Author Archives: wunderbarb

Should you invest in the long tail?

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The long tail theory is one of the strong belief of opportunities in Internet. In a few words, dematerialization of goods offers more choice to consumers; The production cost are minimal. Furthermore, online distribution will change the curve of demand. in other words, people will look for rare treasures and this niches will be great. To simplify, if Internet can provide easy access to the long tail, then there will be a market (expected to be serious)

In the last issue of Harvard Business Review, Anita Elberse benchmarked this theory with real data. She analyzed the weekly sales of home videos from January 2000 to August 2005 on a random sample of 5,500 samples. She verified her results with 3,300 artists between January 2005 to April 2007. Her conclusions are surprising. The shape of demand evolved: The tail becomes longer and flatter.

According to her, the long tail theory does not hold. Among her many findings, some excerpts:

  • Consumers of the most obscure content also buy the hits.
  • Consumers who rent obscure movies are in general the heaviest users.
  • Hit products remain dominant, even among consumers who venture deep into the tail.
  • Hit products are also liked better than obscure products.

So the question is open: is the long tail one Internet Eldorado? read the paper and build your opinion.

Reference: ELBERSE A., Should you invest in the long tail?, in Harvard Business Review, Volume 86, Number 7/8, July/August 2008.

YouTube versus Viacom: privacy does not matter

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In 2007, Viacom launched a suit against YouTube for copyright infringement. Viacom requested $1 billion of damages. In this battle of giants, the latest court order is surprising.

L. Stanton, the senior judge on the United States District Court for the Southern District of New York, ordered YouTube to deliver to Viacom the list of every YouTube username, the associated IP address and the videos that user has watched on YouTube. The objective of Viacom is to evaluate popularity of copyrighted content on the viewing habits of YouTube users. It seems obvious that this evaluation could have been done through anonymized data, as commonly done for statistics. Stanton dismissed Google’s argument that the order will violate user privacy, saying such privacy concerns are merely “speculative.”

More interestingly is that the judge refused to deliver the source code of YouTube software to Viacom to protect the business of YouTube. According to him, the source code could allow competitors to set up a similar system.

According to me, the judge through his decision offers to Viacom the treasure of YouTube. The business model of YouTube is to better know its users so to display more targeted, and thus higher value, advertisments to users. This has only value due to the huge database of collected user viewing habits, i.e., the one to be passed to Viacom. In YouTube software, the most valuable part is probably the profiling one that the judge could have isolated and protected. The rest of the software is available or deployed by many competitors.

Of course, EFF already fight against this breach of privacy.

This type of case becomes more and more complex requiring a good understanding of many fields in addition to legislation. Judges will have to understand technical details as well as business theories. The future of experts to the courts and testifiers seems bright.

Carnage on French piracy

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French cybercops are extremely active these last weeks. They stopped members of two famous French warez. If you are used to scout P2P for French movies, then the names of CaRNaGe and cinefox are probably familiar to you. Four members of CaRNaGe have been arrested. CaRNaGe was the first release group to provide a cam of latest French blockbuster: “Bienvenue chez les Ch’tis” the day of the theatrical release. A few days later, an excellent version ripped from a DVD version used in post production houses was in circulation on P2P, delivered by another release group.

They may incur up to 5 years of jail and a fine of 500,000€. The timing of these arrests is interesting. It coincides with the French presidency of EU. French president, Nicolas Sarkozy, has promised that fight against piracy will be of of his priorities during this coming semester of presidency.

CaRNaGe, as a warez, collected terabytes of movies, songs and software. Typically, warez data flows after a few days or weeks to P2P networks. Release groups are at the top of the pyramid of Internet piracy.

Token for WoW

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Blizzard is the first online game that offers a login security equivalent to the one used by enterprises. In the enterprise world, remote workers are used to so called RS tokens to authenticate on their VPN. This token displays a 6-digit random number valid for a few seconds. When logging, user dials in the currently displayed number.

World Of Warcraft (WoW) suffers from account theft. Thus, Blizzard offers similar token that can be purchased for 6.5$. Once the token linked to our WoW account, you are safe against account theft (but not against character death :Wink:).

Professional grade security for entertainment.

Nico, have you already yours?

DRM and Individualized Pricing

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Michael Lesk, from Rutgers University, attempted to answer why online music stores sell to each customer at the same price. Interestingly, every song is sold at the same price, regardless of its performer. The price of the corresponding CD varies depending on the artist’s fame. Online stores have good profiling of Alice. Thus, they could easily propose a personalized price slightly lower than the price she would be ready to pay. According to Lesk, it is not a privacy issue but a feeling of resentment that frightens the sellers.

One alternative that make price differentiation acceptable is versioning. People accept that a hard-bounded book is more expensive then a paper back. People may accept to pay more for a content they will be able to view several times, than for a content that they will view only once. This is the role of DRM. DRM may allow to decrease the average price by offering different versions. Unfortunately, today DRM is not used for that, probably because it is simpler and safer for merchants to offer one unique price.

Reference of the paper
LESK Michael, Digital Rights Management and Individualized Pricing, in IEEE Security & Privacy, May/June 2008

Is DRM bad for the Earth?

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:Happy:
In my life, I heard many arguments against DRM. I must confess that this one is the most surprising one. It seems that some professors of US campuses promote the use of eBooks as alternative to traditional paper book or photocopies. One of the arguments is that it is more environmentally sound. To that, we can only applaude.
Unfortunately, there is no universally adopted format for eBooks. Furthermore, they are protected with DRM that are not interoperable. Thus, ebooks are an ecologic but less convenient alternative to paper book.

Conclusion of the paper: DRM is not environmental sound. :Sad:

My personal conclusions are that we urgently need interoperability of DRM. It is the unique feature that will make DRM acceptable to users. Furthermore, for ebooks, DRM must support the possibility of free excerpting. This mandatory for any serious scholastic work.

Wii Homebrew channel (2)

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The things are going too fast. I reported the launch of the Homebrew Channel. Meanwhile Nintendo issued a firmware update 3.3 for the Wii. It is possible for Nintendo to patch its installed consoles through firmware update. This allows to add new features, repair some bugs, and answer some attacks. The upgrade checking occurs when the Wii is connected to the Internet. This is a main difference with Nintendo DS that does not have such firmware update.

The new upgrade closes the loop hole of Zelda. This hole allow to create the Twilight Hack supporting homebrew programs. Thus, this firmware should stop the homebrew channel. Nevertheless, it seems that the upgrade does not affect the homebrew channel if it was installed before the upgrade.

According to you, who will make next move:

  1. The hackers to circumvent the new firmware?
  2.   Nintendo to fully close the hole?