E-Commerce Newsletter A-Clue.Com, Volume 4 Number 39
by Dana Blankenhorn
Volume IV, No. XXXVIII
For the Week of September 25, 2000

This Week's Clue: Why Hollywood Wants Censorship

This Week's Clue: Why Hollywood Wants Censorship

SSP (Shameless Self Promotion)

The Market in Names

Where Will Growth Go Next?

It's Beginning to Look A Lot Like Christmas

Clued-in, Clueless

Conservatives are furious over the love-in between the Gore-Lieberman ticket and Hollywood. They call it hypocrisy, and claim they can't mean it.

Well, they do mean it. First, Gore's proposal regarding most of the entertainment industry is hopelessly modest. He doesn't want people to target teenagers and pre-teens in marketing adult entertainment. He calls such strategies fraudulent, and threatens to send the Federal Trade Commission out against them. 

There's no First Amendment issue. He's not aiming at either the content of the content nor the content of the advertising. He's just promising to regulate where that advertising goes. There's plenty of precedent, not just for controlling where advertising happens but (as in the case of liquor or cigarettes) where that advertising goes. 

Beyond that (and this is important) Hollywood actually wants content regulation, not so much of music, movies or TV but of the Internet . There are two reasons for this. 

First, and perhaps most important, regulation creates a barrier to entry for content creators. Knowing exactly where the borders lie, and defending decisions along those borders, is a specialized skill. It's also an expensive proposition. Small businesses respond to such borders through self-censorship, staying far from the border. This fails in a creative market that demands edgy content. The result is that only large businesses (the present media elite) can compete in a regulated market. 

Second, regulation provides comfort to the powerful. Regulation provides an excuse for those interminable meetings and those arbitrary decisions that media bureaucracies specialize in. Regulation gives the private gatekeeper a role, if only as protection against the public gatekeeper. 

It's broadband content that's the primary target of regulation, and I understood why last week at the ClickZ B2B Email Strategies Conference . Wisdom came when I asked Bill McCloskey, who runs the Rich Media SIG, about what happens when spammers and porn merchants get their hands on rich media email creation and delivery tools. He saw no problem, because the tools (and their use) cost a lot of money. Spammers will stay with text because rich media will give them visibility they don't want, he said.

Personally I don't believe that. What I do believe is that, if fraud or sex were sold through rich media e-mails, regulators would jump on everyone with both feet. A few strong cases (based on fraud or obscenity) would force these folks offshore, where treaties (and in the case of sex a far less liberated attitude toward the whole subject) would keep the problem down to a dull roar. (If porn is outlawed we know who the outlaws are.) 

Once you accept that premise, however, it's a very short leap toward real content regulation regarding sex, violence, or even politics. Sex is often a political issue (it is often the most volatile one) and the line between content and advertising on the Internet is very murky. 

Thus, big businesses want lines drawn before committing to a new line of business, like broadband content. It can allow those lines to be drawn crudely, through prosecutions of small businesses and content providers on grounds like obscenity, and that's where we're heading. What's the difference between 18-year old Britney Spears shaking her near-naked booty among male dancers on VH-1 and kiddie porn? It's money, marketing, and a clear understanding of the line separating half-naked hip grinding and an underage girl simulating sex. That understanding, that legal expertise, and those lawyers let her do what you can't, online and offline. 

SSP (Shameless Self-Promotion)

This may be the best announcement I've ever made here. I have joined with the folks at Adventive to launch I-Strategy, a new e-mail list that will replace the discussion section here at a-clue.com . I-Strategy will cover your future and that of the Internet. It will be lively, take just a few minutes to go through, and provide a host of voices other than my own. Please subscribe to it .

I'm still making myself available for consulting to a limited number of clients, with an eye toward assuring their long-term success. If you're interested give me a shout at 404-373-7634.

Also, please pass this along to friends and urge them to join our list. And don't forget our new e-mail address .

I write daily for ClickZ. I write monthly for  NetMarketing and Boardwatch. I've been in Advertisi000ng Age and the Chicago Tribune . Once every other month I'm in CLEC Magazine. Twice each month I'm at OneChannel.Net  and I've recently joined the staff at ISPWorld. You can always buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's journalism that keeps the Clues coming...

Takes on the News

The Market in Names

I've always opposed the market in business names, commonly called domain name speculation. The hoarding is driven by registrars who urge everyone to buy as many names as they can, in league with speculators whose stories of big profit and false scarcity become a self-fulfilling prophecy.

There are now dozens of companies involved in selling domain names. Being a registrar is literally a license to print money because names are basically free. While most of the big money has come in registering .com (then .net and .org) names, the gold rush is now growing in phony national domains like Tuvulu's .TV , whose rights are held by foreign companies. These companies make their hosts complicit in the game by paying them a portion of the proceeds. Then they start shaking down businesses for registration fees - on names the companies already own by right.

Politicians play this game along with everyone else. This is actually a Gore site, not a Bush site. When Bush announced a new campaign slogan, Gore's campaign bought its .com version and went to work. It's a dirty trick worthy of Dick Tuck . It's within the rules, but it shouldn't be, for anyone.

The venality of big businesses such as Proctor & Gamble engaging in this speculation is finally creating a backlash. But the cure may be worse than the disease. Rather than seeking to end this useless, non-economic market, ICANN dissidents seem mainly interested in letting anyone speculate, rather than ending speculation.

The result is that otherwise-intelligent human beings pay up to $7.5 million for nothing , which goes into the pockets of speculators. This ends only when domain names become business names, and someone enforces both the idea of proper filing and the concept of one name to a customer.

Where Will Growth Go Next?

There are lots of predictions about where e-commerce growth will occur next. Most predict that it will go to China , although Brazil also has its advocates .

Here's how to figure out what will really happen.

Online growth requires liberty, democracy and the rule of law, along with a big installed base using a common language. Business absolutely requires the rule of law to thrive, something Russia is now learning. Creativity requires liberty, something Singapore has learned and China is learning. Stability requires democracy, because that's the only way to enable popular revolutions without violence. Israel won't be a major content player because a big installed base (lots of people speaking a popular language) is also an important driver for growth.

In New York last week I had a man express great confidence in the future of Sri Lanka and India. Both are nominal democracies, with functioning law courts, and a history of liberty. Both are heavy users of English. It's true that India's democracy recently survived a crucial test - the opposition won. But its growth is under threat from religious sectarianism (Hindu vs. Muslim).

The fact is no non-Western nation is perfect, and many Western nations (like Australia) are moving backwards, trying to treat the Internet like TV. When governments are stupid, inefficiency is your best defense. That's the strength of India and China. Japan's efficiency has done more to hamper its Internet growth than any other factor. People there obey even stupid laws.

America's dominance is secure because it has more of all the ingredients for success than rivals do. But when we meet the enemy, he'll be us .

It's Beginning to Look A Lot Like Christmas

Remember the horrors of Christmas decorations that went up before Thanksgiving? If last year is any guide, Thanksgiving should represent the end of the online Christmas season, not its beginning. So get those decorations (and holiday sales) up now.

Jupiter Communications predicts this Christmas season will be one-third bigger than last year's season . Here are some ways to take advantage of it.

If you're smart, you can have this season wired by Halloween, and plenty of time to worry about fulfillment.

Clued-in, Clueless

Clued-in are dot-com companies moving operations out of the Bay Area . Silicon Valley is the capital of tech, and you need representation there just as you need to be before the government in Washington and before money in New York. But that doesn't mean everyone has to be there.

Clueless is, was and always will be (the late) Pseudo.Com . Stupid is stupid in every medium, including the Internet. And content without a clear business model is always stupid, especially when it's stupid broadband content.

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