online news still doesn’t make enough money it seems. Some newspapers try to tackle the financial problem by erecting pay walls. “You want information? You pay!” But, as many have noted before, that’s a tough sell in a medium where information exists in overflow. The strategic problems with pay walls have been discussed back and forth:

1. There is no information shortage online—if I can’t read this article, I’ll read another.
2. Pay walls weaken the main attractor (content) of your site and complicates the user experience (login on different platforms). Some leave social media back doors for pro users, but that’s not a good long term strategy either, as more and more people are using social media to find content.
3. Often pay walled news sites feature the same amount of marketing noise as free sites. Paying customers of course are more attractive clientele, but… Paying for news and then dealing with a silly blinking bonanza while reading doesn’t seem like a fair deal.

To be clear: content pay walls are not what we are suggesting. Remember, whether you fly Economy or Business: the result is the same (you travel from a to b), and only the experience differs. And likewise Business Class and Economy class seats on news sites should deliver the same content.

The idea of creating a business class for online news where is not about buying information, but buying better experience, it’s about service and customer experience. That’s right: Customer (paying), not user (free).

I like the idea, though it relies on the fact that the modal experience of flying really sucks. It reminds me of Erin Kissane’s awesome little book The Elements of Content Strategy, which Kieran turned me on to. Her description of content as being wrapped in layers after layer of annoying, sidetracking, distancing marketing is spot-on. And that we press on despite this is as surprising as, well, the fact that we continue to fly coach. Stripping this down, it’s something of a sad state when any client/consumer/customer experience devolves to a version of ‘crap’, for which a premium, better experience could be differentiated.

Nevertheless, this seems to be a new-ish model in the news/media/data space. The first is to institute some sort of paywall (WSJ, NYT, Financial Times, most proprietary library databases, New Yorker). The idea is to force users to pay for content. But as many people have commented, we live in an era of information glut rather than scarcity. And the web is social – walled gardens are necessarily going to be excluded from wider environments. Although I haven’t been active in a while on this blog, the fact is that I read the NYT less and link to it almost never in the post-paywall world.

The second model consists of organizations, and news organizations in particular, that have gone for ‘premium content.’ I mean, Glenn Beck gives his subscribers ‘behind the scenes’ content, and Bloomberg Professional has both (free) news and data feeds that have become a de facto part of the finance community. So you give subscribers additional content that they can choose to pay for. Kickstarter, it seems to me, employs a form of this. If the Ai Weiwei documentary gets funded, we can all see it. But donating more to the project gets you bonuses in the form of special access, special recognition, etc. Maybe I’m eliding multiple models contained in this one approach, but the idea is that there is addition rather than subtraction based on paying vs. not-paying.

The first-class vs. coach idea is slightly different. It assumes that content is universally ‘free’, but that users might pay a premium for a better user experience. Looking at the two NYT pages side-by-side, it certainly makes a cogent case for the user experience being more central to content than we normally credit. What’s interesting about content is that the wrapper matters more than in many other kinds of goods/services. This is not ‘just’ better packaging, like putting an Arby’s sandwich on china, but with content, the medium and message are tied so much more closely together.

Of course, there are already tools to extract the content wheat from the advertising chaff, as it were. Readability, Instapaper, and of course ad-blockers like Adblock all do the job of making your content easier to read. Some reformat the content for you, while others pull out the advertising from the websites you are browsing, leaving you just that sweet, sweet content. So ultimately, I’m still not sure that users would be willing to pay for something that they can already get for free. But I certainly like the attempt to innovate here.

And this presents a problem. Show your OB your baby, and she’ll back away, nice and slowly, to prevent that crazy little thing from going off. Show your breasts to your pediatrician, and he’ll do the same.

Organizational jurisdiction is slightly different from the institutional jurisdiction that Carol Heimer talks about in her article on competing institutions (do yourself a favor and read that article some time. The chart on p. 35 is great).

I realized this most recently when I went to purchase an iPhone for my partner. I had bought one for myself a month back, and I wanted to add her phone (and her 847 area code) to my account. A family plan. Accomplishing this required: 1) a trip to the Apple retail store; 2) a call from Apple store to AT&T customer service; 3) a trip to the AT&T retail store; 4) a second trip to the AT&T retail store; 5) a second call to AT&T customer service; 6) a third trip to the AT&T retail store; 7) a second trip to the Apple retail store. Seriously, 7 different interactions, over the course of 3+ hours and 2 days.

Why? Because first of all, carrier and tech provider each do not know what the other does, and they compete for business. And second of all, because AT&T wireless has a system whereby individual accounts are linked to a geographic location. Trying to ‘combine’ two different geographic locations results in an error (e.g., linking two NYC and a Chicago area codes into one family plan).

As a result, the moron at the Apple store tells me that my wife has to change her cell number that she’s had for 10 years, because there is just nothing they can do. “And it happens to people every day.” He continues by telling me that the idiots at AT&T would do well to let Apple take over the whole business. Meanwhile, over at the AT&T store, the moron salesperson tells me that the idiots at Apple would be able to solve these kinds of problems if they would either learn the AT&T system or else just send customers directly to AT&T to begin with.

Interestingly, though, in this battle of morons, there are no winners, but AT&T actually is the bigger loser (Apple is close, because the smugness their employees exude when speaking about non-Apple stuff makes them a hair more insufferable than the always-defensive, never-experts at A&T).

Why is AT&T worse? Because their organizational jurisdiction is fractal – not only does the iPhone fall into the cracks, but their assignment of area codes across accounts also falls into the cracks. See, they have 2 breast problems.

I learned this when, finally, I realized that I needed to change my account type from a personal, geographic one, to a national business plan. Because national businesses can add whatever area codes they want to a single account. So really, I’m getting stuck over an internal, outdated dip switch internal to AT&T, that the people at Apple don’t know about. And that the people at AT&T also can’t figure out.

For those who like resolution, it went like this. Finally called the AT&T customer service number, explained my problem, and learned that I needed to speak to the NBI department (national business something). But there is no direct number to NBI. So you need to call Business Customer Care, and ask to be internally transferred to the NBI department. Once there, they can flip the dip switch on your account from MNY (geographic NYC) to NBI. And then, the people at the AT&T store can add two different area codes to the same family plan.

As a coda to this, when I asked the nice man in NBI why they didn’t just do away with geographic area code designations, in an era of mobile technology, he noted that this is indeed the direction AT&T wants to go. I then suggested as a starting point, that they make it possible for inbound calls to reach his department. He sheepishly replied that this might be a valid point.

The Apple store morons are still morons, because when I finally went back there to transfer my wife’s G1 Android phone contacts to her Apple iPhone, the supposed expert looked at the phone like he’d never seen any kind of Apple competitor phone in his life, and had no idea at all how to move the existing photos/files to the new phone. And no suggestions. It was something like, ‘huh, so that’s an Android phone. I don’t know how they work at all. All I have is this machine that transfers contacts, and I don’t really even know what cable to use. That G1 sure is poorly designed.’ Um, right.

And third, you will see at least one fantasti-magical example of lateral thinking (in part 7.

The setup: the adventurers have found themselves on a nether plane. They discovered a semi-docile hell-cow, wandering about, chewing on some volcanic rock. The hell-cow delivered them to the mouth of a castle, where they spend their time attacking the baddies. One of the characters (Mike Krahulik, who does the art behind Penny Arcade), sees a minion running away with a chest of jewels. He initially thinks about trying to cast a spell to control the beast. But then he does something very different. Instead of casting a control spell on the beast, he decides to cast a prestidigitation spell on the minion running away, making him appear to be volcanic rock, hell-cow’s favorite food.

The description doesn’t do it justice. Take a watch from about 7:44 to about 11:38.

I’ve been thinking a lot about the prestidigitation play, it connects with some of my interests in automated trading, algorithms, and data mining. With regard to financial markets, as Felix Salmon reports, we are living in an computer-driven, algorithm world (“We may be able to slow it down, but we can never contain, control, or comprehend it. It’s the machines’ market now; we just trade in it”). But it is more than this, I think. Data-driven analysis, the strategy manifestation of quantification, is a force to be reckoned with.

But data-driven analysis can also be stupid. That is to say, data-driven analysis – what Hans Peter Luhn dubbed “business intelligence” in 1958 – has become more intelligence in the ‘fact gathering’ sense than intelligence in the lateral thinking sense.

This sets the context for speaking about this post on business intelligence and human-centric analysis, but as my brain power is working at 35% nowadays, I’m separating this into a couple/few posts before I can make a point.

He thinks it’s possible that his huge appetite for work – for juggling a publishing company with philanthropy and writing – comes from a sense of how short life is. His parents were in their 50s when they died; his older sister, Beth, killed herself when she was 33. “Having lost people when they were young, you feel intimately acquainted with mortality, I guess. Though I procrastinate worse than anybody.” Writing is so hard. “I need eight hours to get maybe 20 minutes of work done. I had one of those yesterday: seven hours of self-loathing. I used to write in the middle of the night. I suppose I was surprised by the sedentary nature of writing: like, wow, most of this is sitting down and typing! So I used to add a bit of adventure by starting at midnight and working until five. That was excitement! But now I have two kids [he is married to the novelist Vendela Vida, with whom he wrote the screenplay for the Sam Mendes film, Away We Go; she also edits another of their projects, The Believer, a literary magazine]. So it’s bankers hours for me.”

At home, where he writes, he no longer has internet access. A four-month stint with wi-fi proved “deadly” for his productivity and having no access at all ensures that he is not tempted to “look at Kajagoogoo videos and old ads for Wrigley’s Spearmint Gum” on YouTube. “Writing is a deep-sea dive. You need hours just to get into it: down, down, down. If you’re called back to the surface every couple of minutes by an email, you can’t ever get back down. I have a great friend who became a Twitterer and he says he hasn’t written anything for a year.”

I’m in that distracted world now, but less because of technology and more because of a changed family situation. But still I like the imagery of a deep-sea dive. I have had the idea of a long-form article about the importance of creativity and lateral thinking in the emerging world of data-modeling and -mining. But every time I go to write it, I’m distracted by my RSS feed reader…

The second, more positive piece of the article comes a bit later, in talking about the 826 stores. We live down the block from the superhero supply shop (826 Brooklyn), and it’s pretty cool:

When Eggers and his team signed the lease at 826 Valencia Street in 2002, the landlord told them the building was zoned for retail; they could put their tutoring centre at the back but out front they would have to sell something. Eggers hit on the idea of pirate store. Not a kitschy place about pirates; a store for pirates. Every 826 now has a shop up front: they’re welcoming, the children love them and they raise funds (in Brooklyn, it’s a superhero supply store; in Boston, it’s a Bigfoot research centre).

I love the make lemonade element of this anecdote. The ability for some people to transform obstacles into opportunities is something I kind of suck at, but want to get better about. The turning of the tutor centers into a retail store with a secret tutoring back entrance makes my heart sing a little.

Also, yes, that’s right, I did both the yellow circle image and the tight-roping stick figure. And the tiling, I remember being so happy about the marble tiling.

Finally, there’s an end-of-year picnic in West Wilshire park. It’s on May 4, 1996. Please RSVP.

If you let me know, and I refer you, they give me more space (yay!), which would be nice. But I don’t even care if you are referred or not, just go try it.

Though as a total aside, the recent May incident where P&G dumped 1/3 of its value, then rebounded (from $60 to $40 back to $60) in 4 1/2 minutes seems more complicated than an accidental trade. In fact, the joint SEC-CFTC report (that’s a .pdf) is something of a doozy:

The quantitative evidence presented above suggest that a confluence of economic events, market forces, and trading system functionality led to a significant dislocation of liquidity in the June 2010 E-mini S&P 500 futures contract sometime between 2:30 p.m. and 3:00 p.m. on May 6, 2010.

Prior to that time, a number of economic events and market developments led to a broad-based market desire to lessen risk exposures. This translated into a downward movement in prices across financial markets in conjunction with significant trading volume. At or about 2:30 p.m., the electronic limit order book in the E-mini S&P 500 futures market exhibited a significant imbalance of sell orders and buy orders. In the backdrop of declining prices, this imbalance appears to have contributed to a sudden liquidity dislocation despite increased trading volume. At approximately 2:45 p.m., several sell orders executed deep into the limit order book, which coincided with a significant loss of depth, triggering the Stop Logic functionality. The Stop Logic functionality in the E-mini S&P 500 contract has been triggered a number of times in the past few years, including several times during the financial crisis in the fall of 2008, when market conditions may have resembled those seen on May 6, 2010. Activation of the Stop Logic functionality on May 6, 2010, initiated a five second pause in trading in the E-mini S&P 500 futures contract. After the five second pause, the limit order book became more balanced, which is its typical state, and the price of the E-mini S&P 500 futures contract recovered.

This is being called the Flash Crash of May 6, 2010.

Anyhoozle, the ATP Oil & Gas Corporation. The analyst for JP Morgan who covers the company, named Joseph Allman (in case you want to know whose work you can’t trust down the road), calculated that the company would need $500 million in additional capital, more than its entire market capitalization. You can see what happened, on June 13, 2010:

That’s end of trading day Monday. On Thursday, JP Morgan put out a second note, as Salmon quotes: “In our July 13 note, we stated that it appeared that ATPG would need $500MM of external capital. This model corrects that error and reduces that need to $50MM.”

Oops.

The lessons Salmon draws are things like, yep, people read sell-side research and act on it, and yep, stocks are hella volatile nowadays, and you betcha, listening to sell-side research without doing your own homework is hazardous to your wealth.

To me, what’s amazing here is how time horizons are highly shortened, and market reflexes are hair-trigger, and trading technologies are tightly coupled. Add people, mix, and there will inevitably be periodic blowups.

Which leads me to Pepsi, Scienceblogs, John Gruber, and Apple’s iPhone 4.

Scienceblogs is a community of science blogs (duh), hosted by what was once Seed Magazine (and what is now Seed Media Group). In early July, 2010, Scienceblogs began hosting a new blog, called Food Frontiers:

As part of this partnership, we’ll hear from a wide range of experts on how the company is developing products rooted in rigorous, science-based nutrition standards to offer consumers more wholesome and enjoyable foods and beverages. The focus will be on innovations in science, nutrition and health policy. In addition to learning more about the transformation of PepsiCo’s product portfolio, we’ll be seeing some of the innovative ways it is planning to reduce its use of energy, water and packaging

(this quote comes from an article by Curtis Brainard at Columbia Journalism Review, the original announcement having been taken down at Scienceblogs and replaced with an apologetic note). But yes, the Scienceblog in question was not just sponsored by PepsiCo, but actually would be a science-based nutrition blog written by PepsiCo. You can catch up at Bora Zivkovic’s (who as a result of this actually left Scienceblogs) massive linkdump.

As a result of this move, in fact, Scienceblogs seems to be falling apart. I would like to take this opportunity to look at the practice of corporate blogging, corporate-sponsored blogging, and well, corporate blog-whoring, all with a jaundiced eye. Seed Media Group’s CEO Adam Bly wrote a confidential letter to contributors (helpfully posted by the Guardian):

We have also hosted blogs on SB from research-based companies like Shell, Dow, Schering-Plough, GE, Invitrogen, L’Oreal (in Germany), and now PepsiCo. I want to address the logic and strategy behind this.

ScienceBlogs has consistently maintained editorial excellence. We syndicate content to the New York Times, National Geographic, and are indexed by Google News. So respected is our platform that the US State Department recently published a post on 3.14. We should all be very proud of what we have achieved in four short years. We have ensured editorial excellence not by editing your posts or telling you what to write – a first principle unique to SB that we will never change – but by learning over four years how to create an environment that encourages your best. We believe that one vital aspect of this SB environment is its intentional diversity. You are all expert at different things, care passionately about other things, and come from different backgrounds and countries. We think this is a good thing and we think it help makes SB tick for our readers. We also think that you cannot have a real conversation about science and its place and role in society unless you pursue and protect this diversity. It’s why we believe that all serious voices in science should have a seat at the table (and we’ve been consistent about what’s serious and what’s fringe or worse).

We think the conversation should include scientists from academia and government; we also think it should include scientists from industry. Because industry is increasingly the interface between science and society. It is our hope that the Xeroxes and Bell Labs of the future will have a real presence on SB – that they will learn from our readers and we will learn from them. That they will break stories on SB and engage our readers in the issues that concern them. The bloggers who blog on ‘corporate blogs’ on SB are necessarily credentialed scientists (we make sure of that), in some cases highly credentialed scientists who have published extensively in peer-reviewed journals. The fact that they work at a profit-making company does not automatically disqualify their science in our mind. And frankly, nor does it disqualify them in the eyes of the Nobel Prize Committee either.

Let me address PepsiCo in particular. Of course we recognize – and of course so does PepsiCo! – that they’ve made a lot of money selling soft drinks and chips. But they also recognize that their future will be troublesome and time-limited without addressing the real and connected issues of obesity and under-nutrition in the world. PepsiCo employs thousands of scientists working on these problems and they are led by some very serious scientists – eg. their chief scientist worked at the Mayo Clinic and serves on the Board of Governors of the New York Academy of Sciences. (PepsiCo is the same place that makes Tropicana and Quaker Oatmeal.)

PepsiCo comes off like Nick Naylor in Thank you for Smoking: Though these lobbyists would like to see Cancer Boy die to prove their point, it is in Tobacco’s best interests that he LIVES, to continue using our product!

Seriously, read that whole memo. Basically the CEO says that 1) there are scientists at for-profit companies; 2) lots of places including the New Yorker and Atlantic give prime access to companies who pay for it; and 3) we need the money.

Now, there is a relatively interesting discussion here to be made about the ways that capitalism intersects with opinion, and the long, historic dependency of news media on paid advertisement. But I would also strongly suggest that for-profit actors are now (and perhaps have always) mobilized the form of more ‘objective’ outlets in order make more credible claims. For me, at its most base level, it comes down to this:

People are more inclined to believe you if they see you as an impartial observer than if they see you as a partial advocate. If you are on the corporate (or political) payroll, you can not be trusted and your opinion is suspect. Impartiality doesn’t even quite get at this, though. Maybe transparent. But not quite, since transparent can be easily dismissed as obviously unable to form a helpful opinion. Fair-minded. That’s more what I am talking about.

This is the fact on which 99% of the complaints and justifications are based. PepsiCo can not be trusted to speak on science issues because they can not be believed to be fair-minded.

And here is where John Gruber comes in. Recently, Apple has had some problems with its recently released iPhone 4. Apparently, its antenna is constructed in such a way that holding it in a particular way attenuates the signal. Consumer Reports called this a design defect in one place and an antenna problem in another. The NYT article calls it a ‘design flaw’.

Apple held a press conference to push back against these criticisms, where Steve Jobs personally spoke and answered questions about the phone’s antenna, its performance against other phones, and Apple’s remedy for the problem (giving away phone cases to physically prevent users from bridging the antenna gap and triggering the loss of signal).

Gruber runs a (wonderful) blog called Daring Fireball, where he both curates and commentates on the internet, with a strong preference for Apple products and a clearly insider-y take on all things Apple. He is not on the payroll, which he jokingly comments about. But still, he seems to have been one of a members of the press who got to tour Apple’s Antenna Testing Lab after the press conference (I don’t know him, and I don’t know this for certain. But that first ‘jokingly’ link notes at the end that some members of the press got to go, the second notes that ‘this is the lab a few of us got to tour in person’).

And here’s the thing. During the press conference, Jobs was at pains to show that other phones had a comparable flaw, and that this was a ‘weak spot’. Early on, Gruber uses quotes around “weak spot”, noting that it is Apple’s parlance, or that it is “Jobs’s term for the infamous lower-left gap in the antenna frame”.

But then a funny thing happens. After a slew of posts about other manufacturers’ phones (and running snide commentary about their lack of attention, as well as how his checks from Apple should keep rolling in), Gruber comes to some conclusions, an Antennagate Bottom Line. Here, he begins:

What is not in dispute: the iPhone 4 antenna has a weak spot in the lower-left corner of the frame, marked by the black line in the frame. When covered by your hand, this antenna suffers from attenuation. This is much like other smartphones.

After running through the evidence and opinion, including Apple’s $100 million dollar remediation effort for something Gruber himself considers a fairly minor trade-off for a great phone, he concludes:

Anyway, bottom line on the iPhone 4 antenna: it has a weak spot but there’s no evidence that it’s a significant, let alone catastrophic, problem in practice. It’s telling that the criticism surrounding this issue has shifted, quickly, from speculation about a technical defect in the iPhone 4 hardware to criticism over the tone of Apple’s response to it.

What certainly could be described as a design flaw, a design defect, or an antenna problem is magically transformed into a weak spot. A weak spot implies a small flaw in an otherwise ‘working’ device; a design flaw implies a ‘broken’ device. And the truth of it is, I do not know which of these is the case here (or both, depending on you, your network, your other options, your disposition towards Apple, etc). But I do know that Apple is deeply, deeply invested in it being the former. “Weak spot”, turns into weak spot, turns into insignificant problem.

It is equally apparent to me that by co-opting Gruber and other journalists, bloggers, and opinion makers, whose credibility precisely rests on their reputation as unbiased observers, Apple is doing just what PepsiCo was doing when it signed on to create a Scienceblog. And of course Gruber knows this. The whole sarcastic schtick about his payola checks suggests that he knows that if he really was on the Apple payroll, his opinions would simply. matter. less.

I’m not really sure what to do with this problem. But in an era of increasing information-by-the-many, it’s one that is likely to get much worse before it gets much better.