Facebook and Apple are toying with us, and it's scarcely believable
- Reference: 1613993168
- News link: https://www.theregister.co.uk/2021/02/22/facebook_and_apple/
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Tamagotchi was the fad du jour , a keyring electronic toy designed for schoolchildren in Japan and thus irresistible to Western adults. You had to pretend it was a pet and press its ikkle buttons every so often to feed, cosset and protect it, and it either prospered or died. As if real life wasn't bad enough for that sort of thing.
[1]
The story was that Bandai, the creator of this monster, couldn't make enough of them; they were in very short supply. I found out when Hamleys would be selling its very limited stock, took an afternoon off, joined an actual throng, and didn't get one. I came back the next day, slipped a fiver to a stoned youth demonstrating model helicopters, and did. Everyone was happy.
Later that week, while she slept the sleep of the successful extortionist, I surreptitiously dismantled her e-pet, curious as to what was so difficult to make. Nothing, of course. It had the same LCD, solitary blob chip and handful of components as any $5 – to me, £20 plus five quid stoner tax – oriental gizmo. Bandai could have flooded the world with them in a week. A source confirmed that there were indeed huge supplies in Hamleys back rooms: I was the victim of artificial scarcity.
[2]
I don't feel too bad about it. This week, I'm in the company of Australia's 25 million citizens and Fortnite 's 350 million players. Fortnite creator Epic Games is in a legal spat with Apple over what Epic considers entirely unfair terms for inclusion in the App Store, and Facebook has taken all [3]news content off its Australian service because the government says it will force Facebook to pay a link tax to news providers.
Now this is Epic: Fortnite maker takes Apple fight to the European Commission and... er... Bismarck, North Dakota [4]READ MORE
In all my dealings with Facebook, I have found it amazingly arrogant, a perception shared by everyone from drag queens to island-continents. It is a familiar arrogance, one I've also found with Apple. And at times, other companies like BT, Microsoft, Oracle, Sony, and Qualcommm have shown the same attitude, a stance proportional to how firmly each company considers it owns its customers. It expresses itself by dictatorship – what the company says, goes – without engaging in discussion or any admission of error or ambiguity. Where reality threatens to upset things, arrogant companies don't hesitate to act in very bad faith – sometimes illegally, or certainly on the edge of legality – because in their minds, they make the rules.
What grants companies this sense of untouchability? How can any company own its customers? In all of the examples above, it's because they have or had market dominance in a sector. They had a commodity, a product or a service that was impossible to duplicate – even if in Apple's case it's really just a fruit emblem – so customers couldn't easily switch away. With Facebook, it's social networks combined with a very simple publishing platform that creates a sense of locality. For many, Facebook is their internet. Getting people off Facebook is like clearing a country, village by village; the history of clearances and forced migration is not good. With Apple, you can't use an iPhone if you don't use the App Store, and you don't get to sell anything to iPhone users if you don't go through the App Store. Both Facebook and Apple are lords of their own medieval fiefdoms, both gatekeepers with absolute powers.
Gatekeepers with absolute powers make bad overlords. Limiting access for profit is a heady drug as market balances no longer apply. The economics of artificial scarcity, and that can make them very rich indeed by the paradox of reducing value to your peasants – sorry, customers – and doing as little work as you can get away with. For half of the 20th century, record labels had near-absolute control over the music industry because they were the gatekeepers to the distribution channels. They grew sleek and fat, unlike most musicians. But they didn't do as well as academic publishers, who don't even have to pay for their content and could charge what they like, having engineered a market based on making publicly funded scientific knowledge as scarce as diamonds.
There are some commonalities in all these cases, which should inform us about how to resolve gatekeeper greed in general. First, all are morally shameful. Apple is arguably extorting its App Store providers and definitely crippling many business models. Facebook just took all the real news stories off its site and left the fake news, in the middle of a pandemic.
The only justification that what is happening is in the public good is that it raises lots of money for developing new services. This is like saying bank robbers encourage innovations in the gun, fast car, and security cam sectors. So while there are no easy answers to each case – the Australian link tax idea is plainly bonkers – there is a principle that unless there's a much better reason than bank balances, gates are better open.
That principle is backed up by experience. You may remember that file sharing and torrenting were going to ruin Hollywood and the music industry. Amazingly, file sharing and torrents are still around, and so is Hollywood and the music industry. Likewise, academic publishing has survived despite Library Genesis and Sci Hub. Forcing open the gates does not kill the estate. But you do need regulation of what happens next.
I propose a National Trust model. The British aristocracy found modern life taxing – literally. Death duties and other levies designed to fund decent social support made ancestral piles, already money pits par excellence, impossible to keep. And so they went into public stewardship in lieu of taxes – often with the nobs staying on. But the plebs were let in; the gates were open. It has worked rather well.
The corporate equivalent can focus on the weak point of rentier gatekeeping – the mounds of cash – and leverage the massive margins such divisions engineer against the sort of tax breaks provided for R&D, debt management and so on. Governments can and do demand visibility of company finances, and can but shamefully don't use corporate tax to balance out power discrepancies. The principle that monopolies must follow special rules is well established; it doesn't have to be limited to very large sectors.
[5]
My Tamagotchi-obsessed girlfriend got what she wanted by insinuating she'd create an artificial scarcity of one particular commodity – one that the governments of the world should promise the tech firms in abundance. But who'd be a gatekeeper to distribution if they were being screwed by the taxman? ®
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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_business/policy&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YDPjNvUYDmbcEw1FQQ3clQAAAJc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[3] https://www.theregister.com/2021/02/17/facebook_australian_news/
[4] https://www.theregister.com/2021/02/17/epic_apple_north_dakota_eu/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_business/policy&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YDPjNvUYDmbcEw1FQQ3clQAAAJc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://whitepapers.theregister.com/
Re: even if in Apple's case it's really just a fruit emblem
Apple make a lot of money from their customers. However, their customers derive a lot of benefit from their products. It's not a zero-sum game.
(Speaking as someone who doesn't own any Apple products, but has experienced countless frustrations with other OSs, computers, media players, phones etc. and has been aware enough of Apple's offerings to know that that *particular* frustration wouldn't occur on the equivalent Apple product. I also know that Apple kit can have its own issues that can frustrate. If I were to join you in over-generalising, I'd suggest that non Apple products often have issues that stem from clumsiness, messiness and a lack of care in their design or poor coordination between hardware and software partners, whereas frustration with Apple kit tends to stem from informed and deliberate decisions by Apple )
Re: even if in Apple's case it's really just a fruit emblem
As a person who had an iPad Mini once upon a time... Apple kit has frustrations. Sometimes utterly stupid frustrations. But they're different frustrations to the typical Android device (of which I have several).
Nothing is frustration free.
Re: even if in Apple's case it's really just a fruit emblem
I think Apple have their own issues caused by lack of care in design or execution.
iPhone 4 that had to be held a certain way in order to obtain a signal? Bendy iPhone 6? Apple Maps?
Re: even if in Apple's case it's really just a fruit emblem
"When it comes to computers and other products, the abuse Apple customers are willing to take makes me pity them."
Given the specs of the devices I don't see most apple gear as stupidly overpriced - even their low end machines are specced well enough that an equivalent non apple machine would be similarly priced.
The pricing on the Pro series is skewy - that's for sure, but for consumer gear what's the comparable laptop from lenovo, or dell, or whichever laptop manufacturer you prefer?
What's a flagship phone from another manufacturer, and how long do they provide updates?
I'll agree that Apple entry level is often much more than "other" entry level, but that's often because Apple entry level is more comparable with the mid-high mid range of "other".
The integration between the systems is also pretty darned nice - in the vast majority of places it "just works", there are a few annoyances, but i can't recall a system I've ever used (computerised or otherwise) that hasn't had any.
[One of my current irritations is that I can't stream to my hearing aids from the Mac - even if that was via airplay through my phone it would be fine by me... but no. Oh well, I just installed a loop in my office instead, which will work since I intend to retain hearing aids with loop connectivity.]
Re: even if in Apple's case it's really just a fruit emblem
I generally love Apple kit. It works well, lasts a long time, and doesn't get in the way when I'm trying to do stuff. If this counts as 'abuse', then I'm all for it.
You want to try living in Spain mate..
It's like someone in the 1930s idea of what the future will be like... But with all seeing computers and phone tracking to maintain "democracy".
Sounds a lot like any big dick technology operation.
Point
But what are you actually suggesting? Taxing the big companies? The ones who'll raise their prices to cover the bill?
I don't see how filling a storeroom with Tamagotchi toys makes sense. Selling them would be the best course of action. Sell the bloody things before the market for them collapses.
Will Google and Facebook reign forever? I'm not so sure. I watched an old film last week, from 2010, and was surprised at how many references they made to 'dead' tech companies. Are the trendy people posting asshat videos on YouTube or TikTok? Instagram seems to be rapidly losing its flavour.
Yes the situation with Facebook in Australia is ridiculous but here you go Antipodeans, https://www.bbc.co.uk/, free news.
Re: Point
"I don't see how filling a storeroom with Tamagotchi toys makes sense"
By artificially creating scarcity you may get to raise the price to way higher than is reasonable: hence you make more money than selling them as fast as you make them. That is literally the whole point of this article.
Re: Point
> By artificially creating scarcity you may get to raise the price to way higher than is reasonable
But were Bandai actually doing this?
In the first instance, and at a glance, the original 1996 Tamagotchi retailed at $17.99 in the USA; so that £20 mentioned in the article sounds about right, once you've done the exchange rate conversion, and added things like VAT and duty/tariff charges.
Especially if you're shopping at Hamleys[*], which I assume adds a Harrods style price premium to everything it sells, not least because it's not exactly cheap to run a shop anywhere near Leicester Square/TCR...
Secondly, the fact that the price was broadly in line with the traditional "$1 = £1" tech-price conversion rate also suggests that neither Bandai nor Hamleys had raised their prices to take advantage of this "artificial" scarcity[**].
Thirdly, this was back in the mid-90s, and we've come a long way since then in terms of logistical capabilities and high-volume manufacturing. So once it became clear that they had a "hot cake" product, there would have been a distinct lead time for getting new stocks manufactured, shipped and distributed. Especially for a relatively small (as compared to the USA) market such as the UK.
Fouthly, they shifted bucketloads of these little keyrings; Wikipedia reckons that by 2010, they'd sold 76 million of them. And I'd guess that the majority of those sales came from the "version 1" sales back in 1996/1997.
So in truth, I suspect Bandai was getting things churned out as quickly as possible. And if Rupert's girlfriend had been willing to wait for a month for the next container ship to dock at Felixstowe, she'd have been able to walk into any toyshop in the UK and buy a dozen. Admittedly, whether Rupert's *ahem* needs could have been left unattended for that long is a different matter altogether...
Bandai isn't the only company who've been accused of artificial scarcity, either. Nintendo got a lot of flack when they couldn't ramp Wii manufacturing up quickly up, despite the fact that with sales of the Gamecube having been relatively low, (22m Gamecubes were sold in total, versus the 155m Sony's PS2 managed), I very much doubt anyone could have predicted that they'd need to ramp manufacturing up to 2.4m per month to meet demand!
There's plenty of valid examples of artificial scarcity, especially when it comes to luxury brands or works of art. But I don't think it's a valid description for any product which has sold tens of millions of units!
[*] I've never been in there, though I've spent a fair amount of time round the back of it, either enjoying a cheap pint in the Sam Smiths, or rocking out to some amazing blues at the Ain't Nothing But The Blues Bar...
[**] In fact, I'm struggling to think of any mainstream company which has deliberately raised its prices when demand has exceeded supply. E.g. Nintendo, Sony with their PS3 and PS5, or Nvidia with their high-end GPUs. If anything, these companies have actually taken steps to try and prevent scalpers from buying and reselling their wares (e.g. Nvidia deliberately crippling their drivers to make them less useful for eCurrency mining), since the negative publicity tends to reflect back on them...
Re: Point
"But were Bandai actually doing this?"
The article explicitly says it was Hamleys.
Re: Point
"And if Rupert's girlfriend had been willing to wait for a month for the next container ship to dock at Felixstowe"
The whole promotion of this sort of thing is based on scarcity. If you let slip an indication that they're common as muck nobody wants one. The choice of being willing to wait for the next container to arrive to buy one doesn't exist. Either they're rare and therefore wanted RIGHT NOW!!!! or there are plenty here or on the way in which case nobody cares.
Re: Point
> I don't see how filling a storeroom with Tamagotchi toys makes sense
It makes sense for the vendor because instilling a sense of scarcity in a consumer's mind can bypass their their rational decision-making process.
As a result they may pay more for your product.
Another benefit to the vendor of scarcity (artificial, or just a result of a sane decision to only tool up so many production lines) is that scarcity can lead to free publicity. Current example: I'm not in the market for a new PlayStation, but I'm still aware that there is a shortage of Sony's new console. Left unchecked, this observation might cause one to think 'Ooh, this new games console must be pretty good if that many people want one'
The 'rational actor' model of economics debunked decades ago, though some more weeding might be required!
Re: Point
" Will Google and Facebook reign forever? "
Wasn't MySpace where it was at, and AltaVista the best search engine?
Things come, things go. Arguably Google will be more resilient as they have their fingers in more pies, but all it really takes is someone somewhere to devise something perceived as "better".
Feel odd
Defending FB (don't use it for obvious reasons & generally hate it)
But the Oz legislation is so poorly worded (and its FBs choice to not pay) - was just surprised Google (another disliked thing) didn't also stand their ground
Re: Feel odd
The current Ozzie stance seems more designed to shake up Facebook and make them start to engage seriously than anything else.
My guess is that Google know to the cent how much links and news snippets are worth to them, and also how much access via Google search results are worth to the news organisations and therefore could agree a deal very fast once they assessed that Oz is serious on this one. People going to Google to search for news probably expect to get a certain quality of results, & not having that would cost Google something. Facebook on other hand firstly seem to have no self-awareness and secondly seem to be happy to fill their pages with user generated trash, cat pictures and fake news at nil cost in place of journalism.
Re: Feel odd
>But the Oz legislation is so poorly worded
I thought it was still at the manifesto proposal stage.
What is interesting is that neither Google or Facebook are taking on the music industry...
Which gives us a clue, as to why there is a problem. The music industry has things so tightly locked down, that you need to pay royalties if you did to music what FB, Google et al are currently doing to news organisations.
So whilst the Oz legislation may need some finessing, it is trying to do the right thing.
Re: Feel odd
No surprise from me.
Facebook is being dragged through the mud by the press and Aussie politicians alike for its stance; now a similar law is being eyed up by Canada and Downing Street is 'concerned' by Facebook's actions. Meanwhile, Google lobs Murdoch a few coins from the petty cash and its reputation remains unsullied.
The only surprise is that Nick Clegg hasn't been let loose to tell us that Mark is entirely lovely and wants to make the world a better place by selling adverts and making everyone stupid and angry.
"Towards the turn of the century, my girlfriend revealed what she wanted more than anything else..."
With this opening sentence, the article could've progressed in many, many ways indeed; perhaps this sentence be the start of a new Register column?
That said, artificial scarcity works amazingly well, tapping into something very deep in our psyches. I still feel somewhat smug that I managed to get a ceramic/steel Daytona a mere six months after it came out; the last I read there was a 7 year UK waiting list - now closed. I am well aware this makes me somewhat sad/insert your own expletive here. But I am still a bit smug. And some of you will definitely dislike me because I got a Daytona and you didn't, which makes you a bit sad too.
Why doesn't Rolex just get their robots to make more of these? Because they easily could. In a similar vein, Patek the maker of watches for overpaid CEOs, has discontinued their 5711 Nautilus which trades second hand at an astonishing yield your pension people can only dream of. Again, they could've made far more of them - as mechanical watches go, neither is absurdly complex.
I have a little sympathy for Apple - they built the App Store when no-one else had for a platform that was so, so different when it first came out; they spent a lot of money and took a lot of risks and are now reaping great rewards. I am not an App developer, but if I was, I'd just be glad someone else was running a delivery channel that works so well, because I couldn't have written anything nearly as good myself. Could you? Could you really? Because some gnarly command line thing that breaks every so often won't fly. Is this worth 30% of income? Very hard to tell really - you and many obviously think not, but I'm not so sure.
As far as social media goes, just stop. Don't use them, turn off notifications, delete apps. Don't think of these platforms as walled gardens - think of them as a septic tanks with a loose lids.
I suspect that Rolex and Patek had no choice but the threat of quartz watches back in the 1980s as a learning opportunity, and so did a deep examination of themselves and their market.
(Sidenote, I'm fascinated by mechanical watches, but I don't like their reliance on eventual servicing - somehow it feels wrong, like the reliance of many a quartz watch on a new battery every few years. Both the servicing of mechanical watches and the manufacture of button cells require a level of infrastructure. There is one premium watch brand who released an automatic watch with silicone components, allegedly negating the need for servicing, but at stupid money it isn't designed to shake up the industry)
Re: Luxury goods
Rolex and Patek are in the jewellery business, not the wristwatch business. If you want a truly accurate wristwatch, you can buy a Bulova Accutron, accurate to better than 15 seconds per year for a few hundred pounds rather than the (tens of) thousands for a diamond-encrusted, solid platinum and gold device. The Swiss Chronometer requirements are to be accurate to within a range of -4/+6 seconds per day.
Rolex, Patek, Omega, TAG Heuer, Breitling, etc. make mechanical jewellery that do not need batteries and keep tolerably accurate time. Although Omega's new 'Master Chronometer' series with the silicon rubber hairsprings are a neat way of being immune to magnetic interference.
(I own both an Omega, 40 years old no longer working, and a Breitling, electronic, working, so am one of the mugs who literally bought into the hype. Oh well, live and learn.)
Daytona?
I have no idea what a Ceramic/Steel Daytona is so I googled it. It appears that [1] Plumbworld have them in stock for £54.
[1] https://www.plumbworld.co.uk/reginox-daytona-inset-stainless-steel-sink-single-bowl-240-1253551
Re: "Towards the turn my girlfriend..
Everything what we consider “created” by Apples Twitters or Facebooks of the world are NTT Docomo and other Japanese and Korean mobile industry players products repurposed for the web.
What grants companies this sense of untouchability?
the same that grants any bully his / her / their sense of untouchability - and unaccountablility. Think any company, think any government (local or central). Plus a large circle of paid, or wannabepaid yes-man/women/undecideds. Sometimes, when they've grown so big and noisy, the REAL BIG BULLY starts paying attention, although it might have overslept and is no longer the baddest mother(...) in town. Popcorn? :(
What's needed is for governments to take a bit more interest in dealing with monopolies although in the case of mass media monopolies by the time they exist it's already too late. Academic publishing monopolies should certainly come under review, however.
Gatekeepers with absolute powers make bad overlords
Ironic that news organisations are the antagonists to Facebook, with exactly the same problem.
"With Apple, you can't use an iPhone if you don't use the App Store, and you don't get to sell anything to iPhone users if you don't go through the App Store. "
Neither statement is correct.
even if in Apple's case it's really just a fruit emblem
Nowadays there is really not much difference between let's say a Samsung Phone and an Iphone, save perhaps for Iphones exploding a bit less.
When it comes to computers and other products, the abuse Apple customers are willing to take makes me pity them.
Cue the downvotes.