Ever since Facebook Applications exploded onto the scene, there has been a problem. Well, I say it’s a problem, but in reality it is actually an amazing thing. It is only perceived to be a problem by old fashioned companies that just Don’t Get It.

For several months now the old Scrabulous saga has been playing out. Some smart guys thought it would be a great idea to be able to play Scrabble with your friends on Facebook. They were right. It became Facebook’s most popular application, and could even count Mark Zuckerberg among its users.

Unfortunately, the creators of Scrabulous didn’t own the intellectual property to the game. The people who do own the IP, Hasbro and Mattel, have gone on the assault. They are suing Scrabulous’s creators Rajat Agarwall and Jayant Agarwall. This is despite the fact that the brothers have undoubtedly done more than anyone else in recent years to raise the profile of Scrabble.

Do you think if Hasbro and / or Mattel had created a Facebook Application for Scrabble it would have been as successful as Scrabulous? I, for one, highly doubt it. Their reaction alone has demonstrated that they simply don’t “get” the internet. Just like the recorded music industry before them, board game companies, it seems, have woken up to find that the internet has eaten away at their old fashioned business model. They don’t know how to capitalise on the internet. It needn’t necessarily be a threat. But their head-in-the-sand behaviour ensures that it will be.

My personal pet theory is that old companies got far too cosy in the 20th century ways. With the intellectual property rights wrapped up, they have seen no need to innovate. They have rested on their laurels. As such, their products have stagnated. Remember, the optimal length of copyright is around 15 years. A similar length will apply to intellectual property. Scrabble can trace its history back to four times that length.

As was pointed out on the Freakonomics blog earlier this year, Mattel’s and Hasbro’s plans for the future of Scrabble are pretty lame to say the least.

The plans include adding anniversary labels to Scrabble packaging and introducing a folding edition of the deluxe Scrabble board.

In the meantime, the best thing to happen to Scrabble in generations is being targeted by Hasbro and Mattel simply because they were not smart enough to come up with the idea in the first place. They should have applauded and endorsed Scrabulous. That way, they would have ended up with a hell of a lot more respect and almost certainly more sales than under the current strategy of the companies.

In the latest stage of their assault, Mattel have finally launched their own ‘official’ Scrabble Facebook Application. But The Guardian reports that all is not well. And yet again, the problem can be laid at the door of intellectual property rights.

Seemingly, the new ‘official’ application is only endorsed by Mattel — not Hasbro. This means that you can not play Scrabble in the USA or Canada, where Hasbro own the rights. For this reason alone, the trust of Facebook’s users has been lost. If you can’t even play against your friends just because they happen to live in North America, why would you bother defecting from Scrabulous which currently has approximately 700,000 “daily active users”?

Today another Facebook Application has been hit by a similar corporate strangling. This time it is from a company that you would think would be able to cope with new technologies better.

Tetris Tournament was an early Facebook hit, and one of my favourite Facebook apps. It didn’t take long for its name to change to BlockStar, but it was still clearly derived from Tetris. The game itself was a bit clunky, but it did the job and was good fun.

Today it has become “Tetris Friends (formerly Block Star)“. Yes, it is now an official Tetris app. So, is this simply BlockStar with a shiny Tetris logo over the top? Far from it. The new game is utter, utter shit. Amazing when you consider that it is actually the official Tetris game. The original is a classic. This is a big pile of flaming hairy balls.

For one thing, the game now only lasts a maximum of two minutes. That’s right. No new levels. No game over as you reach the top. Just a high score after two minutes. It is ready to finish just when you get into the groove. Meanwhile, the graphics are cluttered and confusing. This game is intensely unsatisfying.

The reviews agree. The application’s wall has become a stream of obscenities while the reviews section has turned into a mere succession of one-star ratings.

In this respect, the users of Scrabulous have got off very lightly indeed. The best Tetris app on Facebook has been mauled out of all recognition.

There are only two things in the world that give us absolute total happiness. One is seeing other people fail. The other is unwrapping a newly-bought CD.

–Armando Iannucci

In the wake of all the upheaval that the recorded music industry is facing, a lot of people have been predicting the death of the CD. After all, the very reason why music is cheap or free these days is because they don’t need to be put on a physical object which then has to be transported around the world. Surely digital downloads are the only conceivable future for music distribution.

I don’t like the idea of this. If I was five years younger it would probably make perfect sense to me. Last week’s edition of The Economist tells the story of a focus group that EMI held. It was aimed at understanding yoofs better. At the end of the meeting, the teenagers were invited to take as many free CDs from a pile on a table as they wanted. Not a single person took a CD.

It’s just the latest example of a recorded music industry that has always found it difficult to adapt to new technology. Historically, consumers have gone for the most convenient and cheapest format rather than the technically excellent one. So says Fredric Dannen if you scroll a long way down.

When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).

…You can always count on the record industry to cling to the past, and to fight innovation.

So does the arrival of MP3 mean the death of the CD? I personally hope not. I love CDs. I am of that generation, probably a small five–ten year window of people who wouldn’t consider vinyl but had no access to file sharing as they grew up. Napster came onto the scene in 2000, when I was 14 — well into my music-consuming life.

I have been collecting CDs since I was nine years old. I haven’t counted, but I must have around 600 CDs. I only bought my first vinyl records a few years ago. I bought them grudgingly, only because they were not available on CD. I reckon today I have 30 vinyl records.

I have only ever bought around a dozen MP3s — again, because they were not readily available on CD or vinyl. (I have downloaded a few dozen more because they weren’t commercially available at all — mainly live bootlegs and demos.) I would consider buying more. But although MP3 is the format du jour, there is a big block in my mind preventing me from buying something that I will never be able to see or touch.

I suppose this makes me a collector. (Yes, my collection is in alphabetical order — or it was until I ran out of space.) Collectors tend to be fans of vinyl though, which makes me an anomaly.

It would be nice to think that the CD will limp on and eventually survive another day in the MP3 era just as vinyl has done in the CD era. I have grown up with CDs and I love them. I’m not an audiophile, so the sound quality issue doesn’t worry me too much. And to be honest, I can’t be bothered with the faff of vinyl.

Whether it is CD or vinyl, there will always be people like me who treasure the physical presence of an album. It’s not just about a collection of notes. It about an event, a happening. It’s the artwork, the packaging. The sleevenotes, the lyrics. The smell of the booklet. It has an aura. When you hold a copy of a good album, you are transported to its space without even having to put it on. Could all of this really die because of the internet?

When Radiohead released In Rainbows, the pricing structure grabbed all of the headlines. But that wasn’t the interesting thing for me. The pay-what-you-want method is just a belated recognition of the fact that people could choose to pay nothing anyway.

The other aspect of the release of In Rainbows interested me much more. I didn’t pay anything for the MP3s. I downloaded them for free when they were released on 10 October. That’s because I got them as part of the £40 “discbox” set.

The discbox is a premium edition of In Rainbows. It comprises a CD of the album, an second CD with eight extra tracks and enhanced content, a 2× vinyl edition of the album, and generally all-round badass packaging.

£40 is the most I have ever paid for an album. I hesitated before I ordered it — but not much. Although I am sort of a collector, I have never been a completist. I am usually happy to have the CD version on its own. But I couldn’t resist the awesomeness of the discbox — despite the fact that I hadn’t even heard the album.

This was largely ignored in the media coverage of the album, but to me it was the most notable aspect of the unconventional release of In Rainbows. When I first posted about In Rainbows, I neglected to even mention the fact that the MP3s were free. I didn’t find it that interesting.

People like me, who love the physical formats, will be continue to be catered for. It is easy to make money out of us. Slap a sticker saying ‘limited edition’ on a record and suddenly demand for it will become price inelastic. Suckers like me will buy premium versions of albums at higher prices than we would otherwise consider. And this will become ever more important for the record companies as physical sales continue to get eaten into by the internet, where profit seeking is impossible.

In Rainbows wasn’t the start of this. Limited edition versions of albums have been around for a very long time. But in an age where it is becoming increasingly difficult to make money out of recorded music, it is becoming more and more prevalent.

When I went shopping for Sigur Rós’s Heima DVD I thought £17 was a bit steep. Then I saw the limited edition version for £25 and bought it.

The deluxe multi-format edition seems to be becoming more common as well. Björk’s latest single, ‘Declare Independence’, is available as a deluxe edition, yours for only £19.99.

Formatted in the same extravagant packaging as the Volta double LP, this contains all conceivable formats of the single: double vinyl, CD and DVD.

Something else that is becoming more and more common is for people to automatically get the MP3 version for free when they order a physical version. For instance, Nonesuch has started doing this. You can choose between standard 128kbps MP3s or maximum quality 320kpbs at no extra cost.

It makes sense to me. Being able to have your entire music collection on a portable device is becoming an expectation these days. Since vinyl is a bit more tricky to get onto your iPod, it would be good to get the MP3s of music that you have already bought automatically for free. Hopefully more record companies will adopt this approach.

A lot of people have wondered aloud if the fact that we can now get music for free from the internet is devaluing music. But it seems to me as though the internet is not only driving the price of music down — it’s also driving the price of CDs and records up.

Apologies for taking so long to get round to writing this post. That pesky life business getting in the way as usual.

In the previous posts in this series I have been waxing lyrical about copyright law and the mistakes the entertainment industry has made in adapting to a world with the internet. Over the past couple of years, people in the music industry have — belatedly — begun to tackle the issue properly.

Radiohead made big news last year with their latest album, In Rainbows. What hit the headlines was their novel pricing structure. You could choose the price you wanted to pay for it, between zero and £100.

This idea wasn’t all so novel though. Radiohead are by no means the first band to release their music for free, or to take the ‘honesty box’ approach to pricing. They certainly won’t be the last.

Prince did a similar thing this year as well when he gave away his latest album free with copies of the Mail on Sunday. This led to the odd sight of branches of HMV installing a dumpbin of the paper for one day only.

It’s worth thinking about exactly what Radiohead did by implementing a choose-your-own-price method. The record industry often likes to talk about how much it has “lost” as a result of piracy. But the numbers they use are misleading.

As Tim Worstall pointed out on his (now tabloid) blog many months ago, demand curves slope downwards. So the record industry don’t lose anything like as much as (number of illegal downloads) × (RRP of a CD) as a result of the download revolution.

The old model meant that people could basically either choose to buy a CD at its RRP or pass on it completely. So if you were only willing to pay £11.98 for a CD that was priced £11.99, you wouldn’t buy it. That is fine — that is how the market works.

But when filesharing became more common, people could choose to buy a CD at its RRP or download it for free. Those were the only options available. So if you were still willing to pay £11.98 for that CD, you would not pay £11.99 — you’d just download it for free. From £11.98 and lower, record companies were losing profits. They didn’t know how to deal with this, so used the ham-fisted techniques I described in the previous post instead of coming up with a new business model like they should have done.

The In Rainbows method tackled the problem head-on. Under Radiohead’s system, if you were willing to pay £11.98, you could choose to pay £11.98. What’s more, if people were willing to pay, say, £80 for the album, they could choose to pay that as well.

Chances are that most wouldn’t. You could legally download it for free, so lots of people will have done this without feeling any sense of guilt. Radiohead aren’t releasing any figures, so we can’t tell. But reading between the lines of the interviews Radiohead have given, they seem quite happy with how the experiment has worked out and most estimates suggest that Radiohead have made more money using the honesty box approach than they would have done with the old way — mostly because all of the middlemen have gone.

The middlemen are a big problem. They seem to be particularly so at EMI. Recently EMI was taken over by a private equity firm, Terra Firma. They appear to be particularly clueless. In the space of a few months they have managed to piss off three of the biggest acts on their roster — Radiohead, Paul McCartney and now Robbie Williams.

Here is some insight from Paul McCartney:

“I’d started saying to them: ‘Look, we could write a thing and have it released the next week.’ And they would say: ‘You can’t do that these days.’ So I would say: ‘Well, how much time do you need?’ And they’d say six months. I said: ‘Why do you need that long?’ And do you know what they said? ‘To figure out how to market it.’ I said: ‘Wait a minute, are you sure you need six months for that? Couldn’t some bright people do that in two days?’ Jesus Christ. I said: ‘Look boys, I’m sorry, I’m digging a new furrow.”

EMI seem to be making the mistake of treating artists like widgets. They have mistaken creativity for something that can be switched on and off like a tap.

And they seem to be amazingly inefficient. Fans know all-to-well about the six month gap between the announcement of a new album and its actual release date. It surely don’t have to be that way. Indeed, one of the most refreshing things about In Rainbows was that it was announced a mere ten days before its release.

So if the middlemen are no longer needed and are actively hurting the artists and the fans, does it mean labels are doomed?

Well, Radiohead took a risk, and it paid off. A lot of people say they were in a lucky position. And they were. Radiohead are the best band in the world and probably the most popular contemporary band. They were always going to do well regardless.

But what about the smaller bands? Surely the chances are that they won’t do as well as Radiohead by adopting such an honour system.

But honour systems work. Paul Feldman the bagel salesman knows that. LibraryThing has been using such a model for a while, and found that their takings increased once they adopted the system.

A lot of music fans are extremely loyal to their favourite bands. They are just the type of people who won’t take advantage of the fact that you can get music for free. They get such a warm glow from knowing that they are rewarding their idols.

Labels and bands may still be wary. If honour systems don’t convince, the common answer to the problem is to release music for free and use it as a way of generating publicity so that more money can be made from touring. Alan McGee, manager of The Charlatans, who are also now giving away their music for free, reckons that it could even triple the size of the crowds at gigs.

Merchandise is also becoming increasingly important. There is a theory that the reason concert promoters don’t charge the market value for gig tickets is because keeping the price low attracts a younger audience. These youngsters will go on to buy loads of t-shirts from the merchandise stall, so in the end everyone involved makes more money. Some bands are even stopping selling CDs at gigs for fear of cannibalising t-shirt sales.

So the future of music is gigs and t-shirts. This is great for my wallet. I rarely attend concerts, and I am more and more reluctant to buy t-shirts.

But I think the music industry could still potentially make lots of money from selling physical copies of the music. And my wallet won’t be so happy about that. That will be the subject of my next (and, at last, final) post in the series.

I’m a bit late with this one, but I feel as though I should mention it.

Bloggerheads has been taken down by a bullying Uzbek billionaire and his bullying lawyers. Craig Murray’s website was apparently the one that upset Alisher Usmanov so much. But Tim Ireland’s ISP decided to take down a whole cluster of websites that he is associated with (but which didn’t contain the allegations) — including The UK Today, Bob Piper and some bloke called Boris Johnson (never heard of him).

Alisher Usmanov is the latest dodgy foreign oligarch with a murky past to express an interest in buying a football club. Usmanov is currently lining himself up to take over Arsenal. A few weeks ago he had already begun threatening Arsenal bloggers.

Now he is throwing his weight around at other bloggers who are shining a spotlight on his past. It is disappointing that Tim Ireland’s web host would react in this way to cowardly bully-boy tactics like this.

I should point out that Tim Ireland’s Bloggerheads was one of the blogs that originally got me interested in blogging. I think he is one of the most important bloggers in the country, and it is quite awful to think that these blogs can just be taken down at the say-so of a bullying arsehole with a few billion to spare. It’s a sobering thought. The threat to free speech does not just come from the government.

It’s quite funny because, of course, Usmanov and his law firm Schillings’s actions have only made people more interested in the issue. It’s publicised the allegations far more than even Craig Murray could have done alone. *sarcastic applause*

The best place to get more information will be Chicken Yoghurt, where there is also a list of the bloggers who have now written about this.

Matt Wardman also has a good overview and also wonders about the implications of censoring Boris Johnson, who is currently campaigning to become Mayor of London. Obsolete is the place to go for information on Alisher Usmanov in general. More also from Mr Eugenides.

Tim Ireland has an unlikely ally in Iain Dale. Nosemonkey looks at the libel laws surrounding this. Blood & Treasure provides clues as to where you can find more information.

Update: The blogosphere’s reaction has been strong. A couple of other things to point out.

Mike Power is quite good on this. As is Tim Worstall. But best of all, the original posts that caused Usmanov to throw a hissy-fit are now all over the internet. Check out, for instance, Lard Arsed (an apt title, don’t you think?).

Meanwhile, The Nether World points out:

The list of bloggers expressing their disgust at the antics of Alisher Usmanov and his pack of Rotweillers is growing at a fantastic rate with many of the posts including Craig Murray’s original comments about this (alleged) Uzbek gangster. Now, bearing this in mind, how successful does this intimidation campaign against bloggers look? Has it protected the reputation of Alisher Usmanov or confirmed it? Here’s another question: Do Schillings look like the “Leading Law Firm” they say they are, or do they more closely resemble a bunch of second rate ambulance chasers? If I was Alisher Usmanov I’d sack them.

Also join the Facebook group, Craig Murray’s blog should return.

And since this seems to be the thing that bloggers are doing (and why not?), here is the full list of bloggers that have expressed their disgust at the situation.

Curious Hamster, Pickled Politics, Harry’s Place, Tim Worstall, Dizzy, Iain Dale, Ten Percent, Blairwatch, Davide Simonetti, Earthquake Cove, Turbulent Cleric (who suggests dropping a line to the FA about Mr Usmanov), Mike Power, Jailhouse Lawyer, Suesam, Devil’s Kitchen, The Cartoonist, Falco, Casualty Monitor, Forever Expat, Arseblog, Drink-soaked Trots (and another), Pitch Invasion, Wonko’s World, Roll A Monkey, Caroline Hunt, Westminster Wisdom, Chris K, Anorak, Mediawatchwatch, Norfolk Blogger, Chris Paul, Indymedia (with a list of Craig Murray’s articles that are currently unavailable), Obsolete, Tom Watson, Cynical Chatter, Reactionary Snob, Mr Eugenides, Matthew Sinclair, The Select Society, Liberal England, Davblog, Peter Gasston Pitch Perfect, Adelaide Green Porridge Cafe, Lunartalks, Tygerland, The Crossed Pond, Our Kingdom, Big Daddy Merk, Daily Mail Watch, Graeme’s, Random Thoughts, Nosemonkey, Matt Wardman, Politics in the Zeros, Love and Garbage, The Huntsman, Conservative Party Reptile, Ellee Seymour, Sabretache, Not A Sheep, Bartholomew’s Notes on Religion, The People’s Republic Of Newport, Life, the Universe & Everything, Arsenal Transfer Rumour Mill, The Green Ribbon, Blood & Treasure, The Last Ditch, Areopagitica, Football in Finland, An Englishman’s Castle, Freeborn John, Eursoc, The Back Four, Rebellion Suck!, Ministry of Truth, ModernityBlog, Beau Bo D’Or, Scots and Independent, The Splund, Bill Cameron, Podnosh, Dodgeblogium, Moving Target, Serious Golmal, Goonerholic, The Spine, Zero Point Nine, Lenin’s Tomb, The Durruti Column, The Bristol Blogger, ArseNews, David Lindsay, Quaequam Blog!, On A Quiet Day…, Kathz’s Blog, England Expects, Theo Spark, Duncan Borrowman, Senn’s Blog, Katykins, Jewcy, Kevin Maguire, Stumbling and Mumbling, Famous for 15 megapixels, Ordovicius, Tom Morris, AOL Fanhouse, Doctor Vee, The Curmudgeonly, The Poor Mouth, 1820, Hangbitch, Crooked Timber, ArseNole, Identity Unknown, Liberty Alone, Amused Cynicism, Clairwil, The Lone Voice, Tampon Teabag, Unoriginalname38, Special/Blown It, The Remittance Man, 18 Doughty Street (121).

Nouveau Riche check out these billionaires in Fortune

The other day I took my first trip to Fopp since it re-opened. After Fopp’s flopp, HMV bought the name and six of the stores (a far cry from the 120-or-so stores there used to be). HMV probably bought it to stop Gordon Montgomery from making an easy comeback, but they have promised to run the remaining Fopp stores as Fopp themselves ran them.

Immediately people were wondering if HMV had bought the right stores. I guess they are in a much better position to know which stores are profitable and which are not. But they bought the Rose Street store in Edinburgh. It’s a good shop, but there are already two HMVs within a stone’s throw. The one on Cockburn Street was smaller but only has that dusty Avalanche for competition. And it was closer to the university, which, for purely self-interested reasons, made it automatically better for me.

Also, a lot of the point about Fopp was the fact that it wasn’t HMV. Nor was it some indie-wank shop. It was something in between, which I thought was just perfect.

During my trip there, I was pleased to see that almost nothing has changed in the Rose Street store. There are only very slight cosmetic differences that only the most anal people (like me) will notice. Price stickers are now HMV-style, as are the receipts. But apart from that, most things have pleasantly remained the same.

The prices are still in nice round numbers. There is none of that £X.99 nonsense. It feels good just to hand over a twenty and be done with the transaction with no fuss.

I did try to do my usual thing of looking for a cheap Can album, but although they had loads of Can albums, they were all £15! The same was true for Brian Eno. I guess it’s not inconceivable that this would have happened in the old Fopp, but it did ring a minor alarm bell. Hopefully it is just my imagination. Thankfully, in general, the prices are still pretty good. I bought four albums for £20 (including one Stereolab CD which was just £3! Bargain!), which is pretty good going.

There was something quite striking about my visit to Fopp though. I was browsing there in full knowledge that the shop was almost wiped off the face of the earth, so I was thinking about the business side of things as I was shopping. The thing I noticed above everything else was that almost every single other customer there was a middle-aged man. I was probably the youngest person in the shop. It’s true — kids just don’t buy music these days.

On my way down to Rose Street, I passed the folk specialist Coda store on Bank Street. I wondered to myself, “I wonder how long before that goes?” In fact, I have often wondered that to myself over the years (before today’s music retail woes), but that probably shows my narrow-mindedness about folk music. Today, I suppose most of its customers will be the more loyal middle-aged men. That was probably a curse just a few years ago. It’s surely a blessing now!

I am a big fan of the CD format, and I love to have a physical copy of any music that I have. Then it feels like I really own it, and is a signal that I really value the music rather than just downloading any old crappy MP3 and throwing it in the recycle bin if I don’t like it.

It’s a bit like a story I read about in a very exciting book called A Logic of Expressive Choice by Alexander A. Schuessler. It’s a bit dry, but it has some neat examples to demonstrate its points.

(I don’t have the book to hand, so my memory of this example is quite sketchy, but you will get the general idea.) One of them involved a man who, every year, would camp outside to buy tickets to something or other. He waited an extraordinarily long time to ensure that he was at the front of the queue so that he could get the best tickets.

One year the venue decided to just give him the best tickets anyway, as a kind of token of appreciation (or probably as a publicity stunt). The man was outraged and refused to accept the tickets. For him, his value came from the waiting, not from acquiring the tickets themselves. He took pride in waiting for ages. It was his way of saying to the world, “Look how much I love this thing! I will wait for ages to make sure I see it!” When the theatre offered him the tickets, he was robbed of his chance to express himself in this way.

I think I am the same with music. Sure, I could illegally download every song in existence for free. I could even download them legally and pay for them. But I wouldn’t have anything to show for it. I like to look at my music collection and think to myself, “blimey, I’ve got quite a lot of CDs now”. Even though this means that I am losing space in my room.

I think most people growing up these days won’t value music like this. They have access to far more music than they can possibly consume, and they just do it. They just download disposable albums without thinking about it and don’t give the music their full attention. (I can see myself as an old man with my pipe and slippers, fondly remembering the days of CDs, when youths respected music.)

But a lot of people are saying that CDs are doomed. Vinyl will still have its niche, but CDs won’t be around any longer. Imagine that! I could end up having the opposite dilemma to the previous generation — I will have to convert my entire CD collection into vinyl!

As much as I dislike this situation, it has to be said that there is not much going for music retailers these days. They are dropping like flies. And when they are not dropping like flies, they are hurriedly rearranging their deckchairs in preparation for the sinking.

HMV has launched its “next generation” stores. “Download hubs”, “gaming stations” and smoothie bars. Just don’t mention music.

Richard Branson has just sold his Virgin music stores. This is incredible because it is the first time in three decades that Richard Branson hasn’t had his fingers in the music retail pie. It was music retail where he started, so for Virgin to be pulling out of it altogether, you know that things are just not going well at all in the music retail world.