New Year’s Honours List

Every year, Her Majesty the Queen honours (British Queen, British spelling) those who have enriched the Nation with their success and dedication. In that spirit, I have decided that each year I have decided to donate money to those who provided the free software and resources that have made my life easier and more enjoyable over the past year. I have therefore made unsolicited donations to the following recipients:

Testdisk. While trying to repair a Windows 2000 installation on a triple-boot machine, I accidentally wiped the partition table, “erasing” over 100GB of files. After some frantic floundering, I stumbled across this program, which I used to recover the partition table and all my data.
Mozilla – for Firefox – my browser of choice.
Passwordsafe – My encrypted password repository of choice.
TightVNC – Free remote software that allows me to safely and easily access my PC from anywhere in the world.

I will be making this a yearly tradition. Gotta reward the best – that’s capitalism!

When elephants fight…

Even a casual perusal of my little corner of the web is enough to convince most people that Copyright – and the abuse thereof – is a subject that is dear to my heart. So it was with much interest that I read about the ongoing spat between Macmillan (the publishing house), and the on-line giant, Amazon. Here’s the story so far:

• Amazon buys e-books from publishers at 50% of retail price, and then sets the selling price – typically $9.99.
• Macmillan decide that they want to “go to an agency model” which allows them so set the price and reduces Amazons “cut” to 30%. They also want to raise the price of e-books to around $15.
• Amazon removes the “Buy” buttons from ALL Macmillan products – e-books and print – from their site.
• Amazon later reverses their decision, calling it a “Capitulation” to Macmillan’s “Monopoly”.

Macmillan’s reasoning for wanting to raise the price of e-books is so that they can bring them out at the same time as the Hardback edition without cheap e-books cannibalizing hardback sales.

This makes sense.

They also claim that this arrangement allows them to reduce prices later.

This does not make sense, as they conveniently forgot to mention that they can already do that.

Most of the commentary that I have seen on the subject has been from the writing community. Most of it favors Macmillan, and has vilified Amazon as evil incarnate.

I respectfully disagree. Sort of. Partly.

For centuries, the publishing industry has used the tried-and-trusted Author->Publisher->Wholesaler->Retailer->Customer business model, and for physical books, it still works well. But that business model is not appropriate for electronic media. Why? Because there are no production and distribution costs involved. In theory, an author could write, edit and publish an electronic book and sell it direct to the public.

When I buy a paperback, I can sell it or give it away. It is my property. No-one can take it from me. With an e-book, I am stuck with it. I cannot give it away to someone else (though this is technically feasible, no publisher will enable such functionality unless a gun is put to their head). Even worse, if the publisher decides to yank paid-for content from the customer’s device, there is nothing that the customer can do about it – shame on you, Amazon, for that, if nothing else. So the value proposition is radically different, and no matter how hard you try, the the old rules cannot be made to fit the new .

In spite of this, publishers like Macmillan still insist on clinging grimly to their old model; why? Perhaps it is because like their cousins in the Music and Movie industries, “That’s the way we’ve always done it”. And we’ve all seen just how well that’s working out for them…

I am a firm believer in the free market, but it must be remembered that copyright is a necessary distortion of that market in order to reward creativity and not “kill the goose that lays the golden eggs”. Technically speaking, Amazon is right: Publishers hold a monopoly, as far as copyright is concerned. That is as it should be.

Publishers like Macmillan seek out new talent. In partnership with the authors they help to produce, develop and market their products. They represent the authors. They do their job well and are very good at it.

Retailers like Amazon provide a mechanism to sell stuff. They seek out markets and shift boxes. They also handle returns, complaints and post-sale support. They do their job well and are very good at it.

Amazon is not evil; neither are the publishers. Both are looking after their own interest, and either is free to do business on their own terms.

• Macmillan believe that they should set the price, since they are the publishers and the books are their “property”.
• Amazon believe that they should set the price, since they are… Amazon (well, it works for Wal-Mart!)

They are both, of course, wrong – we, the consumers, set the price with our decision to buy. Market value is “what a willing buyer would pay a willing seller”, but the copyright monopoly distorts that equation.

This whole fight is about who fits in where, and who gets to set the price.

Here’s a case in point: Recently, Amazon put “Dark Side of the Moon” MP3 on sale for $2. I’m not a Pink Floyd fan, but at that price I snapped it up. I would NOT have bought it at the full price of $5. Amazon made money, and so did the artist – money that would not have been made if the publishers were allowed to set the price. The way I see it, I set the price with my buying decision.

I love the idea of e-books, but I do not not own en e-book reader. Why? Cost the reader and the content are both too bloody expensive and DRM requires that I surrender too much freedom for my liking.

• I would pay $3-6 for an e-book; at that price I would buy one or two every week.
• At $10 I might buy 3 or 4 a year.
• At $15, they will never see me – I’ll just visit the library instead.

Returning to the Macmillan-Amazon incident, In theory, Macmillan should set the price. In practice, they will set their prices higher than I am willing to pay. And then, whey sales do not live up to their over-inflated expectations, they will take a leaf out of the RIAA and MPAA’s books – and blame Piracy for their own inflexibility. Come on guys; it’s only ones and zeroes…

Which leads to an African Proverb that most accurately describes this “kerfuffle” as one pundit put it – though I prefer the term “brouhaha”:

“When elephants fight, it is the grass that suffers “

Background Reading:

http://www.authorsguild.org/advocacy/articles/the-right-battle.html

http://www.huffingtonpost.com/susan-piver/the-macmillan-vs-amazon-t_b_444879.html

http://www.businessinsider.com/henry-blodget-hey-john-sargent-ceo-of-macmillan-books-screw-you-2010-1

http://pubrants.blogspot.com/2010/02/amazon-macmillan-kerfuffle.html

http://bits.blogs.nytimes.com/2010/01/29/amazon-pulls-macmillan-books-over-e-book-price-disagreement/

http://www.guardian.co.uk/commentisfree/2010/feb/03/amazon-macmillan-kindle-books

Now reading: Second Variety, by Philip K. Dick

Bad ACTA

The Anti-Counterfeiting Trade Agreement has finally become newsworthy – and it’s about time. This piece in the New York Times goes over the subject in a lot more detail.

Here are my objections to ACTA:

• Is it really about counterfeiting? From what little we know about ACTA, there is a large amount of anti-piracy stuff in there – and most of that has nothing to do with counterfeiting.
• Why all the secrecy? Most treaties are negotiated in public, but this one is being kept strictly on the down-low, and nobody wants to tell the rest of us why. The parties at the table include the Trade Negotiators, the Hollywood “sue-the-customers” Copyright Lobby (what are they doing there?) and … er… that’s it. They’re not even telling us who wants it kept secret; While President Barak “Transparency” Obama has defended the secrecy as a matter of “National Security”, many – including the European Parliament – are calling for the contents to be made public.
• Guilty unless proven innocent? ACTA contains a provision to permanently remove a person from the internet after three accusations of piracy. On it’s face, that is not unreasonable, except that that is three accusations, not three convictions; and that is blatantly unconstitutional in the US – can you say “no person may be deprived of life, liberty or property without due process of law“?

Here are some choice quotes from the article and my response…

“The threat of physical goods bearing counterfeit trademarks is a real one, and it is a priority for ACTA,… Americans do not want to brush their teeth with counterfeit toothpaste or drive a car with knockoff brakes.”

True, but that’s just fear-mongering – we already have laws in place to deal with both of these problems. NEXT!!!

several people with knowledge of the talks said there was no truth to one early rumor — that the accord would empower customs officials to search digital music players for illegally copied songs at border crossings.

Simple solution: There’s only one way to put our minds at rest – Make the contents of the treaty public! Problem solved.

“Given the importance of this agreement to our economy and to consumers, we must not allow ACTA to be derailed by a minority opposed to protecting the rights of artists, inventors and entrepreneurs,” Mark T. Esper, executive vice president of the Global Intellectual Property Center

It makes me feel so much better to know that the Global Intellectual Property Center has our best interests at heart, but I am fairly sure that their constituents are not really artists, inventors or entrepreneurs. I’m not opposed to “protecting their rights”, but these folks forget that copyright is a bargain between “artists, inventors and entrepreneurs” and their consumers and customers. As things stand, that bargain is hideously one-sided and is getting worse, as media conglomerates defend their “rights” at the expense of everyone else… including those “artists, inventors and entrepreneurs” they so vociferously claim to “protect”.

One supporter of the talks, the Motion Picture Association of America, is urging U.S. negotiators not to back down on proposals for fighting the unauthorized digital copying of movies. “Internet piracy has emerged as the fastest-growing threat to the filmed entertainment industry… M.P.A.A. firmly believes that a strong ACTA should address this challenge, raising the level and effectiveness of copyright enforcement in the digital and online marketplaces.”

A-HA! Now we’re getting to the meat of the matter and getting a glimpse at “the man behind the curtain” . Only one problem; piracy and counterfeiting are two different things, and you’re trying to cram them both into one treaty…

Bottom Line: It’s clearly and obviously an attempt at an international DMCA-style law by the back door. Implementing this as an International Treaty will result in law without the legislative process – Congress will not get a vote or a veto; the President will sign it and it’s game over.

I am not a conspiracy theorist, but it’s pretty obvious to me that the Movie and Music industries are behind the secrecy; sneakily trying to create an internationally-enforceable DMCA under the guise of combating “counterfeiting” is just their style. After all, they have some experience in the lack art of Hijacking laws in the dead of night…

For the record, I do not share copyrighted materials. I do not do Peer-to-peer. I try my best to respect the rights of the artists that give of themselves to bring us art and entertainment. However, have little respect for an industry that enforces its “rights” at the expense of those of its customers’ and uses legislation like the DMCA to remove my fair use and criminalize reasonable behavior. If I want to watch my movie on my iPod I should be able to without committing a felony or having to pay for the same thing twice. And letting this industry write the copyright rules – particularly in secret – is like letting the lunatics take over the asylum.

Fear Not

A few days ago I received my annual statement for my 401(k). The results were pleasantly surprising; the return for the year came to just under 29%.

That’s my best year’s return ever.

So what did I do to be blessed with such a superb return? Absolutely nothing.

That’s right; nothing. At the beginning of last year my employers suspended the 401(k) match, so for the whole of last year I did not put in a penny. Aside for a mid-year portfolio re-balance I did not move any money in or out or change investment options. Another 401(k) – for a previous employer – gained 28%, so this is not rocket science.

The irony is that after a two year diet of non-stop gloom-and-doom from the media, they have been silent about this.

I am not ignoring the current situation, nor am I castigating those who are suffering, but when you get right down to it, most of the problems we are experiencing are the consequences of stupidity in one form or another.

• The mortgage/lending/credit/financial crisis was caused by a combination of stupid borrowers and stupid lenders (I refinance my mortgage in the middle of this “crisis” with no trouble at all)
• The financial markets “crisis” was caused by board-level stupidity and too much debt.
• The unemployment crisis was caused by excessive outsourcing, and short-term thinking. Result: short term cost savings, long-term loss of skills.

It is just a shame that so many thousands of people and families have found themselves in dire straits as a result of the stupidity of others.

The media have referred to the current situation as “the worst recession since the great depression“. They are wrong and dangerously so. I have lived through worse. This too shall pass.

They also fail to learn the lessons of the great depression. The Back in the ’30s, the Government tinkered incessantly with the economy for many years; they tried bailouts, they tried stimulus, they tried takeovers and created entitlement programs. But all the King’s Horses and all the President’s men could not cure the great depression – World War II did – though along the way they did a great deal of long-term harm.

What we need is a long term strategy and a common vision. A Government that restrains itself from trying to take charge of everything (I have never had a problem that Washington DC has solved) and leaders of Industry who will take the long view instead of the next-quarter bottom-line view.

This too shall pass. Fear Not.

Now Reading: The Public Domain: Enclosing the Commons of the Mind By James Boyle