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)

#51

Post by loewenskind » Tue, Jan 25, 2011, 3:57 PM UTC

bediger wrote: post #45

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…

Yes, there are indeed two costs of production, and free market economics has terms to cover both: "Sunk costs" and "marginal costs". Free market economics says that the price of a good in a competitive market falls to the marginal cost of production, not to the sunk cost of production. Read up a bit, I think you can find any number of good college freshman texts on "microeconomics". Then come back and argue.

This theory is, first of all just a theory and second of all from a time before there were products with 0 marginal costs. Sunk costs have to be covered somewhere because if you can never make any money off of the product then why would you invest in creating it?

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

#52

Post by randall » Tue, Jan 25, 2011, 3:58 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 only case where I can think of an example of this might be Photoshop or design software. I think many-a cash-strapped-highschooler pirates Photoshop, then picks up some good design skills, and in turn forces his/her professional workplace to pick up a copy of Photoshop.

Hardly a data "smoking gun," and obviously software is different than media, but potentially food for thought.

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

#53

Post by _delirium » Tue, Jan 25, 2011, 4:00 PM UTC

loewenskind wrote: post #49

_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…

>there are quite a few people who love what they do so much that they're actually willing to subsidize their own art-production by working other jobs (e.g. waiting tables). Do you really see this as a good thing? When the only way to make money is to do something that can't be given away and anything digital must be given away?

I don't think it has to do with digital or non-digital. It has to do with the fact that people like forming bands, making music, writing poetry, etc. They like it so much that many of them---even people who are good at it---would be willing to do it even if they didn't make any money at it. Hence, it's hard to charge a high price for labor that people are willingly oversupplying.

Contrast with waiting tables, where people do not enjoy doing it enough to do it for free. If there were a lot of people who loved it so much that they were willing to wait tables for free in their spare time, wages would probably go down there too...

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

#54

Post by loewenskind » Tue, Jan 25, 2011, 4:01 PM UTC

DennisP wrote: post #36

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 chapte…

That's a shame. He should finish it, eat the hit and then be smarter next time. Sounds like he could make a lot more this way if he doesn't destroy his credibility.

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

#55

Post by ckcheng » Tue, Jan 25, 2011, 4:07 PM UTC

CWuestefeld wrote: post #42

Musicians have always relied on other revenue sources. Performance is the big one, but merchandise and licensing matter too. Authors don’t have the same options. Dickens engineered a profitable reading tour of the United States, as new-model enthusiasts always point out. But how many authors could do that today? The author never really addresses his own question, leaving us to assume that authors couldn't generally s…

> books were sold by subscription, with sections serialized and delivered periodically

Isn't that like what Manning does with its MEAP (early access program)?

http://www.manning.com/

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

#56

Post by NickPollard » Tue, Jan 25, 2011, 4:08 PM UTC

DennisP wrote: post #31

tree_of_item wrote: post #19

Earlier quoted context omitted.

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 b…

Exactly. Many musicians are doing better than before, due to getting a larger portion of income through live performance than recorded music. [1]

The recording industry might be shrinking, but the music industry is growing.

[1] http://www.economist.com/node/17199460

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

#57

Post by davidw » Tue, Jan 25, 2011, 4:09 PM UTC

_delirium wrote: post #53

loewenskind wrote: post #49

Earlier quoted context omitted.

>there are quite a few people who love what they do so much that they're actually willing to subsidize their own art-production by working other jobs (e.g. waiting tables). Do you really see this as a good thing? When the only way to make money is to do something that can't be given away and anything digital must be given away?

I don't think it has to do with digital or non-digital. It has to do with the fact that people like forming bands, making music, writing poetry, etc. They like it so much that many of them---even people who are good at it---would be willing to do it even if they didn't make any money at it. Hence, it's hard to charge a high price for labor that people are willingly oversupplying. Contrast with waiting tables, where p…

I think your 'oversupply' might be in the number of people willing to do X (acting in films, music, writing...), which doesn't necessarily correspond to the set of people who are actually good at X. The ideal solution would let people who are good at X do more of it, as this benefits both them and everyone else. In other words, we're "better off" with Humphrey Bogart acting full time, and J Random Dude moving on from waiting tables and dreaming about movies to something he's actually better at (making sets or something).

Were films something people could freely and legally copy, we might see a shift to handycam amateur efforts funded by table waiting, and fewer things like Avatar, which would require approximately 281328282 man-years of table waiting to produce. I think that we would lose something in that transition (although other things would be gained).

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

#58

Post by forensic » Tue, Jan 25, 2011, 4:13 PM UTC

DennisP wrote: post #36

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 chapte…

Wikipedia says he broke his promise because he "ran out of stories" not due to payment

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

#59

Post by forensic » Tue, Jan 25, 2011, 4:22 PM UTC

ghaff wrote: post #23

maguay wrote: post #9

There's another way to look at it. eBooks sales, whether in Kindle, iBooks, or another marketplace, end up with similar dynamics to the App Store in iOS. People have paid $0.99-$4.99 millions of times over for apps such as Angry Birds that would have sold far fewer copies as a $19.99 boxed PC or game console game. I think eBook readers actually encourage buying books, and for the vast majority of the public, it's so…

The (hypothesized--I think it was Tim O'Reilly who has written about this) issue though is that, with books, time is much more of a limiting factor with books than with songs or simple iThing games. Even if an author makes substantially more per copy with an eBook, there's a limit in how many more copies they'll sell even at a much lower price; people only have time to read so many more books. I'm not arguing it's al…

Since the invention of e-books and digital audiobooks I probably buy 3-10 times more of these.

Audiobooks in particular, of the on-demand variety where I can instantly get them on my iPhone through the Audible app, have led to me reading a HELL of a lot more. It's easy and convenient.

eBooks also help because I buy more books and search through them. I can also read them on mobile devices while I take a shit in public washrooms.

Right now I am in the middle of:

* 2 non-fiction audiobooks

* 3 fiction audiobooks

* 4 standard ebooks

I task-switch between these 8 products based on my mood. I could never carry around 8 dead trees or fit 5 audiobooks onto my walkman. It just wouldn't happen.

Digitization has led to me spending way more money on authors. In the past I would just get dead trees from libraries or friends, or not buy them because they were too much money.

Now that I can get an audiobook for an ~$8 audible credit I try out new things way more.

That I can instantly buy an ebook I need for ~$10 means I read a lot more. If it's 2am and I want to read some particular book, I can instantly get it, I don't need to put it on the shopping list and waste so much time finding a bookstore and standing in line and searching through stacks of shelves.

I spend more time reading/listening and far less time deliberating, searching, planning, and waiting.

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

#60

Post by drblast » Tue, Jan 25, 2011, 4:22 PM UTC

Of all the literature produced by the current system in the last century, how much of it is actually valuable in the sense that having it is a great boon to society?

How much of that would not have been produced had the publishing industry not existed? I'd wager that authors would still produce literature regardless; you'd have to be insane to write a book with the sole intention to live off the proceeds. It hardly ever happens NOW. You could make more money cleaning pools.

The loss of the entire publishing industry is not necessarily a great disaster.

Like publishers, the music industry never produced culture; it marketed the latest fad to teens relentlessly. That's a live-by-the-sword, die-by-the-sword business model. When teens decide you're no longer cool or necessary, there's no alternative but bankruptcy.

Now, if I could actually find physical copies of great new music that isn't compressed all to hell for not-outlandish prices, I'd buy it in quantity. But that's not what the music industry is selling.

Same for publishers; these people aren't providing the same value they used to, which is to cull through the crap and only offer the good stuff to the customer. The Internet does that for me now.

As for the financial incentive for the author to write, I really don't care. A patronage system could work. Public funding could work, and might even cost less than enforcing copyrights.

But nobody owes anyone else a living, least of all the middleman between the author and the audience.

If we're really worried about piracy and the book is that great, only sell paper copies. Self-publishing makes that possible too.