by Mike Masnick
Thu, Mar 24th 2011 9:25am
Yet Another Study Says Enforcement Won't Bring Back Consumer Spending On Music; But Will Strangle New Biz Models
from the stop-focusing-on-enforcement dept
- The DEA gets the balance between copyright enforcement and innovation wrong. The use of peer-to-peer technology should be encouraged to promote innovative applications. Focusing on efforts to suppress the use of technological advances and to protect out-of-date business models will stifle innovation in this industry.
- Providing user-friendly, hassle-free solutions to enable users to download music legally at a reasonable price, is a much more effective strategy for enforcing copyright than a heavy-handed legislative and regulatory regime.
- Decline in the sales of physical copies of recorded music cannot be attributed solely to file-sharing, but should be explained by a combination of factors such as changing patterns in music consumption, decreasing disposable household incomes for leisure products and increasing sales of digital content through online platforms.
Tue, Mar 22nd 2011 4:15am
from the dude-where's-my-math dept
Not considering technical details (every wall can be brought down), even by its own business model the New York Times' paywall is doomed to fail.
Last Friday's Financial Times had some interesting numbers.
- Fact 1: According to analysts, the New York Times only needs to convert 1 to 10 per cent of the online visitors in order for the model to pay off.
- Fact 2: NY Times chief executive Janet Robinson has stated that they only expect about 15 per cent of visitors to encounter the paywall, since visitors can read 20 articles per month for free.
- Fact 3: Full website access and the mobile app are bundled for $15 per month. For the iPad app + web you pay $20 per month. $35 for all three.
- Fact 4: One analyst argues that the NY Times could earn $66m per year if it converted just 1 per cent of the visitors. This would mean they go from paying nothing, to paying (at least) $195 a year.
There is no way these numbers add up. Consider fact 1 and fact 2. First of all only 1 per cent might actually not be all that easy, let alone 10 per cent. Secondly, the 1 per cent is misleading, as they'll actually have to convert 1 to 10 out of every 15 visitors to encounter the paywall. So they actually have to convert 6 to 66 (!) per cent.
Next, the pricing might be too high. $15 per month is a lot for consumers who are not used to pay for news online, especially since there's no additional value as Mike commented last week. I'm not saying nobody will pay, but dragging in the 6 to 66 per cent of the visitors will be challenging, to say the least.
I cannot imagine this paywall to be successful. They can probably kiss the $40m investment in the development goodbye.
by Mike Masnick
Thu, Jan 27th 2011 3:10pm
from the oh-look-at-that... dept
The altruistic ideal of giving away one's labor for free appeared credible in the fat summer of the Web 2.0 boom when social-media startups hung from trees, Facebook was valued at $15 billion, and VCs queued up to fund revenue-less "businesses" like Twitter. But as we contemplate the world post-bailout, when economic reality once again bites, only Silicon Valley's wealthiest technologists can even consider the luxury of donating their labor to the latest fashionable, online, open-source project.How's that prediction looking today? Right. (Update: For those who missed it, there's a sarcmark around that "Right")
In that article, he predicted the success of a bunch of websites and how they'd beat the "free" or "open" competitors. I picked out a series of those that I thought were particularly unlikely to happen and asked Andrew if he'd like to put some money behind his predictions -- with the bet being decided by who was right in October 2010 (I didn't choose all of Keen's predictions, because some of them were nonsensical and did not involve actual competitors). Here's what I wrote:
I'd like to make a bet. While there are different estimates as to how long any recession might be, the general consensus is that we should hopefully start pulling out by the end of 2009 or early 2010. So, let's pick a few of these that we can measure, and I'll bet Andrew Keen $100 (really money, Andrew) that in two years, on October 22, 2010, Wikipedia still gets more traffic than Knol, that Google is still much, much, much bigger than Mahalo (if they're even considered competitors any more), and that YouTube gets more traffic than Hulu.Tragically, when October 22, 2010 came around, I had forgotten about this original post. Also, Keen never responded to the bet, either because he was unaware of it or because he didn't really believe his own predictions. Either way, it looks like he made the right decision, whether on purpose or not, because every one of the predictions I made were correct compared to his predictions. Knol didn't beat Wikipedia. Mahalo did not beat Google. Hulu did not beat YouTube (though, Hulu is doing well for now).
If any one of those is untrue, I'll write him a check.
I had never met Keen when I wrote that original article, though I have had some fun conversations with him in the past year, so I'm interested to see if he's willing to revisit his original predictions and to admit that perhaps he was wrong with his analysis of how "free" and "open source" would be knocked out by the economic crisis.
by Mike Masnick
Fri, Jan 14th 2011 7:39pm
from the sound-familiar dept
from the reverse-predictions dept
And while Abnormal Use disagrees, I actually think physicist and Nobel laureate Arthur Compton's prediction was pretty dead on:
With better communication national boundaries will gradually cease to have their present importance. Because of racial differences a world union cannot be expected within eighty years. The best adjustment that we can hope for to this certain change would seem to be the voluntary union of neighboring nations under a centralized government of continental size.It's not quite there yet, but there certainly has been some movement in that direction. There is much better communication, and more widespread travel between countries. Europe and the EU certainly demonstrates -- to a limited extent -- his prediction of a voluntary union of neighboring nations with a centralized government of continental size. That's actually a pretty impressive prediction from 1931.
Then there's sociologist William F. Ogburn, who was pretty specific with many of his predictions. And, as the story at the link notes, some were dead on, while others... not so much. But, still, a lot of this does seem pretty damn accurate:
Technological progress, with its exponential law of increase, holds the key to the future. Labor displacement will proceed even to automatic factories. The magic of remote control will be commonplace. Humanity’s most versatile servant will be the electron tube. The communication and transportation inventions will smooth out regional differences and level us in some respects to uniformity. But the heterogeneity of material culture will mean specialists and languages that only specialists can understand. The countryside will be transformed by technology and farmers will be more like city folk. There will be fewer farmers, more wooded land with wild life. Personal property in mechanical conveniences will be greatly extended. Some of these will be needed to prop up the weak who will survive.You can check out the link for some of the other predictions (which may have been a bit further off...), and if you're feeling brave, let us know what you think will be going on 80 years from now. If we assume Mayo's life span expectancy advancements will continue, perhaps some of us will still be around to check back and see...
Inevitable technological progress and abundant natural resources yield a higher standard of living. Poverty will be eliminated and hunger as a driving force of revolution will not be a danger. Inequality of income and problems of social justice will remain. Crises of life will be met by insurance.
The role of government is bound to grow. Technicians and special interest groups will leave only a shell of democracy. The family cannot be destroyed but will be less stable in the early years of married life, divorce being greater than now. The lives of woman will be more like those of men, spent more outside the home. The principle of expediency will be the dominating one in law and ethics.
by Mike Masnick
Fri, Dec 10th 2010 6:48pm
from the oh-look... dept
The more that I've used it, the more that I've been remembering the stories we covered seven or eight years ago, where various tech "pundits" mocked the idea that anyone would ever want a camera phone. They were derided as some of the dumbest ideas ever, so I'd been meaning to put together a post looking back at some of those early predictions (and, um, modestly note that we correctly called what was going to happen). Just as I was searching for those old posts, someone passed along MG Siegler's perfectly timed (seriously, thanks man) post about how the point-and-shoot market is stagnating and beginning to die, as more people just use their smartphones instead. Siegler is rightly complaining that the camera companies haven't bothered to recognize the value of connectivity in their cameras, but like other products (standalone GPS? standalone mp3 player?) it seems increasingly likely that these will all be subsumed within the phone.
So, let's take a trip back and see. I pretty quickly found three such articles in our archives, talking about claims by two tech pundits, about how camera phones were a dumb idea and had no future. Two such articles were by David Coursey at ZDNet and the other by Andy Ihnatko at the Chicago Sun Times. Not surprisingly, all three original articles are gone from their original URLs, but the internet never forgets. Thanks to the Internet Archive, we have Coursey's first article where he states:
I'm not exactly calling camera phones a fad, but I'm not exactly not calling them a fad, either. My bet is there will be a relatively small number of people who shoot lots of camphone pics--in the U.S., we have a special term for these people: "12- to 24-year-olds." A much larger group will have a camphone but never click the shutter; we call those people "adults."Then we've got the second article where he complains about how bad the quality of these things are, and states:
I just think that, if God wanted telephones to be cameras, he wouldn't have given us separate eyes and ears.... I've found that the fun of the camera phone wears off quickly. The first few times one of these gizmos arrived at my house for review, I dutifully ran out and shot a bunch of pictures and sent them to friends. But the process was cumbersome, and the results not much better than the fuzzy pics my friend sent me. It wasn't too long before I stopped thinking of these phones as cameras.... the fact is that I just find them boring.And then we've got Andy Ihnatko's, where he predicts that the phones will never be cool. Well, technically, he notes:
Barring one of those reality-warping incidents in which Superman gets exposed to the wrong kind of Kryptonite and then there's this huge flash of light and all of a sudden, there's a big statue of Don Ho where the Lincoln Memorial should be, camera phones never will be cool.That was seven years ago. And yet, in the last couple of years, camera phones have become quite cool... and without a reality-warping incident. Andy works up a nice head of steam, before concluding with the following:
So: They take bad pictures, they're expensive to operate, they drain your batteries and in a worst-case scenario they'll cause your name to land on some sort of watch list. And yet more and more of them are manufactured every day. I'm baffled.However, as we noted in our response to Ihnatko at the time, the real innovation wasn't just putting a bad camera in a phone, but that people always had their phones with them, and that those phones were connected to the network -- and we noted that both things opened up all sorts of new possibilities, which we're now seeing in common usage every day. We also pointed out that complaints about quality were likely to go away, as quality would increase pretty quickly.
Look, somewhere here in the office I have a normal-looking digital wristwatch that also dispenses PEZ candy. After you've checked the time and determined that the Tokyo durable-goods market closes in just 20 minutes and thus it's time to start dumping some options from your company's pension fund, you push a little lever and a chalky cherry lozenge springs into your hand. It's stylish and fun.
I've never devoted a column to that one, either, because the PEZ watch had exactly the right sort of impact on the Industry. It's cool in a chocolate-and-peanut-butter sort of way, but it's certainly not the sort of thing that causes columnists and analysts to spend an hour leaning back in their chairs and speculating about where this technology will wind up in three years.
Which is a bloody shame, because on the whole, the PEZ watch is a much sounder investment than a camera phone. It's about as useful, for starters, plus it's a one-time $7.95 investment.
Technology advances. It's easy to condemn technology early on, but you need to be watching the trends and what makes new combinations valuable, rather than just comparing them to what else is on the market today. As we're seeing with the camera phone market today, compared to the point-and-shoot market, over time, the technology gets better and the new things that new technology allows start to become more and more important.
by Mike Masnick
Fri, Nov 12th 2010 12:34am
from the a-look-back dept
How about electronic publishing? Try reading a book on disc. At best, it's an unpleasant chore: the myopic glow of a clunky computer replaces the friendly pages of a book. And you can't tote that laptop to the beach. Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we'll soon buy books and newspapers straight over the Intenet. Uh, sure.I'm reminded of this thanks to Shocklee posting a link to it -- even though I've seen it many, many times before. The last time this article got passed around, it finally resulted in Stoll issuing a mea culpa of sorts, admitting he got it wrong. Newsweek, itself, has also sorta kinda published an apology/non-apology for the piece as well. I do wonder if the likes of Jaron Lanier and other internet pessimists will end up being forced to do the same in another fifteen years as well.
But the point of this post isn't to mock Stoll's bad predictions, but to note that this kind of thinking was hardly unique to Stoll at the time. It was, in fact, quite common -- and still is in some circles. But in rereading Stoll's article, I'm reminded of the naysayers we see around here pretty regularly, complaining about how these new business models we talk about can never work, or that they only work for the few "exceptions" at the margin.
They point out that "only" 30,000 music acts are making a living and snicker, as if that's proof that new models don't work. And, yet, in 1995, folks like Stoll could snicker at the idea of books being sold online. Later he mocks the idea that anyone would get involved in politics online, or buy an airline ticket online. That was only fifteen years ago. The internet enables amazing things, and it does so much faster than people believe, but it doesn't happen instantly. But ignoring basic trend lines and recognizing how technology progresses is only going to serve to make people look foolish down the road.
by Mike Masnick
Tue, Aug 17th 2010 12:16pm
from the mixing-mark-twain-quotes dept
This is not to say, of course, that web technology will dominate forever. Frankly, I still remember when the WWW first came along, and I switched from using Gopher to the web and figured that it was merely a stepping stone (as Gopher had been), and that something better would come along in about five years. I was clearly wrong on that. But it doesn't mean something else won't come along eventually.
In fact, much of both articles seems to be wishful thinking to support a view that the two authors -- Chris Anderson and Michael Wolff -- hope the world will come to eventually, rather than what seems to actually be happening. In both cases, it feels like they take the misleading graph at the top as the starting point, and then justify it, even though it's not painting an accurate picture. There is this new fascination with app madness as the latest new thing -- and companies love it because they think it gives them back some of the control they've lost to the open web. But, openness tends to find its way through. Closed systems are great for leading a charge to a new level, but they almost always stall out as more open solutions leapfrog them in the end. Apps are still digital, after all, and it's tough to keep anything digital closed for too long.
So I wouldn't fear the death of "the web," or of "openness" any time soon.
by Mike Masnick
Thu, Aug 12th 2010 10:10am
from the crying-wolf dept
There isn't necessarily anything new in the paper. Many of you probably know all of these stories, and they've been discussed at length over the years in posts and comments here on Techdirt. However, it's nice to put a bunch of them together in a single document just to highlight the same pattern over and over again:
- New technology
- Legacy industry freaks out saying the world is ending
- Industry flocks to DC & the courts to demand fixing
- Turns out that the new technology actually increases the market
And, yes, many of these technologies did require changes to business models -- which may have meant that some legacy players went out of business. But failing companies and failing industries are two totally different things. It's important to remember that. As Lemley notes in the paper:
The content industry, it seems, has a Chicken Little problem.
It may, in fact, be the case that the sky is falling. But, if you claim that the sky is falling whenever a new technology threatens an existing business model, the rest of the world can be forgiven for not believing you when you claim that this time around it's going to be different than all of the other times. Now, let's be clear, each one of these technologies changed the business model of the industry. They caused certain revenue streams to decline. But they also opened up new ones.