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."
Synthetic diamonds (Score:5, Interesting)
De Beers has been trying to 'educate' the diamond masses about these 'heretic' stones, but eventually, this will bankrupt them
Now, as for the RIAA, CD-Rs and file-sharing won't kill the music industry. I wouldn't even expect a drop in sale-price, just more and more bureaucratic nonsense.
DeBeers never promised (Score:5, Interesting)
Re:Synthetic diamonds (Score:1, Interesting)
Throwing a rock under a spectrascope is practical.
Spending thousands to send a rock to an expert to identify as "posssibly" fake due to being "too perfect" is not.
And besides, one would imagine imperfections could be introduced.
They aren't so worried about $5 synthetics (Score:2, Interesting)
The real reason [theatlantic.com] why DeBeers is sweating is the $1.5 billion worth of diamonds sitting in Israel which, if released into the market, could send diamond prices spiralling down.
Debeers can't stop them all. (Score:2, Interesting)
With the benefits that diamonds can bring to the tech sector, there will be a large demand for cheap diamonds with the right molecular properties. In other words, demand will bring about many more synthetic diamonds and Debeers can't stop them all.
It's more about awareness than technology (Score:5, Interesting)
Diamonds are a rotten analogy because it suggests that, up to now and the magic golden age of P2P, the publishing industry posessed all of the real music. The only thing that really distinguishes their product is that it is so obvious. If you never want to buy a major label release again but want new music all the time it really is not hard at all to do. It just involves a little more work.
There are two ways in which the internet may create a revolution for independent musicians. One is by offering a viable replacement for radio. The second is by exposing music to the distributed filtering techniques of mass exposure and moderation that the internet essentially gave rise to the invention of. File sharing as such strikes me as something that will be much of an adjunct to the real 21st century revolution of music - assuming it really happens because it sure hasn't yet.
Market effects (Score:3, Interesting)
I'd say that this comparison is a bit inaccurate. DeBeers can reduce the number of diamonds offered on the market - supply drops, demand raises the price of the good. Simple. Raising the price and keeping the amount of goods offered at the same level will lead you nowhere, because customers will wait for the prices to drop since they know that a surplus of goods will build up over time (which decreases the price).
Now, does the RIAA really reduce the number of CD in the stores? Because only this would compare to the influence DeBeers has on the market... No, they just raise the price. And guess what - customers buy less CD and turn to P2P.
P2P music sharing distributes a good (mp3) that is nearly equal to the original good (CD). While the $5 diamond may be equal in the quality compared to a 'real' (= DeBeers) diamond, the price is part of the value of the 'real' diamond. Give a $10 ring to a woman, and she'll like it. Give the exactly same ring for $1000 to a woman, and she'll feel appreciated. Diamonds are a girls best friend, after all.
Re:Labor Of Love (Score:5, Interesting)
And besides, have you ever been married? With or without diamond wives freakin' expensive!
No, no, no (Score:3, Interesting)
In reality, file trading is *still* theft because you're breaching the artist's copyright. He's comparing apples and oranges...music is a personally created work of art which is copyrightable. Diamonds are a naturally occuring deposit that just happen to be horded by one relatively nasty company. While I agree the two bare striking resemblances in their distribution models (read: iron fisted), that's where it ends.
The hullabaloo over file sharing is that, since music can be digitized, it can be easily replicated. We all realize by now that the reason P2P is succeeding is because it came up with a more convenient, but less secure, form of distribution. The RIAA's argument is that because music can be duplicated, they will lose the group of customers who would noramlly all individually buy an item but who instead buy one and dupe. A parallel would be DeBeers, had they created the Hope Diamond, getting pissed because someone was able to replicate it and sell it for $5 on the street.
That's not the case, this company is creating new diamonds (parallel: independant artists) that will use the same distribution model (retail sale, more than likely) as DeBeers. The only person who should be getting pissed in all cases is the owner of the original work, which for music is the copyright holder, with diamonds it's God (or, for you scientists, Mr. Pressure). I don't think God (or pressure, for that matter) cares.
It still infuriates both DeBeers and the RIAA, so I understand the comparison, but please don't argue that new, cheap diamonds are the same as P2P. One's legal, one's not (in most cases).
--trb
Re:Labor Of Love (Score:1, Interesting)
Re:Artificial Scarcity (Score:5, Interesting)
All these things need power, and all of these things will be developed before good solar power harnessing is implimented [thus practically eliminating that scarcity]
"Intellectual Property" is forever(?) (Score:4, Interesting)
CDs aren't forever, but the force of copyright means that if you cut a Big Hit(tm), you and your heirs can have a recurring revenue stream for a long time, along with all the fat, balding, over-40 WASPs who are the bulk of the middlemen pushing your work. So RIAA wants to hawk as many "legit" jewels as they can without someone undercutting them. That you can buy some DRM'd songs and can't transfer them to a new system. Hard to find anyone against the concept of playing a "used" MP3 on their system, right?
The Problem with Music (Score:3, Interesting)
http://www.negativland.com/albini.html [negativland.com]
PS: Steve Albini for those that don't know was in many bands very influential to the Nirvana/Pearl Jam type bands of the day. Bands like Big Black and Shellac...then he turned to producing bands like Nirvana and Bush and others...
Re:The names may change, but (Score:2, Interesting)
Re:Labor Of Love (Score:3, Interesting)
heck, i know a couple who earn half of what i do but live at a much higher standard due to in-law support.
Re:DeBeers never promised (Score:4, Interesting)
One of us must have a very bad memory then,
because I remember the uproar when they raised CD prices back to $15, after they had lowered them to $10.
They said that they didn't sell any more CDs at the lower price, so there was no point in charging less.
Back then they were at least honest about just being in it for the money.
-- this is not a
Re:They aren't so worried about $5 synthetics (Score:4, Interesting)
They're worried about the yellow diamonds that are now capable of being reproduced, in extremely large sizes, in extremely good quality. These are not 'just' industrial diamonds - these are extremely high quality, extremely pure, large diamonds which can be grown by two different independent research groups right now, using extremely high pressure systems that have been in development for years.
The yellows are at the very top end of the scale, and are something DeBeers has been cultivating as a market for years - now they're reproducable, and lab-made yellows are higher quality than anything DeBeers can muster.
DeBeers deserves to go down. There is no better example of corporate evil.
Re:De Beers (Score:3, Interesting)
Because, troll child, the record industry hasn't assassinated anybody or enslaved entire towns. It's much harder to convince the government to prosecute a company when everyone is making money and nobody is dying. Until people start dying, you can expect corporations to routinely beat any charges brought against them. See Enron for the latest example.
Re:Labor Of Love (Score:3, Interesting)
PS: My last boyfriend proposed with a very large diamond ring and I turned him down. The fact that he would get that for me was the final and quite a major signal that he didn't know much about me at all.
Re:Labor Of Love (Score:2, Interesting)
Re:The names may change, but (Score:5, Interesting)
We knew eachother for years before we got married. We are best friends, and jewelry is hardly high on our list of priorities. We'd rather spend the money on a dishwasher or furniture, anyway.
How is that so hard? Romantic idealism is overrated, IMO. I think long-term happiness is more easily obtained by fiscal responsibility, for example, than credit-supported fantasy. Perhaps I sound like an old fart, but that's just how I am.
Price War (Score:3, Interesting)
Price War.
The general's not a fool. He won't sell at $5/carat. He'll pitch them at 10 - 50% cheaper than DeBeers. Cheaper diamonds, but not *ridiculously* cheap diamonds. Just cheap enough to get the cost-concious buyer to think "Yeah, it's artificial, but it's still a flawless diamond, and it's 25% cheaper than that other, identical stone...".
DeBeers will either have to reduce prices, or deal with the General. There's a good chance things could get nasty. If the general and his process survive, the consumer will benefit.
Re:Synthetic diamonds (Score:3, Interesting)
Filesharing creates inferior MP3 copies of "perfect" CD audio WAVs. The difference between MP3 and CD is the same as between "artificial" carbon crystal and the "natural" one. If Debeers can "educate" people that their diamonds are real ones, then RIAA do the same to educate people that MP3s are crap. If, on the other hand, RIAA can't educate people so, the chances are Debeers will not be able to do that either. See the Wired article for some quotes by a diamond trader - he is happy to make his profit on artificial diamonds and his customers (in his opinion) are happy to buy cheaper gems.
I think that eventually so called "elite" will switch to other gems, middle class and poor people will be happy with their ~100$ diamond jewelry, some people will use diamonds in extravagant ways (like on the Wired cover - cool! or completely covering a Bugatti or a personal jet in diamonds).
As for RIAA, they will suffer from the same problem. MP3s are a decent substitute for music CDs. People will get these MP3s and listen to them. There are two possible developments.
1) RIAA (labels) survive and start selling MP3s (with no or minimal DRM) cheaply. They are able to maintain some sort of monopoly and still benefit somewhat from pricesetting (now for MP3s).
2) RIAA doesn't survive the P2P blow and labels slowly/quickly die out. Then a competitive market will emerge. The consumers are likely to benefit because competition is likely to improve quality (and keep prices comfortably low).
Re:Market effects (Score:4, Interesting)
The only problem I have with that logic is that you cannot sell a diamond for (anywhere near) what you paid for it. Ignoring the setting and assuming you spent all the money on the stone, your $1000 ring will most likely bring you $150-$200. When I went to sell a diamond I found about three dealers in the entire US that specialize in non-estate used diamonds. I was lucky enough to get almost 60% of what I paid for my ring, but it was a lot of work.
Creation of a cartel (Score:2, Interesting)
Re:They aren't so worried about $5 synthetics (Score:3, Interesting)
And they have diamond testing machines right there in the store.
Re:Labor Of Love (Score:2, Interesting)
But I bet, oh what's the divorce rate now?, at least a significant proportion of men get married because they've got the notion it will provide them with a reliable source of poon.
And the point of engagement rings, has always been, and still is, to entice the woman into giving it up before marrige. But they got their start in an age when chastity had value, which it no longer does, so now it's simply goods for sex. Or prostitution.
DeBeer's knows women are for the most part whores, and men will pay for sex. Women know this too, so they and the religious nuts have colluded to artificially manipulate not the supply, or the price of "the sticky little kitten," but the reliability of that supply. Dasterdly. (We all know about conditioning, and how people will consistantly go back to reliably unreliable sources.) They created the poon futures market that DeBeer's is so dominant in.
I don't know about you. But, not that I want to be a father (God that would be a mess.) but if I wanted my daughter to be chaste, I'd just buy her a lot of diamonds. Train her to confuse lavish gifts with love. At some point hormones alcohol and the typical excesses of youth would take over, but demonstrations of love by would-be suitors that she would deem appropriate would probably be pretty few and far between.
Re:The names may change, but (Score:5, Interesting)
He then recounts the time he told this to one of his female friends. He describes her as one of the nicest people you could ever meet. After telling her that the soldiers/work masters actually cut off the arms of small children, she made a sad face and said, "Both arms?"
That shows you the power of diamonds.
Re:Labor Of Love (Score:3, Interesting)
If anyone is curious, the composer of the "Diamond Music" (official title, Shadows) is Karl Jenkins. Based on that commissioned work, Jenkins has constructed a three-movement suite called Palladio. More information here [jeansonne.com]. Palladio appears on a Sony Classical recording aptly titled (in the U.S.) Diamond Music [sonyclassical.com].
Re:Help the RIAA - Not a Troll (Score:2, Interesting)
So now we have artists who want to get their song to market, and consumers who want to get them. And as Napster and others have proven, the pump has gotten easy and fast enough we no longer NEED a CD or other middle media here. What we will need is a system that connects artists to consumers. The middle man who does that the way that keeps consumers happy and artists paid will be rich while the rest will be wondering why no one brings there car to the man who where the Texaco Star.
Re:Labor Of Love (Score:3, Interesting)
No wonder half of all marriages fail within the first year.Some people think that in order to prove you love & trust I halve to fork out thousands of dollars? I don't know which is worse, you having the gall to make such a statement (AC no less) or the 4 knuckle heads that modded you up.
Cuttiing Down On Blood Money (Score:2, Interesting)
Re:Synthetic diamonds (Score:3, Interesting)
Many of the people who record concerts (Phish and Dave Matthews) onto DAT go with lossless to distribute.
Shorten
Monkey's Audio
WavPack
FLAC (ooh it's also "free")
to name a few
Re:I read it as more "de minimis non curat lex" (Score:2, Interesting)
I agree with you, if a girl is that shallow dump her, you'll be happier in the long run.
Besides, this whole diamond scam was made up fairly recently. In my great grandmothers day an engagment ring didn't have to be a diamond at all.
When I got married my husband gave me a Ducati Monster instead of a diamond ring. That's a gift we can both enjoy!
Re:De Beers (Score:3, Interesting)
This is gonna feel good... (Score:5, Interesting)
When the patents run out the fun starts (Score:1, Interesting)