In these past few weeks, the world has become divided into two camps: those who are sick of hearing anything about Nintendo's new smash mobile hit, Pokemon Go, and those who can't get enough of it. While the media tags along for the ride and with the app shooting up the charts as the craze takes hold, it's worth keeping in mind that this is Pokemon and Nintendo we're talking about, two connected groups with a crazy history of savagely protecting anything to do with their intellectual property.
Still, it was strange to learn that Nintendo is issuing all kinds of takedown requests to "pirate" versions of the Android app that are available roughly all over the place. The reason I wrapped that word in quotation marks above is that the Pokemon Go app is entirely free and even the unofficial versions of the app still point the user back to the app's official store for any in-game purchases.
Nintendo is obviously not happy with this black market distribution. Although it doesn’t seem to hurt its stock value, the company is targeting the piracy issue behind the scenes. TorrentFreak spotted several takedown requests on behalf of Nintendo that were sent to Google Blogspot and Google Search this week. The notices list various links to pirated copies of the game, asking Google to remove them.
Thus far the efforts have done little to stop the distribution. The files are still widely shared on torrent sites and various direct download services. The copies on APKmirror.com remain online as well.
So why is Nintendo engaging in a losing war against its own popularity instead of deciding to spend the time counting the money that is streaming in from its smash hit instead? Well, the speculation is that this has all to do with the geographic release windows for the app.
With no commercial gain to be had from stopping people playing the game, I’m guessing Nintendo is just trying to keep it in the hands of users in countries where Pokémon Go has been officially released. Maybe to cut back on stuff like the problems some Korean gamers are having right now.
The issue appears to be that the game doesn't really function in countries where it hasn't been officially released yet. This means that users of the unofficial apps in these countries are likely to find that no Pokemon exist to be collected, or are at least far more sparse than they will be once the release is official in that country. This has led to some minor frustration from those who downloaded the app from an unofficial source, as they wander around doing essentially nothing.
But so what? That isn't really Nintendo's problem and there's no way that the company will take on any ill-will from those downloading unofficial copies of the game where it hasn't been released yet. The app, keep in mind, is a free one and points to Nintendo's in-game store for purchases whether it's from the official app or the unofficial one. There's literally no money lost in this in any way and, it can easily be argued, the widespread availability from many different sites may well be super-charging the viral nature of the product. That should be a huge win for Nintendo, as the company gains new and free distribution channels at zero cost.
If this is about the geo-restricted release dates, I sort of get it, but I only sort of get it because I already know how crazy-insane Nintendo is in terms of controlling every last aspect of every last product it offers. The company just can't help itself, even when it can be argued the "pirated" apps are doing way more good than harm.
Most Thursday's, we post book recommendations with links to purchase the books through Amazon (where a little cut of the purchase price goes to us). We've received a ton of feedback that people like those recommendations (and seeing how many books you guys have bought via that, suggests it's true!). We had another such book lined up for today, but we're going to put that aside as we saw the news this morning that publisher Verso Books, which has published a number of excellent books (including ones we've recommended in the past), is doing a special one day (today!) offer for a bunch of free ebooks, many of which may interest folks here -- though there are a few caveats which we'll get to.
The books include two that we've recommended before: Gabriella Coleman's excellent book about Anonymous, Hacker, Hoaxer, Whistleblower, Spy and the collected writings of Aaron Swartz entitled The Boy Who Could Change The World. Now there's a big caveat on the Swartz book: as Verso notes, it does not hold the rights to that book in North America, so it's only available to those outside of the US (or someone using a geographically promiscuous VPN, I imagine). Now, quite obviously, Aaron Swartz would probably be first in line to argue that this kind of geoblocking is ridiculous and worthy of scorn. In fact, from its tweets, it appears that Verso also recognizes this. But, it's not exactly in Verso's control. Though perhaps the company could have reached out to The New Press, who published the book in the US to work out some sort of co-promotion.
The second caveat is that... Verso appears to be overwhelmed. There have been lots of complaints that after "purchasing" the ebooks people are not receiving their download links -- and I can confirm that. I tried direct download links and the "email me a link" option, and neither seemed to work. However, the company says it's working on it, and as long as the books are listed in your "library" in their system, then you'll be able to access them in the future.
And, of course, even if you're in North America, all of the other books are available for free, including Coleman's. The other books look pretty good as well. There's The Wikileaks Files with an intro by Julian Assange, Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek and Alex Williams, Revolution in the Age of Social Media: The Egyptian Popular Insurrection and the Internet by Linda Herrera and In The Flow by Boris Groys.
The one other issue that some people may take at least some offense to is Verso's decision to entitle the blog post about this whole thing Psst! Downloading Isn't Stealing [for today], with at least one person on Twitter pointing out that this title at least suggests that Verso hasn't read (or hasn't understood) Swartz's writings. Verso responded noting that it had, and given my own dealings with Verso, I believe that's the case. Though, it does seem a little wrong no matter what that the collection of Swartz's writings doesn't appear to be available anywhere as a Creative Commons download -- given that Swartz himself was instrumental in the founding of Creative Commons and many of the writings in the book were things that Swartz himself posted for free online on his blog.
As for the title, which perhaps a little annoying, it's Verso doing a play on words of an Aaron Swartz blog post entitled "Counterpoint: Downloading Isn't Stealing," which Verso also reprinted on their page. For folks who are extra sensitive to the claims some make that "copying is stealing," you can see why Verso's title may rub some the wrong way, but it does appear to be them just having some fun with the phrase. And, either way, go check out these books for free today...
As you may recall, back in 2007, entertainment giant Viacom sued YouTube for $1 billion, arguing that it was nothing more than a piracy site. Of course, Viacom's case faltered, badly, when it was later revealed that over 100 of the videos it listed as infringing had been... uploaded by Viacom employees as part of a marketing strategy. That act alone showed that even Viacom employees recognized the site had "substantial noninfringing uses." After seven years of battling it out in court, the two sides finally settled last year. However, it does seem noteworthy that Paramount Pictures, the major Hollywood movie studio that is owned by Viacom just announced that it had posted over 100 of its own movies for free on YouTube in their entirety.
This is important for a variety of reasons, but most of all it shows that, once again, when legacy entertainment firms learn how to embrace new technologies, rather than sue them, they're better off. Legacy entertainment companies have basically tried to sue or kill every new technological innovation that somehow challenged new business models. They sued over radio, television, VCRs, cable TV, MP3 players, DVRs and internet video. And yet, once they learned how to use each of those, they realized how great these platforms were in helping to distribute, to promote and to monetize their works.
If Viacom had succeeded in its lawsuits and killed off YouTube, would these movies be available for free online today? I think most people would agree the answer is "no way."
This is a big part of the reason why I get concerned about attempts to shut down businesses that some insist are "nothing but piracy sites." The VCR was "nothing but a piracy tool." The MP3 player was "nothing but a piracy tool." Radio was "nothing but a piracy tool." And YouTube was "nothing but a piracy site." And yet... given the chance to grow and to innovate, these services show that they are successful because they're providing a better product. Suing them out of existence takes away opportunities like this, where companies learn that they can benefit from these (often free!) services to better promote, distribute and monetize their own works. It's easy to think that something that is often used for infringing works in the early days is never going to be anything useful or legitimate, but that ignores the history of innovation in this space. Every new innovation originally looked like a piracy tool. Until it no longer did. Perhaps, rather than trying to kill off every new service, Hollywood should take a lesson and realize that maybe it should be figuring out better ways to embrace them early on, rather than many years later.
We've all heard it before: [industry X] can't compete in the marketplace because the public just wants everything for free. It's a mantra taken up by the film industry, the recording industry, the literary industry, and the video game industry. And, almost always, we've found that the mantra is complete nonsense. Instead, it's been clear that the public is more than willing to purchase that which is scarce and valued. It's just that those scarce and valued things are often times not the content itself.
The retro-gaming industry is instructive in this for two reasons. Piracy is typically much easier for retro games than modern titles. Most of the older consoles have been fully emulated at this point, with ROMs and games readily available for them online. For older PC titles, retro games often have no DRM or have been cracked so long ago that the cracked files are also readily available. In addition, retro titles aren't policed the same way that modern releases are. And, yet, despite all of that, or perhaps because of it, the retro-gaming industry is exploding.
Sites like GOG.com and Steam's client offer old games with smaller pricetags. The major console-makers like Nintendo, Sony, and Microsoft all have their own marketplaces for digital downloads of retro games. Those marketplaces must be doing quite well, considering that the consoles and publishers continue to support them and expand the retro-game catalogs. And, for the actual old products, the interest and prices for retro-game pieces are skyrocketing.
Giulio Graziani says it makes him feel a bit like a drug dealer, even though he's not buying anything illegal. It's part of his job digging up a steady supply of video games from the 1980s and 1990s for his store, VideoGamesNewYork, which specializes in everything from Atari and Gameboy to rare prototype NES cartridges.
Graziani, 50, has been in business since 2003, but says the market only recently began to spike. "Five years ago, I could drive through Texas and stop in little towns and buy everything," he says. "Now they're selling games out there for more than I do!" Even simple pieces, like The Legend of Zelda Ocarina of Time, which cost $12 in 2010, now go for $25. More coveted games, like Nintendo's Earthbound, can fetch hundreds of dollars, even thousands if they're in the original box.
It's always been this way. Collectors of art will always pay for original pieces, or for the items that go along with the actual content. If the public simply wanted everything for free when it came to gaming, anyone could go on the internet and get an emulator and a copy of The Legend of Zelda and have at it. But, of course, there are scarce items that go along with the collectables that can't be downloaded, and so the prices are paid, even as they rise. And it's not peanuts we're talking about here. Estimates for how big the retro-gaming market is come in at something like $200 million per year.
For those who aren't collectors, however, there's still a reason to buy.
Luckily, for a casual retro gamer, there are some cheap solutions to get a quick dose of nostalgia. Nintendo's Virtual Console allows you to download classic titles to play on the Wii U or Nintendo 3DS. The Retron 5 console by Hyperkin sells for $159.99 and supports games for 10 systems, including NES, SNES, Famicom, SENES, Genesis and Game Boy.
Add to that GOG and Steam, along with the old-game marketplace Sony and Microsoft offer, and the RtB here should be clear: ease of purchase and the platform. Much like it is understood that iTunes is attractive because of the platform, rather than the music catalog that is also available via piracy, so do gamers appreciate the convenience offered by these marketplaces. Which is why they're growing and selling more and more.
If anything should signal the end of the "everyone wants everything for free" myth, let it be retro-gaming.
South Park creators Trey Parker and Matt Stone have built an entire comedy empire on the back of free distribution. The pair first came to fame by circulating their animated short, The Spirit of Christmas, for free first as a popular bootleg VHS and later on the Internet. They also were among the first TV show creators to operate their own web portal to provide content for free, striking a (at the time) groundbreaking 50/50 ad revenue sharing deal with Viacom. They were the grandfathers of viral content, with free distribution leading them to the mammoth financial and critical success South Park saw at its peak, and continues to enjoy today.
So with the news that Parker and Stone have struck a new, $192 million exclusive, walled off South Park streaming deal with Hulu, it's a little odd to see Stone suddenly forget what made much of his rise to success possible. In an interview discussing the huge Hulu deal, Stone laments how amorphous, villainous "tech guys" demanded he make his content available online, for free:
"This is now particularly satisfying," said Stone in a recent discussion. "It comes full circle since the tech guys came to Hollywood and said you better give us your stuff for free to put online or else it will be taken from you anyway."
The argument that "tech guys" just want everything to be free is a fairly normal response by those who don't understand the digital economy, and are informed that you can reduce piracy by incorporating free into your business model. But again, this is a particularly weird comment coming from Stone, whose entire career foundation was built on such models (apparently begrudgingly). That freemium models help reduce piracy is something Stone appeared to understand perfectly well when talking to Boing Boing back in 2008:
"Basically, we just got really sick of having to download our own show illegally all the time. So we gave ourselves a legal alternative."
"NY Times: You’re now about two years into the operation of your South Park Studios Web site, where just about all the content is available for free. Does the gamble seem to be paying off?
PARKER: To be honest, we don’t care about the money. We both have all the money we need. It’s really just about the survival of the show. First hearing about, O.K., we’re going to be putting everything on the Internet for free, I was like, Really? Wow, O.K. [laughs] That’s the world we live in. I’m actually surprised at how smooth the transition is going.
STONE: If we had years and years to discuss it, and we had determined what the right course of action was – but we don’t have years and years. We’re doing the show right now in 2010, and the reality is, we have to have our show on the Internet. Would the network like it if everyone who watched it for free on the Internet actually had to pay? Yes. But it always ends up helping us when people can see the show.
Yet here we are, the better part of a decade later, with Stone clearly annoyed by what he insists is Silicon Valley's demand that he not get paid for his hard work:
"Frankly, in the past I haven't much liked dealing with the people from Silicon Valley. I don’t like our stuff being talked about as content. Spoons are metal and guns are metal, but they're not the same thing. We don’t make content. We make television. And that's now what digital understands it has to pay for."
Arguing that "content" is a reductive word is understandable, but this narrative that ambiguous "digital" enemies in Silicon Valley don't want to pay for television programming is odd, since "digital" has been paying an arm and a leg for content since inception. Netflix, for example, is expected to spend as much as $5 billion in 2016 on programming, making the streaming operator the second largest content buyer behind ESPN. Does that strike you as a "digital" industry that doesn't think there's a price tag for quality television? Perhaps Stone is just developing a nasty case of "get the hell off my lawn" and no longer has the best memory, perched as he is upon precariously-leaning towers of money.
Streaming companies, broadcasters, and content creators alike also don't appear to understand the potential pitfalls these exclusive streaming arrangements create. While 2015 has been a banner year for the evolution of internet video by any standard, there's been a troubling rise in not only exclusive content deals (Hulu, owned by Comcast/NBC, also shelled out $160 million for exclusive streaming rights to Seinfeld), but also standalone streaming services from every broadcaster under the sun (even those B-grade schlock masters over at Lifetime), each of which is going to be eager to lock their own content down exclusively to keep it out of the hands of more successful third-party operators.
While streaming operators might correctly believe that having exclusive access to select programming can lure customers in the short run, fracturing the content availability landscape in such a fashion could have some nasty downsides. Making consumers hunt and peck their way through an endless variety of $7 to $40 streaming packages for what they want might easily drive annoyed consumers back to piracy (something we've been saying for years). Streaming operators also risk driving those users back to cable if the industry ever wakes up and decides to offer a more uniform value proposition. Right now that's not a risk, since cable execs are still obliviously raising rates in the face of increased competition; but it will be.
Internet video was supposed to be something different and better, built on the legacy dinosaur bones of an industry obsessed with turf protection and utterly terrified of disruption. There were notable lessons learned during internet video's rise during this period; hopefully they're not all mysteriously and suddenly forgotten just as internet video starts reaching its true potential and the money truly begins to flow.
When it comes to old notions that are used to stave off the need to embrace new business models in the digital age, nothing is more annoying than the whole "the masses just want everything for free" myth. That belief is snappy, punchy, and as simple to understand as it is completely and demonstrably wrong. But for a certain segment of the population, typically older generations of the kind that pine for the good old days when America was all apple pie and tasteful cartoons, the myth persists. Now, however, the myth is old. Old enough that it's begun to lose its flavor, like a piece of gum that you've been chewing on since Metallica shut down Napster. The new flavor is every digital success story that proves the myth wrong. Kickstarter happens to be my favorite example of this. What's remarkable about Kickstarter is that it's over half a decade old and, despite some still embracing the old myths, it's somehow stillsetting records in raising money for content producers.
Shenmue 3 isn’t only the fastest game to raise a million dollars on Kickstarter, it’s also the fastest game to raise two million dollars. The project was announced last night at Sony’s E3 press conference. It’s the follow-up the Shenmue 2, which was released fourteen years ago.
Were you to believe the legacy content producers, who insist the public are free-loading internet anarchists hell-bent on ruining everything and everyone, this shouldn't even be possible. The fact that records for raising money are being broken now is perfect in debunking every part of the myth. The money rolls in over a decade after the myth's creation, despite the expectation that every day would see an increase in younger generations just wanting "everything for free." The money rolls in six years into Kickstarter's existence, meaning nobody can claim that all this money is currently pouring in due to the embrace of some new platform, the popularity of which will quickly die away. The money rolls in for a video game, the exact kind of product that those who believe the myth would expect to be the most pirated.
What does this all mean? Kickstarter is on the verge of becoming the establishment now, if it isn't already. It's no longer the upstart experiment. It's firmly entrenched as a success story in the modern digital economy, taking its place alongside iTunes, Steam, and Netflix as snap-rebuttals to the old mythos. The truth is that there are conversations to be had about how to best operate within the digital economy, but those proselytizing the old gods against a greed that doesn't exist are no more useful in that discussion than flat-worlders might be in a conversation about astronomy. The myth is dead, gone the way of Zeus and relegated to a time before the counterexamples had borne fruit. The new question isn't whether content producers can get the public to pay for their goods; it's whether the now-established platforms can scale to keep up with the wider adoption of the platform.
Site performance is back up to speed. We're still monitoring everything. We've never seen anything like this. Thanks for your patience! #E3
This was in response to the insane amount of interest and traffic generated by Shenmue 3. People flocking to Kickstarter so fast that the site couldn't keep up. People who others will tell you just want everything for free. The myth is dead. Long live the new business models.
As you probably know by now, last summer, Elon Musk announced that he was freeing up all of Tesla's patents. He pointed out that he didn't believe patents made any sense, and they especially didn't make sense in the electric vehicle space where they were clearly holding innovation back. Because some investors still couldn't comprehend this -- and assumed (for months!) that there must be some sort of catch, earlier this year Musk clarified that, yes, he really, really meant it, and Tesla's patents were totally free. No need to obtain a license. No need to pay a fee. No need to talk to or tell Tesla about it -- just go and innovate.
Earlier this week, Ford made an announcement claiming that it, too, was opening up its patents -- but the details show that this is a lot more hype and PR than substance. First, unlike Tesla, it's not all of its patents, but rather a specific portfolio of electric vehicle patents. Second, and much more importantly, it's not open. At all. You still have to license them and you still have to pay. This is just Ford announcing "Hey, we have patents, come pay us to use them." That's not opening up those patents. It's marketing the fact that you need to license them. This is the opposite of what Musk did with Tesla's patents.
To access Ford’s patents and published patent applications, interested parties can contact the company’s technology commercialization and licensing office, or work through AutoHarvest – an automaker collaborative innovation and licensing marketplace. AutoHarvest allows members to showcase capabilities and technologies, then privately connect with fellow inventors to explore technology and business development opportunities of mutual interest. The patents would be available for a fee.
And yet, nearly all of the press coverage worked exactly the way Ford intended: claiming that Ford was doing the same thing as Tesla. Here's just a sampling:
That last one is particularly hilarious. The title doesn't reference Tesla, but early in the article it does -- and again falsely claims that Ford's program is free:
If, as basic economic theory teaches, something is worth only what someone or group of people is willing to pay for it, then it seems the intellectual property associated with electric vehicles and hydrogen fuel cells is worthless.
Ford Motor is the latest car company to make this case. Today Ford joined Toyota Motor and Tesla Motors in making a vast range of patented electrification technologies available to its competitors. All free for serious EV developers.
Second, that's not what basic economic theory teaches at all. It's what ignorant armchair economists think it teaches. I know we have to go through this every few years, but price is not a measure of value. Price is determined by the intersection of supply and demand, and can be influenced by a number of different factors unrelated to value. The value to the buyer plays a role in determining the demand curve. Because if the price is less than the value derived, then that's when the buyer is likely to buy. But giving something away does not, in any way, mean that something is worthless.
And, again, this article misses the basic fact that Ford is not giving these away for free.
And people wonder why news publications are struggling to hold onto readers.
We've written a few times about Elon Musk and Tesla's decision to open up all of Tesla's patents, with a promise not to sue anyone for using them. We also found it funny when some reacted to it by complaining that it wasn't done for "altruistic" reasons, but to help Tesla, because of course: that's the whole point. Musk recognized that patents frequently hold back and limit innovation, especially around core infrastructure. Since then, Musk has said that, in fact, rivals are making use of his patents, even as GM insists it's not.
However, as some may recall, when Musk made the original announcement, the terms of freeing up the patents were at least a little vague. It said that Tesla "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." That "in good faith" claim had a few scratching their heads, and pointing out that still gave Tesla an out. We were a little disappointed that the company didn't make the terms entirely clear, believing that the "in good faith" line would likely scare away some companies from actually using the patents. However, recently, at the Detroit Auto Show, when questioned about this, Musk clarified that he really meant to make them completely free for anyone to use, no questions asked, no licensing discussions needed:
Around the three-minute mark someone asks how many automakers have taken Tesla up on the offer to use its patents, and Musk notes:
Musk: We actually don't require any formal discussions. So they can just go ahead and use them.
Reporter: Is there a licensing process?
Musk: No. You just use them. Which I think is better because then we don't need to get into any kind of discussions or whatever. So we don't know. I think you'll see it in the cars that come out, should they choose to use them.
In other words, Musk is saying what most of us assumed all along was the point. Hoarding the patents and blocking others doesn't help him at all. Letting others expand the market does. And licensing discussions are unnecessary friction and a waste of time.
All good, right?
Well, no. It appears that clueless Wall Street types are absolutely flipping out over this (possible registration wall). Some outfit called "Technology Equity Strategies," which doesn't seem to understand the first thing about how innovation actually works, posted an insanely long and ridiculously misguided note on how this is horrifying for anyone invested in Tesla. The descriptions are hilarious, where you can almost hear these Wall Street types pulling out their hair over this idea of *gasp* actually letting others use Tesla's patents. First, it notes that Musk called them "open source" patents, and spends way too much time detailing the "official" definition of open source, and then says that the patents are now "public domain" (apparently not recognizing that public domain and open source are not the same thing -- though in this case it might not matter). Technology Equity Strategies is very upset about this.
The restrictions in the June 12 blog of "good faith" and "we will not initiate" are over with. They are finished. These patents are either in the public domain, or they have at minimum been rendered unenforceable against all users, "good faith" or not.
Why? Because in their non-innovation minds, all they care about is how do you best value the stock, and giving up patents is giving up an asset. The note first (mistakenly) argues that many areas of the tech industry rely on patents as barriers to entry and that's where their advantage comes in (rather than execution, which is the truth). And so, it thinks now some other company will just come in and eat Tesla's lunch:
Is it possible that the massive capital and labor needed to attain leadership might not be eroded in by imitators in Asia, by large companies with resources to buy market share, by companies whose strengths are manufacturing process, global footprint and scale?
If so, the embedded option on a leader in a new niche in the auto industry and on a shift in the competitive dynamics in the auto industry might indeed be a valuable option.
But Mr. Musk was not interested in that. He is happy to give away the advantages that actually provide great profitability in some sectors of technology. He wants to compete as an auto company, in the brutal and capital intensive way that auto companies compete. More fundamentally, he is willing to eliminate the possibility in the future of competing as a technology company, which depend on the IP protections of patents, copyright, and trade secrets.
Of course, the reality is that Musk recognizes what many in this sector recognize: that sharing the ideas helps speed along innovation, creating greater and greater opportunities, which you can realize by executing well. Musk is confident in Tesla's ability to execute and (as we noted earlier) recognizes that sharing the patents actually helps Tesla by getting more electric vehicles on the market, meaning more overall infrastructure that makes Tesla cars more valuable.
This is the ridiculousness of Wall Street: sometimes it simply can't understand the nature of a non-zero sum game. Giving up any "advantage" is seen as helping others, without recognizing that helping others can also help you out tremendously. Instead, these investor types believe in the myth of intellectual property, that it's patents that make a company valuable:
Intellectual property is an important foundation for valuation technology companies. Funds that own Tesla may not be the same institutions who own GM or Ford, but many will be familiar with Qualcomm and ARM.
IP goes a long way in explaining why Qualcomm has a market cap of $110 billion, and ARM has a valuation of 23 billion (18x trailing revenues) while Nokia and Dell were sold for less than two times revenues. Nokia and Dell did fine work for a while as manufacturers and product companies. There was a time when they too looked like winners based on product execution. But they didn't own core IP, and so when product cycles shifted, they were left with little value.
Yes, ARM and Qualcomm are both patent-focused companies (that dip their toes into trolling all too often). And, yes, companies that don't execute well can lose out in the end, but cherry picking a few companies that have flopped on execution, while pointing to a few trollish companies as success stories, doesn't make a very strong argument. It's basically saying "yes, invest in the companies that don't believe in their own ability to execute, who have a fallback as a patent troll." That's not exactly a strong endorsement. Tesla believes in its own ability to innovate -- and these Wall Street guys think that's a bad thing.
And then there's the rewriting of history:
Let's look at Apple. Apple and Steve Jobs learned the hard way. Some of us will recall that an early Apple (believing that IP wasn't important) opened up its IP to the basic Mac interface with a royalty free license to Microsoft.
This resulted in Microsoft Windows taking nearly the entire PC market from Apple, and nearly bankrupting Apple. In his second chance, Steve Jobs learned about the importance of IP. This is a lesson that Mr. Musk failed to absorb.
Except, that's totally incorrect. While Apple had licensed a few aspects of its UI, that licensing agreement became meaningless by the time of Windows 2.0. Then Apple sued Microsoft and lost, because it was trying to use copyright law to claim things that could not be covered by copyright law. And that's not why the PC took over the market. So this isn't a lesson that Musk failed to absorb, because it never happened.
The Grand Gesture shows the worrisome sincerity in Musk's repeated statements that he is primarily on a mission to get other companies to sell a lot of electric vehicles, not to make money.
A worrisome sincerity? No, it's showing that Musk recognizes that if the market for electric vehicles does not grow massively, then he won't make money. He very much wants to make money, and a good way to do that is to build out the overall market for EVs, allowing Tesla to thrive. And these Wall Street folks first mock the idea that Musk might first invest to grow the market, by then... claiming that Asian makers might do the same thing:
No doubt Mr. Musk believes that if the industry embraces EVs, then Tesla will succeed as part of it. But is this plausible, that everything will just work out for the best. Is it plausible that Musk can succeed as a manufacturer in the U.S. competing against manufacturers in Asia who may take zero margins to grow a business, using Musk's proven designs? U.S. companies have learned over and over that IP is necessary to get a sustained profitable return on their innovations.
Actually, no. Plenty of tech companies don't think that IP is "necessary" to get sustained returns -- they think the opposite. Patents get in the way of profitability. They require lots of lawyer time and threats of lawsuits.
Frankly, Tesla opening up its patents seems like a move that shows how confident it is in its execution abilities, and makes the company a lot less likely to rest on its laurels and become nothing but a "licensing" company down the road. The fact that people who don't understand what a mess patents are and how they slow down innovation are now jumping in making ridiculous claims like Tesla's decision is why Apple can now jump into the EV car market just shows how little some people understand patents. The "myth" of patents as a powerful tool of innovation is still out there, and that's a shame.
"You can't compete with free!" is the mantra of a number of copyright maximalists -- and no matter how many times we show them examples of people successfully competing with free, it's still taken as inviolable law by some. Yet, here we are with yet another example of it happening anyway. As you know, last week the Senate Intelligence Committee finally released its CIA torture report (or, rather, the redacted version of the executive summary of the full report). It is a gripping read, and you can read the whole thing here (or embedded below). We can post it here for a variety of reasons, including the fact that the document is in the public domain, as a work of the federal government.
A little over ten years ago, we noted that the famed 9/11 Commission Report, despite also being in the public domain, had become a best seller in its printed version -- even though it, too, was in the public domain. It appears something similar is happening with the CIA torture report. There is a Kindle version that costs $2.99, and despite the report being available as a PDF (which can be viewed on Kindle), the fee-based version of the torture report is the number one seller in the "intelligence & espionage" section (beating out James Risen's recent book Pay Any Price). And this is happening despite the fact that people on Amazon are warning people not to buy the fee-based Kindle version, posting comments to tell them it's just a PDF that's available for free.
Yet, it appears that the convenience factor has made it worthwhile to an awful lot of people, who are willing to pay the money rather than figure out how to get the PDF onto their kindle. As we've pointed out for years, things like convenience and ease-of-use are real selling points -- and it's why things like Netflix and Spotify have been shown to decrease infringement -- because it's worth paying a little extra for a better-to-use system.
Meanwhile, physical copies of the CIA torture report are being rushed out with at least one publisher, Melville House, saying it will be out by the end of the year -- though, I'd imagine others will follow suit. In Michele Boldrin and David Levine's book, Against Intellectual Monopoly, they have a fascinating discussion on how publisher W.W. Norton made out wonderfully in being the first to publish a hard copy of the 9/11 Commission Report, despite not having to pay any copyright royalties:
The 81-year-old publisher struck an unusual publishing
deal with the 9/11 commission back in May: Norton agreed
to issue the paperback version of the report on the day of
its public release.…Norton did not pay for the publishing
rights, but had to foot the bill for a rush printing and
shipping job; the commission did not hand over the
manuscript until the last possible moment, in order to
prevent leaks. The company will not reveal how much this
cost, or when precisely it obtained the report. But expedited
printings always cost extra, making it that much more
difficult for Norton to realize a profit.
In addition, the commission and Norton agreed in May on
the 568-page tome's rather low cover price of $10, making
it that much harder for the publisher to recoup its costs.
(Amazon.com is currently selling copies for $8 plus
shipping, while visitors to the Government Printing Office
bookstore in Washington, D.C. can purchase its version of
the report for $8.50.) There is also competition from the
commission's Web site, which is offering a downloadable
copy of the report for free. And Norton also agreed to
provide one free copy to the family of every 9/11 victim.
As Boldrin and Levine point out, according to copyright system supporters, this situation couldn't possibly work out. After all, Norton is agreeing to publish a work that anyone can get for free, and which any other publisher (including the federal government) can offer for sale at a lower price. In fact, the book notes, a rival publisher, St. Martin's, teamed up with the NY Times and got a second physical copy on the market just a couple of weeks after Norton's physical copy, and priced it at $8.50. Clearly, Norton got a bad deal, right? And yet, Norton sold 1.1 million copies of the book, and donated $600,000 in "profits" from the book to charity. But, you know, you can't compete with free (and public domain).