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Weighty Words: The Future of e-Books, Part 4

Tuesday, January 30th, 2007

Yesterday we left several unanswered questions: who should digitize the world’s books? How do we ensure that authors get paid? What is the future of libraries in the digital age?

U.S. libraries have the potential to lead the digital book revolution. Libraries have a large market, consistent funding sources, and good relationships with private partners. Unfortunately, a lack of funding, a lack of focus, and usual bureaucratic hurdles have given Google the lead. Google certainly isn’t evil, but their market power does reduce the likelihood that public libraries will ever gain the political traction needed to fund this vision.

Before we start assessing the future of e-books and public libraries, let’s set the framework for how authors should get paid and who has the power to provide a digital library for the world.

The E-Book Market

It might be instructive to take a brief look at how Google has inserted itself into the e-book market. There are five major players in delivering e-books to readers:

1. Authors: The vast majority of authors are crucial but in many ways peripheral to the development of e-books. That may change (as it has in journalism) but in the near future, their power is distributed too widely.
2. Publishers: Publishers select authors, preen their works and prepare them for public consumption. Resembling the intransigence of record labels in the music industry, publishers are effectively dragging their feet on e-books by not offering any type of discount that would realistically lure readers away from paper books. Publishers fear that the sharing of e-books and emergence of virtual publishing will cut them out of the value chain.
3. Google: Google has used its deep pockets to rapidly insert itself into the e-books value chain. Google already reaches out directly to authors, so it’s easy to imagine that publishers may lose power and influence.
4. Libraries: Libraries are a widely distributed market and reliable customer, purchasing millions of books every year for their collections. The role of libraries in the digital world is rapidly changing. They may lag behind and slowly adapt to e-books, but taking initiative sooner could them more control over the e-books market than any other player.
5. Bookstores: Bookstores - online and off - have lagged on developing a viable e-book model. E-book sellers are often small web companies with specialized catalogs (see statastic! below). Your corner bookstores should be shaking in their bricks and mortar when it comes to e-books, and finding an e-book at Amazon.com is a confounding experience.

Copyright Issues

Now that we know the players, let’s look at one sticky issue that may be delaying the widespread adoption of e-books. Copyright is fundamentally a commercial problem, not a legal one. Intellectual property protection enables authors and musicians to derive profit from their works. Digital Rights Management (DRM) is absolutely critical to protecting the rights of authors. While many of us are familiar with the shortcomings of DRM in music, it is much better suited to e-books - with some adjustments:

-Customers who purchase e-books must be given a discount. Of the $20 you pay for a new hardback book, up to half is allocated to shipping, printing, publishing, and marketing costs. When you eliminate those costs by selling it in electronic format, you can charge less (say $12) while increasing publisher and author profits.
-Customers who purchase e-books should have the right to re-sell those books. Although Apple is having no trouble selling DRM music that cannot be re-sold, music downloads are fundamentally different: music is designed for repetition. Just try reading an e-book as many times as your little sister listens to the latest Justin Timberlake CD.
-E-books must be sold in sections. Just like being able to buy an MP3 single rather than the full album, e-books must give customers the option to part of a book - especially in non-fiction. For a few cents, customers should be able to buy a single recipe (rather than the cookbook), or city museum guide (rather than the entire country guide).
-E-books must be rent-able (a.k.a. subscription model or DRM time bombs). This is especially critical for the success of electronic public libraries.

If low-priced e-books are protected by reliable DRM and rent-able for public libraries, copyright protection should cease to be an issue. Why? Because people will have almost no incentive to share e-books and e-libraries would create a reliable profit center for publishers and authors.

The Wal-Mart Library?

Now that we have the commercial fundamentals of our new e-book world established, let’s take a look at how this would impact the players.

Wal-Mart flipped the supplier-buyer relationship upside-down. Because of Wal-Mart’s size and market share, suppliers are hesitant to be dropped from Wal-Mart shelves. This gives Wal-Mart increased power to negotiate supplier prices down (often to a fault). Suppliers make less profit per item, but they bet on making it up on volume.

When Google enters the e-book market, it will do so as the market leader (see statastic! below). This may have been Google’s strategy all along: the network effect. For example, where would you go to auction an item? If you want the most eyes on your item, you will auction it at Ebay where there are the most items for sale. Google’s huge database of digitized books will provide a similar draw for readers, giving Google buyer power over suppliers - in this case publishers. With the promise of massive volumes of e-books being sold on Google Books, Google should be able to negotiate lower e-book prices with publishers.

If libraries across the country were to unite and pool their resources, they could also create a single digital library. The federal government could also negotiate lower e-book prices for its public libraries, just as Congress is considering using the market power of 300 million citizens to negotiate lower prescription drug prices for its Medicare beneficiaries.

There are several advantages to a publicly-funded initiative to digitize the world’s books. Google Books search is proprietary. In other words, if you use Yahoo as your search engine, no Google Book results will show up. In contrast, a U.S. Digital Library would be searchable by anyone. Tomorrow we will explore how a such a nationalized virtual library might be implemented in the Washington DC Public Library system.
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Where Would You Buy an E-book?

Weighty Words: The Future of e-Books, Part 3

Monday, January 29th, 2007

If e-books have been a commercial flop thus far, then how do Americans access books? In 2004-2005 we were divided equally between purchasing 2.3 billion books and checking out 2.4 billion books from libraries. Libraries remain a critical steward of our world’s knowledge. But even as the world wide web has made information more global, most libraries remain local in their focus. Number of Words Dedicated to Wikipedia Entries

For librarians, it must seem that the web has turned information gathering on its head. The Internet is a heady young fellow, self-obsessed, self-referential, and unflinchingly modern in its focus (see right). Libraries house history, centuries of wisdom buried deep in stacks, and even deeper in the un-searchable text of yellowing book pages. So how can libraries remain relevant?

Let’s first examine the mission of public libraries versus the mission of major search engines. The following excerpts are from the mission statements of several major libraries and a certain web giant - see if you can distinguish between them (hover over or click the link for the answers):

A. “Helping people advance knowledge to enrich lives”

B. “…to organize the world’s information and make it universally accessible and useful.”

C. “…to sustain and preserve a universal collection of knowledge and creativity for future generations.”

D. “…collecting, cataloging, and conserving books and other materials…. to serve as a great storehouse of knowledge… and to function as an integral part of a fabric of information and learning that stretches across the nation and the world.”

E. “…to create a comprehensive, searchable, virtual card catalog of all books in all languages that helps users discover new books and publishers discover new readers.”

Private Sector Libraries

Clearly the missions of Google (and other search engines) are converging with those of the leading libraries. Google recognized this as an opportunity and launched the Google Library Project in late 2004. The project started with five major library partners, but has since extended to 11 libraries in three countries. Google is digitizing the contents of prestigious libraries such as Harvard, Stanford and Oxford, increasing access to tens of millions of unique books that were once accessible only to a small, elite group.

Google spends between $10 and $30 for every book it scans. The entire project, which will span at least a decade, will only cost Google the equivalent of its 4th quarter profits in 2006. Not a bad investment for the web giant.

Google has already made these books available on its Google Book Search, a fascinating portal that for the first time in human history opens up rare and not-so-rare books to anyone in the world. Not only are these books are fully text searchable, Google has recently announced an integration with Google Maps, making librarians, technologists and Google-philes giddy. No more leafing through musty books to find a quote or location.

Google’s Library Project is distinctive from several others such as the Open Content Alliance sponsored by Yahoo and Microsoft because Google is barreling ahead and scanning copyrighted texts. This has not only provoked lawsuits, but more importantly, it has also provided a necessary impetus to publishers and libraries to address the issue of how to manage copyrighted books in the digital era.

Google Book Search allows full text search for copyrighted works by simply telling you that the terms you searched for are in the book. Google then provides a tantalizing “snippet view” of the text as if it was torn right from the page. If you want to read the whole book online, however, you’ll have to wait. Rather than selling the e-book, Google paradoxically directs you to amazon.com which will happily mail you a hardback in 5 to 7 days for $21.95.

This is about to change dramatically. On January 21, 2007, Google announced to the Times of London that it would launch an e-book service. Details are murky, but it seems likely that users will be able to purchase all or part of copyrighted books. I can only reiterate that pricing matters. With e-books, publishers can increase the exposure of previously obscure books and eliminate publishing costs. Ideally, this will increase profit margins and create significant savings for consumers. Because digitized books are easily divided, e-books could lead to a new model of micropayments enabling consumers to purchase only what they need, be it a chapter, a paragraph, or even just a quote.

Public Library Reactions

Google’s mission is not without its critics. Jean-Noël Jeanneney, president of France’s Bibliothèque Nationale wrote a plaintive book called Google And the Myth of Universal Knowledge warning of Anglo-Saxon cultural imperialism and the risk of market-driven libraries:

“As anyone who uses Google knows, what is intrinsic to all the information it provides is hierarchization. Even if there are many pages of results, the searcher rarely goes beyond the first few. …The profit motive will necessarily promote one product over another.”

As long as there have been publishers with a marketing budget, there have been attempts to woo readers. And while the psychological effect of publishers’ advertising cannot be stopped at the door of library, our French friend would like to see it diminished.

There is some merit to this view, but not much. Libraries and library science will continue to weigh market forces against intellectual ones, but this new digital medium should not be made the culprit. If a library were to license, buy, or rent the contents Google’s digital library, couldn’t they simply reorganize it in a neutral, intellectualized way that would make even Mr. Dewey Decimal proud? Or should the public libraries simply create their own digital library system from scratch?

Public Library Initiatives

Most libraries do see the upside to digitizing their libraries or they wouldn’t be working with Google. In fact, Google recently gave a $3 million grant to the Library of Congress for its World Digital Library Project in conjunction with UNESCO. The project is focused on improving web access to rare materials that, “…are physically stored in geographically dispersed locations, and which, when brought together with other collections through cross-national and cross-cultural multilingual search and browse capabilities, will yield new knowledge and insights.”

The World Digital Library may sound ambitious, but its scope is much more limited than that of Google Books. It will focus primarily on the long end of the tail: rare cultural treasures that most of us don’t use, rather than popular literature that most of us check out from our local libraries.
Priorities: Cost of Digitizing All of the Books in the World Comparison

So we have the ivory tower approach and the commercial approach. Caught in the middle are the libraries that most Americans use.

Is Google the only answer? To be sure, they have a massive head start (see statastic below). In a decade they may have more books in their digital collection than any library system on earth. But if there is true intellectual concern about the earth’s largest library being in the hands of a profit-driven company, why not launch a public initiative? Can the U.S. government even afford it?

It’s all about priorities. If the U.S. government decided to scan and digitize every one of the 65 million books on earth, it would only cost about $2 billion. That’s less than we are spending for one week in Iraq, and it’s less than kids (I presume it’s kids) are paying for cell phone ring tones each year. We can afford it; so far, we just haven’t chosen to.

Even if the public sector did spend resources digitizing, libraries would face copyright issues. Tomorrow I will look at that as well as e-books initiatives at local libraries. And later this week, a case study that imagines the The DC Public Library in 2017.

Google versus the World's Largest Libraries
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Sources and assumptions: Google has not disclosed the number of books it is digitizing or its timeline for completing the project. Early in the project Google claimed that it would scan 3,000 books per day. This figure was used for the low estimate. The high estimate was based on expanded date searches (1500 to 2007) on Google Books that returned about 4.5 million books. This was extrapolated back to the beginning of the project to find the scan rate, which was then used to project the high estimate. Statastic believes that the high estimate is probably more accurate because the 3,000 books per day figure referred to a contract with only the University of California library system. The fact that Google continues to add libraries to the project indicates that Google is likely to accelerate the scanning rate.

Weighty Words: The Future of e-Books, Part 2

Monday, January 22nd, 2007

With the advent of e-ink and e-paper, the only thing missing is the electronic content: e-books. E-books offer several clear advantages over print media: students able to tote all of their textbooks back and forth to classes in one 7 ounce e-reader; traveling the world with detailed guidebooks and foreign language dictionaries for dozens of countries; the ability to store hundreds of your favorite books in a tiny urban apartment; and finally, the potential to revolutionize libraries around the world (more on that tomorrow).

Many analysts agreed that e-books would revolutionize publishing. In 2000, Accenture predicted that e-books would make up 10% of the book market by 2005. Unfortunately, e-books didn’t live up to their great expectations. In fact, e-books only made up .07% of the 2.3 billion books sold in 2005: less than 1 of every 1200 books sold was in electronic format. Moreover, sales of e-books were flat between 2004 and 2005.

So why has the public rejected the digitization of print media? One problem is that, unlike CDs, there is no way to digitize your current library of paperbacks. E-books and e-readers also present the classic chicken and egg conundrum. Without most titles available in e-book form, expensive e-readers lose their appeal. And without flashy new e-readers to energize consumers (as iPod did for digital music), publishers are naturally less willing to commit to the new format.

Some of that may be changing: Apple’s new iPhone is making bloggers like Booksquare all tingly:

“…the iPhone could either kill the nascent e-reader business or take it to new levels. We’ve been saying just about forever that the problem with dedicated e-reader is the fact that the consumer isn’t seeking a device that does only one thing. With its “smart” orientation features, the iPhone could usher in the mass market e-book era.”

Even as Apple might revitalize the market, if they insist on Digital Rights Management (DRM) as they do in the music market, they may undermine their potential success. Just as Apple iTunes makes it difficult to share digital music downloads with friends, some e-book sellers impose similar restrictions. That makes the paperbacks more attractive than DRM-controlled e-books: you bought it, you can share it with friends. Not so with DRM e-books.

Public Domain Twain: Survey of E-book Prices for Huck Finn Traditional publishing houses are also delusional when it comes to pricing e-books. If you want to read Tom Sawyer’s The Adventures of Huckleberry Finn, for example, you can buy the Penguin Classic paperback for $5.95, or for a modest 10% discount, you can download the same Penguin Classic from ereader.com.

But consider this: Copyrights on many classic titles have entered public domain. This means that almost everything written before 1923 in the United States is free to use.

In the past, Penguin Classics made profit by reprinting classic titles that would otherwise be unavailable.The Internet changes the equation. Take away the public’s need for the printing press, and e-books would seemingly be a major threat to Penguin Classics.

Fear not, for lovers of classics there is good news: Project Gutenberg has taken the Wikipedia approach to sharing e-books in the public domain. With 20,000 free e-books in their catalog - including Huck Finn - Project Gutenberg claimed more than 2 million downloads last month. Contrast this with the 1.7 million e-books sold in all of 2005 and we see once again that consumers of e-books are extremely price sensitive. (More on price sensitivity in music here.)

And the pricing premium for e-books isn’t restricted to the classics. Jimmy Carter’s bestseller, Palestine: Peace Not Apartheid is actually cheaper in hardback at amazon.com ($16.20) than the e-book version at ereader.com or fictionwise.com ($16.99).

Publishers seem wedded to the paper publishing business model. This antiquated pricing model is bad for consumers and worse for the environment. If the 2.3 billion paper books sold in 2005 had been e-books, we would have saved more than 7 million trees. Until publishers drop prices and loosen Digital Rights Management restrictions, the convenience and sensibility of e-books may remain a pipe dream.

But what if our public libraries could help revolutionize the e-book market? More on that soon.
Great Expectations for e-books

Sources: Statastic research, Accenture, International Digital Publishing Forum

Weighty Words: The Future of e-Books, Part 1

Thursday, January 18th, 2007

In the near future, most of our media will be found on a hard drive. 35mm film is rapidly going extinct, CDs are giving way to MP3s. Filmmakers like David Lynch have announced that they will never use anything but digital video cameras. Meanwhile, Netflix has introduced movie downloads. And whether the execs are ready or not, television is being revolutionized by YouTube among others. But our most ancient media of all hasn’t budged: books. Sure we read and write on computers for school and for work, but at the end of the day when you curl up with a good book, it’s unlikely to be on your laptop. Why hasn’t the e- History of Ink & e-Ink book taken off? And what happens when it does?

Books are long overdue (ahem) for the digital revolution. For the rest of the week, statastic! will consider the future of e-ink, e-paper, and e-books. What are the implications for our public libraries? Stay tuned for a case study on the e-library of the not-so-distant future. But first things first: You can’t have an e-book without e-ink.

In the 1970s, the legendary Xerox PARC first developed something they called electronic ink, or e-ink. E-ink is comprised of millions of microcapsules the diameter of a human hair. Each microcapsule contains positively charged white particles and negatively charged black particles suspended in a clear fluid. When a minimal electrical charge is applied, the microcapsules flip and remain flipped until the next electrical impulse tells them otherwise.

E-ink is perhaps best explained by what it is not. It is not an LCD or a plasma display that you may be accustomed to seeing on a laptop computer. Unlike laptop displays, e-ink is not backlit, meaning that if you want to read in bed, you’d better have a light on. The fact that e-ink doesn’t rely on backlighting results in several advantages:

-Easier to read: E-ink has nearly the same resolution and reflectivity as printed text. Reading using reflected light is much easier on the eyes than backlit screens, and much easier to read in sunlight. Unlike plasma or LCD flat screens, you can view e-ink from several angles just like regular paper.
-Flexible e-paper: Because e-ink doesn’t require backlighting, it also doesn’t require a rigid glass screen. The simplicity of e-ink means that it can be paired with flexible materials creating an e-paper that can be bent, or even rolled up.
-No need to recharge: Once the electrical current tells the microcapsules whether to turn black or white, they remain in that state indefinitely with no power input. A page using e-ink (also called e-paper) can remain open indefinitely without drawing down of a battery source. You can read thirty books before you need to plug in an e-reader using e-ink.

Plastic Logic's Flexible e-Reader Prototype Currently several companies are pursuing e-ink and e-paper. Plastic Logic, the developer of the “E Ink,” announced on January 3rd, 2007 that it had completed a $100 million round of equity financing. Their research currently is focused on flexible displays that will enable an electronic reader to hold hundreds of e-books and weigh less than a thin newspaper. For video on the flexible display prototypes, click here.

Several companies have already licensed E Ink for their own devices. Sony’s $300 e-reader holds 80 books, weighs about as much as a paperback and can turn 7,500 pages before it needs a charge. Star eBook just released its 6.2 ounce e-reader in Japan, claiming that it’s the lightest reader on the market. And late in 2006, Hitachi released a 4,000 color e-reader, an innovation that could rapidly earn some converts.

If the $300 to $500 price tag seems unrealistic, consider this: In 1996 DVD players hit the American market for about $600 (in 1996 dollars, no less). The least expensive DVD player at Walmart.com is now $30, less than 5% of the price a decade ago. If e-readers have similar adoption rates, you might be able to pick up an e-reader for less than the price of a hard cover within a few years.

Tomorrow: the e-book market

The Russian Futurists - imagine the Magnetic Fields playing with a full electronic symphony underwater. Try to pick out the honking geese on the track “Our Pen’s Out of Ink.” A relative inconvenience in this age of e-ink.

Weighty Words: e-Reader vs. Books

Sources: Statastic research, Wikipedia, e-paper.org,

Surge Protectors & Bush’s Legacy

Thursday, January 11th, 2007

Last night Bush faced the nation, tail between legs, and announced in sober terms a plan to increase the number of troops in Baghdad and Anbar Province by 21,500 troops. This is not a novel approach. In August 2006, Operation Whac-a-Mole pulled troops from Mosul to secure violent areas of Baghdad. The results were dramatic… and temporary. As Senator McCain predicted then, once the troops moved on, the sectarian violence returned to the neighborhoods that U.S. troops had vacated.

game Theory: Iraqi Policy and Bush's Legacy Last night’s speech was Bush’s last stand. He seemed to finally realize that not only Iraq’s future is at stake, but also his historical legacy. He faced two basic policy decisions with four possible outcomes.

Using a good old game theory matrix, we see that although there is a chance that a Democrat-led withdrawal might succeed, it would not provide a political victory for Bush. The troop surge is the only attractive solution to a president with an eye on his place in history.

Policy A: Democrats secure a phased withdrawal from Iraq

Outcome 1): Iraq stabilizes or even flourishes as a beacon of democracy and freedom across the Middle East. Bush might get credit for his long term military strategy, but will more likely be blamed for a myopic insistence on prolonged occupation that would have ignited a civil war were it not for the Democrats in Congress.

Outcome 2): Iraq devolves into bloody civil war. Bush is blamed for starting an unnecessary war that could ignite sectarian strife across the Middle East. American military looks weak.

Policy B: Troop surge into Baghdad and Anbar

Outcome 1): Troops secure Baghdad and Iraq before Americans become impatient. Iraq becomes a model of democracy in the Middle East. Bush’s reputation is salvaged, but historians note that his “stay the course” tactics changed only after the 2006 elections.

Outcome 2): Additional American troops cannot break cycle of violence. Iraq devolves to civil war and American military looks even weaker and more irrelevant than if we had withdrawn before the civil war. Bush is blamed for strategic and tactical blunders that endure for generations.

No Free Refills

Three weeks ago President Bush announced plans to increase permanent active-duty military by as many as 70,000 troops. Those troops won’t recruited and trained until 2008, but Bush has already committed one-third (21,500) of them to the troop surge proposed last night. Those 70,000 troops will also be replacing the 25,851 dead and wounded during the war thus far.

The grisly truth is that 68% of the new troops that will be ready in 2008 have already been used.

Last night Bush struck a note of atonement, stating that, “Where mistakes have been made, the responsibility rests with me.” Let’s hope that the latest surge protectors are not being sent to Iraq to protect Bush’s historical legacy. We cannot afford for Bush to be responsible yet again.

No Free Refills

*Maximum proposed troop increase

Sources: Iraq Coalition Casualty Count, Washington Post

Republican Tax Cuts Don’t Pay

Monday, January 8th, 2007

In the Saturday Op-eds, The Washington Post again called out the Bush administration for falsely claiming that tax cuts pay for themselves. Tax cuts pay for themselves in much the same way that a ten cent coupon pays for a can of soup. Yes, some tax cuts help stimulate the economy, but no study has found that tax cuts are self-funding.

Estimates range, but a sample of three non-partisan studies indicates that income tax cuts do not pay for themselves - not even close. Most studies indicate that tax cuts do increase personal income and consumption, resulting in a very moderate economic stimulus. But this minor boost in economic growth does not replenish government coffers. For every $100 lost to tax cuts, the government only recoups between 10% to 28% due to economic growth. Even former chairman of President Bush’s Council of Economic Advisors, Gregory Mankiw’s most rosy estimates demonstrate that tax cuts lose 50% of their value.

So tax cuts cost the government money. End of story. Unless you’re the president writing an op-ed in the Wall Street Journal:

It is also a fact that our tax cuts have fueled robust economic growth and record revenues. … The bottom line is tax relief and spending restraint are good for the American worker, good for the American taxpayer, and good for the federal budget. Now is not the time to raise taxes on the American people.

Tax relief has benefited the American worker - as long as you’re talking about the American worker in a household making more than $100,000 per year. According to a study by the non-partisan Tax Policy Center, last year’s tax “relief” amounted a whopping $68 to the 125 million households making less than $100,000. Meanwhile the 20 million earning more than $100,000 received an average of $2,861 per household, 42 times more tax relief than those at the bottom of the income scale.

Indeed, now is the time for Democrats to end Bush’s tax cuts for the rich.

And if you have to pour over tax policies in great depth, I would recommend Tim Hecker’s album Harmonies in Ultraviolet (number 14 on Pitchfork’s best of 2006): ambient static and dissonance for blogging in the middle of a rainy night.

What Bush Isn't Telling You

*Mankiw: Income Tax Cut measured with dynamic scoring

Sources: Washington Post, Congressional Budget Office, Wikipedia, Tax Policy Center

MP3s for a Nickel

Thursday, January 4th, 2007

In online music news, the Record Industry Association of America (RIAA) is suing the Russian website allofmp3.com for the comical sum of $1.65 trillion, more than double Russia’s nominal GDP of $763 billion. To be sure, allofmp3 is skating on thin legal ice by using loopholes in lax Russian copyright laws to sell MP3s discounted as much as 90% from iTunes pricing. But if it weren’t so legally ambiguous, who would complain about song downloads for as little as a dime?

A few weeks ago I had the good fortune of happening upon a Tower records in the process of liquidating its CDs for half price. The place was mobbed. It seems that while people no longer can stomach paying $19 for a CD, the $9.50 price point was much more tolerable. This is not as much a lesson in bricks and mortar versus online music, the lesson is that people buy more music when the music is less expensive.

iTunes has noticed that the $10 price point is significant to customers. But it’s still too high. After all, they’ve compressed a higher quality digital format, cut out shipping costs and eliminated printing of CD booklets. It’s possible to buy CDs online for a similar price, the only trouble is that you’ll have to wait for several days to receive it.

A couple of years ago during an NPR round table about digital rights management (DRM), someone suggested a groundbreaking approach. Why not put every song ever recorded online and let users download them for a nickel each? When allofmp3 started that’s basically what they did. At that price, there’s no reason not to be impulsive. Five cent downloads would reduce incentives for file sharing and encourage listeners to experiment with new music.

A nickel per song doesn’t sound like much revenue for artists, but artists would drastically increase sales volume. If artists picked up 60% of the revenues, or 3 cents per song, then selling an albums with a total of 15 songs would only earn them $.45. If 10 million people downloaded the album they would earn $4.5 million on album sales alone. And what if the artists benefited from the mashups and amateur remixes that now proliferate on the web? Artists could offer up song pieces for sale and then split revenues with bedroom DJs.

As hard drive prices decline, the cost of storing music approaches zero. And if the price of acquiring the music approaches zero, then people have no reason not to buy it. Imagine the innovative companies that might spring up: online DJs who choose playlists from your own MP3 collection. Or, while listening to online radio you could simply push the repeat button for a song you like. The service would charge you a nickel, download the song instantly to your hard drive. Better yet, store your music library of thousands of songs online and stream it wherever you go.

This will never appeal to the RIAA lawyers who make their living by imagineering $1.65 trillion lawsuits. But it would benefit the artists and the public. And artists that no longer make their living attempting to sell overpriced albums can always sell overpriced tickets to sold out concerts (there’s evidence that this is already happening), incentivizing bands to play live more often.

Statastico would love a copy of TV on the Radio’s critically acclaimed “Return to Cookie Mountain.” The single Wolf Like Me is fantastic, as is their live show and nearly everything they’ve produced thus far. So how does someone like me get music? At about $.27 per track emusic.com is the best value out there. If emusic doesn’t carry the album (and they don’t), then I buy the CD and endure the long wait. There are many other options, so I decided to evaluate them compared to my dream website anysongonearthforanickel.com.

Statastico compiled an entirely biased and unscientific assessment of the methods most people might use to acquire music. There are two scores, the price score and the usability score. Price score was taken as the inverse of the price as a percentage of $11.50. In other words, if it’s free it scored 100 and if it is close to $11.50 it scored near 0. The usability score is based out of 100 and is the average of the scores from the following 6 categories:

1. Legality: Sharing songs with friends, file sharing and allofmp3.com scored 1 and 10 in this category; all others scored 100.
2. Ease of Use: File sharing is time consuming and risky, while amazon.com and iTunes are straightforward. Emusic was marked down to 75 because they require a subscription.
3. Music Selection: How many albums can you find? Predictably, our theoretical “any song on earth for a nickel” came out on top.
4. Flexibility: Can users share the music easily with other, are there digital rights management, can you re-download MP3s that you may have lost (as on emusic)? CDs scored slightly higher because they allow users to select their own music compression, allowing flexibility for more advanced compression formats in the future.
5. Audio Quality: CD format was given 100, AAC was rated higher than MP3s because of better quality at lower bitrates, and file sharing was marked down to 50 out of 100 because of inconsistent downloads.
6. Instant Gratification: How long it takes to get the music? Physical transfers involving UPS scored low, online transfers (except file sharing) scored higher.

As you can see, the fictional website anysongonearthforanickel.com wins. Of the next four best options only allofmp3 would (allegedly) pay royalties to TV on the Radio (emusic doesn’t carry the latest album).

The RIAA should remember that customers - especially young customers - are extremely price sensitive and tech savvy. The RIAA will never shut down peer-to-peer networks, (in fact allpeers just developed an add-on for Firefox). The RIAA must embrace innovation rather than outmoded business models. By shifting the paradigm to low-cost song downloads, artists may once again get paid for their hard work.
Evaluating the best value and method for acquiring new music

For full source data click here.

Mission Accomplished in Somalia?

Wednesday, January 3rd, 2007

One week ago Ethiopian troops moved into the Somali capital of Mogadishu to quell the unrest. According to a U.S. State Department spokesman, the Ethiopian military did so at the request of the secular Somali government which has been battling Islamic fundamentalists in Mogadishu.

The invasion bears some striking similarities to the U.S. invasion of Iraq - perhaps even more so to the Muslim world. Ethiopia is a U.S. ally and a largely Christian nation with a history of enmity toward Muslim Somalia. Ethiopia seemed poised for a rapid military victory, yet completely unprepared for maintaining security in Mogadishu.

As we saw in Iraq, a power vacuum is fertile ground for extremists. Somalia’s secular interior minister ominously said, “We have a symbolic government. Ministries we don’t have, a military we don’t have.” Recent statements by Al Qaida spokesman Ayman al-Zawahri identify that Somalia and Iraq as prime Islamic battlegrounds in their war on the West.

The security picture in Mogadishu bears striking resemblance to that in Baghdad:

Six days after the transitional government took hold, very little security was evident beyond that which Somalis have grown accustomed to providing for themselves: roving pickup trucks filled with armed teenagers, and AK-47-toting militiamen who guard the city block by block, and clan by clan.

Despite similar conditions on the ground, there are important differences. For one, Al Qaeda was active in Somalia before the Ethiopian invasion. And unlike the United States, Ethiopia is appealing to the international community for assistance. With any luck the outcome in Somalia three years hence will also be starkly different from that in Iraq today.

Religion: Invaders and Invaded

Source: Wikipedia, statastic research

What Knots to Wear

Monday, January 1st, 2007

Statastico has made some New Year’s resolutions:

1. I will update my blog five times a week.
2. I will try my darndest to provide at least one original statastic per week.
3. I’ll recommend some music that may help soothe your statastics-starved brains.

What does this mean to you the avid reader? It means that coming up with a clever idea, incisive analysis, statastics and graphics every day is more than a full time job… and that Statastico can’t do it alone. Rest assured, Web 2.0 - also known as Time Magazine’s Person of the Year - caught up to statastic! and churned out swivel.com.

Swivel is the Flickr of statistics and its user-generated (and statistically suspect) stats and graphs will challenge any of you bold enough to distinguish between correlation and causation. But it’s still good fun, and you have to admire wide-eyed entrepreneurs who staked their livelihood on the public’s thirst for more meaningless statistics.

Potosi Mines So what has Statastico been up to? Glad you asked. Statastico was doing “research,” exploring the far reaches of the Incan Empire - from the apex of their power in Machu Picchu, to their tragic fate in the silver mines of Potosi, Bolivia at the hands of the Spanish conquistadors.

Seeing the quality of their stonework, the remnants of their agricultural prowess, and 500 year-old terraces still in use today makes one marvel that Pizarro so easily conquered this vast empire. The Incas governed a population of more than 15 million without the benefit of steel or the wheel. More shockingly, the Incas were the largest empire in the history of humankind without an alphabet or a written language (see chart below).

Or were they?

In January, Wired Magazine reports that there is an attempt to decipher Incan khipu textiles. The khipu may look like adornment, but these series of knotted strings were long assumed to be a type of abacus for recording census data. New research at Harvard, however, is exploring how the styles of knots, twists and colors in the string may form the basis of an Incan alphabet.

So far Harvard’s research is inconclusive, but their new approach applies network analysis based on the theory that different khipu textiles may refer to one another (much like Google PageRank). For any of you cryptophiles, Harvard has published the raw data here for you to noodle over.

In the interest of living up to Time Magazine’s Person of the Year honor, I thought I would offer some suggestions:

1. Many of the researchers focus on the khipu as stories to be handed down as a historical record. One of the advantages of knots as a form of a communication is its reusability. What if the khipu were more like portable blackboards constantly being written, erased, and rewritten in order to quickly send messages throughout the empire? This would change the nature of the translation. While researchers might be focused on translating a history book, they may be looking at the equivalent of ancient knot-based emails.
.
2. Although the raw knot data seems pretty conclusive it might be worth enlisting the help of some folks who are so brilliant at mathematics that they created an esoteric sub-discipline known as knot theory. Here’s an example of some of the fun problems the folks at Williams College are considering: “Is the trefoil the only nontritangent knot? (A knot is nontritangent if there is a realization of that knot that does not have any planes tangent to the knot at three or more points.)”

In any case, I applaud Wired Magazine for running this article. Any time you can cross anthropology and google search algorithms, you have my attention. Now it time for the person of the year (you - not me) to decipher the khipu and save the Incas from the ignominy of being the most extensive empire without a written language.
While you’re busy untangling the khipu alphabet, have a listen to the Munich-based Notwist’s 2002 album Neon Golden: beepy, indie, minimalist, fuzz pop.

Evidence of Writing in the 40 Largest Empires

Weighty Words: The Future of e-Books, Part 4

Tuesday, January 30th, 2007

Weighty Words: The Future of e-Books, Part 3

Monday, January 29th, 2007

Weighty Words: The Future of e-Books, Part 2

Monday, January 22nd, 2007

Weighty Words: The Future of e-Books, Part 1

Thursday, January 18th, 2007

Surge Protectors & Bush’s Legacy

Thursday, January 11th, 2007

Republican Tax Cuts Don’t Pay

Monday, January 8th, 2007

MP3s for a Nickel

Thursday, January 4th, 2007

Mission Accomplished in Somalia?

Wednesday, January 3rd, 2007

What Knots to Wear

Monday, January 1st, 2007

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