Category: Four pillars

I’ve been following a perplexingly fascinating case for about a year or so; one of those cases where truth way beats fiction. Simply put, one of the biggest companies in the music business, Universal Music Group, was suing the delightfully-named Roast Beast Music Collectibles, or more specifically Troy Augusto, who trades as roastbeastmusic on eBay, for selling on promotional material.

Last week Judge James S Otero decided enough was enough, threw the case out, and cited the doctrine of first sale as the primary reason.

You can see some of the coverage here and here. The Electronic Frontier Foundation did a great job in publicising the case and fighting in Troy’s corner, here’s an excerpt of what they had to say.

I collect books, and have in my collection many review copies Not For Resale. A small number were actually sent to me, and most of the rest I bought at charity shops (I think they’re called thrifts in the US). Some were given to me by friends who had received them originally. It never occurred to me that someone could even conceive of a reason to claim that what I was doing was illegal. And it is not. Doctrine of first sale.

People have been selling and trading rarities such as promo goods for a very long time, so I tried to figure out why Universal was getting so excited about it. So I looked into it.

I should have known.

Pre-release piracy.

So let me understand this. Universal want to send pre-release promos to people. Why would they do that? So that they could get good reviews of the releases, I would guess. So they must know the people they send it to, at least professionally. But they don’t trust them. They think that the recipients of the promos are going to go into business making copies of the promos and then selling the copies on. So they need a law to protect them against that eventuality.

You know something? If I was one of those recipients of the promo, I would feel insulted and send it back. Maybe that’s what we now need to do, start a movement to get reviewers to send all promos back unheard

Pre-release promos are slow-burning examples of artificial scarcity; the scarcity is non-existent at the point of pre-release….. The promos take time to develop into valued items, time measured in multiple decades. As a result, no one has bothered to create the balancing artificial abundance. What Universal was trying to do was to create that scarcity at the point of pre-release. And they failed.

I’m a pretty gregarious kind of person; I like spending time with people, stay awake all kinds of hours, travel quite a bit (on business as well as pleasure). So I know a lot of people, and a lot of people know me.

Which means I land up with a lot of information about how to contact people: telephone numbers, e-mail addresses and the like. I store this information in all kinds of places, I guess we call them social networks now. And when I store this information, I tend not to think of it as mine. Or as the social network’s. Most of the time I am a trustee of that information.

So when you give me your private mobile phone number, you trust me with that information. I am not empowered to give it to anyone I feel like, you trust that I will use that information wisely. It isn’t my information. It’s yours.

I think a lot of people feel that way.

In the old days, there was a clear distinction between professional and personal, and address books worked that way as well. When job migration was low it made a lot of sense. Now, with security of tenure a distant memory, this is harder to figure out. Quite often people have relationships that last beyond the jobs they were in when they met for the first time.

Which makes me think. Does the average professional relationship last longer than the average professional job?  Have we worked out what the implications are?

The kernel for this post was an article I read on the plane coming over to San Francisco. The headline was amazing:

Court orders ex-employee to hand over LinkedIn contacts

You can find the whole story here. It conjured up visions of this thing called LinkedIn contacts being ceremonially handed over from one person to another.

And for a moment there I thought that the value was in the relationship and not in the contact information.

If there is no relationship then it is just data. Who cares who owns it, it is just commodity. Where there is a relationship, and where the information is scarce, it is usually held in trust and cannot be given away anyway.

All this is about contact information. When we start talking about derived and ancillary information, to do with things like relationship networks, friend wheels, social graphs and so on that’s a whole different ball game. The same is true about patterns of behaviour: buying, selling, watching, eating, reading, listening.

When it comes to contact information alone, the value is not in the data but in the relationship.

I’ve been spending some time reading The Internet and Consumer Choice, a report produced by the Pew Internet and American Life Project a month or two ago.

The report makes four key statements:

• The internet helps music buyers connect with artists and learn more about music, but it doesn’t strongly influence what or how they buy
• The internet is an influential source of information and options for those purchasing feature-rich items such as cell phones
• The internet is an efficiency-enhancer in searching for new housing
• Few internet users bother to rate or comment on their purchase, even for a digital good such as music

I’ve read the whole report, and I think there’s a deeper point to be made here.

When it comes to physical goods, the internet reduces search costs and informs the buyer, but fulfilment does not necessarily take place there. While the ability of the internet to disintermediate continues to grow, the fact is that disintermediation is not the norm as far as physical goods are concerned. Where it does take place for physical goods, the drivers tend to be simplicity and convenience of engagement and breadth of inventory rather than price and distribution capacity.

But when it comes to physical goods that have a digital alter-ego, I think the story is completely different. I think the digital world can and will strongly influence buying decisions for such goods. If the digital world was allowed to. Particularly with music and film, and increasingly with magazines and books, people are going to be influenced in their physical purchases by the nature of access they have to their digital counterparts. So I don’t buy the first point made in the Pew report. I think the market here is not about searching and finding, it’s about tasting and coming back for more. And I don’t mean a trailer or sampler model either, I’m talking about access to the whole thing.

There’s a big Because Effect looming here, a big abundance-versus-scarcity tension. Makes me think of the restaurant business. I get the impression that many restaurants make their money on the liquor and soft drinks they sell, and loss-lead on the food. They’re in the business of keeping their customer satisfied, and making money as a result. They don’t care whether they make money on the food or not, as long as they have satisfied loyal customers and they make money overall.

Merchandising and memorabilia have been around for a long time. So when it comes to music and films, the money may well continue to migrate to physical goods like merchandising and memorabilia, with the Kevin Kelly “Better Than Free” model coming more and more into play. Immediacy and authenticity will command greater premiums.

More later. There’s some stuff I want to share on one aspect of this, primary and secondary markets for memorabilia and suchlike.

When I started talking about the Four Pillars model (search, syndication, conversation and fulfilment) four or five years ago, I had some very specific views about syndication. And, as I see the new generation start entering the workforce, if anything those views have been reinforced.

Let’s take reports and enquiries. In this context, when I use the word “report”, I mean something paper-based, chundered out of a giant enterprise system. And when I use the word “enquiry” I mean something that is similarly yawned out, but online rather than on paper. Both these things come in two flavours, regular and ad-hoc. If you haven’t had to come across such things so far, count your lucky stars.

When I started working in the industry, listing paper grew on trees. And global warming was but a glint in Al Gore’s eye (he was 32!). I was surrounded by ream after ream of paper, green-lined and perforated, in a size I would have guessed as A3-ish. Your desk was dominated by large “trays” marked IN and OUT and, if you were important, maybe even one called URGENT. Sometimes you were even more important, you could decide to suspend work, you had a tray marked PENDING. When you “arrived”, became someone, you were probably given a tray marked FILING, with a person to do that job for you. This usually happened around the time you had the Ceremony of the Keys, when you were finally allowed to use the Executive Toilet. [That’s if you were male, of course.]

But I digress. IN trays. Reams of listing paper. I used to watch what happened to that listing paper with some bemusement. It arrived magically in on a desk in the morning, patiently gathering dust and meeting like-minded reams for a few days. Then, when the pile grew too high, it would get moved. To the floor alongside the desk, en route being junked.

I kid you not. Offices (we didn’t use words like “enterprise” in those days) were full of printed reports that seemed unstoppable, they had a life of their own. They’d get produced, hang around for a while and then get junked.

The advent of the PC and the AT bus changed all that, we stopped using terms like “console printer” and “dot matrix printer” and settled down to the good old laser printer. [I think inkjet and bubble came around the same time, but I was a laser man myself. You haven’t lived until you’ve changed a ribbon on a free-standing console printer.]

So much for the reports of yesteryear. When it came to enquiries it was more of the same, except that you didn’t have reams of paper. Instead you had a new problem. Or rather a new opportunity. You could spend your life figuring out how many ways there were to get the response “Invalid Code”. No more, no less.

Some people think that sticking decal-like things on your computer is a very cool Generation M thing to do. Not true. People were sticking things to the side of their 80×24 dumb terminals thirty years ago. But what they stuck was different indeed. They were lists of “valid codes”, usually scribbled on paper and sellotaped on to the side of the terminal.

You see them nowadays as well, often at cashtills.

What’s the point of all this? Where am I leading? It’s simple. Syndication in the past was a complete nightmare. if you asked for reports you got broadcast grapeshot that then became impossible to turn off. If you asked for enquiries you dealt with unforgiving deterministic forms. The upshot was the same: no personalisation, a firehose that won’t turn off, a deterministic rather than probabilistic process of enquiry, intolerant and not fit for purpose.

Why did I put up with it? I had no alternative. Worse than that, I hadn’t ever seen an alternative.

Well, today’s kids are different. Generation M is different. The generation entering the workforce is different. They are used to RSS, to feed readers, to Google, to iGoogle, to Netvibes, to Pipes, to relevance and ranking, to wild cards.

And they won’t put up with our trashy way of doing things.

Not even for money.

So next time you look at a humongous monolithic system using arcane meaningless codes and chundering out pages of tripe, start planning to replace it. That’s if you want to attract employees from the coming generations.

And by the way, do bear this in mind: Generation M has no border: India and China and Chile and Mexico and Russia also have kids who think the same way. You’re not going to be able to offshore this sucker for long.

Here’s the start of the wikipedia entry for Moore’s Law:

Moore’s law describes an important trend in the history of computer hardware: that the number of transistors that can be inexpensively placed on an integrated circuit is increasing exponentially, doubling approximately every two years.^[1] The observation was first made by Intel co-founder Gordon E. Moore in a 1965 paper.^[2][3][4] The trend has continued for more than half a century and is not expected to stop for another decade at least and perhaps much longer.^[5]

Here’s the diagram that tends to go alongside such text, also from Wikipedia:

The trouble with all this is that normal people are not necessarily used to log scales, nor to statements about exponential growth in the capacity for placing inexpensive transistors in an integrated circuit. Which means that people’s eyes glaze over when I start talking to them about Moore’s Law. [Well actually most people make sure their eyes glaze over as soon as I start talking, regardless of subject, but that’s another matter.]

Where was I? Oh yes. Moore and his Law. I find this a simpler way of explaining it:

The chart above tracks the price per gigabyte storage in an iPod, and how that has varied over the years and generations. I’ve been using it for a while, and now it’s getting a little dated. Haven’t seen a more recent version, I sourced the chart from a James Stoup article in AppleMatters a few years ago.

If anyone has a more recent iPod/iPhone version i’d love to see it. Comments? Views? Have you found better ways of explaining Moore’s Law to my grandmother?