Creative Destruction

December 20, 2011

Burnt Impressions

Filed under: Art,Business,Geekery,Humor,Religion — Brutus @ 4:02 pm

This latest just makes me laugh: a company called Burnt Impressions Inc. in Danville, Vermont, is selling a line of toasters that burn images of one’s choosing into toast.

It’s usually a T-shirt maker that jumps on a trend first, but I suppose if the trend to be coopted is spectral images appearing on grilled cheese sandwiches, then it makes perfect sense to make a toaster than does it for you. Current options include Jesus, the Virgin Mary, the Nativity, the peace sign, and the pot leaf.

I also saw a couple puns worth repeating: Cheesus Christ and Jesus Crust.

November 29, 2010

Back to the Drawing Board

Filed under: Business,Content-lite — Brutus @ 3:36 pm

Not sure what possessed me, but I had a look at the General Motors website, which has a curious intro movie that says, in effect, “well, back to the drawing board.” I’m unsure whether GM’s failure to ignite the passions of the car-owning public is solely to blame for the company’s collapse and subsequent bailout. I have read at least two analyses that suggest there were structural labor and financial decisions made in the 1950s and 60s that later bore their fruit and killed GM’s profitability. The idea that GM might be able to wipe the slate clean and start again by designing cars people want to buy is the clear affect of the website, complete with shots of ultramodern architecture and designers at the drafting board, as well as a couple artisans shaping body panels.

GM was relisted on the NY Stock Exchange a couple weeks ago at a little above $34 per share, a huge increase (200+ times) over the amount it eroded to before it was unlisted last year. I have no stock advice, but I do find it curious that many would want to play the “fool me once … fool me twice” game with this company.

February 19, 2008

Marketing Niches

Filed under: Blogosphere,Business,Economics — Brutus @ 11:49 pm

This report at Hitwise compares the ages and incomes of users of Yahoo! to those of Google. The differences appear to be negligible or at least subtly shaded, unless I’m reading the data wrong. However, in my circle, the perception has long been that Yahoo! was pretty well eclipsed by Google. That perception is apparently untrue, which accounts in part for Microsoft’s interest in acquiring Yahoo!, which hadn’t made sense to me before.

Best of all, though, are the labels assigned to various demographics in this graph:

graph

What does one do if more than one marketing niche might be a reasonable fit? Here they are in a list:

  • Struggling Societies
  • Urban Essence
  • Blue-Collar Backbone
  • Remote America
  • Aspiring Contemporaries
  • Rural Villages and Farms
  • Varying Lifestyles
  • American Diversity
  • Metro Fringe
  • Small-Town Contentment
  • Affluent Suburbia
  • Upscale America

What’s the difference between Varying Lifestyles and American Diversity, or Small-Town Contentment and Remote America? And don’t all of these demographics have an normal age range?

I’m used to being reduced to a number based on my consumption and spending habits. Undoubtedly, one (or more) of those demographics fits me, despite my knee-jerk disdain for such things. Without a specialization in marketing, though, I still can’t believe that such information is worthwhile to makers of products and providers of services. Maybe someone else knows better.

February 16, 2008

Eating Out

Filed under: Business — Brutus @ 5:28 pm

MSN Money has a brief article, by now rather old (two years is definitely old — shoot, one month is old by journalistic standards), examining the economics of eating out vs. preparing home-cooked meals. Based on a fatuous calculation of the “costs” associated with preparing food at home (time spent shopping and preparing plus the food itself) the article finds that it’s cheaper to eat out.

This is a bizarre conclusion. The reduction of the complex of activities involved in eating to a business calculation is myopic in the extreme. In fairness, other considerations are given some attention, too: the health of restaurant food, the size of portions, and the obesity epidemic in the U.S. But the bottom line for this article appears to be getting oneself fed — as though the most efficient ways of getting that done both monetarily and in time are the best ways of calculating value — in order to return to productive activity, that is, making more money. I suppose eating while working is the most economically efficient way of getting fed by the logic of this article. Or perhaps just forgo eating at all.

It’s worth remembering from time to time that it’s the journey, not the destination, that’s important. Although not all meals can or should be extraordinary culinary experiences, the entirety of shopping, preparation, consumption, and clean-up offer an enjoyable process that isn’t well suited to an economical analysis by efficiency experts. Notably absent from the article, for example, is the value of sharing a meal in all its aspects. That’s why people host dinner parties. If it were merely about strapping on the feed bag, there are certainly less taxing ways of filling one’s stomach.

December 24, 2007

Wilkinson’s Family Restaurant

Filed under: Business,Humor — Brutus @ 7:02 pm

Presented without comment:

October 16, 2007

Competition Spurs Failure

Filed under: Business,Economics,Science — Brutus @ 1:38 am

As with Adam’s anticipation of the demise of the newspaper, the demise of the recording industry has been prophesied for some time now. Periodic transitions from one medium to another have been disorienting, but it wasn’t until the digital era, when ripping tunes and file swapping became ubiquitous, that the economic model of the recording industry got to be seriously undermined. (Others have disagreed with me on this point in the past.) The RIAA has made itself a scourge by acting to protect its members’ intellectual property, which I find a legitimate response but others insist is preposterous. This is a brief background to provide context.

What surprised me to learn was that the recording industry has had a larger hand in its own eventual failure than even I suspected. As this article describes in some detail, recording companies (labels, if you wish) competed to attract listeners and sell albums, but rather than focus on developing musical groups and creating the best possible musical product (or maybe in addition to those things), they adopted a subtle technological trick to harpoon listeners. Louder music (average level rather than peak level) tends to give the impression of better quality to typical listeners, so over time, the dynamic range of music was flattened or compressed while made louder overall. The side effect the industry should have foreseen is listener fatigue, which causes customers to turn off the music.

This competetive strategy looks conspicuously like the tragedy of the commons to me. A few thoughtless competitors abandoned their values for a temporary and illusory edge in the marketplace until the practice became so widespread that the music itself was compromised. I suppose there are plenty of examples of both principled competition and weaselly competition. In this case, the weasels sealed their own fates first by enabling infringers and then selling listeners short (not in that order chronologically). Oddly enough, neither of these practices has had the same effects in the classical and jazz markets, where the best possible medium and best possible musical material have always been used to stimulate listeners’ interest and album sales. What a shame those simple values are lost in mass markets.

October 11, 2007

Newspapers Relegated to the Dustbin of History

Filed under: Blogosphere,Business,Economics,Media Analysis — Adam Gurri @ 6:29 am

Note: the following is a paper I wrote for a Microeconomics class, which is why the language is a bit more formal than usual. This paper may also be viewed as a PDF file.

When the last newspaper goes bankrupt, people will be better informed. This is counterintuitive only if you hold to the popular misconception that newspapers developed as an institution in order to filter out all but the highest quality information. The problem that newspapers address is reality is not one of quality, but one of distribution. They utilized mass-production in order to provide consumers with a cheap medium with a wide variety of content. This was a highly efficient solution to the problems of the printing press, but the internet is rendering such problems obsolete. As a result, the newspaper model will rapidly be overtaken by more effective online alternatives.

The incentives provided by the newspaper business model are unnecessary for the production of content. As pointed out in Price Theory and Applications, “Some people are willing to create without material reward, simply for the pleasure and glory.” (Page 330) This is as true for nonfiction writing as it is for creative works—writer William Zinsser famously categorized nonfiction as a type of literature. The fact that content is produced for pleasure does not imply that it will be poor in quality, either. The reason is simple—often people who have a passion for something will invest a great deal of time on it. Whether it’s spent on research or taking art classes, it refines the tools that they will have available to produce content later on.

In some cases, they may be indulging in extracurricular pursuits on topics related to their profession. Tyler Cowen, of Marginal Revolution, is but one of many economists who write on weblogs, or “blogs”. Since his professional career is dedicated to accumulating information on a particular subject, the marginal cost of finding relevant information for a new publication in his field is significantly less than it would be for a non-economist. In fact, it’s safe to say that it would cost a journalist far more to produce something of comparable quality on the subject. In the world of nonfiction, newspapers cannot compete with their online alternatives—Cowen is but one example of the professional blogging in his spare time. Eugene Volokh, of The Volokh Conspiracy, is a professor of law who offers far more educated insights than a newspaper could hope for, without asking for any subscription fee.

In terms of specific content, newspapers are simply unable to compete. Webcomics are abundantly available, free, and popular. Crosswords and Sudoku puzzles are numerous, as are puzzle games of every imaginable variety. Photosharing websites such as Flickr allow for the dissemination of photographs of far more diverse subjects than newspapers ever provided. Perhaps most significantly, websites such as Craig’s List are providing substitutes for the Classified Ads pages.

The myth of the fact-checker aside, the content creation aspect of the internet does not actually come in direct competition with newspapers in and of itself. For newspapers in fact provide not high quality content, but variety in a world where the time to accumulate various sources is scarce. Just as the price system economizes the distribution of information that is fragmented across many minds, so too do newspapers economize the access to certain categories of content that would otherwise be fragmented across many different specialized publications.

What newspapers offer is not authority, but a bundle, in which quality must to a certain extent actually be traded off for variety. For this reason, the fact that an article in Nature magazine on Climate Change may be more accurate than an article in the New York Times does not necessarily make the former a threat to the latter. A newspaper competes, not on the quality of a particular article, but on the quality of the bundle it offers as a whole. So while the New York Times may not be concerned with whether or not a particular article is as accurate as an article in Nature, it probably has to be concerned with whether or not it provides a higher quality product, with greater variety, than the Los Angeles Times.

What newspapers truly have to fear from the internet, then, is the fact that it gives consumers to ability to customize their own bundles of content. For almost as long as there have been web browsers, there have been “bookmarks”, which allow users to save the location of their favorite websites. More recently, websites such as del.icio.us have given users the ability to “tag”not only to save locations, but to provide categorical data “metadata” about those websites. This means that even if a user saves a massive amount of bookmarks, all they need to do to locate a particular one is search for the particular word or words that they “tagged” it with. For instance, one might tag Marginal Revolution, with both words in the title, then “Tyler”, “Cowen”, “economics”, and “blog”, and be relatively confident that it could be found again by searching any combination of those words, even if there are a thousand other websites bookmarked.

Another tool is the feed aggregator, such as Google Reader, that allows users to subscribe to the content of many different websites and access it all in one place. The setup is then almost like a custom made newspaper; you can subscribe to your favorite blogs, webcomics, even online newspapers, and you can access them all in one place, which signals you which of them have updated. Unlike physical paper, however, you don’t have to waste storage space if you ever want to access old content. You can simply scroll back to old updates.

In the past, consumers had to decide between the bundles offered to them by different newspapers, all or nothing. The tradeoffs that were made whenever it was decided to hire a particular journalist, or run with a particular story rather than an alternative, were taken on by the editorial staff. The consumer had no direct input in that process, and effected the outcome only insofar as competition between different newspapers made it clearer the sort of content consumers were interested in.

In a world where consumers make those decisions for themselves, however, the margin of competition will shrink to the level of content. In Price Theory and Applications, it states that content may be given away free of charge because “original composition may yield indirect material gains” (page 330) and it is for those gains that content producers on the internet will have to compete. The reason is that, as shown above, many people will produce content for no other reason than the pleasure of it, including high quality content. The market will be flooded with content, creating a stiff competition to be included in the bundles of consumers. Prices will be undercut until producers no longer even ask for money in exchange for the goods that they supply; merely the attention of consumers.

Those producers of content that are able to make a living off of that particular trade will be the ones who manage to obtain “indirect material gains” through the acquisition of consumers’ attention. In fact, this is already occurring. Webcomics predominantly offer their content for free, and the popular artists manage to make a living by selling merchandise. Successful comics such as Questionable Content and Penny Arcade sell a lot of Tshirts, with the latter even managing to sell large volumes of printed editions of their online works. Blogs have integrated Google Ads, which give them a small payment whenever their readers click on the ads. Glenn Reynolds, who gained fame through his highly popular blog Instapundit, wrote a book that sold quite well—safe to say far better than it would have, without the online fame he had achieved.

The end result is that consumers are able to eliminate the newspaper’s role entirely. They can experience a far greater variety of content than newspapers could have afforded to provide. At the same time, the sources of content will be engaged in a level of competition over quality that used to be relegated to the specialized publications, such as scientific journals. As people increasingly turn away from the old media, newspapers will go out of business one after another. When the time comes that the last one goes under, we will all already be much better informed. This trend will likely continue long after its timely demise.

(Cross posted at Sophistpundit)

August 29, 2007

Apple creeps ahead

Filed under: Business — Adam Gurri @ 8:49 am

For those of you who fear that Microsoft will one day take over the world, good news!  Apple now sells one laptop in six.  Rather a dramatic growth in its market share.

I’ve never subscribed to the evil-Microsoft-monopoly perspective, but I do tend to view their products as inferior.  I’ve been a Firefox user for years now, and I just recently went over to the Linux side–specifically, to Ubuntu.  So I don’t really feel a lack of alternatives these days in particular.

Create a free website or blog at WordPress.com.