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Ballmer Sounds Off
PreacherTom writes "Steve Ballmer shares his thoughts on the Web 2.0 phenomenon, Zune, XBox, Vista, Bill's upcoming 2008 retirement, the future of Microsoft, and other subjects. For example, regarding the GooTube deal: "Right now, there's no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that's up there is owned by somebody else. The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google." He's blunt, if nothing else."
Interviewer: Aren't you oversimplifying things? I mean YouTube was taking down copyrighted content once they were notified of its presence.
Ballmer: I'd never be guilty of oversimplifying something--I was merely attempting to explain a situation to the rest of the world about a company that just happens to be one of our biggest competitors and a direct threat in the search and advertisment industries. You don't remember it like that? Well I do and so does DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS
My work here is dung.
Uh. Surely if YouTube is the ticking time bomb of copyright infringement that it's claimed to be, then what's happening is Google transferring money from the hands of Google investors into a holding tank for eventual litigants.
I mean, if you were Ballmer, wouldn't you be thrilled that Google had bought YouTube?
Now that YouTube has money behind it, Google can expect legal action from a whole bunch of people... some of it justified.
How about "The Internet" which they kindly link to from the start menu? Remember that it won't fit in the recycle bin...
Ballmer let slip at the end, (regarding European vista launch date):
"...we'll have to push the button because our partners--hardware makers and retail chains--need time to ramp up supply chains, marketing, and demand generation."
Demand generation. Vista itself has no demand (meaning no extra benefit over XP), so they have to artificially create demand now.
Ballmer wasn't using wealth to mean "money in the bank account." He was using it in a more technical sense of the word. "Wealth," economically speaking, is stuff that has economic value. Cars and potatoes and the like. Money is just a means of quantifying wealth and facilitating the process of bartering for it.
Information (music, videos, etc.) has economic value, and is therefore wealth. That is what Ballmer was talking about, the transfer of that economically-valuable information from the copyright holders to google.
Now, this statement is still absurd, because of some "have your cake and eat it too" mentalities at work behind the concept of intellectual property.
If I take raw materials and use them to build a car, I have created wealth. I am now wealthier because of it. I also own the wealth I created, which means I control it. I can give it to you if I want, in which case you are more wealthy and I am less wealthy. Obviously I can't keep doing this endlessly without running myself dry, so I will need you to give me something back. Hence we barter. But what's important is that once I give that item to you, I don't have it anymore.
With information it is different. I can give you a copy of it without giving up my copy of it, and without having to expend resources in its creation. So, that means, I can give it to you and still keep it! Thus I get to make money by claiming your wealth (in the form of the money you pay me) without actually giving up any of the wealth I already have (the music/video/whatever).
Of course this is absurd, and demonstrates where common information-as-property metaphors fall short. It doesn't make sense for me to sell you a car and then claim that I still own it, so why does it make sense for me to sell you a digital file and then claim that I still own it? In the real world, I wouldn't have that car anymore, so does that mean that I am obligated to delete my copy of the song once I sell it to you? Of course not. Treating information as property leads to these sorts of contradictions because information is not property, and doesn't work the same way.
"Intellectual property" is basically a game of pretending like information works like property in some ways, but insisting that it does not work like property in other ways. We pretend it works like property when individual consumers are concerned (they can't make copies of cars without resources, so they shouldn't be able to make copies of information without resources either), but we insist that it does not work like property when rich businesses are concerned (sure, I sold you a COPY of the data, but really I still own the data). This is not only logically inconsistent, but economically harmful (it results in lots of money flowing upwards without any real wealth flowing downwards).
We should instead treat information as information, and rethink copyright laws. They should not arbitrarily restrict the zero-cost duplication and distribution of information (which is a great benefit to humanity in and of itself). We must also recognize that money not spent on electronic information is not money lost to the economy, but rather, money that can be spent in an economically healthy way (used to buy food or cars or any other traditional exchange in which the wealth flows in both directions).
I have already written more than anyone will read, so I won't bother to get into the false claims that intellectual property laws protect content providers (which they do not) and that giving them up will result in no new creations and cultural starvation (which it will not). I just hope that the next generation will be able to see through these hypocritical fallacies of "intellectual property law" and act more intelligently than the current generation is acting.
there's no business model for YouTube that would justify $1.6 billion.
or, translated to normal english:
"We have no idea how they plan to make money on this, so it must be impossible."
The sounds of a man who can't accept that there might be people smarter than him on the planet.
Assorted stuff I do sometimes: Lemuria.org