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Diamonds & the RIAA
eaglebtc writes "After reading the previously-posted article on cdfreaks.com about the rapid erosion of cheap CDR's, I found another equally scintillating write-up about the economics of music CDs written by Richard Menta, founder of MP3 Newswire. Sure, we've all heard the whining about how CDs are so expensive, but Mr. Menta takes a unique perspective on the issue by comparing the RIAA to DeBeers. He argues that both companies control distribution of products in their respective markets with an iron fist, and by so doing can artificially raise prices. Coincidentally, the bubble is beginning to burst in both markets: the RIAA is fighting against the uprisings of P2P software, and the diamond cartel's lawyers are losing sleep over the $5 diamonds produced in a lab."
Wow! The guy must be a genius to see the similarity between the two!!
Burn the land and boil the sea, you can't take the sky from me
If guys start wedding gals using cheap diamonds, then chicks will just find a new tool with which to implement Expensive Labor of Love strategy.
DeBeers dosn't have a total monopoly on diamonds now, and there is no reason that any democratic government would give them total control.
What will probably happen is that lab-grown diamonds will still be very scarce. The people making them are being very secretive about their processes and even their identities. They could sell their diamonds for $6 or $6,000, what do you think they'll do?
Maybe in 10 years or so the processes will be widespread enough to kill the market.
autopr0n is like, down and stuff.
Also note that no DeBeers executives have set foot on American soil in several years -- there afraid they will be arrested for their monopolistic practices! So why don't we treat RIAA the same way? Oh, they're headquartered in the US and contribute a lot more to political campaigns...
"Freedom means freedom for everybody" -- Dick Cheney
Yep, you're right, they are overrated for what you're actually paying for. Try telling the girlfriend or the wife that though. They don't give a shit about corrupt, murderous, exploitative companies they just want that fucking iceberg on their finger so they can one-up their girl friends in the coffee house. It's a sad sad situation.
Mother, do you think they'll like this sig?
Is it just me or does it seem like many corporations are now ignoring the will of the people? I think that a few of the more *noteworthy* corp. out there are letting bulls run loose in their china shops by relentlessly pursuing issues that the public deems to be ...tiresome. Especially SCO. And the RIAA could better spend its energy trying to catch up to the digital wave then pursuing petty lawsuits against students.
there should be several ways to distinguish between natural and synthetic diamonds. synthetic diamonds are almost always made using catalysts like nickel or iron - thats why they are yellowish. usually, natural diamonds have some small inclusions, which arent present on synthetic. for a properly equipped and trained diamond dealer, it should be no problem to find out if a stone is synthetic or not, by means of non-destructive chemical analysis methods like X-ray fluorescence. so this hazard to de'beers can be handled in some way.
.-)
compared to that, filesharing creates exact duplicates of any file - there is no way to tell if some file is an original or its tenth copy...
strange comparison.
They are similar becuase of artificially created scarcity. We are moving into an age of plenty. We can already print real objects using a modofied inkjet. It shouldn't be too long (compared to the time between the printing press and the computer) until our computers can produce most anything we want from a pile of atoms.
The better question is, what becomes scarce? Knowledge? Art? Service technicians for replication devices? I've yet to hear a good answer. The elimination of scarcity throws our entire economic model out the window. What's the new model? Do we go Star Trek and only care about improving ourselves?
DeBeers has something to worry about because there is nothing illegal about making artificial diamonds. (In fact, it's far less morally reprehensible than the virtual slavery of people in Africa caused by the bloodshed and civil wars that occur over diamonds and other gemstones.)
On the other hand, while music sharing causes a significant problem for the RIAA, they can still do something about it. The issue of the RIAA's price fixing will never be resolved until some method is devised and implemented successfully to bring independently-produced music to the fore.
Try telling the girlfriend or the wife that though. They don't give a shit about corrupt, murderous, exploitative companies they just want that fucking iceberg on their finger so they can one-up their girl friends in the coffee house. It's a sad sad situation.
:) And if I told her all the @#$ that DeBeers does, she'd probably spread it like hot gossip.
Wait... you mean that you'd marry a girl like that?
Damn.
For the record, my wife doesn't even like diamonds.
Not sure if you noticed, but that article in The Atlantic was written in 1982. (At least, that's the copyright date on the article. The fact that it doesn't mention any events that occurred after 1981 is telling, as well.)
I don't know whether those $1.5 billion worth of diamonds are still sitting in Israeli banks, but I wouldn't bet on it.
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
amen, brother... if you choose to marry a girl, choose wisely.
... hi bingo
Try telling the girlfriend or the wife that though.
I told my wife exactly that. Good thing she isn't like most women: superficial and good for sex and not much else. Women who cry over a diamond are losers, period.
Healthcare article at Kuro5hin
Yeah, but the quality of the product (i.e. the music) has retreated to the point of being worthless. Hell, I can't remember the last CD I bought from a current artist. Most of the CDs I own are re-released copies of older LPs.
It's all fun and games until someone loses the key to the handcuffs.
Wait... you mean that you'd marry a girl like that?
The problem here is that the scarcity on girls like that is far from artificial.
If you know a place where that's not true, I'd be very anxious to hear about it.
Libertarianism is rich wolves and poor sheep playing gambler's ruin for dinner.
Yes, it was written in 1982, but it still makes relevant points - it's analysis of why the market is like it is, how the 'Diamonds are Forever' campaign came about, etc, are all spot on the money. Read the entire article and then look at the market today. Not much has changed.
The points about the used diamond market are particularly relevant. As in there is *no* second hand diamond market. Why is that, given that a diamond doesn't physically deteriorate like most other goods?
Odd, I told my fiance that very thing. She completely agreed. I let her pick out her ring and she immediately went for a beautiful amethyst one. It is prettier and a heck of a lot cheaper than a diamond. The fact that it doesn't come with the baggage of a diamond was only a plus.
I haven't read all the comments yet, so this may be a dupe, but the author of the article is not comparing apples to apples.
True, both the member companies of RIAA and DeBeers are cartels, but what one controls through rarity (diamonds) the other controls through absolute control (music).
The author points to the fact that RIAA companies have pumped out 20% fewer new albums, and then somehow tries to parallel this to the same stratedy as DeBeers. Doesn't work I'm afraid. A diamond is a diamond, and having control over how many are on the market allows you control over price (assuming demand stays the same). The same is not true for music CDs...one album is not the same as another.
If (for example) the latest U2 album had been put out with only 100,000 copies made available, then the price could be pushed up on those CDs much higher as demand would not be met by that number. However, the price is completely uncorrelated to how many other albums are available.
A better correlation between DeBeers and RIAA would have been to focus on the loss of control each industry is facing. Diamonds will soon be cranked out at $5 per karat, and garage bands can now reach a global audience without RIAA interaction. The RIAA isn't playing nice in its death throwes, and I shudder to think what DeBeers will do in theirs.
"The market alone cannot provide sufficient constraints on corporation's penchant to cause harm." -- Joel Bakan
Wowzers, if that subject line doesn't get me mod'd down, I don't know what will.
;)
So, the RIAA's issue is they haven't yet found a way to make money off of file sharing. If there was money in it, they'd be fostering it, not trying to kill it.
So, they're pursuing two directions right now. Fight tooth and nail to protect their current bread and butter (CD sales). They're not doing this for the artists... lord no, they're doing this for the labels. THe other direction they're going is trying to find new sources of revenue. NOTE: This new source must be as large if not larger than the existing stream (from a margin perspective).
Once they find a way to make money on filesharing, I bet two things happen. a) they stop harrassing folks and b) CD prices drop b/c they're no longer a one trick pony.
Sooooo... in an effort to stop the lawsuits and help get CD prices down, we, the buying public, need to find a way for the RIAA/labels to make billions off of online file sharing... hopefully without some terrible DRM integrated into the solution.
There have been many attempts... the $0.99 downloads are the most recent and most successful... but they're still not much compared to the brick and mortor sales that are occuring.
Put your heads together! Come up with a feasible way for the RIAA to migrate to a new business model and make all our lives easier.
I dare you.. find a hole in this logic
I'm down with that, as it were
They don't need it. They control more of the diamond market than OPEC does oil, but look what OPEC is able to do. To control a market, you need three things:
1. You are the largest player in the market, with a high total market share,
2. You have a large oversupply of the product,
3. You have the ability to crash prices by releasing your oversupply.
So what happens if someone mining diamonds were to challenge de Beers? de Beers would make sure that their network of retailers don't do business with that producer. They'd also release some of their capacity to temporarily drop prices. That would put that producer out of business.
The artificial boys are different, because they can make stuff cheaper even than de Beers can get it out if they dropped their prices as much as possible, probably.
What will probably happen is that lab-grown diamonds will still be very scarce. The people making them are being very secretive about their processes and even their identities. They could sell their diamonds for $6 or $6,000, what do you think they'll do?
That's true. Both have a vested interest in keeping prices high. What *should* happen is they should get a deal together where they divide the pie, with neither side stepping over it. Kind of like OPEC. If they did it in the US, it would be collusion, but they don't have to do that. We'll see.
-Looking for a job as a materials chemist or multivariat
"What other product do you buy that hasn't increased in price at all over the last decade and a half?"
Computers?
Spencer Ogden
You're verging on incoherent, but you're looking for a place where there are women (*ahem* not girls) who don't like diamonds and/or who would reject a diamond because of its surrounding politics?
Try any of the following:
1) Local chapter of ACLU
2) Local Amnestry group
3) Local artist or arts school
4) Any town with a healthy population of liberals
It really says something about Slashdot that a moderater scored you as 'Insightful.' Such a sad, sad group of boys.
Oo! Oo! Or you could try explaining your position to your fiancee. I recall learning somewhere that women are people who are as intelligent as guys. Assuming you're an intelligent guy, one would hope your fiancee is at least as intelligent as you are, and would share your concerns over blood diamonds.
The price hasn't gone up, either. And that was what, 15 years ago? What other product do you buy that hasn't increased in price at all over the last decade and a half? Ever hear of inflation? CDs are cheap.
Then how 'bout I sell you my i386 25 mHz PS1 with a meg of ram for $3k and we'll call it a deal.
"If people really love each other, then they give each other the real stone"
Now... I have never, ever used the "If you loved me you'd sleep with me|suck my dick|swallow|let me fuck your sister|whatever else" bullshit.
I've always thought that sort of attitude was eminently disrespectful to anyone with whom you could possibly have any kind of relationship what so ever. It's something only the completely immoral assholes use on mindless, pathetic simulacra. And I say "immoral", not "amoral", since the statement entails a subversion of a pretense of emotional values.
But, De Beers clearly seems to think it works. It seems to think that this is a perfectly acceptable way to communicate with their clients, in their relationship with us. So, we have that same immoral to simulacrum relationship.
It's nice to be called a "worthless cunt" to your face, isn't it folks?
The REAL jabber has the user id: 13196
What you do today will cost you a day of your life
Lab produced diamonds will probably have very good international and geopolitical effects....
... and it could be a good thing.
As you probably know, lots of local wars make the African continent "messy" (it's the less we can say). The control of diamond producing areas is one of the thing that explains many war situations in Africa.
So I think if diamond value is going down, control of these area willl no more be a good reason to make war
(Scuze for the bad english but I'm sure you slashdot peoples are smart enough to understand what I mean....)
Cost to produce has nothing to do with the price of an item, nor should it have. (Other than in the limited sense that if the cost to produce isn't at least a bit lower than the price, there is usually little reason to make an item.)
In fact, it is easy to show that, as far as most people are concerned, a CD at $15 is a better deal than a tape at $10. The proof is the fact that given the choice, most people will buy the CD. If anything, at that price the cassette is unreasonable -- I think I would usually go for the $15 CD even if the tape were only $5.
In my experience, both as a music consumer and as an occasional CD salesman, most people think $15 for a CD of good music is a bargain. $20 feels a lot more expensive, and it would usually take something pretty special to get me to shell out that much.
There's always this thin line of trust/mistrust between a guy and a girl.
If there's a trust boundary in a relationship, I'd consider that a warning sign. I know people who seriously say things like "never get married without a pre-nup", but I never quite understood this. Getting joint accounts and dual-name titles on property is just a no-brainer for me (it makes a will much easier...it also helps keep nursing homes from robbing me blind if I ever end up in one). If a marriage with a pre-nuptual agreement starts out with some expectation for failure and divorce, doesn't that seem to be a prediction rather than a contingency?
Healthcare article at Kuro5hin
it's entirely demand
they feel that people *want* CDs more, so they charge more. not the way competitive market based economies typically work, but if you have a lot of control you can force it.
and sure there are some small cost increases, but i've done enough cd production for friends bands to see the costs. with all costs included it's still cheaper and easier to produce CDs than tapes. and a fair amount of 'bonus tracks' are already recorded, written and produced, they just get left out because some songs always get left out.
incidentally i am all for the new trend to include a dvd with CDs. again, most of the material is already produced--videos, give the band a miniDV camera in the studio, etc--but it's a nice bonus that some companies have begun to include.
botom line: buy more vinyl, and buy it from your local indie record store owner.
!(^((ri)|(mp))aa$)
Because people keep them in their family, because they're too damned expensive, or people form emotional attachments to the rocks (because they tend to be given for emotional reasons).
Also, there's the simple fact that although people are getting more and more trusting of Ebay and the like, they still don't trust people selling diamonds outside of the commercial sellers, because most people don't know how to tell a fake diamond from a real one (even something that isn't a good 'fake' like a lab-created stone) without paying someone to look at it.
-PainKilleR-[CE]
I'm a chemist, I know what they are, but "fake" is four letters and "synthetic" is 9. I give the average slashdotter credit for the intelligence to discern the difference, though perhaps that's overstating things.
On the day when 'authentic' diamond merchants are frantically shipping their stones with a crappy little scrap of paper with a hologram on it, like an Franklin Mint ripoff item, life will be better for common sense people.
They already laser-inscribe the more valuable ones with a serial number. The easy bit for the manufacturers of fake diamonds is going for the small-diamond market. As the article says, anything under 1/5 carat isn't worth verifying. And you can make a $10,000 diamond-encrusted bracelet with a bunch of diamonds that are, individually, not worth enough to check. And that will be a nightmare for de Beers to control.
-Looking for a job as a materials chemist or multivariat
Wait... you mean that you'd marry a girl like that?
What^H^H^H^H One thing a woman wants is to feel that her man values her more highly than all other things. And she needs a proof of this that is unambiguous and readily demonstrable to her friends/family. Jewelry serves this function well, since (1) the man gets no utility from it, (2) it not a dual-use item that might have been bought for its practical value, (3) it is portable.
A second thing a woman wants, in addition to knowing her man places a high relative value on her, is that she has a high absolute value. Jewelry readily demonstrates by its price just how much means her man possesses and that his means are at her disposal.
Why diamonds as opposed to other jewelry? Why, marketting, of course.
"We reject as false the choice between our safety and our ideals." --The American President (20.1.2009)
Money isn't everything. But men and women are alike on this point: Every one of us, if given a choice between two identical mates, one rich, the other poor, will take the rich one.
It's how alike they have to be before money becomes the deciding factor that measures the difference between a mercenary and a saint.
"We reject as false the choice between our safety and our ideals." --The American President (20.1.2009)
Menta's article is a travesty. The Wired article reports that the cost per carat for Appollo is $5.00, not that either diamond-maker will sell their diamonds for $5.00.
Menta also tries to argue that CDs are scarce. Last I checked, I could buy CDs at WalMart, Target, the grocery store, music stores, and dozens (if not hundreds) of online stores. CDs are not scarce. Music is not scarce either, and never has been. For people who really love music, they can find it all around them, i.e., in coffee shops, bars, churches, symphonies, independent artists who distribute online, etc. The only thing scarce in the recording industry is talent.
And for the last time, exchanging copyright protected material (like an entire album), without the author's permission, with hundreds (or thousands) of people through a P2P service is copyright infringement. Copyright infringement is not exactly the same thing as theft, but it is a violation of federal law, and some kinds of infringement carry criminal penalties.
Yes, I would, if I loved her for other reasons. Not everybody has to share the exact same social/economic/political agenda as you to be compatible with you. Nor is it your place to pass judgement on those people. It is not really a persons fault if they grow up in a society....nay....a WORLD where diamonds are considered rare and wonderous things. Granted, the rare bit is now known to be false, but there is still a social value given to diamonds. It is not so much the rarity of the diamonds....it is that the man who buys his woman a bigger rock has more money, and is thus better able to provide for her.
When women brag about their ring to their friends, its not about the rock itself, as I'm sure you are aware. They are merely bragging about their husband. While their basis for such bragging may be misguided, you should not fault them for being so happy with the person they are marrying that they want to show them off. Now, to be fair, there are certainly those women out there who only care about the size of the rock, and about where they rest in the social pecking order. And I would never come near a girl like that. But you should not fault the rest.
Buy Steampunk Clothing Online!
One thing a woman wants is to feel that her man values her more highly than all other things. And she needs a proof of this that is unambiguous and readily demonstrable to her friends/family.
My woman, and most of them women I know, are perfectly capable of defending their choice of mate to their friends and family. They tend to value loyalty, apparant friendlyiness, and their affect on the woman more than the man's material wealth.
And, with a median household income in the US of about $50,000, most women will probably be able to think of a better use for $12,500 than buying a diamond. Their own car, a down payment on a house--even their wedding or a spree of their own.
IMO, if the woman (and her family) can't grasp the "DeBeers is a cruel monopoly, I'm not buying a DeBeers diamond, what else would you like?" logic, then the marriage simply won't last.
Nope. Spoke to a few females at the ivy league university I graduated from about what they thought about the diamond trade. Though liberal and intelligent, their minds would shut off if diamonds were even mentioned. "Diamonds are forever," was recited to me time and time again.
You are vastly underestimating the desire of females to have the *perfect* wedding, and that includes diamonds, no matter what.
Every one of us, if given a choice between two identical mates, one rich, the other poor, will take the rich one.
Do you honestly believe people are that shallow? It's going to come down to personality, brains and values.
I dated a rich girl in college. She was a cheating bitch. A hot cheating bitch with a nice ass and a lot of money, to be sure, but a cheating bitch nonetheless.
The girl I married came from a family of little means. She's sweet and beautiful and appreciates the nice things I can buy for her because they're more than she's ever had. She doesn't need a Ferrari to be happy. And if I ever bought her a diamond, she'd kick my ass for wasting the money.
I had a point here, somewhere...
-Ryan, with the unoriginal sig
This would make a great shirt.