The downward spiral of ownership and value (happened to music, books are next) • Hacker News Board

Re: The downward spiral of ownership and value (happened to music, books are next)

#11

Post by kn0thing » Tue, Jan 25, 2011, 1:44 PM UTC

DennisP wrote: post #3

The article talks about how the music industry is shrinking, but says nothing about musicians. Musicians who embrace the new reality are doing fine. What the Internet is really doing away with is a giant industry that used to be useful, but now is merely parasitic. The same is happening to the book publishing industry. We don't really need them anymore. Instead of giving $15 to a publisher who then gives $1.50 to the…

For authors with established audiences (at breadpig we stick to webcomics) the Internet has been a fabulous publishing boon. We're approaching 35,000 copies sold of xkcd: volume 0 (now available in meatspace!) and Randall is getting a majority of the profits.

Breadpig isn't the first publisher to do that, but it's going to be really hard convincing popular webcomic artists to take a typical book publishing deal.

And for now, there are still plenty of us who enjoy reading deadtree versions of our favorite webcomics - delicious irony!

Re: The downward spiral of ownership and value (happened to music, books are next)

#12

Post by robryan » Tue, Jan 25, 2011, 1:44 PM UTC

bediger wrote: post #7

bad_user wrote: post #4

Earlier quoted context omitted.

What the Internet is really doing away with is a giant industry that used to be useful, but now is merely parasitic. That can go both ways: the Internet is also breeding a generation of customers that used to value and support music & books, but now is merely parasitic. we can just give $1.50 to the author directly I'm all for eliminating middle-men, but free is still a whole lot better than $1.50; and when downloadi…

You're denying basic free market economics with an emotional argument. In a competitive market, the cost of a good tends towards its marginal cost of production. We get all excited as the cost of solar cells tends lower and lower, as the marginal cost of their production gets smaller. Do we "value" solar cells less because of this? "the Internet is also breeding a generation of customers that used to value and suppor…

What about the upfront cost of production? It's all well and good to say each additional copy has tended towards zero but that still doesn't cover the production costs.

Re: The downward spiral of ownership and value (happened to music, books are next)

#13

Post by davidw » Tue, Jan 25, 2011, 1:48 PM UTC

bediger wrote: post #7

bad_user wrote: post #4

Earlier quoted context omitted.

What the Internet is really doing away with is a giant industry that used to be useful, but now is merely parasitic. That can go both ways: the Internet is also breeding a generation of customers that used to value and support music & books, but now is merely parasitic. we can just give $1.50 to the author directly I'm all for eliminating middle-men, but free is still a whole lot better than $1.50; and when downloadi…

You're denying basic free market economics with an emotional argument. In a competitive market, the cost of a good tends towards its marginal cost of production. We get all excited as the cost of solar cells tends lower and lower, as the marginal cost of their production gets smaller. Do we "value" solar cells less because of this? "the Internet is also breeding a generation of customers that used to value and suppor…

The problem is that there are two "costs" of production:

* The cost of reproduction - which in terms of software, music, and now books, is essentially zero.

* The cost of producing those goods in the first place, which is very high in many cases. These are called 'sunk costs'.

Prices are tending towards the cost of reproducing stuff, and people are struggling to come up with ways to cover actual production costs, which haven't really changed much.

Now, certainly, in the past, there were no guarantees that if you wrote a book over the course of a year, that you'd be able to make up for a lost year's worth of wages, but at least you had a shot at it - and also a shot at earning several times that if you had a hit.

If, instead, you spent a year writing a book, and it were easy, legal and acceptable (we're not quite there with all three) to just copy it all over the internet once it was released... where would you get your money from?

This is all described pretty well here:

http://en.wikipedia.org/wiki/Public_good

Re: The downward spiral of ownership and value (happened to music, books are next)

#14

Post by hessenwolf » Tue, Jan 25, 2011, 1:52 PM UTC

Books of artistic or academic value never made much cash, to my knowledge. Detective books - well, they can have Dirk drink a bud light and talk it up for half a page for all I care (and many fictional detectives already do express brand preferences every five pages). So no great change.

Perhaps they can start writing by hand, copying the world of painting and sculpture, in which people happily 'invest' in products which have nominal future cashflow potential other than future speculation.

Re: The downward spiral of ownership and value (happened to music, books are next)

#15

Post by greyman » Tue, Jan 25, 2011, 1:58 PM UTC

anthonyb wrote: post #8

greyman wrote: post #6

Earlier quoted context omitted.

"and when downloading hundreds of songs from PirateBay, that's several hundreds of dollars versus free." No, it isn't several hundreds of dollars, since many people who are downloading from PirateBay would not buy the songs even if the free option wouldn't be available.

That's his point. The choice for a consumer (who knows about BitTorrent) is between paying hundreds of dollars, or paying nothing. Given that, most people will choose to pay nothing.

But I wanted to say something else. Many people how don't know about BitTorrent would still not pay.

Re: The downward spiral of ownership and value (happened to music, books are next)

#16

Post by metageek » Tue, Jan 25, 2011, 2:05 PM UTC

The article cites the decline in music sales, but ignores the fact that a large part of the music sales in the 90s was people buying CDs of albums they already owned--an artificial bubble which burst independently of any increase in illegal copying.

Re: The downward spiral of ownership and value (happened to music, books are next)

#17

Post by JoeAltmaier » Tue, Jan 25, 2011, 2:10 PM UTC

erikstarck wrote: post #2

This goes beyond just the digitalization of media. In the age of access you rent more or less everything. Your car and your home (either directly or via loans), your music collection, library - maybe even your furniture and clothes: http://www.weartodaygonetomorrow.com Huge opportunities for startups to be disruptive here.

New meaning for "a new lease on life!"

Perhaps we'll see "life lease" companies - I'll have the mid-level engineer package please!

Re: The downward spiral of ownership and value (happened to music, books are next)

#18

Post by DennisP » Tue, Jan 25, 2011, 2:37 PM UTC

robryan wrote: post #12

bediger wrote: post #7

Earlier quoted context omitted.

You're denying basic free market economics with an emotional argument. In a competitive market, the cost of a good tends towards its marginal cost of production. We get all excited as the cost of solar cells tends lower and lower, as the marginal cost of their production gets smaller. Do we "value" solar cells less because of this? "the Internet is also breeding a generation of customers that used to value and suppor…

What about the upfront cost of production? It's all well and good to say each additional copy has tended towards zero but that still doesn't cover the production costs.

Simple. Pay it up front, release the files for free afterwards. The files turn into advertisements for the next piece.

Re: The downward spiral of ownership and value (happened to music, books are next)

#19

Post by tree_of_item » Tue, Jan 25, 2011, 2:40 PM UTC

RyanMcGreal wrote: post #5

> The role of piracy. I think we know. And the trends are negative, for both readers and authors. Except that the role of piracy is anything but clearcut. As Tim O'Reilly famously said in 2002 [1]: "Obscurity is a far greater threat to authors and creative artists than piracy." Again and again over the past several years, we have seen both studies and anecdotal stories from artists finding that file sharing produced…

The author quotes Tim O'Reilly and shows why he isn't necessarily correct.

> Don’t need to take my word for it. Just look at all the other industries that have gone digital. Take music. Physical music sales have been declining steadily for more than a decade, and while digital sales rise, they make up only a fraction of the loss. (They’re not even rising much anymore either.) Revenue from Pandora, Spotify, YouTube ads and the like are loose change next to CD sales declines.

> What’s the shortfall? All told, the United States recorded music industry is worth less than half of what it was a decade ago, and the downward slope is only getting steeper. Outside of the big markets, the declines are greater. The Spanish music industry fell 55% in the last five years alone. In China rampant CD copying and file sharing have left a nation of 1.3 billion people with a $75 million recorded-music industry. As a recent Economist report put it, the “worst-case scenario has already come to pass.”

Sales are not doubling everywhere. The industry has shrunk to a fraction of its previous size.

Re: The downward spiral of ownership and value (happened to music, books are next)

#20

Post by jimbokun » Tue, Jan 25, 2011, 2:40 PM UTC

RyanMcGreal wrote: post #5

> The role of piracy. I think we know. And the trends are negative, for both readers and authors. Except that the role of piracy is anything but clearcut. As Tim O'Reilly famously said in 2002 [1]: "Obscurity is a far greater threat to authors and creative artists than piracy." Again and again over the past several years, we have seen both studies and anecdotal stories from artists finding that file sharing produced…

Did you see the chart where revenue from music sales for the entire industry is down more than half?

http://money.cnn.com/2010/02/02/news/companies/napster_music...

How can you argue that piracy increases revenues when revenue for an entire industry is plummeting? Is there another chart somewhere that shows aggregate revenues increasing for some category of media that has been digitized? Is there revenue that that chart does not capture that more than makes up for the lost sales, and that is positively affected by piracy?