Futurismic

In amongst this week’s headlines of ludicrously disproportionate damages being awarded to the RIAA and assorted governments (including my own) clamouring loudly for the privilege of tucking themselves into the moth-eaten and holey pockets of Hollywood, we find a ray of pragmatic sanity: the CEO of computer games publisher Electronic Arts is openly asking software pirates to redistribute their titles. Why? Because they’ve worked out that it’s easier to make money selling stuff within the framework of a game than it is to sell a game itself.

EA thinks this is the secret to stopping—or at least curbing—piracy: games should be services, not products. Or at least products that should be selling other products. We already knew that EA would like to turn Tiger Woods into a subscription-based product, and Sims 3 is a game that wants you to constantly be creating, downloading, and buying new virtual items. The old business model was selling expansion packs, but that was too complicated: why not cut out the retailers and turn the game into its own store to sell the products?

“I’m a longtime believer that we’re moving to selling services that are disc-enabled as opposed to packages that have bolt-ons…. So the point I’m making is, yes I think that’s the answer [to piracy].” Riccitiello told IndustryGamers. “And here’s the trick: it’s not the answer because this foils a pirate, but it’s the answer because it makes the service so valuable that in comparison the packaged good is not. So you can only deliver these added services to a consumer you recognize and know… So I think the truth is we’ve out-serviced the pirate.”

It’s interesting to see a big games vendor like EA waking up to ideas that industry pundits have been suggesting for years, and I expect we’ll see some of the others abandon their King Canute impersonations when they realise that it works. Going forward, I expect that within a few years it’ll be virtually unheard of to “buy a game”; instead, we’ll subscribe to them, or spend time in them socially much the way we do with Facebook now.

That said, I suspect it’s too late for the major music labels to change course given the huge amount of money they’ve pissed away on trying to defend their old business models from change, but I struggle to sympathise; after decades of them screwing consumers and artists alike, I’m rather enjoying seeing the boot on the other foot. [image by Robyn Gallagher]

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It shouldn’t come as a huge surprise – after all, anything that uses networked computing is at risk without the proper precautions – but independent researchers have declared oil rigs to be extremely vulnerable to hacking attempts.

While oil companies have made huge improvements in offshore safety and environmental protection, their efforts to secure important data have been poor, the SINTEF team says.

The group says that the current “integrated operations” model, which uses onshore workers to control processes carried out on the platform via networked PCs, leaves communications open to attack.

According to Science Daily, the team interviewed “key personnel in the petroleum sector” to get a sense of the data protection measures currently in place. The interviewees confirmed “that the number of safety incidents on production systems (platforms) has risen during past few years.”

Researchers said that hackers have already made their presence felt on oil platforms.

“The worst-case scenario, of course, is that a hacker will break in and take over control of the whole platform,” says SINTEF scientist, Martin Gilje Jaatun. “Luckily, this has not happened yet, but we have heard of a number of incidents that could have turned into something quite dramatic. For example, virus attacks have led to process electronic equipment becoming unstable.“

Frankly I’m surprised there haven’t been any major incidents so far, but it’s safe to assume that the inevitable resurgence of oil prices (not to mention the increasingly politicised nature of the fossil fuel industry) will make unmanned rigs into highly appealing target for hackers interested in protest or profit. [image by ccgd]

In fact, the profit motive is probably the stronger of the two… profit, or the prospect of free fuel. Any terrorist group or pirate nation looking for a ready source of the black gold would find it easy enough to hire some disaffected code-kiddie, then pay (or threaten) them enough to get them to bypass the security on an unmanned rig and then fiddle the telemetry for long enough to allow a physical invasion of the platform. Hey presto – a big base in offshore waters with all the oil you could ask for, and a target that even a major government is going to think twice about simply bombing to smithereens…

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Well, what do you know – there’s more to the Somalian piracy stories than meets the eye. Far from being the eye-patched privateer chancers that the term ‘pirate’ conjures up, they’re desperate people trying to make a living and protect their homeland from exploitation by more developed nations who’ve seen fit to take advantage of the political instability of the area.

Sure, their methods are rough (and definitely illegal), but what are a people without a government to defend them supposed to do when foreigners start trawling their waters for fish and dumping nuclear waste?

This is the context in which the “pirates” have emerged. Somalian fishermen took speedboats to try to dissuade the dumpers and trawlers, or at least levy a “tax” on them. They call themselves the Volunteer Coastguard of Somalia – and ordinary Somalis agree. The independent Somalian news site WardheerNews found 70 per cent “strongly supported the piracy as a form of national defence”.

No, this doesn’t make hostage-taking justifiable, and yes, some are clearly just gangsters – especially those who have held up World Food Programme supplies. But in a telephone interview, one of the pirate leaders, Sugule Ali: “We don’t consider ourselves sea bandits. We consider sea bandits [to be] those who illegally fish and dump in our seas.”

There are two sides to every story, as the old saying goes. That said, it’s interesting to note that this article is by the same guy who did the hatchet-job on Dubai the other day… [via BoingBoing; image by Paul Keleher]

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We’ve been mentioning ebooks a lot lately here at Futurismic, as the big publishing companies have suddenly woken up to the fact that the 21st Century has well and truly arrived… and isn’t going to go away.

One can look at the ebook as a way for the publishers to move away from the increasingly expensive and wasteful dead-tree model and reinvigorate themselves in the process. But there is a flipside, of course, as pointed out by The Guardian’s Naomi Alderman:

… if ebook readers took off, big-name authors such as [Stephen] King may be able to move to self-publishing. And that could mean the end of our current publishing system. Because of the way the publishing business is structured, big-name authors who sell millions of books are, in effect, supporting the industry. I’ve heard various estimates of the percentage of books that actually turn a profit. One agent I spoke to said 95% of published books make a loss. Others have put the figure lower. Either way, everyone agrees that a large majority of profits come from a small minority of authors.

If King, Dan Brown, JK Rowling and Patricia Cornwell were all to decide to move to selling their books online themselves, rather than going through a publisher, they’d certainly benefit financially. Typically, an author only receives about £1 for every copy of their book sold. Rather than relying on a publisher, big-name authors could afford to simply employ an editor, a PR person, a typesetter and a designer. They could price their books at only £2 or £3 and still make much more money than under the current system.

There’s obviously a few flaws in Alderman’s reasoning here: first of all she’s discounting the nurturing aspect of the publishing industry, its ability to bring the next generation of Kings, Cornwells and (universe forfend) Browns up through the ranks; secondly, a shift to ebooks should see the loss margins on a title by a smaller author drop considerably, as there’ll be no massive pile of unsold books to pulp (not to mention much smaller distribution costs).

But what is plain is that book publishing needs to learn in adavance from the messy lessons that the record companies are still struggling with now. A look at the music industry blogs will show you that Alderman’s speculation above is an almost perfect mirror of what’s already happening with middle-band musicians as they (and their fanbase) realise the labels are primarily concerned with wringing the last few drops of profit out of a dead business model, and decide to leave them behind.

As has been pointed out before, the principle difference between the publishers and the record labels is that publishers haven’t yet been forced to innovate by the pressures of piracy. It looks as if they’d be wise to jump ship and start swimming for shore right now, rather than waiting to be made to walk the plank. [Image coutesy Wikimedia Commons]

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The gaming community is all a-flutter over some comments from Jason Holtman, the business development guy for games corporation Valve. [via TechDirt] The quote that’s got lips flapping is this one:

“There’s a big business feeling that there’s piracy,” he says. But the truth is: “Pirates are underserved customers.”

“When you think about it that way, you think, ‘Oh my gosh, I can do some interesting things and make some interesting money off of it.’”

Such a statement is naturally considered heresy by the gaming industry, which sees mammoth endemic piracy as eating away at its profit margins. Valve are well placed to understand digital distribution, though, thanks to their Steam service, and Holtman has evidently seen the writing on the wall as regards selling intangible products in tangible venues… perhaps he’s been learning from the mistakes of Hollywood and the record labels? [image by ioerror]

Whether piracy of digital content will ever be defeated remains an open question, of course (and seems unlikely), but it has been pointed out before that the most effective method of curbing the impact might be to minimise the reasons it happens – the biggest of which is surely the high prices. If every $80 game could be bought online for $10, would they sell eight times as many copies? How thin does that margin need to get before people stop taking the risks inherent in using cracked software?

And what ever happened to the flurry of interest in in-game advertising as a monetising strategy?

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