Why You Can't Have A Tacocopter Drone Deliver You A Taco For Lunch Today

from the the-government....-and-a-bunch-of-other-factors dept

Tue, Mar 27th 2012 10:41am — Mike Masnick

We've talked a bit about some more intriguing uses of drone technology lately, including personal individual surveillance as well as for building floating ad hoc networks. But I don't think I've ever seen as much attention given to the potential disruptive nature of drone technology as the story that's been bouncing around the internet the past few days concerning the miraculous concept of the TacoCopter.

Yes, the TacoCopter, one of those ideas that once you hear about it, it sticks with you. It's pretty straightforward. You order (and pay for) a taco via a smartphone app, indicating your location, and a short while later, a drone hums into view and drops a taco at your feet. The folks behind it are targeting San Francisco first (of course), with an expansion plan that includes ~~"TacoLobster"~~ "LobsterCopter" on the east coast.

While some have insisted it's a joke, the folks behind it insist that it's real... except for the fact that it isn't really real. It's not a joke, it's just not quite feasible. Or legal. The legal part is the the one that's getting the most attention. As the founders explained to Jason Gilbert at the Huffington Post, you can't actually use drones for commercial purposes these days:

"Current U.S. FAA regulations prevent ... using UAVs [Unmanned Aerial Vehicles, like drones] for commercial purposes at the moment," Simpson said over Gchat. "Honestly I think it's not totally unreasonable to regulate something as potentially dangerous as having flying robots slinging tacos over people's heads ... [O]n the other hand, it's a little bit ironic that that's the case in a country where you can be killed by drone with no judicial review."

Of course, that's not the only problem. There's also... well, everything else. Which turns out to be a pretty long list.

Simpson told HuffPost that because of the FAA's regulations -- as well as other minor problems, like navigating the treacherous terrain of an urban environment, keeping the food warm, finding a city map precise enough to avoid crashes 100 percent of the time, avoiding birds, balconies and telephone wires, delivering food to people indoors, delivering food to the right person, dealing with greedy humans who would just steal the Tacocopter as soon as it got to them, etc.

Not surprisingly, the team behind it isn't actively working on the project right now, though they still seem to insist they're serious about doing it for real at some point in the future.

That said, it's not hard to realize that most of these problems can and will be solved at some point in the future, and such a commercial use of drones could actually create quite disruptive business models in a lot of sectors. Obviously, just delivering tacos isn't that big of a deal, but once you begin to realize that these things can deliver almost anything (within reasonable weight limits) then it starts to open up a huge world of interesting possibilities. For that reason, it wouldn't surprise me to see that the regulations that now limit such uses of drone technology will almost certainly remain in effect much longer than the technological limitations remain a hurdle. Those who are disrupted by such uses will continue to insist that such things are dangerous, rather than learning to adapt and embrace the technology.

Filed Under: drones, regulations, tacocopter

60 Comments

Patents Threaten To Silence A Little Girl, Literally

Bleeding Edge

from the profit-motives dept

Tue, Mar 27th 2012 7:34am — Leigh Beadon

Slashdot points us to a sad story from blogger Dana Nieder, providing yet more evidence of how patent monopolies can hold back innovation and do very real damage to people's lives in the process—and how people are interested in progress, not patents. As Dana says in her post, she understandably doesn't give a damn about legal details when something as important as her daughter's ability to communicate is at stake:

My daughter, Maya, will turn four in May and she can’t speak. The only word that she can consistently say with 100% clarity is “done”—which, while helpful, isn’t really enough to functionally communicate. When Maya was two and a half we introduced her to the iPad, and we’ve danced with AAC (augmentative and alternative communication) ever since. We experimented with a few communication apps, but nothing was a perfect fit. After an extensive search for the perfect app, we found it: Speak for Yourself. Simple and brilliant, we saw that it had the potential to serve Maya into adulthood, but was also simple enough for her to start using immediately.

And she liked it. And it worked. And I started to have little flashes of the future, in which she could rapidly tap out phrases and ideas and tell me more and more of the secret thoughts that fill her head—the ones that I’m hungry to hear and she’s dying to share but her uncooperative mouth just can’t get out.

My kid is learning how to “talk.” It’s breathtaking.

But now Speak for Yourself in under fire, and from a surprising (to an AAC outsider) or not-so-surprising (to an AAC insider) source. They’re being sued by Semantic Compaction Systems and Prentke Romich Company, big names in the AAC world. SCS and PRC allege that Speak for Yourself is infringing on their patents. I’m going to be honest: I don’t know about patents and infringement, and I’m not going to get into debates about the legal merits of the case, because that’s a conversation in which I would quickly drown.

Dana explains that her defense of the app isn't arbitrary. Before discovering Speak For Yourself, she explored dedicated speech devices from the big AAC companies, including Prentke Romich. None of their options were suited to her daughter, and they all carried hefty price tags—as in $7,000+ hefty. She began asking around to see if PRC or any of the other big companies were planning on releasing an iPad app, and learned that although many customers were clamoring for one, the companies had no intention of meeting their demands. They didn't want an affordable option out there reducing sales of their expensive systems.

Whenever the incumbents of any industry are ignoring the demands of their customers, you can bet that someone else is paying attention. In this case, it was speech-language pathologists Heidi LoStracco and Renee Collender, the pair behind Speak For Yourself. The app's website explains how it came about:

Mrs. LoStracco and Mrs. Collender began to see a shift in the field when the iPad was released. Mrs. Collender says, "Districts and parents were buying an iPad with an 'AAC' app on it and saying, 'Make this work.' We would try to reprogram the applications with the language that the children needed, but it took forever and it was never really 'right.'" Heidi and Renee say that it got to the point that someone was asking them about iPad applications for AAC every day, and they decided that they needed a better answer. Heidi says, "We would tell them, there's not really an effective AAC app out there yet, but when there, is, we'll be the first to tell you about it.” Then we started thinking that we could create something that followed motor learning principles and gave individuals access to the language they needed to communicate effectively, and that's when we designed Speak for Yourself." Renee says, "We've always believed that communication is a basic human right, and the only AAC pre-requisite skill that a nonverbal person needs is a pulse."

Dana points out that PRC's mission statement begins "We Believe Everyone Deserves A Voice" and that their refusal to create an affordable iPad app, and now their attempts to crush a competitor who did, clearly runs counter to that mission. For her, that's basically where the discussion ends: a company is trying to take away the only thing that has been able to give her daughter a voice, and she couldn't care less whether or not they have the legal right to do so.

It's hard not to sympathize with her position, even though the lawsuit and the patent in question, #5,920,303, both appear to be solid. As Dana's story gains traction, we can only hope that it will increase social pressure on PRC and possibly shame them into allowing Speak For Yourself to survive by offering them an affordable license, or at least releasing their own iPad app at a similar price point—but as we've seen with pharmaceutical companies, the holders of life-saving and life-changing patents often don't seem too bothered about withholding them no matter what it does to their public image.

Ultimately, this is more evidence that in today's world of rapid innovation, tech monopolies are increasingly untenable. Big companies that have dominated niche markets for years—and have long since paid off their R&D costs by charging monopoly rates—are being disrupted by nimbler competitors. As we've seen with media and software piracy, this happens whether or not the competitors are "legitimate" under intellectual property law. Can there be any doubt that, if Speak For Yourself is shut down and the app eliminated, Dana will seek out a way to keep it running on her daughter's iPad? Since her story is running on Slashdot, she's already received comments with advice on how to do so, and suggestions that she contact Speak For Yourself and convince them to release their source code on github. At the moment, it looks like she just plans on turning off all connectivity on the iPad so that it will no longer sync and the app will remain even if it is removed from the iTunes store. Can anyone blame her? The simple fact is that markets always eventually find a way to meet demands—and if companies (especially those in industries that seriously affect people's lives) use their intellectual property to block powerful market forces, that control will eventually be wrested from them, one way or another.

Filed Under: augmentative and alternative communication, communications, ipad, patents, speak for yourself, voice
Companies: prentke romich company, semantic compaction systems

238 Comments

Just Because Companies Can Design Around Patents Doesn't Mean There's No Impact For Consumers

Patents

from the economic-reality dept

Tue, Mar 20th 2012 2:27pm — Mike Masnick

This one's from a few week's back, but a few people have called it to my attention. Nilay Patel over at The Verge argued that because various companies offering Android phones have been able to design around a couple of Apple patents that have made their way into lawsuits -- #7,469,381 which covers the "scrollback" bounce when you scroll to the end of a page, and #7,657,849, which covers the "slide-to-unlock" concept -- that there's "really no day-to-day impact on the consumer" from the big patent fights going on over smartphones.

That seems like a rather simplistic analysis. Patel is right that many companies are "designing around" these overly broad and somewhat silly patents, and so it doesn't mean that Android phones aren't available. But that doesn't mean that there's no real impact on consumers. While it can't be quantified directly, there are numerous ways in which these patents are likely impacting the results. First, there's a matter of cost. The legal fights over patents are quite expensive, and that's almost certainly keeping prices on these devices somewhat higher than they might otherwise be. Second, the money and time it takes to do that "designing around" potentially slows the development of these phones. Third, those same resources could have been put elsewhere, working on additional innovations that would make the phones better and more valuable. Instead, they're forced to reinvent the wheel without doing the same scrollback or slide to unlock. Finally, while some will claim that forcing these companies to invent around the patents can lead to new innovations, there's little evidence to support this claim. Certainly it might happen accidentally, but letting developers come up with new innovations based on their own experiments and what the market tells them is always going to be more efficient than stumbling on some innovation because you're trying to avoid the artificial monopoly of a patent.

Of course, this is one of the difficult things in discussing the problems of the patent system. People insist they can't be that bad because these devices are still on the market. It's difficult to see or even explain the innovations that we don't have because of this, or even to show how the pace of innovation is almost certainly slower because of this, but that's exactly what plenty of research has shown for years. No one says that innovation stops completely because of patents, but we have significant concerns about how they impact the overall pace of innovation, as well as the specific direction of innovation. While it might not seem to have a "day-to-day impact on the consumer," chances are it's having quite a large one. We just can't see how big.

Filed Under: android, design around, impact, patents, smartphones
Companies: apple, google

30 Comments

Free 3D-Printable Kit To Connect Different Toy Construction Sets Released -- But Partially Blocked Due To Patents

(Mis)Uses of Technology

from the think-of-the-IP-lawyers dept

Tue, Mar 20th 2012 7:06am — Mike Masnick

I've been hearing about this project for a few months now, and I'm excited to see that it's finally been released. F.A.T. Lab and Sy-Lab have officially released their Free Universal Construction Kit, a set of 3D printer instructions for creating nearly 80 awesome "adapter" bricks that let you connect ten (sort of) popular children's construction playsets:

Included are connectors between the following sets: Lego, Duplo, Fischertechnik, Gears! Gears! Gears!, K’Nex, Krinkles (Bristle Blocks), Lincoln Logs, Tinkertoys, Zome, and Zoob. There's also a giant universal adapter block. I'll admit I'm a bit disappointed that Megabloks didn't make the cut, as my son tends to go back and forth between those and Duplos. If you want them, they're available at Thingverse, though you'll obviously need a 3D printer to actually do anything with them. Here are some of the photos they've put up of the kit in action:

The general idea is really cool. Kids don't care if Lego and Tinkertoys come from the same company. They want them to work together nicely. That's part of the fun of tinkering. But, of course, the toy companies want to "control" the market and pretend that only their toys exist. Acknowledging anyone else's toys is seen as a mistake -- even though it actually adds value to the toys by letting you do more with them. In the past we've seen Lego, in particular, be particularly aggressive in trying to lock out competitors.

Of course, that raises the big question: what about intellectual property law with this offering? The non-commercial nature of it likely protects them against trademark issues, though it does seem silly that actually offering such useful connector blocks for sale might put you in legal hot water. Either way, I know the guys who put this together spent a ridiculous amount of time exploring the different legal issues involved here, and have put up a detailed discussion on them -- with a clear recognition that even after being as careful as possible to not infringe on anyone's rights, they still have to note:

Some may express concern that the Free Universal Construction Kit infringes such corporate prerogatives as copyright, design right, trade dress, trademarks or patents of the supported toy systems. We encourage those eager to enforce these rights to please think of the children — and we assert that the home printing of the Free Universal Construction Kit constitutes protected fair use.

Furthermore, they have a pretty full discussion on how the use of IP here is not about protecting rights at all, but about attempting to gain market dominance:

Today’s manufacturers have little or no intrinsic motivation to make their products compatible with anyone else’s. Indeed—despite obvious benefits to users everywhere—the implementation of cross-brand interoperability can be nearly impossible, given the tangled restrictions of patents, design rights, and trademarks involved in doing so. So we stepped up. The Free Universal Construction Kit is the VLC of children’s playsets.

As we can see from the example above, interoperability is a question of power and market dominance. Most market leaders regard interoperability as an anti-competitive nuisance, a regulatory check on their ambition, or a concession to the whining of lesser players. Quite simply, interoperability is the request of the disenfranchised. And which end-user, in so many ways, is less enfranchised than a preliterate child?

The simple fact is that no toy company would ever make the Free Universal Construction Kit. Instead, each construction toy wants (and indeed, pretends) to be your only playset. Within this worldview, the other manufacturers’ construction sets are just so many elephants in the room, competing for your attention on the shelves of Toys-R-Us. No longer. The Free Universal Construction Kit presents what no manufacturer could: a remedy providing extensible, post-facto syntactic interoperability for construction toys. Let the fun begin!

Of course, there's still the issue of patents... and there the folks behind this project also did something interesting. In that list of supported toys are two -- Zoob and Zome -- that are technically still under patent protection. To deal with those two, the kit actually does not include connectors to either of those toys. Instead, both have a pending date, to be released on the day those patents expire. In other words, progress and the ability to interoperate with those toys must wait until the monopolies expire. Progress is being hindered, not promoted here.

We've discussed in the past how 3D printing is an upcoming legal battle, as many of the issues that previously arose solely the digital realm will be crossing over into the physical. We've also noted how The Pirate Bay has already stepped up with plans to offer a place to share 3D printable plans -- and, indeed, the folks behind this project note that it will soon be up on that site, when it's ready.

The more you look at this, the more it makes you wonder what else simply isn't being done today due to over-aggressive desire for control via IP laws, rather than recognition that making a product more valuable and useful is actually a good thing.

Filed Under: 3d printing, adapters, bristle blocks, construction sets, copyrights, duplo, fischertechnik, gears, innovation, krinkles, lego, lincoln logs, patents, playsets, tinkertoys, toys, trademarks, universal construction kit, zome, zoob

40 Comments

The Pirate Bay Claims It's Going To Host The Site Via Drones Flying Over International Waters

(Mis)Uses of Technology

from the the-pirate-ships-continue-to-go dept

Mon, Mar 19th 2012 2:46pm — Mike Masnick

One of the more amazing things about the recent moves by the entertainment industry to put in place stricter laws around the globe to attack file sharing, is that they still don't realize how pointless this is compared to the only real solution, which is to offer more of what consumers actually want, rather than trying to force them into some old way of doing business. For every "victory" the industry declares, we see more and more evidence that the file sharing just moves further away from what the industry can control (and keeps growing). The Pirate Bay, of course, has always been one of the leaders in mocking the legacy entertainment industry as it continues to operate, despite years-long efforts to shut it down. And even as there are reports of new raids pending, the organization has shifted to magnet links, meaning that taking it down will be even more meaningless than in the past.

Even so, the folks involved in TPB are still trying to go further. As highlighted on TorrentFreak, the latest plan from TPB is to see if it can serve the site from GPS-controlled drones flying over international waters:

One of the technical things we always optimize is where to put our front machines. They are the ones that re-direct your traffic to a secret location. We have now decided to try to build something extraordinary.

With the development of GPS controlled drones, far-reaching cheap radio equipment and tiny new computers like the Raspberry Pi, we're going to experiment with sending out some small drones that will float some kilometers up in the air. This way our machines will have to be shut down with aeroplanes in order to shut down the system. A real act of war.

We're just starting so we haven't figured everything out yet. But we can't limit ourselves to hosting things just on land anymore. These Low Orbit Server Stations (LOSS) are just the first attempt. With modern radio transmitters we can get over 100Mbps per node up to 50km away. For the proxy system we're building, that's more than enough.

Whether or not they can actually pull it off is a totally different question, but as we've been discussing recently, drone technology is getting cheaper, and the potential disruption of the Raspberry Pi should not be underestimated. While such things might not really be ready yet to do what TPB hopes to do, it's not difficult to project these trends out just a little ways to see that not only will it be possible in the not-too-distant future, but it would be a surprise if we didn't see setups that go way beyond what TPB is currently proposing before too long.

Filed Under: drones, file sharing, international waters
Companies: the pirate bay

130 Comments

FAA Admits That It's Going To Rethink Whether You Can Use Kindles & Tablets On Takeoff & Landing

(Mis)Uses of Technology

from the about-time dept

Mon, Mar 19th 2012 3:33am — Mike Masnick

It's been pretty clear for quite some time that there's no real safety reason why electronics are barred during takeoff and landing on airplanes. Furthermore, there's no legitimate technological reason for not allowing mobile phones on planes either -- that one's more just about keeping other passengers from going into a rage at having to hear others' half-conversations. However, it seems that more and more people are getting annoyed that they can't use their snazzy new ebooks or tablet computers (not just iPads, mind you) on airplane take-off and landings. Nick Bilton, over at the NY Times, asked the FAA what was up with that, and they admitted that they're taking "a fresh look" at those devices and whether or not they should be allowed to be used at those times. Of course, as he notes, this might just lead to a bunch of bureaucratic red tape -- including every possible device having to go through significant testing:

Abby Lunardini, vice president of corporate communications at Virgin America, explained that the current guidelines require that an airline must test each version of a single device before it can be approved by the F.A.A. For example, if the airline wanted to get approval for the iPad, it would have to test the first iPad, iPad 2 and the new iPad, each on a separate flight, with no passengers on the plane.

It would have to do the same for every version of the Kindle. It would have to do it for every different model of plane in its fleet. And American, JetBlue, United, Air Wisconsin, etc., would have to do the same thing. (No wonder the F.A.A. is keeping smartphones off the table since there are easily several hundred different models on the market.)

Ms. Lunardini added that Virgin America would like to perform these tests, but the current guidelines make it “prohibitively expensive, especially for an airline with a relatively small fleet that is always in the air on commercial flights like ours.”

But, hopefully, a better, more efficient process can be found, and people will actually be able to use these devices on airplanes that aren't just over 10,000 feet...

Filed Under: ebooks, electronics, faa, flights, in-flight electronics, landing, tablets, takeoff

65 Comments

Copying Leads To Competition, Competition Leads To Innovation

Business Models

from the the-spirit-of-progress dept

Fri, Mar 16th 2012 7:40am — Leigh Beadon

Marco Arment, the creator of the popular read-it-later tool Instapaper, has an excellent blog post discussing copying, innovation, and the best ways to react to competition. Arment discusses a new Instapaper competitor called Readability, which launched last week and received a lot of praise for including custom fonts, something Instapaper lacks:

I could have interpreted this defensively and complacently: “Georgia and Verdana are great, versatile, highly screen-readable fonts! I don’t need to do what competitors do! Newer isn’t always better! My crusty old fonts have some technical advantage that you don’t care about!” And so on.

That would have just made me look stubborn and out of touch, failing to understand (in fact, trying very hard not to understand) why newer fonts could be attractive to customers, and failing to admit that I should have done it first.

Instead, I’m taking this misstep as a wake-up call: I missed an important opportunity that’s necessary for the long-term competitiveness of my product. So I’ve spent most of the last week testing tons of reading fonts, getting feedback from designers I respect, narrowing it down to a handful of great choices, and negotiating with their foundries for inclusion into the next version of Instapaper. And the results in testing so far are awesome. I wish someone had kicked my complacent ass about fonts sooner.

Reacting well to competition requires critical analysis of your own product and its shortcomings, and a complete, open-minded understanding of why people might choose your competitors.

This is someone who understands how innovation and iteration really work. Interestingly, when Readability was announced last year, it had a different focus and was actually going to work in conjunction with Instapaper, but then it morphed into a direct competitor. At the time, other developers tried to shame them for that, but Arment himself was unsurprised and untroubled, saying "this is a very big and increasingly crowded market, and there’s no reason why we can’t respectfully share it."

He never tried to claim that copying was wrong or even unneighborly—not then, and not today. Arment clearly respects his competitors, recognizing what they bring to the table and using it as motivation to improve his own product. That's the mark of a true innovator.

Filed Under: innovation, instapaper, marco arment, readability

39 Comments

Why Anti-Circumvention Laws Are Evil: Hollywood Gets To Veto DVD Jukebox, Despite Complete Lack Of Infringement

from the why-do-we-let-this-happen? dept

Wed, Mar 14th 2012 10:40am — Mike Masnick

As mentioned, it looks like Canada's new copyright law will include the "digital locks" provision, which is more accurately described as giving Hollywood a veto on any technology it doesn't like. If you haven't followed the specifics, the "digital locks" provision is an anti-circumvention rule that makes it against the law merely to break a "digital lock" (i.e., to route around any form of DRM, no matter how weak) even if (and this is the important part) you are breaking the digital lock for perfectly legal reasons. For reasons that I still cannot comprehend, Hollywood has insisted that anti-circumvention provisions -- even if there's no infringement -- are of utmost importance. If it was really about protecting against infringement, they would make it clear that the anti-circumvention provisions only apply in cases where copyright law is broken.

The real reason why they want anti-circumvention even when there's no copyright infringement is because it gives them a veto on any new technology. All they have to do is put in some sort of weak digital lock and suddenly the company has to "negotiate" a deal or they can be sued out of existence.

This is not theoretical. In fact, we now have yet another very real example of Hollywood's ability to kill a technology that only has legal uses thanks to the absolute nature of the DMCA's anti-circumvention clause (on which Canada's law was modeled). We've written about Kaleidescape a few times in the past. The company makes super high end DVD jukeboxes, that allow people to take the DVDs they own and store digital copies on a home (not internet-connected) server, to make it easier to watch those movies. The company has gone to amazing lengths to prevent its product from being used for infringement. Here, I'll let the company explain the details directly:

Kaleidescape has carefully designed its products to protect the rights of content owners. The hard-disk copy of each DVD retains all of the DVD CCA's scrambling and adds more encryption. The Kaleidescape System is a closed system that prevents DVDs from being copied to the Internet, to writable DVDs, or to computers or mobile devices. Furthermore, you cannot download a pirated movie from the Internet to a Kaleidescape System.

Every Kaleidescape customer must agree to copy only the DVDs that he rightfully owns, and must reaffirm this agreement upon copying each DVD. Kaleidescape Systems identify rental discs and prevent them from being imported. This combination of business practices and technology has been so effective that after years of searching for evidence that Kaleidescape's customers use their systems to steal content, the DVD CCA admitted in writing that Kaleidescape has done no harm to any of the motion picture studios, and was unable at trial to show any harm to the DVD CCA itself.

At one point, the company even went to such ridiculous extremes that it required users to put the DVD in the jukebox any time it wanted to play a movie from it -- effectively taking away the device's entire purpose, just to appease Hollywood.

And, none of it mattered. A court has issued an injunction against Kaleidescape selling these devices (pdf and embedded below). The specifics of the case revolve around questions of whether or not Kaleidescape breached the specific CSS license agreement that covers the DRM found on DVDs (which, again, Kaleidescape not only retains but enhances in its product). But that license agreement only has force because of the anti-circumvention provisions of the DMCA.

In other words this product, which can only be used for legal means -- and for which there has been no proof presented (ever) that it was used to infringe -- has been killed by a court... thanks to Hollywood's veto on this technology.

And the amazing thing is that all this does is make things worse for Hollywood. Considering how much Hollywood has been whining about DVD sales falling lately, a device like this only serves to make DVDs more valuable, meaning they would sell more.

Kaleidescape was founded in 2001 to bring consumers a fantastic experience for enjoying their movie collections. The Kaleidescape movie server makes digital copies of DVDs and Blu-ray Discs to hard disk drives so families can play back their movies instantly from any room of their home. A movie starts directly from the beginning, without forcing the family to endure advertisements, trailers, and confusing menus. With the company's wide-ranging innovations, customers can jump directly to the greatest scenes and songs in movies and concerts, and small children can start their movies all by themselves.

[....]

Over the years, Americans have amassed over 13 billion DVDs and Blu-ray Discs – about 110 per household. This means that many American families have a few thousand dollars tied up in a library of movies they hoped to enjoy over and over. However, with collections that size, families soon realize that it takes so long to find what they're looking for that it just isn't worth buying more discs. This frustration has led to a well-publicized 58% decline in revenues from the sale of DVDs since 2006.

The Kaleidescape System eliminates that frustration. Because it's so easy and fun for Kaleidescape customers to enjoy their movies, they start buying movies again, and with a bigger appetite. The average Kaleidescape family owns 506 movies on Blu-ray and DVD.

But thanks to digital locks and anti-circumvention rules, such a product got voted out of existence by the very industry it would help the most.

Filed Under: anti-circumvention, copyright, digital locks, dvd jukebox, dvds
Companies: kaleidescape, mpaa

Valve's Comprehensive Strategy Shows How To Go From Fee To Free... And Increase Revenue Twelve-fold

Business Models

from the nicely-done dept

Tue, Mar 13th 2012 12:07pm — Mike Masnick

We've writen about Valve's approach to the market many times before. The company believes strongly that "piracy" is a service problem not a legal problem. It knows that it can easily compete with piracy by offering a better service, something that it regularly succeeds in doing. However, On The Media calls our attention to an absolutely fantastic case study found on Gamasutra, not (directly) about how Valve competed with infringement, but how it turned Team Fortress 2 from a fee-based game to a free-to-play game and increased revenue twelve-fold.

Of course, over the years, we've covered other online games going from fee-based to free and making more money for it, inspiring more and more other games to do the same. But what's most interesting here is the level of detail. In the case of TF2, it's clearly not about "give it away and pray," but a careful strategy that really does seem focused on connecting with fans and being awesome while giving fans a good reason to buy.

For example, the team at Valve connected with fans in a really cool way. It put out "teaser trailers" with product updates, and then scoured feedback to come up with ideas that fans might like in the game:

[Valve's Joe] Ludwig showed TF2's Sniper-focused update as an example. Each content update started with a teaser trailer that hinted at several possible new items or features, and Valve developers would monitor the community reaction in the forums to determine which aspects caught the players' attention. "We found people in the forums talking about how cool it would be if the Pyro could light the sniper's arrows on fire. To be honest, we hadn't considered it, but we were able to implement it by the time the update shipped," Ludwig said.

In another instance, players picked up on a blueprint displayed in passing within the teaser trailer for the Engineer-focused update of a mechanical hand item. Ludwig explained that "[The players] didn't realize it, but they were indirectly voting on the content of the update. When the update shipped, it included that robot hand."

Separately, Valve was very careful and deliberate about how they "went free" and moved to offering in-game purchases. Recognizing that there's an unfortunate incentive to then make in-game purchases make the actual gameplay worse (such as by making it "pay to win") the team made very strategic choices about how they would have in-game purchases, such that they were never required to play the game how you wanted:

Once Valve rolled out the in-game item system, it needed to get the players used to the idea of paying for them. "This wasn't a change we made lightly, but it was something we had to do to get our game into the free-to-play business model," Ludwig said.

"They had never paid for an item in TF2 at any point in the past, and we weren't sure how willing they'd be to pay now."

Ludwig outlined the players' possible objections to the item store, the first of which was TF2 turning into a "pay-to-win" game:

"We dealt with the pay to win concern in a few ways. The first was to make items involve tradeoffs, so there's no clear winner between two items. But by far the biggest thing we did to change this perception was to make all the items that change the game free. You can get them from item drops, or from the crafting system. It might be a little easier to buy them in the store, but you can get them without paying. The only items we sell exclusive to the store are cosmetic or items optional to gameplay."

In other words, this was entirely designed around the idea of giving people a good reason to buy rather than a negative reason that makes them feel forced to buy. Too many companies (hello most newspaper paywalls!) seem to think that "forcing" people to pay is a "reason to buy." It's not. It may get some people to pay, but it pisses off lots of people. Valve carefully structured its business model here to make people want to buy.

But the real key here is just how much this effort increased revenue. Many people have assumed that taking a fee-based game and going free-to-play is really an "end of life" strategy to try to squeeze the last remnants of revenue out of a game, but Valve is showing it's not that at all. It was a strategic choice to maximize revenue. This is the same point we've made for well over a decade in talking about how to use free as a part of a business model to increase your market. When properly applied (which is not just "give it away and pray"), free becomes a revenue multiplier, and Valve's example of TF2 is really a perfect case study of how to do it right.

Filed Under: business models, connect with fans, fee, free, reasons to buy, revenue, team fortress 2, video games
Companies: valve

74 Comments

Forget Home Taping: Evil Robots Are Killing Music!

Predictions

from the i-for-one-welcome-our-new-innovative-overlords dept

Fri, Mar 9th 2012 7:39pm — Leigh Beadon

The entertainment industry has a long and storied history of incumbents freaking out about every technological advancement that alters the market. From iPods and digital distribution, to VCRs and home taping, all the way back to player pianos, it seems like they've never met a device they didn't hate and fear. And they've yet to be right about any of them: whenever a group claims something is going to destroy the music or movie industry, that thing ends up expanding it instead. In the interval, they churn out scare campaigns and sob stories like "Home Taping Is Killing Music", or the laughably intense anti-piracy ads that run before feature films, or in the 1930s, depictions of a vicious battle between musicians and evil robots.

Yes, evil robots. Long-time reader Matt Novak points us to a blog post he wrote last month, showing off some vintage ads from a campaign by musicians against recorded music in movie theatres:

That must be a textbook symptom of technophobia. You should only be warning the public about robot tyrants if you are a) dangerously insane or b) John Connor. Of course, as we now know, synchronized sound massively expanded the film industry, which in turn created countless new opportunities for musicians—while at the same time, closely-related technology advancements were turning the recorded music industry into its own powerhouse. Today's entertainment incumbents have reined it in a little, preferring somewhat-believable lies over utterly fantastic ones, and focusing more on issues of "theft" than a supposed decline in the quality of the experience (they leave the latter up to technicians and weirdos like Prince). And yet there are still striking similarities between their message and the copy that appeared on those 1930s ads:

The time is coming fast when the only living thing around a motion picture house will be the person who sells you your ticket. Everything else will be mechanical. Canned drama, canned music, canned vaudeville. We think the public will tire of mechanical music and will want the real thing. We are not against scientific development of any kind, but it must not come at the expense of art. We are not opposing industrial progress. We are not even opposing mechanical music except where it is used as a profiteering instrument for artistic debasement.

Note the consistent refrain—"we're not opposed to technology and innovation, except that we totally are"—and the characterization of what they do as the entirety of "art". The more things change, the more they stay the same.

(By the way, there are several other amusing ads in the original post, and I strongly recommend checking them out.)

Filed Under: history, home taping, innovation, live music, live performers, movies, predictions

54 Comments

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