Today’s Economist has a long article on SpaceShipTwo and the commercialization of space. Significantly it reports that plans are already underway to use White Knight Two as a launch assistance vehicle for small satellites. And, as expected, work is underway on designing a successor to SpaceShipTwo that will be capable of long sub-orbital journeys and, eventually, a version that can get into orbit.
Economics
Music, Books and Copyright
There have been a few interesting stories related to music and copyright over the last couple of weeks, and they have a definite bearing on the future of book publishing.
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Probably Stupid Question
Though you never know what skills people out there may have, so…
Anyone out there an expert on Latin Hypercube Sampling, and can recommend a software tool for running such analysis (preferably a cheap Excel add-in).
The Long Tail and the Big Spike
While the SF Community has been engaged in various forms of Doctorow Wars, the wider world has been more interested in the online sale of music. There are good reasons for more attention to being paid to music than books. Music, after all, already works well in digital form, whereas books do not. And the fortunes of retail music stores have been plummeting much faster than the value of the dollar. Big money is at stake, not just a status war between Cory and SFWA.
The latest salvo in the war was provided by Radiohead, who released an album online for free, but asked their fans to donate money for it. Rhodri Marsden, The Independent’s technology expert, has an interesting column on the experiment. Radiohead are apparently very happy, having netted millions of dollars from those voluntary donations, and yet it seems likely that far more people obtained the album for free than paid for it.
That’s a very graphic illustration of something that has been obvious in online retailing for a long time. Only a fraction (the usual rule of thumb is 1%) of people who are asked to pay for an online service will do so voluntarily. So if you happen to be Radiohead and have many millions of fans then you can sell online and make millions of dollars. If you are Cory and have Boing! Boing!, reputedly the world’s most read blog, as a sales vehicle then you might be able to make many thousands of dollars. If I were to try selling anything here I might expect to make about 3c.
The important point here is that we can’t all be Radiohead, or Cory. Online retailing is the ultimate in globalization. With so few barriers in the market, the top sellers can always get their goods to the customer, and everyone else loses out. Do you think that the midlist is getting squeezed now in bookstores? It will be much worse online. Are you upset at the increasing inequality of wealth in Western countries? Online retailing will magnify that significantly.
None of which is to say that those of us out in the long tail can’t sell online. There will always be a market for minority tastes, and online selling makes it much easier for purveyors of the unusual to reach their market, small though it may be. But that market may still not be big enough to make a living from.
Of course there may be other technologies on the horizon that will make things easier. A working micropayment system would make it much easier to make money from online publication. We’ve only just started to find out what this brave new online world is going to mean for us.
Journalist Can’t Count – Shock Horror!
Today’s Guardian contains a new shock story about the book trade. A survey of 1,324 publishing industry professionals taken at the Frankfurt Book Fair produced the amazing prediction that the high street bookstore may have vanished in 50 years time. Wow. And just how many of the respondents were saying this? Was it as many as 90%? Of course not. Perhaps two thirds? Well, no. More than half? Sorry, try again. The overwhelming statistical support for this idea came from “Almost a quarter” of those who took the survey.
Cue shock story about declining standards in maths teaching in British schools.
Economic Warfare
Someone has been reading Charlie Stross, I think.
A Market of Ideas
For those of you who assume that The Economist is always on the side of Evil Capitalists who want to establish a monopoly over everything, here is their blogger on the subject of intellectual property.
Product Shortages
Over at The Economist’s blog they are discussing the economics of the marriage market:
If less people are married why is it that single, urban women feel that there are no suitable partners?
Er, because there’s a big difference between “available” and “suitable”?
Taxing Your Gold Pieces
The US Government has announced that it is launching an investigation into commercial activities in online gaming. They are at pains to point out that they are not intending to tax every gold piece a party of adventurers brings back from a dungeon. However, the mere existence of game farming (employing kids to play online games for the real-world money they can make) points to the fact that real profits can be made. And one of the issues is that game farmers tend to operate from outside the US. Goodness only knows what the policy wonks in Washington will make of it all. My guess is that they’ll be totally confused and will throw their hands up in horror. Either that or they’ll get hooked, give up politics, and move to Second Life.