Economist Looks at the Digital Home

spisska writes "There is an excellent article this week in The Economist looking at the "digital home" and at what cable, telecom, internet, and hardware companies are doing to create the new entertainment nerve centers of the future. The article touches on what exists today (CDs, DVDs, etc), what is in production or preparation from various companies (MS MCE, IPTV, music downloads, etc), DRM, interoperability, and competing standards, among other topics. Although there is no mention of MythTV or Linux, it is a pretty solid analysis of the market as it is now and concludes that vendors are trying to hype a market into existence where there is no great consumer demand. A choice quote: "'If consumers even know there's a DRM, what it is, and how it works, we've already failed,' says Peter Lee, an executive at Disney". The article concludes: "As John Barrett, research director at Parks Associates, says, 'it seems that we've concocted a new variant of the 'paperless' office.' This, you recall, was the consensus a decade or so ago among technophiles (but almost nobody else), that computer technology would save our forests by freeing us from having to read and write on paper. Today's variant, says Mr Barrett, is 'no more tapes, CDs, DVDs, discs.' In other words, expect them to be around for a very long time to come.""

Comments

Knowledge of DRM

[kfg]

"'If consumers even know there's a DRM. . . we've already failed,'"

Well Sparky, you kinda let that cat out of the bag when you forced people to watch ten minutes of ads every time they just wanted to watch a DVD, didn'ch'a?

KFG

Re:Need British translation

[Anonymous Coward]

From the OED; claptrap:

Language used or sentiments expressed only to elicit applause; pretentious but empty assertions; nonsense.

All marketing is claptrap, so marketing claptrap is a tautology.

Consumer behavior

[sg3000]

> An intelligent, wise consumer always investigates before
> making purchases.

Although your idea to get more "intelligent consumers" is admirable, it's misplaced. Basic understanding of consumer behavior indicates that "investigation" does not necessarily proceed the purchase, regardless of the "intelligence" or "wisdom" of the consumer.

There are considered to be three types of decision making processes for consumers:
a. Extended problem solving
b. Limited problem solving
c. Habitual or routine

Extended problem solving is used for high value, high involvement goods, like cars, houses, etc. Limited problem solving is used for low value, low involvement goods. Habitual is used for low involvement items that people purchase frequently.

For extended problem solving, the process looks as follows:
1. Problem recognition (the consumer recognizes a "problem")
2. Internal search (the consumer thinks of possibilities)
3. External search (the consumer does research for other possibilities; i.e. investigation)
4. Alternative evaluation (the consumer considers the different choices that came up from internal and external searching)
5. Choice (the consumer makes a decision; i.e. purchases)
6. Outcomes (the consumer evaluates their results for determining a solution for the next time)

For low involvement decision making, there is a limited decision making process that's fundamentally different:
1. Problem recognition
2. Internal search (the consumer thinks of possibilities)
3. Choice (the consumer makes a decision)
4. Outcomes (the consumer evaluates their results)
5. Alternative evaluation (if the consumer is unsatisfied, they seek out other alternatives that will be considered for the next time they purchase)

(I'll skip Habitual here)

"Investigates" implies external search and alternative evaluation, and you can see that those only occur before the purchase in an extended decision making process, but they do not occur in a limited decision making process. In a limited decision making process, the user may consider alternatives if they're not happy in the last step, so the next time they may do an extended decision making process and then they'll do an external search.

Now no one is going to go through extended problem solving whenever they want to buy a Coke, but they may either go through extended or limited when they're going to buy a car. Often times, that's the purpose of a coupon -- to push people out of a limited decision making process or habitual process and into an extended decision making process so they'll consider the product. You can also see that limited problem solving when IT managers at companies play the game "no one was ever fired for buying XXX".

It has nothing to do with "intelligence" as it has to do with the personal involvement with the purchase. And for a $100-200 MP3 player, a consumer isn't necessarily going to go through the extended decision process; they may recognize an iPod, file it mentally away, and tap into that knowledge when they do the internal search for a limited decision making process.

Re:The big problem with paper

[cpt kangarooski]

You misunderstand Bobbs-Merrill.

In that case, the publisher asserted that their copyright gave them the power to control resale; it did not. As the Court noted, there was no issue of whether there was a contract at work in the case, which might have produced a different result:

The precise question, therefore, in this case is, Does the sole right to vend (named in 4952) secure to the owner of the copyright the right, after a sale of the book to a purchaser, to restrict future sales of the book at retail, to the right to sell it at a certain price per copy, because of a notice in the book that a sale at a different price will be treated as an infringement, which notice has been brought home to one undertaking to sell for less than the named sum? We do not think the statute can be given such a construction, and it is to be remembered that this is purely a question of statutory construction. There is no claim in this case of contract limitation, nor license agreement controlling the subsequent sales of the book.

In our view the copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchasers, with whom there is no privity of contract.

Where there is a contract -- which is what many courts have been finding in EULA cases -- then limits on first sale and so forth are entirely acceptable. In fact, the seminal EULA case, ProCD, dealt with public domain data, which as it was uncopyrightable, had to be protected by contract or not at all.

EULA cases have nothing to do with machine-readable formats. They're more common in the software industry (despite typically being utterly pointless) more out of historical accident than anything else. But you can use them with paper, or other consumer goods, just as much as you please, as far as the courts seem to be saying lately.

We'd be better off abolishing the practice altogether, however. It's dangerous.