While I agree with Mike's idea, in reality the Silicon valley firms need to be in DC. Much like patent stockpiling, if you're not involved you're going to get screwed. DC isn't going away and all you need is one jackass to lobby for a small change and poof, you're out of business. I see Mike's argument the same way I see America's view on freedom in other countries, "we're all for it, unless oil is involved."
Did anyone else get the feeling he was arguing with HAL from 2001? "There's different types of photocopiers, Dave." "That's what's at issue in the case, Dave." Just waiting for the "I'm sorry Dave, I'm afraid I can't do that."
Oh crap. I don't have enough money to defend the pending suit on my name, Neville. Hopefully, Zynga will go after my rich musician cousin Aaron Neville first.
Actually, removing the dollar bill would save $55 billion...sure it's over 300 years, but who looks at that number?
Seriously, why can't these stupid government reports just do the per year savings/cost?
Why are we still trying to sell albums? I thought that bundling method was thrown to the dustbin of history. Who wants to pay for 12 crap songs when only 3 are any good? This model breaks down quite quickly when you do it on a per song basis.
This model also reminds me of the "mobile phone woman" service that was popularized by Grameen Bank's microlending. When cell phones were scarce resources, the mobile phone woman would buy a phone (with credit from Grameen) and lend it out to customers who paid a per min fee. Customers could benefit from low investment (didn't have to buy the phone) and still get access to a cell phone. The mobile phone women did well and became well off by local standards. This led to a rush of other women trying to replicate the success. The flood of new entrants drove down the price and eventually none of the women were making any money on the service.
I see parallels here. The first entrants (like in any good pyramid scheme) stand to benefit the most. Once there are lots and lots of secondary and tertiary buyers, the per song rates will be driven down to a point where the players at the bottom of the pyramid will drop out and the prices of music will rise leading to more piracy. Wash, rinse, repeat.
His model also grossly inflates the sales levels of primary and secondary sales. Let's assume BestNetTech is a popular blog - could you really sell 10,000 copies of a song? Could a secondary seller really sell 25,000 copies? I doubt it. The figures he uses need to be spread across a wide group. So instead of 1 guy making $330K as a primary seller, it's more likely he's making $3,330 as one of 100 primary sellers. The secondary guys are likely to make only $135 as 1 of 1000 secondary sellers. Seems a lot less lucrative now.
It's going to work a lot better in Libya. Egypt is the pinnacle of freedom compared to Libya. There is little internet use, decent cell phone penetration, but no freedom of any kind at all. Libya is just barring foreign jounos from even coming to the country and any local journos reporting on the topic will be killed. How's that for cutting off the news stream?
Lumping the two countries together just shows ignorance of the differences between the governments. Economic impact? Who cares. Oil is the only thing of value produced in Libya, but they are a small player with no influence on world prices. Gadaffi is a crazy person who doesn't care a lick about world opinion. So he kills a few hundred Libyans. He's survived being a pariah before, why change now? I expect a harsh crack down and Gaddafi to remain in power with only a few cosmetic changes that will quickly be rolled back. That guy is going to give up power when you pry it from his cold dead hand.
You make it sound like LG is the bad guy here when this is just a retaliation lawsuit against Sony for their original suit against LG. This is the sad state of affairs, but you have to patent up to protect yourself. Sony is the jackass that started it.
http://www.engadget.com/2011/02/08/lg-files-itc-complaint-against-sony-goes-blow-for-blow/
Major corporations that have to report poor earnings can use the hot news claim to prevent newspapers from reporting on their poor earnings. Great new strategy...
VCs like a startup to have patents because it is a type of insurance against the failure of the startup. If the business can't survive in the competitive market (and most can't), the VC might be able to recover some investment by selling the patent or suing whoever figures out how to successfully market the product. The problem lies in the fact that suing can make as much or more money than most startups will generate in years. The live or die nature of the startup is then skewed.
I think we need to cut AT&T a break here. They definitely underestimated the huge increase in usage thanks to the iPhone and are trying to remedy that situation. It takes a long time to get approval to add more towers and expand coverage. It's not just a matter of turning up the power to improve the signal strength. I don't fully support Mike's point here because he is effectively equating the caps on mobile broadband to fixed broadband. Regular readers know that Mike hates caps on fixed broadband and doesn't buy into the arguments that "the internet is running out of capacity". I completely agree with him there. The mobile world differs in that operators are constrained by spectrum availability, so bandwidth hogs really do impact the service everyone else receives. I totally agree that operators should be sued every time they use the word "unlimited". AT&T has a rather simple solution to kill off the bandwidth hogs - ban streaming services. Might drive away all of their customers, but will definitely solve the bandwidth issue.
Mike - Great video. As a non-econ person it broke down a complex subject quite nicely. I am interested to know if you would share the business model around the ads as an example of how you're monetizing the "free" website. Clearly, UPS paid you to do create the video, but how about some details? Was it a fee for hire where UPS controls the content or do you retain the rights? What was UPS' goal beyond getting the readers of BestNetTech to see their logo for 2 mins? Are they developing some sort of education program around economics?
What I found interesting was that the song was created for and used in a Doublemint gum ad (note the "double your pleasure, double your fun" line in the song and Chris Brown putting a stick of gum in his mouth in the opening of the actual music video). That's another example of an artist finding an alternate funding source for creating new music. Though this is clearly product placement, the placement is subtle and doesn't detract from the overall intent of the song.
On a separate note, the wedding video was the first time I heard Forever and I really liked the song and bought it from iTunes (before the ad link went up). I buy all kinds of music that I hear in TV shows, movies and on the internet. I don't understand how the big labels can be so clueless as to think that having their music played in the background is hurting sales. Quire the opposite actually.
The article notes that the TV listings are printed for free. I can see having the images of the movie as an advert for which a distributor might pay, but the basic listings in the paper should be free. It's a basic service the paper provides.
You make it sound like this is a new phenomemon. The telephone tax from the Spanish-American war was only repealed a few years ago. Pretty sure that war was paid off long ago. Governments are greedy and no one wants to turn down easy money. It would be nice if the gov just had a flat tax on everything (like here in Europe with the VAT) rather than wildly different taxes on certain products (like alcohol, tobacco and gas).
I applaud CBS for trying this with the Superbowl, but I agree that us overseas viewers are going to be left out in the cold. The NCAA tournament was great online with CBS (amazing quality), but I only got to wawtch it in England because the NCAA hasn't licensed the tourney to overseas TV. The NFL will block this for overseas viewers. The stupid thing is the BBC doesn't even show the commercials. That's half the enjoyment of the SB. I would rather watch the game online with the commericals than watch the BBC's inane coverage.
What Carl fails to note is that balloon squeezing did not occur. I know because I work in that segment of the industry. Prior to regulation, roaming rates were slowly falling due to some competition. The problem with roaming is that there is little actual competition between operators. Network operators compete aggressively in the domestic market, but have rarely extended that competition to the international market. This is probably because roaming brings in huge margins and companies were reluctant to cut into their cash cow if none of their competitors were doing so.
The operators bluffed that they would raise domestic rates or charge non-EU customers more, but neither event happened. Competition is too fierce in the domestic market for prices to go up and raising rates for non-EU customers would have little effect as they contribute only a tiny amount to overall roaming revenue. The networks bent over as expected and suffered the financial hit. Many saw 40% declines in roaming revenue while only a minor rise in usage. The EC failed to anticipate the impact on the financial health of the networks, assuming that the massive rate reduction would see a corresponding growth in traffic.
The network operators have a legitimate case that they are being singled out for regulation when many products, from cars to food are sold at different prices in different countries. If the EC wants to regulate mobile services, they should cut the prices of all of these other products too.
Derek, you are grossly overestimating the roaming costs you incur while roaming. Cingular roaming rates in the EU are $1.29 per minute for the major destinations. Yes, they gouge you by rounding up to the nearest minute, but let's tone down the hyperbole. All major US operators offer rates between $0.99 and $1.50 for roaming in most EU countries.
Mike said, "Of course, rather than reward drivers for driving more fuel efficient cars, this sort of tax punishes them, and actually encourages the use of less fuel efficient vehicles."
I don't see how this tax encourages the use of fuel efficient vehicles. If we leave the intelligence of this idea aside, drivers will still pay less in gas by buying fuel efficient cars. Even if the gas tax is completely removed, there is always an inherent cost for the gas and owners of more efficient cars will pay less per mile driven. I agree with your overall sentiment, but that sentence doesn't hold up.
...and it's pretty much the textbook definition of racketeering. Pay us or we'll sue is more sophisticated than pay us or we'll burn down your store, but the intent is the same.
It's the little things
At least they changed the font. That should probably avoid the lawsuit for lawsuit copyright infringement.