Thursday, September 09, 2004

Labelling as Service

In the old days, when you bought a pie from a shop, or ate it in a canteen, you didn't really know what it contained. If there wasn't any beef or it tasted bad, you complained or took your custom elsewhere. If lots of people got ill after eating the pies, the place might be closed down. Otherwise, the recipe was private – if you asked for the recipe, you were politely told it was none of your business. In SOA speak, this is a form of encapsulation.

Nowadays, food products have to be labelled to death. I can demand to know where the beef was reared, whether the carrots were organically produced, and whether the pastry contains nuts. I want fair trade and dolphin-friendly. I want to know how much sugar, salt and hydrogenated fat, and does it contain enough food colour to make kids go berserk?

For food production, publishing this information adds to the suppliers' transaction costs in two ways: compliance and flexibility. If you claim something is organic, you may have to be inspected by the Soil Association or equivalent body. (The costs of proving you are operating organically are over and above those of operating organically.) If you identify your beef as Scottish, you can't switch to Irish beef without reprinting all the labels. Therefore suppliers generally try to get away with non-specific information, unless there is some marketing advantage in being specific. (E.g. you can charge more for organic.)

But there is a more general reluctance to provide information. With music CDs, the booklet often costs more to produce than the CD itself. Dan Hill complains about the paucity of music information (which he calls metadata) provided by iTunes. Bad MetaData Is Killing Music

This is a form of information asymmetry, which reflects an asymmetry of demand. Different consumers have different levels of information need, and suppliers like iTunes provide the minimum.

One way out is to separate the provision of information from the provision of the base service. We buy meat pies from one site, and pie recipes from another site. There are countless websites where we can get information about films or music, and these are logically separate from the websites where we can buy copies of these products, although of course there may be commercial links. This may be okay as long as there is some guarantee of version dependency – this pie was produced using this version of this pie recipe, this recording of this jazz piece was the version recorded in September 1957, with Joe Smith on drums.

Additional Comment

There are issues of trust: is the information service pointing at legal or pirate versions, how do commercial interests influence the selection or sequence of information, who (if anyone) cares about the accuracy or timeliness of the information. Finally, there is the question of granularity/composition: if the user's notion of a whole service is the proper combination of information service with base service (neither having much value without the other), then the whole service (including its total cost and QoS) needs to be managed somehow.


Labelling as service 2 (October 20th, 2004)

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