Stocks don't get "punished" for missing estimates

You see it all the time, "so and so got punished for missing estimates." It's especially common in the press relating to a specific market segment, but isn't strictly a finance publication. The other day I saw this in numerous articles about Google. Here's what one Android Web site had to say:

Stocks -- or, more accurately, investors -- always react to quarterly results. Analysts keep detailed models of their expectations, and the average of these models is known as the “consensus estimate.”  If you miss consensus, as Google did, you get punished.

This is exactly wrong. There's no punishing going on.

Why physical stores are better than online

I don't like online stores, but I love them. Until recently, I couldn't figure out why this was. I love the convenience and I feel like I get a better deal online than I do in a store, but for some reason I have this very low-level desire to go to a store to shop instead of loading up Amazon, eBay, Google Music or what-have-you. Why is that?

The other day, it finally occurred to me, and when I saw Tim O'Reilly's recent post about publisher ecosystems and the closing of Borders I thought I should post my thoughts on the topic. I suspect that many people love physical stores for the same reason, but can't quite put their finger on why.

Ok, so short answer: physical stores have a greater selection.

Yes, I understand that that's absurd, but it's actually true in a sense. The online stores that I use tend to have vastly larger selections. In fact, the smaller and more specialized they are, the larger their selections are within those niches. The Paizo store, for example, has the broadest supply of Paizo Publishing products that I know of (kind of obviously). So, why would I go to a store to look for the Pathfinder Roleplaying Game Core Rulebook? Well, I wouldn't, but when I want to browse, that's another story.

Browsing online is fun, in that I can navigate through items quickly without having to stoop over and look at the bottom shelf or otherwise contort myself to find cool things, but there's a shift in the power dynamic. In a physical store, the vendor puts everything they want to sell out on the shelves. Sometimes they might put out dummy items (like empty DVD cases), but in terms of browsing, I have everything right there to look at, and I can look at whatever I want, regardless of what the vendor wants me to buy (e.g. what has the highest margin, or what wholesale vendor they're trying to bump up to a larger order size). Sure, they can strategically place items in end-caps and on eye-level shelves, but ultimately I'm going to look where I want for what I want.

In an online store, the vendor decides what I'll see unless I do extremely specific searches. There might be items that they have for sale that, due to a desire to steer customers elsewhere or oversight, I'll never see. In fact, I can't know what all the books for sale on Amazon are at any given time. There's no master list that I know of, and certainly no wall of titles that I can just glance over and let whatever grabs my eye do so.

It's this subtle shift in the power dynamic where the online retailer isn't required to show me everything that's "on the showroom floor" that I instinctively dislike about online shopping. Maybe the last book on the end of the bottom shelf was just the one I was looking for, but would never have remembered the title or author.

Of course, when it comes to books, I can pick up a book in a bookstore and glance through the entire thing. Online, vendors simply can't get publishers to agree to such a thing (heck, they never would have agreed to it in physical stores if customers were willing to buy sealed books... but they're not).

The Android App experiment has failed

My experiment was this: spend 3-4 months doing Android App development, and see if I could make enough profit to justify continuing down this road of freelance development, professionally. The answer is no. The hard fact of the matter is that in 1 month of active use of my first free app, it has made back 1/25th of the money that I sunk into advertising it. Also, in a little under a week, with $50 sunk into advertising, my first for-pay app has 3 installs at $1 each.

While I'm sure that I could continue to put out apps and would eventually see more revenue than this, it is increasingly unlikely that I will see revenue on which I could make a living wage.

Failure is part of life, and I've learned a new programming language and a fairly complex platform in the process, so I don't feel the last 3 months have been a waste, but now is the time to go back to work and start making some money again. I'll leave my apps out there and submit bug fixes from time to time. Who knows. Maybe at some point, there will be a surge of interest...

How not to open source a roleplaying game

After the phenomenal success of open source software development in the 1990s, someone at Wizards of the Coast decided to try to follow this model for their roleplaying game, Dungeons & Dragons, purchased in 1997 when they acquired TSR. Specifically, they decided to publish a cut-down set of rules called the SRD, which represented the core of what it takes to publish a Dungeons & Dragons-compatible game. The idea at the time, which worked well, was to encourage what marketing people call an "ecosystem" of publishers who made everything from full roleplaying game systems to source books for D&D.

All of this made sense, but Wizards had opened the genie's bottle, and there was no putting it back. As long as they continued to encourage their new ecosystem, they were assured of their place as king of the mountain. However, in 2008, they announced that they would end support for D&D version 3.5 and begin publishing version 4.0. This new version would not be available to third party publishers for creating their own games, at least not at first (they have since published a new, more restrictive set of rules called the GSL).

At the same time, a small publisher named Paizo had been licensed the rights to publish Dragon and Dungeon magazines. These two magazines were in decline at the time, but Paizo manged gain the enthusiasm of the roleplaying community by dipping into the well of nostalgia that many players had for the game. The printed updates to classic adventures in Dungeon and breathed new life into old stapes of Dragon such as the "Ecology of the..." series. They also fanned the flame of the original Dungeons & Dragons setting: Greyhawk. Their most impressive accomplishment was the enthusiasm generated by their "Adventure Paths." These 12-issue serial adventures were published in Dungeon magazine and the first was then collected as a hardcover book. Overall Paizo did quite a bit of cheerleading for Wizards and in 2007 they received their reward: notice that their licenses to all Dungeons & Dragons products were being revoked so that Wizards could develop a stand-alone Web site to replace the print magazines in coordination with the launch of the 4.0 edition.

Of course, the consensus at the time was that Paizo was doomed, but Wizards' Open Gaming License for the 3.5 edition was their way out. They immediately converted all existing Dungeon and Dragon subscribers over to new products based on the Open Gaming License. In less time than most publishers take to decide to take on a project, Paizo had their own campaign setting for D&D 3.5, published under the OGL along with a new adventure path, Rise of the Runelords. However, the OGL also allowed for full 3.5-compatible systems, and that was Paizo's next step. Over the course of the next two adventure paths that they published, Paizo continued to work on their variant system: the Pathfinder RPG.

Today, with several adventure paths published under their new system and a constant stream of supplement books published for their world of Golarion, one has to wonder if Wizards of the Coast is feeling burned. The popularity of the Pathfinder RPG hasn't reached the level of D&D, but it continues to build a dedicated base of adherents and is frequently referred to as "D&D 3.75."

So should Wizards not have created their "ecosystem?" Of course they should, it was a shot in the arm to what many declared a dead product. What they should not have done is assume that because they wanted to move on with a new edition that the industry would either follow or contentedly watch their businesses crumble. Wizards should have built support for 4.0 among their publishers and then eased into it without yanking the rug out from under Paizo. This would have resulted, at the very least, in reducing the number of long-term players that walked away from their version of the game.

The public domain and why it's important

I've been thinking a lot about the public domain ever since I wrote my proposal for a reform of copyright law in the United States. In that proposal I discussed the value of allowing works to expire (I set a time frame of 30 years, but that number is arbitrary; the important element is the expiration), but I continue to hear corporations who own copyrights "explain" how their business will be in ruin, should their works expire, fueling the continued extension of copyright terms each time they are about to expire. But, this fails to explain why the public domain was considered valuable enough to enrich with expired works in the first place. What is it that we, the public and the creators of new works derive from copyright expiration and the public domain?

When we discuss the public domain today, it can be difficult to understand its true value because so few works expire today. However, the works which have already expired have had a deep impact on our modern culture. One need look no further than Walt Disney Corporation's success in adapting public domain works such as Snow White and the Seven Dwarfs, Cinderella, Pinocchio, The Hunchback of Notre Dame, Alice in Wonderland, and The Jungle Book. How is it, then, that we continue to argue that copyright terms must be extended in order to protect our cultural heritage? Is it possible that such examples are just outliers and the public domain doesn't actually benefit the public and our culture? Hardly. In order to illustrate that point, let me provide a few examples:

It's likely impossible to fully account for the impact of William Shakespeare in  modern culture. Hamlet, alone, has spawned dozens of adaptations for film and television, not to mention its continued performances and adaptations on stage. Film alone accounts for over fifty adaptations of the play! Overall, there are over 400 adaptations of Shakespeare's plays, just in film.

Since the copyright expired in 1956 there have been over 40 adaptations of The Wonderful Wizard of Oz and related books and characters in film, television and stage.

The script for Braveheart was based mainly on Blind Harry's 15th century epic poem, The Actes and Deidis of the Illustre and Vallyeant Campioun Schir William Wallace.

The 1985 film, Ran, by Akira Kurosawa is based on legends of the daimyo Mōri Motonari, as well as on the Shakespearean tragedy King Lear.

The 1959 film, Ben-Hur, was the third film version of Lew Wallace's 1880 novel Ben-Hur: A Tale of the Christ, though I have not been able to determine if, in fact, the novel's copyright had expired by 1959, it does seem likely that it had.

The Wizard of Oz, Braveheart, Ran and Ben-Hur are all listed in the Internet Movie Database top 250 films of all time. How could it be that our popular culture could be so influenced from the public domain and yet we continue to argue that enriching the public domain by allowing works to expire is harmful?


The simple fact is that corporations fear losing any source of income, regardless of how much they might ultimately benefit from a copyright system that enriches the pool of works upon which they might draw. This is understandable, but should not be the basis on which we form our laws.

iTunes vs. Amazon

Have you ever compared iTunes and Amazon for music download services? I have, and while both services have something unique to offer, I can quickly point you to the two largest differences between the two. Here's a link to a page on Amazon:

 Free Albums on Amazon

And here's a link to a similar service through iTunes.

 Free on iTunes

You will notice these differences:

1. The iTunes link doesn't go to a Web page that has the items on it. Instead it goes to a nearly blank page that, if you have the right browser features, will allow you to launch iTunes to go to the iTunes store.
2. The Amazon mp3 store has 120 free albums for download. The iTunes store has two songs and a music video. No, I'm not kidding, check it out.

Enough said? Of course, free music isn't all there is, but I figure it's worth going through those 120 albums from Amazon first and then maybe browsing their over 1,500 individual free songs and then think about which music service you want to patronize for your non-free music purchases.

AT&T: We'd Rather You Use Verizon!

I recently bought a Droid from Verizon. Previously, I had an iPhone from AT&T. My partner has an old AT&T account with a junky phone that we just wanted to keep the number from. I called up AT&T and explained the situation. They told me that I was required to keep both accounts or delete one, but that I was not allowed to move any numbers from any account to any other.

That seemed odd. So I asked what they would do if the number I wanted to bring in was a Verizon number. They told me that they'd be thrilled to move a number in and replace my current number at no charge and with my current plan. Wait... so, if I were a Verizon customer, I'd get better AT&T service, but because I'm an AT&T customer, they're not even willing to just move a phone number?! No, I had to have heard that wrong. So, I asked to speak to a manager and made it quite clear that all I wanted to do was move a number, not an account and that I wanted to keep my high-priced AT&T iPhone service for a good long time. Nope. I'd have to get a new plan with a new contract.

When I explained that my life would actually be simpler if I payed the $150 to terminate the iPhone and get my partner a Droid, I was told that that was my only workable option and he didn't even try to keep me as a customer.

In the end AT&T would much rather that you become a Verizon customer than close one, old clunky account and move the number around internally. Your customer loyalty for 10 years isn't, it turns out, worth a database record update to AT&T.

Well, two Droids is better than one, I guess...

What Does a Disney Buyout of Marvel Mean Creatively?

Lots of buzz around the Intertubes today about the Disney buyout of Marvel. Interestingly, this has really made me think that it's time for The Walt Disney Company to change its name to something vastly more neutral. It might even make sense to do one of those corporate renamings where the new name is some variant of an English word, but just skewed enough to be trademarkable.

As an example, one person suggested that this was, "bad news for anyone who like mature-themed comics and movies," in a Slashdot feedback post. The problem with this is that Disney is a giant holding corporation that owns everything from Hannah Montana to Kill Bill to Queen. Since the mid-1990s, Disney really hasn't resembled the original Walt Disney Corporation (even though they continue on as one of the many Disney brands).

I'm not a big fan of Marvel comics. I've enjoyed Joss Whedon and Warren Ellis's work for them, but then I'd enjoy their work for the sanitation planning department (actually, no, don't let Ellis near my city's planners, thank you very much, but you get the idea...) There's nothing that I think will be lost once Marvel, an already behemoth corporation, is absorbed by an even larger behemoth. But that doesn't really have anything to do with Disney and what they'll do to the brand. It has to do with the risks that you don't take when you're in charge of billions of dollars worth of intellectual property.

Quick thoughts on MSFT vs. APPL

I won't be the first person to point out that Apple has announced their best March quarter ever while Microsoft nearly simultaneously announced their first drop in profits for 23 years. It's the "I'm a PC," moment that Microsoft PR is going to be hard-pressed to spin positively. I blame Microsoft's end-user products which have been kicked in the teeth. Does anyone have a Zune? Yeah, XBox is growing, but Wii and PS3 still own the market in the U.S. and overseas, XBox is barely a competitor.

Update: A friend pointed out in the comments that I'm all wrong about the PS3! I mis-read my source info. In fact the XBox outsells the PS3 in the U.S. (the opposite being true in Japan, and I don't have numbers for other countries).

Interesting times...