This work also addresses the concept of dematerialization. As music distribution formats evolve from the physical to the intangible, some audiophiles are questioning whether their emotional value is compromised. By exploring innovations in this space over the past 135 years, we see a steady increase in consumers’ desire for compacting, immediacy, and customization. Thus, the richness of the experience is now more important than the product delivery method.

Source: Flickr Creative Commons, by photosteve101, November 18, 2010

I’ve explored how advancements in musical reproduction technology have fundamentally changed consumers’ relationship with musical culture from the 19th century to the present, and how they’ll continue to do so in the future.

Below is the slideshow for my in-class presentation. Full details are shared in my term paper.

I plan to define the past as the pre-CD era, and the present as the cusp between the CD and established online music services, including iTunes, Pandora, and Rhapsody. As I try to predict the future, I’ll consider today’s emerging trends and technologies, such as the cloud. This journey will take me from the phonograph in 1877 to the Amazon Cloud Player and beyond. I have not revised my timeline since developing my most recent proposal; however, my areas of focus within the past, present, and future phases of innovation have become more apparent.

At this point, I believe the three most important developments in my timeline are the advent of radio in the 1920s, the invention of the CD in the 1960s, and the creation of online music services via the Internet and MP3 technology in the 1990s.

RADIO

Radio technology was accelerated, in part, by military sponsorship during World War I (Recording History, 2011). While radio remained off limits for the general public during the war, between the cessation of hostilities in November, 1918, and the end of civilian radio restrictions in 1919, there were scattered reports of military personnel firing up transmitters in order to broadcast entertainment to the troops (White, 2011).

Following World War I, new nightly radio shows were created to keep families at home entertained. By 1935, two out of three homes had radios; however, much of the programming was limited to storytelling due to the predominant AM frequency (Capuano, 2007).

During World War II, the radio once again hit a speed bump due to a ban on non-essential electronic manufacturing, but it rebounded once the war ended. Themes changed, and radio gradually started making its way to the FM frequency. Musicians were beginning to view radio as great way to expose new audiences to their music and to increase their popularity (Capuano, 2007).

COMPACT DISCS

The CD was invented by James Russell, a Bremerton, Washington native. Russell developed the new technology while working for the Battelle Memorial Institute in Richland, Washington as a Senior Scientist. Russell was an avid music listener, and like many audiophiles at the time, he was frustrated by the wear and tear suffered by his vinyl phonograph records. He was also dissatisfied with their sound quality (MIT, 1999).

Russell envisioned a system that would record and replay sounds without physical contact between its parts, and he believed the best way to create such a system was to use light. Russell was familiar with digital data recording in punch card or magnetic tape form, and he saw that he could represent the binary 0 and 1 with light and dark (MIT, 1999).

After years of work, Russell succeeded in inventing the first digital-to-optical recording and playback system, which was patented in 1970. He had found a way to record onto a photosensitive platter in tiny “bits” of light and dark, each one micron in diameter (MIT, 1999).

THE INTERNET & MP3 TECHNOLOGY

The Internet concept originated with ARPANET, which was created in the 1960s so U.S. Department of Defense researchers could share information with one another (Bellis, 2011). It was fully developed in the 1980s by Tim Berners-Lee, and was later shared with the world (Quittner, 1999).

This technological advancement brought about a new era of information sharing; however, music files could not initially be shared due to file size.  Research into a compressed format for digitized music began in Germany in 1987 at the Fraunhofer Institut Integrierte Schaltungen research center. The project was code named “EUREKA” by its two main contributors, Dieter Seitzer and Karlheinz Brandenburg. In 1989, Fraunhofer received a German patent for the MP3, and a U.S. patent for the MP3 followed less than a decade later (Stop Music Theft, 2011).

In May 1999, Napster introduced the exact functionality users wanted with regard to music files. Napster was the first of the peer-to-peer systems that allowed many users to connect to a sub-network and share files stored on their individual computers. Napster was optimized for sharing music files – and thus let users search for songs by artist, title, sampling quality, and other characteristics. The system worked very smoothly, and users could locate others who had the files they wanted, and start downloading from them instantly (MIT, 2002).

INNOVATION & THEORY

All three developments – the advent of radio, the invention of the CD, and the creation of online music services via the Internet and MP3 technology – are examples of Winston’s theory of supervening social necessity. This theory is based on the belief that technological developments are brought about by societal needs, such as the desire to be informed, to be entertained, or to make life easier (Winston, 1998, pp. 5-7).

Radio technology was accelerated due to the need for mass communication in World War I. The CD was created in order to improve sound quality and durability. The Internet, which gave rise to MP3 technology and online music services, was initially developed in order to help Department of Defense researchers share information.

Just as Winston theorized, a practical need was at the root of all three entertainment-focused technological advancements.

SOURCES

Bellis, M. (2011). ARPAnet – the first Internet. About.com. Retrieved May 2011 from http://inventors.about.com/library/weekly/aa091598.htm.

Capuano, E. (2007, January 16). The history of radio: an FCC uncensored look at technological entertainment. Associated Content. Retrieved May 2011 from http://www.associatedcontent.com/article/117962/the_history_of_radio_an_fcc_uncensored.html?cat=33.

MIT Website (1999, December). Inventor of the week archive: James T. Russell. Lemelson-MIT Program. Retrieved May 2011 from http://web.mit.edu/invent/iow/russell.html.

MIT Website (2002, March 3). Digital music distribution. MIT Sloan School of Management. Retrieved May 2011 from http://shumans.com/digital-music.pdf.

Quittner, J. (1999, March 29). Network designer Tim Berners-Lee. Time. Retrieved May 2011 from http://www.time.com/time/magazine/article/0,9171,990627,00.html.

Recording History Website (2011). Electrical recordings. Retrieved May 2011 from http://www.recording-history.org/HTML/phono_technology6.php.

Stop Music Theft Website (2011). Online music history. Retrieved May 2011 from http://www.stopmusictheft.com/online-music-history.

White, T. (2011). Radio during World War I. United States Early Radio History. Retrieved May 2011 from http://earlyradiohistory.us/sec013.htm.

Winston, B. (1998). Media technology and society (pp. 5-7). New York, NY: Routledge.

Hardin applies the “invisible hand” concept to an agricultural example with both economic and environmental implications in order to illustrate how decisions reached individually can, at times, harm society as a whole. He paints the picture of a pasture that is open to all. This pasture is also referred to as “the commons.”

Flickr image by JelleS, September 19, 2008

We can assume each herdsman will try to keep as many cattle as possible on the commons. This arrangement may carry on for centuries because intervening factors such as tribal wars, poaching, and disease keep the numbers of both man and animal well below the capacity threshold. Eventually, argues Hardin, the day of reckoning will come, and the long-desired goal of social stability will become a reality.

As each herdsman seeks to maximize his gain, he asks, “What is the utility to me of adding one more animal to my herd?” The utility has one positive component and one negative component.

The positive component is a function of the increment of one animal. Since the herdsman receives all of the proceeds from the sale of an additional animal, the positive utility is nearly +1. The negative component is a function of the overgrazing created by one additional animal. Since, however, the effects of overgrazing are shared by all of the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of -1.

Considering the value of the positive component vs. the negative component, the rational herdsman concludes the only sensible course of action is to add another animal to his herd. Over time, he continues to follow this logic and adds many more animals. Eventually, the commons is overcrowded. Therein lies the tragedy. Each man is locked into a system that compels him to increase his herd without limit in a world that is limited.

Hardin underscores his point, stating that ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.

After reading Hardin’s article, I considered current examples of the tragedy of the commons. The environmental impact of a growing population immediately came to mind – in part because overpopulation was Hardin’s primary focus throughout the article, but also because I recently left a job as an environmental communications manager for a global corporation, where I observed the inherent tension between profit and sustainability.

As I sought to apply to tragedy of the commons concept to the digital world, I came across an interesting Huffington Post piece. The article suggests that in the late 1990s, news organizations created a tragedy of the commons for itself by conditioning people not to pay for their trusted content online.

The author of the article, Charles Warner, discusses how the Washington Post and the New York Times led the way by offering free versions of their newspapers online. This seemed like a good way to make a little extra money through advertising dollars. Eventually all newspapers and virtually all magazines followed the lead of these venerable news outlets.

Unfortunately, these organizations weren’t thinking long term and, as a result, it’s extremely challenging to enlist paid print subscribers or to begin charging for online content.

The New York Times has tried to recoup some of its lost revenue by shrouding online content behind a paywall. Experts believe it’s too early to determine whether or not the paywall is working, but early traffic stats didn’t look promising. According to Hitwise, page views dropped in the first two weeks after the paywall was erected. Additional information is provided in an April Mashable article.

Sources:

Hardin, G. (1968, December 13). The tragedy of the commons. Science, 162, 1243-1248.

Parr, B (2011, April 11). What impact has the New York Times paywall had on traffic? Mashable. Retrieved May 2011 from http://mashable.com/2011/04/11/new-york-times-paywall-stats/.

Warner, C. (2010, March 18). The media tragedy of the commons. Huffington Post. Retrieved May 2011 from http://www.huffingtonpost.com/charles-warner/the-media-tragedy-of-the_b_503548.html.

In chapter 1 of Media and the American Mind, Daniel Czitrom addresses the telegraph’s role in developing modern communication. He points out that, before the telegraph, there was no real separation between transportation and communication.

Samuel Finley Breese Morse gave the world its first practical electromagnetic telegraph in 1838. He petitioned Congress for an appropriation to build an experimental line, and eventually obtained a $30,000 grant to construct a line between Baltimore and Washington, D.C.

Morse and his partners had hoped to sell their invention to the federal government, but Congress refused to buy the patent rights. Still, eight years later, the nation had over 25,000 miles of telegraph lines.

The public greeted the telegraph with excitement, but there were plenty of skeptics. One man actually wagered a bet that his horse could race against the telegraph, as he believed he could deliver messages more quickly. Others were concerned about the safety of the telegraph, and went to great lengths to avoid crossing under its lines.

The presumed annihilation of time and space held a special meaning for a country of seemingly limitless size. Morse envisioned a “global village.”

The press was partially responsible for making the telegraph economically viable and, in turn, the telegraph dramatically transformed the press. The “penny papers” of the period shifted to a greater stress on local and sensational news, and invented what we now refer to as the human interest story.

Telegraphy required the systematic cooperative news gathering by the nation’s press. The Associated Press emerged, and by 1852 it consisted of seven papers operating two complex systems of news gathering – foreign and domestic.

In the post-Civil War decades, the Western Union Telegraph Company’s alliance with the AP created a double-barreled monopoly. This concentration of control resulted in a public outcry against WU-AP.

In 1872 the House Committee on Appropriations emphasized the dangers inherent in the alliance. A Senate investigation in 1874further documented instances in which Western Union had cut off the transmission of news reports to papers that criticized the telegraph company and the content of AP dispatches.

In 1866 Congress passed a law giving all telegraph companies the right to build lines along post and military roads on the condition that, at any time five years later, the United States could buy all lines and property of these companies if it chose to.

Telegraph reform of some sort received support from a wide strata of the American public in the late 19th century, but it dissipated around 1900, partly due to the decline of the Populist movement and the inability to offset Western Union’s strong lobbying presence in Congress.

By the turn of the century, the promise of the telegraph seemed distant. It gradually fell into the shadows of a newer form of media: the motion picture.

Discussion questions:

• How do you think the WU-AP monopoly affected the life span of the telegraph?
• When the Internet became available to the mainstream, what were some of the barriers to adoption?
• How has the Internet impacted the news media industry?
• What will the next evolution of the Internet look like?

Tom Standage’s story about the invention, popularization, and extinction of the telegraph is a fascinating look at one of the most significant periods in history.  The book draws many parallels between the telegraph and the Internet, illustrating how human thoughts and behaviors really haven’t changed all that much over the last few centuries.

We, as a society, are still skeptical about the practicality and safety of technology at the onset, but become fanatical supporters once we understand how it can make our day-to-day lives easier; we quickly adapt new innovations to carry out both good and bad deeds; and we suffer from chronocentricity, which in Standage’s words, is defined as “the egotism that one’s own generation is poised on the very cusp of history.”

The concept of chronocentricity is intriguing to me. It brings up the question of whether we’re currently in the midst of a digital revolution or a digital evolution.

In the 1800s, a major newspaper said of the telegraph, “Since the discovery of Columbus, nothing has been done in any degree comparable to the vast enlargement which has thus been given to the sphere of human activity.”

The pioneers of the telegraph had exceedingly high expectations. Not only did they predict the telegraph would make commerce more efficient, they believed it would broker world peace. One slogan said the effect of the electric telegraph would be “to make muskets into candlesticks.”

This Internet has faced similarly high expectations. We’ve seen proof of its ability to fuel the economy, and we’ve also seen how it has enabled citizens living under oppressive regimes to speak out in protest and raise awareness of their efforts to achieve freedom. Nicholas Negroponte, head of the MIT Media Laboratory, said in 1997 that he believed the Internet would break down national borders and lead to world peace. He claimed that, in the future, children aren’t going to know what nationalism is.

While I want to believe this is true, I question whether Mr. Negroponte is under the influence of chronocentricity. The Internet is, undoubtedly, making the world “smaller,” but are we putting too much pressure on it to serve as a panacea for our most daunting problems? Are we really in the middle of a revolution?

Looking more closely at the similarities between the telegraph and the Internet, I believe we’re not experiencing a revolution, but an evolution. As Standage’s title suggests, today’s Internet could be considered a modern version of the telegraph.

Standage points out that, every time two computers exchange an eight-digit binary number, or byte, they’re going through the same motions as an eight-panel shutter telegraph would have done 200 years ago.

Instead of using a codebook to relate each combination to a different word, today’s computers use another agreed-upon protocol to transmit individual letters. This scheme says, for example, that a capital “A” should be represented by the pattern 01000001, but in essence the principles are unchanged since the late 18th century.

Similarly, Chappe’s system had special codes to increase or reduce the rate of transmission, or to request that garbled information be sent again – all of which are features of modems today. In fact, the protocols used by modems are decided on by the International Telecommunications Union (ITU), which was founded in 1865 to regulate international telegraphy. At the time it was known as the International Telegraph Union.

Just as scam artists found ways to make money by manipulating the transmission of stock prices and the results of horse races using the telegraph, they have found ways to deceive consumers and cash in on security loopholes via the Internet.

And just as people courted and married via the telegraph in the 1800s, they are doing so today with the help of Match.com, eHarmony, and other dating services.

If history is, indeed, cyclical, and we’re living during the Internet’s heyday, what will the future look like? As the telegraph became more automated, it eliminated jobs and reshaped culture. Will similar developments transform the Internet as we know it? What will be our version of the telephone?

It’s exciting – and a little overwhelming – to consider the possibilities. Standage points out that by the end of June 1877, there were 230 telephones in use. Today there are over 4.6 billion mobile phones in use around the world, and this doesn’t account for the many landline phones still in operation.

I imagine Alexander Graham Bell and his contemporaries would be shocked to see us using cell phones today. If you think about the concept in 19^th century terms, it definitely falls into the “black magic” category.

This goes to show technology affords us unlimited possibilities. If we can imagine it, we can likely make it happen – maybe not in the short term, but over time. Thus, we shouldn’t overstate the importance of present-day technologies; we must understand what has come before and the potential for what may come after.

References:

Standage, Tom (1998). The Victorian Internet. New York: Walker and Company.

The Associated Press (2010, February 15). Number of cell phones worldwide hits 4.6B. Retrieved April 2011 from http://www.cbsnews.com/stories/2010/02/15/business/main6209772.shtml.

Today’s business leaders can often be heard preaching about the importance of listening to customers and providing products and services that align with their wants and needs. It seems the mantra “the customer is always right” has never been more prevalent. But does that philosophy focus too much on what the customer wants and needs in the short term versus the long term?

Bower and Christensen point out that most well-managed, established companies are consistently ahead of their industries in developing and commercializing new technologies, provided those technologies address customers’ next-generation performance needs. However, these companies are rarely the first to commercialize new technologies that don’t initially meet the needs of mainstream customers and appeal only to small or emerging markets.

While rigorous resource management promotes profitability and keeps shareholders happy, it can also restrict innovation. Meeting the needs of current customers and fending off competitors typically requires all of the resources a company has, and then some.

This is especially true when economic challenges arise. I saw this first hand as an employee at Starbucks corporate during the recent economic downturn. Starbucks stock price dropped to $8 in late 2008 and has gradually rebounded to its former value of over $30 per share. Starbucks CEO Howard Schultz has written about this hard-fought battle in the new book, How Starbucks Fought for Its Life without Losing Its Soul.

Starbucks cut resources in many areas, but did not abandon innovation in new markets. The company expanded its existing packaged goods portfolio and took a big risk by launching VIA instant coffee.

As Harvard Business School Professor John Quelch commented in a 2009 Starbucks announcement, “Instant, soluble coffee has long been the unspeakable wasteland of the coffee business. Conventional wisdom would be that no premium brand should go near it. But Howard Schultz’s vision from day one has been to bring quality coffee to the mass market. Starbucks VIA™ Ready Brew continues that effort.” Quelch continued, “Starbucks VIA™ is going to redefine and reenergize the instant coffee subcategory. It will offer time-strapped Starbucks loyalists a chance to stretch their dollars and sustain their Starbucks brand consumption frequency. It will also offer non-Starbucks users an affordable entry point into the Starbucks world; after trying Starbucks VIA™, they may want to visit a store for the full Starbucks experience.”

Despite the negative stigma associated with instant coffee in many markets, Starbucks chose to forge ahead and create a new product formula that delivered quality at an affordable price point. The company successfully launched a disruptive product by prioritizing innovation and ignoring the skeptics.

Bower and Christensen caution that the key to prospering at points of disruptive change is not simply to take more risks, invest for the long term, or fight bureaucracy. Companies must manage strategically important disruptive innovations in organizational contexts where small orders create energy, where forays into ill-defined markets are possible, and where overhead is low enough to permit profit even in emerging markets.

According to the authors, innovation flourishes when companies have both the motivation and ability to innovate. They state that new-market disruptive innovations typically follow two patterns: They introduce a relatively simple, affordable product or service that increases access and ability by making it easier for customers who historically lacked the money or skills to get important jobs done; and they help customers do more easily and effectively what they were already trying to get done instead of forcing them to change behavior or adopt new priorities.

The introduction of telephony in the late 1800s exemplifies a successful disruption strategy. New-market entrants didn’t compete against consumption and target telegraphy users who were only interested in transmitting information over long distances. Instead, they focused on local consumers whose only method of communicating with their fellow townspeople was to walk or ride on horseback.

In addition to targeting non-consumers, companies can create up-market sustaining innovations to reach undershot consumers, and they can introduce low-end disruptive innovations or modular displacements to reach overshot consumers.

The authors of “Seeing What’s Next” illustrate how this can become a circular process in chapter 2. When companies first start to target non-consumers, they often undershoot their needs. As a result, they introduce up-market sustaining innovations. Companies trying to meet their customers’ needs eventually overshoot their customers, creating opportunities for low-end disruptions and displacements that change the basis of competition.

Examples of disruptive companies moving up-market are Bell and MCI. Western Union considered Bell’s innovation a toy, while AT&T dismissed MCI as an insignificant blip on its radar screen.

Disruption creates and capitalizes on asymmetries of motivation and skills. According to Christensen and his colleagues, it follows a three-step process. First, companies enter behind a shield of asymmetric motivation. Next, entrants grow and improve. Finally, entrants utilize the sword of asymmetric skill.

This was the case with Western Union. The company couldn’t suddenly become a viable competitor after the telephone had been improving “under the radar” for 25 years.

As I think about incumbents I’d like to see challenged, Comcast comes to mind. While customers can switch to DirecTV or Verizon’s FiOS service, they can’t choose between Comcast, Cablevision, or Time Warner (Duprey, 2011). I wonder how increased competition would impact Comcast’s pricing, customer service, and desire to innovate? Is any opponent currently sharpening its sword under Comcast’s radar?

In chapter 3, the authors discuss strategic decisions, specifically those related to venture capital funding and the value chain. They bring up an interesting point about the “right” amount of venture capital for a fledgling company, stating that get-big-fast money is only desirable after the company identifies the right customers and develops a profitable business model.

When there is too much pressure to get big fast in order to generate returns, companies may turn down small, profitable opportunities that could position them on a disruptive trajectory. Too much money also allows companies to focus on losing strategies for too long. As the employee of a growing start-up, I can identify with the benefits of being hungry. To an extent, hunger can make companies considerably more nimble and aggressive.

In terms of the value chain, the authors state that if a would-be disruptor uses the same suppliers as an incumbent, the disruptor will face pressure to adapt to the incumbent’s cost structure. Incumbents who have earned their disruptive black belts can create spinout organizations to ward off disruptive threats.

In chapter 4, the authors introduce the role of government in fueling innovation. They acknowledge that conventional wisdom suggests government involvement is bad for innovation. Admittedly, this has traditionally been my own personal view as well.

Christensen and his colleagues argue against this perspective, claiming it ignores the long list of innovations that would not have been successfully created or exploited without the government’s support. They cite both the Internet and the modernization of health care as examples.

Ultimately, the goal is to move companies toward the “hotbed,” where motivation and ability exist in abundance. Creation and exploitation of innovation flourish in this space. Interestingly, in many scenarios where innovators lack the ability to either create or exploit an innovation, innovation can still happen – motivation can trump ability. In other words, where there’s a will, there’s a way.

References:

Christensen, C.M., Anthony, S.D., & Roth, E.A. (2004). Seeing what’s next: using the theories of innovation to predict industry change. Boston, MA: Harvard Business School Press.

Some of my basic questions include: How has the transition from one recording format to the next gradually shaped mainstream musical style? How has the shift from physical goods to non-physical services impacted consumers’ interaction with recorded music? And what barriers have been overcome to make this shift possible?

My initial research has begun to answer the first question above; I learned the ‘‘album’’ originated with 78 rpm discs, which were limited to three or four minutes per side. This format shaped the contours of the modern pop song. The storage limitations of the 78 rpm disc also explain why the solos of early jazz recordings were compressed, and why these recordings often ended abruptly with cymbal crashes (McCourt, 2005).

In addition, McCourt addresses the “aura” of physical music formats. He points out that, when we browse through a record collection, we often pore over the jacket art and liner notes. We also tend to determine the value of the recording by gauging the wear on the jacket and disc. As someone who has a Beatles album jacket framed in my home, I can appreciate this concept. I miss the days when part of the excitement of buying a new album was, at least in part, directly related to its visual design.

With digital recordings, this aura is diminished, but paradoxically, the lack of materiality in digital files is said to heighten our sense of ownership, as well as our desire to sample, collect, and trade music in new ways. According to McCourt, possessing digital files can be a more intense and intimate experience than owning physical recordings based on three factors: the desire for compacting (a marriage of quantity and convenience), the desire for immediacy, and the desire to customize.

As I develop my term project, I’d like to learn more about McCourt’s perspective, and also uncover opposing views. I plan to define the past as the pre-CD era, and the present as the cusp between the CD and established online music services, including iTunes, Pandora, and Rhapsody. As I try to predict the future, I’ll consider today’s emerging trends and technologies, such as the cloud. This journey will take me from the phonograph of 1877 to the Amazon Cloud Player and beyond.

References

McCourt, Tom (2005, May). Collecting music in the digital realm. Popular Music and Society, 28 (2) 249-252. Retrieved April 2011 from Ebscohost.com, University of Washington.

Abstract:

Focuses on the collection of music in the digital realm. Brief historical recap of musical recordings, noting the 78 rpm albums and the increasing technological advances resulting in the LP, audio cassettes, compact discs, and digital music players; Discussion of the tactile and aesthetic loss in packaging as music formats change; Elements of digital recordings that enhance user “ownership”; Music compression; Ease in working with files; Customization of music; Belief that technology is emphasizing access and convenience over artifact and sound quality.

This project idea was inspired by my love of Pandora Radio. I’m deeply fascinated by its suggestion capability and also by its monetization model.

When I further research this topic over the next several weeks, I plan to zero in on both the technology that has made broad distribution possible and the economics of various formats. I look forward to learning more about what specific factors led to the extinction of formats like the 8-track cartridge, which was a part of my childhood.

At this point I’m planning to define the past as the pre-CD era. For the present, I’ll analyze the cusp between the CD and existing online music services, including iTunes, Pandora, and Rhapsody. As I try to predict the future, I’ll consider today’s most innovative trends and technologies, such as contextual online advertising and the cloud.