Brother Ernie wonders how Apple can convince people that an iPod that can store thousands of songs should be filled at a cost of 99 cents per song.,
Something's got to give. I don't think that it will be digital storage in which advances continue to outpace Moore's Law. I don't think it will be people's expectations. Thus, it is going to have to be the ala carte pricing point. However, I think the only realistic ala carte pricing point is going to be in the micropayments realm, which is unlikely to work. Thus, a subscription-based model will be the only likely, voluntary solution.
I wrote about the coming death of newspapers quite a while back. One of my points was that the decline in young readership spells doom. Vin Crosbie has more data to buttress that view.
Minnesota Opinion Research Inc. (MORI), presented data showing that young adults are increasingly less interested in newspapers. Scarborough Research found that 44.6 percent of young adults read a newspaper each weekday in 1996 but only 38.5 percent did in 2001.MORI found that 39 percent of 18-to-34-year-olds read a newspaper daily in 1997 but only 26 percent did in 2001.
I'm also not at all surprised by this:
The newspaper industry has spent billions on the Internet to create online editions that are read by fewer people, less frequently and less fully than print editions. These online editions haven't helped newspapers attract younger readers, and most of them are a financial drain on the newspapers that support them.
opening the walls of those newspaper companies' vertical integration and inter-syndicating their and other companies' content right down to the story level.
But I don't think you can teach the dinosaurs to survive. The decline will be long and slow, and in fact the slowness of the decline will be what makes it impossible to bring about change in the industry. A sudden crisis might bring a creative response. Slow death won't.
A long interview with Jim Griffin.
iTunes itself I would not call a successful model. It's a model for selling iPod. Very few songs are being sold, and there's just one price of 99 cents. Its lack of interoperability is almost a statement against DRM itself. I would call iTunes the sort of leaky bucket we've always been used to; remember that iTunes ships with its own circumvention.It costs $20,000 to fill an iPod from iTunes Music Store. Quite simply, no one looks at a 40 GB iPod and thinks, "it will cost me $20,000 to fill it". It's a polite fiction. It's a looking the other way. We pretend there's monetization, but there isn't.
Look where the money goes. It's a good model for credit card companies but a bad one for artists.
...
iTunes and Napster 2 will go to flat fee systems. Steve Jobs has already said every dime you pay goes to the RIAA. He just wants to sell iPods. Let's say the average person spent $4 a month, which I'd say is very high. And if you charged $10 month, you'd make your money.People feel it in their belly, this zero marginal cost. If you look at the pricing of goods you can't control, price equalizes at marginal cost. Can you think of a single model for uncontrolled goods where we haven't had a pool of money then split it up?
Dan: The real threat to traditional journalism isn't blogging. It's eBay, the largest classified ads publisher.
Anyway, he is absolutely right. Classified advertising accounts for 50 percent of the profits of newspapers, and eBay is taking that franchise away. Without classifieds, newspapers are not a business. They are charity cases.
Andy Kessler has a good article on self-publishing. I am going that route with my economics book. I found an editor on linked-in, and printed out a draft at Kinko's. It is much more efficient. I couldn't believe that when I ordered a 315-page print job on the web, it was done faster than I could get to the store to pick it up.
But Kessler is also the author who got Amazon to delete my negative review of his book. It's a lousy book, nothing but name-dropping and turgid prose. Like him, it has no intellectual content or conscience.
Now that I know that the Amazon review process is corrupt and that a ruthless SOB of an author can get a review deleted if he does not like it, I no longer write reviews for Amazon. I asked them to take off all my existing reviews, but the terms of service are that the reviews are the property of Amazon. I wish neither Kessler nor Amazon well in the future.
Mark Hurst says the value is with the latter.
Any unbounded bitstream tends to irrelevance.Bits are so easy to create, copy, and send that without some filtering process, the worth of the entire bitstream decays rapidly. A good example is the e-mail inbox. Many e-mail users have no discipline about deleting or filtering their mail, and thus the bits that flow in—spam and legitimate mail together—clutter the inbox to an extent that the worth of the inbox overall tends to zero.
Ed Felten made some interesting predictions for 2004, including
DRM technology will still be ineffective and inflexible. A few people in the movie industry will wake up to the hopelessness of DRM, and will push the industry to try another approach. But they won’t be able to overcome the industry’s inertia – at least not in 2004.
As spring semester classes got under way Monday at Penn State, more than 2,600 students had registered for the Napster 2.0 service, which comes free with their tuition. All 17,000 on-campus resident students are eligible to use it.
Thanks to Lawrence Lee for the pointer.
Shirky pointed to the online porn industry, which has tried on several occasions to adopt a micropayment strategy akin to the 25-cent peep-show booths in the offline world.
"They can't make it work online," Shirky said. "And those guys are the e-commerce geniuses, so if they can't do it, who can?"
Obviously, this is a question that will require extensive research on my part in order to answer, won't it?
And some much-needed common sense, from Ben Compaine.
If large segments of the public choose to watch, read, or listen to content from a relatively small number of media companies, that should not distract policy makers from the key word there: choose. At a time when such a fragmented audience is dividing itself among niche cable channels, tens of thousands of book titles published annually, and hyper-individualized Web surfing, it may even be socially positive that there are some mass audience shows, movies, and books that, like the Harry Potter series, give us something common to talk about. It may indeed be that at any given moment 80 percent of the audience is viewing or reading or listening to something from the 10 largest media players. But that does not mean it is the same 80 percent all the time, or that it is cause for concern.
Russell Roberts comments on the selection of iTunes by Time as the invention of the year.
By creating a profitable interface for downloading music via the internet, iTunes gives the musicians of the future an increased incentive to create new music and get it into listeners' ears with the click or two of a mouse. That's pretty important if you have a soul and music speaks to it. That's most of us.
On my post on Steve Jobs and music, Randall Parker posted a comment that concluded,
If the record companies are so incredibly inefficient then we should see big successes coming from artists who never signed a contract with a record label. After all, there's the internet. Maybe that will happen some day. But so far I do not see it happening very often.
Sending a song or a photo around the world can take just a few clicks and a few seconds, but if you merely want to send the same MP3 or JPEG file to the stereo or television in your living room, forget it.
I walked into the second issue of the New America thingy with less of an open mind. The issue was Digital Rights Management, which is an attempt to embed copy protection capabilities into technology.
Given that I had my mind made up before I walked in, it's not surprising that I took little away from the session.
My view is that of all the solutions to the dilemma of "information wants to be free, but people need to get paid," DRM probably has the highest cost/benefit ratio. If the music industry has fallen behind the technology industry, then I really doubt that the socially optimal outcome is to move the tech industry backwards.
My view is that DRM is a "tail wagging the dog" phenomenon. Across time and space, only a relative handful of artists have lived on royalties. Until the 20th century's mass consumption era, artists lived on patronage. Even today, music and book publishers are like venture capitalists, with lots and lots of failures made up for by the occasional big hit. Very few writers or recording artists make enough royalties to pay the rent.
With the Internet, maybe we'll go back to a patronage model. Or a subscription model. Or a micropyaments model (although I doubt it). But I don't think that DRM will be part of the winning model. DRM is only attractive to people who want to hang on to the existing mass market publishing model. But by imposing design restrictions on hardware, DRM potentially affects consumers who have no desire to participate in that model.
In short, you have this business model which only works for a few artists in one era, and you want to throw lots of technological and legal resources into preserving that model? That has to be wrong.
Not long ago, I was singing the praises of Michael Powell.
Now, I'm calling for massive civil disobedience of the FCC.
I will not buy any device for the purpose of receiving HDTV. Instead, I will gladly purchase devices that will route packets via the Internet Protocol over that spectrum. In the neighborhood of my house, IP packets will take precedence over HDTV signals.I recommend that other consumers adopt the Jack Valenti Spectrum Re-allocation. I am talking about massive civil disobedience of the FCC. Remember, anyone who receives television over cable or satellite will give up nothing by assigning higher priority to IP packets. For anyone who misses broadcast television, it would be better to give them taxpayer dollars to subscribe to satellite TV than for consumers to pay the Broadcast Flag hardware tax.
By re-allocating spectrum from HDTV to wireless IP, we can kill two legacy birds with one stone. We can hasten the demise of the phone companies--because with a wireless "last mile" the wireless Internet can replace traditional land lines and cell phones; and we can show Jack Valenti, the movie industry, and the television industry what it really means to "score a big victory for consumers."
