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Category: economics

Day trading the information stream: Reading and Writing

Published April 1, 2008 by cgerrish

Our filtering of information pouring off the network is starting to resemble the activity of a NASDAQ market maker. A market maker is a buyer and seller in a set of tickers on the electronic market. She’s always looking for pools of liquidity, ways to match up a buyer and sellers in whatever trading or crossing network that provides the acceptable transaction.

We are buyers and sellers of information. Techmeme, Delicious, Twitter, Google Reader, Technorati, The Gang and NewsGang, The NY Times, MSNBC, YouTube, iTunes, Facebook, MySpace, CNN, your favorite Blogs, Meg Fowler, Chris Brogan, KR8TR, Karoli, C-SPAN, The New Yorker, The Public Library, News.com, TechCrunch, Mahalo, Google News, Yahoo News, ESPN, Digg, TWIT, Your personal network, and Your friend’s networks are all pushing information into the marketplace. You choose what to buy. You also sell your own writing, photos, music, films, radio into the networks you have access to, the pools the provide the most liquidity.

Just like a Hedge Fund, or a portfolio manager, we try to put together the best portfolio of feeds, and pick the best stories and pieces out of the stream. The term we hear these days is “curator” or “editor.” But the sense of time is not of the long term investor, but rather of the day trader or the market maker.

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Twitter: A Simple Tool for Connecting Two Nodes

Published March 27, 2008 by cgerrish

The viral contagion that is Twitter is directly related to its simplicity. Twitter is one of the smallest possible connectors of nodes on the network. Follow. Unfollow. Block. Post 140.

Some think we want more complexity. We want more depth, more features. But the fact is we want to build up complexity out of simplicity.

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Quarantining the digital: What’s the right price for a copy?

Published March 24, 2008 by cgerrish

If your business is now selling digital copies of something, you can’t use the economics of your prior state. Every business would like to maintain that kind of pricing power. However, if the marginal cost of making the digital copy is close to zero, and you’re selling into a mass market, how do you justify your pricing? Why isn’t free the right price?

When is free the wrong price? When you’re selling digital copies into a niche or small market and producing the master copy is expensive and requires highly specialized talent. This could be a picture of the software business, the music business or the movie business. The digital has changed the very DNA of these industries. You can’t accept the price cutting power of the digital on the production side, if you don’t accept the price cutting power on the distribution and sales side. The digital can’t be quarantined.

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Against Perfection: Musicians no longer seem to know what music is

Published March 23, 2008 by cgerrish

45 RPM Vinyl Record

For the record, music is not recorded music. A photograph of a painting is not a painting. A video of a play is not a play. Seeing a symphony in person is not the same as listening to a CD. In point of fact, the digital itself is a copy at it’s origin, it never inhabits time the same way as the performing arts. The digital replicates without effort, cost, talent or skill. Compare and contrast to performing music live, acting in a play, painting a new work.

Because a large industry has grown up around selling recordings, the recordings are often confused with the thing recorded. Of course there are recorded works that only exist as recordings and cannot actually be performed. Then there are records put out by musicians who can’t actually play their music live. But once these recordings exist in digital format, it’s nothing to make an extra copy or two. Or ten thousand or a million.

The great thing about music is that it’s different every time. That’s why we go to see plays and operas we’ve seen before, see bands we’ve seen before. It was the recording industry that taught consumers that there was only one version of a song, the one they were selling. And that was the moment where musicians were cut off from their music. Recordings create an artificial kind of perfection that stands outside of life. Life is imperfect, filled with mistakes, errors, moments of passion and virtuosity. Recordings can simulate the depth of life, but cannot capture the living.

As the cost of making and distributing recordings continues to approach zero, musicians need to understand what the digital means to them. It could mean you’ve got many versions of the same song: the unplugged version, the one you did in Austin, the desperate one you recorded in that little club in New York. The one where that great harmonica player sat in and changed the way you thought about the melody. It could mean multiple mixes, it could mean letting the fans create their own mixes. Or even computer-generated random mixes. Let a thousand flowers bloom and capture all the beautiful moments of imperfection in all their glory.

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