Author: Deven Desai

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CUT THE CORD!! HBO without Cable

O frabjous day! Callooh! Callay! It is about time! HBO has announced it will offer a streaming service in 2015. Earlier claims about the need for cable to market and to work with the cable industry seem to have fallen away. The claim is that there are 80 million homes that do not have HBO, and HBO wants to fix that. Can you say Netflix? Netflix subscriber numbers were flat today. Still, if HBO goes over the wall, I imagine that Showtime and others will too. So I may just succeed in cutting the cable. Atlanta has decent digital signals (though there should be more). The most interesting thing to watch: ESPN’s next move. It has a hold on cable a Brazilian jiujitsu master would respect. But if ESPN decides to go with a direct pay model, it could pick up many new viewers, especially the ones who are used to watching the special college version of ESPN they have for free while at some schools.

These markets may also be quite different. Some may prefer the ease of watching the pre-programed madness that is cable. Heck, if I am channel surfing and see that Ocean’s Eleven is on TNT, I will watch with commercials even though I own the blasted DVD. Oh yes, laugh. Because you know that you do it too. May not be Ocean’s but fill in the blank with Bridget Jones or whatever floats your boat; there is something oddly comforting or easy about finding a program in a guide and selecting it. It seems like a low-grade information overload problem. Rather than reaching for the DVD or searching Netflix or Amazon, having someone else narrow the options tips us into odd choices like watching that same movie for the umpteenth time with God help me commercials!

In any event, I hope the HBO experiment works. I know unbundling may threaten many offerings. But the current costs of cable are absurd and the best content is on just a few channels. I don’t think the new golden age of T.V. will suffer in this new world. It could grow as more people are reached with niche shows (that is how I see things like Breaking Bad and other winners that don’t need huge viewership to succeed). Subscriber shows should be a real thing soon. As I said before, Firefly could have been saved today, because enough viewers would likely have fronted the costs to get a 10-13 episode season. Add in many have the patience to just buy the series and binge, or stream on Netflix or Amazon or HBO, and maybe shorting cable companies is smart.

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3D Printed Cars: The Model T Redux?

3D printed cars were a growing possibility while I researched Patents, Meet Napster: 3D Printing and the Digitization of Things. Now a company discussed in the article, Local Motors, has exceeded expectations in a wonderful way. It has produced a 3D printed car in a total of five days. The car, called the Strati, weighs about 2,200 pounds and can go about forty miles per hour. The expected retail price is $20,000. Now that seems less cool. But here is the really good stuff.

The design time and total number of parts is super low. Apparently, the design started in May and was complete four months later. Total number of parts 49 compared to 5,000 for a standard car. As one of the engineers, James Earl, put it in the article: “The thing that this lends most to is customisation-ality, [sic] so you can get a car that really suits your needs with very little monetary input from the design side.” These facts, if they hold up, are why car makers, or at least auto-parts suppliers may be excited or scared out of their minds.

We now have customized cars, with few parts, at a low cost. Let’s assume the cost could go down if the company scales up. Let’s also assume that some of these techniques are incorporated into other auto-maker’s manufacturing. The vast array of auto-suppliers that were in deep trouble when Detroit took a dive could soon be unnecessary. That network of industries Detroit supports could shrink and, in essence, vanish. At the same time, if India’s Tata Corporation, which aims to make low-cost cars for the growing middle class in India, jumps in, Local Motors could find a partner with cash to go big with its technology. High-end makers may allow for bespoke BMWs or Jaguars. Really tall or short people could have cars custom-built to their height and sight lines. Then again, Google may want the tech for its golf cart-like self-driving cars. Lots of possibilities, yes? That’s the point. Something amazing is bubbling up and fast. Which brings me to another point.

Sometimes when I presented the paper, there’d the law professor response of “I just don’t think the tech is there yet.” That view missed what motivated the paper. For once, I wanted to be ahead of the curve on law and technology. Being at Google solidified my view that one can assume the tech will come. “Whether 3D printing will realize all the dreams it currently inspires is not the question” is part of how the article engaged with this point. Local Motors and cars. 3D printed guns. The dreams or nightmares are coming true. Expect some incumbents to fight, some to fear monger, and some to embrace the change. As I offer in The New Steam: On Digitization, Decentralization, and Disruption “this era of disruption and decentralization will likely pass and new winners, who will look much like firms of old, will emerge, if they have not already.” For now, the car-world could be plunging into the disruption and decentralization phase. As Local Motors and others ramp up their factories and break through the regulatory issues, new players may find it harder to play. Until then, let the games begin!

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Process Matters: How, Corporate Reputation, and the Trademark Game

The New York Times reported about the fight over trademark rights around the word “How” and there was the usual chatter about how (yes very punny we law professors are) such a thing could be. But for me the more interesting point was that the issue of how something is made continues to rise as a market question. The dispute is between Chobani, which is pitching us ““A cup of yogurt won’t change the world, but how we make it might,” and that “How Matters,” and Dov Seidman whose company “is in the business of helping companies create more ethical cultures” and whose book is “How: Why How We Do Anything Means Everything.” As I argue in Speech, Citizenry, and the Market: A Corporate Public Figure Doctrine:

Corporations no longer exist in a purely commercial world. Corporate policies intersect with and shape a host of political issues, from fair trade to gay rights to organic farming to children’s development to gender bias to labor and more. Thus Google urges countries to embrace gay rights; Mattel launches a girl power campaign; activists question Nike’s labor practices, McDonald’s food processing, and Shell Oil’s business practices; and bloggers police the Body Shop’s claims about its manufacturing practices. The social, political, and commercial have converged, and corporate reputations rest on social and political matters as much as, if not more than, commercial matters.

The How of Seidman and Chobani is not limited to those companies. McDonald’s is now trying to engage with its customers about, yes, how, they make their food. I suppose using social media and the former Myth Buster Grant Imahara to reach young ‘uns is wise (then again if the goal is to reach Millenials as reported, they might see this tactic as a ploy). Regardless of success or failure, McDonald’s is another sign that Douglas Kysar’s Preferences for Processes: The Process/Product Distinction and the Regulation of Consumer Choice insight that process matters to the marketplace have force. As he put it “Because process preferences provide an outlet for the expression of public values through a market medium that is being endorsed simultaneously as a primary locus of choice, opportunity, and responsibility, individuals may well come to view such preferences as their most appropriate mechanism for influencing the policies and conditions of a globalized world.”

To date, activism over how has not seemed to gain major traction, if one looks to things such as labor and clothing or environmental issues in energy. Price still matters. Giving up our easier way of life (yes first world ACH! such a condescending term, high quality problem) to improve lives all over the world and for future generations is easier said than done. Try to buy clothing and food that is truly perfect (whatever that metric is, let’s assume fair labor and environmentally sound). Some sort of quasi-subsistence/commune hybrid life would be required and is not viable across society. Yet, as people speak up, and companies engage, make claims about their roles in addressing social matters, and adjust offerings (e.g. offering fruit in kids’ meals or refusing to sell cigarettes in a pharmacy), it may be that long term, incremental changes will emerge. When folks indicate preferences, options to buy something a little bit healthier or fairer could come on to the market. We might buy fewer things but buy better things. And another signal is sent so that the cycle might persist.

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The Future, Heaven, and Limbo Have Been and Will Always Be Apple Stores

If you saw Sleeper, Heaven Can Wait, or the last of the Harry Potter films, you might notice that they all have scenes that look quite like an Apple Store. White, seemingly floating desks, some robots, a sense of what it is all about. The likely reason is the design gurus of the 1970s like the stark white, sharp lines look. Steve Jobs was a student of that era and it informed Apple, The Sequel from iPods to the stores (the first Apple movie was design tools, the second was “we design, you buy”). As for Harry Potter, why fight the future and the masters? Tap into that vibe and viewers will be happy to know that even limbo, afterlife (whatever that was) is much as it has always been. White, simple, soothing, yet confusing too.

I wonder whether the Chinese group that copied the Apple Store perfectly could argue that the trade dress was generic?

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3D Printing and Quality Ears. Ears? Expensive Monitors Really

It turns out that musicians wear customized earpieces called monitors to hear the music they make at a concert and to protect their ears from the speakers. A company called Ultimate Ears Pro is in this line of business and uses 3D printing for its next step in creating the devices. As Digital Trends explains the shift is not lowering cost but is increasing the quality:

“Bringing this process in required a tremendous investment in capital, time, resources and training.” Dias explains, which is why 3D printing hasn’t lowered the price points for the devices, as we had imagined. In fact, the company apparently had to take a hit just to keep the pricing the same. Apart from throwing down a hefty load for equipment and software, all of the craftsman who had been working with UE Pro’s in-ear monitors in the traditional method had to completely relearn their craft to work with the new 3D printing technology. As difficult as the process was, the company believes it was necessary to create a revolution in “speed, fit, quality, and comfort” for UE Pro’s monitors.

The company has been mainly serving professional musicians, but is now reaching music lovers too. UEP started from work for Van Halen’s drummer and then its opening act at the time, Skid Row. The desire to keep the quality up is where 3D printing comes in. The turn around time is abut half but given the customer-base, professionals and upscale music lovers, the quality improvement. As Ryan Waniata put it in his article, designers “can be more brazen with their sculpting, allowing them to create a fit for each user that is virtually perfect. And when it comes to in-ears, it’s all about the fit.”

The process still require several other steps including taking a mold of your ear. But the head of UPE mentioned something Gerard and I discussed in Patents, Meet Napster: 3D Printing and the Digitization of Things. Scanners may soon allow someone to get a scan at a store or make the scan themselves.

It’s not magic, but each step may move us to a world of bespoke earpieces for almost everyone. An upgrade for an iPhone or Samsung phone may be supercool headphones, customized and as good as rock stars, which, after all, is what Apple claims we can all be, at least in our heads.

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There She Is, Your Homemade AR-15

I cannot give a talk about 3D printing without addressing the question of homemade guns. As Gerard and I pointed out in Patents, Meet Napster: 3D Printing and the Digitization of Things, this is America and making guns at home is legal. The issues many faced was whether the gun would work well, fail, or possibly misfire and harm the user. These issues are important as we look at the shifts in manufacturing. Many of us may prefer authorized, branded files and materials for home made goods or prefer to order from a third party that certifies the goods. That said, some gun folks and hobbyists are different. They want to make things at home, because they can. And now, Defense Distributed has made the “Ghost Gunner” “a small CNC milling machine that costs a mere $1200 and is capable of spitting out an aluminum lower receiver for an AR-15 rifle.” That lower is the part the the Federal government regulates.

Accoridng to Extreme Tech, Defense Distributed’s founder Cody Wilson, thinks that “Allowing everyone to create an assault rifle with a few clicks is his way of showing that technology can always evade regulation and render the state obsolete. If a few people are shot by ghost guns, that’s just the price we have to pay for freedom, according to Wilson.” This position is what most folks want to debate. But Gerard and I think something else is revealed here. As ExtremeTech puts it, “This is an entirely new era in the manufacturing of real world objects, in both plastic and metal. It used to be that you needed training as a gunsmith to make your own firearm, but that’s no longer the case.” That point is what motivated me to write about 3D printing and look deeper at digitization and disruption.

The first, short, follow-up on these ideas is in an essay called The New Steam: On Digitization, Decentralization, and Disruption that appeared in Hastings Law Journal this past summer.

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Sports, Player Protection, and of course, Money

The attention to the way football head injuries affect players at all levels of the game is good. Whether the game as it is loved today can persist, I leave to others. But as the NFL has asserted that it wants to protect its players, the question of injury and health beyond head injuries struck me as a good one. I love football. I grew up with hard-nosed, crazy players (Raiders fan even during the abysmal last twenty plus years of dubious management). But with the evidence that these Sunday circuses put players at so much risk, I hope that the league and fans can find ways to mitigate the long-term harms of the sport. As Arian Foster recently pointed out, Thursday night games are not geared to protect players. Quite the opposite. They generate large revenue and are not going away. Yet it seems that a solution is at hand.

Use the bye-week teams to play on Thursday nights. With some juggling, the teams could be set up so that if a team is on a bye week, they play on Thursday, and then they again would have nine days rest. That should make for fewer injuries overall and a better post-season. Others may have written about this option (and a good friend had made this argument in the past but not to me). There may be fewer Thursday night games. But smart folks at the NFL should be able to figure out how to maximize the games, while still making money for the league and the players. Some may ask whether all long-term injuries can be mitigated. I doubt that. Still, if lawsuits persist, football, soccer (more contact and head injuries than one might think), and many contact sports may have to shift their rules or find that they can’t attract the best athletes. Hmm a world of basketball, extreme sports, and curling. Maybe I could get into that.

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Now That’s Innovation: Punkin Chunkin – He Chunked It!

Several Thanksgivings ago, John Scalzi and I had returned to his house after a lovely meal at his in-laws and melted into his couch as food coma rendered our brains incapable of thought. Required channel surfing followed. We hit upon the Punkin Chunkin contest (before the Myth Buster folks tagged in). The coverage lacked quasi-reality show production. It was pure unadulterated silliness. We had no idea what it was, but the first images of a launched pumpkin exploding in the air and the phrase “He chunked it!” had us rolling in laughter.

I have watched the T.V. coverage since then and despite the rubbish narrative/competition/inner thoughts of the contestant shift, I still love the event. Each category is great. The way contestants study the previous winners’ work; create, test, and iterate; and invest in expensive rigs or squeeze huge results from limited resources makes me think, “Now that’s innovation!” And it seems quite American. Junk yards, scrap iron, applied engineering, contests, bragging rights, open fields, and a big ole party (chili and I imagine beer) to see what’s what is all very American to me. It may not be the America’s Cup, and I am not sure that we will need siege engines in the near future, but the spirit is in the right place. Take your ingenuity, build something fun, and share it.

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And I’m Back – Deven to GA Tech, Scheller College of Business

I joined the Scheller College of Business at Georgia Tech in August. Some have asked (or speculated as law professors seem to do) about my choice. As those who know my past might see, I go where I think the best work is possible. My scholarship dives into business and technology literatures. GA Tech is excellent in both areas. I took the interview and the position with the hope that I could go deeper into these fields. And, as I hoped, it is great here. Peter Swire is my office neighbor. My group in law and ethics is smart and fun. Throw in friends like Stu Graham, and excellent professors in marketing (can you say more branding?), strategic management, information technology management, operations management, organizational behavior, accounting, and finance, and it is a field day. Folks here are pursuing data analytics, IT and supply chain, behavior and identity shaping by branding, and more. Chats have already pointed to me books and articles for my next set of papers. And that is just at Scheller. I am connecting with the engineers and public policy folks too. Not to mention that friends at Emory, GA State, and Georgia law are near, and I am overdue to visit them. So why move? The opportunity and resources make it a high quality problem place: so much to do and so many people with whom to connect that picking is difficult.

With a summer hire and move, blogging has not been active. Plus, I find that I am bursty (if that is a word). A few ideas pop up and blog posts fly. Then things seem less interesting for a bit. In any event, I think I have a few posts up my sleeve. See you in the funny papers, err blogosphere, as Hawkeye Pierce would say.

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Are You Missing the Market, Aspen?

Professors are in an uproar over Aspen Publisher’s new rules for textbooks. In short, if you thought you could buy a book and do what you wanted after that (i.e. sell it used), Aspen wants to change that system. Instead of a true, unbundled digital option, it has a system where students buy both a physical textbook and a “lifetime” digital book. Too bad as there is a market opportunity that they might be missing. On the legal doctrine front, Josh Blackman called it out. James Grimmelmann jumped on the bashing. Rebecca Tushnet has poked at the offer too. But where is the market here? Is there a way Aspen could make this shift work well? If so, would authors (i.e., professors with deals with Aspen) like it? And why not use dollars to tell Aspen what to do? Assign a different casebook from a competitor (FYI there is a free one out there, see below). There are some specific issues that illustrate sme of the problems in this space.

First, what about time and artificial editions? Rebecca nails this point by calling out that some areas of law (e.g., IP) change so fast that new editions and coverage issues make staying up with casebooks a problem. In those areas, does first sale do much work? Maybe it does much work in the few years between editions. But after that, the text is somewhat obsolete. Dusting of an IP text in digital or hardcopy from the 1990s would be dangerous except for fundamentals (and maybe even for those). Still, there are now seven editions for the Dukeminier casebook. Are the updates every four or so years needed? Even in other areas, are authors updating to add value or to create a new text that undercuts the used market? Do publishers lean on authors to issue new editions when there is not much to say as a market window or version control? If so, the publisher is setting up the demand for secondary or alternate markets that cut out the publisher.

So is this system functioning? As I noted before, the OpenStax system offers high quality texts for free and in a modular way. That means sections are updated for free and folks can assemble material as they wish. Law does not have that yet. The folks at Semaphore Press are close however. That press happens to publish a property text by Steve Semeraro (disclosure I am friends with the folks at Semaphore and introduced them to Steve). It is not quite OpenStax, but it is an interesting model with a shareware feel.

Second, what about the cost to write and update a text? I know it takes tons of time. Whether RA’s do some work or it is all by the professors, the time to write a good casebook is real. I am grateful for the good books. A great teacher’s manual is also a huge help. For new teachers and even experienced, a rich manual provides insights about how the author(s) teach the material and where they see the comments to be headed. One can then choose to follow that lead or modify. But is the price point for texts (as many noted often close to $200) sustainable? Would the market collapse if the cost dropped to low or no charge? OpenStax indicates that the system could shift, and a small crowd of experts would be able to offer an excellent, up-to-date text. And as Pam Samuelson and many others have noted, scholarly works pay off in reputation. So having the most assigned text (or specific chapter on a subject) may stimulate just enough competition for reputation to get great texts (or chapters) but not a glut of roughly the same material from many high-priced publishers.

Third, what about that market opportunity? Would a publisher that offered A) a true digital copy for $40, $50, or even a $100 take share from others? B) What if the publisher said rent the hard copy for a reduced price (again it should be low)? Some might hate that idea as a matter of doctrine but that market is emerging on Amazon and at least lets the student know what is going on (though I think a rental model poses some issues for libraries in that no one should say that libraries should just be rental depots that is another debate for another time).

So Apsen, if you’d like to survive I am betting your authors would like that too. But I am also betting they want to work with you to offer much better solutions than the ones you have right now. The life time digital edition and the high price insult the authors and the marketplace. I think others will find ways to route around you. But you could take your current position and parlay it for the future. If not, I think you may have pushed the law text market to Semaphore or OpenStax. Hmm, maybe Aspen should stay with its model after all.