Disruption of innovation

"Soft SOPA" & How Copyright Disrupts Technological Innovation

Copyright and free speech have been at the forefront quite a bit lately. To some, we need to afford protections to creators. To others, it is manipulation of laws to suit their personal wants. The result is everybody losing.

The internet has created a huge disruption in sales and distribution of many kinds of media, including movies and music. The biggest problem many people have pointed out has been that, rather than adapt, old business models refused to adapt and instead tried to get laws to force things from changing. This is especially obvious of the RIAA who simply fought against the MP3 format rather than embrace and use it. Now, Apple, Amazon, Google, and many others are making a lot of money they never will. All because they refused to change.

Instead, they tried manipulating laws and suing people in order to extract money. For this, the popular media and the public have demonized them. Yet they continue for the sake of stagnation.

This is a disruption of innovation.

Disruption in the business world is supposed to strengthen the money that goes in and out of coffers, but this is because people are “building better mousetraps”. When innovation is disrupted, they are essentially happy to let the mice run free if their product does not work properly.

The issue here is copyright. Copyright is not a bad thing in and of itself. Nevertheless, the way it has been manipulated has forced people to fight in ways that are shocking to the old business models. In the past, if someone profited off your work without permission, you could sue him or her for profits. With the modern internet, they have encouraged people to fight back by not making money off those works.

This strikes me as interesting. They know these people are not making money and yet they sue them anyway. Where exactly is the profit? I could go on and on, but plenty of people have realized this is a dead horse. Well, everyone except lawyers…

The point is, we have a broken system, and that is our current copyright laws. We need to overhaul it. It used to be your work was yours for 14 to 28 years, which may not seem long now, but let us consider how long a work is profitable. A book comes out. It will sell, make some money, movie rights are sold, it becomes a blockbuster, toy action figures are sold, kids have the characters on their lunchboxes (do they still do that?), and so on. The time frame for this? Let us take Harry Potter as an example. The first book was released in 1997 and the last movie was released in 2011. If we take that series as a whole for our argument, that is 14 years alone. Obviously, the series was VERY profitable. To this day, it is still making money. The 28-year limit above was if an author applied for an extension, and you can be sure J. K. Rowling and Warner Bros. would have applied for that extension.

By 2025, Harry Potter’s fame and profitability should be very much diminished, such that entry in to the public domain would not really cost anyone. That is 28 years. So what about Disney? Mickey Mouse is still popular and they are making money off of it, right? Disney is a poor example of protecting copyrights. Simply put, they have made quite a bit of money off of public domain properties. Disney’s first feature length film was Snow White and the Seven Dwarves. The movie was derived from Snow White, first officially published, if I understand my sources correctly, in 1857. They made a fortune off that movie using nothing but a public domain work.

Disruption of games

The Next Xbox Has Mandatory Kinect, Game-Swapping and New Controllers, According To Leaked Info

The speculation of Microsoft’s next-gen console having systems in place to stop people from playing used game discs has many people speculating. If true, the used game market could take a nosedive in an empty pool. The idea is that once a game is installed and played on a single console, it cannot be installed on any other console. So, once you install it, it’s your for life. Even if you lend to a friend, he couldn’t play it.

Now, I know quite a few people who, once they are bored with a game, will trade it in for store credit and get another game. This business would come to a halt. While I know people who would not shed tears for their $10 credit for a $50 game being around anymore, there is also a misunderstanding about how the used games market works. When you trade in your game, they are essentially taking a chance that the game will be bought by somebody else. While they give you a $10 credit and them mark it up to $30 on their shelves, if the game does not sell, they’re out that money for good.

“So what? They make plenty of money from new games, right?” Wrong. Game stores usually buy a game for $45 and sell them for $50. Not a big profit. Now perhaps you can understand why they are willing to take such risks: much bigger profits.

So what is the uproar then? Developers do not get a cut of used game sales. They make money based on how many new games are sold. While people purchase a game 10 million times, only 5 million of that may be new games.

With this new suggestion of locking a disc to a console, the used game market is cut. The business of selling games becomes disrupted. So why is this “better” for consumers? Well, if developers can make more money on their games, they can lower the prices on them. Naturally, consumers win.

This begs the question; why not just go digital on games? XBox Arcade does that now. There is Steam as well. Why not just sell those AAA titles digitally? This is because of places like Walmart who threaten to cut shelf space for everything if they do. Stores do not make much money on games, but they do make money on peripherals, like controllers and HDMI cables. Companies like Microsoft make good money on those too. With games on the shelves, people will come in to buy the games and increases the chances of buying peripherals as well. Walmart makes money, Microsoft makes money, and prices stay high.

This has been true for quite some time, but physical stores are losing to virtual stores. Amazon can give you a comparable deal to Walmart. What’s more, they could set themselves up to sell games digitally as well. By cutting out more need for physical game discs, they can cut prices. At that point, if Walmart were to do away with selling peripherals, they would only be hurting their own bottom line.

We have two cases of disruption that essentially cut out the middleman. Companies can sell virtually direct to consumers without shelling out money to print millions of discs and get a much better return. This may take some time to bring about, but at this point, it seems inevitable.

Disruption of smartphones

Is the Samsung-Google alliance heading for a crossroads?

The article describes how Samsung and Google may have cooperation problems in the future. However, let us back pedal a bit.

Apple released the iPhone. Suddenly, the smartphone was at the forefront of the electronics consumer market. Sure, it built of the popularity of the iPod. However, the iPhone was quick to take the market by storm and if you did not have one, you were behind the times.

Sometime after, Google unleashed the Android operating system. It was obviously a competitor to the iOS system, and thus to Apple’s successful iPhone. Apple, who enjoyed a virtual stranglehold on the smartphone market, suddenly was losing market share. The war was on.

Now, Samsung has the option to insert more competition in to the smartphone market. With a new smartphone operating system, they can wean themselves off Google’s Android system and launch their own.

They are disrupting Google and Apple’s dominance.

This, as many people will argue, is a good thing. While Samsung has not innovated software or hardware, they have made great strides in combining the two. Their smartphone OS, named Tizen right now, would reduce their reliance on Android OS and allow them a substantial boost to their bottom line if successful. Google and Apple would have to step up their game.

Apple has shown, in my humble opinion, a lack of creativity. We see less and less innovation from them. Their latest phone sought to throw off Google Maps simply because they wanted to cash in on ad revenue. They failed miserably and their replacement app has become the laughingstock of the tech world. Meanwhile, Google released a replacement that many people quickly downloaded.

Google, on the other hand, is very versatile. They are very familiar with trying new things and cutting what does not work. In their latest “spring cleaning”, they are eliminating Google Reader, simply because it is not working as they want any more. Sure, many people jumped to other services. I myself tried to join Feedly, but I couldn’t right away because of the vast amount of people accessing their servers.

So, if we end up having 3 viable smartphone sources, the only thing that can happen is competition. Innovation. Improvement. These are good things. Not only would Samsung bring a new product that would make the market stronger, but also Google would respond by stepping up their game. Hopefully Apple will react appropriately and bring some new ideas to light. Win for the companies and win for the consumers.

Disruption in our world

Of all the words to become buzz-worthy, I would not have imagined that disruption would be one of them. After reading the articles, I have come to believe that it's more than buzz. It is fear.

There are plenty of stories of "the student becoming the master", and I am not talking of Darth Vader. Usually these stories are of the old masters teaching new students who eventually out do their master. However, I rarely see these successes being "Oh, I just did a better job than you." They are more along the lines of "Oh, I can do it in a better way." This is disruption. We are seeing it more and more in our modern world at a faster pace than before. I would like to look at a few of these cases and evaluate them and what impact they could have. In addition, we will see what is being done to stop it.