Oh No! Car Dealers Might Have To Deal With Informed Customers! That Must Be Illegal!

from the felony-interference-of-a-business-model dept

A few folks sent over this recent NY Times article about how the traditional auto sales world was apparently up in arms about a company called TrueCar that seeks to make the process of buying cars easier by providing more info to buyers about what cars are actually selling for, what the dealers' true prices are, and also offering guaranteed "haggle free" prices from certain dealers. To be honest, this really doesn't sound all that different from a few other services online. The last two times I've bought cars, I've been able to get good deals using online services like this and just emailing directly to dealers (and for anyone buying a car, I can't recommend CarBuyingTips.com enough, even with its 90's era web design -- that site has saved me a ton).

However, what's really incredible is how the industry has reacted to this site -- basically freaking out and whining about how consumers actually being informed might put them all out of business. The excuses are typical of what you'll find with an industry that works on a collusion or gatekeeper system when it's finally faced with real competition. They start talking about how real competition is evil and how it will lead to a worse situation with more scams. In fact, TrueCar got hit with claims that what it was doing, in providing consumers with more info, was illegal. They've even had to change their practices in some states -- which really only goes to show just how much car dealers have influenced various state laws in their favor to protect against true competition and an informed consumer.

Others, including Honda, have argued that TrueCar could open the door to unscrupulous dealers trying to sell a more expensive car or more options once they get the customers in the door — which Honda said reflected poorly on the brand. Honda also threatened to cut off marketing dollars to dealers who promoted its cars on the site below the invoice price, a price that is supposed to represent something close to the dealer’s cost (though dealers usually make more money on other manufacturer incentives and programs).

Think of just how convoluted and insane this argument is. Honda doesn't want informed consumers because (wait for it...) informed consumers might lead dealers to try to trick buyers. Seriously. Okay, time to cross Honda off any future potential car list.

Filed Under: car buying, cars, competition, gatekeepers, innovation
Companies: truecar

Innovation In Security: It's All About Trust

from the who-do-you-trust? dept

This post is part of an Intel-sponsored series of posts we'll be doing here at Techdirt on the topic of innovation. Posts in the series consist of a video interview of myself (which you'll see below), the post, and another video interview with an Intel representative and others. That second video, obviously, is content from Intel, but my video and what I've written here was done with complete and total editorial independence. We hope you enjoy the content and take part in the overall discussion, either via the comments or through the interactive ad unit to the right of the post.

Security is a touchy subject, these days. There's a fine line between legitimate security concerns and blatant fear mongering, but there's no doubt that security, in general, is an important subject. One key point that I think too often gets lost in the discussions around security is the question of trust. First up: the short video of me discussion a bit about security today: Trust is one of the key elements of security, and while I only really had a chance to discuss it briefly at the end of the video, it is something that deserves a bigger discussion. After all, the "strongest" security in the world from an untrustworthy party isn't any security at all. I've been thinking more and more about this now that "cloud" storage has become a bigger issue. There are some out there who think that cloud storage means that you have "less" security, since your data is "out there." And, in some cases, that might be true. But, consider this: if you store the data yourself, you're responsible for your own security, and you might not be nearly as good as whoever is on the security team at the cloud storage provider.

Of course, there are also different factors at play here. If you do it yourself, you're likely a smaller target than a larger cloud provider, but that doesn't mean you're not a target. As the video below notes, you either you know you've been attacked, or you've been attacked and you just don't know it. Point being: everyone's a security target. Relying on the fact that you're not big enough to be a target is a naive game to play. So, if we're to accept the idea that cloud storage may be important, the security chops of the crowd storage partner you're working with becomes key. And that's where trust is important.

Suddenly, "trust" becomes almost as, if not more, important than the type of the actual security. When you hand off your security to someone else, its almost entirely based solely on trust. Unless you're directly a security professional who is going to dive in and fully test the technology itself, most people (and many organizations) aren't making their security decisions based on whose security is "best," but on which company they trust the most not to screw things up.

Based on that, I'm often surprised at how little some security companies do to really build up and keep that trust. Too often it feels like security vendors focus just on the nuts and bolts. Obviously that's important, and having good technology is always going to be a major component of trust. But it has to go beyond that as well, showing how responsive and clear a firm is about security issues.

Trust has filtered through into a number of different tech categories, but it still seems to be something that many overlook. In the next few years, I fully expect that to change, as more and more companies seek to play themselves up as the "trustworthy" partner in security.

Below is the Intel video discussing computer security today

Filed Under: innovation, security, trust

Innovation In Wireless: The Disruption In Connectivity

from the data-everywhere dept

This post is part of an Intel-sponsored series of posts we'll be doing here at Techdirt on the topic of innovation. Posts in the series consist of a video interview of myself (which you'll see below), the post, and another video interview with an Intel representative and others. That second video, obviously, is content from Intel, but my video and what I've written here was done with complete and total editorial independence. We hope you enjoy the content and take part in the overall discussion, either via the comments or through the interactive ad unit to the right of the post.

When most people think about wireless technologies today, they think about the fact that it makes it easier for them to connect their computers without having to plug in. Or that it lets data flow to their smartphones. But the overall impact can be seen as being much more profound. First up, here's a short video of me talking about the impact of wireless technologies: I think it has become easy for many of us to take for granted the power of wireless connectivity. It's almost difficult to remember what life was like before we had data at our fingertips anywhere, at any time on any device. And, yet, it wasn't that long ago that this wasn't true at all. WiFi has only been around for about a dozen years. Mobile cellular data (at any reasonable bandwidth) is much more recent. And, yet it's become so embedded in our lives. The idea that you can get directions anywhere, pull up information about any shop or restaurant, or even access any content at all is so powerful, yet almost feels mundane already.

But think about just how powerful it is in areas that were barely connected at all in the past. We've read stories about communities in developing nations where small players, who only used to have access to the nearest market, can suddenly reach out to others, and actually allow for competition for their products. That can be a massive change, in that it gets rid of a monopsony situation, allowing the poor in developing countries to get out of a never-ending cycle of poverty.

Similarly, wireless technology alone is enabling new careers and new types of businesses. There are the famous stories of women (and it's almost always women) in certain rural villages, who have built careers out of carrying around mobile phones that can be brought to different farmers, and used on a time-share-like system. This allows those farmers to have access to data and connectivity, but also has provided a way for those women to build up a career for themselves.

And think, then, about what begins to happen as the vast richness of data and information, that we now take for granted, reaches further and further into the far corners of the globe. The ability to do more, to build more and to connect more is going to reshape the lives of the many billions of underprivileged people of the world in ways that we can't even begin to fathom. The world just reached an astounding 7 billion people -- most of whom don't have access to many of the things we in the west take for granted -- including information. Wireless technologies have a chance to change that equation, and what comes out of it may be completely unexpected, but tremendously powerful. The idea that people who in the past may never have had an impact on the world may now be able to reach out and share their ideas and innovations with everyone is a revolution that is destined to bring powerful new ideas to the entire world.

Below you can see a video Intel put together, discussing how powerful wireless technologies can be.

Filed Under: access, innovation, wireless

Which Causes More Harm: Copyright Or Patents?

from the hard-to-choose dept

One of the recurrent themes on Techdirt is the harm caused by intellectual monopolies – copyright and patents – to the economy in particular, and to society in general. Stephan Kinsella has raised an interesting question: which of them is worse?

There are many Types of Intellectual Property, and all of them are bad, and most of them are getting worse and expanding. The worst two by far are patent and copyright. Some say the patent system is worse than copyright, because most innovations are inevitable anyway and there is no independent inventor defense, whereas it’s unlikely someone else would independently write Romeo and Juliet (of course, Shakespeare had no copyright and he borrowed freely from previous stories, but let’s not let facts get in the way of the romanticized notion of copyright). This argument overlooks the fact that copyright prohibits not only literal copying but non-literal copying of “similar” aspects of the copyrighted work and also the making of derivative works.

Others think copyright is worse because it lasts longer, for example.

In the end, he plumps for copyright, and gives three main reasons.

Length. The patent term is about 17 years, while copyright usually lasts over 100 years (life of author plus 70 years).

It's interesting that there hasn't been the same push to lengthen the patent term in the same way as for copyright. Is that just because it needed companies like Disney with skilful lobbyists to push through legislation extending copyright, or is there some reason that people feel that the heirs of artists have a greater "right" to this protracted monopoly than the heirs of inventors?

Trends. Copyright law keeps getting worse, while patent law has been basically the same for a while now, and in fact has slightly improved–in recent years it’s more difficult to get injunctions; and the recent patent reform law, the America Invents Act, actually added a general prior commercial user defense, the first significant legislative improvement to patent law … ever.

Again, is that simply a function of corporate greed being more prevalent in the copyright industries? Or maybe it's because there is a greater concentration of power in the world of music or films, say, that makes it easier for a few corporations to exert pressure on politicians. There is no equivalent concentration in the patent world. In fact, there is a very clear tension between different sectors – the pharmaceutical industries just can't get enough patent power, whereas the computer industry is far less enthusiastic.

Taxation versus Censorship, the Police State, and Regulation of the Internet. The patent system imposes costs of at least $100 billion a year, by reducing innovation and competition. So it basically acts like a tax. It’s bad, it impoverishes us, it slows things down. But it’s just another tax.

The copyright system, by contrast, besides imposing untold billions of cost on the economy, consumers, and artistic creation, and distorting the entire domain of creative works, is also being used as an excuse by the state to increase its surveillance, warrantless searches and seizures, punitive bans of people from the Internet without due process, censorship, cutting off websites accused of piracy, and control and regulation of the Internet and related technologies. As the Internet is one of the most significant tools ever to emerge to help people battle the state and communicate and learn and spread ideas, this is very chilling. In the name of stopping copyright piracy, the state is trying to squash mankind’s greatest anti-state weapon. Taxes are bad, but killing or restricting the Internet is just horrible.

The Internet works by copying files multiple times as they are transmitted across the network. Everything we look at online is a copy. So there is a fundamental dissonance between copyright, a monopoly that seeks to stop people from copying, and the Internet, which is built on it.

This explains why previous laws to stamp out online copyright infringement have failed: it's inherent in the system. It also helps us understand why the latest iteration of those laws – E-PARASITE/SOPA – is about destroying the Internet as we know it. Turning the clock back really is the only way of preserving copyright's 18th century approach to controlling copies.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: copyright, harm, innovation, patents

A History Of Hyperbolic Overreaction To Copyright Issues: The Entertainment Industry And Technology

from the the-sky-is-falling,-the-sky-is-falling dept

It seems that the entertainment industry has settled on its hilarious key talking point against people who are concerned about SOPA/PROTECT IP. I've been seeing variations on this in a bunch of different places, but the entertainment industry's biggest shills are focusing on the idea that the concerns being raised by actual technologists, entrepreneurs, innovators, creators and investors are somehow "hysterical hyperbole." A key example is RIAA boss Cary Sherman's "rebuttal" posted to News.com this week, which starts out with "let's all take a deep breath," and goes on to say that passing SOPA "won't kill the internet."

That's all well and good, though no one has said it will kill the internet, but just change it in massively significant ways that the RIAA/MPAA and its ilk don't understand. Remember, these are the folks who once admitted that they were too clueless to even know how to hire a good technologist, let alone understand how a massive change to the fundamental regulatory and technological framework of the internet will impact innovation.

But, really, let's go back to a key point. In the last century or so, which industry has a habit of being hysterical and hyperbolic about copyright issues... and which has a history of being right. Let's start about a century ago, with John Philip Sousa, the composer. In 1906, he went to Congress to complain about the infernal technology industry and how it was going to ruin music:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy...in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.

Yes, the tech industry was going to kill music, because of "these infernal machines."

Around that time, Thomas Edison, who tried to monopolize the entire "moving pictures" industry as both a content provider and a tech provider, freaked out over the idea of others providing machines that could show movies, claiming that if there were ten such movie "screen machines" in the US, it would kill the industry:

If we put out a screen machine there will be a use for maybe ten of them in the whole United States. With that many screen machines you would show the pictures to everyone in the country -- and then it would be done. Let's not kill the goose that lays the golden egg.

Jump forward to 1932 and that great technological innovation called "radio." Once again, fear permeated the entertainment industry, leading to calls for massive changes to the laws and complaints about how radio was killing the industry:

Tin Pan Alley is sadly aware that Radio has virtually plugged up its oldtime outlets, sheet music and gramophone discs. The average music publisher used to get $175,000 a year from disc sales. He now gets about 10% of this. No longer does a song hit sell a million copies. The copious stream of music poured out by Radio puts a song quickly to death. The average song's life has dwindled from 18 months to 90 days; composers are forced to turn out a dozen songs a year instead of the oldtime two or three.

Evil stuff. Okay. Jump forward a few years, to the rise of cable TV. Once again, the MPAA freaks out, because some cable TV stations are "rebroadcasting" network TV. The MPAA argues in court that cable TV effectively kills off copyright law, as noted in a dissent in one of the key cases concerning the legality of cable TV:

We are advised by an amicus brief of the Motion Picture Association that films from TV telecasts are being imported by CATV into their own markets in competition with the same pictures licensed to TV stations in the area into which the CATV—a nonpaying pirate of the films—imports them. It would be difficult to imagine a more flagrant violation of the Copyright Act. Since the Copyright Act is our only guide to law and justice in this case, it is difficult to see why CATV systems are free of copyright license fees, when they import programs from distant stations and transmit them to their paying customers in a distant market. That result reads the Copyright Act out of existence for CATV.

Jump forward a decade or so, and we have the infamous statement of Jack Valenti comparing the VCR to the Boston Strangler:

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Around the same time, over in the UK, the British Phonographic Industry (BPI) -- the equivalent of the RIAA -- began its infamous campaign telling the world:

Home taping is killing music.

Or, in logo form: Okay, how about the DVR? The wonderful device that made TV watchable and useful again? The entertainment industry attacked that big time, focusing its legal guns on ReplayTV, who it effectively forced out of business. As part of the arguments against Replay, the entertainment industry's lawyers claimed that:

What's happening here is much more than just delaying the time in which I watch a show that I taped off the television. I'm delaying it, and watching it without commercials, and that is something that our courts have never said is acceptable.

Yes, watching TV without commercials goes against the law. Turner Broadcasting boss Jamie Kellner put it more succinctly:

People who watch TV without commercials are stealing from the entertainment producers.

Okay. MP3 players? The thing that's such a huge part of the music industry today? Cary Sherman's RIAA did everything it could to kill them in its lawsuit against the Diamond Rio. From the RIAA's filing in the case:

While the proliferation of MP3s over the Internet has been a serious problem for the recording industry, the scope of that problem has been bound by a natural limitation. MP3 files can be played only by computers, and enjoyed only while operating a computer. The introduction of the Rio devices -- and a number of anticipated look-alike devices from other vendors -- will change that by making MP3 files portable.

[....]

The growth of illicit MP3 files will injure not only the record companies and artists whose work will be pirated, but also the music publishers, musicians, background singers, songwriters and others whose existence is dependent on revenue earned by record sales.

How about the XM + MP3 device that let paying subscribers to XM radio record what they listen to -- just like you could record radio over the air or off a computer? Yeah, the record labels sued over that, claiming $150,000 in statutory damages per recorded song.

And, finally, how about Viacom's attack on YouTube, claiming it was the equivalent of a "Grokster for video." While that case is still ongoing, Viacom has argued that if the district court ruling stands, it would completely destroy the value of content:

If affirmed by this Court, that construction of Section 512(c) would radically transform the functioning of the copyright system and severely impair, if not completely destroy, the value of many copyrighted creations. It would immunize from copyright infringement liability even avowedly piratical Internet businesses.

Given this little tour through history, it's pretty damn funny to see the RIAA and MPAA and their supporters insisting that it's the tech industry who has a history of hyperbole on these subjects. As far as I can tell, there isn't a technological innovation that has come along in the last century that the entertainment industry hasn't had a hysterical negative reaction to... even as it later turned out to be a massive help to the industry.

Thus, when the entertainment industry seeks to totally overturn the basic technological and regulatory underpinnings of the internet, over its latest freakout (rogue sites! cyberlockers!), forgive those of us who have seen this hyperbolic overreaction play out before, from pointing out that (a) the entertainment industry is totally and completely overreacting and (b) rushing into broad regulatory changes without the input or help of the tech industry is a big, big mistake. As with nearly every technology discussed above, if the RIAA and MPAA would just stop freaking out and falsely believing it's a legal or enforcement issue, and recognize that it's all a business issue, then the tech industry can actually help them innovate, support new services and make more money. Instead, in typical hyperbolic overreaction fashion, they're seeking to kill the very infrastructure that is their path to solve their current financial woes.

So, when the RIAA and the MPAA insist that "something must be done!" as quickly as is humanly possible to deal with the "threat" of so-called "rogue sites" domestically and abroad, we say back to them: "let's all take a deep breath." And suggest that, perhaps it is they who are hysterically overreacting... as they've done for over a century.

Filed Under: copyright, entertainment industry, innovation, overreaction, technology

Steve Jobs' Real Genius: Tweaking, Curating, Editing & Remixing To Make Things Better

from the indeed dept

We've argued a few times that Steve Jobs' real success wasn't in inventing anything particularly new, but in taking what others had done and making it better. That's why we found his complaints about Android seem so odd. Now, as a ton of you have submitted, Malcolm Gladwell has penned a piece on Steve Jobs' "real genius," which he describes (eloquently, as always) as a "tweaker" more than inventor. Elsewhere, he's described as an "editor," rather than inventor.

Jobs’s sensibility was editorial, not inventive. His gift lay in taking what was in front of him—the tablet with stylus—and ruthlessly refining it. After looking at the first commercials for the iPad, he tracked down the copywriter, James Vincent, and told him, “Your commercials suck.”

“Well, what do you want?” Vincent shot back. “You’ve not been able to tell me what you want.”

“I don’t know,” Jobs said. “You have to bring me something new. Nothing you’ve shown me is even close.”

Vincent argued back and suddenly Jobs went ballistic. “He just started screaming at me,” Vincent recalled. Vincent could be volatile himself, and the volleys escalated.

When Vincent shouted, “You’ve got to tell me what you want,” Jobs shot back, “You’ve got to show me some stuff, and I’ll know it when I see it.”

I’ll know it when I see it. That was Jobs’s credo, and until he saw it his perfectionism kept him on edge. He looked at the title bars—the headers that run across the top of windows and documents—that his team of software developers had designed for the original Macintosh and decided he didn’t like them. He forced the developers to do another version, and then another, about twenty iterations in all, insisting on one tiny tweak after another, and when the developers protested that they had better things to do he shouted, “Can you imagine looking at that every day? It’s not just a little thing. It’s something we have to do right.”

This is a key point that we've been arguing about for years. There's tremendous value in what Jobs did: innovating not actually by inventing, but by tweaking and "editing" the ideas and designs of others to make them "perfect." That act of taking what others have done and making it more valuable is such an underrated skill -- and yet it's really the key ingredient to innovation.

If you look back, historically, it's what Thomas Edison really did as well. He didn't actually invent very much himself. But he took others' ideas and made them better -- often recognizing how valuable the ideas were much more than those who originally came up with them. That's a form of editing and a form of remixing to make things better -- and Edison and Jobs were both amazingly skillful at it. So skillful, that many people falsely credit them with "inventing" things they really just remixed.

Filed Under: curation, editing, innovation, remix, steve jobs, tweaking

Applying Apple's Design Sense To Other Items... Like The Thermostat

from the just-as-long-as-it-doesn't-crash-so-often dept

There's no denying that Apple has been amazing at industrial design for years. Tons of companies strive (and usually fail) to reach the bar that Apple regularly crosses. But what if you took a bunch of ex-Apple designers, and they started building other stuff? Apparently that's the question being answered by a company called "Nest" which is releasing a smart thermostat, that beyond looking awesome, also learns from you and your habits to become much more efficient. It also, conveniently, allows access via computers and mobile phones. My thermostat with a mobile app? Why not? And it is definitely nice looking. And, yes, a bunch of people there, including the founder and CEO, came from Apple, and helped design the iPod and iPhone.

Nest claims that using the thermostat will help you save a ton of money by making your heating usage a lot more efficient -- though it would be nice to see some real world testing on such claims before anyone buys into them. Also, while perhaps not nearly as pretty, we've seen similar home automation thermostats on the market for years, without making a huge dent. It's just not that clear people that care enough to make even the initial outlay ($250 apparently).

Still, I'm intrigued by getting more products out on the market with exceptional design. We need more of that.

Filed Under: design, innovation, thermostat
Companies: apple, nest

Innovation In Retail: The Informed Shopper Is A Happier Shopper

from the information-is-king dept

This post is part of an Intel-sponsored series of posts we'll be doing here at Techdirt on the topic of innovation. The series consists of a video interview of myself (which you'll see below), the post, and another video interview with an Intel representative and others. That second video, obviously, is content from Intel, but my video and what I've written here was done with complete and total editorial independence. We hope you enjoy the content and take part in the overall discussion.

In some ways, many people think that the world of physical retail is "over." It's been killed off by online retail. In fact, I recently heard someone refer to the challenge faced by a large brick-and-mortar retailer as "having to do more than be Amazon's showroom." But there are some interesting opportunities coming. First up, here's a brief video of me discussing the possibilities: I tend to think that the real opportunities, when it comes to innovation in retail, are in making life easier, better and more efficient for shoppers -- and that applies across both online and offline retail. While many people joke about the end of offline retail, you have to remember that it has a huge benefit in immediacy. You don't have to wait a few days for people to ship things to your door. The problem, however, is people often feel that they have more information online -- reviews, comparisons, videos, etc. But there's no reason that the same sort of information can't be built into the offline retail experience as well.

In some ways, this is already happening via smartphones. The fact that people can access all sorts of content via their smartphones means that some of that information is already there. But the next challenge will be for retailers themselves to provide more value through realtime information as well. The challenge is in making sure that information is really what's useful to the consumer, and not just useful to the retailer. The temptation will be to provide limited and/or biased information to push people into buying as soon as possible (and possibly the most expensive item). But unbiased and fair information can build up trust, and trust can make a buying decision much easier.

Beyond just the obvious stuff of providing the same kind of online information (reviews/specs/videos) to people in a store, let's take things a step further. Imagine a kind of open API that allows for others to provide additional information about a product. If you're buying vegetables, imagine an API that lets you easily find suggested recipes for those vegetables -- which could also check with a listing of what you already have at home and/or the store you're in and other nearby stores, to figure out how to buy whatever else you need.

For years, we've heard of retailers dreaming up the ability to text message you with a coupon as you walked by a store -- but that's an idea that's likely to piss off plenty of people, if they don't want such things. But imagine a system that lets you let stores within a certain area bid for your business. You want a cup of coffee? Set a radius, put the coffee shops you dislike on a blacklist, determine a weighting of price vs. distance vs. taste -- and see who offers the best deal.

As with pretty much anything these days, the real disruption, and the real innovation, come in making the consumers' lives significantly better in ways they didn't expect. The tools that will work and the tools that will wow are the ones that aren't so much focused on just improving retailers, but in making the consumers' lives improve. The end result, of course, for retailers who implement such systems will likely be improved bottom lines as well, but if they're just focused on improving their bottom lines without taking the consumers' viewpoint into account, it's unlikely they'll be all that successful.

Along those lines, the real lasting benefits for retailers may come from something as simple as connecting people to other people. One of the issues I've had with buying things in the past is the uncertainty of whether or not the product is right for what I need. I recently installed a new dishwasher and it required both some new tools and some new materials. I actually ended up watching some videos online before heading down to the store to pick up things, but even then I wasn't entirely sure what I was buying was what I actually needed (turned out, it wasn't, and I ended up making two additional trips that day to the store to buy/return things). While I had asked the one random store employee I found wandering among the aisles, they weren't really sure. But imagine if, from within the store, I could explain the job, take a quick picture of certain items, and reach out to a community of experts on the subject who could let me know if I really had the right tools for the job or not.

Similarly, when I ran into problems with the install, what if various retailers could tell me what I was doing wrong/missing -- and bid for my business with a complete package of everything I needed. Best package deal -- ready and waiting for me next time I came in? Sold!

In the end, what it comes down to is that by providing more information for the consumer, allowing them to better connect and improve the overall process, you improve the whole experience. Taking the guesswork, hassle or inconvenience out of shopping can be a huge win for retailers who want to compete against the online world by offering more immediacy, more information and a better overall experience.

Below you can see a video of Intel helping to enable just that kind of retail innovation

Filed Under: innovation, retail