"is this: if a company pirates (arrrrr, mateys!) a piece of software, they immediately take the money that would have been used to buy that software and stick it in an underground vault, never to be seen or spent again. That's why the state gets no tax revenue."
A lot of people are missing the point here. The BSA's activities include catching companies who use pirated software, and getting them into compliance (ie extracting money from them). It's the revenue from these settlements that would be taxable.
The point of the BSA study is to get the local governments on their side, and support their efforts to get companies into compliance. If the BSA busts a company in Ohio and the settlement is $100K, that's $100K of taxable revenue for the BSA, which Ohio might use to hire police officers or whatever.
It's all too easy to pretend that the BSA is claiming that each pirated copy is a lost sale, or that (as you put it) the money not spent on software isn't otherwise put into the economy. This makes the BSA look like idiots and, thus, makes us look a little bit smarter. But I think it's essential to have a deepter understanding of what the BSA's doing here. It's a big mistake to underestimate your enemy, and I think that's what a lot of people are doing here.
"And how would they raise taxes from something that a pirate would not buy? How do they draw a conclusion that, if forced to choose, a pirate would PAY for the software instead of not use it?."
They make estimates of how many pirated copies truly represent lost sales; or, more accurately, they have estimates of the attainable conversion rates of businesses that currently use pirated software, to law-abiding businesses. Although it's a popular myth around here, the BSA doesn't assume that every pirated copy is a lost sale.
"The reasons a pirate doesn't pay for software can be various, but I can assure you that only a small portion of pirates would actually pay/buy the software if forced to choose. They would instead not use it."
Remember -- this is a BSA study. The RIAA tends to concern themselves with individual customers, where the BSA focuses on enterprises that use multiple copies of Office, Windows, PhotoShop, and the like. It's a romantic notion that companies that are busted can simply switch to Linux or GIMP, but the BSA already knows (from experience) that many companies pay up and move to licensed copies of commercial software.
Your statement holds very true for the 14-year-old collector who got Illustrator via BitTorrent and might have used it three times. But that's not who the BSA is after.
The BSA does not make this assumption. Many people make the ASSUMPTION that they make this assumption, but that's not the same thing.
When the BSA does their calculations, they use indices based on the percentage of pirated software that their studies tell them truly represents a lost sale (and -- again -- they don't use 100% for this figure). Of course, this index isn't something that they like to talk about publicly, as it lends credence to the fact that not every pirated copy is a lost sale. But they're smart enough to understand that it's not 1:1.
The original, original, released in 1980, was an excellent book. The various followups are worth skipping. A tiny bit of sex and violence, but largely okay for an 11-year-old.
There's also Engdahl's The Far Side of Evil.
Just to second a few other mentions: The Stainless Steel Rat series by Harry Harrison is good fun; the protagonist is profoundly anti-violence but does like his liquor. Starship Troopers, as mentioned in the summary, may not be the best choice, but Heinlein wrote tons of excellent juveniles.
"ou don't throw someone to the wolves for just using a pseudonym."
They do not throw people to wolves for just using a pseudonym.
"If MySpace even thinks of dragging my kids into criminal (or even civil) court just because they used a pseudonym? I will make it my business to do everything in my power to bring MySpace down."
They won't. Let's take a step back, look at the facts of the case, and avoid slippery-sloping this.
MySpace isn't going after Lori Drew just because she used a pseudonym. They are going after her because she used said pseudonymous account to harass a young girl to the point that she killed herself. The pseudonym aspect is the best legal angle they can come up with.
Likewise, the government didn't put Al Capone in prison just because he cheated on his taxes. They put him in prison because he cheated on his taxes and because he robbed and killed. The tax evasion aspect was the best legal angle they came up with.
To be fair, if this case were about MySpace going after somebody for just using a pseudonym, then the level of outrage here on Slashdot would be appropriate. But Lori Drew went far, far beyond that.
"Way better than paying like $30 per full res image at rip off stock photo libraries."
Where are you paying $30? The hi-res images at istockphoto are around $8, and the web-res versions (which I use the most) are under a couple of bucks.
With stock photography, you typically get what you pay for. Corbis, Getty, et al tend to have the best quality, but they're pricy. istockphoto is really cheap, but you often have to sift through a lot of crap. And the "free stock photo" places tend to be awful.
That's why I'm not sure if a torrent tracker for free or CC stock photography would be useful. It would be stuff on the level of the free sites -- that is, generally bad.
istockphoto is empowering a lot of pro and serious amateur photographers. At a buck a download, the royalties can add up really quickly. If I were a pro or serious amateur photographer, if I had the choice of posting to istockphoto or giving it away on a torrent site, I'd go with the former. Yes -- I know that information wants to be free, RMS is god, and every time you pay for copyrighted material a kitten dies, but the bank that holds the note to my house tends to be a little more rigid about making money than many Slashdotters.
Thus, he finds it humorous that this is claimed to be the first "p2p jury conviction." He is saying: aren't all juries "p2p"? You see, it's a play on words.
"How do you prove that the people who downloaded whatever they downloaded would have paid for it if that was the only way they could get it?"
You don't have to. Copyright law isn't about proving damages; it's about respecting rights.
Other laws work like this, too. If you violate my property rights (say, by trespassing), I can have you removed and punished even if I can't prove that, say, you trampled my flower bed.
"The story as it goes is stupid. It would not happen if the Drudge Report (sic) was a high school newspaper. This is simply an attempt to quash competition using the DMCA. A government tool provided for their friends to squash anyone that might dissent."
Wire services are in the business of licensing content to newspapers and news web sites. News outlets are the AP's customers, not their competition. AP's competition is other wire services.
"Seriously, I hope that this whole mess costs them millions in the end. It is not only despicable, it is against all that is good in humanity. Sure, that sounds like a rant, but WE have to start pushing back now, not later when there is no room to do so. Please everyone stop supporting the AP in any way shape or form. They need to just go the way of buggy whip makers."
Huh? The wire services are some of the good guys. They get the reporters to the scene and report it. Whether it's Darfur, London, Washington, or Lisbon. It's only fair for them to license their content. This is how they pay reporters, who often risk their lives to deliver the news. I don't want to rely only on my government to tell me what's going on in Iraq. I want independent news sources, and I want them to be smart and qualified. Those sorts of people tend to want to be paid for their work.
"as long as drudge is providing the info where they took the quote stuff from, i don't see how AP has a case in this. They provide a link to original story on AP its not stealing if you are giving the credit to the original writer in these cases."
There's a persistent meme on Slashdot that artists should be happy that their stuff is simply being shared and listened to. If they make even a peep about trying to make a living from their craft, they're branded as greedy businesspeople, not artists.
Looks like people are starting to think the same way about journalists, too. That's sad.
If the Drudge Retort fellow thinks that there's not much value to the AP articles which he excerpts, then great -- he can stop using them, and switch to a news service which is less profit-oriented and which allows free distribution of their content (provided he can find a suitable replacement). But if he thinks that using the AP source material is a benefit to his site and to its readers, he can license it, just like real news sites do.
He seems to be playing it down the middle -- the AP content is worth reproducing on his site, but not worth paying for.
You're exactly right: the software market is based on supply and demand.
Linux's share of the desktop market is low compared to Microsoft because there simply isn't enough demand for it. It's as simple as that. But "lack of demand" is a multi-headed beast. One is simply education: there are plenty of folks out there for whom Linux would suit their needs perfectly, but they don't know it exists. Another is availability: there's lots more work to do to get Linux as an option from OEMs. And, the improvements in user-friendliness will continue to address this issue.
Microsoft charges what they charge for Windows because they can. But this can be fixed. Few people thought that Linux would get to the desktop share it has now. Few people thought that there'd be a day when Dell and Wal-Mart would offer PCs with Linux pre-loaded. And many people have surprised that Apple's taking so much share away from Windows PC vendors.
The roadmap is there. As alternative OSes get better, easier to use, and more available, Microsoft will respond by lowering their prices.
"Yeah yeah, but if you think about it, software used to have a tangible monetary value to me before the internet."
Fixed that for ya.
Piracy was going gangbusters before the Internet. Software still sells like gangbusters today. Even companies who use the Internet to distribute their software by selling downloads are still doing great -- just ask Adobe. If you and/or your friends like to pirate software, that's fine, but it's best not to make sweeping generalizations based on this.
"If the market were free to determine the price of software, it would be a very low price."
The market does determine the price of software.
"Microsoft should be doing the same. Provide Vista free, unencumbered. Let it spread naturally. Sell boxes, sure, but sell them essentially at-cost. Let Microsoft's specialist abilities (software support, live updates etc) be the thing people pay for."
Compare Microsoft's revenues to those of, say, Red Hat or Ubuntu and you'll see why Microsoft has not chosen this approach. The model you describe exists; and many people are happy engaging in it. But lots of companies do just fine by selling things.
Interesting. I consider myself to be a bit of a musical detective...what are some of the bands whose work you had trouble finding legally, thus forcing you to pirate? You mentioned The Pagan Bank... do I have that name right?
Well, the parent is correct. Rhapsody is 14 clams a month and I can listen to pretty much anything I want, when I want, as long as I want. In the rare case that I want something forever, I buy the track in DRM-free MP3 form on Amazon. Pandora is also great, and legal. I like it so much that I pay them the 36 bucks a year to get it on my Squeezebox. I don't have the slightest need to do anything illegal to get my music.
"But copyright as currently implemented mostly benefits the rich elite."
I lost you on that one. I use the copyright law (in the forms of the GPL, CC and the more old-fashioned kind) to protect my software. I'm hardly rich or elite. And there are millions of people just like me.
You might be thinking of the sense of Microsoft or Oracle, since Bill Gates are incredibly wealthy. But keep in mind that both companies have thousands of people on the payroll... most of whom are firmly in the middle class. And there are plenty of software companies, big or small, where the most highly paid employees aren't so rich.
When you watch MTV Cribs it's easy to get the impression that everybody who earns their keep as an artist is doing well. But the reality is that the vast majority of musicians, as well as novelists, poets, sculptors and myriad other artists barely scrape by. Copyright law protects them all.
Great explanation. One important amplification is that unit elasticity rarely exists. Prices won't race to the bottom in even a competitive market if it's been shown that the elasticity peters out below a certain point.
I'm not sure if the market for digital goods is a monopoly in the economic sense. Copyright law speaks of temporarily monopolies on works, but retail competition is growing along with the digital market. I can buy the same music track from iTunes for $0.99, from Amazon from $0.79, or as part of a $14/month package from Rhapsody.
There's probably more retail pricing variance now in the music industry than there is in, say, the auto industry. Ford has a "monopoly" on the F150 in the same sense that many Slashdotters state that a record company has a "monopoly" on a particular music track, but I don't know if I'd find the same pricing in retail pricing on an F150 as I can on most mustic tracks.
I think monopoly concerns are prevalent when there's the perception that the vendor is a greedy profit-monger. Both Warner Music and Ford posted losses last year due to the efforts of competitors who do it better, so I'm not sure which one is the bigger culprit.
Production costs tend to be amortized over unit sales whether the units are hard goods are downloaded.
For example, if Acme Software forecasts that they'll sell 10K pieces of a new application that cost them $100K to develop, then the amortized development costs are then there's a $10 burden on the cost for development, as well as opex and various overhead.
Now, each physical copy they sell will have a total cost that includes that $10 development cost, but so does each download they sell. Downloaded copies must cover the costs of production all the same. Acme Software can't get away with selling the downloaded version for a buck, as there's $10 of cost built-in to the download, even though it might cost Acme only a buck in bandwidth.
This is pretty intuitive for software, but many people fall down on the understanding that this applies to MP3 files, as well. It's a common belief among Slashdotters that record companies would be able to make money selling MP3 tracks for a dime apiece, but the (counterintuitive) truth is that there are a lot of costs built in to the download. These costs can't be shifted to the sales of the equivalent physical items, particularly since the market is shifting to digital distribution. The record companies are scrambling to get all their beans in a row to make their offerings profitable in a 100% download world, where customers are liable to buy just one track when they previously were forced to buy ten.
That's why Warner Music's been hurting so badly -- not because not enough people are purchasing legitimate downloads, but because too many are, as a proportion of their total sales.
"It's a new model and/. is not the target demographic."
Very well put. The interesting thing is that for many folks, if something's not in their target market, then it's inevitably doomed to fail.
Slashdotters spewed similar hatred and disbelief at downloadable ringtones, the iTunes Store, Apple's decision to add TV shows to the iTunes store, NBC's decision to remove its shows from the iTunes store, and the addition of movies to the iTunes store. Yet inscrutably, Apple and NBC are still doing fine, and ringtones are a multi-billion dollar market.
Another thing I haven't seen mentioned is that Michael Robertson is dishing a competitor. I have to wonder if he's a little concerned.
What if lala were to magically appear on your Duet's screen? That would equalize the playing field a little more. Depending on how bit your Rhapsody library is, it might save you money in the long run to use lala. You're already paying a rental fee to listen to Rhapsody on your Duet; the key difference is that Rhapsody is $14 a month for all you can eat, while lala is a la carte rental.
Much of my music listening is ephemeral. I recently added the new Donna Summer album to my Rhapsody library (it's actually pretty decent). This is how it would break down for me:
via Rhapsody: $14 a month to keep and listen to the new Donna Summer album for as long as I like
via iTunes: $10 to have a copy forever
via lala: $0.80 to keep and listen to it for as long as I like
The thing is that I don't want to have it forever. It is simply not a great album and I'm sure that next month I'll be on to something else.
The other thing is that lala does not carry this album, so it's moot. A 5MM track library makes no difference if they don't have enough of the stuff that you want.
"It just seems odd that they would be going in this new, stupid direction."
I give them credit for trying. They're listening to the bleatings that music is too expensive, and they're trying an inventive way to get the cost down. For many people's listening habits, this will be a lot cheaper than using iTunes.
I'm aware that many Slashdotters are quite sure that it's possible to make a profit selling downloadable, unencumbered MP3 tracks for ten cents each. If you take this at face value, then lala is indeed going in the wrong direction.
"too bad it's not a dime to rent it for say, a month or something like that. Or to just have unlimited access to it."
The writeup states that the dime allows you to listen to it for an unlimited amount of times.
I did a quick bit of analysis. I presently subscribe to Rhapsody for $14 a month. I have about 200 tracks in my Rhapsody library. To rent these tracks via lala for a year (or any arbitrary time) would cost $20 for the year, vs. the $14 per month for Rhapsody.
Rhapsody and lala do not compare directly. Rhapsody allows for downloading to an MP3 player; this is a non-issue for me because I use Rhapsody exclusively on my Squeezebox Duet.
"There are a lot of people complaining in this article about that they just don't like it or are against the entire idea. How about some more people with ideas on how to make it work for you?"
The average Slashdotter will insist on nothing less than uncompressed FLAC files for ten cents each, plus a pony. It's also common for us to swear up and down that this is economically feasible; we just know it. Although this is utterly common sense to your typical Slashdotter, nobody has yet stepped up to actually do it.
This would require changing the law. Mechanical royalties are set at around eight cents each for the composer and lyricist; this does not include negotiated royalties for the performer. A song which is the work of three parties -- a composer, a lyricist, and a performer -- could cost more than $0.20 in royalties alone. And, this is assuming that everybody else who had a part in creating the track -- the mixer, the musicians, and so on -- all worked for free.
For what it's worth, the record companies are trying to get the law changed, so that they can pay mechanicals based on a percentage of the selling price, rather than a fixed amount. This would make it a lot easier to sell some tracks for $0.20, but it's not a popular notion among Slashdotters in general.
About a dozen years ago I ran a pretty popular web site whose charter was to expose and mock "make money fast" chain letter spammers and similar scam artists. On occasion I'd link to some slimy MLM company's web site as part of the process of mocking them, and I'd get an email insisting that I remove the link to their site. "You don't have permission to link to me!" they'd claim. "I demand that you remove your link to my site immediately!". Rather than capitulate to their wishes, I'd simply mock them some more. Even then, it was well understood that no permission is required to link to another party's home page.
This is why I'm so surprised that you're even bringing this up, here in 2008. I know you're a seven-digiter, so you deserve a bit of slack, but this is Slashdot, for crying out loud. You should know better.
I'm not sure where you're going with the "second class" stuff. I'm sure you understand that the link blogs were linking to files that were posted without the rightsholder's permission. This is wholly unrelated to somebody linking to your site which (presumably) contains stuff you've created yourself. In your instance, no infringement occurs. If you're not infringing, then there's no case for contributory infringement against anybody who links to you.
"How do you know that these two sites did not intend for people to share their own movies?"
You misunderstand how these sorts of sites work. They are closer to blogs than trackers, indexes, or user-sharing sites. The operators check the files in question to make sure they're legitimate, then post links to them. The links are titled "click here to watch Indiana Jones for free" or similar; there's no ambiguity. When the links break, they fix or remove them. They then make money on the ad revenue. They're not "information wants to be free" zealots or hapless forum operators done in by the actions of their users. They're businessmen, capitalizing on the demand for these films.
If a site like Google or YouTube or a torrent tracker were sued by the MPAA, it would make for another interesting Slashdot discussion -- but that's not what we're discussing here. We're talking about link blogs, which are a different animal.
Slashdot Mirror
"is this: if a company pirates (arrrrr, mateys!) a piece of software, they immediately take the money that would have been used to buy that software and stick it in an underground vault, never to be seen or spent again. That's why the state gets no tax revenue."
A lot of people are missing the point here. The BSA's activities include catching companies who use pirated software, and getting them into compliance (ie extracting money from them). It's the revenue from these settlements that would be taxable.
The point of the BSA study is to get the local governments on their side, and support their efforts to get companies into compliance. If the BSA busts a company in Ohio and the settlement is $100K, that's $100K of taxable revenue for the BSA, which Ohio might use to hire police officers or whatever.
It's all too easy to pretend that the BSA is claiming that each pirated copy is a lost sale, or that (as you put it) the money not spent on software isn't otherwise put into the economy. This makes the BSA look like idiots and, thus, makes us look a little bit smarter. But I think it's essential to have a deepter understanding of what the BSA's doing here. It's a big mistake to underestimate your enemy, and I think that's what a lot of people are doing here.
"And how would they raise taxes from something that a pirate would not buy? How do they draw a conclusion that, if forced to choose, a pirate would PAY for the software instead of not use it?."
They make estimates of how many pirated copies truly represent lost sales; or, more accurately, they have estimates of the attainable conversion rates of businesses that currently use pirated software, to law-abiding businesses. Although it's a popular myth around here, the BSA doesn't assume that every pirated copy is a lost sale.
"The reasons a pirate doesn't pay for software can be various, but I can assure you that only a small portion of pirates would actually pay/buy the software if forced to choose. They would instead not use it."
Remember -- this is a BSA study. The RIAA tends to concern themselves with individual customers, where the BSA focuses on enterprises that use multiple copies of Office, Windows, PhotoShop, and the like. It's a romantic notion that companies that are busted can simply switch to Linux or GIMP, but the BSA already knows (from experience) that many companies pay up and move to licensed copies of commercial software.
Your statement holds very true for the 14-year-old collector who got Illustrator via BitTorrent and might have used it three times. But that's not who the BSA is after.
The BSA does not make this assumption. Many people make the ASSUMPTION that they make this assumption, but that's not the same thing.
When the BSA does their calculations, they use indices based on the percentage of pirated software that their studies tell them truly represents a lost sale (and -- again -- they don't use 100% for this figure). Of course, this index isn't something that they like to talk about publicly, as it lends credence to the fact that not every pirated copy is a lost sale. But they're smart enough to understand that it's not 1:1.
The original, original, released in 1980, was an excellent book. The various followups are worth skipping. A tiny bit of sex and violence, but largely okay for an 11-year-old.
There's also Engdahl's The Far Side of Evil.
Just to second a few other mentions: The Stainless Steel Rat series by Harry Harrison is good fun; the protagonist is profoundly anti-violence but does like his liquor. Starship Troopers, as mentioned in the summary, may not be the best choice, but Heinlein wrote tons of excellent juveniles.
"ou don't throw someone to the wolves for just using a pseudonym."
They do not throw people to wolves for just using a pseudonym.
"If MySpace even thinks of dragging my kids into criminal (or even civil) court just because they used a pseudonym? I will make it my business to do everything in my power to bring MySpace down."
They won't. Let's take a step back, look at the facts of the case, and avoid slippery-sloping this.
MySpace isn't going after Lori Drew just because she used a pseudonym. They are going after her because she used said pseudonymous account to harass a young girl to the point that she killed herself. The pseudonym aspect is the best legal angle they can come up with.
Likewise, the government didn't put Al Capone in prison just because he cheated on his taxes. They put him in prison because he cheated on his taxes and because he robbed and killed. The tax evasion aspect was the best legal angle they came up with.
To be fair, if this case were about MySpace going after somebody for just using a pseudonym, then the level of outrage here on Slashdot would be appropriate. But Lori Drew went far, far beyond that.
"Way better than paying like $30 per full res image at rip off stock photo libraries."
Where are you paying $30? The hi-res images at istockphoto are around $8, and the web-res versions (which I use the most) are under a couple of bucks.
With stock photography, you typically get what you pay for. Corbis, Getty, et al tend to have the best quality, but they're pricy. istockphoto is really cheap, but you often have to sift through a lot of crap. And the "free stock photo" places tend to be awful.
That's why I'm not sure if a torrent tracker for free or CC stock photography would be useful. It would be stuff on the level of the free sites -- that is, generally bad.
istockphoto is empowering a lot of pro and serious amateur photographers. At a buck a download, the royalties can add up really quickly. If I were a pro or serious amateur photographer, if I had the choice of posting to istockphoto or giving it away on a torrent site, I'd go with the former. Yes -- I know that information wants to be free, RMS is god, and every time you pay for copyrighted material a kitten dies, but the bank that holds the note to my house tends to be a little more rigid about making money than many Slashdotters.
You are correct.
This is the joke that the parent was making:
"jury of one's peers" is a well-known expression.
The "p" in "p2p" stands for "peer."
Thus, he finds it humorous that this is claimed to be the first "p2p jury conviction." He is saying: aren't all juries "p2p"? You see, it's a play on words.
HTH.
"How do you prove that the people who downloaded whatever they downloaded would have paid for it if that was the only way they could get it?"
You don't have to. Copyright law isn't about proving damages; it's about respecting rights.
Other laws work like this, too. If you violate my property rights (say, by trespassing), I can have you removed and punished even if I can't prove that, say, you trampled my flower bed.
"The story as it goes is stupid. It would not happen if the Drudge Report (sic) was a high school newspaper. This is simply an attempt to quash competition using the DMCA. A government tool provided for their friends to squash anyone that might dissent."
Wire services are in the business of licensing content to newspapers and news web sites. News outlets are the AP's customers, not their competition. AP's competition is other wire services.
"Seriously, I hope that this whole mess costs them millions in the end. It is not only despicable, it is against all that is good in humanity. Sure, that sounds like a rant, but WE have to start pushing back now, not later when there is no room to do so. Please everyone stop supporting the AP in any way shape or form. They need to just go the way of buggy whip makers."
Huh? The wire services are some of the good guys. They get the reporters to the scene and report it. Whether it's Darfur, London, Washington, or Lisbon. It's only fair for them to license their content. This is how they pay reporters, who often risk their lives to deliver the news. I don't want to rely only on my government to tell me what's going on in Iraq. I want independent news sources, and I want them to be smart and qualified. Those sorts of people tend to want to be paid for their work.
"as long as drudge is providing the info where they took the quote stuff from, i don't see how AP has a case in this. They provide a link to original story on AP its not stealing if you are giving the credit to the original writer in these cases."
There's a persistent meme on Slashdot that artists should be happy that their stuff is simply being shared and listened to. If they make even a peep about trying to make a living from their craft, they're branded as greedy businesspeople, not artists.
Looks like people are starting to think the same way about journalists, too. That's sad.
If the Drudge Retort fellow thinks that there's not much value to the AP articles which he excerpts, then great -- he can stop using them, and switch to a news service which is less profit-oriented and which allows free distribution of their content (provided he can find a suitable replacement). But if he thinks that using the AP source material is a benefit to his site and to its readers, he can license it, just like real news sites do.
He seems to be playing it down the middle -- the AP content is worth reproducing on his site, but not worth paying for.
You're exactly right: the software market is based on supply and demand.
Linux's share of the desktop market is low compared to Microsoft because there simply isn't enough demand for it. It's as simple as that. But "lack of demand" is a multi-headed beast. One is simply education: there are plenty of folks out there for whom Linux would suit their needs perfectly, but they don't know it exists. Another is availability: there's lots more work to do to get Linux as an option from OEMs. And, the improvements in user-friendliness will continue to address this issue.
Microsoft charges what they charge for Windows because they can. But this can be fixed. Few people thought that Linux would get to the desktop share it has now. Few people thought that there'd be a day when Dell and Wal-Mart would offer PCs with Linux pre-loaded. And many people have surprised that Apple's taking so much share away from Windows PC vendors.
The roadmap is there. As alternative OSes get better, easier to use, and more available, Microsoft will respond by lowering their prices.
"Yeah yeah, but if you think about it, software used to have a tangible monetary value to me before the internet."
Fixed that for ya.
Piracy was going gangbusters before the Internet. Software still sells like gangbusters today. Even companies who use the Internet to distribute their software by selling downloads are still doing great -- just ask Adobe. If you and/or your friends like to pirate software, that's fine, but it's best not to make sweeping generalizations based on this.
"If the market were free to determine the price of software, it would be a very low price."
The market does determine the price of software.
"Microsoft should be doing the same. Provide Vista free, unencumbered. Let it spread naturally. Sell boxes, sure, but sell them essentially at-cost. Let Microsoft's specialist abilities (software support, live updates etc) be the thing people pay for."
Compare Microsoft's revenues to those of, say, Red Hat or Ubuntu and you'll see why Microsoft has not chosen this approach. The model you describe exists; and many people are happy engaging in it. But lots of companies do just fine by selling things.
Interesting. I consider myself to be a bit of a musical detective...what are some of the bands whose work you had trouble finding legally, thus forcing you to pirate? You mentioned The Pagan Bank... do I have that name right?
Well, the parent is correct. Rhapsody is 14 clams a month and I can listen to pretty much anything I want, when I want, as long as I want. In the rare case that I want something forever, I buy the track in DRM-free MP3 form on Amazon. Pandora is also great, and legal. I like it so much that I pay them the 36 bucks a year to get it on my Squeezebox. I don't have the slightest need to do anything illegal to get my music.
"But copyright as currently implemented mostly benefits the rich elite."
I lost you on that one. I use the copyright law (in the forms of the GPL, CC and the more old-fashioned kind) to protect my software. I'm hardly rich or elite. And there are millions of people just like me.
You might be thinking of the sense of Microsoft or Oracle, since Bill Gates are incredibly wealthy. But keep in mind that both companies have thousands of people on the payroll... most of whom are firmly in the middle class. And there are plenty of software companies, big or small, where the most highly paid employees aren't so rich.
When you watch MTV Cribs it's easy to get the impression that everybody who earns their keep as an artist is doing well. But the reality is that the vast majority of musicians, as well as novelists, poets, sculptors and myriad other artists barely scrape by. Copyright law protects them all.
Great explanation. One important amplification is that unit elasticity rarely exists. Prices won't race to the bottom in even a competitive market if it's been shown that the elasticity peters out below a certain point.
I'm not sure if the market for digital goods is a monopoly in the economic sense. Copyright law speaks of temporarily monopolies on works, but retail competition is growing along with the digital market. I can buy the same music track from iTunes for $0.99, from Amazon from $0.79, or as part of a $14/month package from Rhapsody.
There's probably more retail pricing variance now in the music industry than there is in, say, the auto industry. Ford has a "monopoly" on the F150 in the same sense that many Slashdotters state that a record company has a "monopoly" on a particular music track, but I don't know if I'd find the same pricing in retail pricing on an F150 as I can on most mustic tracks.
I think monopoly concerns are prevalent when there's the perception that the vendor is a greedy profit-monger. Both Warner Music and Ford posted losses last year due to the efforts of competitors who do it better, so I'm not sure which one is the bigger culprit.
Production costs tend to be amortized over unit sales whether the units are hard goods are downloaded.
For example, if Acme Software forecasts that they'll sell 10K pieces of a new application that cost them $100K to develop, then the amortized development costs are then there's a $10 burden on the cost for development, as well as opex and various overhead.
Now, each physical copy they sell will have a total cost that includes that $10 development cost, but so does each download they sell. Downloaded copies must cover the costs of production all the same. Acme Software can't get away with selling the downloaded version for a buck, as there's $10 of cost built-in to the download, even though it might cost Acme only a buck in bandwidth.
This is pretty intuitive for software, but many people fall down on the understanding that this applies to MP3 files, as well. It's a common belief among Slashdotters that record companies would be able to make money selling MP3 tracks for a dime apiece, but the (counterintuitive) truth is that there are a lot of costs built in to the download. These costs can't be shifted to the sales of the equivalent physical items, particularly since the market is shifting to digital distribution. The record companies are scrambling to get all their beans in a row to make their offerings profitable in a 100% download world, where customers are liable to buy just one track when they previously were forced to buy ten.
That's why Warner Music's been hurting so badly -- not because not enough people are purchasing legitimate downloads, but because too many are, as a proportion of their total sales.
"It's based on an old Persian religion, Zoroastrianism, and the battle between light and darkness."
Let's hope it leaves out the ritualistic testicle shaving referenced in Austin Powers.
"It's a new model and /. is not the target demographic."
Very well put. The interesting thing is that for many folks, if something's not in their target market, then it's inevitably doomed to fail.
Slashdotters spewed similar hatred and disbelief at downloadable ringtones, the iTunes Store, Apple's decision to add TV shows to the iTunes store, NBC's decision to remove its shows from the iTunes store, and the addition of movies to the iTunes store. Yet inscrutably, Apple and NBC are still doing fine, and ringtones are a multi-billion dollar market.
Another thing I haven't seen mentioned is that Michael Robertson is dishing a competitor. I have to wonder if he's a little concerned.
What if lala were to magically appear on your Duet's screen? That would equalize the playing field a little more. Depending on how bit your Rhapsody library is, it might save you money in the long run to use lala. You're already paying a rental fee to listen to Rhapsody on your Duet; the key difference is that Rhapsody is $14 a month for all you can eat, while lala is a la carte rental.
Much of my music listening is ephemeral. I recently added the new Donna Summer album to my Rhapsody library (it's actually pretty decent). This is how it would break down for me:
The thing is that I don't want to have it forever. It is simply not a great album and I'm sure that next month I'll be on to something else.
The other thing is that lala does not carry this album, so it's moot. A 5MM track library makes no difference if they don't have enough of the stuff that you want.
"It just seems odd that they would be going in this new, stupid direction."
I give them credit for trying. They're listening to the bleatings that music is too expensive, and they're trying an inventive way to get the cost down. For many people's listening habits, this will be a lot cheaper than using iTunes.
I'm aware that many Slashdotters are quite sure that it's possible to make a profit selling downloadable, unencumbered MP3 tracks for ten cents each. If you take this at face value, then lala is indeed going in the wrong direction.
"too bad it's not a dime to rent it for say, a month or something like that. Or to just have unlimited access to it."
The writeup states that the dime allows you to listen to it for an unlimited amount of times.
I did a quick bit of analysis. I presently subscribe to Rhapsody for $14 a month. I have about 200 tracks in my Rhapsody library. To rent these tracks via lala for a year (or any arbitrary time) would cost $20 for the year, vs. the $14 per month for Rhapsody.
Rhapsody and lala do not compare directly. Rhapsody allows for downloading to an MP3 player; this is a non-issue for me because I use Rhapsody exclusively on my Squeezebox Duet.
"There are a lot of people complaining in this article about that they just don't like it or are against the entire idea. How about some more people with ideas on how to make it work for you?"
The average Slashdotter will insist on nothing less than uncompressed FLAC files for ten cents each, plus a pony. It's also common for us to swear up and down that this is economically feasible; we just know it. Although this is utterly common sense to your typical Slashdotter, nobody has yet stepped up to actually do it.
This would require changing the law. Mechanical royalties are set at around eight cents each for the composer and lyricist; this does not include negotiated royalties for the performer. A song which is the work of three parties -- a composer, a lyricist, and a performer -- could cost more than $0.20 in royalties alone. And, this is assuming that everybody else who had a part in creating the track -- the mixer, the musicians, and so on -- all worked for free.
For what it's worth, the record companies are trying to get the law changed, so that they can pay mechanicals based on a percentage of the selling price, rather than a fixed amount. This would make it a lot easier to sell some tracks for $0.20, but it's not a popular notion among Slashdotters in general.
About a dozen years ago I ran a pretty popular web site whose charter was to expose and mock "make money fast" chain letter spammers and similar scam artists. On occasion I'd link to some slimy MLM company's web site as part of the process of mocking them, and I'd get an email insisting that I remove the link to their site. "You don't have permission to link to me!" they'd claim. "I demand that you remove your link to my site immediately!". Rather than capitulate to their wishes, I'd simply mock them some more. Even then, it was well understood that no permission is required to link to another party's home page.
This is why I'm so surprised that you're even bringing this up, here in 2008. I know you're a seven-digiter, so you deserve a bit of slack, but this is Slashdot, for crying out loud. You should know better.
I'm not sure where you're going with the "second class" stuff. I'm sure you understand that the link blogs were linking to files that were posted without the rightsholder's permission. This is wholly unrelated to somebody linking to your site which (presumably) contains stuff you've created yourself. In your instance, no infringement occurs. If you're not infringing, then there's no case for contributory infringement against anybody who links to you.
"How do you know that these two sites did not intend for people to share their own movies?"
You misunderstand how these sorts of sites work. They are closer to blogs than trackers, indexes, or user-sharing sites. The operators check the files in question to make sure they're legitimate, then post links to them. The links are titled "click here to watch Indiana Jones for free" or similar; there's no ambiguity. When the links break, they fix or remove them. They then make money on the ad revenue. They're not "information wants to be free" zealots or hapless forum operators done in by the actions of their users. They're businessmen, capitalizing on the demand for these films.
If a site like Google or YouTube or a torrent tracker were sued by the MPAA, it would make for another interesting Slashdot discussion -- but that's not what we're discussing here. We're talking about link blogs, which are a different animal.