People Would Pay A Hell Of A Lot More If DRM Were Gone

from the paying-for-value dept

An argument that we've made for years is that for all the whining about how the legacy entertainment industry insists it needs DRM, adding DRM takes away value. It limits the content/games/software/etc. that people purchase a license to and therefore limits the value. You don't need an economics degree to recognize that providing less value decreases how much people are willing to pay (and how many people are willing to pay). Thus, there's at least some economic force when using DRM that decreases the potential market for DRM'd offerings. Supporters of DRM will likely counter with some version of the argument that this decrease in value/addressable market is okay, because it's less than the expected decrease in the potential market that happens when "OMG I CAN GET A PIRATED VERSION FOR FREE!?!?!?!??" enters the market. I'm not entirely convinced that's true -- as time and time again, we've seen that people are more than happy to pay for (1) official versions in order to support creators they know, appreciate and trust and (2) especially when it comes with other benefits beyond just the content.

But, one thing that hasn't really ever been made clear is just how much DRM depresses markets. Until now. Some researchers at the University of Glasgow have just released some preliminary research (found via Cory Doctorow and EFF) specifically looking at the market for DVD players -- and how things work when they come with built in DRM and without it. The findings are pretty spectacular. People are much more willing to spend more money to be able to avoid DRM.

Overall we find that interoperability has a significant positive effect on the price that consumers are willing to pay for DVD players. The average price that they are willing to pay increases by $19 USD for players with any interoperability features present. The average price increases by $30 USD for players with the specific ability to play content in open file formats like Xvid. This feature has the strongest impact on price in our study. The lack of region locks also has a moderately significant effect on price. Backwards compatibility with legacy formats live VCD had no significant impact on price in any of our models, likely because VCD is a very legacy format, indeed, having been popular in the late 1990s. Backwards compatibility might have a bigger impact for products that are released at closer time intervals.

These are -- again -- preliminary findings, and specific to DVD hardware. It's possible that there are confounding factors here as well, but as a starting point, it's quite interesting to see that people seem willing to spend much more for greater interoperability and less DRM. And, once again, it goes against the claims of Hollywood that people are always just looking for the cheapest overall option.

Filed Under: drm, paying, studies, value

Taylor Swift Is Not The Savior Artists Need

from the the-feel-good-story-that-isn't dept

I'm going to do something crazy and generally not advised on the internet: I'm going to try to make a nuanced argument that cannot be summarized just in the title alone. I fully expect that some will not read through the details, but please, just ignore them in the comments and try to focus on the full argument presented here.

Let me start out this post by noting a key thing: from the beginning, it was stupid that Apple had negotiated a deal with record labels in which copyright holders would not be compensated with royalties for the three-month "trial period" of Apple's new streaming music program. It clearly should have agreed to pay the royalties, and it was a really short-sighted move to push for a deal without royalties. It was always going to come back to haunt the company. Second, while I know some people like to attack Swift for a variety of reasons, I actually think she's an incredibly savvy music person, who has built a tremendously successful career, often by maintaining control on her own and not giving it up to the major labels. That's fantastic. But all of that doesn't mean I think what happened this weekend was a good thing (remember: nuanced argument, please read on).

Of course, as you've probably heard, on Sunday, pop star Taylor Swift wrote an "open letter" to Apple on her Tumblr blog about how ridiculous this was, and how she wouldn't allow her latest album to stream on the service because of this -- even though she supports Apple's "no free tier" stance. There's a lot to comment on about her piece but, no matter what, it was effective. Late on Sunday, Apple's Eddy Cue tweeted Apple's capitulation: And... the internet went kind of wild. The fact that Taylor Swift wrote a blog post that made Apple -- probably the richest and most powerful company in the world -- back down within a day (on a weekend, no less), does have a sort of populist appeal to it. People started jokingly suggesting that Swift should weigh in on politics, the Middle East and much, much more.

Thought pieces were written by-the-dozen about how Swift is the "most powerful woman/person in music/tech." No, really:

• The Guardian: Apple royalties U-turn: is Taylor Swift the most powerful woman in music?
• Entrepreneur: Why Taylor Swift Is Now the Most Powerful Person in Tech
• The Atlantic: Taylor Swift Almighty: Is she the most powerful person in music?
• Fuse: Is Taylor Swift The Most Powerful Person In Music?
• NY Times: With a Tap of Taylor Swift’s Fingers, Apple Retreated (which includes "most powerful person in the music industry" quote).
• Malaymail: How Taylor Swift became the most powerful woman in music
• BGR: My Jaw Dropped When I Realized How Powerful Taylor Swift is

And that's just the first ones I found in a quick Google search. There are more.

But here's the problem with all of this: it's hogwash, meaningless blather that doesn't change a thing and will have no lasting impact. If anything, the lasting impact may be negative, not positive for artists. And, remember, I actually agree with the overall point that Apple's original decision was the wrong one, and think the company made the right decision to reverse course.

But there are three big problems with the rush to celebrate Swift as the new savior of the music industry over this. First her arguments for why are misleading and not very helpful. Second the overall impact of this move will be minimal to musicians (and other creative types). Third, it will give a false sense of hope to those who rely on obsolete business models, rather than innovating.

Let's break down all three. First: her arguments are kind of useless. Here's the key one, which got lots of people excited:

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.

It's very touching. And it's almost entirely hogwash for a variety of reasons. First, if your album is a success, there are all sorts of ways to make money beyond the royalties from Apple Music's streaming service. Swift herself kind of admits this in her first sentence in which she notes that she makes a ton of money playing live shows. And why does she make that much money live? Well, as Tom Conrad rightly points out, her career was built on terrestrial radio play -- which is a free service (the kind that Swift has attacked Spotify over) and which doesn't pay the performers anything at all in the US. You can (and many do!) argue that the law in the US should change on this, but it's the way things are today, and Swift is living proof that being a part of a free service that doesn't pay performance royalties certainly doesn't mean that you end up suffering. In fact, it can lead to an immensely successful and profitable career... like Swift's.

But that brings us to the second problem with that paragraph, which is that for most musicians, this doesn't much matter anyway. That's because the industry's biggest secret, which it always tries to hide from these debates, is that the vast majority of musicians basically make absolutely nothing in royalties. This is due to a combination of factors, starting with the fact that if you're signed to a label, the label is likely keeping nearly everything you get from streaming. When Eddy Cue says "Apple will always make sure that artist [sic] are paid" he's lying. They may make sure the copyright holder gets paid, but that's frequently not the artist.

And, related to this, is the other dirty secret: most musicians don't have a big enough fanbase to generate enough revenue. Most musicians don't make a living, period. That has always been the case. The supporters of the old system like to try to slide this fact under the rug and they do some creative counting, where they only look at the stats of those who have made careers out of music, and they leave out the vast majority who fail. The vast, vast, vast majority of musicians don't make a living, because the music business is tough. It's tough to get attention. It's tough to make good music. It's tough to make money. Apple paying for streaming really only addresses a tiny, tiny, tiny bit of that last one. No musician is going to make it or not based on getting paid in this three-month trial. If they're getting enough plays to matter, then they have other ways to make revenue.

Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.

Three months is a long time to go unpaid. But not getting paid by Apple Music does not mean "going unpaid." It just means one small revenue stream is limited while it aims to get up to speed. And, again, Swift herself proves this via the fact that her songs play all the time on the radio — for free, but still helping her get paid. And, even though she can pull it down, she's left her streaming music on YouTube. Furthermore, as others pointed out, Swift herself is a bit of a hypocrite here. She puts ridiculous limits on photographers who are on assignment to photograph her shows, such that it often means they have to put in the work and not get paid -- even as she gets to use their photographs forever. If she's really so concerned about creative types "going unpaid," shouldn't she be paying those photographers for their works?

As for the second point above: the overall impact of this move will be minimal to musicians (and other creative types). As already discussed in point one, for most musicians, this isn't going to move the needle one way or the other. Any musician out there relying on the royalties from Apple Music to make or break their musical career has no musical career. Perhaps it's possible that there are one or two artists at the margin for whom this is helpful, but for the vast majority of artists, this isn't going to make a big difference at all. Additionally, while Apple has said that it will now pay during the trial period, it didn't actually say how much it will pay. Yes, for struggling artists any revenue helps, but trust me, when the first royalty checks from Apple start coming in, I can guarantee there will be musicians complaining online about how little they get. Those stories always get coverage. They'll happen again.

And, of course, for label-affiliated artists, much of it will go to the label anyway, and the artist won't see any of it.

Finally, onto the third, and most concerning point: it will give a false sense of hope to those who rely on obsolete business models, rather than innovating. We're already seeing this in the reverence and adoration being showered on Swift for her blog post, despite its questionable premises -- but more for its impact. And musicians are celebrating this, despite the fact it won't move the needle for them one way or the other. And that's really unfortunate, because here's another chance to do things right by focusing on business models that let them connect directly to fans and give them a reason to buy something. Demanding others pay you money is no substitute for convincing others to willingly pay. One is sustainable, one is not.

But because of this "success," people will still cling to the false notion that the "solution" to content creators' failure to build their own successful business model is to demand that other successful companies give them money. And this goes way beyond music as well. Already, you see people like Jeremy Olshan, Marketwatch's Editor-in-Chief, saying that "journalism needs a Taylor Swift to save content from getting... devalued." This is wrong on so many levels, but that's another post for another day. But this notion of "a savior" magically swooping in and reviving business models that aren't working any more, based on sheer will, is a myth. And it's a dangerous myth because it gets people focusing on that rather than implementing sustainable business models and creating great content. There is no savior for music. There is no savior for journalism. There is no savior for movies. No talk about "fairness" or "fair compensation" or "ethical compensation" is going to change fundamental economics. Most content creators fail out of making a career of it, and if you're going to succeed, praying for a savior, rather than taking steps to ensure a competent business model, isn't likely to be particularly productive.

To conclude (with nuance baked in): So, again, despite all of this, I think Apple made the wrong move initially, and the right move on Sunday night. However, Taylor Swift's reasoning was silly (even if I think she's a great success story who has built up a tremendous career without ceding much control), and the impact of all this will be basically nil for almost every single artist. But, worst of all, this whole episode reinforces this savior concept, and the false belief that because some companies are successful, while some content creators are not, a savior should just demand "fair compensation" and money will magically rain down upon the creative class. It doesn't work that way. It's never worked that way. And nothing in what happened over the weekend with Swift will change that. If anything, it only serves to distract people from focusing on the business models that do work.

Filed Under: apple music, business models, music, paying, streaming, taylor swift
Companies: apple

For All The Talk From Hollywood About Making Sure People Get Paid, Why Doesn't It Pay Interns?

from the because-it's-never-been-about-getting-anyone-paid-by-studio-bosses dept

We hear the refrain from the entertainment industry all the time, about how they are fighting against modern technology because without it, people don't get paid, and how unfair is that? The RIAA's Cary Sherman keeps talking about all those lost jobs (even though his math doesn't add up), and talking about all the people the movie industry "employs" (exaggerated by an order of magnitude) has become a key part of the MPAA boss Chris Dodd's stump speech.

So, isn't it interesting that the entertainment industry may be facing a potentially big class action problem... for not paying interns? Apparently, it's quite common for entertainment industry heavyweights to take on unpaid interns, usually eager kids hoping to "break into" the business. But, federal law (and the key state laws) are pretty explicit in noting that "free" internships are almost always illegal for for-profit companies.

Now, to be clear, I actually don't think free internships -- entered into willingly -- should be illegal (just as I don't think there's anything wrong with people volunteering to do stuff for free). But if Hollywood is running around whining about getting more people paid... it seems pretty hypocritical to then not pay people working for you.

Filed Under: class action lawsuit, hollywood, interns, movie industry, paying

Amanda Palmer Destroys/Saves Musicians; Chances Of 'Hitting It Big' As An Artist Remain Unchanged

from the one-sentence-between-'darling'-and-'pariah' dept

In terms of incendiary writing, the following sentence ranks so low on the scale as to be imperceptible:

we will feed you beer, hug/high-five you up and down (pick your poison), give you merch, and thank you mightily for adding to the big noise we are planning to make.

That was Amanda Palmer's offer to instrumentalists willing to join her on stage during tour appearances. And then the internet exploded for most of five days before Palmer reappeared to say this:

me and my band have discussed it at length. and we have decided we should pay all of our guest musicians. we have the power to do it, and we’re going to do it. (in fact, we started doing it three shows ago.)

So. Here's the deal. I had 1,600 words assembled in an orderly fashion and was gently (but firmly) herding them through the Amanda Palmer "free as in volunteer musicians" minefield. It was quite possible many of these words, some multisyllable, some a bit sweary, wouldn't make it all the way across. But, it was this close to being a "thing," a monumental defense of Amanda Palmer's absolute right to ask for fans to pitch in on tour despite her having $1.2 million worth of Kickstarting (mostly spent) in her hip pocket.

Because she had every right, no matter how seemingly large the amount at her disposal, to ask people to volunteer to be her sidemen/women. The problem was her critics (and lord, there were quite a few of those) were blinded by all the money she had, especially when comparing it to the money they had. Here's Bob Lefsetz, breaking it down:

They believe she should pay.

Because she raised a million dollars on Kickstarter and they didn’t!

Amanda ankled her major label deal, she makes money on Twitter, she uses the new technologies to both reach people and profit and they don’t like it. They could join in, but then they might fail, and they wouldn’t be able to sit at home at bitch.

But before the (probably) bloated opus could hit the front page, Palmer decided to shell out cash to her volunteers, freeing up the money by shuttling money back and forth between line items, robbing Video to pay Sax Players, as it were.

my management team tweaked and reconfigured financials, pulling money from this and that other budget (mostly video) and moving it to the tour budget. 
all of the money we took out of those budgets is going to the crowd-sourced musicians fund. we are going to pay the volunteer musicians every night. even though they volunteered their time for beer, hugs, merch, free tickets, and love: we’ll now also hand them cash.

Was it the right thing to do? No. It wasn't the wrong thing to do, either. It was simply a thing to do. When you're trying to tour and all anyone wants to talk about is whether or not the VOLUNTEER sax player is going to get paid scale or at least, more than hugs, it's often simpler to do the thing that drops the ongoing dialog down to a manageable dull roar, or at least a trifle more supportive roar.

Not paying was never wrong. Take away the crowdfunding aspect (which seems to be what the critics get hung up on) and Palmer's offer is every diehard fan's dream. Get on stage with your favorite artist! Get beer/hugs! In any other situation, there's no controversy. Only people who get to live their dreams for a night and those who get to see others living their dreams. Try these hypothetical offers on for size:

- Lady Gaga, major label artist, sends out an invite for interested fans to jump onstage and perform for a couple of tracks in exchange for discarded wigs, unused wardrobe and travel bottles of Ciroc. (Feel free to substitute a major label artist you can actually tolerate for Lady Gaga, if need be.)

- Indie legend Weezer sends out an open invitation for interested fans to perform onstage with them at their tour stops in exchange for corrective lenses, sweaters and "Pinkerton" CDs rescued from the cutout bin.

- Label-free artist Jonathan Coulton sends out an open invitation for interested fans to perform interpretative dances during his live appearances in exchange for retweets and a 4-song EP dedicated to you and recorded backstage while you wait.

Viewed this way, the same invitation Palmer made sounds like pure gold for diehard fans. Each of these artists is offering a chance for local artists to become local heroes, if only for a night. In exchange for their time, effort and expertise, the contributing fans will walk away $0 richer in direct monetary terms. But who would turn that down? No fan is going to tell one of their favorite bands, "Thanks, but I'd rather be paid." Or, "Not interested. I'd rather watch from a safe distance away."

Palmer's offer is different. It's not different because her offer is any different than the hypotheticals posed above. It's different because of one thing: $1.2 million in transparently spent, crowdsourced dollars.

If Lady Gaga declines to pay supporting volunteers, it's the label's fault for not spotting her enough money to do the show the way she envisioned it. If Weezer does it, it's because working for indie labels means tight margins. If Coulton does it, it's because he has to finance his own touring via ticket, album and merch sales.

But, because Amanda Palmer pre-financed her tour, a majority of her detractors saw "$1.2 million" and wondered if she's blown it all on ridiculous stuff like, well, who knows exactly, but presumably wasteful, more-money-than-brains accoutrements. The debacle turned musicians into accountants and Palmer's actual accountants into a "crazy moebius strip of waste."

But that's ridiculous. Beyond the fact that the source of the money does make her offer wrong, there's the poor underlying argument from some musicians that there's something "wrong," or at least "diminishing" about playing for free. There isn't. Everybody does it.

if my years working as as street performer taught me anything, they taught me to accept help in every way, to never be too proud or afraid to ask for it. i never got pissed at a passerby for not throwing change in my hat. i stood there knowing that maybe 15 people later, maybe 20, maybe 100…someone would. it’s literally an opposite strategy from someone deciding that they, on principle, won’t gig for free.

i’ve built my life as a musician, like many many people in rock and roll, playing for free….a LOT.
or playing for beer.
playing for exposure.
playing for fun.
playing just to be able to sell merch.
playing to do somebody a favor.
playing a benefit to help a cause.

It's also important to note that Palmer was only asking for a little bit of the artists' time. She wasn't asking them to tour with her gratis or even perform the entire show. 

we’re looking for professional-ish horns and strings for EVERY CITY to hop up on stage with us for a couple of tunes.

Palmer's transparency worked against her. A full breakdown of where that $1.2 million is going has only prompted questions on the validity of some of the line items. Her response that it would cost $35,000 to secure the additional musicians for the entire tour is greeted with "but, but... $1.2 million." It almost seems as though fans were happier when all the money was raised and spent in complete opacity. When the sausage making apparatus was still hidden, and the money routed through middlemen, being invited to jam with your idols was a dream come true. Now, somehow, it's a slap in the face to struggling musicians everywhere?

Artists performing for free do not diminish the art form or drag all other similar artists into a race for the bottom, pricewise. Neither does one artist asking other artists to perform for free. There's nothing disingenuous about this offer. Anyone who thought they were being taken advantage of needed to do nothing more than not respond the offer.

Were these volunteers being screwed? If they were, it was being done so skillfully and pleasurably that they never noticed.

when we handed the musicians their surprise cash backstage in new orleans the other last night, they laughed like mad and said “after ALL THAT, you're going TO PAY US??!!

moreover: i feel like we accidentally put ALL of our volunteer musicians into a weird situation that they didn’t bargain for….they unwittingly signed into a kerfuffle they never asked to join. all they wanted to was to hop on stage, rock out, and drink beer with us, etc.

so you all know: when this all started going down last week, jherek sent an email out to his current list of volunteers telling them that we totally understood if all this controversy was weirding them out. and we gave them an opportunity to pull out, no hard feelings.

since this started, not a single musician has pulled out.

One of the saddest aspects about this whole debacle is that the artists who did decide to play for free were treated as traitors to The Cause simply because they didn't demand to be "treated with respect", respect in this case being dollars. That's some ugly artist-on-artist hate right there. Not that there weren't other sad aspects, what with the internet being involved and all:

I can’t tell you how many “you’re such a stupid cunt” and “i’d pay to travel just to fuck up your gig…if i played violin” tweets i’ve seen in the past few days...

Lots of criticism along the lines of "I'm a classically trained musician and it's hard enough to find paying gigs without rich musicians refusing to pay us for our contributions." Well, it's probably true that it's hard for a violinist or cellist or sax player to find paying gigs, but in no way did Palmer's "unpaid gig" offer hurt you unless you yourself accepted... but then, if you hate the idea so much, why the fuck would you? Just to make a point? Weird thought process. It's as if they believe every artist looking for a cellist or whatever will just point at Amanda Kickstarting Palmer and say, "She doesn't pay, therefore neither do we."

The problem with this "NO UNPAID GIGS" stance is that it only ends up hurting the idealist who take it. You might believe that if enough people turn down unpaid gigs (and make a lot of angry noises about it), then at some point, those needed instrumentalists will run out of artists willing to work for free. If you can manage to hold together a career long enough for every invitation to come accompanied with payment, good on you. You've beaten some very long odds.

Most of this discussion is now academic, as Palmer will be paying all contributing tour musicians from this point forward. That's what living in public does. Transparency is double-edged and every Palmer detractor was seemingly a music school grad with an accounting degree. To her critics, this offer "proves" that her breakdown of the $1.2 million was filled with waste. Now they can pat themselves on the back for righting a wrong and turning "instrumentalist" back into a paying job.

But Palmer paying cash doesn't make the world better for struggling artists, just as paying in beer didn't make it worse. If someone wants to reach the million-dollar-Kickstarter level, they need a whole lot more than one artist paying other artists. And most of these artists who decried the previous situation just aren't up for the level of commitment involved. In fact, most human beings aren't up for it. Living like Amanda F. Palmer isn't easy, and the rewards only come after years and years of killing yourself day in and day out:

You’re just not willing to work that hard.

That the only thing holding you back is you. Amanda does not know the word “no”. And every effort is an investment in her career. Money is secondary. She wanted to raise a million bucks on Kickstarter, did, and now it’s almost all accounted for, profit is next to nothing.

If she sleeps, it’s not for long. I felt lazy just being in her presence. But that’s what it takes to make it today. Hard work. Are you prepared? 

And hard work is not e-mailing journalists who don’t care, it’s not badgering people to watch your YouTube clip and like you on Facebook, it’s doing something so good people are drawn to you.

Palmer has delivered the narrative, lived out in public, that if you're willing to run flat-out, day after day, for more than a decade, you can get to this point. And the response from so many musicians to her open invitation was basically: "You made it to the top. Now, lift the rest of us up." You won. Now you owe us.

Everyone got the same offer from Palmer. There's no shame in saying "no." But there's also nothing wrong with saying "yes." Artists, including Palmer herself, have done unpaid gigs for exposure, charity, or simply because they were dying to perform and doing it for free was the only way to get it done. Either way, it's up to the individual. Someone else accepting a perceived screwing from an artist that a thousand armchair accountants have already decided has the money to pay in no way diminishes your chances as an artist. These chances remain what they have been, and will be, for years in either direction: slim to none. 

In the end, I'm neither relieved nor disappointed this turned out the way it did. I'm glad that Palmer will be able to concentrate on what she'd clearly rather be doing: touring and entertaining. The Kickstarter money was freely given to her during that campaign, but apparently had plenty of strings attached once she started talking about unpaid gigs. I get the feeling that many of her detractors didn't contribute to the fundraising effort (indeed, it's doubtful that many had even listened to her music -- Steve Albini, along with other commenters in that thread, clearly stated that he hadn't), but it certainly didn't stop them from having strong opinions on how an artist they'd never listened to should spend money they didn't contribute.

I guess it sort of works out for everybody -- musicians get paid and Palmer gets back to work. But no wrongs were righted and the long, hard road to success didn't get any new shortcuts.

Filed Under: amanda palmer, crowdsourcing, fans, money, paying, volunteers

The Content Industry Keeps Penalizing The People Who Actually Pay

from the i-know-the-feeling dept

I've pointed out before that, contrary to the smug insistence of many people who dislike this site, I don't download any unauthorized content. At all. In 1999 I had Napster on my computer, but I was stuck on a dialup connection, so I never had a chance to test it out before it got shut down (and, at the time I had no real desire to listen to music via my computer). Since that time, I've always legally obtained the various content I consume, preferably directly from artists themselves, but otherwise through buying the CD or via Amazon or CD Baby (and now I use Spotify a lot too, though I still like to directly support artists when I can). Despite people insisting that I must be "pirate Mike," as I've said repeatedly, I'm simply not comfortable with going against the wishes of copyright holders. My arguments concerning the economics of free and why I think many artists should embrace these markets has a lot to do with what I think would be best for them, but I've never tried to use that to justify copyright infringement (again, contrary to what some insist).

During the SOPA fight, I explained this to someone who was heavily involved on the other side of the debate, and he simply couldn't believe it, and made comments to the effect that even he would download unauthorized content, even if he felt it was wrong and he felt morally obligated to pass an internet-harming law to try to prevent himself from continuing to do so. Of course, for what it's worth, I'm sure that I accidentally and incidentally infringe all of the time. Someone sends me a YouTube video? Could be infringing. These days it's impossible not to accidentally infringe all the time. But when it comes to actually getting copies of content, I feel a personal obligation to do so in an authorized manner.

So, I identify quite closely with Brian Barrett's recent article at Gizmodo, where he basically explains that he's just like me: he pays for all the content he consumes. And he follows it up by noting that, even as he knows this is the "right" thing to do, it makes him "feel like a sucker," because the experience he gets is much worse than what those who download unauthorized copies get.

I waited nearly a full year to watch Game of Thrones, because that's how long it took to get from HBO to iTunes. If I had any interest in purchasing a Avatar 3D Blu-ray, I would have either had to buy a Panasonic 3DTV or wait three years just for the right to spend thirty bucks on FernGully with giant blue cat-people having tail sex.

Even content that's accessible doesn't often make much financial sense. Amazon's the most reasonably priced e-retailer in the world (seriously, it's got 1,000 albums for five bucks each right now), but even it can be fraught with peril and annoyance. Ebooks that cost more than their paperback equivalents. The specter of DRM haunting every click. A layout so unnavigable you feel like you're being punished.

Want to comparison shop? Forget about it. Ecosystems aren't just apps and software anymore, they're movies and TV shows and everything you'd ever want to watch, read, or listen to. On any given day the best price might be on Amazon or iTunes or Google Play or Xbox, but if you want the simple comfort of knowing everything you paid for with your own American dollars lives in one place? Expect to pay full freight for most of it.

This is why I've always been arguing from the position of copyright holders and the content creators for why they shouldn't just scream about how awful piracy is, but rather learn from it, and note that many people who are infringing are getting a better user experience. When they don't do that, the end result may not be "infringement," but it may just be people dropping out of the market entirely. Lately, that's what I've done with movies. Despite being a movie buff, the limitations and controls on movie efforts has just made the whole thing not worth it. Combined with less time than I used to have (yay, family life), it's made me pretty much stop watching movies or TV shows over the past two years. These days, the market is so fragmented, and the offerings still all seem so half-baked, that I'd rather spend my time reading or writing or just spending time with friends and family. I don't necessarily feel like a "sucker" as Brian does, but I find that it's just not worth the hassle.

Eventually, I figure the market will catch up, and perhaps I'll go back to it at that point. But if the industry has lost some of my spending dollars it's not because of infringement -- but because they've failed to deliver a compelling customer experience for me.

Filed Under: business models, content, paying, payment, restrictions

How 'Playing It Safe' Cripples Fair Use

from the limping-layer-of-pointlessness dept

This is about how over-budgeted media productions historically paid to license things they didn’t need to license, just because they had tons of money and their lawyers preferred to “play it safe” rather than claim Fair Use, which is how Fair Use became the weak pathetic limping layer of pointlessness it is today.


…and this is what inevitably happens when you regularly pay people not to punch you...


...and this is why "playing it safe" compounds the problem.

Filed Under: culture, fair use, paying

Microsoft Back To Trying To Bribe People To Use Bing

from the if,-at-first,-you-don't-succeed... dept

We've discussed in the past how Microsoft's attempt to bribe users to use its search engine -- based on a Bill Gates brainstorm from back in 2005 -- turned out to be a dismal failure, and pointed out how recent research shows how little some companies understand incentives. However, Microsoft is apparently back at it again, creating a somewhat different loyalty rewards program for Bing users. While I'm sure it will appeal to some folks, something about this just makes me think even less of Bing. It makes me wonder: if they need to pay me to use it, is it because they know the experience just isn't as good as the competition?

Filed Under: bing, loyalty, paying
Companies: microsoft

Will People Pay For Content Online?

from the false-hopes dept

One fascinating thing to watch is how people in certain content professions continue to hold out hope that there's some way that maybe, possibly, really people will suddenly see the light and magically start "paying for content online." Now, obviously, many people do pay for content online, but it's a very difficult market position to sustain due to basic economic forces, unless you're doing something special, and have figured out a way to effectively bundle that content with some sort of real and valuable scarcity -- i.e., a true reason to buy.

But, figuring out those business models aren't easy, and for those who grew up in a world of artificial scarcity, there's always this vague hope that, magically, people will start paying again. Believers in this fantasy were pretty happy to gloat and point us to a recent report from Nielsen, concerning some survey data on whether or not people would pay for content. The suggestion passed along was that this shows that we're crazy for questioning whether or not people will actually pay for content online, as seen in the following chart, released by Nielsen plotting the data: Of course, you can read this chart in a variety of different ways -- and I found it interesting that the data is not actually to scale, since it cut off at the 60% mark. To put this into a bit more perspective, it's a bit more helpful to show what the data actually say on a full 100% scale, so I did a quick & dirty version of that myself to help out: Ah, amazing what a different scale will do, as the latter image makes the numbers (accurately) look a little less impressive than the image released by Nielsen.

But, even beyond that, these numbers don't actually look all that good for the folks who claim that there's some way to suddenly get people to start paying for this stuff, for a whole variety of reasons. First, this is survey data, which is notoriously bad at getting people to accurately predict if they would pay for something. You can lop off a big percentage of people who say they would pay, because when asked, lots of people who would never actually pay for something will say they will pay. I won't even bother to estimate that amount, but I would argue it's a significant chunk of those orange bars.

However, even if we grant the premise that these people potentially would pay, it still doesn't support the "if we just did x, they'll pay" camp (where x is anything from "shut down The Pirate Bay" to "kicked file sharers off the internet" to "passed three strikes legislation" to "increased enforcement" to "beefed up copyright laws" etc.). And the reason for that is when you look at how many people are actually paying. That is, it's really those tiny blue percentages that matter here. And those are tiny across the board -- and the reason isn't copyright infringement or unauthorized file access, but the fact that the producers of the content haven't figured out how to give most people a true reason to buy. They're used to a world where you didn't need to figure out a business model, but artificial scarcities and a small number of gatekeepers were able to make it so people had little choice.

But these days, with widespread abundance in content -- which is growing every day -- the era of artificial scarcities is rapidly ending, and anyone who wants to build a 21st century business model needs to start looking for real scarcities that offer real value, not artificial scarcities that seek to limit value while boosting price. So, yes, there's some interesting data here, but it's not the savior of those who think there's a business model in selling content directly. It really says the exact opposite.

Filed Under: business models, content, paying