Market Failure Again?
How did I miss this the first time around?
Betamax vs. VHS
Sony (the developer of the Betamax format) and Matsushita (one of the VHS developers) choose to give different weight to the importance of ease of transportability (which meant small tape size) and recording time (which increases with tape size). Sony thought that consumers would want a paperback-sized cassette, even though this limited recording time to one hour, while Matsushita opted for a larger tape and a two-hour recording time. Otherwise, the two technologies were nearly identical.
“Later studies have failed to support Dvorak’s results.”
Such as?
“The ergonomics of QWERTY, it turns out, differ from those of the Dvorak by so little that it does not repay the cost of training to switch. If this were not the case, and Dvorak’s claims of large efficiency increases with a few days training were true, then a single corporation with a large typing pool could internalize the costs of switching technologies, and lead the market away from the “QWERTY trap” all by itself. ”
While I think that the “large efficiency increases with a few days training” is an exaggeration, he neglects the fact that with the average rate of turnover in today’s companies, it would pretty impractical to invest time in converting employees to Dvorak.
“Far from stifling innovation, as Arthur contends, Microsoft has had to innovate constantly to maintain its position. ”
Does the strategy of “clone and bundle” ring a bell? This guy is a Microsoft shill.
ECON 101
I have found that economists are fond of ideas about how money is made and business plans about how money will be made. What they don’t seem to have a clue about is strategy. The result is something like a dotcom boom or a major airline. In economics everything has to be measured, calculated, graphed and charted. In business everything can take unexpected twists and turns. Economists call this chaos and have theories for it also. Buyers know what they want and sellers figure out what it is and that creates order and orders for products. A fairly simple, but effective explanation is never simple in economic terms. It is only fair when everyone is really confused. Not the economists though. Economists look for confusion, write journals about the confusion and what you end up with is more confusion, plus a fancy graph that only the economists can decipher. This helps create the market for textbooks, courses and instructional aids. The result of which is we can develop new models and income from college tuition which is rising all the time. There is no business plan for lowering tuition, because there is no incentive for colleges to do this. The probability is great that college tuition will rise, with no theories supplied.
Here’s my 1st theory: X=number of econ students, Y=number of econ classes offered, Z=amount of student debt. X+Z=Y. The result of this theory is more downloaded music and movies on campus networks, with no VHS or DVD equipment required.
2nd theory
So if A=demand for movies and B=college students with no money, demand for A should be driven by the supply of B. This could mean chaos=C, which isn’t good news for the local video rental store or Hollywood which is counting on A=profit. A+C=B, dictated by the theory of we still need money for beer this weekend. The beer helps create more chaos, but at least the breweries are making a buck based on demand which =D. The truth is not that we do not have economic beliefs, merely that for most people stuff like food and beer are more important or =D. This may help explain the original Napster concept, which was replaced by a corporate Napster concept that says food and beer are further down the list of priorities and =X. All of which means that FM radio is as good as free beer and is in greater supply. Maybe the breweries should start making movies and giving more beer away and create more demand for X. This strategy could create a demand for additional breweries, which could mean the C+B=X. X being an unknown quanity could result in more chaos theory and required coursework, meaning more demand for Y and more money left to pay for Z. We now need a graph of this. You do the math!
http://ugrad.math.ubc.ca:8099/mathsheet/applet.html
http://ugrad.math.ubc.ca:8099/mathsheet/docs/manpages/graphs.html
“If you like it–give us beer money, we’re broke college students,” this site reads. http://ot.f00f.com/
Give them beer money! if something’s broken, you can email them usourtunes12@yahoo.com What if you don’t like it?
Informative eweek story By David Kravets, Associated Press Writer
Music Industry to Target Individuals Following File-Sharing Ruling?http://www.eweek.com/article2/0,,1638485,00.asp?keycode=EWBF103039TX1K0000575
Free songs and movies are what draw P2P users and generate ad profits. This idea has made television and radio work. For some reason, when the home PC enters into the picture all hell breaks loose. Watch for a new suspect lists from the RIAA. The powerful recording industry will throw all kinds of cash at their effort. Also look for government resources to be wasted on this sort of thing. Who can imagine what sort of draconian legislation will be proposed or passed next? 40 million Americans have no health insurance. That’s a problem. 40 million people downloaded a song. I’m really concerned it could be 60 million in another year. Hurry up and pass a law!