The better technology gets in delivering, the better the technology will become for reporting … It’ll all be kosher in the near future, Mike Chunn, New Zealand country manager for the Australasian Publishing Rights Association (APRA), on music downloads in 1998.
I think we are getting to the point that a strange relationship would be one where there was no virtual element. We are at the tipping point: how can you be friends with someone who is not on-line? In a couple of years, we will be no more disturbed by our relationship with virtual worlds than we are by our relationship with television, William Gibson, 2007.
A combination of Internet access, faster computers, CD recorders, and technology that squeezed music files down to one-tenth of their normal-size posed a major challenge to the music industry at the end of the 1990s. By the new millennium, the download culture, along with the huge trend to social networking, had challenged not only the music, movie, and television industries, but transformed the entire mode of on-line interaction through its collective influence.
The chasm first began to open in mid-1997 when free MP3 compression software became available on line, enabling anyone with a computer to easily create, play, copy, and distribute music files. The software typically reduced a song from 60Mb to 5Mb of disk space, which meant up to 140 songs could be saved on a recordable CD, and slightly fewer on a Sony minidisk or flash-based memory card.
The resulting files could be sent from computer to computer by email, FTP or shared via IRC or ICQ forums. Users could also download ‘jukeboxes’ to help manage music files on hard disks and CDs or load songs onto minidisks or portable solid-state players.
The MP3 format had thrown the recording industry into a spin and rapidly became a runaway global phenomenon with legitimate and blatantly pirated songs criss-crossing the globe. The new piracy trend had taken off in the United States, particularly among college students. At universities, students were taking turns buying the latest CDs to convert to MP3 for distribution to ever-widening groups of friends.
Many were no longer buying music but were using fast Internet to access and share illegal copies of the latest songs. While local Internet users, who were still struggling to get broadband speeds, had to wait 30 minutes or more for a track to download, the compressed music format was catching on in New Zealand universities, where fast Internet was available. The search item ‘MP3’ had become the third most popular on the AltaVista search engine and there was even an MP3 top 40.
While unsigned indie or world music artists now finally had a chance to market themselves to the world, record companies had been caught off guard by the proliferation of songs from their catalogues being illegally copied. Even if they wanted to, there was no means for them to protect copyright, extract royalty payments for songwriters, or maintain control over traditional distribution channels. On-line piracy was spreading like a virus.
Record industry in a spin
Individuals and ISPs around the world were being threatened with legal action unless they removed ‘illegal’ music files from their web sites and hard drives. The recording industry even hired electronics and computer experts to track down thousands of sites containing hundreds of thousands of offending audio clips, which were seen as a threat to the industry, undermining sales, copyright, and royalty payment structures. It was exploring every option to trip up the impudent MP3 industry until it found a way control the technology and establish legitimate sites.
Mike Chunn, New Zealand country manager for APRA, wasn’t too concerned. He believed the industry would eventually work out an accurate system for detecting and reporting. “The better technology gets in delivering, the better the technology will become for reporting.” Internationally all collection societies including APRA were looking to find “a technologically accurate way of knowing who’s doing what with the music, and to report what’s been downloaded,” he said. He claimed the MP3 issue was about novelty value. “It’ll all be kosher in the near future.”
Around five million MP3 software players had been downloaded from the Internet by 1998 and the format had become so popular that the first of a new generation of MP3 hard disk-based or solid-state, handheld players were being sold with storage of up to 64Mb. The music industry was again in reactive mode in October 1998. The Recording Industry Association of America (RIAA) and the Alliance of Artists and Recording Companies (AARC) obtained a short-term injunction against Diamond Multimedia to halt the launch of its Rio portable MP3 device.
In the United States the manufacturers, importers, and distributors of digital audio recording devices received immunity from copyright infringement if they paid a royalty to compensate composers, musicians, publishers, and record companies. They also had to incorporate into their products a serial copyright management system, (SCMS) to prevent second generation copies being made. Essentially the recording industry had been caught on the hop without the agreements or the technology in place to keep pace with the MP3 revolution. RIAA failed to prevent the release of the Rio solid-state player, when it was technically classified as a computer peripheral, not a recording device.
During a summit at the University of California in San Diego in June 1999, John Perry Barlow, Electronic Frontier Foundation (EFF) co-founder and Grateful Dead lyricist, claimed record companies were trying to use the law to ‘bottle up’ music and other content, which he described as “the common property of humanity.” In this case, the vessel for that content was the compact disc. Barlow predicted that as music downloading became more popular in the mass market, the need for physical product would wane, along with the power of the record companies. “We need a different economic model.
The one we have now is based on the material containers” that hold the music. The record industry countered that it invests a great deal of money and resources to find, develop, record, and market artists. Studios said a lot of money that doesn’t get paid directly to the artist is spent on building them up, getting them on the radio and MTV, and marketing products such as CDs and concert tickets.
In New Zealand, Michael Gladding, managing director of Sony Music, warned that downloading MP3 files could destroy the basis of his business, the payment of royalties. “In an ideal world governments would ensure the technology would allow you to download but not pass it on. We’re a hardware and a music company but the problem is where you have third parties who create hardware without giving a damn about intellectual property. We’re trying hard to control the rights to our product and for five years we’ve always said no one can put our product on the Internet. If we don’t control it the artists won’t get paid,” he said. Locally, copies of Stellar* and True Bliss songs were on the Internet well before their scheduled international release, and at least 150 MP3 sites with unauthorised Bic Runga songs had been found, according to Sony Music.
The issues facing the industry were compounded by CD recording hardware and software which was now mainstream, and supplied standard with most new machines. During Christmas 1999–2000 you couldn’t get a CD recorder in New Zealand. Either there was a lot of pre-Y2K data back-up going on or the MP3 fad and home copying had caught on. In fact we were going through container loads of recordable CDs to feed our appetite.
The Recording Industry Association of New Zealand (RIANZ) admitted it felt powerless to do anything about the proliferation of illegally copied songs unless it caught a commercial operator in the act. “Even if there are 10,000 people in New Zealand downloading MP3 files illegally, what can we do until someone pops their head above the crowd? It’s out of control,” said chief executive Terence O’Neill-Joyce. RIANZ began its campaign against illegal MP3 songs in 1998 when it wrote to a number of ISPs and individuals asking them to remove unlicensed MP3 content. However the organisation had limited resources and its hands were full with more pressing issues such as lobbying for changes to the Copyright Act to protect intellectual property, and trying to catch unlicensed local operators who were using commercial grade CD burners to make and sell music compilations.
New format frontier
Not only indie artists but high-profile names were rushing to take advantage of the download phenomenon, from Billy Idol to Taylor Dayne and classics from Kansas, Dionne Warwick, the Blues Brothers, Willie Nelson, The Beach Boys, and John Hiatt. These were essentially promotional offers designed to sell albums, but also a small step by record companies to try to bridge the gap the new format had opened up.
While the major music industry players were decrying MP3 at one end of the scale, they were also hedging their bets with software players such as Microsoft’s Windows Media Player embracing MP3, and the major electronics companies building their own MP3 hardware. By early 2000 more than a dozen players had appeared from electronics giants, including Sony, Creative Labs, Sanyo, Samsung, and Casio. Locally the Warehouse chain sold out of its first parallel-imported Rio shipment. The tsunami of change was further complicated by the arrival of secure digital (SD) and Memory Stick solid-state removable media cards which would plug and play with notebook computers, next generation cameras, MP3 players, and even cellphones.
The first legitimate site to offer a portal for MP3 songs was US-based MP3.com. Following its overnight success similar sites jumped on the download bandwagon including Australian namesake MP3.com.au; even a group of New Zealand entrepreneurs got in on the game in March 2000 with MP3.net.nz. Those sites ‘signed’ artist contracts and offered a share of royalties based on the number of downloads, but the door for free, unprotected, illegal music downloads continued to open wider. As soon as authorities shut down one site another two would open elsewhere, and dedicated search engines soon helped locate them. The International Federation of the Phonographic Industry (IFPI) believed there were 100 million illegal MP3 tracks on the Internet at any one time, representing potential losses of up to a billion dollars in 1999. Wired magazine estimated about 17 million MP3 files were downloaded each day.
The next cause for concern among industry moguls was a peer-to-peer MP3 distribution network, devised by 19-year-old US college student Shawn Fanning. Napster was a freely available software suite allowing users to share MP3 music files by turning their PCs into servers to upload or download music files on request. Users would simply create a music folder on their PC, type the name of song they wanted and pretty soon the folder was filling up with responses. Napster could download three tracks at a time, and if you had a song someone else wanted, their machine polled yours and away it went. The software had its own music player and automatically catalogued the music received. To cap it off, the latest MP3.com service allowed users to register CDs they already owned so they could download them and listen to them from a PC or portable audio player.
The RIAA was livid. It had tried to put a lid on the unprotected format and was now going to sue MP3.com, for infringement of the copyrights of record labels and artists.
It was too easy to dismiss MP3 as a pirate’s paradise. It should have been viewed as the ultimate beta test for the future of the music industry, and the ideal proving ground for up-and-coming talent. Way before the mainstream music industry fuss, the format had helped liberate many independent artists and made freely available a cornucopia of legitimate sounds from every genre. Increasingly sites were ensuring artists got paid, which in itself addressed one of the main concerns. North Shore band Mistake Theory, one of a dozen or so local bands with legitimate songs on MP3 sites, had more than 15,000 downloads at MP3.com and eventually made it to the top of the trip hop charts. The real rewards came from the high profile they achieved and the royalty cheque, which was greater than the band’s earnings from APRA, the official royalties distribution agency in New Zealand.
Paul Jessop, UK-based director of technology with IFPI, was waging his own war. In New Zealand for a copyright conference, he said record companies must keep MP3 out of the mainstream and its users in ‘the swamp of infringement’ where they would miss out on new-generation enhanced products. Forrester Research, however, predicted the market for digitally downloaded music would grow to US$2.2 billion by 2003. Record companies wanted their share, but were still trying to get agreement to firm up their secure digital music initiative (SDMI), designed to protect digital downloads and help track pirates.
Ultimately compliant players and product would be introduced to further screen out counterfeits. SDMI, they believed, would ultimately provide copyright and trademark protection on digital media, including DVD and CDs, as well as MP3 and other download formats. However there were concerns that no matter what the industry did it would be hacked. The Rio and every streaming media package had already been ‘liberated’ by people determined to free the music.
Pirates on digital seas
Analyst Jupiter Media Matrix said word-of-mouth from a younger, mainly 17- to 24-year-old, male-dominated audience was driving the latest round of exponential growth for next generation file sharing services. The ‘market’ had grown a massive 492 percent, to 6.9 million files between March and August 2001. Music sales slumped 5 percent across all major markets, except France and the United Kingdom, during the first half of 2001. New Zealand was no exception – some music chains claimed sales had slipped about 2000 units per month. Illegal CD copying and on-line file swapping was blamed. In the United States the National Association of Recording Merchandisers (NARM) said record companies had contributed to the problem by failing to provide attractive retail alternatives to file sharing. It said retailers could have been competing with the trend but instead had increased CD prices and consumers were burning discs and sharing files on a massive scale.
Major record labels, quick to criticise attempts by rivals to provide on-line access to music, were exceedingly slow to come up with an alternative. In October 2001 the five major labels, representing 85 percent of the industry, were readying their own digital distribution channels and preparing to unplug illegitimate competitors. RIAA, representing more than 600 record companies, was going after music pirates with specialised computer hacking software which could delete illegal files or prevent downloads, using a type of DoS attack. The industry was also pushing law changes to embed copy-protection controls in nearly all PCs and consumer electronic devices, believing this would speed up the official distribution of movie and film content over fast Internet.
While industry paranoia highlighted an uncomfortable trend towards dishonesty, contributing factors were often overlooked. MP3 rose to global prominence because major labels didn’t support world music or reinvest profits to foster and encourage new artists beyond a tight radio-play prescription. They led by example with their technology and the pay-for-play process. Attempts to shut down entrepreneurial on-line sites, by refusing access to legitimate content or crippling CDs so they couldn’t be copied for personal use, had resulted in a major consumer backlash. The cost of CDs was far too high for a piece of plastic worth little more than $1. Even when adding legitimate artist and distribution costs it still seemed excessive and parallel importing had made little difference to local pricing ($24–$34).
After administering devastating blows to several pioneering on-line outlets, and with further court action in progress, the American Justice Department, the European Commission, and independent on-line players were asking if action by the industry wasn’t in fact anti-competitive. Already the big boys had attacked MP3.com and Napster with all their legal might. In fact MP3.com and Napster had been forced into the hands of the big labels. Several copycat sites including Scour, Aimster, Morpheus, Kazaa, and Grokster had either been shut down or were facing court action for sharing music, movie, and software files.
Having opened a Pandora’s box on digital downloads, MP3.com had a database of a million songs from unsigned bands, and was being restructured after being acquired by French media conglomerate Vivendi Universal. The site, which had 37 million registered users, fell foul of the major labels when it launched its My.mp3.com file-swapping service. Vivendi sued for copyright infringement, winning US$118 million before buying the company for its own on-line subscription service. The RIAA forced peer-to-peer file-swapping company Napster to pay US$26 million for unauthorised use of music and an advance of US$10 million against future royalties. Napster was sold to European recording giant Bertelsmann Music Group (BMG). A host of other independent music downloading and file sharing sites then sprang up in their wake.
Peer-to-peer networking was a ‘disruptive technology,’ so different to existing models it forced fundamental change, and opened up enormous opportunity for those nimble enough to follow through. At last the industry was reclaiming its territory from the remaining free file sharing networks such as iMesh, Kazaa, and eDonkey. However an industry standard for downloads and devices remained bogged down in a confused mire of digital rights, copy protection, and playback technologies. The major investors were still insisting on trying to lock customers into their way of doing things. Research firm NPD Group said Apple with its iTunes commanded nearly 70 percent of the legal download market between December 2003 and July 2004. The new legitimate Napster took 11 percent, while major industry-run download portals MusicMatch, RealNetworks, and Wal-Mart took 6 percent each.
Despite the new legitimate face of the industry, research company Big Champagne said peer-to-peer file sharing was still on the rise. It claimed seven million people were on-line using such services at any time – half in the United States. That was a 20 percent increase over 2003. In New Zealand, demand for Apple’s iPod was so great it took six months to clear back orders, and there were several thousand advance orders for the new iPod Mini, which went on sale in July. Many users were frustrated at the lack of a New Zealand outlet for iTunes and other major legitimate music download sites. Most US sites wouldn’t accept New Zealand credit cards unless subscribers had a US street address. In its 2004 projections IDC called on-line music ‘the first layer of the broadband content value stack,’ pointing out the success of on-line music services such as iTunes, Musicmatch, Napster 2.0, SonyConnect in the United States and OD2 in Europe.
Kiwis in download deluge
In 2005 pioneering local download site amplifier.co.nz had been delivering selected Kiwi music at $2 a pop. It was joined by Digirama and Coke Fridge (Coketunes) with their extensive catalogues of global and local songs. Speculation the number might be swelled by Apple’s iTunes, which now operated in 20 countries, remained just that. Regardless, iPods had become an extremely popular device for people to upload music to. Worldwide more than 500 million songs had been downloaded from iTunes sites since it launched in April 2003. Kiwi iPod music fans were envious of their Australian cousins who could select from among a million songs (A$1.80 each) and around 1000 music videos ($3.60 each). Video clips could also be viewed on the newly launched video-capable iPod with the promise that TV shows and movies were on the way.
Locally owned Digirama had more than 100,000 songs and rival Coketunes had half a million plus. Users could preview songs and download in Windows Media Player (.wma) format. The music would play instantly on Media Player but needed to be converted to an MP3 format to play on Apple’s iPod. Digirama let you burn or transfer to an MP3 player three times before security kicked in. Coketunes was in seven European countries and the software was imported for the local market by Coca-Cola New Zealand. It had a music fund, with a portion of every track sold going to quarterly grants to young local musicians. An early price war with Coketunes forced Digirama to cut its fees from $2 a song to $1.70.
In the first week of December 2006 Apple Computer finally launched its iTunes store in New Zealand, giving the local market access to the same features, pricing and seamless integration with the iPod that had made iTunes the most popular music jukebox and on-line music store worldwide. With a catalogue of more than two million songs, the New Zealand iTunes Store now featured the largest catalogue of local and international music in the country. Songs were priced at just $1.80, music videos at $3.60, and most albums at $18. There were also 65,000-plus podcasts, from TVNZ, The Voice Booth, and Radio NZ.
Coketunes started in late 2005 and instantly became the biggest legal download site in the country, but wound up on 10 August 2007. Coca-Cola said its demise had nothing to do with competition from other web sites and the heating-up of the digital music market since the Apple iTunes store opened. Coca-Cola communications manager Alison Sykora said the web site had served its purpose and it was time to focus on new ideas. “When we came up with the concept it was to provide something that wasn’t available … It’s basically a case of the job having been done.” She said one of Coketunes’ main objectives was to channel the profits from the web site back into a music fund to help promote emerging New Zealand artists. Only two received grants – singer Ladi6 got $15,000 for her debut album and Madison Press received $12,000 worth of music equipment.
The news of Coke quitting came just as the Recording Industry Association launched a new-look sales chart, based on counter sales, radio airplay and, for the first time, digital music downloads. RIANZ expected the singles charts in particular to take on a very different look once digital sales were taken into account. NZ Herald journalist Peter Griffin asked in his blog, “Will this change the face of the charts? Probably the singles charts. But what will it mean for New Zealand music? Is a local song less likely to go to number one where digital single sales are accounted for? I doubt it will make much difference as the marketing efforts on the major download web sites are usually tightly integrated with those of retailers. If anything, it may allow some smaller bands to climb higher than they would have before.”
A new presence in the on-line music world entered the fray in July 2007 with some added value: a chat tool for fans to converse with their favourite artists, and the ability to buy tracks via text messages. Txttunes, two-thirds owned by former iPod distributor Renaissance Corporation, opened to New Zealand and US customers, and hoped to expand to the UK market as well. It offered independent labels and artists an opportunity to not only publish music and make money from sales, but also chat with fans and inform them of upcoming events and new releases. Txttunes CEO Matt Coleman said artists could upload their content directly onto the web site where fans could purchase tracks with a text message at $2 each. The company expected to have 1500 local artists by the end of 2007. The site launched with about 30,000 tracks. Txttunes was originally created by Brad Carter, lead singer and songwriter of New Zealand band Stereogram. The company was based in New Zealand, but had six business development agents in North America.
All Kiwi copying illegal
Access to digital music in New Zealand had been complicated by the fact that it was illegal to copy your old tapes or LPs into digital format, make music compilations, or even copy CD tracks onto portable MP3 players. Even taping TV programmes on VCRs and modern-day DVD recorders or hard disk machines was technically against the law. Legally you could have your CDs confiscated, face a hefty fine or jail time, but in this case the law really was out of step with the times, and no one was going to enforce it unless you were making multiple copies for sale.
In a way the old law made a mockery of tape recorders, CD and DVD burners, burning software, recordable media, and portable hard disk music players, so clearly designed to assist in this ‘crime.’ It was clear that CD writers had come of age by 2001. They were no longer optional add-ons but bundled with high-performing computers and so efficient as to make low-end back-up tape redundant. In fact the average computer could now easily perform as a real-time digital sound studio. In the late 1990s a four-speed CD writer cost more than $1000 and copying a 74-minute music disc took about half an hour.
By 2002 writers operating at 52x speed cost around $300 and could record an album’s worth of music in a few minutes; a little longer for rewritable disks. Blank CDs cost 50 cents to $3, depending on quality and quantity. The growing efficiency of the CD writer made life much easier for computer users needing to regularly back up or archive computer files or software, but there was no doubt that many were also using them for music.
While many drink coasters were created by earlier CD-Rs which left noise on the media, or were incompatible with some systems, the major hi-fi manufacturers had accepted home users were creating their own compilations. They revised their players to bring MP3 audio encoding into the mainstream. The technology and the software that came bundled with the CD-R drive also improved, typically protecting against ‘buffer under-runs’ that used to cause recordings to fail or create errors in the finished product. In other words the process was now almost foolproof – even if you were to eject the CD in the middle of recording, chances were it would recall the exact position of the laser and resume where you left off.
Judging by the statistics New Zealand’s love affair with home recording was escalating beyond all expectations. Between March and May 2002, 2.58 million recordable CDs were imported compared to 3.83 million pre-recorded music CDs. The monthly average of recordable CD imports for the previous two years had remained around a million but after 2003 continued to increase incrementally until memory card capacities grew to 1–2 Gb and recordable DVD technology (8Gb and beyond) began to move into that space.
Basically the music and movie industries had sat on their collective thumbs crying foul, while their electronics divisions sold a whole generation of CD and DVD burners, MP3 players, and burning software that enabled exact copies to be made of any song or movie ever produced. Music lovers have had the technology to do what they like with their LPs ever since the tape recorder, but digital media enabling format shifting to VCRs, Minidisks, CDs, DVDs, hard disks, memory cards, and now solid-state players had created a demand that the industry and copyright law were still trying to come to terms with.
MP3 players and portable media devices were by far the most popular consumer electronics items on the market, with New Zealanders spending $25 million on them in the first half of 2006. According to consumer electronics market researcher GfK, sales went through an astounding 864 percent growth in the six months to June 2006, compared with 2005. The new breed of miniature multimedia devices was vying for a niche between USB flash memory drives, phones that doubled as cameras and specialised players such as the iPod and a growing number of rivals. The latest fashionable, slimline devices weren’t just providing copious storage for songs and photographs; they were also music players, FM radios, voice recorders, and video players.
Glorified storage devices that doubled as MP3 players littered the pages of sites such as TradeMe for around $50–$100, along with scores of older model iPods and other brand-name devices, whose owners were trading up. The fact that most pocket players were optimised for video was a massive sea change, causing concern among those whose livelihoods depended on DVD sales or rentals, now comprising half of Hollywood’s revenues. They no doubt recalled the impact free-for-all audio downloads had on the music industry when the wildcard MP3 format got loose on the Internet, forcing the major record labels to rethink their strategies and come up with a digital one.
Video distributors, mobile phone companies, Internet service providers, and broadcasters were gearing up to feed this hungry youth-driven fad, with everything from music clips to on-demand TV series for mobile players, known as ‘mobisodes.’
Higher-end media players, with larger screens and video capability sold for $500–$1000 with up to 30Gb capacity, enough to deliver days of video viewing or game playing or sufficient songs to keep a radio station fresh for months.
Trusted brand names such as iRiver, Creative Labs, Toshiba, Philips, Sony, SanDisk, Samsung, Nokia, and dozens of clones, were trying to gain traction. Even Victorinox, the Swiss army knife maker, was in on the game with a knife was also a Gigabit MP3 player. Entry-level devices retailed from $100 to $200, with enough capacity for several hundred MP3 songs (1Gb–2Gb). Portable players typically came with a USB cable for easy uploading of song, videos, photos and other files direct from a PC, notebook, digital camera or other device.
Digital media players had been around for several years, but the iPod still dominated and iTunes accounted for nearly 70 percent of digital music sales in 2006. Eighteen more sophisticated, stylish, higher-capacity 20Gb–60Gb devices were expected to hit the market during 2008–2009 with a stronger focus on sound and image quality and compatibility with standard home entertainment systems.
Saving our lives
Andy Warhol’s famous 1960s quote “In the future everyone will be famous for 15 minutes” has an eerily prophetic tone about it now that we had the tools to capture, store, and display almost every detail of our existence. Some were taking the challenge to digitally document life seriously; hunter-gatherer instincts were in overdrive as technology unleashed extraordinary capabilities and capacity. With a minor investment anyone could record, edit or manipulate music, movies, photographs, or words and store, or publish the results in any number of public or private places.
Having a single portable device that could record, play back, or display all of your media requirements was high on the list of must-haves for the youth market in particular. The new tools seemed to appeal to a deep inner need to collect, archive, and share, and almost required a new vocabulary. In fact Trendwatching.com had defined the term ‘life caching.’ “Even though life caching seems very much about technology and virtual lifestyles, its behavioral drivers are nothing new. At the core is the need to collect experiences, which ideally convert into stories, [and] in return enable human beings to engage others; whether it’s to please, to convince or to gain status. Oh, and let’s not forget that in our individualised, ‘everyone counts’ society, all consumers have a story.”
The Web had become a playground for anyone with the inclination to have an input into the ‘collective unconscious.’ Home pages telling the world about hobbies, passions and interests were giving way to blogs, where anyone with an opinion could have a rant, adding their diaries and dialogues to the information overload.
Social networking sites were the flavour of the year in 2007, and judging by the number of people drawn to them, keen to make their blogs, photo albums, home movies, and personal profiles public, it was fertile ground for the future. In fact the music and other industries were having to quickly wake up to another trend that had gone ballistic virtually overnight. Social networking was seriously influencing not only opinion, particularly among youth, but buying trends from fashion to music, and social attitudes.
The fact that major media companies were quickly acquiring any innovative on-line real estate to further exploit and explore options for the future was a sure sign the model was maturing. Google had acquired YouTube only two years after it had been created by two former PayPal employees; Fox Interactive Media’s Yahoo! acquired del.icio.us and Flickr, and Rupert Murdoch’s News Corp spent half a billion dollars on the company that owned MySpace.com. In New Zealand thousands of people were logging on daily to sites like MySpace, YouTube, Bebo, Facebook, LinkedIn, and Google’s orkut.
New Zealand On Air announced it might fund productions made specifically for the Internet, and TVNZ launched its own channel on YouTube, regurgitating edited fragments from popular local shows alongside news and other content. Content included Kiwi musicians, film trailers, historic television footage – and dozens of videos of the haka and bungy jumpers plunging from bridges. New Zealand’s best known YouTube contributor, Lonelygirl15, played by Tauranga-born actress Jessica Lee Rose, had already featured on the cover of Time magazine after reaching 7.7 million viewers on her channel; and Lonelygirl remained one of the most subscribed tags, even after the video log of her life was exposed as a made-for-the-Internet creation.
In fact the YouTube confessional video-blog was being hailed as a new form of on-line entertainment with spin-offs appearing on other sites and new episodes of the Lonelygirl15 social network drama continuing to unfold. After her Bree character had been killed off, the Kiwi actress went on to mainstream success in film and television roles.
Kiwis in MySpace
MySpace launched a New Zealand–focused site in February 2007, kicking off with about 300,000 Kiwi members and a live concert from Kiwi band Evermore, which used its presence to keep in touch with fans and develop a new audience. It was heralded as an opportunity for local musicians and bands to market themselves. MySpace had more than 60 million users worldwide. It allowed users to share information about themselves and link to each other’s pages within the site. It has been credited with launching the careers of a number of top bands including My Chemical Romance. Fox Interactive general manager Rebekah Horne said half a million Kiwis used MySpace, and that number was expected to rise in keeping with the Australian trend.
The site would initially be run from Australia but be tailored for a Kiwi market. Horne said New Zealand was leading the region in embracing new technologies. “Although the population is small, a lot of New Zealanders are really interested in popular culture – probably more so than Australians.” New media commentator and journalist Russell Brown said the move into New Zealand was probably part of Murdoch’s grander scheme to integrate his other media interests in film and television with the Internet.
Telecom quit its long-term relationship with Microsoft in December 2006 and formed a new joint venture, Yahoo!Xtra, to become more aligned with the new social networking trend. Xtra had partnered with Microsoft in 2002 to provide content and on-line services for its default home page and Web portal. The site had been consistently ranked at the top of Nielsen’s monthly Web polls. Now Yahoo!7, a joint venture with Australia’s Seven Network, had displaced the software giant with 51 percent of the new Xtra partnership. Telecom promised an enhanced range of news, sport, weather, and messaging services plus premium on-line services such as on-line photo sharing, local news, Internet radio, and enhanced spam and virus protection.
Some of those promised services were a little while coming but were included in the August 2007 announcement for an exclusive VIP area for Telecom’s 600,000 Internet customers, called Yahoo!Xtra Bubble. Despite launch problems, with some customers losing email access for up to a week, the site soon stabilised. Among the premium services was a personalised home page with customisable news, entertainment, and information from a choice of over 300,000 content sources, email storage, on-line photo storage and sharing with Flickr Pro, a 1Gb on-line briefcase and an all-in-one free security suite, featuring Norton AntiVirus. Clearly Xtra was seeking to differentiate its site and services and build loyalty.
In May 2007 the statistics suggested about 75 percent of US Internet users were streaming video and the average user watched more than 2.5 hours of on-line content, according to measurement and analysis firm, Comscore. The Comscore Video Metrix report said sites run by Google topped the monthly rankings with the most unique video streamers and the most video streamed. Google sites grabbed 21 percent of all 1.8 billion videos streamed, with 1.7 billion originating from Google subsidiary YouTube.com. Fox Interactive Media ranked second, with 680 million streams, or 8 percent of the total, followed by Yahoo! sites, with 387 million streams, and Viacom Digital with 237 million streams. In all, Americans viewed more than 8.3 billion streaming videos on-line in May, said Comscore. The average video stream was 2.5 minutes, the average on-line video viewer consuming 653 video streams, or more than two a day.
Social networking site Facebook, which launched in late 2006, was growing at an average of 150,000 people a day and by January 2007 had 30 million subscribers. By August it was trailing just behind MySpace, the most visited site on the Internet, with more than 100 million account holders. In New Zealand, Facebook ranked third, gaining about 1000 Kiwis a day, with Bebo the preferred site among teens.
Users could build their own home page with a customisable personal profile, which might include photographs, wallpaper, and links to information from any of 47,000 other networks that might appeal. They could add existing friends, invite new friends to join, and send messages to other users from within their page. More than 2000 accessories were available to ‘pimp your profile’ ranging from local weather forecasts, horoscopes, a graffiti pad, top friends list, games, and mood indicators.
Social networking sites made up four of the 20 top web sites New Zealanders visited in August according to survey company Hitwise; Bebo was in fourth place, MySpace tenth, Facebook 12th and Friendster 20th. Facebook’s share of web site visits increased by 240 percent between May and August 2007; and in July, possibly due to the school holidays, it overtook MySpace for the first time.
Networking web sites had a 270 percent increase in visitors worldwide during 2006–2007, according to Comscore. In comparative figures over a year to June 2007 MySpace remained the top social networking site with 114 million unique visitors, representing growth of 72 percent on the previous year. However Facebook was catching up, with 52 million unique visitors, up 270 percent. Facebook’s growth may have been partly to do with media reports that Yahoo! and Microsoft had shown interest in acquiring it, but their multi-billion dollar offers had been rejected, said Comscore.
Bebo had 18 million unique visitors, up 172 percent and had a strong following in New Zealand. Comscore also surveyed Latin American Hi5, with 28 million unique visitors, and Orkut – owned by Google, although Friendster, which kicked off the social networking revolution, was now well out of favour with only 65 percent growth over the year, followed by Tagged, which claimed to have 30 million registered users and ten million unique visitors a month. In the Comscore study it had 13 million unique visitors in June, equating to annual growth of 774 percent.
In October YouTube launched local channels in New Zealand. The pages featured localised search and home pages highlighted videos relevant to the local market. Comedy duo Flight of the Conchords, which had recently become overnight sensations in the United States with their off-the-wall TV series, and a teenager’s ode to sheep love were among the most viewed clips at the launch. Celebrity bloggers were out in force and YouTube co-founder Steve Chen said the localised site would “showcase New Zealand’s unique culture and lifestyle to the world.”
Early content partners included TVNZ, 100% Pure New Zealand, and Sky News. “It’s great to be able to bring the local users a New Zealand version of the site that will not only provide them with more relevant content, but will also help to reinforce connections and experiences within the local community.” An added bonus, said Chen, was the chance for Kiwis to pursue the modern-day Holy Grail – fame.
Social networking sites fell into a burgeoning category known as second generation or Web 2.0 services, which were rapidly gaining ground because they were far more intuitive and delivered a richer, more dynamic and interactive experience. Web 2.0 was typically about the ‘live Web’ or web sites that had improved communication between separate software applications and people; for example blogging and social networking technologies that enhanced connectivity and collaboration between people. It was more about push than pull with content coming to the user rather than the user having to look for it.
At the heart of the move was a shift to open Web standards for describing and accessing data and improving interfaces to mimic the real-time responses of desktop applications. Web 2.0 was born in the aftermath of the 2001 dotcom-bubble bursting. “Many people concluded the Web was overhyped, when in fact bubbles and consequent shakeouts appear to be a common feature of all technological revolutions,” said Tim O’Reilly, president and CEO of O’Reilly Media, who coined the term Web 2.0. “Shakeouts typically mark the point at which an ascendant technology is ready to take its place at centre stage. The pretenders are given the bum’s rush. The real success stories show their strength, and there begins to be an understanding of what separates one from the other.”
The concept of Web 2.0 began with a conference brainstorming session where it was observed that far from having crashed, the Web was more important than ever, with new sites and applications popping up with surprising regularity. The dotcom collapse seemed to mark some kind of turning point for the Web as the companies that survived appeared to have common qualities. The call to action to find out what that was became the Web 2.0 Conference. Within 18 months the concept had obviously gained ground with 9.5 million citations in Google (14 million in September 2007).
A must-have for many frequently changing sites was rich site summary or really simple syndication (RSS), a family of Web feed formats used to publish frequently updated content such as blog entries, news headlines, or podcasts. An RSS document could contain a summary of content or the full text from an associated web site which could be read through an RSS reader or an aggregator, which summarised the content you subscribed to and would automatically update any update when you clicked on it. Then there was the permalink, the first attempt to build bridges between Weblogs; literally a permanent link to a particular blog or article that remains active even if something had been archived.
The growing world of blogging gave rise to another term: the blogosphere, which embraced the bloggers’ world of words or universe of discourse. “The blogosphere can be thought of as a new, peer-to-peer equivalent to Usenet and bulletin-boards, the conversational watering holes of the early Internet. Not only can people subscribe to each others’ sites, and easily link to individual comments on a page, but also, via a mechanism known as trackbacks, they can see when anyone else links to their pages, and can respond, either with reciprocal links, or by adding comments,” said O’Reilly.
Then there was collective, net-enabled intelligence which, through enabling people to leave feedback and comments, makes blogging an approach enhanced to great effect in services such as Wikipedia. Open source software projects like the thousands listed on SourceForge.net were often where new applications are launched, tested, and adopted by the wider Internet community. Anyone could add a project, or download and use the code, and ‘new projects migrate from the edges to the centre as a result of users putting them to work, an organic software adoption process relying almost entirely on viral marketing.’
What was happening through the emergence of Web 2.0 applications, claimed O’Reilly, was a kind of collective intelligence operating as a kind of filter. What author James Surioweck called “the wisdom of crowds” came into play, and produced better results than analysis of any individual document; the collective attention of the blogosphere selected for value. The world of Web 2.0 was also the world of what Dan Gillmor calls “we, the media,” a world in which “the former audience, not a few people in a back room, decides what’s important.” Riley said this whole area was in for major transformation as more and more devices became connected to the Web 2.0 platform. “What applications become possible when our phones and our cars are not consuming data but reporting it? Real-time traffic monitoring, flash mobs, and citizen journalism are only a few of the early warning signs of the capabilities of the new platform.”
Now with social networking sites going mainstream the companies behind their development were working on standards for third parties to create their own social sites or develop add-ons that might enhance them. MySpace and Google joined forces to create a set of application programmable interface (API). Plaxo unveiled new dynamic profiles that supported Google’s new OpenSocial interfaces so users of Plaxo’s Pulse social network could create professional and personal profiles including photos, contact information, and privacy settings.
During a visit to New Zealand in early 2006 David Boloker, chief technology officer of IBM’s emerging Internet technology software group, claimed that in a decade Web user interfaces would be similar to today’s world of gaming. “We’ll have the same high quality graphics, and the underlying messaging sub-system. The requirements for a high-quality game today will be the norm of the Internet.” Google Earth was an example of such a system. It combined satellite imagery, maps, and information.
In fact in August 2007 Google launched a virtual telescope feature called Sky, which it hoped would turn millions of Internet users into stargazers. Google Earth, which launched in June 2005, had by August 2007 been downloaded by more than 250 million people. The stargazer’s version delivered an astronaut’s view that could zoom from street level out into space. “Never before has a roadmap of the entire sky been made so readily available. Sky in Google Earth will foster and initiate new understanding of the universe by bringing it to everyone’s home computer,” said Dr Carol Christian of the Space Telescope Science Institute, who co-led the institute’s Sky team. Like Google Earth, Sky enabled users to float and zoom in on more than 100 million individual stars and 200 million galaxies as seen from earth.
Its different layers showed the life of a star, constellations, high-resolution images provided by the Hubble Space Telescope and a user’s guide to galaxies. A backyard astronomy layer let users click through stars, galaxies, and nebulae visible to the eye, binoculars, and small telescopes. The imagery was stitched together from numerous third parties including the Digital Sky Survey Consortium, the United Kingdom Astronomy Technology Centre and the Anglo-Australian Observatory. The imagery would be updated over time and the Sky service was made available in 13 languages.
IBM’s Boloker said in the near future Web 2.0 tools would enable people to build applications quickly. “Web 2.0 is a new class of affordable applications that deliver instant value such as mash-ups and programmable Web. It comprised everything from Ajax to social software, blogs and wikis, with a focus on simplicity and ease of use to microformats. Web 2.0 will change the way we look at Web socialisation, mash-ups and usability.” Content would come to you dynamically. Broadband and wireless would become one, and the wireless devices we have today will converge, he said.
Get a real life
The reasons to go on-line and stay on-line were becoming increasingly compelling. If social networking sites where you voluntarily offered up details of your life to virtual strangers and virtual friends wasn’t enough; and real-life friends were suggesting you should ‘get a life,’ well now you could. A second one. Second Life offered a virtual world where you and you avatar could live a surrogate life in cyberspace, and had gone from curiosity to a mainstream experience in just over a year.
Visitors needed only to download a free program, then log in and take a virtual tour to become familiar with the strange new environment. It had its own malls, media, music, fashion, and real estate. Second Life was a 3D on-line digital world imagined and created by its residents, the site said. Long-time inhabitants created automated tours, opened virtual travel agencies and even published travel guidebooks with sections on how to fly, hover, and even teleport from place to place. Automated tour vehicles ranging from hang-gliders to flying carpets were available to purchase. Cleverly disguised as your customised avatar you could travel to virtual ancient Rome or a range of fantasy worlds where you could interact with other participants, lounge on the beach, dine at a restaurant, dance at a nightclub, or engage in dozens of other intriguing activities. There were 27 different on-line worlds, including Second Life and World of Warcraft. If there were language barriers you simply typed into a text for translation into one of nine languages.
In October 2007 there were nine million residents and millions of literal dollars were being transacted in business from Second Life’s Linden dollars every month. Victoria University had its own MediaZone Island where School of Design students could interact. One student was even engaged in a PhD based around collaboration through open source and creative commons technology. The Anglican Church began running meetings in Second Life and among many others Kiwis, the All Blacks and the Mongrel Mob and real estate company Harcourts had established a presence there. IBM had sales avatars servicing customers in New Zealand.
While the social networking trend was clearly achieving mass market momentum, it was also raising concerns about its impact on youth, as new forms of elitism and bullying emerged. Wellington High School guidance counsellor Mark Pope said it was having a similar impact to cellphones. “The more names teens have in their phones, the more popular they feel. This does create a kind of anxiety to look as though one has more friends.”
Susi Maclean from Christchurch PR firm Glass Tower Strategic Communications said the idea of friend envy came from the way people increasingly see themselves as a brand. “If you don’t have legions of friends on your Facebook page, how successful is your brand?” Auckland actor and former Ready Steady Cook presenter Clayton Carick-Leslie said if someone had a friend who looked interesting “and fun” there was always a slight tendency to want that person on your web site too. “Although one of the worst things about Facebook is being rejected by people who you want to be friends with, the other frustrating thing is being signed up by people you left behind happily at primary school.”
There had long been concerns about young children being victimised by paedophiles and other predators in chat rooms and interactive sites. The Internet Safety Group expressed its alarm at the number of children in New Zealand who ended up having face-to-face meetings with people they had encountered on the Internet. In the 2002 publication The Net Generation: Internet Safety Issues for Young New Zealanders, the biggest survey of its type, it was revealed 23 percent of Internet-using children between the ages of seven and ten had a face-to-face meeting with someone they met on the Internet, rising to 37 percent in the 16-plus age group.
Internet Safety Group spokeswoman Liz Butterfield said she was shocked by the high number of youngsters meeting someone they encountered on the Internet. “Some are not even employing safety strategies, not even half told their parents, and if all they did was tell a friend, then I’m worried. Do they understand how little they know about that person? The Internet gives people a feeling of intimacy, they feel the other person knows a lot about them, but they forget they’ve never laid eyes on them or heard their voice.” The survey of 2500 young people found 7 percent felt unsafe or threatened, some suffered physical harassment and others wanting to meet a girl suspected their ‘friend’ lied about their sex. Of those who felt unsafe only 20 percent told a parent.
By May 2007 more than 2000 New Zealand schools had taken steps to limit student access to the Web, as concerns grew over social networking sites like Bebo. Ministry of Education figures showed at least 2300 schools had filtering software installed to stop students accessing sites deemed by the school to be inappropriate. The bans came after growing concern about Bebo, YouTube, and MySpace, some of which had featured fights in New Zealand playgrounds or photos of students in provocative poses. Schools were trying to educate parents through school newsletters and specific letters to the home to become more aware about what their children were doing on computers at home.
Social shift in progress
We were clearly experiencing a major social shift in the means of communication and sharing information. Mostly there was a genuine exchange of desirable data but as in the real world, there’s always a wild side on the Internet. Cellphones with cameras were being used to cheat in exams, or post candid and at times unpleasant or invasive images on the Web; prisoners were using cellphones to organise drug deals from behind bars or send images of life inside for publication on public access sites.
Young people were using social networking sites to bolster egos and hit rates, pushing the boundaries; crazy exploits, speeding vehicles, bonnet surfing and bizarre, Jackass-inspired shock antics were commonplace. Just as text messaging had its downside with text bullying, with private gatherings transformed into riots as email lists notified gatecrashers of the next weekend party, so low-res videos published on public sites were also causing problems. Bashings were being filmed and posted, and text alerts were being sent out pre-bashing so there was an audience for what would later be posted.
A schoolboy whose assault was videoed and placed on YouTube web site told the Hastings District Court he had expected to get “a hiding” but hoped he could talk his way out of it. The youth, whose name was suppressed, was assaulted at a Hastings park on 30 March by two brothers and several others who had been alerted by text-messaging to the prearranged fight.
A West Coast rugby league player was banned for eight matches over punching and kicking an opponent at a game in August after the video was posted on YouTube:
Speedsters who had clocked up to 160km on the open road and boasted about it with giveaway footage got booked and even thieves were being found out on the Web:
And then ultimately the social networking site Bebo was used to help in a murder investigation but the response from the law also showed a degree of naivety in requesting the global social networking site shut down debate on the case, which in turn provoked even greater on-line participation, making a mockery of an attempt at name suppression.
The NZ Herald’s Patrick Gower claimed New Zealand teenagers “use their Bebo sites to boast about their wannabe street gangs, abuse the police and show off their guns and drugs … A series of clicks through a wide network of Auckland teenagers reveals many of their Bebo pages are firmly linked to a Los Angeles-style ‘gangsta’ culture … with photos of teenagers toting guns, or of bags of ecstasy and P. Many displayed photos of wall-sized tagging they have done around the city.”
The Internet is an extraordinary leap forward in freedom of communication. It bypasses national, political and social boundaries; it is at once Pandora’s box and the biggest reference library in the world. It is the greatest tool for sharing the latest research and news events, and the most confusing source of disinformation and lies ever devised. The on-line experience can be exhilarating, mind expanding and at times downright dangerous. People are talking across all boundaries; geographical, racial, political, social, and sexual, and sharing so much about their likes, dislikes, personal habits, and sensitive data that it is often an invitation for trouble.
Security firm Sophos conducted an on-line survey about how seriously users took the strict privacy settings on social networking sites and was surprised to discover most were are all too willing to accept strangers as friends. The survey found more than 40 percent of Facebook users would accept a ‘friend request’ from a complete stranger, and more than three-quarters revealed their date of birth, address and information about their education or employer. Some exposed complete CVs and even their mother’s maiden name, a detail often used by banks and various on-line services to help users retrieve forgotten passwords.
Sophos’s head of technology, Paul Ducklin, warned personal details on social networking sites could be used maliciously by thieves to impersonate the user, after which they could obtain passwords for on-line accounts and access employers’ private computer networks. The details could also be used to develop highly targeted phishing emails, to convince people to give up sensitive information like credit card details. While both Facebook and MySpace allowed users to restrict profiles so their information could only be viewed by approved ‘friends,’ the general definition of a friend on the sites was too loose, and people were too quick to approve friend requests from strangers.
“Just because it looks like someone you might like or know or be interested in, it doesn’t mean that it is. You actually need to take some reasonable steps to find out whether someone who wants to be your friend is actually someone you want to be friends with,” said Ducklin. People were learning to be suspicious of email and spam messages but they needed to keep those same lessons in mind with social networking. For its experiment Sophos created a fabricated Facebook profile under the name Freddi Staur (an anagram of ‘ID Fraudster’), a green plastic frog who divulged minimal personal information. Sophos then sent out 200 friend requests to random Facebook users. Eighty-seven accepted.
Sites that valued their reputation and wanted to create a safe environment for users were involved in an ongoing vetting of membership. In May MySpace deleted about 7000 user profiles that belonged to convicted offenders. In August 2007 it detected and deleted a further 29,000 convicted sex offenders from its service. The service had come under attack after some of its young members fell prey to adult predators posing as minors. The families of several teenage girls sexually assaulted by MySpace members sued the service in January for failing to safeguard its young members. The company struck a partnership with background verification company Sentinel Tech Holdings to co-develop the first US national database of convicted sex offenders to make it easier to track offenders on the Internet. The minimum age to register on MySpace is 14.
Virus and spam protection, search tools, and sharing capabilities are getting more sophisticated, but the Internet still requires new levels of discernment, information sifting and research skills, and a new on-line ethic. So what do you do with the Internet? You can’t shut it down, or legislate against it. That’s like trying to staple jelly to the wall. As with TV you can choose your channels and content, learn to respect the no-go zones, and focus only on sites that are valuable and informative and uplifting for your particular purposes.
Freedom of access and information comes at a price. Instead of always asking governments and the law to deal with the nasties, perhaps it’s time to police ourselves, ensure we have the latest security updates and to develop a ‘culture of trust’ where we become more discerning about the sites we visit and the people we communicate with on-line.
As the blogger on Scoopit said, “We who use it daily, quickly learn how to navigate around the piles of rubbish, lurking fraudsters, lies and malice and vapidity and perversion. It is a vast teeming city, and you can choose whether to frequent cathedrals, theatres and parliament or just the brothels and public hangings.”
The alternative is unless we get a conscience, undertake a moral inventory, learn some manners and self police, within five years governments and international enforcement bodies will close in and replace the unfettered global free-for-all with their own set of rules and taxes, backed up by hi-tech surveillance that can trace illegal, undesirable, or subversive material right to your desktop.
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 A mash-up combines data from more than one source into a single integrated tool
 A Web development technique for creating interactivity or to make Web pages feel more responsive by exchanging small amounts of data with the server behind the scenes to increase speed and functionality so the page doesn’t have to be reloaded each time the user requests a change. en.wikipedia.org/wiki/Ajax_(programming)
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