Local Doesn’t Scale DNAinfo, the much-beloved local news operation was shuttered last week by owner Joe Ricketts. The timing of the shutdown – shortly after the site’s reporters voted to unionize – looks suspiciously like a power-play by the billionaire owner. But DNAinfo insiders are telling a different story. Former DNAinfo editor-in-chief John Ness writing in Recode suggests that the problem is endemic to local news organizations. By his calculations, local news requires a reporter for every 70,000 people in a community and editors to oversee those reporters. Ness is a local news true believer. He argues that neighborhoods served by good local news gain the type of immediate, useful information that can protect and develop a community. However, the economics of local news are not likely to quicken a venture capitalist’s heart. (Thump, thump.) Consumers of local news don’t demonstrate any willingness to pay for the product, so that leaves advertising support. While advertising networks benefit from the micro-targeting of local news, the pennies-per-placement model is unlikely to pay for all those reporters and editors. Why does this matter? Here’s how ad fraud becomes a national crisis. Media dollars are pretty inelastic. Advertisers don’t spend more money when there is more media to spend it on. They have a marketing budget and they stick to it. Advertisers demand of ad networks that they can deliver massive, but highly targeted audiences at scale. Ad networks need huge audiences to meet this demand, so they sign on providers of low-quality content who somehow manage to pull large audiences. These content providers make their money by taking in more ad dollars than they spend producing content. So they create cheap, empty content – clickbait – and then they might (wink-wink) purchase some additional pageviews. Meanwhile, all of this junk inventory bleed dollars out of the advertising ecosystem leaving less and less behind for providers of high-quality content with real audiences. In the end, the economics just don’t work, leaving high-quality content producers with a choice between paywalls (The New York Times), generous billionaires (The New Republic) or shutting down (DNAinfo). The electorate becomes progressively worse-informed with predictable results. In a nutshell: Local media can’t work because it can’t be made to pay. Read More Net States Rising Alexis Wichowski writing in this month’s Wired suggests the interesting idea that the Post World War Two world order is being destabilized by new, non-state actors she calls “Net States.” Certain Net States are large companies like Google or Facebook, which boasts a user base larger than China. Others, like Lulzsec or Anonymous or Wikileaks are harder to define. They are internet-based, self-organizing and loosely structured. In fact, any attempt at discerning lines of command and control within these groups is bound to fail. The US military confronts ISIS as if it were a “rogue state,” but the loss of its territory has not impacted its ability to commit acts of aggression. ISIS was less an organization than an organizing principle. It was an idea that the dispossessed and alienated in the Middle East and abroad could agree upon. Violence and fear were considered superior to paralyzed weakness under repressive client states. Wichowski suggests strategic alliances between traditional nation states and these new Net States. If we are confronting the structural ambiguities of ISIS or the security risks of Wikileaks or Russian state use of vast hacking networks, we had best have some of these Net States on our side. Why does this matter? Kurt Vonnegut – there was a guy who had a sneaky degree of insight into the human condition. In his novel Cat’s Cradle, he invented a religion known as Bokononism. One of the central tenets of this religion was that groups of human beings were linked to one another in cosmically significant ways. He called these groups a karass. Finding other members of your karass is emotionally fulfilling. On the other hand, there were also things called granfalloons. These are false karasses between people who imagine a connection that doesn’t exist. (Stay with me here, I’m coming to my point.) Non-corporate, self-organizing Net States are karasses. People join because they find meaning and belonging in the group. The group’s actions speak to them. So they are willing to take self-sacrificing action on behalf of their karass. Nation states and corporate Net States are granfalloons. We think they are significant because we want them to be. The solution to this problem is for Nation States and tech companies to figure out what they believe in. It’s not enough to say “Amurica First!” or “we will maximize the return for our shareholders.” That is some granfalloon nonsense right there. In a nutshell: Non-state actors are truer representatives of their members’ beliefs. That is what makes them hard to beat. Read More Enough with the Headsets Franziska Roesner writing in the MIT Technology Review suggests that there are serious security issues for Augmented Reality that must be addressed prior to widespread adoption. She points out that malware on your phone or computer may be inconvenient, but malware on an AR headset might prevent you from seeing oncoming traffic. I agree that AR could be abused by people or companies in particularly dangerous ways. But I do not agree that we are about to see a world where people walk around wearing visible headsets. It will quickly be considered rude to do so, because it is deeply antisocial. Think of sunglasses. If I see a friend on the street on a sunny day and go over to talk, the first thing I do is remove my sunglasses. That’s because people put a high value on eye contact in communication. Remember glassholes? I remember having a person show up for a business meeting with me wearing Google Glass. Apart from the fact that he looked absurd, it was particularly unpleasant having a conversation with a smirking doofus who might be recording the whole thing. Neal Stephenson in his novel Snow Crash came up with a wonderful name for people who wear their cyber gear out on the street – Gargoyles. The reality is, everyone hates you if you look at them through a headset. Why does this matter? Here’s how I think AR will work once the bugs are ironed out. People at work will wear a headset most of the time. It will be like a welder’s mask – to be worn while work is being done and removed while communicating. People at home will wear headsets for entertainment, but it will be considered rude to wear one at the table. (Like looking at your phone, but more so.) People in public who are not looking at others or communicating, will wear their headsets, but feel slightly embarrassed about it. It’s like having your laptop at the coffee shop. It’s useful, but you’d rather not draw too much attention to what you’re doing. And walking around? Nope. I just don’t see it. People resent the possible intrusion on their privacy. They don’t want you scanning their face for recognition. Pretending not to see or recognize people you’d like to avoid is a crucial part of the social fabric. Also, I doubt the projection screens will be worn above the eye as Google Glass was. It’s much more natural to have it below the eye like reading glasses so that direct eye contact can be made over-top. In a nutshell: Gargoyles are not headed for the streets of New York any time soon. Read More