Here we'll explore the nexus of legal rulings, Capitol Hill
policy-making, technical standards development, and technological
innovation that creates -- and will recreate -- the networked world as we
know it. Among the topics we'll touch on: intellectual property
conflicts, technical architecture and innovation, the evolution of
copyright, private vs. public interests in Net policy-making, lobbying
and the law, and more.
Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.
ETA: I am editing this article to correct errors of fact. As always, any mistakes here are my own fault.
In a word, they're socializing the cost. The price PeerJ charges you is, in effect, a fee to submit. There's no guarantee that your article will be published, only that by paying the $99 fee you'll get it reviewed.
ETA: Peter Binfield, the publisher of PeerJ and Jayson Hoyt, the CEO, have written comments you can read below kindly letting me know that I've misunderstood the model. There is indeed a $99 up-front option, but it's not required. If you choose not to pay that and do get published you pay a $129 cost.
This compares with a PLOS publication like PLOS1 that might not take your article for review but if it does so it pays the cost at that time for you and only on publication do you pay your $1350.
Well, a little math will show you that if they publish 1 out of every 14 submitted articles then PeerJ has a better revenue model. The publication rate for submitted articles at most high-quality journals is probably less than that. Many journals don't publicize these rates (presumably to avoid discouraging potential authors) but a rate of 1 in 20 or 1 in 25 would not surprise me. In fact, one of the things that makes certain journals so prestigious is that they are hard to get into. Often an author will find that a very good paper isn't published not because of anything to do with the paper but just because the journal only has resources (pages, editors, reviewers) to handle a fixed number of submissions. A common academic strategy is to submit a potential publication first to the best-possible venue for it and if it's not accepted there then turn around and re-submit it to other places.
ETA: Binfield wrote in his comment that they "...expect to end up accepting ~70% of all submissions". That's a fantastically high rate and assumes a level of quality in submitted papers that was not present when I was doing academic peer reviewing. It will be interesting to see what the numbers end up being.
The review-reject-resubmit cycle can lead to long delays for publication, which in turn relates to another pointer art sent: a notice in Nature's blog about the White House's incremental move toward open access. The new policy is that "taxpayer-funded research should be made free to read after a year’s delay" which seems like a lot on the face of it but is still shorter than the often multi-year delays involved with pay-subscription journals.
Once upon a time Dave Barry wrote a great column about how corporations in general used the phrase "for your convenience" to mean "we're doing whatever the hell we please but we want you not to hate us for it." Companies make changes that people hate but slap the "for your convenience" label on it on the theory that people are stupid and easily duped. His edge case example was something like a supermarket announcing "For your convenience we've filled the parking lot with rabid weasels. Have a nice day."
Where David Kravets wrote "online copyright scofflaws" you should read "anyone who happens to have the misfortune to be assigned responsibility for an IP address that the Cartel thinks is doing something wrong." Because, remember, that's what we're about here - taking IP addresses and smacking people for things we claim were done at those addresses. The Cartel can't even be bothered to remember its own history, which involves claiming that mysterious "Someone Else" used RIAA-owned IP addresses to pirate content.
Where David Kravets wrote "backed by the President Barack Obama administration" you should read "pushed by the Cartel flunkies who have entirely captured the DOJ and the US Copyright office in the last four years." I doubt Obama gives a rat's ass about this stuff, but you can bet that the people at DOJ who are eyeing juicy jobs at major studios and labels after their tenures in Washington are done.
Where David Kravets wrote "To be sure, the deal is not as draconian as it could have been" you should read "Somehow the ISPs managed not to cave entirely to the Cartel's demand that people associated with IP addresses it doesn't like be tarred, feathered, and dragged through the public square, as if piling on ever-more-draconian measures would somehow eradicate hundreds of years of people sharing creatively."
OK, I give up. I can't even maintain a sufficient level of outrage to make this entry funny. It's pathetic, it's sad, and it's hopeless. No one elected the Cartel to enforce laws and I certainly didn't pay my ISP hundreds of dollars/year to filter my content. I eagerly await the inevitable day when DOJ is forced to degrade its own network because, hey, people are using DOJ IP addresses to torrent movies, too.
If you read my lengthy yard-sale post earlier this month, I discussed how the new consoles coming out - Microsoft are apparently debuting theirs at E3 - have been rumored to have functionality that would hamper the playing of used games. Sony, despite having been granted a recent patent in this area, appear not to be doing that. The money quote is: "[gamers] purchase physical form, they want to use it everywhere, right? So that's my expectation."
Instead, what appears to be happening is a more gentle approach, whereby Sony are planning to roll out a variety of services such as streaming, cloud-based game libraries, and so on. These services should get people used to the idea that a console game isn't just a cartridge and if the services are priced to be competitive with existing game stores such as Steam, the gamer will get used to frequent sales and when they want cheap games they'll buy from these services.
I think this is good news for gamers, good news for first-sale rights, and good for the marketplace. Now to see what Microsoft's answer is.
Why TV Ad Revenue Goes Up and Internet Ad Revenue Goes Down
This is pretty far off the nominal Copyfight beat but I could not resist pointing to Felix Salmon's column on "Content economics." It's a very good look at why Net advertising is not the same as/does not replace TV advertising and why broadcast TV can keep raising its prices even as its viewership shrinks. Hint: it's all about the fragmentation.
Flaherty's issue appears to be that there are patents covering aspects of 3D printing and therefore companies are not inventing things de novo without constraint. This is hardly a shock - every business of the last couple centuries has been born into a world where patents existed and some of those patents were even relevant to the new field of business. Indeed, the point of a patent is that you've introduced some innovation or improvement, often by improving upon existing related processes. Much of homebrew 3D printing is innovating and improving on the areas of 2D printing and process manufacturing that have existed for decades. To find that there are relevant patents is far less surprising than it would be if there were no patents.
Furthermore, although the last few years have seen a surge of companies, models, and innovations in 3D printing, the ideas and technologies go back quite a ways. Again, older technologies are often covered by patents, upon which new inventors improve. The specific 10 patents that Flaherty highlights seem pretty normal to me, despite how much he wants to hype things up for this story.
What do you do in such an environment? Well, you do what businesses have always done - you deal with the existing intellectual property. You can license it, innovate around it, show that your machine or process doesn't infringe the specific claims of the patent, file a patent on your improvement that cites the existing patent as recognized prior art, and so on. Bringing 3D printing to every home that wants one is a laudable goal but it's no more likely to be "stymied" by patenting than any other home-use machine, though Flaherty seems fond of hyperbolic descriptives like "fortresses of patents".
In fact, Flaherty seems to hyperventilate over companies doing exactly what I describe. He notes that patent #5,387,380 is held by MIT, which licensed it to a company that... hold your breath, it's scary! ... innovated on it and filed its own patents on its innovations. By the way, MIT doesn't sign exclusive licensing agreements - anyone else who wants to go license that patent from MIT and innovate on it is free to do so. He also seems unhappy that the current crop of 3D-printing companies like 3D Systems and Makerbot are themselves applying for patents.
This is just silly FUD. Patents in 3D printing aren't special - they have all the same strengths and weaknesses as patenting in other industries. It's just that home 3D printing is hot right now and sexy and ... well, that sells more ad space.
As I and others noted back then academic publishing is a gigantic scam in which free labor (peer reviewing) is used to filter works submitted for free by people (researchers) who got other people (usually taxpayers, corporations or endowments) to pay for the research in the first place. All this free and paid-for-by-others stuff is then turned into extremely expensive dead trees by publishers like Elsevier who charge so much that even very rich institutions like Harvard are saying "enough" and refusing to pay more.
Around that time, Tim O'Reilly put his money behind people who included Peter Binfield, the managing editor of PLOS ONE with the goal of changing the game entirely. The result, known as PeerJ, has been hard at work and this week published its first articles, with a pricing model that - to use a much-abused term these days - is majorly disruptive.
PeerJ promises to combine revolutionary low pricing levels (like, USD 99) with high-speed turn-around, addressing two of the worst problems in academic publishing. PLOS ONE has a great pricing model compared to traditional publishers, but PeerJ blows even PLOS ONE out of the water on pricing. Taylor also reports that PeerJ's user experience is first-class, something that ought to attract academics who are still leery of working with non-traditional publishers.
And yet... and yet, I cannot help re-asking the question that I think forms the heart of this problem: what about tenure? Is there any evidence that, five years on, non-traditional journal publications have the weight and impact that traditional journals do? Because Taylor's subhead is about "the moving-prestige-to-open-access dept" and last time I looked open access wasn't granting tenure, and when you submit a grant proposal to DARPA or NIH or your favorite funding source, they still require you to submit a publications list and they still care where you publish.
Yes, PeerJ is bringing revolutionary and much-needed pricing change. But until someone can show me the professors who got tenured publishing in PeerJ or PLOS ONE, there's still going to be a long distance between publication and prestige.
While we wait for a decision on Kirtsaeng a couple of interesting news items have crossed my radar and I wanted to write about them together, as they both relate to the marketplace for used electronic goods, and the non-trivial relationship of those goods to piracy. This is a bit of a long walk but I promise it all ties together.
The first item is the reporting around Amazon's recent patent announcement. This isn't an actual service that Amazon is providing, or has even stated that it's going to provide. Instead, it's a patent they were awarded at the end of January that purports to cover a marketplace for digital objects. Putting this out to the news wires is clearly them floating a trial balloon.
The patent (#8,364,595) involves creation of a "personal data store" for the digital objects. While you own the object you get to download or stream it up to a certain number of times controlled by DRM or policy. Since there's already a mechanism in place to limit your access, it's pretty easy to say "OK, I'm done with this object and no longer want it." At that point, your remaining number of accesses gets set to zero, and you can dispose of the object by selling it to Amazon (or whoever licenses the patent) for some amount. The used-object vendor can then either apply some more DRM/policy to give the next owner some more downloads or streams, or just keep the original counter going. Presumably when you buy a used digital object there would have to be some disclosure that your use of it was limited.
His objection is that Amazon would be making money off the used e-book, but he wouldn't. I find this baffling. To my knowledge, Scalzi doesn't object to used bookstores for physical books. I suspect he's also purchased a used CD or LP in his day, as well. As far as I know, in those cases no additional money is flowing to the original author. This, after all, is the whole point of first-sale doctrine, which is at the heart of the Kirtsaeng case. I confess I can't see any significant difference between the e-book and physical book situations. In fact, it's quite possible to buy used physical books right now through Amazon. It just so happens that Amazon has things set up so it's a front for third-party sellers, but it gets money on every sale and in principle nothing stops them being originating sellers. So what's the big deal here?
Other people have a different attitude toward used digital goods, and piracy. Take, for example, games. Right now we're at an odd place in the console gaming industry in that all the popular consoles are using old-generation hardware. New machines are on the way: Microsoft and Sony have both shown previews and talked about their upcoming devices. Both look fairly similar from a hardware perspective, but there's a potentially huge split coming in how the next generation of consoles treats used games.
For a while now there have been rumors to the effect that the next Xbox will try to block users from loading used games whereas the Sony console will allow it, or vice versa. Naturally, this is upsetting to places like GameStop that make a great deal of money from reselling used games. In a speech to the Goldman Sachs Technology and Internet Conference, GameStop's CFO Rob Lloyd showed his company's research that indicated a solid majority of consumers were opposed to having used games blocked and wouldn't want to buy a console which did that. His research also claims that most used games are older titles, with the clear implication that the used market isn't cutting into new-game sales, since the volume of game releases often means that all but the biggest-selling titles are cleared from store shelves within 60 days.
In fact, the makers have taken the unusual step of talking directly to people who have illegal copies of the game, asking for feedback, mentions in tweets, and upvotes on Steam's Greenlight, which is kind of Survivor for indie games. If this works out, then some people who pirated the game will like it and buy a copy. Some people will talk about it on Twitter and elsewhere, which is free publicity. And some will upvote it, which means more people see it on Steam and buy it because it's cheap there.
And that brings me back around to the console/used games issue. Steam, like Amazon and unlike GameStop or Walmart, doesn't have shelves to empty. Games stay there virtually forever. So long as the maker still exists to provide more license keys, Steam can sell additional copies. Steam has established itself as a place where older games are available at steep discounts. This begs the question of why would you buy a used game when you can expect to get it new from Steam (or Green Man Gaming or similar site)? It's entirely possible that the ubiquity - the effectively infinite shelf-life - of downloadable games will do more to kill the used-game market than anything Sony or Microsoft do.
And that, at last, brings me back around to the "I hate reselling" attitude that John Scalzi expressed above. Because here's the thing: if you can make a game for a console that blocks used games or you can make a game for a console that allows used games, from which you don't profit, which would you do? Well, if you think you'd lose sales to used games then you might want to go with the locked-down platform, just as Scalzi would have you go to piracy before resale. Except you may lose more original game sales because people might not buy that locked-down platform in the first place, as GameStop is arguing.
But if you believe that your game will always be available (e.g. through Steam) to people who want it then you can afford to wait for the less-popular console to gain market share. And of course there's a knock-on effect in that if people see more good games being released only for the locked-down platform they may just swallow hard and buy that platform anyway.
The big deal, then, is that it's not as simple as "Amazon reselling used stuff = bad". It's that we're witnessing a rapid evolution of marketplaces and business models with lots of players jockeying for position, all of which makes me hope even more fervently that SCOTUS doesn't "drop the banhammer" as we gamer geeks say.
Salmon notes that the tip jar and accompanying text give the impression that the blogger needs the tip revenue to support her hard work. However, a slightly deeper look reveals that not only does she have another "day job" that provides income, she heavily uses affiliate links both on her blog and on social media like Twitter. Her actual income from these links isn't known, of course, but given her popularity and standard conversion rates it's possible to generate estimates. Given that these estimates appear relatively large, it's a fair question to ask whether the tip jar on her blog is actually necessary, in the sense of "I will not have money if you don't leave a tip here."
That's a very different situation from the musicians of NoiseTrade, or even Amanda Palmer's famous Kickstarter. In those cases it's clear that the funding provided by the sponsoring individuals is all there is. It's a level of transparency that may be necessary for this kind of model to work. Palmer's problems with her Kickstarter included complaints about its size - to which she provided a breakdown of how the funds were to be used. It's natural for people to think "hey, you have $VERYLARGEAMOUNT, why do you need it?" and it may be incumbent on those who are asking for public donations to include a publicity/transparency plan in their campaigns.
This is more or less the core question posed by music download site NoiseTrade. The site provides hosting and tools for music creators who are willing to give their stuff away, along with a fan-settable slider. This slider, labeled "Tip", gives the downloader the option of paying 1-25 dollars for what's on offer. There are also usually free listening samples so you know what you're getting before downloading.
This is similar to the set-up that many independent artists have on their own Web sites, and the tradition of setting out a tip jar on the piano, or an open guitar case with a few symbolic bills or coins in it is as old as anyone can remember. (I'd be curious to know if this tradition is world-wide. I've seen it in North America and Europe, but not elsewhere.)
In addition to hooking into this old traditional social practice, NoiseTrade provides artists with tools to build "meaningful connections" to their fans. NoiseTrade allows artists to create "widgets" that can be embedded on personal sites and in a variety of social media (Facebook and MySpace are still popular with many artists). NoiseTrade handles the downloading bandwidth and associated technology lifting in exchange for its services. Artists need to have a PayPal account, which NoiseTrade uses as the transfer destination for tipped funds. This means that artists end up collecting less up front due to the service fees but as with any service it means they have more time to focus on their work.
The question, as yet unanswered, is whether this sort of service to facilitate a more intimate connection is worth it. Clearly artists are taking risks - NoiseTrade music is DRM-free and nobody is required to tip for what the artists choose to put up. On the plus side, artists need fans, and need to get noticed. The site promotes artists (via targeted mailings, Facebook, blog posts, and featured sessions) and as with so many creative endeavors it's clear that the biggest problem facing most performing musicians today is getting noticed.
I've signed up for NoiseTrade's email newsletter and we'll see how it works out.
It's possible, then, that Apple or Amazon won't come to dominate the ebook-to-reader "last mile" the way many of us had feared. But that mostly depends on relying on the good graces and forgiveness of these companies, which I'm not inclined to rely on that any more than I'm inclined to rely on DOJ's prosecutorial discretion. I would say that Macmillan's capitulation brings us to the end of Chapter 1 in the mass-market e-book story, but there are going to be more chapters written, and probably soon.
Dear Gamers Workshop, Welcome To Social Media Hell
As I mentioned yesterday, GW has acquired a whole new set of un-friends. Today they hit the bigtime, with a front-page linked article on io9, a very popular site for SF/F/gaming/movie genre fans. Apparently they're also getting thrashed on Twitter. Dear GW, back down now. Apologize. You need to stem this tide. Every minute you let this go on your name becomes more mud. If this goes on for a week it'll take you a year to wash the stink off. The entire Northeastern US is sitting at home under a blizzard and has nothing to do all weekend except talk about how shitty you have been to one of our friends.
This is all over my blogroll today: Games Workshop is coming down absurdly, wrongly, overreachingly hard on a small author over its fantasy of having a trademark on the phrase "Space Marines" that prevents others from using that phrase.
The most direct victim at this time is author M.C.A. Hogarth. Hogarth reports on a disheartening, but all-too-familiar, situation in which the big company pulls out the big lawyer guns and picks on the small (mostly self-published) individual who doesn't have the money to fight protracted legal struggles. One of the people who has responded is John Scalzi whose blog entry at "Whatever" points out that not only is this "weak sauce" on GW's part, the story may turn out very differently if they ever try to pull this crap on ",,,an actual publisher, with actual lawyers. That should be fun."
Doctorow's post (correctly, I think) also lays some of the blame on Amazon. They had no need to take down Hogarth's e-books. That was a craven corporate decision, and a disappointment. Say what you like about Google, but their efforts with their Transparency Report are setting a standard that other corporations including Amazon could do well to emulate.
So what happens next? Well, readers might want to let Games Workshop know how they feel about this. You can reach them by physical mail in the UK. at Games Workshop, Willow Road
Lenton, Nottingham, NG7 2WS - or if you're more digitally inclined I believe they read and comment pretty regularly on their Facebook page (https://www.facebook.com/gamesworkshopofficial)
Greenfield compares Netflix's numbers with some sample numbers from HBO (since Netflix says it wants to be "the HBO of Internet TV") and the results look surprisingly good even at that price-tag. Given their stated goal of having five shows at this size and price, Greenfield estimates that the shows would need to drive an additional 10% growth in subscriptions in order to break even, assuming that Netflix doesn't change its basic $8/mo subscription price and includes these series in that price. HBO's shows cost considerably more to produce and don't drive that much more revenue, making Netflix's P/L projections easier to hit.
If there's a problem in Netflix's future, it's probably not home-grown content but the content it has to get from other producers, which is getting increasingly expensive. As those costs have gone up, Netflix's margins (and possible profits) have gone down. Making its own exclusive content helps stabilize that drain and provides a differentiator - if you like these shows and can't get them anywhere else... well, there you go.
My personal opinion is that Netflix is going to have to raise subscription rates. I foresee them inching toward a $9.99 price over the next two years. If they break $10 though I'd be surprised. I also expect them to explore some pay-more extras like the bonus things you get on most DVDs. Interviews, backstage stuff, even possibly early access are all things they can price out and play with that won't hurt their main subscription base.