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From: Glenn Petersen12/8/2019 9:51:02 PM
1 Recommendation   of 6612
Musk's defamation win may reset legal landscape for social media

by Reuters
Saturday, 7 December 2019 14:58 GMT
By Tom Hals

Dec 6 (Reuters) - Elon Musk's daring has left its mark on electric cars and rockets, and now experts say the entrepreneur may have reshaped U.S. defamation law with his willingness to defend at a high-stakes trial a lawsuit over an off-the-cuff tweet.

The victory by Tesla Inc's outspoken chief executive over a Twitter message describing a British cave explorer as "pedo guy" has raised the bar for what amounts to libel online, according to some legal experts.

Musk defended his comments as trivial taunts made on a social media platform that he argued everyone views as a world of unfiltered opinion, which is protected as free speech, rather than statements of fact.

"I think this verdict reflects that there is a feeling that internet tweets and chats are more like casual conversation whether you call it opinion or rhetoric or hyperbole and should not be punished in a lawsuit," said Chip Babcock, a lawyer who defends against defamation lawsuits.

Several other attorneys who specialize in defamation cases privately expressed surprise at the outcome of what they viewed as a strong case for the cave explorer, Vernon Unsworth. They attributed it to Musk's fame and the perceived youthfulness of the jury.

But they also agreed it would shift the legal landscape, undercutting the cases that would have seemed viable before the trial while defendants would use it to try to reduce possible settlement values.

Musk's court papers cast his comments as part of the rough-and-tumble world of Twitter, which rewards and encourages emotional outbursts and sucks in readers worldwide but that no one takes seriously.

Mark Sableman, a lawyer who defends defamation cases, said the freewheeling nature of social media has inevitably changed the understanding of language and what amounts to defamatory factual statements, versus opinion.

"I think defendants in modern defamation cases are likely to point to the vitriolic no-holds-barred nature of modern social media, cable TV, and political discourse, in contending that many words and accusations formerly considered defamatory are now understood only as mere opinions, not factual assertions," he said.

In general, to prove libel, the written form of defamation, someone must show the existence of a false statement, which defendants often try to present as opinion. The plaintiff also must show it was published to a third party, it was negligent and it caused harm.

"While there is more leeway and more hyperbole online and in social media in general, courts never really accepted that argument that social media is a libel free-zone," said Lyrissa Lidsky, a professor who specializes in defamation at the University of Missouri School of Law.

Several attorneys said Unsworth appeared to have a strong case, and noted that Musk failed to convince the judge to dismiss it at an early stage. But they cautioned that anything can happen in a courtroom where factors such as the credibility of witnesses and likeability of parties can become important factors.

"Based on the court's pre-trial rulings on motions, Mr. Unsworth's case going in had the potential to underpin a substantial verdict in his favor," said John Walsh, who represents people bringing defamation cases.

Unsworth helped rescue a boys soccer team from a flooded cave in Thailand and during a TV interview criticized Musk's "PR stunt" of showing up at site with a mini-submersible, which was never used. Musk responded with several tweets to his almost 30 million followers and a damaging email to a news outlet, and the lawsuit followed.

In recent years, judges have been wrestling with social media comments and whether to consider them factual statements or protected opinions.

U.S. President Donald Trump, singer and actress Courtney Love and actor James Woods have all been embroiled in multiple libel lawsuits over tweets, with mixed results.

Trump has had success casting Twitter as a place where combatants trade demeaning messages that users understand are not defamatory statements of fact.

Judge James Otero in Los Angeles dismissed a case against the president for a tweet blasting as a "total con job" a claim by adult film actress Stormy Daniels that she was threatened for speaking about an alleged affair with Trump. Otero described the message as "rhetorical hyperbole," fired off with an incredulous tone that no reasonable person would take as factual statement about Daniels, whose real name is Stephanie Clifford.

Unsworth's attorney, Lin Wood, warned social media is "tearing at the fabric of society" and the Musk verdict would worsen that trend.

"It is now said by this jury that insults are completely open season," he said. "Everyone should be concerned about their reputations."

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Daniel Wallis)

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To: Glenn Petersen who wrote (6572)12/10/2019 9:50:56 AM
From: Glenn Petersen
   of 6612
In wake of Shutterstock’s Chinese censorship, American companies need to relearn American values

Danny Crichton @dannycrichton /
5:25 am CST • December 8, 2019

cameraImage Credits: Ashley Pon/Bloomberg (opens in a new window) / Getty Images

It’s among the most iconic images of the last few decades — a picture of an unknown man standing before a line of tanks during the protests in 1989 in Beijing’s Tiananmen Square. In just one shot, the photographer, Jeff Widener, managed to convey a society struggling between the freedoms of individual citizens and the heavy hand of the Chinese militarized state.

It’s also an image that few within China’s “great firewall” have access to, let alone see. For those who have read 1984, it can almost seem as if “Tank Man” was dropped into a memory hole, erased from the collective memory of more than a billion people.

By now, it’s well-known that China’s search engines like Baidu censor such political photography. Regardless of the individual morality of their decisions, it’s at least understandable that Chinese companies with mostly Chinese revenues would carefully hew to the law as set forth by the Chinese Communist Party. It’s a closed system after all.

What we are learning though is that it isn’t just Chinese companies that are aiding and abetting this censorship. It’s Western companies too. And Western workers aren’t pleased that they are working to enforce the anti-freedom policies in the Middle Kingdom.

Take Shutterstock, which has come under great fire for complying with China’s great firewall. As Sam Biddle described in The Intercept last month, the company has been riven internally between workers looking to protect democratic values, and a business desperate to expand further in one of the world’s most dynamic countries. From Biddle:

Shutterstock’s censorship feature appears to have been immediately controversial within the company, prompting more than 180 Shutterstock workers to sign a petition against the search blacklist and accuse the company of trading its values for access to the lucrative Chinese market.
Those petitions have allegedly gone nowhere internally, and that has led employees like Stefan Hayden, who describes nearly ten years of experience at the company as a frontend developer on his LinkedIn profile, to resign:

The challenge of these political risks is hardly unknown to Shutterstock. The company’s most recent annual financial filing with the SEC lists market access and censorship as a key risk for the company (emphasis mine):

For example, domestic internet service providers have blocked and continue to block access to Shutterstock in China and other countries, such as Turkey, have intermittently restricted access to Shutterstock. There are substantial uncertainties regarding interpretation of foreign laws and regulations that censor content available through our products and services and we may be forced to significantly change or discontinue our operations in such markets if we were to be found in violation of any new or existing law or regulation. If access to our products and services is restricted, in whole or in part, in one or more countries or our competitors can successfully penetrate geographic markets that we cannot access, our ability to retain or increase our contributor and customer base may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could Be adversely affected.
Thus the rub: market access means compromising the very values that a content purveyor like Shutterstock relies on to operate as a business. The stock image company is hardly unique to find itself in this position; it’s a situation that the NBA has certainly had to confront in the last few weeks:

It’s great to see Shutterstock’s employees standing up for freedom and democracy, and if not finding purchase internally with their values, at least walking with their feet to other companies who value freedom more reliably.

Unfortunately, far too many companies — and far too many tech companies — blindly chase the dollars and yuans, without considering the erosion in the values at the heart of their own business. That erosion ultimately adds up — without guiding principles to handle business challenges, decisions get made ad hoc with an eye to revenues, intensifying the risk of crises like the one facing Shutterstock.

The complexity of the Chinese market has only expanded with the country’s prodigious growth. The sharpness, intensity, and self-reflection of values required for Western companies to operate on the mainland has reached new highs. And yet, executives have vastly under-communicated the values and constraints they face, both to their own employees but also to their shareholders as well.

As I wrote earlier this year when the Google China search controversy broke out, it’s not enough to just be militant about values. Values have to be cultivated, and everyone from software engineers to CEOs need to understand a company’s objectives and the values that constrain them.

As I wrote at the time:

The internet as independence movement is 100% dead.

That makes the ethical terrain for Silicon Valley workers much more challenging to navigate. Everything is a compromise, in one way or another. Even the very act of creating value — arguably the most important feature of Silicon Valley’s startup ecosystem — has driven mass inequality, as we explored on Extra Crunch this weekend in an in-depth interview.
I ultimately was in favor of Google’s engagement with China, if only because I felt that the company does understand its values better than most (after all, it abandoned the China market in the first place, and one would hope the company would make the same choice again if it needed to). Google has certainly not been perfect on a whole host of fronts, but it seems to have had far more self-reflection about the values it intends to purvey than most tech companies.

It’s well past time for all American companies though to double down on the American values that underly their business. Ultimately, if you compromise on everything, you stand for nothing — and what sort of business would anyone want to join or back like that?

China can’t be ignored, but neither should companies ignore their own duties to commit to open, democratic values. If Tank Man can stand in front of a line of tanks, American execs can stand before a line of their colleagues and find an ethical framework and a set of values that can work.

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From: Glenn Petersen12/17/2019 8:49:19 PM
1 Recommendation   of 6612
'They’ve been blindsided’: Silicon Valley wakes up to Sacramento

12/16/2019 07:16 PM EST

SACRAMENTO — The powerful tech giants of Silicon Valley may wield some of the biggest lobbying budgets in Washington, but they have been comparatively absent in their home state’s capital — where they are now on the defensive.

California caught the world by surprise last year when it passed the nation’s strongest data privacy law, instantly making Sacramento one of the most important regulators of global tech. As members of the California legislature forged the deal on a defining challenge of the digital age, the internet companies were slow to awaken to the threat, and brought few of their considerable resources to bear.

The combined lobbying firepower of Google, Facebook and two major tech trade associations amounted to just $235,000 in the three months leading up to the vote, compared with $3 million from the four biggest oil interests. Facebook, then mired in the Cambridge Analytica scandal, spent less than $18,000 that quarter, according to disclosure records.

The business community’s recent attempts to roll back parts of the privacy law, which takes effect in January and will give consumers more control over personal data, hasn’t gone much better, further underscoring the disconnect between Silicon Valley and its powerful neighbors a two hours' drive away.

The Washington travails of Mark Zuckerberg and other Silicon Valley czars are well-known, and tech companies have been grappling with aggressive European regulators eager to rein them in for years now — the European Union has the world’s most stringent privacy law. But the companies’ reluctance to plunge into California politics has hurt them, strategists say, as they grapple with proposals from state lawmakers and a ballot initiative system that has produced two data-privacy campaigns in less than three years.

“You just get the sense that they feel that Sacramento is on the other side of the moon,” said Andrew Acosta, a Democratic strategist.

That light touch looks to be changing as California dives deeper into data-privacy regulation. Facebook, Google and the trade groups TechNet and the Internet Association are on track to boost their combined lobbying spending by more than 80 percent this year and next, compared to the last two-year legislative session. Those four groups spent a combined $1.3 million to influence policymakers in the first nine months of the year. And Facebook has just hired a well-connected Sacramento insider, Mona Pasquil Rogers, to run its California policy shop.

But is it too late? Souring public sentiment about tech’s role in society and daily life may undermine companies’ efforts to shape policy in Sacramento, where even business-friendly Republicans have raised alarms. California’s ballot initiative process adds another layer of unpredictability.

This year’s tech lobbying blitz, to the surprise of many, did not yield major carveouts in the new Privacy Act. What’s more, the consumer privacy advocate behind the law, Alastair Mactaggart, said he was so concerned by such efforts to water it down that he decided to advance a second ballot initiative for 2020. The new version would add new consumer protections — and prevent the Legislature from making any changes that would weaken the Privacy Act.

That could explain why tech companies who don’t like California’s new privacy rules are leaning on Washington for regulations that would supersede state laws — an end-run on Sacramento. Last month, a tech and telecom-funded foundation helped send a delegation of California lawmakers to Washington. In meetings with their counterparts in Congress, the tech-friendly caucus discussed the flaws in California’s law and the merits of federal preemption, one of the organizers told POLITICO.

One might assume state politicians facing reelection would shiver at the thought of alienating a company worth the GDP of Argentina or Saudi Arabia. And to be sure, the sector does have friends in the Legislature. But a closer look at campaign finance records shows that Big Tech has not been a big player in candidate races.

Facebook is by far the sector’s biggest spender, with $1.7 million in contributions since 2009 (excluding those made by a former company executive to his own campaign for attorney general in 2010). Google has spent $959,000, state records show, while Apple has given just $256,000.

Compare that to $5.3 million that AT&T funneled into candidates’ coffers during that period, and $6.2 million from labor powerhouse SEIU.

In fact, strategists say, some progressive lawmakers might even welcome opposition from companies like Facebook. “If Facebook did a big independent expenditure against Buffy Wicks,” Acosta said, pointing to a first-term assemblywoman who has championed privacy rights, “Buffy Wicks would say, 'Bring it on!’”

“It’s telling that candidates running for president are now using Mark Zuckerberg in their ads and highlighting him as a negative,” he added. “Facebook’s on the ground and everyone’s kicking them.”

Facebook and Google declined to comment.

Amazon’s foray into local politics offers a cautionary tale. The company suffered a public relations backlash and electoral defeat in November after pouring nearly $1.5 million into a PAC backing business-friendly candidates for Seattle City Council.

But another veteran Sacramento strategist thinks it is even riskier for tech to remain on the sidelines. Steve Maviglio, a ballot initiative consultant, believes the industry’s ambivalence about publicly opposing the 2018 data-privacy initiative created an opening for California’s privacy law.

Maviglio was hired by a tech and telecom coalition to fight the initiative. But rather than pledge millions to defeat it, he said, the companies took a wait-and-see approach, not wanting to be the first to jump. The first contribution didn’t come until February 2018, four months after the initiative was filed, campaign records show. That April, reeling from the Cambridge Analytica fallout, Facebook announced it would no longer fight the privacy measure.

The initiative had strong polling, and in June the Legislature unanimously passed the Privacy Act as part of a deal to get it off the ballot. By passing it in the Capitol, lawmakers regained the power to make changes without going back to the voters.

“There was a fundamental misunderstanding of how the initiative system worked and what they had to do,” Maviglio said. “It was painful to try to get them engaged, and frankly, that’s one of the reasons the Privacy Act passed last year. They simply didn’t know how to engage and head it off.”

Roger Salazar, another veteran Democratic consultant, drew a contrast between the tech startups of today and the hardware and software giants like Hewlett Packard and Apple that ruled Silicon Valley in the 1980s. The valley’s first generation companies tended to hire “old school” executives, he recalled, “types of corporate managers who understood how to deal with government.”

Newer tech businesses don’t tend to have the same kinds of safeguards or relationships, he said, possibly because they’ve grown at such a dizzying rate.

“I think they’ve been blindsided,” Salazar said, “because they didn’t understand the process, they didn’t understand the environment they were operating in, they didn’t understand the political system in California.”

The tipping point for Facebook’s image — in Sacramento and just about everywhere else — was the Cambridge Analytica scandal that exploded in early 2018. The British consulting firm hired by the Trump campaign acquired data from millions of the social network’s users that had been gathered without their knowledge and used it to try to manipulate likely voters with political ads before the 2016 election.

Google’s data-gathering practices and market dominance has also been under the microscope, especially as the company expands into the personal health realm and tries to acquire Fitbit.

In early November, California Attorney General Xavier Becerra revealed an ongoing probe into Facebook’s handling of personal data stemming from Cambridge Analytica. Becerra, a former Southern California congressman, also announced he was suing the company for allegedly stonewalling his investigation.

In a sign of the company’s fall from grace, Becerra’s reelection campaign used the news as fundraising fodder.

“Xavier sued Facebook,” read the email blast. “Big Tech is no longer an infant. These corporations are running at Olympic speed. It’s time for the industry to be treated as an adult.”

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From: Glenn Petersen12/22/2019 10:04:39 AM
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Triton is the world’s most murderous malware, and it’s spreading

The rogue code can disable safety systems designed to prevent catastrophic industrial accidents. It was discovered in the Middle East, but the hackers behind it are now targeting companies in North America and other parts of the world, too.

by Martin Giles
MIT Technology Review
Mar 5, 2019

As an experienced cyber first responder, Julian Gutmanis had been called plenty of times before to help companies deal with the fallout from cyberattacks. But when the Australian security consultant was summoned to a petrochemical plant in Saudi Arabia in the summer of 2017, what he found made his blood run cold.

The hackers had deployed malicious software, or malware, that let them take over the plant’s safety instrumented systems. These physical controllers and their associated software are the last line of defense against life-threatening disasters. They are supposed to kick in if they detect dangerous conditions, returning processes to safe levels or shutting them down altogether by triggering things like shutoff valves and pressure-release mechanisms.

The malware made it possible to take over these systems remotely. Had the intruders disabled or tampered with them, and then used other software to make equipment at the plant malfunction, the consequences could have been catastrophic. Fortunately, a flaw in the code gave the hackers away before they could do any harm. It triggered a response from a safety system in June 2017, which brought the plant to a halt. Then in August, several more systems were tripped, causing another shutdown.

The first outage was mistakenly attributed to a mechanical glitch; after the second, the plant's owners called in investigators. The sleuths found the malware, which has since been dubbed “Triton” (or sometimes “Trisis”) for the Triconex safety controller model that it targeted, which is made by Schneider Electric, a French company.

In a worst-case scenario, the rogue code could have led to the release of toxic hydrogen sulfide gas or caused explosions, putting lives at risk both at the facility and in the surrounding area.

Gutmanis recalls that dealing with the malware at the petrochemical plant, which had been restarted after the second incident, was a nerve-racking experience. “We knew that we couldn’t rely on the integrity of the safety systems,” he says. “It was about as bad as it could get.”

In attacking the plant, the hackers crossed a terrifying Rubicon. This was the first time the cybersecurity world had seen code deliberately designed to put lives at risk. Safety instrumented systems aren’t just found in petrochemical plants; they’re also the last line of defense in everything from transportation systems to water treatment facilities to nuclear power stations.

Triton’s discovery raises questions about how the hackers were able to get into these critical systems. It also comes at a time when industrial facilities are embedding connectivity in all kinds of equipment—a phenomenon known as the industrial internet of things. This connectivity lets workers remotely monitor equipment and rapidly gather data so they can make operations more efficient, but it also gives hackers more potential targets.

Those behind Triton are now on the hunt for new victims. Dragos, a firm that specializes in industrial cybersecurity, and where Gutmanis now works, says it’s seen evidence over the past year or so that the hacking group that built the malware and inserted it into the Saudi plant is using some of the same digital tradecraft to research targets in places outside the Middle East, including North America. And it’s creating new strains of the code in order to compromise a broader range of safety instrumented systems.

Red alert

News of Triton’s existence was revealed in December 2017, though the identity of the plant’s owner has been kept secret. (Gutmanis and other experts involved in the initial investigation decline to name the company because they fear doing so might dissuade future targets from sharing information about cyberattacks privately with security researchers.)

Some notable cyber-physical threats2010 ?? StuxnetDeveloped by America’s National Security Agency, working in conjunction with Israeli intelligence, the malware was a computer worm, or code that replicates itself from computer to computer without human intervention. Most likely smuggled in on a USB stick, it targeted programmable logic controllers which govern automated processes, and caused the destruction of centrifuges used in the enrichment of uranium at a facility in Iran.2013 ?????? HavexHavex was designed to snoop on systems controlling industrial equipment, presumably so that hackers could work out how to mount attacks on the gear. The code was a remote access Trojan, or RAT, which is cyber-speak for software that lets hackers take control of computers remotely. Havex targeted thousands of US, European, and Canadian businesses, and especially ones in the energy and petrochemical industries.2015 ?? BlackEnergyBlackEnergy, which is another Trojan, had been circulating in the criminal underworld for a while before it was adapted by Russian hackers to launch an attack in December 2015 on several Ukranian power companies that helped trigger blackouts. The malware was used to gather intelligence about the power companies’ systems, and to steal log-in credentials from employees.2016 ?? CrashOverrideAlso known as Industroyer, this was developed by Russian cyber warriors too, who used it to mount an attack on a part of Ukraine’s electrical grid in December 2016. The malware replicated the protocols, or communications languages, that different elements of a grid used to talk to one another. This let it do things like show that a circuit breaker is closed when it’s really open. The code was used to strike an electrical transmission substation in Kiev, blacking out part of the city for a short time.Over the past couple of years, cybersecurity firms have been racing to deconstruct the malware—and to work out who’s behind it. Their research paints a worrying picture of a sophisticated cyberweapon built and deployed by a determined and patient hacking group whose identity has yet to be established with certainty.

The hackers appear to have been inside the petrochemical company’s corporate IT network since 2014. From there, they eventually found a way into the plant’s own network, most likely through a hole in a poorly configured digital firewall that was supposed to stop unauthorized access. They then got into an engineering workstation, either by exploiting an unpatched flaw in its Windows code or by intercepting an employee’s login credentials.

Since the workstation communicated with the plant’s safety instrumented systems, the hackers were able to learn the make and model of the systems’ hardware controllers, as well as the versions of their firmware—software that’s embedded in a device’s memory and governs how it communicates with other things.

It’s likely they next acquired an identical Schneider machine and used it to test the malware they developed. This made it possible to mimic the protocol, or set of digital rules, that the engineering workstation used to communicate with the safety systems. The hackers also found a “zero-day vulnerability”, or previously unknown bug, in the Triconex model’s firmware. This let them inject code into the safety systems’ memories that ensured they could access the controllers whenever they wanted to.

Thus, the intruders could have ordered the safety instrumented systems to disable themselves and then used other malware to trigger an unsafe situation at the plant.

The results could have been horrific. The world’s worst industrial disaster to date also involved a leak of poisonous gases. In December 1984 a Union Carbide pesticide plant in Bhopal, India, released a vast cloud of toxic fumes, killing thousands and causing severe injuries to many more. The cause that time was poor maintenance and human error. But malfunctioning and inoperable safety systems at the plant meant that its last line of defense failed.

More red alerts

There have been only a few previous examples of hackers using cyberspace to try to disrupt the physical world. They include Stuxnet, which caused hundreds of centrifuges at an Iranian nuclear plant to spin out of control and destroy themselves in 2010, and CrashOverride, which Russian hackers used in 2016 to strike at Ukraine’s power grid. (Our sidebar provides a summary of these and other notable cyber-physical attacks.)

However, not even the most pessimistic of cyber-Cassandras saw malware like Triton coming. “Targeting safety systems just seemed to be off limits morally and really hard to do technically,” explains Joe Slowik, a former information warfare officer in the US Navy, who also works at Dragos.

Other experts were also shocked when they saw news of the killer code. “Even with Stuxnet and other malware, there was never a blatant, flat-out intent to hurt people,” says Bradford Hegrat, a consultant at Accenture who specializes in industrial cybersecurity.

Ariel Davis

It’s almost certainly no coincidence that the malware appeared just as hackers from countries like Russia, Iran, and North Korea stepped up their probing of “critical infrastructure” sectors vital to the smooth running of modern economies, such as oil and gas companies, electrical utilities, and transport networks.

In a speech last year, Dan Coats, the US director of national intelligence, warned that the danger of a crippling cyberattack on critical American infrastructure was growing. He drew a parallel with the increased cyber chatter US intelligence agencies detected among terrorist groups before the World Trade Center attack in 2001. “Here we are nearly two decades later, and I’m here to say the warning lights are blinking red again,” said Coats. “Today, the digital infrastructure that serves this country is literally under attack.”

At first, Triton was widely thought to be the work of Iran, given that it and Saudi Arabia are archenemies. But cyber-whodunnits are rarely straightforward. In a report published last October, FireEye, a cybersecurity firm that was called in at the very beginning of the Triton investigation, fingered a different culprit: Russia.

The hackers behind Triton had tested elements of the code used during the intrusion to make it harder for antivirus programs to detect. FireEye’s researchers found a digital file they had left behind on the petrochemical company’s network, and they were then able to track down other files from the same test bed. These contained several names in Cyrillic characters, as well as an IP address that had been used to launch operations linked to the malware.

That address was registered to the Central Scientific Research Institute of Chemistry and Mechanics in Moscow, a government-owned organization with divisions that focus on critical infrastructure and industrial safety. FireEye also said it had found evidence that pointed to the involvement of a professor at the institute, though it didn’t name the person. Nevertheless, the report noted that FireEye hadn’t found specific evidence proving definitively that the institute had developed Triton.

Researchers are still digging into the malware’s origins, so more theories about who’s behind it may yet emerge. Gutmanis, meanwhile, is keen to help companies learn important lessons from his experience at the Saudi plant. In a presentation at the S4X19 industrial security conference in January, he outlined a number of them. They included the fact that the victim of the Triton attack had ignored multiple antivirus alarms triggered by the malware, and that it had failed to spot some unusual traffic across its networks. Workers at the plant had also left physical keys that control settings on Triconex systems in a position that allowed the machines’ software to be accessed remotely.

Triton: a timeline2014Hackers gain access to network of Saudi plantJune 2017First plant shutdown August 2017Second plant shutdownDecember 2017Cyberattack made publicOctober 2018Fireeye says Triton most likely built in Russian labJanuary 2019More details emerge of Triton incident responseIf that makes the Saudi business sound like a security basket case, Gutmanis says it isn’t. “I’ve been into a lot of plants in the US that were nowhere near as mature [in their approach to cybersecurity] as this organization was,” he explains.

Other experts note that Triton shows government hackers are now willing to go after even relatively obscure and hard-to-crack targets in industrial facilities. Safety instrumented systems are highly tailored to safeguard different kinds of processes, so crafting malware to control them involves a great deal of time and painstaking effort. Schneider Electric’s Triconex controller, for instance, comes in dozens of different models, and each of these could be loaded with different versions of firmware.

That hackers went to such great lengths to develop Triton has been a wake-up call for Schneider and other makers of safety instrumented systems—companies like Emerson in the US and Yokogawa in Japan. Schneider has drawn praise for publicly sharing details of how the hackers targeted its Triconex model at the Saudi plant, including highlighting the zero-day bug that has since been patched. But during his January presentation, Gutmanis criticized the firm for failing to communicate enough with investigators in the immediate aftermath of the attack.

Schneider responded by saying it had cooperated fully with the company whose plant was targeted, as well as with the US Department of Homeland Security and other agencies involved in investigating Triton. It has hired more people since the event to help it respond to future incidents, and has also beefed up the security of the firmware and protocols used in its devices.

Andrew Kling, a Schneider executive, says an important lesson from Triton’s discovery is that industrial companies and equipment manufacturers need to focus even more on areas that may seem like highly unlikely targets for hackers but could cause disaster if compromised. These include things like software applications that are rarely used and older protocols that govern machine-to-machine communication. “You may think nobody’s ever going to bother breaking [an] obscure protocol that’s not even documented,” Kling says, “but you need to ask, what are the consequences if they do?”

An analog future?

Over the past decade or so, companies have been adding internet connectivity and sensors to all kinds of industrial equipment. The data captured is being used for everything from predictive maintenance—which means using machine-learning models to better anticipate when equipment needs servicing—to fine-tuning production processes. There’s also been a big push to control processes remotely through things like smartphones and tablets.

All this can make businesses much more efficient and productive, which explains why they are expected to spend around $42 billion this year on industrial internet gear such as smart sensors and automated control systems, according to the ARC Group, which tracks the market. But the risks are also clear: the more connected equipment there is, the more targets hackers have to aim at.

To keep attackers out, industrial companies typically rely on a strategy known as “defense in depth.” This means creating multiple layers of security, starting with firewalls to separate corporate networks from the internet. Other layers are intended to prevent hackers who do get in from accessing plant networks and then industrial control systems.

These defenses also include things like antivirus tools to spot malware and, increasingly, artificial-intelligence software that tries to spot anomalous behavior inside IT systems. Then, as the ultimate backstop, there are the safety instrumented systems and physical fail-safes. The most critical systems typically have multiple physical backups to guard against the failure of any one element.

The strategy has proved robust. But the rise of nation-state hackers with the time, money, and motivation to target critical infrastructure, as well as the increasing use of internet-connected systems, means the past may well not be a reliable guide to the future.

Russia, in particular, has shown that it’s willing to weaponize software and deploy it against physical targets in Ukraine, which it has used as a testing ground for its cyber arms kit. And Triton’s deployment in Saudi Arabia shows that determined hackers will spend years of prodding and probing to find ways to drill through all those defensive layers.

Fortunately, the Saudi plant’s attackers were intercepted, and we now know a great deal more about how they worked. But it’s a sobering reminder that, just like other developers, hackers make mistakes too. What if the bug they inadvertently introduced, instead of triggering a safe shutdown, had disabled the plant’s safety systems just when a human error or other mistake had caused one of the critical processes in the plant to go haywire? The result could have been a catastrophe even if the hackers hadn’t intended to cause it.

Experts at places like the US’s Idaho National Laboratory are urging companies to revisit all their operations in the light of Triton and other cyber-physical threats, and to radically reduce, or eliminate, the digital pathways hackers could use to get to critical processes.

Businesses may chafe at the costs of doing that, but Triton is a reminder that the risks are increasing. Gutmanis thinks more attacks using the world’s most murderous malware are all but inevitable. “While this was the first,” he says, “I’d be surprised if it turns out to be the last.”

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From: Ron1/7/2020 6:06:34 PM
1 Recommendation   of 6612
Bots Are Destroying Political Discourse As We Know It
They’re mouthpieces for foreign actors, domestic political groups, even the candidates themselves. And soon you won’t be able to tell they’re bots.

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From: Glenn Petersen1/12/2020 3:27:35 PM
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Hollywood Bets On a Future of Quick Clips and Tiny Screens

Entertainment startup Quibi has already won over industry A-listers with its vision for short-form mobile streaming. But will it catch on with viewers?

Adam Rogers
January 8, 2019

Katzenberg says he spent three hours convincing Whitman to be the CEO of Quibi. “If you don’t ask, you don’t get it,” he says.Photograph: Rozette Rago

TV, but on phones! You know—for kids?

That’s it. That’s the pitch.

The company making that pitch is called Quibi—a portmanteau of “quick bites.” Its product: less-than-10-minute fiction, reality-show, and news videos streamed exclusively to mobile devices. The shows will be high-end, glossy even, with the production values that only international news divisions and Hollywood studios can manage, but they’ll have the rough shape of user-generated content. Disney, but YouTube. Amazon Prime, but TikTok.

Even Quibi’s origin story sounds like a pitch, this time for a buddy comedy: Ex-studio mogul partners with a former big-shot tech CEO for one last big score. The mogul is Jeffrey Katzenberg, former chief of Walt Disney Studios, the K in Dreamworks SKG, most Hollywood of Hollywood people. The CEO is Meg Whitman, former CEO of eBay and Hewlett-Packard. In a world dominated by a market of 18- to 44-year-olds, two old pros come out of retirement to show the kids how things are done.

This is What Hollywood Is Talking About Now.

Partially that’s because the entertainment business is very open to innovation in a time of great change—by which I mean, everything is on fire and people are running around screaming. The old studio-and-network, theater, and broadcast system is melting into a bubbling cauldron of subscription-based streaming services and online video, and the younger viewers at whom advertisers always want to flash their logos are fleeing the old transmission systems for newer ones with weirder names.

Amid that chaos, Quibi has raised $1 billion in investment capital from every major Hollywood studio and most of the major tech companies. It has corralled an A-list tsunami to make programs—Steven Spielberg, Steven Soderbergh, Guillermo del Toro, Anna Kendrick, Zac Efron, Chrissy Teigen, Jennifer Lopez, Antoine Fuqua, Sam Raimi, Catherine Hardwicke, Idris Elba, Kevin Hart, Lena Waithe, NBC News, ESPN, BBC. The whole thing launches in April with a year of advertisements already sold. It’ll cost $4.99 a month with ads or $7.99 without, and the phone company T-Mobile has already promised to bundle subscriptions to customers—neither Quibi nor T-Mobile would say how many.

Quibi is a thing that is happening. Whether it is a thing millennials and Gen Zers will actually look at is a whole other question. It’s what Katzenberg and Whitman are pitching, hard, in a keynote address at CES in Las Vegas. But really, it’ll get answered only when Katzenberg and Whitman press the button to turn the thing on.

Ask people why they signed up to make a thing for Quibi, and they’ll talk about the general clustereffery that show business has become, but they’ll also say, simply, “Jeffrey.” That’s Katzenberg, who is a macher. He is late to our meeting in a glassed-in Quibi conference room because his earlier meeting with Spielberg ran long. He has to leave a little early because he has a phone call scheduled with Tommy Hilfiger. Status: signaled.

In between, Katzenberg explains that he and Whitman have known each other for 35 years, since he was running Disney and she was a VP there. Katzenberg led the Disney animation renaissance—Lion King, Beauty and the Beast, etc.—that the company is still revisiting with live-action remakes.

But things change. He got ousted, with acrimony, in 1994, and just weeks later announced he was starting a new studio with Spielberg and David Geffen … sparking a whole other animation renaissance (Shrek, Kung Fu Panda, etc.). And now, he says with perhaps some satisfaction, people in Hollywood are joking that if you’re not on a project with Quibi, you’re not really a people in Hollywood. (This seems like the right time to disclose that Roger Lynch, CEO of WIRED’s parent company, Condé Nast, is on Quibi’s board, and WIRED is in early talks about having a show on the streamer.)

After Disney, Whitman went on to a series of heavy-hitter companies, from Hasbro to eBay—when, as she says, it was nonobvious that people wanted to buy stuff online. She left HP after six years at the helm; Katzenberg says he was on a plane to Silicon Valley that night to offer the CEO job at Quibi. She was planning to go travel; he pitched her for three and a half hours. He needed what she knew. “If you don’t ask, you don’t get it. If you don’t take a swing, kick the ball, run with it, you don’t score,” Katzenberg says. “I’ve always come from the school: Go for the unattainable. This is honestly the second time in my lifetime when I actually got the absolute perfect, unattainable partner.”

“What was the first?” I ask.

“Steven Spielberg and David Geffen,” he says.

The guy can do a meeting, I’m saying. And it was good teeing-up, too, because this is roughly when Whitman joined us in the conference room.

Despite what everyone else I talked to said, Katzenberg’s own hypothesis for why a large fraction of Hollywood signed up to make Quibi shows has little to do with him, or even with technology. Broadly, it’s a little bit “show” and a little bit “business.”

The “show” part is the next turn of the evolution of story structure, he says. Movies are a couple of hours of story meant to be consumed in a gulp; TV shows you can choose to see as either a unit of 22 minutes or 42 minutes (that’s show minus commercials), or as a however-many-hours-long story taking one season or many.

But in all of those formats, the secret, irreducible unit is the act. As in a play, these are story subsections, akin to chapters. Movies have them, though smart screenwriters disagree about how many and how long they ought to be. In radio and broadcast TV, commercials became de facto act breaks—an hour-long show has roughly five, in the modern construction. “And the first act break is always at—” Whitman says. “—eight and a half minutes,” Katzenberg finishes.

So while short online video seems more like the purview of a social network or YouTube, the fact is that TV and moviemakers already understand the qui in Quibi. (It’s short for “quick” in case you’ve forgotten. Yeah, I’m not really sure about the name either.) They’re already making shows with acts of 10 or so minutes.

They can already imagine series with those constraints—whether they’re single stories told over multiple episodes or anthology-type shows like Sam Raimi’s 50 States of Fright, which will tell different scary stories set in every US state. “What Quibi is doing is taking these two proven sciences and actually converging them together for our ‘lighthouses,’” Katzenberg says, “in which we’re telling a two-hour story in chapters that are seven to 10 minutes long.”

There’s further inducement—a quibi pro quo. The rise of multiple streaming networks, restructurings at various studios, and an ongoing fight between TV writers and the agencies that represent them all sum up to lots of new opportunities for writers, producers, actors, and the production folks who make entertainment for screens. The old, predictable systems and schedules for making all that stuff no longer apply.

That’s scary, but it also creates a landscape of experimentation. “It might be worth thinking of Quibi the way we think of Darpa. Darpa’s job is to think of new stuff that might not work, but if it works it’ll be very important,” says John Rogers, a veteran television writer and showrunner (who doesn’t have a Quibi show). “You can’t predict what the audience is going to respond to. If you could, all television would be good and high-rated, and there would be no executives.”

That’s not only true for drama and comedy. At NBC News’ famed New York headquarters in Rockefeller Center, producer Madeleine Haeringer is building a whole new newsroom for Quibi shows—two every weekday, one a day on weekends. She’s hiring new correspondents, producers, editors, and crew. They start rehearsals in February, aiming not for a traditional anchor-throws-to-correspondents structure but something more in-depth. “Working within that construct is actually pretty great for me,” says Haeringer, who started her news career at NBC, launched Vice News on HBO, and came back to run the Quibi shows.

TV news is already about short bites; the freer Quibi format actually gives Haeringer more flexibility to go in depth, she says. “A lot of the evening news shows don’t do [segments of] two minutes or more, and that’s fine. It’s great for them. But if I need seven minutes, I can do it.”

That sounds good for news—but why not do it online, or on NBC's own incipient streaming network Peacock? “It’s an emerging platform,” Haeringer says, “and if that’s where viewers are going to be, we want to get to them.

Phones, you’ll hasten to say, have two orientations—horizontal landscape and vertical portrait. Reasonable online video networks could differ on which is better for the viewing experience.

Quibi will do both. Everything it streams will have two versions, landscape and portrait, and (thanks to some clever buffering technology) your view will smoothly shift from one to the other when you rotate your phone; the audio stream unifies the two. The tech folks at Quibi call this Turnstyle, and they say that one of their business advantages is being able to focus on technological innovation like phone-turning rather than prosaic stuff like content management software to organize video or uninterruptible streaming servers.

Breaching those technological barriers made companies like Netflix and Amazon Prime possible. They also made those companies expensive to launch and maintain. Now, though, what was bespoke wiring under the hood is commodity hardware and software, much of it open source. This is what analysts call “last-mover advantage.”

Turnstyle, though, is new, and creative types are finding interesting uses for it already. Quibi’s tech leads showed me a news program demo where infographics moved from above the talking head’s head in portrait to left-of-screen in landscape. In a more cinematic demo, a long depth-of-field shot revolved into a wide master on the turn.

Quibi uses a technology called Turnstyle to allow seamless transitions between portrait and landscape views. This show, the car-stunt series Elba vs. Block, will premier later this year.

Give directors a new set of tools, and they’ll use them. Catherine Hardwicke directed the teen drama Thirteen and the teen vampire/werewolf drama Twilight, so when her agents brought her the script for Quibi’s Don’t Look Deeper—part girl-coming-of-age and part sci-fi—she was inclined toward it. The opportunity to shoot something in a novel way clinched the deal.

First, Hardwicke and her director of photography did a test. They shot a scene twice—horizontal in the morning and vertical in the afternoon—and tried editing both. Eventually Hardwicke decided they could get good quality from shooting widescreen and then making the portrait view in the edit, reframing shots by panning-and-scanning during post production. “We mostly just went for it, shot the most beautiful, composed horizontal frames we could, and then it took us about three more weeks to compose in vertical,” Hardwicke says.

Don’t Look Deeper will have 14 episodes totaling just under two hours, and her actors have all done movies—Don Cheadle, Emily Mortimer, and relative newcomer Helena Howard. Hardwicke says the resources she had added up to roughly a $10 million budget—sort of midway-ish between Thirteen’s $1.5 million and Twilight’s $37 million. But Don’t Look Deeper doesn’t act like a movie. “It’s more nonlinear and more fun. We have a cold open in each episode, and each episode ends in some kind of cliffhanger, like ‘holy shit, did that just happen? Fuck, what are we going to do next?’” Hardwicke says. “It added an energy I really liked.”

The upcoming sci-fi drama series Don’t Look Deeper also takes advantage of Turnstyle.

The experiments get weirder from there. Steven Soderbergh is shooting Wireless, his cliffhangery suspense thing, his usual way—with a high-end digital camera aimed at actors acting. But since a lot of the character interaction takes place via phone, every actor also shoots their scenes with devices that capture their texting and video chatting. Their phones capture them through the front-facing camera, and another device strapped to the back shoots outward, as if through the rear-facing camera, for the phone’s POV. Soderbergh’s landscape edit will be the traditional one; the portrait edit will use the phone footage. You, the nominal viewer, will flip-flop between the two.

Gimicky or intriguing? Hard to know. I can tell you that WIRED’s original iPad edition had different landscape and portrait versions of every page. They were meticulously executed, and if readers had shrugged any harder they’d have dislocated their shoulders. We had the numbers. It was a different time!

Meanwhile, the Quibi programming grid is full of concepts higher than Brad Pitt at a Snoop Dogg party. On Jennifer Lopez’s reality show, she’ll give $100,000 to someone in her life who influenced her, and then that person has to give half of it to someone who influenced them, and likewise all the way back up the line. (Would it suck to be the 10th person in line, who by my math would get about $95? Eh, that’s a decent night out.)

For a dating show, Quibi will post profiles of prospective daters on Monday, viewers will send back their videos of why they should go on the date on Tuesday, they’ll pick Wednesday, go on the date Thursday, and then show the results in an episode on Friday. Katzenberg says one of his favorites is Barkitecture. “This is Cribs,” he says, “but for dogs.”

Quibi will have 35 high-gloss narrative shows—Katzenberg’s aforementioned “lighthouses”—in the first year, along with 115 “alternative” shows and daily “quick bites.” So that’s one lighthouse, five quick bites, and 25 “essentials” per day, from the jump. “That is over 180 minutes of original content that we put up every day,” Katzenberg says. “A broadcast network in prime time publishes 135 minutes. So we’re 35 percent more original content every day.”

No one in television or online video knows what’s going to happen next, Whitman says: “A lot of what we’re doing here is based on our judgment and our experience and some research.”Photograph: Rozette RagoThat’s the “show” part; now we can talk business. According to Quibi’s research, in 2012 people watched an average of six minutes of video a day on their phones. By 2018 it was 60 minutes, and though the final numbers aren’t in, in 2019 it was 75 minutes. It’s even higher, Whitman says, among younger viewers, though she didn’t share that specific demographic breakdown.

Some of that digital video is movies or series television—premium longform. Some of it is user-generated or “semiprofessional,” whether long or short. But none of it, Katzenberg and Whitman believe, is premium but also short-form. Or at least, none that’s curated in one place. The trends tend toward that kind of content, Whitman says, and the business area is a “white space,” new customer behavior that opens an opportunity for a business that latecomer entrants would have a hard time copying. It also has a large potential market cap. “I’ve seen every business plan in Silicon Valley for the last 20 years, and virtually none of the time are those four all at work,” Whitman says. “Those four are all at work here.”

Some dollar figures might prove it. By Whitman’s accounting, user-generated or semipro video gets made for anywhere from pennies per minute to thousands of dollars per minute. Premium longform shows cost $10,000 to $100,000 per minute. That means 10 minutes of show can cost $1 million—uneconomical for the vast majority of what’s on YouTube. “YouTube can’t sell a million dollars’ worth of advertising to cover that piece of content,” Whitman says. “That’s why our monetization model is subscription plus advertising, because we have to generate enough funds to go buy this quality of content in its short form.”

Quibi provides the (high) budget, paying creators or other studios the cost of production plus 20 percent, which is nice. That content gets licensed to run on Quibi only for seven years, but the rights belong to the creators, who never lose ownership of their intellectual property. Theoretically that means whether Quibi launches successful shows with cultural oomph or merely goes pfft, the creators can eventually take their ball to some other court. “We have given people a financial incentive and ownership in their own work that they have never had before in this town,” Katzenberg says. “Or at least they haven’t had it for a really, really long time.”

The pitch to advertisers is designed to be just as compelling: brand safety. Quibi’s year of pre-sold pre-roll comes from heavyweight transnational brands like Walmart, Pepsi, Google, Progressive, and ABInBev (so Budweiser or some other beer). Those companies are watching the demographics they covet flee ad havens like prime-time TV, magazines, and newspapers for the web.

But putting an ad up alongside user-generated content can be algorithmic roulette. Today’s Twitch narrator or Instagram make-up applier could be tomorrow’s Nazi or #metoo-villain. “If you think about the tens of billions of dollars that are still spent on network broadcast television, in prime time, every one of those advertisers knows they have to move those dollars elsewhere as the audience is moving,” says Tom Conrad, Quibi’s chief product officer. “And so you say, well, where do you go with that money that has the same characteristics of that network?”

Not to be grandiose, but dealmaking like this suggests a new direction for television (or whatever we’re going to call video entertainment transmitted via the wireless internet). Quibi is a Hollywood startup, a studio-like entity doing something interesting with the internet, as opposed to a Silicon Valley tech business doing something interesting with content. The technology might be cool, but it’s not important (as long as it works). The dealmaking, though? That could make Quibi, um, quibiquitous.

I leave the well-appointed offices of Quibi, two floors of open-plan in the heart of Hollywood’s industrial studio zone, in the frame of mind one should have on leaving a good pitch meeting. I’m thinking, well, maybe it could work (and I’m regretting slightly my decision not to fill my pockets at the Candy Wall). Then, when I get downstairs, I have to sidestep a film crew striking a shoot in the building’s ground floor, and I remember that until something in this town is concrete, it’s filigree. A Hollywood "yes" generally means "no."

Just up the street I walk past a soundstage under construction, open to the world, a featureless white box with curved corners empty of everything except stardust, potential, and a couple of scissor lifts. Maybe Jeffrey Katzenberg and Meg Whitman are running the Big Con, and if I went back to the building today I’d find two empty floors, a couple of broken chairs, and wires dangling from the ceiling.

I mean, almost certainly not. But believing that Quibi is the next big thing does require buying into a few basic concepts. You have to believe, for example, that the people watching more video on mobile devices want video optimized for those devices as opposed to just, like, pressing pause. “The under-25 crowd has grown up with short-form video, from YouTube to Snapchat to really short form on Vine and TikTok,” says Ben Carlson, senior vice president and general manager of streaming platforms at the analytics company MarketCast.

But, he adds, when successful iterations in those media like Between Two Ferns or Awkward Black Girl moved to more “grown-up” media, that leveling-up—leveling-over?—came with increases in length and more traditional formats. “There is ample evidence of a desire for short-form content on a mobile device,” Carlson says. “What is as yet unproven is what happens when you set Hollywood professional storytellers out to do content specifically for that.”

One possible advantage Quibi has—and I’m just spitballing here—is that because its shows have a unique format and delivery mechanism, people will remember where they watched. Carlson says people often have trouble attributing which streamer carries which show, as when people protested the show Good Omens at Netflix even though it ran on Amazon Prime.

Maybe a Quibi show won’t be subject to the same kind of network brand confusion suffered by each of the other 75 bazillion TV programs. Quibi will need that kind of differentiation if it’s going to succeed; HBO Max powers up in May, and NBCUniversal’s Peacock unfurls in April. Quibi is launching into a crowded sky.

Maybe phones-only quick bites are a brand differentiator, but that won’t help if Quibi doesn’t have a hit. For now, Carlson says that Quibi shows like the documentary series on the rivalry between DC and Marvel Comics, produced by the Russo Brothers—makers of the last two Avengers movies—and a Reno 911 revival have gotten the most chatter. The Spielberg and Del Toro shows? Not so much. Of course, that could all change once they actually debut.

You further have to believe that people will pay for something they already get for free. You can already watch short videos on your phone, for the cost of your mobile subscription. To be fair, consumers have made that transition before, with music and television. Now, potential paying customers will have to ask whether it's worth adding another $60 a year to a credit card bill already laden with entertainment options? Amazon Prime video is essentially a perk that comes with faster delivery, so maybe you keep that. Cable often comes with home internet. Netflix … maybe. Disney+ is a yes for families and nerds; DC Universe even more so. CBS Online is using Star Trek as a wedge into new TV business models, a tradition in the industry. And that’s not even counting music services, videogames, newspapers, and magazines. At some point, people are going to start to say no. If Quibi is that point, the company has a problem.

Quibi (or something like it) isn’t the only possible answer to all these questions. The this-is-fine fire in which Hollywood now burns extends at least as far north as Mountain View, where YouTube, that maximalist provider of video-to-mobile, is preparing for a future that’s the opposite of the one Quibi pitches. Fully 70 percent of YouTube watch time is on mobile, but the company’s fastest-growing locus is the big screen at the front of the living room—250 million hours of video watched a day on a billion devices as an approximate replacement for cable TV.

Relative to mobile, what people are watching on that screen is a higher-than-usual proportion of premium stuff like full TV episodes, movies, and livestreamed events. “As more and more folks are getting smart TVs, they’re all HD-capable, and YouTube has the largest library, so it sort of makes sense,” says Kurt Wilms, head of living room at YouTube. (His official title is project manager.) “Folks are looking for content similar to traditional television, so we’re trying to make it easier for a viewer to select content and lean back.” (Yes, it’s harder to search with a scroll wheel and a remote than with a phone keypad. YouTube technologists are spending a lot of money on voice search, Wilms says.)

No one in television or online video knows what’s going to happen next. Whitman and Katzenberg have been good at seeing the future a few times already. “A lot of what we’re doing here is based on our judgment and our experience and some research. I think it’s hard to research products that don’t exist,” Whitman says. “But once we launch, it’s all about the data. We have no legacy tech platform and we have no legacy data platform. So all this is being built de novo, purpose built. Which is actually really fun.”

That’s why people are willing to spend money to try something as manifestly outlandish as Quibi. Young people are watching a lot of free video on their phones. They might be willing to pay for it if it was better. So why not?

That’s it. That’s the pitch.

Updated 1-9-20, 1:45PM ET: An earlier version of this story incorrectly stated that 215 million hours of YouTube are watched on televisions a day. It's 250 million hours.

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From: Ron1/16/2020 11:58:03 AM
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An interesting and controversial collection of tech companies said to be doing evil

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Silicon Valley Abandons the Culture That Made It the Envy of the World

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From: Glenn Petersen2/2/2020 11:03:40 AM
   of 6612
The man who changed disruption—and saw his own theories get disrupted

What I learned from Clayton Christensen, the author of The Innovator’s Dilemma.

by Christian Sandström
MIT Technology Review
Jan 29, 2020

I met Clayton Christensen only once. It was 2012, and thousands of business scholars were gathering in downtown Boston for the Academy of Management, the industry’s biggest conference of the year. People from all around the world presented papers, networked, applied for jobs. Keynotes were delivered in gigantic lecture halls packed with hundreds of curious PhD students, aspiring postdocs, and tenured professors.

Not everything felt like a rock concert, though. Two years earlier, I’d defended my doctoral thesis on Christensen’s theory of disruption, and I was keen to present some of my arguments to anyone who would listen. Our paper was assigned to a small seminar room. There were hundreds of such backwater sessions, and usually only the coauthors and a few acquaintances from last night’s cocktail party showed up.

A few minutes before the session started, Christensen entered the room. I was stunned. Why would someone of his status even bother to find our paper in this haystack of academic research? But he listened carefully, and his presence was calm and focused. After our presentation, Christensen made a couple of remarks—most of them reflective and self-critical—and acknowledged some of our arguments.

This man was clearly not in the game to gain prestige or try to push an agenda. He came across as humble, thoughtful, and curious in a way that left me astonished and impressed.

Data driven

When I heard that Clayton Christensen had died—aged 67, from complications caused by the leukemia he had been fighting for some time—I thought about my experience in Boston back in 2012. After all, if we are going to discuss his legacy, that first and only impression seems as a good point to start as any.

Christensen’s own doctoral dissertation, defended at Harvard Business School in 1992, concerned the disk drive industry from the early 1970s up until the 1990s. He investigated every technological change during this era and tried to relate these shifts to changes in industrial leadership. The data told an interesting—and initially confusing—story.

Previous research had tried to answer the question of why organizations found success so difficult to keep going over long periods, but it mostly looked at a company’s internal capabilities. If a business built on what it was good at, went the received wisdom, then it could defend itself against new, smaller entrants unless they came up with some entirely novel approach.

Christensen’s data suggested otherwise. It wasn’t the emergence of radically new technology that helped David outsmart Goliath. Rather, it was the emergence of a new generation of smaller disk drives that created insurmountable problems for established players. Why?

Over the coming years, Christensen developed and refined his thoughts on what was happening. Invoking some out-of-favor concepts from the 1960s and 1970s, he highlighted how the demand to serve current, profitable customers in the short-to-medium term seemed to captivate companies. The needs of these customers made it seem irrational to invest in other initiatives, and so, he contended, these firms ended up brittle and vulnerable to being blindsided. He argued that companies were being misled by the very same practices—such as listening to their customers, or designing next-generation products for existing users—that had made them successful in the first place. Firms performed well by adhering to the needs of key actors in the environment, but over time, the environment started to impose a great indirect control over firms, eventually putting them in deep trouble. The theory was beautifully counterintuitive.

Tony Luong

These ideas were clarified into a coherent framework in his famous 1997 book The Innovator’s Dilemma, and, as they say, the rest is history. Christensen’s ideas spread like a wildfire. They were intriguing and exciting to everyone who came across them, both in academia and in industry.

By the 2000s, Christensen had reached academic stardom. He was an outstanding communicator and author, and his books about disruption had a huge impact: Intel’s acclaimed CEO Andy Grove notably said The Innovator’s Dilemma was the most important book he had read in a decade, and Christensen was celebrated regularly as the world’s greatest management thinker. But as the work became more widespread, his original ideas became more diluted. By 2010 or so, “disruptive innovation” meant the same thing “radical” had meant in the 1990s. At conferences and corporate events, among startups and in tech media coverage, “disruption” became omnipresent—at the expense of its original meaning and identity.

On several occasions, Christensen tried to restore the original ideas behind the disruption concept, but ironically, his ideas now faced a form of innovator’s dilemma themselves. Their meaning was beyond the control of the mind where they were born.

Disruption, diluted

As “disruption” became progressively more well known, the concept increasingly faced another threat: becoming too powerful. Christensen’s theory of disruption was never the only one that suggested when and why entrants displace incumbents in business—after all, decades had been spent studying how such things took place. But as his work was watered down, many scholars, consultants, and corporations began to focus on only this one framework, disregarding the entire edifice of knowledge that his work was part of.

For sure, the “Christensen effect” mattered when one company pushed another out of the limelight, but there were many other factors that mattered too. And you could produce an interesting analysis if you applied the theories of The Innovator’s Dilemma to business—but the conclusions would often be invalid if they did not pay enough attention to the rest of reality. A company’s capabilities, organizational routines, managerial cognition, and network effects were just some of the factors that clearly mattered—and yet, time and again, experts tried to make predictions based solely upon Christensen’s theories. I know I am guilty of several such mistakes.

For those of us who did this, the natural and unfortunate reaction was then to blame Christensen’s work for our failed assessment or inaccurate forecast. But the problem was less the theory of disruptive innovation and more our collective will to attribute more explanatory power to a single theory than is possible.

Christensen’s work was one theory concerning industrial dynamics and technological change. It was never the theory. Elevate any idea to that sort of position and you are bound to generate disappointment. Combine it with other concepts and theories and you can find a much greater impact.

So the innovator’s dilemma faced an innovator’s dilemma of its own. It’s not just companies that are dependent on and vulnerable to an environment beyond anyone’s direct control. Ideas are too.

Keys to success

Clayton Christensen was not the first brilliant scholar or charismatic professor to write and speak about technology and innovation, and he will not be the last. So why was he so remarkably successful? What was the true source of competitive advantage that separated him from others?

He inspired a generation of scholars, including me, to think seriously about how businesses are affected by technology; he helped countless companies and provided valuable knowledge to hundreds of thousands of students who read his books and related papers.

My moment with him suggests an answer. His accomplishments were enabled by the same character that cast its light across that tiny, half-empty seminar room in Boston. You can only speak about failure if you are humble and graceful. You can only explain why well-managed firms fail by being thoughtful. And you can only develop truly remarkable concepts by being self-critical, curious, and open-minded.

Christian Sandström is associate professor of innovation management at Chalmers University of Technology and the Ratio Institute in Sweden.

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