It has been a while since I've ranted about an economics article, but there was one by Peter Thiel (cofounder of PayPal and Palantir) in the Wall Street Journal that caught my eye, so it is the subject of this post. In it, he argues that monopolies are not always the bad entities that people make them out to be. In particular, he argues that Google's dominance in the search market has allowed it to expand to other markets such as advertising, robotics, and phones, and in all of those it is far from a dominant market player. He also argues that firms in perfectly competitive markets are too caught up with staying afloat to be able to innovate in any meaningful way, so real innovation can only come from firms with dominant market positions (such that they have money to gamble on such an innovation). Follow the jump to see my reaction to this.
Showing posts with label innovation. Show all posts
Showing posts with label innovation. Show all posts
2010-03-26
The Film Industry's Next Avatar
I mean "avatar" as a pun on the movie title and the word as meaning incarnation. It stems from this article (Marguerite Reardon, CNET) talking about Avatar director James Cameron's take on film piracy.
In a few words: he gets it.
He gets that to actually be successful in the marketplace, one must innovate; profits are not one's birthright. Where was all the fuss about the plethora of tech companies failing early last decade? Yet when filmmakers see their products being pirated, they put ever-more restrictions on the media which are ever-quicker bypassed in a vicious cycle both for the filmmakers and for the purchasers of unpirated copies. They also claim to be "victims", though the vast majority of data (not coming from the MPAA) shows that film companies are making ever-increasing profits through...theater ticket sales. I also talk about this in an earlier post.
Somehow, film companies aren't getting the fact that theater viewing is making a comeback. James Cameron understands that DVD sales are a venue for advertising, while the theater sales are the real deal.
He understands that the way to combat piracy is not to be restrictive, threatening, or litigious; rather, the way to combat piracy (and this is true of any medium - books, music, etc.) is to make acquisition of legitimate copies easier and more compelling than acquisition of pirated copies. Hence, he made the movie Avatar with 3-D graphics, which is only available in theaters; now, to see all the cool effects, people must go to theaters - watching it on DVD or on the computer is only half the experience (because as far as I know, once the effects are removed, the plot itself is a really poorly written soap opera).
A part of me goes against the notion that movies must resort to gimmicks like 3-D viewing as compelling reasons for people to attend cinema showings (as opposed to buying or pirating the DVD) - the movie has got to have substance behind all the show. That said, the movie makers are creative enough to think of some appropriate way to make their movie seem better in the theaters than on DVD (legal or pirated) - otherwise their movies wouldn't do well in terms of sales in the first place.
I understand that it is hard work for people to make a movie, and that this goes to waste when movies are pirated; what this means, though, is that movie makers need to work a little bit harder in terms of finding new ways to make cinema viewings worth people's money. By the time 3-D technology hits mainstream TVs and computers, James Cameron and other directors should be able to think of even more innovative ways to capture people's attention.
In a few words: he gets it.
He gets that to actually be successful in the marketplace, one must innovate; profits are not one's birthright. Where was all the fuss about the plethora of tech companies failing early last decade? Yet when filmmakers see their products being pirated, they put ever-more restrictions on the media which are ever-quicker bypassed in a vicious cycle both for the filmmakers and for the purchasers of unpirated copies. They also claim to be "victims", though the vast majority of data (not coming from the MPAA) shows that film companies are making ever-increasing profits through...theater ticket sales. I also talk about this in an earlier post.
Somehow, film companies aren't getting the fact that theater viewing is making a comeback. James Cameron understands that DVD sales are a venue for advertising, while the theater sales are the real deal.
He understands that the way to combat piracy is not to be restrictive, threatening, or litigious; rather, the way to combat piracy (and this is true of any medium - books, music, etc.) is to make acquisition of legitimate copies easier and more compelling than acquisition of pirated copies. Hence, he made the movie Avatar with 3-D graphics, which is only available in theaters; now, to see all the cool effects, people must go to theaters - watching it on DVD or on the computer is only half the experience (because as far as I know, once the effects are removed, the plot itself is a really poorly written soap opera).
A part of me goes against the notion that movies must resort to gimmicks like 3-D viewing as compelling reasons for people to attend cinema showings (as opposed to buying or pirating the DVD) - the movie has got to have substance behind all the show. That said, the movie makers are creative enough to think of some appropriate way to make their movie seem better in the theaters than on DVD (legal or pirated) - otherwise their movies wouldn't do well in terms of sales in the first place.
I understand that it is hard work for people to make a movie, and that this goes to waste when movies are pirated; what this means, though, is that movie makers need to work a little bit harder in terms of finding new ways to make cinema viewings worth people's money. By the time 3-D technology hits mainstream TVs and computers, James Cameron and other directors should be able to think of even more innovative ways to capture people's attention.
2010-02-22
A Victory for Openness and Against Patents
This article (Bruce Perens, Datamation) gives a good analysis over the closing of a 5-year old court case involving open source software and patent infringements.
The good news is that the party accusing the open source developer of patent infringements has lost both patents in question and has paid the developer $100000, among other things.
Basically, a physicist named Bob Jacobsen who also develops software controlling model trains as a hobby (and released them under open licenses) was accused by Matthew Katzer, a seller of software for model trains, of patent infringement. The problem is that Jacobsen's license was meant to ensure that all software covered in the license would be released under a similar license, with which Katzer did not comply (the non-compliance came in the form of a patent application). Worse, Katzer extended his original 1998 patent to cover this open source code while keeping it under the 1998 date to make it look like Jacobsen was guilty of patent infringement. That shows the worst side of today's patent system and how it really doesn't promote innovation.
Despite numerous pressures (financial and otherwise) on Jacobsen, he persevered. The worst part was when Katzer essentially dismissed the open license (requiring use of the license for derivative works) as essentially public domain and thus patentable in a specific application. This basically threatened the basis of all works published under open licenses like the GPL. When it became clear that Jacobsen's Artistic 1.0 license was legally inadequate, ironically (though I don't approve of this part) the law that came to Jacobsen's rescue was...a law I have railed against multiple times...the DMCA.
What? The DMCA came to the rescue of an open developer?
Funny how the world works, huh?
Basically, the DMCA provided the requirement of retaining attribution and the original license on the work (Katzer was removing Jacobsen's name and license from the code).
Things went downhill for Katzer from there.
Ironically, despite the provisions of Jacobsen's license, as punishment, Katzer can no longer copy, modify, or distribute the model train code (though everyone else can). He can no longer take trademarks of Jacobsen's project. He must pay Jacobsen $100000 over 18 months or pressure people close to Jacobsen about this during this same time period. Both sides have agreed to not sue each other within these same 18 months.
Most importantly, however, unlike most court cases, this one is not sealed, meaning that all details of the case are open to public scrutiny. This is extraordinarily important, as people can now make sure that a similar drawn-out case does not happen again.
Congrats, Bob Jacobsen, and hooray to the open source community!
The good news is that the party accusing the open source developer of patent infringements has lost both patents in question and has paid the developer $100000, among other things.
Basically, a physicist named Bob Jacobsen who also develops software controlling model trains as a hobby (and released them under open licenses) was accused by Matthew Katzer, a seller of software for model trains, of patent infringement. The problem is that Jacobsen's license was meant to ensure that all software covered in the license would be released under a similar license, with which Katzer did not comply (the non-compliance came in the form of a patent application). Worse, Katzer extended his original 1998 patent to cover this open source code while keeping it under the 1998 date to make it look like Jacobsen was guilty of patent infringement. That shows the worst side of today's patent system and how it really doesn't promote innovation.
Despite numerous pressures (financial and otherwise) on Jacobsen, he persevered. The worst part was when Katzer essentially dismissed the open license (requiring use of the license for derivative works) as essentially public domain and thus patentable in a specific application. This basically threatened the basis of all works published under open licenses like the GPL. When it became clear that Jacobsen's Artistic 1.0 license was legally inadequate, ironically (though I don't approve of this part) the law that came to Jacobsen's rescue was...a law I have railed against multiple times...the DMCA.
What? The DMCA came to the rescue of an open developer?
Funny how the world works, huh?
Basically, the DMCA provided the requirement of retaining attribution and the original license on the work (Katzer was removing Jacobsen's name and license from the code).
Things went downhill for Katzer from there.
Ironically, despite the provisions of Jacobsen's license, as punishment, Katzer can no longer copy, modify, or distribute the model train code (though everyone else can). He can no longer take trademarks of Jacobsen's project. He must pay Jacobsen $100000 over 18 months or pressure people close to Jacobsen about this during this same time period. Both sides have agreed to not sue each other within these same 18 months.
Most importantly, however, unlike most court cases, this one is not sealed, meaning that all details of the case are open to public scrutiny. This is extraordinarily important, as people can now make sure that a similar drawn-out case does not happen again.
Congrats, Bob Jacobsen, and hooray to the open source community!
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