The Business of E-Books: Amazon's Wholesale Model vs. Apple's Agency Model

The battle to determine the future of e-book pricing

     There is a lot of competition in the e-book marketplace, and many wonder whether the medium will ever take the place of print books entirely.  While it may seem insane to imagine a world without paper books, I think that it could definitely happen at some point.  However I don't believe that it would be a good thing.  Paper books have definite advantages over e-books such as low cost of access and the ability to freely transfer the object from person to person.  In contrast, e-books require a reader technology that can come in the form of a dedicated e-reader tablet or other computer, thus creating a barrier to use of e-books for many.  There is also the issue of transferring e-books, which can be complicated by proprietary formats and digital rights management (DRM) technologies.  The issue at hand though is really the price of e-books themselves.  There is a case going on right now that will decide how e-books will be priced.

     The current e-book landscape is dominated by the titanic presence of Amazon and their e-book sales.  They use a wholesale model to determine the pricing for the e-books they sell. This model allows them to set the price of the books they sell rather than the publisher having the ability to set the price.  Apple on the other hand was trying to set up a e-book marketplace of its own using an agency model that would allow the publishers to set the price of e-books rather than Apple itself.  The issue surrounding the case is the accusation by Amazon that Apple forced publishers to move to a model that artificially inflated the prices of digital books and hurt consumers.  This move would definitely hurt consumers by increasing the price of e-books.  The evidence in this case shows many communications in the form of emails and phone calls between the CEOs of the five largest publishing companies during the time that they were all negotiating with Apple over the pricing of e-books on its marketplace.  It will be interesting to see what the court decides in this case, because the decision will have immediate consequences for e-book consumers.

      Apple's decision to allow the publishers to set the price of their e-books makes sense for those who are willing to pay more for e-books, and it certainly will make Apple more money.  I think that people who are using Apple devices obviously don't care too much about the price of their media.  An Ipad costs upwards of $500.00, and a standard e-reader costs less than half of that ($200).  The publishers are going to make more money selling on Apple's store as well as all believed Amazon's $9.99 pricing to be too low, and wanted a way to change it.  If Apple's model of pricing survives this court case, they will have got that way.

PRISM and the American People: Is it Necessary to Accept Surveillance for Security?

     With the investigation of the PRISM spy program and the search to understand how it effects us in full swing, we should slow down and figure out what privacy means for each of us and what value we place on it in our daily lives. There are two really big areas that we want or expect privacy in: our own homes, and the internet. On the internet, most people believe that there should be privacy because the internet is very anonymous by nature. However the reality is that we put so much personally identifiable information on the internet, any sense of anonymity is negated. Now when a program such as PRISM is brought to our collective attention, there is understandable outrage. My own opinion is that people are more angry at the idea of internet surveillance in general than the actual activities that PRISM conducted. Even polls conducted by the Pew Research Center have shown that 45 percent think the government should be able to "monitor everyone's e-mail and other online activities if officials say this might prevent future terrorist attacks," while 52 percent said they were against this practice.  I would think that if this program was really a problem for Americans, then the numbers would show a far more convincing picture.

        It seems Britain is ahead of us in terms of grappling with the privacy vs. surveillance dilemma, although in a slightly different context. Britain has more private surveillance cameras per capita than any other country in the world, in the interest of deterring crime, of course. Now that surveillance is so widespread in Britain, it has found a recreational use; spying on neighbors. There is even talk of enacting laws that would serve to curb this practice because of the high value placed on the privacy of a person's own home. It's extraordinary how some people can become sensitive about privacy in one area of their lives (their four walls) and be entirely insensitive about it elsewhere (the Internet).  What do you think of privacy in your life? Do you feel that you have a high degree of privacy in your home or on the internet?

Google's Project Loon: Can it Make Universal Internet Access a Reality?

 

One of Google's internet-beaming balloons

   Google is an ambitious Technology company, creating self-driving cars, hidden camera-equipped glasses, and now, balloons that can beam the internet down to people on the ground.  The goal of these balloons, referred to as part of "Project Loon" is to provide universal internet access by blanketing the stratosphere with these balloons.  Each balloon has a finite range, but grouped and spread about the sky, they could theoretically provide a blanket of continuous internet signals to receivers on the ground.  This approach to increasing access to the internet has two distinct advantages:  The balloons fly in the stratosphere, higher than planes and within the unlicensed spectrum, and it would be cheaper than laying fiber optic cable everywhere that needs internet access.  The fact that the balloons transmit from within the unlicensed spectrum is an advantage because they would not need to register and lease frequencies from the FCC like wireless network carriers do (AT&T, Verizon, Sprint, ect.).

  Google is trying to tackle a pressing problem around the world.  Even in the US, there is a significant portion of the rural population that is lacking an internet connection or is overcharged for inferior service.  More internet connections for this population could increase productivity and spur economic growth.  This effect would be seen around the world as well.  Since this problem is so important, why aren't more companies investigating solutions to correct this imbalance in access?  There is profit to be made, as Google will increase the audience for viewing its ads as a result of universal internet access.  Maybe other companies just can't see the connection, and are just looking to increase internet access where they know they can be paid well for it.  This pattern reinforces the pattern of keeping internet access away from those with low socioeconomic status.

    The projects that Google has undertaken thus far have been very ambitious and creative.  Their approach if successful could reward them with enormous influence if they are successful. Would a single company with so much influence be a good thing?  Whether or not it would be is a separate issue from the resistance they will definitely face as they move forward with this project and others.  Traditional telecommunications and internet providers will likely push back hard to stop Google's progress.  There has already been evidence of this from back when Google started laying Google Fiber in certain cities.  Telecom companies made it difficult to roll out the new service and start new projects in various cities.  Lobbying efforts can produce some significant effects, and I'm betting that those companies won't lay down and let Google reap the satisfaction of creating a completely connected world.

The Government Has You: The NSA's Spy Program and its Connection to Companies such as Facebook and Google

The Eagle is Listening...

     The story of the NSA spy program that was revealed by former contractor Edward Snowden has been all over the news recently, and it is a big deal for both civil rights/privacy advocates and the IT community as well. The reason that the IT community is intimately involved with this program is that the program siphoned data from many prominent IT companies. The NSA and FBI, in a program codenamed PRISM, have been accessing the central servers for Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, and Apple. Some of these companies such as Google and Facebook have recently reached agreements with the government to release information on the amount and types of information requests that were initiated by the government.

       The stated purpose of this program is to protect Americans from foreigners plotting terrorist actions. President Obama has come out in support of the program and has stated that this program has thwarted many attempted terrorist attacks already. While this may be true, the evidence that proves the validity of the statement will obviously never be released. What remains to be seen is the type of data that was requested and whom it was requested from. This data is currently being released, and while it is limited, it is still a first step towards better understanding this program. Of course, some would put little value in the limited information being released because it is only a sample of the requests, and not necessarily a representative sample.

       Many people see this as primarily a overreach of government in the context of privacy. I do have an issue with this assertion. How much of the internet is really private? Information that is posted on any site such as Facebook or Twitter essentially belongs to the company, and they can do with it as they see fit. If you want to keep your personal information private, then don't post it on the Internet. The government would have a LOT harder time getting any information from anyone if they posted less information online. It seems that there is misconception that the internet is secure and private. That is truly not the case, as exemplified by this recent development.

Yahoo Ends Telecommuting: Ingenious Move, or Invitation to Disaster?

Marissa Mayer, CEO of Yahoo!

      Yahoo announced back in February 2013 that it would end its telecommuting program come June in the hopes that the move would help foster creativity in the ailing IT company.  Well, June is here and telecommuting is gone at Yahoo.  Is this move a good one for Yahoo?  Well, there are many factors to consider when evaluating this decision.

     There are distinct advantages to telecommuting for both employers and employees.  On the side of the employers, it decreases the need for office space.  Employees benefit from the flexibility of telecommuting by saving time that would have been used for commuting and having flexible work hours to accommodate family and other needs.  However, there are distinct weaknesses to telecommuting.  The main obstacle to working at a distance is the suitability of the task to telecommuting.  Individual tasks with clearly defined goals are best done by telecommuters, whereas complex, creative, and collaborative projects are more difficult to complete without the social interaction that is inherent in the office environment.  Mayer's decision was based on what she wanted to accomplish within the company; fostering creativity and collaboration.  These goals were perceived to be unattainable while employees worked in solitude from their homes.

     Yahoo's decision to end telecommuting has been seen as radical by many in the IT community who embrace the use of technology to increase flexibility in the workplace.  However, Yahoo's CEO Marissa Mayer (who made the call to end telecommuting) has emphasized that Yahoo's actions are "wrongly perceived as an industry narrative".  While this may not have been her intention, a week after her announcement, Best Buy also announced that it would end its telecommuting program as well.  What do you think about Yahoo's move and Best Buy's subsequent decision? Do you see this as a reversal of the trend towards greater workplace flexibility?

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