Transcript: PodTech Weekly

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1383/podtech-weekly

Jason Lopez - PodTech News
It's Saturday, October 28th; this is PodTech News weekly, I'm Jason Lopez. Did you know that JibJab is more than an online political cartoon? It's a brand; also, be careful what you ask for, especially if you are a civil liberties activist. The FBI is finally going from messy paper to computerization even this late date (ph) after 9/11. Video Gaming costs are a funny thing; prices for many players are still at a premium, but the ubiquity of gaming could bring with it the kind of competition that brings prices down; those stories coming up on PodTech weekly. You probably know a netaholic, someone who just can't take being separated from his e-mail, eBay, or gaming console. But, is this online mania simply a normal response to our increasing dependence on the internet, or an addiction that could land a person in a support group or a shrinks office? Catherine Girardeau talks with some doctors and a self-described recovering 'World of Warcraft' game addicts.

Speaker 1
The internet is powerful psychoactive media, meaning it can change mood and behavior and consciousness.

Speaker 2
People do exhibit compulsive use; they hide their use; they stay online longer than intended. So, basically, you are talking about some kind of clinical entity.

Speaker 3
Anyone who has the energy to play 'World of Warcraft' has the energy to do great things in life.

Catherine Girardeau
On today's show - Internet addiction. Fad illness or a new pathology. A recent study by Stanford University School of Medicine Researchers, tries to get closer to the question of whether compulsive internet use merits a medical diagnosis. The researcher's telephone-based study found that one in eight American adults exhibited at least one possible sign of problematic or excessive online behavior. We'll talk with clinical psychologist and a self-described survivor of the massive multi-player online role-playing game, 'World of WarCraft'. This is Catherine Girardeau, PodTech News. Dr. Kimberly Young directs the Center for Online Addiction in Bradford Pennsylvania, and is an expert on online behavior. How can you compare a behavioral kind of dependency to alcoholism?

Dr. Kimberly Young
What the Stanford study does, as well as my study and other studies, they are all finding the same kinds of things. Basically you are talking about some kind of clinical entity. We don't separate what that looks like necessarily from drug addiction which is - in terms of physical inhalants or intoxicants versus impulse control disorders.

Catherine Girardeau
Dr. David Greenfield runs the Center For Technology Behavior in Hartford Connecticut. He wrote a book called 'Virtual Addiction'. And you said that internet addiction looks a lot like gambling addiction; what are some of the markers, what are some of the things that you see in patients?

David Greenfield
Well the most -- in order to meet the real technical criteria for compulsive internet use, you have to have a lot of negative consequences, and the things that would be included in that, or an inability to decrease or cut down or discontinue your use, a recognition by people, friends and family, that your behavior has changed or has been impacted spending greater and greater amounts of time online and/or involving yourself in more stimulating content online, a negative impact in some major sphere of your life, which would be work, school, home life, primary relationship, children, legal status, financial status, health. But the bottom, bottom line is, the most important criteria is, the greater the amount of time you are spending online on a consistent basis, along with the recognition by other people who know your life pattern that there's some shift in your personality or your behavior, are probably the two greatest markers.

Catherine Girardeau
Where do you draw the line between someone who enjoys and uses the internet as a source of entertainment, social interaction, information and someone who you would call an internet addict? Dr. Kimberly young.

Dr. Kimberly Young
Obviously, there is a big issue between differentiating between normal drinkers from heavy drinkers to alcoholics - and the same thing applies to the internet. Certainly is a matter of time, more than it is a matter of looking at the number of drinks somebody consumes to diagnose alcoholism. You're really looking at how is this affecting a person, is it debilitating, can they quit, and what kinds of problems is that particular behavior causing?

Catherine Girardeau
Yeah, what kinds of problems? Those psychologists I talked to mentioned massive multiplayer online role play gaming as one of the primary seducers of potential internet addicts. So, I called up Gary Haran in Montreal. Gary runs a website called 'World of Warcraft Detox' on which players and ex-players of the Blizzard Entertainment game, 'World of Warcraft' can “Tell the world your reasons for leaving the addicting game.” Gary, what lead you to start a Detox blog for 'World of Warcraft' addicts?

Gary Haran
To make a long story short, when I decided to quit, I noticed that a lot of people were coming to me with their stories on why they wanted to quit the game as well. And I thought that a site where they could post anonymously their reasons, would encourage others to do so as well.

Catherine Girardeau
What was your experience with World of Warcraft?

Gary Haran
It was my first MMORPG ever; so I went from casual gamer to a guild leader for one of the greatest guilds on the site. It was like the third highest ranked at the time I was Guild Leader. It took about a year; in the first couple of months, I just learned how the game worked; and I met some really nice people who were a little bit more hardcore gamers than the usual bunch. You have lots of great moments in 'World of Warcraft'. The problem is, how long every subsequent step takes?

Host
What is the power of a Guild Leader?

Gary Haran
Every guild actually creates its own form of government. For stuff that I had to do, was to make sure that we had all the resources to take on new bosses. So I would delegate work to different people; there would be one person who would be incharge of our voice server, and there would be another person who would be responsible for gathering herds and spices. I was the person orchestrating all of that making sure that everything was done so that we could move forward in the game.

Catherine Girardeau
And how much time were you spending in 'World of Warcraft?'

Gary Haran
I get home from work at around six, and I'd be getting to bed at around 1, 1:30 in the morning; and then I'd be up in the morning at seven to go to work. I didn't get much sleep.

Catherine Girardeau
Why did feel you needed to quit? It doesn't sound like that time block would necessarily be so disruptive to someone's life?

Gary Haran
When I was at home -- I'm married, I have a wife and I just didn't have time for her anymore. When you have almost a hundred people who want you to be available because they have questions, they want to know what we are going to do next, you cannot press the pause button on this game and that's a very important reason why I decided that I had enough. You become this father's_ figure I guess; you always have to be there for them, otherwise they might go to another guild. And when people leave your guild, you have to start recruiting again, train the people, gear them up, so that they are ready to kill (ph) those bosses with us. And the whole process is so time-consuming that the people in the guild are very important to you. So you put a lot of time trying to please them and make sure that they are okay with what we do.

Catherine Girardeau
What inspired you to quit? Was it somebody else in your life coming to you telling you you're spending too much time online, or how did it happen for you?

Gary Haran
My wife did mention a few times that she would like to spend more time with me; so I tried to make more time for her; unfortunately, not enough, and it was pretty much me. I decided that I had enough with the game. It was more work than it was a game actually at the end.

Catherine Girardeau
Did you quit 'Cold Turkey' or do you play any kind of games casually now?

Gary Haran
I quit Cold Turkey; I joined the best guild on my server, and the next morning after doing a raid with them, I quit Cold Turkey. I was at work and I just decided to hit the 'unsubscribe' button from the website. And I didn't play games for a couple of weeks, then I bought couple games that I could hit pause on.

Catherine Girardeau
Do you blame the game itself for your addiction? I mean, would you - first of all, would you characterize your playing as an addiction?

Gary Haran
Oh Yes! It's kind of hard to admit that to yourself that you are addicted to a game, but there are some numerous aspects of the game that I can blame on Blizzard for making it that way, and there are some aspects that I can blame myself - I mean, you got a character that you connect to, because you are the one controlling his every move and deciding every aspect of that character. So you get really attached to it. The other aspect is the social one, you make bonds with people and like, you are a hero in this game, so it can create some pretty strong bonds; at the same time, they are very fragile. You don't see somebody become a friend as easily with someone whose class doesn't compliment your own. In real life, you don't meet someone and ask them, “Oh! Do you compliment an aspect of me?” I mean, you talk to the person, you get to know them, and if they are interesting, they have more chance to be your friend. In one of the Warcraft, if you're a 'healer class' and the person is a 'tank' then you have got more chances to be friends with that person rather than if the person is interesting or not.

Catherine Girardeau
Do you think there were other factors in your life during the time you were gaming that led you to spend so much time playing 'World of Warcraft?'

Gray Haran
Yeah, I did have a mild case of depression; I hated my job, I really hated it. It was the most boring job ever - and having a game that could allow me to forget about it was really easy.

Catherine Girardeau
There were up to like, 8300 posts on your blog; just people telling why they quit 'World of Warcraft' or why they want to quit. Do you think the people who post on you blog tend to be addictive in some other way, or do you think it's the game that's pulling people in and causing them to get addicted?

Gary Haran
There's always something that -- once we start doing it, we can't really stop. But I don't think that everyone who gets addicted to 'World of Warcraft' has the prototypical addictive personality. I mean, I never really gambled that much; I went to the Casino a couple of times, never spending more than $20. However, having a game that I couldn't beat - that was too much for me to handle. I beat almost every game that I've laid my hands on; and having finally found a game that was so hard, at first I was thrilled because hey, this game is hard to beat, takes me longer to beat it, so I am enjoying it. But at the same time, I was looking at the tunnel, I was thinking, I have to beat this game, and its unbeatable; and that's really what got to me is that no-end zone where you can try and try and try, and you'll never get there; and if you do, it's just a matter of weeks before Blizzard comes out with something.

Catherine Girardeau
Well, studies on compulsive internet use are hardly conclusive. Oddly enough, the two experts I talked to who either said or have been quoted in the press as saying, they didn't believe internet addiction was a clinical disorder, didn't want to go on the record with those opinions. Dr. Peter Banis (ph) of the University of California, San Francisco's VA Hospital said he is generally against the “Proliferation of addiction such as compulsive shopping.” A professor of Human-Computer Interaction at Carnegie Mellon University Sara Kiesler was quoted by the New York Times calling internet addiction a fad illness. At this point, the consensus in the medical and academic community seems to be that not enough study has been done to determine whether internet addiction is actually a distinct mental disorder. But skeptics aside, Dr. David Greenfield of the Center for Technology Behavior said, basically a spade is a spade, no matter what you call it.

David Greenfield
There are a number of people, thousands and thousands that have something going on with their compulsive use of the internet in a way that we have not seen before with other forms of communications in technology - and if you go - if you speak with any group of mental health professionals, half to three-quarters will say that they have seen them in practice, people have issues with it. All addictions really are about numbing pain, and then that pattern of numbing and pleasure seeking becomes habitual, most probably because of elevated levels of dopamine, which is consistent across many behavioral and substance based addiction.

Catherine Girardeau
Well, internet addition is unlikely to be the next global pandemic; take it from the experts; if you experience cold sweats when you're offline, you might want to consider getting professional help or a real life. For PodTech News, I'm Catherine Girardeau in Menlo Park, California.

Jason Lopez
The FBI took a lot of heat post 9/11 for their lack of sophisticated technology. The agency had to admit that it still kept paper files on suspects, and that its countless computer systems were not only out of date, but couldn't even talk to each other. Recently, the FBI has been trying to shed that image by showcasing some of its high-tech data collection and retention systems. Civil liberties watchdogs though are concerned about what the FBI is using and how it's using it. PodTech's Clark Boyd has the story.

Clark Boyd - PodTech
On today's podcast, the FBI has been showcasing what it calls one of its toughest tools in the fight against terrorism. It's a searchable database called the 'Investigative Data Warehouse' or IDW. It contains more than 650 million records; according to the FBI, the IDW includes photographs, biographical information, physical location information and financial data for use in anti-terrorism investigations. Officials involved in the IDW project even claim it can, “Scale to the size of the entire internet.” But those officials have been tight-lipped when it comes to providing precise details on the IDW. And that lack of disclosure has some folks wondering what the FBI's database means for American Civil Liberties.

Marcia Hofmann - Electronic Frontier Foundation
When the country's premier law enforcement agency is maintaining a database like that and can use it to make decisions about people and assess people that are a very big concern.

Clark Boyd - PodTech
That's Marcia Hofmann, Staff Attorney for the Electronic Frontier Foundation. Marcia and her colleagues have been following news of the IDW for a while now; they wanted to know first and foremost who's records are being kept, and how are they being collected. So they send a Freedom of Information Act or FOIA request to the FBI. The FBI didn't respond; so the Electronic Frontier Foundation filed a lawsuit. I reached Marcia Hofmann by phone at her Washington office. I started by asking her what we do now about the FBI's Investigative Data Warehouse.

Marcia Hofmann - Electronic Frontier Foundation
Most of what we know comes from newspaper reports, especially recent ones, because the FBI held a press conference within the past couple of months to show off its investigative abilities with this database. And the FBI has been criticized a lot over the past few years for it's failure to implement really good, solid, effective technology, and so the FBI has held up this database as an example on how excellent its current technology is. But we are interested in how it works, what sort of information is in it, what laws govern the use of the information and the maintenance of the information, and how long that sort of information is retained, whether it's disclosed to anybody else? So, that's the sort of stuff that we are interested in.

Clark Boyd - PodTech
Do we have sense of what kind of information they are gathering with this? Or not really?

Marcia Hofmann - Electronic Frontier Foundation
Well, we know it's a very comprehensive database; its not clear what all information it includes, but from public statements made by FBI officials it seems that there are some telecommunications records in this database, general law enforcement information. There are questions about whether there is airline information in it, like passenger name records that airlines or travel agents would have, so that is of course of the things that we are very interested in, is trying to learn the universe of the information in there.

Clark Boyd - PodTech
We have a very limited sense of what they are gathering. Do we have any sense of, sort of the process here about how they are gathering it? I mean, what are the methods that they are using here?

Marcia Hofmann - Electronic Frontier Foundation
Well, you know that's certainly another thing that we are looking to uncover with this lawsuit. We don't know a tremendous amount of information about how this is maintained, what processes the government uses to pull this information together, and also again, what laws govern that? I mean that it would seem pretty clear that the Privacy Act would govern the way that this database is maintained. The privacy Act is a law that requires the government to take certain measures when it collects information about people in what they call a 'system of records' and it seems very clear that this is a 'system of records', but it seems also that certain provisions of the Privacy Act have not been followed here, things like notifying the public officially that this database exists, and letting people know what information is in it and how they can make sure that information is accurate.

Clark Boyd - PodTech
Right. Well, I guess the question is, from a listener's point of view might be, “Well, what's the big deal about this?” We have terrorist threats against us, we are looking to the FBI and organizations like that to keep tabs; why would the EFF want to bring this suit?

Marcia Hofmann - Electronic Frontier Foundation
Well, the big deal about this database is that it could possibly include information about completely innocent people; and there is no way to know how long that information is kept, how its used, who else it's given to, and whether or not it's kept up-to-date and accurate. And when the country's premier law enforcement agency is maintaining a database like that and can use it to make decisions about people and assess people that's a very big concern.

Clark Boyd - PodTech
So, you are bringing this law suit and you are using the Freedom of Information Act to try to get this information. Maybe listeners have heard of the Freedom of Information Act, but they don't necessarily understand how it works. Can you give them a sense of how it does work and how groups like EFF can use it?

Marsha Hoffman
The Freedom of Information Act is a federal law that gives every person the right to ask the government for information about its activities; and the government has to release that information and must -- has a really good reason to withhold it. The specific reasons why the government can withhold information are very specifically set out in the law, and there are things like national security that information is classified, that information is law enforcement, that information is sort of in draft form and not a final decision. And there are good reasons behind all of these, but if information has to be disclosed, it has to be disclosed. And my organization is interested in using this tool to get information from the government that isn't otherwise public that reflects the way that the government uses technology to collect information about people, to conduct surveillance and to otherwise perform activities that might infringe upon celebrities. And we are also interested in seeing the way that the government coordinates with the private sector to develop technology along these lines to keep tags on what the public does.

Clark Boyd - PodTech
Marsha, is your sense, having worked in this now for the last few years that depends on this kind of swinging back, that the public is becoming aware that perhaps the government is violating some of their simple liberties or keeping information on them even though they may be innocent? I mean, is there a sense that people are kind of saying, now hold on, wait a minute; we really do need the government to tell us what they are doing.

Marsha Hoffman
Yeah, I would agree that that's the case. I think that after 9/11, people tended to feel extremely cautious about security versus privacy. And most people felt that, if one had to yield to the other, it should obviously be privacy yielding to security, but I think that we have moved forward enough to realize that we haven't had anything resembling a 9/11 since 9/11; and I think that people understand that there is a balance to be struck and we cannot sacrifice civil liberties in the name of security.

Clark Boyd - PodTech
Now I wanted to make a point that this is part of a larger effort by the Electronic Frontier Foundation called the FLAG project. Can you tell me what FLAG stands for and then tell me a little bit about the project more broadly?

Marsha Hoffman
The FLAG acronym stands for FOIA Litigation for Accountable Government, and basically our project involves making Freedom of Information Act requests, trying to get as many records from the government as we can about issues involving civil liberties and technology and the way that technology affects civil liberties, and making that available to the public and also making sure that decision makers have access to that information.

Clark Boyd - PodTech
Right. Now, I noticed that there was another suit that was filed against the FBI; was it a little bit earlier this month?

Marsha Hoffman
That's right. It was a few weeks ago. The department of Justice Inspector General released a report earlier this year that mentioned two Electronic Surveillance Systems that the FBI had developed to intercept communications; and these were systems that we realized aren't known very well by the public, there is not a great deal of information out there, and so we submitted a FOIA request to the FBI to ask for information about these systems, and the FBI didn't respond and so we filed a lawsuit.

Clark Boyd - PodTech
So, do we know anything about these technologies at all?

Marsha Hoffman
Well, the most comprehensive description that I have seen at these technologies is, in this report that I mentioned, the Justice Department, Inspector General's Report. One of them is called Red Hook, and I have been unable to find further information about that. The other is called DCS 3000, this is a Surveillance Technology that appears to have been around for a few years and as of the time that the report was published, it still was in use by the FBI.

Clark Boyd - PodTech
It sounds almost like a offshoot of the Total Information Awareness or 'Carnivore', or something like that.

Marsha Hoffman
Well, it is worth noting that 'Carnivore' was later renamed DCS 1000, and this is DCS 3000.

Clark Boyd - PodTech
Do you think it's likely that the FBI will be forced to open up?

Marsha Hoffman
I don't think that the FBI will give us everything that they have on it because, you know, these are obviously systems that involve law enforcement, and that sort of information is clearly going to be protected by the Freedom of Information Act and won't be disclosed to the public, but certainly when the existence of 'Carnivore' became public a few years ago, Freedom of Information Act lawsuits were instrumental in prying out information about how the technology worked, making enough information available to the public so that we knew that there were privacy implications that were very distressing. And so, it is my hope that we will get information like that out of this lawsuit.

Clark Boyd - PodTech
Marsha, thanks a lot.

Marsha Hoffman
Thank you.

Clark Boyd - PodTech
There has been, as yet, no official response to the Electronic Frontier Foundation's lawsuit; Marsha Hoffman says that if the government needs more time to process the formal legal requests, it now needs to explain why to a court. And if it doesn't need more time, she says, then information on the IDW, DCS-3000 and Red Hook should be released immediately. And that's all for this PodTech Podcast in Boston. I am Clark Boyd reminding you to visit Podtech.net for all the latest technology news.

Jason Lopez - PodTech
Its been a while since we have heard from JibJab, the comedy company that launched the animated spoof, “This Land is Your Land” during the 2004 presidential election cycle. What's the company up to now? Will there be another parody for the 2006 mid-term elections just a little more than one week away? PodTech's Matt Kelly caught up with one of the company's founders and files this report.

Matt Kelly - PodTech
The Spiridellis brothers, Greg and Evan have become Internet superstars since the debut of their animation that satirized political candidates in mid to late 2004. The viral political animation video, 'This Land is Your Land' and their follow up 'Good to Be in DC' made for the Tonight Show, garnered 80 million views during the 2004 election. Quite a feat, when you consider this was pre-YouTube. The two brothers began their venture in the Internet's heyday or the late 1990's when they realized the potential for independent content producers with little to no money.

Greg - JibJab
My brother and I started the company back in 1999; I was a recovering investment banker we say, and doing my MBA at the time, and Evan was an independent filmmaker and he was making incredible little digital films with off-the-shelf consumer grade equipment, matched with the Internet as open platform that allowed anybody to kind of, create something and get it out to an audience, created a really big opportunity for independent creators. And not having come from the entertainment world, we didn't realize how silly the idea of starting our own brand was - our own entertainment brand, so we set up shop in Brooklyn in 1999, and our timing was really good, we hit the first web, kind of, online entertainment bubble and were licensing original content to other sites, like Adam Shockwave was a partner from way back in the day, and then when the market crashed, all our clients went out of business within six months and my brother and I packed up shop and moved out to LA - and that was in 2002, and then 2004, we published “This Land” which is the animation that really kind of, got things rolling for us.

Matt Kelly - PodTech
The inspiration for the political comedy clip was obvious, Spiridellis notes, and began with a spoof in 2000 between then candidates George Bush and Al Gore and was made in very little time for almost no money, yet, so an unprecedented response in a time before the advent of viral video sites, he notes its success was an early testament to the power of social media.

Greg - JibJab
In 2000, we had created a Bush-Gore Rap Battle and by the standards of 2000, it was a huge success, I think we did about 5 million views and it was licensed by Mad TV. So presidential elections provide a really unique time where the whole country, really, the whole world is focused on one story for an extended period of time. And unlike events that just happen, Dick Cheney getting shot in the face, I mean, you know when the conventions are coming, you can plan a production calendar to kind of, get something out for the conventions, and then you know, it's going to be the number one story for three to four months, so you have got relevant content. The problem with producing original content for the web is, the shelf life is so short, but in the presidential elections, you have like a really nice window to get your work out there. So it is very intentional to produce something for the election, and it was just - where does the creative inspiration come from? - who knows, but it was probably a result of frustration at the stupidity of the political dialog at the time and you know we came up with the idea. I brought (ph) up my brother designs and animates and at the time there were only the two of us; we had gone from about thirteen people on Brooklyn, we moved out here, it was literally just the two of us and we'd staff up on jobs working for Corporate clients and then we take some of the money we made and then take eight weeks we took to make This Land. And so, the budget was our time and the opportunity cost of not doing work that would pay us. So, there's not necessarily a budget, all of the technologies -- consumer grade stuff, we use Photoshop and Flash to make this land and some consumer-grade audio technologies to kind of cut it out. So, it was a just very low budget, but at the time we created This Land, we had been producing and distributing online entertainment for four and a half years. And we had seen some success before, I mentioned the 2000 Bush-Gore piece - in 2004, we did an 'Arnold for Governor' piece that really kind of, made the rounds, and so typically, when we added success at that time, we had seen 40,000 visitors the first day and when we released This Land, it was 100,000. The next day it was like 500,000, and it just got completely out of control really quickly. We've always known that distribution is in your audience, so if you create something of value, with some entertainment value, that what you want to do is, make sure you give your audience the tools to be your champion and to leverage your audience to be your distribution network - and This Land is the primary example of that. We've -- the only marketing we did for This Land was, we send one email to our newsletter base, which was our fan base, which was about 130,000 people at the time. That one email costs about $400; that was the only marketing we did, and the viral distribution took care of the rest. We hit this positive feedback circle where it created such a buzz online that it started getting covered offline, which drove more people online, and we wound up getting tons of media coverage. And that was really the idea; that was why we created it. We wanted people to hear about and know about the JibJab Brand.

Matt Kelly - PodTech
So, the video's popularity was clearly evident to the public early on, but what was the reaction from the candidates themselves?

Greg - JibJab
We have heard through the media; so, we've heard the head of the RNC make a comment and D.M.C. but (Inaudible) personally met in person was Al Gore, and that was an event in New York and we're -- someone said you should meet Al Gore and we're terrified, because we put him in the gutter with a 'we'll work for food' sign. And then, like, oh no, I hope he hasn't seen them. The first thing he did is, come over and say, “You guys put me in the gutter with a 'we'll work for food sign'” and he was laughing about it and he was good spirited about it too.

Matt Kelly - PodTech
The Company has grown tremendously since then, Spiridellis says, and has gotten the attention of some of the biggest internet companies as well as one of Hollywood's best known directors, John Landis.

Greg - JibJab
We were able to kind of, leverage the success we had in the election to do a distribution deal, so we did a distribution deal with First Adam Films and then Yahoo and then MSN, so it enables us to fund, kind of, our next batch of original programming, and we also did some corporate work for Anheuser-Busch to kind of, fund the business because regardless of 80 million views, the monetization, it's not like an established industry, like you sell 80 million CD's, you're going to be rich. With us, we had this huge success and it enabled us to kind of capitalize the business for another year. So, we kept building and our goal has always been for JibJab to be a comedy brand - a broad comedy brand. So, this year we launched something called JokeBox, which is kind of a user-generated comedy content channel on JibJab, and the idea there was to really create a place where people could come and share the funniest viral stuff, not only videos but photos, text jokes, audio jokes and create a joke sharing community that would create -- would give people the reason to come back to JibJab everyday while we were in the middle of our production cycle, because the problem in the past for us has always been -- we've released something every three months and we have huge surges in traffic, and then it kind of goes away, and then we have another piece and big bump. So, JokeBox is really to help us smooth out that traffic a little bit and to build out the JibJab brand, both with JokeBox and also to fill up our development pipelines or producing more original stuff. We raised our first round of capital in June of 2006 after being in business for six and a half years with Polaris Venture Partners. We did the deal of Adam films and they were selling -- and we were sharing the ad revenue from pre-roll's, not only off of their site, but also off of our own site as well. So, the pre-roll video ads are great and that's how we've gone our deals with Yahoo and MSN video. MSN video is great, they do a great job of monetizing the original content that they have licensed from us. So, because we were self-funded for six and a half years, we were making -- we were definitely profitable, I mean, that was -- the profits were what were funding the growth of the business, and now with the launch of JokeBox, we're building out our original pipeline. We think -- things like we just launched called “The Great Sketch Experiment,” it was sponsored by Verizon Wireless, you know that there's a big opportunities for us to create high quality comedy programming and attract premium sponsors like Verizon - like when we launched JokeBox, we launched it with Bud Light as a sponsor. So, sponsorships is really our business model.

Matt Kelly - PodTech
John, who directed Blues Brothers, Animal House, Trading Places, Coming to America, Spies like us, Three Amigos, I mean, the greatest comedy director of our lifetime at least, works with us on a project. We believe that there is a vast untapped pool of talent out there that doesn't have the opportunities to really break through in traditional media. And so we want JibJab to be a platform for their talent the same way, it was for Evan and myself. So we had a contest, and we had 50 scripts come in from across the country and six were selected for John Landis to direct, and so we shot six 'Police' theme sketch comedy shows with John Landis with these troops from Seattle, New York, San Fran and LA, and now they're up on JibJab.com and the audience is voting for the winning sketch, and the winner gets $10,000 development deal with us. And the coping (ph) is, the site is sponsored by Verizon, (Inaudible) the project is sponsored but you can also stream the videos on the V CAST service on Verizon Wireless.

Morgan Freeman
This is Morgan Freeman; what you are about to see is a blatant maiming (ph) of one of the greatest movies ever made, 'The Shawshank Redemption'.

Matt Kelly - Podtech
That was one of the finalists for JibJab's great sketch experiment. The video is called 'Shawshank in a minute' and starts the Sketch Comedy Troupe, 'Famous Last Nerds'. Spiridellis feels that this type of media is the future of entertainment.

Speaker
The challenge is, how do you create great creative without spending hundreds of thousands of dollars for every production because the economics can support hundreds of thousands of dollars but you know, if you're good, you think (ph) the economics can support $20,000 productions. So, the challenge is, how do you create a production mall or where you can produce quality content at a bonus price point where they can be profitable.

Greg - JibJab
I was on a panel with Ross Levinsohn from Fox Interactive yesterday, and he said, this is the best time to be in media; it's the most exciting time - the rules of the old game are out the window, and there's huge opportunities for creators that have -- creators and small independent creative studios like JibJab that have never been able to reach an audience directly, but now thanks to production technology cost falling, I mean, any best buy carries all the equipment you need to make it a good video, and with broadband penetration where it's adding computer processing power where it's at, people can make things and get an audience if they're good, and that's just -- that's knocked the gates down, or the gatekeepers to the audience -- traditional gatekeepers to an audience are gone. And what the internet let's you do is, not only get your work out there but also to connect with that audience. So, now we have over 700,000 people on our newsletter -- that means we can go back out to those people when we have something new. So, it let's us basically build our own direct relationship with an audience, where it's a small studio, and that's never before been possible. This is the best time to be in media because all of the gates are coming down and little guys like us, if you're smart and you work hard and you do good work, you can get to an audience, and ultimately I believe that the brands that are being built today, are the brands that are going to be the Comedy Central, CNN's and other great media brands that were built when cable first came around. So I think that opportunity is open for the taking.

Matt Kelly - Podtech
And with the November 2006 mid-term elections just a short time away, will we see another political animation video from JibJab? Sadly, no; it's something we'll have to wait for until 2008. I am Matt Kelly in Los Angeles.

George W. Bush: (Singing)

This land is your land
this land is my land
I'm a Texas Tiger
you're a liberal wiener,
I'm a great crusader,
you're a Herman Munster
This land will surely vote for me

John F. Kerry:

This land is your land
This land is my land
I'm an intellectual you're a stupid dumb…

Price could be a key weapon in the next generation console war between Sony, Nintendo and Microsoft. But a recent report by a research firm Intreprid suggests, price will not matter when the Sony PlayStation 3 and Nintendo V hit store shelves next month. Intreprid chief strategy officer Jason Kramer and Wedbush Morgan Security's analyst, Michael Pactor spoke with PodTech's Rio Pesino and gave their thoughts on the report.

Rio Pesino - Podtech.Net
This is Rio Pesino from PodTech.Net. (Inaudible) the Sony PlayStation 3, I am looking at spending $500 to $600 and I am going to have to have a game, and that will cost me about $60, and I'm also going to need an Extra Wireless Controller, and that's going to cost me another $50. Despite the fact that I will be spending about $700 to $800, hey, owning a next gen gaming counsole - it's priceless; is it really that price list? Sony's PlayStation 3, Nintendo's V is priced at $250, will be on store shelves next month just in time for the holiday season. Microsoft's Xbox 360 has been out for almost a year now, and costs about $300 to $400, and those prices don't include tax, don't include games or accessories or the HDTV required to take full advantage of the systems with the exception of the V, which is not HD compatible. But, history tells us Video Game Consoles buy off the shelves regardless of price. So today's world, does price really matter when it comes to buying a NextGen System? New report by a research firm Intrepid suggests price is simply an afterthought.

Jason Cramer - Intrepid Media
Well, this is part of a major report we did on new media called 'Interpreting the New Media Landscape' and one of the things we looked at was, which new consoles were going to go win the battle, and who was actually going to buy them. With our research, we found that consumers are incredibly excited about the PS3 and buy a Longshot. There are about 8.9 million consumers who want to buy a PlayStation 3 at full price at launch. That's great news. It bodes well for the long term; the challenge is that with Sony Shipping, maybe 500,000 to 1 million consoles, it will be really difficult for people to get their hands on one. One question is, what will people do, will they wait, or will they switch to the Xbox 360 or the Nintendo V. One (Inaudible) thing that we looked at in the data is cross-ownership of platforms. Interestingly enough, the Xbox and Xbox 360 owners, about half of them own a PS2. So there is -- somewhat crossover there, but not as much as every one thinks. There is much more crossover between GameCube owners and PS2 owners, probably because there are so many PS2's out there - and that's about it, two-thirds of the GameCube audience are into PS2. Why do we think it's interesting there is that if Nintendo has the supply and also the hype, one thing that PS3 and V will have going at Xbox 360 may not have as much of, is just all of the hype about launching a new console - and there is a lot to be said for that. And we may see that PS3 buyers who can't pick up a console will either wait or switch to the V -- and about 5.7 million consumers. So, even more than we'll ship, say that they'll buy the Nintendo V at full price when it ships.

Matt Kelly - PodTech
That was Jason Cramer, Chief Strategy Officer for Intrepid. He believes consumers are insensitive to price when it comes to you must have products, including the latest video game consoles.

Jason Cramer - Intrepid Media
Price matters less than you think; and this is mostly because gamers are so enthusiastic, gamers' enthusiasm translates into a level of price insensitivity and that is not say that everyone wants to fork over $400 or $500 bucks for a PS3. But, we are talking about a super scarce commodity here, where you'll likely see PS3's on eBay for $1,000, and with the enthusiasm in the category, you really get less price sensitivity to a console launch.

Matt Kelly - PodTech
Those people who plan to buy PS3 to sell it on eBay, what was that taken into consideration while taking this survey?

Jason Cramer - Intrepid Media
Well, I mean, the survey is -- as a general sample we did 2,000 consumers, 13 to 54, so there is no particular bias towards hardcore gamers as representative of every one. I am sure there are maybe two or three people on a sample (ph) who may have considered that but that is about it. We are reflecting that, but it is going to be probably a few isolated cases, but ones that will be well publicized.

Matt Kelly - PodTech
Do you feel that you guys got a proper cross section of the population with this report?

Jason Cramer - Intrepid Media
Yeah, actually it is a really rigorous methodology and it's kind of unusual for the game space because we eventually did three surveys; a main online survey on 2000 consumers, because online panels sometimes have us queue to them, but we want to do a telephone survey as well -- offline survey, to make sure that we were representing the population correctly. And so, we actually did two, we did one among adult 18 plus and one among teens 12 to 17. And there was actually -- that data altogether we waited to the 2004 US census. So it is pretty rigorous; that said, this is a measure of consumer sentiments, so at the time of our survey, there was a lot of excitement about the PS3 and the Ninetendo V.

Matt Kelly - PodTech
Now, of the 8.9 million US consumers who are prepared to pay full price for the PS3, how many of those 8.9 million fall under say the middle to low income bracket?

Jason Cramer - Intrepid Media
I would have to look that up, so I wouldn't -- actually I wouldn't want to guess on it, it's definitely something we are, so just wasn't able to look it up before the call.

Matt Kelly - PodTech
Was income taken into account as well when conducting this survey?

Jason Cramer - Intrepid Media
Yes. It's represented by income, and yeah, I said that traditionally, gamers have been sort of price insensitive when it comes to new platform launches. We have also got a lot of people -- keep in mind that there is not going to be a lot of inventory out there. And if somebody is selling a console for $1000 on eBay, there's also somebody who is going to come out and buy it.

Matt Kelly - PodTech
But Wedbush Morgan Securities analyst Michael Pactor believes there are some problems with Intrepid's reports.

Michael Pactor - Wedbush Morgan Securities
My understanding is that they talked about a much smaller number being interested in buying an Xbox 360, and that sounded quite a bit skewed to me. They also talk about people who are prepared to buy, but at the end of the day there is only something like, probably 60 or 70 million households in the US and Europe that ever purchased a PS2 68 I think it is. They purchased a PS2 at any price. So, to say 8 million will pay full price or 9 million, that sounds like a lot I would guess that half-evolved console purchases if not more, are gifts and I cannot believe that gift givers have made up their mind that they are buying one, or what they are going to pay. I would also imagine, most mothers don't even know there is PS3 out because they haven't asked their kid what they want for Christmas yet, and the PS3 is not out, it hasn't been marketed. So, gift givers should be excluded from that survey, they probably don't know any better, and I think an 8.9 million extrapolation of full price for actual consumers who are buying for their own account is probably a bit overstated.

Matt Kelly - PodTech
How are your thoughts on the survey being done online? You think that may have skewed the numbers a bit as well?

Michael Pactor - Wedbush Morgan Securities
I am certain; I mean, clearly people who are online tend to be younger and tend to be more educated; obviously people without PCs aren't online, so you are excluding households who don't own a PC, which tends to be socioeconomic indicator. Younger people I think don't appreciate what things really cost. I speak from experience having children, and they wanted to pay anything for anything; my kids would buy a Maserati if they could; they have no idea what they cost.

Matt Kelly - PodTech
Participants in the survey were between the ages of 12 and 54 so...

Michael Pactor - Wedbush Morgan Securities
And certainly, I mean, I am on the high end of that range and of course I am on the internet all day long. So, I don't mean to suggest that no one above the age of 30 ever goes on the Internet; I just mean that the average user is probably heavily skewed toward a younger user, and I don't mean younger, like kid, I mean, younger like twenties as opposed to fifties. So, I think that the demographic probably had a bell curve, an average median age of probably something in the low to mid twenties, and of course those people tend to be more self-indulgent than the average gift giver. And I think 50% of all hardware purchases are made by moms; they just are. And that's why you see the surge in console sales at Christmas. So, you know, we know that the console purchaser is older and is female; and we know that the internet user is younger, and in the case of games, is probably male. So, I think that there is a bias in that kind of a survey.

Matt Kelly - PodTech
Pactor also believes price does matter when it comes to videogame purchases, especially for the hardcore gamer.

Michael Pactor - Wedbush Morgan Securities
The hardcore gamer is defined more by age and sex than anything. And I think hardcore gamers are 12 to 25 year-old males. I think that those hardcore gamers come from all socioeconomic classes. So you have sixteen-year old boys who live in households that have under $40.000 household income. They are not getting a PS3 this Christmas; they would love one, and they do consider themselves hardcore, but the family can afford it, so it is not happening. The early adopters tend to be affluent people, and when you have household income of 200,000 or more, it is easy to say, I don't care if the Box is $300 or $400 or $500 bucks. We have household income of 40,000, you care a lot about the durability between $250 and $500 or $600 dollars. So, I think that the press I think that investors, I think that most surveyors just don't appreciate this fact. But, you know, when you look at Sony PS2 sell through, they sold 300,000 consoles last month in the US at $129. My question was, what were those people waiting for? So, the box was cut to $199 in 2002, and they only sold 400,000 in September 2002, but honestly there are people who just say that $199, it was too expensive, and they waited four more years for it to come down to $129. There are just people who are like that. I think that if you are a kid, an unemployed student in a household, you don't have any money; you are waiting for dad or mom to buy it for you as a gift; doesn't make you any less hardcore; you really love playing games and they probably play online, but they have trouble getting the console until the family can afford it. So, I think pricing matters a lot; most consumers have experience with the console manufacturers that prices come down pretty dramatically over time, and I think that most consumers look at a 4, 5 or $600 box and figure it's going to be $150 someday away.

Matt Kelly - PodTech
So, will price determine who wins the Next-Gen console battle?

Michael Pactor - Wedbush Morgan Securities
I think that the data says pretty clearly that PlayStation 3 is positioned to win the console war despite the price points. Consumers except the price to drop eventually, and actually if you'd look at that, who will -- say they will eventually buy it, you've got an audience that goes from 9 million to 36 million. So there are lot of people waiting in the wings there. You got incredible brand strength for Sony and PS3 and a gaming audience that has really strong enthusiast space that doesn't tend to be as price sensitive; you really get to the price sensitivity when the price starts to drop late in the console life cycle. So, really looks like PS3 will come out ahead and then, we really think the battle is going to be for second place with Nintendo making a really strong showing in the survey, and Xbox 360 sort of like the established player at this time in the market with some strong offerings as well. I think the V will sell about 25% of its expected life time units in the first couple of years, and then only 50% in the last 3 or 4 years, where I think that the PS3 and the 360 are going to sell something closer to 15% of their lifetime units in each of their first couple of years, and 70% in their last 3 or 4 years. So, they are going be elongated because of their price point, and the V will be accelerated because of its price point. I also think there is a dynamic that's going to show up -- manifest itself at holiday (ph) and beyond where many households, probably 40%, own at least 2 game devices, a console and a handheld or 2 consoles or even 2 consoles on a handheld. And I think that 40% -- this next cycle is going to think very seriously about buying the V first. This time around, because the price and because the V is so different, so that will result in higher initial V sales than people expect, and lower initial PS3 sales than people expect. And so, my guess is that when you and I speak in July of next year, you are going be asking me is Nintendo the winner of this cycle? I don't think they are going to win, but I think they are going to finish very strongly, and I think this really is pre-horse (ph) race.