Is online content a product, or a service?

The question is inspired by the two main online music models. In the iTunes model, you pay for each individual track. Once you pay for it, you can do anything you want, but your choices and your willingness to experiment are inherently limited by your budget.

In the internet radio model, exemplified by Rhapsody (see previous post), you pay a flat monthly fee to listen to as much music as you want. There is no incremental cost to try out individual tracks or entire albums by artists you've never heard of in genres you never listen to.

The radio model tethers you to a "receiver" of some sort, so it works best with ubiquitous broadband. I suspect, though, that treating content as a service is the best model for both creators and consumers in the long run. The product model ultimately depends on scarcity, while the service model depends on abundance. Internet distribution encourages abundance and makes content scarcity more and more difficult to maintain.

I've talked about last.fm before. They had some serious server problems this week, though, so I went looking for net radio alternatives. I found Rhapsody, and I'm sold. Rhapsody avoids the biggest annoyance of last.fm, the time it takes to train your profile, by providing a whole bunch of preprogrammed stations. You can also design your own station very quickly, by simply listing up to ten artists whose music you like. That sounds more limiting than it is, since a station based on, say, Eric Clapton, will also pull in music from a whole bunch of similar artists.

Rhapsody also fixes the second biggest annoyance of last.fm, the fact that you can't request a specific track or album. Rhapsody lets you play most of their music on demand, create playlists, etc.

The downside is that Rhapsody isn't free. The nominal cost (about $10 per month for unlimited listening, plus $0.79 per track to burn a CD) is well worth the added features, though.

Many discussions of creativity are superficial. They observe that children are creative, and conclude that we should all seek the spontaneity of children. There's nothing wrong with that as far as it goes. But children did not, and could not, create Shakespeare's plays, Michelangelo's David, Beethoven's Ninth Symphony. Masterpieces require spontaneity, but also craftsmanship and life experience.

The Philadelphia Inquirer editorial page editor, Chris Satullo, draws an important distinction between journalism and publishing. Journalism, meaning the diligent search for accurate coverage of newsworthy events, is a critical part of a functioning democracy. That's why "freedom of speech, or of the press" is enshrined in the First Amendment.

As long as journalism takes place, however, it doesn't matter who publishes it. Big Media does not have a privileged position, and any special respect it might have must be earned and carefully maintained. (Which CBS utterly failed to do in the forged documents mess that started this whole discussion.) Conversely, citizen journalists like bloggers are just as likely to have biases and hidden agendas as anyone else. They are not inherently "more pure" than professional journalists.

Jay Rosen's commentary on Satullo's column is also well worth reading, with lots of links to other voices in the debate.

Chartered president and CEO Chia Song-Hwee considers an issue that I've been thinking about as well. As the mask and design costs for leading edge devices soar, how does the supply chain change? Standard products reduce costs, but eliminate opportunities for product differentiation.

SEMI is doing an interesting series of oral history interviews. The most recent is with Shoichiro Yoshida, chairman and CEO of Nikon. He was involved in the early development of steppers, mask inspection tools, and similar equipment at Nikon.

Wired has a long but interesting article about how online distribution changes the economics of publishing. For example, an average Barnes & Noble store carries 130,000 titles. But more than half of Amazon's book sales come from outside its top 130,000 titles. The difference is that Amazon can reach anyone in the world who is interested in (say) the music of pre-Columbian Mexico, while a retail store only draws from a 5-10 mile radius.

Similar statistics hold for all kinds of publishing. A typical Blockbuster video store carries fewer than 3,000 DVDs, yet a fifth of Netflix rentals are outside the top 3,000 titles. Every single one of the Rhapsody music service's top 400,000 tracks is streamed at least once a month.

This is fantastic news for content creators and consumers alike. For creators, it means that you no longer have to be a hit in order to interest the distribution channel. For consumers, it means that it's easier to find things you're interested in, even if you're not interested in the hits.

Toppan Printing has agreed to acquire DuPont Photomasks. Between them, the two companies control about 36% of the photomask market.

(Silicon Strategies article. Free registration required.)

Professors from UC Santa Barbara, Caltech, and MIT will share this year's Nobel Prize in physics. Their work made a significant contribution to the Standard Model of particle physics.