Perspectives

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The future of media for the coming decade was settled in 2010. Amazon and Apple have divided it up, and are taking no prisoners. Amazon will completely eat the traditional book market, and a fair chunk of the periodical world.  Apple will control everything else, with an emphasis on breaking news.

Why?

The Kindle 3 has become the bestselling, and fastest, product ever sold on Amazon. “We’re grateful to the millions of customers who have made the all-new Kindle the bestselling product in the history of Amazon — surpassing Harry Potter 7,” said Jeff Bezos, Amazon.com founder and CEO in a press release last week.

And it’s no surprise that the Kindle is so popular. It’s appealing to both consumers and publishers.

It’s attractive to modern customers who seek an affordable and convenient way to read newspapers and books. With the introduction of high royalties and respectable independent publishing, publishers can’t lose either. As of December 1st, Amazon offers 70% of royalties (after delivery costs) to their publishers, compared to the previous 30%.  If the publication retails for $9.99 per month, the publisher would earn $6.05 for each subscription, according to Amazon’s FAQ.

Plus, there’s the Kindle’s subscriptions for newspapers and magazines. Bringing in fresh, high-margin revenues to venerable brands, and with their introduction of the Kindle Publishing for Periodicals, Amazon creates an ease and comfort for potentially skeptical publishers. The Kindle Publishing for Periodicals makes subscriptions compatible with any Kindle-enabled app across any device.

Although blogs aren’t yet included on the Kindle applications, they aren’t being overruled completely either.

Then there is the iPad, which should shine even brighter in its next version. The device has literally reshaped how media looks in a digital world, with every brand rushing to build an application that can fully employ a touch interface.

The Kindle and the iPad are radically different, but they are both massively popular because they know their market and are the best in their field.  According to Business Insider, “analyst Ming-Chi Kuo of Concord Equity Research says that Amazon produced 1.6 million Kindles in December, matching the production of Apple’s iPads during the month.” Even Amazon CEO Bezos agrees that consumers are buying both: “Internally, we view them as two stand-alone businesses that have to succeed on their own merits,” he said. The Wall Street Journal wrote that “Mr. Bezos takes pains to distinguish the Kindle from the iPad, saying the company is committed to making a single-purpose piece of consumer electronics.

When the new iPad does come out early this year, there should be another explosion of sales as long as the novelty hasn’t completely worn off. Taiwan-based DigiTimes believes that Apple is planning on shipping over 65 million tablets in 2011, which is incredible considering that selling 25 million iPads in a year was considered insane this past summer.

If you want to reach the wealthiest and most enthusiastic consumers, the Kindle and the iPad are exactly where most purveyors of content are headed.  Content will be designed with the two platforms in mind, out-sizing their influence in the market, and making the next several revolutions in the world of content built for them.

An example of this already? Rupert Murdoch, head of News Corp, plans to release the world’s first ‘newspaper’ completely designed for a tablet-style computer (with help from Apple CEO Steve Jobs).

Folly, or just a sign of things to come?

Grooveshark is an odd service. If you don’t know, Grooveshark lets you play music for free by allowing users to upload songs which it then streams to listeners. Alarm bells should be ringing if you know anything at all about the world of online music. What gives? How is Grooveshark still online and growing?

Under no current litigation that puts its future in doubt, Grooveshark was even named by TIME.com as one of the Top 50 websites for 2010. Not only that, but Men’s Health said this month that they were better than Pandora.

Grooveshark has even expanded to offer free college courses to intermediate programmers at Grooveshark University in their local Gainesville. Using the Santa Fe College’s Center for Innovation and Economic Development (CIED) as the campus, they aim to “teach students about cutting-edge technology used by Grooveshark, including HTML5 web standards, Python programming language, and mobile application development for platforms like Android,” according to Santa Fe College News.

Grooveshark claims their revenue comes from a premier service called ‘Grooveshark VIP,’ advertisements, and artist promotions on the site.  But even still, how are they paying the artists? With deals with more than 1,000 musicians, publishers and labels, they lack deals with 1,000′s of others. Wikipedia rates the service as streaming a quarter billion songs a month. One could conclude that if the company did start paying for each and every stream it would be quickly bankrupt.

According to their blog on December 26th, they launched a copyright management page where they include a web-based DMCA takedown tool. They say:

It is our policy to honor all takedown requests that comply with the requirements of the Digital Millennium Copyright Act (DMCA) and other applicable intellectual property laws.

We strongly suggest that you contact us at licensing (at) grooveshark (dot) com before filing a DMCA infringement claim. Grooveshark has an artists/label program to ensure that any owner of content will be compensated fairly for each time their content is played via Grooveshark. To be clear, as long as your infringement claim complies with the terms of the DMCA we will honor it, however we would much rather pay you than remove your content.

It seems they are relying on the consumers to tell them what they’re doing wrong, and for artists to file before paying.

It seems Grooveshark is just waiting for a lawsuit to end its parade. And yet, on the service goes. The company dealt deftly with a lawsuit from EMI, which ended in a licensing deal and settlement, and a scuffle with Universal cost the company their slot in Apple’s app store.  However, you can still download the app with “jail-broken” iPhones or other Apple devices that allow unsanctioned applications.

Grooveshark is quite literally the website that either you can’t kill, or possibly the site that no one wants to kill. It certainly is popular.

What will become of Grooveshark? No one knows, but if the past forecasts the future, the company will more than likely enter into a protracted legal battle that ends with its untimely demise. Then again, the company was launched in 2007, and has yet to fear for its life a single time.

Could 2011 be the year that Grooveshark grooves its last? How long can they keep streaming music and not get in trouble for it? How much expansion will occur?

“I’m so over YouTube.”

Those were the words that smacked me in the face yesterday. A gaggle of teenage girls sat at the airport in front of the television watching Entertainment Tonight. Specifically, they were watching a piece about several YouTube videos where college kids dunk hoops in crazy places (off airplanes, jumping off cliffs, high rise shots, between railroad cars).

“But, why,” one equally baffled girl asked her.

“Stupid stunts, annoying people trying to make it famous and forwarded “funny” videos in my email inbox. I just want it all to go away,” she said. I was shocked to hear this come out of anyone’s mouth, let alone a teenage girl. The other girls nodded their heads in agreement, uttering “Totally” and “God, I agree.”

They got me thinking.

The day before this puzzling remark, I read an article by venture capitalist Mark Suster about how “Google turned YouTube into one of the most valuable future Internet properties,” and here is this younger, dare I say, hipper generation saying how over YouTube they are.

I had even just uploaded a video of my nephew’s insane reaction to receiving a Wii for Christmas in the hope that Nintendo would notice and send us a free game or even a letter – anything to acknowledge or validate our existence.

Let’s be honest, I’m just as fame hungry as the rest of them. Or should we call it desperate?

But, are these girls just an example of where the mainstream is headed? Are we so obsessed and focused on trying to be or trying to find the next star on YouTube that we don’t recognize it’s doomed existence? Is the demise of YouTube before us?

Sometimes surrounding ourselves with other technologically savvy and passionate people, we can get out of touch with how the mainstream truly feels about certain things. The media clearly believes that YouTube news is what people want to watch, otherwise they wouldn’t be showing it.

Then again, the BBC quoted Tamar Kasriel, founder of Futureal consumer trends consultants, predicting that a term called “techno yoyo” will come into the common vernacular to describe people who have a love-hate relationship with technology. These people will begin demanding “Wifi-free” zones to disconnect from all technology.

When will the public stop becoming interested in crazy, unbelievable tactics from talentless people? When will we stop being impressed by the baby Charlie that bites his brother’s hand? Or the Ninja cat that stalks its owners? Or the double rainbow? Or the viral sensation of wedding dances and entrances? (I personally will never cease to be impressed by choreographed dances.)

People, interns and talent scouts spend hours scouring the Internet for the next sensation. But is it all useless? Are the next sensations already washed up before they’re even found?

If the Guinness World Records is anything to use as comparison, we won’t give up hope. We will always be craving stupid, mind-numbing exploits to see who can be faster, bigger and better. Or simpler, more ironic and more subtle – as the fad seems to be going now.

I guess these are just our ways of telling stories – of connecting with other humans. We will always want to cheer for the underdog – the next Susan Boyle, the next Antoine Dodson or Justin Bieber. We all want to say we found that person before they were famous, or to be able to hope that that person could be us.

Jason Fried, founder of 37signals, tweeted yesterday “Kinda incredible to ponder that the iPad is only about 8 months old.” Eight months is an eternity in the technology world. I certainly don’t remember a time before the iPad. That’s pretty insane.

People are hedging their bets right now on YouTube sticking around, the Google and the investors certainly are – but it’s impossible to say. Could these teenage girl’s comments be the beginning of the tipping point? How many people have to repeat that one sentence – “I’m so over YouTube” – for the trend to disappear into AOL-land? With two billion views daily, it seems unlikely.

I guess we won’t have to wait long to find out.

We’ve had quite a year, with both the midVentures25 and midVenturesLAUNCH conferences, and a host of great news coming out of Midwest startups.  From high-profile funding rounds to whopping buyout offers from behemoths like Google, the Midwest has much to celebrate this holiday season.

For those of you who have given your time and energy to bring together entrepreneurs and capital, we want to extend our gratitude.  And for those of you who have discovered the vibrant Midwest technology scene this year, we are glad to see you join our community.

Finally, we want to extend our humblest thanks to Chicago–the Windy City–where we continue to discover new people and companies, and where we have always been at home.  We have seen amazing ideas come out of this city and we are looking forward, as always, to the future of tech in America’s heartland.

In the next week, we will be reminiscing about 2010 and we look forward to posting our favorite moments of the year.

What was your favorite tech moment of 2010? Leave a comment and tell us!

The biggest problem with “social media” is that it doesn’t always live up to its name. Physically, it can’t; psychologically, it won’t.

I see how social media has opened up new possibilities for small companies in remote locations and connected like-minded people across the world.  And I understand the excitement that follows viral media campaigns such as the late-night “food truck” phenomenon in many cities (now a sitcom in development) or any number of YouTube ad campaigns.

Even with the midVenturesLAUNCH conference, the excitement continues to build daily with hundreds of retweets of our original tweet from this past September: “Hear from the founders of @groupon, @reddit, @okcupid, and @mint at @midVentures: http://bit.ly/fOyCZF#mVLAUNCH.”

My personal experience with social media has been incredible: solid relationships formed through Twitter; excursions in London and Oxford with other expat bloggers; a flight halfway across the world to swap lives with a French student whom I met in a chat room.  I have many friends who have met their life partners through various social media applications.  (How else could my friend George find another gay man in Tuscaloosa, Alabama, without the help of Gaydar? And, I’m not talking about his intuition.)

But have these social media applications made all these connections a little less spontaneous?  A little less surprising?  A bit less real?  Are we too busy looking down to notice what’s happening right in front of us?  (This isn’t a new thought, but don’t worry, there’s more.)

Even Unsocial.mobi, which aims to make business networking smart by matching you with people you should meet rather than people you already know, takes away the natural inclination for compatible humans to gravitate towards one another.

In 2005, when I was walking down a back alley in Amsterdam having just experienced Ann Frank’s house for the first time, the last people I expected to bump into were my former co-workers from Los Angeles.  Yet, there they were!  It was a rush, a thrill and oh, so random.

If I had had my iPhone in hand, following my friends on Foursquare, and I already knew they were in Amsterdam, would I have over-thought and avoided them altogether?  After all, isn’t the point of living in Europe to assimilate with the culture and get away from fellow Americans?

On the one side, social media applications are making it cool again to get out and about.  People want to brag. They yearn to share their locations, their participation in events and their excitement for a new restaurant or activity.  Rather than playing Nintendo on their Power Pad in the basement, this generation is getting out and talking about it.  That’s huge.

On the other hand, bumping into my old roommate in the terminal at JFK International a few weeks ago wouldn’t have happened had I been plugged in and updating my Facebook status.

That brings me to my final point.  Social media applications and technology as they are right now are physically antisocial. Staring at a screen or typing on a keyboard is, by definition, the epitome of unsocial behavior. We need connecting to become simpler, more streamlined, even more prediction-based.
It’s great people are getting out now, but they need to be out and present in the moment.  Social media needs to develop to the point where the “media” part is minimized and the “social” aspect is maximized.

This means less time spent actually using social media web and mobile applications, but still getting the same amount of information delivered to you that we get from Facebook, Twitter, Foursquare, etc., today.  Interaction will become less tangible perhaps, and more inferred, delivered through a different medium.
What will this new medium be?  Perhaps audial, visual or sensory.  You are walking down the street and a voice chip embedded in your ear tells you who to speak to at the corner cafe. Who knows?

I’m not saying that social media is completely antisocial.  All I’m saying is that right now, it’s too hard to be both in the moment and up-to-date using current social media apps.  And we need to develop an alternative.