April 2012 archive

The Old as a Barrier to the New

Techdirt has an interesting piece on the follies of the publishing industry in shifting its business model over to ebooks and digital publishing, focusing on the utter and infuriating pointlessness of DRM, or digital rights management.

It makes the salient point that DRM fails because it makes a legitimate product less useful, and therefore less valuable, than a pirated one, which can be acquired easier and cheaper than the legitimate product.

However, the piece also raises a bigger point about the impact of change on existing industries. And there’s a little psychology and decision theory to explain why almost all industries almost always screw up the transition phase, largely motivated by their desire not to go extinct, and then go extinct anyway. This is particularly true of publishing and the media.

Here’s the story:

Company A has an existing product, X,  which sells for a high price and achieves a good margin.

A new disruptive technology emerges which, like most disruptive technologies, make things less expensive to produce and/or disseminate.

This results in a cheaper product Y that competes with the more expensive old technology product X.

Company A now has a number of choices – and it’ll always choose the wrong one:

1) Lower the price of X to compete with Y, thus crippling its margins and forcing it to lower the quality of X to appalling levels. This is what most newspaper publishers have done in response to the internet. Now their print editions and online editions are scraping the bottom of the barrel, while online outlets, like the Huffington Post, boom.

2) Sell both X and Y. However, now they’re competing with themselves, and Y will win, putting the long-established X department out of business. But X makes a good margin and the company doesn’t want to lose that, or change its business model. So the company raises the price of Y well above its cost to make X competitive against it. However, now Y is unreasonably overpriced in the eyes of consumers, who can probably easily get Y free illegally. This is what book publishers are doing by pricing ebooks at only a fraction lower than print books, and television and movie studios with DVDs vs. downloads. Then company B comes along, unhindered by the old technology, and it only produces product Y, and puts company A out of business anyway, like iTunes did to the music industry.

3) Transition from product X to Y, and either phase out X entirely, or find an equilibrium between the two. Y will rarely entirely replace X, and X will likely have to change, such as bestseller fiction moving to ebooks while quality hardbacks remain in print, or top 10 music going digital while vinyl lives on. Y will be priced such that it’s competitive, and it’ll supplant X fairly rapidly, with the business model adapting and departments probably closing. Businesses almost never take this option, even though it’s the most rational.

Basically, management, when faced with the decision of competing with themselves or continuing business as usual, will almost always continue business as usual. And, in doing so, they effectively let other companies compete with them and put them out of business anyway.

This is because most management are intrinsically conservative, they seek to protect the business model they know (and thus their own jobs), even at the expense of the business at large. Few managers have the courage to actively destroy part of their company in order to compete in a new environment, and thus passively destroy the entire company.

I’ve seen this phenomenon unfold a dozen times in my career, and I expect it’ll continue as long as new disruptive technologies emerge.

The upshot is we’re currently living in a transition time where many industries are busy making their mistakes, but they haven’t gone out of business quite yet. When they do, and new business emerge that embrace the new technology, then things will settle into a new equilibrium – and BitTorrent will suddenly decline in popularity, as did music filesharing systems once iTunes emerged.

I look forward to that day.

Religion for Atheists Review

ABC Religion and Ethics has posted a review I penned of Alain de Botton’s new book, Religion for Atheists.

Despite the negative press de Botton has received from some quarters of the New Atheist movement, his book is a worthwhile contribution to moving the discourse about god, atheism and religion forward.

In the wake of the atheist convention here in Australia, there’s renewed discussion about religion, but sadly, most of it is the same old to-and-fro that we’ve seen for decades. This kind of debating is mostly fruitless and, for the most part, a tremendous waste of time and energy.

What we need right now is for some of the very smart people behind the current atheism push to shift emphasis towards building secular culture, whether that be underpinned by Humanism or another system of values. And in creating secular culture, there’s a lot we can learn from religion.

de Botton’s particular approach and his specific prescriptive suggestions might not be the best ones, but at least he’s engaging with positive atheism rather than wallowing in negative atheism. I’d like to see more atheist thinkers to do the same.

Evolution and Moral Ecology Seminar at UNSW

Picture this: a philosopher giving a seminar on evolution and moral ecology to a bunch of evolutionary biologists and ecologists. It’s bonkers. But I’m going to give it a shot. I mean, what could go wrong?

Actually, I’m hoping the audience will teach me a thing or two. I’m going to use the opportunity to hurl at them the most ribald version of my moral ecology thesis and see if the analogy sticks.

And I’m going to flop out the full length of my evolutionary story for how our highly polymorphic psychology came to be as it is and see if anyone chops it off.

I’m not sure on the attendance rules, but it’s at the Evolution and Ecology Research Centre at the University of New South Wales at 3pm in the Biomed C theatre on Friday 27th April. Do come!

Here’s the abstract:

In this talk I introduce the notion of ‘moral ecology.’ This is the thesis that there is no one way to promote optimal levels of prosocial and cooperative behaviour in a population. Instead, certain behavioural strategies will be more or less successful depending on the environment in which they’re situated. The environment includes both the physical environment, such as resources and climate, and the social environment, which includes the behavioural strategies employed by other members of the group. What emerges is a pluralism of strategies that are able to sustain high levels of prosocial and cooperative behaviour in their particular environment, forming a meta-stable equilibrium. I suggest that human social and moral psychology evolved in light of this phenomenon and, as such, we evolved a polymorphism of psychological types that promote a pluralism of behavioural strategies while retaining sufficient plasticity to adapt to changing environments. This polymorphism is maintained primarily through negative frequency-dependent selection. I argue that moral ecology can help explain the existence of human psychological diversity, and the existence of moral diversity in the world.

 

Linking Psychology, Politics and Climate Scepticism

Conservatives are from Mars, Liberals are from Venus. So says Chris Mooney in his new book, The Republican Brain.

I tend to agree. I’ve written as much on this blog back in 2010, and on the ABC’s Drum website again in 2011.

The thesis is that liberals and conservatives tend towards very different psychological make-ups. Political psychology studies have shown that liberals and conservatives are measurably different along a number of different axes.

For example, liberals tend to have higher scores than conservatives in Openness in personality tests. This means liberals tend to be more curious, inquisitive and exploratory when it comes to information and opinions. Conversely, conservatives tend to be less experimental, more rigid in their thinking and more dogmatic.

Liberals also tend to exhibit greater integrative complexity – which is a metric that measures the tendency to incorporate many different pieces of information into forming an attitude or making a judgement. It’s kinda ‘shades of grey’ thinking. Conservatives, on the other hand, tend towards more black and white thinking.

None of these things are rock solid. There’s no determinism at the root of this. But there are clear leanings amongst those who self-identify or vote one way or the other.

Do these psychological differences contribute to the differences of opinion among liberals and conservatives? Could they help explain why a majority of conservatives reject anthropogenic climate change, for example?

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