The argument to crowdsource archiving of content by making digital copies of films freely available falls flat (for now) due to the large size of an uncompressed film vs. the bandwidth and space available to move and store it.
The reason film originals sit in cans on the archive shelf is that 1.) the film is going to last hundreds of years if properly kept, much longer than any digital medium in use today, and 2.) the film original is the highest possible quality copy of the content.
Not long ago DVD's were thought to be the pinnacle of consumer video quality, even though they hold a small fraction of the information on the original film. Now that we have BluRay and HD television we get an idea of what we were missing. But even those formats, thought by the average viewer today to be the best possible rendition, still only hold a fraction of the information of the original.
Giving everyone a "copy" of these films will preserve some but not all of their value. The mold -- or some other form of decay -- will win in the end.
Ballmer is not ignorant, and his comments are not inconsistent with his company's practices.
Last time I checked, Microsoft is using a number of business models across their vast range of products and services. The primary one -- that has been fattening the portfolios of MSFT shareholders for many years -- is to set standards for OS and core applications (Windows, Outlook, Office for example) and then charge the user and developer community rents for using them, primarily through hardware bundling and upgrade licenses.
Does Microsoft give out some stuff for free? Of course they do. Several examples have been cited by earlier posters. Is that Microsoft's business model? Not really. I get free samples at Costco and that's part of the reason I like to shop there, but Costco isn't an example of a "free" business model. To be honest, Google isn't either. Google rakes in oodles of dough by attracting eyeballs to "free" products like gmail, search, etc., and then selling them to advertisers. When someone buys the advertisers' products as a result of that exposure, they are indirectly compensating Google for the service that attracted them in the first place.
The point that I have not seen emphasized here is that Google is a media company while Microsoft is a software company. At this point they cannot compete with Google in the mobile space or anywhere else on the same terms (free to the consumer) so they are going about it the way they know best, through hardware bundling.
Ballmer is correct to critique the "free" model from the standpoint of Microsoft, since its non-free products are still making lots of money; and its "free" (i.e. advertising-supported) products are business flops since they have not gotten anywhere near the critical mass of users (eyeballs) as Google. Maybe the IT industry can actually support more than one business model.
These distressed assets are already illiquid, but they were bought by investors who expected them to be liquid, based on the fact that they were actively traded on the securities markets at the time of purchase.
If you are investing for the long term (as the US government implicitly is) it does not matter if some of the assets in your portfolio are not liquid, i.e. immediately convertible to cash. Eventually, when economic conditions improve and when the underlying value of the assets (based on the borrowers' ability to repay) can be determined, they will become liquid again.
Having these illiquid assets held in Uncle Sam's balance sheet, rather than the balance sheets of thousands of investors, actually increases liquidity in the financial system.
The assets are not "dead." Housing has real economic value, and claims on borrowers' income (i.e. "loans") also have real economic value. Speculators overbid and overpaid for these assets and now nobody wants to touch them. The government is the only entity with the resources and the patience to sort out the fair value and wait out the markets.
Fair value can be determined by textbook financial formulas -- present value of future cash flows, discounted for risk -- and by the restoration of stable markets. I agree that this would be a bailout if investors are compensated for more than fair value.
The only scenario in which both homes and loans would be worthless is one in which the entire nation is bankrupt, which is pretty unlikely, but less unlikely if this credit crisis is not resolved.
I may be a fool to respond to this comment, but for the benefit of readers who might misunderstand the situation and fall prey to this line of argument...
The $700B would not be "spent" or "taken out of the economy" and the government will not have to increase the national debt or take up a collection from taxpayers to finance the program.
If done correctly, the federal funds disbursed would be used to purchase distressed assets at fair value so that the holders of those assets can have currency to go about their business. Those who sell these assets to the government will have already incurred their losses, and are not being "bailed out" since they are not being compensated for the losses. They just can't sell the assets on the open market for anything close to fair value because of panic and lack of liquidity.
Here's a simple analogy: the carnival just left town but you have a pocket full of ride tickets that you spent $1.4 Trillion to buy. Lucky for you, Uncle Sam will buy your tickets for 50 cents on the dollar since he can wait until next summer for the carnival to roll back into town.
Housing price inflation was the carnival, mortgage backed securities are the ride tickets, and the capital markets are afraid the carnival won't come back next year. Let Uncle Sam buy the tickets.
The tension here is from Adam's attempt to split the world of thought about the Internet into two camps. In general, these kinds of polar categorizations are simplistic and anti-intellectual. The world of ideas and culture has many sides.
But it is not difficult to see that people who write and speak about Technology tend to have a polar bias. One group (whom Adam calls the optimists) feels that the Internet has enabled profound changes in the way we communicate, trade, and behave, and that these changes are positive because they remove unwanted barriers between people and information. The other group (pessimists) feel that this surge of free information is on the whole destabilizing and damaging: it promotes mediocrity, mutes the intellect, and minimizes the human experience.
The same arguments were made on both sides about Television (fifty years ago) and, for that matter, the printing press (about 400 years ago).
As far as being branded as an "Internet optimist," I would wear this badge proudly. It marks a progressive thinker, and someone who has faith that humanity will ultimately prevail over technology.
I think you are overlooking a few facts of the story.
Google does differentiate between "news" and "the web" when performing searches. It also offers a service called "Google Alerts" where you can have alerts sent to you via email whenever a new link appears in a selected category (news or web). On Monday, people who had subscribed to Google news alerts about United Airlines received a "news" article saying that the company was filing for bankruptcy.
I agree that Google is not liable for the error, but it does open itself up for criticism for tagging web pages as "news" that are neither new nor newsworthy.
As for this comment "IF YOU TRUST ANYTHING OTHER THAN THE WALL STREET JOURNAL AND BARONS (sic), WELL YOU DESERVE A 75% LOSS," couldn't you have made the same statement about Bloomberg before Monday?
Sorry, Travis. You've just described the "free rider syndrome."
Physics lesson: the energy required to move an object, such as a postal truck, is a function of the mass (accelerating the mass to velocity, plus overcoming internal friction to sustain the velocity, which is largely a function of weight -- I am disregarding air resistance which is more complex). Bottom line: If you increase the mass, you increase the energy requirement.
Technically, to operate a single postal vehicle with one 15 gram DVD in it requires slightly more fuel than to operate one without a DVD in it, although it would be such a ridiculously small amount of fuel that it would not even be worth calculating. And yes, it is a MUCH more efficient means of transporting DVDs than devoting a single car trip to Blockbuster with each pickup or return. Netflix has a much smaller carbon footprint than Blockbuster in that regard.
When you consider the scale of Netflix, however, the footprint is not insignificant. According to company and postal service research, Netflix received almost half a billion disc returns a year back from its customers. If you consider that each of those discs was also shipped to the customer, that is nearly a billion discs moving through the mail between a Netflix customer and a warehouse each year.
At 15 grams each, this annual movement of DVDs weighs well over 30 million pounds. What is the incremental carbon footprint of shipping 30 million pounds of freight in a year? Honestly, I don't know, but I am confident that it is a lot more than zero. And I suspect that it is a lot more than the incremental carbon footprint of shipping the same information in the form of "bits" over fiber or copper.
The International Olympic Committee only granted (sold) NBC the rights to retransmit the games within the United States. They would be violating their contract -- and the local broadcasters in the country where you live would have a grievance against them -- if they did not make an effort to restrict access outside the US.
Incidentally, broadcasting the Olympics is not a profitable enterprise. The rights are extremely costly (NBC paid $2.2 Billion!!!), as are the production costs (flying equipment and crews around the world, leasing satellite and fiber capacity for backhaul) and despite some passionate fans, it is generally not a well-watched event in the US. This year's Olympics is an anomaly due to the Michael Phelps phenomenon. I predict a similar anomaly in registration for swim team ;-).
So is NBC's claim that people still like to watch TV on TV that far fetched? Check out this report from Nielsen released this summer. They found that while growth in broadband consumption of programming is strong, people are spending more time than ever watching traditional TV.
So 93% of viewers watched the Olympics on TV. Does the poster really believe that if NBC had used different video viewing software, this would have dropped below 50% in favor of online? This is difficult for me to believe.
It is very difficult to post a critique about a post that I can relate to so vividly that I feel that I could have written it myself.
But ... what's the point?
I mean no disrespect, but haven't you just described the exact same experience that approximately hundreds of thousands of other customers have had? Hundreds every day? If this had been an Andy Rooney segment (which it felt like at times), I would have tuned out by the second or third "Page Down."
I'm not saying that tragically bad service is acceptable, but it is certainly not exceptional. Why not use this forum to confront AT&T about their ridiculous claim of award-winning customer service instead of just dishing about it? Let's put McDonalds' on the hot seat for non-working electrical outlets while we're at it.
For a blog that regularly skewers the mainstream media for lacking relevance, it should be noted that the average writer at a third-tier newspaper reporting this story would have at least called AT&T public relations for a comment... Or have confronted the bonehead legislator who gave AT&T its monopoly...
Is your solution really just to go back to Comcast? What good will that do? Instead of complaining, let's expose who is accountable for these broken customer relationships and telecom markets and try to make the situation better for others.
XM-Sirius won the anti-trust battle by arguing that satellite radio is a technology, not a market. Merging will not reduce competition but will enable them to compete better with terrestrial radio, MP3 players, and all the other things people listen to or get their news from other than satellite radio.
DTH television is in the same state, especially now that television shows and movies are available for download to a variety of devices that sit comfortably alongside the living room TV (i.e. XBOX, PS3, AppleTV...).. Not to mention that the Telcos have come on strong. DirecTV and Dish don't just compete with each other, they compete with Comcast, Verizon, AT&T, etc.
Satellite TV is also a technology, not a market. If DirecTV and Dish merged, what would they have a monopoly on? Little steel discs on people's roofs? The vast majority of consumers have alternatives.
Another issue is the inefficient use of satellite resources with two redundant full-service DTH operators. There are only so many orbital slots available in the sky over North America, and it is redundant (and expensive) to have two satellites both beaming the same stuff. The satellite industry likes a crowded sky because then they can raise transponder fees and sell new technologies like Ka band and MPEG-4 to squeeze out capacity from existing slots, but this raises costs for the consumer.
In today's competitive landscape, does anyone really believe that a DirecTV/Dish merger would result in higher rates for satellite TV?
I think some of the facts of this story have been lost in translation. If you read the actual Pew report cited by the blog cited by this post, you will conclude that as of April 2008 year-over-year broadband penetration growth was strong (from 47% to 55%, a 17% increase).
The statement that growth has stalled in 2008 YTD is not emphasized in the report, and is probably a mis-reading of the line graph (the nine-month period from 3/07-12/07 is represented with the same range on the x-axis as the 4-month period from 12/07-4/08). It looks like the slope has flattened in 2008, but this is just because the graph is non-linear in the x-dimension.
Here is the actual text of the article: "The rate from March 2007 to April 2008 was 17%; this compares to the 12% growth rate from March 2006 to March 2007. It is also worth noting that the April 2008 number for broadband adoption at home is little changed from the 54% figure from the Pew Internet Project’s December 2007 survey."
The "also worth noting" clause is insignificant since the previous samples were taken annually, and we are given no information about the seasonality of the trend. I would guess that broadband growth is more prevalent in the fourth quarter when students start school and new computers, gaming systems, etc. are purchased as gifts.
Seasonality speculation aside, even if there was a slowdown in early 2008, the annual growth rate including this 'slow' period accelerated 42% (from 12% to 17%) compared to the previous year.
The main counter-trend that the article discusses is the flat-to-negative growth in low-income households.
This is just political maneuvering. XM is settling in order to "play nice" while their merger with Sirius awaits final approval. They can't fight on every front at the same time and with the same force.
One nuance about Radiohead's release of "In Rainbows" which can be overlooked: they did not release a CD in the traditional sense of granting copyright to a publisher. They licensed it to the publisher, and this license is constrained by time and/or units sold. After the license term is over, the rights will revert back to the owner of the copyright (Radiohead).
The licensing model is not usually used for popular music artist new releases; it is more likely to be used for thematic compilations (Best of the 80's Party Collection) where the licensor is selecting a track with predictable market value to re-release and the licensee is granting limited use for a set fee.
In essense they have combined a high-risk model (choose your price download) with a low-risk model (licensing) to create their overall distribution strategy. Radiohead has the level of success necessary to take these risks; due to their popularity and partnerless approach they are less concerned about maximizing revenue and more likely to experiment.
The AP article cited was a relatively neutral exposition about volunteer translators. Only one quote made any point about the foolishness of contributing free labor to benefit a for-profit enterprise -- and the point was directed at the volunteers, not Facebook.
This post is a little hyperbolic, methinks. Oh wait, am I getting compensated for this post??
My response to the group meeting question: the phenomenon is not limited to the classroom. I work full time in a corporate environment while taking courses in a part time master's degree program. I've seen plenty of both good and bad use of laptops in the classroom. And I've seen plenty of good and bad use of blackberries and other devices in the corporate meeting room.
I have been in classes where a professor's question to the class is met with silent response, largely due to mass immersion in reading emails, carrying on IM sessions, checking portfolios, or even watching basketball playoffs.
The point here is not whether professors can deal with students not paying attention; the real issue is that students short change each other by not participating in a community of engaged learners. If students cannot adopt norms on their own that promote learning in class, then maybe the University needs to enforce them by fiat.
That said, turning off Internet access is extreme. It overlooks the real problem (behavior) in targeting the false problem (technology).
... but not "worthless." (Please note the single space in the subject) I agree wholeheartedly with Mike's post about ValuePrice. It's a familiar argument and anyone who stayed awake in Economics 101 should have the capacity to grasp the concept. Furthermore, it is plain to see that media business models are changing as a result of this shift in the economics of distributing content.
I do think Handel has a point about the devaluation of "content" as a generic description for the words, sounds, and pictures that people consume via the media. To categorically (and perhaps unfairly) pick on User-Generated Content, for a moment: there are so many voices which are now being amplified by Internet blogs (like my own, for instance!) that would never have had seen the light of day in the pre-Internet media.
Yes, this is good, because it gives people (like me) with the occasional flash of brilliance to share it with the world. But it also devalues the work of profoundly talented creative work. The "signal to noise ratio" has declined. More quantity, less quality, anyone? It is as if an art museum invited the public to hang their own paintings in the empty spaces on the wall. The museum visitor would get to see a much more diverse array of work, but the greatest works would be crowded out and get less attention.
Don't get me wrong, I support the democratization of content and wouldn't change a thing. But with the arrival of a new "golden age" of interconnectedness, an old "golden age" of nobility in the creative community falls by the wayside. While we cheer the new arrival, it is appropriate to take a moment to mourn what is dying. In my humble opinion, that is all Handel is suggesting.
This case didn't, and shouldn't, provoke criticism of "YouTube" or "The Internet" since no part of it actually played out on the web. It further illustrates the video makers' immaturity that they allegedly believed the YouTube community would tolerate a clip of a violent assault.
The irony of the whole thing is that many more people have seen the video replayed endlessly on national newscasts than would have ever seen it on YouTube.
Please check your facts. NPR receives the majority of its funding from corporate underwriting and listener contributions, as is obvious to anyone who has had to sit through the sponsor tags at the end of every program, or the interminable pledge drives.
The tempest over Arrington's words is not because they are a groundbreaking statement of economic theory, but because his statement reduces human expression to purely economic terms.
In the context of an economic discussion, this is perfectly appropriate. In the context of human expression, this is as inappropriate as assigning economic value to your children.
In this debate I fault both Arrington (for failing to nuance his statement) and Carr (for rhetorical absence - his post is nothing but a stammering "did he just say that?").
In general, this seems to be what many of these "debates" about the economics of internet music amount to. One writer cites a basic and widely-held principle of economic theory, then another writer expresses shock at the shallowness of a purely economic worldview. Duh.
There is also a persistent "artist as victim" myth that I have commented on before. Artistic talent is a gift, and people who have made sacrifices to create art and share it with others deserve respect. Same goes for intellect, athletic talent, etc. But simply having talent does not entitle one to a paycheck. Part of being a human being is figuring out what to do with your gifts, whether a professional outlet (a market) or other non-monetary ways to cultivate and share them with the world.
The other myth is that art has only recently become "polluted" with markets and money. A few years ago I toured Europe and had the privilege of seeing many great Renaissance paintings and sculptures, almost all of which were commissioned by patrons of the arts, who in that time were royals or wealthy landowners.
With the democratization of content made possible by the Internet, maybe we're in the middle of a different kind of renaissance right now: a societal realization of truth and beauty through humanity. If scientific thought and artistic expression can once again be united, then tired arguments of entitlement for artists or anyone else will fade into irrelevancy.
Billy Bragg's concern, as expressed in the NYT article, seems less about Bebo's legal obligation and more the "moral" obligation that he felt founder Michael Birch had made to Bragg personally, to compensate artists for their contributions of content to the site.
Anyone who has ever invested time and effort into creating something (anything) that is valued by others should be able to relate to Bragg's sentiments on some level.
That said, I agree with the post. The artists were not investors. If Birch had lost $700 million instead of profiting by that amount, Bragg would not be making a plea for the artists' share.