Philosophical Musings

May 30, 2010

Peter Drucker on Intellectual Property, 1993

Filed under: business,Copyrights — Elad Kehat @ 11:49 am

Found in the Wired archive:

We have to rethink the whole concept of intellectual property, which was focused on the printed word. Perhaps within a few decades, the distinction between electronic transmissions and the printed word will have disappeared. The only solution may be a universal licensing system. Where you basically become a subscriber, and where it is taken for granted that everything that is published is reproduced. In other words, if you don’t want everybody to know, don’t talk about it. I think we are getting there very fast.

I have worked with musician Peter Gabriel on several projects. At a workshop we were holding for AT&T he was asked, “How do you deal with piracy of your albums?” Gabriel said, “Oh, I treat it as free advertising. I follow it with a rock concert. When they steal my albums in Indonesia, I go there and I perform.”

How come it took the music business about 15 years to sort-of figure out what Drucker (and apparently Peter Gabriel) got in 1993?

Which just goes to prove what Drucker says earlier in the same interview:

Thirty-odd years ago I began to counsel that you should build organized abandonment into your system. It follows the old line that it makes more sense for you to make obsolete your own products than to wait for the competitor to do it. But this is very hard for organizations to do. The internal resistance is great. They have to be forced.

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July 5, 2009

Where Cory Doctorow is Wrong – You won’t Make Money Selling Books in the Future

Filed under: business,Copyrights,Digital Culture,ebooks — Elad Kehat @ 9:57 pm

I was delighted to find an interview with Cory Doctorow in the July-August 2009 issue of Harvard Business Review (available here, but behind a paywall). I’m a huge fan of Cory, and while there was nothing new in that interview, it was still fun to read.
The point of this post however is spread the word about the interview (for that there’s twitter…), but rather to take the opportunity to say that I think Cory’s got his views on the future of books wrong, and to bring my own experience as a counter example.

The case in point is his claim (oft-repeated elsewhere) that an electronic book isn’t a substitute for a printed book, and thus authors can expect to keep making money by selling printed books in the future, while giving away e-books for free to gain publicity.
Of special interest are the following question-and-answer:

HBR: What about the Kindle? Doesn’t it throw your model into question?
CD: I don’t think so. First of all, anyone who’s willing to spend $350 on a Kindle is not someone who’s going to cheap out about spending 10 bucks on a book. The Kindle may come way down in price, but I think it’s going to do that by adding a bunch of features that increase appeal and the volume produced. Once you load the Kindle up with features, you have the same problem you have with a computer – it becomes too distracting. So I’m not all that bothered. Now, maybe I’m wrong about this, and if I am, then I’ll have to figure out another way to make money on my books. Of course, spending 10 years at the coal face of electronic publishing will give me the tools to find that new income model.

Like I said, I’m a huge fan. I read many of Cory’s books. However, I never paid for them. I read them all in e-book format on my Sony Reader (a competitor to the Kindle). I spent far more than $350 on Sony Readers (I bought 3 of them to date – for my wife and my father as well as for myself), but that doesn’t make me not “cheap-out” on spending $10 on a book. Even though I admire the author, if he gives the e-book away for free, I see no problem in not paying for it. Moreover, future features notwithstanding, my Reader is, and has been since I bought my first one 2.5 years ago, my preferable way to read books. Whenever faced with a choice between a printed book and an e-book, I choose the latter. In fact I go out of my way to acquire an e-book version of a book that I want to read even when I have the printed version available at hand.

Obviously, this single counter-example – myself – does not mean that the majority of the market will behave the same as I do. Cory himself seems to acknowledge the exceptions to his expectation by saying that “It’s a rare person who treats an electronic book as a substitute for a printed book” – that could leave me as one of those rare cases.
Nevertheless, I don’t think that he supplies any strong arguments to support his expectation that my case is going to be the rare exception. His main argument is the problem with reading off the computer screen is its myriad distractions. I disagree. My reason for preferring to do my long-form reading on my Sony Reader rather than my computer screen(s), is that it’s much more comfortable for curling up with in bed, on the sofa, or reading on the table during breakfast. Laptops, even NetBooks, are too big and uncomfortable for that, and Smart-Phones are too small. The average paperback has the near-perfect form factor for book reading, and the Kindle / Sony Reader manage to improve on that!

Finally, we’re discussing here an author who gives his e-books away for free. As most books become available in digital editions, and digital readers proliferate, the publishing industry is going to experience the same fate the music industry did. No DRM scheme would save them (as Cory had claimed himself in the past).
In conclusion, I think that Cory had better put that coal face to good use. If anyone can find a new income model for authors, it’s him.

January 11, 2008

The Right to Life is Reserved to Humans, Not Business Models

Filed under: capitalism,Copyrights,music — Elad Kehat @ 7:11 am

The Right to Life is reserved to Human Beings. Not to businesses. In a market economy, when a business fails to serve its purpose – i.e. generate revenue by selling a product or service to customers, it dies. This includes entire industries too.  If you’re lucky enough to still be producing something that people want, and it’s just your business model that doesn’t work anymore, good for you – you don’t have to die. Just find a new busines model.
Technology changes, business models stop working, you move on.

Oh, wait, there’s another option. You can lobby for new taxation designed to keep your obsolete business alive.

December 24, 2007

Morals, Law and Belief

Filed under: Copyrights,Democracy,Freedom,religion — Elad Kehat @ 11:36 am

Two seemingly unrelated posts I read this morning combined in a beautiful way.

Seth Godin is insightful as always, saying:
* Most people want to believe.
* And we’re most comfortable believing what everyone else believes.

Add to that the fact that “everyone else” isn’t really everyone else, it’s just your peer group. That’s why we mostly hold the same religious views as the community we grew up in.

The related post is from TorrentFreak: Piracy, Morals and The Need for Change
Ernesto discusses a NY Times article that tells of the generational divide in the moral perception of copyrights – today’s college students just don’t see anything wrong with copying digital files.
This is only surprising if like most people you (wrongly) assume that morals should be based on the law, and not the other way around. Morals aren’t a constant, they’re just the sum of what we believe to be right and wrong. They exist because we want to believe that there are such things as right or wrong, but their content is usually whatever our peers happen to believe in in that time and place.

So, asks Ernesto, should sharing copyrighted material be leglized?
Wrong question. The right question is “should there be such a thing as copyright?”. Well, the future generation has voted, and their answer is “definitely not”!

November 13, 2007

(Real) Competition-Blindness

Filed under: business,Copyrights — Elad Kehat @ 2:46 pm

So a major TV network (NBC) has finally launched a service that lets you download shows to your PC. Not surprisingly, they still don’t get it right:

“First off, it’s Internet Explorer only, then once you download the player, if you don’t have the latest .NET framework, you’ll be downloading that also. Next: Windows Media needed a security update on top of it all. On a Mac? Sorry, can’t help. Outside of the US? You’re out of luck too.

Don’t they realize that they have to be better than competition?  They probably do. It’s just that they choose to ignore the real competition. Let’s parse those (non)issues:

1. It’s internet explorer only. Mininova etc. work on firefox as well.

2. You need to download the latest .NET framework. I guess I could live with that one 🙂

3. Windows media needs a security update. Screw you.  Playing DivX torrents doesn’t require any “security” updates that securely send information about me somewhere else.

4. On a Mac? No problem. Lots of bittorrent clients work on the Mac.

5. Outside of the US? Even better, in most countries MPAA hasn’t got lawmakers in their pocket (yet).

September 14, 2007

Copyrights vs. Creativity

Filed under: Copyrights,music — Elad Kehat @ 9:03 am

TechCrunch (well, actully Reuters) reports that 80’s pop-star Prince (formerly known as The Artists Formerly Known as Prince) plans to sue a number of top websites, such as YouTube, for copyrights infringement.

Note this quote from Reuters:

“But it is believed to be rare for an individual artist of Prince’s stature to take on popular Web sites, while some up-and-coming performers actually encourage online file sharing to create a fan base and buzz around a record.”

It’s no wonder that up-and-coming performers encourage file sharing – they need to promote themselves in order to create an audience for their material.
Even no-longer up-and-coming artists promote their new material through file sharing.
However, if your fountain of creativity now has plumbing problems, and your new material isn’t any good (and you have to resort to tricks to promote it), then your best strategy is certainly to protect your income from the old material – which makes Prince’s move very logical (as it does Metallica’s prominent position in the ranks of file-sharing critics).
What we must ask ourselves though, is whether any of this makes sense for society as a whole. Preventing file sharing on copyrights grounds nowadays serves to secure more wealth to the already wealthy yesterday’s pop-star, while making it harder for new stars to emerge. It certainly does not “promote the progress of science and useful arts“.

August 10, 2007

Strike Back for Freedom

Filed under: business,capitalism,Copyrights,Democracy,Freedom — Elad Kehat @ 2:01 pm

Finally, someone is trying to use the media industry’s own weapons against them.

TechCrunch reports that Veoh, an online video website, is suing Universal Music, after being continually threatened by them.  While their chances in court are probably not very high, its heartening to see that some entrepreneurs aren’t easily intimidated.

Incidentally, I ran into this quote of a judge today:

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit.”

Unfortunately, the speaker isn’t a real judge, he’s a fictional one, in Robert Heinlein’s classic short story Life-line, written in 1939! (I’ve been reading some classic scifi lately). Too bad that this paragraph, written 68 years ago by a true libertarian to criticize corrupt business, is still relevant today. Even worse, no real life court today would say the same.

May 24, 2007

Growing Revenues in the Music Industry

Filed under: business,Copyrights,music — Elad Kehat @ 6:17 am

This article from eMarketer shows that artists’ revenues from recording performance rights (i.e. payments by radio and TV stations) as well as synchronization licensing (i.e. the licensing of music for commercials, television shows, films and videogames) are growing fast. Together they totaled nearly $4 billion in 2006.

So while the recording industry, i.e. the people who sell CDs, is in trouble, the people who actually create music have many potential sources of revenue even if the end user isn’t paying for CDs.

May 23, 2007

Couldn’t say it better myself…

Filed under: Copyrights,Freedom,music — Elad Kehat @ 3:35 pm

NewsFlash! - Amazon Now Has DMR Free Mp3s

April 16, 2007

Major Lables are not to blame for Music Business Demise

Filed under: business,Copyrights,economy,music — Elad Kehat @ 7:26 pm

A NY Times article by Tony Sachs and Sal Nunziato tells the story of the independent CD shop that they owned in Manhattan for 12 years, until it closed in 2005.
They are full of criticism for the major record labels, whom they blame for making all the wrong moves in the face of the file sharing revolution, mistakes that they claim have led to their shop going out of business.
It is an important read, that helps you realize how the revolution does not hurt just big faceless corporations or multimillionaire-but-still-gready musicians. It also affects small business owners, who lose the business that they had spent 12 years nurturing.
But as much as I share their loathing for the big record labels, Mssrs Sachs and Nunziato are plain wrong. The labels are not responsible for the demise of their shop, and rather than make mistakes, I believe that they soon enough realized where all this is going, and began fighting for their lives with all the tools at their discretion (basicly money, which is used to influence lawmakers and public opinion).
Sachs and Nunziato’s shop had closed because its many of its customers no longer had a need for it. It’s great that their staff, unlike Best Buy’s actually “knew who Van Morrison was”, but people now go to the internet for music advice. It’s fun to claim that Tower Records had “the entire history of recorded music under one roof”, but that claim is plain wrong, and in any case, we can turn to file sharing to really find any piece of music ever recorded, and searching for it is easier too.
They continue by claiming that “the customers who had grudgingly come to trust our opinions made the move to online shopping or lost interest in buying music altogether. Some of the most loyal fans had been soured into denying themselves the music they loved.” Come on guys, people don’t deny themselves of the music they love. Instead they have a much better source now, and they still spend endless hours browsing and building themselves a great collection, but it doesn’t cost them money.
They end by saying that “the occupation we planned on spending our working lives at is rapidly becoming obsolete. And that loss hits us hard — not just as music retailers, but as music fans.” Again, while it’s heart wrenching that someone’s life creation is becoming obsolete, you can’t stop technology. Too bad that you share your lot with the buggy drivers, but that’s life. You can’t blame the major record labels for this. Change is an inevitable part of our world, better learn how to handle it. Finally, we should also keep in mind that recorded music, the basis for the CD shop business (the entire music business actually), was enabled by a technological advance. Some times these advances are good for you, some times they’re not.
Finally, as self-described “music fans”, these guys should be happy with the change. What it really means is more music in the hands of more people. Business has nothing to do with it.

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