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.