Get thee to a revenue stream and grow rich without doing anything

Friday, June 27. 2014

Good morning:

With increasingly rare exceptions, modern capitalism is not about building a better mousetrap and selling it for a cheaper price than your competitors. It’s about positioning your business in a revenue stream, charging as much as the market will bear, and systematically eliminating your competitors.

To understand the concept of a revenue stream, think of a vast ocean, such as the Atlantic, and replace the water with money that behaves like water.

Oceans have currents. For example, most people are familiar with the the Gulf Stream that flows north along the east coast of the United States.

Revenue streams are currents composed of money. For example, the United States Government has created a vast revenue stream to conduct the business of war. Other revenue streams created by our government are collecting intelligence and homeland security.

Many corporations have positioned themselves in one or more of those revenue streams by hiring people who have expertise in those areas and using their influence to be awarded no bid, cost plus contracts to carry-out a desired activity.

Aereo, which the SCOTUS smacked down on Wednesday, was a business that inserted itself in the cable TV revenue stream by recording free television broadcasts in a digital format and storing them in a cloud that customers could download and watch over the internet for a fraction of the cost that cable customers pay.

NYET! declared the SCOTUS deeming the interception a copyright infringement, thereby preserving the revenue stream for cable TV.

Moral of the story: Pay to Play and don’t mess with the big boys.

Aereo’s idea is a good one, but they are going to have to pay fees to the broadcasters to capture their broadcasts and make them available over the internet.

Yes, internet users are a revenue stream.

22 Responses to Get thee to a revenue stream and grow rich without doing anything

  1. crazy1946 says:

    “Get thee to a revenue stream and grow rich without doing anything”

    Wow, that sounds almost like what Fogen is doing! He has plenty of money, yet no visible source of income… If he want to really write a book it should be about “how to scam and steal with immunity”… or perhaps it should be “how to go from a cold blooded killer to a right wing hero overnight”…

    • Get a co-dependent woman who foots the bills – oh, and get her pregnant, she’ll probably work for you longer.

      • J4TMinATL says:

        She’s pregnant? Omg.

      • Malisha says:

        This idea has already occurred to the loosely organized bunch I call the “fathers’ rights gang.” They marry (or just impregnate) and bully a woman until she rebels, then they get custody and make her pay them child support while they have another woman take care of the offspring. It’s a great racket if you can keep it up long enough. It was invented by lawyers.

        • MKX says:

          I have what may be a controversial view on the rights pertaining to birth.

          It comes down to who determined whether or not you exist.

          IMO, after seeing my wife go through two hard pregnancies – the second being a close call with death – , I feel having a baby is a right exclusive to a women.

          So I am for right to choose.

          And the “right to life” group is violating the separation of Church and State. For the basis of their argument is that God decides whether or not we exist. What about those who do not believe in God? Or those with religions wherein life starts at birth, not conception?

          And the men who “slut shame” or “make” women bear the result of their seed are a low form of pond scum. Basically, they see a women as a form of property wherein they use their pee shooter to mark “the property” as their own. The women is just a vessel to deliver property.

  2. Malisha says:

    Professor, what do you make of this case:

    http://www.washingtonpost.com/national/prosecutors-move-to-drop-charges-against-al-arian/2014/06/27/cceabf72-fe28-11e3-91c4-01dcd9b73086_story.html

    From what I know, even though the Eastern District of VA is known a the “rocket docket” and even though they do the terrorist trials there, Brinkema and her little fave, Cacheris, will let a case sit forever and ever and ever and ever if they don’t know how to get out of ruling in a way that is clearly the ONLY OPTION according to law. That is, Cacheris one time left a HABEAS on his desk for 17 months because he knew that he had to grant it but he didn’t want to embarrass the judge who had entered the flawed conviction; he eventually called it “moot” right in the face of US Supreme Court precedent that said a habeas never goes moot if it is filed on time.

    This time, Brinkema (who is, in my opinion, just as corrupt as many of her better-looking brethren on the bench) left the motion five years because it appears that she COULDN’T rule against the govt. but she refused to embarrass them by ruling as she had to. I am sure that a deal was worked out behind the scenes (as in “NOT ALLOWED BECAUSE CRIMINAL TRIALS ARE PUBLIC”) so that the AUSAs involved, realizing she could NOT rule for them and could not bring herself to rule against them (ahem ahem ahem my lady) decided to drop all charges rather than to face up to the bad spot they helped put her in.

    Another judge entered the order and the press doesn’t know why?

    Take a guess, press.
    Give up the ghost, Post.
    Admit that it rhymes, Times.
    Suck it up and rule, Tool.

    See why everything in govt. is dishonest? Because everybody is protecting everybody else (except the SUBJECTS of course) from the natural consequences of their unnatural actions.

    The Eastern District should no longer be called the Rocket Docket.

    It is, more aptly, the “Block-it Docket.” Shame shame shame!!

  3. Thanks for the great discussion – learned a lot here about this market stuff. Financial stuff always twists my mind.

    OT – I did something interesting yesterday – went to a court session at the Orange County Superior Court in Santa Ana, California for some motions by Manuel Ramos’s defense team (one of Kelly Thomas’s killer cops) and some city of Fullerton lawyers. Unfortunately I couldn’t hear much (need hearing aids, didn’t know I could ask in advance for some kind of hearing device) and could only understand what was going on later from catching bits from a mini press conference that Ron Thomas’s lawyer gave for the indy journalists afterward. No mainstream reporters there as far as I know – and I couldn’t hear much of that, either because I was too shy to get up close and felt it was more important for the livestreamers to do so. Fortunately fortunately a young lady posted the court paperwork on FB afterward. Kelly’s mother and father are divorced and his mom already won a civil lawsuit that happened well before the criminal trial, but his father waited until after the murder trial to sue the city of Fullerton . There were only about 7 or 8 of us there with Ron Thomas (including a cute young schoolgirl). I thought there might be dozens, judging by the response to the invitation on Facebook. I think if there had been a lot of people, there might have been some protesting outside, but the small group decided to go into the courtroom with Ron Thomas. (Apparently a few people raised some cain for a short while afterward, but I missed that – didn’t know about it.)

    Anyway, the motion had to do with reenactments during the civil trial – the judge ruled that there could be some hand gestures but that this was 1 – pointless to do a reenactment, because the entire incident is on video and 2 – dangerous to do a reenactment because obviously they beat Kelly’s face in for fifteen minutes.

    The defense attorneys are now trying to posit that Kelly swung a punch at the cops – as if swinging a punch at the cop allows them to murder someone by beating him in the face, sitting on his chest, and choking him, doh. Plus, this didn’t happen ‘cuz it clearly doesn’t happen on the heartwrenching video.

    Ramos’s lawyers also tried to motion for immunity recently (immunity from Federal civil rights lawsuit? – not sure) – but the county judge ruled that he had no jurisdiction over that, so that’s a plus. Both Ramos and Cicinelli volunteer for Little League baseball and I can’t imagine why any parents would tolerate that.

    Cincinelli, the other main perpetrator (there were actually 6 cops involved, but only R&C were taken to court after a year of protesting by the public – a third was charged but the county never took him to court because the other two walked) – anyways, Cicinelli is not only suing the City of Fullerton to get his job back (won’t happen, said the city) – he is now – get this – a mailman, walking around delivering mail. Now if you or I brutally killed a homeless guy, we sure as hell wouldn’t be handed a USPS job. He’s a scary-looking guy too, having been shot in the face when he was an LA cop. Already makes 40k a year disability from that previous job.

    • Malisha says:

      Everyone on his route needs a vicious guard dog!

      • Heck, they don’t even have to be vicious dogs. All dogs like to harass the mailperson or delivery service people. Our little yappers go crazy if they’re outside when the mail comes.

        I hope there are three dogs waiting at every box to slowly unnerve him!

  4. totalfreedom1 says:

    I will add that all of these decisions (including the 2005 US District Court Ruling that overturned key components of the 1996 Telecommunications Act) are based on an erred assumption that there is competative viability in the Communications market (telecom, broadband, ISP, cable, etc). There is completition in services, but access and distribution has NO competition (many thanks to Michael Powell, the most destructive FCC Commissioner in history).

    Aereo has no avenue to compete for broadcast programming….period. Getting a retransmission carriage agreement cost huge money for them with NO benefit outside of offering the service at a similar cost model (not to mention analytics/rating that will not work with their current content aquisition model). Their only hope is to be a cable operator, which is already tied up with the current local monopolistic structure or buy a few billion of dollars in satellite gear. None of those options are even feasible for low cost provider.

    Trust me, a few years back I tried to start a low cost, low margin social enterprise with a prepaid ISP structure for underserved urban areas and demographic segments. The conditions of reselling access were not feasible (ie 10% below retail cost with no respectable SLA outside of “best effort”).

    The National Broadband Plan did nothing to help that scenario.

  5. totalfreedom1 says:

    I direct a regulatory division of a telecom vendor. I am appauled at the ruling yesterday een though it does not have an effect on my business dealings. (I could go on and on about the Net Neutrality circus as well…ugh)

    First, Aereo is legal and innovative. The way of collecting the programming was not in copyright violation of anything PayTV is doing today.

    They were using a low cost mechanism of obtaining local network programmng no different than any average American could do today with an antennae and digital adapter (which BTW was supplied free of cost to taxpayers not 3 years ago by the US gov’t) and converting the format in the cloud to be accessed by another media. There is zero copyright infrigement there and the offer of an existing [free] resource is an alternative media is a valid and legal business model. The networks involved in this are pushing a strong FCC precedent as local network programming has been free, and is avaiable at no cost to those that have access. The FCC required that local public stations utilizing free public airways can be accessed via antennae and digital converted boxes in the 1992 Cable Act. If a broadcaster thought they added additional value to a cable or like provider, they could “in good faith” negotiate a carriage retransmission agreement with that cable/PayTV provider.

    This issue is, this us not associated with the copyright laws associated with the replication of obtaiing and distro of premier, PayTV content.

    The issue with this ruling is the architecture was not considered and the retransmission rules meant for PayTV providers allowing exclusive access to specialized (premier) content did not apply in this architecture presented and maintained by Aereo. They obtained publically accessable content, via a publically available means without the “premier” and proprietary content that accompany PayTV subscriptions (like local insert ads, interactivity, review, record, or On demand selections) via antennae farms that anyone could legally build in the public domain and then was paid a minimal fee, not for the programming, but the convertion of media for IP based consumption. Any IP related to that progress would be in the transfer of media, not the premier content features provided by broadcasters to PayTV providers. So, the SCOTUS just used a rule and situation related to “premium content and features” allowed by the 1992 Cable bill (and greatly expanded subsequently in multiple rulings) and applied it to an architecture and service structure that did not apply. Net neutrality was handled the exact same way by the US District court. The lack of understanding in the issues involving Net Neutrality and the purpose of the original FCC decisions 4 years ago (ie blocking undesireable traffic in low/no competative broadband provider areas) and blew it out of portion. Net neutrality is an issue due to competition and the lack thereof and network management practices, not peering agreement or capacity issues (which is complex and not straightforward) as the operators have argued. Sorry for the rant. I hate when court decisions are made in ignorance of technical knowledge and understanding of FCC mandates. It seems to be happening everywhere and the big losers are the consumers…the winners…the members of the monopolies that are protected and coddled by regulatory bodies.

    Sorry for the rant.

    • Trained Observer says:

      You lost me at :”appauled” …

      • totalfreedom1 says:

        Yes, please excuse the typos. My track pad stinks on this computer and to back track and “fix” anything is a pain.

        Basically, the SCOTUS was dead wrong in their ruling and misinterpreted some significant aspects of the case as it relates to the historical requirement for retransmission and carriage agreements.

      • totalfreedom1 says:

        Cell phone, fast moving comments…please…

  6. MKX says:

    A stream or flow is a good analogy. In fact, in macroeconomics a closed loop system wherein the GDP is a function of flow rate is a commonly used model. Government spending is largely a transfer payment wherein money is routed from a source to a user {either private such as a defense contractor or public such as a judge enforcing property rights issues}

    I think on problem we have is the deification of free markets as the perfect solution to everything. In fact, Libertarians tend to think the free market is the entirety of economics.

    Not so.

    Economics deals with two issues

    A) How does a society best organize itself to maximize the productive potential of all of its resources?

    B) The equitable distribution of the resources produced.

    Free market capitalism is interested in one primary thing:

    M to capital to M’

    Buy capital, access labor and resources to add value to the capital, and sell the capital after paying for labor and resources such M’ > M.

    So this entire meme that a wage laborer is paid for exactly what they contribute to our economy is a lie.

    For it is rather obvious that without labor, there would be no way for M’ > M

    Does that mean capitalism and free markets are bad?

    No, one thing they do is create competition that improves the productivity of labor.

    However, as M’ increases, there is a need to create more markets for the sake of markets. And this tendency can exploit labor.

    For example, what is the War on Drugs really about?

    It is a make work scheme that adds to the GDP, but detracts from the equity of our society.

    It is like this.

    What if we had a farm and could produce all we needed to eat with the 10 people on it working for 4 hours a day and decided to have 3 people put in a stockade with 2 others watching them such that the remaining 5 had to work an 8 hour day?

    Kind of stupid is it not?

    Unless you are the capitalist who owns stock in the farm and the stockade.

    What I am trying to convey is that a one man one vote government for, of, and by the people is the check on capitalism which allows just laws to be enabled to fairly distribute production.

    Remember, M’ > M. So it is the capitalist who is the taker.

    Am I wrong?

    If I banished all the capitalists and gave their holdings to randomly chosen laborers, life and wealth would go on.

    If I sent all the workers away and left all the capitalists their deeds, stocks and bond, they would have to work and their wealth would be gone.

    • crazy1946 says:

      MKX, Excellent analogy.. But one small question, where do we “welfare bums” surviving on SS fit in this picture? The upper echelon thinks were a drain on their resources, and the poor have been brain washed to think we are using their money for our survival…

      • MKX says:

        Agrarian justice by Thomas Paine is the best argument to throw in their face. And he is a founding father.

        He, correctly IMO, pointed out that poverty was the result of lack of equal access to property. And that those of wealth derived it from owning property. And, because title the Earth naturally belonged to all of mankind, the wealthy owed a ground rent to those who toiled to add value to property.

        http://www.constitution.org/tp/agjustice.htm

        ^ A long but enlightening read it is.

        And are those receiving welfare or SS really a drain? Or are we being deceived?

        Welfare recipients pay rent via the government transfers, do they not?

        Who owns the property to which the rent is paid?

        Welfare people eat, so they not?

        Do they own lots of dividend paying stock in food producers or food stores?

        And let us not forget that SNAP helps feed the workers who help to add value to Wall Mart shares.

        It is just more divide and conquer.

        Wage income is taxed and some of it goes to welfare for people who do not have jobs so that they can augment the value of holdings of the wealthy while doing essentially no wage compensated labor. The reason I say wage compensated is that there are other ways to add value to a society. For example, the much maligned single mother often has a job, gets SNAP and raised children. These children become adults who can add value to capital by their labor. So why does the labor that the women does to raise children not get compensated or even given a thank you?

        But lets look at this again.

        The wage earner who pays tax for welfare is naturally pissed at those doing “nothing” on his or her dime.

        However, it is another make work scheme.

        The 100 person farm is making 80 workers do 40 hour weeks while other sit idle. Why not just reduce the work week for the same amount of compensation and have all 100 work?

        So the wage earner should really be pissed at the capitalist.

        Or, if that is not satisfactory, tax capital gains and dividends for to pay for welfare. Hey, they run the system that can not provide full employment due to “the holy market”. So they should pay for their mistake.

        And keep in mid that corporate forms of welfare dwarf the pittance we give to laborers.

        Food aid to Africa.

        Yep, our government pays our agribusiness a good price for mediocre food products that we give to them.

        And that cheap free food get appropriated by African elites who use it to undercut indigenous farmers who then flock to Dakar to beg on the street.

        And then there is the whole Dick “Halliburton” Cheney game.

        SS is a right, IMO. You earned it and they should help pay for it.

        As I said, without labor working from can till can’t there would be no wealthy. So SS should be a “thank you” to those who were lucky enough to live to get it.

        • Malisha says:

          In the declaration of independence, we heard the phrase:
          “life, liberty and the pursuit of happiness.”
          In the constitution we heard the phrase, “Life, liberty and property.”

          In a real sense, the pursuit of happiness was replaced with property, and liberty was limited to the same extent that property triumphed because property was actually the right to decrease the liberty of property’s non-owners.

          In the U.N. formulas about human rights, however, we see a different line-up: Security of person, liberty, equality. Thus, no inherent right to “property.” No inherent right to prevent OTHERS from being as, where, or as rich as WE are.

          Our country rejected that at its very inception.

          • MKX says:

            Unfortunately true, and it lies at the heart of American Exceptionalism. The USA, because it did not recognize the property rights of the indigenous population, was one the great free land grabs for those of European blood. So liberating property in the name of liberty {or is that taking a liberty?} was paramount.

            In Europe, the land had already been stolen via the skullduggery of the Church and Nobility.

            What a con.

            Tell the tribal people that God has selected one of them as King to have title to all of his subjects. And have the Church tell them to breed well so that there can be more pike men to grab more land?

            But how different is that from the Prosperity Gospel that tells the peons that the good deserve to be rich and that you are poor {not propertied} because you are bad.

            Divine right of the Capitalist Elite????

            I believe that Paine, if he were alive today, would be a big pain to them. He would see through all their crap clear as a bell.

  7. crazy1946 says:

    Professor,

    “Aereo’s idea is a good one, but they are going to have to pay fees to the broadcasters to capture their broadcasts and make them available over the internet.”

    Is that not similar to what the cable and satellite providers do? While I am a firm believer in the free enterprise system, even I realize that the television and radio provided by private entities has a definite cost to the providers. While we as consumers do not (in most cases) pay a direct fee to the stations that are in the public broadcasting realm, we do pay a fee indirectly by using the services of their advertisers. What Aereo was doing is charging a direct fee for a product that another company had invested the time, money and associated costs to provide without any real expense of their own. It would be similar to me charging people to fish in the lake across from my dwelling that is a public lake. What’s that old saying? If you want to play you gotta pay…

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