Hardcore capitalist's views on abundance, scarcity and the RIAA

[TankGirl]

From Tim Oren's blog:
The RIAA and the destruction of value

Call me naive - [Chorus: You're a hopeless naif.] - but I've got this quaint idea that the idea of a business is to add value. And that the value is judged by the customer, not the seller. By its obstinate and culpably idiotic refusal to understand that technology has changed the way in which the value of music is delivered and understood by listeners, the RIAA and the labels it stands for have turned from value creators into value destroyers, in many different ways. They are well on the way to permanently damaging an industry that has been part of America's cultural heritage, as well as a decent part of our exports to the rest of the world. The bill of particulars...

...starts with the obvious: digital music and the Internet. From the customer's side the value is overwhelming - no more stacks of polycarbonate discs, access to a world of choice instantly, removal of most of the risks of format obsolescence. Even from the selling side there are advantages: no more inventory holding costs, more packaging flexibility, no more takebacks on unsold product. But, it does require that you rebuild your model for creating value from one based on scarcity, to one based on abundance. Something the industry apparently can't deal with until it's rammed down its throat by a customer revolt.

The industry's response? While the P2P systems grew, built on networks of machinery operated by its customers, it went off on a tail chase, seeking digital rights management (DRM) approaches to locking up digital music. In other words, to restore the scarcity value model, regardless of the benefits to its customers. Kevin Marks has for some time been saying 'DRM destroys value'. If value is in the customer's eyes, shouldn't that be obvious? Is a locked piece of music more or less convenient to use, and more or less likely to be a problem to copy to other devices? Which version would you value more? It's amazing that it's even a question that artificial scarcity is a stupid idea. How much more obvious should that be, when the customers already know there's an alternative, and have it in their hands?

boycott-riaa.com: Among other things, Tim Oren is managing director of the Pacifica Fund which, "invests in Information Technology and Materials Science companies" focusing on, "companies with core technology assets that have the potential to become industry-shaping platforms".

He's a hard core capitalist, as he freely admits on his web page, saying, "I've got the word 'capitalist' in my job title, unreservedly support private property rights, and don't have ethical issues with the concept of intellectual property (some implementation details aside). I don't copy music I don't own, nor do I encourage others to do so."

And yet on Due Diligence, his web page with thoughts and opinions on technology, venture investing, Silicon Valley, "life, the universe and everything," he admits, "I boycott the RIAA and take frequent opportunity to trash them publicly."

[JackSpratts]

well informed nu members can all become rich capitalists betting on the mistakes the riaa will make. by definition and almost without exception, if the riaa makes a decision it will be the wrong one. wrong for musicians, wrong for consumers and of particular irony, wrong for their own member companies (who are actually the ones doing the deciding here in the us). it's gotten so bad that the "other riaa's", the groups representing foriegn recording companies, are going out of thier way to reassure consumers they won't be behaving the same way, such as suing thier remaining customers. this is an important development in itself, as most of the recording conglomerates (universal, cbs, rca, capital-emi) are no longer owned by americans and it may - just may - represent the beginning of a turning point. good find, tg.

- js.

[multi]

interesting that he dislikes the riaa for giving capitalists a bad name...
or thats what it looks like anyway..

the actions of the lables are forcing people to start rethinking the music buying habits in other places in the world because of whats happening in the united states...listening to some of this guys advice might give them a chance to patch things up with music buying community....
im sure they could if they really tried, produce a product that will get people buying of the shelves again..