Artists like Radiohead, with their digitally distributed and variably priced album “In Rainbows,” have gotten the gist of direct distribution (or disintermediation for you nerds1) for a few years now. Aside from the movie Bubble—not a financial success from what I can tell—I can’t think of many disruptive digital distribution events that will be as big as this one. Louis C. K. is letting you buy his latest comedy special directly from him, “No DRM, no regional restrictions, no crap.” More awesome words have never existed in a legal statement. I hope this crushes. And if you’re like me and don’t really think a movie ticket is worth nine bucks, then do like me and buy this twice!

I say “nerds” lovingly.  ↩

Lots of opinions and attitudes feisty have been stirred up by the recent announcement from Netflix that the company will be split down the boundary of physical media (neue nambre Qwikster) and streamed media (Netflix sans DVD). Personally—and maybe this is a first-world problem—but I didn’t even notice the price change, and I’ll—for the moment—keep subscribing to both services. It’s not like I own any DVDs, so getting them in the mail and then saving the plastic for someone else to view is good for the environment and lowers the price of oil. And it’s not like anyone has a streaming service that has everything. And Netflix business decisions are not my problem. What is my problem (as an artist) is what streaming means for artists’ rights to distribute their work.

What struck me as such an odd conundrum is what Bill Gurley, author of Above the crowd has to say about this matter. Apparently, there are laws that imply art can be divided into two separate constructs. In one case, art is something physical that you buy. In the second case, art is something that only briefly occupies the circuits of a computer that you own. In his article he quotes from the first sales doctrine:

“The doctrine allows the purchaser to transfer (i.e., sell, lend or give away) a particular lawfully made copy of the copyrighted work without permission once it has been obtained.”

It’s not at all implied in the law, but the way that companies tend to stream media implies that because I have experienced a work of art, and because I cannot somehow physically recover the bits–the work of art in its basic coded form—I can no longer experience it again. That is strange when one considers that I have a memory—in the very, very personal computer in my head—of said work of art. I could, of course, re-create the work in my own fashion, but that would likely get me sued. This is one of those classic US laws that has become silly over time. I can redraw a lot of art I’ve seen—I’m happy to do it for experimentation, and I wouldn’t ever release a counterfeit. I respect artists too much. Let’s instead assume that information is out and about on the internet and is really “out there“—as if to say, the work of art is not residing on any particular piece of physical hardware at all times. While that’s possible, it’s rare and don’t matter so much. The substrate of a work of art is hardly the point of any work of art.1 Chances are, in the case of streaming artwork, it resides on your personal property (your computer) for a time (and then your brain). Said work of art certainly uses your resources and, if nothing else, adds to your electricity bill. But then, once it’s over, it’s not yours anymore. What a dodo. I promise you that you will forget which cell phone you had in ’98 but that you will never forget a sanctioned smooth part of the wall of the MOMA labeled Art.2 That seems reasonable until such a time that I ensure that my machine copies every frame as it “streams” to property that I own, and physically so. So if I have bits on a DVD, I can trade it, but if I stream it, copy it to my hard drive and give you a copy on a USB disk copy—I bet distribution companies wouldn’t like that so much.

The “first sales doctrine” should include my hard drive—frankly, any equipment owned by me, utilized in the streaming process, should count as a “physical” copy. The business I rented the movie from borrowed my resources (with my consent) and then proceeded to show me a work of art. And I can no longer access it once all the bits have arrived on my equipment? I don’t find that circumstance to be distasteful most of the time, because, let’s face it; most video you can stream isn’t worth watching twice. But this is yet another chunk of the right to copy removed from us and handed over to those who claim that there is such a thing as intellectual property. I rail against the idea of intellectual property quite often and so it should be no surprise that I do not think the separation of a work of art from its medium of distribution should suddenly create brand new rights for the producers of the artwork. It’s not like we’re talking about the artists here—we’re talking about the corporations trying to legalize their business model. Their business is an anomaly that’s only been around for the last few hundred years and it deserves to go down the drain but they would rather ruin Netflix instead.

Of course, there are exceptions. ↩

I’m not making that up. There is a very polished part of a wall at the MOMA that is artwork. Debate me on whether that’s art, but but my point is that you can’t debate me that I’ve never forgotten it since I saw it. ↩

On reading a recent post at Freakonomics on how the media is liberally biased, I was reminded of the problem of an old email that had circulated for far too long (and probably is still circulating). It was a call-to-arms electronic petition to help “SAVE SESAME STREET.” The original email was initiated by two students at the University of Northern Colorado, and as is sometimes the case, regardless of our best intentions, our creations can still retain a life of their own and mutate into monsters. They initiated that email in 1995, and to the best of my knowledge, it is still circulating today. There are a few lessons to be gleaned from that (and other) chain email. One is simply: don’t sign and forward email petitions. By all means, add your name to a web site petition, but email petitions are generally useless. Another lesson is this: triangulate your information if it matters to you and if you want to be effective in what you do. This has everything to do with recognizing that we live in a country with a liberally biased media and that the best way to inoculate yourself against isn’t to engage a conservatively biased media, but rather cultivate a information portfolio.

There are more technical meanings for triangulation (with regard to IT), but I only mean it here as ensuring that your facts have multiple sources at their origination. Daily there are stories transmitted through blogs (and twitter) that are farmed and aggregated on yet more blogs, and often these stories even find their way on to radio and television. These media echo chambers are a sure way to distort an accurate world-view precisely because of the way that humans transmit and value information. Many psychologists argue that one reason that we commonly make conjunction fallacies is because we are inherently “wired” to discount sources of information (Bovens and Hartmann, 2003). As we gather information, we consider its source, and based on that sources’ reliability in the past, we can better consider the evidence. But this process of gathering information is biological in nature and in no way accounts for how we’re getting our information these days, often from multiple sources simply repeating the same information. The repetition is a problem for us, because if we treat each source as independent, we increase the evidence that we have for some event without true justification. 1 This problem is all the more exacerbated by media outlets that are not objective.

Which brings me to the concept of the information portfolio. When constructing a stock portfolio, it’s important to consider how the stocks in the portfolio balance one another out. What you do not want to have is a portfolio of corporate bank stocks or only stocks in the shipping industry. That kind of clumping can get you into trouble when an industry-wide event occurs. Instead, it’s better to diversify—have a little of each industry. And I tend to try to think of my reading matter in the same way. I’ve yet to find a measure for it, but the central tenet in how I decide what I regularly read—there’s always room for new samples—is if I feel they’ve achieved maximum disagreement. If you can look at your regular reading catalog and you don’t find a lot of disagreement amongst the reporters and pundits, your information portfolio could maybe use some diversification.

More and more, I’ve begun to believe that this is why people think airline travel was more dangerous than driving a car after 9/11—when nothing could be further from the truth. On average, every year, nearly 40,000 americans die in car accidents. In 2002, the year after 9/11, there were no fatalities in the US due to airline accidents. but study after study showed that people rated driving as more safe than flying. What if those people had been exposed to 40,000 minutes of car crash footage? ↩

An addendum to James Surowiecki’s “Soft in the Middle”

In the New Yorker, James Surowiecki (of the “The Wisdom of Crowds” fame) makes the assertion that life is getting hard for corporations “in the mushy middle”—high, middle and low being demand markets. The high-end market is one where consumers are concerned with and will pay a premium for quality. Conversely, the low-end markets are made up of consumers that are purely cost-conscious. His two principle points are that reaching consumers with a message of quality is getting harder because of the ready availability of information that critiques products, and also that same ubiquity of information is making it easier to be a niche player. Well, he doesn’t make this second point precisely, but it’s floating around in the article. I think that there is an additional reason why this trend is occurring—one that is on the demand side. The middle class is (and has been) getting squeezed.

It used to be that brands were a signal of quality to consumers, but they are becoming increasingly irrelevant. Or at least they are becoming more like beacons than bat signals—there to help you steer to them, but not as real indicators or anything anymore. He doesn’t cite his information, but he makes the claim that consumers now consider generic store-brand items equally as good as the brand-name items. I know this is true for me in the grocery store, but I don’t know where else this phenomena occurs. Most people don’t know it, but many of the brand name products that you buy are bought by the brands themselves from “private label” companies, usually but not always with exclusive contracts. I know a lot of the wares I used to find on Canal street in Chinatown (NYC) didn’t “fall off a truck,” they were just private label overflow with the brands added illegally. But I digress, and to this point that Surowiecki makes, I think there is a real test to be had in looking at how consumers change their purchasing strategies based on greater quantities of information. I like, specifically, the way he puts it, “In effect, the more information people have, the tighter the relationship between quality and price…” That strikes me as a testable behavioral economic proposition.

He also makes the point that because of economies of scale it has become easier for companies that specialize in “quality” of high-end products to do so with a slimmer margin of cost. I’m not sure what he means since these economies of scale are available specifically to large corporations that can leverage their size against their own suppliers. This is true to the extent that small Chinese factories can’t argue too much with a company like Apple or Dell, but does that in anyway ensure quality? I think that’s entirely up to the standards established by the designers and engineers of the contracting company. Dell would love to be considered high-end; they don’t know how to do it. But to this point as well; that’s it’s easier for any company to focus on high-end products, so long as those companies are working in niche markets (or create their niche), they have whole new channels available to them in order to reach new consumers worldwide.1 To that extent, going after the “middle” consumer isn’t necessary since you can focus on customers with highly particular (or peculiar interests).

As has been pointed out in numerous places (among them, this MIT study the middle class has been and is shrinking. Granted, the middle class and mid-level consumers are not synonymous, but it does mean that there are fewer people overall with large amounts of cash with which to conspicuously consume. Some might be high-end consumers when it comes to power tools, but a low-end consumers when it comes to electronics. Nonetheless, overall, more folks are going to worry about reducing spending, while a few others will have far more to spend on luxury and high-end goods.

So overall, I agree with Surowiecki’s observation that companies would be wise to figure a path out of the middle. But I would also suggest that those companies wanting to avoid mere commodity markets for the more lucrative high-end markets make their number one priority the quality of their goods. The cluetrain has left the station and those not prepared for the overwhelming amount of information available to consumers will be left chomping at thin margins for price competitiveness. Advertising has been the traditional (in the last fifty years or so) way for a company to gain marketshare. With the exponential growth of information channels ahead of us in the next decade advertising will increasingly become noise in the din of public conversation.

Milk is a Danish design firm that makes this really cool desk that will set you back about $5000. Is there really a market for this in Denmark? There might be, but judging from the amount of attention this piece of furniture has gotten—Google’s blog search shows about 300,000 results—maybe they don’t need a worldwide advertsing campaign? And at $5000 a desk, they don’t need economies of scale either. You are paying for truly elegant, timeless design. ↩

Rupert Murdoch is going to take his ball and go home. In a recent interview, he informed all that he intends to eventually block Google and some other search engines from indexing his News Corp. sites and then start charging for content. Apparently, Murdoch has been taking a nap for the last some odd ten years. More ridiculous still, Murdoch seems to have a problem with fair use itself, making claims towards dismantling it. I think it would be a good psychology study to look at what number of billions of dollars actually makes a person completely lose their grasp on reality—it can’t just be one billion. Cory Doctorow’s analysis of the situation is dead on over at BoingBoing along with the best quote I’ve read in weeks:

“So good luck with that, Rupert. have a delightful, Howard-Hughesian dotage, acting out a crazed, Moby-Dick dumbshow against the Internet…”

“World Builder” is a very nicely produced (and touching) short film by Bruce Banit. From the Vimeo page: “A strange man builds a world using holographic tools for the woman he loves.” This is the kind of virtual reality I long for, even if it were just on the Xbox. All the first-person shooter games are great fun, but I wish developers would invest more time in games/open-ended environments like this. I know, of course, that some will point out that Second Life is close, but their rendering engine still doesn’t match what the shooter games manage.1

Of course, I haven’t been in Second Life for about a year and a half–maybe it’s time to re-visit. ↩