Kim Dotcom's locker may be full, but the cupboard is bare

Do you fancy your chances with Kim "Dotcom" Schmitz's new online file locker? It's staggeringly unoriginal in every respect - it's even called Mega, like his last one - but I'll propose we think about it in a new way. So I haven't come to mock the rotund self-promoter, but rather to talk about what might happen if its users were …

[jonathanb]

I don't get it

Mega charging by the MB for storage is not like Tesco charging a flat price per kg of food whether it is horse burgers or single malt whisky. It is like a courier company charging by the kg to move stuff, or a storage company charging by the m^3 to store it.

Why on earth should Mega charge different amounts for storage of files depending on some "perceived value" of the data being stored. Their scarce resources are bandwidth and disk space, so that's what forms the basis of their pricing strategy.

[Andrew Orlowski]

Re: I don't get it

That's because Mega is creating a scarcity and then charging you for it. In effect, it's creating virtual property.

Some lockers do this, but many don't.

[Steen Hive]

Re: I don't get it

"That's because Mega is creating a scarcity and then charging you for it. In effect, it's creating virtual property."

The very definition of copyright law itself.

[Anonymous Coward]

Re: I don't get it

Yes and no? I've not looked over their business plan with a fine tooth comb, but they are charging for a scarcity that is real. Their actual server space and bandwidth. Yes they can arbitrarily limit the usage of both of these, but the usage is very much real.

Now, is the usage of memorizing, through technology or mere memory, and communicating media and ideas a real usage or an imagined one? Dare we charge for every memory of a song? Why charge for every replay on digital data?

[Anonymous Coward]

"a fine tooth comb"

I have never had the need to use a tooth comb, but credit to you for owning a particularly fine specimen of one.

Maybe you were being figurative, and you really meant to write "a fine-toothed comb"?

[Katie Saucey]

Re: I don't get it - Me neither

"...Mega is creating a scarcity"... I might suggest it is creating a perceived scarcity. If we're talking just storage, they are selling an inferior overpriced product. The Pro III account ( https://mega.co.nz/#pro ) will cost you $30/month for 4tb storage & 8tb bandwidth. Compare with 2x2tb hdds for about $200, and no bandwidth charges. After a year you've spent $360 on megaupload2.0, and while most hdds don't fail the day after the 1 yr warranty is up, you've still got more for your money if they did. As for sharing, use a free service to transfer larger files, email the rest. For encryption, if you know what it is and why you might require it, chances are you can figure out one of the many free easy ways to achieve it. This all assumes you're not just some kid wanting to screw the man ( for the lulz ) by pirating stuff and giving it to all for nothing.

[austerusz]

Re: I don't get it - Me neither

I'm pretty sure they mean 8Tb traffic, not bandwidth (or it would be /s)

But in any case, how do 2x2Tb HDDs help you? A locked like Dropbox, Mega or Box helps you by making sure your files are constantly available online.

Let's say you make your own NAS at home and make it available online. You have to put up with your bandwidth for transfer (I have only 2Mb/s for upload from my home network so if I choose to transfer my speed will be low so my download at a remote location will be limited), your router's availability not to mention the fact you need to be savvy enough to juggle the port forwarding necessary for a secure connection.

I'm definitely not going to be carrying x HDD's which I can't really share with others unless I'm physically there.

[Ian Johnston]

Re: I don't get it

Eh? What scarcity are they creating? Bearing in mind that GDrive, Dropbox, Box, Ubuntu One etc etc etc all exist already.

[Oninoshiko]

Re: I don't get it

That's because Mega is creating a scarcity and then charging you for it. In effect, it's creating virtual property.

Some lockers do this, but many don't.

So what you are suggesting is that they use their infinite bandwidth and infinite storage space to give the service for free?

Your assertion that "Mega is creating a scarcity and then charging you for it," only makes sense if they have unlimited free resources, otherwise the scarcity already exists and they need to charge you for it to make sure they have the resources to provide the service and make a profit.

You then move on to "... it's creating virtual property." I'm rather surprised to see you complain about that. I presume you make your living writing. This article is nothing more then virtual property (for when I received it, it was only a stream of bits), which you seem to be of the opinion should not be charged for. So can we presume that you will not be accepting payment for any more articles you write?

[Paulds11]

Re: I don't get it

The files are encrypted so the file type is of no consequence to Mega.. why you and this article INSIST on this course of differential pricing is hugely irritating, misguided and not I think what the majority of customers want. ONLY I know how valuable a file is once encrypted, Im not going to reveal to you or anyone else offering me space therefore what I am storing. Drop it.. let it go.

[Anonymous Coward]

> "All these businesses do is take something digital and reduce the value of it to the value of storage. That's not

> particularly smart," he points out, with an analogy to illustrate:

> "Imagine, perhaps, a food market where everything cost a dollar a kilo. Suppliers would soon learn that they

> needed to produce at 50c, or find another way to do business."

I disagree - this is nothing new at all. The music industry charged about $1 US apiece for single records in the 1970's, and iTunes charges about $1 apiece for songs today. Songs were probably about $0.25 apiece in the early 1960's. The idea of charging a set price for "bin space" or "storage space" in music is as old as the hills. And the streaming movie services like Netflix and streaming music services go one step further - all you can "eat" (or view) for $10 a month. Reducing artistic value of content to "the value of storage" is an extremely old concept - nearly as old as retail music sales.

[graeme leggett]

Perhaps it could be possible to find a mechanism whereby you can charge more for safely storing a Porsche than an Astra - both take up roughly the same space but their value differs.

Rather than all your storage being the same flat rate, you could pay less for storing a software distribution package (recreatable content - albeit time and effort) and more for the photo's from a family holiday.

Further the access to the data could be differentiated, your music collection available at a faster download rate than an ebook.

The host system would have to know how you classify your data, or to automate giving you different rates from different data types inspect the data and determine its type.

[Muscleguy]

Agreed, just look at what happened to text post Guttenberg once it did not have to be laboriously hand written by monks. It also got democritised as text production moved out of the rather closed monasteries.

If every book cost as much as illuminated manuscripts did in their day, they would have about the same sized market, in proportion.

If you consider the vast explosion of good, useful, tested knowledge post Guttenberg then the flattening of the value of text is even more stark. Trashy pulp fiction notwithstanding ;-)

[Steve Knox]

Yes and no.

There is a significant difference between digital delivery of artistic content and physical delivery which breaks the model under which this flattening of value worked and worked well for decades.

Go into any brick-and-mortar music store, and count the number of each album or single on sale. In a true flattened-value world, there would be exactly the same number of each stocked, and people would buy exactly the same number of each. Instead what you see is that the store stocks more of the songs that it believes will sell, and people buy more of certain songs than others, so there is inconsistency in the quantities left in stock. When popular albums sell out,the store will buy more of those, whereas when unpopular albums sit for too long, they end up in the discount bin. So the store's stock space becomes the scarcity that arbitrates the market.

But there's no real scarcity in digital storage. Online purveyors of artistic content need keep only one copy of each item, because it's copied rather than removed when sold. They can use sales records to determine the popularity of a song, but lack of scarcity and remnants of the flattened-value mode mean they generally don't use this to change the price. Price difference online becomes primarily a reflection of the novelty of the content.

It's this lack of scarcity which leads some people to believe that IP is valueless. But the value of intellectual property has never really been in its scarcity*; that was simply a convenient model. The value of intellectual property is in its knock-on effect, whether that's a song's ability to produce an emotional reaction or a game's ability to entertain, or a financial program's ability to produce usable forecasts. Those, unfortunately, are much harder to measure and materialize in a market.

*In fact, the surest way to keep intellectual property scarce is also the surest way to minimize its value: tell no-one.

[GrantB]

Re: Yes and no.

"But there's no real scarcity in digital storage. Online purveyors of artistic content need keep only one copy of each item, because it's copied rather than removed when sold. They can use sales records to determine the popularity of a song, but lack of scarcity and remnants of the flattened-value mode mean they generally don't use this to change the price. Price difference online becomes primarily a reflection of the novelty of the content"

Looking at iTunes, there is variability in pricing (new popular songs costing more than the average price) which probably reflects the price of promotion and the 'novelty factor'.

The problem with a bit locker like iTunes or similar is that people can't really deal with nearly infinite number of songs or apps on the shelf. I have experienced going to buy a song and finding 20+ versions of it - the remixes, covers, live versions, remastered, album vs single, censored radio release / non-censored extended etc. Something I have heard described as the 'Tyranny of Choice'

Ultimately the most significant cost of music, apps, even movies appears to not in creation, storage or distribution but simply making people aware of it. Some random Icelandic band might have just created the best album of all time that I will love and be very willing to pay full price for, but if I am never made aware of it I will never hand over my money. And to make a jaded world-wide population aware of some artistic creation that is bombarded daily with vast amounts of advertising is getting increasingly difficult.

I remember Snow Crash from 20+ years ago discussing the problem; in a VR world, land is infinite but like the real world, some land in inner cities is worth more than the same amount of land in some Mongolian desert.

In the iTunes world, having the Album cover on the front page or in a top 10 list must be worth vastly more than having it simply sitting in the iTunes catalogue.

[Anonymous Coward]

eh

What was all that about ?

If it is more secure than Dropbox and offers some additional features I can see a market for it. There is also the fact that it will probably avoid hosting whatever it can in the USA and that has to be good for privacy.

I think I will stick with my 50GB free Dropbox account for now though, Thanks Samsung :)

[(AMPC) Anonymous and mostly paranoid coward]

Re: eh heh heh heh

Non-authoritative answer:

Name: mega.co.nz

Addresses: 154.53.224.162

154.53.224.166

154.53.224.158

Various IP location services now map it in Wichita Kansas.

On opening day, it was mapped a block away from the White House.

The fat man may not understand digital economics as well as you Andrew, but he certainly understands irony.

[frank ly]

"So I haven't come to mock the rotund self-promoter, ...."

You just did. I don't think that making points about a person's weight or body shape is helpful to any serious discussion about their business activities.

(In case anybody is wondering, my BMI is 22, so it's not me being sensitive about it.)

[Anonymous Coward]

Mega dumb

Mr. Dotcom is in for another big reality check if he facilitates piracy.

[mike2R]

Re: Mega dumb

Reality cheque?

[Malcolm Weir]

Re: Mega dumb

Aaaaand... welcome to the effort by the commercial copyright interests (RIAA, MPAA, et al) to shape the conversation.

Why, exactly, is one type of on-line service demonized for "facilitating piracy" (whatever that means), and not others? Surely, in any illegal-file-sharing exercise there are *at least* three aspects: the storage location itself, the forum or discussion list that identifies at which storage location the content can be found, and the connectivity that connects them.

So why don't we hear about e.g. AT&T and Verizon "facilitating piracy"?

Fundamentally, the "problem" is the communication of locations, not the use of them (unless we're going to pretend that lockbox storage systems have no legitimate uses, which is preposterous on its face as it would include cloud backup systems as well as drop boxes). So in essence the only way to control the "facilitation of piracy" is to control speech: if people can't share the locations, the problem goes away.

Of course, most stuff written on the internet has no value anyway, so it's no great loss to prohibit unauthorized users from writing stuff.

[Anonymous Coward]

50GB dropbox?

How do I get it?

[Rattus Rattus]

Re: 50GB dropbox?

Comes free with a Galaxy S3. Only for a year, though, Dropbox want you to pay to keep it after that.

[KjetilS]

Re: 50GB dropbox?

Buy a high end Samsung, and you get two years of 50GB free

[Anonymous Coward]

Re: 50GB dropbox?

Buy a Galaxy S3...

[David Neil]

Re: 50GB dropbox?

Some of us got it with an HP touchpad in the firesale :o)

[Intractable Potsherd]

Re: 50GB dropbox?

I don't know whether it comes with the Galaxy camera that I just bought, or whether it is because I have lots of accounts/devices registered to it, but my Dropbox account just got an extra 48GB for two years immediately after downloading the app to the camera.

[Chad H.]

"Imagine, perhaps, a food market where everything cost a dollar a kilo. Suppliers would soon learn that they needed to produce at 50c, or find another way to do business."

----

I don't get what this has to do with anything. Mega aren't creating content, they're storing existing content. The storage costs behind 1Gb of Photos, and 1Gb of spreadsheets, and 1GB of anything else you'd care to name is the same.

I think this article got a bit confused in what it was trying to say.

[David Neil]

Spot on

It's not a supermarket, it's closer to a bonded warehouse

[teebie]

"I think this article got a bit confused in what it was trying to say."

It did seem a bit all over the place. Not very introduction-body-conclusion, and seemingly using mega as an excuse to talk about the writer's views on copyright. The lack of a clear premise made it a jumble.

(See, it's not hard to do)

[trapper5]

Well, I read this article quite carefully, twice, and it made no sense at all. Comparing cloud storage to finite scare resources like food? Turnip growers are happy because stores have lots of turnips that no one is buying? Getting people to pay is no problem?

Most of all there seems to be a correlation being made between price and value - they are not the same.

I won't trash this article on logic, mainly because I can't tell what point the author is trying to make.

[Anonymous Coward]

Gosh, it's not so hard to understand this argument is it?

Storage isn't really of much VALUE to consumers anymore, as they can access content ON DEMAND without having to worry about acquiring/storing/maintaining it.

Little more than five years ago I was on the verge of splurging tens of thousands of pounds on a huge home media system with hundreds of terabytes of storage for every item of film and music that I could ever possibly want. Today I find the idea absolutely absurd: I don't want the hassle of it. I can access whatever film and music I want, when I want through the likes of Netflix, iTunes and Spotify.

So, as competition forces these content suppliers improve their offer and add new features/benefits that add further value, pure storage providers going down Kim's path will find themselves completely unable to compete.

[Anonymous Coward]

Because, of course, the large media conglomerates; those who have Netflix, Spotify, etc. agreements, are the only entities who create any content whatsoever. Every other entity in the world is an entirely passive consumer of such media, and neither create, nor have the means to create, any documents, photos or videos of their own.

[Grave]

"as a consequence, the digital economy today isn't much more advanced than Somalia's real economy"

or perhaps this is the new society, economy, culture and world emerging, and the current failed and broken ones are going the way of dodo, no matter how much big media dinosaurs pay their shills to write otherwise. (how much they pay you?)

[amanfromMars 1]

Smoke and Mirrors to Hide the Naked Phantom Emperor is the Folly of Fools for Imbeciles

or perhaps this is the new society, economy, culture and world emerging, and the current failed and broken ones are going the way of dodo, no matter how much big media dinosaurs pay their shills to write otherwise. (how much they pay you?) ..... Grave Posted Monday 21st January 2013 20:58 GMT

Ron Paul's Texas Straight Talk highlights the inevitable colossal flash crash of the current failed systems which are bankrupt and devoid of novel future intellectual property.

And yes, Grave, I agree. There is a new society, economy, culture and world emerging ..... and it and its IT suffers not the folly of fools who would be imbeciles in collapsed and collapsing systems/ failed dysfunctional states.

[unitron]

Re: Smoke and Mirrors to Hide the Naked Phantom Emperor is the Folly of Fools for Imbeciles

Were the Mayans right after all?

Did the world actually come to an end and we just didn't notice?

Because I've just read an amanfromMars 1 comment that I could (I think) understand, appended to a column of which I could make neither heads nor tails.

trapper5 did an excellent job, by the way, of summarizing my reaction to it.

[John Deeb]

value is not product but experience

""Smart in this world is aggregating, organising, and then delivering compelling services on top of storage and metadata".

While definitely true, the author forgets -- especially noticeable with the Tesco analogy -- that Mega on its own doesn't have to provide the smarts to still become part of a larger experience of valuable searching, finding, tagging, converting or sharing. That value could be delivered by a massive user base, API's, smart tools, aggregate sites and more.

It's like Tesco storing everything for a penny in some massive warehouse but you hire a delivery service to find it for you and unpack it. Now the question is what the delivery service will be charging and how. Smart people probably will try to add the value as happened with the Pirate Bay infrastructure.

The key for the content industry is to stop selling experiences which are impossible to contain to a medium and therefore have little value anymore once it's in the wild where others will add value to the bare product. They need to integrate the experience of searching, finding, storing, sharing and giving feedback with the original product. And aggregate that. They should have started 15 years ago. And actually a few did but most didn't mainly because of the lack of organization of an extremely self-centered industry. In my opinion this lack of vision on "product", "experience" and "value" is now creating this false dilemma of piracy.

[Graumis]

Copyright Protection Should Not Be Free

Your argument that copyright owners should be able to set the value of copyrighted material is bogus. Why should they be the ones who dictate the terms of enforcement? No, copyright is an inducement provided by government. In a democracy, this means the majority decides. They set the value of copyright. They then get to decide how, or if, copyright is enforced. Not the copyright owners.

You argue as if copyright protection were some unalienable right. It's not. It's a tax on the people enforced by police power.

[southpacificpom]

This will no doubt all end up in the Schmitz house again.

[Anonymous Coward]

It don't work that way...

Copyright holders like any other business are fully entitled to sell their products at whatever price suits them. No one is forced to buy their products and you can't steal it, or infringe on the copyright or pirate without being punished. No one is "entitled" to any product unless they pay the asking price, period. Try telling the oil companies they must sell petrol at 1 Euro per gallon, because they could still make tons of money and they will just laugh at your ignorance. The majority don't rule on this or the price might be 1 Euro per gallon.

The majority does not rule in either the pricing of copyright protected works or punishment for piracy. The judicial branch of government decides what the penalty will be for piracy based on existing law. There should be a uniform world wide penalty for piracy and it should be painful like Japan has with mandatory 2 year jail sentences and a stiff fine. That's the only way to get through to ignorant people in denial, aka pirates.

[DavCrav]

Re: It don't work that way...

"The majority does not rule in either the pricing of copyright protected works or punishment for piracy. The judicial branch of government decides what the penalty will be for piracy based on existing law. There should be a uniform world wide penalty for piracy and it should be painful like Japan has with mandatory 2 year jail sentences and a stiff fine. That's the only way to get through to ignorant people in denial, aka pirates."

I beg your pardon? Why shouldn't the majority rule in deciding how to punish made up crime like copyright infringement (I mean rather than real crimes, like murder, rape, theft, etc.)? Do you prefer autocracy? And why should the penalty for copyright infringement be worse that actually physically stealing the album from a shop? If you make the penalty for copyright infringement very stiff, and actually use it on lots of people, well then "pirates" will physically steal the stuff instead. Or maybe not, since there won't be any music shops soon, but anyway.

[xpusostomos]

Re: It don't work that way...

You're right, but only because the government said so. Oil companies get their oil from public land, and copyright holders charge for an artificially created government monopoly. Both exist at the sufference of the community.

[graeme leggett]

Re: It don't work that way...

+1 for the first paragraph, but I can't support the second.

For a start, law is supposed to be society's rules reflecting its collective mores, and therefore is a form of majority opinion albeit one that changes and evolves with the actual alterations to legislation following in due (or much later) course..

[Roger Houghton]

Re: It don't work that way...

Copyright isn't anyone's natural right - it's something granted my government. In a democracy the majority could choose to abolish or, as now, restrict it. Afraid your argument doesn't really work.

[apjanes]

The assumption seems to be...

that without copyright protection artists would no longer produce and our arts & culture would stagnate. I simply do not believe this is true. Many cultures (Egyptians, Greeks, Babylonians, etc) had thriving cultural output without any copyright protection whatsoever. Artists produce art because they are artists. The inflated and often excessive riches that some artists get (or at least did in the recent past) seems to me to be a somewhat modern phenomenon.

[Ole Juul]

Re: The assumption seems to be...

without copyright protection artists would no longer produce and our arts & culture would stagnate

In fact I would argue that copyright protection is what is causing our arts and culture to stagnate. And yes, it is stagnating. I base that idea on the observation that people are starting to confuse a post card of the Eiffel tower with a visit to Paris. Listening to a recording is fine, but you're not going to fool me. It's not real. Not any more than a turnip pill is a turnip - although there are obviously some (poor souls) who are not clear on that.

[graeme leggett]

Re: The assumption seems to be...

The Greeks weren't in a position to knock off multiple copies of an item in the blink of an eye.

But they did have a word for re-using other ideas - mimesis

[Anonymous Coward]

Re: The assumption seems to be...

The ancient cultures you mention wouldn't particularly need copyright protection as a great deal of the cultural output was physical and not really open to even limited copying. High value physical goods such as ornate jewellery would rely principally on the quality and scarcity of the craftsmanship and materials for their value; if you were a good enough forger to copy the best, there would be little reason not to just set yourself up as a top of the line jeweller. Many - if not most - of the designs were religious motifs and largely common property for craftsmen to use as they liked, although the quality and appropriateness of physical likeness might be subject to approval by the priestly class, who probably didn't need a copyright law to arbitrarily introduce you to to your recently removed bowels for some perceived slight of a goddess. The revered Indian artist M.F. Hussain has been on the business end of this copyright-free religious bigot approach to image management for 20 years.

Any plays, texts or musical works were likely to be commissioned and paid up front by a wealthy sponsor (the way most high value art worked for much of human existence) whose version of enforcing exclusivity would have more to do with their place on the greasy pole than calling the copyright cops.

[Noodle]

All based on the usual assumption...

.. that the majority of people storing files on an upload site are doing so for pirated copies of movies and music. Is there any evidence of this? As far as I know Megaupload had a huge number of completely legitimate users storing personal and business files, who are all now being penalised for the alleged illegal behaviour of some other users of the same site. Whether or not Kim Dotcom knew about the alleged piracy is neither here nor there - you wouldn't confiscate the contents of an entire mall if you found one shop selling illegal goods, nor would you prosecute the builder or owner of the mall. There is a market for private online storage that is completely unrelated to piracy.

[Anonymous Coward]

"But they've come to resemble what they most hated, philistines who reject value - and it's quite an ugly sight."

I don't believe that value as a concept is being rejected. I believe it's the actual value itself, the price if you will, that's being rejected. As you said earlier in this piece, getting people to pay isn't a problem. Well if it isn't, why is piracy so rife ? The answer is in part due to those who will not pay no matter what and will go to any lengths to get something for free. These seem to be the people you are commenting on but they are a minority. There's a larger class of people who understand value and are happy to pay for it, but who believe quite strongly that the current price point does not reflect value. Now in truly free markets the answer to a price/value disconnect is to go to another supplier. That's exactly what people are doing. The fact that this 'alternate supplier' happens to be illegal is an artefact of various market distorting govt. policies. If suppliers price their goods at a point where this large majority agree reflects value then the problem will be minimised (it won't go away of course but ..). The problem isn't that people are philistines who don't recognise value. The real problem is that they do recognise value, disagree with govt. sanctioned monopolies as to what constitutes value and, more importantly, have the power to do something about it.