Lawyers, Content and Business Savvy
October 26, 2009
I enjoyed “Lawyers Discussing Business Models.” You may find it interesting. TechDirt does a good job of deconstructing a podcast about business models in which no business people participated. Sure, some of these folks work in commercial organizations, but the lawyers are overhead, not the individuals who have to make sales and make the business work. One comment I noted was:
The last analysis I’ll talk about that is again faulty from an economics standpoint again comes from Scott Martin at Paramount, where he tries to defend the importance of DRM, noting that if he flies into JFK he has various price options on transportation: he can buy a car, rent a car, take a cab or take a train. So there are price differentials. He says that without DRM, content is like saying his only option is to buy a car. That is, if he had DRM, they could offer different “rental options” for content, with “one day pricing or one week pricing.” But that’s totally wrong again. There’s a reason for the differential pricing in the transportation options: it’s related to the marginal cost of each option and the competitiveness of the market. That’s what sets the prices. But with content, the marginal costs are zero, so what he’s doing is trying to set up an artificial barrier to pretend the markets are the same. While I like listening to these discussions, I just find the economic fallacies frustrating.
TechDirt and I are on the same page. Lawyers make money by finding angles within the legal system and charging for time. Pretty exciting stuff, just not the business model that works in an online environment or for most business organizations yet.
Stephen Arnold, October 26, 2009
No one paid me to write this. I am safe from the Railway Retirement Board’s oversight of bloggers. I think.
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