The Experience of Music

[This entry was originally published as an opinion piece in Music Ally, a European music consultancy.]

The boot print was still clearly visible on my forehead when I stumbled out of Detroit’s State Theatre into the early morning grime of Woodward Ave. I hadn’t been more exhausted, or exhilarated, from a live show since I had played the part of Max at the first Lollapalooza festival a few years earlier. There I had danced for hours with the other Wild Things, high on the grassy hill of nearby Pine Knob Music Theatre, dodging flames from makeshift bonfires radiating the unnatural colors of burning blankets, trash, and suddenly-unnecessary clothing.

At its core, music is communication. Whether experienced with a thousand other people in an amphitheatre, or alone in a darkened bedroom, the value of music is in its ability to connect us all in impossibly complex ways. Like music, mobile communications is all about personal interactions. The way we engage with our mobile device is as personal and diverse as how we experience music. The mobile phone is now at the center of the communication and entertainment universe for an entire new generation, and as we watch the mobile industry converge with the internet before our eyes, we are witnessing the birth of the most empowering personal technology in history. And by providing such powerful and new ways for people to interact, the mobile phone represents an opportunity of unparalleled magnitude for a struggling music industry.

In the business of music, it has become all too common to measure value in ‘units.’ These measures emerged in an era when the production, marketing, and distribution of sound recordings were difficult and expensive problems, forcing the value of the industry to be tied very closely to its ability to solve them. The disruption and chaos that followed the emergence of the first peer-to-peer services on the internet was inevitable: too much revenue came from distribution, and distribution was suddenly completely and utterly free.

But music is not a download. Nor is music a CD, a ringtone, nor any other mechanical representation or reproduction of sound waves. Clearly, no jewel case could contain my Where The Wild Things Are experience of Lollapalooza some seventeen years ago, and no stream of ones and zeros can ever replicate the mingling sensations of ringing ears and metallic taste in my mouth that I associate with that Nine Inch Nails show.

If the music industry is to regain its footing, it must go back to the business of enhancing the experience of music, and break its unhealthy dependency on the mechanics (and, perhaps, monetization) of distribution. Mobile technology is the perfect platform to simultaneously enhance the musical experience while allowing for substantial revenue potential for those who would take a holistic approach.

Ironically, the dominant mobile entertainment value chain today looks a lot like a physical distribution model. High production costs, tightly-controlled distribution channels, and limited retail space are strange characteristics for a digital environment, but they persist in mobile due to a legacy of restrictive and anti-competitive business practices in the telecom industry.

Fortunately this model, like the physical distribution model before it, is quickly becoming an anachronism. Mobile phones have become full-fledged internet devices, and the same market forces that provide the beautiful mess of innovation that is the internet today are quickly converging on the mobile space. Though the promise of a truly open mobile environment remains elusive, there is an emerging new mobile economy that promises to dramatically change the mobile industry for the benefit of all.

Change, especially disintermediation, is always resisted by those with a vested interest in the status quo. But fighting technological advances has historically been a doomed strategy. Indeed, it always will be. By providing zero-cost distribution, technology has fundamentally and irrevocably altered the economic landscape of the music industry. The toothpaste is out of the (you)tube, and no amount of litigation or legislation can change that.

Indeed, society itself is changed by technology. We simply are not the same people we were before the internet, and the mobile generation now coming of age has an identity and set of expectations that are very different from that of their parents.

The fluidity of distribution, and the resulting fluidity of value chains and of society as a whole, has created completely new levels of interaction with music. In mobile, especially, we see emerging artists using text messaging to communicate directly with their fans, harnessing the promotional value of ringtones to virally market themselves, and providing over-the-air downloads of “behind the scenes” videos that fans can enjoy on their phones anywhere. If the spirit of an open mobile ecosystem were embraced fully by the music industry as a whole, we would undoubtedly see huge markets emerge for impulse purchasing of concert tickets, merchandise, and a million other things besides.

Mobile represents an incredible opportunity for the music industry, but the true potential can only be realized by working in an open environment to enhance the experience of music, rather than trying to control its expression. Openness encourages a vastly higher level of engagement, such as my experience at Lollapalooza so many years ago, and can serve as the foundation of a valuable and profitable modern music industry.

By fully embracing the mobile music experience we find more than ample opportunity to compensate for the loss of the industry’s historic profit centers.

Flickr my Myxer! Or. Don’t.

So we launched what I thought was going to be a wonderfully well-received feature on Myxer this past weekend. Using the public flickr APIs, we wired up Myxer’s search functionality such that, in addition to searching our large catalog of user-submitted images, we would also search public photos hosted by flickr. We then added a “send to phone” feature to the images, so that Myxer users could send images they discovered to their phones (e.g., to use as wallpapers).

We loved this feature internally, because most of us around here use flickr as a way to share simple snapshots of people and places that we want to share with others. Adding “send to phone” functionality to flickr was a great way to quickly find photos of friends, etc., and send them to your phone. Because we always included full attribution and direct links back to the hosting page on flickr, we thought the integration would be appreciated by the flickr community at large.

Unfortunately, that’s not exactly what happened.

Soon after we launched this feature on the evening of July 3, 2008, a thread appeared on Flickr’s help forums with the title Myxer Using Copyrighted Images Without Permission. After browsing through a dozen or so posts, it became fairly obvious that the community at large had some, err, issues with our implementation. We quickly disabled the Flickr integration feature on Saturday so that we could step back and take a look at the situation, and I posted a response on the flickr forum apologizing to the community for having obviously struck a nerve.

Comments publicly ranged from the straightforward (“The fact that you can see something on Flickr doesn’t automatically mean you can use it.”) to rather more USENET-style flaming to my personal email (“I guess you cheated in school and feel you can do anything you want just because you think you can”). At least there were a few less angry comments, for example a simple post by Jayal Aheram who said the words we were hoping everyone would say:

“Oh, sweet! They can send my photos and my favorites straight into my phone. How cool is that?”

So what was the problem? Well, the mechanical thing that caused grief was that our engineers mistakenly assumed that search results we received from the “public” flickr photostream via the API were all appropriate for use by Myxer (assuming we included all of the attribution information) because we had obtained a commercial API key. But as was very quickly pointed out to us after launch, the Flickr API Terms of Use state (in section 1.a.ii.):

…your use of the Flickr APIs [does not] override the photo owners’ requirements and restrictions, which may include “all rights reserved” notices…Creative Commons licenses or other terms and conditions that may be agreed upon between you and the owners. … If you use Flickr photos for a commercial purpose, the photos must be marked with a Creative Commons license that allows for such use, unless otherwise agreed upon between you and the owner…

In other words, without the explicit consent of the photo owner, a commercial Flickr API partner should filter out content that does not have an appropriate Creative Commons license attached to it. iansand pointed this out very concisely in a follow up post on the flickr forum (“Use CC Commercial content only and there will be no problems”).

So that appears to be a relatively simple fix for us: update our code to examine every item that comes back from the flickr API, and check it for a CC Commercial license, signaling that the owner of the photo has consented to commercial use such as ours. No CC license? Toss it in the bit bucket.

I think, though, that the mechanical failure is in many ways less notable than the failure to realize that, at a high level, not everyone who uses Flickr uses it like most of us here at Myxer do. Indeed, the Flickr community is home to a large number of professional photographers who use Flickr as a showcase for their commercial photography. This is to be contrasted with many people’s personal use of Flickr, as a convenient place to upload digital snaps they want to share freely with the world of family, friends, and so on. And while we have a couple of professional photographers in our company, it didn’t really sink in to us that there were many in the Flickr community who were not interested in spreading their photos far and wide, and opening them up to new uses by the web community.

Mea Culpa.

Let me repost some of my original reply from the Flickr forum thread:

“First of all, I want to apologize to everyone who was angered by the recent launch of our Flickr integration feature, and I want to thank everyone who took the time to send a note to our copyright alias (copyright@myxer.com). We do, in fact, read and act on every single email we receive.

Because of your emails, we have suspended Myxer’s Flickr integration features until we can re-evaluate the situation. (This feature was live on Myxer from late Thursday, 3 July, to Saturday, 5 July).

It was never our intention to power mobile delivery of any Flickr content against the wishes of the person who posted it to Flickr, and I feel terrible that there were many who felt violated by this feature. We were honestly just really excited to add what we thought was a really cool feature for Flickr users — the ability to send publicly-posted photos to mobile phones.”

Now, a couple of other bloggers picked up on this thread and ran with it. Jim Goldstein wrote a piece called How Every Flickr Photo Ended Up For Sale This Weekend on his blog that discusses the issue in the broader context of what responsibility Flickr should be burdened with with respect to controlling access to images via APIs, RSS feeds, and so forth. Says Jim:

This latest incident is by far the most egregious, as the use of photographs from Flickr were being sold with out the consent of a single photographer, all while photo licensing terms were programmatically ignored. I’m glad to see that Myxer took the proper steps to disable their Flickr integration, but this is the latest example of Flickr playing with fire. On some varying level it is easy to point the finger at Myxer, Dave Winer (author of FlickrFan), Eightface (the company behind FlickrRSS) or any other developer/company for improperly using the Flickr API, but I would argue that responsibility ultimately lies with Flickr.

(Now, I feel it is important to point out the fact that Myxer never sold photographs from Flickr. We are, indeed, a commercial company, but we are a service provider who generates revenue primarily by selling advertising around our conduit between the traditional web and mobile phones. Something akin to NetZero for mobile.)

Jim also points to Dave Winer’s FlickrFan (the website for which has the retro/Mosaic feel befitting a true web pioneer) as an example of concern for professional photographers.

These are indeed trying times for a massive number of creative people whose footing has been destabilized in this era of instant, zero-cost distribution of digital content on the internet. It’s not unlike the challenges faced by the music industry in the internet age, a topic about which I have previously written and that I spend a considerable amount of time thinking about.

I have to say, though, that I have always been a huge fan of Flickr, and have long respected the community of creative people that make it what it is. It pains me to see members of its community turn against pioneering features such as the open APIs, because I have seen firsthand how they have fostered innovation across a large spectrum of web companies. Web 2.0 itself owes a lot to the ‘mash-up’ spirit encouraged by Flickr early on, and the evolution of the web from an archipelago of isolated websites to a fluid and interconnected network of cooperating web services will ultimately bring previously unequaled opportunities to everyone — content creator and consumers alike.

And so I again apologize to all of those in the Flickr community who felt violated by our integration, and I assure you we will very carefully evaluate all of the details of our integration with third party sites going forward. Our current plan is to fix our original implementation such that it filters out non-CC Commercial content, as was discussed above. We’re also considering providing a mechanism by which Myxer users can proactively link their Myxer account to their Flickr account (on an opt-in basis) to make their Flickr photostream available on Myxer’s site according to their explicitly-defined policies.

I hope, on the second time around, the combination of Myxer & Flickr will be seen purely in a positive light by everyone!

Myk

Mobile and the Music Industry

The carrier-dominated world of the mobile industry has created a mobile entertainment value chain that, ironically, has a lot in common with physical distribution models. High production costs, tightly-controlled distribution channels, and limited retail space are characteristics we normally think of as being part of the music industry’s past, when records and CDs were the products being sold, but today we find the same limitations in the mobile entertainment value chain.

And so it is perhaps not surprising that the music industry has found some success in this environment. Still struggling with the shift from physical to digital distribution on the internet, the artificial limits imposed on mobile technology have allowed a reprise of many of the same business practices that were honed over decades to sell music in the physical world.

Ringtones, for example, are methodically manufactured, focus group-tested, and released on carefully-controlled schedules that accommodate the weeks or months it takes to get creative to the carrier deck. The ridiculous transaction fees charged by mobile operators, often up to 50% of an item’s purchase price, are tolerated by physical distributors accustomed to giving retailers a similar markup.

But this model, like the physical distribution model before it, is quickly becoming an anachronism. Mobile phones have become full-fledged internet devices, and the same market forces that provide the beautiful mess of innovation that is the internet today are quickly converging on the mobile space. The costs of distribution, storage, and service provisioning are all asymptotically approaching zero, and consumers have developed an appetite for the open access and limitless shelf space that internet economics provide.

It’s now clear that long-term success with mobile music is not going to be achieved $1.99 (or even $0.99) at a time. And the potential for subscription models in mobile has been squandered by the tactics of unscrupulous companies with misleading bait-and-switch tactics that trick consumers into recurring $9.99/month charges they didn’t expect. The scummy underbelly of the mobile content market has damaged consumer confidence to the point where the convenience of mobile payment, already encumbered by ridiculous carrier fees, is often overshadowed by confusion and fear.

The good news is that, in the same way that music is not just an MP3, the mobile industry is not just ringtone downloads purchased through premium SMS. The mobile phone is an inherently personal device, the most personal computer ever to emerge, and the convergence of mobile phone technology with the internet is an opportunity for the music industry unparalleled in its entire existence.

Never before has such an intimate connection between artist and fan been possible; never before have market forces pushed distribution costs to effectively zero; never before has technology conspired to intertwine social expression and interaction so tightly with entertainment.

To take full advantage of this new opportunity, though, requires a mental shift, one in which we stop thinking of music as a collection of discrete units (CDs, MP3s, PSMS purchases, etc.) and go back to thinking more holistically of music as an experience. The limitations imposed by physical distribution (reflected in today’s artificially-stifled mobile entertainment market) have historically driven the music industry as a whole to an unnatural position in which value is represented by the number of units an artist can sell to the mass market.

When one removes the high production costs, constrained distribution, and limited shelf space of physical distribution, a new world is revealed. This has been extremely disruptive and disorienting to the music industry as it comes to grip with the internet. It will be just as disruptive as mobile advances, but this time around the industry has a chance to reflect on lessons learned in the shift to internet and apply that proactively to the emerging new mobile economy.

The knee-jerk reactions of fighting technological advances (suing innovative service providers instead of adapting the technology to one’s own benefit; preaching to consumers and lecturing against their desired usage patterns instead of engaging in a dialog and learning to adapt) have had – can have – no long term benefit. On one level, this is because technology changes the economic landscape such that the industry is fundamentally altered. Technology never moves backwards, so once technology takes us to a new place, the toothpaste is out of the (you)tube, and any attempt to put things back the way they were before is futile.

On a more human level, resistance to technological change is doomed because society itself is changed by technology. We simply are not the same people we were before the internet, and we are changing yet again as mobile takes the torch.

Faced with not just fluidity of distribution, but fluidity of value chains and of society as a whole, the best positioned companies in the music industry are those who have evolved to enhance the experience of music. Labels who work with their artists to create a valuable and sustainable brand that transcends any particular packaging are far more likely to succeed than those that measure value by units shipped on a weekly basis. The musical experience is multi-modal, encompassing everything from live performances to chat rooms to merch to MP3s and a thousand things besides, and new digital technologies provide new ways every day to profit by facilitating the interaction of artist with fan.

One of the reasons mobile technology is so exciting is because it has the potential to bring together so many aspects of the musical experience in a way that has never before been possible. Artists can communicate with their fans using the same tools the fans themselves communicate with each other (SMS); fans enjoy self-expression through music (ringtones); performances can be enjoyed anywhere (over the air video and song downloads); and even merch can be provisioned on impulse (mobile payments). There is no other application better suited than music to take advantage of mobile.

It’s fine for labels to make whatever money they can from ringtones today. But the greater promise of mobile for the music industry lies in its ability to be part of a much more holistic approach to the musical experience. One hopes that the hard lessons of the shift from physical to internet distribution will provide insight to the industry that allows it to take advantage of, rather than fight, the beautiful mess of the emerging new mobile economy.

Happy New Year from Myxer Inc.

To the extended Myxer family,

 

2007 was a great year for Myxer. As I prepared to write this note, I went back through my old documents and emails, and was constantly doing double-takes and saying things like “that was this year?” and “that was only x months ago?” I’m simply stunned by the sheer amount of stuff we have done in one single year!

 

Consider we started the year working out of a tiny two bedroom house in a residential neighborhood with a single hosted server handling our web traffic. Today, our two dozen employees occupy the equivalent of an entire floor of our office building on Ocean Blvd, and we need at least 10 servers and tens of terabytes of storage to deal with our website’s demand.

 

We broke 100,000 page views on our website for the first time at the end of 2006. On Christmas day 2007, we served about 6 million. And, oh, yeah, we delivered four hundred thousand mobile downloads on that day alone, meaning we sustained an average of about 5 downloads a second over the entire day.

 

We also saw 50,000 new users on Christmas – that’s one new user every two seconds – bringing our total user base to over 4.3 million people.

 

An endless stream of enhancements, from the addition of themed content (did everybody get their holiday ringtones?) to infrastructure enhancements, and a million things in between, have all contributed to this astounding growth.

 

But while the growth stats are really amazing and fun, they don’t highlight what I believe to be the most important changes that took place for Myxer over the course of this year.

 

In 2007, we recognized that long-term, large-scale success requires more than just a website and a great idea. Delivering a whole product to our key customers requires the development of a mature market economy that involves relationships with many other partner companies.

 

So as 2008 begins, market development has taken a place of importance next to product and technology development. The key challenge of the New Year is to effectively orchestrate the development of what we call the Myxer Economy – a mature framework of business and market relationships that aligns the motivations of our partners with our own, and defines an efficient value chain for ad-supported mobile content in which Myxer plays a key role.

 

In 2008, Myxer will establish itself as the de facto standard for ad-supported mobile content.

 

This is a very exciting time for the company, because for the first time we have a clear roadmap that connects our high-level Vision on the one hand with our day-to-day, nose-to-the-grindstone operations on the other. And in our current position as one of the most prolific distributors of mobile content in the world, we have the opportunity to effect great change in an industry that sorely needs it.

 

An important aspect of developing the mature Myxer economy is the integration of advertisers in a real way. 2008 begins with our sales team leaping out of the gate with the goal of attracting and selling advertisers directly. This shift from a ‘network sales model’ (whereby we primarily rely on intermediary companies as brokers for our advertising inventory) to a ‘direct sales model’ (whereby we interact directly with ad agencies and large brands) is an important key to reaching our revenue goals for the New Year. We ended 2007 in a great position to springboard this newly-invigorated sales effort and we’re incredibly pumped up about our opportunities.

 

Sales is just one aspect of our operations, however.  In 2007, we recognized the value of Myxer as a brand, and invested significantly in it. Both “brand” in the marketing sense, as well as the equally important legal sense. It was difficult to do at the time, but the serious amount of blood, sweat, tears, and money we put into defending our trademarks against would-be competitors and domain name squatters last year has resulted in a huge step up in brand equity. Myxer Inc., our new corporate name, owes its existence to the difficult challenges we faced early in the year.

 

Our legal endeavors were complemented by a serious new wave of marketing efforts intended to hone our messaging, positioning, and value proposition. The fruits of this labor, of which there are many, will become apparent in 2008 as we work to bring consistency and precision to our brand through the matured understanding of our target customer and our relationships with content providers and other partners.

 

All told, it was an amazing year for Myxer that has set us up for an even more amazing 2008.  I am so proud of what we were able to accomplish in 2007, so proud to be associated with people of such amazing ability and high standards, and so thankful to everyone who has supported our efforts with time, money, advice, and understanding as we’ve grown. I’m so excited for 2008 that I can barely contain myself!

 

Happy New Year to all!

 

Myk

 

Measuring Value in an Advertising-Supported Industry

There are many competing theories of value in economics, but the neoclassical assignment of value to an object or service based on the price it would bring in an open and competitive market is fairly widespread.

This definition of value, unfortunately, requires rather significant tweaking to work in an advertising-supported market. With “free to consumer” products such as web sites, newspapers, and broadcast television, the consumer product’s “price” is paid indirectly by advertisers. (The advertisers ostensibly are leading the consumer to some other product which itself has value.)

To model the value of an advertiser-supported product based on the price paid for the advertising opportunity is about the best valuation we can hope for. In the fluid economy of internet advertising, we have something very close to the “open and competitive market” required. Unfortunately, unlike in the examples of newspapers and television programs, there exists no clear one-to-one mapping between the consumer product offered and the advertising opportunity actually paid for. Various attempts to map one on the other have proven clumsy, forcing us into unnatural analyses such as treating individual “page views” as consumer products.

Yet try we must. The value of the products and services we offer is, in aggregate, defined to be the amount of advertising money we bring in. It is sometimes useful to assign a value that is based on the number of customers. The average value of our service is simply the advertising revenue divided by the number of customers (visitors to our website) in any given period. Having an average measure of value like this allows us to examine and optimize our service’s value to users independently of growth patterns.

It’s important to remember that what we are measuring is the value of our service to users, not the value of our website or company as a whole. Measuring that is a far more complicated matter, as it depends heavily on one’s perception of our potential to grow our service’s value to our users. This speculative assignment of value for a web site or company can be seen every day in investments and acquisitions in the internet economy.

Toward a Myxer Economy

These are complicated times in the mobile industry. Unlike in years past, there is no unambiguous, multi-tiered value chain that neatly describes how each company in the industry relates to the others. In 2004, it was clear how content platforms were operated by aggregators to interface between content owners and carriers. It was clear how device manufacturers relied on network operators (carriers) for retail distribution and demand generation.

Above all, it was clear how carriers exclusively owned the relationship with consumers.

Today, things are very different. Apple sells hardware through their retail outlets. Google is launching an open device platform. After failing as a virtual carrier, ESPN emerges with a direct to consumer web offering. It’s going to get progressively harder for everyone to figure out where to set up their booths at CTIA and 3GSM in the coming years.

It is the power of the internet, and the internet economy, that is driving this change. Based on open protocols and unrestricted access, the internet does not allow for redundancy or inefficiency in the value chain between service/content provider and consumer. In stark contrast to the mobile industry, the internet makes it possible for anyone to reach everyone and everyone to reach anyone. And while far from being stable, the large free-market economy of the internet seeks out and rewards value, and punishes inefficiency harshly.

If you don’t provide value in the internet economy, you disappear. The internet economy will “route around” you, as the internet protocols themselves will route around damaged nodes.

And so as the internet continues its inexorable spread into the mobile industry, previously comfortable (and therefore lazy) companies find the threat of disintermediation around every corner.

Myxer has been a pioneer in applying internet economics in the mobile industry, even as the establishment claimed our approach was impossible, and even as one hurdle after another was placed in front of us. Our stubborn persistence and faith that the openness of the internet would prevail in the mobile industry has finally been vindicated. And we find ourselves today in the enviable position of serving an audience of millions with a differentiated service offering in an exciting and dynamic time.

We have an advertising-supported business model that is dependent on extremely high volumes of low-margin transactions to support it. In order to insure we continue to generate the high volume of transactions required for our success, it’s not enough for us to turn inward and focus on our operations. Scale, redundancy, and new opportunities are all dependant on fostering the development of a supportive ecosystem – not only of consumers, but also content partners, advertisers, affiliates, and others. Each of the players in this community must be given motivation – a compelling value proposition – that directly or indirectly supports our success.

The various interactions between Myxer and these other companies together make up what we call The Myxer Economy. We model the Myxer economy in a conceptual framework that highlights the important currencies exchanged between various constituents, allowing us to understand our partners’ motivations and efficiently address them.

One of the most important conclusions that comes from a consideration of The Myxer Economy is that, ultimately, all of our value comes from the size and quality of our user community.  The people who visit our properties form an audience for our advertisers, who pay us money in exchange for the opportunity to reach them. In this way, we are like any other advertising-supported business, such as newspapers, television networks, and other websites.

And like these other ad-supported businesses, our continued success depends on us delivering compelling content and services to our user community. When we deliver a good experience to our users, we are rewarded not only with their continued patronage, but with user growth as a result of word of mouth recommendations and other viral effects. Many advertising-supported businesses have low overhead and need only maintain their existing user community, but our business plan is relatively capital intensive and requires compounding growth rates for success. Only viral growth from within our user community can deliver that.

So providing a great user experience is absolutely fundamental to the success of our business. Everyone from artist recruitment to the CEO needs to vigilantly work to insure that our users are engaged, happy, and have incentive to “tell their friends” about us.

If you can read this, I just earned $0.00001

So. We’re ramping up advertising ’round here in MyxerLand. It started, like all buzz-kills, with the suits. Somebody invited a finance guy into the office the other day, and he spent the whole time he was here looking at one of those funny pieces of paper with all the numbers in a grid, and muttering something about zero being “an awfully small number.”

“No, no,” I tried to reassure him. “Look at all those really big numbers — the pretty red ones in parenthesis! That’s good, right?”

* * *

If you’re a regular visitor to MyxerTones, you’ve probably noticed that lately it looks like vandals have broken in and scattered Flash-formatted graffiti randomly on our pages. Hopefully you weren’t on the site during The Smiley Horror Trilogy (starting with the somewhat humorous but unwelcome “The Smiley Incident”, followed by the obligatory “Son of Smiley”, and rounding out with “Smiley’s Revenge”). I’ll have more to say about the Smiley people later, but for now let me just say that it is absolutely amazing how much money is poured into Smileys advertisements. It’s like, more then…umm…ringtone advertisements.

The good news is that we’re actually earning some money now. Weird. The bad news is that, even with the Smiley Guys banished, the ad quality is, well, terrible. There is apparently an irrational amount of venture capital being poured into companies with “spokeschickens,” and they seem to really like hanging around our website. Funny thing: we’re currently working on implementing a new UI for MyxerTones, and we’re working off of Photoshop mockups from the graphic designer. For the ad placements, he used really cool iTunes banners with black backgrounds and emotive subject matter, which really make the layout look sweet. With the chickens in the ad placements…not so much.

(Incidentally, I’ve heard that the Smiley people are so keen for you to download their “free smileys” because the download actually infects your machine with spyware, and the spyware shows you ads even when you’re not online (which presumably also infect your machine with their own spyware, and so on and so forth). I’m not sure if that’s true, and I’m also curious about the vulnerability of bloggers to libel lawsuits for repeating stuff they’ve overheard, especially given the obvious resources Smiley Inc. could bring to bear against me if they wanted…)

* * *

So we have to start this whole advertising bit up to get our revenue number to be, well, less small than zero. Just in case you’re not familiar with the way internet advertising works, allow me to present a really quick summary:

1. Get a web site. If you don’t have a good original idea, don’t worry. Just pick a name that sounds like another successful website our there, and hire a college kid to register “your” domain name and put a simple home page up.
2. Generate a lot of page views. You can do this by having a really useful website that people like to use and visit, or you can just rent a botnet and aim it at your web site. Either way, be sure to collect the demographics or your “users,” because that will be Really Valuable Information when you need to…
3. “Partner” with the Ad Networks. The obvious first step is to sign up with Google so that they can deliver crappy “contextual” ads on your pages. There are other companies that can get you different – but equally crappy – ads, and you should sign up with as many of them as possible. The most important criteria to consider is SPM (Smileys Per thousand impressions), which is a rough but effective measure of the throughput that a given ad network has between your site and Smiley Central. Believe it or not, some of these networks can actually exceed SPM’s of 1,000, displaying more than one Smiley per ad impression.
4. Retire.

OK, well, that’s what I was led to believe anyhow. A funny thing happened on the way to step (4)…

* * *

It turns out that when you use these ad networks to serve ads on your site, you generally don’t earn That Much Money. It’s really hard to give hard numbers for what you can earn (the networks are intentionally vague about it, and many even contractually forbid publishers from discussing their earnings!), but on a general purpose site with reasonable ad placements I would be fairly surprised to see an effective CPM of anything over $0.50. (Some types of sites actually can do better than this, and many do worse, so there’s a lot of fudge in that factor).
(I used the term effective CPM above. Effective CPM (eCPM) is a common way of measuring advertising earnings as a function of ad impressions. It’s useful to discuss earnings in eCPM because often times the ad networks pay publishers (websites) based on how many clicks ads get (“CPC”), or how many users the advertisers acquire (“CPA”), as opposed to how many times the banner is actually displayed (“CPM”). Regardless of the actual payment trigger, all of these other metrics can be converted into an eCPM value, which makes it easier to compare and optimize.)

So the first thing you will do after you hook up these ad networks and start looking at the stats is…Try to figure out what’s Plan B. ‘Cos you’re not going to retire on $0.00001 a page view if you’ve got 20 mouths to feed. See, these ad networks are generally only good for dealing with what’s called remnant inventory. Remnant inventory is a fancy way of saying “ad slots we couldn’t sell.” Ad networks are in the same basic category as the ad serving platform (like DoubleClick, Atlas, 24/7, etc.) — they’re essentially required infrastructure for an advertising-supported business, but a business they do not make. The eCPM you get when you fill with these networks is generally only going to make you profitable if you’re a part time operation.

To increase eCPM, there are several things you can do. First and foremost, you need to sell directly to advertisers to cut out all of the middlemen (sorry, Googuys!). But what happens at this point is that you realize that, umm, you have to talk to people. And you need to sell to them. So you have to hire people to do those things for you, because you are, after all, a technogeek who is much more comfortable behind a keyboard than in a sales call and has a notorious weakness for telling the truth. And so you hire people that know how to communicate with these alien advertisers. And then, according to my experience so far, the next thing that will happen is that you will be asked to quantitatively assert that:

1. Yes, we have a huge population of 18-24 year old males on our site, and
2. No, we have no potentially offensive content on our site.

Now, I’m not going to get back into the whole potentially offensive content discussion at this point, but I will reprise my earlier observation that an advertiser with no stomach for possibly having their banners on the same page as “potentially offensive” content in the form of butts-in-thongs or whatever has no absolutely business trying to reach 18-24 year old males. OK, I’m done.

See, people who sell internet advertising think that it’s really important to have a good handle on a site’s Demographics, because certain advertisers are interested in reaching certain groups of people, and they will Pay a Premium for the Privilege (read: higher eCPMs). You need to know, they say, the age, gender, and geographic location of every user of your site, and if you can extract information about income, marital status, bank account balances, key vices, etc., that would be swell, too. But the most important information is summed up by the handy ZAG acronym (“zipcode, age, gender”) that is apparently part of the parlance.

The easiest way to get this data from users, of course, is to simply require that every user enter the information when registering for your site. Well, that’s true assuming what you really want to do is:

1. piss off those of your visitors that are protective of their personal information;
2. lose another slice of users because they don’t want to fill out a long form;
3. get fake information from the rest of them.

But, hey, fake information is better than no information, right?

* * *

What’s really funny to me is that this whole ZAG thing, while apparently universally accepted as a great way to allow Targeting (and, ultimately, elevated eCPMs), seems terribly inefficient. Start at the beginning: a company has a product or service, and wants to reach people who are likely to be interested in said product or service. So, they hire some consulting firm to do a study to find out what are the Key Demographics of the users who are likely to be interested in the product. (Obviously, this step comes before product development in a lot of cases). The consulting firm comes back and breaks things down to, effectively, this ZAG group and that ZAG group is likely to respond well to products of this type, based on sampling and statistical analysis, etc.

Thence follows the demand for ZAG statistics from web publishers, which leads to required personal information fields on web registrations, which lead to pissed off users, reduced registration rates, and decreased accuracy of data.

But what if instead of asking people to supply us with their personal ZAG information, and using that to target campaigns for advertisers, we just cut right to the chase and simply ask “what types of products and services are you interested in?” Just come clean and say, hey, this is an advertising supported site, and we will indeed subject you to advertising. If you’d be so kind as to tick the boxes next to the topics you find most interesting, we will try to deliver ads that are most relevant to you. I mean, if my company sells jewelry, wouldn’t it be great to be able to buy targeted advertising that reaches users who have proactively indicated that, yes, they are interested in jewelry? That’s a first order correlation, unlike the significantly more removed ZAG data.

I call this approach the ZIG (“Zero personal Information Gathered”) approach. Instead of requiring personal information such as gender and age from users, we allow them to tell us which class of advertisements they would like to see. The visitor is happier because they don’t give out personal information (other than interests), and advertisers have the potential to reach a hyper-targeted audience that has professed to be receptive to their products and services. So, advertisers get better results, which justifies higher retail pricing of advertising inventory on our site, which (gasp!) increases eCPM.

* * *

So we’re going to be working on this advertising problem for a long time, trying to increase our eCPM as much and as quickly as possible while always maintaining a deep respect for our users’ personal information, and looking for ways that we can actually provide better options for advertisers than they might know exist. All the while, slaying Smileys and enduring spokeschickens and the rest of their ilk.

Internal (Myxer) email on content filtering

As a follow-up to my post of the other day, here’s an email I sent internally regarding our procedures for dealing with potentially offensive content.

From: Myk Willis
Sent: Wednesday, August 01, 2007 4:42PM
To: mVisible Technologies
Subject: Dealing with Potentially Offensive Content

I’ve written about five drafts of this email, with each one turning into a book that I can never find the time to finish. So while this actually turned out to be fairly lengthly, please understand that there is a lot (I mean a lot) of caveats, special cases, apologies, and admissions of deficiency swirling in the background that I wasn’t able to get into any readable form.

Filtering Potentially Offensive Content

By default, every user account (and anonymous web visitors) has a setting called “content filtering” that is turned on. Registered users may disable this content filtering in their account settings if they so choose.

The “content filtering” switch is intended to prevent potentially offensive user-submitted content from being displayed to users who have it enabled. When content filtering is on, three things happen:

(1) User-submitted text is run through a profanity filter before being displayed;

(2) Content from the catalog marked as “potentially offensive” is removed from all browsable or searchable areas.

(3) User-submitted images (note: this does not include wallpapers, which are covered by #2 above) that have been marked as “potenially offensive” will be filtered.

Mechanics of Filtering Profanity

All user-submitted text, including user profile names, item titles, descriptions, biographies, tags/keywords, comments, and probably some others I forgot, are run through a “sterilization” process before being written to an output page. If the content filter is on, any word or phrase in the text that matches a known ‘dirty word’ will be substituted with grawlixes so that, e.g., “shit” becomes “$%^!”.

The known dirty words are maintained in a file that is part of the project, and we can adjust them if need be. I would caution, however, that my advice for patrons of Taco Bell (“never, ever, open the burrito”) applies fairly well to this text file as well.

Note: Tags (keywords) that match a profanity will not be displayed at all.

Mechanics of Filtering Images

Users may submitted images to Myxer in three ways: (1) as user profile images, (2) as images associated with ringtones or songs, (3) as actual content items (wallpapers and videos).

Every new image uploaded to the site will be queued for review by a lucky member of our staff. We will commit to reviewing new images within 24 hours of their submittal, though we will likely “work the queue” during the day to keep up with new stuff.

There is no delay between when an image is submitted and when it may be displayed to other users, so there is a 24 hour window during which potentially offensive content may be in general circulation.

We currently do not have a method of knowing when images of type (1) and (2) have been changed, so we will have to do a little work to insure changed items are re-queued for review. (Wallpapers and videos are immutable, so we can get away with just reviewing them upon creation).

Deciding Which Images are Potentially Offensive

Please understand this is one of the points at which I could go on for volumes describing the impossibility and subjectiveness of any attempt at this. But I won’t. Instead, I give you my version of “you know it when you see it”:

Potentially Offensive Content is: any image containing
enough exposed flesh to embarrass you if your children and/or parents found
you looking at it.

This definition is, I believe, much more conservative than what we’ve previously applied to the site. In particular, an image need not contain full or partial nudity in order to be considered offensive. Extremely scantily-clad persons in suggestive poses would fall in this category as well.

Beyond Potentially Offensive

Full nudity is not allowed in the MyxerTones catalog. Any item containing nudity will be excluded from the catalog, such that it will not be visible in search/browse even if content filtering is off.

Anything beyond “simple” nudity will be deleted upon detection, and may result in termination of the originating user account.

Common Sense

Each of us, as employees, members of the Myxer community, and human beings has the right and responsibility to mark content as “potentially offensive” that we believe could bring harm to members of our community, whether because of nudity, hate speech, or whatever. Don’t be a slave to any particular rule, and do what you feel is Right at the time. We can and will revisit our decisions and guidelines often.

In Summary…

It isn’t our intention to be the moral cops of the mobile universe. As I’m sure most of you understand, the classification of something into the category of “offensive” depends in an impossibly complex way on the individual and the circumstance. And the importance of self-expression to our user community is self-evident. We have an important mission, and now a mandate from the masses, to be a force that works tirelessly to move what should be personal decisions about content choice out of the hands of the carriers and into the hands of the – duh! – individual. So I don’t want us to ever fall into the trap of blindly imitating the behaviors of those that have come before us.

When ever we are accused by outsiders of crossing some line – be it with regard to allowing the possibility of hosting offensive content or copyright abuses or whatever – it is invariably a result of our position as a disruptive force in their industry. With so much control in the hands of the corporations entrenched in these industries, it takes a strong will – and sometimes an extreme position – to have any affect at all.

Tweaking how we identify and deal with potentially offensive content is part of our overall goal of providing a friendly and comfortable environment for our users while still allowing for a maximum amount of personal choice and self-expression. Rest assured that we’ll continue to revisit this topic until the end of time.

As always, massive amounts of flame mail are invited!

Myk

P.S. Have a spare half hour? I have some more musings on my blog that may be of interest to provide further background on my personal thinking on the subject: http://mykwillis.wordpress.com/2007/07/28/holy/

Holy $&#!

This post is going to discuss how we at Myxer approach the issue of potentially offensive material appearing on our MyxerTones website, or otherwise being made available through our Myxer platform. Where do we draw the line with respect to what can be posted to the site? Given that we are essentially just a service provider for our user community, should we instead give tools to the community that allows every visitor to draw their own line? Should we feel obligated to help balance, e.g., the right of every person to self-expression with the wish of every person to avoid hateful, disturbing, or vulgar content?

These questions are very old, and there is no solution. Hopefully, this post will at least help people to understand how Myxer currently feels about some of these topics, and will provide enough background to demonstrate that we take these issues very seriously – probably far more seriously than a casual visitor to our website thinks at first blush.

Discussing potentially offensive topics without offending

Speaking of blushing, one of the problems I face in writing this post is figuring out how to talk with any specificity about profanity, nudity, drugs, guns, or any other fun stuff (ha, ha) without actually offending anyone.

Oops, too late.
Inside our company, I think we’ve gotten to the point of being able to communicate relatively efficiently about these topics. For example, our meetings on the subject no longer consist of each of us taking turns blushing, laughing nervously, or avoiding eye contact while gently lofting various uncomfortable words in an apologetic and barely audible manner. But it has taken time to get here. And were it not for the fact that all of us here are good friends with a high degree of mutual respect (and generally a long history together), this would’ve been almost impossible. If we weren’t so close we wouldn’t know, for example, that he’s not a pedophile and she’s not a racist and this guy doesn’t kill baby seals for fun on holiday.

Not much fun for little Harpo

Let’s get the obvious out of the way from the start: Everybody is different. Even the same person is different from one situation to another. So every visitor to our website is going to have a different idea of what’s offensive (and what’s fun), leading us to admit defeat from the get-go: it is absolutely impossible to insure that people are not exposed to something they find offensive unless they are exposed to nothing at all. Dory said something along these lines when she commented on a promise Marlin made to his son Nemo. Marlin promised that he would never let anything happen to Nemo, to which Dory said, “Well you can’t never let anything happen to him. Then nothing would ever happen to him. Not much fun for little Harpo.”

If we want to be fun (and we do), and we want to allow independent voices to express themselves in ways that differ from the prevailing “mainstream” (and we do), then we will sometimes offend some people. I’m sorry. Sortof.

Communities form, and form from, shared values

We all have values that are uniquely our own. They are, of course, shaped and shared in many very complicated ways by our family, friends, neighborhood, teachers, personal experiences, and probably a few hundred million years of evolution (if you’re into that kind of thing), among countless other factors. Part of what makes a community a community is, I believe, some set of shared values. So I think one might imagine it’s not out of the question that a litmus test could be developed that would determine, for some particular exhibit, for one particular community, whether it should be considered inappropriate or not.

It was this idea that led to the original method used on MyxerTones to identify what material should be considered inappropriate. What we did was add a “report as inappropriate” link next to every item, putting the job of identifying what shouldn’t be included in our catalog into the hands of the user community. (The original idea was that we would automate the process of removing inappropriate content from the site after it reached some threshold of “votes” by users, though we’re still doing this process manually).

What I really like about this approach is that, in principal, it allows us (Myxer) to remove ourselves from the position of being some moral authority. The community would use its shared values to determine what was allowed and what wasn’t, and we wouldn’t have to spend our time making lists of what were vulgar words and which configurations of human flesh would trigger an “inappropriate” label.

And if the Myxer user community had stayed a small one, and had intersected with a relatively small set of other communities, this might have been sufficient. The set of shared values might’ve stayed large enough to allow the “flag as inappropriate” scheme to be a fairly efficient filtering mechanism. But the Myxer community has grown to be larger than the population of many countries, and it attracts hundreds of thousands of people from very different backgrounds and external communities that – at least when it comes to determining what constitutes vulgarity or pornography or violence (or indeed whether these things are even offensive at all) – have a relatively small set of shared values.

This problem is just one inevitable result of the fact that the world is made up of an almost infinite number of overlapping, constantly changing communities of varying importance and influence. At one extreme exists “the world community”, a community that shares a relatively small set of common values. At the other, every individual can be thought of as their own personal community, with a rather more complete set of values. (I resist the notion that each individual has an entirely complete set of personal values, because it’s been demonstrated to me that even a single person often has multiple ideas that are put to use in different situations. Las Vegas has built a multi-million dollar advertising campaign around this idea (“what happens in Las Vegas…”).)

Divide or Dilute?

Faced with a large user community that has divergent tastes and values, the “flag as inappropriate” approach becomes problematic. It’s rather obvious in hindsight, but as we’ve continued to add people to our Myxer community, the percentage of contributed content that is considered “appropriate” by everyone has become smaller and smaller. This has forced us to consider whether we should maybe:

1. Lower the threshold of what is considered inappropriate to accommodate the values of the most (hard to find the right word here) conservative users in the community-at-large.
2. Define more than one threshold for offensiveness, along the lines of the MPAA ratings (PG, PG13, R, etc.)
3. Segment the population into smaller sub-communities that are more likely to share the same values, and allow each sub-community to set its own thresholds on inappropriateness;

The first option is essentially continuing on with the status quo. As our community grows to include people like advertisers who complain about images of butts-in-thongs, etc., we can crank down on our content to make it more and more sterile. This has the obvious effect of purging from the system a lot of things that are actually interesting to a lot of members of the community.

When your web community has a large number of 18-24 year old males, the probability that some of the images and videos they want to put on their phone and share with others could have subject matter that falls into the “potentially offensive” category for people who are not 18-24 year old males is pretty darn near 100%. At the risk of further offending a certain slice of my current audience, I submit that this last conjecture is virtually inescapable given the aforementioned millions of years of evolutionary biology.

The second option is actually already in use by Myxer in some fashion. We currently allow users to turn “content filtering” either “on” or “off”. When “on” (which is the default), content that has been flagged as inappropriate will not be shown. When the user chooses to turn it “off”, even inappropriate content will be shown to them. The main problem with the current implementation is that it’s only a binary thing, and it doesn’t account for people that want to, say, allow “profanity”, but still block…Julio Eglasias or something.

We’re actually in the process of trying to understand whether we can adopt some of the (admittedly very flawed) guidelines maintained by the MPAA (gag) or TV ratings people for Myxer. I don’t have terribly high hopes, but it might turn out that implementing something like this will at least keep people who don’t consider the issues as carefully as we do happy enough to give us their money for advertising.

Allowing sub-communities

The third option is philosophically really interesting to me, but it has implementation details that are difficult to wrap one’s head around. How does one choose the sub-communities? Is it possible to allow the sub-communities to self-evolve such that one need not define them ahead of time in a top-down manner? And then just the logistics of running an “appropriateness” test when displaying content from the Myxer catalog becomes computationally expensive and prone to error.

There are some specific segmentation use cases, though, that seem like they would pragmatically really useful. One thing we know from operating our website is that there is a rather large community of people who are really into hip-hop as a genre and as a lifestyle. The hip-hop community often makes use of language and imagery that, to people outside the community, is considered profane or hateful. The most often-cited example is probably “the n-word”, which we see used colloquially on Myxer in contexts where no offense is apparently intended.

Calling attention to the fact that I practice self-censorship when referring to “the n-word” above wasn’t my original intent, but it occurs to me that it illustrates the point fairly well. In my personal value system, that word is tainted to the point where I feel it is inappropriate for me to even spell it out – in my community, it’s just not acceptable. And yet I think it’s a word that should not be redacted in communities where it has acceptable and even very important connotations.

So I was trying to show an example of how segmentation of the user population into sub-communities could be useful. I’ll try to finish it off: if we had a hip-hop sub-community, that community could be allowed to self-police with the same “report as inappropriate” functionality we originally implemented site-wide. The ever-changing values of this hip-hop community could be tapped into to evolve what Myxer considered ‘inappropriate’ for people within that community. So if you were in that hip-hop community, it might be that there was a completely different set of words that were considered (by our system) to be profanity, which would prevent the values of other communities from restricting the speech of the hip-hop community.

Unfulfilling Conclusion

That’s really all the typing I can justify doing on the background of this topic right now. Needless to say, we at Myxer are extremely interested in doing The Right Thing (or at least The Rightest Thing Possible) to preserve the empowerment aspects of our technology while maintaining a comfortable and friendly atmosphere for people who visit our site. We want neither to censor nor to offend, but we understand these are impossible goals toward which we can only hope to ever advance.

We do have some specific refinements to our internal policies that we are putting into place that are too specific to warrant getting into, but this is just a small step and we will continue to adjust course time and again as we continue to grow and learn. I hope this discussion has been useful for at least one of the two people who made it all the way to end, and I would welcome any comments or suggestions you have on how Myxer can further improve.

Peace,

Myk

What’s in a name?

I think Myxer is a really cool name. I have to admit to the possibility that I may be biased, and that does make me give pause to analyze my rationale. But come on – 5 letters, ‘x’ in the middle, connotations of being social with musical overtones – it’s a cool name!

When we named our company mVisible, we already had the name Myxer (along with MyxerTones) being used as our product name. But we weren’t really sure, at the time, that this first product of ours was going to be large enough to encompass all of the things we wanted to do with the company, so we were hesitant to make the company name and the product name one and the same.

There was a bigger issue with domain names that factored in heavily, as well.

Back in early 2005, the domain name mixer.com was owned by some cybersquatter who wanted tens of thousands of dollars for the domain. We were in pure startup mode, working out of my house without salaries, and we couldn’t justify paying more money than we had (!) for a domain name. We had myxer.com, of course, but there was always this worry that we would lose viral growth because people would tell their friends to “go to myxer.com”, but their friend would hear it as “mixer.com.” So, we often put a lot of emphasis on our sub-brands, like MyxerTones and MyxerTags. We owned the more popular phonetic spellings of those domains (mixertones.com, mixertags.com, etc), so there was less to worry about from a viral growth point of view.

Because it turned out that ringtones were the most used part of our platform, MyxerTones gained prominence. But because we didn’t want to be thought of (in the investment, mobile, and internet communities) as “a ringtone company,” we continued using mVisible whenever the corporate entity was being discussed. The platform stayed “Myxer”, so whenever we get airtime, we juggle between (1) mVisible, (2) MyxerTones.com, and (3) the Myxer platform.

This was a mistake. And continues to be a mistake.

From where we stand now, Myxer is undisputedly an extremely valuable platform. It delivers something like two ringtones, wallpapers, video clips, or songs every second of every day – and the volume is increasing month over month at something like a 30% rate. I really wish I could get statistics from other mobile content companies to compare this with, because I think we probably deliver more mobile content than anyone else in the world.

But more than a valuable platform, Myxer has become an extremely valuable brand. It is synonymous with simplified mobile content and services. This is a testament to its power and simplicity, because our marketing efforts have been decidedly inferior to our technological exploits, and we have abused and neglected the brand over the years as we dragged it behind mVisible as if it were somehow just a toy. But it’s clear now that the Myxer name is, in fact, big enough to encompass all that we are trying to do with our company.

To take us to the next level — to establish our platform and products as the de facto, undisputed, only way to mobilize your stuff — our platform, products, messaging, and our company itself all need to regroup around a single, unified, easy to understand brand. And in my mind, there is no rational choice for that brand other than Myxer.

To be continued…