Xanthir’s Techdirt Profile

On the post: Is HP Finally Just Targeting Ink Counterfeiters, and Not Legit Refillers?

Xanthir ( profile ), 03 Jun, 2009 @ 06:04am

As others have said, there's absolutely nothing wrong with a loss-leader business model. As you say, consumers enjoy paying less for the large item, and don't generally mind paying a bit more for the repeated item. The issue, of course, is that the business model is inherently a gamble. Can you keep a customer loyal long enough to recoup the loss on the original product?

In some industries, the answer is generally yes. In the aforementioned razor blade industry, people don't really *care* about their blades, so the purposeful incompatibility of the connectors is enough to keep people loyal. In the aforementioned video game industry, the systems can employ strong enough DRM (generally requiring one to actually open up the system and physically install something to get around it) to again generally keep people loyal.

But in the printer industry? The cost of ink is high enough to care about, but it's difficult to justify putting DRM on an ink cartridge. The idea just *sounds* ridiculous. The other strategy - suing the pants off of ink refillers - is similarly ridiculous-sounding, and makes the company look like a jackass to boot.

I think the core problem here is that the printer manufacturers realized one of the big benefits of a loss-leader strategy - once the consumer has bought enough repeatable items to 'make up' the debt from the original sale, they'll continue to buy at the inflated price - and have tried to capitalize on it for it's worth. Printers are substantially cheaper than they should be, and ink cartridges are substantially more expensive than they should be, to the point where color printer ink is one of the most expensive consumer-grade products on the entire planet now. There have literally been cases where buying a *new printer* (which comes prefilled with a supply of ink) was cheaper than just buying ink refills for the existing printer. The printer is essentially a very wasteful wrapper for value-priced ink! (To be specific, I've seen printers sell for $99 while their ink sells for $40 a cartridge, which is $160 for a full fill-up.)

The situation is *so* ridiculous that the price savings achievable by buying ink near the marginal cost from refillers is actually *worth* the hassle of getting around whatever roadblocks the printer manufacturers have put up.

So, yes, there's nothing wrong with a loss-leader business model. But you have to realize that it is an inherently risky strategy, and may very well backfire on you when others legitimately and legally compete with you, and don't have the original item hanging around their neck to force them to overprice the repeatable item.

On the post: The Next Big Copyright Battle? The 'Real-Time' Web

Xanthir ( profile ), 28 May, 2009 @ 06:13am

Re: Re: Re:

Mike, in all seriousness, because of my business I am very aware of the implications of DMCA on a day to day basis (people I work with). You may have a theoretical opinion, but the reality, where the "rubber meets the road" is that DMCA gives people with no rights an incredible free pass that they have leveraged into various business models.

Do you honestly think that you are unique in rubbing up against copyright infringement and the DMCA? Do you really believe that this is a 'theoretical' concern for Mike? Have you ever tried searching for a TechDirt post title on the open internet?

TechDirt has *loads* of infringers. They're all over the place. THEY ARE LEGION. And yet, TechDirt continues. Mike chooses not to fight them, because he's built his business right, where the content itself isn't what he's selling, precisely *because* it can be infringed with basically zero effort. Techdirt's posts, Mike's words, Mike's primary effort on this site are an infinite good and thus not capable of being reasonably monetized directly. Instead, Mike monetizes in other ways, using his infinite good as advertisement.

Pre-DMCA legislation, Youtube would have been shut down the first week, because they would have likely been found liable for all of the violations on their site, and been sued into the dirt. With the poorly written and poorly considering DMCA, their business model now works with little chance of losing in court, providing they are prompt to remove stuff on notification. They can continue to knowingly use material that they suspect is in violation, provided they are not specifically notified.

Do you honestly believe that Youtube being sued into the ground due to the actions of its *users*, not the company itself, would be a good thing? If so, you're quite out of touch. Youtube has never committed a single crime. Punishing it for the acts of individual people unaffiliated with the site is an abortion of the process of law.

On the post: Amazon Connects The Cloud To The Postal Service

Xanthir ( profile ), 22 May, 2009 @ 07:47am

Been talked about

I can't recall where I read it, but I recently read someone else talking about exactly this. He actually compared the bandwidth and cost/byte of various connection types, plus just sending a big hard drive through the mail. With a large enough drive the mail has the highest bandwidth of all! And the cost is relatively low for the quantity of data transmitted.

Lessee... just sending a single 1TB disk through the mail, with a two-day transfer time, results in a bandwidth of 46 Mbps. That's *much* faster than what most people have access to (obviously faster than the connection that Amazon expects you to have, since they're quoting a transfer time of 13 days rather than 2, or roughly 7 Mbps), and it scales up linearly with the size of the drive you transfer. Sending 10 of those 1TB disks at a time gives you an effective bandwidth of 460 Mbps, which is far beyond what can reasonably be squeezed out of the modern net.

And the cost? Well, you can probably slap some bubble-wrap around a drive and send it in a Priority Mail Flat Rate envelope, for $4.95. A larger box, for greater protection, will cost you about $10. It looks like buying any dedicated server with at least 1TB of bandwidth/month will cost you $60 or more. If you're shipping out several TBs a month, the cost can get even worse. So good ol' US Mail has the lowest cost per byte and the highest bandwidth of *any* solution right now if you're shipping out large quantities of data to single destinations. This is, btw, exactly the scenario you're looking at when dealing with backups.

It seems silly, but the sneakernet is alive and well these days. ^_^

On the post: Is Cablevision Caving On Remote DVR?

Xanthir ( profile ), 21 May, 2009 @ 06:23am

Too much precedent to get overturned

This case is straight retarded. The argument that buffering a copy is infringment is trivially false, as your computer does that every single day. Hell, it does it for more than a fraction of a second with cached files that may stick around indefinitely! The law already recognizes that this brand of copying is completely legal.

If the SCOTUS did take up the case, there's no way they could rule in anything but Cablevision's favor.

On the post: Apparently, Providing Derrida's Works For Free 'Harms The Diffusion Of His Thoughts'

Xanthir ( profile ), 21 May, 2009 @ 06:19am

Re:

Imagine I translate this blog into a language you don't know and without your authorization, and I paint Mike Masnick as a RIAA agent secretly working with the Illuminati towards world domination. Surely you would be justified in asking me to stop.

That would be awesome. I'm not sure why you haven't started this already. Hell, do it in English.

On the post: Last Chance For The Old Recording Industry… But Plenty Of Excitement In The New Music Industry

Xanthir ( profile ), 20 May, 2009 @ 07:28am

Re: the Josh Freese model

Yes, Josh Freese. Well, we all would like to be Josh Freese, just as many of us would like to have been born to a prominent family (with our mom sharing a board of directors with the chairman of IBM) and have a million-dollar trust fund so we could drop out of Harvard to start Microsoft, but both of those possibilities seem equally unlikely.

Gates is an extreme example. We have quite a supply of successful business owners in this country who dropped out of college to start their own business *without* such assurances. Don't bother making excuses - if you have an idea and the will, go out there and execute it. You might win, you might lose, you might break even and cut out to start something new. In any case, you're doing something rather than whining about how unprivileged you are.

- What's a viable business model for touring groups of greater size than your typical pop/rock combo?

There are probably few to no business models in the new culture for handling large groups like an orchestra well. We'll probably have to continue funding them through patronage and taxes, like we do to a good extent now.

- What's a viable business model for individuals or groups that don't tour, require exceptional resources to tour, or play music that isn't what you'd expect to hear on the radio?

Well, if *all three* of those are true together, you're a bit hard up. ^_^ You can still make it, but you've got to be good and lucky.

However, there are many ways to work around these weaknesses. First, let's address the last. Being a radio-pop band is *far* from necessary for success. Techdirt has highlighted *many* bands who have gotten successful using in the digital economy while not being pop. In fact, non-pop bands were the first to really start pushing the boundaries of the new models, precisely because bands who *did* sound like what you hear on the radio could get signed by labels.

As for touring, you don't *need* to tour. It's just an obvious and easy way to make money. However, if you can do 'targeted' touring, like what Coulton does where he requires enough fans to get together in an area requesting a concert before he parachutes in, you can get much of the benefit of touring while removing much of the risk. You can even do backyard/house concerts, which a few artists have successfully done - just charge some appropriate amount to the homeowners, and let them charge admission to recoup it themselves. They'll be sure to bring in plenty of friends who can become new fans for you.

- How can the next Josh Freese fund himself while he tries to become Josh Freese? Is there a way for a relative unknown to earn $250 for plastic discs and lunch that doesn't require firearms, relatives buried in remote places or powerful drugs?

Josh Freese is obviously banking on his existing celebrity to sell the largest packages, but it's relatively easy to gather a decent chunk of loyal fans who'll plunk down serious change for some premium swag. Some CDs and lunch probably aren't sufficient for normal people to charge $250, but drop the price and up the value a bit (due to the loss in value derived from celebrity), and you've got yourself a sellable package.

There are many, many ways to make money in the digital economy, and it's surprising how many of them fundamentally revolve around personal connections. In the end, though, not everyone can make money. This is just how the world works. One of the nice things about the new models is that they allow much larger numbers of people to make good money, at the cost that we'll lose the infrastructure to make a small number of people extremely rich. It's still possible to be super-rich under the new models, just less likely.

I'm pulling numbers out of my ass here, but it's something like, under the old model, 1% of people got super rich, 5% of people made okay money, and the rest either aren't good enough, or got shut out by the labels. Under the new models, .1% of people get super rich, 10% of people make okay money, and the rest either aren't good enough or just plain can't monetize themselves. So you have something like twice the chance to be successful in music using my ass-numbers, even though there's only a tenth the chance of striking gold. I'd consider that a fair trade-off, and I suspect that the real numbers are actually skewed substantially more in the new model's favor - either my numbers for the old model are too high (likely), or my numbers for the new model are too low (possible).

On the post: FTC Cracking Down On Car Warranty Robocall Scammers

Xanthir ( profile ), 18 May, 2009 @ 10:50am

Re: The bigger issue...

Supposedly, this company had been calling people for months. Did no one complain to the FTC? Did it take the FTC this long to finally figure catch up to them?

Apparently, yes. The companies went out of their way to hide themselves, setting up offshore shell companies and such. It seems it really did take the FTC a while to gather sufficient witnesses and evidence to take them to trial and be sure of hitting them.

On the post: Girl Talk On Remix As An Art Form

Xanthir ( profile ), 18 May, 2009 @ 10:40am

Re: Re: Re: Re: Creativity

remix artists should not be ones choosing if something is base product or finished product. i will go to car dealer say that ferrari is just base product i will take it for free put new rims on it now it is finished product then i sell it for $100000. sorry real world doesnt work like that musicians did the playing it is up to them not the dj.

And the day you can make a perfect copy of that Ferrari for a fraction of a cent without damaging the original Ferrari at all (in fact, you'd just be copying the copy of the Ferrari that the original owner already created and sent to you over the internet, or possibly copying the copy that Google copied from the copy that the original owner copied onto his webhost which then copied another version to send to the Google spider, which then makes many copies distributed over Google's content distribution servers*), your argument will be relevant.

Until then, physical goods are finite. Digital goods are infinite. One of them can be copied perfectly for a fraction of a cent without harming the original. The other can't. I hope you can distinguish which is which.

*There is likely more copying going on here than I indicated.

On the post: The Economist Debate On Copyright Needs Your Input

Xanthir ( profile ), 08 May, 2009 @ 05:42am

Re: Re: Re: Free Market... NST

This misses the point. The fundamental issue isn't about free markets here; it's about what constitutes property. It may seem obvious, but it's not. Any notion of property starts off with monopoly: I have the right to exclude anyone else from using what is my property. But *how* do I exclude others? I can do it with a gun, but then we're not talking about the rule of law and further debate is meaningless. No, a property right is exactly something that I have a *court enforced monopoly* over.

You're right! It is about property. The problem is that copyright is totally confused about just what the property is.

It tries to treat the idea/artistic expression/etc. itself as property in the sense that the creator 'owns' it, but then it throws that out the window when it states that, even when someone else 'buys' it, then don't 'own' it.

Let's be consistent here. Property is property. If I own something, and I sell it to you, it's yours now. You can do with it what you want. That's a basic right covered by the First Sale Doctrine. Digital goods are in a very unique situation because I can sell you something but still keep owning it as well. Note the "as well" there.

If we go with this, though, it means that you actually *can* 'steal' intellectual property! Taking some IP from someone without their permission (say, by leaking an album) is then stealing their property. However, having someone else who legally owns it as well share it with you is not, any more than it's illegal to split a cookie you've bought with a friend.

In short, Mike's right. Property law is about scarcities. When you apply property law to creative expression, you find that the infinite part of it is mostly meaningless to treat as property. In order to get something useful that property law can sink its teeth into, you have to find something that is scarce (like a secret).

On the post: Techno Slap Chop Informercial Remix… Infringement Or Brilliant?

Xanthir ( profile ), 06 May, 2009 @ 08:35pm

I can't get this song out of my head now. It's crazy that an infomercial can be a catchy tune.

Slappin' your troubles away with slap chop!

ARGHHH, they totally need to pay the guy for this remix.

I'll let you in on a secret. The reason I sent this in was because I was already infected with its rhythm and lyrics, and wanted only to spread the agony.

I've watched the video 20 times or more now. >_

On the post: Another Bogus Copyright Takedown: Can't Protest A Viacom Movie With T-Shirts

Xanthir ( profile ), 05 May, 2009 @ 05:56am

Off-topic, but...

I am immensely amused to see the word "Zazzle" start three consecutive lines in the post.

On the post: EFF Agrees That Copyright In Second Life Is A Mess

Xanthir ( profile ), 04 May, 2009 @ 05:31am

What the frick are you talking about? What exactly does copyright, which is a government granted monopoly, have to do with physics? How can physics impact a legally created government grant?! And since when do you equate property rights with copyrights. They're not synonymous at all.

Hi! Your reading comprehension must be a little low, because we're talking about Second Life in this post, not the real world! In SL, the 'laws of physics' are sufficiently different such that you can duplicate 'physical' objects with the same ease as digital objects (because they are digital, of course!).

Thus, property rights mix with copyrights here, and physics *can* have an effect on government-granted monopolies. We'll run into similar problems here in the real world when we get a decent 3d printer that the masses can afford.

On the post: Spammers Solving Difficult AI Problems With An Underground X Prize

Xanthir ( profile ), 22 Apr, 2009 @ 04:42am

Awesome

For those of you who don't know, reCAPTCHA is a very popular captcha program that uses images of words that couldn't be read properly by the OCR software used by various book digitizing programs. The fact that the OCR software failed means that it's unlikely any other similar software will succeed, which is what makes it such a great captcha.

The neat thing is that it forces you to decipher *two* words, one of which is already known and one which is not. If you get the known word right, you pass. Once enough people give the same answer for a particular unknown word, though, that information is passed back upstream to the book digitizers.

If the spammers can solve this reliably, it means that they've made a great advancement in the field of OCR which can be passed back to the book digitizers for great benefits. And it still won't defeat reCAPTCHA unless the new software is *perfect* - there will still be words that can't be read by the new software.

On the post: From Infinite To Scarce: xkcd Goes The Book Route

Xanthir ( profile ), 21 Apr, 2009 @ 05:23am

Re: Re: lack of history in mainstream media

Nod, I was just thinking that. I bought books from my favorite webcomic artists years ago, and I continue to do so now. As Mike said, it's just one more scarcity they can make money off of.

Plus, the books usually have bonus content in them!

On the post: Demigod, Piracy And Good Business Models…

Xanthir ( profile ), 18 Apr, 2009 @ 09:51am

Re:

There's really no way to flame on this issue, though. You *can't* run a fat-client MMO. Every bit of data you give to the client is a bit that they can control, manipulate, and use to cheat, thereby ruining other player's experiences.

An MMO client really *is* nothing more than a graphics display engine and some networking code. Anyone who has tried to do differently has paid the price and failed. All the significant bits of the application are, and *must* be, on the server.

On the post: Rethinking Handing Copyright On To Heirs Beyond Death

Xanthir ( profile ), 10 Apr, 2009 @ 05:15am

Re:

As for the matter at hand, copyright should be something that exists for whatever the set amount of time is regardless of the lifespan of the creator (or creating company, which is another issue altogether).

A 99 year old man that creates the greatest song even in his last year should see his work protected in the same manner that a 12 year old would get. There should be no difference in the length of the grant because of age, that would be discriminatory, no?

Plus of course, the copyright owned by corporations and not individuals brings a whole other issue. When does a corporation die? Would a company that exists for 300 years have a long copyright protection than an individual?

Wow, that's... actually a reasonable argument. Good job for once, WH.

We may disagree on how *long* that 'fixed term' should be, but as long as we can agree that it *should* be fixed, I'm honestly fucking happy.

On the post: As Long As People Keep Buying, Scams (and Spam) Will Keep On Coming

Xanthir ( profile ), 26 Mar, 2009 @ 06:23am

Re:

One day someone will come up with an actual replacement for the current crappy mail system used on the net, putting something out there that cannot be easily spoofed, and that doesn't allow mail from just any address without a sponsoring ISP to handle it.

Spam is a result of one of the most massive security holes in the world, and one that every ISP perpetuates by handing new users an email account. It would be much safer to point them to hotmail and call it a day.

Unnecessary, and contrary to the open nature of the web.

Spam still makes money, but *much less* than it used to, due to the effectiveness of today's antispam filters. If we can just drive up the price a bit more we can get a handle on it. Charge everybody a cent to send emails (with all the major players auto-rejecting mails that weren't 'paid for') and spam'll *stop*. ^_^

On the post: Do Kids Still Need Courses In Basic Computer Skills?

Xanthir ( profile ), 05 Mar, 2009 @ 05:46am

Typing Classes

I'm with a few others in saying that typing classes are still a necessity. I'm a young'un, and too many of my peers (Comp Sci majors!) still do touch-typing when *coding*. They just never learned to type properly, and it definitely affects them.

On the post: Amazon Gives In To Ridiculous Authors Guild Claim: Allows Authors To Block Text-To-Speech

Xanthir ( profile ), 02 Mar, 2009 @ 05:22am

Wait for the lawsuits

This may have been said before; I haven't read all 72 comments (at the time of this posting). But I just can't wait for the first lawsuit brought against Amazon by a deaf owner of a Kindle who is being discriminated against by this decision.

On the post: Corey Smith Clarification: Not $4.2 Million; Just $4 Million

Xanthir ( profile ), 04 Feb, 2009 @ 05:26am

Re: Re: Re: What this PROVES?

Ideas can't be stolen? Really?

http://www.telegraph.co.uk/news/worldnews/1558275/Facebook-founder-in-court-over-%27stole n-idea%27.html

Yes. Ideas can't be stolen. If your knowledge of legal regulations comes solely from newspaper headlines, though, I can see how you might be misled. If that's the case, though, you're really a lost cause.

If you actually *read* the article, you'll note that Zuckerberg is *not* accused of stealing anything. Specifically, he is alleged to have committed "breach of contract, misappropriation of trade secrets, breach of fiduciary duty, unjust enrichment, intentional interference with prospective business advantage, breach of duty of good faith and fair dealing, and fraud", not theft.

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