Kivus
Archive for economics
September 17, 2007 at 7:34 pm · Filed under dcma, economics, riaa
With the recent release of the new Kanye West album and the new 50 Cent album, I figured it would be a good time to examine the current state of the highly publicized “DRM-free” music. My goal was simple, acquire DRM free versions of Kanye West’s _Graduation_ and 50 Cent’s _Curtis_. Unfortunately, this proved to be a near impossible task.
My first stop was iTunes. I didn’t think either Kanye or 50 were part of the EMI, but I figured it was worth a shot. It turned out both of these albums were only available in the standard iTunes DRM format, so I decided to move on. Stop #2 was Rhapsody. I tried for about 10 minutes to figure out how to purchase any song from Rhapsody, regardless of whether it was DRM-ed or not. I finally gave up and decided that the secret to using Rhapsody must be using their Windows software and moved on.
Stop #3 for me was gBox. I had heard about this site, but didn’t really know a ton. I was once again thwarted, as it turns out gBox is Windows only. Finally, I decided to give Wal-Mart a shot. I didn’t get very far, as the “windows only” message came up on Wal-Marts music store as well.
So after 4 different online music sites, I had actually only been able to browse 1 of them on my Mac. At this point, I normally have simply given up, however, I decided to get out one of my Windows laptops to see what those Windows-Only sites had to offer.
Rhapsody involved downloading their software. It wasn’t too bad, however, I would prefer being able to buy directly from the website. I did a search on Kanye first. It turned out that he was only available in WMA format. I did a search for 50 Cent and _Curtis_ came up, with the “Buy Mp3″ option. I took a closer look though, and saw it was the “edited” version. I clicked on the “unedited” version. No “Buy Mp3″ option. It appears this was only the case for his latest album too, as a number of his other “unedited” albums seemed to be available in MP3.
With strike 1 from Rhapsody under my belt, I moved on to gBox. Apparently, they have structured their site to revolve around the concept of “gifting” music, whether it’s you buying music for someone else or you making a list of music you want people to buy for you. It sounds like an interesting concept, however, their site is practically unusable. The interface is cluttered and confusing, while being particularly brutal for someone who wanted to just do a simple search by artist. Eventually I did find 50 Cent’s artist page, however, _Curtis_ wasn’t listed on it at all.
Down 0-2, I turned to my final hope: Wal-Mart. The Wal-Mart site was easy enough to navigate. I tried 50 Cent’s album first. It came up immediately, _Curtis_, purchase Mp3. I figured I’d hit the jackpot. It was then I realized the flaw in my thinking. Wal-Mart only sells the edited versions of the CDs. So much like Rhapsody, I could only buy the edited version of _Curtis_ in Mp3 form. I didn’t bother even looking for Kanye’s CD since that would have been edited too.
So, after about an hour of playing around in the tubes of the inter-webs, I came up empty in my quest to get un-DRMed versions of Kanye West and 50 Cent’s latest albums. Since it was only 8:30, and I did want these albums, I hopped in my car, headed to Best Buy, purchased both albums at the release day price of $10 a piece, and then returned home to rip them into 256 Kbps AAC files. When it was all said and done, that was the only way I could reach my goal.
July 30, 2007 at 10:14 pm · Filed under conservative, economics, political, web2.0
One issue that most of the web media (i.e. podcasters, tech news websites, etc…) seems to have a consensus opinion on is Net Neutrality, namely: the government should step in and regulate the internet to prevent companies from distributing bandwidth via free market principles. It’s for this reason that the term “Net Neutrality” can be simply defined as “government regulation of the internet.”
Be any measure, the internet has grown at a tremendous rate. Larger quantities of homes now have high speed internet access and people carry a bevy of devices with them that allow access to email and the web. The question then becomes, why would anyone want the government to start interfering with an industry that’s featuring such spectacular growth? Though I clearly cannot speak for everyone, most of the reasons are pretty standard anti-market feelings: the “big tel-co” will start charging more for content to be delivered faster and the “little guy” won’t be able to have his site viewed because it will take too long, or worse, the tel-co will block access to some sites all together. As is usually the case with people who don’t understand basic economic principles, these fears are misguided.
What we have with the Internet at this time is scarce resource. Despite its vast nature, there is in fact a scare amount of bandwidth available for people to utilize, and the most efficient way to distribute this bandwidth with is via the free market. If a company has the financial resources to pay more access to more of this bandwith, then that company should be allowed to access it. It’s simple distribution of a resource. What people normally fail to understand is, there’s a difference between there being “scarcity” in the bandwidth and there being a “shortage” of bandwidth. A common mistake is people are only looking at the existing infrastructure of the internet as it stands now, the cable companies, the DSL companies, utilizing cables to bring the internet into your house. This constricts the market too narrowly however as there are other alternatives such as cellular internet, possibilities for city-wide wi-fi, internet delivered via power lines, etc… that are all in different stages of development. The way people will access the internet in the future has potential to be vastly different from the standard set of technologies we have today. All ones has to do is look at the difference between dial up modems of 8-10 years ago and the speed of cable modems & dsl connections of today in order to see what kind of advances can be made.
Additional reasons against net neutrality include the fact that it’s unnecessary to make a law against monopolistic activities for a specific industry, when there are already laws against monopolistic activities on the books. The most important reason to oppose Net Neutrality, however, is that passage of such as law paves the way for much more heavy handed government regulation of the internet. It ultimately could result in a bureaucracy that controls the internet, much in the same way the FCC controls television. In this period of growth and innovation with the internet, the last thing it needs is governmental red tape.
June 19, 2007 at 9:20 pm · Filed under conservative, economics
In order to properly discuss a number of important issues of the day (immigration, gasoline prices, net neutrality, etc..) a certain level of economic education is required. Now, I’m not talking about some of the stuff you’ll learn in your standard Econ 101 or Econ 102 class, all of the jargon, some of the more advanced supply curve stuff…I’m talking about the type of common sense economics you’d learn in a book like Thomas Sowell’s _Basic Economics: A Citizen’s Guide to the Economy_. Though I’ve taken those economics classes in college, I’ve found that I’ve learned more from reading Dr. Sowell’s book than I did during the 2 semesters of economics education in school. I will try to use the knowledge I’ve accumulated over the years to try and explain a couple of fairly basic, yet commonly misunderstood items.
The first topic I’m going to discuss is a shortage. Probably the biggest misconception about shortages is that a shortages represents an actual physical lack of something (as in, there isn’t physically enough milk for everyone to have enough milk to drink), but this understanding is quite off from what a shortage really is. A shortage means that there is not enough of something for everyone to get what they want, at the current price. There is the key: “at the current price”. Too often people forget to remember that prices have a profound effect on our economy, especially with the distribution of goods. Let’s look back at the milk example again. Let’s say a gallon of milk costs 50 cents. Well, at 50 cents everyone in the neighborhood would probably go to the store and buy some, to the point where the store sells out. When the next person comes into the store, there will be no milk. This is a shortage. Of course, part of the issue is that at 50 cents, people might buy more milk than they’d buy if say, the price were $1.00, and probably more than if the price were $2.00, and progressively up to the point where the milk costs too much for people to buy anything. So if person X buys 3 gallons of milk at 50 cents, they might only buy 1 gallon at $2, and that last person who strolled into the store in the evening and found no milk when it was 50 cents, might find plenty of milk left at $2.00. To sum things up, prices help regulate how much of something someone buys.
The second topic I’m going to discuss is common a misconception about profit, namely, if you’re making a huge profit, you must be charging a lot more per item than it cost you to make said item. A simple example can show how it is possible to make a profit without charging much above cost. Let’s say, for the sake of example, that I develop a new drink, something that catches on as a replacement for both coffee and soda, so people can drink it at all times during the day. If everybody loves this drink and can’t get enough of it, I could conceivably charge as much as I wanted per bottle right? I mean, even if it costs me $1.00 to make a bottle, I could charge $10 because everybody wants it, right? That’s actually not the case (due to a principle known as “substitutes and complements” that’s a little off topic…), so I’ll charge $1.50 per bottle. So I’m only going to make 50 cents a bottle, how could I make any money? Well, if I end up selling 10 million bottles of the stuff, I’ll end up making 5 millon dollars in profit. The basic principle here is I want to increase the number of transactions that have small little profits, instead of having a smaller number of transactions that have a proportionally larger profit. As Dr. Sowell points out, this is the principle behind large grocery stores; they count on people buying a large number of items per visit as smaller profits that add up to a large overall profit. In summation, if people buy a lot of something, a company can make a large profit even if they hardly charge over the cost it takes to make that something.
Though I doubt I just explained those two principles as well as Dr. Sowell does in his book _Basic Economics: A Citizen’s Guide to the Economy_, I hope that provided a little economics background that will help in understanding a few issues that I plan on tackling next. it’s unfortunate that our school system does not provide a strong foundation on the principles of market economics, but thanks to people like Dr. Sowell, there are still ways for people who to get the information they need.
