February 2011 – purple motes

classifying communications services

In 1880, the British High Court held that the telephone was a telegraph under British law. The judgment in The Attorney-General v. The Edison Telephone Company of London:

Held, that Edison’s telephone was a ‘telegraph’ within the meaning of the Telegraph Acts , 1863 and 1869, although the telephone was not invented or contemplated in 1869.

Held, also that a conversation through the telephone was a “message,” or at all events a “communication transmitted by a telegraph,” and therefore a “telegram” within the meaning of those Acts; (LR 6 QB D244)

These holdings seem ridiculous now, when only 28 telegraph lines appear in Verizon’s 2008 regulatory account of its interstate communications demand. But if you read the Court’s decision, you will find it reasonable and well-argued.

Attorney-General v. Edison turned on statutory interpretation. The key statutory text was the Telegraph Act of 1869, s. 4:

The Postmaster-General shall have the exclusive privilege of transmitting messages or other communications transmitted, or intended for transmission, by any wire or wires used for the purpose of telegraphic communication, with any casing, coating, tube, or pipe inclosing the same, and any apparatus connected therewith for the purpose of telegraphic communication, or by any apparatus (other than such wire) for transmitting messages or other communications by means of electric signals.

The Court read this statute to grant the Postmaster-General a monopoly on any apparatus for communications by means of electric signals. It judged the telephone to be such an apparatus. Given the rudimentary development of constitutional interpretation of that time, reaching any other judgment would have been quite difficult.

The Telegraph Act of 1869 foreclosed a broad realm of future innovations without any good reason. Given that the telephone wasn’t contemplated in 1869, no specific characteristics of the telephone could have justified granting the Postmaster-General an exclusive privilege to it. Freedom of the press and freedom of association are deeply rooted freedoms in Britain. Not interpreting the Telegraph Act of 1869 with respect to the electrical technology of that time means that it potentially threatened the future practice of press and associational freedom. Policy makers might take such communicative freedoms for granted while writing statutes that undermine them, or while literally proposing their abolition. Courts can usefully insist that a new law not project constraints on wholly unknown communications possibilities without the law explicitly accounting for established communicative freedoms.

media business model innovation

In this time of media industry turmoil, Gertrude Berg’s long and successful media career highlights a variety of possible business models. Berg began her career in 1929 with a fifteen-minute radio show, The Rise of the Goldbergs. She wrote this show and also starred in it. By 1931 she was earning $2,000 a week from the show. She also developed product tie-ins, including a line of dresses and a cookbook. Her show became the second-most popular show on radio, behind only Amos ‘n Andy. Berg, with considerable persistence, ultimately succeeded in moving her radio show to television. She also starred in a related film and acted on Broadway. She became a widely recognized personality and the highest earning woman in the U.S.

Berg directly plugged sponsored products. Each episode of The Goldbergs opened with Berg, acting in character and within the set of the show, promoting the sponsored product. These promotions undoubtedly were much more valuable than advertisements distinctly separate from the programming. Such sponsorships were a common feature of radio and television programs until the late 1950s.

Advertising sponsorship revenue in the first half of 2010 was only 2% of total reported U.S. Internet advertising revenue. Sponsors no longer need separate media companies to communicate with their potential customers. But what Gertrude Berg offered sponsors was not just radio or television time and an assembled audience, but also the acted personality of Molly Goldberg. That latter asset would be valuable even in today’s much different media circumstances.

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COB-56: bureaucratic leadership

Jim's Coat of Arms, by Tom Sawyer In a bureaucracy, merely getting the job done isn’t sufficient. The job must be done in the regular way, as described in authoritative books. Bureaucrats fulfilling requirements for continuing bureaucratic education credits should study in detail Tom Sawyer’s actions in freeing his imprisoned, formerly enslaved friend Jim. Rather than reveal that Miss Watson’s will had manumitted Jim, Tom Sawyer worked hard to free Jim by the books. Tom persevered despite his friend Huckleberry Finn’s misgivings. Concerning just one part of the job, Tom explained to Huckleberry:

“It don’t make no difference how foolish it is, it’s the right way — and it’s the regular way. And there ain’t no other way, that ever I heard of, and I’ve read all the books that gives any information about these things. They always dig out with a case-knife — and not through dirt, mind you; generly it’s through solid rock. And it takes them weeks and weeks and weeks, and for ever and ever.”[*]

Huckleberry Finn lacked a formal education. Nonetheless, he had much common sense: “if it’s in the regulations, and he’s got to have it, all right, let him have it; because I don’t wish to go back on no regulations.” Tom Sawyer and Huckleberry Finn are not just great American heroes; they are also great bureaucratic heroes.

In other bureaucratic issues this month, no one should doubt that Nokia, a venerable business organization founded in 1871, will remain a communications industry giant. Nokia CEO Stephen Elop recently described, in a coded way, Nokia’s key business advantage:

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.”

PowerPoint presentations are ubiquitous in bureaucracies around the world. The demand for PowerPoint presentations is growing rapidly. Nokia is well-positioned to meet this huge demand.

The Nokia developer community has taken the lead in developing plans. Nokia Plan B has attracted considerable attention. A large number of additional prototype plans briefly were visible. Now, however, these prototypes have been hidden behind an apple-like skin of secrecy. When these additional plans are formally introduced publicly, they are certain to create a stir among consumers.

Microsoft, another leading example of bureaucracy, recently suffered a minor setback with a Windows 7 Phone update. The underlying problem appears to be lack of sufficient options in the UI for a firmware reset. An insightful article explained:

Those unfortunates with apparent firmware corruption can try forcing the phone into download mode (turn off the handset, then turn it on while holding the camera button and the volume down button) or firmware reset mode (turn off the handset, then turn it on while holding the camera button and volume up button; then choose the “format” option) or perhaps even a different download mode (turn on while holding camera, volume up and volume down).

With a wider set of options, users are more likely to find such mobile games entertaining.

Who would you trust more with your own personal genetic information, yourself or the American Medical Association? The answer is obvious. To avoid the risk of mistakes, the American Medical Association apparently is seeking to forbid persons freely gaining access to their own genetic information. No person, including yourself, cares about you like a bureaucracy does.

That’s all for this month’s Carnival of Bureaucrats. Enjoy previous bureaucratic carnivals here. Nominations of posts to be considered for inclusion in next month’s carnival should be submitted using Form 376: Application for Bureaucratic Recognition.

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[*] Adventures of Huckleberry Finn, Ch. 35. The subsequent quote above is from the same chapter.

Wednesday's flowers

signs of spring

artists and performers outperforming sound recordings

The U.S. recorded music business has been in steep decline over the past decade. Compared to ten years ago, U.S. recorded music sales (in 2009 dollars per capita) in 1999 ($71) was nearly three times greater than the corresponding figure ($26) in 2009. In gross nominal terms, music sales declined 46% from 2000 to 2009. These statistics are calculated from Recording Industry Association of America (RIAA) shipment estimates. They concern reported net shipments valued at estimated list prices.

U.S. Census Bureau statistics on the sound recording industry differ considerable from the RIAA’s, but also show a large decline. According to the Census Bureau’s annual and quarterly services reports, employer firms classified as engaged in “integrated record production and distribution” had a 27% decline in nominal revenue from 2000 to 2009. The underlying statistics have different coverage and different potential biases than the RIAA data. The Census data corroborate the big-picture view from the RIAA estimates.

Census Bureau figures for performing arts revenue indicates that artist and performers have done well relative to firms producing sound recordings. Among independent artists, writers, and performers organized as a firm with at least one employee, aggregate firm revenue rose 67% from 2000 to 2009. Apparently the added value of media production has declined. Put differently, value has shifted from media artifacts to the creative symbolic producers. That’s consistent with the growth of low-cost, highly effective new media channels.

Data: U.S. sound recording and performing arts revenue, 1998 to 2009 (Excel version)