Better than Free (2008)

This truth is often hidden by some given abstraction.

(file, save, download, streaming, etc.)

Businesses have been built on such abstractions. Success stories.

On the flipside, existing businesses that were built before the internet who do not know the truth have been fed these abstractions. These businesses may stand nothing to gain from participating in the copy machine. Whomever is feeding these businesses with abstractions that hide the truth are not helping these businesses. They are helping themselves and watching these businesses being destroyed by a copy machine.

One category that he missed is embedding digitized products like software into dedicated hardware. It's a form of DRM that is harder to crack (I think).

Here's some examples from the audio world, that are variations of this idea.

The main audio software platforms, known as Digital Audio Workstations (DAW) have all evolved to a point where they have to support open plugin formats. Plugins are implementations of digital signal processing software, that are used in combination within the DAW to produce the end result, which is a complete, finished sound file,

Because audio production and engineering is hard (basically, things tend to not sound good) there is constant development, and fierce competition, in this niche market.

Various forms of DRM, or licensing systems, are almost universally used. This provides enough friction, meaning you can get cracked versions of most plugins, but it comes at a cost of inconvenience, malware, or compromised stability, that a modest number of small companies have built business in the market.

But the competition is fierce, and the trend in license prices has been steadily down. The cracks do hurt the sales.

One company that has thrived in this market is Universal Audio. They put heavy development into making premium, we'll respected plugins, but they only run on their proprietary DSP systems. For a while, this could be seen as a genuine advantage, as users commonly ran up against the limitations of their CPUs.

This is no longer the case, but the company has steadfastly stuck to their proprietary system. One technique they used was to embed their DSP in dedicated sound interfaces.

The sound interface market is also hotly contested, and companies are constantly fighting against commoditization. So they developed high quality sound interfaces, which is something all audio producers have to have, and use their catalog of exclusive software plugins as a "value added differentiator."

CEDAR is the pre-eminent developer of specialized software dedicated to challenging issues of noise reduction. For a long time, they limited the use of their algorithms to their own DSP hardware. If you wanted these industry best algorithms, you had to buy their, relatively, expensive systems. While they now do offer some of their software as plugins, they continue to use dedicated hardware as part of their product strategy.

One interesting possibility is the embedding of otherwise unremarkable software into dedicated hardware, because of the user interface advantages. By giving the user access to physical controls, that do nothing but mimic their virtual cousins, the goal would be to dramatically increase the usability of the software. There has been some movement in this direction, which is actually a kind of throwback to how the first generations of audio DSP devices, back when dedicated hardware was the only way to implement such processing.

You can see this tension around user interface play out in the realm of audio mixers for life performance. They use dedicated interfaces to run the real time DSP, but combine various virtualization strategies. Some of the biggest audio plugin companies, like Waves, have released versions of their popular software plugins to run on some of the modern live mixing hardware systems, thereby generating new revenue streams from existing products.

At this point, while it is entirely possible to run an entire mix of a live show on a PC with a mouse and keyboard, it is such a sub-optimal user experience, that I have never witnessed anyone do this. (Though I'm sure some foolish, Braveheart do, and budget challenged audio engineers have done it!)

Not really true at all. So many times I've found a dead link, archive.org doesn't have a copy, it's gone. Entire domains loaded with content have disappeared. In general, people don't copy and save other people's material, except temporarily for viewing.

(Findability, anyone?)

Apache??

For starters, the Internet itself is far more about distribution than duplicating. It's effect is to achieve distribution of information. Computers alone are sufficient to achieve copying, but it was the distribution component which computers alone, or even low-speed or fixed-location Internet failed to achieve. And though the Internet's distribution involves copying of bits, that's not the critical function.

Information theory itself concerns the origination, distribution, receipt, comprehension (or decoding), and possibly redistribution of messages. Those are instantiated through such systems as webservers (or application engines), the Internet, protocols, and ultimately some human or nonhuman interpretation engine.

Kelly is also correct in that the Internet removes costs and frictions. Or alternatively, it shifts the cost points of media, and generally reduces the costs of originating and duplicating information, without increasing individual capacity to comprehend or filter it. This gets to the core of what's been called the attention economy, forseen in the 1970s and earlier by Herbert Simon and Alvin Toffler.

I've been looking at quantifications of information absorption capacity of people and suspect that that's generally quite low -- a few tens, possibly hundreds, of messages per day, but not much above that. The consequence of filter overload is a real problem. And the attention we can give any one message is directly inversely proportional to the number of messages received, divided by our time to dedicate to such messages.

Reducing costs gives rise to the Jevons paradox: It's not that the high-barrier-to-entry messages of the high-cost era suddenly become more available, but that a new flood of low-barrier, low-value (or negative-value) messages appear. Spam. Viruses. Junk mail. Phone solicitations. Web advertising. Clickbait.

There's also Woozle's Law of Epistemic Systems: as the audience using any given communications medium increases in number (and especially: in significance), the value of manipulating that audience will increase.

In market economics, low marginal costs become a problem as marginal cost is the mechanism by which markets set prices. For goods with high fixed and low marginal costs, market prices are simply insufficient to reward producers (or creators). This is the subject of recent books by Paul Mason (Postcapitalism) and Jeremy Rifkin (The Zero Marginal Cost Society).

Gresham's Law is another challenge, multiple ways. The popular form is "Bad X drives out good", though the general mechanism is more nuanced: Greshams mechanisms are complexity constraints applied where a "better" (more complex) good is valued identically to a "worse" one, for whatever reasons, within a given domain. The general result is that the worse goods predominate. The capacity to distinguish better from worse itself affects this, which is why a larger market tends to incentivise worse goods. And, if there is an alternative market in which the better goods are more highly rewarded, you'll see a flight of those goods to those markets. This is often exhibited as brain-drain: flight from low-paid professions such as teaching, government work, politics, or academia, to business, trades, or finance, for example.

It can also be exhibited as international flows of capital, coin, or talent.

And this plays out in information markets, where the lack of sufficient reward will see authors and creators either depart for realms in which they are appropriately rewarded, or to other fields. Political and ethnic persecution can have similar effects -- the flight of European Jews to the US in the 1930s and 1940s, or the flight of American blacks to Europe from the 1930s through the 1970s and even beyond, as examples.

Sorting out the implications of changing relative costs and rewards is key, and that's what Kelly, and a great many others, fail to do.

> Careful readers will note one conspicuous absence so far. I have said nothing about advertising. Ads are widely regarded as the solution, almost the ONLY solution, to the paradox of the free. Most of the suggested solutions I’ve seen for overcoming the free involve some measure of advertising. I think ads are only one of the paths that attention takes, and in the long-run, they will only be part of the new ways money is made selling the free. But that’s another story.

Since this is (2008), does anyone know if that blog covered that "other story" at some point? I'm currently digging through a Google search for

  advertisement site:kk.org inurl:thetechnium

I mean, for a movie, just wait a few months and you can download it.

If you don't want to wait, you still have to wait for the next movie to come out, so it makes no difference really.

To say it another way: no matter where you are in the pipeline, you still have to wait the same amount of time for new data to arrive.