How much has been invested in RSS?

In yesterday’s piece I wrote of the RSS 2.0 roadmap: “There’s a huge community that has invested billions of dollars around its assumptions.”

Sounds good, but while I was riding on the BART yesterday for a lunch appointment in San Francisco I wondered if it’s true, and if so, how you’d come up with an estimate of what the investment is.

One way of measuring it is to take the dollar value of the time that has been invested by various organizations and people. So, for example, how much money has the NY Times put into its RSS support? A million? Two? And the Christian Science Monitor, Time-Warner, AP, Reuters, BBC, etc. The University of California, Pennsylvania, Maryland, Florida, Harvard, Yale, Columbia, Waterloo, Oxford, Moscow and Beijing and the U.S. Department of State, the Oklahoma Department of Agriculture. It would take quite a while to even make a list of all the different kinds of organizations that have made and continue on an ongoing basis to invest in RSS, much less the organizations themselves.

And then there’s the technology of RSS. Brad Feld has invested millions of dollars in Feedburner, Newsgator and Technorati. My former colleagues Jim Moore and John Palfrey in Cambridge have raised a $100 million fund entirely designated for RSS. We were impressed a couple of years ago with Apple’s investment in RSS, but quietly, that investment has deepened. There’s now a link on the home page of apple.com to a huge collection of feeds that are updated presumably on an ongoing basis. And then there’s podcasting, which is also RSS. Kleiner-Perkins invested $8.5 million in Podshow, and another sizable chunk of money went to Odeo, and those are just the deals we know about. National Public Radio in the U.S. is continuing to invest in podcasting. My bet is that their over-the-airwaves distribution system will become much less important than the over-the-net system, which of course is RSS top-to-bottom. What’s the annual budget of NPR and what portion of that should we allocate to RSS?

And then there’s Microsoft. A company that employs over 50,000 people, many of whom are part of their multi-billion-dollar R&D budget, a company that just filed plans to build yet another campus in the Seattle area. They’ve made an impressive committment to RSS in their upcoming operating system. If RSS delivers, and we think it will, how much will they be investing in an ongoing basis in RSS?

Okay this isn’t my specialty, but firms like Forrester and Gartner are experts in estimating dollar-value of investment. Maybe they should be tracking this, along with their estimates of the size of the user base.

And why should we care? Well I care because it would help to explain to my colleagues in the XML world why it isn’t so easy to reinvent RSS. Do the math. Let’s say the actual number is, for the sake of argument, $8.2 billion. What does that look like?

Here’s one way to visualize it. Let’s assume the average home price in the U.S. is $400K. So $8.2 billion is about 21,000 houses. Now imagine you wanted to change the way the plumbing worked in all of those homes. You get the idea. There’s no way 4 or 5 random people on a Yahoo mail list, people of ordinary means, can move that much capital without having a pretty compelling argument and making it an incredibly compelling way. Even if you had the money and would give it to all the companies that had invested, you’d have to account for the opportunity costs in rebuilding the infrastructure around a new set of assumptions. That kind of change never seems to happen. People still drive on the right side in the U.S. and on the left in Japan and the U.K. The world runs on the metric system, except the U.S. which still uses the English system. In New York City the IRT, the IND and the BMT still use different rail gauges, meaning you can’t move the trains from one system down the tracks of the other. Don’t forget the QWERTY typewriters that were designed to be hard to use but difficult to jam. Conventions don’t change easy.

Viewed another way, given that Scripting News, for years, was the central if not primary means of distributing information about RSS, it gives you a sense of how powerful blogging is. It can’t move that much capital overnight, but given enough time, and persistence, and a high-quality idea, you can create quite an economic effect. :-)

15 responses to this post.

  1. [...] Essay: How much has been invested in RSS?  [...]

    Reply

  2. Posted by Marina Architect on February 22, 2006 at 10:38 pm

    I like you as a figurehead, a pioneer and so on . . . I’d like to see you cash in some way to move on to the next iteration and not be sidetracked by all the emotional noise that inhibits your vision.

    Reply

  3. [...] Dave Winer on how much has been invested in RSS. I’ve never really thought about RSS this way. [...]

    Reply

  4. Dave,

    RSS is XML and XML is extendable, right? If we view RSS as the “Abstract” for a research paper, we’ll see it does not have “key words”. I believe RSS would be greater if it can be extended to include optional “key words”.

    If it’s too hard to do, we may consider to drop “X” in “XML”. :-)

    Gene

    Reply

  5. Posted by wka on February 23, 2006 at 5:32 am

    Nitpicking:

    “In New York City the IRT, the IND and the BMT still use different rail gauges, meaning you can’t move the trains from one system down the tracks of the other.”

    All of the tracks of the NYC subway use standard gauge (4′ 8.5″, or, if you prefer, 143.51 cm). The reason trains from the IND and BMT lines cannot run on IRT tracks is because many of the IRT tunnels are too small, making for tight curves that IND and BMT subway cars are too big to make it through. IRT subway cars are constructed to be smaller because of these narrow tunnels.

    About the narrow tunnels: http://www.nycsubway.org/faq/briefhist.html (see paragraph 6)

    Reply

  6. [...] Dave Winer, the founding father of RSS, has a lucid essay on putting valuation on the current state of RSS investment in the world. Given the VC investment, the number of companies doing RSS and podcasting that have invested in RSS, and even the companies like Pheedo and FeedBurner that have hired and entire staff devoted to RSS, there’s a pretty substantial chunk of capital that’s decked against this technology. I analogize it to CRM (Customer Relationship Management). I’m not sure who is the ‘arguable’ father of CRM – perhaps Tom Siebel plays a role. CRM is essentially the ‘plumbing’ of customer data & customer interactions inside most major companies. As of 2003, the CRM market was around $8.8 billion. It’s only grown from there. But if only 19% of user licenses of software like SAP are deployed, then I guess they’ve got issues greater then market size to contend with. Back to RSS. The investment, however large, is real, and it’s alive. RSS is not a technology that sits on the shelf. RSS, once implemented, lives, breaths and connects content to customers, just by the nature of its very being. In some ways, RSS is changing the ‘plumbing’ of the Internet and its effects are profound. The RSS investment trend illustrates just how powerful blogging and social media are in this web 2.0 world. Something CRM didn’t have in it’s favor. To that end, Dave puts it this way. Here’s one way to visualize it. Let’s assume the average home price in the U.S. is $400K. So $8.2 billion is about 21,000 houses. Now imagine you wanted to change the way the plumbing worked in all of those homes. You get the idea. There’s no way 4 or 5 random people on a Yahoo mail list, people of ordinary means, can move that much capital without having a pretty compelling argument and making it an incredibly compelling way. [...]

    Reply

  7. WKA, thanks for the clarification.

    Reply

  8. Posted by Gregg Morris on February 23, 2006 at 6:17 am

    Dave,

    I have to run out of the office quick but I just saw this and thought you might be interested in responding to her. She has a very nice blog (i’ve been following it awhile now) and she seems to be wondering about OPML.

    http://www.cre8d-design.com/blog/2006/02/23/fumbling-my-way-around-opml/

    Reply

  9. I just don’t understand how that much money can be spent.

    Heck, I’ve spent nothing and have developed a site which currently contains 6,000+ feeds linking in over 100,000 items.

    With images, and pages devoted to displaying the content of the producers.

    Where does their money go?
    How many times do they need a five-martini lunch to discuss things?
    Or first-class flights to Vegas for an RSS convention?

    If they’re going to continue to waste millions of dollars and have NOTHING to show for it except for a few press releases, then by all means give the money to someone like myself. A developer who actually knows a thing or two about how the Internet works.

    -Michael

    Reply

  10. Posted by mcdmcblog on February 23, 2006 at 9:53 am

    Dave,

    How much of this value will be lost or compromised if three questions are clarified:

    1. Can an item contain more than one enclosure?

    2. Can elements other than item description carry HTML?

    3. How do I resolve relative URLs in a feed?

    If you answered them here, the RSS Board might just write that down for the developers benefit.

    Reply

  11. I think the most important investment is in the people. There are now thousands of developers out there that grok RSS. Developers developers developers developers!

    Seriously though… I think this is the major asset. The fact that thousands of people are groking RSS is a good thing.

    Reply

  12. [...] So here’s my first edition of the RSS Roundup, a look at what went on going in the world of marketing and promotion with feeds. How much has been invested in RSS? [...]

    Reply

  13. Posted by Sebastian Lewis on February 24, 2006 at 8:43 pm

    Wow the Irionic thing is I read this entire article with an RSS Reader. RSS is a good advertising tool. It keeps people up to date and well draws people’s Attention. RSS is huge now and it’s only set to get bigger.

    Reply

  14. [...] According to Dave Winer, inventor of RSS, the global investment in RSS is already $8.2 billion. The schema for content syndication might be set already. Moving away from RSS as a standard for a company like Yahoo! might be akin to replacing all the plumbing in all their worldwide offices. [...]

    Reply

  15. [...] Do they really think people will think everything’s ok just because they get a few refills? Eventually,  When live simulation/holodeck environments like Croquet are the norm, we’ll be able to have truely informed citizens. Folks will be able to ask questions like “Where are the calculations that led to the $100 figure?” and “How many hours did the Senators and their staffs bill us for in the process?(please include the spreadsheet and 3D graph)” RSS has had a huge social and financial impact, Croquet, Second Life et al will amplify that. [...]

    Reply

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