On Macro, the Financial Crisis, Global Warming, and Plato

Jan Libich from Latrobe University is running a televised series on economics. He gets people into his TV studio to talk about some aspect of the economy and then puts it out there. Andrew Leigh, Andrew Hughes Hallett, and Eric Leeper were previous victims. Adrian Pagan and Warwick McKibbin are lined up in future instalments.

It was my turn last week to be grilled on all questions involving macro-economics. It evolved into a lively debate about long-run growth, developments in China, the case for inflation, Plato’s Republic, and the options for averting global warming. A good introductory discussion on all those topics, but in future installments I clearly need to get rid of my smug smile.

If you want to know more about the issues raised, see here.

Apple’s Final Cut Pro is part of a broader strategic change

Apple’s new final cut pro is causing unhappiness. But it is only part of two broader changes: a shift in Apple’s strategy towards consumers and a broader change in the demand for videos.

Last week Apple launched the new version of their movie-editing software, Final Cut Pro X (FCPX). This led to a firestorm of criticism by professional video editors (see here, here, and here). Even Conan O’Brien decided decided to chip in :-). The main complain is that it lacks sophisticated features used by broadcasters and video professionals and that are available in earlier versions of the software. FCPX doesn’t even open projects built using earlier versions! On the positive side it is slick and easy to use.

Apple is consolidating its strategy

I suspect that two things are happening. The first is that Apple is consolidating their strategy around mobile computing, the iCloud and end-customers. The price tag for the new FCPX is an indication (US$299.99 versus around $1000 for the earlier version). The move by Apple away from “professional” markets has been happening for some time now and across multiple products. It happened with Aperture, which is now basically an upgrade for those using iPhoto, and a nice one at that, but distinct from Lightroom+Photoshop. Earlier this year Apple decided to discontinue its professional xserve rack mounted server. This year’s Macbook Pro notebook was the first to receive several new high-end features (Thunderbolt and 6Gb/s SATA) that have yet to appear in Apple’s high-end Mac Pro desktop aimed at professionals. This is not a surprise as Apple is now selling 2.4 times more notebooks than desktops.

Focusing on the consumer market makes good business sense for Apple because (a) it fits with their capabilities, which are about making complicated things simple to use, whereas a lot of professional software is by nature complicated and intricate, (b) they can cross-sell many more copies of the software to people upgrading from iMovie or iPhoto than they can to a niche audience of professionals, and (c) it fits well with their major strategic thrust on the iphone/ipad/icloud platform, which is consumer focused rather than enterprise focused.

Video consumption is changing

While video professionals are blaming Apple for not listening to their needs, there is a bigger trend that is happening here. Apple is responding to anticipated changes in the marketplace. Just as with the newspaper and book publishing industries, there are big changes happening with video production and broadcasting. An increasing number of videos are being made by “advanced amateurs”. This is driven by the proliferation of inexpensive video cameras, as well as new platforms for online video distribution. When I think about my own personal consumption of video, I am amazed how little television I watch anymore. I do watch the occasional movie, but an increasing amount of my video consumption is on Youtube, Vimeo and other sites sent to me via Facebook, twitter and email. Are these videos as well-made as those by professional broadcasters? No. But are they good enough for the general public? Often, yes. For these people, the new Final Cut Pro X is a terrific tool for the most part.

Beyond traditional video, there are other interesting developments, such as animoto that takes the pain out of making simple music videos. There is software like Toontastic that lets you make animated skits and apparently even the Gans family is now into it. Each minute of our free time we spend watching these things is probably a minute less spent watching professionally-produced video content.

I’m not saying this to defend Apple. As David Pogue pointed out, in the case of FCPX, Apple Blew It. Some of my friends are in this business and I can’t help feeling concerned for them. As one of them wrote to me, “the industry has gone nuts over this ‘upgrade’. it’s really bad and sad”. I think Apple should have launched FCPX as a different product, instead of discontinuing Final Cut Pro. But the knee-jerk reaction among video professionals right now is leading them to be angry about some some video editing tool. Fair enough. But they need to assess the bigger question: where will their industry be in 5 years, and where do they want to be in their careers?

Videos now available for “Who Owns The News?” seminar

Click Image for Video Album

Last week MBS hosted a public seminar on “Who Owns the News?” exploring the impact of the internet on the news industry. The event was organized by IPRIA, CMCL and MBS CITE. It serves to clarify the key issues and lays the groundwork for a discussion of these issues. I had fun and hope that the 110+ people who attended it did too.

Sam Ricketson, Professor at Melbourne Law School, chaired the event and did a great job orchestrating the Q&A session. Mark Davison from Monash spoke about changes in copyright law and expressed concerns over the “Hot News” doctrine, an approach currently being proposed by news organizations in the US to prevent others from copying their content. Stephen King outlined the economic issues and has posted his very thoughtful comments at https://economics.com.au/?p=5909.

As the discussant, I described what I had learnt from Mark and Stephen and also tried to consider various options faced by a CEO in this industry. My pdf slides are at http://works.bepress.com/kwanghui/18. While my comments might have been perceived as pessimistic by Stephen and others, I am actually quite optimistic about the future of the industry, but mainly for individuals and firms trying out innovative ways of gathering and delivering the news. I am however pessimistic about existing firms: if history has taught us anything, it is that many of them will struggle to adapt with these drastic changes.

The video recordings for “Who Owns the News?” are now available. I have posted them at http://vimeo.com/album/253549. Portions were removed to protect the identity of audience members. We thank the speakers for permission to share their insights online. Enjoy the show ?

Do you see Obama as Black or White?

[Tirta Susilo is a PhD student in psychology, and a co-author of mine on a recent study, published in (appropriately enough) the Journal of Economic Psychology. Tirta has written a guest-post on some fascinating new research about skin colour and politics.]

Earlier this year Andrew Leigh and I observed that skin colour can predict vote share: in a Northern Territory election, darker-skinned candidates won more votes in predominantly darker-skinned electorates, while lighter-skinned candidates fared better in predominantly lighter-skinned electorates. Our finding argues that, in the absence of complete political information, voters might use skin colour to help them cast the ballot.

But how do voters actually perceive skin colour? Is voters’ perception of skin colour veridical? Or do political leaning biased voters’ perception of skin colour in a systematic way? This question was recently examined in a study by psychologists Eugene Caruso, Nicole Mead, and Emily Balcetis.

Continue reading “Do you see Obama as Black or White?”

Series Finales

(Caution: reaction but not plot spoilers for BSG ahead): Unless you have been hiding out somewhere in the last day, you’ll know that there is a consensus that the Finale of Battlestar Galactica was really terrible and was enough to pretty well make the 5 year investment a negative one. Let’s face it, when Galactica 1980 has a more realistic depiction of human societal interactions, you are in big trouble.

Of course, this raises the question: has anyone got the final episode right? There are some candidates for the good including Firefly (if you count Serenity as the finale) and also Seinfeld. I am told that Newhart was excellent but the finale was never shown in Australia and we still wait for DVD. Shows like Cheers and Fraser tried to do too much while the various Star Trek series were OK but had wained anyway by the time they ended. Babylon 5 can be excused because of studio wrangling although it can’t be excused on the basis of later telemovies. Nonetheless, it is hard to find ones that have been so destructive of the series’ point as BSG. How sad.


Boxee, the computer-based interface for viewing internet videos and other multi-media, went into public alpha last week. I installed in on a Mac and it worked very well. With just a remote control you can browse and view YouTube but also Comedy Central’s online materials including every episode of The Daily Show and Colbert Report. Sure you can do this anyway on a browser but this is a much more ‘TV-like’ way to go. Continue reading “Boxee”

Finally, finally, finally, TV on iTunes Australia

The Australian iTunes Music Store has finally got itself some TV shows. There is quite a bit of stuff from Channel 9, the Disney Channel, MTV and, of course, the ABC (not just Australia but the US so Lost is there). Episodes are $2.99 making them considerably more expensive than ones in the US (which sell for $1.99). But at the very least that makes having a Video iPod, iPod Nano, iPod Touch, Apple TV or iPhone much more sensible. Previously, only music videos and podcasts were there. It is still pretty sparse and you had better have a good broadband limit otherwise it will be chewed up quickly but maybe this is an alternative to the raft of illegal downloads.

Rational expectations

From Boing Boing:

Joss Whedon fans have already organized a campaign to stop his new show, Dollhouse, from being cancelled, even though the first episode won’t air for another eight months. Whedonistas have witnessed so many kick-ass TV shows cancelled by callous goons from teeveeland, they’re girding their loins for the inevitable fight and not waiting around for the disappointment before working up a good head of bitter outrage. …

A Facebook fan page dedicated to the online campaign already has nearly 1,500 members.

Who says people don’t form and act on rational expectations!

New class of judicial evidence

The US Court of Appeals in Colorado recently heard an anti-trust case involving a grocery chain selling below-cost petrol as part of a deal. The appeal court held that this did not constitute illegal bundling. In its judgment, it wrote:

Indeed, the plaintiffs’ reading would apparently render unlawful in the State of Colorado a promotional gimmick so common that it features in an episode from Seinfeld:

JERRY: “Atomic Sub”? Why are you eating there?

ELAINE: I got a card, and they stamp it every time I buy a sub. Twentyfour stamps, and I become a Submarine Captain!

JERRY: What does that mean?

ELAINE (embarrassed): Free sub.

Seinfeld: The Strike (NBC television broadcast Dec. 18, 1997). If the first twenty-four sandwiches are sold for $4 apiece at a cost to the maker of $3, the customer who follows through and redeems the offer will have spent $96 to buy $75 worth of sandwiches. But the last one is sold below cost (in fact, it is “free”), making it illegal under the plaintiffs’ version of the UPA.

Well I never. Doesn’t this open up the field on the type of evidence one can bring to a Court? This is going to suit me very well the next time I am an expert witness. All you have to consider is whether a particular legislature intended for an act in a TV program to be legit or not and you are done.