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Cheaper? I'm seeing uncapped peak pricing making up the difference.

I am not — during peak hours the prices match those of taxis, other times they are way below. Maybe, your experience is different, but I also remember, how impossible it was to hail a cab in the situations, in which Uber today is available — even if at a higher price. What good is a nominal price of even 1 penny per trip, if you can not find an actual car?

It was so bad, economists started using the phenomenon of "umbrellas vs. taxis" as an example. Now, with Uber, Lyft at al. solving this problem, they'll have to look for some other illustration.

So, the prices really are lower throughout — comparing Uber's "uncapped" price with that of a cab is like judging Venezuela's economy by the official prices — nobody can buy anything at those either.

I haven't seen anything in the last 14 years to make me doubt any assertions in this article, which gives MANY reasons that micropayments won't work. Here's just one short section, but it's one of the key points.

micropayments create a double-standard. One cannot tell users that they need to place a monetary value on something while also suggesting that the fee charged is functionally zero. This creates confusion - if the message to the user is that paying a penny for something makes it effectively free, then why isn't it actually free? Alternatively, if the user is being forced to assent to a debit, how can they behave as if they are not spending money?... Users will be persistently puzzled over the conflicting messages of "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."

http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.html

The reasoning here is sound, and the theory has been borne out over the past dozen years since this was written:

A transaction can't be worth so much as to require a decision but worth so little that that decision is automatic. There is a certain amount of anxiety involved in any decision to buy, no matter how small, and it derives not from the interface used or the time required, but from the very act of deciding. Micropayments, like all payments, require a comparison: "Is this much of X worth that much of Y?" There is a minimum mental transaction cost created by this fact that cannot be optimized away, because the only transaction a user will be willing to approve with no thought will be one that costs them nothing, which is no transaction at all... micropayments create a double-standard. One cannot tell users that they need to place a monetary value on something while also suggesting that the fee charged is functionally zero. This creates confusion - if the message to the user is that paying a penny for something makes it effectively free, then why isn't it actually free?... users will be persistently puzzled over the conflicting messages of "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."

Clay Shirky, 12/19/2000

Read the whole piece -- it has tons of good info. (And it's an entertaining read.)

This was covered in detail over a decade ago.

[M]icropayments create a double-standard. One cannot tell users that they need to place a monetary value on something while also suggesting that the fee charged is functionally zero... users will be persistently puzzled over the conflicting messages of "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."

There are many reasons why micropayments haven't caught on in the decade+ that we've been hearing about them and they're all covered very nicely in that article. His talk about the mental effort involved in transactions may sound like psychobabble BS but this part sums it up nicely:

Imagine you are moving and need to buy cardboard boxes. Now you could go and measure the height, width, and depth of every object in your house - every book, every fork, every shoe - and then create 3D models of how these objects could be most densely packed into cardboard boxes, and only then buy the actual boxes. This would allow you to use the minimum number of boxes.

But you don't care about cardboard boxes, you care about moving, so spending time and effort to calculate the exact number of boxes conserves boxes but wastes time. Furthermore, you know that having one box too many is not nearly as bad as having one box too few, so you will be willing to guess how many boxes you will need, and then pad the number.

For low-cost items, in other words, you are willing to overpay for cheap resources, in order to have a system that maximizes other, more important, preferences. Micropayment systems, by contrast, typically treat cheap resources (content, cycles, disk) as precious commodities, while treating the user's time as if were so abundant as to be free.

I'm not saying that small payments can't exist anywhere, in any form, but it's pretty obvious that the more small payments you ask for, the worse a game gets.

Tim O'Reilly already provided the answer; "Piracy is a progressive taxation". http://openp2p.com/lpt/a/3015

For more obscure works (eg sci-fi by Cory Doctorow, indie films such as Sita, Ink) free copying has a beneficial, promotional effect.

For already popular works (already heavily promoted legal music and movies) piracy replaces sales more than it encourages new sales.

CP is in the earlier category.

For those interested in more detail about the economics and psychology behind Clay's theory that micropayments will never work, I recommend this earlier piece from 2000. Nine years later, we still haven't seen a viable micropayment system (where "micro" = 25 cents or less) and I don't think that will change.

...micropayments would still seem to have an advantage over larger payments, since the cost of the transaction is so low. Who could haggle over a penny's worth of content? After all, people routinely leave extra pennies in a jar by the cashier. Surely amounts this small makes valuing a micropayment transaction effortless?

Here again micropayments create a double-standard. One cannot tell users that they need to place a monetary value on something while also suggesting that the fee charged is functionally zero. This creates confusion - if the message to the user is that paying a penny for something makes it effectively free, then why isn't it actually free? Alternatively, if the user is being forced to assent to a debit, how can they behave as if they are not spending money?

Beneath a certain price, goods or services become harder to value, not easier, because the X for Y comparison becomes more confusing, not less. Users have no trouble deciding whether a $1 newspaper is worthwhile - did it interest you, did it keep you from getting bored, did reading it let you sound up to date - but how could you decide whether each part of the newspaper is worth a penny?

Was each of 100 individual stories in the newspaper worth a penny, even though you didn't read all of them? Was each of the 25 stories you read worth 4 cents apiece? If you read a story halfway through, was it worth half what a full story was worth? And so on.

When you disaggregate a newspaper, it becomes harder to value, not easier. By accepting that different people will find different things interesting, and by rolling all of those things together, a newspaper achieves what micropayments cannot: clarity in pricing.

The very micro-ness of micropayments makes them confusing. At the very least, users will be persistently puzzled over the conflicting messages of "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."...

Imagine you are moving and need to buy cardboard boxes. Now you could go and measure the height, width, and depth of every object in your house - every book, every fork, every shoe - and then create 3D models of how these objects could be most densely packed into cardboard boxes, and only then buy the actual boxes. This would allow you to use the minimum number of boxes.

But you don't care about cardboard boxes, you care about moving, so spending time and effort to calculate the exact number of boxes conserves boxes but wastes time. Furthermore, you know that having one box too many is not nearly as bad as having one box too few, so you will be willing to guess how many boxes you will need, and then pad the number.

For low-cost items, in other words, you are willing to overpay for cheap resources, in order to have a system that maximizes other, more important, preferences. Micropayment systems, by contrast, typically treat cheap resources (content, cycles, disk) as precious commodities, while treating the user's time as if were so abundant as to be free.

Oops -- let me try one more time to get the link right: micropayments.html Need to learn to hit "preview"

The answer to your question is no. Seems like most everyone here agrees they behaved like idiots, and that messing with a pilot's vision is life-threatening, and if the story is all true they probably deserve to be charged and hauled before a judge. But I can't buy your second reason the way you said it:

The second reason is similar: because lasers are damn straight sighting mechanisms . . . and a missle can be targeted on the aircraft . . . .

Whether or not you meant that, the very same kind of silly reasoning is rampant these days: "This technology can be used for bad things, so the technology itself is bad! Let's suppress the technology, make its name synonymous with its misuse, and assume the worst about anyone who is using it." Hence, "Don't just punish these idiots for their crime, also punish them because they were brandishing the laser half of a laser-guided missle!" In general, since technology X can be used for $VERY_BAD, any offense with technology X deserves extra punishment. Certain analogies are unavoidable.

The same thing happened in Boston when Adult Swim advertised Aqua Teen Hunger Force and the police went berserk over some illegally placed glowing lights -- which I assume is something like a littering offense. Their explanation was that they thought the glowing lights and the visible batteries might have been a bomb -- since, from movies, we know bombs have glowing LEDs on them. So let's prosecute the perps for a hoax bomb on top of littering.

This kind of delusion if taken to its logical conclusion would involve attempted murder charges for, say, a larceny where the robbers tied up the victims with rope. (Rope can be used for hanging someone.) A peeping tom who uses a telescope would be charged the same as a sniper. Sharing mp3s = commercial piracy. And so on.

I daresay that we, the proud members of the Nation of /., oppose this kind of perverse justice. We don't excuse wrongdoing, but we do try to put the wrongdoing in the proper perspective.

InfraSearch was another early attempt at collaborative search, based on Gnutella. Sun bought it for about $20 million in stock (estimated) then did nothing with it.

They did lose it in the courts but congress passed an act giving it back to them. How many companies want to stake their future on congress passing legislation just for them? If you want a more recent example there is considerable speculation that Google is in danger of losing its trademark because "google" has become a verb listed in the OED. Levi lost a seagull trademark. I am sure there are many less prominent examples that only trademark lawyers could site.

The law requires that trademark holders actively defend their trademarks. How does one actively defend a trademark? Simple, you sue anyone whose names might possibly constitute infringement even if it requires extremely exaggerated interpretation. That way, when a real case of infringement comes up, you can go into to court and say, "look we defend our trademark. We have filed X number of suits every year for the past Y years". This produces insane behavior. From an article by Cory Doctrow:

There aren't many areas of business wisdom more fraught with superstition and dread than trademark lore. Trademarks exist, mainly, to prevent consumer confusion, but for many business people, they're important competitive assets. They're the company's good name, upon which it trades, and companies have a duty to their shareholders to defend those good names. And defend it they do, even if the defense is so odious that it makes the company synonymous with litigious bullying. Ask a lawyer for a 100 percent assurance of trademark protection and he'll give you plain advice: pay me to send a nasty letter to everyone who utters your name without due care and specificity, or I can't guarantee you that your mark won't slip out of your fingers and into the public domain. He won't be lying: 100 percent certainty is the kind of unrealistic objective that requires extraordinary, self-defeating measures to achieve.

Corporate officers face a "damned if they do, sued if they don't" situation. Trademark lawyers will advise them defend their trademarks out on the hinterlands of reasonableness even it makes the company look like an irrational bully. If they don't follow this advise, which constitutes a standard business practice, their stockholders can sue them if the company does lose the trademark years down the road. Put yourself in their shoes. Would your opinion of Apple's action change if you personally would face significant lawsuits 10 years down the road if "iPod" becomes a generic term?

I am curious. What is your model of why companies like Apple spend the money and take the PR hit of seemingly trivial trademark lawsuits? What is more likely: Corporate executives in many companies acting like loons or computer geeks with the same grasp of trademark law as trademark lawyers have of operating systems?

I don't want to justify anything illegal, but have you read Tim O'Reilly's http://www.openp2p.com/pub/a/p2p/2002/12/11/piracy .html ?

It's a good article, and even though file sharing isn't right by any means, that might help you simply live with the amount of illegal copying.

I hope you can continue to keep your company afloat; the piracy part is just out there, and I'm not sure how much of it would ever translate to real profits. (maybe wait till the file-sharers grow up ;) )

When you manage to get people to use your company name as the verb for doing what your main product does, you won.

While it's certainly a sign of success to get your company or brand's name to become a household word or a verb for your product or service, it's actually Bad News in the Trademark Department.

Many successful companies, such as the two examples you gave -- Xerox and Google -- as well as other more famous examples such as Kleenex and Coke, have found themselves at the receiving end of "trademark dilution". That is to say that their brands are so synonymous with their particular type of product that they've slipped into the public domain lexicon.

For example, in many parts of the South, a carbonated beverage is called "coke". It doesn't matter if you're drinking Coca-Cola, Pepsi, Root Beer, Sprite, or Mountain Dew. It's all "coke". Similarly, many people blow their nose with "kleenex", even if it says "Puffs" or even "Store-Name Generic Brand" right on the side of the box.

You can read more here.

Two wonderful articles on why micropayments are a bad idea:

The Case Against Micropayments
Fame vs Fortune: Micropayments and Free Content

The general theme is they don't really take users into account.

Note that the most successful micropayment system right now is probably Google adWords. Laugh if you want, they allow users to contribute a trivial amount of real world currency to the author of a website and provide value added to both users and authors without unduly inconviniencing most users. And they do a couple million dollars in business every week.

Still amazing that in 2005 nobody has figured out a way to make it simple to charge a penny on-line.

The problem is not an inability to ship pennies. The problem is that users don't want micropayments and they never will. (Where 'micro' is in the penny/nickel/dime neighborhood.)

"...micropayments create a double-standard. One cannot tell users that they need to place a monetary value on something while also suggesting that the fee charged is functionally zero. This creates confusion - if the message to the user is that paying a penny for something makes it effectively free, then why isn't it actually free? Alternatively, if the user is being forced to assent to a debit, how can they behave as if they are not spending money?

"Imagine you are moving and need to buy cardboard boxes. Now you could go and measure the height, width, and depth of every object in your house - every book, every fork, every shoe - and then create 3D models of how these objects could be most densely packed into cardboard boxes, and only then buy the actual boxes. This would allow you to use the minimum number of boxes.

"But you don't care about cardboard boxes, you care about moving, so spending time and effort to calculate the exact number of boxes conserves boxes but wastes time. Furthermore, you know that having one box too many is not nearly as bad as having one box too few, so you will be willing to guess how many boxes you will need, and then pad the number.

"For low-cost items, in other words, you are willing to overpay for cheap resources, in order to have a system that maximizes other, more important, preferences. Micropayment systems, by contrast, typically treat cheap resources (content, cycles, disk) as precious commodities, while treating the user's time as if were so abundant as to be free."

Bonus article here.

most people who go through the trial by fire to become bona fide authors are pretty firm when it comes to intellectual rights. In fact, I don't think I've met a single pro author who isn't.

What, like grub? Or any of the myriad of p2p search engines?

Nope. He's already said that he doesn't really care. Short Form Summary: He agrees with Tim O'Reilly, Piracy is Progressive Taxation.

Ah yes, I *want* to spend my day thinking "hmm... is it worth 2 cents to me to read this article? Here's one over here for just a penny..." You should read this: the best article about micropayments ever written, and another one just in case. The problem with micropayments is *not* the technology. It's that nobody wants them. Period. (OK, maybe not "nobody." But, say, 99%+ of the world. Close enough.)

Micropayments, like all payments, require a comparison: "Is this much of X worth that much of Y?" There is a minimum mental transaction cost created by this fact that cannot be optimized away, because the only transaction a user will be willing to approve with no thought will be one that costs them nothing, which is no transaction at all.

First, I live in New York and have available to me between 6 or 7 completely free newspapers I can grab. The Times has been competing with free papers like the Village Voice and the Metro for a long time. That aspect is not new. Those papers aren't going anywhere -- why would their web site counterparts?

Secondly, My girlfriend buys the Post because she likes the gossip and it's $1. The whole paper is $1. Ask her to pay for each article and look for the one she wants and then decide to pay .05 or .25 or... she's already moved on folks.

People not wanting to pay is not the problem. She pays $1 for something she peruses for 10 minutes and throws away (hardly different from a web page). Micropayments are the problem. Lack of attention is the problem. This is the attention economy after all. Technically speaking, my time is worth ~.50/minute. It is not worth and will never be worth it for me to look for and buy something that costs less than that. Micropayments are never going to happen because below the dollar mark there is not enough of an incentive for a consumer to even both to consume. They won't happen because any variability below a dollar is virtually meaningless. And even if the interface was virtually totally transparent the user still has to think about a purchase decision. If that decision costs more than the price of the product to be purchased, they will move on before bothering.

Frankly I think the interface on most news sites is also part of the problem. You could never get me to pay for the priveledge of not being able to find what I want. The nature of the commodity needs to change. Use RSS in an RSS browser for starters. That's the way web-based newspapers shoudl look: a list of stories that you can sort through in several different ways. RSS by its nature creates simplicity for the user and I've yet to see it, but there are a couple RSS feeds that I would pay $1-$2/month for. I have a subscription like that for runabot.com ($2/month) and I hardly think about it. I think most people would go for something like that. I don't think the average consumer will EVER go for paying for an article at a time.

In the interview Daddy, Are we There Yet Alan Kay mentions that he read a paper on Simula in 1966. As he says in the interview much is lost to the programming community because we don't have a good sense of history.

Be careful... "dumbass employer" and "distributed computing client" can be a combination hazardous to your health.

Some people consider file sharing progressive taxation, if not outright advertising.

I would wager that most of the big software vendors enjoying immense market share wouldn't be doing so were it not for "piracy", "warez" and file sharing, getting their stuff into the hands of those talented enough to use it, but poor enough to be unable to afford it.

Likewise there are musicians and artists who would have vanished from the scene, if it hadn't been for downloadable files to alert and encourage us to seek out and support their efforts.

I know for a fact that I would not be buying the work of Frank Cho, or Philippe Buchet had I not first found them as scans in the a.b hierarchy.

Likewise, Goldfrapp and Invader Zim.

I didn't hear Goldfrapp on the local FM or catch the original airing of Zim on Nick. But I have bought all of the Goldfrapp catalog (and sold some of it too), as well as buying all 3 DVD's of Zim, and the only reason I did was...."piracy" alerted me to their existence.

This whole copyright/intellectual property thing strikes me the same way as the "War on Drugs" has.

The little people get to watch the spectacle of a bunch of suits bandying about a bunch of numbers pulled from their collective anuses, patting themselves on their backs after criminalizing something that only threatened their control.

Even though I do understand that content creators wish to protect themselves I believe that no DRM is the way to go.

The main thing is to focus on having a well working and simple delivery model, and to make sure the content isn't over-priced. DRM ultimately pretty useless, since it can always be broken eventually. If it's simpler to buy the content from a reputable store than getting it over P2P the model will work.

Tim O'Reilly wrote and excellent piece on the subject in 2002, and it still applies today: Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution

PS. I'm sure a lot of you will disagree, but at least I can claim to be a content creator myself...

Infrasearch was working on this, until Sun paid $8M for the company, them had them work on something else, then Gene Kan committed suicide. Be careful what you work on.

Guess the author you can't remember is Tim O'Really, and the article is Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution.

"I have watched my 19 year-old daughter and her friends sample countless bands on Napster and Kazaa and, enthusiastic for their music, go out to purchase CDs. "

And yet, O'Reilly doesn't release his books as single, convenient downloads (they're not even sold that way).

If he's so comfortable with the notion that his daughter buys more CDs on account of P2P, then why doens't the same hold true for his ebooks?

It's all just about personal agendas.

As Tim O'Reilly puts it.

This article is well worth a read - the subsection headings say a lot:

Lesson 1: Obscurity is a far greater threat to authors and creative artists than piracy.
Lesson 2: Piracy is progressive taxation
Lesson 3: Customers want to do the right thing, if they can.
Lesson 4: Shoplifting is a bigger threat than piracy.
Lesson 5: File sharing networks don't threaten book, music, or film publishing. They threaten existing publishers
Lesson 6: "Free" is eventually replaced by a higher-quality paid service
Lesson 7: There's more than one way to do it.

1. Micropayments still suck.

2. Why the hell should I trust this company, particularly when Verisign buy all successful competitors - as they did for digital certificates?

3. Most importantly: there is no natural reason for the cost.

Now, if there was an easy way to pay me one penny to receive each email, with free channels set up on a case-by-case basis ... that would work wonderfully. All we need then is a workable mechanism for single-penny transactions to be workable for almost everyone ...

I think this just confirms that age-old adage: embrace new technology or die.

In 18th England 'manual' textile producers smashed up machines that were stealing 'their' work. Did that stop industrialization of the textile industry? Of society in general? Did it stop the almost total eradication of non-machine produced textiles? No, no and no.

It would appear that as soon as you have new technology that is showing some promising signs of becoming popular (for after all not all new technology 'takes off'; think laser discs -- or at least that's what I think they were called: those vinyl looking things that were supposed to supersede videos -- for instance) you'd better jump onto that bandwagon quicksmart and figure out a way to turn it into a cashcow working for your advantage. Which the movie industry has. And which I think that the music industry did once upon a time: when CDs were introduced on the market you often got lots of 'extras' that weren't on the vinyl-version: demos, single B-sides; remixes etc ... in fact, quite similar to the DVD vs video situation today.

I think that the music industry is fighting a rear guard action in a losing battle. And I think that that battle is lost for many reasons. For instance (in no particular order):

1. The interests of the music industry do not necessarily coincide with the interest of the artists: as pointed out in the article by O'Reilly referred to here on /. a few days ago, obscurity is often far worse for the artist/author/whatever than copy-right infringment. However, for the company publishing (in the broad sense) the oeuvres of the artist that is not necessarily true: what you lose on the swings you might think that you can win on the round-abouts: if one of your artists fade into obscurity or just never makes it, so what? You have other ones. Maybe their records will sell instead. This is obviously not at all the same for the artist: the artist doesn't have any other artists on which to fall back (well, at least not if the artist isn't Andy Warhol and he is dead): a piece of art falling in a forest where nobody hears it might still make a noise, but it might as well not have. In other words, word of mouth, or in these techno-times p2p, might benefit the artist (gain notoriety) but hurt the publishing company (missed-out copy-right payment): their interests do not coincide: the moment a majority of artists realize that will be a day of reckoning for the music industry.

2. P2P is here and it's easy to use and persuading people to just forget about something you think that the world would be better without is really tricky stuff( cf. atom bombs).

3. Going after 12-year-olds is just really dumb from a PR point-of-view and should be avoided at all costs.

I haven't bought any CDs in a long time -- just too expensive and I won't support the copy-protection nonsense. But I do need my new music fix, so I subscribed to emusic. $10 a month for all the DRM-free mp3s I can download. It's been well worth it, and it's allowed me to get new music without running to the record store to pay extortionist prices for crippled products.

There's a nice article on emusic and its advantages here.

No, they're not paying me, but I heard about emusic from a similar Slashdot discussion, so I figured I'd return the favor.

Wrong! ... Since an office file opener could be used to open your own documents, or documents that others want you to open, there exists a substantial non-infringing use, so the software would not be a circumvention device.

Yes, he is partly wrong, but so are you. It may be true that the circumvention device clauses are satisfied. Unfortunately, we don't have to look far to see how companies and projects that fit that exception are still prosecuted/persecuted and even killed.

This would be a good target for a bunch of SLAPP suits against the developers -- if they chose to implement it. The potential gain for Microsoft and others ("We bankrupted 30 contributers to OpenOffice for DMCA violations. We're sending you a DMCA notice. You wanna be bankrupt next?") far outweighs their potential cost ("We paid $250,000,000 in the cases we lost, but it's just an investment for product lock-in and extra FUD against developers.") .

Just being on the right side of the law does not mean that you will survive a massive legal attack from a multi-billion dollar company. Anti-SLAPP laws are in effect in most states but the DMCA altered the USC, which is the federal law, so those state laws could be carefully avoided.

Examples:

• DeCSS (multiple cases, some still in appeal)
• kazaa (in court and dying)
• napster (dead)
• CopyWrite (alive, after expensive years in court and an expensive appeal)
• Lessig about Fox fair use problems, MyMP3, Napster (in court & private settlements, dead, dead)
• DRM Conference transcrpt (discusses dead & dying, but legal, projects)
• Embedded fonts (alive, but at a big cost and avoidance of court)
• A student's paper with summaries of other cases (United States v. Sklyarov, Lexmark v. Static Control Components , Felton v. Recording Industry Ass'n of America) and several interesting hypothetical physical-world comparisons to the law (locking keys out of your car == loss of ownership of car until you present the Automobile Protection Assocaition with a proper court orders allowing you to jimmy the lock).

The unfortunate fact is that just because it is legal, and even if it is right, both StarOffice (Sun) and the contributors to OpenOffice (including Sun) could both face deadly lawsuits from Microsoft if they attempt compatability.

Strategic lawsuits (gray-area, predatory lawsuits), "death by lawsuit", and even Google's lists of Allegedly Unethical Firms, Corporate Accountability, and corporate criminals show how corporations are attacking and killing projects, even when the projects or public participation are the right and legal thing.

So while you are right that such a project would be legal, you are wrong in your implied statement that it would be a safe thing to do.

frob

Lesson 1: Obscurity is a far greater threat to authors and creative artists than piracy.

Let me start with book publishing. More than 100,000 books are published each year, with several million books in print, yet fewer than 10,000 of those new books have any significant sales, and only a hundred thousand or so of all the books in print are carried in even the largest stores. Most books have a few months on the shelves of the major chains, and then wait in the darkness of warehouses from which they will move only to the recycling bin. ...

Lesson 2: Piracy is progressive taxation

For all of these creative artists, most laboring in obscurity, being well-enough known to be pirated would be a crowning achievement. Piracy is a kind of progressive taxation, which may shave a few percentage points off the sales of well-known artists (and I say "may" because even that point is not proven), in exchange for massive benefits to the far greater number for whom exposure may lead to increased revenues.

Our current distribution systems for books, music, and movies are skewed heavily in favor of the "haves" against the "have nots." A few high-profile products receive the bulk of the promotional budget and are distributed in large quantities; the majority depend, in the words of Tennessee Williams' character Blanche DuBois, "on the kindness of strangers."

Our current distribution systems for books, music, and movies are skewed heavily in favor of the "haves" against the "have nots." A few high-profile products receive the bulk of the promotional budget and are distributed in large quantities; the majority depend, in the words of Tennessee Williams' character Blanche DuBois, "on the kindness of strangers."

Lowering the barriers to entry in distribution, and the continuous availability of the entire catalog rather than just the most popular works, is good for artists, since it gives them a chance to build their own reputation and visibility, working with entrepreneurs of the new medium who will be the publishers and distributors of tomorrow.

I have watched my 19 year-old daughter and her friends sample countless bands on Napster and Kazaa and, enthusiastic for their music, go out to purchase CDs. My daughter now owns more CDs than I have collected in a lifetime of less exploratory listening. What's more, she has introduced me to her favorite music, and I too have bought CDs as a result. And no, she isn't downloading Britney Spears, but forgotten bands from the 60s, 70s, 80s, and 90s, as well as their musical forebears in other genres. This is music that is difficult to find -- except online -- but, once found, leads to a focused search for CDs, records, and other artifacts. eBay is doing a nice business with much of this material, even if the RIAA fails to see the opportunity.

Lesson 3: Customers want to do the right thing, if they can.

In my opinion, as good as (or even better than) the interview itself was an article by Tim O'Reilly that he linked to in one of his answers: Piracy is Progressive Taxation". He has some excellent insights into piracy, and makes several very good points and some interesting comparisons. One of his main points is that free services have been historically replaced by higher quality paid services (ISPs being a prime example). Well worth the read.

http://www.openp2p.com/pub/a/p2p/2000/12/19/microp ayments.html

Rich.

The Short Answer for Why Micropayments Fail

Users hate them.

The Long Answer for Why Micropayments Fail

Why does it matter that users hate micropayments? Because users are the ones with the money, and micropayments do not take user preferences into account. [...]

To summarize, when the cost of clicking a link is only time (how long will it take to load that link on my 28.8 modem), its a relatively simple decision. When its both time and money, a judgement has to be made. Sure, for a penny a page, one might not worry about it, but nobody's going to make money on a penny a page, no matter what "they" say; that only works on click-rates the size of CNN, MSNBC, Slashdot, source-forge, etc. And even then, when they see "the bill", it'll be like getting their first credit card bill and having no idea just how much they "spent" online...then they'll be reconsidering each and every link and users don't want to do that.

Users surf or they don't. If you had to pay a per-minute charge for doing real surfing in the pacific ocean, you wouldn't surf, so (extending the metaphore) why would you do it at home? There's a reason AOL and all the other ISPs got rid of their traditional per-minute charges and people buy cell phone and long-distance plans with max minutes instead of per-minute charging; the variable at the end of the month isn't worth the hassle.

Imagine you are moving and need to buy cardboard boxes. Now you could go and measure the height, width, and depth of every object in your house - every book, every fork, every shoe - and then create 3D models of how these objects could be most densely packed into cardboard boxes, and only then buy the actual boxes. This would allow you to use the minimum number of boxes.

But you don't care about cardboard boxes, you care about moving, so spending time and effort to calculate the exact number of boxes conserves boxes but wastes time. Furthermore, you know that having one box too many is not nearly as bad as having one box too few, so you will be willing to guess how many boxes you will need, and then pad the number.

For low-cost items, in other words, you are willing to overpay for cheap resources, in order to have a system that maximizes other, more important, preferences. Micropayment systems, by contrast, typically treat cheap resources (content, cycles, disk) as precious commodities, while treating the user's time as if were so abundant as to be free.

And the answer is, they will *never* happen. read all about it here. In that article, Clay says so much, so perfectly, that I won't quote any of it--just go and read the whole thing. OK, I can't resist. One of his points is micropayments have too much "user overhead"--you have to make a descision for literally every penny you spend, and that alone makes it not worth it. As he says, the user is getting conflicting messages: "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."

MS has had the DRM defeated on yet-to-be released WM9 using it's own freely available tools for developers. Just a few days agom, too.

First, MS has it's DRM defeated on yet-to-be released WM9 using it's own freely available tools for developers. Now this . . . sheesh!

This PL = 1000 thing is not bad for p2p. The economy of p2p works differently to that of the real world because data is never consumed or transfered, it is only copied which means that the network will only continue to grow despite freeloaders. See In Praise of Freeloading.

Freenets trade Adobe software.

Bingo.

Don't think that O'Reilly doesn't know this either. Check out how many books, articles, and so forth they have published since OS X came out. I had the privilege a few months ago to have a sit down with the current editor of the Apple books, and from the way he talked it seems that O'Reilly is nothing short of ecstatic about the OS.

O'Reilly, IMHO, publishes by far the best books on the market. This is because they have excellent editors and scouts (for lack of a better word) to find very intelligent, very insightful people to write their books. I suggest people check out there dev sites more often; they are treasure troves of info

The O'Reilly Network

MacDevCenter.com

OnDotNet.com

OnJava.com

OnLamp.com

openp2p.com

osdir.com

Perl.com

XML.com

...and make no money. As usual, Jakob Nielsen slants the data in a way that seems so very important. But, almost no small sites make any money. Why isn't that the real story? Bah!!

As usual, Jakob throws shit against the wall. A little sticks, but a lot of it does not stick. Why do people ignore this? For example, he predicted micropayments, which would be great for small web sites. Are micropayments viable now? No! They sucked in 2000 and they suck now. (Good idea, but, micropayments suck!)

Last year I wrote Spanking Jakob Nielsen. I'm just so tired of how he throws around ideas and "important" data and people got nuts. Have you ever noticed that he rarely points to sites outside of useit.com and he often is selling his usability reports? Drives me insane...

She's a verified three-bagger

You'd let this (pix of rosen) blow you? You really do spend too much time on your computer. (thanks to google image search for the pix of rosen)

Lots of good points have already been made, so I won't rehash them (and I'm only looking at +5 already!) but here's a good article on why micropayments will never, ever, ever, ever [emphasis mine] work by Clay Shirky.

Had you said obscurity rather than plagiarism I would have thought better of you (See O'reilly's article). Copycats and plagiarists actually bolster a works popularity and create a sort of strange scarcity e.g. there are 100 copycats of a work, but only one original. In Japanese anime companies they don't let their lawyers run their business, and the artists take this 'copying' or derivative work as a compliment. I'm not making the claim that copyright should be abolished in leiu of this. I only wish to present a society's outlook that comes at this from an entirely different perspective that doesn't automatically try to supress works just because it might have the legal foundation to, but asks whether that is really in its best interest.

I think the freenet link above is wrong. It's
http://freenetproject.org/

Before I installed, I needed a credibility check. I found it on one of the O'Reilly Network sites:
ian.html
maybe uprizer is what the author above meant.