Quotulatiousness

January 16, 2023

The music industry fails to capitalize on the vinyl revival

Filed under: Business, Media, USA — Tags: , , , — Nicholas @ 04:00

It’s kind of hard to believe, but the companies that control the pressing of music into vinyl appear to have no clue about the business they’re in:

“Framed Vinyl Album Art: America ‘Homecoming’; Nick Gilder (Studio Copy of Singles From ‘City Lights’ Chosen for AOR); Climax Blues Band ‘FM Live’)” by JoeInSouthernCA is licensed under CC BY-ND 2.0

I’d heard so many grand claims for the vinyl resurgence, but the reality was tremendously disappointing. And I was a late adopter — the revival had been going on for a decade, but record labels still didn’t have their act together.

In my case, I ended up buying vinyl albums, but mostly used ones. I simply couldn’t find new pressings of the records I wanted. This was fine for me, but lousy for musicians and labels — who make no money on the sale of a secondhand vinyl album.

I have some experience in these matters — in my alternative career I worked with CEOs chasing after fast growth product categories. I know how they handle these situations. But, really, it’s no mystery. The strategies you use in this kind of business are very straightforward:

  1. You add manufacturing capacity aggressively — to make sure you have enough product to fuel growth.
  2. You bring down costs by getting scale advantages. But this only happens because unit costs drop as volume increases. So the single biggest goal is to grow sales as hard and fast as possible.
  3. You constantly reduce prices to keep demand building. In some cases, you even set prices below your costs to accelerate growth rates. When I originally saw companies do this I was skeptical — how can you make profits if you sell below your costs? But I soon learned that you eventually got a huge payback.
  4. You keep expanding the product line, so that you constantly have something new and exciting to sell to every potential buyer.
  5. You invest in R&D so that you eventually have a next generation technology to keep the growth going over the long haul.

None of this is easy to do, but it isn’t impossible. It just takes investment, focus, management commitment, and hard work. And later you reap the benefits. You turn a small business into a huge one, and enjoy a big payday.

The record labels could have done that with vinyl. It was taking off — unit sales doubled in just 5 years. And these sales were insanely profitable, because much of the demand was for old music. So labels didn’t even have to pay to sign artists, and cover the costs of recording sessions. The music was already there, with the fixed costs amortized long ago.

They just had to press the bloody album and ship it to the store. How hard is that?

But what did the music industry do?

  • They hate running factories — which is hard work. So they tried to outsource manufacturing instead of building it themselves. Chronic shortages resulted.
  • They refuse to spend money on R&D, so they stayed with the same vinyl technology from the 1950s. In other words, the record business became the only entertainment industry in the world with no plan for technological innovation. In the year 2023, even bowling alleys, bordellos, and bookies are more tech savvy than the major record labels.
  • They want easy money, so they kept prices extremely high. That was bizarre because their R&D and catalog acquisition costs were essentially zero, and they could have priced vinyl aggressively. Instead they treated vinyl as a luxury product, even as they dreamed of it also becoming a mass market option. But you can’t do both without a careful market segmentation strategy — which the labels never even started thinking about.
  • They love hype, so they focused on high visibility vinyl reissues, which look good in press releases, but couldn’t be bothered to make back catalog albums available. After a decade of the vinyl revival, they still hadn’t taken even basic steps in offering a wide product line.

This is a lazy strategy — and the exact opposite of what they should have done. And the results are, of course, predictable.

January 14, 2023

More on the Barnes & Noble turnaround

Filed under: Books, Business, USA — Tags: , , , — Nicholas @ 05:00

In the latest SHuSH newsletter, Ken Whyte looks at the Barnes & Noble recovery story (discussed a couple of weeks back):

“Barnes & Noble Book Store” by JeepersMedia is licensed under CC BY 2.0 .

Back in 2018, the bookselling chain was losing $18 million a year. It had just fired 1,800 full-time employees. About 150 stores had been closed, leaving the company with 600. It had lost its fourth CEO in five years, this one to a sexual-harassment charge. The firm’s big digital initiative, the Nook e-reader, was a flop. The share price was down 80 percent.

Not only was the business failing: it was demoralized. As the writer Ted Gioia noted in a recent newsletter, B&N had lost faith in the public’s willingness to buy books from anyone but Amazon. Its leadership “shifted a huge portion of its floorspace to peddling toys, greeting cards, calendars, and various tchotchkes”. It doubled down on in-store cafes and even tried launching freestanding Barnes & Noble restaurants.

Just when it seemed B&N was certain to follow the path of its former competitor, the Borders chain, which closed in 2011, it was purchased for $638 million (US) by Elliott Advisors, a hedge fund.

SHuSH has been skeptical about the record of hedge funds in the cultural space. We are also skeptical of hedge funds in the retail space where they have a well-established record of buying chains, slashing costs, and driving them into the ground: Sears, Toys R Us, Payless Shoes, Radio Shack, Aeropostale, Sports Authority, etc.

Elliott Advisors is an exception.

The UK based-firm has a demonstrated commitment to bookselling (at least in the medium term — more on this later). It bought the Waterstones chain in 2018. Waterstones and its 283 stores had been rescued from near-bankruptcy in 2011 by lifelong bookseller James Daunt and a Russian backer. Elliott kept Daunt at the helm and a year later bought Barnes & Noble and added this second chain to his responsibilities.

Daunt acknowledged that Barnes & Noble was in rough shape when acquired by Elliott. Its stores were “crucifyingly boring”. But he was confident the chain could be turned around. There was no template or magic ingredient, he said. It was a simple matter of “running really nice bookshops”. To that end, he gives his stores unusual autonomy to develop their own personalities and tailor their stock to the interests of their communities.

Barnes & Noble stores have since dropped most of their crap: they no longer look like big-box flea markets. They’ve quit accepting payments from the major publishers to put their books on display, a practice that brought B&N revenue but left publishers in charge of what customers saw when they walked into stores. Local managers now decide how their books are presented based on what they think will appeal to their customers.

The company used the COVID lockdown to freshen up its dowdy stores. Managers were instructed to take every single book off the shelves and “weed out the rubbish”. Walls were painted, aged carpet replaced, furnishings upgraded. The result is a much improved browsing experience. Readers like to browse.

There were hard decisions, too. Daunt cut the B&N head office staff in half and shed about 5,000 of 30,000 employees.

All in all, it worked. Last spring, The New York Times reported that sales were up and costs were down at Barnes & Noble and that “the same people who for decades saw the superchain as a supervillain are celebrating its success. In the past, the book-selling empire, with 600 outposts across all 50 states, was seen by many readers, writers and book lovers as strong-arming publishers and gobbling up independent stores in its quest for market share … Today, virtually the entire publishing industry is rooting for Barnes & Noble — including most independent booksellers. Its unique role in the book ecosystem, where it helps readers discover new titles and publishers stay invested in physical stores, makes it an essential anchor in a world upended by online sales and a much larger player: Amazon.”

There are not a lot of reliable financial numbers available on Barnes & Noble because it is no longer a public company, but it reports that its 2021 sales in were up 3 percent over pre-pandemic times. Most importantly, sales of books were up 14 percent.

January 13, 2023

In a surprising bit of news, Canadian defence companies still don’t know what the government plans to acquire

Filed under: Business, Cancon, Military — Tags: , — Nicholas @ 03:00

On the CBC News website, Murray Brewster explains why Canadian defence industries haven’t gone to anything like a “war footing” because the federal government hasn’t told them what they plan to purchase or when, despite pleas that they “get with the program”:

The association representing Canada’s defence contractors says it’s going to take a lot more than talk to put the industry on a so-called “war footing.”

In a bluntly-worded opinion piece published online Wednesday, Christyn Cianfarani, executive director of the Canadian Association of Defence and Security Industries, said that Canada — unlike its allies — has not put in place a framework to ramp up production to meet the demand triggered by the Russian invasion of Ukraine.

Instead, Cianfarani wrote, the industry has heard “vague pleas” from the Liberal government “for companies to get with the program,” without any clear sense of which items of equipment are needed and what the long-term expectations might be.

“Canadian defence companies can and would step up if they knew exactly what, and how much, to step up with,” she wrote.

In an interview with CBC News last summer, Defence Minister Anita Anand described the enlistment of weapons manufacturers in the struggle to save Ukraine as a “moral imperative.” Gen. Wayne Eyre, the country’s top military commander, also publicly urged the defence industry to get on a “war footing” in response to the crisis.

“No one in industry has a clue what government will require from companies to achieve that end, or even what ‘wartime footing’ means to government in the modern context,” wrote Cianfarani, adding that the last time the country’s defence industry was on a war footing was during the Second World War.

“No firm will take vague exhortations to ‘increase their production lines’ seriously without meaningful and systematic commitment from the government. No respectable CEO is going to take the risk of ordering tens of millions of dollars worth of parts to then see them sitting on a shelf awaiting integration, while simultaneously telling investors to trust them that a buyer will materialize in this highly managed protectionist market.”

January 10, 2023

Persuading women not to have families because it “helps the GDP”

Filed under: Britain, Business, Economics — Tags: , , , , — Nicholas @ 03:00

In The Critic, Niall Gooch stands up for family life despite the regular hand-wringing articles pointing out just how “expensive” children are and how much money women forego in the working world to take time off and have a family, as if no other economic decisions in life have opportunity costs attached:

Every so often, a publication called something like Bosses Quarterly or Money Patrol will report a new study investigating the financial costs of having children. “Average child now costs £200,000”, they breathlessly inform us, or perhaps “Women Who Become Mothers Lose £400,000 In Earnings Over Their Lifetime”.

I have no idea how they generate these figures. Presumably they have at least some basis in proper empirical research. It doesn’t seem inherently implausible that middle-class parents in Britain spend well into six figures on their children one way and another, when you factor in childcare, holidays, clothes, food, transportation, birthday parties and university attendance. Raising children is undoubtedly costly, from a financial perspective, even if you are frugal. If my wife and I did not have children, our lifestyle would be considerably more affluent than it is at present. The “motherhood penalty” in lifetime wages does seem to be a real phenomenon – although it is one that many women are willing to accept.

But the accuracy or otherwise of the calculations is beside the point. There is something profoundly wrong-headed about the whole endeavour of trying to evaluate the good of family life in economic terms, or to treat the raising of children as simply one option among many in the great lifestyle marketplace. And yet many people persist with doing so. Sam Freedman, the policy analyst and writer, claimed on Twitter earlier this week, in defence of expanding subsidies for nurseries, that “it’s a lot cheaper for one person to look after several children than each parent to look after their own and not work”. This person noted “the long term impact on (nearly always) women’s career prospects which has a big effect on GDP”. He also argued against replacing subsidies to nurseries with direct payments to parents, noting that “giving money direct to parents would encourage people to leave the workforce when we need the opposite to happen”.

Even on its own terms, this is dubious. Low birth rates are a significant drag on economic growth, and making it harder for women to spend more time at home with their children is hardly conducive to increasing the birth rate. Besides which, there are big socio-economic problems connected to the modern norm of two parents working more or less full-time — house-price inflation for example, or the decline of communal organisations and lack of time for family caring responsibilities.

January 8, 2023

QotD: Unintended consequences, fuel economy division

Filed under: Bureaucracy, Business, Economics, Government, Quotations, USA — Tags: , , — Nicholas @ 01:00

It’s a claim that you encounter a lot — an insult really — that people are buying bigger and bigger trucks to compensate for … something. Here’s one particularly cringeworthy example, because the person making it doesn’t seem to realize the go-kart he’s praising doesn’t meet US emissions standards.

    whenever americans say that they *need* a massive pickup truck that gets 12mpg just show them the Subaru Sambar

    utility vs. ego pic.twitter.com/NqexDbQcok
    — sam (@sam_d_1995) May 11, 2022

In response, a lot of people will defend their big truck purchase by saying they need a larger vehicle for their family, their business, or just because they like it. And to an extent, market forces are partly responsible for the increase in truck sizes, particularly when it comes to features like crew cabs. But it turns out that even a lot of people who like the big trucks don’t know the full story of how their trucks got so big.

The rest of the story is something the folks at Freakanomics might enjoy because it is a classic tale of unintended consequences. In brief, Obama-era fuel regulations incentivized automakers to build bigger trucks.

One particular goal of the Obama Administration was to increase fuel efficiency through the typical political process: telling someone else to do it. To that end, the DOT and the EPA handed down a series of standards that nearly doubled the miles-per-gallon requirements for cars and light trucks.

The administration praised their own new standards as “groundbreaking”. Transportation Secretary Ray LaHood predicted that the program would “result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before”.

The intent was to put pressure on automakers and force them to work out the engineering to meet the tough new standards. Their blindspot was failing to recognize that by placing the regulations solely on cars and small trucks, they had created a much simpler solution.

The new platform-based standards set fuel economy targets based on wheelbase and tread width, that is, how far apart the wheels are. If your vehicle is longer and wider, the fuel-economy targets shrinks. In the words of Dan Edmunds of Edmunds.com, “There was kind of an incentive to maybe stretch the wheelbase a couple of inches and set the tires maybe an inch [farther] apart, because you get a bigger platform and slightly smaller target.”

The regulations meant to get better mileage out of vehicles also made it easier for larger vehicles to meet fuel-efficiency standards. In what should have been an unsurprising move, when faced with the choice between reengineering their vehicles or simply going bigger, automakers chose to go bigger.

AndToddSaid, “The Real Reason Why Are Trucks Getting Bigger”, Todd’s Mischief blog, 2022-05-13.

January 6, 2023

QotD: The weird economics of “Onlyfans”

Filed under: Business, Economics, Media, Quotations, Technology — Tags: , , , , , , — Nicholas @ 01:00

… I’ll be the first to admit that I not only don’t understand the business side of it, but the whole concept leaves me cold. Yes, of course, like any young man from the latter half of the 20th century I’ve seen a few pornos, gone to a few strip clubs, and so forth. Both were bachelor party rites of passage in my day; lord knows what they do now, and maybe that’s part of the OnlyFans sales model — since guys can’t go out to seedy strip clubs or get together as a bachelor party and watch a porno (too much Toxic Male Gaze, #MeToo) they have to do it virtually. And I don’t get that, either. Looking at sex strikes me as pointless — either put me in, coach, or I’m going to find some other, more productive use of my time — and looking but not touching at a strip club seems even dumber.

Given that I am not in the target audience for OnlyFans, then, perhaps all my speculations are hilariously wrong. And obviously there’s a robust market for porn, so it stands to reason that a la carte porn would have, if anything, an even bigger market …

… but do we trust those numbers? Everything in Clown World is fake and gay, and everything to do with the Internet has always been … how shall we put this? Factually dubious. This was true even when the Internet was a Libertarian paradise (for the young guys out there: Back in the build-your-own-modem days, I’m told, the Internet was hardcore Libertarian. By the time I got there, it was still very, very Right. Which stands to reason — you needed patience, discipline, and a little savvy to be online back then, and those are not Leftist qualities). OnlyFans claims a subscriber base of X, with revenues of Y. Do we have any reason to believe those are even within shouting distance of reality?

Money laundering seems like a live option.

My other guess was kompromat. I understand that Chinese Intelligence has all but openly admitted that TikTok is part of a targeted program to spread deviance, and if it has some intel benefit that’s a bonus. I figure OnlyFans had some sort of similar function. We all know that the classic “honey pot” is alive and well — Eric Swalwell and of course Hunter Biden say hi — but why bother running a real agent at somebody when he’s perfectly willing to put all his deviant desires in writing, backed by his credit card number?

I checked out OnlyFans — on Wikipedia; for research — and hey, whaddaya know, they got in on The Current Thing in Ukraine. Given what we know about Vladimir Putin, I’m sure he’s real broken up about that. It probably works pretty well as “open source” domestic intelligence, too — just as your enemies are busy uploading their own blackmail photos, so your domestic deviants are busy outing themselves on the other side of the transaction. Indeed, the only thing that surprises me is that the usual (((retards))) aren’t blaming it on the Mossad …

… actually I’m sure they are, and I do NOT want to know about it, but the point is, the whole thing seems really sketchy. So what are your thoughts? Money laundering scheme? PsyOp? Really obvious intelligence ploy? Or is it exactly what it seems like, desperately horny betas doing their thing?

(Based on what I saw on Facebook etc., I’m almost willing to believe the latter. All a recognizably human female has to do is post a cleavage shot on Facebook and she’ll get a hundred thirsty simps complimenting her. It’s the money thing that gets me, though. Being a simp in the Facebook comments is free).

Severian, “The E-Thot Economy”, Founding Questions, 2022-10-05.

January 5, 2023

Trudeau’s government has paid 30 times as much to consultants McKinsey and Company as the Conservatives did

Filed under: Business, Cancon, Government — Tags: , , — Nicholas @ 05:00

Paul Wells on the amazing profit margins McKinsey and Company must be making thanks to their booming business with the Canadian federal government under Justin Trudeau:

From Radio-Canada, and not yet translated into English at this hour, comes news that the Trudeau Liberals have paid 30 times as much to the global consulting firm McKinsey and Company as the Harper Conservatives did, even though the Liberals have so far spent less time in office than the Conservatives did.

That’s $2.2 million in nine years under Harper, against $66 million in seven years under Trudeau.

And this chart, which I’ve taken from the Rad-Can report, shows the recourse to McKinsey is accelerating: the company’s take from the feds last year was almost as much as its combined take from all previous years.

Rad-Can reporters Romain Schué and Thomas Gerbet write: “What was the firm’s precise role? It’s impossible to know for sure. [McKinsey] refused to answer our questions … And despite our requests, Ottawa didn’t want to share the reports the firm produced.”

This is only the latest evidence of a massive trend in government in Canada’s federal government, in many provinces, and abroad: the contracting-out of complex problems to private firms that charge a premium; are never around when problems arise later; often produce work of questionable quality; and are too often exempt from even the minimal transparency and accountability that’s expected of work done in-house by the regular public service.

We’re seeing that latter point play out in a Commons committee’s attempts to find out how the ArriveCan app came to cost so much. The app was developed by outside contractors (not McKinsey — today’s Rad-Can story is about McKinsey but the use of contractors benefits many firms), and MPs seeking details have so far received only shrug emojis from the Trudeau government.

This increasing resort to secretive external consultancies impoverishes public discussion about ideas for the future. It is brutally demoralizing to the professional public service, which means it pays nasty dividends by making public-service worse ever less attractive to talented people. It allows timid elected officials to buy a backbone, in the form of a commissioned study supporting their preferred option, and the only cost is the burden on public finances, which elected officials plainly soon learn not to worry about.

December 31, 2022

Tour of the AREX Defense Factory in Slovenia

Filed under: Business, Europe, Technology, Weapons — Tags: , , , , — Nicholas @ 02:00

Forgotten Weapons
Published 30 Aug 2022

During my visit to Slovenia, I had a chance to tour the AREX Defense factory in Šentjernej. I came away really impressed by the quality and the breadth of operations that the factory performs in-house. They have only been making their own handgun designs for about 5 years, but they have been a subcontractor making parts for other big-name companies (like FN) for decades.
(more…)

December 30, 2022

Barnes & Noble used to be like an even more boring Indigo … but they’ve been turned around

Filed under: Books, Business, USA — Tags: , , , , — Nicholas @ 05:00

Back when my job required more travel, one of the things I used to look forward to was visiting US bookstores, as they always had a wider and more interesting stock than our staid Canadian equivalents. Over time, the interesting local bookstores got harder and harder to find as the big box stores like Borders and Barnes & Noble took over much of their customer base. Of the two, I much preferred going into a Borders store, as they had better stock than B&N and the staff seemed friendlier and (generally) more helpful to clueless foreigners like me. Borders went under around the same time my business travels to the US tapered off and it looked like it was only a matter of time for B&N to follow it into bankruptcy. Even if it struggled on, surely the pandemic killed off what Amazon left behind? Ted Gioia says not so fast:

“Barnes & Noble Book Store” by JeepersMedia is licensed under CC BY 2.0 .

But Barnes & Noble is flourishing. After a long decline, the company is profitable and growing again — and last week announced plans to open 30 new stores. In some instances, they are taking over locations where Amazon tried (and failed) to operate bookstores.

Amazon seems invincible. So the idea that Barnes & Noble can succeed where its much larger competitor failed is hard to believe. But the turnaround at B&N is real. In many instances they have already re-opened in locations where they previously shut down.

Barnes & Noble tried exactly the same sort of “re-imagining” of their stores that Canada’s Indigo chain is currently floundering with: cutting back on the floorspace devoted to books in favour of throw cushions, candles, decorations, bath salts, scarfs and towels. It worked just as badly for B&N as it is working for Indigo: it chases out the primary customer base (book-buyers) in favour of bored people looking to waste away an hour or two just browsing tchotchkes. (And if you can find an Indigo staff member to ask about a particular book, they almost always assure you that you can find it on their website, which I’m sure helps bring more people into the store …) In desperation, B&N looked to expand into a very different market:

… in a bizarre strategic move, the company decided to launch freestanding restaurants under the name Barnes & Noble Kitchen — no books, just meals. But this was another disaster.

The company chairman Leonard Riggio eventually admitted, in September 2018, that running a restaurant is “a lot harder than you think it is … The bottom line is awful.”

Given the incredibly short and profitless life of most start-up restaurants, that really does qualify as a “No shit, Sherlock” moment. So how did Barnes & Noble turn things around?

It’s amazing how much difference a new boss can make.

I’ve seen that firsthand so many times. I now have a rule of thumb: “There is no substitute for good decisions at the top — and no remedy for stupid ones.”

It’s really that simple. When the CEO makes foolish blunders, all the wisdom and hard work of everyone else in the company is insufficient to compensate. You only fix these problems by starting at the top.

In the case of Barnes & Noble, the new boss was named James Daunt. And he had already turned around Waterstones, a struggling book retailing chain in Britain.

Bringing in fresh blood can be a life-saver for a business, but we also have that expression about deck chairs on the Titanic in common business parlance, so just being “new” isn’t enough … new leaders must also bring new approaches and fresh ideas:

But the most amazing thing Daunt did at Waterstones was this: He refused to take any promotional money from publishers.

This seemed stark raving mad. But Daunt had a reason. Publishers give you promotional money in exchange for purchase commitments and prominent placement — but once you take the cash, you’ve made your deal with the devil. You now must put stacks of the promoted books in the most visible parts of the store, and sell them like they’re the holy script of some new cure-all creed.

Those promoted books are the first things you see when you walk by the window. They welcome you when you step inside the front door. They wink at you again next to the checkout counter.

Leaked emails show ridiculous deals. Publishers give discounts and thousands of dollars in marketing support, but the store must buy a boatload of copies — even if the book sucks and demand is weak — and push them as aggressively as possible.

Publishers do this in order to force-feed a book on to the bestseller list, using the brute force of marketing money to drive sales. If you flog that bad boy ruthlessly enough, it might compensate for the inferiority of the book itself. Booksellers, for their part, sweep up the promo cash, and maybe even get a discount that allows them to under-price Amazon.

Everybody wins. Except maybe the reader.

Daunt refused to play this game. He wanted to put the best books in the window. He wanted to display the most exciting books by the front door. Even more amazing, he let the people working in the stores make these decisions.

This is James Daunt’s super power: He loves books.

“Staff are now in control of their own shops”, he explained. “Hopefully they’re enjoying their work more. They’re creating something very different in each store.”

This crazy strategy proved so successful at Waterstones, that returns fell almost to zero — 97% of the books placed on the shelves were purchased by customers. That’s an amazing figure in the book business.

On the basis of this success, Daunt was put in charge of Barnes & Noble in August 2019. But could he really bring that dinosaur, on the brink of extinction, back to life?

QotD: If AT&T had used the Google model

Filed under: Business, Quotations, Technology, USA — Tags: , , — Nicholas @ 01:00

I’ve written elsewhere of how much we would have suffered if AT&T had run the phone network with a Google strategy. You wouldn’t be able to talk on the phone until you heard a bunch of advertisements first. The restaurant you call for a dinner reservation would have to kickback a share of your meal tab to the phone company. Everything you did on your phone would be more cumbersome and less efficient.

Guess what? That still may happen. The only reason Apple hasn’t already started force-feeding ads on your iPhone is a fear that competitors may not do the same — and they might lose a few market share points. But all it takes is one backroom meeting of dubious legality between smartphone providers, and you will soon start hearing a pitch from the GEICO gecko before you even say hello.

Ted Gioia, “YouTube May Force You to Watch 10 (or More) Unskippable Ads in a Row”, The Honest Broker, 2022-09-19.

December 28, 2022

The Twitter Files – “How does anyone run a business under these conditions?”

Filed under: Business, Cancon, Government, Liberty, Media, Politics, Technology, USA — Tags: , , , , , , — Nicholas @ 05:00

Chris Bray on the sheer magnitude of government(s) meddling in Twitter’s business (even though, yes, Twitter’s management was totally on-board politically with most or all of this meddling):

[…] Twitter has been constantly flooded with requests from at least dozens of separate federal entities, all of them needy and pushy and consuming the company’s time and energy: CENTCOM wants a meeting this week and CDC wants a meeting this week and NIH wants a meeting this week and the FBI wants a meeting this week and the White House wants a meeting this week and DHS wants a meeting this week and DOD wants a meeting this week even though CENTCOM already has one, and several members of Congress have some concerns they want the senior team to address this week, and …

Now: Twitter is a global platform. I would bet a kidney that there’s a Twitter Files equivalent for the Ottawa Police Department during the Freedom Convoy, and an RCMP file, and a Trudeau government file, and that Chrystia Freeland had some thoughts to share about some tweets she didn’t like. I would bet the other kidney that Twitter has equivalent files, in dozens of languages, from multiple government agencies in Iran and New Zealand and Australia and the Netherlands and the UK and Brazil and on and on an on.

As for my third kidney — just go with it, and we’ll clean up the biological metaphors later — state and local governments also expect Twitter to act on their content concerns and complaints about disinformation, which means fifty governors and attorneys general and state directors of public health and state police commanders picking up the phone, and 3,243 sheriffs and district attorneys and public health directors expecting to be able to reach out to their partners at Twitter, and close to 20,000 mayors and police chiefs, and thousands of state legislators and tens of thousands of city councilmembers, and on and on and on. “You tell this Jack Dorsey that I’m the damn mayor pro tem here in Glendale, and I want my concerns to be dealt with.”

And so, if we accept the premise that governments have special rights to demand content moderation, if the staff director of a legislative committee in the Arkansas state legislature and a sheriff in Maryland and the flag officers at all the MACOMS and Jen Psaki’s deputy assistant and a member of a county board of supervisors in Oregon and the chief of staff to the governor of Rhode Island, being Very Important People, all expect to by God get a direct meeting with Twitter executives because @buttchug623 is saying some things that they do not like at all, and oh by the way the prime minister of the Democratic Republic of the Congo is holding on line 6 and he’s pissed and when can you pencil in a half-hour with Turkmenistan’s finance minister, then how much does it cost to manage all of those relationships?

The regulatory affairs staffing buries the business — you can’t pay for that much face time with that many self-important officials. We need to schedule the senior management team for a meeting with the White House this week, ’cause they don’t like Alex Berenson. How does anyone run a business under these conditions? “Before you cook that cheeseburger for order number seven, the deputy assistant secretary for sustainable agriculture would like to share some thoughts on the environmental trajectory of industrial protein cultivation. And about that milkshake …”

In addition to the free speech problem and the pathologies of gleichschaltung, the Twitter files are about the way government without boundaries consumes resources from every entity it touches.

Twitter’s path to bankruptcy runs through the premise that every government official who doesn’t like a tweet deserves a meeting.

December 27, 2022

Whatever government touches, it makes worse – book publishing as a prime example

Filed under: Books, Bureaucracy, Business, Cancon — Tags: , , — Nicholas @ 03:00

The Canadian government has always claimed to want to encourage Canadian book publishers and many, many speeches and press conferences and announcements and gestures have been produced over the years (not just by the Liberals, but usually by the Liberals). The actual results of all that political performance? “Meh” at the very best:

Another of my favorite SHuSHs of 2022 was no. 168, “It Started as Polite Talk”, in which my colleague Dan Wells of Biblioasis complained of the dominance of foreign publishers in the Canadian book market. “I don’t think there’s a literate nation in the world whose native industry makes up a small percentage of its overall market”, he said. “This, perhaps, is the real crisis of Canadian publishing.”

The astonishing thing to me is that the stated policy of the federal government for more than half a century has been to foster and protect a Canadian-owned publishing sector to avoid outsourcing our intellectual life to New York and London. Acres of policy written. Billions spent. The results are risible. Here’s a visual representation of Dan’s point. The 113 members of the Association of Canadian Publishers, representing the vast majority of English-language book publishers in Canada, produce $34 million in annual sales against the $1.1 billion of foreign firms:

If you read the self-congratulatory reports from the Department of Canadian Heritage and the Canada Council, everything is fine: “The Canadian book publishing industry consistently demonstrates a high degree of resilience.”

Does this look resilient to you?

I’ve never been much of a Canadian nationalist and, all things considered, I’d prefer less of a government presence in our arts sector, but government is now so deeply entrenched in book publishing and has made such a hash of the industry that there’s really no way out that doesn’t involve better government policy.

What, exactly, better policy might look like is next year’s project.

December 17, 2022

The history of America’s most famous toys

Filed under: Business, History, USA — Tags: , , , , , , , — Nicholas @ 02:00

J.J. McCullough
Published 20 Aug 2022

The story behind some of America’s most iconic postwar toys, including GI Joe, Play-Doh, Monopoly, and Stretch Armstrong.
(more…)

December 16, 2022

“To hear Musk tell it, his motivation is obvious: It’s about saving the world”

Filed under: Business, Media, Politics, USA — Tags: , , , , — Nicholas @ 05:00

Bari Weiss at The Free Press (formerly known as Common Sense) on what went on in preparing to reveal the “Twitter files” and what Elon Musk is hoping to accomplish with Twitter:

Elon Musk at the 2015 Tesla Motors annual meeting.
Photo by Steve Jurvetson via Wikimedia Commons.

“I’m not going to spend $44 billion to reinstate a satire blog”, Musk said about the Babylon Bee, which had been banned from Twitter in March 2022. “I did it because I was worried about the future of civilization”, he told us late one night. 

As far as Musk sees things, “birth rates are plummeting, the thought police are gaining power, and even having an opinion is enough to be shunned. We are trending in a bad direction.”

He says he wants to transform Twitter from a social media platform distrusted and despised by at least half the country into one widely trusted by most Americans. To have it fulfill its highest mission: that of a digital town square where all ideas can be heard, and the best will win out. 

“If there is one information source that breaks ranks, then I think it ultimately forces others not to have the same narrative”, he said. “If even one organization competes hard for the truth, others will have to follow.” 

To win back that trust, Musk figured it would require being honest about what had, until very recently, been going on at the company he had just bought: the suppression of disfavored users; the curtailing of certain political views; the censorship of stories like the Hunter Biden laptop; and the extent to which the government had tried to influence such decisions.

“We have a goal here, which is to clear the decks of any prior wrongdoing and move forward with a clean slate”, Musk said in one of many conversations that took place over the course of a week. “I’m sleeping at Twitter HQ for a reason. This is a code-red situation.” (He put it even more forcefully on Twitter, where he said that the company was a “crime scene”.) And so he has been sleeping there on-and-off, claiming a sofa. His 2-year-old son, named X, was almost always nearby. 

Musk, who is a South African native, analogized the work of cleaning-house at Twitter several times to a kind of Truth and Reconciliation Commission. But what looks to some like truth and reconciliation can look to others like revenge.

At one point after midnight, as Musk showed off a closet of swag, including t-shirts left by the previous crew that said “Stay Woke”, he joked: “The barbarians have crashed through the gates and are pillaging the merch!”

Remember: After Musk made his offer to buy Twitter in April, he tried to get out of it in July, arguing that the company had not been honest about the percentage of fake users and bots on the site. But the company sued to force the deal, and he went ahead with it. 

Musk estimates that he paid at least twice what it was worth but that he had to “chew down this hairball” — which is to say, he had to buy Twitter. 

The price tag isn’t his only grievance. There’s also the fact that the company, to hear him tell it, wasn’t really a functioning company at all.

When Musk took over, he said, he found Twitter in disarray. Employees had unlimited vacation time and permanent work from home. The company had stopped doing performance reviews altogether, according to a long-time Twitter employee. “As long as Twitter could just keep its head above water and be roughly cash-flow break-even, then that’s all that they cared about”, Musk said. 

Musk calls the Twitter he purchased a “non-profit”. Twitter, as it existed, wasn’t pursuing net earnings but “social influence”, he said. “This was fundamentally an activist organization”. 

Since he took the helm at Twitter, he has fired 80 percent of the staff. He has insisted that those not prepared to be “extremely hardcore” and work “long hours at high intensity” show themselves out. Several engineers I spoke to had been working 18-hour days for the past month. They looked like it.

“It’s like if an aircraft was going in one direction and then suddenly pulled a U-turn and hit the afterburners in the other direction. That’s what happened to Twitter”, Musk said, making a vroom noise and laughing. 

The Online News [Shakedown] Act passes the House of Commons

Filed under: Business, Cancon, Government, Media — Tags: , , , , , , , , — Nicholas @ 03:00

Michael Geist summarizes the farcical progress of Justin Trudeau’s legalized theft from the “tech giants”:

Later today, the House of Commons will vote to approve Bill C-18, the Online News Act, sending it to the Senate just prior to breaking for the holidays. While Canadian Heritage Minister Pablo Rodriguez and media lobbyists will no doubt celebrate the milestone, it should not go unremarked that the legislative process for this bill has been an utter embarrassment with an already bad bill made far worse. The government cut off debate at second reading, actively excluded dozens of potential witnesses, expanded the bill to hundreds of broadcasters that may not even produce news, denigrated online news services as “not real news”, and shrugged off violations of international copyright law. All the while, it acknowledged that mandated payments for links are the foundation of the bill with officials stating that individual Facebook posts accompanied by a link to a news story would be caught by the law. As for the purported financial benefits, the government’s own estimates are less than half those of the Parliamentary Budget Officer, who also concluded that more than 75% of the revenues will go to broadcasters such as Bell, Rogers, and the CBC. The end result is a bill that will undermine competition and pose a threat to freedom of expression, while potentially leading Facebook to block news sharing in Canada and Google to cancel dozens of existing agreements with Canadian news outlets.

As I’ve chronicled for months, Bill C-18 is the product of an intense lobbying campaign from some of Canada’s largest media companies. While the Globe and Mail broke from the pack at the last minute, years of one-sided editorials — even devoting full front pages to the issue — had its effect. Indeed, Canadian newspapers would be exhibit #1 for how government intervention in the media space has a direct impact on an independent press. From the moment of its introduction, the consequences were immediately obvious as payments for links serves as the foundation for a law that treats “facilitating access to news” as compensable. Canadians can be forgiven for thinking the bill is about compensating for reproduction of news stories. It is not, since the platforms don’t do that. Instead, it is about requiring payments for links, indexing or otherwise directing traffic to the news organizations who are often the source of the link itself. In most circumstances, recipients pay for the benefits that come from referral traffic. With Bill C-18, the entities providing the referrals pay for doing so.

Further, the bill is about far more than struggling Canadian newspapers as it expands eligibility into broadcasters such as the CBC, foreign news outlets such as the New York Times, and hundreds of broadcasters licensed by the CRTC that are not even required to produce news. The end goal is negotiated payments for links, backed by the threat of a one-sided arbitration process overseen by the CRTC in which the arbitration panel can simply reject offers if it believes it fails to meet the government’s policy objectives. That isn’t a commercial deal, it is a shakedown.

I’ve been operating on the assumption that the government is betting that the big internet companies won’t do the obvious and ban linking to any Canadian media outlet on their respective platforms, but the feds don’t have a great track record of predictions in recent years …

In a later post, Michael Geist illustrated the literal misinformation that was pushed by government MPs during Bill C-18’s path through to final reading by quoting some of Liberal MP Lisa Hepfner’s contributions:

Last month, Liberal MP Lisa Hepfner shocked Canadian online news outlets by stating that “they’re not news. They’re not gathering news. They’re publishing opinion only.” The comments sparked instant criticism from news outlets across the country, leading Hepfner to issue a quick apology. In the aftermath of the comments, Hepfner said nothing for weeks at Heritage committee studying Bill C-18. That bill passed third reading yesterday – I posted on the embarrassing legislative review – and Hepfner was back at it. Rather than criticizing online news outlets, this time she targeted the Internet platforms, saying the bill would make it “harder for big digital platforms like Facebook and Google to steal local journalists’ articles and repost them without credit.” 

[…]

Hepfner’s comment not only provide a troubling example of an MP engaging in misinformation about links who has effectively labelled her own Facebook posts as theft, but strikes at the heart of the problem with Bill C-18. As government officials have acknowledged, the entire foundation of the bill is based on paying for links. In fact, when a proposal to remove links from the bill was raised at committee, government MPs described the change as a loophole and voted against it. In the case of the CBC links, the government confirmed that Hepfner could write about the availability of children’s medications (ie. “Great news! CBC reports a million bottles of pain medication are on the way”) but once she added a link to provide a source for the claim, Bill C-18 is triggered.

These examples highlight the absurdity of a law that treats links as compensable and MPs who equate those links to theft. To be clear, there is nothing wrong with Hepfner or anyone else providing a link to a story on greater availability of children’s medicine. In fact, the CBC story has effectively already been paid for by the public and should be shared widely without the government creating barriers to sharing that information. What is wrong that is ill-informed MPs have voted for Bill C-18, creating a framework in which the government is imposing a mandatory payment scheme for some platforms for hosting links. The bill is now headed to the Senate which will hopefully make the necessary amendments to set Hepfner’s mind at ease that her own Facebook posts do not make her an accomplice to theft.

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