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In this post on his blog, Kevin Kelly discusses how the Internet is a massive copying machine. This is a major reason that digital rights management (DRM) does not protect business models very well.

The music and movie industries have focused on protecting content and managing copying, instead of building and offering value that is difficult or hard to copy. U2’s manager recently attacked ISPs, search engines and other companies for aiding and abetting music and video file sharing on the Internet. (CBC).

Kelly, on the other hand, proposes a network economy where sharing and abundance are key success factors that every content publisher must satisfy. He also identifies 8 key success factors that spur customers to buy instead of copy.

It’s difficult to copy reputation and trust, but it’s rather easy to offer or measure these attributes. Just look at eBay.

Reputation and trust are relevant in education. Jason Schultz published links to several YouTube videos of students demonstrating how to cheat in school. BoingBoing’s Cory Doctorow discussed his own experiences with cheating when he linked to Schultz’s post.

Schools offer interpretation, which is another form of value that is difficult to copy. Grading, evaluation, advising are good examples of content that is very difficult to copy. These also have elements of personalization, which help increase their value.

Patronage is another factor. Some users want to pay for content, even if it can be downloaded free of charge.  Physical forms that cannot be downloaded through the Internet can also make content more valuable – cover art and booklets are examples in the music industry.

Convenience is also an important value generator. Immediate access to content may be more important to some users than eventually finding free access through peer-to-peer networks or file sharing. Metadata, XML and web services are some of the tools that small and independent publishers use to sell their content.

Blogs are also part of the value system that is created as multiple value chains link together from end to end. BoingBoing is a good example – that blog has several editors who promote their solo media projects through the web site. I discovered Kelly’s article on a BoingBoing post, as a matter of fact.

In my Thursday evvening IS 7010 class, we keep coming back to Starbucks and McDonald’s as examples of distinctive competencies. Starbucks does coffee and coffee-flavored milk very, very well.

As a music store, Starbucks is not that great.  I do not understand why Starbucks has to litter its counters and floors with CDs and DVDs for sale. Most Starbucks customers want coffee, not entertainment.

In the fast-food industry, breakfast is battle to satisfy some very specific key success factors. Coffee has to be hot and acceptable. The food has to be quick and reasonable. McDonald’s figured these issues out in the 1970s and has dominated fast-food breakfast ever since.

Starbucks has announced that the company will dump its recently introduced line of breakfast sandwiches before this fall. The items were selling, but counter staff had to spend time microwaving the refrigerated sandwiches.

Frankly, this idea sounded more like a McDonald’s scheme. After all, McDonald’s uses distribution as its driving force. The food can be assembled in the restaurant with a minimum of skill. The factory plays an important part in preparing the food to be shipped to each restaurant.

As McDonald’s rolls out its McCafe coffee counters, Starbucks is planning a 19 March announcement of five “bold” new features. I’m wondering what Starbucks will try next. Perhaps they’ll have breakfast pastries that actually taste good.

From BusinessWeek comes a long profile of the Facebook economy. As I discussed on 10 August 2007, Facebook has become very popular as the service opened its APIs to third-party applications last 24 May. Slide recently received a US$50 million round of venture capital funding, based on that company’s suite of Facebook widgets like Top Friends, SuperPoke and FunWall. That seems like crazy money, considering that these f8 applications are little more than features in a social network. Gigaom.com points out that the recent acquisitions of MySQL, BEA and Skype don’t make much sense, either.

Security is another major risk. A cracker named DMaul recent posted a 17 gigabyte file of photos that he downloaded from thousands of private MySpace profiles, according to this report in Wired. The massive file was posted on BitTorrent, and includes photos posted by 14- and 15-year old MySpace members. MySpace makes profiles private by default for that age group.

I was rereading a student paper from last fall and came across a citation for this excellent comparison of the BlackBerry 8800 and the first generation iPhone. The reviewer compares the two devices from an enterprise user’s perspective. The BlackBerry carried the day with better syncing, real-time push email and WiFi connectivity, but the reviewer admits that the iPhone is a nicer looking product.

Rumors persist of a touchscreen BlackBerry model, possibly called the 9000 or the 9100. The keyboard is on the screen, similar to the iPhone. Executives would leap on these models, just for the “shiny new toy” factor alone. Mobile carriers would have a fresh weapon against iPhone carriers. An on-screen keyboard would certainly solve some interface problems for international BlackBerry users. Looks like the virtual keyboard is becoming a new key success factor for mobile devices.

I have several articles about the BlackBerry available. Just type “blackberry” in the search box or use this link.

There’s two articles in today’s Honolulu newspapers about local Internet usage.

An article in the Honolulu Advertiser’s business section reports that Honolulu residents tend to spend more time on the Internet than the average US Internet user.

Oceanic Time Warner’s Road Runner cable modem service recently celebrated its 10th anniversary in Honolulu. The company reports that Honolulu is one of its most mature markets, with 220,000 customers. Many customers use residential broadband service to work from home.

Meanwhile, the lead story in the Honolulu Star-Advertiser’s business section examined the coffee shop office. At the bottom of the article, there’s a nice set of netiquette tips for public WiFi users. One major item in this list – people who buy little or nothing from a coffee shop while they use the free WiFi. Squatters beware!

Sadly, there wasn’t a single meaningful mention of security and privacy issues in either article. I recommend that anyone who uses their computer in a public place buy and use a privacy filter. This is a thin piece of polarized plastic that completely covers the screen. The filter restricts the viewing angle, making it difficult for anyone but the user to read the screen. 3M has a nice selection of filters that will fit most laptops. The Gadgeteer has a good review here.

The next two pictures demonstrate how a privacy filter works, by comparing a bare screen  on the left with the filtered screen on the right.

More public WiFi services are offering encrypted sessions, but it’s a good idea to use a VPN (virtual private network) to encrypt traffic. For companies whose employees tend to use public WiFi, a VPN is an easy expense to justify. Residential users can also set up their own VPN with a router, open source software or web-based services like GoToMyPC.

This article mentioned Kokua Wireless, a free municipal WiFi service that covers my office building in downtown Honolulu. Kokua’s coverage of downtown Honolulu is quite good, as shown in this screen shot from their mapping application.

Residential broadband providers have joined the battle for customer loyalty. Road Runner has Speed Zone, its own public WiFi network for its residential and business customers. Hawaiian Telcom partnered with Skywave to offer HT Spots, its own attempt at satisfying this key success factor. Users must have be a broadband subscriber to use these either of these services.

In the last few months, I’ve noticed more people around town using mobile data cards from Sprint, AT&T and Clearwire. These devices are more expensive and more secure than some public WiFi connections. Both HawTel and Oceanic offer encrypted public WiFi connections, of course.