The Right Wing's $7 Billion Media Subsidy

February 6, 2012

Considering how much conservatives and right-wing political personalities in the United States claim to hate the liberal media, it's remarkable how much money they've been able to funnel into the coffers of the liberal media institutions they malign.

By looking at a few numbers, we can see nearly where nearly 7% of all U.S. advertising dollars are attributable to policy decisions and judicial activism driven directly by conservative priorities.

  • The United States is the only country other than New Zealand which allows the bizarre practice of advertising prescription drugs directly to consumers. Called direct-to-consumer advertising (DTCA), this practice accounted for $4.9 billion dollars in advertising spending in 2007, nearly all of it targeted to traditional media such as television and print. It's hard to imagine how a mainstream print magazine such as Time would survive without this largesse, especially as the FDA's regulations typically require drug interaction disclosures which effectively double the amount of advertising space which the pharmaceutical company must purchase. The conservative goal of commercializing prescription drugs while reducing oversight has undoubtedly succeeded; the data show that FDA oversight of DTCA drug ads is decreasing while any of us who consume media have noticed the increasing medicalization of ordinary aspects of life for which companies have created remedies. But it's inarguable that this adds up to nearly five billion dollars in advertising that goes overwhelmingly to the old media institutions which conservatives rail against.
  • Similarly, conservatives delighted in the execrable Citizens United decision by the Supreme Court, which equated money with speech and has resulted in SuperPACs which offer no accountability or transparency while supporting candidates despite being ostensibly required to be independent. It's a horrendous thing, but it amounts to a $2 billion subsidy that, again, goes largely to traditional media with television being the single largest benefactor. Here I'll quote liberally from Wikipedia, because this is a topic where the community has done a remarkably concise job of illustrating the impact:

With total projections of all campaign spending exceeding $1 billion and more likely to be approach $2 billion, some comparison to overall advertising spending is in order. World-wide, total spending in all areas for 2012 is expected to be $438 billion, with North America accounting for 26.6%. In rough terms, allocating some of North America's total to Canada and Mexico, this leaves predicts the US market share to be roughly of $100 billion ($438 billion global times 26.6% for North America times 85% estimate for USA). Therefore, if total spending is nearer the $2 billion figure, the US consumer should expect, averaged out of over the year, about 2% of advertising to be regarding the election. However, since spending is focused closest to voting dates, and may be area focused in hotly contested areas, some markets may see peaks upward of 20-30% of all messages to be election related and paid by PACs and 527 organizations.

The key thing to realize here is that mainstream media cannot encourage reform, either of politically poisonous ideas such as corporate personhood or of personally poisonous ideas such as drug advocacy that is not driven by medical professionals, without fundamentally advocating for the obliteration of as much as 7% of their total revenues. The amount represented by just DTCA pharmaceutical ads and SuperPAC/PAC/527 spending is equal to twenty seven times the $262 million in advertising purchased in the New York Times last year.

As somebody who loves media and has lots of friends employed by these big media companies, I'm surprised and impressed by the concerted conservative efforts to prop up the liberal media establishment. As somebody who detests the commercial exploitation of those who are unhealthy and the distortion of our political system by wealthy oligarchs, I am saddened by what the math shows. I wish that the billionaires behind most SuperPAC dollars would go back to just having their own personal media outlets, like rich people did in the old days. But for today, I'm just delighted by the idea that the unintended consequences of focused lobbying from the right has been the artificial sustenance of the media monoliths run by the left.

Additional Reading

(Special thanks to my colleague Chris Morf for helping with a sanity check on some of this research. None of my opinions stated here are his fault.)

Published on 10:42 AM | Tagged , , , , , ,

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The History, and Future, of Web Protest

January 18, 2012

This week, many of the web's most popular sites shuttered their doors in protest of SOPA and PIPA, the pair of bills that had been winding their way through congress with the stated intent of fighting piracy and the unfortunate side effect of fundamentally threatening the web. After this concerted outburst of activism from the web community (which even extended to a first-of-its-kind offline protest by the New York Tech Meetup community), the sponsors of the bills have withdrawn their support, many undecided or former supporters of the bills changed their positions and in all, people who love the web are claiming a victory. Hooray! And it's still not too late to express your displeasure to your elected officials if you'd like to make sure they know how you feel.

But. There are a number of unanswered questions about this victory, and some important questions about what it means going forward, not just for web freedom, but for the technology community as a driver of public policy and legislation. We should start, as always with a brief look back.

Blogs Were Born To Do This

The entire modern social web was born from the blogging movement, and social activism has been part of the blogging medium since its birth. But ironically, the most common form of protest for our young medium has been self-censorship.

  • One of the inarguable pioneers of blogging, Dave Winer, started his first blog as the news page of the 24 Hours of Democracy campaign. What was that about? Well, it should sound familiar — the leading voices and sites of the social web spent 24 hours protesting onerous potential legislation that they thought would significantly curtail free speech on the web. SOPA? Nope! It was the Communications Decency Act (CDA) which unified the nascent personal web sixteen years ago, and the protests that accompanied the 24 Hours of Democracy included the Blue Ribbon Campaign and the Black World Wide Web shutdown, which climaxed in an estimated 7% of all active U.S. websites changing their background colors to black in protest.
  • Just a few years later, my late, lamented friend Brad Graham, who coined the word "blogosphere", also created one of the first blog-specific protests when he launched the Day Without Weblogs in 1999 in observance of World AIDS Day. Patterned after the Day Without Art, and named "Day Without Weblogs" because the word "blog" was not yet in common usage, this moving demonstration was an annual tradition for many years (eventually evolving into a more information-oriented project called "Link and Think") and carried on the social web's deep tradition of drawing attention by shutting itself down and forcing users to confront a black page. Sadly, it seems much of the early record of Day Without Weblogs has been lost since Brad's untimely passing.

Just at a cultural level, it's fascinating to me that our medium finds that the most powerful thing we can do is deny the rest of the world our voices and creations, and that this almost invariably takes the form of a black screen confronting unsuspecting, perhaps uneducated, and certainly confused non-geeky users.

How It Works

Does this form of protest work? It's hard to say — most of the CDA protests from 1996 took place after the law had already been signed. But we have some feedback on the more contemporary protests:

When Rupert Murdoch dog whistles "terror" about a topic, he's saying he wants some people illegally detained and tortured. So that's a good sign we had some impact.

This is a particularly stunning turn for a few reasons. First, as Bijan Sabet noted, congress members had considered SOPA and PIPA a done deal. Not "likely to pass", but "such a sure thing that I should sponsor it, even though I haven't read it and don't really understand it, so I can have my name on successful legislation".

This is especially remarkable because the tech industry sucks at 1. understanding how legislation happens 2. how legislation can impact their businesses and 3. actually responding to these issues before it's too late. John Battelle discusses this in depth, explaining "[T]he fight isn’t over. In fact, it’s only starting. And the folks who basically wrote SOPA/PIPA are pissed, and they plan on using the same tactics they always have when they don’t get what they want: They’re throwing around their money." Marco Arment continues, correctly, by stating that SOPA will keep coming back, over and over, in some form until it passes. Does that doom us to recurring bouts of black page syndrome? Maybe not.

The Infrastructure

One of the most unheralded successes of this week's SOPA and PIPA victories was the role that pioneering open government and government transparency efforts had in enabling the protests to take off. Just a few weeks ago, few online had heard of either bill, almost no one could understand their potential impact, and even fewer had read the actual bills.

But thanks to efforts like OpenCongress, which routinely creates valuable resources like this look at the money behind SOPA through its support from the Sunlight Foundation and the Participatory Politics Foundation, the web was able to see who was helping pay for the law. Giving that information a place to live on the web was a fundamental step that enabled powerful demonstrations like the GoDaddy protests in which thousands of users moved their business from the company in protest of its support of SOPA. (I have some misgivings about the tactics and effectiveness of that particular protest, but overall as a first example of the organization and focus of those who would object to SOPA, it was inarguably powerful.)

Similarly, the Center for Responsive Politics powered detailed look at lobbying dollars which drove the bills, which organizations like MapLight could use to create a clear picture of how SOPA and PIPA were purchased.

Of course, I've got a dog in this fight; Expert Labs was founded specifically to conduct experiments about getting people on social networks to organize in ways that would allow them to impact policy makers. And we had some amazing successes in unexpected ways — Clay Johnson on our team educated hundreds of thousands of people on how techies can effectively engage with the policy-making processin his piece "Dear Internet: It's No Longer OK to Not Know How Congress Works". And despite her well-earned misgivings about having a disproportionately large social network, Gina Trapani demonstrated the best potential of that network with a result that is best illustrated in a single tweet:

That's the CTO of the United States, Aneesh Chopra, directly thanking Gina for her honest, forceful feedback about SOPA and linking to an official White House response to a petition asking for a veto of SOPA. Despite the well-intentioned skepticism of folks like Felix Salmon in response to my admittedly optimistic visions of "#OccupyWhiteHouse", the idea that this sort of direct online feedback could have a meaningful impact was validated by none other than the Director of the White House's Office of Public Engagement:

Still, amidst the web-nerd triumphalism, it's worth noting: This isn't how I thought it would work. While I've always believed in the potential of the open government and transparency movements, I predicated our work at Expert Labs on the idea that the type of large-scale, effective, (relatively) well-organized demonstrations we've seen against SOPA and PIPA online were unlikely to happen. I was, perhaps, too willing to assume that change would only happen through more traditional channels. While we've made an amazing tech platform in ThinkUp, I was trying to push it to conform to the lobbyists-and-big-dollars world of D.C. today, and this week's victory gives me hope that I was wonderfully, delightfully, completely wrong about that decision.

So Now What?

What we've gotten so far, with our SOPA and PIPA demonstrations, is a first, rough beta test of the power to impact policy online. What we don't have is the way to use this power effectively. We are missing a few key things:

  1. The ability to organize for issues that aren't life-or-death for big tech players
  2. The ability to clearly and quickly form communities of interest around particular issues that are complicated
  3. The desire and willingness to stand up for issues that aren't simply about the self-interest or self-preservation of technology experts

This final point is my biggest concern and greatest wish for our industry. We now know we have the power bend the law to our will, and to make legislators respect our values, if we can just coordinate our efforts and focus our attentions. But there are many issues which have to do with the soul of our nation that may not galvanize a redditor who's only concerned with legislation that might interfere with watching movies online.

Google Waterboarding

We have discovered that our biggest companies, our most popular sites, or most passionate communities on the web are willing to stand up and have a powerful impact on the laws that govern our country. But we're on the fence. Google's spending somewhere around $10 million dollars on old-fashioned lobbying this year. Maybe that's useful — as Clay said, we need to know how the old system works before we can reform it.

But maybe we should be darkening our sites for deeper, more profound issues. We have the ability to affect marriage equality and reproductive freedom and immigration reform and many other issues where those of us who love technology tend to have similar values regardless of which of the traditional political parties we list on our voter registrations.

This is the power we were promised the web would give us. Let's use it.

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Responses and Replies

January 9, 2012

A few nice conversations around the web, either in response to or inspired by what I've been talking about here:

  • My favorite TechCrunch post in a long time is Jon Evans' Scheming Intentions, which outlines a simple way that native mobile apps could take a tentative step towards re-integrating with the web.
  • Shapeways, the delightful 3D printing-on-demand service wrote a deep and thoughtful response to my ideas about where 3D printing is headed. BoingBoing had a quick take on the post, too, and I found the comments entertaining.
  • I liked Michael Newman's recap of his favorites from 2011, especially his ruminations on animated .gifs.
  • I had a blast talking to Leo Laporte and Tom Merritt on the Triangulation show — I know spending the better part of an hour listening to me ramble is a lot, but I'm very proud of the conversation about blogging in the first half, and hope that justifies enduring this for some folks:

Watch Fixing Government: Anil Dash on a social media revolution for Congress on PBS. See more from Need to Know.

Published on 10:23 AM | Tagged , ,

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Foursquare: Today's best-executing startup

January 3, 2012

About two years ago, Fred Wilson and I were talking about which startups we found interesting and I mentioned offhandedly that Foursquare was far and away the one that I thought had the most potential to be a huge, meaningful business. I'm sure Fred (and Union Square Ventures) had many other people recommend Foursquare to them both before and after that day, and of course their subsequent investment proved that Foursquare was compelling to the USV team. But at that point, it was still early enough in Foursquare's evolution that Fred was surprised both at the vehemence of my optimism for the young company (which at the time still consisted of just Dennis and Naveen) as well as how casually I just assumed they'd be a huge success. At the time, I hadn't really critically considered why I was so bullish on the company, I just knew at a gut level that it had a ton of potential.

Foursquare Crown

Two years later, what seemed like unformed potential has blossomed into truly impressive execution: Foursquare is the one startup that's doing the most remarkable job of any company out there in product strategy and product creation. Though they've obviously gotten a lot of attention for their success, I think some of the nuances of what they're pulling off have remained non-obvious, and wanted to document what's interesting far beyond the amount of dollars of venture capital funding they've amassed.

Of note: I don't have any stake in Foursquare except in some broad sense that I want NYC startups to succeed, I like that the company is independent of big companies like Facebook, and I'm friends with a number of folks at the company (including the founders) and would be pleased to see them do well. Also, I'm going to describe some of the things that they're doing from my perspective as an educated outsider to the company — I haven't talked to anyone at Foursquare about this post, so it may not reflect every detail of what they've pulled off, but hopefully the spirit is correct and Foursquare folks can respond in the comments or on their blogs to correct any inaccuracies.

What's the big deal?

  • Core Platform: The first, and perhaps most fundamental, brilliance in Foursquare's product execution is the recognition of the ubiquity of geolocation features in mobile platforms and the identification of declarations of place as a form of establishing identity online. While much has been made about the gamification aspect of Foursquare's design, I actually don't think that's the biggest innovation responsible for the platform's success; Identifying when small incremental improvements to hardware have enabled a profound and fundamental improvement to software capabilities is the sort of thing that's usually the exclusive province of companies like Apple and Microsoft, and yet Foursquare's pulled that off out of the gate.
  • Reliable Iteration: Foursquare's removed features from the core app a few times, constantly changes the design of its flagship iOS application, and in general asserts its authority over the experience that users have within the Foursquare application. Yet, unlike every single other major social application, they don't inspire mass user revolts or negative press every time they iterate. Some of this is that they practice WWIC 101, vetting ideas with actual users as they begin to test them, including the very key fact that the company's founders are very public, visible, and enthusiastic users of the service itself, ensuring not just an attention to detail but a deep fluency in the application's limits and shortcomings as well. But part of this is the small, well-paced timing of iteration on the application where there are always small things changing in ways that aren't wildly disruptive, but do enough to set a tone that users know to expect the furniture might get rearranged once in a while. This type of iteration is extremely difficult to balance well, and it underpins the other successes outlined here.
  • Technical Competence: Foursquare's slow sometimes, and I never know if failures in the app are due to something on Foursquare's part or due to the vagaries of an AT&T connection in Manhattan. This is a great thing. Pushing areas of uncertainty to known points of failure where users already expect some frustration takes away a lot of the antagonism that people would otherwise feel towards Foursquare if its technical errors were clearly just Foursquare's fault. Just as importantly, new features are introduced across all platforms simultaneously, and they consistently work at scale even as Foursquare's user base rapidly increases in number. These kinds of successes are extremely difficult to pull off at scale, and are usually only visible when they fail. In this category, no news is good news, and unlike Twitter or Flickr or Tumblr or other services which preceded Foursquare as the "hot" social startup of the moment, Foursquare doesn't even have a signature "failure" message like the Fail Whale or "Is Having A Massage".
  • foursquare-icons-4.pngDesign Innovation: Mari Sheibley's signature design style has defined Foursquare's public face since its earliest days, and the entire design team at Foursquare has maintained a design aesthetic that's distinctive and playful without being cloying, in support of an interaction model that's surprisingly clear given the depth of features that the platform supports. For example, I don't really pay any attention to the points-and-leaderboard part of the service, and despite the richness of functionality available around those features, I never have to see them since they're tucked away under one tab in the iOS app. Similarly, while Lists invite an interesting form of discovery, I'm only gradually engaging with the feature, and the architecture of the app supports dipping into this area without resorting to the "here's a blinking light you need to dismiss" prompts of analogous features like the "Discover" tab in the new Twitter client for iOS. More fundamentally, an incredibly rich information model is represented consistently and elegantly across the app on all its platforms, even though displaying just a simple list of what my friends are up to incorporates elements including avatars, nicknames, mayoralty indicators, place names, location data, time/date information, live maps, comment boxes, and icons indicating venue types. Keeping information this dense while also having it be comprehensible and flexible enough to accommodate constant feature iteration is a formidable challenge, made all the more impressive by having a design language that's consistent across different resolutions and platforms, and still distinct enough to be recognizable when it's applied more broadly. Put another way: Foursquare's design is fun enough that I'd fully expect to see hipsters wearing Foursquare-themed ironic tees by springtime, and very few brands that are only two years old have enough visual identity to be worth parodying that quickly.
  • Thoughtful Business Model: The single biggest prompt for me to write this post was the sheer jaw-dropping impressiveness of the Small Business Saturday promotion that Foursquare pulled off in conjunction with American Express on the Saturday after Thanksgiving. While it's obvious that any company that you voluntarily give information about your location and shopping habits to should be able to build a meaningful business out of that data, there are still a million ways that incorporating those business opportunities into an app could be screwed up in a way that'd be permanently off-putting to users. But Foursquare didn't just avoid those traps -- this very young company delivered a unique new ecommerce integration built into their platform that 1. Shipped on time for the Thanksgiving holiday weekend 2. Functioned properly across all platforms for millions of users 3. Didn't wildly disrupt the existing uses of the app 4. Provided meaningful financial incentives (a $10 credit) to actually use the new features 5. Provided a meaningful social justification for the new features by encouraging support for local businesses 6. Was easy enough to use that signing up basically involved quick one-time entry of a credit card number and 7. Seamlessly interacted with a partner's complex financial systems (who knows what kind of APIs American Express provides to partners?) in a way that was so seamless as to be invisible. While a few users tweeted about liking the promo, from the standpoint of a startup executing on an ambitious product vision, this was an absolute tour de force, and one of the most impressive product launches I've ever seen a small company pull off.
  • Meaningful APIs: One of the great things about Foursquare's APIs is that they don't just give other companies the opportunity to plug in to Foursquare's data, they support the creation of experiences that are actually meaningful. Just one example is articulated well in this piece on digital nostalgia, showing how the wonderful Timehop has built a thoughtful and evocative experience on top of the Foursquare API, simply by reminding us of where we've been in the past. I expect people will be making apps that are as valuable as they are meaningful in short order, as well.

What's it mean?

While there may be individual companies that have out-executed Foursquare in these individual areas, the combination of the team's relatively small size, the growth rate in the user base, and the consistency of execution across all of these areas while also growing the company as a whole is incredibly impressive. Particularly important to me is that everyone from Dennis and Naveen on down within the company speaks about the vision that they have for what Foursquare can become, as opposed to short-term thinking or resting on the (not inconsiderable) hype that's been lavished on the company.

I point out this success for selfish reasons, too — I'd love to see more companies that both remain independent of the big players in the tech industry while staying focused on creating meaningful, large-scale products that aren't just simple features. The breadth of successes that Foursquare's had recently also point out to the fundamental wisdom they had in choosing not to be part of a bigger company like Facebook, as Facebook's own failures in this area stand in stark contrast, despite their advantages in scale, money, developers and resources.

But perhaps most importantly, I think we need more stories that celebrate the success of what seem like small, iterative product launches, but actually reflect triumphs in unsung disciplines such as systems operations, design process, business development and product management. There are lots of loud, pointless headlines about companies getting money from venture capitalists or angel investors. What I'd love to see more of in 2012 (and beyond!) is headlines about how a few small successes with users are a demonstration of a small company outperforming and out-innovating the biggest companies in the tech industry by being focused and disciplined in their execution. That, actually, is my most favorite Foursquare feature.

Published on 3:37 PM | Tagged , , ,

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