42 replies to this topic

[icuurd12b42]

This topic was created from posts that were derailing a topic about Steam. What follows is an interesting discussion.

This post may be modified to structure the discussion at a later date

I moved the content to Distributing Games as it looks like the closest match to hold the discussion.


originating post

Spoiler

Here is my 2 cents about steam and piracy. After all I did work for the company that invented the method steam likely uses...

First, claiming that steam prevents piracy. Well, it does limit the damages because most consumers would rather be legit than not, but it will never eliminate it.

The factors that limit piracy are:
-The price of the product. This is where most distributors fail as they always want to milk as much as possible. Charging the same price for online content as in stores. Even if the online distribution method costs way, I mean way way less than the old shelve method. Or charging 75$ in a locale that, oddly enough, people make that little money in a month but yet still have access to computers.

-The morality of the person that wants the product vs his self deserving factor

-The availability of the content (online or not). BTW, if any big distributor out there reads this, if you are not on steam, you are an idiot.

-The ingenious level of the person who wants the game. That is really no longer a factor.

-The inconvenience of the anti-piracy method. This was thought to be the huge factor by the geeks evaluating the method in my days. But in reality, this factor is sooo close to nil when you consider that most people don't even know what the heck is going on anyway.


Basically, only the 2 first factors count today. Most are online, most don't care of the underlying technical details, most are not geeks

But here is the big kicker which I do hope steam and all those publishers will one day consider... The world is changing and the kind of users we are turning into is big factor. We are all turning into a bunch of self righteous deserving demanding babies. And ya know what, it not our fault. We want stuff, we deserve it, it's there, there is soooo much stuff now, we want it all. It is impossible to have it all today at the prices we have to pay.

I estimated, a while back, how much money I spent on computers, tvs, monitors, laptops, dvd players, cassettes, floppies, games, dvds, blue ray disks, blue ray players, consoles.... I spent in 20 years about 200000 to 400000$ (it hard to tell, but 10000$ a years is about right) for this stuff. And that was in the infancy of product diversity until today... You can see the self righteous deserving part here being justified. Even if the hardware cost vs income is way less today, no one can possibly keep up with the wave of stuff with the current system


Back to steam, thank to it, I am not a sw pirate but I do have to wait for the deals to come up.


Now I do hope the publishers adopt the Netflix model, by publishers, I mean the publishers of all content possible, from movies to games to software to music. I think 10$-20$ a month would be a reasonable price to pay to access all the content ever created. There would be no more piracy and everyone would profit properly.

[chance]

I think 10$-20$ a month would be a reasonable price to pay to access all the content ever created. There would be no more piracy and everyone would profit properly.

You need to explain how this makes sense economically, for developers and publishers. I don't believe it provides enough profit margin to sustain the game industry -- let alone the other content providers. Frankly, it sounds a bit naive.

When economic benefits are weighted too heavily toward consumers, it has the unintended consequence of reducing consumer's choices. Like what happens when governments restrict prices to "help the poor": Quality is reduced and shortages occur, because businesses go elsewhere.

Not saying a flat-rate for all content can't work. I just doubt $10-$20/month is anywhere near enough.

.

Edited by chance, 10 January 2012 - 01:31 PM.

[Rusty]

I think 10$-20$ a month would be a reasonable price to pay to access all the content ever created. There would be no more piracy and everyone would profit properly.

You need to explain how this makes sense economically, for developers and publishers. I don't believe it provides enough profit margin to sustain the game industry -- let alone the other content providers. Frankly, it sounds a bit naive.

When economic benefits are weighted too heavily toward consumers, it has the unintended consequence of reducing consumer's choices. Like what happens when governments restrict prices to "help the poor": Quality is reduced and shortages occur, because businesses go elsewhere.

Not saying a flat-rate for all content can't work. I just doubt $10-$20/month is anywhere near enough.

I don't think icuurd was suggesting a serious business plan around a monthly flat rate... were you?

I also don't see how this plan would prevent piracy because this goes one of three ways:

1. After I stop paying the monthly fee I can no longer play any games, this also means that I can't play anything offline, thus increasing the demand for piracy.

2. I pay for a month, take as much content as I can install within that month and leave developer companies with so little profit to fight over that they may as well of given them away for free in the first place.

3. Customers get tied to a monthly fee because they wanted to play a game worth $5, obviously pirating a $5 game seems a better option than paying a $10-20 monthly fee or a $10-20 fee in general.

Either way this business plan takes profit from the Game Developers. In an ideal world full of ideal people on an ideal wage with ideal morals, yes, this could work.

[icuurd12b42]

The way this could work (my naive idea) is if the "media access" fee was already included in your internet provider cost. (Let's not start "a forced on you" debate)

20$ * 12 = 240$
* say 2 billion users (http://en.wikipedia...._Internet_usage)
= 480 Billion Dollars

The global music market was estimated at $30–40 billion in 2004
The global game market, 11.7 billion in 2008
The global Software industry in 2008 was 303.8 billion (it may include games but hey)
The global Movie industry (data can't be found, I wonder why, lets say ~ same as music * 2) 100 billion

Total about=470 billion
There ya go chance, sustainability is there and potentially more.

The profit distribution between media providers/creators would be based on how many people got the media and probably other factors, I'm not the expert on sneakiness.

Piracy cost factors would be eliminated, even if people still grab a pirated copy, the ratio of legit download would remain stable enough to extrapolate compensation and eliminate punishment/prison costs to tax payer

Can anyone spell money and paradigm shift?

[chance]

There ya go chance, sustainability is there and potentially more.

Your assumptions are horribly flawed. First of all, those internet stats include vast numbers of users from under-developed and third-world countries whose yearly income can't possibly support $20/month. For many internet users, that's several months income!

Secondly, even in industrialized/wealthy countries, only a small fraction of users are significant consumers of movies, books, games, etc. And those few users typically buy 2-3 DVD per year, and maybe several games. Typical yearly expenditure is (estimating) $200-$300/year.

So yes... if every internet user on the planet spent that amount each year, your system might sustain itself. But that's not even a remote possibility.

[icuurd12b42]

There ya go chance, sustainability is there and potentially more.

Your assumptions are horribly flawed. First of all, those internet stats include vast numbers of users from under-developed and third-world countries whose yearly income can't possibly support $20/month. For many internet users, that's several months income!

Fair enough, lets get a better stats figure

http://en.wikipedia.org/wiki/List_of_Internet_users_by_country

Look, India, only 7.50 can afford a computer and connection, yet you have 87,983,101 customers that can afford the fee. This percentage does mirror the fact that in most countries about 10% of the population is richer than most by a large margin no matter where you go. The number does reflect great disparity there though.

Do you think the global market estimates I got and copied here includes the people in India that are not a viable part of the market. I'm pretty sure they dont.

"The global music market was estimated at $30–40 billion in 2004." I'm pretty sure the estimate takes into account that only 10% of India can afford to buy games, hence can afford the 20$ fee.

Horribly flawed indeed.

Secondly, even in industrialized/wealthy countries, only a small fraction of users are significant consumers of movies, books, games, etc. And those few users typically buy 2-3 DVD per year, and maybe several games. Typical yearly expenditure is (estimating) $200-$300/year.

So your estimated 200-300$/y is not in line with my 240$/y?
[edit] I re-read this... I'm pretty sure people with computers and internet connections are the same few people you mentioned. Few in poor countries and more in others like in the Americas and UK. In any case it should be in line with the percentage ratio of the stats above

So yes... if every internet user on the planet spent that amount each year, your system might sustain itself. But that's not even a remote possibility.

Ya know, instead of automatically jumping on possible flaws all the time, you could contribute more positively. You cant expect the germ of an idea to be fruitful by stomping on it every time you see a sprout that does not look green enough.

[chance]

So yes... if every internet user on the planet spent that amount each year, your system might sustain itself. But that's not even a remote possibility.

Ya know, instead of automatically jumping on possible flaws all the time, you could contribute more positively. You cant expect the germ of an idea to be fruitful by stomping on it every time you see a sprout that does not look green enough.

haha... sorry, not trying to pick on you. Your idea just struck me as hastily suggested, without much careful thought.

Given the other priorities most people in the world have -- even those with internet access -- paying a $20/month fee is hopelessly unrealistic. Especially for children, who comprise a large fraction of that internet user base.

I can't really contribute "more positively". I just don't think the idea can be "fixed" by jiggling the numbers.

.

Edited by chance, 11 January 2012 - 12:46 PM.

[icuurd12b42]

haha... sorry, not trying to pick on you. Your idea just struck me as hastily suggested, without much careful thought.

All ideas are "hasteful", the research to support it has to be meticulous and so is the implementation.

I'm not saying I did the all the research because that is not my area of expertise, but the first thing is to guesstimate the potential with valid numbers, which often/always does yield bad estimates, but you adjust the concept over time to bend with the reality. Likely the first implementation would not yield as much as the potential, it never does (Look at Netflix). But it opens doors to it.

Hasty rejection is what most people do(1), usually by reflex instead of reflection(2), that causes trouble in the long run, like the steam system that is now popular, EA & all spit on it when we tried to sell that concept of merging distribution and protection to limit the damages caused by piracy and drastically reduce distribution costs in the late 1990, our company De-funked and now the scraps were picked up to make it THE method of choice while we got nothing. That hurts like hell.

(1) I was one of the geeks mentioned in post #63, actually the one with the most conviction, dare I say decent, in my arguments. (what a fool I was)

(2) Reflection often comes after the reflex and more often than none, it's to justify the reflex.

Now there is a cure to that automatic reflex, if you are willing to try...

Given the other priorities most people in the world have -- even those with internet access -- paying a $20/month fee is hopelessly unrealistic. Especially for children, who comprise a large fraction of that internet user base.

I can't really contribute "more positively". :sad: I just don't think the idea can be "fixed" by jiggling the numbers.

.

Playing with numbers as you plainly understand is what every corporation does to prove feasibility; from that they try to get on the wagon to get as much of the potential pie as they can.

Currently, yes, there are huge factors that would kill the idea in the womb, but that is not children who can't pay 20$/month, because in most cases it's the parent that pays for all their cool stuff.

No, the factors would be the various industries involved failing to (want to) grasp the idea because it is so different... And the general population failing to grasp the idea because it is so different, probably convinced by the industries it would cost more for them to pay a media fee (for access to all content imaginable) than buying every media they want individually.


Now for that cure I mentioned:

I know the kind of guy you are so this should be relatively as easy and fun for you as posting a witty comment.

Give me 3 short arguments for the industry/population to opposed this system, you can re-hash the ones covered so far if you want.

Give me 3 short arguments for the industry/population to convert to this system, again you can re-hash the ones covered so far if you want.


I will then counter the arguments (if possible)... From that, possibly we will remove our emotional reflex reactions from the equation and either properly destroy the idea or properly recommend it.


Are you game?

[chance]

Given the other priorities most people in the world have -- even those with internet access -- paying a $20/month fee is hopelessly unrealistic. Especially for children, who comprise a large fraction of that internet user base.

Currently, yes, there are huge factors that would kill the idea in the womb, but that is not children who can't pay 20$/month, because in most cases it's the parent that pays for all their cool stuff.

My point about the children was to point out that you've over-estimated your client base. You mustn't assume it's the same as all "internet users". It's only very small fraction of users. The result is that the cost per participant increases -- and you haven't properly accounted for this.

Give me 3 short arguments for the industry/population to opposed this system, you can re-hash the ones covered so far if you want.

My main concerns about your proposal are:
1. You've over-estimated the potential user base, by relating it to the number of "internet users".

2. You've under-estimated the required cost. (because of 1.)

3. It "socializes" the industry. Namely, it doesn't leave room for exceptional games to reap exceptional profits. It allows consumers to access games -- both good and bad -- all at the same price.

This reduces the incentive for developers to make large investments, and take large risks, to make innovative games. Ultimately, this approach would reduce consumer choices, and produce more mediocre games.

So you need to show how developers can retain the ability to reap great rewards for truly exceptional games -- under a system where the cost to consumers is constant.

Finally, regarding the tone of your post: I don't object to your idea because it's "different". I'm neither for, not against, it. I've objected because you haven't demonstrated how it can work economically. Since this is your proposal, the burden is really on you to show how it's cost effective, and why industry would adopt it. I don't feel you've done that.

[icuurd12b42]

Given the other priorities most people in the world have -- even those with internet access -- paying a $20/month fee is hopelessly unrealistic. Especially for children, who comprise a large fraction of that internet user base.

Currently, yes, there are huge factors that would kill the idea in the womb, but that is not children who can't pay 20$/month, because in most cases it's the parent that pays for all their cool stuff.

My point about the children was to point out that you've over-estimated your client base. You mustn't assume it's the same as all "internet users". It's only very small fraction of users. The result is that the cost per participant increases -- and you haven't properly accounted for this.

Yeah, I don't know if the "Number of connected users" are actual people or computers or routers or households or corporations or employes. I just used the numbers provided.

Give me 3 short arguments for the industry/population to opposed this system, you can re-hash the ones covered so far if you want.

My main concerns about your proposal are:
1. You've over-estimated the potential user base, by relating it to the number of "internet users".

2. You've under-estimated the required cost. (because of 1.)

3. It "socializes" the industry. Namely, it doesn't leave room for exceptional games to reap exceptional profits. It allows consumers to access games -- both good and bad -- all at the same price.

This reduces the incentive for developers to make large investments, and take large risks, to make innovative games. Ultimately, this approach would reduce consumer choices, and produce more mediocre games.

So you need to show how developers can retain the ability to reap great rewards for truly exceptional games -- under a system where the cost to consumers is constant.

Finally, regarding the tone of your post: I don't object to your idea because it's "different". I'm neither for, not against, it. I've objected because you haven't demonstrated how it can work economically. Since this is your proposal, the burden is really on you to show how it's cost effective, and why industry would adopt it. I don't feel you've done that.

Great Points! But I must wait for your 3 "pro posts" to proceed. You really should think about posting those as I have some interesting points for the above.

[chance]

My main concerns about your proposal are:
1. You've over-estimated the potential user base, by relating it to the number of "internet users".

2. You've under-estimated the required cost. (because of 1.)

3. It "socializes" the industry. Namely, it doesn't leave room for exceptional games to reap exceptional profits. It allows consumers to access games -- both good and bad -- all at the same price.

This reduces the incentive for developers to make large investments, and take large risks, to make innovative games. Ultimately, this approach would reduce consumer choices, and produce more mediocre games.

So you need to show how developers can retain the ability to reap great rewards for truly exceptional games -- under a system where the cost to consumers is constant.

Great Points! But I must wait for your 3 "pro posts" to proceed. You really should think about posting those as I have some interesting points for the above.

I'm struggling to find "pro" points for the industry. But in the meantime, here's a calculation based on more reasonable assumptions about user base:

US annual sales figures: (source http://vgsales.wikia...o_game_industry )

Video game industry - $22 billion (US 2008)
Music industry - $10.4 billion (US 2008)
Book industry - $35.69 billion (US 2007)
DVD industry - $23 billion (buying $16B, renting $7B)

Number of US Households:

about 113 million (source: http://www.census.gov/ )

To (optimistically) estimate the potential, let's assume every US household has internet, and every household (regardless of income) paid your $10-$20/month fee "to access all the content ever created" (as you stated in post #63, referring to "all content possible, from movies to games to software to music ").

That generates about $13 - $27 billion annually. Now compare that VERY optimistic estimate to the sales figures above. You can see why I'm skeptical.

And this still doesn't address the bigger issue of how publishers can maintain their competitive edge, if consumers can access all content for the same price -- regardless of its cost to produce.

.

Edited by chance, 12 January 2012 - 08:56 PM.

[icuurd12b42]

Number of US Households:

about 113 million (source: http://www.census.gov/ )

243,542,822 connected vs 113,000,000 homes vs 312,842,900 people... The number of connected users value could also include duplicates like work/business connections (1 user has his home account and his work account, so 2). But yes, it does look like the connected user data may try to take into account the number of users per internet provider contract, eg people per household or people on that connection

The rough estimate is obviously faulty.


However there are other factors to consider. I'll reboot the discussion on the first post tomorrow or later.

Just a few comments for re-adjustment

1. You've over-estimated the potential user base, by relating it to the number of "internet users".

2. You've under-estimated the required cost. (because of 1.)

3. It "socializes" the industry. Namely, it doesn't leave room for exceptional games to reap exceptional profits. It allows consumers to access games -- both good and bad -- all at the same price.

1-Possibly, but by potential user base, are you strictly talking games because when it comes to media, I think all connections use media of all kinds which all use. EG Software Industry was included in the basket. But remember, corporations paying the fee is also included in the basket. That could offset the fees and balance things out.

2-Like the cost per month of 20$, probably from the new values, at current profit most corporations would like to see and the actual amount needed to stay up and running, looks like there would not be enough to go around, at least with today's mentality.

3a-Well, no, that is not quite correct, in fact if implemented properly it would promote good products and good competition and I talked about the funds sharing but never put any details in place. For example, you cant expect a piece of dedicated software that costs 9000 because the user group is like 100 people to be placed in the same category as a 5$ game, whose game could be gotten by 300000000 people. A simple profit capping could also resolve some issues, like you can't make more than x amount of profit (profit = funds grabbed minus production cost) Like a guy that made a game in 3 hours could not kill EA for example. The funds sharing system could be quite complex


3b-socializes the process. well, yes it would, in both Social Media (affecting the downloads) sense and Socialistic aspect of the controlling under layer which yes, it's a scary thought and that one was actually one of my con argument... On the other hand isn't it what's going on right now in a twisted way.


There is also this idea tacked on this concept of having the system actually invest parts of the funds into new companies, developers, products, ideas... That on top of the distribution of funds vs product user count/downloads. This to sustain constant media creation and promote stability in the creation force.

[chance]

243,542,822 connected vs 113,000,000 homes vs 312,842,900 people... The number of connected users value could also include duplicates like work/business connections (1 user has his home account and his work account, so 2). But yes, it does look like the connected user data may try to take into account the number of users per internet provider contract, eg people per household or people on that connection

That's why I decided "households" was more realistic. Typical households may contain several users (usually family members). However, if one of them buys a DVD, book or game, it's likely other family members will share it, instead of buying copies for each person.

Of course there are exceptions to this, as you suggested. On the other hand, I've assumed every household in America pays the fee. So I've already set the potential user base unrealistically high. It's actually much smaller.

...when it comes to media, I think all connections use media of all kinds which all use. EG Software Industry was included in the basket. But remember, corporations paying the fee is also included in the basket. That could offset the fees and balance things out.

I agree some specialized business-related software could survive under a flat-fee system -- much like corporate licensing works today. But this is a small part of "all media", and a small number of users compared to all consumers. Not enough to "balance things out", as you say.

...A simple profit capping could also resolve some issues, like you can't make more than x amount of profit (profit = funds grabbed minus production cost) Like a guy that made a game in 3 hours could not kill EA for example. The funds sharing system could be quite complex.

This takes a bad idea and makes it even worse. Limiting profits, and/or controlling how they're shared, is a horrible idea.

Only the free market (consumer choice) should determine this. For example, if an Indie developer makes a great game that consumers love more than big EA titles, then he deserves big profits, regardless of his investment cost. The market isn't a democracy. It's a meritocracy.

History has shown that controlling profit distribution based on some sense of "fairness", drives businesses away, stifles innovation, and ultimately creates shortages. You can see examples of this in other markets, in many countries around the world.

[icuurd12b42]

243,542,822 connected vs 113,000,000 homes vs 312,842,900 people... The number of connected users value could also include duplicates like work/business connections (1 user has his home account and his work account, so 2). But yes, it does look like the connected user data may try to take into account the number of users per internet provider contract, eg people per household or people on that connection

That's why I decided "households" was more realistic. Typical households may contain several users (usually family members). However, if one of them buys a DVD, book or game, it's likely other family members will share it, instead of buying copies for each person.

Of course there are exceptions to this, as you suggested. On the other hand, I've assumed every household in America pays the fee. So I've already set the potential user base unrealistically high. It's actually much smaller.

I agree with that.

...when it comes to media, I think all connections use media of all kinds which all use. EG Software Industry was included in the basket. But remember, corporations paying the fee is also included in the basket. That could offset the fees and balance things out.

I agree some specialized business-related software could survive under a flat-fee system -- much like corporate licensing works today. But this is a small part of "all media", and a small number of users compared to all consumers. Not enough to "balance things out", as you say.

Actually, specialized software would probably still sell in a conventional way. And the balance things out mainly meant most companies use say windows and other software, corporations would pay the media fees to allow product use. Licensing would mainly become a separate "Support Fee". But still, yeah, we both know very little about what this would imply if it was feasible. if it was.

...A simple profit capping could also resolve some issues, like you can't make more than x amount of profit (profit = funds grabbed minus production cost) Like a guy that made a game in 3 hours could not kill EA for example. The funds sharing system could be quite complex.

This takes a bad idea and makes it even worse. :sad: Limiting profits, and/or controlling how they're shared, is a horrible idea.

Only the free market (consumer choice) should determine this. For example, if an Indie developer makes a great game that consumers love more than big EA titles, then he deserves big profits, regardless of his investment cost. The market isn't a democracy. It's a meritocracy.

History has shown that controlling profit distribution based on some sense of "fairness", drives businesses away, stifles innovation, and ultimately creates shortages. You can see examples of this in other markets, in many countries around the world.

Actually, I inferred that a guy that made a game in 3 hours should not be allows to kill EA, sure he deserved a big profit but the sharing system should not allow devaluation of the profits EA made, eg you cant implement the sharing system to be a straight up yourshare = yourdownloads/totaldownloads * TotalFunds. I think my "simple capping" statement was faulty. I'm not saying, if you made 100000$ then no more profits for you. I just mean one would have to consider some sort of logical limiting function that would result in about the same amount of profit as the current system.


As for driving business away, yes, definitively, unfairness does drive business away. But under our current system, profits are driving business away as we speak to 2nd and 3rd world countries. Though I guess this sharing method would not prevent that unless the profit function would mean taking your initial investment into account, and now we are bordering on fascism type control.


Now we are making progress in exposing many flaws... Yet I'm thinking this system may still be viable, maybe not right now or for media control but possibly for MMO type world where people can create virtual content with possibility with income from it (Like Second Life implementation).

[chance]

I just mean one would have to consider some sort of logical limiting function that would result in about the same amount of profit as the current system.

Here's the problem with that. If you replace the free market with a flat-fee system, you have no way to determine what those profits "would have been".

In free markets, developers must compete with other developers for finite consumer dollars.

But under a flat-fee system, consumers can take anything and everything for the same price. Unlimited choices! Consumer budget isn't a factor. Prices aren't a factor. Consumers can play every game, read every book, watch every DVD for one flat fee.

Effectively, you've eliminated competition, and given everyone an unlimited budget. Having done this, how can you determine what the free-market "would have provided" each developer?

Now we are making progress in exposing many flaws... Yet I'm thinking this system may still be viable, maybe not right now or for media control but possibly for MMO type world where people can create virtual content with possibility with income from it (Like Second Life implementation).

On a smaller scale, for a limited type/amount of content... yes, I agree it might possibly work.

.

Edited by chance, 13 January 2012 - 10:19 PM.

[lmbarns]

I just wish in addition to the app stores there was a search engine just for games. Everything from home-made games, every level of indie up to polished AAA big budget games, aggregated, categorized and returned based on a variety of factors.

Or maybe like an "etsy.com" for indie developers, or to buy/sell game resources(art/code/sprites/models).


As far as piracy and subscriptions I just don't think at this moment in time you'd get the different factions (movie producers, game conglomerates, etc.) to agree on what percentage of the money they're entitled to.

They're already going the route of legislating ridiculous laws (@ how much cost?) rather than changing their model.........If for some reason they can't "buy" the rights "legislatively" to make the profits they believe they should, they'll probably consider other paths of revenue.

[icuurd12b42]

I just mean one would have to consider some sort of logical limiting function that would result in about the same amount of profit as the current system.

Here's the problem with that. If you replace the free market with a flat-fee system, you have no way to determine what those profits "would have been".

In free markets, developers must compete with other developers for finite consumer dollars.

But under a flat-fee system, consumers can take anything and everything for the same price. Unlimited choices! Consumer budget isn't a factor. Prices aren't a factor. Consumers can play every game, read every book, watch every DVD for one flat fee.

Good point but can and would are 2 different things though, would you download a movie you would never want to watch.

Here are other concerns
-Would the system be smart enough to detect people trying to rank up their media with hacking methods
-How about games that suck or you never use, would the system be smart enough to realize this factor, should it? You talk about competition later, how many companies survived by putting out bad products.

Effectively, you've eliminated competition, and given everyone an unlimited budget. Having done this, how can you determine what the free-market "would have provided" each developer?

Competition would take the form of popularity contest actually, much like it is now, and no I did not give unlimited budget to anyone. I would hope the system would allow to at least cover the cost of product development (on a failed or unpopular media) or at a minimum allow companies to fail in the way they do now while sustain the content creators more directly, the industry would possibly become more fluid.

As for what the free market would have provided, I mean they do research to estimate if a product has potential in the current system. The process would probably be similar for that system, after all if this could be implemented is a sort of compartmentalized free market where the actual moneys available for grab is no longer a prediction, they would be able to make more calculated risks. And I did mention some portion of the funds could be used to invest in new companies(or existing ones I guess), which does imply there is hope the entire fund would not be needed to provide sufficient profit. But from the numbers you exposed this may not happen.

I would need to hire a mathematician to come up with the proper distribution formula.



@lmbarns

Yes, the main fail factor is the companies involved not willing to give it a shot for many many reasons, most probably not obvious. As you may or may not know, the music and movie industry was originally created as a money laundering front, earlier from the media content creation process and the theaters/concerts and production facilities, later, less so, from the rental shacks, with the internet though, that table has turned (we are the crooks now). I mean I don't pretend they still launder money but there surely are unseen money aspects of the business that would cause to strike the idea...

So yes, this topic is somewhat naive in this reality, but really it is a good "out of the box" exercise.

[chance]

...and no I did not give unlimited budget to anyone.

When consumers can have all the content they want for a flat fee, it's effectively an unlimited consumer budget. Because consumers are no longer required to limit their choices to what they can afford.

In free markets, consumers can only afford limited choices. And competition to be "chosen" over your competitor is what drives developers to improve their products. A flat-fee system reduces this competition.

I would hope the system would allow to at least cover the cost of product development (on a failed or unpopular media) or at a minimum allow companies to fail in the way they do now while sustain the content creators more directly....

I agree it's painful to see companies/creators fail. But trying to "protect" companies from failure, may actually subsidize failure. Successful business involves risk-taking, learning painful lessons, and weeding out those who can't succeed. Sounds mean... But in the long run, it strengthens the industry.

As for what the free market would have provided, I mean they do research to estimate if a product has potential in the current system.

Of course developers do this "research". And if they were always right, developers would never fail ! Predictions are the "holy grail" of market research. Unfortunately, they aren't reliable enough to replace market forces. And they never will be, because of the human factors involved.

And I did mention some portion of the funds could be used to invest in new companies(or existing ones I guess)

Currently, investments are determined by the private sector: individual investors, banks, other businesses, etc. Would this be replaced by some "central authority" that decides which new ideas get a chance, and which ones don't? Sounds a bit Orwellian.

As you may or may not know, the music and movie industry was originally created as a money laundering front, earlier from the media content creation process and the theaters/concerts and production facilities

I don't believe that's correct. The music/movie industries grew from the existing entertainment industries -- such as stage, opera, and vaudeville. They were enabled by Edison's new technology.

As in every successful industry, you'll find examples of money laundering at one time or another. But there's no evidence money laundering drove the creation of the music and movie industries. Where did you read this?

Maybe this topic should be our next discussion.

.

Edited by chance, 14 January 2012 - 10:42 PM.

[icuurd12b42]

...and no I did not give unlimited budget to anyone.

When consumers can have all the content they want for a flat fee, it's effectively an unlimited consumer budget. Because consumers are no longer required to limit their choices to what they can afford.

In free markets, consumers can only afford limited choices. And competition to be "chosen" over your competitor is what drives developers to improve their products. A flat-fee system reduces this competition.

The problem is really in the "Are they using what they got" aspect of the system. If the system don't know that then everything falls apart, especially for software.

If everyone got a bad game A and a good game B, but most play the game B then to creator of Game A will do their best to re-grab the market by making a better product the next time.

Were as today, when both games are released, bot A and B will do well until the word is out that A is crap. In the meantime the developer of game A may have made enough to be even with production. And the (miss/ill-informed) users may have spent his money on a crap product

I don't know what is better (for competition), the threat of instant failure or a delayed one.

It is a concern we agree on though maybe not from the same perspective.

I would hope the system would allow to at least cover the cost of product development (on a failed or unpopular media) or at a minimum allow companies to fail in the way they do now while sustain the content creators more directly....

I agree it's painful to see companies/creators fail. But trying to "protect" companies from failure, may actually subsidize failure. Successful business involves risk-taking, learning painful lessons, and weeding out those who can't succeed. Sounds mean... But in the long run, it strengthens the industry.

Vague hopes yield vague ideas. so I agree with you here. Though it would be nice if there was some protection to the industry as a selling point of the system.

As for what the free market would have provided, I mean they do research to estimate if a product has potential in the current system.

Of course developers do this "research". And if they were always right, developers would never fail ! :tongue: Predictions are the "holy grail" of market research. Unfortunately, they aren't reliable enough to replace market forces. And they never will be, because of the human factors involved.

And I did mention some portion of the funds could be used to invest in new companies(or existing ones I guess)

Currently, investments are determined by the private sector: individual investors, banks, other businesses, etc. Would this be replaced by some "central authority" that decides which new ideas get a chance, and which ones don't? Sounds a bit Orwellian.

Indeed you could take that position unless the system is corporate owned so still part of the free market.

As you may or may not know, the music and movie industry was originally created as a money laundering front, earlier from the media content creation process and the theaters/concerts and production facilities

I don't believe that's correct. The music/movie industries grew from the existing entertainment industries -- such as stage, opera, and vaudeville. They were enabled by Edison's new technology.

As in every successful industry, you'll find examples of money laundering at one time or another. But there's no evidence money laundering drove the creation of the music and movie industries. Where did you read this?

I got it from the stable boy who got it from the horse's mouth. There are documentaries on the subject now. It's not a big secret, just a dark past.

They are having the same problem in Ballywood recently.

[chance]

As in every successful industry, you'll find examples of money laundering at one time or another. But there's no evidence money laundering drove the creation of the music and movie industries. Where did you read this?

I got it from the stable boy who got it from the horse's mouth. There are documentaries on the subject now. It's not a big secret, just a dark past.

They are having the same problem in Ballywood recently.

The horse's mouth? No, the stable boy was looking at the other end.

And you mean, "Bollywood", right? Yes, India's money laundering is in the news. But again, this is an example of a successful and profitable industry being exploited by crime after the fact.

There's no evidence of your claim that money launderers created the industry in the first place, for the purpose of money laundering. They did not. Especially not in Hollywood, where the industry started.

I agree it's painful to see companies/creators fail. But trying to "protect" companies from failure, may actually subsidize failure. Successful business involves risk-taking, learning painful lessons, and weeding out those who can't succeed. Sounds mean... But in the long run, it strengthens the industry.

Vague hopes yield vague ideas. so I agree with you here. Though it would be nice if there was some protection to the industry as a selling point of the system.

I believe the only way your flat-fee idea could work is on a much smaller scale. For example, game developers are hired by a "corporation" that also delivers consumer content. Those developers sign a contract for some period of time -- i.e., they are employees who grant the corporation exclusive rights to their products. They create games, based on the market research of the corporation, which in turn offers its limited assortment of games to its "subscribers" for a flat-fee.

In turn, the developers are guaranteed a fixed profit (and maybe a percentage). i.e., they settle for less money than they might make in the free market, but they're protected from risk of failure.

The "corporation" has its own limited set of games, and is just one part of a larger free market. Schemes like this couldn't replace the free market, making all content available for the same flat fee, for the reasons we've been discussing.