A Look At Comparative Market Innovation

Why does all the cool stuff come out in Asia first? [pdf]

“The way business works here is simple,” says David J. Farber. “In America, if you have a potential product, you do research, you try to figure out the size of the potential market. And if it’s a totally new, totally innovative thing, where no one has any idea of the size of the market, and there’s no guaranteed return on a large investment, well, forget it. No American company will touch it. In Japan, it’s usually quite the opposite: manufacturers know that the home market loves new stuff; they’ll take risks there, hoping that something will catch fire and take off. The only U.S. company that’s doing that is Apple, and, honestly, I don’t think that even Steve Jobs, in all of his infinite wisdom, thought that the iPod was going to take off the way it has.”

Which means that for the foreseeable future, American technophiles will continue to experience a chronic case of gadget envy.

Giving Modding a Bad Name

D.C.-Area Video Game Stores Targeted in Piracy Raid [pdf] (See also BBC’s Arrests over Xbox games piracy and Slashdot’s Arrests Made Near D.C. Over Modded Game Consoles)

Pandora’s Cube, Wright said, sold $500 “Super Xbox” consoles, modified versions of Microsoft Corp.’s Xbox video game console, that had been modified to hold larger hard drives and play pirated games.

The modified consoles, some holding 15 or more games already copied to the hard drive, were on open display in the stores.

“They were burning games onto the hard drive and equipping the hard drive with copying software so that the average consumer could just go ahead and copy the software themselves,” she said.

BBC Look at DVD Piracy

Pirates of the high street

“Put an end to piracy. Movies, they’re worth it.”

So says actor George Clooney as part of an anti-piracy message at the start of the DVD.

Except it’s not George. It’s veteran film industry set painter David Goldstein – but the picture is dark and slightly pixelated, making it hard to tell.

Ironically, the trailer is itself on a counterfeit DVD, of The Incredibles, the Christmas Hollywood blockbuster that’s playing in a cinema near you now, or available for about a fiver from markets, suitcases, pubs and car boots across the UK.

[…] But poor quality is not putting off punters, who are snapping up the estimated 60 million counterfeit DVDs flooding the UK market. Besides, sometimes the quality of pirate films is not as bad as these examples.

[…] But while the UK Film Council argues it is a major money spinner for criminals, it’s failing to put off those grabbing the chance to watch new films, often days after their US cinema release.

[…] “People who buy from them are doing so with their eyes open,” says Iain McCord. “They know they’re not getting the best quality, but then they’re not paying for it.”

Oz Passes New Copyright Law

Tougher copyright laws passed [pdf] (See also Slashdot’s Tougher Copyright Laws for Australia)

The FTA for the first time gave performers economic and moral rights in sound recordings.

A number of criminal offences were broadened to target copyright breaches for financial gain or commercial advantage and significant infringements on a commercial scale.

New provisions were introduced in relation to the unauthorised receipt and use or distribution of encoded broadcasts.

And the term of protection for copyright material was extended by 20 years.

The Australian Greens and Democrats voted against the bill, saying it would impact on freedom of speech and media diversity on the internet.

Reworking the Business Model

Musicians Are Making Tracks to Video Games [pdf]

“If iTunes were the story in 2003, then video games are the story this year, as major recording companies found that soundtracks for new games introduced new music to listeners almost more than any other medium,” says Shahid Khan, a managing director with the McLean-based consulting firm BearingPoint. In the past year, Khan has met with music executives to discuss this new market. “In due time, video game soundtracks are going to be as popular as film soundtracks,” he says.

[…] The world of video game soundtracks represents the ’60s, the rock-and-roll rebellious frame of mind I had when I first got into this business,” says [veteran producer Niles] Rodgers, who has worked with Madonna, Mick Jagger and Diana Ross, and whose film scores include “Thelma and Louise” and “Beverly Hills Cop.” “You’re playing a video game 30 to 40 to 50 hours a week, sometimes more than that. The music you hear is an integral part of your psyche, and I think fans are going to demand that we push the envelope more and more.”

[…] Not long from now, a “paradigm shift” in popular music will take hold, [Electronic Arts’ Steve] Schnur says. In the early ’80s, in the time of MTV, the hit song became real when you heard it while watching its video. In about 10 years, he says, the hit song will become real when gamers hear it on their consoles or computers.

Format Fight, Continued

Mickey Mouse Makes a DVD Pick

In the battle for a souped-up DVD standard, major players are lining up behind two dueling formats. Walt Disney Co. is the latest studio to throw its weight behind the “Blu-ray” format, pitting it against an A-list of other Hollywood heavies who are already behind the rival HD DVD format.

Slashdot: Studios Face Off in Next-Gen DVD Format War; BBC: Disney backs Sony DVD technology

DRM, LIbraries and eBook Access

A technological cheerleading article from the NYTimes. I wonder how long it will take before we get some widespread reconsideration of Mr. Potash’s assertion that “the lending model is identical to what libraries already have”? Libraries Reach Out, Online

They are electronic books – 3,000 titles’ worth – and the library’s 1.8 million cardholders can point and click through the collection at www.nypl.org, choosing from among best sellers, nonfiction, romance novels and self-help guides. Patrons borrow them for set periods, downloading them for reading on a computer, a hand-held organizer or other device using free reader software. When they are due, the files are automatically locked out – no matter what hardware they are on – and returned to circulation, eliminating late fees.

[…] “The lending model is identical to what libraries already have,” said Steve Potash, president of OverDrive, which provides the software behind the e-book programs in New York City, White Plains, Cleveland and elsewhere. “But lending is 24/7. You can borrow from anywhere and have instant, portable access to the collection.”

A Telecomm Policy Puzzle for France

A New French Headache: When Is Hate on TV Illegal?

Last month, France’s public broadcasting regulator, the Audio-Visual Higher Council, similar to the Federal Communications Commission, granted Al Manar a license to operate in France as long as it abides by French law. Al Manar had to agree “not to incite hate, violence or discrimination on the basis of race, sex, religion or nationality.”

Four days later, however, the channel broadcast one report claiming that for years Israel had spread the AIDS virus and other diseases throughout the Arab world, and a second calling for war against Jews and the destruction of Israel. The broadcasts set off new demands by French officials, members of Parliament, academics and commentators to shut down the channel.

[…] The status of Al Manar here has become a test of whether any government can legally or technically impose limits on satellite television broadcasts on its soil.

Al Manar beamed its first signal from its headquarters in a Beirut suburb in 1991, but its global reach was felt only nine years later when it began to broadcast via satellite.

The French government largely ignored the channel until it broadcast a virulently anti-Semitic Syrian-made series during the holy Muslim month of Ramadan in October 2003. […]

[…] Dominique Baudis, president of the audio-visual commission, defended the decision to license Al Manar, arguing that his panel lacked the legal tools to block it.

“What to do when images ‘fall from the sky’?” he asked in an opinion article in Le Monde last week. “In no other country where these programs are broadcast, in Europe or the United States, have public authorities intervened. We are alone in attempting something without truly having effective legal means.”


An alliance between Clear Channel and Fox News — hmmmm. Fox News’s Deal Will Make It a Radio Power, Analysts Say

Jack Abernethy, a Fox News executive who on Tuesday was named chief executive of Fox Stations Inc., said the network’s decision to develop its radio division was a natural step in the company’s evolution. “Talk radio is complementary to television,” he said. “It’s not competitive. And because so many people listen in their cars, you have a real opportunity to reach an audience which is watching you on television already.”

In a survey conducted last year by Talkers, Fox News Channel was the primary nonradio news source for talk-radio news listeners, Mr. Harrison said. Andrew Jay Schwartzman, president of the Media Access Project, a nonprofit, public interest, telecommunications law firm, was not surprised by the Clear Channel-Fox union, calling it “a logical fit.”

“Large, monopolistic companies are comfortable with other large, monopolistic companies,” Mr. Schwartzman said. “They have similar business models and similar business philosophies. Put another way, they deserve one another.”

[…] Josh Silver, executive director of Free Press, a nonprofit organization working to increase public participation in media policy, said, “You have the largest radio giant now running the news provided by one of the largest media empires, Exhibit A of what’s wrong with media consolidation.” He added, “Now what Rupert Murdoch decides is news suddenly becomes news.”

Some “Long Tail” Statistics

From John Buckman’s end of year sales: Summary of Magnatune sales so far – sales by artists and albums

A few things the data tell me:

1) Magnatune’s sales don’t follow the 80/20 rule (where 80% of the revenue comes from 20% of the artists) – our sales are more evenly distributed. Maybe because this is because we have no “star” artists but I like to think it’s because all our artists are on an level playing field, with visitors equally able to listen to any artist, and all the music being randomly shuffled in the playlists.

2) We have a “long tail” — Wired Magazine’s important article The Long Tail argues that there is wealth to be made with a catalog of wide breadth. While our catalog is small in comparison to Amazon’swe still see a long-tail effect, with 42% of album sales revenue coming from the bottom 60% in sales rank, and only 20% of sales revenue from our top 10 albums.