In-Reply-To: 
Message-ID: 
MIME-Version: 1.0
Content-Type: TEXT/PLAIN; charset=US-ASCII
Status: O
X-Status: 


On Thu, 18 May 1995, Richard Layman wrote:

>  The gentleman from Telemedia isn't really asking about
> "electronic copyright policies," he's asking about the disposition of
> "electronic publishing/reprint rights" vis-a-vis authors. 

> They seem like very different animals.  The former are in flux as people
> figure out what they mean in the digital age.  It's not that people don't
> know what republishing means, but the ease of digital reproduction makes
> the issues much more provocative. 

One of the great "Pipe Dreams" that has been propagated since the first 
stored program computer is the myth of "Computer Cornocopia".  The pitch 
goes something like this: "Pay me $X and put your software on computer X 
and you can sell it for the cost of the media".  This "new media" will 
somehow turn into the "Cash Cornocupia" where virtually no investment 
will result in unlimited returns.

Even though the "media" has changed from punched paper tape to 9-track 
tape to floppies then to CD-ROMs and Now to THE INTERNET, this was the 
lure.  If you buy that, I have some great land in Colorado you might be 
interested in, or a bridge in New York.

Behind the great myth is an element of truth.  I have personally been 
involved in projects producing $1 million/day Net on Investments (NOI).  
My personal contribution was an NOI of over $1 Million/week.  There are 
also companies such as ButtonWare, PKWare, among others who have turned 
shareware into $40 Million/year businesses with virtually no significant 
investment.

On the flip side, what it took to create a Lotus, or a Novell, or a 
Microsoft was the ability to buy a so much advertizing at such high rates 
that no publisher in his right mind would "bite the hand that feeds them".

Lotus has defended itself successfully against several contender 
spread-sheets through lawsuits, misinformation, and favorable press.  
Although other, more powerful spreadsheets were available, only Microsoft 
was able to dominate Lotus.  The lotus e-mail products are not 
significantly better than many of the MIME e-mail packages that are used 
on the internet (in fact they are liabilities on the internet), yet 
businesses spend substantial sums for Lotus notes (at $300/user) when the 
internet user can get better service with Eudora or Pegasus (at <$30/user).

Novell maintained the commercial dominance of if IPX over TCP/IP even 
when the numerical superiority of TCP/IP dwarfed Novell.  Novell spend 
millions promoting IPX and encouraging extensive coverage of every 
disparaging remark possible.  In spite of the fact that TCP/IP was 
developed by the military for use in battlefield conditions (routers 
being blown-up mid-packet), publications like NetWorld continually touted 
TCP/IP as insecure and unreliable.

Microsoft has maintained the commercial dominance of MS-DOS and later the 
pseudo-multitasking Windows, Windows 3.X, and now Windows95 by dismissing 
the multitasking capabilities of UNIX, all the while scrambling their 
entire work staff to be able to stay no less than 2 years behind the 
technological capabilities of UNIX.  Even in the face of over 2000 
competitive packages, Microsoft is the "Sole Survivor" in almost every 
niche it has addressed, even to the point of "bundling" Microsoft Office 
professional with it's business system so as to eliminate the demand for 
all other Office Automation products.

So what does this have to do with On-Line publishing?  The bottom line of 
the information industry is that each consumer has a finite amount of 
time, a finite amount of money, and a finite amount of resources 
(band-width, disk space, password memory...) and there is the potential 
for an infinite number of suppliers.

Who will survive in this competition for resources?  One scenario is that 
Microsoft will be the sole dominant force on the internet.  Publishers 
seeking to put themselves on the net would have to pay 80% of their 
after-tax revenue to Microsoft, until the are starved into becoming 
take-over candidates.  The remaining competitors would be starved into 
complete non-existance.  Subscribers would simply put their electronic 
paycheck into "Bill's Bank" (which ever one of the major chains he buys),
and pay "Bill's Net" the 10% commission on all purchases, including all 
taxes, insurances, and investments, in addition to the 4% service charges 
paid to "Bill's MasterVisa".  The economics of an unregulated monopoly 
are quite simple.  Remember AT&T when "Ma Bell" was the only game in 
town?  MCI spent 10 years in litigations trying to force open even a 
small niche.  The main difference between Microsoft and AT&T or IBM is 
that Microsoft is an unregulated virtual monopoly with controlling 
interest closely held by one man.  Imagine what Mr. Gates could do when 
he has absolute control of the Media.

Another possible scenario would be that the founders of the Internet 
Infrastructure will provide the technical leadership and the commitment 
to a "democratic internet".  This would result in a free-market 
competition that would create a full-fledged free-market economy.

The big oligopolies would be hurt, but the small business owners and 
managers would have access to unlimited opportunities.  In this 
environment, the internet publisher becomes the champion of diversity at 
economic, geographic, and interest/preference levels.  The ability to 
quickly buy and sell existing inventories would make it possible to
compete for supplies as well as customers.  The margins would be thinner, 
but the volumes would be higher and the overhead would be lower.

With the advent of Just In Time queuing/ordering technologies, the 
ability to restock from a nationwide inventory becomes a feature.  
Service and Customization would become a major competitive advantage.  
The Internet provides access to an exponentially expanding pool of 
technological innovation which reduces the consumption of natural 
resources through efficient communication.

Which will it be?  One Microsoft, with your publication extinct by the 
year 2000?  Or: The cultural diversity of the internet, where content is 
carried through an infrastructure that is incapable of excluding 
legitimate interests due to economic "leverage".


	Rex Ballard
	A personal post.


From rballard@cnj.digex.net Tue May 23 00:48:11 1995