Flickr's terabyte move: brilliant big bet or desperate call for attention?

Flickr announced yesterday that they are offering one terabyte - yes, that would be 1,000 gigabytes - of free storage for still images of any resolution and HD videos up to 3 minutes long.

They also redesigned the Flickr experience. Personally I like the new design, although I am sure there will be as many opinions on this as there are die-hard Flickr lovers out there. Check out my new Flickr profile and photo stream here.

Yet, the real question has to be how can they afford to do this? We all know that storage is becoming really, really cheap. BUT cheap does not equal free. Even Google, with their infinite compute and storage resources, made a big thing last week at Google I/O out of the fact that they are offering 10Gb of free image storage at high resolution, with unlimited storage for your low resolution images. Just in  case it doesn't jump out at you like it did at me: 10Gb is 1% of 1Tb!

So what's the deal? Here is my simple logic and theory:

• Y! needs to make some big bets to become relevant again in the imaging and photo sharing space.
• Tumblr and this Flickr reboot are undeniably big bets
• The new Flickr is an arbitrage play. Here is how it works...

Let's look at Amazon Web Services (AWS), arguably the largest "off the shelf" cloud storage service available to developers of websites and apps. For instance, a big part of Smugmug, a competitor to Flickr is using AWS storage solution (S3) to power their image storage. The AWS list price is $0.05/Gb/mo. In other words, $50/Tb/mo.  Amazon has a really good margin on their storage at that price. Let's assume that Yahoo could build their own, large scale storage solution at 50% of that cost. Heck, I'm feeling generous this evening so let's even say at at a 75% discount. That makes their internal cost $12.50 Tb/mo, or $150 year.  

Now comes the tricky part.  How many photos will the average user upload? I'm going to make a wild guess and say that the average storage utilization will be… 10%? In other words, on average, across all users, it's costing Flickr $15/user/yr to service them.  These prices represent storage costs only. We probably need to add in ballpark 10-20% for compute and bandwidth. But, I'm still feeling generous. Let's stick with $15/user/year. In order to cover this cost, Flickr must monetize their traffic with advertising, which has become a more visible and integrated part of the new design.

I think Yahoo is betting that this will be an arbitrage play with a bipolar usage distribution. The majority of people will only use it a small part of their storage, primarily for smartphone photos. These users will probably be averaging in the low 10's of Gb's of total storage used. On the other end of the continuum, a relatively small minority will actively utilize the full free 1Tb or significant portion thereof. If you actually upload 1Tb of images and video to Flickr, it's probably safe to claim that you're a die-hard and/or a professional photographer. Therefore some of these people will opt for the $499 package that Flickr also announced, which doubles your storage to 2Tb. Again, this will likely be a very small segment in the end, surely less than 1% of total users. Given the price analysis above, at $499 for 2Tb, Y! still makes a healthy margin on these customers.

Returning to my back-of-the-envelope analysis above I conclude that If Flickr can get the arbitrage to work, they should be able to make a break-even or slightly profitable business with this play. Meanwhile, they're showing strong leadership, getting lots of attention and, if successful, driving many more eyeballs to the site - which of course fuels their real revenue engine of advertising.

My vote: a brilliant big bet

Nordic Light 2013 in pictures

Einar Sira, an exciting up-n-coming Norwegian photographer

Steve McCurry and Morten Krogvold

Panel discussion summarizing conversations from the Beyond Pixels un-festival

Knut Koivisto

Anne-Lise Flavik, the director of Nordic Light

Rebecca Norris Webb and Alex Webb in conversation with Morten Krogvold

For more photos, click here

Taking Pictures or Making Pictures.

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“Give someone a flute and they own a flute. Give someone a camera and they’re a photographer”. This quote kicked off a discussion last week among a group of technology people and photographers about what it means to be a photographer. The conversation happened at Beyond Pixels – an un-festival of photography that I co-hosted with Mikkel Aaland in Kristiansund Norway. Beyond Pixels was planned and organized in collaboration with the Nordic Light International Festival of Photography.

Steve McCurry's famous image of the Afghan girl on the cover of National Geographic. McCurrey, a guest photographer at Nordic Light this year, has spent a career consistently making iconic, powerful photographs.

You’ve heard the number; billions of pictures are taken, shared and liked online every week. In a world where more and more people carry a smartphone with a camera, we’re all becoming picture takers. Yet does that make us photographers?

Surely taking a picture is easy: point and push a button and with smartphone photo apps that sport and seemingly unlimited filters and effects, it's easier than ever to give a picture an "artistic" look. With enough people pointing and pushing beautiful “signals” will rise from the flood of pictures. Indeed many interesting, fun, informative and exciting pictures will and do surface from the overflowing digital streams. Still, what makes some people take the occasional good picture while others are proficient at consistently making interesting pictures.

As with all art and expression the definition of “interesting” can be subjective and certainly contextual. A picture of a small child may be interesting when seen by a family member, but uninteresting to the rest of us. Yet there are some pictures of small children that transcend the subject and capture something more, something universal. Why does one person with a camera take a picture that is “just” a picture, while another makes a picture with universal appeal?

 Alex Webb, my favorite street photographer, makes photographs that capture the world in a way that pulls you in, asking questions, laughing, wondering?

While anyone can take a picture, to make a picture involves a few basic ingredients:

1)   skill. Making a picture is a skill. Some people have it. Some don’t. Like any skill it is something that can be learned and honed over time And some people have innate abilities and a drive that makes them masters.

2)   storytelling. Making pictures is about expression, communication and telling stories. Photographer make pictures that tell stories. Some pictures stand on their own while others belong together. Pictures can be poetry and abstract, they can be funny, they can be literal and descriptive. And with photographs just like with the written word, there are forms and “genres”.

3)   mastery of the tools. Making a picture requires tools. Whether it’s the camera, editing software or screen calibration for printing, mastery of the tools is a part of what separates the makers from the takers. Selecting, “producing" and editing a picture is often as important to the picture making process as capturing it in the first place.

To be sure, lots of photographers make bad pictures. Knut Koivisto a Swedish photographer perhaps best known for his portraits, pointed out last week in Norway that many professional photographers do not make very good pictures, while many amateurs make wonderful pictures. The camera is a tool, just like a pen or a paintbrush. Becoming a good writer or a good painter requires a lot more than owning the tool of the craft and there are many people who are not professional writers who write beautiful poetry or prose. Surely photography is no different.

In the end the difference between taking and making pictures may simply boil down to commitment, intent and vision. To take a picture requires a camera, while to make a picture requires a commitment to the craft. A photographer sees the world through a lens and tries to make pictures that capture something they see that perhaps others don't. A photographer frames the picture, sees the light, waits for the defining moment to make a picture.

How flat?

Exactly how flat is it? The world.

Pretty flat.

And getting flatter.

The more we share the flatter it gets. The more we open up the flatter it gets.

Flat is good... mostly.

Software-innovation-flat is riveting. It does not matter where you are. APIs connect.

Open-source flat is a revolution. Nothing less.

Hardware-innovation-flat is happening. Kickstarter helps. The maker movement helps. 3D printers help. Shenzhen accelerates, but might matter less as local eco-systems pop up everywhere.

Social-capital-flat is empowering. Kiva.org removes barriers to capital, in Kenya, in New Orleans, in Cambodia... in places where not much is needed to change lives.

Starbucks-flat is convenient at times, but really just the yuppie version of McDonalds-flat. I like the local coffee shop... if they have good tea.

Democracy-flat seems slower. Consent of the Networked explains why.

Flat is mostly good. Unquestionably happening. Unquestionably powerful. Unquestionably subversive.

Triangulation - fun TWiT.tv chat

Had fun at TWiT.tv yesterday chatting with Leo Laporte about Nokia, thinking different, connected devices, location services and much more. Check it out:

NYT picks up the hardware as new software meme

In a recent article titled Silicon Valley’s Hardware Renaissance in the New York Times, John Markoff and Nick Bilton pick up on the theme from my June blog post Is Hardware the New Software? Contains some nice additional proof points.

Menorca TechTalk 2012

Menorca TechTalk 2012, a set on Flickr.

Thank you to Martin and Nina for hosting yet another fabulous TechTalk week-end at Terra Nova in Menorca.

Is hardware the new software?

When I observe what’s happening to consumer electronics I get a feeling of déjà vu.  Is consumer hardware going through the same transformation that consumer software did in the last decade? Change has been simmering in the hardware space for years and now I wonder if we are about to witness a convergence that will cause transformational shifts and disruptions to hardware like those brought about in software with the advent of “the cloud”?

Ten years ago if you had a good idea and raised a million dollars in seed funding to start an Internet software company, you’d spend 20-30 percent of your capital, sometimes more, on basic infrastructure. You had to rent your own hosting cage. You had to lease and rack-and-stack your own servers, switches and firewalls. And you would likely have to license and install costly software. Finally you had to hire someone to manage it all.

There was no app store and no Facebook “likes”. You had to manufacture physical discs and boxes and shrink-wrap the software. You had to do "distribution deals" with retailers. And you needed a co-marketing budget in order to buy ads and shelf space.

It was not uncommon for a company to raise a full $3-5 million before even launching their product or service. Efficiency of capital in the software space was low ten years ago because so much of it had to be spent on undifferentiated, commodity infrastructure and costly awareness building.

The consequence of having to raise a lot of capital in order to build software was that barriers to entry were high and innovation stifled. Ten years ago it was almost impossible for a 22-year old college grad to start a software company, regardless how smart they were or how good their idea was, because in order to get going you needed to enter into business relationships and secure multi-year server and software leasing contracts. You had to hire a management team to demonstrate to both investors and vendors that you had what it took to be successful.

All that has changed. What enabled this change was the emergence of a utility model for computing and storage, an operating system model that encourages a long-tail of innovation through apps, plus a ubiquitous network that ties it all together with customers.

Today all you need to build a web service is a credit card and an Amazon Web Services (AWS) account. Or with one or two engineers you can build a mobile app for iOS, Android or Windows Phone and get instant distribution through an app store. You can hardly get your hands on $100k in seed funding without having a working prototype of the thing you’re building.  It's not easy to stand out in a sea of online services and apps, but the cost to take a shot at it has dropped like a rock in a pond. Anyone can run the experiment. Access to capital is no longer the primary gating factor when trying out a software and services idea.

The way we develop and distribute software has radically changed as a primary function of five pervasive and loosely coupled developments: open source software, open services and APIs, “the cloud” aka hosted computing and storage, primarily Amazon Web Services, mobile platforms with app stores and finally access to the social graph for awareness building and distribution.

While a small amount of effort is still required to set up and configure the servers and software to run a new service, the vast amount of work now goes into the development – coding – of the core idea, failing early and iterating or moving on if the experiment fails.

The blossoming and explosion of web and mobile apps in the last ten years are a direct consequence of major barriers to innovation disappearing. The reduced need for capital has had a profound democratizing effect. DropBox, Angry Birds, Instagram, even Facebook are a few high profile examples where a few people have created hugely successful applications and services with minimal amounts of start-up capital. These examples are only a few exceptionally bright beacons in a vast, seething ocean of creativity and innovation, all fueled by ubiquitous access to “the cloud” and to simple distribution through “app stores”.

Are we going through a similar transformation in hardware?

A couple of weeks ago Wired ran a story called In the KickstarterFuture, Hardware is the New Software.  They featured two guys who used Kickstarter to raise only $32,000 to manufacture their first batch of an air guitar pick that plugs into the iPhone. They had raised a little bit of money from angel investors first in order to design the product, but altogether were able to build and ship their first product for just over $100,000. This would have been unheard of just a few years ago.

On May 18^th a small start-up called Allerta became the talk of the tech community by setting a new record on the crowd-funding site KickStarter. They raised an astonishing $10.2 million from individuals who pre-ordered, and hence funded manufacturing of the $150 Pebble smart-watch. Pebble is a cool looking Android based smart watch that wirelessly connects to your smartphone and shows alerts from your phone, including caller ID, email messages and Facebook notifications. It even has APIs that lets developers write their own apps that run on your watch.

 The Pebble Smart-Watch pitch

Yet the most interesting part of the Pebble story, a part that most people seem to have missed, was not that they raised more than $10 million. The astonishing thing was they were only trying to raise $250,000!

With only a quarter of a million dollars a small company with a few young guys – five if I’m not mistaken – were planning to build and ship their first fully functioning, nicely designed, Android based smart-watches. In fact, when they posted their pitch to Kickstarter they already had a working prototype that they had built based on learning from a prior, similar product called InPulse that they had built for BlackBerry phones.

How is it that a few talented guys – used gender neutrally of course – with very little capital can now build and sell functioning hardware products? Is there a “cloud equivalent” that is changing the rules of the game in hardware too?

While the cloud is an apt metaphor for the “bits of software”, it is not the right model to describe the “atoms of hardware”. So perhaps we should be calling what’s happening to hardware an “earth infrastructure” as opposed to the software “cloud infrastructure”. Something big is going on with this earth infrastructure and here are the drivers:

3D printing and modeling tools – a remarkable revolution is underway in 3D printing. Physical objects can literally be designed on a laptop and printed as full physical models that we can touch, feel, and see in the real world. 3D printing technology is on a roll and it is having an effect on both perception and reality of how “easy” it has become to produce a physical object. “Just hit print” and at rapidly falling cost you can pick up a model and see if it resembles what you had in your mind. This is having a big effect on the speed and cost of iterating on designs and form-factors.

Maker movements and open source – The Maker movement today looks a lot like the early open source software movements. The Maker movement still has a decidedly “hobbyist” flavor, yet growing rapidly in breadth and depth. Hardware incubators such as Lemon Labs based in SF is bringing the incubator model that's blossomed in the software space to hardware. And the open source model is emerging as well. Adruino and Bug Labs are both open source electronics platforms. Thingiverse is emerging as an interesting repository of digital designs. While a full-on GitHub equivalent in the hardware space has not emerged yet, it’s likely that this will happen.

Android – while the lower layers of the operating system has been commoditized for a while, Android is rapidly making the whole OS stack a commodity. Equally important is the fact that the success of Android as a mobile phone OS has made it much, much easier than it was before to get set up and running on virtually any chip set. All chip vendors have an Android implementation and apps will (more or less) run on all of them. Just like people used to put a lot of effort into the hosting infrastructure pre-cloud, only a few companies had access to an OS. Others would license it. Owning the OS was a significant barrier to entry. Not so much any more. With Pebble a couple of guys were able to take Android and get it up and running on their smart watch. The equivalent would have been very expensive or even impossible even two or three years ago. Today someone wanting to build a “smart gadget” can focus most of their effort on the user experience and apps, as opposed to investing heavily in developing or significantly customizing the OS.

Chipsets – from sensors to CPUs with micro controllers in the middle, it is now possible to get powerful, fully functional computing devices up and running in record time. Reference designs that run Android are readily available by all the chip manufacturers leading to a significant reduction in cost and complexity. Much like what happened with internet software development, a much larger part of the development effort can now be focused on creating end-user value, rather than developing a low level software stack and designing chip sets.

Shenzhen – a powerful hardware manufacturing eco-system has emerged in Shenzhen, China. And as pointed out in the Wired article, the Chinese manufacturers are now increasingly willing to take on small start-ups. The competitiveness of the eco-system leads to constant improvements in quality and pricing. And this also leads to efficiencies where it is no longer necessary to start with large orders. It has become possible to start a production run with only a few thousand devices, again significantly reducing the need for start-up capital to get a consumer electronics product off the ground.

Two other trends supporting hardware innovation are access to capital through crowd sourcing services such as Kickstarter and the pervasiveness of ecommerce options, reducing dependencies on traditional retailers and distribution channels. Even if a product still needs to make it into traditional retail channels in order to make it big, it is possible to get going, get market validation and get your first customers by selling direct, asking your first customers to help promote your products on Facebook and Twitter, circumventing traditional dependencies on big marketing budgets and distribution agreements at the beginning of a new product’s life.

The “earth” – as opposed to “cloud”, remember – manufacturing and distribution infrastructure necessary to support design and manufacturing of atoms – aka hardware – is becoming very efficient resulting in the barriers to entry in hardware coming down fast.

What is happening in consumer electronics looks a lot like what has happened in software in the last ten years. A small team can now make hyper efficient use of capital and voila, out comes a cool little physical object, manufactured with earth infrastructure, running a state of the art operating system with apps, and obviously connected to a hyper efficient cloud infrastructure.

If I were a venture capitalist today I’d be investing in next generation earth infrastructure!

Renewal

Golden gate on-ramp a photo by brondmo on Flickr.

In the company of giants

From back to front: James Mollison, Martin Bell, Mary Ellen Mark, Greg Gorman, Peter Gerdehag

The ground did not shake when they walked, nor did they speak in loud, thunderous voices. They were not even big, scary looking or intimidating. Yet, they are giants. Last week I had the wonderful opportunity to walk, talk and eat in the company of some legends in the field of photography.

I spent three days at the Nordic Light photo festival, held annually in Kristiansund on the west coast of Norway. Kristiansund is not objectively a beautiful small town. The old fishing village was first bombed then burnt to the ground by the Germans in the 1940s. The architecture reflects that it was rebuilt in a hurry shortly after the war, a time when Norway was still very poor and aesthetics were not high on the list of anybody's priorities. The surroundings make up for any beauty the town may lack. Perched on the North Sea and nestled amongst snow clad mountains, it has become an important link during the last two decades in the supply and caring of the Norwegian oil-making machine.

The festival is a small, intimate affair that attracts a wonderful cast of photographers old and new. I was invited to muse about photography through a lens of technology, a decidedly minority perspective at this event. My talk titled "In the future pictures will tell their own stories" was about the future of photography, digital storytelling and the rapid evolution of the medium.

• Ubiquity is changing the nature of photography. Everyone carries a camera in our pocket - our mobile phones - and that changes our relationship to photography.
• The camera app model has emerged. The ability to develop "camera apps" on the mobile phone platforms has unleashed an exciting long-tail of innovation. Previously innovation was constrained to what a handful of camera (hardware) manufacturers could accomplish with proprietary, closed firmware in their cameras. Not any more.
• The connected camera - again enabled with the smart phone - has made photography a social activity. Instant gratification has come to photography. Every picture can instantly be beautified (Instagram), shared and "liked" (Facebook).
• Rich context makes the photograph a new medium. Digital photos are increasingly captured together with information about where they are, what direction the camera is pointing, who is in the picture and much more. With all this information it becomes possible to "ask the picture questions" such as "what is that building?", "who is that person?", "was it cold that day?", and much, much more. This is increasingly having an effect on how people view photographs and photography.
• Referencing research by the UC Berkeley Sociologist Nancy Van House, I summarized the four key motivators for why people take pictures: 1) Constructing a narrative of our lives. 2) Establishing and maintaining relationships. People are using photographs for communication. 3) Self representation. We use photos to project and image of who we are. 4) Self expression. Photography as art and as pure joy.
• Finally, we are on the cusp of computational photography becoming a reality evidenced by recent developments such as the new Nokia Pureview 808, a mobile phone with a 41mega pixel sensor and Lytro, the first consumer camera based on light field technology. Soon cameras will no longer be recording pixels - rows and columns of colored dots - but rather they will record data (light fields) and render photos in real time from that data. Lytro demonstrates the ability to focus an image after it has been taken. This is one of many exciting opportunities that will emerge from the field of computational photography.

But this festival was not about technology and all the wiz bang things it can do with digital images. It was primarily – and refreshingly for me – about the art and expression, past and present, of photography.

Photo by Mikkel Aaland. Yours truly with a Nokia Pureview 808 in my hand, in hallway conversation with Bruce Davidson

 

It’s Friday afternoon and the conversation turns to Ansel and Minor. Yes, that would be Ansel Adams and Minor White. Abe Frajndlich is telling stories about the first time he met Ansel Adams and the year he lived with Minor White during the end of White’s life. Abe also gave a colorful presentation about his book Lives I've never lived, a portrait of Minor White.

Friday morning Farzana Wahidy a young Afghani woman showed pictures she has made of women “behind the veil” and inside the privacy of their homes in Afghanistan. Farzana shows us a different Afghanistan than the image we see in the west, so often defined only by war and violence. She tells of women, repressed since the Taliban took control, and their stories through striking images. She shows pictures that speak of the same desires, wants and needs that women have throughout the world. A desire to be seen for who they are and to simply “let their hair down”. She said that even now when it is possible for women to go out in public without a burkha, many women have come to feel more safe wearing it. Hiding. Exposed if they don’t. She speaks of the continuing challenges for women in Afghanistan and her fears that the small steps forward that have been made will be erased by more conflict and chaos as the foreign troops withdraw. She tells openly and with a matter of fact tone about her own fears of being attacked, even killed for the stories she is telling.

Later we hear Greg Gorman telling stories about photographing celebrities, reminiscing about how he and Michael (Jackson) would just hang out in the early days or how he shot Tom (Cruise) shortly after risky business in the bleachers of a local baseball field without an entourage of handlers and with nobody bothering them. He speaks of how the days are over, where celebrities were accessible as people and it was possible get close to them and capture intimate personal portraits.

Bruce Davidson with a young student who won the "rising star" competition at the festival.

Bruce Davidson spoke about some of the pictures he has made during a lifetime of street photography. Wonderful photographs of the streets of New York, a Brooklyn Gang and circus performers from the 50s, the civil rights movement in the sixties and seminal events during each decade till the present. A remembrance of the lives of real people in their every day and during pivotal moments for over a half century, frozen by his lens and captured as if in time capsules.

Calling the pictures displayed by the photographers and at the exhibits dotting the town of Kristiansund stunning would be an understatement. Yet ironically, the beauty of Nordic Light at the end of the day turned out to be as much about the dialogue as the photographs. 

What made Nordic Light extra special was listening to Mary Ellen Mark in conversation with Bruce Davidson. Greg Gorman bantering with the hot Norwegian photographer Bjørn Opsahl. The conversation I had over dinner with Robert Pledge the founder of Contact Press Images in 1976 with David Burnett, Annie Leibovitz and other legends. Robert spoke about the the classic photographic image as being "flat, still and silent". He emphasized the importance of the "flat, still and silent" image as a means of expression, perhaps the very opposite of the insta-hipsta-like-share mode that drives so much of today's thinking and attention as the art-form evolves.

Robert Pledge and Mollison Jr.

This forum and others like it are important. Nordic Light is a wonderful event and a reminder that we need more dialogue across boundaries of traditional disciplines and art forms. I love photography as art and expression, with its rich history and established genres. At the same time photography is rapidly evolving. I cannot wait to see how the next generation photographers will (re-)invent the medium. Being in the company of great photographers who have dedicated their lives to capturing history, telling stories or simply making art, was a wonderful treat. I wish that more of the innovators in imaging technology and the new voices in the art and expression of photography would attend, participate in the dialogue and challenge each other as we define and refine the future of the medium. How do we make that happen? How do we broaden the dialogue? I'd love to hear thoughts and ideas.

Sunday morning: outing to the small island of Grip. More great dialogue and opportunity to build lasting connections.