On Line Culture

On my way home today, I walked by hundreds of people waiting in line at Apple and AT&T stores. The iPhone line snaked all the way down Greene to Houston, along Houston and then halfway up Mercer. Prince St was filled with photographers taking photos of the purchasers (including Whoopi Goldberg) and people gawking at the line.
The first people to plunk down upwards of $500 for a iPhone had been waiting in line for days.
Why? Is it just the Jobs Reality Distortion Field at work?

The obvious answer comes from basic microeconomics. Demand exceeding supply. Until 6 PM today, the supply of iPhones in the world was 0 while lots and lots of people (including me) wanted one. At 6 PM, the supply started to exist and the market is quickly adapting and supplying the customers.
That assumes that there is enough supply to meet the demand. If you were not in line early, you may not be able to buy an iPhone at all this weekend. It might take weeks or months to resupply after the launch.
But even if there is enough stock at the Apple stores to meet demand, I’m sure that people would have lined up early. An Apple release is an event. A while back, I walked by a line snaking around the block at the Apple store in NYC for the release of a new version of the Mac OS– one that could have been pre-ordered online.
For some consumer electronics, demand still outstrips supply. Just a couple of weeks ago, David Berkowitz waited in line for a Wii at the Nintendo store. For some consumer electronics, demand still outstrips supply. Just a couple of weeks ago, David Berkowitz waited in line for a Wii at the Nintendo store.
In Soviet Russia, people queued up for bread because the demand for bread regularly exceeded the supply. In Manhattan, people wait in line for up to an hour for a burger at Shake Shack.
20070530herebedumbasses.jpg
(credit: A Hamburger Today)
In 2004, Star Wars fans waited on line– many in costume– at the Ziegfeld theater for Star Wars Episode II. Yes, they waited in line after seeing the awful Episode I. Admittedly, it was a fundraiser for charity, but just as much a celebration of the fan community.

I suspect that waiting in line is not merely a way of allocating goods, but just as much for the shared experience and feeling part of a community.

iPhone, youPhone, we all phone for iPhone

Have you heard that Apple is releasing a phone today?
When the first iPod was released, six years ago, the first Slashdot reaction read, “No wireless. Less space than a nomad. Lame.” The early reviews of the iPhone are in and they’re very positive for Apple’s contribution. The device itself, despite some flaws, is brilliant. But the critics are not quite as generous towards AT&T’s contribution– the voice and data cell network. Here’s a handy scorecard from Valleywag
In the WSJ, Walt Mossberg writes, “The iPhone has a major drawback: the cellphone network it uses. It only works with AT&T… it uses a pokey network called EDGE, which is far slower than the fastest networks from Verizon or Sprint that power many other smart phones.”
The NY Times’s David Pogue: “Then there’s the Internet problem. When you’re in a Wi-Fi hot spot, going online is fast and satisfying. But otherwise, you have to use AT&T’s ancient EDGE cellular network, which is excruciatingly slow. The New York Times’s home page takes 55 seconds to appear; Amazon.com, 100 seconds; Yahoo. two minutes. You almost ache for a dial-up modem.”
But I’m not sure what the big problem is. After all, under the FCC’s definition, AT&T’s 300 kbps EDGE network qualifies as broadband. For the last 12 years, the Commission has continued to define a broadband connection as one capable of 200 kbps or more in one direction.
A new report released this week from the Communications Workers of America finds that the US has fallen out of the first tier of connectivity. “The median download speed for the 50 states and the District of Columbia was 1.9 megabits per second (mbps). In Japan, the median download speed is 61 mbps, or 30 times faster than the U.S. The U.S. also trails South Korea at 45 mbps, Finland at 21 mbps, Sweden at 18 mbps, and Canada at 7.6 mbps.”
If upload speeds (which is what individuals use when speaking, sending and publishing to the rest of the internet) were averaged in, the US would fall even further behind, as most cable and DSL broadband connections are asymmetrical. The median upload speed for internet users in the US is 371 kbps– only 19% as fast as the median download speed. Broadband connections in the US are deployed for consumption, not speech. If the FCC definition were modified to require the paltry 200 kbps connection speed in both directions, many US broadband connections would no longer be classified to be broadband.

Lobster Rolls and the Lanham Act

Rebecca Charles, the chef of Pearl Oyster Bar is suing Ed McFarlane and Ed’s Lobster Bar for creating a restaurant that nearly clones Pearl.
Chef Sues Over Intellectual Property (the Menu)

“Yesterday she filed suit in Federal District Court in Manhattan against the latest and, she said, the most brazen of her imitators: Ed McFarland, chef and co-owner of Ed’s Lobster Bar in SoHo and her sous-chef at Pearl for six years.
“The suit, which seeks unspecified financial damages from Mr. McFarland and the restaurant itself, charges that Ed’s Lobster Bar copies “each and every element” of Pearl Oyster Bar, including the white marble bar, the gray paint on the wainscoting, the chairs and bar stools with their wheat-straw backs, the packets of oyster crackers placed at each table setting and the dressing on the Caesar salad.”

Serious Eats: Rebecca Charles is Mad as Hell and She’s Not Going to Take It Anymore: “‘I’ve looked the other way for years,’ Rebecca said. ‘I understand that chefs take dishes from the restaurants they worked in when they open their own restaurants. But Ed’s Lobster Bar is much more than a knock-off. It’s an exact duplicate of Pearl. Thirty-one of the 34 dishes on his menu are simply lifted from Pearl. The stools, the look and feel of the place, everything is exactly the same. It’s offensive. Plus he lied to me. He told me and the staff when he quit that he was leaving to open an Italian seafood restaurant. I said great. I even offered to help him. Then, six weeks later, he opens Ed’s.’”
McFarlane was sous-chef at Pearl Oyster Bar for six years before leaving Pearl to start Ed’s and much of the press coverage of the Ed’s opening mentioned the Pearl heritage.
Pearl Oyster Bar is derivative of the New England clam shack, albeit with Manhattan prices. Ed’s is not the first restaurant to follow a similar formula. Previously, Charles’ partner left acrimoniously to start Mary’s Fish Camp– a direct competitor– across the street.
But, Mary’s menu differs from Pearl’s offering more dishes and slightly different preparations. To Charles, Ed’s appears to be a clone of Pearl rather than a derivative working from the same source material. Charles asserts that some recipes at Ed’s– the Caesar salad, in particular– are based on trade secrets acquired while McFarlane worked at Pearl.
In Two Pesos, Inc. v. Taco Cabana, Inc., the Supreme Court ruled that trade dress in a restaurant is projectable if the trade dress is inherently distinctive. Note that there are a number of restaurants in NYC inspired by New England clam shacks and they seem to adopt somewhat different look and feel than Pearl. Is there a likelihood of confusion here? If the details are in fact so similar, confusion could be likely.
Serious Eats: Is Imitation Always the Sincerest Form of Flattery?

Internet Radio Goes Silent

Today, a large coalition of webcasters, including small hobby operations to large sites– including Yahoo, MTV, Pandora, Rhapsody, Live365, WOXY and KCRW — are going silent for the day to bring attention to new royalty rates set by the Copyright Royalty Board that are set to go into effect on July 15. For many of the smaller commercial webcasters to continue to webcast the same content would cost more in license fees than their total revenues.
RAIN: Massive listener support cripples servers, switchboards: “An overwhelming response by listeners to today’s ongoing ‘Day of Silence’ event has overwhelmed the web and database servers being used by SaveNetRadio.org and is tying up switchboards in Congressional offices all over Capitol Hill as a deluge of online radio listeners have rushed to contact their representatives to ask them to co-sponsor the ‘Internet Radio Equality Act.’”
Mike Musgrove, Washington Post: Web Radio Stations Hope Silence Speaks Volumes About Fee Hike: “Many Web-based music services and some conventional radio stations that offer Internet audio streams are scheduled to shut off their online music and programming until midnight tonight. Organizers are calling it Day of Silence and are hoping it will focus attention on a royalty-fee increase that many Internet-based broadcasters say could drive them out of business.”
Felix Contreras, NPR Morning Edition Internet Radio Silently Protests Royalties: “Many fans of Internet radio will be tuning in to nothing Tuesday, as many Webcasters participate in ‘A National Day of Silence.’”
In Findlaw, RealNetworks’ Senior Counsel Cecily Mak A Look at Radio Silence: When Copyright Law Reform Goes Terribly Wrong: “The webcasters have an excellent point: Instead of increasing rates enough to properly compensate rights holders and encourage creation, the new rates are so unreasonably high that they are threatening the survival of an entire industry. Unless the new regulations are successfully repealed, the new rates will result in true perpetual ‘radio silence’ for thousands of online radio stations – a loss for rights holders, distributors and consumers alike.”
Deven Desai at Madisonian.net, Sound of Silence: “if nothing changes, on July 15, 2007, Internet radio stations will have to pay increased royalty rates such that many of the smaller and even some of the larger Internet radio stations will have to pay more than AM and FM stations. The increase appears to be large enough that many of the Internet radio stations might have to shut down. The whole system seems a mess.”
On Thursday, the House Small Business Committee will hold a hearing on Assessing the Impact of the Copyright Royalty Board Decision to Increase Royalty Rates on Recording Artists and Webcasters with testimony from:

Bryan Miller
La La Media, Inc.
Palo Alto, CA
Tom Silverman
Chairman
Tommy Boy Records
New York, NY
Joey Allcorn
Artist
Columbus, GA
Cathy Fink
Artist
Washington, DC
Kieran Kelly
Co-Owner
Stunning Models on Display Records
Astoria, NY
Thomas F. Lee
President
American Federation of Musicians
New York, NY
Richard Eisworth
President, General Manager & CEO
Cincinnati Public Radio
Cincinnati, OH

Unrelated miscellany

Before clickwrap, before shrinkwrap and before the Copyright Act of 1909, a record jacket with a license agreement: No license is granted to use this record when sold at a less price..
Julian Dibbell explores The Life of the Chinese Gold Farmer in cyberspace: “It was an hour before midnight, three hours into the night shift with nine more to go. At his workstation in a small, fluorescent-lighted office space in Nanjing, China, Li Qiwen sat shirtless and chain-smoking, gazing purposefully at the online computer game in front of him. The screen showed a lightly wooded mountain terrain, studded with castle ruins and grazing deer, in which warrior monks milled about. Li, or rather his staff-wielding wizard character, had been slaying the enemy monks since 8 p.m., mouse-clicking on one corpse after another, each time gathering a few dozen virtual coins — and maybe a magic weapon or two — into an increasingly laden backpack.”