Some readers have asked me the goal I pursue in my fillips, a fair question with an obvious answer. Individuals' rights to data privacy, eprivacy in short, are either trampled or ignored. I raise my voice in their defense (see 2/27/07 fillip). I believe however that enforcing eprivacy requires a good understanding of what information is about. Call me conceited if you want but these pages try to build a theory, or at least a framework to this effect.
Take for example the recent study lead by Thorsten Hennig-Thurau as reported by Andrew Edgecliffe-Johnson (*). "Film studios could boost their revenues up to 16 per cent if they released titles simultaneously in cinemas, to DVD rental chains and via video-on-demand". In this model DVDs are released for sale after a mere three months' delay and cinemas lose 40 per cent of their revenues. What are cinemas indeed if not the equivalent of Soviet style shops, with rationed supplies, long queues and exploitation of captive consumers ? The results of the study are a normal consequence of the free diffusion law (see 2/13/07 fillip). If I am correct, Thorsten Hennig-Thurau should find that the more popular the title, the quicker all available distribution channels should be saturated to maximize studios' revenues.
Academic theory makes for dry reading and its author is required to know it all. See those fillips rather as a serendipitous inquiry at the mercy of current events, an Odyssey on a sea of information, today's equivalent of Our Sea (1). The recent clash between Google and Microsoft is a case in point. More Iliad than Odyssey, it echoes my first fillip (5/02/06). John Gapper (**) tells us of Microsoft's wrath at Google's trampling of copyrights and Aline van Duyn (***) registers Google's Paris shrug, Eric Schmidt implicitly dismissing Microsoft Thomas Rubin (****) as just another lawyer. Meanwhile John Markoff (*****) shows us Microsoft ordering new weapons to be forged for the next battle. Let us then take this opportunity to analyse how economic value arises from information.
Information gains economic value from arousing the interest of an audience. Once captured however, a person's attention can be split between the original content and other messages presented next to it by the media used by that person. Hence the value of a piece of information is itself split between a part intrinsic to the piece, paid by its audience, and an extrinsic component paid by advertisers targeting the same audience.
With this in mind, one can describe today's evolution of the media world (see 1/09/07 fillip) as a precipitous decline of the price to be had for the intrinsic value of information relative to its extrinsic value, coupled to the spectacular rise of search-based media versus content-based media.
Old mass media, such as the newspapers quoted in this fillip, sells content subsidized by publication-based ads to its audience. New search media, such as Google, gives its users free access to content to accompany search-based ads. In principle, both barters are fair. The real issue is that when content media, in which I include self-publishers and libraries, migrates to the Internet, it finds itself doubly preempted by search-based media.
First search engines routinely quote content and associated social sites encourage its free diffusion, thereby depressing its intrinsic value. Second they capture the user's attention ahead of the content publisher within the richer context they derive from search keywords, thereby squeezing most extrinsic value to their benefit. As a final blow, content publishers may find it more profitable to abandon the management of their remaining extrinsic value to the same search engines as the latter become significant members of the media buying industry.
I sympathize with content providers. Maybe they will come to see themselves on the same side of my fight for eprivacy (see 5/23/06 fillip) and return the favor. But my purpose today is to illustrate information value creation, not to arbitrate its distribution.
One must not forget that, when it comes to information, most definitions tend to be recursive. So here is some free advice to those looking for a better search engine. Next to Google's output, whose intrinsic value is free and can be quoted into your own content, simply substitute your own extrinsic value to Google's search-based ads. For an implementation, see my crude attempt which sports a blank advertising channel (2). I have no doubt Microsoft, for one, has all it takes to polish it. And Google will never dare send lawyers dispute the rights of individual users to avail themselves of this feature. It would be so old media.
Search is of course but a case of collective creation. I gave my best shot last week at the vexing problem of compensating all sources behind a collective effort (see 3/06/07 fillip).
As for media and technology companies, their CEO's should read the fate of all the heroes sung by Homer. Besides Odysseus, who can boast of a happy ending?
- (*) ........... Revenues could be on a roll in film release date rewrite, by Andrew Edgecliffe-Johnson (Financial Times) - March 12, 2007
- (**) ........ Microsoft attacks Google on copyright, by John Gapper (Financial Times) - March 6, 2007
- (***) ...... Google chief dismisses criticism from rivals, by Aline van Duyn (Financial Times) - March 7, 2007
- (****) .... Copyright must be respected as culture goes online, by Thomas Rubin (Financial Times) - March 6, 2007
- (*****) .. Searching for Michael Jordan? Microsoft Wants a Better Way, by John Markoff (New-York Times) - March 7, 2007
- (1) see Mare Nostrum in the Wikipedia
- (2) for best results, use Explorer without its standard buttons nor its Explorer bar. To activate the demo, click here and allow pop-ups from eprivacy.com.