O'Reilly Radar » Peter Bennett

Why don't they get it?

Peter Bennett — Fri, 15 Jul 2011 15:00:00 +0000

Predicting the development and adoption of new technology is difficult, with problems ranging from focusing too deeply on detailed technical features, to being swept along by an emotional gut feeling that may be unique to you.

When our forecasts don’t pan out, we can feel great frustration with the people in the market who we see as either extremely cynical, irrational or stupid. Sometimes we just plain don’t understand them.

In the mid 1990s I worked for a research company. At one point I produced forecasts of UK broadband penetration that turned out to be about 10 years too aggressive. We had totally underestimated the reluctance of BT to let go of potential ISDN revenues and invest in ADSL. The long-term technical call was correct, but the timing was naïve. I had understood the technology, but not the people.

Fast-forward 15 years and a tweet from Tim O’Reilly touched a nerve:

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Sometimes copyright-protected industries are so far out of line, and I wonder why government doesn’t see it http://bit.ly/lEWy9A #overreachless than a minute ago via Seesmic Desktop Favorite Retweet ReplyTim O’Reilly
timoreilly

The piece he linked was highlighting television broadcasters’ efforts to get the government involved in what are currently purely commercial negotiations between program producers and broadcasters. Rather than negotiate payments for rights, some broadcasters are asking the government to require program makers to grant these rights through new legislation.

You can see why broadcasters would want this, but how could a government begin to think this would be a good idea all-in-all for the economy?

To quote the distinguished Princeton psychologist and economist Daniel Kahneman, I believe it’s because human beings are “endlessly complicated and interesting.” Rather than take the knee-jerk response that politicians must just be in the pocket of big media, I’m going to look at how some aspects of human behavior make this kind of highly damaging legislation more likely.

We need only assume that politicians are people who are “against unemployment” and “against crime.”

Fear of loss is much stronger than desire for gain

Kahneman’s groundbreaking research with Amos Tversky on loss aversion showed that the fear of losing something generally (and strongly) outweighs the desire to acquire it.

So when an established industry like broadcasting cries out that there will be massive job losses if they don’t get legislative support, then politicians’ fear of loss will often greatly outweigh any desire to loosen or enact legislation to encourage innovation and new job creation.

If the broadcasters are able to convince the government that what was once considered fair use of material should really be seen as criminal copyright infringement, then they might also be able to push the “against crime” button.

Web 2.0 Summit, being held October 17-19 in San Francisco, will examine “The Data Frame” — focusing on the impact of data in today’s networked economy.

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A bird in the hand

Enacting heavy-handed legislation to support old, lumbering businesses can positively damage the prospects of new businesses and future job creation.

As investors, we learn through discounted cashflow analysis how to compare a dollar now with a dollar next year. We can apply this to compare a job now with a job in the future.
Unfortunately, humans are often poor at this and undervalue future events compared to immediate circumstances (so-called hyperbolic discounting). In our broadcast media case, a perceived crime now (e.g. file sharing) can seem to totally outweigh the value of possible future job creation.

Political bandwidth is very narrow

To discuss or influence government policy we face a massive bandwidth problem, as politicians need to be able to state their position as crisp soundbites.

Allied to this is the fact that politically-engaged people tend to feel the urge to pick a side or risk being portrayed as spineless ditherers. Having picked a side, another psychological bias (confirmation bias) can kick in, leading to a tendency to fit evidence to their current viewpoint. Broadcast legislation is a walk in the park compared to climate change legislation, however. And I’ll leave evolution denial to The Onion …

In our media example, there are two sides to copyright (and also patent) law:

Encouragement of innovation and creativity
Punishment of criminal infringers

Our broadcasters are pushing hard to make the first point disappear off the radar, and ensure that copyright is perceived solely as an open-and-shut “protection of property” issue, similar to housebreaking or auto theft.

Unless the proponents of innovation can reclaim this ground, we will see that there is only room for the simplest of soundbites. They will eventually lead to works of art like the Protect IP Act.

So how do you combine an understanding of people and technologies?

The world is complex. Even the most sophisticated attempt to model “things” has led to a realization that this can only take us so far, and that we must put people’s behavior at the center of our models.

If you doubt this, ask Google what they are up to with Google+.

I’m not a psychologist — I have an iPhone app development business and a background in media and business strategy. However, I would strongly recommend that anyone discussing or commenting on new technology get to know as many of the quirks and biases of human behavior as they can, as you’re modeling people first and technology second.

I’m sure you’ve come across Freakonomics, but if you really want to swallow up the rest of the day I can recommend the Wikipedia list of cognitive biases, which has more than 100 listed reasons why people don’t behave like technology.

So, next time you find yourself wondering why elegant and simple logical assumptions have once again been poleaxed by “some bunch of [insert your favorite insult here],” you’ll probably find that some, if not all, of these cognitive effects are at play somewhere in the model.

Related:

Amygdala FarmVille: The people that know the most about you are the people you know the least about

Mobile apps and the quiet handling of data

Peter Bennett — Thu, 26 May 2011 13:00:00 +0000

The web was never designed to be personal. Until Netscape added cookies to its servers and browsers in 1994 there was no way for a web server to store data on a user’s computer. In 1996 there was a bit of a ruckus in the media about the privacy implications of cookies, then everyone relaxed a bit and got used to them.

Fifteen years later, the European Union has leapt into action and is now keen to enforce legislation in
this area (despite a last-minute reprieve for the UK). As cookies are clearly defined and limited in scope, they make a good attack surface for legislators.

The Internet, and mobile in particular, have moved on a bit in the last 15 years, however.

Mobile apps, scattering data

I would happily predict that even in 20 years there will not be a 100% reliable, always-on, cheap wireless broadband option.

So unless you reside in Mountain View, Calif., luxuriating in virtually unlimited mobile data connectivity, I think you’re going to find living 100% on the mobile web to be a pretty miserable experience.

Conversely, it will be harder and harder to find examples of apps on mobile devices that do not benefit from connection to data networks.
So, unfortunately for the legislators, the once-clear boundary between device and service continues to blur and morph.

Software and data on iPhones and other devices are going to remain smeared across devices, the open web, and various other data services. Let’s look at how this currently works.

Unique Device Identifiers (UDIDs)

To track a user across multiple apps you’d need some way of putting a unique tag on each device so that no matter which app read it, you’d know you had the same person.

This is precisely what the Unique Device Identifier (UDID) number on iOS devices can do. It’s easily available to the writer of an app, and it cannot practically be changed or deleted.

These UDIDs allow developers to link data collected by different apps. (Interestingly, as the UDID acronym gets bandied about it will probably become irrationally feared.) Apple forbids the sharing of this data between companies, but within a company there is no effective means of preventing this.

The Shared Keychain in iOS allows apps published by a single developer to share data if they find themselves installed on the same iOS device — no network required.

Here’s a theoretical example of how this might apply to apps from an insurance company:

You provide your date of birth to a motor insurance app to get a quick quote.
A year later you download a pension calculator app from a different division of the same company.
The pension app already knows your age, so it can get straight down to convincing you to buy savings products.

Data access to the Internet, with local storage on the device

The elephant in the room when talking about data protection is the fact that any app can silently connect to the Internet and send and receive data to its heart’s content.

Developers are encouraged to show a spinner to indicate that the network is being accessed, but this is a guideline rather than an enforced requirement.
This is not all about tracking users, of course. These capabilities allow things like remote throttling of app usage, enabling of new features, binding of sponsor data to parts of the app, updating media in the app, syncing with other services, etc. As there is no clear way to identify personal or tracking data within the app’s local storage, any focused privacy legislation will be tricky.

The bottom line is that your iPhone apps are increasingly likely to be using a full set of web services without you ever setting up accounts, accepting terms and conditions, logging in or even being aware of it.

Apple Push Notification Service (APNS)

One of my personal favorites in terms of potential unexpected consequences is the Apple Push Notification Service (APNS), which allows developers to remotely pop up messages on iOS devices, or add badges with numbers to the icons of their apps.

That’s all relatively straightforward, but there is also the ability to make the iPhone play any audio file included in your app, whether the app is open at the time or not. Check the push permissions for “Angry Birds” for an example (Settings > Notifications).

When you installed “Angry Birds,” Rovio explicitly asked for your permission to play sounds from Angry Birds on your phone whenever they like.

As an aside —
If you’re looking for true Internet notoriety, then gaining control of Rovio’s servers would allow you to remotely command all iOS devices with Angry Birds installed to “tweet” (audibly, not via Twitter) in unison.

Data handling on PCs vs. data handling on mobile apps

Given all that’s happening right now, how are we doing on transparency and consent?
Let’s compare some of the warnings and alerts you might get from three different use cases:

Case 1: Installing software on your PC that uses data on the Internet

Warning: this software was downloaded from the Internet
Please enter your administrator password to install
Antivirus warning: new software identified
Firewall warning: Unauthorized software trying to connect to the Internet

And when you run your new PC-based software:

Please provide your email to register your account
Please set a password
Click the confirm link in the email we’ve sent you to authorize your account
Accept the terms and conditions

Case 2: Accessing a website through a PC

Please install Flash plugin / authorize Java applet / install Silverlight
Register or log in
Provide email address / password
Click link in registration confirmation email
Can I set a cookie on your PC? (Thank you, EU)
Please accept the terms and conditions

Case 3: Installing an Internet-enabled app on your iPhone

Tap to install app
Errr…
That’s it

Some final thoughts

The comparison between PC-based software and smartphone software shown above is stark, with many implications. There’s a lot to work out, and there’s a lot to debate. With that in mind, here’s a few discussion points I think are worth exploring:

The “app way” of working could be great for business, but it only works if you trust the app delivery platform and the app developer. Organizations create and destroy trust in many ways, and we might benefit from a more explicit review of or focus on this.
Developers could be more open about what they are doing, but explaining technical issues in plain English can be tough. Frankly, most users aren’t that interested, either.
New laws to control use of cookies are focusing on what legislators can see and understand. Legislation will always trail technology, leading to more “privacy theater.”
Broader technology legislation that relies on applying judgement and intelligent interpretation may succeed more than narrow, knee-jerk legislation and zero tolerance.
The iPad brings the smartphone approach closer to the standard PC. Expect Mac OS X Lion to bring it all the way.
Just because it fits in your pocket, doesn’t make it private.

Related:

Expectation of Fair Pricing, Not Free

Peter Bennett — Mon, 23 Feb 2009 17:04:13 +0000

At Dear Author, a post stating that not all content should be expected to be free; rather it must be provided, free or not, in a realistic understanding of consumer needs and expectations, which might mean changing the way you do business.

What content providers must realize is that a changing business model wherein revenues are no longer captured in the same way does not mean that content is not without value or
that people will not pay, in some way, to use that content. I think many people recognize that in order to have worthwhile content, we must pay in some way for it. Consumers have reduced the value of the album, but have not determined that music itself is without value. Consumers might believe that digital books have reduced cost given the costs of production, distribution and warehousing; but it is not our belief that books are without value altogether or that all books must be provided for free. I think what consumers are looking for is a fair trade. Content creators provide the best content they possibly can and for a fair price allow the consumers to utilize it in the way that it fits into their lives.

The Economic Realities of Digital-Only Newspapers

Peter Bennett — Mon, 02 Feb 2009 16:58:37 +0000

Alan Mutter has an incisive analysis explaining why an all-digital strategy would be unacceptably painful for the majority of established newspapers:

Because newspapers on average derive approximately 90% of their sales from print advertising, the only ink-on-paper newspapers that can afford to attempt digital-only publishing are the ones that are irreversibly losing money. Moving to digital publishing is the last, best hope to salvage at least some value from their waning franchises.

But those web-only franchises would produce far less cash than their print predecessors, reducing the value of those businesses by several magnitudes. How much less? A conventional newspaper moving to online-only publishing might produce at best 10% of the cash generated by its print-plus-online predecessor.

This would be catastrophic for any of the newspaper companies that operate today on the premise of selling both print and interactive advertising. This is especially true for the many publishers that borrowed billions in recent years to finance acquisitions that for the most part have not produced sufficient profits to service the loans.

New York Times Settles Linking Suit

Peter Bennett — Tue, 27 Jan 2009 17:56:18 +0000

In what many of us thought was a slightly bizarre case, the New York Times Co. has settled with GateHouse Media in a suit attempting to cease the automated aggregation of Gatehouse content on Boston.com’s affiliated properties (Boston.com is owned by the Times Co.). It is not clear why the settlement was reached, since precedence was on the side of the Times’ operation.

Mathew Ingram examines the settlement at the Nieman Journalism Lab:

Because while the settlement is not a legally-binding precedent — the one piece of what might be called good news — it still involves the New York Times voluntarily refraining from what many would argue is perfectly defensible behaviour. As Joshua Benton notes in his post at the Nieman Journalism Lab, that could well embolden other publications to launch similar cases, on the assumption that if the NYT caved then someone else might too. [Links included in original post.]

Palm's webOS Represents Major Shift for Syncing and Data

Peter Bennett — Mon, 12 Jan 2009 19:41:28 +0000

In an article covering the Palm Pre mobile device, Ars Technica makes a very important point about how devices utilize network connectivity, and what the assumptions are underlying their models of data storage and access:

Users just make changes to their data (contacts, calendar, mail, etc.), and Palm’s webOS handles committing those changes to whatever canonical data source it is accessing in the cloud. And herein lies the most important difference between the webOS and Apple’s iPhone OS: the iPhone was originally designed under the assumption that the canonical source of a user’s data (contacts, calendar, music, tasks, etc.) is a Mac. Palm’s webOS, in contrast, presumes that cloud-based services are the canonical source for your data (with the possible exception of media, which we don’t know about yet) …

Palm’s webOS does not presume any sort of tether at all. The company has totally ditched the idea that you will use this phone in conjunction with a specific “main PC” that contains the canonical, authoritative repository of your data. Instead, webOS draws seamlessly on a variety of data services–not data repositories, but cloud-based services that actively feed the device both data and critical context.

This is a deep, fundamental break with both the iPhone and previous, repository-based smartphone usage models, and it’s important enough that other smartphones are bound to follow.

Google Doesn't Have Answers for Newspapers

Peter Bennett — Thu, 08 Jan 2009 17:16:19 +0000

Fortune Magazine has an interesting interview with Eric Schmidt about Google’s relationship with newspapers:

Maybe their time [newspapers'] has just come and gone?

No. They don’t have a problem of demand for their product, the news. People love the news. They love reading, discussing it, adding to it, annotating it. The Internet has made the news more accessible. There’s a problem with advertising, classifieds and the cost itself of a newspaper: physical printing, delivery and so on. And so the business model gets squeezed.

So what else can Google do?

We have a mechanism that enhances online subscriptions, but part of the reason it doesn’t take off is that the culture of the Internet is that information wants to be free. We’ve tried to get newspapers to have more tightly integrated products with ours. We’d like to help them better monetize their customer base. We have tools that make that easier. I wish I had a brilliant idea, but I don’t. These little things help, but they don’t fundamentally solve the problem.

New Tech Mixes Book Experience with Sensors

Peter Bennett — Tue, 16 Dec 2008 03:09:40 +0000

A new form of hybrid book is coming on the market — and the
inventor consults with Apple. From the Guardian UK:

Lyndsay Williams –
who has already developed the PC sound card, SmartQuill, and
SenseCam — is now
working on SenseBooks, and the first of a series will be published
next year.

SenseBooks are a hybrid of paper and computer intelligence, and
will have MP3 quality audio from an ARM processor and a gigabyte of
storage. Williams says SenseBooks “will know when the user picks up
the book and looks at a page”:

A proximity sensor detects this and can light up pages or make
music. What is also useful is the book has sensors to know what page
it is on, can send a wireless message to a PC and open up a web page
with more information on. Current applications include children’s
teaching books, music books, cookery books etc.

History Repeating with Book Publishing's Mobile Efforts

Peter Bennett — Wed, 10 Dec 2008 17:14:55 +0000

A Computerworld blog post from Mike Elgan looks at recent mobile announcements from book publishers. From the perspective of technology, watching book publishers slowly grapple with the tentative migration of books to mobile platforms is painful. Interestingly, the comments attached to the piece are almost all more conservative.

The music industry was holding on to physical CD sales so tightly that they let Apple run away with control over digital distribution and the future of their industry.

It looks like the book publishing industry is about to do the same thing.

Publishing industry: The book isn’t the paper. It’s the content! Why don’t you understand your own product?

800 Newspapers Coming to Iliad E-Reader

Peter Bennett — Sat, 06 Dec 2008 21:20:27 +0000

iRex Technologies scores scores of newspapers for its new iLiad e-reader. From E-Reads:

Digitally delivered news is gaining momentum and as we turn the corner to 2009 it’s gotten a rocket boost from the Dutch firm iRex Technologies, which announced it has made a deal with NewspaperDirect to deliver 800 newspapers on iRex’s Digital Reader 1000 …

The iRex/NewspaperDirect partnership will undoubtedly cause some headaches for Amazon.com, too. A visit to Amazon’s Kindle newspaper web page shows 28 listings. The 800 titles to be carried on the iRex 1000, dubbed ‘Kindle Killer’ by some, will obviously dwarf Kindle’s offering. Of course, many of them are foreign language papers like Le Figaro and Die Welt. But 800 is 800 and that’s good news for the environment.