Monthly Archives: March, 2008

The weekly Caravaggio homage

Caravaggio’s Bacchus

Image: Web Gallery of Art.

Painting on display at Galleria degli Uffizi, Florence.

All my postings on Caravaggio

Marginal cost of zero or substitute goods?

(Or how I learned to stop worrying and love economics)

Dr. Strangelove (Or how I learned to stop worrying and love the bomb)

(Update 07/04/2008 – See this post for a plain english version)

I have one hour to spare

Do I:

Listen to a live broadcast in the hope of serendipity or the podcast I have lined up?

Click on the YouTube and DailyMotion links I have in an email or go to the on-demand offerings from the broadcasters to catch the programme I missed last night?

Follow the links in a story I’m reading online or do I catch up on the RSS feed?

Post a blog entry or update my Flickr photostream?

Listen to the podcast or watch the YouTube/DailyMotion videos?

Read the links in the story or update my photostream?

In economic terms:

Is it that all digital information must be free or that all digital goods are perfect/imperfect substitutes and if one is free then this is your price floor?

Is it the average cost versus the marginal cost of a digital item or the average cost of one item versus the marginal cost of another where all goods are perfect/imperfect substitutes?

Is one digital good a perfect substitute for another or is it that the scarce resource is time and the choice of goods determined by the lowest barrier to entry where goods are imperfect substitutes but the means of delivering them makes substituting one for another more advantageous than the pursuit of the original?

What value can you add to a perfect/imperfect substitute to make it a complementary good?


What is really happening with the convergence of electronic appliances is not necessarily the shifting of all content to one platform but the freedom to substitute one digital good for another, both of which are in competition for the scarce resource – time.

The marginal cost of production – where a digital reproduction is claimed to have a zero marginal cost, as you still have the original but I have a perfect copy for free, as the cost of storage heads to zero, – is missing the point as far as I’m concerned.

I don’t wish to consume something only because it is free.

When the substitutable alternatives available to me are free of cost but require my investment of time then I have no incentive to add a monetary cost to the equation.

If what you have to offer costs me in monetary terms and time then you need to add value in a way that turns the substitute good into a complementary one.

The trick is to recognise who in the market are playing by the economic rules (mostly the consumers on the Internet) and who are seeking protectionist measures (mostly the rights holders – DRM etc.) and to show those seeking protection from the market how rational the market actually is behaving and that if they innovate, they can reposition themselves from being protectionists in a declining business model to being on the growth curve in a new business model.

Links for substitute goods:

Links for complementary goods:

Links for marginal cost

Links for average cost:


RTE_DAB_Gold_Mux, originally uploaded by mike.walsh.

RTE, the state broadcaster in Ireland, extended their DAB broadcast this weekend to Cork and Limerick.

I captured the settings for the various digital channels and put them up on my Flickr phototstream. See:


The weekly Caravaggio homage

Caravaggio’s Flagellation

Image: Web Gallery of Art.

Painting on display at Museo Nazionale di Capodimonte, Naples.

All my postings on Caravaggio

YouTube – Danny Boy

A day late – but early for next St. Patrick’s Day.

Vodpod videos no longer available. from posted with vodpod

TED | Talks | Frank Gehry: From 1990, defending a vision for architecture (video)

Frank Gehry at TED.

TED | Talks | Larry Lessig: How creativity is being strangled by the law (video)

Larry Lessig at TED.

The weekly Caravaggio homage

Caravaggio’s The Seven Acts of Mercy 

Image: Web Gallery of Art.

Painting on display at Church of Pio Monte Della Misericordia, Naples.

All my postings on Caravaggio

100 classic Seinfeld moments and catchphrases mashup


I had the audio for this for ages – but this is just brilliant!

Irish ISP sued by four major record companies

From the RTE website:

“Four record companies have brought a High Court action to compel Eircom – the State’s largest broadband service provider – to prevent its networks being used for the illegal downloading of music.

It’s the first case to be aimed at the service provider rather than at individual illegal downloaders.

The four record companies taking the action are EMI, Sony BMG, Universal Music and Warner Music.

Willie Kavanagh, Managing Director of EMI Ireland and Chairman of the Irish Recorded Music Association, said because of illegal downloading and other factors, the Irish music industry was experiencing a “dramatic and accelerating decline” in income. 

He said sales in the Irish market dropped 30% in the six years up to 2007.

EMI and the other companies are challenging Eircom’s refusal to use filtering technology or other measures to voluntarily block or filter illegally downloaded material.

Last October Eircom told the companies it was not in a position to use the filtering software.

Eircom also told the companies that it was not on notice of specific illegal activity which infringed the companies’ rights and it had no legal obligation to monitor traffic on its network.”

From the Irish Times (behind a pay wall):

“FOUR MAJOR record companies have brought an unprecedented High Court action aimed at compelling Eircom, as the largest broadband internet service provider in the State, to take specific measures to prevent its networks being used for the illegal free downloading of music by computer users.

The case is the first here aimed at internet service providers, rather than individual illegal downloaders, ……

In his affidavit, Mr Kavanagh outlined measures by the record industry aimed at discouraging record piracy, including public awareness campaigns and legal actions against individuals.

He said legal actions brought against persons with the highest numbers of illegal files on their computers at specific times had proven costly and time consuming. The record companies believed selective legal action was not sufficient to safeguard their property rights and the deterrent effect of such cases was not enough to stop people using illegal services on a broad scale.

Mr Kavanagh said the reality for many young people was that they had never known a position where they actually had – as a practical matter, rather than as a matter of law – to pay for sound recordings.”


Digital is digital. Whether it’s audio, video, text or pictures, once it becomes digital it just becomes a stream of ones and zeros.

To properly filter traffic on the network ISPs would have to intercept all the packets on the network, identify the ones destined for users on their IP addresses (as peering arrangements mean a lot of traffic is transitory), test the unencrypted packets against the fingerprints they have for filtering and then check to see whether the content is being used in a way that is infringing copyright law as it exists on the statute books in that jurisdiction.

A number of questions arise from this. What would they do with the encrypted traffic? Should they assume nefarious intent and refuse to carry it? How do they test what is copyright infringement? How do they know the fingerprints they have correctly correlate with the content they are associated with? Once ISPs are capturing all packets on their network are they legally obliged to filter for other civil or criminal lawbreaking?

I can understand the music companies wanting to target the ISPs. They have bigger and deeper pockets than the individual actually committing copyright infringement, but you have to ask yourself a question if you’re a music executive – how well has the business model of suing worked so far? Getting ISPs into court may well be a bargaining position to move towards a blanket licence model. This would not be a dumb idea, but unfortunately the track record to date would suggest otherwise.

My advice. Take the thing that makes the Internet what it is and use it to your advantage. If you recognise computers as wonderful copying machines, digital content as a perfect format to be copied and the Internet as an ideal medium for
distributing copied content then all you need is to refocus your concepts on what your content is for.  I could go on but why bother trying to save an industry that seems so determined to run itself into the ground. I can’t begin to tell you how much negative feeling I have towards Eircom for abusing their near monopoly position in Ireland. They have a very poor roll-out of broadband and the prices they charge (with capped downloads!) are outrageous – but suddenly they now look like heroes. That’s some achievement by the record industry!

The weekly Caravaggio homage

Caravaggio’s Supper at Emmaus

Image: Web Gallery of Art.

Painting on display at The National Gallery, London.

All my postings on Caravaggio

BBC Internet blog – I was wrong!

Back in the day, when the idea of the BBC Internet blog was first being mooted I suggested some names.

They were:

BBC 2.0 blog
BBC DigiMedia blog
BBC eMedia blog
BBC fMedia blog
BBC TechnoWeb blog
BBC Janus blog
BBC Teh Internets blog
BBC WTF??? blog
(or just accept it and call it “FFS – ENOUGH about the iPlayer! blog”)

On the last one – I was completely wrong!

The recently redesigned homepage has prompted loads of comments (the ones that managed to get through!) – almost as many as on Richard Titus’ post indicating it was coming.

This is very interesting. I would have dismissed the homepage redesign as merely a brand refresh exercise and that the really important stuff was the technology underpinning this.

There have been excellent posts about some of the changes afoot on the audio, visual and online fronts – all of which I would have imagined would have drawn much more animated responses. There are some very important issues discussed in relation to  the BBC’s Future Media and Technology arm. Surely destined to draw a massive response from the technology community?

Nope! The homepage. This is the burning issue for the people commenting on the BBC Internet blog.

Just goes to show – it ain’t the technology, it’s what you do with it.

You know you’re in trouble if….

HNLim01, originally uploaded by mike.walsh.

… you need a sign indicating how to find a GPS!