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April 8, 2005
Hal Varian on Grokster: It's the size of the pizza, stupid
Hal Varian, kick-ass economist from UC Berkeley, lays out the case in the New York Times for why keeping Grokster legal could be a win-win for both tech and content companies:
So what should the policy be for new technologies like Grokster? I advocate the Pizza Principle: If you want everybody to get as big a slice as possible, you first have to figure out how to bake as big a pie as possible. Once you have a nice big pie, you can let people fight over how they slice it up.
With respect to technology, the Sony decision got it right: encourage technologies that create more total value. Then, let companies fight to find business models that deliver that value to consumers. They can be awfully creative when they are forced to be.
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