Diamonds & the RIAA 739
eaglebtc writes "After reading the previously-posted article on cdfreaks.com about the rapid erosion of cheap CDR's, I found another equally scintillating write-up about the economics of music CDs written by Richard Menta, founder of MP3 Newswire. Sure, we've all heard the whining about how CDs are so expensive, but Mr. Menta takes a unique perspective on the issue by comparing the RIAA to DeBeers. He argues that both companies control distribution of products in their respective markets with an iron fist, and by so doing can artificially raise prices. Coincidentally, the bubble is beginning to burst in both markets: the RIAA is fighting against the uprisings of P2P software, and the diamond cartel's lawyers are losing sleep over the $5 diamonds produced in a lab."
waah? (Score:2, Insightful)
Labor Of Love (Score:5, Insightful)
If guys start wedding gals using cheap diamonds, then chicks will just find a new tool with which to implement Expensive Labor of Love strategy.
How *could* it work? (Score:3, Insightful)
What will probably happen is that lab-grown diamonds will still be very scarce. The people making them are being very secretive about their processes and even their identities. They could sell their diamonds for $6 or $6,000, what do you think they'll do?
Maybe in 10 years or so the processes will be widespread enough to kill the market.
De Beers (Score:5, Insightful)
Re:The names may change, but (Score:3, Insightful)
Re:Labor Of Love (Score:5, Insightful)
Re:Labor Of Love (Score:5, Insightful)
But then that's just me (and pretty much anybody else I know who didn't grow up in the US / Canada).
Corporate bulls? (Score:1, Insightful)
Re:Synthetic diamonds (Score:1, Insightful)
compared to that, filesharing creates exact duplicates of any file - there is no way to tell if some file is an original or its tenth copy...
strange comparison.
Artificial Scarcity (Score:5, Insightful)
The better question is, what becomes scarce? Knowledge? Art? Service technicians for replication devices? I've yet to hear a good answer. The elimination of scarcity throws our entire economic model out the window. What's the new model? Do we go Star Trek and only care about improving ourselves?
However (Score:3, Insightful)
On the other hand, while music sharing causes a significant problem for the RIAA, they can still do something about it. The issue of the RIAA's price fixing will never be resolved until some method is devised and implemented successfully to bring independently-produced music to the fore.
Re:The names may change, but (Score:5, Insightful)
Wait... you mean that you'd marry a girl like that?
Damn.
For the record, my wife doesn't even like diamonds.
Re:They aren't so worried about $5 synthetics (Score:5, Insightful)
I don't know whether those $1.5 billion worth of diamonds are still sitting in Israeli banks, but I wouldn't bet on it.
Re:Labor Of Love (Score:1, Insightful)
Re:Labor Of Love (Score:2, Insightful)
Re:The names may change, but (Score:2, Insightful)
Re:How *could* it work? (Score:2, Insightful)
Re:The names may change, but (Score:1, Insightful)
I told my wife exactly that. Good thing she isn't like most women: superficial and good for sex and not much else. Women who cry over a diamond are losers, period.
Re:How *could* it work? (Score:5, Insightful)
Re:DeBeers never promised (Score:2, Insightful)
Yeah, but the quality of the product (i.e. the music) has retreated to the point of being worthless. Hell, I can't remember the last CD I bought from a current artist. Most of the CDs I own are re-released copies of older LPs.
Re:The names may change, but (Score:1, Insightful)
The problem here is that the scarcity on girls like that is far from artificial.
If you know a place where that's not true, I'd be very anxious to hear about it.
Re:Artificial Scarcity (Score:4, Insightful)
My last post [slashdot.org] touched on the same ideas: We are moving out of the age of "scarcity-based value" quite rapidly.
It won't be long before you can "print" nearly everything from its atomic components.
We all (as a society) need to carefully consider the implications of the framework we are laying down now:
Single-entity (human, or worse: corporate) monopolistic control of "information" or "Intellectual Property" is leading towards the "worse" end of the spectrum, at least as far as I am concerned.
Call me a hippie, but I'm not.
Call me a communist, but I'm not.
Call me a StarTrek nut, but I'm not.
Call me anything you wish, but I firmly believe that everyone has an inherant (natural) right to use any and all information that enters their person.
This may be too over-the-top for most people, but:
Everyone has a inherant, 'natural' right to use information, including EMF radiation (radio/television signals passing *through* your body), genetic encodings (God help you, Monsonto!), Clever C++ code implementations (patented or not), or whatever.
We need to take back control of our information!
-dave-
Shameless plug:
Use BearShare [bearshare.com] for all your peer-to-peer needs!
Re:They aren't so worried about $5 synthetics (Score:3, Insightful)
The points about the used diamond market are particularly relevant. As in there is *no* second hand diamond market. Why is that, given that a diamond doesn't physically deteriorate like most other goods?
Re:The names may change, but (Score:4, Insightful)
Apples to oranges (Score:3, Insightful)
True, both the member companies of RIAA and DeBeers are cartels, but what one controls through rarity (diamonds) the other controls through absolute control (music).
The author points to the fact that RIAA companies have pumped out 20% fewer new albums, and then somehow tries to parallel this to the same stratedy as DeBeers. Doesn't work I'm afraid. A diamond is a diamond, and having control over how many are on the market allows you control over price (assuming demand stays the same). The same is not true for music CDs...one album is not the same as another.
If (for example) the latest U2 album had been put out with only 100,000 copies made available, then the price could be pushed up on those CDs much higher as demand would not be met by that number. However, the price is completely uncorrelated to how many other albums are available.
A better correlation between DeBeers and RIAA would have been to focus on the loss of control each industry is facing. Diamonds will soon be cranked out at $5 per karat, and garage bands can now reach a global audience without RIAA interaction. The RIAA isn't playing nice in its death throwes, and I shudder to think what DeBeers will do in theirs.
Re:Labor Of Love (Score:1, Insightful)
And as it's been said before, there are many other very pretty stones available for the fraction of the cost.
I honestly don't know why people judge their opinion of someone by how much money they waste buying them crap. Especially for something that's essentially a useless trinket, and ESPECIALLY for something like forming a life-long relationship around.
If she makes a big deal over the cost of a ring, then I'm thinking her priorities might not be in building a lasting partnership.
=Smidge=
Help the RIAA - Not a Troll (Score:5, Insightful)
So, the RIAA's issue is they haven't yet found a way to make money off of file sharing. If there was money in it, they'd be fostering it, not trying to kill it.
So, they're pursuing two directions right now. Fight tooth and nail to protect their current bread and butter (CD sales). They're not doing this for the artists... lord no, they're doing this for the labels. THe other direction they're going is trying to find new sources of revenue. NOTE: This new source must be as large if not larger than the existing stream (from a margin perspective).
Once they find a way to make money on filesharing, I bet two things happen. a) they stop harrassing folks and b) CD prices drop b/c they're no longer a one trick pony.
Sooooo... in an effort to stop the lawsuits and help get CD prices down, we, the buying public, need to find a way for the RIAA/labels to make billions off of online file sharing... hopefully without some terrible DRM integrated into the solution.
There have been many attempts... the $0.99 downloads are the most recent and most successful... but they're still not much compared to the brick and mortor sales that are occuring.
Put your heads together! Come up with a feasible way for the RIAA to migrate to a new business model and make all our lives easier.
I dare you.. find a hole in this logic
International collusion (Score:5, Insightful)
They don't need it. They control more of the diamond market than OPEC does oil, but look what OPEC is able to do. To control a market, you need three things:
1. You are the largest player in the market, with a high total market share,
2. You have a large oversupply of the product,
3. You have the ability to crash prices by releasing your oversupply.
So what happens if someone mining diamonds were to challenge de Beers? de Beers would make sure that their network of retailers don't do business with that producer. They'd also release some of their capacity to temporarily drop prices. That would put that producer out of business.
The artificial boys are different, because they can make stuff cheaper even than de Beers can get it out if they dropped their prices as much as possible, probably.
What will probably happen is that lab-grown diamonds will still be very scarce. The people making them are being very secretive about their processes and even their identities. They could sell their diamonds for $6 or $6,000, what do you think they'll do?
That's true. Both have a vested interest in keeping prices high. What *should* happen is they should get a deal together where they divide the pie, with neither side stepping over it. Kind of like OPEC. If they did it in the US, it would be collusion, but they don't have to do that. We'll see.
Re:DeBeers never promised (Score:2, Insightful)
Computers?
Re:The names may change, but (Score:5, Insightful)
Try any of the following:
1) Local chapter of ACLU
2) Local Amnestry group
3) Local artist or arts school
4) Any town with a healthy population of liberals
It really says something about Slashdot that a moderater scored you as 'Insightful.' Such a sad, sad group of boys.
Oo! Oo! Or you could try explaining your position to your fiancee. I recall learning somewhere that women are people who are as intelligent as guys. Assuming you're an intelligent guy, one would hope your fiancee is at least as intelligent as you are, and would share your concerns over blood diamonds.
Re:DeBeers never promised (Score:3, Insightful)
Then how 'bout I sell you my i386 25 mHz PS1 with a meg of ram for $3k and we'll call it a deal.
Telling quote from the article (Score:4, Insightful)
Now... I have never, ever used the "If you loved me you'd sleep with me|suck my dick|swallow|let me fuck your sister|whatever else" bullshit.
I've always thought that sort of attitude was eminently disrespectful to anyone with whom you could possibly have any kind of relationship what so ever. It's something only the completely immoral assholes use on mindless, pathetic simulacra. And I say "immoral", not "amoral", since the statement entails a subversion of a pretense of emotional values.
But, De Beers clearly seems to think it works. It seems to think that this is a perfectly acceptable way to communicate with their clients, in their relationship with us. So, we have that same immoral to simulacrum relationship.
It's nice to be called a "worthless cunt" to your face, isn't it folks?
Re:Help the RIAA - Not a Troll (Score:3, Insightful)
I have enough trouble trying to make money for myself; you want me to help people I hate make money instead?
Effects on war in Africa (Score:1, Insightful)
As you probably know, lots of local wars make the African continent "messy" (it's the less we can say). The control of diamond producing areas is one of the thing that explains many war situations in Africa.
So I think if diamond value is going down, control of these area willl no more be a good reason to make war
(Scuze for the bad english but I'm sure you slashdot peoples are smart enough to understand what I mean....)
Re:Help the RIAA - Not a Troll (Score:4, Insightful)
The RIAA represents the labels in distribution issues. If they must resort to litigation and FUD to survive then they deserve to die by the invisible hand of capitalism. By choosing litigation and FUD instead of the market, they have essentially spit on a cornerstone of freedom and I have no pity for their demise.
Hopefully, *Apple* makes billions from online distribution because they have embraced the market and the consumers within it. The RIAA deserves nothing.
Re:The names may change, but (Score:2, Insightful)
Re:Labor Of Love (Score:1, Insightful)
Frankly, if you believe that sort of thing, I have a house to sell you. It's located in Iowa and has gorgeous views of the Pacific Ocean.
If my sarcasm flew over your head, the point I'm making is that "females", i.e. women, are not irrational. We also don't seek to remove all joy from the universe. If you'd like to blame women for the fact that DeBeers constantly advertises diamond jewelry and for the fact that over the years the concept of a diamond engagement ring has been heavily pushed, then your perception of reality is highly distorted. You are suffering from Fundamental Attribution Error.
Re:control is the problem (Score:1, Insightful)
In fact, it is easy to show that, as far as most people are concerned, a CD at $15 is a better deal than a tape at $10. The proof is the fact that given the choice, most people will buy the CD. If anything, at that price the cassette is unreasonable -- I think I would usually go for the $15 CD even if the tape were only $5.
In my experience, both as a music consumer and as an occasional CD salesman, most people think $15 for a CD of good music is a bargain. $20 feels a lot more expensive, and it would usually take something pretty special to get me to shell out that much.
Re:The names may change, but (Score:3, Insightful)
If there's a trust boundary in a relationship, I'd consider that a warning sign. I know people who seriously say things like "never get married without a pre-nup", but I never quite understood this. Getting joint accounts and dual-name titles on property is just a no-brainer for me (it makes a will much easier...it also helps keep nursing homes from robbing me blind if I ever end up in one). If a marriage with a pre-nuptual agreement starts out with some expectation for failure and divorce, doesn't that seem to be a prediction rather than a contingency?
Re:Demand, mostly (Score:2, Insightful)
they feel that people *want* CDs more, so they charge more. not the way competitive market based economies typically work, but if you have a lot of control you can force it.
and sure there are some small cost increases, but i've done enough cd production for friends bands to see the costs. with all costs included it's still cheaper and easier to produce CDs than tapes. and a fair amount of 'bonus tracks' are already recorded, written and produced, they just get left out because some songs always get left out.
incidentally i am all for the new trend to include a dvd with CDs. again, most of the material is already produced--videos, give the band a miniDV camera in the studio, etc--but it's a nice bonus that some companies have begun to include.
botom line: buy more vinyl, and buy it from your local indie record store owner.
Re:They aren't so worried about $5 synthetics (Score:2, Insightful)
Also, there's the simple fact that although people are getting more and more trusting of Ebay and the like, they still don't trust people selling diamonds outside of the commercial sellers, because most people don't know how to tell a fake diamond from a real one (even something that isn't a good 'fake' like a lab-created stone) without paying someone to look at it.
Re:strong-arm power (Score:5, Insightful)
I'm a chemist, I know what they are, but "fake" is four letters and "synthetic" is 9. I give the average slashdotter credit for the intelligence to discern the difference, though perhaps that's overstating things.
On the day when 'authentic' diamond merchants are frantically shipping their stones with a crappy little scrap of paper with a hologram on it, like an Franklin Mint ripoff item, life will be better for common sense people.
They already laser-inscribe the more valuable ones with a serial number. The easy bit for the manufacturers of fake diamonds is going for the small-diamond market. As the article says, anything under 1/5 carat isn't worth verifying. And you can make a $10,000 diamond-encrusted bracelet with a bunch of diamonds that are, individually, not worth enough to check. And that will be a nightmare for de Beers to control.
Re:The names may change, but (Score:3, Insightful)
What^H^H^H^H One thing a woman wants is to feel that her man values her more highly than all other things. And she needs a proof of this that is unambiguous and readily demonstrable to her friends/family. Jewelry serves this function well, since (1) the man gets no utility from it, (2) it not a dual-use item that might have been bought for its practical value, (3) it is portable.
A second thing a woman wants, in addition to knowing her man places a high relative value on her, is that she has a high absolute value. Jewelry readily demonstrates by its price just how much means her man possesses and that his means are at her disposal.
Why diamonds as opposed to other jewelry? Why, marketting, of course.
Re:The names may change, but (Score:3, Insightful)
It's how alike they have to be before money becomes the deciding factor that measures the difference between a mercenary and a saint.
Menta should check his facts better (Score:3, Insightful)
Menta also tries to argue that CDs are scarce. Last I checked, I could buy CDs at WalMart, Target, the grocery store, music stores, and dozens (if not hundreds) of online stores. CDs are not scarce. Music is not scarce either, and never has been. For people who really love music, they can find it all around them, i.e., in coffee shops, bars, churches, symphonies, independent artists who distribute online, etc. The only thing scarce in the recording industry is talent.
And for the last time, exchanging copyright protected material (like an entire album), without the author's permission, with hundreds (or thousands) of people through a P2P service is copyright infringement. Copyright infringement is not exactly the same thing as theft, but it is a violation of federal law, and some kinds of infringement carry criminal penalties.
Re:The names may change, but (Score:3, Insightful)
Yes, I would, if I loved her for other reasons. Not everybody has to share the exact same social/economic/political agenda as you to be compatible with you. Nor is it your place to pass judgement on those people. It is not really a persons fault if they grow up in a society....nay....a WORLD where diamonds are considered rare and wonderous things. Granted, the rare bit is now known to be false, but there is still a social value given to diamonds. It is not so much the rarity of the diamonds....it is that the man who buys his woman a bigger rock has more money, and is thus better able to provide for her.
When women brag about their ring to their friends, its not about the rock itself, as I'm sure you are aware. They are merely bragging about their husband. While their basis for such bragging may be misguided, you should not fault them for being so happy with the person they are marrying that they want to show them off. Now, to be fair, there are certainly those women out there who only care about the size of the rock, and about where they rest in the social pecking order. And I would never come near a girl like that. But you should not fault the rest.
Re:The names may change, but (Score:3, Insightful)
My woman, and most of them women I know, are perfectly capable of defending their choice of mate to their friends and family. They tend to value loyalty, apparant friendlyiness, and their affect on the woman more than the man's material wealth.
And, with a median household income in the US of about $50,000, most women will probably be able to think of a better use for $12,500 than buying a diamond. Their own car, a down payment on a house--even their wedding or a spree of their own.
IMO, if the woman (and her family) can't grasp the "DeBeers is a cruel monopoly, I'm not buying a DeBeers diamond, what else would you like?" logic, then the marriage simply won't last.
Re:The names may change, but (Score:3, Insightful)
You are vastly underestimating the desire of females to have the *perfect* wedding, and that includes diamonds, no matter what.
Re:Help the RIAA - Not a Troll (Score:3, Insightful)
And why exactly would they stop? In the long run, if they could eliminate P2P, it would make them money. If they have another viable business model, this would just be more money on top of that. And I'd like you to explain why I should help come up with a business model to support a dying industry who refuses to change their business model to adapt, and instead decides to ruin the lives of students through litigation because they were unable to catch the P2P wave before it crested.
Re:The names may change, but (Score:1, Insightful)
Do you honestly believe people are that shallow? It's going to come down to personality, brains and values.
I dated a rich girl in college. She was a cheating bitch. A hot cheating bitch with a nice ass and a lot of money, to be sure, but a cheating bitch nonetheless.
The girl I married came from a family of little means. She's sweet and beautiful and appreciates the nice things I can buy for her because they're more than she's ever had. She doesn't need a Ferrari to be happy. And if I ever bought her a diamond, she'd kick my ass for wasting the money.
I had a point here, somewhere...
Re:Give a RIAA CD to your girlfriend... (Score:1, Insightful)