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In a restaurant, the cost of providing you with a warm comfortable place to sit, and someone to bring you glasses of water (the cost of the water itself being d

In a restaurant, the cost of providing you with a warm comfortable place to sit, and someone to bring you glasses of water (the cost of the water itself being deminimus), is covered by the expensive meal you pay for. Since all unprotected digital goods are approximately as cheap to copy as one another regardless of production cost, all digital goods count as 'glasses of water' in your analogy. This implies that the cost of producing unprotected digital goods in general can only be covered by selling some non-digital good or service in conjunction with it.

Retric 15y ago
MMO's are digital goods without this problem as is Facebook. Also, many restaurants barely break even on their food and make most of their money selling dramatically overpriced drinks. If you order a ten 99c cheeseburger's from McDonald's they make less money than if you order one 1.50$ soda, yet when you focus on the average customer you sell enough soda for McDonald's to become a multi billion dollar company. http://adage.com/article/news/double-cheeseburgers-working-triple-time-fast-feeders/122898/ http://adage.com/article/news/double-cheeseburgers-working-t...
- rbarooah 15y ago
  No they aren't - they both keep important parts of their software protected and sell an adjunct service. The MMO server software is heavily protected, and you pay for access to the data center where they run it. MMOs are therefore both protected and funded by the selling of an adjunt service. Facebook's client software is free but the server software is also heavily protected, and the operation is paid for by selling advertising, also an adjunct service.
  - Retric 15y ago
    The server side software on most MMO's is a tiny fraction of the overall code. People have reversed engendered World of Warcraft and some people play on private servers. However, in both WOW's and Facebook's case it's the hosting of all that data that's valuable not just the code. Which comes back to my main point, there are DRM free ways to make piracy irrelevant. If someone was trying to sell a nuclear submarine by walking door to door in a trailer-park people would have no problem suggesting they were an idiot. Yet, for some reason people get all up in arms when someone suggests selling prepackaged media is a poor decision.
    - rbarooah 15y ago
      How is your point any different to the point I made in the comment you first replied to? Am I missing something?
      - Retric 15y ago
        When you said: This implies that the cost of producing unprotected digital goods in general can only be covered by selling some non-digital good or service in conjunction with it. My impression was you did not agree with this point and where simply bringing it up as a topic of conversation. Clearly many individuals and companies do make a lot of money selling content. I simply feel that what's needed to keep that model working in the long term is more costly than the value of content it protects.
        rbarooah 15y ago
        I don't like it, but I don't disagree with it. I was bringing it up as a topic of conversation, mostly in the hope that someone would argue against it convincingly, because if such an argument can be made, I'd like to hear it.
drostie 15y ago
I'm not sure where you get the "this implies" aspect of your conclusion from. There might be some sort of "common sense" logic here, but the only ways I can really read it are either boring or wrong. So you might be saying, "content authors will find it more profitable to sell T-shirts and posters and hardcopy books than trying to sell a required subscription for viewing their content archives." That is true for some cases, like webcomics, but it is not true in other cases, like the machinima series Red vs Blue where you can "sponsor" Rooster Teeth for a set of services which are primarily digital -- or for people who download the MS Paint Adventures music off of BandCamp. You might object that at some level there is a "non-digital good" called "authenticity" which is being sold in the latter two cases, which might be true, but it makes the claim much less interesting, because people sending their money to someone they like is precisely the original author's point, and it opens up all sorts of business models, like aggregation (SomethingAwful requires a small payment for forum memberships and it has worked very well for them; GitHub sells private repositories and that works very well for them too). In fact it's very hard for me to see what business models you'd be excluding, if you took that approach.
- rbarooah 15y ago
  I don't see why you need to open with an insult. By your analogy, all copyable digital goods are like water, regardless of what they cost to produce initially, because the cost of copying is close to zero. If I'm wrong, please explain. In your second paragraph are you suggesting that digital goods will be supported by donations? Github doesn't sell digital goods. They operate a service.
  - drostie 15y ago
    (1) I didn't need to and I'm not sure that it was in fact an insult. (2) Well, the first thing is that I don't know what "all copyable digital goods are like water" means. Perhaps in context you mean "all copyable digital goods should be offered for very cheap prices." I'm not sure I agree with that. Either way I'm not sure that it implies, by itself, that "the cost of producing unprotected digital goods in general can only be covered by selling some non-digital good or service in conjunction with it." (3) No. In my second paragraph I am explicating the two ways that I see to understand your original statement: the narrow way ("people will not pay for bits period") which is wrong, and the broad way ("people can always be viewed as paying for something other than the bits, like the service to access the bits or the authenticity of getting the bits from some official retailer") which I think doesn't really rule out any particular payments for any particular practices. I have no idea what exactly you're trying to "rule out". This is all complicated by the fact that as far as I can tell, these are apparently beliefs which you are trying to ascribe to me. That misunderstands the point of my analogy, which is that there is no "free rider" problem generated particular to digital goods sans artificial scarcity. A "free rider" problem occurs when nobody wants to pay to maintain a service. The point of the water analogy is twofold: first, it is to show the absurdity of worrying about free-riders when there is little to no maintenance cost. Second, it is to show how trying to punish those so-called "free riders" is just going to alienate people who might otherwise like you. (4) That's why I didn't say that they sold digital goods. o_O.

Retric 15y ago

MMO's are digital goods without this problem as is Facebook. Also, many restaurants barely break even on their food and make most of their money selling dramatically overpriced drinks. If you order a ten 99c cheeseburger's from McDonald's they make less money than if you order one 1.50$ soda, yet when you focus on the average customer you sell enough soda for McDonald's to become a multi billion dollar company. http://adage.com/article/news/double-cheeseburgers-working-triple-time-fast-feeders/122898/ http://adage.com/article/news/double-cheeseburgers-working-t...

rbarooah 15y ago
No they aren't - they both keep important parts of their software protected and sell an adjunct service. The MMO server software is heavily protected, and you pay for access to the data center where they run it. MMOs are therefore both protected and funded by the selling of an adjunt service. Facebook's client software is free but the server software is also heavily protected, and the operation is paid for by selling advertising, also an adjunct service.
- Retric 15y ago
  The server side software on most MMO's is a tiny fraction of the overall code. People have reversed engendered World of Warcraft and some people play on private servers. However, in both WOW's and Facebook's case it's the hosting of all that data that's valuable not just the code. Which comes back to my main point, there are DRM free ways to make piracy irrelevant. If someone was trying to sell a nuclear submarine by walking door to door in a trailer-park people would have no problem suggesting they were an idiot. Yet, for some reason people get all up in arms when someone suggests selling prepackaged media is a poor decision.
  - rbarooah 15y ago
    How is your point any different to the point I made in the comment you first replied to? Am I missing something?
    - Retric 15y ago
      When you said: This implies that the cost of producing unprotected digital goods in general can only be covered by selling some non-digital good or service in conjunction with it. My impression was you did not agree with this point and where simply bringing it up as a topic of conversation. Clearly many individuals and companies do make a lot of money selling content. I simply feel that what's needed to keep that model working in the long term is more costly than the value of content it protects.
      - rbarooah 15y ago
        I don't like it, but I don't disagree with it. I was bringing it up as a topic of conversation, mostly in the hope that someone would argue against it convincingly, because if such an argument can be made, I'd like to hear it.

drostie 15y ago

I'm not sure where you get the "this implies" aspect of your conclusion from. There might be some sort of "common sense" logic here, but the only ways I can really read it are either boring or wrong. So you might be saying, "content authors will find it more profitable to sell T-shirts and posters and hardcopy books than trying to sell a required subscription for viewing their content archives." That is true for some cases, like webcomics, but it is not true in other cases, like the machinima series Red vs Blue where you can "sponsor" Rooster Teeth for a set of services which are primarily digital -- or for people who download the MS Paint Adventures music off of BandCamp. You might object that at some level there is a "non-digital good" called "authenticity" which is being sold in the latter two cases, which might be true, but it makes the claim much less interesting, because people sending their money to someone they like is precisely the original author's point, and it opens up all sorts of business models, like aggregation (SomethingAwful requires a small payment for forum memberships and it has worked very well for them; GitHub sells private repositories and that works very well for them too). In fact it's very hard for me to see what business models you'd be excluding, if you took that approach.

rbarooah 15y ago
I don't see why you need to open with an insult. By your analogy, all copyable digital goods are like water, regardless of what they cost to produce initially, because the cost of copying is close to zero. If I'm wrong, please explain. In your second paragraph are you suggesting that digital goods will be supported by donations? Github doesn't sell digital goods. They operate a service.
- drostie 15y ago
  (1) I didn't need to and I'm not sure that it was in fact an insult. (2) Well, the first thing is that I don't know what "all copyable digital goods are like water" means. Perhaps in context you mean "all copyable digital goods should be offered for very cheap prices." I'm not sure I agree with that. Either way I'm not sure that it implies, by itself, that "the cost of producing unprotected digital goods in general can only be covered by selling some non-digital good or service in conjunction with it." (3) No. In my second paragraph I am explicating the two ways that I see to understand your original statement: the narrow way ("people will not pay for bits period") which is wrong, and the broad way ("people can always be viewed as paying for something other than the bits, like the service to access the bits or the authenticity of getting the bits from some official retailer") which I think doesn't really rule out any particular payments for any particular practices. I have no idea what exactly you're trying to "rule out". This is all complicated by the fact that as far as I can tell, these are apparently beliefs which you are trying to ascribe to me. That misunderstands the point of my analogy, which is that there is no "free rider" problem generated particular to digital goods sans artificial scarcity. A "free rider" problem occurs when nobody wants to pay to maintain a service. The point of the water analogy is twofold: first, it is to show the absurdity of worrying about free-riders when there is little to no maintenance cost. Second, it is to show how trying to punish those so-called "free riders" is just going to alienate people who might otherwise like you. (4) That's why I didn't say that they sold digital goods. o_O.