"Why is the GAO - Government Accountability Office, scanning the Internet for invalid phone numbers on domain names? Did they get too much money one year? We'll need a GAO Accountability Office to find out..."
Because the House Subcommittee on Courts, the Internet, and Intellectual Property asked them to. The GAO is where House Subcommittees turn to when they need statistical information to compare to that provided to them by private sources.
don't say that 5.14% of the sample used incorrect info -- the GAO estimates that 5.14% of all domains use false info.
The sample showed results of 45 false data sets (out of 900 domains), which is exactly 5%. Given the figures shown on the highlights I've linked above (especially the chart), I'm thinking that the 5.14% comes from having to extrapolate from data that includes both patently false, and missing, information.
Also, the margin of error is +- 5%, so the difference in the percentages is statistically within reason.
"When would there ever be an instant that a business would want to disclose a leak?"
If a company negligently allows access to sensitive information on thousands of their clients, their liability in the end might be less if they notify all the clients exposed, since the actual harm done would (hopefully) be less.
So the conditions are:
1) Legal liability for the leak
2) Announcing the leak will help prevent damages
"Sometimes the engineers are true artists and really care what they're doing, doing a really great job. Although, I don't know how much I can even say that because the big companies, Microsoft, Apple and AOL, they tend to turn out the crappiest products, you know, software-wise. The ones that have the most bugs, the most items that are supposedly in there but don't work. "
It's a symptom of two things, from the standpoint of poor quality software produced by people who are capable of much better:
1) Nothing personal at stake for the people actually producing the software. It's a lot different when your livelihood directly and visibly depends on the quality of the product your employer produces. Whether it's because it's my own company, or I get fat stock options, I'll work harder when I'm trying to reach the cheese.
2) Diluted responsibility for the product. 2,000 people working on a product means that in all likelihood, my individual contreibution will go unnoticed, and therefore I have less incentive to perform well. Also, even if my contribution is perfect, it won't have that much effect on a huge project.
"The principal goal of a producer/provider (again, IMHO) should be to produce/provide quality items/services for the betterment of the buyer. (I use the term "betterment" not as a lofty moral judgement -- it encompasses everything from comfier La-Z-Boys to more effective AIDS treatments.) Profit is a nice side-effect."
I totally disagree. It is human nature to do things to benefit yourself and your DNA -- even benefiting your customers is done to benefit yourself.
I like to think that some people are not motivated entirely by personal gain (which is not always financial -- like the good feeling people get when they do charitable deeds) -- but I'm getting more cynical every year.
"Btw, saying that "consumers end up paying what they are comfortable with" completely writes off all the people who aren't comfortable with or can't afford the set price. But then, if they can't afford it I guess they're not consumers..."
Yes it does, but I don't think it is true that everyone should have equal access to all things, regardless of wealth.
If you're any kind of capitalist (not that there's anything wrong with being a communist), then that's what your entire economic theory is based on.
" The expanding into Asia and Europe is hardly synonymous with outsourcing."
You're right, but the word you are looking for is offshoring, not outsourcing. If the product is being consumed here in the US, but made elsewhere by a company located in the US, that is offshoring. Outsourcing is something totally different, and doesn't apply to this.
" The key markets for information technology in the next few decades are not the US, Western Europe or Japan'
You mean, the key emerging markets. IT will still be bigger in the 'western world' + Japan for a while, but it's a lot more developed already, and has less opportunity for an entering player and/or initial sales.
"So, as a manufacturer, you simply enter new markets by lowering your costs until the real masses, the billions, can afford your products."
You mean, you lower your prices. Lowering your costs is not so simple, it doesn't automagically happen as a given over time. But, in essence, you are saying you need to lower your costs so you can lower your prices to be competitive in a poor market while maintaining profitability, right?
"The answer to how it remains profitable is simple, volume."
Again, not so simple. Yes, volume helps, since then fixed costs are diluted with respect to each unit sold. However, your marginal cost of each item sold doesn't change just because you increase your volume -- and labor, raw materials, and energy are not remotely free.
What's really driving the prices of hardware down is a reduction in production cost, based on new manufacturing processes and new designs using cheaper raw materials.
All increasing sales volume does is enable you to remain profitable while pricing your goods at a point closer to your marginal cost of production -- you can pretty much remove the cost of, say, administrative salaries, from your P&L analysis.
"Because populary in music follows social trends, and demand only exists for a limited period of time. You don't have the flexability of a long period of time over which to adjust your prices."
Except your real-time price changes for electronic distribution (or, as you say, in-store calculation) negate the problems with this, since you can implement on a tighter interval.
"Remember, that the digital music demand curve has a point when you drop from lots of sales to practically none, instead of a smooth decline on the upwards side of the price scale due to the existance of online piracy."
What I think you're missing is that it's a different demand curve depending on the popularity of the song. The demand curve will shift constantly, you don't move along the curve when demand for a song increases -- you shift the curve. Time is not a variable in a demand curve. If demand for your song goes up because of radio play or whatever, you need to move the curve and recalculate your IPP. I guarantee you the IPP will be higher.
"You can tell because the industry publishes sales figures, and you can see the corresponding drop in sales for every price increase"
Source? And are you talking about a drop in number of goods sold, or a drop in sales volume? Because a drop in goods sold may not be indicative of over-pricing.
Yup, it is a childish rant. The fact of the matter is, his post was informative. I read the summary, and immediately thought, hmm, I remember using that demo, what was it called again? I wonder if I still have it linked somewhere.
And lo and behold, TMM posted the information I was wondering about, and saved me a bunch of time searching. And people who hadn't used the demo (which is quite amusing|distubring) which was inspiration to the subject of the article now have it at their fingertips to check it out.
That's called being informative, and if I had mod points before it got upmodded, I would have modded it up too.
It's nothing to do with TMM -- it's all about whether any particular post is informative|insightful|funny|interesting or troll|flamebait.
"The virus hides users from seeing the messages sent out to members of their buddy list. Viruses are evolving; now they will even talk to you."
That's why I Touring-test every single person I ever chat with on IM clients. Sure, no one really wants to talk to me after 30 questions, but I kinda like sitting in an empty chat room.
That's not greed, that's the marketplace. It's the way the world works. Both consumers and producers benefit from ideal pricing, since consumers end up paying what they are comfortable with, and producers maximize profits.
Or, do you think you shouldn't ask for a raise next year, because that would be greedy?
"BTW, the part your leaving out (the reason why your demand curve is backwards) is that once you cross a certain threshold you lose 99% of your market to piracy. I would argue that the threshold is $1.01."
Arbitrary, and changeable. Many people are quite willing to pay $1.50 for a song, most $1.00 people will come around to it. If only 2/3 of the $1.00 people com around to paying $1.50, they've broken even on the price change.
I would argue that most people who are going to pirate music have already chosen to do so. There's so much FUD out there that people on the fence will stay on the fence for a while.
"I don *not* assume that sales are instantanious, or that demand is infinite. I'd like you to explain to me how what I described didn't work out to be a high initial price followed by a steady decrease."
You said in your OP: "In order to make the maximum amount of money off any particular song, you want to increase it's appeal as much as you can through price lowering"
That's not true at all. Maximizing sales != maximizing profits. If demand is infinite, then you can have infinite sales, which means that price lowering is always a good idea. Also, lowering the price does not change the demand for the song (is this what you mean by appeal?).
When the demand curve shifts down is when you need to lower prices, or in order to capture the long tail. When the demand curve shifts up (i.e., when demand is high for a song) you want to raise your prices.
No. Not at all. You make the assumption that greater sales = greater profits, and the way to do this is lowering prices. When the demand is high, you are better off having a high price, otherwise you are not maximizing revenues from those people who lie in the high-demand portion of your demand curve.
When you can change the price at will, your goal is to maximize the profit from each sale -- that is, sell high to the people willing to pay a lot, sell low to the people who will only buy low.
How does selling your product for less than people are willing to pay help you maximize profits? It doesn't, which is why your logic is flawed.
What kind of BS are you going on about now? Idealism has nothing to do with a morality issue. Just because I believe that people like you are hypocritical for not acting on their supposed morals, doesn't mean that I don't understand that people are too selfish to do so.
"apparently, when you are presented with two bad choices, you choose not to choose at all? how do you win the game of life by not playing it?"
There you go, making stuff up again. Stop it. Where do you get that idea, except off the top of your head? You keep constructing straw men so you can debate yourself, without even bothering to address what I say.
Your morals appear to be: 'do whatever is best for me. Let the rest sort itself out; if the industry doesn't adapt, it's not my problem.' Hell, you even claimed in your OP that it's not even a morality question, which is what I disputed.
So now, apparently, you think I'm some kind of ivory tower academic idealist? With no basis for that, other than the fact I disagree with your notion that it's ok to pirate music, just because everyone else is and because the industry has to change to support you, and people like you? That's BS -- just because I disagree with your lack of morals, or failure to apply your morals to the piracy issue, doesn't mean that I'm an idealist.
I know that people like you will always take what they can get for free, regardless of moral issues. But then to say there are no moral issues with what they do -- well, your just a selfish twit who chooses to ignore the consequences of their actions, and a coward who doesn't choose to act by their so-called morals.
I am fully aware of how the real world works (you know, I live and work in it, and deal with people every day), but that doesn't mean that morality doesn't exist.
"Agreed, but I still think that competition is a more effective weapon than a boycott, because it proves to the labels that their customers will support a better system."
I'm not sure where the competition is coming from, though -- if not from another label with better business practices (in our minds, anyway), then where? The industry will nevr regard piracy as competitor -- and it's not, since pirates don't bear any of the production costs.
And where, I ask you, did I say the current model is a good one?
Never in the entire thread. I've said the exact opposite.
But so what if the current model is a bad one -- does that make music piracy good?
No. You act as if your only option is to support the current model, or to pirate. That's bullshit. You could support your convictions without pirating.
"so here's your pirates paradise- artists: more exposure, better ad deals. record exec: more cash. sound tech: job security. fans: freedom, more cash in their pocket. self-appointed music snob: still lots to talk about in their self-important blog. EVERYBODY WINS"
BS. And you call me an idealist? What about the artist who doesn't get critical mass for ad sponsorship, niche artists? What about the censoring of content by advertisers -- you know that'll happen. What about the fact that we all pay for that advertising through increased product prices. You're just subsidizing your music preferences by the increased prices that we'll all have to pay on advertised goods. Anyone who doesn't download music LOSES.
"your morality? protecting the status quo of music snobs who in their self-importance think they should decide what we should listen to! FUCK THAT"
WFT? again, you cherrypick and misapply things I say. Dude, you need to fucking learn how to reason. What's wrong with rewarding a friend who tips me off to a band? Huh? Song referrals on iTunes etc would be a great way to do that. THAT'S what talent scouts do, albeit on a large scale. They get commission on finding artists that people like. If they can't find anyone that the market likes, then they don't get paid. It's just another way for the "DEMOCRACY" of consumerism to make a choice. That's what fucking talent scouts do, you moron, they refer talent to people who might want to listen to them.
"or what they actually fucking download and pick themselves?"
And how the fuck do you think those songs you like to download actually get produced? You think a song just magically appears on the market with good production quality? Who the fuck are you to say that I, or anyone else, couldn't drop a couple thousand to help produce an album by a friend's band that we think is really good? What, every band has to put up some live cut from some shitty bar, then the market can all vote on who's cut makes it to post-production edit? You want your music choices to be determined by some world-wide "American Idol?" You want all your fucking musicians to just be a brand used to cross-promote? No artistic independence, no art for the sake of art? You want corporate whoring to be the primary method by which bands make a living? Fuck off.
"dude, you are so far away from morality it's not even funny. you're totally deluded on the subject. my position is more moral than yours. utterly. completely"
Nyaah-nyah-nyah-neeners-neeners? That's your fucking argument? Your only other one is that you don't like it when people refer musicians to you? That qualifies a so-called superior moral position that boils down to:
"Free music for me, it doesn't matter where it comes from, as long as I don't have to pay for it." You think advertising dollars appear from thin air? Wrong, mofo, every consumer pays for that. All you want to do is make it so we all subsidize what is popular (because that's who gets the ad dollars). Fuck you, I don't want the money I spend on detergent to subsidize your music tastes. If I like your music, I'll pay to listen to it.
And if I couldn't afford it, then I'd listen to music I could afford -- there are plenty of bands out there that are willing to distribute their music for free. No one is forcing me to listen to any band out there. If I want it bad enough, I'll pay for it.
"Except that this model is backwards. As demand increases, supply usually decreases causing an in crease in cost. In this case supply is unlimited, you can't even really call it fixed, as demand increases the supply is always there to match it. In this case, the increase in demand without any shortage of supply would more likely indicate a reduction in price."
Supply, in this case, is totally inelastic (shouldn't have said fixed, my bad) -- it will not change based on price. Therefore, the only pressure on price is demand. The stock market doesn't work this way because supply is not inelastic.
It's hard to describe this without graphs, but here you go:
Assuming marginal cost of zero (which is true for digital music, or close enough): Profit = (units sold) * (unit price).
Since units sold at price x when supply is inelastic is dependent only on demand, all we have to do to determine profit is to find the area under the demand curve for whatever price we set. We can solve for maximum profit, and find the price point at which either increasing or decreasing price results in lower profits. What you'll see if you do this for shifted demand curves, you'll see that a higher demand results in a higher ideal price point.
In my view, morality has nothing to do with control, nor does it have anything to do with maintaining the status quo.
It's an abstract that's hard to define, since it varies from culture to culture. But, in a nutshell, I say:
Do unto others as you would have them do unto you; and
When in doubt, try to do what benefits the most people, or harms the least people.
With regard to music piracy, the issue, to me, is this:
Pirating the music benefits no one but the pirate. It does not reward the artist for creating the music; it does not reward the people who worked on the album/song; it does not reward the people who recognized the talent and decided to fund their album or career.
In the long run, what does this mean? I get lots of content now. But the shrinking incentive for musicians to enter the market means that I'll get less quality music later, especially since a lot of quality music is not cheap to produce. This means fewer listening options for me, fewer listening options for everyone... which in my mind, is a bad thing.
This has nothing to do with control. It has nothing to do with the current state of the industry (which I don't like either, I have big problems with copyright law in the US). All it has to do with is this: piracy rewards only the pirate, and has negative consequences on others. In addition, it provides an easy scapegoat to the **AA, which results in less impetus for positive change in the industry... which means that, ironically, piracy is helping preserve the status quo.
"in my eyes (more realistic eyes) what is moral is what is fair"
How is it fair to the artists that they receive no recompense for the hard work they've done and the art they've created? Just curious, cuz, y'know, that doesn't seem very fair to me. Not saying the industry system is fair, but two wrongs don't make a right.
If you don't want to reward the big industry companies, then don't... but that doesn't make piracy any more or less moral. You're still taking advantage of someone else's work, to get enjoyment for free, that is not normally available for free.
"Actually, I would simply not get a copy from any source. But regardless the "record company" won't get a penny from me. If I go to iTunes, or Rhapsody, or any other online music distributor and the price is too high for a song I want, I won't purchase it. If I get annoyed by the prices more than a few times, I will simply go elsewhere, or do without."
Exactly, this is simply stating where you are on the demend curve compared to the given price. Totally independent of supply:)
I think you meant marginal costs, which is the difference in cost between supplying x and x+1 units -- which you are absolutely right, is approaching zero for electronically distributed music.
"I think that this behavior is primarily due to a market failure in the area of distribution, itself brought on by the way that the labels have abused their copyrights to retain monopoly on distribution as I mentioned above."
Yup. Except that I don't think they've abused their copyrights, this is exactly what copyrights are meant to do. The problem is that copyrights are no longer held by individuals (as a whole), nor do they expire (unless you forget to renew). Without the threat of expiration, there is no incentive to lower prices & capture the low-price portion of the demand curve near the end of the copyright term.
"Either that, or the industry execs would blame the loss of revenue on "piracy" (you won't be able to convince everyone to stop, after all, and not all "pirates" actively oppose DRM anyway). Boycotts don't seem to work all that well against the labels, since they have a universal scapegoat in the form of "piracy" on which to blame their financial troubles."
Yup yup. But if we want copyright reform (that benefits the consumer and the creator, not just the copyright holder) we need better public awareness of their abuses. Bad publicity associated with a boycott is more effective than lost sales occurring as a direct result of a boycott. It's really a PR war, and people who pirate music aren't helping the cause.
"The only way charging more for popular songs is a good idea is if your goal is to punish your customers for being mainstream music listners, or if you have a complete lack of understanding of supply and demand. If the goal is to actually make money, they've got this plan completely backwards."
Errm, no. Not at all.
Supply and demand curves are used by firms, in this model, to set the ideal price point -- where profits are maximized. The goal is not to sell the maximum number of copies, that would only hold true if demand were infinite. Assuming marginal cost of zero, fixed cost of $10,000: If you sell 10,000 copies at $2 a pop, that's profit of $10,000.
20,000 copies at $1 a pop, profit $10,000.
5,000 copies at $5 a pop, profit 15,000.
This is just an example to show that maximizing copies sold does not necessarily maximize profits.
Your post tries to state in words what a demand curve is -- how many people would purchase based on price of a good. It assumes, however, that sales are instantaneous, and that demand is infinite. If you look at the demand for a particular (unpopular) song, you'll have basically two components -- the people that will pay any reasonable price for it, and the people who will give it a shot based on a low price. The ideal pricing scenario, then, would be a high initial price, followed by a steadily decreasing price to woo marginal purchasers.
The trick to demand-pricing of songs, then, is to start them off very high, then decrease over time, holding the price steady when there is significant purchase activity, maybe even increasing price if there is a surge in purchases that reflects a change in demand. While demand remains high, you can charge a high price, but then discounting toward a minimum price to pick up the long tail. Just like consumer electronics.
Slashdot Mirror
"Why is the GAO - Government Accountability Office, scanning the Internet for invalid phone numbers on domain names? Did they get too much money one year? We'll need a GAO Accountability Office to find out..."
Because the House Subcommittee on Courts, the Internet, and Intellectual Property asked them to. The GAO is where House Subcommittees turn to when they need statistical information to compare to that provided to them by private sources.
300 each of three TLDs = 900 domains.
900*0.0514 = 46.26.
Truth is, though, that the GAO report (highlights here, pdf: http://www.gao.gov/highlights/d06165high.pdf
don't say that 5.14% of the sample used incorrect info -- the GAO estimates that 5.14% of all domains use false info.
The sample showed results of 45 false data sets (out of 900 domains), which is exactly 5%. Given the figures shown on the highlights I've linked above (especially the chart), I'm thinking that the 5.14% comes from having to extrapolate from data that includes both patently false, and missing, information.
Also, the margin of error is +- 5%, so the difference in the percentages is statistically within reason.
"When would there ever be an instant that a business would want to disclose a leak?"
If a company negligently allows access to sensitive information on thousands of their clients, their liability in the end might be less if they notify all the clients exposed, since the actual harm done would (hopefully) be less.
So the conditions are:
1) Legal liability for the leak
2) Announcing the leak will help prevent damages
"Sometimes the engineers are true artists and really care what they're doing, doing a really great job. Although, I don't know how much I can even say that because the big companies, Microsoft, Apple and AOL, they tend to turn out the crappiest products, you know, software-wise. The ones that have the most bugs, the most items that are supposedly in there but don't work. "
It's a symptom of two things, from the standpoint of poor quality software produced by people who are capable of much better:
1) Nothing personal at stake for the people actually producing the software. It's a lot different when your livelihood directly and visibly depends on the quality of the product your employer produces. Whether it's because it's my own company, or I get fat stock options, I'll work harder when I'm trying to reach the cheese.
2) Diluted responsibility for the product. 2,000 people working on a product means that in all likelihood, my individual contreibution will go unnoticed, and therefore I have less incentive to perform well. Also, even if my contribution is perfect, it won't have that much effect on a huge project.
"The principal goal of a producer/provider (again, IMHO) should be to produce/provide quality items/services for the betterment of the buyer. (I use the term "betterment" not as a lofty moral judgement -- it encompasses everything from comfier La-Z-Boys to more effective AIDS treatments.) Profit is a nice side-effect."
I totally disagree. It is human nature to do things to benefit yourself and your DNA -- even benefiting your customers is done to benefit yourself.
I like to think that some people are not motivated entirely by personal gain (which is not always financial -- like the good feeling people get when they do charitable deeds) -- but I'm getting more cynical every year.
"Btw, saying that "consumers end up paying what they are comfortable with" completely writes off all the people who aren't comfortable with or can't afford the set price. But then, if they can't afford it I guess they're not consumers..."
Yes it does, but I don't think it is true that everyone should have equal access to all things, regardless of wealth.
If you're any kind of capitalist (not that there's anything wrong with being a communist), then that's what your entire economic theory is based on.
"It may or may not ripple into the larger global economy but would definitely hurt foreign companies with large investments in China."
Or, say, the US Government, which is dependent on Chinese banks to buy our debt and keep the budget deficit afloat.
Or maybe that's how the US will crush China -- renege on our debt to them and collapse their banking system.
" The expanding into Asia and Europe is hardly synonymous with outsourcing."
.
You're right, but the word you are looking for is offshoring, not outsourcing. If the product is being consumed here in the US, but made elsewhere by a company located in the US, that is offshoring. Outsourcing is something totally different, and doesn't apply to this
" The key markets for information technology in the next few decades are not the US, Western Europe or Japan'
You mean, the key emerging markets. IT will still be bigger in the 'western world' + Japan for a while, but it's a lot more developed already, and has less opportunity for an entering player and/or initial sales.
"So, as a manufacturer, you simply enter new markets by lowering your costs until the real masses, the billions, can afford your products."
You mean, you lower your prices. Lowering your costs is not so simple, it doesn't automagically happen as a given over time. But, in essence, you are saying you need to lower your costs so you can lower your prices to be competitive in a poor market while maintaining profitability, right?
"The answer to how it remains profitable is simple, volume."
Again, not so simple. Yes, volume helps, since then fixed costs are diluted with respect to each unit sold. However, your marginal cost of each item sold doesn't change just because you increase your volume -- and labor, raw materials, and energy are not remotely free.
What's really driving the prices of hardware down is a reduction in production cost, based on new manufacturing processes and new designs using cheaper raw materials.
All increasing sales volume does is enable you to remain profitable while pricing your goods at a point closer to your marginal cost of production -- you can pretty much remove the cost of, say, administrative salaries, from your P&L analysis.
FTS: "Microsoft plans to create 3000 more jobs at India" (emphasis mine)
India's pretty big, dude. Some even call it a sub-continent (though the Indian subcontinent also includes Bangladesh and parts of other countries).
I don't think MS is adding 3000 workers at India... in India, perhaps, or at MS's India facilities...
Anyway, It's a good move by MS for India, though Indians will be complaining in a few years about some of those jobs going to Africa and the Pac Rim.
" I thought the whole date-triggered thing went out of fashion with the Michelangelo virus."
I still have an old 486 with the Michelangelo virus embedded in the partition table. It still has this message written in wite-out on the casing:
"WARNING: DO NOT USE ON MARCH 6"
I might have to boot that sucker up this weekend and see what's on it.
Nazi party, yada yada yada.
How about the fact that it's 34 years form the day that the shuttle program was ordered by Nixon?
Or the 152nd anniversary of the sinking of the San Francisco Steamer? (any relation to the Cleveland Steamer?)
Or the 92nd anniversary of the 8-hour workday and a $5 minimum daily wage (by Ford Motor Company)?
Seems to me that whoever wrote the worm is against the shuttle program, ferries in San Francisco, and organized labor. Hmm.
Source: http://en.wikipedia.org/wiki/January_5
"Because populary in music follows social trends, and demand only exists for a limited period of time. You don't have the flexability of a long period of time over which to adjust your prices."
Except your real-time price changes for electronic distribution (or, as you say, in-store calculation) negate the problems with this, since you can implement on a tighter interval.
"Remember, that the digital music demand curve has a point when you drop from lots of sales to practically none, instead of a smooth decline on the upwards side of the price scale due to the existance of online piracy."
What I think you're missing is that it's a different demand curve depending on the popularity of the song. The demand curve will shift constantly, you don't move along the curve when demand for a song increases -- you shift the curve. Time is not a variable in a demand curve. If demand for your song goes up because of radio play or whatever, you need to move the curve and recalculate your IPP. I guarantee you the IPP will be higher.
"You can tell because the industry publishes sales figures, and you can see the corresponding drop in sales for every price increase"
Source? And are you talking about a drop in number of goods sold, or a drop in sales volume? Because a drop in goods sold may not be indicative of over-pricing.
Yup, it is a childish rant. The fact of the matter is, his post was informative. I read the summary, and immediately thought, hmm, I remember using that demo, what was it called again? I wonder if I still have it linked somewhere.
And lo and behold, TMM posted the information I was wondering about, and saved me a bunch of time searching. And people who hadn't used the demo (which is quite amusing|distubring) which was inspiration to the subject of the article now have it at their fingertips to check it out.
That's called being informative, and if I had mod points before it got upmodded, I would have modded it up too.
It's nothing to do with TMM -- it's all about whether any particular post is informative|insightful|funny|interesting or troll|flamebait.
"The virus hides users from seeing the messages sent out to members of their buddy list. Viruses are evolving; now they will even talk to you."
That's why I Touring-test every single person I ever chat with on IM clients. Sure, no one really wants to talk to me after 30 questions, but I kinda like sitting in an empty chat room.
That's not greed, that's the marketplace. It's the way the world works. Both consumers and producers benefit from ideal pricing, since consumers end up paying what they are comfortable with, and producers maximize profits.
Or, do you think you shouldn't ask for a raise next year, because that would be greedy?
"BTW, the part your leaving out (the reason why your demand curve is backwards) is that once you cross a certain threshold you lose 99% of your market to piracy. I would argue that the threshold is $1.01."
Arbitrary, and changeable. Many people are quite willing to pay $1.50 for a song, most $1.00 people will come around to it. If only 2/3 of the $1.00 people com around to paying $1.50, they've broken even on the price change.
I would argue that most people who are going to pirate music have already chosen to do so. There's so much FUD out there that people on the fence will stay on the fence for a while.
"I don *not* assume that sales are instantanious, or that demand is infinite. I'd like you to explain to me how what I described didn't work out to be a high initial price followed by a steady decrease."
You said in your OP: "In order to make the maximum amount of money off any particular song, you want to increase it's appeal as much as you can through price lowering"
That's not true at all. Maximizing sales != maximizing profits. If demand is infinite, then you can have infinite sales, which means that price lowering is always a good idea. Also, lowering the price does not change the demand for the song (is this what you mean by appeal?).
When the demand curve shifts down is when you need to lower prices, or in order to capture the long tail. When the demand curve shifts up (i.e., when demand is high for a song) you want to raise your prices.
No. Not at all. You make the assumption that greater sales = greater profits, and the way to do this is lowering prices. When the demand is high, you are better off having a high price, otherwise you are not maximizing revenues from those people who lie in the high-demand portion of your demand curve.
When you can change the price at will, your goal is to maximize the profit from each sale -- that is, sell high to the people willing to pay a lot, sell low to the people who will only buy low.
How does selling your product for less than people are willing to pay help you maximize profits? It doesn't, which is why your logic is flawed.
What kind of BS are you going on about now? Idealism has nothing to do with a morality issue. Just because I believe that people like you are hypocritical for not acting on their supposed morals, doesn't mean that I don't understand that people are too selfish to do so.
"apparently, when you are presented with two bad choices, you choose not to choose at all? how do you win the game of life by not playing it?"
There you go, making stuff up again. Stop it. Where do you get that idea, except off the top of your head? You keep constructing straw men so you can debate yourself, without even bothering to address what I say.
Your morals appear to be: 'do whatever is best for me. Let the rest sort itself out; if the industry doesn't adapt, it's not my problem.' Hell, you even claimed in your OP that it's not even a morality question, which is what I disputed.
So now, apparently, you think I'm some kind of ivory tower academic idealist? With no basis for that, other than the fact I disagree with your notion that it's ok to pirate music, just because everyone else is and because the industry has to change to support you, and people like you? That's BS -- just because I disagree with your lack of morals, or failure to apply your morals to the piracy issue, doesn't mean that I'm an idealist.
I know that people like you will always take what they can get for free, regardless of moral issues. But then to say there are no moral issues with what they do -- well, your just a selfish twit who chooses to ignore the consequences of their actions, and a coward who doesn't choose to act by their so-called morals.
I am fully aware of how the real world works (you know, I live and work in it, and deal with people every day), but that doesn't mean that morality doesn't exist.
"Agreed, but I still think that competition is a more effective weapon than a boycott, because it proves to the labels that their customers will support a better system."
I'm not sure where the competition is coming from, though -- if not from another label with better business practices (in our minds, anyway), then where? The industry will nevr regard piracy as competitor -- and it's not, since pirates don't bear any of the production costs.
And where, I ask you, did I say the current model is a good one?
Never in the entire thread. I've said the exact opposite.
But so what if the current model is a bad one -- does that make music piracy good?
No. You act as if your only option is to support the current model, or to pirate. That's bullshit. You could support your convictions without pirating.
"so here's your pirates paradise- artists: more exposure, better ad deals. record exec: more cash. sound tech: job security. fans: freedom, more cash in their pocket. self-appointed music snob: still lots to talk about in their self-important blog. EVERYBODY WINS"
BS. And you call me an idealist? What about the artist who doesn't get critical mass for ad sponsorship, niche artists? What about the censoring of content by advertisers -- you know that'll happen. What about the fact that we all pay for that advertising through increased product prices. You're just subsidizing your music preferences by the increased prices that we'll all have to pay on advertised goods. Anyone who doesn't download music LOSES.
"your morality? protecting the status quo of music snobs who in their self-importance think they should decide what we should listen to! FUCK THAT"
WFT? again, you cherrypick and misapply things I say. Dude, you need to fucking learn how to reason. What's wrong with rewarding a friend who tips me off to a band? Huh? Song referrals on iTunes etc would be a great way to do that. THAT'S what talent scouts do, albeit on a large scale. They get commission on finding artists that people like. If they can't find anyone that the market likes, then they don't get paid. It's just another way for the "DEMOCRACY" of consumerism to make a choice. That's what fucking talent scouts do, you moron, they refer talent to people who might want to listen to them.
"or what they actually fucking download and pick themselves?"
And how the fuck do you think those songs you like to download actually get produced? You think a song just magically appears on the market with good production quality? Who the fuck are you to say that I, or anyone else, couldn't drop a couple thousand to help produce an album by a friend's band that we think is really good? What, every band has to put up some live cut from some shitty bar, then the market can all vote on who's cut makes it to post-production edit? You want your music choices to be determined by some world-wide "American Idol?" You want all your fucking musicians to just be a brand used to cross-promote? No artistic independence, no art for the sake of art? You want corporate whoring to be the primary method by which bands make a living? Fuck off.
"dude, you are so far away from morality it's not even funny. you're totally deluded on the subject. my position is more moral than yours. utterly. completely"
Nyaah-nyah-nyah-neeners-neeners? That's your fucking argument? Your only other one is that you don't like it when people refer musicians to you? That qualifies a so-called superior moral position that boils down to: "Free music for me, it doesn't matter where it comes from, as long as I don't have to pay for it." You think advertising dollars appear from thin air? Wrong, mofo, every consumer pays for that. All you want to do is make it so we all subsidize what is popular (because that's who gets the ad dollars). Fuck you, I don't want the money I spend on detergent to subsidize your music tastes. If I like your music, I'll pay to listen to it.
And if I couldn't afford it, then I'd listen to music I could afford -- there are plenty of bands out there that are willing to distribute their music for free. No one is forcing me to listen to any band out there. If I want it bad enough, I'll pay for it.
"Except that this model is backwards. As demand increases, supply usually decreases causing an in crease in cost. In this case supply is unlimited, you can't even really call it fixed, as demand increases the supply is always there to match it. In this case, the increase in demand without any shortage of supply would more likely indicate a reduction in price."
Supply, in this case, is totally inelastic (shouldn't have said fixed, my bad) -- it will not change based on price. Therefore, the only pressure on price is demand. The stock market doesn't work this way because supply is not inelastic.
It's hard to describe this without graphs, but here you go:
Assuming marginal cost of zero (which is true for digital music, or close enough): Profit = (units sold) * (unit price).
Since units sold at price x when supply is inelastic is dependent only on demand, all we have to do to determine profit is to find the area under the demand curve for whatever price we set. We can solve for maximum profit, and find the price point at which either increasing or decreasing price results in lower profits. What you'll see if you do this for shifted demand curves, you'll see that a higher demand results in a higher ideal price point.
In my view, morality has nothing to do with control, nor does it have anything to do with maintaining the status quo.
It's an abstract that's hard to define, since it varies from culture to culture. But, in a nutshell, I say:
Do unto others as you would have them do unto you; and
When in doubt, try to do what benefits the most people, or harms the least people.
With regard to music piracy, the issue, to me, is this:
Pirating the music benefits no one but the pirate. It does not reward the artist for creating the music; it does not reward the people who worked on the album/song; it does not reward the people who recognized the talent and decided to fund their album or career.
In the long run, what does this mean? I get lots of content now. But the shrinking incentive for musicians to enter the market means that I'll get less quality music later, especially since a lot of quality music is not cheap to produce. This means fewer listening options for me, fewer listening options for everyone... which in my mind, is a bad thing.
This has nothing to do with control. It has nothing to do with the current state of the industry (which I don't like either, I have big problems with copyright law in the US). All it has to do with is this: piracy rewards only the pirate, and has negative consequences on others. In addition, it provides an easy scapegoat to the **AA, which results in less impetus for positive change in the industry... which means that, ironically, piracy is helping preserve the status quo.
"in my eyes (more realistic eyes) what is moral is what is fair"
How is it fair to the artists that they receive no recompense for the hard work they've done and the art they've created? Just curious, cuz, y'know, that doesn't seem very fair to me. Not saying the industry system is fair, but two wrongs don't make a right.
If you don't want to reward the big industry companies, then don't... but that doesn't make piracy any more or less moral. You're still taking advantage of someone else's work, to get enjoyment for free, that is not normally available for free.
"Actually, I would simply not get a copy from any source. But regardless the "record company" won't get a penny from me. If I go to iTunes, or Rhapsody, or any other online music distributor and the price is too high for a song I want, I won't purchase it. If I get annoyed by the prices more than a few times, I will simply go elsewhere, or do without."
:)
Exactly, this is simply stating where you are on the demend curve compared to the given price. Totally independent of supply
Thanks for the compliment.
I think you meant marginal costs, which is the difference in cost between supplying x and x+1 units -- which you are absolutely right, is approaching zero for electronically distributed music.
"I think that this behavior is primarily due to a market failure in the area of distribution, itself brought on by the way that the labels have abused their copyrights to retain monopoly on distribution as I mentioned above."
Yup. Except that I don't think they've abused their copyrights, this is exactly what copyrights are meant to do. The problem is that copyrights are no longer held by individuals (as a whole), nor do they expire (unless you forget to renew). Without the threat of expiration, there is no incentive to lower prices & capture the low-price portion of the demand curve near the end of the copyright term.
"Either that, or the industry execs would blame the loss of revenue on "piracy" (you won't be able to convince everyone to stop, after all, and not all "pirates" actively oppose DRM anyway). Boycotts don't seem to work all that well against the labels, since they have a universal scapegoat in the form of "piracy" on which to blame their financial troubles."
Yup yup. But if we want copyright reform (that benefits the consumer and the creator, not just the copyright holder) we need better public awareness of their abuses. Bad publicity associated with a boycott is more effective than lost sales occurring as a direct result of a boycott. It's really a PR war, and people who pirate music aren't helping the cause.
"The only way charging more for popular songs is a good idea is if your goal is to punish your customers for being mainstream music listners, or if you have a complete lack of understanding of supply and demand. If the goal is to actually make money, they've got this plan completely backwards."
Errm, no. Not at all.
Supply and demand curves are used by firms, in this model, to set the ideal price point -- where profits are maximized. The goal is not to sell the maximum number of copies, that would only hold true if demand were infinite. Assuming marginal cost of zero, fixed cost of $10,000:
If you sell 10,000 copies at $2 a pop, that's profit of $10,000.
20,000 copies at $1 a pop, profit $10,000.
5,000 copies at $5 a pop, profit 15,000.
This is just an example to show that maximizing copies sold does not necessarily maximize profits.
Your post tries to state in words what a demand curve is -- how many people would purchase based on price of a good. It assumes, however, that sales are instantaneous, and that demand is infinite. If you look at the demand for a particular (unpopular) song, you'll have basically two components -- the people that will pay any reasonable price for it, and the people who will give it a shot based on a low price. The ideal pricing scenario, then, would be a high initial price, followed by a steadily decreasing price to woo marginal purchasers.
The trick to demand-pricing of songs, then, is to start them off very high, then decrease over time, holding the price steady when there is significant purchase activity, maybe even increasing price if there is a surge in purchases that reflects a change in demand. While demand remains high, you can charge a high price, but then discounting toward a minimum price to pick up the long tail. Just like consumer electronics.