Message from Michael -- July 7, 2008

THE ATLANTA TRAFFIC JAM ON THE INTERNET HIGHWAY

CONSPICUOUS CONSUMPTION

SHOW ME THE SOCIAL MONEY

IRRIGATING THE VAST WASTELAND

COCKTAIL CHATTER – GLOBAL WARMING, AVATARS AND THE PRINCESS BRIDE


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THE ATLANTA TRAFFIC JAM ON THE INTERNET HIGHWAY: That’s as close an analogy as I could come up with, in trying to visualize the amount of Internet traffic hitting the so-called information superhighway around the world. According to the latest report from Internet backbone provider Cisco, global internet traffic in 2012 will be over a thousand times greater than ALL the traffic traversing the U.S. Internet backbone in 2000. More specifically, the company says global IP traffic will increase SIX FOLD, from 7 exabytes per month last year to 44 exabytes by the year 2012. As if that number isn’t enough, let me add a little perspective. According to data cited by the University of California-Berkeley, every word ever spoken by human beings since the dawn of time could be stored in five exabytes of data. The report, with the catchy title of Cisco Visual Networking Index Forecast (visual networking is the combination of video and social networking/ collaboration), says Internet growth is slowing, but that is very much a relative term when you consider the projection calls for a 51% growth this year, followed by 44% in 2009 and 40% in 2010. Of course, a substantial amount of that traffic growth is video. And here’s the kicker: the report says “the volumes are so large that sustaining high growth rates becomes increasingly difficult.”

And that is the essence of an article in Technology Review which warns video downloads are “sucking up bandwidth at an unprecedented rate.” Senior Editor Larry Hardesty gives the example of video download The Evolution of Dance (which, BTW, really is cool). The video runs six minutes, but watching it requires 100 times as much data as reading a magazine article of the same length. Or, put another way, the video which has been downloaded 87 Million times (including one by me) has sent the equivalent of 250,000 DVD’s worth of data across the Internet. He says the information superhighway isn’t really a superhighway at all, but more like a four-lane state road with a traffic light every five miles. Those traffic lights are the routers and switchers which control the packets of information. A technical solution has been developed by a Ph.D. student at Yale which basically maps all the computers of all the ISP’s and therefore all the ‘traffic lights’, but the problem is it requires an across-the-board cooperative effort.

And that runs into the issue of net neutrality which runs into the issue of – do you trust the major Internet providers. Cable and Internet provider Comcast was recently cited for controlling the video traffic of BitTorrent. The question to be determined is what controls are necessary technically to make sure those broadband pipes don’t become clogged and which controls represent an attempt by the larger corporate ISP’s to squelch competition. Cable and Internet provider Time Warner, along with Comcast, is looking at capping usage with additional fees for anything above that cap. Officials at Times Warner say 5% of Internet users account for 46% of the bandwidth used, and that usage is doubling every 1.5 years.

Foot Note: A quick lesson in data storage, courtesy of Wikipedia: A kilobyte, as we all know is 1000 bytes. A megabyte is a thousand thousand bytes. From there, it goes to gigabyte, with each increase adding a power of one, so that a gigabyte is 1000/3 (to the power of 3). After that, it’s terabyte, petrabyte and then exabyte which is 1,000,000,000,000,000,000 bytes. After that it’s zettabyte and then yottabyte. Humorously, at least to me, when I typed the word exabyte the first time, my Word processor highlighted it as an unknown word.

CONSPICUOUS CONSUMPTION: I vaguely remember the term from one of my economics courses years ago, in which one spends lavishly to display income or wealth. That seems to be some of the drive behind the video clogging, as people talk about the video’s they’ve seen and share with others, according to two separate reports. Forrester Research forecasts a 25% increase in video consumption with per-day video video viewing jumping from four hours a day to five hours a day. Not from more people joining in so much as from people viewing more content online. In a similar vein, ComScore reports that while the web video audience is flat, the actual usage has soared. According to ComScore, the percentage of video viewers dropped slightly from 74% last year to 71% this year, but those folks are viewing more clips (82 this year versus 63 last) and watching them longer (228 minutes this year versus 158 minutes last year.)

SHOW ME THE SOCIAL MONEY: More and more, one hears or reads that journalistic axiom being used when discussing social networking sites. The question is being raised by organizations as diverse as eMarketer and Technology Review. That’s not to say they’re all failing to make it. According to VentureBeat, sites like LinkedIn are making it, using a variety of models to drive revenue. What may be the reason for the disconnect is because of the research indicating a huge growth in the use of social networking sites. Research firm TNS says more than half of the online social network users visit their sites daily, with many logging on several times a day. In a similar vein, advertising giant Universal McCann echoes those numbers in its “Media in Mind” study showing that half of adults rely on social media to communicate with friends, family and colleagues and that 85% of adults 18-34 use “at least one Web 2.0 platform” to stay in touch with their peers. A study by the University of Minnesota says three quarters (77%) of teens aged 16 – 18 have a social networking profile and that social networks “had increased their creativity and their willingness to learn new communication skills.” An analysis by Bryan Urstadt writing for Technology Reviews shows that while Internet ad spending continues to skyrocket, social networks remain a very small percentage of that revenue. Part of the problem may be the unpredictable nature of social networks, he says, with advertisers reluctant to have their ads on the same page where sexually explicit content is provided or where the F-word is used with gay abandon. As a point of reference to this, according to Price Waterhouse Coopers and the Internet Advertising Bureau, first quarter spending on online advertising hit $5.8 Billion, an 18.2% growth and the second highest fiscal quarter.

Side Note: You already know the big social networking sites – MySpace which has more than 60 Million users and is growing at 7% a year; and Facebook which has 26 Million users and is growing at 83% a year. And Maybe you know about Classmates Online (14.3 Million users and a 20% growth) LinkedIn (7.6 Million user and 146% growth); Windows Live Spaces (7.6 Million users but a minus-6% drop); AOL Hometown (6.5 Million users but, again, a drop, this time of 11%); and Flixster (4.8 Million users and a 70% growth). But how about Reunion (7.3 Million users and an 82% growth), or Club Penguin, targeting kids and tweens, 4.4 Million users and 39% growth) or Imeem, focusing on music and bands, (3.1 Million users and a 102% growth rate.)

IRRIGATING THE VAST WASTELAND: That may be a little cutesy of a headline but that is in essence what the University Of Georgia’s Research Foundation and the Grady College of Journalism and Mass Communication propose to do with the recent offer to purchase the Media General-owned television station in Northeast Georgia. To borrow from the famous speech by Federal Communications Commission chairman Newton Minnow, the concept is to balance “costs per thousands” with “understanding per millions” by combining a teaching laboratory for journalism students with an innovation incubator in a commercially viable (read – profitable) operation. An obvious disclaimer: I teach at the Grady College and have been involved in the process, along with colleagues David Hazinski, Steve Smith and Brooke Rooks as well as former WNEG General Manager Ben Daniels, along with our fearless leader, Dean Cully Clark. We believe that you can have good television and good ratings, that money and public responsibility can be used in the same sentence, that new media and mainstream media can be a winning combination, and that instead of being a vast wasteland television is a vast opportunity. Some quick details: The station will be an independent with an emphasis on local news and programming, combined with UGA-generated materials supplemented by purchased programming. The station is presently based in Toccoa, Georgia, but the main operations will be migrated to Athens, but with a continued emphasis on all the communities of Northeast Georgia. Eventually it will evolve into a state-wide superstation.

FACTOID(S) OF THE WEEK: Okay, I admit it, I can’t just do one. First off, in an earlier MfM, we reported the prediction that Internet advertising spending would overtake television spending in five years time. A new report by Enders Analysis says Internet advertising will overtake television advertising in England this year. Global media revenue will reach $2.2 Trillion by 2012, with an annual growth rate of 6.6%, according to Price Waterhouse Coopers.

COCKTAIL CHATTER: According to Pew Research, less than half (49%) of Republicans believe there is evidence of global warming. Yet, according to a poll by Harris Interactive, nearly three out of four Americans (72%) believe their personal actions “are significant on the environment” while one in five (22%) believe their actions are not significant. According to lifestyle trends site Springwise, two brothers in Maine are offering consumers the chance to ‘adopt’ a lobster trap for one year for $2,995, and for that they get all the lobsters it catches for a year. Political website Stateline.org reports that Vermont has declared Juneteenth (when slaves in Galveston, Texas, found out that the Emancipation Proclamation had been signed) as a state holiday, making it the 29th state to do so. Somewhat surprising, since I can still remember reporting on it as a new phenomenon, Linden Labs Second Life is actually celebrating its fifth anniversary. Even more surprising (at least to me), teen-oriented online virtual world Habbo (which I admit I’ve never even heard of), celebrated a milestone with its 100 Millionth Avatar. (Think about it – 100 Million.) And my favorite cocktail chatter of all, Worldwide Biggies has created a “narrative adventure game” based on the Rob Reiner classic movie (and one of my all-time favorites) The Princess Bride, in which you get to choose your favorite character to play and are given separate tasks to complete.

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