by Mike Masnick
Mon, Jul 12th 2010 4:10pm
by Mike Masnick
Fri, Jul 9th 2010 7:39pm
from the yet-again dept
Reader Ephraim points us to a recent post at the Freakonomics blog that highlights how the restaurant business absolutely thrives creatively, despite a lack of copyright protection. The main example: the rise of Korean taco trucks in LA. As you may or may not know (and trust me, you're better off if you are familiar with this trend), a few years back, some enterprising folks set up a Korean taco truck in LA called Kogi. It quickly became a huge sensation, in part because the food is awesome and in part through smart marketing, including being one of the first food establishments to actively embrace Twitter.
But what happened next is quite interesting. Throughout LA (and now around the country) there's been an explosion of Korean taco trucks. And, it's not just limited to trucks. As the article notes, the large chain Baja Fresh is now offering Korean tacos as well. Believers in strong copyright have trouble explaining why this happens. According to them, without copyright as an "incentive to create" people won't innovate because they can't be rewarded, but that's not what's happening at all:
As readers of our past posts know, the conventional wisdom says that in a system like this no one should innovate. Copyright's raison d'etre is to promote creativity by protecting creators from pirates. But in the food world, pirates are everywhere. By this logic, we ought to be consigned to uninspired and traditional food choices. In short, the Korean taco should not exist.So why isn't the "theory" matching up with reality? The author's come up with a few theories, but it seems to me that the biggest reason is the same one why the arguments that copyright is needed to get people paid is so wrong: they're not selling copyright. They're selling a product. And you can still sell your product whether or not someone can copy you. In fact, if someone can copy you, you have incentives to keep innovating and adding extra value that the buyer can only get from you -- such as prestige or ambiance or experience.
But the real world does not follow this logic. In fact, we live in a golden age of cuisine. Thousands of new dishes are created every year in the nation's restaurants. The quality of American cuisine is very high. The so-called molecular gastronomy movement has innovated in myriad (and often bizarre) ways that have filtered down to more modest restaurants all over the world. Television shows such as Top Chef and Iron Chef challenge contestants to mix and match improbable combinations of ingredients with little warning or time. Our contemporary food culture, in short, not only offers creativity; it increasingly worships creativity--and many of us worship it right back.
The authors also point out another reason (similar to the one we've noted about comedians), which is that there are social norms involved as well, focused on reputation. If you're seen as just copying the works of others, you are looked down upon, and reputation is quite important in these fields. And, of course, reputation and social norms function just fine without copyright.
The authors of the blog post conclude with a dead-on assessment:
The key point is that culinary creativity is flourishing, and it doesn't depend on copyright. Like fashion, food challenges our preconceptions about the economics of innovation--and perhaps should challenge our legal rules as well.Pretty much everywhere we look, when we find industries or fields where copyright doesn't exist or isn't relied upon, we see the same thing: much higher levels of competition, more and faster innovation and an overall thriving industry. This is the kind of actual evidence that never seems to be discussed in debates over strengthening copyright laws, but should be. It also explains the supposedly "counterintuitive" research that has shown as there has been less respect for copyright in movies, music and books... the rate of production for each of those has increased as well (again, contrary to what copyright system defenders will tell you).
At what point can we put the "without copyright no one would create new content" statement into the mythbin of history?
by Mike Masnick
Thu, Jul 8th 2010 11:17am
from the the-debate-goes-on dept
I definitely understand the general rationale for this line of thinking, but I'm afraid that people are going too far with it, and it's actually harming the value of free music in some cases. Obviously, it's great if you can get something (monetarily or not) in exchange for the music, but putting up a barrier can also be harmful. First of all, if it's truly a brand new fan who hasn't heard your work, they might not be willing to commit to you in that way. Especially when it comes to Tweeting or Facebooking an artist. If I don't know the artist, there's no way I'm mentioning them to all of the people who follow me on various social networks. On the flip side, when I do see friends who make those kinds of Tweets, they feel like spam. They're not at all convincing and they don't feel authentic. They feel forced. Honestly, when I see people post social networking messages in exchange for free tracks, it actually makes me less interested in the musical act, because I feel like they need to beg for attention, rather than letting the fans organically give them attention.
Finally, part of the reason the whole "free music" world exploded the way it did was because of the massive simplicity and lack of friction in music sharing, which made music discovery and promotion much more seamless and easy. Putting required friction back into the process seems like a mistake, and will likely just drive fans (or potential fans) either to other artists or back to the same file sharing systems that remove that friction. That doesn't help anyone.
So rather than requiring an explicit exchange, it always seems a hell of a lot more effective to offer the content for free, but ask for the exchange as a voluntary setup: "If you like these songs, tell your friends or sign up for our mailing list" or something like that. This way it's not forced. It's not inauthentic. It's not friction. It's about trusting the listeners, rather than trying to force them to act in a certain way.
by Mike Masnick
Wed, Jul 7th 2010 11:31pm
from the join-the-club dept
Take, for example, the street-level bookshop at Politiken, the leading newspaper in Denmark. I stopped in there one drizzly Saturday morning last Fall after teaching in Poynter's Scandinavian Summer School. I picked up a couple of travel guides and an English language version of a popular Danish novel. But I paid my bill and left the shop oblivious to the range of products and services available to Politiken subscribers via its Politiken Plus loyalty program.This actually fits in well with some of the suggestions that people came up with back at the Techdirt Saves* Journalism event last month, highlighting how publications can focus on building up services for the community which keep them loyal to the publication and the community itself.
"We can say 70 percent of (our subscribers) use Politiken Plus during the year," the paper's sales and marketing director, Poul Skott, told the authors of the WAN report. "The more products we have the better ... the harder it is to say good-bye to the newspaper. It's going to hurt a bit, because you can only get a Plus card as a newspaper subscriber."
This Google translate page will give you a sense of what the program offers, including special offers on travel, restaurants and theater, and how the activities and deals of Politiken Plus are integrated into the newspaper.
It sounds like the early results from such programs suggest they work well (or, at the very least, better than comparable newspapers that don't use them). Still, reading through the analysis, it still feels like most publications are looking at these programs as ways to "retain subscribers," not as a central reason to buy. That is, they're still focused on "selling the newspaper" with this is a bonus add-on, rather than trying to sell this bundle, which is made more valuable by getting the news as well.
by Mike Masnick
Wed, Jul 7th 2010 8:23am
from the how-do-these-people-keep-their-jobs? dept
After spending several days here in Los Angeles this week, talking to execs, talent and others who toil in the entertainment industry--I can't say what I am hearing is that much different in terms of the continuing frustration with the lack of decent business models to replace the ones that have worked for so long and been so lucrative for the entertainment and media industry.This is how disruptive business models work. The disrupted whine and complain about how the disruptors haven't shown them how to continue making the same monopoly rents they made in the past. But that, of course, ignores the nature of disruption. Disruption doesn't work by having someone come along and show the legacy players how to exactly replicate their old profits. It's the exact opposite of that. Disruption is when others figure out how to break down the barriers to do something more efficiently, and undercut the old business model. But that doesn't mean that there's anything wrong for the underlying benefit that people get.
More entertainment content -- movies, music, books -- are being made today than ever before. Anyone bitching and complaining about how the internet is "destroying" the industry isn't paying attention. What they should be focused on are all of the massive new opportunities created by this sudden glut of content, combined with massively more efficient (and often free) methods for content creation, distribution and promotion.
From music to movies to television, the biggest minds here still sound perplexed as to what will finally be the golden ticket to carry them through to the inevitable next era of digital distribution.That single sentence basically describes the problem. These guys are sitting back and waiting for someone to hand them a golden ticket that replicates the old ways of doing things. That's not how it works. No one gave the buggy whip makers a golden ticket that let them keep their old lines of business going.
But the lack of a golden ticket most certainly does not mean there are no business models. Those who are embracing new business models are finding plenty of opportunity to do amazingly well (in fact, better than they did before). But, for the most part, it involves hard work and multiple streams of revenue. It's not the old "sit back and let the cash roll in" model that the industry is used to. But, some of us think that's a good thing.
"Why is the consumer always right?" said one exec to me this week in a typical statement. "You can't have a business if there is no business model."It's a good thing the exec who said that did so anonymously, because otherwise his or her board of directors should be calling for him to be fired. The consumer is always right in a competitive marketplace because if you don't serve them, your competitors will. That there are still entertainment industry execs who don't get this is scary. And, saying there are "no business models" is so wrong that it again seems troubling that this exec still has a job in the industry. We spend a lot of time pointing to all sorts of working business models every day. They may not be the "golden ticket" that this exec wants where he gets to sit back and relax and see the cash flow in, but they can actually bring in a lot more money by leveraging a more efficient system, connecting better with fans, and giving them a real (scarce) reason to buy, rather than trying to bully them into paying through artificial scarcities.
From there, Swisher reverts back to Prince's statements:
If you remove the sillier parts of his quote that preceded it, such a statement is not unreasonable from an artist who wants to be paid for his creative efforts.The role of the disruptor is not to make life easy for the disrupted. Swisher and these execs seem to be confusing the role of certain folks in the legacy industry with the overall entertainment industry itself. As noted, the entertainment industry is thriving. More movies, music and books are being created. More money is being spent. It's just that it's going to different players. There's no reason to "figure out a way to keep talent from being dragged into the future." The opportunities and wide open path are there. The problem isn't that tech leaders haven't made it easy for them. They have. It's that these guys are so myopically focused on the way they used to make money they don't realize that the new opportunities are already there and have been embraced widely by others.
Thus, instead of mocking that sentiment, perhaps it is time for tech leaders to figure out a way to keep talent from being dragged into the future without so much kicking and screaming.
by Mike Masnick
Wed, Jul 7th 2010 5:54am
from the the-system-is-designed-to-trip-you-up dept
In his defense, he claimed that he'd never even heard of PPL, and since he had a PRS license, he assumed (quite reasonably) that he was in the clear. Now, I'm sure that defenders of the system will quickly step up and say that it was his responsibility to find out what music licensing groups you have to hand over a tithe to each year, but all this guy wants to do is turn on his radio. For most people, it's just common sense that you shouldn't have to pay a fee just to turn on a radio in your barber shop. And then, once you're informed that this totally nonsensical situation is, in fact, true, it seems quite reasonable to then assume that one license will let you turn on the radio. Finding out that you need two (or more) separate licenses just to turn on the radio (even though the radio already pays its fees and the music acts a promotion) just seems ridiculous for everyone who isn't a recording industry exec or a long term copyright lawyer.
Copyright is not supposed to work this way.
by Mike Masnick
Tue, Jul 6th 2010 1:26pm
from the these-things-evolve dept
But, what's interesting is what's happened since Star Wreck. As we noted last year the filmmakers behind Star Wreck have been busy at work on their latest project, called Iron Sky, and they were experimenting with a sort of hybrid funding model that included a fair amount of fan support, whereby fans could buy "War Bonds" to crowdfund a portion of the movie.
Wired is now reporting that the film has raised 90% of its $8.5 million budget, and they're close enough that plans are moving forward to get the movie production underway. Again, this particular effort was a hybrid. Part of the money is fan funded and part of it involves traditional movie investors.
But what's most interesting to me is how this story progressed. It went from some fans messing around and creating a rather impressive film visually speaking, to a new $8.5 million production. $8.5M is still a small amount from a movie-making perspective, but it's not nothing. Plenty of excellent indie films have been made for a lot less. And, of course, you never know what happens next, after this film is made as well. And that was really the point. It was never that the model that created Star Wreck was the answer, but that the overall ecosystem is evolving, and its evolving to a world where the fans and the community really area a part of things, rather than looked at as evil people who just want stuff for free. Embracing your community leads to wonderful possibilities.
by Mike Masnick
Tue, Jun 29th 2010 7:47am
from the it's-a-sign-of-a-market dept
Almost every good idea has already been built. Sometimes new ideas are just ahead of their time. There were probably 50 companies that tried to do viral video sharing before YouTube. Before 2005, when YouTube was founded, relatively few users had broadband and video cameras. YouTube also took advantage of the latest version of Flash that could play videos seamlessly.Similarly, just because there are so many companies in a market, it doesn't mean any of them are really executing well:
Other times existing companies simply didn't execute well. Google and Facebook launched long after their competitors, but executed incredibly well and focused on the right things. When Google launched, other search engines like Yahoo, Excite, and Lycos were focused on becoming multipurpose "portals" and had de-prioritized search (Yahoo even outsourced their search technology).In fact, this succinctly reiterates a whole bunch of the points that we've discussed repeatedly over time. First, there's a big difference between ideas and execution. Just because others are in the market (and even well established), it doesn't mean you can't do a better job. It also highlights the difference between invention and innovation, where invention is just coming up with something new, but innovation is really bringing it to market successfully. Facebook and Google are both great examples of innovative companies who didn't really "invent" their initial markets.
And Dixon then brings it back to the value of imitating, on which there's now an excellent book out (which I'm still only partially through) called Copycats. Dixon points out that in being a "follower" initially, you can build off of their work:
The fact that other entrepreneurs thought the idea was good enough to build can be a positive signal. They probably went through some kind of vetting process like talking to target users and doing some market research. By launching later, you can piggyback off the work they've already done.On top of that, I would argue that you can also avoid some of the mistakes that they make.
In the end, he points out that worrying about competitors is really usually the least of your issues as a startup:
Startups are primarly competing against indifference, lack of awareness, and lack of understanding -- not other startups. For web startups this means you should worry about users simply not coming to your site, or when they do come, hitting the BACK button.Consider that the startup equivalent of the messages told to tons of content creators these days: that obscurity is a much bigger threat than "piracy." In the same way that "piracy" is really just "competition," those too focused on that sort of competition will often miss the more important fact that you need to find actual, real users and customers who are going to stick around.
One other point on all of this: when you limit a market to just one player (via monopolies like patents), you can actually lose out. You don't get those other players in the market that you yourself can piggyback off of as well, and there's less incentive to get the formula right. Competition is a good thing in how it drives a market, but if you're working in a startup, you shouldn't necessarily be so worried about it directly.
by Mike Masnick
Thu, Jun 24th 2010 3:41pm
from the things-to-think-about dept
While I definitely believe this sort of model can make a lot of sense in certain areas, I don't think it's right for everyone, and it certainly can create some potential problems -- especially if the content creator doesn't live up to expectations. Kickstarter got a lot of publicity back in May when one of its projects, called Diaspora, for a "distributed" social network got covered in the NY Times at the same time as there was a lot of fuss about privacy concerns on Facebook. That resulted in the project -- which had only been seeking $10,000 to let four college kids work on this project over the summer -- raising over $100,000.
Now, many have looked at this as showing off the power of Kickstarter (though, others might argue it really showed off the power of the NY Times). However, Clay Shirky pointed us to a critique of the Diaspora/Kickstarter "success" that points out that it could actually end up being bad for both Kickstarter and Diaspora:
It is kinda alarming as this pressure to deliver something by the end of the summer something so complex is not necessarily going to help them. The open source community have been trying to develop peer to peer web solutions for ages. There are many reasons why we have not seen a strong distributed social web yet. Some of these reasons are technical, other are social, it's not impossible, but also not trivial.To some extent, I also wonder if the research Daniel Pink talks about in Drive can also come into play. By adding more money to the mix, it may actually make it more difficult for the developers to build something as good as they might have otherwise. Now they have so many more expectations and so much more attention that it makes it that much more difficult to live up to expectations, even if they actually can achieve what they initially set out to achieve.
It is not unlikely that Diaspora would fail to deliver on it's promised milestone by the end of the summer. This should not be a big deal for an Open Source project with developers scratching their own itch. But in this case, the Facebook users frustration, Diaspora's media attention and the actual $$$,$$$ make this an itch shared by many many more users and only 4 students are given the scratcher.
The other thing that might make this tricky is the same point I've made a bunch of times about the difference between ideas and execution. One of the things you quickly learn at a startup is that the initial idea is meaningless. Once you get to work on executing, that idea will change daily (if not more often). You may have a general idea, but reality gets in the way, and you adjust and adjust and adjust. Often, what comes out in the end is entirely different than what you set out to do, but that might not be a problem. It's quite rare for a project to set out towards a specific point and end up at that point.
For most startups, there's flexibility there. As the execution happens, they can shift course along the way. But in a situation like this, where thousands of people have donated with specific expectations, changing course is difficult, if not impossible, even if it turns out to be the most important thing for the project itself. If they do change course along the way, for the good of the project, suddenly people may get upset about a sort of "bait-and-switch." This doesn't mean that I don't like the Kickstarter model in general. But I can see where it could cause trouble in certain situations. For things like an album, where the deliverables are clear and understandable, it can work fine. But for a software development project, it could be a lot more complex, and there can be some serious pitfalls. Combine that with having a project massively overfunded, and it could lead to trouble.
by Mike Masnick
Thu, Jun 17th 2010 3:47am
from the it's-not-so-bad dept
Right now, in meetings at corporations around the world, the wise are suffering. They are trapped in rooms where debate rages over how to solve a problem. The rub is that the problem has already been solved, just not by someone in the room--and solutions from outside are ignored. This is the disease known as "NIH," or "Not Invented Here" syndrome, and it's alive and well in 2010. Despite our many technological advancements in communication, none have eliminated this perennial waste of time. Why is this problem so hard to shake? Will we always be confronted with people who insist on reinventing wheels?It's good to see more people discussing this basic topic, as the cultural stigma against building off of what others have done is really quite disturbing, and underlies many of the arguments in favor of bad copyright and patent laws. Getting people to realize that building on the works of others has produced wonderful things, while also being much more efficient, is a key to rethinking how we view concepts like "intellectual property."