Monthly Archives: January 2010

Qui Bene?

J.D Salinger died today.

He was 93.

He was a writer; his claim to fame was the classic “The Catcher in the Rye“.

One good definition of the word “classic”, is “A book that people praise but never read“. I have never read any of his work, and I have no intention of doing so anytime soon.

So why the need to write an obituary? Simple. Now that he is no longer with us, it is time for “catcher in the Rye” and the rest of his work to take its place along with the like of Mark Twain, Jack London, Earnest Hemingway and Herman Melville In the pantheon of our culture known as the public domain.

But it won’t. Not for a while, anyway; under current law, copyright on books lasts for the life of the author plus seventy years – so “The Catcher in the Rye” will pass into the public domain on January 1, 2071“.

The purpose of copyright was to reward creative people enough to keep them creative, to provide them with enough reward for them to do more, but not enough to make them do nothing. For the next seventy years, however, who will receive the royalties?

Who benefits from such ridiculously long copyright terms?

This song is Copyrighted in U.S.,
under Seal of Copyright #154085,
for a period of 28 years,
and anybody caught singin’ it
without our permission,
will be mighty good friends of ourn,
cause we don’t give a darn.
Publish it. Write it. Sing it. Swing to it. Yodel it.
We wrote it, that’s all we wanted to do.

— Woody Guthrie

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The Copyright Playbook

Based upon the behavior of the Music, Movie and Publishing industries – and the laws and treaties that they have foisted upon the rest of us – I have assembled the following hypothetical rulebook:

  1. Intellectual Property is King, even when there’s no such thing
    We know that there is technically no such thing as Intellectual Property – ideas can not be owned, just expressions of those ideas – but anyone who points this out should be shouted down. This is because “a lie spoken often enough becomes the truth” (Herman Goering); so we should keep using this term until the great unwashed (aka our customers) start to believe it.
  2. Longer is better. Forever is best
    Copyright on Books was originally 28 years, which was sufficient reward to authors to encourage them to write more books. It is not enough for us, however, and thanks to our efforts we – I mean “the artists and creators” – now enjoy life+70 years, which works out to about a century on average. The vast majority of Movies, video games and software programs make most of their money inside about five years, but we have managed to get 95 years of “protection”. That’s not enough for us; more would be better – but it’ll do for now.
  3. Our Customers are Thieves and should be treated as such
    It is vital for the continued survival of our business model that all of our products should be locked down, encrypted and resticted wherever possible. The inconvenience to our customers is incidental. Should they choose not to purchase our goods, we should always blame the losses on piracy. To mis-quote Gollum “It has stolen the Precioussss… and we hates it for ever!
  4. The Internet is evil, and must be stamped out
    We have a long and distinguished history of fighting every new technology that comes along. From Piano Rolls to the Compact Cassette, FM Radio, the VCR, the Minidisk (thank God Sony went on to become one of us!), the CD Burner and the TiVo are just a few of the technologies that we have declared to be a threat to our business model, our profit margins and civilization as we know it. Our current nemesis is that piracy and file-swapping networn of tunes know as the Internet. We must mobilize our truthspeakers to spread the word that any technology that might conceivably be used to copy information should be labeled as “piracy” and shut down. The fact that they could be used for legitimate purposes is utterly irrelevant.
  5. Everyone else should clean up our mess (aka “Externalities are good“)
    Our need to make a profit is so important that it is everyone else’s job to safeguard our income and business model, including:
    The Justice Department, who is expected to allow us to investigate without a warrant, threaten with impunity and prosecute without the inconvenience and expense of a Coutroom hearing, and assist us every step of the way.
    The ISPs, who are expected to snoop on their customers, cos we are that important.
    The TSA, who is expected to search travelers’ laptops and music players looking for “contraband” content (anything we don’t approve of or like), and sieze any hardware
  6. Always assume the worst
    Every Computer is used only for swapping, trading and downloading copyrighted material.
    Every download is a lost sale.
    Every lost sale is a full-price retail sale.
    Every shared file has been copied one thousand times.
    The customer is always guilty. If they are not, just threaten them with expensive legal action until the problem goes away.

Now Reading: The Shack, by William Young

The other half of the story

I recently stumbled across an article called “The iTunes Effect and the Future of Content“, which refers to a paper of the same title published by Harvard Business School Associate Professor Anita Elberse

An excellent and well-written paper. However, it leaves out a few variables that I feel should be considered:

  1. The declining value of music: Twenty years ago, long-distance phone service cost $1/min and people put “listening to Music” on their resumé/CV. Today, everybody and his dog has a cellphone and they expect free long-distance service as part of the package. In a similar way music has lost its value – for most of us, music has become a background soundtrack instead of a foreground activity.
  2. A smaller slice of the pie: Twenty years ago, home entertainment options consisted of records/CDs, Television, Videotapes, Computer Games and… that was about it. Now we also have cellphones, smartphones, PDAs, MP3 players, Cable TV, Pay-per-view, TiVo, Game Consoles of varying sizes and sizes… all competing for a shrinking pot (we have less disposable income now than we did fifteen years ago) of entertainment dollars.
  3. Price-fixing hurts profits:  Big Music seems to be in love with the $1/song price point. Actually, they would love to raise prices, but they are terrified of the loss of revenue if Apple refuses and walks away*. They are also terrified of lowering prices: it is axiomatic that the value of experience goods drops over time (which is why the Movie companies keep new releases away from Redbox and Netflix), but Big Music refuses to discount anything – the latest big hit on iTunes costs the same as, say, “Right Said Fred” by Bernard Cribbins (1962). Somebody (I believe that it was eMusic), halved their prices of downloadable music, and sales went up sixfold*. Since downloads are almost pure profit, this means that about three times as much money was made. However, the bold experiment had to be discontinued when Big Music refused to lower their “cut” (estimated to be 88c per song; Big Music isn’t telling) even though it meant making more money overall. Case in point: when Amazon recently put “Dark Side of the Moon” on sale for $2, I bought it, even though I am not a Pink Floyd fan. That’s $2 that Big music would not have made if they insisted on full sale price.
  4. Their Customers hate them: After throwing their weight around for the past fifteen years, the music business has succeeded only in creating some truly awful legislation and spawning a generation that hates them and will work actively to hasten their demise. Inconveniencing your customers, buggering up their computers in the name of “Protection”, treating them like criminals  – and in extreme high-profile cases, suing them – is not a good way to win friends and influence people. Even if Big Music repented of this behavior now, the damage would take at least a decade to reverse (and if ACTA is anything to go by, repentance is the last thing on their minds). Protestations of piracy notwithstanding, Allofmp3 has proved that people are willing to pay to download music… just not as much as big music insists that their product is worth in everybody else’s eyes. Value is defined by “what a willing buyer would pay a willing seller“, not by how much the rights-holder thinks it is worth.
  5. Industrial Inaction: The music industry’s unwillingness to come up with a standard format for marketing old music has resulted in the loss of millions – perhaps billions – of sales. Here are a few of the songs I have not been able to download a legitimate, DRM-free MP3 version from anywhere…
    Gerard Kenny – Living on Music
    Modern Romance – Cherry Pink and Apple Blossom White
    Chas & Dave – Rabbit
    The Main Event – Gonna do My Best
    Tight Fit – Fantasy Island
    and, of course, “Right Said Fred” by Bernard Cribbins..!
  6. Inability to abandon an out-of-date business model: The Music business was never about music. It was never about art: It was about selling plastic disks. Everything else – marketing, production and distribution – were built around this concept. This is why the music business switched easily from Vinyl to CD, but going from CD to digital was far more painful; ever since digital music and the Internet reared their ugly heads, Big Music has been kicking, screaming and throwing corporate hissy-fits. If they could wave a magic wand and make all forms of digital music disappear, they would. If they could make the Internet disappear they would do so in a heartbeat. But the world has changed, and they have not.
  7. DRM hurts sales. Nuff Said.

Elberse has done an excellent job nailing down the facts, but she had missed the emotions involved and the way that they affect purchasing decisions. Those factors affect the underlying numbers in a way that is impossible to quantify. It’s just a shame that the comments area at the bottom of the page is broken.

* Source: “The Perfect Thing” by David Levy

Why Bank of America is doomed

I have been a customer of Bank of America (“BofA”) on and off for about fifteen years. More off than on.

My first experience with them was when I came over to work in the States. in 1995, my employers had moved me to California. My boss knew the manager of the local branch of BofA, and he was able to set me up with a checking account. He was a great chap, and was able to make things happen. Unfortunately, he was unable to approve me for a credit card (even though I had an account with them), and I ended up getting one through MBNA instead. I closed my bank account six months later when I left the state.

My next encounter with BofA was a few years later when MBNA was “eaten” by BofA and I received a new card in the mail. This was odd, as the card I already had still had two years to go before its expiry date. I called up BofA, only to find that the old card had already been canceled without my knowledge or consent. When I called and asked why they had done this, they explained that I “needed” a “branded” card. I explained that MBNA had been good enough to offer me a Credit Card when BofA wouldn’t… then I closed the account.

My next run-in with BofA was in 2009. Countrywide, with whom I had my mortgage, had just been “eaten” (I used the term deliberately, as the process is analogous to taking something intricate and successful and turning it into crap) by BofA. I had no problem with this, as they did not have the ability to change any part of the Mortgage, and life went on as normal.

In late 2009 we decided to refinance. We spoke to many Mortgage Bankers and Brokers, and were subjected to a confusing array of interest rated, fees, terms and conditions. By far, the worst deal that we were offered was with – you guessed it – BofA, who offered the worst deal of all – the highest fees coupled with the highest interest rates. The best deal was with the Broker with whom we got our original Mortgage, who have my wholehearted recommendation. Like many lenders, they re-sold the mortgage, and I was not surprised to find that I was once again with BofA. I got the deal I wanted… but it was no thanks to BofA. It is amazing to me that they would rather drive my refinance business away than make an effort to retain the business.

At the same time, BofA were once again busily crapping in the nest that others had built. They decided to erase Countrywide from existence, and part of that meant removing their perfectly-good and familiar website with Bank of America’s, which meant I had to…

  • Create a new profile on B of A’s website
  • Create a new and less-secure password (Countrywide’s allowed “special characters” such as !, @ # $ and % in their passwords, while BofA did not, which made the passwords significantly less secure)
  • Re-link my bank accounts.

All because they couldn’t be bothered to migrate the information.

No wonder Dave Ramsey refers to them as “BoA”, deliberately comparing them to a large strangulating snake…

Background Reading: B of A forecloses on paid-for house!

Wally of the week: Terminix.

When I purchased my house, it came with a Termite warranty. This warranty is renewed at the end of every year.

Every September, they send me a bill.

They send me another one in October…

…and another one in November…

…and another one in December…

…and another one in January.

These folks must hate trees. But that, while silly, is not worthy of a rant by itself.

Last year I decided to pay the bill online for the first time. So when time came to pay the bill once again, I did the same thing again. Sign on… authorize a payment from my saved Debit Card, get confirmation… done.

Easy. Or so I thought. Until I received an e-mail from them stating that the Debit Card had been declined. I soon realized why: Last year the card expired and was replaced by an identical one with a different expiry date. Thinking that this would be speedily fixed, I replied to the e-mail.

The reply bounced. Apparently the sender’s e-mail address – “prd.vger@terminix.com” – was bogus, even though the message was genuine. Apparently it never occurred to them that someone would actually reply to one of their e-mails. I replied with a general inquiry to “webmaster@terminix.com“.

That one bounced, too. What the…

I figured that a “bounced” payment would ring some alarm bells. So I waited for them to get back to me. Weeks went by.

Finally, I went back to the website. All payment links had disappeared. How odd…

In disgust I finally phoned them up and did a payment down the phone.

I have no disrespect for the local folks who go out and kill termites every day. But whoever is running the website office needs to have their head examined.