicious code is discovered, but Bouncer will automate the process, scanning for known spyware and trojans, too. Bouncer runs every new application on Google’s cloud infrastructure and simulates how it’ll run on a device. That way, Google can see straight away whether an app is misbehaving and flag it accordingly. Another smart feature is that Bouncer isn’t 100 percent automated. Once something is flagged, there’s a manual process for confirming the app is indeed malicious, reducing the risk of false positives. To be quite honest, the Android platform is way more secure than most people think. I spoke with Android VP of engineering Hiroshi Lockheimer, and he seems to feel the same way. “There’s this impression that Android is a huge target for malware, and I really don’t think that’s the case,” said Lockheimer. Google polices the Market, scans for known malicious code (though most instances of flagging in the past have been from users notifying Google), and is quick to act when an issue pops up. But where the platform has fallen short (in one respect), is the developer registration process. Becoming an Android developer is as easy as pie. I actually did it myself just to see how easy it is, and it literally takes five minutes and $25. After clicking accept a few times, you’re good to go. In fact, developers can register under pseudonyms if they’d like. From a certain perspective, this is amazing. It allows young entrepreneurs to offer a product to millions of users for a very low cost, lowering the bar for developers who can’t afford to jump through Apple’s hoops. At the same time, it makes it easy for malware writers to get the ball rolling. Sophos blogger Vanja Svajcer said it best : The requirements for becoming an Android developer that can publish apps to the Android Market are far too relaxed. The cost of becoming a developer and being banned by Google is much lower than the money that can be earned by publishing malicious apps. The attacks on the Android Market will continue as long as the developer requirements stay too relaxed. With Bouncer, Google is recognizing this issue without making things difficult on developers. Devs will still be able to submit an app and see it in search results within minutes — Bouncer’s scanning process only takes seconds — and they’ll still be able to register for $25 and a few clicks on “Accept.” But… now that Bouncer is in place, previous offenders will have a much more difficult time sneaking back on to the platform by registering under a new name. According to Google’s blog post, the search giant will be “analyzing new developer accounts to help prevent malicious and repeat-offending developers from coming back.” This is what I believe will make the biggest difference when it comes to the threat of Android malware, and I’m more than thrilled that the company is making it a priority moving forward.

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Google Adds A New Security Layer To The Android Market… A “Bouncer,” If You Will

Little Black Bag Raises $2.75M From GRP, Chamath P., David Tisch And Others

ACMAir — Thu, 02 Feb 2012 10:46:39 +0000

There is something to be said about the serendipity of shopping in a brick and mortar stores, especially when you’re buying fashion. The dilemma with clothing is that you don’t know what you’ll like until you get to the store and are presented with an array of options, and that perfect thing you never though you’d like. Perhaps this is why people stock up sartorially in actual stores — Part of the fun of shopping is the sense of discovery involved in finding and loving items IRL. Attempting to bring some of this spontaneity back, startups like Stylemint and Birchbox are trying to make the online shopping experience as novel as the offline. A new addition to the spontaneous online shopping club today is startup Little Black Bag , which takes off on the Japanese shopping concept of fukubukuro, or “lucky bag sale,” where shoppers buy a mystery bag of fashion products and the trade those items with friends. Taking off on this concept, Little Black Bag attempts to apply this model to the Internet. To get started the app asks you questions about your style preferences, allowing you to choose options like “Hipster” or “Classic” to questions like “What are your favorite styles?” The site then presents you with a virtual “bag,” revealing one item and keeping the other two a mystery. A user can purchase their bag for $59.95 or $49.95 for a monthly subscription and, if they don’t like the products, can trade their items with other Little Black Bag users resulting in modest savings on brands like Betsey Johnson, Z Spoke by Zac Posen and others. The company turns a profit on its resale margin. “I’ve been fascinated for years by how cold the Internet is when it comes to eCommerce,” writes co-founder Dan Murillo, “And this gap has only gotten bigger as new social media sites have emerged (Pinterest, Path, etc.) When I came across this idea, I thought it would be the perfect starting point from which to build a truly interactive community around eCommerce.” To execute on its vision, Little Black Bag has just raised $2.75 million from investors like GRP, DCM Chamath Palihapitiya, Tim Kendall and David Tisch. Murillo will be using the money to build out his product and team.

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Little Black Bag Raises $2.75M From GRP, Chamath P., David Tisch And Others

Sony Rolls Out A Trio Of New Cyber-Shot Point And Shoots

vertical8 — Mon, 30 Jan 2012 09:00:01 +0000

In the market for a new point and shoot? Didn’t think so. Why don’t you take a gander at the new Sony shooters anyway? You’ve basically got two models worth looking at. First is the rather expensive TX200V: It’s expensive for a reason, though. They’ve made it look as much like an iPhone as possible, flat glass on both sides. Unlike the iPhone, however, this thing is waterproof down to 5m. It’s got a 5x non-protruding zoom, for which they provide no F numbers, so it can’t be very fast — though the camera’s back-illuminated 18-megapixel sensor makes up for that a bit. It’ll shoot 1080/60p of a sort. On the back is a 3.3″ OLED touchscreen of the “Xtra Fine™” variety, which I presume is a higher resolution than the previous 3.3″ OLED they put on a camera. Should be nice, high contrast, and decent resolution. There are no buttons on the thing except power, shutter, and a zoom rocker. Looks like a fun little camera, though for my money I’d want something with a brighter, bigger lens. This thing will set you back Next you have the WX70 and the WX50: They share the same internals, but are different on the outside. The WX50 has normal controls: switches and dials and all that, and a 2.7″ normal LCD. The WX70 is like the TX200V, all touchscreen on the back, and with just power, zoom, and shutter controls on the top. The screen is 640×480 and 3″, which should be nice and sharp. The lens for both is a 5x zoom, F/2.6-6.3. Nothing special, but F/2.6 isn’t bad for a compact wide-angle. Inside they both have the same 16-megapixel back-illuminated sensor, which will shoot 1080/60i, though if it has a progressive mode (the press release doesn’t say) I’d recommend that. Anyone shooting interlaced in 2012 should have their camera confiscated. I wish somebody would tell Sony that. The WX50 will cost around $200, and the WX70 will be $30 more. If the touchscreen works well (can’t tell until there’s a hands-on), the extra $30 will be well-spent. So which is the best? Obviously the expensive, waterproof one, though for $500 you can get a better camera these days as far as lens and sensor are concerned. And you can get waterproof ones for under $150. Hell, I got a waterproof smartphone for $80 on Craigslist. So although it’s nice, it doesn’t strike me as a bargain. Meanwhile, the WX70 is pretty fancy for $230, and with the BSI sensor and F/2.6 you should be able to get most shots without bumping the ISO too high. I’d go with that over the more traditional WX50 and the nice but expensive TX200V. And there you have it!

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Sony Rolls Out A Trio Of New Cyber-Shot Point And Shoots

SigFig: CES Gets Public Investors Excited About Companies, But Stock Prices Don’t Go Up

Budowniczy425 — Tue, 24 Jan 2012 07:05:28 +0000

The Consumer Electronics Show , that turgid January gadget fest in Las Vegas, has been widely seen in the industry as a great place to show off your wares if you’re not Apple. But is that true? SigFig , the stealth investing startup that’s growing out of stock portfolio manager Wikinvest , has run some numbers on the market performance of the show’s big-company attendees during the event. The main trend is pretty clear: there’s lots of buying and selling, but no significant gains. And actually, losses are not uncommon. This data, I should note before getting further, is from SigFig users — a relatively small but statistically significant group of retail investors who use nearly 70 brokerages to handle stock sales and purchases. The overall market data also shows similar big volume changes, but is partially obscured by the large-block trading activities of institutional investors (which in many cases happens for other reasons). So, in other words, for all the money and time that electronics companies put into the event, they’re not winning many more believers than they’re losing. Maybe it’s just what they’re announcing that isn’t building enough new enthusiasm to drive prices up? Maybe it’s these sorts of data points that helped convince Microsoft to dial down its participation this year? Now that all the trades have closed from that week, here’s more detail on how this year looked for some top publicly-traded attendees versus previous years. Intel, which makes semiconductor chips used by many of the electronics companies in attendance, grabs the spotlight every year with a CES keynote about its plans for the future. This year, on keynote day, its stock price jumped a relatively small $0.82 per share — even though shares bought increased by 129% and shares sold also rose by 123% among retail investors on SigFig. Overall, the stock closed down 2.22% by the end of the four-day show. In 2010, meanwhile, the stock ended up 0.48% on top of an 1402% increase in volume, and in 2011 it ended down 0.05% with a 215% increase in volume. Google, whose Android operating system can be found in more and more devices at the show, has also not seen big gains among SigFig investors. On its biggest day of trading during the show — 90.64% above the average volume — its shares fell by 0.6%. In 2010 it grew by 1.4% during a 374.84% volume increase, and in 2011 it fell by 1.21% with its trading volume at 369.7% above normal. What about other firms with a big presence at CES? AT&T’s CES keynote on the 9th mostly failed to register this year, with only minimal volume increase to show — the volume of those buying actually dropped by over 13%, and continued falling during the conference. Verizon, meanwhile, had purchases surge by 1209% (there’s no decimal missing from that number). The price, however, only increased by 0.82%. Both carriers had volume increased around 100% in the past two years, with AT&T losing 2.77% in 2011, and Verizon losing 3.82%. More analysis is needed to fully understand what’s going on here, like a broader view of all publicly traded companies that have news at the event, over more years. But I have a bit of speculation, following on my earlier point. Maybe CES is really good at generating attention for these companies, but their own announcements are perenially underperforming the hype? If that’s the case, there’s nothing wrong with attending CES, it’s what you bring with you to launch that matters. By the way, TechCrunch made the CES trek in a big way this year, and generated all sorts of coverage about the events whether it helped the above companies’ stock prices or not. Check out our hub site here for all the details.

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SigFig: CES Gets Public Investors Excited About Companies, But Stock Prices Don’t Go Up

Microsoft To Ditch “Microsoft Points”? Oh, Please Let It Be True.

Achilles — Tue, 24 Jan 2012 06:52:32 +0000

Microsoft Points are dead! Or, they’re dying. At least according to InsideMobileApps. Dead, dying, being taken to a farm, whatever — but man do I hope it’s true. Citing a “source with knowledge of the company’s decision”, InsideMobileApps says Microsoft is planning to ditch the Points system on Windows Phone (where it’s only used for in-app purchases, oddly), Zune Marketplace, and Xbox Live by the end of the year. Of course, given that it’s January, “by the end of the year” is about as precise as saying “before the end of time” — but in the end, what matters is Points going away. For anyone who’s somehow managed to avoid Microsoft’s silly-ass points system, here’s the idea: instead of buying content with, you know, money, you buy content with Microsoft Points. Points… which you buy with money. Imagine you’ve gone to the store, and you want to buy 2 pineapples. You take them to the counter, and the guy at the register says “Great! That’ll be 7 bloo-blops.” “What? I don’t have any bloo-blops. I only have dollars. Can I just give you dollars?” “No. You have to give me bloo-blops. Fortunately, I have this pack of 10 bloo-blops right here.” “..But I thought you said I only needed 7 bloo-blops?” “You do. But I only sell them in packs of 10. Don’t worry! You’ll have 3 bloo-blops left over to buy anything you want!” “Oh, okay. What can I buy with 3 bloo-blops?” “Nothing.” See? Garbage. Now, there’s some logic behind the point system — at least for Microsoft. It lets developers set one “price” (in points) globally — if something is 400 points in the US, it’s 400 points in Japan (though what 400 points works out to obviously varies by country.) But it also totally works out in Microsoft’s favor: the dollars-to-points ratio (80 points per $1) makes things seem a bit cheaper than they actually are, and that you always seem to have points left over after each purchase (but never enough to buy anything else) means pretty much everyone with an Xbox is constantly floating Microsoft a few pennies. (It also lets Microsoft cut down on credit card fees, which isn’t a bad thing.) With all that said, it’s got one other major effect: making me not buy things. Of the many dozens of games I’ve gone to grab, the movies I’ve wanted to rent, and the stupid hats I would’ve bought for my avatar, I’ve ended up buying two — all because I didn’t want to deal with adding more silly bloo-blops Points. I know I’m not the only one.

Megaupload Bust Causes Cyberlocker Panic – But It’s Only Temporary

A D M I N — Tue, 24 Jan 2012 04:45:51 +0000

Oh god! Megaupload has fallen and its brethren are dropping like flies! The age of the cyberlocker is passing. No longer will we be able to host a large file somewhere for free and have someone else download it. Actually, it’s not quite so dire, but it’s true that a number of major file hosts have either shut down, closed part of their service, or changed the way they operate. It’s not the first time that file-sharing tools have received a shock to the system, though, and this little contraction is less the end of an era and more a winnowing of the herd. That’s a good thing. A few sites have been tracking the changes and shutdowns. At Fileserve and Filesonic you can only download items you’ve uploaded yourself. Sites like Filejungle, 4shared, and Uploadstation are deleting premium accounts and affiliate programs. Uploaded.to has banned all US IP addresses. And the list goes on. There are dozens, some taking more serious actions than others. TorrentFreak has been keeping track, and the ever-zealous commenters there are full of information as well. Services that have operated more cautiously from the beginning, things like Yousendit and Mediafire, aren’t feeling the heat. The restrictions they’ve placed on their service, and their more rigorous attention to enforcing copyright infringement, means that they can go on as they have done for years. It’s sites that have built a model with sharing as the currency that are spooked. That just means that this model is done for. It was never going to last forever. Neither did Napster. But the demand for file hosting isn’t going away any time soon. Until point to point transfers and personal sharing via one’s own server are practical solutions, file lockers are a great solution. Where there’s demand, companies will try to fill it and will compete on business models by which they can generate money from that demand. If those models stop generating money (demand dries up or the tech is obsoleted), the sites move on. And if those models turn out to be questionably legal (as in the case of Megaupload and imitators), the sites also move on. What will the next generation of file lockers be like? The differences will be protective, shielding link pages from Google, streamlining the “report this file” process, building a wall between the site administrators and the users’ activity so they can’t be held liable. Building your site carefully around the current reach of the law has always been the rule, and it will continue to be the rule going forward. Sites that found themselves in danger of being included in copycat takedowns just acted to preserve the future of their business. For the present, if you need to send a file too big for email to a few people, there are plenty of services that let you do it. The systematized, compensated share networks that tacitly relied on illegal files to bring in traffic were a form that is being phased out, that’s all. Like so many services that have had to reinvent themselves in the face of looming illegality, they’ll come back stronger and better in a few months and this old model, lucrative as it was for many, will be forgotten.

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Megaupload Bust Causes Cyberlocker Panic – But It’s Only Temporary

A Tale Of Two Cities: Silicon Valley And Hollywood

A D M I N — Tue, 24 Jan 2012 04:27:27 +0000

Editor’s note : This post was written by guest contributor Aaron Levie , CEO and co-founder of Box.net . You can read his previous posts here . Silicon Valley and Hollywood: so close geographically, yet so distant digitally and philosophically. You would think we’d understand each other better. In the Valley, we circulate pitch decks. In Hollywood, they shop around scripts. We strive for exits, while they sell distribution rights. They have record labels, we have venture capitalists. They have agents, we have recruiters. People on Sunset Blvd. obsess over the next “hit” that will draw viewers, ears, or butts in seats. On Sand Hill Road, we toast to market disruptions and business model innovations. Ultimately, both are working towards bringing transformative experiences (content and apps) to market. Yet for all the apparent ecosystem similarities, our two worlds are surprisingly at odds. I know first hand. When I was in college at USC, up-and-coming actors, directors, and musicians were just a dorm room away generating art while I was glued to my laptop building sites. And I’ve found myself at the intersection yet again with my company, Box, as a large number Hollywood studios and labels are now moving their information and collaboration to the cloud. Hollywood’s creators and the Valley’s innovators could achieve so much together. Instead, we’re clashing, and neither viewpoint is wrong. Of course content creators should be able to get paid for their works, and of course those works should be free to move across any device, platform, or service. When Steve Jobs was here to mediate – or rather monetize – we were somewhat pacified because the experience was so robust for the producers and so great for the consumers. Even then, though, we only got so far: iTunes was continually blocked out of important content deals , and lawsuits came up frequently. But now, within just a few months of Jobs’s passing, we’re back to our early 2000’s ways: a wild west, pre-iPod world, where no one quite knows what equilibrium looks like, and justice is pursued through legislation and lawsuits that only widen the divide. Where did we go wrong? In his usual zen-like manner, Jobs explained the dichotomy of the Valley and Hollywood: “…people from technology don’t understand the creative process that these companies go through to make their products, and they don’t appreciate how hard it is. And the creative companies don’t appreciate how creative technology is.” Hollywood is a special kind of beast: it’s as insular as the Valley, but success relies far more on the connections between individuals than the decisions of markets, making it more complicated, slow, and inflexible. In a world where middle-men have their own middle-men, the Valley’s egalitarian, direct-to-customer, democracy-rules-all ethos does not apply. In Silicon Valley, we don’t think to ask for permission or support before introducing hopefully world-changing products. That simply doesn’t happen in entertainment. You fundamentally need support from others, many others in fact, and paradoxically that collaboration tends to be hard in LA. These differences have created a digital divide. In the Valley, we demand more from our southern neighbors, wondering why content is priced at uncompetitive rates, why it’s so hard to get a deal done, and why lobbyists are hired to block innovation. Paul Graham’s answer to Hollywood’s modus operandi and slow pace is just to disrupt the entire business model . How? By usurping the power of ‘entertainment’ from those in 90210 altogether. Basically, what Atari and EA kicked off in the 70’s and 80’s, but modernized: moving far beyond traditional forms of entertainment, where the Valley builds the creation and consumption platforms, and owns the rights to the content. This future state, where people entertain themselves (either through shared status messages, photos , or virtual worlds) is far easier to grok, “simpler” to monetize, and seemingly more in our control. It’s an aggressive response to Hollywood’s perceived unwillingness to participate in the new environments technology is creating and powering. But as Sarah Lacy points out, “disposable content isn’t bad, it’s just not everything. And as long as that’s all that the Valley is putting out, we won’t kill Hollywood.” Can we create a better future together? Can there exist a world in which Hollywood leverages more efficient channels to reach a broader audience? Where they reduce the release windows to reach more consumers, faster? Where the Valley can introduce more seamless monetization platforms, helping artists make more money? Where content quality is enriched through different mediums or interactive experiences, and the creative and cultural influences of LA are amplified by the innovations of SF? I actually don’t think we’re as far off as we think, or as recent legislation proposals would suggest. In fact, there are plenty of people and examples that have made this work, however painstakingly, in recent years. On both sides of the fence, Daniel Ek, Steve Jobs, Jason Kilar, Jeff Bezos, Reed Hastings, Jeffrey Katzenberg and others have brokered adequate and attractive solutions to these challenges. If you compare the world today to the world of 10 years ago, it’s obvious that we’ve come pretty damn far: I can stream nearly any song instantly from my iPhone; I can watch a growing number of movies and TV shows on demand from my computer or TV; and I can read almost any book from a Kindle or Android device after waiting just a few seconds. Entrepreneurs, lawyers, venture capitalists, and entertainers climbed mountains to make this happen; none of this was possible, or even legal, in the 90’s. Cars, finance, education, healthcare, and even enterprise software have all changed considerably more slowly than the entertainment world in response to this technology revolution known as the internet. But we want more speed and openness, and without an easy “API” into Hollywood, the rest of the Valley remains dumbfounded. The opaque and murky process of getting things done isn’t in our nature; we don’t like worlds that require connections, contracts, or consent. We like elastic consumables, whether it’s computing resources or maps data, that are easy to understand and priced fairly. The primary methods the entertainment industry uses to protect its value include locking it behind closed doors or aggressively penalizing those that take it. This is magnified in part by the fact that the digital files holding Hollywood’s value are already so free-flowing, no one knows how much they should be monetizing, and most contracts are so convoluted you wouldn’t even know who to pay if you could. But, just to put this environment in context, Google won’t let you freely build a search engine with unfettered access to its information, nor does Facebook allow data to flow freely out of its service. The Silicon Valley approach is different, but the motivation is the same. I’m going to choose to believe that Hollywood wants to change, and they’ve clearly shown they can and have. Responding to disruption at the same pace that we cause it is no small feat, and failure to do so does not necessarily signal distrust of technology. Most people simply don’t respond well to their industry turning upside down every five years. Yes, SOPA sucked. Like, it was a really bad idea. When people think their backs are up against a wall, sometimes they do weird things. But consumers, the Valley, even many in Hollywood took a stance, and the proprietors backed down . In the aftermath of this ‘victory’, we should try harder than ever to fuse these two worlds, particularly before SOPA II is attempted. We need more cooperation, less antagonism. Perhaps I’m just empathizing with my former film school roommates, or maybe I’ve just read one too many books on the film business. But it could also be that there’s something so powerful – magical, even – about clicking a button and instantly watching The Dark Knight. We need far more of this, not less. Hollywood needs to understand that every hour Americans spend tending to a virtual farm is an hour they’re not watching Family Guy. Now is the time for reinvention and innovation, on both sides. Some things might be painful at first, some margins will decrease, and powers may shift a little. But the responsibility for creating a viable resolution belongs to both industries. Oh, and one last thing. Hollywood, Please stop making Jersey Shore. It’s ruining America.

Here is the original:
A Tale Of Two Cities: Silicon Valley And Hollywood