WHO OWNS THE AIR?

The current “meltdown” as it is euphemistically labeled goes deeper than money and is really a question of values. As a recent article in The Economist called “Diagnosing Depression” said, “The word ‘depression’ is popping up more often than at any time in the past 60 years, but what exactly does it mean?”

There are two main criteria it cites from an Internet based search that differentiate a depression from recession—a depression involves a decline in real GDP that exceeds 10% and/or is a recession that lasts longer than three years. The Great Depression qualified on both counts with GDP falling by approximately 30% between 1929 and 1933. While there may not be apple stands out on every street corner yet, soup lines have been expanding at a rate that may parallel the two banks that the FDIC is now seizing weekly.

Karl Marx, not a man known nearly for humor as say the American comedy team sharing his namesake, may be at least sporting a rictus smile as he spins in his grave. If we are at the beginning of a depression, it will certainly merit the name Depression 2.0 because like the financial engineered debacle we are drowning in, it will be distinguished by a feature set uniquely its own. Technicalities and definitions aside, the current global economic crisis is also as much about the nature of meaning or what might be called by “the meaning of meaning” as it is about values.

Nowhere is this better showcased than in Bernard Madoff’s ability to hide an unparalleled scam while avoiding oversight detection—amazingly even without a single trade for a decade and with a professed 10% return annually—behind a supposedly “proprietary system” he called “split-strike conversions”, which he obstinately refused to define when pressed by the curious. According to April’s Wired and Greg Hays, whose firm Hays Financial Consulting specializes in fraud detection, this critical element of how to run a scam can be summed up as, “There’s usually some cryptic angle.”

Mike Olson of Wired likens this approach to the kind of “marketing scams (that) often push products with secret compounds that say, “triple muscle mass, hair thickness, and brain cells.” Like it or not, Wall Street is now firmly situated in the realm of P.T. Barnum. The New York Times has recently gone so far in two articles to call the “performance bonuses” and “management fees” received by senior banking executives as “looting”. With AIG currently defending its post-bailout executive bonuses and with what the LA Times called the “grudging consent” of the Obama Administration, we clearly are looking at a divide in perspectives, if not values. There seems to be a semantic gap here between “bonus” and “theft” the size of a Black Hole.

The form that this maze of mirrors takes is nor more transparent than with the arcana of derivatives, credit default swaps, and other financial instruments that were developed by the financial engineers or as they came to be affectionately known “quants” starting in the 80’s. Like the equations they are founded on, notably David K. Li’s Gaussian copula function first published in 2000, these values are all theoretical “windows” with often what are only secondary or tertiary relationships to “the store” or collateral. When even “the experts” have professed to not understand these concepts, then we are in the realm of talking heads on CNBC, Bloomberg, and the Sunday morning network “political” talk shows nodding like bobble heads in the back of a repossessed American car being towed away into the sunset. Even a worthy on the frontlines like Elizabeth Warner of Harvard Law School and Head of the Congressional Oversight Panel on TARP offered to Terry Gross last week on Fresh Air that nobody knows yet where the bailout money has gone, but that the process of transparency has started. At this point, the vastness of the numbers involved now that they are in the multiple trillions are just plain numbing since there is no way for we non-quants to reference them.

As the crisis continues to reveal layers of the onion and falls like so many cards in the Wall Street Funhouse, it’s these kinds of expressions of “value” that are a long way from a monetary system based on the gold standard backed up by bullion at Fort Knox and Bretton Woods. We’re way beyond something that Auric Goldfinger would lust for here and the depths of how far the cards will fall can only be described as an endless maze where we’ve just wiped our dung-soiled shoes off on the welcome mat to Wall Street’s House of Mirrors attraction.

So, if the financial basis for the system has now proven shoddy, if not shaken to its core by virtue of not being based on any reality except for greed and probability formulas—both shaky as foundations at best—what then, is the reality we find ourselves in? Psychotherapist Robert J. Sardello and Randolph Severson in a masterwork called Money and the Soul of the World (a phrase coined by Norman O. Brown), provide a clear picture of how we got here: “Bottom line thinking makes money appear as the one solid reality left…money is the epistemology of our Age. Money makes things happen. It is the source of action in the world and perhaps the only power we invest in. Life seems to depend on it…Perhaps in every other respect, in every other value, bankruptcy has been declared giving money the power of some sacred deity, demanding to be recognized. Economics no longer persuades money how to behave. Numbers cannot make the beast lie down and be quiet or sit up and do tricks. Thus, as we suspected all along, economics falsely imitates science. At best, economics is a neurosis of money…it enables functioning in the world, and before long all functioning revolves around maintaining the neurosis.”

Maybe it can be argued that this is a Western neurosis and that a billion Muslims would not subscribe to this apostasy. But we’re not alone—in February, the nation once held as the standard for emerging economies of this century—Dubai—received an initial bail-out of $10 billion from the U.A.E. The crisis of values is clearly a global affair. Or maybe, as Tom Tomorrow mordantly observes in his most recent column in This Modern World, the “current turmoil” is based on the fact that “Tax cuts for the wealthy have never been properly implemented!” His current post features a cover for a periodical called "The Magazine of Wall Street" from July 27, 1929 with the headline "Ten Best Stocks To Buy Now" and Tom's caption, "Little did they know..."

This past week, I was talking with Kevin Henry of Bazzeo, who has been an active voice in the environmental movement since 1974. As an early mover, he has now become a recognized arbiter of style, taste and innovation in the Green Home and especially the kitchen. We were discussing the history of how environmentalism has changed and in particular, how it’s experienced a sea-change in the last five years, in large part due to An Inconvenient Truth taking global warming into the mainstream.

We were discussing corporate “greenwashing” and the bandwagon effect, but Kevin elevated the conversation from my cynicism to his always infectious optimism. He said: “We’ve gone from consumers saying, ‘I’ve got to have that!’ to saying, “Why do I need that?’” Simply put, he spoke to a movement that is the subject of forthcoming lectures called "Consumerism To Consciousness".

This theme is at the root of our current economic crisis and holds the key to recovery. Weather expert and anthroposophical scholar, Dennis Klocek, has taken James Lovelock’s Gaia theory, which posited the planet as a living entity one step further. Klocek offers a formula which advances that the Earth’s consciousness is directly equivalent during any given historical epoch to the level of human species consciousness. Or to put it another way, E∞=H∞/C (E=Earth, H=Homo sapiens, ∞=Consciousness, C=Time). It follows that the sooner we continue of our own volition—rather than as forced by economic disaster—on the path of course correction toward deeper values connected to the whole—the better our future will be.

To survive this crisis of what stands behind value, it is common sense to base our currency on the living system we all share and should sustain together. It’s not a gesture like cap and trade toward substantiating the market value of the natural world that we need now, though to value nature as the market is the right direction. But we need to be careful for as Chief Seattle once asked rhetorically and with some irony of the Great White Father in Washington: “Who owns the air?” A Green WPA, however, would be a great leap forward to start rebuilding our infrastructure and manufacturing around sustainability and renewable energy.

To inspire hope and start on the road to a new earth economy, we will need many more living, breathing formulas like Klocek’s to replace the vampire quant formulas of Wall Street—but Klocek’s equation is a miraculous, bold and auspicious way to formulate an Earth Standard to a eco-system of organic values based on every breath we take…

IT'S A SHORT FORM WORLD AFTER ALL

My eight-year-old son recently asked me when I started seeing in color. We were watching a black and white TV show on cable and had been talking about what some of my favorite shows were when I was growing up. This wasn’t my first close encounter with my children’s incredulity at my media shortcomings. Past incidents have included their disbelief that I grew up without videotape and DVDs. Vinyl recordings were also a revelation when I pulled some albums from my secret stash out of the garage and gently placed them on the altar of a new turntable.

Artifactual media can be a curio if not hold a talismanic power over newcomers. Sometimes new generations are beaten into submission through accidents of discovery or inter-generational wars of attrition. A major victory in my personal campaign in support of archaic media occurred last week when my teenager asked for advice on how to properly handle her new vinyl acquisition—an MGMT record. It was almost a cultural breakthrough until it was marred when I had to transfer the record to a digital file because my son had used my new record player to do some scratching—only without the benefit of having a disc on the turntable, thus shredding another hard-to-find needle and rubber platon.

When generational media worlds collide, minds are blown. In my case, I was captivated by my son’s perspective that before the advent of color televisions and what NBC called “living color”, we would all obviously only be seeing the world in black and white. Looking at the Wall Street quants maze of arcane derivatives and other financial instruments, I sometimes wish the world could still be deciphered in black and white. But what is interesting about my son’s comment is that we all seem to take the media we grow up with for granted.

There is now a generation that did not know life without the Internet and mass game changers like the iPhone and Wii. More important it seems than changes in technology and distribution are the generational shifts that change the way consumers use media. It also leads to questions about where the mass market and Main Street have gone and a conversation I had last week with the most brilliant marketer I know.

Fred Seibert is a self-proclaimed “serial entrepreneur” who among other things was largely responsible for branding MTV and currently has several of the top-rated animated TV shows. But, I don’t hold any of that against him especially since these accomplishments don’t always mean that he’s always right—even though visitors to his old office were warned by a large sign that they best leave their opinions outside the door because the person they would find inside was infallible.

Still, like the agent provocateur he is, Fred said, “The methodology to reach the mass market no longer exists.” Now, maybe I’m taking his observation out of context for the sake of this post, so I duly note that his comment originated with respect to the state of the music industry. But, we were also talking about how the television business was bound to follow suit sooner or later.

When I was watching an old episode of “The Honeymooners” on TV Land recently, the difference between the world of the long form, mass market universe of yesteryear and today’s short form, micro media markets was brought into high relief. The scene featuring a typical argument between Jackie Gleason and Audrey Meadows lasted for almost two minutes without interruption and only used one wide shot. The relationship of early television with stage performances is clear when watching this series as well as other fifties classics like “The Jack Benny Program” and “Amos and Andy”. It’s no accident that live drama like CBS’ “Playhouse 90” made up a lot of 50’s TV fare.

In the 60’s, television scenes got shorter, influenced most likely by the tempo of rock and roll. With the introduction of MTV in the early 80’s, quick cutting and handheld techniques became the order of the day and “scenes” lasted a matter of seconds, serving up music cuts instead of video edits, and in turn, influencing highly stylized, network TV series like “Miami Vice”. Media critic and sci-fi writer, Paul Levinson, has offered a granular look in Digital McLuhan of the dwindling length of scenes for small screen time from earliest television through the 90’s. He also notes that, in a reversal of fortunes that Marshall McLuhan would have appreciated, many movies in the last two decades are remakes of classic TV shows—so many so, in my view, that one wonders how many are left to dredge up in the archives. As Frank Zappa once said to me, “The world will end in nostalgia”.

Last year’s introduction of long form downloads of its primetime hour dramas by ABC displayed a fascinating metric—Nielsen Digital measured that there were some 40 million total downloads. But, the average time viewed was—guess what? Three minutes. The consummation of this sea change movement to short form was realized with the one-second Miller High Life commercial in this year’s Super Bowl. At $3 million per 30-second spot, it was also a relative bargain.

Still, Fox’s American Idol is still reaching what is undeniably a huge mass audience even when compared with the former power of top-rated shows from broadcast TV’s height such as “MASH”, “Cosby” and “Seinfeld”, which characteristically reached scores of millions of TV viewers. According to Entertainment Weekly, last Thursday’s Idol show attracted 21.2 million viewers beating Survivor’s 12 million. If I’m a consumer brand trying to reach a mass market, then even a portion of the total TV universe on any given night still represents a viable methodology compared to the short form universe of the Internet. However, television advertising has never been proven to have a direct correspondence between commercials and purchase. In the television business, it’s all about growing brand awareness. Even so, Short Attention Span Theater has arrived even as just a relatively unmonetized consumer trend. While YouTube’s valuation is $1.5billion, its 2008 revenues were $150million, a paltry sum compared with the $65 billion TV ad business.

Despite this stark earnings contrast, Cynthia Turner reports in that the overall Internet video audience is now 135 million strong. But, a growing share of audience isn’t necessarily market share. It isn’t a question of size that matters, but of how this new online video medium works as discrete from others. Largely as a result of the Obama Inaugural, YouTube was up after a flat December to 5.86 billion video streams in January with over 100m uniques. Paidcontent.org reported a week ago that Yahoo, MySpace, MTV.com, and YouTube are all considering eventual upgrades to HD as a way to keep up with broadcast. But, the question presented by mass media is not a matter of how many streams but where is the mainstream? And what matters is not necessarily how people are watching at any given time, and not even what they are watching, but how and for how long?

Appointment, scheduled viewing was the original standard for broadcast television. Video and cable chipped away at this model, but it was the Internet and personalization that finally did it in. TV is literally background to my daughter’s generation and a complement to other multitasked media input. In the on demand, VOD, PVR, short form universe, video consumption is not tied to time in the same way that hit TV shows once defined an evening when families had to sit down together in front of the pixel campfire to catch their favorite show—or else miss it entirely.

Even though CBS’s March Madness is nearly sold out for online ads, it is unclear how the short form universe is reaching users in a meaningful way. Short form video may have the eventual power of narrowing the focus to very specific demographics. Consumer viewing habits will continue to morph. In a recent piece, Phil Swann asks whether Blockbuster will go away. Maybe, but my answer to Fred’s question is that TV is still the methodology to reach the mass market.

Audience share is transformed with the introduction of every new visual medium. But each medium has its own value proposition and attendant feature set that can vary in differentiation from others with respect to process and content. But movies didn’t replace radio and TV didn’t replace radio—and the Internet didn’t replace TV. The introduction of a new medium doesn’t replace extant forms, but displaces them by defining new audiences as well as cannibalizing old ones—and their power to do so is always based on how they increase value for the consumer.

The bigger question is what impact the generational shift of video consumers who have grown up in the short form universe will have on making the video stream the standard and long form an occasional luxury seen at the movies or as PVR saved fare of five or ten minute shows on future integrated online and offline "broadcast" networks. But in concentrating on the expanding video web, we are looking in the wrong direction. My prediction is that it’s going to be the mobile video web that is the definitive, disruptive platform to watch. Whatever happens, one thing is sure—it’s already a short form world after all and our children will inevitably be faced with tough questions from their own kids who won’t believe them when they roll out their saved iTunes playlists and talk about how cool HD and iPhones were.