The Psychotic State Number 16 September 5, 2000 The Revolution Will Not Be Televised My grip on reality is always at best precarious. It doesn't take much to tip me over the edge. I have long since come to terms with this state of affairs, and I always take precautions not to damage to myself or others when I sense myself about to crack. One of the things most likely to unhinge me is reading a credulous article about technology. The old Wired magazine was especially crazy-making, since it seemed to be written and edited by people with literally no filter - the believed everything anyone ever told them about the importance of the internet, the new-age economy, new-age politics, or whatever. I always had to read Wired on the subway, where my ranting and gibbering wouldn't stand out too much. I finally lost my patience with it when I saw the cover story that said that "push" was the biggest thing since fire. Quiz question for those of you who have been in the industry 2 years or less: have you ever heard of pointcast? (Wired mag ultimately met a poetic fate. Having priced their IPO far in excess of what the market wanted to buy, they failed to go out and were ultimately taken over by Conde-Nast, the most old-media of outfits.) I was a bit taken by surprise when two weeks ago I found my eyes crossing, while reading the Sunday New York Times Magazine of all things (the Aug 13, 2000 issue). The piece is about a new technology that you might already have heard of - a sort of suped-up video recorder that allows recording and playback at the same time, thanks to the miracle of large capacity hard drives. (See Psychotic State 14, Oct 31, 1999.) There are two companies that make them, called TiVo and Replay. These devices allow all sorts of wonderful things. It has space to capture 30 hours of video, so you can record and watch your favorite shows whenever you want, just like you would on a VCR. But there's more: you can watch a football game and do your own instant replay of whatever action you want to see over. Then you can keep viewing the match more-or-less live (with a few minute delay). Purportedly - I haven't seen one - the interface of these things is so simple that even the 80% of the US public who can't figure out how to set the clock on their VCR will know how to use it. Naturally, you can also skip forward while watching a show, meaning you can skip right over the commercials. This has the advertisers and broadcasters in a bit of a tizzy, as you can imagine. That's pretty interesting, but the boxes go on to do more. They watch what you're watching, and keep track of the sort of things you like. The machines are patched into the network, and the boxes upload their records of what you've tuned to the manufacturer's servers. After suitable time, the logic goes, the box knows you well enough to find things you want to watch, and to sell your eyeballs to suitable advertisers. There will be no general ads for the general public, only ones special to you - these are the only ones you'll be willing to watch - and so we reach the end of the mass market. Michael Lewis, the author of the NY Times piece, thinks that this development of this technology is of equal historical import to the fall of socialism. Excuse me, I think I hear those voices in my head again. I need a break... Ok, I'm back. Ours is, I think, the era of advertising. In the old days, say before 1960, ads were pretty prosaic. Businesses believed that the point of an ad was to tell the buying public about a product, or if it was already widely known, to reinforce people's positive perceptions. I find old ads sort of charming, what with the plodding way they actually talk about what they're trying to sell. Today, we live in an era of unprecedented hype and spin. We believe that the power of advertisements is nearly magical. A witty ad for a dot-com on the super-bowl substitutes for a business model. There are companies out there - I can think of a couple that people left jobs at AGENCY.COM in order to join - who think they are going to be supported by advertisements, yet have burn rates that would make the most successful magazine publisher blanch. No ad has more powerful magic than one that's "targeted". The idea certainly makes sense - if you are advertising baseball bats, you probably want to reach people who are interested in baseball. Certainly, if you make Louisville Sluggers, reaching the readers of Sports Illustrated is a better bet than those of Vanity Fair. Nowadays, however, the recipient of a targeted ad is supposed to be an idiot. First of all, the TiVo and Replay folks think they can learn enough about people from their TV watching habits to know how to market to them. Perhaps I am alone in this, but I find that pretty unlikely. People have been trying to do that by tracking behavior on web sites for quite some time, without any striking successes. (Hell, a couple of companies ago, I worked on such things myself. The best, in my opinion, is the NetPerceptions software that's used on Amazon.com. But it's not amazing, it's not a critical part of their business model, and books are a pretty limited realm anyway. Another quiz for the new-to-the-industry set: have you ever heard of firefly?) People are pretty complicated. My family has known me for forty years - and they know more than just what I watch on TV - and every year they still buy me things I don't want. The TiVo folks evidently also believe that we're all going to be perfectly blithe about having our every moment of channel surfing recorded and uploaded to a server owned by who-knows-who, who will sell the info to who-knows-who, who will do who-knows-what with it. To top it off, what about the not unlikely scenario in which more than one person watches the same TV? "Honey, how come we keep getting ads for Playboy magazine? Have you been watching channel 35 at night again?" Let me point out that targeted ads have actually been around for a very long time. Check the junk mail you get every day. It is exquisite, perfect, they know exactly who you are. The direct marketers know the magazines you read. They know what catalogs you get. I'm told they even know what you charged on your credit card. You get that junk in your mailbox every day, and I daresay it's hardly the center of your life, or of the business world. TiVo expects that the accumulated database will be so valuable that they're actually losing money on each box they sell. They really want to control totally the mechanism by which businesses reach consumers. If the article is to be believed, the VC behind TiVo is prepared to lose over a third of a billion dollars to make their dream happen. Yes, I said _billion_. Excuse me, I think I need to go grab one of my pills... OK, that's better. What I find interesting is that I actually agree that the world is going to change, and that it's likely that the mass market as we knew it will go away. I don't think I'm particularly savvy for believing this; it is, after all, happening anyway. What I find amusing is that the TiVo and Replay people think that they're thinking out of the box, when in reality there just isn't any box anymore. What happens in a world where some kid in a college dorm has his PC - not his TiVo - record every episode of The Simpsons that comes over his cable hookup, and he redistributes it through Napster / Gnutella / Freenet? I don't need to watch commercials, and I don't need to be snooped on by TiVo either. Thirty hours of video? That's nothing - what happens when computers can hold thousands? The final amusement: a few days after the NY Times Magazine article, they had another piece in the Circuits section. They said that, surprisingly, TiVo and Replay weren't selling very well. Perhaps they don't know how to advertise them.