Monday, June 2, 2003 at 7:00AM C-SPAN is currently broadcasting today's FCC proceedings on media ownership regulations. [via How Appealing] The Los Angeles Times has this interview with four of the five FCC commissioners ("Reflecting on Media Ownership Debate").
Sunday, June 1, 2003 at 5:30PM Howard Bashman has a penetrating essay in today's Los Angeles Times ("'Conscience' Is No Cause For Judges To Flout Laws"): "[I]f one judge can elevate his conscience above the law, so can others, and soon we will have a system where judges at every level are free to decide cases based on personal predilection rather than binding judicial precedent and the texts of constitutions and statutes." While I wholeheartedly agree, I also have trouble imagining a world where law and circumstance don't sometimes inexorably conspire to wad up the proverbial Blindfold of Justice and send it skittering across the floor. (This observation probably has nothing to do with the fact I must negotiate the Judge Harry Pregerson Interchange 8-10 times a week...) I agree too with Howard when he says the thing to do if you're a judge in such a pickle is to "at a minimum, refuse to participate in deciding those cases in which the impediment arises," but I also can envision a different kind of conundrum that then becomes possible: a situation so anathema that no lower court judge can, in good conscience, apply the law as written. If judges at any level of the process have well-reasoned grounds for believing precedent to be unconscionable or unconstitutional (or both), then perhaps their duty to apply it becomes coextensive with their duty to express their displeasure about it (as Judge Reinhardt did). This information thus becomes available to the higher court, and may factor into its decision whether to reexamine the law by granting review or certiorari. (See also New York University School of Law professor Stephen Gillers, in a related Recorder article: "[Pregerson] should recuse himself and write his angry dissent in the recusal so he gets his voice heard. And it's an important voice.") I've said it before, I'll say it again: we need our very best people on the bench; they have one of the toughest jobs around.
In a May 23 post that broke this story, Howard also reproduced the pertinent text of the orders that gave rise to his incisive piece today in the Times. His next installment of 20 Questions for the Appellate Judge (with an undisclosed 9th Circuit Clinton appointee) is due for posting shortly after midnight, EDT, tonight.
Sunday, June 1, 2003 at 10:58AM Bradley Fikes of the North County Times has this report ("Nation's tech moguls conferred in Carlsbad"). Fikes mentions that the venue was popular with attendees, and why not? It's a beautiful place, and just minutes from the Palomar Airport (i.e., super-convenient private jet access). But should the organizers find themselves casting about for alternate locations next year, the new Montage Resort and Spa in Laguna Beach is one of the most spectacular hotels I've ever seen (more from the L.A. Times, "New wave of chic"), and is thought to have an eBay connection...
Sunday, June 1, 2003 at 9:26AM The following are my notes from the May, 28, 2003 interview with Meg Whitman and Barry Diller, conducted by Kara Swisher at D: All Things Digital. (Again, please don't mistake these jottings for a verbatim transcript or a complete portrayal. I'm a highly selective listener and a most imperfect note-taker.)
Swisher: Why have your companies been successful?
Whitman: eBay was just a brilliant idea, a marketplace that couldn't exist without the Internet.
Swisher: (Asks about "USA Interactive.")
Diller: I was intrigued by interactivity really early. A mixture of serendipity and curiosity.
Swisher: (Asks about what's to come.)
Whitman: The next five years will see as much change as the last five. UI changes. "I assure you my mother calls me [for help as she gets lost on the site] all the time." eBay is user generated content, and will always reflect the dynamic community of users. Changes will involve improvements to navigation, etc.
Diller: Regarding Match.com, initially it provided a serious service for people to meet each other with the goal of being together, not flirting. We broadened it to make it more about "flirt." Added voice and video features. (Brief discussion of what's in the voice and video.) "We don't want anything to do with it, it's pure point to point. And I guess you can toss out 'pure.'" We think it's about every kind of match you can imagine. We match people. (Hmm, dating services as social software?) There's a personality test that's very interesting. "I think this word content is a stupid word. It's the product. The product gets richer as you learn things and find out things and do what you do."
Swisher: Asks about feedback, what do your consumers want?
Whitman: Ours break down into two categories. Sellers want a platform that helps them build their business, merchandise their own brand. They were screaming for PayPal. That was a catalyst of PayPal and eBay to do the deal. PayPal was the de facto payment standard on eBay, and we kept hearing, it would just be better if you integrated. Sellers want more help with overseas transactions. On the buyer side, two of our growth areas are home and business and industrial.
Swisher: (Asks about importance of the Buy It Now/fixed purchase price option.)
Whitman: It accounts for about 26% of our sales. Some buyers like it.
Swisher, to Diller: You have a lot of businesses that lend themselves to broadband.
Diller: Any time you need pictures and data and a pipe going two ways broadband is important, but there's no point yet in spending a lot of money getting products ready just yet. Everything we do is digitalized. HSN is complete video, 24/7, all through a digital process. Pretty soon when the pipe is big enough the video and online sides will come together.
Whitman: Broadband is great for eBay, but we have not yet invested very much in developing products that take advantage of it. 80% of our users are still on dial-up. We'll take advantage of broadband as it becomes more prevalent. Korea is the most wired country in the world. In Korea, we do have some unique programs that take advantage of some of this.
Swisher: Will the shopping experience become more immersive, or just a souped up version of what you're doing now?
Diller: It will, of course. All the things you can do will be fluid. There's an hour drama in Korea with 1.7 million subscribers, each paying a dollar an episode to watch. Editorship will shift from the old system, of having people do it for you, to your doing it yourself. We're at the first leg of all this. In Hollywood, this has people quite scared but this is good, hopefully it will lead to better programming. Whenever you can get a small number of people to more than pay for the production, this is better than straight broadcast. (To Whitman, referring to an earlier mention of eBay television show efforts.) If you went to your users, you could get enough subscribers to support an eBay show.
Swisher: (Asks about importance of WiFi to their businesses.)
Diller: Citysearch is perfectly suited to seamless WiFi.
Whitman: WiFi access is good for us, although the initial uptake on the eBay cell phone/PDA software far underdelivered on our expectations. Again (echoing Jobs), eBay's not perfect for a small screen. We'll keep offering services as WiFi becomes more pervasive.
(There's a funny moment when Barry Diller notices Kara Swisher has notes written on her hand—per Diller, "in complete, declarative sentences.")
Swisher: What is eBay doing now?
Whitman: It's a worldwide marketplace. In 27 countries today, can be in many more. Strategic decision is to stay focused on this very large opportunity. What we're good at is running a marketplace.
Diller: Our strategy is the be the largest and most profitable ecommerce company in the world using multiple brands.
Swisher: So, we've been asking folks what would interest them if they were seventeen and starting over again today...
Whitman: Probably biotech or stem cell research.
Diller: It's most important to follow your curiosity. I don't think you go into stuff because there's an opportunity there, but because it arouses your curiosity.
Audience member, to Diller: You've been outspoken about media concentration. [More.] What's the impact going to be if control gets tighter?
Diller: You're referring to the FCC's June 2 rulemaking, and loosening restrictions on cross-ownership. The issue is not about consolidation, it's this: there are 5 entities that control 90% of what you see and here. What we need is sensible, wise regulation that will make it so you can still hear independent voices. It's not about size, but when you have size you have to have careful oversight and regulation or you get in trouble. If these entities control the broadband types as well, they'll sit on the tollbridge. The size issue can't be met by just tossing everything out.
Audience member: (Interjects the conference's first blog reference.) Along these lines, Larry Lessig has written recently on his blog that the Internet is dying. What do you think?
Diller: Not enough people are saying enough about this. We need to get it out there.
Audience member: regarding eBay, what about letting people sell themselves, their loyalty. "I'll be your customer, for X months."
Whitman: We've experimented with a broader range of saleable items, but what eBay reacts to is the demands of its users. The "services" category has only been moderately successful.
Esther Dyson, from audience, to Whitman: Are you experiencing tension between serving the small guys and the more wholesale side of market?
Whitman: Wholesale is a new category, and we think they coexist quite nicely, the pricing is consistent no matter how large or small the seller is. Sellers can get nervous when changes occur. For example, Disney selling on the site caused concern among collectors, but it wound up helping them and being embraced. The site is an economy, it's a marketplace that is self-regulating.
Audience member: (Asks about sniping.)
Whitman: It's an economy, and that was an innovation that occurred. Fixed price is an alternative.
Audience member, to Diller: (Asks about shopping models.)
Diller: The thing you've got to get to is it's on all the time, will become a shopping medium for daily needs, commodities of life. (It was either here or earlier that Swisher mentioned a well-known Barry Diller quote about the convenience of buying underwear in your underwear.)
Audience member: (Asks about marketplaces v. portals: Yahoo, Google.)
Whitman: Google does an awesome job for us, we buy words on behalf of our users. We in turn help the richness of their services. We have to be nimble as well, think about what the right thing to do is over the long haul. We're not the only place to buy goods on the 'Net, never thought we were. Will continue to navigate through the changes that take place.
(Unfortunately, I missed most of Dr. Richard Klausner's remarks, but I understand he was excellent. Next up in my notes: Yahoo's Terry Semel.)
Friday, May 30, 2003 at 9:08PM The following are my notes from the May, 28, 2003 interview with Steve Jobs, conducted by Walt Mossberg at D: All Things Digital. (Despite their format, please don't mistake these jottings for a verbatim transcript or a complete portrayal. They are necessarily paraphrased and incomplete. That said...)
M: You were there at the beginning if the PC era.
J: '77, Apple II.
M: Where are we in the arc of this?
J: The PC is interesting in the way it has morphed. First, there were the hardware hobbyists, the PC served the software hobbyists. Dan Bricklin and Bob Frankston, who's here, invented the first spreadsheet. Lots of productivity growth, but people were speaking of the PC's demise in the early '90's. Then the Internet came along. At Apple we feel there's a third great age of the PC coming, where it becomes your digital hub. Cameras, music: it's becoming central to the digital lifestyle.
M: (to audience) He makes a music player, you guys know that?
J: You need screen real estate to do things like a music store. Portable devices are not perfect for everything, even with 'Net connections.
M: The market share for Apple has not increased dramatically; why?
J: We ask ourselves that a lot. (Audience laughs.) We serve three primary markets: consumers, education and creative professionals. The pro market has been suffering economically for the last few years, same with education. We've more than doubled our share of the consumer market, it's now between 5-10%.
M: A lot of people think given the success you've had with portable devices, you should be making a tablet or a PDA.
J: There are no plans to make a tablet. It turns out people want keyboards. When Apple first started out, "People couldn't type. We realized: Death would eventually take care of this." "We look at the tablet and we think it's going to fail." Tablets appeal to rich guys with plenty of other PCs and devices already. "And people accuse us of niche markets." I get a lot of pressure to do a PDA. What people really seem to want to do with these is get the data out. We believe cell phones are going to carry this information. We didn't think we'd do well in the cell phone business. What we've done instead is we've written what we think is some of the best software in the world to start syncing information between devices. We believe that mode is what cell phones need to get to. We chose to do the iPod instead of a PDA.
M: How many iPods have you sold?
J: We passed the 700,000 mark recently, will probably sell 1 million by some time this summer.
M: Do you have plans for movies on the iPod?
J: I'm not convinced people want to watch movies on a tiny little screen. To paraphrase Bill Clinton, "It's the music, stupid, it's the music!" Music's been around for a long time, will continue to be, it's huge. Not speculative, a real tangible market.
M. Why were you the company that was the last to figure out MP3s?
J: Apple invented FireWire. Then, the only company that forgot to put it in something was Apple. We addressed that with iMovie, and we saw that the brass ring was to be able to create a DVD. We were the first ones out with that. This music thing happened on the side when weren't paying enough attention.
M: Apple was associated with piracy in the recent past.
J: Yes, the slogan was "Rip. Mix. Burn." Some industry executives—who did not have teenagers living at home—thought this meant "rip off." They went to Washington, held us up in effigy. That's not what it meant. It meant rip it to your hard drive. We care deeply about video editing, we care deeply about music. When we did the iPod, we thought this thing could be the coolest thing in the world, and it also could be a theft shuttle. So we crippled it.
M: You could say you crippled it for an honest person. You walked a middle path.
J: We did, we crippled it in a modest way. If you want to get around it, you can. I guarantee you, there's a way to hack anything.
M: Were you looking ahead toward working with the labels?
J: That crossed our minds. (Audience laughs.) We understand about intellectual property issues. We make software.
M: Why did the labels do a better deal with you for the Music Store?
J: The content industry and the technology industry never have understood each other. They're like ships passing in the night. One of the greatest achievements of Pixar was bridging this divide. One of the most important things record companies do is pick which of 500 people will be the next Sheryl Crow. If they don't do that well, the rest of it doesn't matter. It's not surprising that they didn't understand Napster, or that distributing content over the 'Net was going to be big. We approached them initially and they said go away. About nine months ago, we began talking to them about this middle path. One of the things that appealed to them about Apple was its smaller percentage of the market, its control over hardware and software, its ability to be sued.
M: (Suggests that Jobs demonstrate the Music Store.)
J: How many people have never seen the iTunes Music Store, show of hands? (About 1/2 the room. Jobs gets up and demos the Music Store.) It's important and unique to make it easy for a user to find and organize her music library. (Funny moment when software wouldn't recognize Jobs' password. Demonstrates one-click song purchase.)
M: If your seven year old gets on this and starts downloading, you're hosed.
J: Well, you've got a lot of great music.
M: What happens if you upload it to Kazaa?
J: Songs will only play on three Macs, so it won't be very interesting.
J: (Shows how fun it is to look up all the alternate versions of an old classic like "One for the Road:" Willie Nelson, Billie Holiday, Bette Midler, Frank Sinatra. You always hear about how mesmerizing Jobs is as a speaker and presenter. It's especially apparent as he cycles through these versions of "One For The Road." His joy in the coolness of the software is palpable and infectious. Demos the "browse by genre" feature. Pulls up Barry Manilow's "Copa Cabana" at Walt Mossberg's request, because he says it's Kara Swisher's favorite.)
M: By the end of the year, everyone's going to have something like this. Microsoft, Real. What happens when everyone has it?
J: Maybe these guys are a lot smarter than us, they probably are. But it's really hard to get the rights you need from the labels, it's really hard to write the software, and you need a usable jukebox. We'll find out, but I think it might be a little harder than it seems.
Audience member: Where are we when it comes to speech as a user interface?
J: Speech has always been five years away. Most of the smart people in the field I know have gotten out of it. Even 1% error drives you nuts. Everyone has groups working on it, but it doesn't look like it will be real anytime soon.
Audience member: Does Apple plan an equivalent of a breakthrough application like the Music Store for Wifi/wireless?
J: We've sold a lot of WiFi products. We were the first to ship 802.11g earlier this year, and this is clearly the next standard due to its compatibility. We've built it into the computers and software so it's seamless.
M. Except in this room. (Audience laughs. I keep typing and suppress a growl.)
Audience member: Much of the music industry's growth has come from unwanted bundling. It would seem that that industry is heading for a huge leg down on that front.
J: That's the conventional wisdom but I don't think it's true. Over 1/2 the tracks the Music Store has sold were bought as part of complete albums.
M: Do you think the high rate of album purchases is just a function of what people are used to?
J: My personal belief is a significant share of the songs being sold still will be albums. Until now, you could only buy about 20% of a record label's inventory because most of the catalog wasn't on the record store shelves. I expect that the catalogs are going to be worth a lot.
Audience member: What would you do if you were seventeen and starting over?
J: (Jobs talks a bit about his diverse interests, especially at that age.) Intellectually the most exciting thing to me is bioscience.
Audience member: Has Apple thought about finding a way to make medical information more accessible and personal?
J: No, but that's interesting and something our industry hasn't paid enough attention to.
Audience member: What has been your hardest decision in last six years?
J: Letting people go is always the hardest. When I came back to Apple, it was in tough shape, and we had to change the management team. Fortunately, there have been no big recent layoffs, we've decided to innovate our way through this downturn.
(Next up: Meg Whitman and Barry Diller.)
