Lynne Kiesling
Through the miracle that is TwitterFeed, you can now follow Knowledge Problem posts via the new KP Twitter feed. Yay!
Daily Archives: April 9, 2009
Hey, someone in Bakersfield just bought purple Converse hi-tops!
Lynne Kiesling
Alex Tabarrok and Zappos FTW!!!!! Check out this ridiculously fun real-time map of Zappos shoe sales. I am sure that this has some massively important implications for social networking, fashion trends, and so on, but it’s also just.darn.cool.
A Thursday afternoon links roundup
Lynne Kiesling
I should probably follow David Zetland’s lead and start calling these speed blogging, because it’s really just me clearing out my links to open and interesting reads!
This is an old Environmental Leader article from November, but it describes Sun’s Open Eco application:
Sun Microsystems has updated OpenEco.org, an online community that provides tools to help companies calculate, compare and reduce their greenhouse gas emissions.
What’s cool is that it’s a community, complete with discussion forums, developers, and so on. It enables organizations to benchmark their carbon emissions against industry peers. Regardless of one’s stance on carbon policy, software tools that make information gathering cheaper and make information more transparent are good things.
Similarly, this Environmental Leader article discusses another information tool, this time from the Rocky Mountain Institute, that estimates “electricity productivity” by state. By electricity productivity they mean state domestic product (SDP) per kilowatt-hour of electricity consumed. New York gets the most bang for its buck from its electricity consumption, not very surprising, given its population density. 48, 49, 50: Alabama, Kentucky, and Mississippi, respectively. I leave it to you to develop a hypothesis for that!
From the Oil Drum, here’s a lengthy guest post from Joost van den Bulk with an estimated economic benefit-cost analysis of electric cars relative to internal combustion cars in the Netherlands. I have not digested it fully, but it’s based on his Master’s thesis, and quite informative.
Cap-and-trade and politics
Michael Giberson
From Environmental Capital, reports that selling all greenhouse gas emission permits under a cap-and-trade scheme may not be politically attractive:
Europe already saw what happened when it gave away emissions permits—utilities gobbled up more than 100 billion euros in windfall profits.
The pain for the consumer—i.e., the voter–will be the same whether the permits are sold or given away.
Writer Keith Johnson notes that “for the overall emissions-targets to work, prices would have to rise more in other parts of the economy to compensate” (if, that is, giving permits to utilities serves to limit power price increases).
Billions in profits for companies well represented in D.C. versus non-transparent price increases in unspecified other industries? I guess we can work out the political calculus easy enough.
And for readers who think this is a reason to prefer a carbon tax…, well, I’m not convinced that lobbyists or their congressional aides would keep their hands off the tax code, either.
Cybersecurity and the smart grid
Michael Giberson
Yesterday on the front page of the Wall Street Journal was a report of cyber-attacks on electric utility systems. Computerworld gives this overview of the story. Cheryl Morgan provides a run down of some of the issues, including whether development of a smart grid will increase or decrease the vulnerability of transmission infrastructure to internet-based disruptions.
The WSJ‘s Environmental Capital blog also raises the smart grid angle, asking whether a smart grid will help repel attackers or make access easier.
At NewsWatch: Energy, Tom Fowler notes reactions to the WSJ story from NERC and ERCOT, and follows up with comments from former FERC chairman Pat Wood.
I’m not expert enough on utility computer systems generally, or computer security specifically, to offer many useful remarks. My intuition is that a well-designed transactive smart grid will help minimize the costs of any intrusion, since it should decentralize decisionmaking and control relative to the vertically-oriented, centralized utility systems we have today.
iTunes and music price discrimination
Lynne Kiesling
You may have noticed on Tuesday that Apple’s iTunes store implemented price discrimination for the purchase of singles.
On Tuesday, Apple’s traditional 99-cent song price was shelved. From now on, record labels can choose to charge $1.29 for new releases. Some older catalog titles will sell for 69 cents, and everything else will be available for the tried-and-true 99 cents.
The pricing structure decision is the record label’s, not Apple’s, and the label is the one making the calculation of whether or not the additional revenue from selling the $1.29 songs at that higher price more than offsets the reduction in revenue from the reduction in quantity demanded for those songs plus the reduction in revenue from selling the older songs at $0.69. Put another way, they have to estimate whether the price elasticity of demand for the new songs is sufficiently low to make the higher price profitable, as well as whether the price elasticity of demand for the older songs is sufficiently high to make the lower price profitable.
The CNet article linked above contains a good discussion of the difficulty of determining a price structure and estimating willingness to pay. But there’s another issue, discussed in both the CNet article and this Wired blog post on the change:
Although new prices will be a step in the right direction for many iTunes customers, they are a superficial fix for iTunes’ real threat: that most consumers and even some artists think 69 cents per track is far too dear.
According to Nielsen SoundScan, paid downloads growth slowed last year, increasing 27 percent in 2008, where it increased 45 percent in 2007. Meanwhile, free streaming services accessed through web browsers and mobile apps are growing in popularity. Apple and the labels raising the prices 30 percent on popular songs and dropping them 30 percent on back catalog tracks won’t help them compete with shifting consumer behavior.
Note also that in the paid music market, the structure has become a duopoly; Amazon has competed effectively with iTunes, matching their $0.99 pricing and offering a streamlined download application that connects directly with your iTunes application. I’ve used both recently, although I have to admit that I’ve been using Amazon more just to make sure and support competition … Wal-Mart also has an online music store, and both Amazon and Wal-Mart have followed iTunes in changing their pricing, but not exactly:
The Electronista blog noted that a new $1.29 price, the same top-level cost at iTunes, was applied to ten of Amazon.com’s top 100 songs, but a reduced $0.79 price was also applied more liberally to older tracks than over at iTunes. Wal-Mart, for its part, caps the top price at $1.24, and sells its bargain bin tracks at $0.64.
