Profits Without Intellectual Monopolies

Great interview with Mr Open Innovation, Eric von Hippel, who has these wise words of advice:

It is true that the most rapidly developing designs are those where many can participate and where the intellectual property is open. Think about open source software as an example of this. What firms have to remember is that they have many ways to profit from good new products, independent of IP. They’ve got brands; they’ve got distribution; they’ve got lead time in the market. They have a lot of valuable proprietary assets that are not dependent on IP.

If you’re going to give out your design capability to others, users specifically, then what you have to do is build your business model on the non-design components of your mix of competitive advantages. For instance, recall the case of custom semiconductor firms I mentioned earlier. Those companies gave away their job of designing the circuit to the user, but they still had the job of manufacturing those user-designed semiconductors, they still had the brand, they still had the distribution. And that’s how they make their money.

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Serials Crisis, Thy Name is Reed Elsevier

I've noted this before, but here's more info on how evil my former employer is in the sphere of science publishing. Profit margins of around 30%...bring on the OA.

A Huge Leap *Back* for Transparency

One of the fundamental rules in an open, democratic society is that government must be transparent to be truly accountable: if you can't see who is doing what, there's no hope of fingering the wrong-doers. Against that background, this is a huge slap in the face of the European Union's citizens:

Marco Cappato MEP asked the Council to provide him the contract concluded by the Council and Microsoft, and the Study on the Open Source realized by the interinstitutional committee on informatics in 2005.

...


The Council negative answer was motivated saying that "because these contracts establish specific terms and conditions for the European institutions, the divulgation of those information could jeopardize the protection of commercial interest of Microsoft. Acknowledging that the divulgations of the records are not backed by a clear public interest, the Secretariat general concludes that the protection of Microsoft's commercial interests, being one of the commercial partners of the European institutions, prevails on the divulgation for the public interest".

Got that? "Protection of Microsoft's commercial interests ... prevails on the divulgation for the public interest." Microsoft's profits are more important to the European Council than the public interest of 300 million EU citizens....

Microsoft on the Rocks?

Hardly, with a quarterly profit of $4.39 billion, but this is interesting:

Sales in the division selling Office and other business applications fell, hit by lower demand.

As was this:

One factor denting profits was a $1.42bn fine imposed by the European Commission for breaching competition rules.

Put like that, the fine was a significant chunk of Microsoft's profits. Maybe it actually felt it this time.

DRM's Worst Nightmare: Profit

This is what will finish off DRM:

Killing DRM is saving digital music, reckons British retailer 7Digital. The company says DRM-free music sales now outnumber sales of DRM-enumbered music by 4:1 , and credits EMI with the shift.

Removing the locks and keys also helps shift albums, with 70 per cent of MP3 sales by value being full albums.

Music companies that fight the move to DRM-less music are fighting against profits - and their shareholders might not like that....