"What the record companies can not apparently figure out is that if priced affordably, some sales are money in the pocket versus no sales and no money in the pocket."
Oh, I'm sure they know this, but what many Slashdotters don't know (after all, we're programmers, not marketers or economists) is that the optimal point on the supply/demand curve is usually the point at which the most money is made over time. It might make perfectly good sense to you that the right point is where you sell the most units, or where you make the most profit per unit sold, but that's not the classical way of picking the price point. And, it's a supply/demand curve, not a slope or a line, so people in the business of setting pricing (for whatever they're selling) must deal with elasticity, market size, and those other niggling things that we get to ignore when we write "just lower the price, morons!"
If you're boggling over this, think about Kenneth Cole vs. Sears, or, say, a luxury car company vs. Hyundai, or even Adobe PhotoShop vs. The Gimp. Kenneth Cole and Cadillac and Adobe could certainly move a lot more units if they lowered their prices dramatically, but they don't want to. It's not, as you've put it, because they "can not apparently figure out" pricing theory.
For what it's worth, CD prices have indeed been in free fall lately (new releases were $18 - $20 just a few years ago and now can be had for $13 - $14) as the industry reacts to new competition from piracy and whatnot. But Warner Music had something like a 6% operating margin last year... there's not much room to play with.
"Now, if they were smart.... record companies would *give away* music from bands just starting out and from the biggest bands out there and make money from tours. Bands in the middle of the spectrum could be the "middle-class" of the record companies that could provide the most profit after small bands graduate into the middle class and start selling their music, touring as they want."
The rough consensus among Slashdotters seems to be that the right way to run a record company is to:
Charge much less than $13 a CD or $1.00 a track -- it's commonly pointed out that Allofmp3's Pay for the production costs of the music, but give the artists the copyright on the recording
Pay the artists higher royalties
...to which you've added:
Give away music and take a cut of the artists touring profits
If all of this is so obvious to so many people (at least here on Slashdot), it raises the question of why this hasn't yet been tried. Even Magnatune won't pay for studio time and asks that customers pay about $0.80 per track (and won't even accept less than $0.50 per track). Another really cool company, CDBaby, pays musicians well, but doesn't help with production costs and still asks for $14 a CD. And yet just about the only time we hear about either of these great companies is here on Slashdot.
Why don't you and a couple of other clever Slashdotters put your heads together and really do it right?
"I never understood how a blockbuster movie that took months to film on location with dozens if not hundreds of workers building sets, setting up special effects, holding cameras and microphones, and that have to pay big stars millions of dollars can be purchased for about $15."
I'll take the risk that you really don't understand it and you're not simply being disingenuous. A couple of other people have explained some of the reasons, but I'll cover another one:
Manufacturers of DVDs and CDs have every right to price their products according to supply and demand.
It's vital to understand that the optimal point on the supply/demand curve (and it's not a supply/demand line or a supply/demand slope) is not always the point at which the most people buy it, or even the point which generates the most margin per unit sold, but usually the point at which the seller makes the most total profit over time.
The producers of DVDs and CDs seem to think that around $13 for a CD is about right, and around $20 for a DVD is about right. Selling them for less might increase unit sales, but decrease the overall profits to an unacceptable level (e.g. Warner Music netted around 6% last year; they don't have much room to play with). They might like to sell them for more, but if there aren't enough customers out there who'll pay more for them, then they won't.
If you think that any company is obligated to set a product's price based on your arbitrary idea of how much profit they should make per sale, remember this: they have the same rights that you do. If you could live comfortably on $40K a year, you'll likely still take that job that pays $60K or $80K or even $800K if you're able to get it. Kenneth Cole has every right to sell shirts for $150 while Sears sells shirts for $15. Why wouldn't producers of DVDs and CDs enjoy this same right that you and Mr. Cole do?
By the way, that price point for which I'll buy a DVD rather than renting it is $5.00. Why? I might watch a DVD a few times at most. I just won't get more than five bucks of enjoyment out of it. Most DVDs don't cost $5.00, so I don't buy them. But I'll listen to that $14 CD dozens or even hundreds of times. That's what counts for me, and for most consumers -- whether I'm getting a good value for my money. I buy what I want if I think it's worth the money, and I could give fuck all about the net margin or the gross margin.
'Cause I've been traveling. Greetings from O'Hare's B concourse.
"I notice he hasn't responded to this. I'm thinking it's because, well, there isn't an easy way to do it. In fact, I can't think of a _hard_ way to do it. Maybe an SUID script to open it as root, but then you have the display thing to deal with. Hm... more likely he was just talking out his arse."
I think I was too delicate in making my point. See my reference to the kitty cat in my original post. Yeah, it's highly unlikely that pussy would dance across the keys in a manner to make this happen, but the point is that it's about as likely, practically speaking, that some audio playing over my speakers would cause a similar fate to befall a Vista installation. I hope that's clear now.
I think my post was taken as flamebait or an OSX vs. Windows sort of thing. That was not the intention -- I use both. The point is that it's fun to have a laugh at Microsoft's expense.
"All voice recognition software, no matter what platform, would suffer from this supposed "exploit". So why this article on Vista specifically? What is the real agenda here? Also, if the voice recognition software is trained for a specific user's voice, the chances of an exploit are reduced."
Yup, this is an old one. There's an apocryphal tale of a user group meeting from long ago of a vendor demonstrating voice-control software and a smart aleck in the back of the room yelling "DEL *.*!" (or whatever the MS-DOS command was).
As you implied, the agenda is, of course, to have a laugh at Microsoft's expense. If they hadn't included voice control software, the opportunity would have been to point out that Microsoft spent $BIGNUM person-years working on Vista and didn't even include that feature. OSX's easy access to a shell prompt with root access is about as relevant an exploit as the voice control exploit, and the odds of a cat wandering into my house and walking on the keys in such a way to generate the wrong "rm" command are about the same as this Vista "exploit" happening to me. But, it's aways fun to have a laugh at Microsoft's expense, isn't it?
"Evidently this author of TFA is not aware of this reality."
I posit that the author was quite aware, but was being disingenuous. He was writing for an audience of P2P fans, not the content industry.
Lots of people state that the content industries should change their tactics in the face of the explosion of piracy, but what they often really mean is that they would like the practices changed so that they may continue their guilt-free piracy. In the meantime, people like the author of TFA throw out these lame ideas, so we can all gloat when the content industry rightfully doesn't implement them. This, in turn, makes us feel both morally and intellectually superior to content providers, which makes it easier to engage in guilt-free piracy.
"It's not nonsense at all. Supply of proprietary software is not infinite - the copyright monopoly creates artificial scarcity. It weren't for that artificial scarcity, selling price per copy would approach zero, just as it has for Firefox, Linux and a whole host of other best of breed products. Just because the gimp has not attained best of breed status doesn't disprove basic economic theory, it just proves that the gimp is not best of breed, yet."
Pick lots of retail sectors -- cars, clothing, coffee makers, power tools, you name it -- and you'll find instances where some vendors make a really nice product and thus command retail prices that are much higher than the cost of materials. It happens with software, too, but the software industry didn't invent the idea.
Agreed with you that The Gimp's main problem is that it simply isn't as good as PhotoShop. If the folks who spend their spare time writing it can work out the economics of how to make it as good as PhotoShop, then some day, it may be an interesting fight in the market. But a big reason that it's not good enough is because the cost of good software is often much, much more than the material cost of the media. PhotoShop's good because Adobe has spent the money to get an adequate supply of smart people in the room and keep them there for a long time. Adobe's net margins are good, but not crazy insane like you'd expect if the true selling cost of the product were equal to the material cost.
Also agree with you that if we abolished copyright law, it would indeed be legal to get PhotoShop for free, so the price would be zero for everybody, not just for the people now whose moral compass allows them to get the torrent. Abolishing copyright law would shift the financial rewards to those who are good at copying or facilitating copying (TPB is already making some pretty good money), and shift them away from Adobe and other innovators who follow the "invest a lot of money in R&D" model. It's been argued that abolishing copyright law would bring about this grand and glorious golden age where the vast human creative potential could be reached due to the fact that each of us could have all the free software and music we want. I'm not sure about that, but all those folks in China who already own the factories would certainly be happy with the notion.
"BTW, why is it that software is the only product where supply and demand and mass production rules don't apply? Everything else that is mass produced comes down in price, software stays the same or gets more expensive."
Lots of people don't understand the "...and demand" part. Sure, lots of us would like Adobe or Microsoft to sell software for five bucks, and perhaps many of us would only pay five bucks for the latest wares from Adobe or Microsoft. But if there is sufficient demand at a higher price, that's the price at which they will sell it.
Many folks (at least here on Slashdot) think that the ideal point on the supply/demand curve is the point where the product has the most customers. The reality is that it's at the point where the company makes the most profit. Finding this point on the curve that works for your business means understanding the market size, knowing who you want as your customer, and who you don't want as your customer.
More to the point: PhotoShop is $650. Enough people want to buy it at that price to allow Adobe to have a really nice building -- you should see their lobby! Sure, The Gimp is free. But even at free, it's not good enough for a critical mass of users. Lots of Slashdot armchair economics experts don't get this; they parrot the "supply is infinite thus value should be driven to zero" nonsense. Meanwhile, Adobe continues to do quite well selling a few bucks' worth of CDs at $650 a set, while you will have to look far and wide to find any serious designer who's foregone PhotoShop in favor of The Gimp.
"To draw on an obvious but compelling example, few would suggest that African-Americans were wrong to protest segregation in the South by sitting at whites-only lunch counters and refusing to leave, or by refusing to move to the back of the bus."
You've nailed it. By pirating movies rather than going to see them in the theatre, we're right up there with Rosa Parks. Saving money is just a fringe benefit. The 60's civil rights protests obviously come to mind here.
I'd love to sit in on a meeting between your average "pirating all my entertainment is my form of civil disobedience" teenager and somebody who was actually there in Montgomery or Selma, facing down the police with the firehoses and the dogs and whatnot. I'd really like to see the look on the latter's face when the former tries to assign any equivalence to the two.
"Time will tell if civil disobedience of the DMCA and/or DRM is justified or not."
Stick around on Slashdot long enough and you'll find that it's extremely justified by those who do it... and that's really all that counts. Collectively, humans are very good at justifying their actions. I think it's an evolutionary thing.
"Wow, that sure is some shiny green astroturf you have there. Not to worry; a used BMW is almost as good as a new BMW, at a fraction of the price."
I agree with you 100% that picturing your typical film industry worker as capable of owning a BMW surely simplifies a lot of things and smooths out a lot of potential moral issues, but we know it's not the case.
I wonder if many people who work outside the IT biz look at Bill Gates, Larry Ellison, and all those dot-com millionaires and assume that the typical person who works in the computer software biz is well off enough to own a BMW. Perhaps it's this misperception that drives a lot of software piracy, much as the misperception you covered above appears to drive a lot of film piracy.
"that is, wasn't copyright put into place to protect companies from other *companies* (and "businessmen") stealing their IP?"
If you're genuinely interested in learning about the history of copyright law, googling on "history of copyright law" will get you started. Many folks point to the Statue of Anne as the first copyright law. It was enacted to protect writers from their publishers.
"something to think about: record labels' biggest costs are distribution and promotion. so when i buy a cd, i'm paying for the promotion and distribution behind it -- not so much the creation of the content (the artist is responsible for that)."
Interesting that you you know people who can't distinguish between a CD and an MP3, and at the same time you state that the artist is responsible for the creation of the content of a CD. Unfortunately there's also a world of difference between a sheet of tabs and lyrics, and a song that's been recorded, engineered, and mastered. Whether we like it or not, production costs are a significant piece of the pie for all but the best-selling CDs. At any rate, your statement is correct for lots of stuff; milk, designer clothes; computer hardware, and so on. "CoS > CoP" is one of the tenets of supply chain economics.
"i think the labels (and society) is just beginning to come to terms with the issues. i'm still unclear on a lot of them. but i do know that a future with strong IP law is a dystopian one. i think it's one of the top issues of our time."
I disagree. If I want to see a movie or listen to some music, I rent it from Netflix, or buy it on the iTMS. If I don't... I don't. The great thing about copyright is that you can opt out to certain degrees (see the GPL, Creative Commons, etc.) and it's not a requirement of copyright that you sell the material. Prices are market-driven; if you think there are enough people who think that a buck a track is too much, then that's a golden opportunity for you to go into the business of helping artists sell their work for $0.50 a track. The market will find a balance; if there's a demand for free content, and there are enough talented people who are willing to spend the time creating work and giving it away for free, then it will exist. But as long as people keep wanting to, say, buy music from major labels at a buck a track, then it will be an uphill battle. It's one thing to say "music is overpriced" but it's another thing to serve a demand that may not exist.
I agree 100% that many of us find it distasteful to use this word, but to claim that it does not have this meaning is, frankly, tilting at windmills.
The word "piracy" is an example of a homonym, or as some call it, a homophone. Type "dict piracy" into your Firefox toolbar (we're all running Firefox, right?) to get the following definition:
"2. the unauthorized reproduction or use of a copyrighted book, recording, television program, patented invention, trademarked product, etc.: The record industry is beset with piracy."
We're all smart enough not to confuse dogs and trees when we hear the word "bark," so it's disingenuous to suddenly pretend to be homonym-challenged.
Another common bit of misinformation is that this is some sort of new meaning of the word. Not so; it shows up in court rulings from the 19th century, and if you're lucky enough to have an OED around, it'll tell you a lot more about the etymology.
Again: you may find the definition distasteful. But there's no point in claiming that the definition does not exist.
Before I explain the difference, I should acknowledge that many Slashdotters have equal disdain for anybody in the music business who tries to assert their rights. For example, we normally state that we're in favor of the artists and that we think artists should have more rights, money, and respect, but when the BMI or ASCAP (US performing rights agencies run by and for artists and wholly unrelated to the RIAA) sue businesses for playing music without a royalty, Slashdotters bring out the hatred equal to that of the RIAA. So, if "RIAA" is shorthand for "anybody in the music industry who tries to interfere with the free (as in beer AND speech) distribution of music", then yeah, GEMA is like the RIAA, but it's still important to understand the difference.
Here's what GEMA is about, in English. Like BMI and ASCAP, they're a society of composers, lyricists and music publishers.
I believe (somebody please correct me if I'm wrong) that the actual German equivalent of the RIAA -- that is, the trade group representing record companies -- is the IFPA.
With all the ire at GEMA's actions, I think the message here is clear: as covered above, we all respect the musicians, and we want them to have more money, rights, and respect. But only on our terms. If they take legal actions or otherwise demand more money, rights, or respect -- in other words, if they simply get too uppity -- then they're on equal moral grounds as the RIAA et al.
"Where do you get that from? The cassette recorder on my home stereo has no such feature neither does the VCR in the attic."
He's referring to the AHRA. He referenced it in his note; it's also in the writeup. Specifically he's referring to the AHRA's requirement that digital audio recording devices have serial copy management systems in place. He was pretty terse; he made the (obviously incorrect) assumption that readers are familiar with the AHRA.
At any rate, the devices you mention aren't likely defined as digital audio recording devices by the AHRA. While you're 100% correct that they don't have SCMS, it's not germane to the discussion.
"I'm just saying. If he followed the rules he'd either have a highly negative profit, or he wouldn't be turning out the same tapes he's been turning out."
Sorry, I lost you. There are plenty of purveyors of legitimate, authorized mixtapes and promo CDs. Music licensing is a healthy business and the rules and procedures are pretty straightforward. It takes time and effort to be successful, (as do many, many things) but it's not rocket science. He took the easier and quicker "don't get authorization for content" route which provided short-term gain but he's running into some steep consequences.
If you can't see a way to build a business of producing mixtapes or promo CDs with authorized content -- perhaps you have no idea where to even begin, or you can't fathom doing it without a loss of hundreds of millions of dollars a year, as you put it -- that's fine... the important thing is that there are others who do. The universe sort of balances out; I'm sure there are lots of folks in the music biz who know fuck all about, say, load balancers.
"I'm also confused. This is a civil matter, not a criminal one."
I don't follow you. The threshold is $1K retail value in 180 days. Are you of the belief that in the past six months he sold less than $1K worth of CDs? He had 80K CDs in his possession and as you know mix tapes are only really good for a month or two; even if you (inaccurately) placed the value at $1 per CD, he was likely selling at least $80K of merchandise every few months. That's over the criminal threshold by an order of magnitude.
"I think this is another case where the Slashdot crowd generally sides with the "little guy" and it just looks like the same hypocritical line that the RIAA puts forth because we all are trying to root for the underdog. However, it's not a good argument."
I wouldn't even go so far as to use "little guy." He had 80K units in inventory. Mixtapes and promo CDs have a short shelf life (the outfit that my company buys from gets a new one each month in each of several genres), so his annual volume was likely way more than that -- perhaps needless to say, far more than the sales volume of many indie labels. And, he seems to have profited handsomely.
There are plenty of ways that he could have engaged in the mixtape or promo CD business while respecting the rights of the performers and the record labels which funded the production (and had exclusive distribution rights to) the music he was selling. That might have meant that he cleared less profit on each sale, so I suppose it's his greed that got in the way.
"As opposed to whom? The RIAA? They're a "champion of artists' rights"? Please tell me you don't believe that for a second."
Wow, I don't even understand what led you down that path. Like I mentioned in my post: legaltorrents.com, garageband.com, creativecommons.org.
The content you see on those sites was placed there with the artists' explicit permission. Compare and contrast the actions of these sites compared to a site like ISOhunt. I acknowledge that they may not be as useful or interesting because they don't have the really cool stuff like the latest hit movies, CDs, and software, but I hope it's clear that it's quite easy to set up a site that's truly respectful of creators' rights, rather than paying lip service while making a profit off of piracy.
"Can you name one reason we shouldn't be considered "legitimate"? We comply with DMCA notices as required by law, and we don't actually host any of the end-result files. We simply index torrents."
First, a clarification of terms: I'm using "legitimate" in the sense that I think you're trying to convey: legal, and working in a manner that's respectful of others' rights under the law.
There are indexing, search and resource sites that fall under that description -- legaltorrents.com, garageband.com, creativecommons.org, and so on. A quick look at what your users are downloading shows that you're in a different league. You have quite rightly discovered that there's a huge demand for pirated material, and that there's money to be made in addressing this demand. Kudos to you and I hope that you continue to be successful, but it's pointless to claim legitimacy here.
"We're even working with independant artists. A few months ago I worked with the artist Kazy to release a higher resolution music video through our site as a promotion for his youtube contest entry, was that not legitimate? Kazy seemed to think it was."
Kazaa also tried that route when they started to feel the heat. If you were really serious about being "legitimate" you'd start by filtering out the obviously copyrighted content. This doesn't mean waiting for a DMCA takedown; it means exercising a firm grasp of the obvious and recognizing that Windows Vista and the Borat movie are not legally being made available as free downloads. Think long and hard about why the MPAA is after you and not after the sites I mentioned above.
Of course, I understand why you would not take this approach; it would kill your revenue stream. It's pretty likely that your income is severalfold that of a site like legaltorrents.com, and, let's face it -- you're here to make money and to give your customers what they want, and not to be a champion of artists' rights.
"Good grief, -all- the legit torrents I have got recently have been ISO's (as opposed to the other stuff, it tends to come in divx). They have all been F/OSS distros by the way, and why would I search when I can go direct to the relevant website to find them. The lack of linux distros on the site you list is all about relevance (or, to be more precise, a lack of it) to the people who would use such a site."
Exactly. If I were after a Linux ISO, I wouldn't go to legaltorrents.com, and I certainly wouldn't go to ISOHunt. Others seem to agree... snapshots on the Wayback archive show that Linux distros aren't even in the top 20 searches.
You and the other other fellow who replied to my comment have helped close the door on the notion that the "ISO" in "ISO hunt" referred to Linux ISOs. There are a lot of Linux ISOs being distributed, but they sure ain't being distributed to any significant degree on ISOHunt or the other piracy-centric torrent sites.
"First thing I thought of from the name is can I find Linux Distro ISOs."
I can see how somebody who's had no experience with piracy might have thought that, but a visit to the site would have cleared up that misconception for you REALLY fast. The top three searches recently were "Prison Break," "Snakes on a Plane" and "Miami Vice" -- not Linux distros, obviously. The only OS in the top searches was "Windows Vista," which is not freely distributable.
"It appears to me that they are doing everything that they can to keep BitTorrent as legitimate as possible in the eyes of the public..."
No, sites like LegalTorrents and even BitTorrent.com itself are "doing everything they can." ISOHunt puts absolutely no effort into maintaining legitimacy; when you visit a tracker site and see that the top stuff mirrors the top ten movies, CDs and games, it's pretty clear that the owners care not one whit about being "legitimate." Plus, the name "ISOHunt" is a pretty poor choice if you're trying to specialize in legal torrents.
If they had wanted to create a tracker for "legimate" content, they could have. Others have. But there's very little money in that business model. There's money in piracy, so that's the direction they chose.
Re:a Rose by any other name is still full of crap
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IsoHunt Shut Down?
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"When supply is infinite, as it is when you can copy something with zero effort without affecting the original, the cost approach zero."
Come on; you know that demand isn't infinite, and that costs are recovered only if the product sells. The supply/demand curve is still very much at play, even with products where the cost of sale is inordinately larger than the cost of production.
While it could be that you're simply smarter than those morons at Adobe, and that they haven't done their due diligence in setting pricing; it's pretty doubtful. Quoting Econ 101 stuff won't change the fact that Adobe has a nice, shiny building, and that there are a hell of a lot more PhotoShop users than The Gimp users, despite the fact that the latter is free.
"The point is IsoHunt is purely a medium which people could search out torrents. The purpose was to make a library of legit legal torrents that people have created."
The first clue that the above is bullshit is the site's title. "legit, legal" torrents are seldom distributed as ISOs. If you're thinking that it refers to Linux ISOs, think again -- there's already a site specializing in "legit, legal" torrents. Notice that there are few if any ISOs to be had there, and no Linux distros.
Listen, I understand why the owners of ISOHunt think they need to keep chanting the "legitimate" line; it's to build a case that they didn't have intent. But we don't need to be their stooges. We know exactly why ISOHunt was there. Let's not kid ourselves.
"And if all citizens are equal from a legal standpoint, isn't suing IsoHunt and not Google liable to be labeled persecution?"
You've been to IsoHunt, right? You understand their purpose, their business model, and so on?
For those of you who really don't see the difference, a good place to start is intent. Nota bene that when the folks at IsoHunt used the "legitimate distribution" phrase, they were being ironic.
Slashdot Mirror
"What the record companies can not apparently figure out is that if priced affordably, some sales are money in the pocket versus no sales and no money in the pocket."
Oh, I'm sure they know this, but what many Slashdotters don't know (after all, we're programmers, not marketers or economists) is that the optimal point on the supply/demand curve is usually the point at which the most money is made over time. It might make perfectly good sense to you that the right point is where you sell the most units, or where you make the most profit per unit sold, but that's not the classical way of picking the price point. And, it's a supply/demand curve, not a slope or a line, so people in the business of setting pricing (for whatever they're selling) must deal with elasticity, market size, and those other niggling things that we get to ignore when we write "just lower the price, morons!"
If you're boggling over this, think about Kenneth Cole vs. Sears, or, say, a luxury car company vs. Hyundai, or even Adobe PhotoShop vs. The Gimp. Kenneth Cole and Cadillac and Adobe could certainly move a lot more units if they lowered their prices dramatically, but they don't want to. It's not, as you've put it, because they "can not apparently figure out" pricing theory.
For what it's worth, CD prices have indeed been in free fall lately (new releases were $18 - $20 just a few years ago and now can be had for $13 - $14) as the industry reacts to new competition from piracy and whatnot. But Warner Music had something like a 6% operating margin last year... there's not much room to play with.
"Now, if they were smart.... record companies would *give away* music from bands just starting out and from the biggest bands out there and make money from tours. Bands in the middle of the spectrum could be the "middle-class" of the record companies that could provide the most profit after small bands graduate into the middle class and start selling their music, touring as they want."
The rough consensus among Slashdotters seems to be that the right way to run a record company is to:
...to which you've added:
If all of this is so obvious to so many people (at least here on Slashdot), it raises the question of why this hasn't yet been tried. Even Magnatune won't pay for studio time and asks that customers pay about $0.80 per track (and won't even accept less than $0.50 per track). Another really cool company, CDBaby, pays musicians well, but doesn't help with production costs and still asks for $14 a CD. And yet just about the only time we hear about either of these great companies is here on Slashdot.
Why don't you and a couple of other clever Slashdotters put your heads together and really do it right?
"I never understood how a blockbuster movie that took months to film on location with dozens if not hundreds of workers building sets, setting up special effects, holding cameras and microphones, and that have to pay big stars millions of dollars can be purchased for about $15."
I'll take the risk that you really don't understand it and you're not simply being disingenuous. A couple of other people have explained some of the reasons, but I'll cover another one:
Manufacturers of DVDs and CDs have every right to price their products according to supply and demand.
It's vital to understand that the optimal point on the supply/demand curve (and it's not a supply/demand line or a supply/demand slope) is not always the point at which the most people buy it, or even the point which generates the most margin per unit sold, but usually the point at which the seller makes the most total profit over time.
The producers of DVDs and CDs seem to think that around $13 for a CD is about right, and around $20 for a DVD is about right. Selling them for less might increase unit sales, but decrease the overall profits to an unacceptable level (e.g. Warner Music netted around 6% last year; they don't have much room to play with). They might like to sell them for more, but if there aren't enough customers out there who'll pay more for them, then they won't.
If you think that any company is obligated to set a product's price based on your arbitrary idea of how much profit they should make per sale, remember this: they have the same rights that you do. If you could live comfortably on $40K a year, you'll likely still take that job that pays $60K or $80K or even $800K if you're able to get it. Kenneth Cole has every right to sell shirts for $150 while Sears sells shirts for $15. Why wouldn't producers of DVDs and CDs enjoy this same right that you and Mr. Cole do?
By the way, that price point for which I'll buy a DVD rather than renting it is $5.00. Why? I might watch a DVD a few times at most. I just won't get more than five bucks of enjoyment out of it. Most DVDs don't cost $5.00, so I don't buy them. But I'll listen to that $14 CD dozens or even hundreds of times. That's what counts for me, and for most consumers -- whether I'm getting a good value for my money. I buy what I want if I think it's worth the money, and I could give fuck all about the net margin or the gross margin.
A good place to go hunting is techcentralstation. It's nothing but paid ads. Check the Energy and Environment page. Articles like this one sound like they have some sponsorship behind them. Interestingly enough, the author is also a proponent of intelligent design.
"I notice he hasn't responded to this."
'Cause I've been traveling. Greetings from O'Hare's B concourse.
"I notice he hasn't responded to this. I'm thinking it's because, well, there isn't an easy way to do it. In fact, I can't think of a _hard_ way to do it. Maybe an SUID script to open it as root, but then you have the display thing to deal with. Hm... more likely he was just talking out his arse."
I think I was too delicate in making my point. See my reference to the kitty cat in my original post. Yeah, it's highly unlikely that pussy would dance across the keys in a manner to make this happen, but the point is that it's about as likely, practically speaking, that some audio playing over my speakers would cause a similar fate to befall a Vista installation. I hope that's clear now.
I think my post was taken as flamebait or an OSX vs. Windows sort of thing. That was not the intention -- I use both. The point is that it's fun to have a laugh at Microsoft's expense.
"All voice recognition software, no matter what platform, would suffer from this supposed "exploit". So why this article on Vista specifically? What is the real agenda here? Also, if the voice recognition software is trained for a specific user's voice, the chances of an exploit are reduced."
Yup, this is an old one. There's an apocryphal tale of a user group meeting from long ago of a vendor demonstrating voice-control software and a smart aleck in the back of the room yelling "DEL *.*!" (or whatever the MS-DOS command was).
As you implied, the agenda is, of course, to have a laugh at Microsoft's expense. If they hadn't included voice control software, the opportunity would have been to point out that Microsoft spent $BIGNUM person-years working on Vista and didn't even include that feature. OSX's easy access to a shell prompt with root access is about as relevant an exploit as the voice control exploit, and the odds of a cat wandering into my house and walking on the keys in such a way to generate the wrong "rm" command are about the same as this Vista "exploit" happening to me. But, it's aways fun to have a laugh at Microsoft's expense, isn't it?
"Evidently this author of TFA is not aware of this reality."
I posit that the author was quite aware, but was being disingenuous. He was writing for an audience of P2P fans, not the content industry.
Lots of people state that the content industries should change their tactics in the face of the explosion of piracy, but what they often really mean is that they would like the practices changed so that they may continue their guilt-free piracy. In the meantime, people like the author of TFA throw out these lame ideas, so we can all gloat when the content industry rightfully doesn't implement them. This, in turn, makes us feel both morally and intellectually superior to content providers, which makes it easier to engage in guilt-free piracy.
"It's not nonsense at all. Supply of proprietary software is not infinite - the copyright monopoly creates artificial scarcity. It weren't for that artificial scarcity, selling price per copy would approach zero, just as it has for Firefox, Linux and a whole host of other best of breed products. Just because the gimp has not attained best of breed status doesn't disprove basic economic theory, it just proves that the gimp is not best of breed, yet."
Pick lots of retail sectors -- cars, clothing, coffee makers, power tools, you name it -- and you'll find instances where some vendors make a really nice product and thus command retail prices that are much higher than the cost of materials. It happens with software, too, but the software industry didn't invent the idea.
Agreed with you that The Gimp's main problem is that it simply isn't as good as PhotoShop. If the folks who spend their spare time writing it can work out the economics of how to make it as good as PhotoShop, then some day, it may be an interesting fight in the market. But a big reason that it's not good enough is because the cost of good software is often much, much more than the material cost of the media. PhotoShop's good because Adobe has spent the money to get an adequate supply of smart people in the room and keep them there for a long time. Adobe's net margins are good, but not crazy insane like you'd expect if the true selling cost of the product were equal to the material cost.
Also agree with you that if we abolished copyright law, it would indeed be legal to get PhotoShop for free, so the price would be zero for everybody, not just for the people now whose moral compass allows them to get the torrent. Abolishing copyright law would shift the financial rewards to those who are good at copying or facilitating copying (TPB is already making some pretty good money), and shift them away from Adobe and other innovators who follow the "invest a lot of money in R&D" model. It's been argued that abolishing copyright law would bring about this grand and glorious golden age where the vast human creative potential could be reached due to the fact that each of us could have all the free software and music we want. I'm not sure about that, but all those folks in China who already own the factories would certainly be happy with the notion.
"BTW, why is it that software is the only product where supply and demand and mass production rules don't apply? Everything else that is mass produced comes down in price, software stays the same or gets more expensive."
Lots of people don't understand the "...and demand" part. Sure, lots of us would like Adobe or Microsoft to sell software for five bucks, and perhaps many of us would only pay five bucks for the latest wares from Adobe or Microsoft. But if there is sufficient demand at a higher price, that's the price at which they will sell it.
Many folks (at least here on Slashdot) think that the ideal point on the supply/demand curve is the point where the product has the most customers. The reality is that it's at the point where the company makes the most profit. Finding this point on the curve that works for your business means understanding the market size, knowing who you want as your customer, and who you don't want as your customer.
More to the point: PhotoShop is $650. Enough people want to buy it at that price to allow Adobe to have a really nice building -- you should see their lobby! Sure, The Gimp is free. But even at free, it's not good enough for a critical mass of users. Lots of Slashdot armchair economics experts don't get this; they parrot the "supply is infinite thus value should be driven to zero" nonsense. Meanwhile, Adobe continues to do quite well selling a few bucks' worth of CDs at $650 a set, while you will have to look far and wide to find any serious designer who's foregone PhotoShop in favor of The Gimp.
"To draw on an obvious but compelling example, few would suggest that African-Americans were wrong to protest segregation in the South by sitting at whites-only lunch counters and refusing to leave, or by refusing to move to the back of the bus."
You've nailed it. By pirating movies rather than going to see them in the theatre, we're right up there with Rosa Parks. Saving money is just a fringe benefit. The 60's civil rights protests obviously come to mind here.
I'd love to sit in on a meeting between your average "pirating all my entertainment is my form of civil disobedience" teenager and somebody who was actually there in Montgomery or Selma, facing down the police with the firehoses and the dogs and whatnot. I'd really like to see the look on the latter's face when the former tries to assign any equivalence to the two.
"Time will tell if civil disobedience of the DMCA and/or DRM is justified or not."
Stick around on Slashdot long enough and you'll find that it's extremely justified by those who do it... and that's really all that counts. Collectively, humans are very good at justifying their actions. I think it's an evolutionary thing.
"Wow, that sure is some shiny green astroturf you have there. Not to worry; a used BMW is almost as good as a new BMW, at a fraction of the price."
I agree with you 100% that picturing your typical film industry worker as capable of owning a BMW surely simplifies a lot of things and smooths out a lot of potential moral issues, but we know it's not the case.
I wonder if many people who work outside the IT biz look at Bill Gates, Larry Ellison, and all those dot-com millionaires and assume that the typical person who works in the computer software biz is well off enough to own a BMW. Perhaps it's this misperception that drives a lot of software piracy, much as the misperception you covered above appears to drive a lot of film piracy.
"that is, wasn't copyright put into place to protect companies from other *companies* (and "businessmen") stealing their IP?"
If you're genuinely interested in learning about the history of copyright law, googling on "history of copyright law" will get you started. Many folks point to the Statue of Anne as the first copyright law. It was enacted to protect writers from their publishers.
"something to think about: record labels' biggest costs are distribution and promotion. so when i buy a cd, i'm paying for the promotion and distribution behind it -- not so much the creation of the content (the artist is responsible for that)."
Interesting that you you know people who can't distinguish between a CD and an MP3, and at the same time you state that the artist is responsible for the creation of the content of a CD. Unfortunately there's also a world of difference between a sheet of tabs and lyrics, and a song that's been recorded, engineered, and mastered. Whether we like it or not, production costs are a significant piece of the pie for all but the best-selling CDs. At any rate, your statement is correct for lots of stuff; milk, designer clothes; computer hardware, and so on. "CoS > CoP" is one of the tenets of supply chain economics.
"i think the labels (and society) is just beginning to come to terms with the issues. i'm still unclear on a lot of them. but i do know that a future with strong IP law is a dystopian one. i think it's one of the top issues of our time."
I disagree. If I want to see a movie or listen to some music, I rent it from Netflix, or buy it on the iTMS. If I don't... I don't. The great thing about copyright is that you can opt out to certain degrees (see the GPL, Creative Commons, etc.) and it's not a requirement of copyright that you sell the material. Prices are market-driven; if you think there are enough people who think that a buck a track is too much, then that's a golden opportunity for you to go into the business of helping artists sell their work for $0.50 a track. The market will find a balance; if there's a demand for free content, and there are enough talented people who are willing to spend the time creating work and giving it away for free, then it will exist. But as long as people keep wanting to, say, buy music from major labels at a buck a track, then it will be an uphill battle. It's one thing to say "music is overpriced" but it's another thing to serve a demand that may not exist.
"Copyright infringement != piracy"
I agree 100% that many of us find it distasteful to use this word, but to claim that it does not have this meaning is, frankly, tilting at windmills.
The word "piracy" is an example of a homonym, or as some call it, a homophone. Type "dict piracy" into your Firefox toolbar (we're all running Firefox, right?) to get the following definition:
"2. the unauthorized reproduction or use of a copyrighted book, recording, television program, patented invention, trademarked product, etc.: The record industry is beset with piracy."
We're all smart enough not to confuse dogs and trees when we hear the word "bark," so it's disingenuous to suddenly pretend to be homonym-challenged.
Another common bit of misinformation is that this is some sort of new meaning of the word. Not so; it shows up in court rulings from the 19th century, and if you're lucky enough to have an OED around, it'll tell you a lot more about the etymology.
Again: you may find the definition distasteful. But there's no point in claiming that the definition does not exist.
Before I explain the difference, I should acknowledge that many Slashdotters have equal disdain for anybody in the music business who tries to assert their rights. For example, we normally state that we're in favor of the artists and that we think artists should have more rights, money, and respect, but when the BMI or ASCAP (US performing rights agencies run by and for artists and wholly unrelated to the RIAA) sue businesses for playing music without a royalty, Slashdotters bring out the hatred equal to that of the RIAA. So, if "RIAA" is shorthand for "anybody in the music industry who tries to interfere with the free (as in beer AND speech) distribution of music", then yeah, GEMA is like the RIAA, but it's still important to understand the difference.
Here's what GEMA is about, in English. Like BMI and ASCAP, they're a society of composers, lyricists and music publishers.
I believe (somebody please correct me if I'm wrong) that the actual German equivalent of the RIAA -- that is, the trade group representing record companies -- is the IFPA.
With all the ire at GEMA's actions, I think the message here is clear: as covered above, we all respect the musicians, and we want them to have more money, rights, and respect. But only on our terms. If they take legal actions or otherwise demand more money, rights, or respect -- in other words, if they simply get too uppity -- then they're on equal moral grounds as the RIAA et al.
"Where do you get that from? The cassette recorder on my home stereo has no such feature neither does the VCR in the attic."
He's referring to the AHRA. He referenced it in his note; it's also in the writeup. Specifically he's referring to the AHRA's requirement that digital audio recording devices have serial copy management systems in place. He was pretty terse; he made the (obviously incorrect) assumption that readers are familiar with the AHRA.
At any rate, the devices you mention aren't likely defined as digital audio recording devices by the AHRA. While you're 100% correct that they don't have SCMS, it's not germane to the discussion.
"I'm just saying. If he followed the rules he'd either have a highly negative profit, or he wouldn't be turning out the same tapes he's been turning out."
Sorry, I lost you. There are plenty of purveyors of legitimate, authorized mixtapes and promo CDs. Music licensing is a healthy business and the rules and procedures are pretty straightforward. It takes time and effort to be successful, (as do many, many things) but it's not rocket science. He took the easier and quicker "don't get authorization for content" route which provided short-term gain but he's running into some steep consequences.
If you can't see a way to build a business of producing mixtapes or promo CDs with authorized content -- perhaps you have no idea where to even begin, or you can't fathom doing it without a loss of hundreds of millions of dollars a year, as you put it -- that's fine... the important thing is that there are others who do. The universe sort of balances out; I'm sure there are lots of folks in the music biz who know fuck all about, say, load balancers.
"I'm also confused. This is a civil matter, not a criminal one."
I don't follow you. The threshold is $1K retail value in 180 days. Are you of the belief that in the past six months he sold less than $1K worth of CDs? He had 80K CDs in his possession and as you know mix tapes are only really good for a month or two; even if you (inaccurately) placed the value at $1 per CD, he was likely selling at least $80K of merchandise every few months. That's over the criminal threshold by an order of magnitude.
"I think this is another case where the Slashdot crowd generally sides with the "little guy" and it just looks like the same hypocritical line that the RIAA puts forth because we all are trying to root for the underdog. However, it's not a good argument."
I wouldn't even go so far as to use "little guy." He had 80K units in inventory. Mixtapes and promo CDs have a short shelf life (the outfit that my company buys from gets a new one each month in each of several genres), so his annual volume was likely way more than that -- perhaps needless to say, far more than the sales volume of many indie labels. And, he seems to have profited handsomely.
There are plenty of ways that he could have engaged in the mixtape or promo CD business while respecting the rights of the performers and the record labels which funded the production (and had exclusive distribution rights to) the music he was selling. That might have meant that he cleared less profit on each sale, so I suppose it's his greed that got in the way.
"As opposed to whom? The RIAA? They're a "champion of artists' rights"? Please tell me you don't believe that for a second."
Wow, I don't even understand what led you down that path. Like I mentioned in my post: legaltorrents.com, garageband.com, creativecommons.org.
The content you see on those sites was placed there with the artists' explicit permission. Compare and contrast the actions of these sites compared to a site like ISOhunt. I acknowledge that they may not be as useful or interesting because they don't have the really cool stuff like the latest hit movies, CDs, and software, but I hope it's clear that it's quite easy to set up a site that's truly respectful of creators' rights, rather than paying lip service while making a profit off of piracy.
"Can you name one reason we shouldn't be considered "legitimate"? We comply with DMCA notices as required by law, and we don't actually host any of the end-result files. We simply index torrents."
First, a clarification of terms: I'm using "legitimate" in the sense that I think you're trying to convey: legal, and working in a manner that's respectful of others' rights under the law.
There are indexing, search and resource sites that fall under that description -- legaltorrents.com, garageband.com, creativecommons.org, and so on. A quick look at what your users are downloading shows that you're in a different league. You have quite rightly discovered that there's a huge demand for pirated material, and that there's money to be made in addressing this demand. Kudos to you and I hope that you continue to be successful, but it's pointless to claim legitimacy here.
"We're even working with independant artists. A few months ago I worked with the artist Kazy to release a higher resolution music video through our site as a promotion for his youtube contest entry, was that not legitimate? Kazy seemed to think it was."
Kazaa also tried that route when they started to feel the heat. If you were really serious about being "legitimate" you'd start by filtering out the obviously copyrighted content. This doesn't mean waiting for a DMCA takedown; it means exercising a firm grasp of the obvious and recognizing that Windows Vista and the Borat movie are not legally being made available as free downloads. Think long and hard about why the MPAA is after you and not after the sites I mentioned above.
Of course, I understand why you would not take this approach; it would kill your revenue stream. It's pretty likely that your income is severalfold that of a site like legaltorrents.com, and, let's face it -- you're here to make money and to give your customers what they want, and not to be a champion of artists' rights.
"Good grief, -all- the legit torrents I have got recently have been ISO's (as opposed to the other stuff, it tends to come in divx). They have all been F/OSS distros by the way, and why would I search when I can go direct to the relevant website to find them. The lack of linux distros on the site you list is all about relevance (or, to be more precise, a lack of it) to the people who would use such a site."
Exactly. If I were after a Linux ISO, I wouldn't go to legaltorrents.com, and I certainly wouldn't go to ISOHunt. Others seem to agree... snapshots on the Wayback archive show that Linux distros aren't even in the top 20 searches.
You and the other other fellow who replied to my comment have helped close the door on the notion that the "ISO" in "ISO hunt" referred to Linux ISOs. There are a lot of Linux ISOs being distributed, but they sure ain't being distributed to any significant degree on ISOHunt or the other piracy-centric torrent sites.
"First thing I thought of from the name is can I find Linux Distro ISOs."
I can see how somebody who's had no experience with piracy might have thought that, but a visit to the site would have cleared up that misconception for you REALLY fast. The top three searches recently were "Prison Break," "Snakes on a Plane" and "Miami Vice" -- not Linux distros, obviously. The only OS in the top searches was "Windows Vista," which is not freely distributable.
"It appears to me that they are doing everything that they can to keep BitTorrent as legitimate as possible in the eyes of the public..."
No, sites like LegalTorrents and even BitTorrent.com itself are "doing everything they can." ISOHunt puts absolutely no effort into maintaining legitimacy; when you visit a tracker site and see that the top stuff mirrors the top ten movies, CDs and games, it's pretty clear that the owners care not one whit about being "legitimate." Plus, the name "ISOHunt" is a pretty poor choice if you're trying to specialize in legal torrents.
If they had wanted to create a tracker for "legimate" content, they could have. Others have. But there's very little money in that business model. There's money in piracy, so that's the direction they chose.
"When supply is infinite, as it is when you can copy something with zero effort without affecting the original, the cost approach zero."
Come on; you know that demand isn't infinite, and that costs are recovered only if the product sells. The supply/demand curve is still very much at play, even with products where the cost of sale is inordinately larger than the cost of production.
While it could be that you're simply smarter than those morons at Adobe, and that they haven't done their due diligence in setting pricing; it's pretty doubtful. Quoting Econ 101 stuff won't change the fact that Adobe has a nice, shiny building, and that there are a hell of a lot more PhotoShop users than The Gimp users, despite the fact that the latter is free.
"The point is IsoHunt is purely a medium which people could search out torrents. The purpose was to make a library of legit legal torrents that people have created."
The first clue that the above is bullshit is the site's title. "legit, legal" torrents are seldom distributed as ISOs. If you're thinking that it refers to Linux ISOs, think again -- there's already a site specializing in "legit, legal" torrents. Notice that there are few if any ISOs to be had there, and no Linux distros.
Listen, I understand why the owners of ISOHunt think they need to keep chanting the "legitimate" line; it's to build a case that they didn't have intent. But we don't need to be their stooges. We know exactly why ISOHunt was there. Let's not kid ourselves.
"And if all citizens are equal from a legal standpoint, isn't suing IsoHunt and not Google liable to be labeled persecution?"
You've been to IsoHunt, right? You understand their purpose, their business model, and so on?
For those of you who really don't see the difference, a good place to start is intent. Nota bene that when the folks at IsoHunt used the "legitimate distribution" phrase, they were being ironic.