Your analysis assumes a) those prosecuted would have stopped on their own (you underestimate their lifetime earning potential), b) the amount reported reflects the actual amount stolen, c) the actions of these governments will have no deterrence effect, and d) this money wasn't used to fund other illegal activities. Even if you still believe the amount lost is lower than what was spent on enforcement, it's clear some judgements were made regarding the value of perceived justice|security|.*.

It's not the free copies of books/movies/whatever that are troubling (to me). It's the strong correlation between positive reviews and lucrative advertising contracts on some sites that I find deceptive. That's the part that should be disclosed.

But that sort of activity is difficult to regulate against without banning product ads on the sites that review those same products.

What do you get? You get to be like the vast majority of people. We (often unconsciously) seek out those that are similar to us as a way of validating ourselves. If others are like us, we must be pretty good people. If (smart|rich|famous|powerful) people think the same way we do, we must then be more valuable. Feeding our self-image leads to some pretty potent biases.

And while you certainly deserve kudos for seeking out those with conflicting opinions in order to challenge your world views, it is still highly likely you're seeking out those like you. (You're on Slashdot, for goodness sakes.) Most of your friends are likely of similar age, marital status, education, and ethnicity. They have similar interests to you.

Trying to overcome these biases can be a good thing. Just don't think you've beaten them.

Amen. The summary says Americans don't want targeted ads--which is quite a different statement from the much clearer statement further down that we don't want targeted ads created from following our behavior across the internet.

I *do* want targeted ads. When I sign up for a store's loyalty program (like I did last week), I *don't* want five ad emails from the company in the next seven days pushing me clothes that have no relation to my purchasing habits (which is exactly what happened). It should be no surprise that I'm a fan of "permission marketing" as espoused by Seth Godin. If Netflix can do such a remarkable job of guessing my preferences with a handful of data points, these stores should too. And don't bother me otherwise.

The part of the survey scenario that's creepy is the single entity tracking my viewing habits across multiple sites.

Syfy has the single lamest rebranding since Spike?

I think you're forgetting The Shack

The fifth... And the fourth. And fourteenth. And ninth ...

I didn't say I agreed with the claim. It's an idea that (as you point out) is not intended for to brick-and-mortars; the long tail is given as a reason why web business are superior to physical stores.

The term was coined and perpetuated by Chris Anderson, author of The Long Tail and, more recently, Free.

Increasingly, long-tail claims are being disproved by researchers.

Not wholly accurate. The "long tail" phenomenon as used in this context describes the belief that the revenue gained from the long tail exceeds that gained from the top selling items. The idea encourages production and sales of items that appeal to niche markets.

This idea has not yet been born out by the marketplace. While it's true that those who frequent Slashdot (and let's be honest, most here are probably close to being outliers in any normal distribution) may enjoy the less popular media the populates the long tail, most of the media sold in the U.S. is still sold by Walmart, which keeps primarily the most recent stuff in stock.

Just a couple of days ago I listened to a presentation by researchers from Emory who came to the same conclusion with music album sales. In order for the long tail to work, prices have to be low enough that sampling behavior is enabled--but there is still a significant herd mentality when purchasing music. (So it's not much of a stretch to extrapolate this to video, to align w/ the article.) A quick peek at the seasonal distribution of sales explains this: for album sales, the Christmas season sells significantly more than at the rest of the year, suggesting album sales are mostly gifts, where purchases are likely to be risk-averse. (So, no long tail effect there.) The same research has not been done at the _track_ level, where sampling is more likely, but it the very un-bundling of tracks from albums that is leading to revenue declines in the music industry.

Other research suggests that Netflix would be *more* likely to display the long tail effect than other media outlets. Its very nature is sampling (rentals at very low cost), so it's a good place to look for the long tail. Decision psychologists refer to the "want self" and the "should self", the competing faces of our internal dialogue. A service like Netflix is more likely to trigger the "should self" because gratification (watching a DVD) is delayed from the initial decision, leading to a higher likelihood of "art film"-style selections than is found at, say, a $1-night DVD vending machine. Thus, the findings of these researchers showing no long-tail effect from Netflix data are additionally convincing.

Another reason for fewer vertically integrated companies is the economic principle of specialization--a company that focuses on a single component can often be more productive than its competitors; a company that diversifies attracts competition in niche markets.

Another reason for specialization is to make capital more available--industries carry different capital structures and risk tolerances. A vertical company is more likely to be too risky for investors in one of their markets, or have a smaller return than investors in another market prefer. (e.g. Pepsi spinning off its restaurant businesses.)