Subject: Re: near/medium future digital media economics
From: "Ben Tilly" <btilly@gmail.com>
Date: Thu, 18 May 2006 14:28:24 -0700

 Thu, 18 May 2006 14:28:24 -0700
On 5/18/06, Thomas Lord <lord@emf.net> wrote:
[...]
> So what? Well, consider Michael Tiemann's "Metcalf's law" economic analysis
> of FLOSS -- very relevant, I think, to emerging views (e.g. Tim O'Reilly) of
> Web 2.0: "The value of a network is proportionate to the square of the
> number of users." The potential value, therefore, of the cross-linked,
> universally annotatable library is vast. Is copyright law enough to lead us
> to resist that potential value? I would think not -- rather, the assumption
> of such a library should be a dominant factor in planning for the next few
> years. (I say that copyright law is not strong enough here because it is
> unenforcable beyond a certain boundary and, if rivals outside of that
> boundary begin to realize the value of the hyper-participatory-library,
> those inside the boundary will have no choice but to adapt by emulation.)
[...]

I'm sorry, but Metcalfe's Law is certainly wrong in all but a very
small number of circumstances.  Under normal circumstances a far more
reasonable scaling rule is n log(n), which does not pose the same
level of irresistable network effects that Metcalfe's Law does.  There
are network effects, but they are far smaller for mature networks than
Metcalfe's Law would suggest.

Cheers,
Ben