brando's Comments

What Will the U.S. Economy Look Like in 10 Years? Look to Greece

Mon, 30 Nov 2009 13:30:59 -0500

"on the basis of the economics you teach and study...you could see nothing wrong."

Let me guess, you teach and study something called economics that is, in fact, totally divorced from reality. Something called Keynesian "economics" perhaps? Bloody hell, people! Wake the F up. There are no equations which describe or predict human behavior.

On Nov 29 09:07 AM Ferdinand E. Banks wrote:

> Greece too. Where will it be next? I had a wonderful vacation in
> Greece a month ago. On the basis of the economics I teach and study,
> I couldn't see anything wrong - and if it was wrong, I think that
> it can be repaired if the people there don't start bitching and moaning
> like many Americans seem to be doing these days. Of course, maybe
> they are right to do so, although I can't understand how anyone who
> could support Mr Bush and Co could find something wrong with President
> Obama and his team.

Time to Buy China, Copper, the Canadian Dollar and Oil

Sat, 07 Mar 2009 21:10:36 -0500

95% US treasuries, 5% out of the money puts and calls on just about anything and everything.

On Mar 07 11:36 AM comox wrote:

> Jay- thanks for taking the time to reply. I'm invested in Canadian
> resources now, impatiently waiting for the coming commodity resurgence,
> and still taking some downward hammering. Of course that all hinges
> on this China/US recovery discussion.
> Conventional investment advice did nothing for us leading up to this
> meltdown, and in general the commentators and advisors missed this
> completely (including some very smart people: Eric Sprott of Sprott
> Funds, Tom Stanley of Resolute Performance Fund, etc.). I'm feeling
> completely let down and skeptical of the investment community. I
> do like to follow Peter Schiff, Jim Rogers as their ideas make sense
> to me.
>
> Someone made money: shorting oil and commodities, long on US dollar,
> shorting DJIA and TSX, etc. in last 6 months. I'd like to get some
> professional advice that makes me one of those making that money
> by making smart aggressive bets (not for the major part of portfolio
> of course)!
> PS- read Nicholas Taleb's "Black Swan" and found it very heavy going.
> I was hoping for some specifics of how he exposes himself to the
> huge winning opportunities (and the majority of his portfolio is
> very safe he says)- the book never contained any specifics. Does
> anyone know what he invests in?

Time to Buy China, Copper, the Canadian Dollar and Oil

Sat, 07 Mar 2009 20:53:54 -0500

Your inability to perform basic math is dismaying.

On Mar 06 01:14 AM ScottEX wrote:

> You think about it, 11 million people working for a pittance, to
> build America, and save the wealthy vast amounts of money on the
> work nobody wants to do. How about the 52,000 account at UBS. Do
> you think there might be a little more tax leakage there? Your logic
> is astounding.

Bank Nationalization - The Max Holmes Proposal

Mon, 02 Feb 2009 16:48:12 -0500

Roger that.

On Feb 02 02:51 PM Tom Armistead wrote:

> The proposed solution - transferring equal amounts of liabilities
> and assets from the troubled banks to the "bad bank" or government
> makes good sense in that no money is actually spent and it will work
> if the assets do not deteriorate further.
>
> The government can deal with further market value reductions of the
> assets, something many banks cannot handle with their current capital
> and credit ratings. The Max Holmes proposal is another way of permitting
> the assets to be held to maturity rather than sold at fire sale prices.
>
>
> I personally take the view that a great deal of the hue and cry in
> favor of rigid application of mark to market accounting comes from
> the vultures, jackals and hyenas who expect to feed richly on the
> ensuing financial carnage, as if they were not already sufficiently
> gorged with the fruits of naked short-selling, rumor mongering, and
> naked CDS manipulation.
>
> I favor any solution that avoids the fire sale and deprives the vultures
> of their feed.
>

Bank Nationalization - The Max Holmes Proposal

Mon, 02 Feb 2009 13:10:17 -0500

Of course, Fannie, Freddie and the CRA are not solely responsible for the subprime fiasco. Certainly, lenders and Wall Street were complicit. But for the most part, the private sector was responding exactly as directed, prescribed and expected -- facilitating a secondary mortgage market that appeared to accommodate subprime borrowers by spreading the risk among parties who thought they knew what they were buying. If not for government interference encouraging too much credit, market forces would have rationed credit more, shall we say, rationally. Wall Street was acting perfectly rationally under the circumstances promulgated by our government's enabling institutions and legislation. The issue isn't so much over-regulation or under-regulation as it is misplaced and misguided regulation, much of which is directly or indirectly the result of corruption. Why is Franklin Raines never mentioned in all this? Do a little research and learn about his political affiliations and the amount of money he walked away with. He's just as worthy as John Thaine, Dick Fuld and countless other luminaries in the reprobate CEO hall of fame. This is not a right or left issue. It cuts in all directions and ultimately falls on all voters who continue to vote for the corrupt and incompetant egomaniacs and sociopaths that gravitate toward "careers" in politics.

On Feb 02 09:38 AM You're Kidding wrote:

> brando - your right wing bias is disgustingly obvious.
>
> The CRA act is not responsible for this meltdown we are in. Most
> of these loans are doing just fine (see Wikipedia and Business Week
> Mag:
> www.businessweek.com/i...
>
>
> Its not the "socialists" who don't understand economics, its your
> neo-con friends and their supporters who have forever fought for
> deregulation and who have been in charge of the executive dept. for
> the last 8 yrs (say "no oversight" a few times why don't you?)

>
> Finally, we have an executive that cares more about the health and
> well being of all the people in this country rather than just the
> rich and powerfully placed.
>
> Please say goodbye to unregulated, scumbag capitalism for hopefully
> forever. The rest of us have had enough of your lunatic, money grubbing,
> criminal excuse for government. I'm afraid its best this way for
> the vast majority of people in this country. Take off your rose colored
> glasses. You're blind as a bat.

Bank Nationalization - The Max Holmes Proposal

Mon, 02 Feb 2009 08:58:19 -0500

Something we taxpayers need to "get over" is this feelling that Wall Street and bank equity is getting a free ride on our backs. We taxpayers elected the Congressional officials who enabled and arguably caused this meltdown through their cozy relationship with Fannie and Freddie, thier adamant refusal to consider stricter oversight of the then politically correct GSEs (hearings documented and visible on YouTube), and the ill-conceived vote-garnering imposition of the so-called Community Reinvestment Act which forced lenders to extend credit based on demographic profiles rather than sound lending standards. Wall Street has taken a beating in terms of job losses and equity devaluation, but for some reason displaced finance workers are ignored or portrayed as being less human than union members. Voters who elected the politicians who enabled and compounded this mess need to take the medicine. If our democratic republic properly functions, voters will learn their lesson and stop electing populist socialist politicians with little or no understanding of economics.

Social Banking: How to Make Bank Shares Worthless

Wed, 21 Jan 2009 09:33:31 -0500

Instead of "investing" trillions of taxpayer dollars in specious shovel-ready projects and pork, the U.S. needs to make a bold move that sends a strong and proper message. We should immediately abolish the corporate income tax. Corporations don't pay taxes, their customers do. The tax is simply passed on in the cost of products or services. It makes our products and services less price competitive and it provides a cesspool of opportunity for lobbyists in search of corporate welfare. It also diverts billions of hard dollars and wasted man hours on the process of minimizing, avoiding and complying with the tax. And lastly, but most importantly, this move would play upon the competitive strength of the United States. We have the best Universities, the best intellectual property protection and the best infrastructure in the world. If we clearly had the best tax regime, corporations from around the world would have no alternative but to move headquarters and highly paid staff to the United States and U.S. corporations would stop moving to Bermuda, Switzerland and elsewhere. It would be the largest job creation legislation ever devised and it would create the kind of jobs we want and for which our people are trained.

Gold Poised to Move Higher

Mon, 29 Dec 2008 20:54:00 -0500

Alexander Hamilton is responsible for creating the privately owned Federal Reserve. He certainly rocked for the shareholders of the Fed.

On Dec 28 01:41 PM Mark123 wrote:

> Alexander Hamilton rocks...... Adam Hamilton rules!!!!

G-20’s Done: Time to Recheck Buy Signals

Sun, 16 Nov 2008 15:12:18 -0500

I concur with XerJ. Bush was certainly distracted by the war on Islamo-fascist terror against the Western world, but to blame him for the financial meltdown is lazy intelect at its nadir. The roots of the current crisis lie in the unintended consequences of socialist imposition of mandated financial measures upon institutions that would not have made such decisions without government coersion. Yes, it was magnified by the unchecked speculation in the opaque credit default swap market and that is the fault of the U.S. Congress and regulators. It's not as if people were unaware of the impending explosion, however. How many times does one have to read about the "explosion" of derivatives markets before one realizes the thing needs attention? Furthermore, calls for a tighter rein on the GSEs were manifold, yet the socialists in the U.S. Congress browbeat those making the requests into submission. It's all well documented in Congressional hearings video.

Get Ready to Buy Like It's 2002

Sun, 02 Nov 2008 18:44:41 -0500

On Nov 02 08:39 AM Vee wrote:

> Nov 2, 2008 7:27 AM
>
>
> We be more worried that Mccain would raise the taxes, than Obama.
>
> And I'd also be weary of Mccain putting the draft back in to effect
>
> since , he want's the wars to go on forever. So, he can hunt a dead
>
> Bin Laden, and get thousands and thousands of our troops killed.
>
> He's another Bushman, except he'd be double trouble, compared to
>
> what Gw has been.
> Also Mccain want's to get rid of the income tax and just put a tax
> on
> everyone.

I surely hope no one has entrusted money to such a naive childlike mind as yours, Vee. Do yourself a favor and check into the nearest mental institution. Run. Don't walk.

MySpace Aims to Be the Jukebox of Our Internet Existence

Sat, 27 Sep 2008 15:06:59 -0400

All these "free" music sites are crap IMO. The user experience sucks. When are people going to realize you get what you pay for? Music is in demand, therefore it has value. The paid subscription sites like Rhapsody and Napster where you get all the music all the time without the BS blow away the competition.

Retail Goes Digital As Best Buy Gobbles Up Napster for $127M

Wed, 17 Sep 2008 12:19:34 -0400

This is NOT a good deal for Napster shareholders. Management cut a sweet deal for itself taking almost 10% of the total deal price in personal payouts in exchange for GIVING the company away at less than 0.4x revenue. This is a travesty and somebody needs to get the Feds involved. This kind of CEO theft from shareholders in exchange for value destruction and incompetance has to stop. Please do some diligence, discover the truth and modify your story.

Best Buy and Napster: Combination Is Doomed

Tue, 16 Sep 2008 11:17:57 -0400

You obviously don't understand what is going on in the digital music space. You and just about every journalist and blogger capable of fogging a mirror think Apple actually offers a good value proposition and nothing else matters. Apple has nice hardware and their software interface works well -- as long as you play by their rules using their equipment. But the real reason Apple has succeeded is because the iPod and iPhone are nothing more than well concealed intellectual property burglary kits. If you don't get that, you don't know squat about the music biz, pal.

Record Companies Starting to Shun iTunes

Sat, 30 Aug 2008 11:44:24 -0400

Markham,

You are correct. The music business cannot survive if things continue in the current direction. The problem is obviously piracy. If people had to procure music legitimately the market would be large enough to support the "new model" everyone seems to think the record labels owe us. Nothing will stop piracy altogether, but our govenrment has a responsibility (one of the few legitimate responsibilities of governement) to allow businesses and people to contol private property. It seems obvious that property laws are not being enforced and the recording industry is punished for this abrogation of duty. Ignore the hecklers from the peanut gallery. Anyone who has listened to an mp3 file believes he is an expert on the economics of producing and distributing music. My fear is that the hecklers are so vocal, and the victims so weak, that the music business will cease to exist before the world realizes what it has killed. BTW, I also agree with you on the best way to procure music. I subscribe to Napster and love it. Cheers.

Rhapsody's New e-Music Download Service Takes on iTunes

Tue, 01 Jul 2008 16:50:58 -0400

You obviously don't know much about music, and even less about the music business. Nobody is trying to out-iPod Apple...not Rhapsody, not Napster, not Amazon. These music stores are vying for slices of what is hoped will be a larger overall legal music pie (the real problem is piracy and why the law is not shutting it down -- but I digress). iTunes sales are plateauing as people realize Apple's content is locked by its proprietary DRM into Apple devices. Secondly, you sound like what the technology community refers to as a "fanboy", i.e. neither logic nor reason can infect your love of anything Apple. Lastly, subscription music is not "a really bad idea." I and thousands of others who subscribe to Napster's and Rhapsody's subscription product think it's a really good idea and love the value proposition. What people need to understand is that subscription music isn't necessarily a replacement for owning a collection of music (although I choose to use it in that manner). It drives my home stereo system, my son's stereo in his room, and another system we have by the pool. It also fills and re-fills 3 different mp3 players that my family shares, one of which happens to be my cell phone that also can purchase tracks over the air via ATT. All this for $15 per month. It's the best entertainment value proposition I know. I tried Rhapsody and it's fine, but I like Napster better. They have over 6 million songs and you can purchase them DRM-free if you like.

Napster's DRM-Free Music Store Will Struggle

Wed, 21 May 2008 21:59:43 -0400

I've been a Napster subscriber for over three years and love it. Subscription music is the only way to go as far as I'm concerned. Piracy is not an option and iTunes is not nearly as user friendly as having over 6mm songs available on command. Now I can start a library of DRM-free high bitrate files that I own...but frankly, I don't care. Once you try the subscription route you probably won't want to purchase. Napster's challenge is getting people to try it and realize the potential.

The Music Biz: Something Important Is On The Horizon

Fri, 04 Apr 2008 12:17:31 -0400

There is one huge horsefly in the soup: illegal peer to peer file stealing. Why aren't you writing about how this has to be stopped? It's the first and foremost thing necessary to move the digital music space into an environment capable of supporting profitability. All the new so called "business models" cropping up are going to end up burning more VC money than the online bakeries and shoe shine shops funded at the turn of the century. Copyright law must be enforced. We are on a slippery slope that could lead to a long and painful decline of creativity and business application of all things digitally filable. Fans don't steal, thus record labels are not suing fans, just common thieves.

CD Sales an Improper Proxy for Measuring Purchased Music Demand

Fri, 04 Apr 2008 08:49:48 -0400

The statisitics I have seen do not verify that digital revenue is at all close to making up for lost physical revenue. Although I understand the public's desire to thwart the record labels from forcing them to repurchase their physical music libraries in digital form, that argument does not hold for young people as most have never had physical music libraries. A serious social issue is developing in the current economic environment for music: the sudden lack of respect for property and the law. Almost all music is copyrighted, meaning it generally cannot be copied for an unrelated third party without the creator/owner's permission. Such permission normally requires compensation. It is morally wrong and against the law, illegal, for people to offer their digital music libraries to millions of strangers via peer to peer file "sharing" (really stealing) networks and it is just as illegal to download these files without paying the artists who created them and the record labels who financed them. I am amazed and confused by the popular argument that record companies should not be suing their fans. People who steal your product are not fans. I'm sorry to say, they are nothing more than common thieves who should be prosecuted to the fullest extent of the law in order to protect one's rights as a property owner. The situation is entirely out of hand. If public opinion does not change soon, or if the ISPs do not step up and voluntarily filter this illegal content crossing thier networks, congress should intervene and provide statutory relief. Copyright law is the linchpin holding together the greatest movement of creativity the world has ever known -- the U.S. music, record, book and software industries. P2P "sharing" of uncompensated digital files has to be stopped.

Universal Music Group Readies DRM-Free Music, Sans iTunes

Tue, 14 Aug 2007 09:23:54 -0400

I hear your point about Apple's right to keep its license to itself. After all, I'm a free market libertarian. But it doesn't make long term business sense. More digital music stores capable of selling into the iPod ecosystem would mean more iPods sold. And after all, Apple makes money on the sale of hardware, not the iTunes store. What we have now is near total chaos, unless you are simply a cult-like lover of Apple who would never consider owning a device manufactured by anyone else. What if, in the 1970s, RCA 8-tracks would only play on RCA 8-track players and Motown 8-tracks only played on Motown players? There needs to be a content standard. We're not talking about games here, which are primarily played by a cult-like following of mostly adolescents, were talking about music that virtually everyone listens to. Even if the big labels go out of business the independent labels and/or the artists themselves are going to want to be paid for the IP and I suspect they are going to want a form of DRM. Again, IMO, it is simply wishful and naive thinking to believe DRM will totally go away. There should be a single interoperable hardware-agnostic DRM, and if Apple, who currently owns the "standard" by default, is not willing to license its DRM so it truly becomes the standard then the record labels should do what UMG appears to be doing and cut Apple out until it is forced to play ball. If Apple doesn't play then they should release their content on one DRM only and force Apple to license it. If that happens I suspect the DRM will be PlaysForSure of Microsoft's new DRM, PlayReady. I just don't think DRM is really going away. Lastly, even you admit you don't think this experiment is going to result in much. Well, if iPod owners continue to purchase UMG music via the iTunes store with DRM embedded rather than go to Rhapsody to purchase the same music without DRM I think that's a pretty good indication DRM is not as reviled as many suggest. And I think this is part of the experiment UMG is conducting. Of course, if UMG were to embrace iTunes Plus they would see a big uptick in digital music sales. UMG knows this. That's not the point of the "exercise." I must say that the way you wax so elequently about the seemles and flawless interopeation of the iTunes music store and the iPod one has to question your independence. Anyone who is truly consumer focused would want the most options possible for the consumer. So why not have a single standard for all content so all hardware manufacturers could compete head to head and give us the best product a competitive market is capable of delivering? Yeah, yeah, yeah DRM-free mp3 is single standard but it does not adequately protect the IP.

Universal Music Group Readies DRM-Free Music, Sans iTunes

Mon, 13 Aug 2007 23:18:41 -0400

Dear Seeking Alpha,

Please put a spell checker in the comment boxes.

(Thanx)

Universal Music Group Readies DRM-Free Music, Sans iTunes

Mon, 13 Aug 2007 20:37:12 -0400

I have to take exeption with your contention the record labels need Apple more than Apple needs them. Apple has bullied the music industry by not licensing its DRM (called FairPlay) to other music retailers, and only FairPlay-encoded music will play on iPods. This is the main point of contention, in my opinion. If Apple would license its DRM to other music stores like Rhapsody, Napster, Yahoo Music, etc. UMG would be back at the bargaining table. Although DRM-free digital music is clearly more valuable to the consumer I believe consumers would consider interoperable DRM-agnostic music almost as valuable as totally DRM-free music. And why shouldn't Apple license its DRM anyway? It only stands to reason that more people would purchase iPods if iPods were capable of playing legal music purchased from sites other than just the iTunes music store. Under today's environment 80% of the music stored on all iPods is of the unprotected mp3 variety and I believe it is a fair guess that most of that is pirated. It will be an interesting test case, indeed, if we see that people continue to purchase UMG DRM-encoded music from the iTunes site rather than DRM-free UMG music from other sites. That would provide evidence consumers' issues are not so much with DRM in and of itself, but rather with the music's ability to operate with their chosen hardware. Such a result could enbolden the record labels to play even harder with Apple to license its DRM to other music stores. The record labels have been behind the curve since the digital music genie slipped out of the bottle, but I cannot have any sympathy for Apple either. Apple should open up the FairPlay license to all legitimate digital music stores. Alternatively, the record companies should band together and force a single interoperable DRM standard upon all retailers of their digital product. I think it is naive to expect a totally DRM-free world.

Apple, Listen Up: Asia's Getting Hooked On Mobile Music

Thu, 14 Jun 2007 20:43:06 -0400

Why does everyone fawn so over Apple? And why do you care whether they are missing Asia? Apple is so overrated it sorely perplexes me. The hardware is overpriced. You don't really "own" anything of value when you pay $0.99 or $1.29 for their closed system files and you'll have to buy them again when a newer better codec or other technology arrives. And they don't have a subcription option. It is truly a mystery why America is so enamored with the feminine little white boxes that look like a woman's makeup compact. Maybe it's because America has become so feminized overall. Real men subscribe to Napster.

Apple: Subscription Music Service Seems Inevitable

Tue, 24 Apr 2007 13:36:08 -0400

I have to disagree, Joe. I certainly do not consider myself a DJ, or even an aspiring one, but I am a happy customer (and shareholder) of Napster. For less than I spend on coffee every week (or day, sometimes) I get unlimited access for a month to over 3mm tracks on my PC, home stereo and portable player that I take to the gym. I don't have access to the "music scene" but Napster allows me to easily experiment and try out hundreds of new artists during the marathon sessions I spend in front of my PC doing investment research. To boot, I've become the favorite uncle by giving up the two additional PC/player slots on my subscription to my two nephews. Their parents are glad the boys aren't tempted to subject the family a lawsuit and the boys are happy with Sansa players I purchased for them to fill and refill over and over with whatever it is that kids listen to these days. I think it's pretty much a cinch that the subscription model will carve out at least 10% of the overall retail music market.

How Apple Will Frustrate Music Subscription Moguls

Tue, 17 Apr 2007 01:10:44 -0400

My head is still spinning from your BS.

When you pull your head out...into the sunshine...perhaps we can have a conversation about the music business. On second thought, I'm growing bored with your intransigent, religous fervor in favor of Apple and disrespect for the law. Enjoy your investment or employment at Apple whichever it is.

Most of the non iTunes music on iPods is not ripped directly from CDs. It's from P2P, i.e. pirated. Everyone knows this, including Jobs. Did you hear him stumble all over his himself when discussing this point in the EMI conference call announcing the DRM experiment?

And BTW, I'm not an employee of the music industry, an investor in WMG or any other label. I just think the public would be well served to know the facts...and to realize the limitations of the iPod's closed system. It's a cute little product, but it isn't the world changer so many dreamers think it is. When all digital music is interoperable across all hardware devices, including one's home and car stereo systems, within the confines of the law, then we will have something to go wild over. Right now we have managed chaos with one very clever player nimble enough to temporarily exploit it while simultaneously hoodwinking the consumer into thinking he has done them a great service. People who think they actually "own" something with those files purchased from iTunes are in for a little surprise when the technology passes them by or they realize the files are only playable on an iPod. That's why I subscribe to Napster. Unlimited access to 3mm tracks and no technology obsolescence issues. I like the service so much I did a Victor Kiam -- own the stock. I recommend you do the same.

How Apple Will Frustrate Music Subscription Moguls

Sun, 15 Apr 2007 18:48:13 -0400

There is no doubt EMI will find widespread favor for thier no DRM, higher quality initiative. It remains to be seen, however, if the other labels will see the economic benefit of forever losing any hope of having control over their IP. I think cooler heads will prevail and they will give the consumer what he wants without giving away the store. Yes, the consumer wants, and deserves, interoperability across all hardware platforms and devices. Thanks to Steve Jobs' penchant for control they don't have that now. All he would have to do is license FairPlay to the online record stores such as Napster, Rhapsody, Yahoo Music, eMusic, etc. and one very large step in the right direction would have been taken. That was not to his benefit however during the time he was building market share with his superior player. The iTunes music store is not a profit driver at Apple. It is more akin to a loss leader in support of iPod sales. Now that the iPod has achieved success (probably even beyond Jobs' expectations) and competition will soon start nipping away, it behooves Jobs to consider opening his device so that it can play more than just iTunes music (and of course pirated music - estimated to be as much as 97% of all music collectively stored on iPods today!). But instead of taking the logical step of licensing FairPlay Jobs cleverly (some might say sinisterly) positioned himself as the music messiah by advocating DRM-free music and muscling EMI into taking a highly risky maneuver in an effort to retain relevance. Interoperable DRM would benefit consumers AND Apple as the iPod would be able to play music from anywhere. But DRM-free music would be even better for Apple as it would accomplish this AND position Apple as the consumer friendly king maker in the music industry - an invaluable marketing ploy. This time Jobs may have overplayed his hand, however. No one in the music industry wants a single player to have as much control as Apple is trying to position itself to have. I project that forces will align to assure this does not happen. Secondly, as stated above, it is not in the labels' interest to temporarily juice digital sales by dropping DRM only to soon realize they gave away the store. To use an old analogy it would be like a farmer feeding out his seed corn during the winter. Sure, the hogs will enjoy it, but come spring time there will be nothing to plant and nothing to harvest in fall. Consumers who advocate a DRM-free world are acting like the farmer's whining, greedy, pigs squealing for more corn. P2P piracy has temporarily conditioned consumers to believe music should be free and that the record labels are the greedy ones. Perhaps the labels have not conducted themselves in perfect fashion, but as I said above, the law is on thier side. Futhermore, if you think it's so easy to self produce, market and distribute a platinum release then please tell me why it's not happening right and left already. The technology has been available for years and the built up animosity toward the recored companies has been there as well. I don't think I have to spell out the answer to the self production theory - but I will - it's just a little bit harder to pull off than it looks. Interoperable DRM that allows the consumer to do with the music files as he sees fit within the confines of IP law will solve the current problem. It's really that simple. But to completely abandon DRM altogether, the only hope IP owners will ever have of keeping up with piracy technology, would be seed corn suicide.

How Apple Will Frustrate Music Subscription Moguls

Fri, 13 Apr 2007 17:29:10 -0400

Well, I think you are a bit optimistic. It would be naive to think the record labels are just going to roll over and die. The law is on their side and they have time to make technology work for them as well. DRM is not "all but dead." The weakest of the four major labels is experimenting with a premium product in a last ditch effort to see what might save them. I suspect WMG will acquire them in the end and the DRM-free experiment at EMI will be dead. The record companies have every right to sell the same music to consumers over and over. That's what happens when new technology supplants old. The music business is no different than any other. Consumers have no right to take licensed intellectual property and engage in distribution on a massive scale, that's not what the "fair use doctrine" intended. I will not apologize for the major labels' inability to produce quality product anymore, that truly is a problem. But if one believes the product is bad today just imagine how bad it would be if there were no monetary incentive. It is not reasonable to assume artists can "go direct" by producing and distributing their own recordings any more than it would be to assume authors can have major success publishing thier own books. It takes a lot of money to compile a musical work in form and substance acceptable to today's market and even more money to promote the artist to the global public. Self production is a pipe dream. Perhaps the big four labels will fail, but if so, they will only be replaced by another set of distributors doing essentially the same things.

How Apple Will Frustrate Music Subscription Moguls

Fri, 13 Apr 2007 13:51:08 -0400

Al,

No, I haven't forgotten. Perhaps you have not realized that music distribution is moving towards a fully digital delivery model. The 80% sold in CD form will be 20% approaching 100% at some point in the not very distant future. Just because an outdated technology facilitates piracy is no reason to set up the next generation of technology for the same problem. DRM, properly administered, is an issue only for people who want something for nothing. It doesn't take a PhD in economics to realize the something for nothing business model is a failure.

How Apple Will Frustrate Music Subscription Moguls

Fri, 13 Apr 2007 10:33:27 -0400

I have to disagree. First of all, we disagree on DRM being fundamentally flawed. Its flaws are technical in nature, but not fundamental. A product that may be so effortlessly copied and pirated must be managed in order to sustain any value. Music is intellectual property just like a painting or work of literature. Digital technology allows unmanaged IP to be copied in infinite quantity by mere novices without just compensation to the owner. If there is a fundamental flaw, it is here. No market for valuable goods can function without a just payment mechanism. Without just payment, goods cease to have value and the incentive to produce disappears. DRM must be modified to allow the music purchaser the flexibility of sharing music a limited number of times with consent and to move the music an unlimited number of times by its original owner to as many devices as the owner possesses. Microsoft is purportedly working on a new DRM called PlayReady that meets these needs. Secondly, DRM must be interoperable among all hardware brands. If these technical flaws in DRM were solved, consumers would receive the value bargained for and IP owners would receive just compensation. The chaos we have today has produced a generation of scofflaws, a dysfunctional market for music IP, and a dearth of new talent. DRM is necessary and can be implemented in a consumer friendly way, and it must be done very soon if the music industry is to regain its footing.
Thomas Sailors, CFA
Cloverdale Investments, LLC