On 3/8/2011 2:36 PM, Lauren Weinstein wrote:
Piracy vs. Lost Sales
http://j.mp/fmgMWS
Does every pirated copy represent a lost sale? Back in the heyday of
phone phreaking, which as you know I only, uh, have, uh, indirect
knowledge about, AT&T claimed that every phreaked call represented a
potential chargeable call lost. But how many 18 year-olds were going
to pay $3/minute to call the "speaking clock" in Sydney from L.A.? To
argue that every pirated music file or movie actually represents a
lost sale doesn't make sense. This doesn't make piracy right, of course.
I'm glad to read about Minecraft's approach. I've been saying for some
time that the people who succeed in the Web 2.0 market are going to be
those that can come up with a business model that doesn't depend on
artificial scarcity. So the fact that somebody is doing that is good news.
Maybe with Notch leading the way, other businesses will develop
innovative, agile business plans that can make money even in the face of
widespread copying. This is needed, because I just don't see any way to
prevent the copying. It has simply become too easy.
That said, a call from LA to Sydney probably _did_ represent lost
revenue for AT&T. Not because an 18yo was going to pay $3/minute to
call the "speaking clock". But because back then there were a limited
number of phone lines, and a "free" call used up a line that could have
been used for a paid call.
I remember being in Japan in 1975. One "fringe-benefit" provided by my
employer was a 5-minute call back home once a week. (We would save
these up and make 20 minute call once a month.) We would go into the
office on a Saturday, call the long-distance operator, and "book" a call
to Los Angeles. Then we would wait, and 5-15 minutes later the operator
would call back and place our call. So it seems pretty obvious that
there was a shortage of lines back then.
[ Barry, while clearly the international capacity back then was
far, far less than today, there's lots of evidence that much
of the perceived "scarcity" was artificial at the time. For example,
phone phreaks, using *exactly the same access points as AT&T
operators would use* only on extremely rare occasions encountered
international busy circuits when placing calls. And there was
plenty of evidence that AT&T was willing to play fast and loose
with the "scarcity" argument, as was the case when they tried
to shut down our "ZZZZZZ" entertainment line here in L.A. I wrote
up that saga -- including how I ended up in a meeting room at
the California PUC at the age of 20 or so -- back in 2009 as
"'Z' vs. AT&T" - http://j.mp/hscu5T (NNSquad).
-- Lauren Weinstein
NNSquad Moderator ]
