Steve Jobs's greatest legacy: persuading the world to pay for content

An Apple store in Taipei, Taiwan. Steve Jobs announced last week he is stepping down as CEO. Photograph: Sam Yeh/AFP/Getty Images

Ten years is, of course, a long time in media. Ten years ago, if you wanted to download some music, your best bet was Napster or one of the filesharing systems such as LimeWire or KaZaA. There were legal services, but they were so dire they wouldn't pass much muster today: there was PressPlay and MusicNet (from rival groups of record companies), which required $15 a month subscriptions for low-quality streaming (when most people had dialup connections, not today's broadband). You couldn't burn to CD. They were stuffed with restrictive software to prevent you sharing the songs.

What happened? Steve Jobs happened, mainly. The hardware and design team at Apple came up with the iPod (initially intended to be a way to sell more Macintosh computers), and then followed the iTunes Music Store – a great way to tie people to Apple by selling music. In 2003 Jobs persuaded the music companies – which wouldn't license their songs to bigger names like Microsoft – to go with him because, he said, Apple was tiny (which it was, at the time). The risk if people did start sharing songs from the store was minimal, he argued. The record labels looked at Apple's tiny market share (a few per cent of the PC market) and reckoned they'd sell about a million songs a year, so they signed up.

Apple sold a million in the first week of the iTunes Music Store being open (and only in the US). It sold 3m within a month. It's never looked back.

Nowadays Apple sells TV shows, films, books, apps, as well as music. We take the explosion in available content for granted. But without Jobs, it's likely we wouldn't be here at all; his negotiating skill is the thing that Apple, and possibly the media industry, will miss the most, because he got them to open up to new delivery mechanisms.

Content companies have been reluctant to let their products move to new formats if they aren't the inventors, or at least midwives. Witness Blu-ray, a Sony idea which wraps up the content so you can't ever get it off the disc (at least in theory); or 3D films. Yet neither is quite living up to its promise, and part of that comes down to people wanting to be able to move the content around – on an iPod, iPhone, iPad or even a computer – in ways the content doesn't allow. Apps downloaded directly to your mobile? Carriers would never have allowed it five years ago. Flat-rate data plans? Ditto. But all good for content creators.

Jobs pried open many content companies' thinking, because his focus was always on getting something great to the customer with as few obstacles as possible. In that sense, he was like a corporate embodiment of the internet; except he thought people should pay for what they got. He always, always insisted you should pay for value, and that extended to content too. The App and Music Store remains one of the biggest generators of purely digital revenue in the world, and certainly the most diverse; while Google's Android might be the fastest-selling smartphone mobile OS, its Market generates pitiful revenues, and I haven't heard of anyone proclaiming their successes from selling music, films or books through Google's offerings.

Jobs's resignation might look like the end of an era, and for certain parts of the technology industry it is. For the content industries, it's also a loss: Jobs was a champion of getting customers who would pay you for your stuff. The fact that magazine apps like The Daily haven't set the world alight (yet?) isn't a failure of the iPad (which is selling 9m a quarter while still only 15 months old; at the same point in the iPod's life, just 219,000 were sold in the financial quarter, compared with the 22m – 100 times more – of its peak). It's more like a reflection of our times.

So if you're wondering how Jobs's departure affects the media world, consider that it's the loss of one of the biggest boosters of paid-for content the business ever had. Who's going to replace that?

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Boot up: Arrington departs, British Airways tests iPads for cabin crew, and more

Arianna Huffington, the co-founder of The Huffington Post and Arrington's boss Photograph: Daniel Barry/EPA

A quick burst of 7 links for you to chew over, as picked by the Technology team

"Arrington will partner with many well-known Silicon Valley venture capitalists - including Digg-founder Kevin Rose, Yuri Milner, Marc Andreessen, Ben Horowiz, and Accel Partners - to invest between $100,000 and $200,000 in fledgling internet firms."

"TechCrunch founder Michael Arrington is resigning as editor of the popular technology blog, and will run a $20 million venture-capital fund backed by TechCrunch-owner AOL Inc. and several venture-capital firms.

"Mr. Arrington "will run the fund and will continue to write for TechCrunch, but will have no editorial oversight," said an AOL spokesman. Erick Schonfeld, who has served as co-editor in New York, will become interim editor while AOL searches for a replacement for Mr. Arrington, the spokesman said. AOL purchased the site last year."

Arrington gets the exit that one suspects he always wanted. Now the interesting times start for Techcrunch and AOL.

Horace Dediu, analysing the comScore numbers for US smartphone users: "In the last 12 months, Android gained 25m users in the US. iPhone gained 9.5m while Blackberry lost 3.2m and Microsoft lost 1.6m. Other platforms had a net loss of 1.2m.
"The total net gain of smartphones was about 29m new users.
"RIM switched from being a consistent net gainer of users to a consistent net loser of users in October 2010. Windows Phone is showing signs of holding the line on user base erosion but share remains below 5% (now at 4.7% vs. 4.6% last month). To put the mountain-sized hurdle in perspective, Android now has 7 times more users in the US while iPhone has about 5 times more. To become the largest mobile platform in the US, as some analysts are predicting, Microsoft has a 12:1 disadvantage that looks to continue to grow.
"Those are some pretty tough odds."

"Add British Airways to the list of airlines putting iPads in crew members' flight bags.

"The U.K. carrier recently began a pilot program that will see some cabin crew members using the tablets to improve in-flight service and replace the paper clutter of the passenger manifests, seating charts and flight timetables they typically carry.
"BA will initially outfit just 100 crew members with iPads. But if that initial deployment is successful, it plans to give them to 1,800 more in the coming months."

Shouldn't we be hearing about RIM, that darling of the enterprise, winning PlayBook contracts some time soon?

Tim Harford, the FT's undercover economist and presenter of the BBC's More Or Less programme, investigates why people give up personal information so easily online.

So true, so very, very, true.

These guys are on a roll.

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Boot up: Apple's iPhone jailbreak hire, ignoring Google+, Twitter Bootstrap and more

Google+ growth chart by Paul Allen: heading towards 20m in July. Now you can ignore and block them too!

A burst of 6 links for you to chew over, as picked by the Technology team

"Nicholas Allegra, better known as 'comex', the creator of the JailBreakMe website which made it child's play for iPhone owners to jailbreak their devices, has been given an internship at Apple. "The 19-year-old from Chappaqua, New York posted the news of his new position on Twitter."
As Eric Schmidt says, we need to up our game. Where are the British 19-year-olds getting hired (rather than, say, arrested and charged) for their hacking skills?

"We want to make sure you can represent your real-life relationships on Google+ -- whether you want to connect with someone or not :-) So starting today, we're rolling out a new option to Ignore people, in addition to the existing (and stronger) option to Block them."
Now, where have we heard of that before?

"Researchers at anti-malware company F-Secure say they have found the actual infected Excel file that was used in the attack on RSA earlier this year, eventually forcing the company to replace millions of its SecurID tokens. The Outlook email message containing the malicious file apparently was uploaded to Virustotal in March and the researchers dug it out this week."
An Excel file with Flash content which Excel executes. As the researchers say, why does Excel need to execute Flash content? Ever?

Good points. It's been clear for years that Steve Ballmer is not a visionary. But does Microsoft need one?

"Bootstrap is a toolkit from Twitter designed to kickstart development of webapps and sites. It includes base CSS and HTML for typography, forms, buttons, tables, grids, navigation, and more."
Er.. thanks.

Some surprises among there, including one which lasted a glorious minus one days.

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Boot up: Windows Explorer gets ribbon, Microsoft launches cloud CRM deal, and more

A quick burst of 6 links for you to chew over, as picked by the Technology team

The fascinating thing in this is how few commands are used most of the time, and the appalling user interface decisions made in the new ribbon: "people use lots of commands, so let's cram them all in there explicitly."

An alternative view: keep the most used commands visible. Put the others in contextual menus. Simplify, don't complicate.

"Microsoft has rolled out a special deal (and new spoof video) for its cloud Customer Relationship Management (CRM) service, in an effort to draw customers away from from Salesforce.com, Oracle and SAP.
"The Redmond company will pay $150 in cash per user seat (minimum 50 seats per company; maximum 500) for customers that switch to its Microsoft Dynamics CRM Online service.
"However, to qualify for the service, businesses must be located in U.S. or Canada, subscribe to at least 50 Microsoft CRM Online licenses, and sign a 2-year licensing subscription for the service."

Interesting how Microsoft's principal business is built around the idea that it's expensive to shift from its products to rivals'. How does it go when the boot's on the other foot?

"Let's say you were given a year to kill Hewlett-Packard. Here's how you do it."

Witty.

Probably the best title for the COTD ever. Now you'll have to click through to understand it.

"One of the several new features in Chrome is the addition of HTTP Strict Transport Security. HSTS allows a site to request that it always be contacted over HTTPS. HSTS is supported in Google Chrome, Firefox 4, and the popular NoScript Firefox extension.
"The issue that HSTS addresses is that users tend to type http:// at best, and omit the scheme entirely most of the time. In the latter case, browsers will insert http:// for them.
"However, HTTP is insecure. An attacker can grab that connection, manipulate it and only the most eagle eyed users might notice that it redirected to https://www.bank0famerica.com or some such. From then on, the user is under the control of the attacker, who can intercept passwords etc at will."

Chrome will start having a preloaded list of must-HSTS sites. Seems like other major browsers should do this too.

A fun open data project in Toronto, Canada: "The City's controversial Core Service Review, a consultant-led examination of which municipal services might be cut or reduced for cost savings, involved public consultations in May and June. Those consultations generated over 13,000 responses from residents who either attended a consultation session, or filled out a form online.
"The City, being the City, crunched all that data into some black-and-white PDFs and posted it on an obscure section of its website. Brian Gilham had other ideas.
"What Toronto Said, a cleanly designed website that Gilham, a professional web designer, built over the course of three weeks in his spare time, provides a search-bar interface for the entire corpus of feedback data. It makes filtering the raw opinions of thousands of Torontonians about as simple as using Google to find a recipe for soup. It launches August 29."

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Boot up: Facebook prepares music offering, and Apple 'loses (another) iPhone prototype in (another) bar'

... And it reportedly happened on Steve Jobs's watch Photograph: Justin Sullivan/Getty Images

A quick burst of 10 links for you to chew over, as picked by the Technology team

"Facebook Inc. is preparing changes designed to make the site a hub for listening to music, watching movies and playing videogames, according to people familiar with the matter, in much the same way people already use the social network to share personal media like photos and videos."

Note: This isn't a music platform. It's not (really) an iTunes-rival.

"In a bizarre repeat of a high-profile incident last year, an Apple employee once again appears to have lost an unreleased iPhone in a bar, CNET has learned."

Photographer Thomas Hawk: "Flickr asked me if I wanted to apply it only to photos going forward, or also to images that I'd already geotagged. I told flickr to go ahead and apply this setting to all of my past and future photos -- which included a thumbnail of the photo I linked. So now when you go to this photo on flickr, indeed, the geotag seems to be removed from the photo page for the image.
"Except that there is one pretty major security hole.
"Although the geotag information is indeed pulled from the flickr photo page, ANYONE can potentially still get your geolocational data simply by downloading the original sized file and looking into the EXIF data.
"This only seems to apply to images that were geotaged at the file level (i.e. by you or your device/phone, etc.) and not photos geotagged using flickr -- but still, with cell phones and software that auto geotag things, you could easily be lulled into a false sense of security on Flickr when you should not be."

Truly, a website design that sticks two fingers up at you from its lair in the mid-90s.

Pointed out to us by John Dowdell of Adobe, the people who make Flash: details how baseball is being changed by the greater access to information about games. Guess how they access it.

Paul Thurrott, whom nobody would describe as an Apple fan, isn't very keen on the new Windows 8 Explorer ribbon idea: "The Microsoft post describing the new ribbon UI goes into great detail about telemetry data, which provides the company with information about what users are really using in Explorer and elsewhere in Windows. And according to that data, the top 10 commands represent over 81% of all commands used in Explorer. The bottom 18% of commands (by usage) include such things as Open, Edit (Menu), View Toggle, Organize, New Folder, Send To, and Edit.

"And yet, looking at a Microsoft screenshot of the new ribbon, what do I see in the default first tab? A bunch of commands - including Open and Edit, by the way - that are not in the 81% most-frequently used commands." Huh?"

He also described Apple's Finder as "much cleaner and less busy". That's really quite scary.

If you were wondering how Hot Spot and Snickometer worked in cricket...

Good graphic, though it obviously assumes that the software costs nothing to produce, and that the marketing and so on happen magically to give the "Apple's slice" element.

From early in August, but still relevant: "'With a large enterprise, you have to assume that people are going to get tricked into installing malware,' iSec CTO Alex Stamos told The Reg. 'You can't assume that you'll never have malware somewhere in a network. You have to focus on parts where a bad guy goes from owning Bob the HR employee to become Sally the domain admin.'
"At the heart of the Mac server's insecurity is a proprietary authentication scheme known as DHX that's trivial to override. While Mac servers can use the much more secure Kerberos algorithm for authenticating Macs on local networks, Stamos and fellow iSec researchers Paul Youn, Tom Daniels, Aaron Grattafiori, and William "BJ" Orvis found it was trivial to force OS X server to resort back to Apple's insecure protocol."

They also did a proof of concept. OSX Server is the weakest link. Then again, a similar flaw in Windows is what led to Google getting hacked in China in 2009.

"The average selling price for Double Data Rate 3 (DDR) in the 2-gigabit (Gb) density--the bellwether DRAM product--is projected to drop to $1.60 in the third quarter, down 24% from $2.10 in the second quarter. The dive would be the biggest decline for the year, following a surprisingly solid second quarter during which pricing fell only 5% from the first quarter. Moving into the fourth quarter, the price could plummet another 22% to $1.25--dangerously close to cash costs for many manufacturers. Only a year ago in the third quarter, pricing stood at $4.70."

There's been a fall in demand, while yields are about to rise. The money now is shifting towards NAND Flash.

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Boot up: Police 'assisted' Apple in lost iPhone hunt, and no US launch for Samsung Galaxy Tab 7.7 or Galaxy note

Ho Kak-yin in Hong Kong ... not the man whose house was searched by police in San Francisco Photograph: AP/Kin Cheung

A quick burst of 9 links for you to chew over, as picked by the Technology team

"...Anyway, I totally understand why Google did this list. It just isn't a well curated list and so I don't want my name associated with it."

For those who doubted the original report was correct: "The bizarre saga involving a lost prototype of the iPhone 5 has taken another interesting turn. Contradicting past statements that no records exist of police involvement in the search for the lost prototype, San Francisco Police Department spokesman Lt. Troy Dangerfield now tells SF Weekly that "three or four" SFPD officers accompanied two Apple security officials in an unusual search of a Bernal Heights man's home."

Police don't get involved in publicity stunts.

An intriguing stack chart of the ever-growing number; the lifespans are interesting to compare.

"For example, you're doing TDD, you write a test, do some coding and hit run test but have to wait 30 seconds+ for it to run. This takes long enough to break your flow, you have a quick think about something else and then you realise the test has run and you need to switch you attention back. You might have a quick chat about something else with your pair.
"We know it's hurting our velocity but without numbers it's difficult to convince management of the true costs.
"So what did we do?
"We took a stop watch, kept it with us all day and recorded all the time that where we were waiting for the computer to do something - from opening apps, running builds and tests, searches and refactorings in visual studio - any time at all where the developer had to wait for the machine to work, be it 5 seconds or 5 minutes the stop watch was running. It took quite a lot of discipline. The results were startling."

Worth buying the fastest possible if the project lasts more than a month.

"The Galaxy Tab 7.7 and Galaxy Note are two devices that are generating quite a bit of buzz here at IFA 2011 in Berlin. There's a lot to like about these devices, but unfortunately you might not be able to buy one stateside. According to Samsung, there are currently no plans to ship either of the devices in the U.S."

Simplifies the questions of whether to stock or not for retailers.

MG Siegler, visiting Seattle, doesn't have pictures but has been trying it out - a 7in tablet with multi-touch.

The 16GB version is $450 (save $50!), the 64GB is $550 (save $150!) and the 32GB version is... $550 (save $50!).

Explanations for this pricing regime where 32GB of Flash memory costs nothing welcomed.

Martin Belam, writing in a purely personal capacity (you understand): "[if you're moderated] ask yourself, "Was I being a bit of a dick?".
"I'd define dick-ish behaviour on a news site as including, but not restricted to: personal attacks, using 'amusing' clichés like EUSSR and Tony Bliar, making the same off-topic point day after day, being rude and grumpy and unwelcoming to newcomers, mocking other people's spelling, bullying and hectoring staff and journalists appearing in the comment threads, asking 'is this news?' on a story you are not interested in and which nobody forced you to read, hate speech, 'ironic' hate speech, anything that might now or in the future potentially land the publisher in legal hot water, and any comment which includes the phrase 'I don't suppose the moderators will publish this but...'"

Three strikes filesharing rule comes into play in New Zealand: "The three-strikes regime is not expected to be widely used by rights holders, however, because of the high $25 fee they must pay to internet providers to forward those warnings to internet users and a $200 fee for bringing cases in front of the tribunal."

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Will Apple launch a TV set?

Not another Apple TV black box but a real 50" flat-screen TV, "Designed by Apple in California" – and made in China, like most Apple products. Or made In Korea, if the company concludes a new pact with its best "frenemy", Samsung, the new king of TV sets, the new Sony.

Rumours of an Apple TV set have been circulating for at least two years. In a May 2010 blogpost, Peter Yared wrote:
"Stylish, high-end TVs is the last consumer electronics frontier for Apple to dominate, and it will make apps as much of a differentiator on TVs as they were on smartphones."

and:
"The TV is the last frontier in Silicon Valley's relentless drive to computerise every screen. With the price of fully internet-enabling a screen at below $300, everything that people see and touch is being turned into a computer: mobile phones, billboards, price displays, and with the iPad even magazines, books, and newspapers."

More recently, Gene Munster, an oft-quoted analyst at the PiperJaffray investment bank, repeated his prediction of an Apple TV set launch in 2012, with Stewart Alsop adding:
"Apple will do to television manufacturers what it did to phone makers with the iPhone …"

The idea is exciting and so obvious it's got to happen. Imagine a true plug-and-play experience. One set with only two wires: power and the cable TV coax. Turn it on, assert your Apple ID credentials and you're in business. The programme guide looks good and is easy to navigate; pay channels are just a click and a password away. The TV runs apps, from games to FaceTime and Skype, it "just works'' with your other iDevices and also acts as a Wi-Fi base station using the cable provider's internet service.

But when we turn to the small matter Of implementation, we see a few obstacles.

First, the TV incorporates a set-top box, with storage for the DVR function. It's feasible: the CableCARD was invented for that very use. The electronics of a set-top box:

Now squeezed onto a card that's inserted in the back of the TV set:

It's an attractive idea, but the implementation failed to meet expectations. Although critics accuse cable carriers of being technically incompetent and lazy, I think there's a more acceptable explanation: Carriers looked at the CableCARD and saw complicated field service calls in their future. A separate, outboard set-top box is easy to diagnose and fix; a card inside the TV set, not so much. It generates a host of hard-to-understand bugs: Is the card working? Is it kind of working but causing the TV to malfunction? Is the TV working but killing the card?... and so on. More calls, more finger pointing, more expensive field techs…

Apple's product culture, its talent for giving birth to nicely integrated devices could overcome some of these problems, but not the field tech issue. Would this new product force Apple to deploy its own Geek Squad, or do we see ourselves carrying a 50" Apple TV set back to the store when something goes wrong?

Then there's the complexity of supporting multiple cable systems. Large carriers, such as Comcast, are known as multiple system operators, MSOs. They're a patchwork of acquired systems that have never needed to be compatible. This would either restrict the TV set to a small number of carriers, or make the product more complicated and prone to more bugs – and more field tech visits.

And there's Moore's Law. In addition to the CableCard, the wonder set contains a little computer running iOS, and enough storage for apps and content that's not hosted by iCloud. Great …but how long will it last? Not in terms of reliability, that's not a problem -- especially with an SSD replacing the DVR's conventional hard disk – but in terms of being competitive with newer hardware.

Conventional TVs aren't really affected by Moore's Law. As long as the electronics work and the display doesn't fail – and today's sets are exceptionally reliable – there's little pressure to upgrade. Once a family shells out for a nice 1080p set, it's difficult to sell them the new improved model next year.

We're willing to upgrade our laptops, smartphones and tablets every year or two because Moore's Law keeps improving the CPU and other electronics at the rapid rate that made the computer industry's fortunes. An integrated Apple TV set wouldn't benefit from better electronics as naturally as an iPhone does … unless, of course, the tiny iOS computer is implemented as an easily accessible plug-in module. This could also solve – or at least mitigate – the field service problem: Bring the module to the store, we'll diagnose and replace it if needed … or sell you this year's model.

In one device we might have something like: a CableCard inside an Apple TV 3.0, itself inside a TV set.

With regard to carriers, there's no need to disintermediate them, no need for Apple to seduce them into giving up content sales the way Jobs did with AT&T. Carriers ought to welcome an Apple TV set as a way to increase their ARPU, but for this to happen much work remains. Try getting a human on the phone when you want to add a channel to your current Comcast bundle. At home, you're connected through a secure device with a known MAC address, so why can't you simply point to a channel and click-to-add? This and other bone-headed commercial practices – such as refusing to suspend your billing when you're between houses – reveals a depth of customer-hostile culture that an Apple or a Google would find intolerable, but might have trouble changing.

I mention Google because they're in the TV/internet/apps integration game as well. The first Google TV wasn't a success, to say the least. My friends at Logitech lost tens of millions of dollars – and a CEO – with the first iteration. And Sony's Google TV implementation didn't fly either.

But the concept remains valid. And now that Google owns Motorola, a company with known expertise in set-top boxes and CableCards, we can expect a next-generation Google TV and, quite likely, a Samsung TV set with an integrated Google TV running Android apps and competing with the putative Apple TV.

I used to think product size, carriers and the rapid obsolescence of the integrated computer made an Apple TV set an impossible dream. I'm not so sure any more.

JLG@mondaynote.com

PS: To help think about this some more, a great counter-example: the Bose Videowave TV set. I use and like other Bose products but, with this one, what are thinking? $5,000, no cable box integration, a separate console box for the "integrated" set. See the setup and owner's guides for more details.

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Boot up: Microsoft Windows 8 tablets, interview with ex-Anonymous hacker, and more

A quick burst of 9 links for you to chew over, as picked by the Technology team

Raises all sorts of questions about how the Windows 8 desktop/hybrid behaviour will be managed. Intriguing.

Inspired by this XKCD strip.

The total BitCoin economy has a value of £39m. At current exchange rates, anyway. Unless someone finds the lost wallet.dat that someone left on an Amazon web instance which got restarted.

Quote from a speech (much more at the post): "What we're seeing in the cloud era is not just hundreds of millions but billions of new users and devices now coming into play. Three years ago over 95% of the devices connected to the Internet were personal computers. Three years from now that number will probably be less than 20%. More than 80% of the devices connected to the Internet will not be Windows-based personal computers."

Obvious, really (think: smartphones) but intriguing to see it put that way. Maritz's real point though is about what becomes important when that is true.

Well, it isn't streaming, except that you can listen to it while it's downloading. And it's only sort of downloaded, as it might be in a cache. Anyhow.

From the conclusion: " the stellar 9900 shows that when its back is against the wall, RIM can produce winners. This phone is the best BlackBerry RIM has ever produced, but against the gigantic technological and marketing forces of iPhone and Android, it's a whisper in the wind. Let's hope that there are enough BlackBerry fans left to support their favorite phone and that the company completes its reboot in time to prevent the 2013 headline, 'RIM R.I.P.'"

Interview with @SparkyBlaze, who is in his 20s and from Manchester (but wants to keep the rest under his to-be-white hat).

"Q: What are some of the biggest challenges you see out there?
"SparkyBlaze: In my mind social engineering is the biggest issue today. We have the software/hardware to defend buffer overflows, malware, DDoS and code execution. But what good is that if you can get someone to give you their password or turn off the firewall because you say you are Greg from computer maintenance just doing testing. It all comes down to lies, everyone does it and some people get good at it."

James Surowiecki, the New Yorker's financial writer, dissects the problem around the virtual currency in typically astute fashion: "many--probably most--Bitcoin users are acquiring bitcoins not in order to buy goods and services but to speculate. That's a bad investment decision, and it also hurts Bitcoin's prospects.
"True believers in Bitcoin's usefulness prefer to deny that speculation is driving the action in bitcoins. But the evidence suggests otherwise.":

And if hoarding, instead of trading, takes over, then nobody uses it, so it becomes useless - trapped in a deflationary spiral where the velocity of the currency is zero.

Ed Bott finds the same thing that we pointed you to a while ago: a real-life crackdown by Russian police, rather than any fiendishly clever piece of technology, is what killed off Mac Defender and various Windows workalikes.

Trouble is, that could mean that more will be along soon, depending on when the next gang gets its act together.

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Politico: what are the secrets of its success?

To cover American politics, Politico deploys an editorial staff of 150. This is more than any news organisation in the US on the same beat. It all started five years ago: a niche website launched by three seasoned political reporters who sharpened their claws in mainstream media. As envisioned by John Harris, Jim VandeHei and Mike Allen, Politico was to start with a kernel of 12 hardcore political reporters who would aggressively run after all the balls.

Four years later, as a new presidential campaign gears up, Politico owns the news cycle, from 4:30am to midnight, on all platforms: web, mobile, television and … print. And it does so in rapid-fire mode.

Last week, I chatted with Bill Nichols, Politico's managing editor. Before Politico, he spent 24 years at USA Today. There, among the many items on his impressive résumé: he covered six presidential campaigns as well as the state department. Bill was in Paris to deliver the inaugural lecture at the Journalism School of Sciences-Po where I happen to have a gig (highlight of the lecture summed up in French on Slate.fr). His talk provided the students with a great start for their year; they were listening to a 50-plus journalist who didn't hesitate to leave the comfort of a great newspaper to jump into the unknown. Even in 2007, going after the Washington media establishment with a website was quite a bold move. Today, Nichols is obviously having a lot of fun – which is the best message to convey to a crowd of aspiring journalists.

The lessons to draw from Politico's success are both journalistic and business ones.

Politico has sliced and diced the news cycle with an array of dedicated products fitting all possible subjects, reading time and formats. Anyone serious in politics or government affairs will begin his day with a peek at the mobile version of the Politico Playbook. Described as " Must-read briefing on what's driving the day in Washington", it is written by Mike Allen, the chief White House correspondent. The site features eight other "tip sheets":
Huddle A play-by-play preview of the day's congressional newsPulse The latest in health care policy every weekday morningMorning Money Political intelligence on the intersection of D.C. and Wall StreetMorning Score A pre-dawn guide to the permanent campaignMorning Tech Daily download of technology news from D.C. and Silicon ValleyMorning Defense A daily briefing from inside D.C.'s national security apparatusMorning Energy The one-stop source for energy and environment newsInfluence Intelligence and analysis on lobbying

The idea is to hook the reader on the day's "must-follow" items. Then, developing stories will be made available in all possible forms: stream of stories as the news dictate, a great deal of support through countless TV appearances (Politico maintains its own studio linked to all networks and all reporters are required to promote their work). Many times a day, breaking news, alerts, warnings are pushed on mobile. Then, to maximise the impact, top stories will be re-edited to feed the eponymous daily. It is published five days a week, only when congress in in session, and its 34,000 (free) copies are distributed at various strategic spots in DC.

Then, the Politico tone. As Bill Nichols acknowledges, Politico's pitch is slightly more tabloidish than mainstream media. It doesn't pontificate, nor does it endlessly circle around a subject. It reflects internal newsroom discussions and the talk of the town. A few days ago, recounts Nichols, the editorial staff was discussing Republican Texas governor Rick Perry's intellectual ability to run for the presidency; instead of going for a convoluted story loaded with nuances, Politico went straight with this headline: "Is Rick Perry dumb?" This treatment was later supplemented by an informative 1,600-word piece about Perry's 2010 book "Fed Up!", itself a great gift to his opponents. (To nail it, Politico published a Nine questions for Perry article listing subjects the candidate will have hard time avoiding.)

That's Politico's way: aggressive, relentless, fun, witty, but also dedicated to providing in-depth, well-reported journalism. Last year, the New York Observer ran an interesting story on how the Atlantic (great magazine, along with an equally great site) was fighting back against Politico on the Washington scene. David Bradley, owner of Atlantic Media company, had this comment:
"It was much happier to do what we were doing until Politico arrived in the world. Politico introduced a whole new standard of, I wouldn't say quality, but I would say velocity and metabolism. I responded way too slowly. (...) They are going to be at the more racy, tabloid end of the spectrum. That seems to be the position they have chosen. I think we'll be more of the authoritative end."

To which Jim VandeHei retorted:
"People come to us because we break news, we are authoritative and we help readers understand how Washington really works. I think Bradley's description is clearly motivated by business interests. That said, we take all competitors seriously."

Business is important as well to Politico and its powerful backer, the Allbritton family. As a privately held company it does not disclose financial data. Even with its large staff of 200 in total, it is said to be profitable thanks to its multi-pronged product strategy:

• The website had an audience of 4 million unique visitors last July, according to comScore (it should triple during the 2012 campaign). This is rather small compared behemoth such as the Huffington Post or the NYTimes that are more into the 50 million UVs range. But the value extracted from each visitor is quite high.

• Around half of its revenue comes from the newspaper, which sells high premium ads. Thanks to the geographical concentration of the Washington elite, the paper does not cost too much to distribute and its pagination and printing costs are adjusted to the advertising load.

• Last November, Jim VandeHei launched Politico Pro, an in-depth paid-for service focusing on three critical (and lobbying-intensive) issues: energy, technology and healthcare. The price is $2,500 a month (story in the Columbia Journalism Review). "Pro" relies on several dozens of reporters and editors integrated with the rest of the newsroom.

• Recently, Politico added an event department: get-togethers with big political names, moderated by staffers. The guests don't pay, but big sponsors do – happily it seems. Events will be organised not only in Washington but on the campaign trail as well.

• Last June, Politico announced an ebook venture with Random House. The concept: quick accounts, 20,000 to 30,000 words (80-120 pages), of the 2012 campaign. Produced at little additional cost, promoted by the brand, these could be pure gravy.

Politico's potential revenue pool is huge. According to the Center for Responsive Politics, the 13,000 registered lobbyists in Washington spent $3.51bn in 2010. This is an affluent market, highly concentrated, both geographically and interests wise.

On the surface, Politico's method of squeezing money from every slice of its market looks logical and reproducible. But its unique ecosystem makes Politico's success difficult to replicate elsewhere.

frederic.filloux@mondaynote.com

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Why HP's purchase of Autonomy is good news for UK startups

Hewlett-Packard is buying Autonomy - and UK startups should be happy. Photograph: Marcus Brandt/EPA

The planned acquisition of British software company Autonomy by US tech giant Hewlett-Packard has stirred up a lot of comment. Shadow business secretary, John Denham, said there might be a case for looking at whether certain strategic industries should be protected from foreign takeover, and criticised financial backers of technology startups who insist on a sale of the business so they can recoup their investment. Tony Burke, Unite's assistant general secretary for manufacturing, claimed the problem with merger and acquisitions is that they do not grow the economy and rarely create jobs.

Have we really come to this? Instead of celebrating a great British success, our reaction is to wring our hands and discuss legislation to make sure such success cannot happen again. Something is very wrong with this picture.

I spent more than a decade in San Francisco and New York working both for startups and for large tech companies such as Apple and Google. Two years ago I returned to the UK, where I'm now CTO of one of London's leading tech startups, Songkick. Much has changed in the UK since I left, but apparently we still have a fair way to go if we're to emulate the success of Silicon Valley.

The UK has several concentrations of startup activity. A number have sprung up in "Silicon Fen" around Cambridge University, Autonomy among them. Another hub is in east London with more than 500 startups based around Shoreditch, in an area fondly known as Silicon Roundabout. Government support for these burgeoning communities is very helpful, but what we really need is a steady flow of money and expertise to fund exciting new companies. These companies are creating thousands of new jobs and are attracting new investment from within and outside the UK.

Any success like Autonomy's is a huge inspiration for those who aspire to run a company. It shows that hard work, and building great products pays off. Mike Lynch, Autonomy's founder, was a penniless graduate when he founded the company in 1991 and now stands to reap the rewards of decades of success. He has a long history of investing in British startups. He and many others now at Autonomy will be ploughing their money and their know-how back into the UK startup scene, creating yet more jobs and, hopefully, more successful entrepreneurs.

So let's look at Autonomy's acquisition a different way. This is not a threat to Britain's future, its a vital component of our future. If we want large, successful technology companies in the UK we first need lots of smaller, successful companies. Autonomy's acquisition will pump vast sums into both the UK government's coffers and into the hands of investors.

Successful startups reach an "exit". This usually comes in the form of an initial public offering – such as Google's – or an acquisition, such as Autonomy's. In either case, the value created by the employees is transformed from a theoretical one into something that you can actually bank, and the employees and the shareholders make a lot of money. In the case of an acquisition, the company (hopefully) becomes part of a greater whole where it can continue to find success.

So, what happens to all the money HP just agreed to pay? A lot of it will immediately flow to the British government, through taxation. The several billion dollars of extra tax revenue will make a small but significant dent in our debts, or could be used to save thousands of vital public sector jobs.

Meanwhile, many individuals will become wealthy. Some may retire to sail around the world. But others will become investors and use that money to fund new startup companies. This virtuous cycle is at the heart of Silicon Valley's success. Each generation of startups creates new wealth that is ploughed back into the next generation through venture capitalists and angel investors – such as the music executive who got Lynch and Autonomy started by loaning him £2,000 in a pub. Wealthy individuals with a passion for, and deep knowledge of, technology help budding entrepreneurs start their own companies. If we can ignite this cycle here in Britain, we can spawn an entire new technology industry to rival America's.

So, let's toast Mike Lynch and Autonomy. Let's welcome the influx of HP's money and all the good things it will bring to the UK. We should be celebrating this very British success, not looking to stifle it.

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