Every year, I make a set of predictions as to what the new year is going to bring. At the end of year, I also review how close or far off the mark I’ve come. It is now time to review the 2011 edition of predictions, which I made on the 3rd of January of this year.

Politics

Last year’s leading internet political story was the rise of wikileaks and, as such, my views were impacted by it. Surprisingly, there has not been that many wikileaks-like organizations arising on the internet. This may be due to the fact that there just aren’t that many people leaking information.

The power of wikileaks, however, could not be denied, and my predictions of protests arising out of cablegate were right on the mark. This year, cablegate highlighted some of the abuse of governments in Tunisia and Egypt and some of that evidence was part (but only part) of what led to radical changes in those northern African countries.

On the regulation end, the FCC has indeed gotten more aggressive, with its more visible move being its attempt to block the acquisition of T-mobile by AT&T. However, to my surprise, there hasn’t been that much complaining from either political party about this rejuvenated enforcement effort.

Meanwhile, the rise of SOPA is clearly in line with the prediction that the entertainment industry will push for more internet regulation.  However, it is relatively easy to predict such thing as it appears the entertainment industry is forever locked into the concept of a more regulated internet. They basically see the internet as competition and would love nothing more than to strangle it to death.

So looking at the political end of the spectrum, I’ll give myself points for good prognostication.

Business

In that category, I decided to stick my neck out on the concept of a public-less IPO and while it was essentially something that happened with Facebook, the concept did not really take off for other companies as they decided to go the public route instead. My expectations were really that IPOs would not come until very late into the year and I was surprised by the likes of LinkedIn, GroupOn, and Zynga managing to get into the market relatively early.

Furthermore, I was pretty much off the mark when it came to NFC. NFC is (and has been) a promising technology but 2011 was not a breakout year for the technology. At this point, only a few select Android models seem to support it and there seems to be little traction from the market around it. While Intel invested in NFC, it may be a technology that grows into usage without having a particular breakout year.

The rise of cord-cutters did happen but not in as large an amount as I suspected. While this is a trend that continue to grow, it is still sitting on the edge and hasn’t gone mainstream yet. However, its a trend I will continue to monitor closely as I suspect this will move to the mainstream in relatively short order.

All and all, my predictions on business were off the mark. Maybe I’ll do better next year.

Technology

Gamification continues to grow but did not really have the big breakout year I expected. While more and more companies are continuing to integrate game-like behavior in their applications and workflows, we are starting to experience a period of consolidation in the space, with bunchball being one of the larger players. This seems to highlight that this space is one where only a couple of major players will arise and smaller players are already running out of steam. The focus around developing gamification models for computer-based applications may be part of the reason for this failing to move forward as the trend is increasingly to more and more applications moving to a mobile-first model.

The scan and shoot revolution I predicted quietly made its ways into the mainstream, with smart phones being the new weapon in every shoppers’ belt this christmas season. It’s one of those quiet revolution that arrived in 2011.

And finally, the big bet I had made on a Microsoft Nokia partnership came in mid-february, when Nokia announced that it would focus all its efforts on developing exclusively for the Microsoft platform.

The internet backlash I was expecting for this year did not come to pass. There may yet be more power in the current positive cycle that has been covering our industry and, as such, it appears that the possibility of a backlash against our industry remains a remote but slim possibility at this time.

So all and all, I’d get a barely pass on the technology side.

Arts and Entertainment

The recent multi-billion contract extensions for NFL broadcast rights are in line with my prediction that big event entertainment is becoming the core focus of the broadcast entertainment world. The continuing effort to support the existing model will increase this trend, giving more and more power to producers of real-time events.

Remixing, and Danish coolness, did not come of age in the past year, however. While groundbreaking on Bjarke Ingels first American project happened in New York, Danes haven’t really moved to the center of popular consciousness. The same is true of remixing: while supercuts are still making their way through youtube but, as a whole, remixing is still not something that has made it into the mainstream.

Maybe I should keep to the margins when it comes to making big predictions around arts and entertainment.

All and all, for this year, my performance at predictions has been average. I will try to do better for the 2012 year.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2011 Predictions: The scorecard. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

This week, Amazon unveiled a new line of digital consumption devices under the Kindle moniker. Along the way, it may have provided us a view of the future of the book.

A short history of the book

At some point between 7000BC and 4000BC, writing appeared and, along with it came the idea of record keeping. Clay tablets then papyrus made such records more portable but required that each record be manually created. Meanwhile, printing popped up in China in 2000BC and South America around the same time (Chinese had a system to print on wood while meso-American cultures used some kind of loom to “print” using knots). Papyrus was replaced by parchment but still required manual transfers of text, making books a rare good that generally was only available to rich (and therefore educated) people.

At some point between the 2nd and 4th century, paper replaced parchment and monasteries starting generating bigger books, with scriptoriums appearing in many places. Because of their close ties to the church, the scriptorium mostly produced religious texts. The rise of paper over parchment however, made books cheaper, which meant that their diffusion became somewhat wider.

And then it was 1440!

That year, Johan Gutenberg was inspired to combine a wine screw (used to press grapes or olives) with paper and hot type to create the first priting press. Books could now be reproduced quickly and cheaply, allowing for substantially lower costs and more widespread distribution. The rotary printing press was introduced in the 19th century, speeding things further, but apart from that the printed book one gets today is basically produced in the same fashion as it was in 1440.

In the 1930s, the paperback book appeared, making printed goods a complete mass medium. The book world then became stratified with paperback at the bottom of the pile, aimed at mass distribution, hardcovers in the middle as somewhat better produced and more durable, and collectible books, produced in small quantity and created as art objects to be appreciated by collectors.

Then came e-readers!

The Kindle arrives

E-readers were initially a curiosity, offering new technology to read books but mostly without having any content on them. But in 2007 Amazon, which had already established a dominant position in selling printed matter, unveiled the Kindle, an e-reader that had access to a wider collection of new titles than any other. The company introduced a second version in 2009 and the low price of the device, combined with access to hundreds of thousands of books help fire up a new revolution for books, with readers getting more interested in the device.

Barnes & Noble, a large American book chain, introduced the Nook, a competing device that offered e-book reading in color, something Amazon did not have, as it chose e-ink, a technology that reproduces the printed page but is mostly available in black-and-white.

2011 the year the printed book changed

I think future generations will look at this year as the year the book radically changed. Already, the data seems to point to a decline in the sale of paperback books and trends seem to indicate that consumption of certain book types has moved to e-readers as the preferred form. I was recently chatting with a book seller for one of the largest publishers in the world and he remarked that thrillers and romance novels now sold more widely on e-readers than they did in print. Another person recently told me (and a quick check on the New York subway confirmed) that women are the prime users of e-readers right now, with the tablet market being more male dominated.

So if large segments of the population are moving to e-readers, what’s to become of the printed book? Is it the end of the road for something that has existed through most major technological changes? Will centuries of history go digital? Will future generations see the latest Harry Potter volume in museums, scratching their heads as to why someone would think of carrying something as heavy to read it?

Two paths for the book

What I see is something a little different. I think we’re about to see the book split down two paths and people will go down one or the other depending on how they feel about books.

Before I look at the two paths, I must highlight that there are two types of book readers:

• On one side are people who look at the book for its content, only concerned with what stories or facts are contained within the book. Those people don’t care about the distinction between paperback, hardback, or e-text. What they want is the words and sentences, not the other stuff that comes along with the book.  Those people tend to see books as information vessels to be discarded once the information has been consumed.

• On the other side are people who look at the book as a total experience, moving from the cover and its layout into the book, its size, its type, and finally its content. Those people look to book as complete objects that cannot always move to another form without changing. Those people tend to have larger libraries at home, attaching certain time periods and feelings to books.  They may pull a particularly worn tome from a shelf and be reminded of the time they acquired it, the time they read it, the people and locations they frequented with that book.

I am not assigning judgement to either category but I wanted to create a clear distinction because it has relevance to what happens next to the book. And let me get into that now:

• Death of the mass market printed book: I believe the vast majority of people fall in the first category I highlighted. Looking at the trends, it seems that price has generally been an issue with books and people who do consume them tend to consume them mostly as paperback. I’d venture that within a generation, paperback will disappear, and those texts will be moving to e-readers (I’m also assuming that e-readers will continue to drop in price until the point where they may be bundled with a first purchase of a book). This does not bode well for large chains that are selling books as they will see those revenue evaporate as more people move to e-books. In the US, we’ve already seen the death of Border’s bookstore and I suspect that it’s only a question of time before Barnes & Noble suffers the same fate (unless it adapts and finds a way to sell their nook for substantially less than Amazon does the Kindle).

• Survival of the book as object: However, the second group of readers will continue to exist and that group is about to go through interesting times as books become rarer but also more prized. The newfound rise of the book as object is more of a return to the pre-paperback days when libraries were as much status symbol as they were about learning. Books will be produced in substantially smaller quantities to appeal to this crowd, forcing their price up and their margins down. However, authors who are printed will be seen as more influential than authors who are only published digitally.

In the next entry, I will look at some of the impact those changes may have on society as a whole.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The future book. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Over the last couple of decades, we’ve seen technology have a major impact on all aspects of our society and I’ve tried to chronicle some of those impacts. This year, I’m starting something new by trying to classify the trends I’m looking at and attach them to the broader categories of interest.

So without further ado, here are some of my predictions for this coming year.

Politics

Wikileaks, the phenomenon

Last year, Wikileaks showed that governments may now have to find new, and more transparent, ways to operate in the age of the internet. However, long-time internet observers may have noticed that the US efforts to shut Wikileaks down seem very similar to the RIAA’s efforts to shut Napster down exactly a decade ago. I suspect that the net impact will be similar, with more Wikileaks-like organizations arising left and right.

Meanwhile, the cablegate scandal will continue to reverberate as more revelations from the cables will lead to details about the inner working of governments around the world. This will eventually lead to internet-organized protests making it into the real world, probably starting first outside the US and eventually making their ways around the globe. The protests outside the US will lead to the toppling of at least one government either in the middle east, Africa or South America.

Internet regulation at a crossroad

This year will be a year marked by several fights over internet legislation. I suspect that the US will see increasing clashes between Republicans and Democrats over the level of control the FCC has the right to assert on the Internet and over how much the government can force companies to maintain a level playing field on internet lines. Along the way, we will see a more aggressive and active FCC, making many heads turn as it starts becoming a stronger enforcer.

In several countries, we will see discussion of regulations trying to patch legislative holes created by the rise of Wikileaks and there may be some renewed attempt to increase the control of government over press organizations as a result of these regulations.

The fight over online piracy will also extend from discussions of music piracy to increasing movies, television, e-books, and e-magazine piracy. This will be the start of a new push by the entertainment industry to regulate the internet further.

Business

The public-less IPO

With last-year’s announcement of large-sized funding rounds by the likes of Groupon and Twitter has shown that there may be a different way for early investors to get some cash out of a company than a sale or Initial Public Offering. I suspect that it’s only a question of time before someone creates a Special Investment Vehicle (SIV) that allows for a private investors to invest in private companies like Facebook, Zynga, Twitter, GroupOn, etc… Along with the rise of secondmarket, I believe that 2011 will see large privately-held companies offer stock to investors through means other than a public offering or a sale.

Update: I wasn’t finished writing this entry that Goldman Sachs announced a Special Purpose Vehicle to allow some of its clients to invest in Facebook.

NFC payments come of age

It’s been many years in the making but I suspect that 2011 will finally be the year of touch-payments via Near Field Communication devices (NFC). A few years ago, I was involved in an effort to bring NFC, the little key-fob or specialized payment cards, to the New York taxis. Similar trials have happened in the New York subway system, and in some point of sale systems but, over the last few years, people have often asked me about my key fob payment tag as it appeared I was the first user they witnessed using one.

With NFC chips slated to be put into the next generation of iPhones, Android phones, and Blackberry phones, 2011 may finally be the year when the potential of NFC commerce is enabled.

A dent in ownership

Netflix and Redbox have almost destroyed the concept of owning DVD disks. Pandora has lowered the need to buy music.  Zipcar has made not owning a car possible for a lot of urbanites. The real estate crisis has made owning your own place seem less cool.

All and all, it seems the trend is moving, to a large extent, away from physical ownership of goods and towards either sharing models or outright rentals. We will see this trend continue to grow over the coming year. Some of the things to watch out for are the rise of the cord-cutters, where people replace their cable TV offering with an online only offering because of the a-la-carte pricing nature of online efforts. Another trend to look at is e-book lending with the initial efforts or the Nook and Kindle readers offering sharing capabilities on select titles.

Technology

Gamification

This, in my view, is part of a larger megatrend I highlighted a few weeks ago. I believe that 2011 will mark the beginning of a very large trend in technology to make every application more like a game. Individual user acceptance has ingrained itself in our society and we will now see this phenomenon starting to take place in the enterprise space. Expect much talk of enterprise application developing game-like features this year but real implementations will only see the light of day towards the end of the year at best, with more of the serious implementations happening in 2012.

The mobile revolution continues

The introduction of the iPhone 3 years ago shifted the whole online landscape to mobile devices. Yet, for all the discussion of mobile, it still has been a phenomenon sitting on the edge, as smart-phones were on the more expensive side of the price spectrum. Except all this to change this year, with many Android-based phones being available for free or almost free, putting any feature phone at a substantial disadvantage.

At the same time, get ready for the shoot-and-learn revolution as QR-codes, tagged objects, and smart tools like Google Goggles gain more mainstream acceptance. People will increasingly scan or shoot to learn more about or compare a physical good to information available online.

Last but not least in this is that I suspect Microsoft will make a major move in the space by either acquiring or teaming up with Nokia for its partnership and distribution footprint, making Windows Phone 7 the only OS running on Nokia phones.

Internet Backlash

The internet industry has benefited from a great amount of support over the last 2–3 years. Companies like Facebook, GroupOn, Zynga, and Google have been able to move along with high levels of consumer acceptance. I suspect that this year, we may start seeing more people rethinking some of their web 2.0 choices, disclosing a little less information on Facebook, or becoming more wary of the power of Google. We will also see the rise of digital-free zones, where people agree that the use of mobile devices or computers is not allowed.

We will also see many people questioning the validity of many of those internet companies and bringing up the specter of another financial bubble. Much of this talk will focus around internet companies that are looking to go public towards the end of the year.

As more people get impact by the stress that can be caused by our always-on culture, we might also see the rise of interest in digital down-time, time set aside to go offline and recharge before the next session.

Arts and Entertainment

Big event entertainment

There will be two major trends in fighting the continuing fragmentation of the media landscape. On the one hand, large media companies will continue to flock to the tried-and-true, remaking or making sequels to movies and TV shows that have been successful. Formula-based entertainment will continue to be produced but with an ever-decreasing return on investments.

On the other side of the spectrum is the rise of what I would dub “big event entertainment”, where media companies will attempt to build up their media product as an cultural event. In the US, the launch of the Oprah Women Network will be such an event. Other forms of media will try to build up those events through time-based models, creating sport-like offerings (think American Idol) through all forms of media.

Those efforts are all attempts at keeping the old system of release windows in place so that existing revenue streams are not threatened by the ubiquity of the internet access.

Remixing comes of age

Remixing has been common in music, and video remixing has been a largely underground phenomenon on the internet. 2011 will be a banner year for video remixing as the likes of Pogo will start entering the mainstream. I suspect that mainstream artists will start leveraging some of the same techniques in their efforts, bringing video remixing to the masses this year.

As the 2012 US presidential primaries get underway, we will also see an increasing amount of online remixing of politicians speech, sometimes misrepresenting their positions.

Danish cool

This is kind of my bleeding edge prediction but I believe that 2011 will be a big year for Denmark. Copenhagen-based architect Bjarke Ingels has recently opened a new office in New York. Meanwhile, Noma, a Copenhagen-based restaurant, was recently named as one of the top restaurants in the world. And many cities look to Copenhagen as an example of how to organize large-scale projects for public transportation (one third of the people in Copenhagen ride bicycle to commute).  And Denmark has established itself as a leader in the wind-generation and green technology space. So I think all this will add up to Denmark being seen under a new lens and may even be considered cool in 2011.

We’ll see at the end of the year how well I did on all those predictions. in the meantime, feel free to chime in in the comments or on twitter (use the #tnlpredicts hashtag so I can track things).

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 11 Predictions for 2011. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Some people have argued that its death was foretold by the introduction of the iPhone a the iPad but I would say that those were only components in a trend that has been going for a lot longer.

What is ubiquitous computing?

In the late eighties, researchers at the famed Xerox PARC research started thinking about the implication of the computer disappearing. In their views, information from computers would start melding into the surroundings without being thought of as part of a computer. In that sense, they saw the world we now live in 20 years ago.

Think of how you’re reading this. It may be on a computer, a tablet (like the iPad), a e-reader (yes, TNL.net is now on the Kindle), a mobile device (blackberry, android, or iPhone), or a TV. Each of those items provides a screen that can be connected today to access information from the Internet.

The increased numbers of sensors in our world is only furthering this trend. For example, at their most basic level, you have barcode on supplies in the grocery store. Every time these bar codes get scanned, their presence is translated into bites on a machine somewhere, to be tabulated and presented. You don’t generally think of the cash register at your local supermarket as a computer but it is one.

Your telephone (either wired or wireless) also provides tremendous amounts of data about you and what you’re doing. For example, your phone company probably has as good an understanding of your social graph as facebook does since it tracks who you call, how often, and for how long.

In New York, as in a lot of European cities, subway trains now have sensors allowing anyone to see where trains are, and get some estimate as to when they’re coming. Once again, bits of information presented in a computed form on a screen like this (Hat Tip to Second Avenue Saga):

Source: Second Avenue Saga

So information now surrounds us in a number of ways. This means that the computer, as an information device, will lose its prevalence since there are now other ways in which we can access the information.

But how will we interact with it?

Bye Bye Keyboard, Bye Bye Mouse

People in the mobile camp will argue that touch is the way to interact with information. The answer is correct but only partially so. While touch is the most efficient way to interact with a screen you hold (as proven by the iPad, iPhone, and now most smartphones), it is not so good when it comes to screens you are not holding. Steve Jobs, in the introduction of the new Macbook Air, said so himself.

So what is the rest of the world to do in order to interact with those other screens. Some solutions, like the new Android TV, look to interacting with those with new remotes that look like keyboards. They want to bring more of the computer to those other screens. For example, Google TV devices offer a wide range of keyb0ard-like remotes.

This is the wrong answer because the majority of consumers are not interested in that form factor (I am talking from experience here as I have a computer connected to my television with a Logitech DiNovo Mini keyboard and it has failed every single person who has come in. I’m the only one who can really get a show started on there.)

However, the right answer comes from a player everyone has all but dismissed: Microsoft.

A resurgent player

It’s been a rough decade for Microsoft. Badly singed by an Antitrust lawsuit, the company has become hesitant and tentative in its approach to the new post-PC world. It has also been saddled with a tough anchor: Windows. The problem Microsoft has is that it continues to hang on to the belief that everything needs to tie up to that platform.

And in doing so, it fails at most of its new efforts.

But there is one division at Microsoft that has somehow managed to avoid that curse: the gaming division. The Xbox has been a success because it hasn’t been saddled with the Windows background. The group threw out that mantle early on and developed a series of machines that were performing well in the environment they were designed for: the living room.

And now, they’ve introduced Kinect, a device that I would call as revolutionary as the iPhone was in the mobile market.

Source: Wikipedia

The revolution comes from the fact that the device introduces a new way to interact with a computer: without any physical devices. Their tagline (“You are the controller”) represents a brand new approach in defining interfaces for devices: whether it is voice or motion, the user is now brought closer inside the computer.

Extent the kinect to the next generation of screen and you now have non-portable computing devices you will interact without having to touch them. Wave your hand in the air and you can manipulate objects in those devices.

The end of the drive

This week, Verizon showed off their  technical prowess by showcasing how they could move files at a 10Gbps. To give you a sense of how fast that is, most computers today only operate at 100Mbps so what Verizon accomplished is roughly 100 times faster than the fastest network most people have experienced. The most advanced computers available on the market tend to top out at 1Gbps: they usually can move files at those speeds on local network but it’s rare to find networks that are connected to the internet at these types of speed. So what Verizon demonstrated is the future, a future where a 2 gigabyte file can be transfered in less than 5 seconds.

A few weeks ago, I told TNL.net readers that we were witnessing the beginning of the end for local storage. However, since then, I’ve come back a bit on that idea: local storage will continue to exist but mostly for caching purpose. In a world where you can move several gigs in a few seconds, it is more efficient to move data to the cloud, where it can be accessed from any device.

The rise of Work Computers

Based on all these trends, there is a more limited need for PCs. While the Personal computer was a great transitional device to the ubiquitous computing world, it is a device which suffers from some limitations.

For starters, there are the input methods. There is a clear reason why Apple didn’t make their devices any smaller than 11 inches and touted the fact that the Airbook had a full size keyboard: our hands don’t get any smaller.  So the keyboard and mouse, as entry device are gated by this fact and will be stuck in that mode for as long as we live.

But most people will not need a keyboard or mouse in the future. Except where text is concerned, the existing computer is getting close to having run its course: writers will keep using them (until the point where voice dictation software is good enough to replace the need for a keyboard) and programmers will continue to use a keyboard as an input device to program. Most every other people will interact with the devices either via direct touch (like the iPad) or via motion (like the Kinect).

Those uses will be primarily for “work” or pro-sumer type of purpose and other people will not have computers at home.

One gating factor: Power

The main challenge for most devices will, however, continue to be how to power them. To date, there has been some improvements in the battery space but those are not moving as fast as the rest of the technology world.

And we’re becoming more demanding of our devices.

For example, most smartphone users complain that their device lasts only a day or so on a full charge. But think of a decade ago. Back then, a device with a 1 Ghz process, 10–20 Gb of disk space, and about 128 Mb of RAM might have worked on a battery charge for about 2 hours. Those were powerful laptop back then but we didn’t seem to expect them to run all day.

Today, there is a lot of work going on around trying to get more out of the batteries we have and companies like Apple have worked on reducing the amount of power a device may ask from a battery: for example, the Macbook Air is a marvel in trying to figure out what to remove in order to ensure the devices squeezes more out of the battery.

Will the work computer disappear?

The last bastion of the computer will be the office. At this time, it is difficult to imagine people gesturing in front of their computers as a way to interact with them. More likely, tilted touch displays will become the new norm in offices (and by tilted, I mean that the screen would be on the desk at an angle of no more than 20–25 degrees). Those types of changes will take some time to make their ways into cubicles and may force business to even rethink the concept of the cubicle. The ones that have already will get a head start on their competitor.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Goodbye PC. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The Kindle Lawsuit

In my last entry, I pointed to the case of Justin Gawronski, who was mentioned almost as an aside in the New York Times article about Amazon deleting legally purchased and downloaded content from their users’ Kindle devices. At the time, I suspected that the deletion of annotations could eventually lead to lawsuits:

Beyond the irony of Amazon throwing a book like Nineteen Eighty Four down the memory hole (a large incinerator in that book), Amazon’s action raise troubling questions as to the ability of online providers to remove content they have not created. I leave it to legal scholar to assess whether Amazon could actually be considered to have infringed on the intellectual property rights of people whose annotations were removed along with the books.

Today, news comes out that this student is one of the plaintiffs in a lawsuit against Amazon, making this the first legal case to test what a cloud-based provider can and cannot do with legitimately purchased content. The complaint uses language similar to what I talked about:

2. With an uncanny knack for irony, Amazon recently remotely deleted any traces of
certain electronic copies of George Orwell’s “1984” and “Animal Farm” from customers’
Kindles and iPhones, thereby sending these books down Orwell’s so-called “memory hole.”

[…]

16. On or about July 16 and 17, 2009, Amazon withdrew from sale certain e-books,
including George Orwell’s “1984” and “Animal Farm.” Amazon then remotely deleted these ebooks
from purchasers’ Kindles and iPhones. In doing so, Amazon not only deleted the e-books,
but also rendered useless any electronic notes and annotations that consumers had made within
these e-books because the notes were no longer tied to the referenced or highlighted text.

While I had initially thought that the content was deleted, it turns out that the annotations are still available on the device, albeit without any context to them, which is what the lawsuit is now testing:

54. Plaintiff Gawronski and the Big Brother Work-Product Subclass suffered
damages because they created content on their Kindles within the purchased content that
Amazon deleted.

Most surprising is that the lawsuit did not look at Amazon’s infringement of its customer’s rights under the first sale doctrine. The first sale doctrine, which has been in place since the beginning of the 20th century, basically states that purchases can transfer a lawfully acquired copy of a copyrighted work without requiring permission from the copyright holder. Many people interpret this to mean that:

the copyright holder’s rights to control the change of ownership of a particular copy end once that copy is sold, as long as no additional copies are made. This doctrine is also referred to as the “first sale rule” or “exhaustion rule.”

It could be argued that, by taking the book away from its users, Amazon has controlled the ownership of a particular copy that had already been sold, even though no additional copy was made. It was surprising to not see the lawsuit also incorporating this point as it is probably one of the larger legal infrigements Amazon could be charged with when it comes to that incident.

The Apple Store and iPhone community

Meanwhile, while there are no legal rumblings yet around Apple’s treatment of its development community. With every incident of an app being denied access, it appears that a few more developers decide that, while the platform is exciting to use, developing for the iPhone is not worth the trouble. If it were one case, that could be considered a disgruntled developer; if it were two, that could also be ignored; but with every new incident, it appears another developer or group of developer decides that they’d rather not develop for the platform.

When I was in journalism school, we were told that when there is a high similarity between three different events in a very short time, we ought to pay closer attention as it could be a trend. When that similarity pops over and over again, as in the case of the iPhone development community, it seems like a slow grumble is turning into something more potent.

But of course, one could argue that such grumbles are really nothing to worry about, as long as Apple can continue growing its user base. After all, the company makes more money selling devices that it does from the revenue generated by the app store.

True to some extent but that particular issue starts falling on its face when one considers two important facts:

1. Selling applications through the App Store is probably a more profitable business (as costs associated to the sale, as represented by a percentage of the revenue is probably lower than it would be on hardware).
2. Prominent users are starting to complain loudly.

Of course, none of this is going to single handedly stop the growth of the iPhone but what is increasingly appearing is that Apple is having a potential communication challenge on its hands. A single disgruntled developer or disgruntled user cannot bring the product down but a continuous stream of complaints starts creating the appearance of wrong-doing, potentially undermining the long term success of the offering.

Apple is still thought of by the majority of the people as a cool company (as Google and Microsoft once were), a shinning beacon highlighting the power of innovation and capitalism. As it grows marketshare, what was once considered OK as a way to help the company compete against larger players (the aforementioned Microsoft) is increasingly being considered as arrogant and evil.

What does it all mean?

Of course, at this point, if you’re still reading, you’re probably wondering how this is an example of a new hope. The new hope is arising out of the fact that a largely quiet population is now starting to fight back against the over-reach of large corporations into what level of controls such corporations will be able to excert. In the case of Amazon, the class action has the potential of redefining what a company can and cannot do with a purchase device. Such decision could also establish some precedents as to the use of kill-switches in electronic devices (or invertly, give large corporations more power and legally codify the level of control they have been afforded).

In the public arena, the push-back Apple is encountering from both its developer and early adopter communities could help establish new boundaries as to what is and isn’t accepted in terms of controlling access through online gateways (in the case of Apple, that gateway is the App store but one could argue that the social rules established around the App store could eventually extend to the kind of perception around what is and isn’t acceptable in terms of consumer ISPs blocking internet sites).

With each event, the online community is also establishing some precedent as to what will be considered acceptable in an environment where all data is stored not a user’s machine but on some remote corporate server.

In each of these individual cases, awareness is raised and with every other skirmish, more people become aware of the issues at stake. It is my belief that, as more people become aware, more people will require less corporate control and more individual control. And that gives me hope.

Update: The government is now looking into Apple’s removal of Google Voice related apps from their App store. This is getting interesting.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Cloud Wars — A New Hope. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Traditionally, the model or rent vs. own has been one that most consumers and companies have mostly considered when it came to real estate (and traditionally, people have looked at renting real estate as more normal than owning, with the possible exception of the last couple of decades, during which real estate ownership appeared more attractive). But today, that concept seems to be increasingly extending to other arenas.

Netflix

For example, Netflix has build a very solid model around renting movies over the Internet. True enough, many people will mention that rental of media dates back to the early days of the video store and were a substantial component in the rise of companies like Blockbuster (born Blockbuster Video). True also that said companies have been falling on hard times lately. But the substantial difference between what Netflix offers and the traditional rental model is focused on convenience: one could argue that Netflix’s original business model was largely centered around the distribution of physical media (the DVDs themselves) but I would argue that the true success of Netflix will be due largely to its digital distribution model, allowing for instant distribution of movies and TV shows with the click of a few buttons. The instant (and the emphasis here needs to be put on instant) access to a large media collection can easily call into question the concept of owning similar content in a physical form: What is the advantage of having a physical copy of a movie sitting on your shelf, collecting dust most of the time, when the same movie is available at the touch of a remote control button from the Internet?

However, the challenge in such concept is that once someone stops paying Netflix, the access to said collection disappears. An owned movie is paid for upfront and can be watched time and time again by a consumer but a rented one can only be watched as long as one keeps paying the owner renting party.

Apple

With Apple’s recent move to sell music tracks without any digital rights management features on it, one could safely assume that Apple is not in the rental business. Apple’s move was largely a response to Amazon’s own marketing around selling DRM-Free music but it is interesting to note that, while the restrictions on music went away, the same was not true of similar restrictions around music videos, movies, and TV shows. The lock-in that appears here is similar to that which exist with Netflix in that if you decide to end your relationship with Apple, the media you bought will stop working. Under such restricted mode, can one really assume that he/she owns the media he/she purchased?

Similarly, Apple is renting out, in partnership with telecommunication vendors like AT&T, an ingenious device called the iPhone. The reason I would call it a rental model is that use of the device is limited by the partners to people who have paid the initial fee and continue to pay a fee to the telecommunication provider on a regular basis. It is a model that exists for most phone providers, as devices tend to be tied to a specific vendor. Once again, people will highlight that it is possible to get rid of that lock-in with software but I will counter that doing so is a violation of the contract terms of the device, voiding warranty and your agreement with Apple. To claim otherwise would be similar to saying that everyone has access to as much money as they want, as long as they are willing to rob banks. (In the interest of disclosure, I should highlight here that I own an iPhone which is not connected to the “authorized provider”.)

Going a little further, Apple gets to lock-in who can and cannot play on an iPhone, only allowing developers who submit themselves to Apple’s whim and offering what is sometimes only temporary access to the userbase as release of every update to a product still has to go through Apple’s review. In other words, Apple gives developers temporary access to the iPhone user base, an access it can choose to revoke at any time.

The Amazon Kindle

All this conversation bring us to Amazon and a couple of its products, starting with the Kindle, which serves as the incentive for writing this lenghthy post. The Kindle, much like the iPhone is a pretty impressive device, bringing several technologies (always on device, e-ink) out of the labs and into more mainstream consumption. And like the iPhone, it has both fans and detractors. And once again, the Kindle offers an interesting kind of lock-in, allowing you to read titles purchased on the kindle (or through the iPhone kindle software) but allowing you access for only as long as you keep a relationship with Amazon. Where the model moves to rental is around magazines and newspapers: you may purchase subscriptions but, should your Kindle be completely full as a result of your subscription, you may loose access to the back issues you “own”.

But Amazon’s move to a rental model is not just around the kindle device. On the consumer end, Amazon now play in the same spaces as Apple and Netflix, renting out or selling digital versions of movies, TV shows, and music.

Renting at the Enterprise Level

In other example of the evolving trend moving from the consumer to the enterprise space, Amazon is now renting itself, or rather portions of its own operating capacity, to anyone willing to pay a fee. Its infrastructure (storage, computing, and databases ) are all available to organizations who are willing to put their application on top of Amazon’s own servers. Amazon offers similar solutions for payment services, and goes as far as providing space in their warehouses along with complete pick, pack and ship capabilities.

The infrastructure component is part of a trend in which enterprise vendors are now providing data center capabilities on a per data transaction costing model. For many Chief Technical or Chief Information Officer, it changes the basic questions around data center from a “Build vs. Buy” to “Build vs. Buy vs. Rent”.

In the process, it also changes the dynamics of how a business can be built as a substantial portion of a company’s activities can now be outsourced to outside players (I’ll go into more details around the enterprise related issues in my next post)

Is it all bad?

If you read this far, you might assume that, by this point, I’m going to claim that this is all about the over-reach of DRM and that it is all a horrible thing.

I’m not.

What I am trying to highlight here is that the experience around internet driven goods is changing. As connectivity speeds increase, the ability to access any movie/TV show/video/ music clip/ books / magazines / etc is going to have a substantial impact on our relationship to said goods (in a fashion similar to the type of relationship kids now have to music, assuming that music on the Internet ought to be free of restrictions, while at the same time assuming that mobile phone ringtones are something one ought to pay for).

The change in our relationship to media forces us to reassess the value of the physical good. In the case of our household, we have made a leap of faith, assuming that the content of certain DVDs will always be available online from one rental provider or another. The reason for that approach is that the experience of watching such thing on our TV using an internet connected video player is not diminished by the lack of a physical medium. Living in a more constrained space (in Manhattan, space is always at a premium), the physicality of a DVD box is actually an impediment to the experience of the medium. As a result, the internet connectivity, and the rental model, appears to make much more sense than the physical ownership of DVD boxes.

In the same way, the value of a CD collection is in what’s on the CD rather than the plastic container it’s in. Much of the value of the physical container of music has decreased: in the past, LPs were designed and the wraping of the LP was almost has important to the experience as the music itself. However, as CDs reduced the size of the cases, and music production companies spend less time on designing custom boxes, physical CDs became more of a commodity, with the music on them being the only thing that truly distinguished one CD from another.

But what about books, magazines, and newspapers?

To a large extent, I would venture that the relationship we have with magazines or newspapers is different from that of a book. When I first saw the Kindle, I was not attracted to it because I could read books on it but rather because I might be able to subscribe to newspapers or magazines. The clear line falls in the arena of experience: with a few exceptions, magazines and newspapers are read and then discarded. The ephemeral nature of that experience archetype seems to make such relationship a prime candidate for digitization: Once again, the convenience of something like a Kindle seems to trump the experience of having to fold a newspaper in a crowded subway or the guilt associated with recycling large amount of newsprint or magazines on a regular basis: because the intrisic value of newspapers or magazines is as conveyors of temporal information that now appears to be archivable and retrieveable online, the need for ownership of that data appears to be lowered.

Books, on the other hand, are a different issue. Reference books may lend themselves to a good digitizable model (O’Reilly, for example, has had success with its Safari offering, as have encyclopedias like Brittanica and the OED) but fiction books may be in a different class. The book as object may be falling into the same class as those ancient LPs, being designed as a full object rather than just its content and rental of such good (though people will mention that books have been something you can borrow from a library for a long time) may take longer to break through as the advantage of reading such a book on a Kindle is not necessarily higher than that of a physical good. I may be romantic in my thinking, attaching to books not only the content and the packaging but its experience in a greater space, as each book I own has, in itself, a number of memories attached, in the form of sand from a beach where it was read, or wrinkles from being carried on a trip or fold marking and writings from a particular era. In those rare cases, the books serve as containers for more than the stories they held when first presented on a bookshelf or through the online presentation they had: they are containers of a full experience and that, at this point, is not yet something that any digital device (whether it is a kindle or other) has yet been able to reproduce.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Is Ownership Passé?. You can follow him on twitter here or receive his weekly newsletter by subscribing here.