Patterns in the record industry

Stan Liebowitz writes on how his analysis of music sales shows a fall in album sales, which may be to do with MP3.

note on page 8 that I discuss movies, DVDs and videogames and do not believe their growth can explain any but a small part of record sales

You do not seem to have analysed DVD sales at all. You say:

if the official numbers are to be believed, listening to recorded music took up approximately 45 minutes of a person's time per day, whereas going to movies took up 2 minutes, watching prerecorded movies took up 9 minutes, and playing videogames took up 7 minutes. I do not believe it is reasonable to argue, at these low time-levels of usage, that changes in movie attendance, DVD usage, or videogames usage, for the population as a whole, could be responsible for more than a small portion of the changes in album sales discussed below.

Did 'listening to recorded music' include radio? Does 'watching prerecorded movies' include TV movies? How much time was spent watching TV? Aren't TV audience trending down? Might some of this be displacement by DVD?

An analysis of revenue and units of DVDs would be very helpful - Figure 6 looks like a classic succession curve, as seen with other technologies such as fuel sources, though with a shorter time span. Adding DVD sales, pre-recorded and blank VHS sales and recordable CD sales to it would be illuminating.

By citing the listening/viewing statistics, you are missing 2 behavioural points. Music is listened to repeatedly; Movies less so. There should be a discount rate applied for this.

Secondly, the library/collector model has shifted too. Watching my friends and colleagues, the same people who used to buy huge home audio systems and collect CDs, are now buying huge home Theater systems and collecting DVDs. The amount of time spent viewing or listening to them may not increase, but what they are collecting has. In addition, collecting classic TV series on DVD is a growing market. An examination of retail space devoted to each makes this fairly obvious to the layman, but studying this empirically would be worth doing to test the hypothesis.

p21: Of course, copying using cassettes requires having an original handy. That means either borrowing one or purchasing a legitimate copy. The difficulty of borrowing might have been sufficiently great that most copies would have been made from originals purchased by that individual.

Not necessarily. I remember in my youth carefully recording songs from the radio to cassette by listening to the chart countdown, when the order was approximately known. I'm sure many people were transferring older vinyl to cassette as well for portability and making 'mix tapes'.

The succession from vinyl to tape was based on flexibility - portability, as you say, but also the ability to make 'mix tapes' - music sequenced by the customer, not the label. This could be done with singles, by a jukebox, or stacking changer deck, but cassettes let these juxtapositions be recorded for others, as memorialized in the book (and film) High Fidelity.

The succession from vinyl/tape to CD was based on Quality as well as portability. With recordable CDs we now have both.
With MP3 players such the iPod our existing CDs become far more portable. Being able to carry hundreds of albums in my pocket means I am far more likely to listen to what I already have, as it will do shuffle play across my entire collection, or let me pick out one song from a thousand in short order. I think once you get over the ability to carry it all with you, you do want to buy more, as you are listening to more music, but listening to much less music radio, as I have a bigger playlist than they do, and I like all the songs on it.


Another area for investigation that I would love to see some solid stats on is the distribution of hits. Bentley and Maschner have shown that the Billboard chart exhibits a Zipf distribution and is thus in a state of self-organised criticality, where avalanches (sales collapses) of arbitrary size can occur.

My suspicion is that the distribution of album sales, whether cumulative or over an interval, would also show a Zipf distribution. The 'hit-chasing' model of the record industry makes a lot of sense if this is the case, as the records that hit it big will be hugely profitable. The ones that do less well - in the long tail of the distribution - are the ones that are relatively subsidised. However, the tail is cut off at the point where labels won't pick up a band.

I suspect that the widespread availability of music from unsigned bands via legitimate digital distribution can affect the overall form of the power law, by extending the tail still further, perhaps changing the power of the distribution slope, and reducing the number of 'hits' that way. If the cut-off happens further down, while the relative sales distribution may be the same, overall listening has moved out to an even longer tail of smaller bands.

Posted 2:45 AM by Kevin Marks

Eric confides

Eric responds:
DRM: say what you want -- the BigCos in this space are not going to go down quietly. DRM will happen -- in some form. But understand the large-ness of DRM. Its not simply BigCos fighting their distribution problem.....it also goes to things like, me sending you an email in confidence and being able to KNOW that you can't forward it to anyone. Identity required.
They don't have a distribution problem - as Dave put it, any 11 year-old can distribute these days - they have a payment problem, and a publicity problem, as the monoculture fragments.

The email example is deeply bogus. If I can read it, I can recite it, or retype it or grab a screenshot or whatever. If you don't trust me, don't send it. Look at your choice of words 'in confidence'. Are you really saying you would have more confidence in code than in people? Either you don't know much about code, or you're mixing with the wrong people.

I know I need some kinfs of identification for mediAgora- what I'm asking is what does 'Digital Identity' offer or define that beats easy to implement identity tokens I've aleady described?

Posted 3:29 AM by Kevin Marks

Quote of the day

Traditional music is based on hexagrams. It comes about from legends, Bibles, plagues, and it revolves around vegetables and death. There's nobody that's going to kill traditional music. All these songs about roses growing out of people's brains and lovers who are really geese and swans that turn into angels - they're not going to die. It's all those paranoid people who think that someone's going to come and take away their toilet paper - _they're_ going to die.

But anyway, traditional music is too unreal to die. It doesn't need to be protected. Nobody's going to hurt it.

--Bob Dylan
February 1966
(thanks to Adam Powell for finding this)

Posted 7:45 PM by Kevin Marks

Eric -Digital ID is it

In response to Dave saying:
We have a recording business that was built around its ability to solve what was once a really hard problem - distributing music. Now any 11 year old with Internet access can solve it. So, the current recording industry has to change or fail.
Eric says
Digital IDs provide that possibility (via DRM)...ie, they provide for the recreation of a viable distribution channel; one that looks much different from today, but still allows company and artist to get paid.

You say DRM like its a good thing...

Eric, you've said before that Digital Identity is the key. Can you explain it in a mediAgora context, as I don't quite get it. In mediAgora I need to keep track of Works, Creators, Customers and Promoters. What does Digital ID tech offer me in each case?

Why not just use an email address for the humans, and a GUID made by, say, SHA'ing he concatenation of the MAC address and the time for registering the works. What do I gain by adopting some elaborate Digital ID scheme?

Posted 2:51 AM by Kevin Marks

Streaming media listeners buy more CDs

Arbitron found that listening to music makes you likely to buy it

[...]people who have watched or listened to streaming media online in the past week - bought more than one and a half times the number of compact discs (CDs) in the past year than the average American, according to a new study by Arbitron Inc. and Edison Media Research.

[they]bought 21 CDs in the past year, compared to the average American, who bought 13 CDs.

Record companies know this really; after all they pay 'independent' promoters millions to get airplay on FM. So why are they trying to shut down streaming music on the net?

Posted 1:22 AM by Kevin Marks

Liebowitz vacillates

File sharing: Guilty as charged?
Based on figures he read in USA Today, Stan Liebowitz changes his mind and thinks file-sharing is reducing sales. But he has a suggestion:

[O]ne of the things that the entertainment industry has always been really good at is differentiating products. With movies, you have the theater, the tapes, the pay-per-view, the HBO, then the TV. To me, the interesting thing is that historically, the record industry hasn't done much differentiation. What you might have expected was, say, a CD that was half the price of current high-quality CDs that just has a lower sampling rate. With MP3s, for example, when you rip a CD, you have a choice about whether you want to have CD-quality or near-CD quality or FM-radio-quality. When you're playing music on low-quality stereos, you wouldn't really hear the difference. So one of the things the industry could do with their downloads is have different prices. People with high-quality stereos aren't going to want to put the low quality material on, and the people who have lower quality stereos, with speakers that are incapable of producing the frequencies that let you hear the difference, then they'll buy the cheap ones. That would a way to broaden the market and increase their revenues. In a way it's surprising that the industry hasn't done that. And as they are trying to figure out their models for online sales, that would be one way of doing it.

Posted 1:17 AM by Kevin Marks

Overview of protection rackets

Lots of good quotes that tell the story:
"All this smacks of desperation," says Eric Garland, president of BigChampagne, a company hired by major labels to measure online file-sharing traffic. "When you've got a consumer movement of this magnitude, when tens of millions of people say, 'I think CD copying is cool and I'm within my rights to do it,' it gets to the point where you have to say uncle and build a business model around it rather than fight it."[...]

"The labels run the risk of angering millions of their best customers with these copy-protected CDs," Rep. Rich Boucher, a Virginia Democrat and Internet policy maven, said in a recent phone interview. "That's a business call on their part. But I think there's a role for Congress to make sure that copy-protected CDs are adequately labeled."[...]

"It just doesn't work," said David Bowie, whose latest album, "Heathen," was released protection-free. "I mean, what's the point?"[...]

"If you play it, we can record it in MP3," says Bob Fullerton of Pogo Products, which makes Ripflash. "And there's no legal way to restrict that, that I know of."

Posted 1:09 AM by Kevin Marks

Dave Weinberger, wise as ever

Blowing Copyright (Commentary)
I'm not looking for free music. I'm 51 and employed. I can buy the music I want. And I'm a writer; I'm in favor of people getting paid for what they create. The fact is I don't know what the law should look like . But I do know in my heart three things.

First, the industry's gotta change. We have a recording business that was built around its ability to solve what was once a really hard problem - distributing music. Now any 11 year old with Internet access can solve it. So, the current recording industry has to change or fail.

Second, I don't think any of us know how to change it. Our current common sense doesn't work. [...]

I think I know how to change it - as outlined here. But it does require new common sense - or 'commons' sense.

Third, and this is really what matters to me. The very thing the most conservative among us have dreamt of, have died for since the founding of this country, is now within our grasp: free markets, free speech, worldwide.

That's the idea!

Posted 1:00 AM by Kevin Marks

Good suggestions at popmatters

David Medsker and Neil Soiseth I love my CD burner, though it probably doesn't love me much. I make CDs by the pound, and in the process have helped scores of bands sell records. My friend Tony, after receiving a mix disc from me, went out and bought the albums from every single band that I put on that disc, and in some cases bought the entire catalog of a band. (You're welcome, Guster) The Recording Industry Association of America should be paying me referral fees for the bands that I've promoted on their behalf. Instead, they think I'm a thief and part of the reason the music business is in so much trouble.

They go on to propose something similar to Janis Ian. I think the suggestion above is better (and closer to mediAgora). You don't need everything on one site - after all the net isn't all on one site; that's why we have Google.

Posted 12:53 AM by Kevin Marks

A 'celestial jukebox' proposal

Dan Krimm clearly explains the state of the music industry and argues for statutory licensing to establish a 'celestial jukebox'.
I am sympathetic to this, as I started out with ideas along these lines myself, before coming up with the mediAgora model which puts the Creators fully in control. The more I thought about it, the less I wanted to be tied to pay-per-listen and a streaming model. Local storage is going to be cheaper than bandwidth for a long time to come, and people prefer to own things than rent them. Selling high quality unrestricted copies means you can set the price at a sensible level and avoid micropayment miasma.

Posted 2:31 AM by Kevin Marks

Another musician declaring independence

Robert Fripp's Discipline Global Mobile
Business imposes limitations and restrictions upon music and musicians. This is inevitable. But the mainstream music industry often, even mostly, determines and directs the music which is available to the public. Business may legitimately recognise areas of public interest which are not being addressed, but should not make musical choices for musicians. Neither should business apply pressure to make musicians conform to industry "common practices" and concerns. Industry agencies do this in a number of ways, some of which are honest and some of which involve lying, misrepresentation and threats, even corruption of the musician's better nature. Some are subtle and invidious. Some are blatant. Some are the result of an inexorable and ongoing embrace. They are rarely innocent.

Q. Isn't that a bit strong?

A. The history of the music industry is a history of dissembling, conflict of interest, exploitation, and theft - legal, illegal and quasi-legal.

Posted 2:24 AM by Kevin Marks

Help

Various helpful colleagues (including Kevin and Tom and the Head Lemur and Colin Robertson) offered helpful feedback to my licenses question. Probably the simplest answer will be to assert copyright, but explicitly permit online distribution (Colin reminds me to be specific about what forms that distribution might take). He points me, though, to the Open Publication License, which may be a helpful alternative. Thanks, everyone.

Posted 1:26 PM by AKMA

Internet Society opposes proposed anti-copying laws

They say:
The Internet Society strongly opposes attempts to impose governmental technology mandates that are designed to protect only the economic interests of certain owners of intellectual property over the economic interests of much larger portions of society. The current debate in many countries of the world regarding digital rights management (DRM) has illustrated the inevitable conclusion of technology mandates in law: a world where all digital media technology is either forbidden or compulsory. The effect of these mandates is to grant veto power over new technologies to special interest groups who have continually opposed innovation.
Read the rest there - it's a good summary.

Posted 4:02 PM by Kevin Marks

In the Right Direction?

Since I haven't seen her mentioned 'round here, add one of my favorite musicians, Aimee Mann, to the ranks of the relatively clued. She helped form the group United Musicians (sadly the web site seems a bit out of date), which states that it is "founded on the principle that every artist should be able to retain copyright ownership of the work he or she has created and that this ownership is the basis for artistic strength and true independence." Her upcoming album is freely available online as an audio stream until its release on CD.

Seems like a few steps in a mediAgora-ish direction-- recognition goes directly to the Creator. Also seems like something that could directly benefit from the mediAgora model. From this article at Harmony Central:

United Musicians is not a record label in the traditional definition. UM is a place where an established artist, who has masters in hand, can come and benefit from the collective's pool of business talents. UM will be collecting a distribution fee, plus a percentage for whatever services it provides.

"It's not a situation that's right for everybody, because it really is up to the artist to do a lot of the work themselves," Hausman explains. "At this point they have to be able to produce their own masters, tour without tour support, and get press."

Newer artists, he believes, won't fit well into the UM mold. "I think it will work only for artists who have a fan base that is identifiable and is fairly easy market to," Hausman says. "We're not set up to promote and market that way, unless everybody had an extremely modest sales goals [sic]."

The article was written 2 years ago. If that's still the case, mediAgora's extended concept of the Promoter role could possibly assuage a shortcoming like that. Something seemingly not addressed at all, obviously, is the additional concepts of incorporation/ collaboration. Baby steps, I suppose.

Posted 3:13 PM by Andrea James

Licenses

Friends, I have a question about licenses that one of you may be able to help with. In a project on which I’ve been working, I will need a form of license that permits free electronic distribution of the material covered, but would reserve the right of physical reproduction to the copyright holder and her or his assigned publisher. (We have a print-on-demand publisher already on board as a physical press.)

I haven't seen a license that offers this specific sort of arrangement. Have I missed an obvious element of one of the extant licenses? If someone could point me toward a license that works this way, or provide a license modified to suit our enterprise, I'd be most appreciative. I doubt mediAgora will be functional in time for our site going live, but this sort of arrangement looks to me like a possible bridge toward mediAgoric distribution.

Posted 7:47 AM by AKMA

Lies and Disinformation

Causes do not depend for their validity on the integrity of the people who espouse them; as a theologian, I have to believe this, since so many spokespeople for Christianity have been manifestly flawed creatures, and some outright scoundrels and hatemongers.

So there may be more to the present dispute over digital reproduction management than the mouthpieces of the entertainment cartels say. But the threats and bluster they promulgate do little to assure me that their cause is anything but self-serving.

Take for example (thanks to Doc Searls) this snippet from a Cnet report:

Wheeler said the industry would take a similar approach when it comes to digital television. “You don’t get the programming and no restrictions on what you can do with it. The free lunch does not operate in copyright.”

RIAA representative Mitch Glazier seconded that notion, saying pleas for fair use rights mask a desire for widespread stealing of digital content. “Anybody who doesn’t want to talk about this as a stealing problem hasn’t created anything,” he said.

These statements misrepresent matters of fact both in copyright law and in the social reality of the present copyright argument.

In the first instance, as copyright emerges from the outset as a limited monopoly granted to a copyright holder not as a natural prerogative, but as an encouragement to contribute to the shared cultural wealth of the community. If “[t]he free lunch does not operate in copyright,“ then the lunch we should be withholding is the indefinitely-prolonged smorgasbord of delicacies served at the tables of the moguls, who are granted a free meal at the expense of the community to whom the right to mess with their own cultural inheritance belongs.

In the second instance, the Web and even the corporate media have been amply provided with examples of creators who oppose the Mickey Mouse Protection Act, the Buggy-Whip Protection Act, the Dinosaurs Anti-Mammal Protection Act, the Corporate Digital Vigilante Act, and other such desperate maneuvers of the obsolescent media control companies. If you want examples, start with Courtney Love and Janis Ian at the heights of creative production; Kevin and me, closer to the ground.

If there’s a sound historical, legal, and social argument in behalf of these legislative pirates, let’s hear them. But these appeals to ignorance and prejudice do the entertainment cartels no credit.

Posted 7:16 AM by AKMA

Jim Griffin: Splitting Up the Spoils

Blogcritics: Jim Griffin says
...the expectation created by advocates and purveyors of what is called Digital Rights Management software are squarely to blame. They sold a bill of goods to the industry, telling them they'd turn digital music and media and art into digitally controlled products with no marginal cost and infinite protection and data mining, with the result that big media waits and waits and waits for control that will never come. Michael Eisner hypocritically swears Disney won't release content unless it can be controlled at the same time he sends it down a cable wire into a flat-fee market of uncontrolled video cassette recorders, the same device Jack Valenti swore in court would kill the industry like the Boston Strangler.
Technologists everywhere need to become hyper-honest with industry executives who ask: No, we will not in our lifetimes harness and tether art. No, it wouldn't be a good thing if we could. Art and anarchy go hand in hand, and conditioning access to granular pieces of knowledge and art on the ability of a parent to pay is a bad, immoral thing.
Let's be clear: Digitization of music and media inherently liberates that content to find a shorter path to its audience, and whatever speed bumps we can shortsightedly build are quickly obviated by the new digital vehicles we build to move them. Control is not coming back, and there is no need to wait. The next vine is not a mechanism for control.

Good points all. His licensing idea is one answer, but I think mediAgora is a better one.

Posted 5:22 PM by Kevin Marks

Bob Cringely gets it

Bob Cringely writes:
I just bought a "Lord of the Rings" DVD at Fry's Electronics for $16.95. That $16.95 has to support not only the movie production, but also an immense manufacturing, distribution, and marketing organization that at the end of the day probably yields two dollars or less in pure profit to the intellectual property owner. So why not cut out that manufacturing, distribution, and marketing operation -- and its associated administrative overhead -- and instead just hurl a copy of the movie onto the Net, let it propagate as demand dictates, with that same two dollars making its way back to the film makers from every subsequent owner?
That's where we are headed, to a system where Microsoft doesn't control access to media as much as content controls its own use, and only the content creators get paid. And when it all comes together a decade from now, we'll see that for the very reasons I just described it was inevitable.

Posted 3:39 PM by Kevin Marks

Even Milton and Shakespeare could not publish their own works

Well, my name is on this thing, I should attempt at contributing since I'm committed now! For those that don't know me (and I'm sure there are many of you), I have no professional background in DRM, online publishing, intellectual property, copyright, or a lot of the things that my more esteemed fellows here do. I do work for a niche e-book publisher, so I understand a little about the process, but really I'm just a humble web developer with an amateur interest in these sorts of things. I was invited to join the mediAgora blog after I posted this conversation on my own blog about Creative Commons.

OK, enough boring stuff. I am primarily interested in what mediAgora has to offer those who create, since I am one, if not necessarily in a hugely professional capacity as yet. The results of a creative person's efforts is not a new subject for discussion. In 1793, titled To the Public, at the beginning of a work by some guy named William Blake, we can read:

The Labours of the Artist, the Poet, the Musician, have been proverbially attended by poverty and obscurity; this was never the fault of the Public, but was owing to neglect of means to propagate such works as have wholly absorbed the Man of Genius. Even Milton and Shakespeare could not publish their own works.

This difficulty has been obviated by the Author of the following productions now presented to the Public; who has invented a method of Printing both Letter-Press and Engraving in a style more ornamental, uniform, and grand, than any before discovered, while it produces works at less than one fourth of the expense.

I think William Blake would have loved the WWW. If you want ornamental, uniform and grand, it's out there and then some-- and cheap? Unbelievably cheap to reproduce. So cheap, in fact, that most folks are giving their works away for free. The power of the web is that anyone can instantly take on both the role of writer and the role of publisher-- or musician and producer, etc. and so on. This gives any creator an instant audience. The problem is that at the moment, if we really want an audience, the best and most expedient way to disseminate our works is to simply give them away.

If you read my conversation on Creative Commons, you'll notice I have no problem with giving things away for free. But that willingness is slightly in part due to the fact that at the moment, I have no realistic hope of ever making any decent income from the poetry and short fiction I write. In fact, it's completely engrained in me that writers just don't make money, unless maybe they're Stephen King, one in a hundred million. My poems aren't too shabby, but the odds aren't looking particularly generous, either. I've seen plenty of other aspiring writers (including my own mother) struggle with sending manuscripts to publishers only to receive rejection letters; I know that route is a tough one. Currently, charging users for downloads or page views is a complicated tangle of technological, legal, and social issues. Who needs that kind of headache when you know you can't get published conventionally anyway?

Then along comes upstart Kevin Marks with his crazy mediAgora idea. My first reaction to it was just that-- crazy. People don't make money from being creative. It's the law! It was a great epiphany for me when I realized why I was struggling so much with the concepts it laid out. "This stuff seems so simple," I thought. "Why can't I believe it'll work?" This dogma is the plague of our modern times, as the need for physical human labor reduces due to the advent of machinery, robots, computers. What else are we going to do in such leisure-based societies?

Perhaps I'm not coming from a logical enough, a legal enough discussion, but this is the best perspective that I've got to offer for now. mediAgora's biggest hurdle won't be a good implementation, or getting the right kinds of laws made, determining fair use, or working out what role DRM has to play in all of this (and all of those are certainly significant hurdles-- don't get me wrong). The idea that it's legitimate to be a creative person; that the Artist, the Poet, and the Musician should be allowed to make a decent living from their efforts is going to be a real battle to be fought and won if this excellent idea is to succeed.

Posted 10:20 AM by Andrea James

Lots to respond to today

Howard: 'We don't need the guard follow us home to make sure we use the product in the intended way' - then we don't need Computer-enforced DRM, or anything more severe. (see below for definition)
I can buy books and other goods from Amazon or QVC online today, or random artefacts from unknown strangers on eBay without anything more complicated than an encrypted communications channel and a credit card or Paypal account. Buying intangible digital goods that don't need shipping should be easier.

Regarding the 'people need to get paid' argument - of course they do - thats what I want to facilitate. I have created very successful works published (on CD-ROM) under a royalty model with a large team of co-creators and media licensed from many sources, but I watched that business disappear and my brilliant creative colleagues leave and get laid off when its revenue model no longer made sense. It is not pleasant, but I speak from experience when I say denying that it is happening and ignoring new opportunities makes it worse. My creative colleagues are still creating while employed in different places, but the company involved is now a banker's shell.

Paying different amounts for different quality formats makes sense, but buying a master quality format like CD means you can transform it to others as they come along - I can rip my CDs to mp3, mp4 or wma equally well. It is only when you restrict this in hardware that you get the planned obsolescence problem.

I'm going back to first principles of computer science and economics here - as Akma & Cory said, Turing's Universal Machine copies data. It is the basic definition of what computers do - read and write symbols, and alter their internal state. The reason it is called a Universal machine is that it can simulate any other computer. This malleability is implicit. If you restrict it and prevent copying, you no longer have a computer. I discussed this at more length in my submission to Congress.

Similarly, the basic law of economics is that a willing trade creates value (as both parties are receiving something they value more than what they are giving up) but a coerced trade destroys value (as one party is losing out).

With intangible, readily-reproducible goods this gets trickier, as the value is added to the world whether the creator realises any or not - this is the complaint of the artist. With digital distribution, the marginal costs aren't zero - they are low, but higher than for broadcast. The cost of entry is significantly lower though, and this favours a smaller-scale approach - the huge aggregations of production and promotion aren't as necessary, as the break-even point is far lower. Pace Akma, this is not about 'fending off predatory duplication', but providing an incentive to recognise the artist's creation of value by returning a fraction to those who respect it.

Tom says 'Perhaps rather than talking about managing a future we cannot predict or control, there might be more focus on creating a "market" of inclusivity and enthusiasm.' - beautifully put and exactly right.

Another instance of willing exchange being better is the give and take as new works are based on older, or the kind of conversation we are having here, where we build on the thoughts expressed -expanding one anothers' minds - rather than tearing them down to make a winner and a loser.

This is the root of my underlying optimism - that in the long run the open, free, value creating ways win over the closed, restricted, value destroying ones.

Posted 12:39 AM by Kevin Marks

More DRM thoughts

Glenn Reynolds has a different theory on DRM:
For years now, I've been saying that the record industry's long-term legislative strategy had less to do with preventing copying than with sewing up the market to ensure that Big Entertainment companies won't have to worry about competition from independent artists. It looks like I've just been proven right. . . .
What they're trying to do is to create a system that's not so much proof against copying - a mostly impossible task anyway - as a system that's very unfriendly to content that comes from anyone other than Big Media suppliers. It's not about copying. It's about competition.

Posted 1:36 PM by Kevin Marks

Strange Changes

As we work toward assent on Howard’s and Kevin’s and other folks’ notions about Digital Reproduction Management, may we keep in mind Cory’s warning regarding innovation (thanks, Kevin)?

One of the things digital devices do that makes them usable is duplicate files. If they didn’t duplicate files, it’s hard to imagine what they could do. Our reflections on copyright should begin from this point.

“Intellectual property” and its associated laws and customs depend for their cogency on a limited-reproduction economy, in which a few industrialists could choose which authors to publish, whose ideas for films to bankrolls and distribute, whose music to record. When we deliberate about the distribution and duplication of files under conditions of infinite reproduction, we can’t afford to enter the deliberations with the same assumptions about remuneration in effect. I say this not because I suppose that musicians should be starved, or authors unrewarded; again, I’m a copyright-holder who has supplemented his academic income with welcome (though relatively small) royalties checks.

I’m also a live performer (of a certain kind), who has been paid to lead adult education groups, to preach, to consult with groups about teaching, technology, and other such topics. My income from “live” gigs far outstrips my income from royalties.

What if we were forced into a situation wherein recorded/published performance were viable principally as a promotional device for live performance (I gather that for many musicians, this is already more or less true)? I suspect the world wouldn’t topple from its axis. Some folks would change jobs; some would earn less money, but others more. Some of us would gladly pay for recorded/published works, but others wouldn’t; perhaps they’re the radio-listeners of the digital world.

But transitions happen, and I’m deeply troubled that policy-makers and thinkers have devoted so much power and energy to throttling a transition that will take place, dead certain, outside the area governed by the USA/RIAA/Disney, Microsoft, and whatever other lawmakers try to impede that transition. Kevin’s thinking about mediAgora helpfully envisions a cooperative way of fending off predatory duplication, but in all our discussions I wish we would keep in mind the inevitability of unfettered hardware and software, and the extent to which our copyright alternatives may survive alongside machines capable of unchained reproduction.

Posted 6:57 AM by AKMA

Open Source DRM? Unlikely

Howard Greenstein thinks Janis's idea will only work with DRM, and puts up an outline of requirements for an Open Source DRM implementation.

The trouble with DRM is that it is trying to solve the wrong problem. The problem is not people copying digital works, it is creators not being paid.
We don't need 'Digital Rights Management', we need 'Digital Payment Encouragement'. If I liked three letter acronyms, I'd call it DPE, but I prefer mangled classical phrases with internal capitalisation, so I call it 'mediAgora'.

Let's take this point by point.

1. Enables purchasing, anonymously.

OK so far.

2. Contains or works with business rules that allow the content owner to designate a package of rights, including "fair use" rights. How would this be done? Allow users to certify that the current play/viewing/use is a 'fair use' one. (Oh, you're saying, people will just abuse this. Fine. They're already doing it. Come up with a better idea. That's the intent of this writing...)

Now this is silly. How does this work? Every time you try to copy it you get an EULA-style popup accusing you of being a thief and asking you to assert that you aren't? What purpose does this serve? Is it just to annoy me and encourage me to hack the message out?

3. Enables resale or transfer of rights
4. Enables copying to some devices for one fee, copying to additional devices for another, etc.

These don't take any enabling - they are possible by default. It is attempting to disable them that makes DRM systems annoying, offensive and value destroying

5. Makes sure money flows back to the correct parties, lowers friction.

This should be number 1, not number 5. I agree absolutely, but I think that you need to think through who the correct parties are. By rewarding those who copy the work in a way that leads to a sale, you align their incentives with the Creators of the work. Being able to be paid for Promoting like this does imply giving up anonymity to the extent that payments can be tracked.

6. Is open so people who wish know how the system works, can correct and improve it. It can work on whatever platforms can attract dev resources.

Good idea.

7. Is STABLE - the protocols and formats can't change all the time because keys are written into hardware.

Where did that come from? The protocols needn't change but I expect formats to continue to evolve; as long as they have a way of attaching a short metadata reference to an ID, I think mediAgora can work with any format. By being based on consent and trust rather than coercion and restriction, the technical prerequisites are far more relaxed, and unlike a 'lock it up' DRM model, you don't need to be able to repudiate the whole thing and abandon the content when it is (inevitably) compromised.

Posted 1:01 AM by Kevin Marks

Janis Ian returns

Janis Ian returns
She's in fine form, and has a note of hope:
I have hope. Because I know that in America, votes count. Because I know that if enough people understand this issue, and vote accordingly, right will win. Legislation will be enacted that takes the will of the people into consideration, and favors their right to learn over Disney's right to control. Internet radio, currently in peril, will go offshore and out of the country if necessary, so audiences can hear thousands of songs instead of a narrow playlist. The RIAA will become a small footnote in the pages of Internet history, and the people will have triumphed - again.
plus some interesting suggestions:
All the record companies get together and build a single giant website, with everything in their catalogues that's currently out of print available on it, and agree to experiment for one year.
This could be the experiment that settles the entire downloading question once and for all, with no danger to any of the parties involved. By using only out of print catalogue, record companies, songwriters, singers won't be losing money; the catalogue is just sitting in storage vaults right now. And fans can have the opportunity to put their money where their mouths are; if most people really are willing to pay a reasonable price for downloaded music, traffic on this site should be excellent. If most people really are downloading from sites like Napster because there's so much material unavailable in stores, traffic on this site should be unbelievably good.

Posted 12:41 AM by Kevin Marks

More from Eric, Doc, Tom, Donna & Bruce

Eric says
1. I'm not sure that the net is really a commons. My understanding of a commons is that it is a *finite* resource that everyone draws upon. The net seems to be an infinite resource that everyone can *add* to.

I see the net as a Hayekian spontaneous order, like language or scientific knowledge; an information commons is a similar concept (via John Udell).

2. I'm not sure that (as Kevin says) the "publisher" goes away. Publishers fill an important role in forming an efficient marketplace -- they filter (and filters are important).

If I gave that impression, I need to clarify it. Currently publishers have 4 roles - providing Venture Capital to support the Creators of works, Editing and honing works, acting as Promoters for works, and organising Distribution of works. I see the Distribution role vanishing away, and the Promotion role being devolved to the emergent customer market, but the VC role can still be important for some kinds of works, and Editing and honing is a Creative act. Within mediAgora, I would expect some publishers to be co-creators -editing works into a better form, and acting as Promoters (or filters if you like), and getting some creative credit for bankrolling the process.

4. I don't think that DRM is an attempt to replicate or outlaw the "fundamentally one to one, conversational marketplace that is the net."
5. In fact, i'm not convinced that the net is fundamentally 1 to 1 (i AM, however, convinced that digital identity will get us there).

The net IS fundamentally 1 to 1 in packet flow terms, but in cultural terms it is many to many.

Doc says:
What commercial and public radio have both needed, desperately, is competition from other, unregulated broadcast media. Internet radio was getting ready to give them a run for their money. Maybe it still will, from signals originating outside the U.S.
  But Internet radio can't take off in a big (i.e. mass appeal) way until the demand side gets equipped with radios that aren't computers.

I think radio is a bad metaphor - it is exactly the kind of model that is too cumbersome to replicate and largely pointless to. We have better devices now- the iPod is the canonical example, with its 4000 songs or hours of speech that plays what I want to hear when I want to hear it, not some local spectrum monopolist trying to sell my attention to his customers.

Tom says:
Along with the economic strangulation of hyperbolic property law goes the choking of the voice of culture. A permissions format gives rise to the insanity documented here[...]
Exactly why we need this.

Donna sums up

Bruce rants lyrically:
It's not even about "Fear Uncertainty and Doubt" any more. The flavor of it has changed. If you look at it, it's all about Fear Uncertainty and Hate. "Where do you want to go today – to give us some money, OR ELSE?"

And the answer – the popular American answer, really a kind of consumer uprising here – is: "I wanna go steal some MP3s!" That's the answer. "I wanna go pirate some Hollywood movies and keep 'em for myself, please!" And the reaction is: "Gee, our customers are criminals! They must be spied upon, lest they hurt us, and one another!"

Posted 2:28 AM by Kevin Marks

I think we're agreeing

So, Jonathon and Doc and even Eric all seem to be converging on a commen theme with me - that DRM is an attempt to replicate a centralised 'content distribution' business by ignoring or outlawing the fundamentally one to one, conversational marketplace that is the net.

I don't expect the copyright cartel and the free-for-all memes to converge anytime soon. We need a new meme to fill in the missing middle ground - eBay did it for garage sales, after all.

Posted 7:49 PM by Kevin Marks

Non-zero sums and Making things

Eric:
1. on the "must" comment -- you're *absolutely* right! My fear is that the 2 sides I characterize talk past each other so much that no negotiation ever occurs. Bottom line: if they don't compromise, then they will ultimately conspire to both shut down the most important thing -- a marketplace for content (something mediagora is aiming toward).

Not at all - those that engage in zero-sum games lose out to those who create positive-sum alternatives, eventually.

2. I don't agree that the 2 key parties are creators and customers. I think that DRM (properly spoken of) *begins* at a peer-to-peer level (ie, you and i are doing a primitive form of it right now by allowing the other to quote freely).

Yes, but that is already available - the web makes that kind of interaction easy. Putting together a marketplace is the next phase.

3. A FAIR marketplace is *exactly* what I'm aiming for....our next task is to define what the hell that means -- and how digital identity is integral (my opinion). THAT will be the tough part.

Agreement! Good - so, read the whole proposal and let me know what needs more definition. Perhaps you could explain what you mean by digital identity and how it helps - Amazon, eBay and PayPal seem to do OK with email addresses, Credit Cards and user ID's

4. Exploitive relationships -- couldn't agree more. That includes people that are (and these aren't my words) "stealing" movies that are currently in the theater and putting them on the web. Both sides are being exploitive for their own purposes. Time to dialogue.

This is what I mean by zero-sum or negative-sum transactions. Not honourable, and they destroy value, instead of creating it.

Copying stuff isn't cool. Making things is cool.

Posted 2:04 AM by Kevin Marks

Split the difference?

Eric play's the 'find the midpoint' gambit
I would put this topic up for discussion....
At this point in time, there appear to be two extreme camps on the spectrum of debate.
On one end lies the Recording/Entertainment industry. Their view is that they should be paid for every single instance wherein their copyrighted material is used. And not only that, but that fair use and length of copyright should be expanded so that users of their works must *always* get permission (and pay).
On the other end sits the (for lack of a better term) information wants to be free crowd. They believe that since information on the internet (for the most part) has always been free, they should *never* have to pay for it. Furthermore, they should be able to trade, swap and extend their use beyond the normal legal definitions of fair use.
I'm *purposefully* over-stating these positions to the point of characterization so as to draw out the two extremes of the spectrum.
My contention is that DRM technology (whatever that may be) must find a compromise between these two positions.
Is that contention objected to? If so, on what grounds?

I don't disagree, but 'must' implies either logical necessity or overwhelming coercive force, and I don't think either apply here.

To date DRM vendors have been selling to exisitng publishers, and so the fantasy pay-per-view and self destructing files have been their mainstay. The dream of remote controlling other people's computers is going to hard for them to drop.

By characterising the DRM problem in those terms you are ignoring the two key parties - the Creators who make the works in the first place, and the Customers who want to buy them. Helping them find each other in a fair marketplace is what I'm interested in. Those looking for exploitative relationships need not apply.

Posted 7:09 PM by Kevin Marks

Culture without borders

Akma, that is a good point - the net does transcend borders, as indeed does culture - DVD region coding is an odd throwback to tariff barriers and the kind of cultural ring-fencing that Hollywood normally opposes.

The last big publishing project I worked on recognised this, and sold rights to different languages instead of different territories - there are English speakers everywhere, French speakers are almost as widely dispersed, two large groups each of Spanish and Portuguese speakers, and segmenting them by region reduces the size of the market opportunity.

Another example: the EU has a higher tariff on video recorders than video cameras, due to lobbying by the copyright cartel there. This means that video cameras sold into Europe have the video inputs disabled in firmware, and there is a grey market for undamaged ones from abroad, as well as firmware hackers who will re-enable them.

And cross-post away - If Eric wants to put his half of our dialogue here too I'm happy with that.

Posted 3:46 PM by Kevin Marks

Why we need implicit inclusion

Peter (who lurks here) pointed me to Bootleg culture at Salon - it describes exactly the kind of thing I envisage legitimating:

Typically consisting of a vocal track from one song digitally superimposed on the instrumental track of another, bootlegs (or "mash-ups," as they are also called) are being traded over the Internet, and they're proving to be a big hit on dance floors across the U.K. and Europe. In just the past couple of years, hundreds if not thousands of these homebrewed mixes have been created, with music fans going wild over such odd pairings as Soulwax's bootleg of Destiny's Child's "Bootylicious" mixed with Nirvana's "Smells Like Teen Spirit," Freelance Hellraiser's mix of Christina Aguilera singing over the Strokes, and Kurtis Rush's pairing of Missy Elliott rapping over George Michael's "Faith." Bootlegs inject an element of playfulness into a pop music scene that can be distressingly sterile.

Posted 3:34 PM by Kevin Marks

Pardon my Intervention

I greatly appreciate the Norlin-Marks Auseinandersetzung, but my particular interest in this area concerns the ways in which our habits from the print-and-vinyl economy constrict our vision of what's possible and perhaps inevitable in the digital economy. My interest develops not only from a junkie’s hunger for easily-available music and literature (I suppose I'll get het up about digital video someday, but not yet), but also from attention to the broader economic consequences of locking a nation’s or region’s system of transactions into an artifically constricted model. If the US and EU adopt strong DRM policies and Malaysia (let’s say) doesn’t, the giants may be swamped by waves that the less-fettered economic environment generates.

I’m no American historian, but don’t I recall that one of the elements in the US’s rise to international prominence came precisely from the relative fluidity of its economic and social structures at a time when industrial capitalism made possible tremendously efficient new configurations of production, transportation, finance, and exploitation? How many people want to consign Euro-America to the status of has-been economic engine in order to perpetuate property, labor, investment and class institutions from an obsolescent social context?

Not to beat up on Microsoft (however tempting that may be), but simply to take it as the pre-eminent example of a technological-economic power broker, even Microsoft can't beat “free.” If someone in Kuala Lumpur (or Calcutta or Cape Town or Auckland) produces software and hardware that make possible electronic transactions that aren’t possible in Los Angeles, London, Berlin, and Tokyo, don’t you think there’ll be a massive interest in obtaining Malaysian computers? How much economic energy do we want to commit to policing our borders against computers that do what computers actually do very well, unless you construct limitations on them? “Excuse me, ma’am, I have to examine your motherboard. . . .”

(I’m going to cross-post this on my blog, thinking that it may generate some extra traffic—if only from my wife and son (Hi, Margaret and Si!). Won’t make it a habit.)

Posted 6:53 AM by AKMA