Forum Archive Index - August 2000

[Phil Eriksen <phil@acepay.co.nz>]

DAlderton@gtlaw.com.au wrote:
> 
> What do people think about Estar Online Trading Limited?  Does anyone use
> the system?  Is anyone going to take part in the IPO on the ASX?

I can't see how Estar can be successful.  Music is one area that is
certain to change due to the internet, and I cannot see how Estar will
fit into the picture.  Assuming that it remains possible to sell music
over the longer term (i'm not convinced, see below) over the internet, I
can't see why a company such as Estar is needed.  The creators,
producers and distributors of music needed retailers to sell it when the
only way to purchase it was through a store. Will they need them in
future?

The real question for me however is : Will it be possible to sell music
at all in the future?  The assumption many people seem to be making is
that the record companies will eventually win the battle against
internet piracy of their music, but surely that is far from certain. 
Have you used Napster, Gnutella etc to acquire (nice word for steal)
music?

Lets say you run a business, and want some accounting software.  It is
certainly possible to pirate this software.  However, if you do this,
you'll have to work to get around whatever protection has been built in,
you won't get a manual, and you won't be able to get support.  You won't
be notified of upgrades and you won't get bug fixes.  Alternatively, if
you pay for the software, you will get all of the above.  Now, the thief
will pirate it anyway - nothing can convince him it is worth buying the
software.  Most people (ie the mainstream) will see the advantage of
purchase over theft, and buy it.

Same principle applies with getting a Christmas Tree.  You could buy one
from many places for a small amount, take it home, and Merry Christmas. 
Alternatively, you can sneak onto someones property at 3am armed with a
chainsaw, chop one down, and get it for nothing.  Again, the thief will
always go into the forest, but most people will conclude there is
advantage to paying for it - certainly I wouldn't bother nicking one.

With music however, I believe it is a different story.  It is actually
*easier* to steal music than it is to pay for it.  Today, I have a
choice.  I can download Napster and install it.  I then simply type in
the song I am looking for, a list of people with that song appear, and
viola, I have it.  Alternatively, I can go to Estar, or a record company
site, or whoever.  I can browse through pages of html, put up with a
slow server, wade through banner ads.  I can type in my credit card,
have a download die half way through.  I can get added to a mailing
list, and get hassled every fortnight by the company.  I can have them
storing records of my preferences so that every time I log on they
hassle me with what they think I might like.  Yippee.

In other words, it is simply easier to steal music than to pay for it. 
Even if Estar and Co were completely free, it is far easier to use
Napster/Gnutella that it is to order a CD or download it from a
website.  The guy selling Christmas trees had a saving grace - he could
deliver your tree, save you a trip to the forest etc.  The guy writing
software had an advantage - he could provide excellent backup support,
updates, a good manual etc.  However, what saving grace can the music
seller provide to stop me using Napster?  (answers welcome)

To me, Napster/Gnutella have broken the convention rules.  With what you
have to go through to purchase music compared to getting it for free
from Napster, the guy who wouldn't steal the software and wouldn't chop
down the Christmas tree *will* download music for free.  Not because he
doesn't believe in paying for things (he bought the tree and the
software) but because stealing is *SO* much easier than buying.

Before buying shares in Estar, or any music retailer or record company,
I would need to know how they will make stealing music like going into
the forest at 3am, and buying it like the guy selling trees.  Currently,
it is the wrong way round.

Cheers,
Phil

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