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)

#31

Post by DennisP » Tue, Jan 25, 2011, 3:07 PM UTC

tree_of_item wrote: post #19

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 ad…

He says "obscurity is a far greater threat to authors and creative artists than piracy."

The industry is another matter. Its main contribution is file distribution, a function which we can perform for free now. I expect the industry to ultimately shrink to zero, while authors and creative artists do just fine.

Over ninety percent of the money we pay for music used to go to the industry, and we thought that was fine because they were pressing all those vinyls and CDs. Now the industry thinks they still deserve that ninety percent, just because they used to press all those vinyls and CDs. Free markets don't work that way.

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

#32

Post by pmichaud » Tue, Jan 25, 2011, 3:08 PM UTC

tree_of_item wrote: post #19

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 ad…

I don't think those figures are really meaningful. What about the mushroom cloud of new and different bands who are all unsigned, all selling CDs and shirts, and booking shows, etc, while the giants fall? Those are the growth areas, not the giants. It's easier to measure the downfall of the giant and say that's what's happening to "music," but really what we're looking at is corporate revenue. We need a better way to measure the actual music industry, instead of just the dying players who used to dominate it.

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

#33

Post by [deleted] » Tue, Jan 25, 2011, 3:08 PM UTC

davidw wrote: post #30

_delirium wrote: post #26

Earlier quoted context omitted.

> struggling to come up with ways to cover actual production costs, which haven't really changed much The cost of buying food hasn't changed much, but the actual costs of doing the recording/release/distribution have decreased a lot, which lowers barriers to entry and increases supply. To produce a recording whose production values are seen by the average casual music fan as "good enough", and then sell an mp3, requi…

Each type of 'information good' is a bit different: Musicians can at least do concerts, which are excludable and rivalrous, and so make for a pretty good 'traditional' product that they'll get paid for. Writing a book is likely a bit faster than 50 years ago due to computers, but not that much, as most of it's in your head. Isn't it Neal Stephenson who says he writes everything freehand?

[deleted]

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

#34

Post by Goronmon » Tue, Jan 25, 2011, 3:11 PM UTC

jimbokun wrote: post #20

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 ch…

Is there some reference that states music sales should always go up and never go down? Maybe music sales just spiked?

Also, how much of sales descreasing is because people no longer have to buy an entire collection of songs all at once (a CD, for example) and instead get to pick and choose their songs? I know my music purchasing habits have changed from when I was young. I rarely buy entire albums and usually just nab an individual song here and there.

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

#35

Post by _delirium » Tue, Jan 25, 2011, 3:12 PM UTC

davidw wrote: post #21

DennisP wrote: post #18

Earlier quoted context omitted.

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

Eh? Who pays up front? I think it's anything but "simple". There's a big incentive to free ride and let someone else pay.

"Anyone who wants to" is one model, perhaps with some goodies thrown in for those who do. A bunch of musicians have been using that in various forms for the past decade or so (e.g. http://www.neubauten.org/?q=supporters-english), and Kickstarter now sort of formalizes it.

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

#36

Post by DennisP » Tue, Jan 25, 2011, 3:12 PM UTC

lionhearted wrote: post #25

I think we'll see more serialized, short length, low price point works. Will someone pay 99 cents for 20-30 pages of a well-crafted story? I think probably yes. I'm thinking of something like "Harry Potter and the Methods of Rationality" - obviously Yudkowsky can't sell that because of its fanfiction nature, but something of that quality level, I think I'd pay a buck to read 4-5 episodes of it. Especially if I got ho…

Stephen King did exactly that, though he screwed up the incentive. He released a new book one chapter at a time, allowing each chapter to be freely distributed. He charged a dollar for each chapter download, but it was optional. He asked only that 75% of downloaders pay a dollar.

Where he screwed up: he promised to finish the book if his targets were met for the first two chapters. Naturally, for the first two chapters, they were. People were paying extra just to make sure. But after two, donations dropped dramatically. Ultimately, King broke his promise after seven chapters.

Nevertheless, he netted half a million bucks for an unedited novel that he didn't even bother to finish.

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

#37

Post by lionhearted » Tue, Jan 25, 2011, 3:14 PM UTC

lsc wrote: post #29

lionhearted wrote: post #25

I think we'll see more serialized, short length, low price point works. Will someone pay 99 cents for 20-30 pages of a well-crafted story? I think probably yes. I'm thinking of something like "Harry Potter and the Methods of Rationality" - obviously Yudkowsky can't sell that because of its fanfiction nature, but something of that quality level, I think I'd pay a buck to read 4-5 episodes of it. Especially if I got ho…

The thing of it is, the author usually doesn't get much of the cost of the book. If the author could sell as many copies of an e-book on their own as they could with a publisher, they would usually be making as much or more charging one dollar a copy, I mean, if they got to keep all of that dollar.

Agreed. I think the author's cut will settle in at between 60% and 90% for a short piece like that. Combine with instant purchasing via Wifi or 3G, and I think it'll emerge as a business model. The $1 to $3 range is really impulse buy territory, around the price for a coffee. I reckon we'll see more of that model coming up.

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

#38

Post by DennisP » Tue, Jan 25, 2011, 3:14 PM UTC

davidw wrote: post #13

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…

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, whi…

The same wikipedia article also lists a variety of methods to overcome the problem.

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

#39

Post by davidw » Tue, Jan 25, 2011, 3:20 PM UTC

DennisP wrote: post #38

davidw wrote: post #13

Earlier quoted context omitted.

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, whi…

The same wikipedia article also lists a variety of methods to overcome the problem.

Yes, all of which have various strong and weak points.

For instance, light houses are generally constructed by governments.

Do you want the government to be in charge of who gets paid to write or make music? I'm not a libertarian, but I don't really like that idea.

Intellectual property is another listed solution that, despite recent problems, has worked pretty well. As of late, enforcement costs may be exceeding benefits, although it's hard to say, really.

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

#40

Post by _delirium » Tue, Jan 25, 2011, 3:22 PM UTC

davidw wrote: post #30

_delirium wrote: post #26

Earlier quoted context omitted.

> struggling to come up with ways to cover actual production costs, which haven't really changed much The cost of buying food hasn't changed much, but the actual costs of doing the recording/release/distribution have decreased a lot, which lowers barriers to entry and increases supply. To produce a recording whose production values are seen by the average casual music fan as "good enough", and then sell an mp3, requi…

Each type of 'information good' is a bit different: Musicians can at least do concerts, which are excludable and rivalrous, and so make for a pretty good 'traditional' product that they'll get paid for. Writing a book is likely a bit faster than 50 years ago due to computers, but not that much, as most of it's in your head. Isn't it Neal Stephenson who says he writes everything freehand?

One possibility some self-publishing writers are using is to also sell traditional products of some sort, e.g. limited-edition letterpress or handmade editions of their books.

It does lead to different economics, since it rewards a writer by how many ardent fans they have (preferably well-off ardent fans who're collector types), rather than total readership.

Not sure how many total writers it'll be able to support; I suppose we'll see. But then, I'm not sure how many total writers traditional publishing would be able to support either, even absent piracy; the industry seems to be converging on a model that picks and heavily advertises relatively few large blockbusters per year, which only serves to support a fairly small number of writers, though it admittedly supports each of the lucky few quite handsomely.