Help me write a blog post

I seem to have been engaging in what Tim Oren calls 'old fart blogging' a bit this week too, but here we go again. What I remember from my early blogging experience was having conversations on group blogs with multiple authors, like Gonzo Engaged and the
Small Pieces gang blog - we'd add multiple authors and post our conversations to the same blog as separate posts.

Posted 11:47 AM by Kevin Marks

Hope for rebirth

Mark Eris rants: The year in which all intellectual property (All? No. One small village in Gaul still.....) goes digital, and thus becomes thievable within 5 seconds of being available. Download the record of the book of the film of the comic and the delete it after one view, because it`s a crock of shit and you`re glad you didn`t pay any money for it anyway. The robber baron cartels find themselves having to run fast enough to keep up with people, as sitting on the sidelines calling the consumer a thief won`t cut it any more, no matter how many 5 year olds they take to court. And they can`t take it. It`s been too many decades since they had to go outside the house, and all that rich food, slave girls from the ghetto and colombian health products have taken their toll. Come off the accelerated culture curve for a second and listen. Really strain your ears. And you can hear them wheezing, coughing up blood, collapsed to the floor shouting abuse at the customer who is always right from somewhere back in the last decade.

Lots more - read the whole thing.

Posted 3:21 AM by Kevin Marks

The technical case against DRM

Although the economic argument is more powerful - that DRM destroys value for customers and hence will be shunned by them - the technical argument is strong too.
This rests on one of the fundamental pillars of Computer Science - the Church Turing Thesis that states that any computer can emulate any other. When this is combined with the continual improvement in computing power available, it means we will always be able to run old software, or indeed protected software, by emulating the environment it runs within.
Simson Garfinkel describes how emulation saved the BBC Domesday Project, the authors of which I worked with at the BBC and the MMC.

"But that wasn't DRM" I hear the cry, "just obsolete hardware and data formats".

How about a systematic program that defeats the hardware protection for pay per use interactive experiences that works in a general enough way to encompass 25 years worth of hardware design?

It's called MAME and it has just been ported to the Nokia N-Gage cellphone/game gadget. It has emulators for various CPUs (and graphics and sound chips) to run the code directly from the original game ROMs - they look and feel just like the real thing
If Nokia are smart they will license this and the games and use it to promote the gadget - this company has licensed Atari ROMs for sale. After all, those 80s games are smaller than most MMS photos that get sent, and they're lots more fun than ringtones.

I hope Ed Felten and maybe can explain this to the assembled lawyers at the Berkman conference today. Most of them seem to like on compulsory licensing schemes.
I wish I had been able to take the chance offered to join them and present mediAgora to them. I look forward to reading the blogging of the event.

Here's a cartoon I made with the wonderfully silly Bayeux Tapestry Construction Kit

Posted 4:06 AM by Kevin Marks

Sharing and Stealing - Jessica Litman

Comment on Sharing and Stealing - Jessica Litman

It is a great essay until this paragraph::
"The key to the opt-out mechanism I propose is the selection of a single digital file format or family of formats capable of conveying copyright management information as defined in section 1202 of the copyright act. The format will probably incorporate digital rights management capability because the people who will be using it will desire that feature, but there's no need for any copy-protection to be hack-proof, or even exceptionally durable. It should also be compatible with the current generation of digital playback devices, including CD players. I'll call the format *.drm for short."

This aspiration: "It should also be compatible with the current generation of digital playback devices, including CD players." is impossible. CD players play unencrypted, uncompressed digital audio. A drm'd format would require new players.

Posted 3:50 AM by Kevin Marks

TeledyN: How to Slay the RIAA

TeledyN: How to Slay the RIAA: Music is not like painting or playwriting or really most of the other arts: Music is intimately temporal, epherimal, abstract and fluid. Music is here one moment, gone the next, and in the days before the mass-distribution recording, we expected music to be fresh, even the old favourites. As John Cage noticed when they first started to compare the electrical signals on recording wires, it is impossible for even the finest performer to exactly replicate a prior performance; John says he stopped listening to recorded music the day he attended a performance of some orchestral piece and a small boy seated behind him told his father afterward, 'That's not how it goes!' -- records are only that, a record, a snapshot of some moment in time, a moment past, stale, for the most part, forgotten as the artist has already moved on to something new.

With all this free sample music out there, constantly replenished and refreshed, sure there's lots for a small rural radio station to pilfer for their ads, but remember, if we ensure the meta-data is accurate and leaves a clear trail back to the artists, then there's no excuse for commercial or public uses of the music not to contact the performer and arrange for a custom deal.

It's all those custom deals that create friction and barriers to entry. How about a uniform, fair deal, like mediAgora offers?

Posted 3:29 AM by Kevin Marks

Tim Oren has a meta-plan

Tim Oren:

Desiderata for a business model Some of these flow directly from the market description, others need a bit of explanation:

Leverage the net for promotion and distribution as far as possible. Both to reduce the costs of creating new markets (building a peak), and to create a structural barrier to labels tied down by channel conflict.
Be neutral to the artists' and genre audience's choices of revenue model. Whether the model is CDs, MP3s, concerts or merchandise, support it. Support both bundling and variable pricing, whatever makes the market by minimizing transaction costs in the eyes of the particular set of artists and customers.
Disaggregate creation, production, promotion, and distribution. This will allow amortizing infrastructure across genre and artists, while it forms another structural barrier to labels whose models inherent aggregate promotion and distribution. Specialists may ultimately be more efficient than 'tied' services.
Emphasize individual value, to both the customer and artist. This should be the antithesis of one-size-fits-all top 40 demographic marketing. Give them what they want, and then show them some more things they want. Create loyalty and trust among customers and artists; increase the emotional costs of cheating the system.
Be adaptive. It''s a moving landscape. The BigCo's are stuck on the peaks and can't explore. Fill up the new ground by using both artists and customers as scouts.

OK, Tim, which bits am I missing from mediAgora?
Or put another way, isn't mediAgora an ideal component of the choice of revenue model?

Posted 1:36 AM by Kevin Marks

Untangling the Web of Music Copyrights

Lydia Loren has a thorough paper on copyright complexity:
The crisis in the music industry has been brought about only in part by the digital revolution. The layering of copyright ownership interests and the complexity of copyright law, particularly as it applies to music, has also played a major role in the inability of the industry to respond to the rapidly evolving ways in which digital works can be distributed and otherwise exploited.

After detailing the tangle of legal rights in the music industry and identifying the vested industry players and their respective roles, this article describes the difficulties faced by users of new technology in attempting to comply with the law. These problems may explain, at least in part, the widespread phenomenon of what many in the industry see as infringement on a massive, and global, scale. Without low-transaction-cost solutions and reasonable absolute price for obtaining authorization for the digital activities of millions of users, we see a classic example of market failure. Users respond to this failure by effectively exiting the failed market, completely ignoring the overly cumbersome requirements of the law.

However, her proposed reform is almost as complex as the current system, and removes the simplicity of compulsory licensing, requiring more, not less negotiation, thus raising barriers to re-use.

Posted 9:54 AM by Kevin Marks

Volokh on Media as Property

The Volokh Conspiracy: ...say that virtually all TV viewers start using a hypothetical new technology that lets them watch all programs (cable or broadcast) for free, and lets them seamlessly skip commercials. Pro-I/P argument: This will mean much less incentive to create new works, and thus much less new TV programming. Anti-I/P argument: No problem; there's always some other business model. Shift from advertising and pay TV to, say, product placement (advertising Coke by having Coke cans appear as props in the show, or praise of Coke appear as part of the dialog) -- that will provide the revenue needed to make people invest in making more programming.
This argument does have some merit, in rebutting the extremist pro-I/P argument that "If it weren't for intellectual property, we'd have zero new works being created." Like most predictions that contain the words 'zero', 'always', or 'never', this is bunk: Some people will find some ways to make some money from the works even without intellectual property, and others will do it without a profit motive (consider blogs, for example). The extremist argument has always been hyperbole, not reality.
But this leaves the moderate pro-I/P argument that "If it weren't for intellectual property, we'd have much less investment in new works" -- and the "there's always some other business model" argument isn't really much of a response to that.

The flaw here (as Volokh acknowledges later) is that digital media re non-rivalrous and non-excludable:
Now of course one can argue that tangible property is different from intellectual property, for instance because it’s nonrivalrous; I won’t get into that debate now. But the store example shows that the argument that “there’s always some other business model” doesn’t really carry independent weight. Once you conclude that the seller has no legitimate property right in some kind of property (whether television programs or clothing), you can then pooh-pooh its claims by saying “there’s always some other business model.” But what’s doing the work in that argument is your initial rejection of the seller’s property right claim -- not your argument about other business models.

It seems that Volokh is the one doing a lot of work here to pretend these works are rivalrous and excludable. Pointing out the opposite is the boy that says 'but the Emperor has no clothes'.

Volokh has fallen into the trap of economic shallowness - that people act in accordance with the simplistic models of one-shot game theory, which says that the Prisoner's Dilemma will always end in betrayal.

In the real world, there is an iterated Prisoners Dilemma, and those who betray don't get to play for long, as their reputation precedes them.

Fans will readily pay for value perceived and received, especially when they know it will reward the creators. Creative work is not a commodity good, subject to uniform valuation and equilibrium economic assumptions, obeying Gaussian staistics, it is a fashion good, whose value varies wildly between individuals, and over time as trends ebb and flow, following Power law statistics. Pretending otherwise is the real mistake.

Posted 4:16 AM by Kevin Marks

Ready for mediAgora

Jack Rusher:
Suggestions presented by non-technical persons typically hinge on central control and accounting of the public Internet. The Internet was designed in such a way as to make this entirely unpracticable. Central planning is not a robust solution to these, or most other, problems.

The survival of the unit sale mechanism depends upon the creation of a robust micropayment system that will provide the market lubrication necessary to reduce the cost of legal acquisition until cheating is more effort than it%u2019s worth. There will, of course, still be piracy in that future, but it will be lost in the noise of commerce.

Posted 12:14 AM by Kevin Marks

iriXx summarizes for me

iriXx of copyleftmedia wrote a great article on copyright alternatives, including this nice summary of mediAgora:
The mediAgora project, initiated by Kevin Marks, demonstrates a new economic model which aims to provide a realistic and supportive framework for musicians to release their works while still earning a living. Marks defines mediAgora as 'a new marketplace for media', turning the established model on its head and redistributing the balance of power away from record company middlemen and back where it belongs, to the creator of an artistic work. Yet he acknowledges that promoters play a valuable role in getting an artist's work heard, and deserve recompense according to their contribution.
Under the mediAgora model, Marks defines a set of rules for the commission which his promoters would earn for distribution and publication of a creative work. His system is designed to work 'with the new realities of digital media, instead of fighting them', and so he suggests that customers can also become promoters - when someone recommends a work to their friends, leading to a subsequent purchase, or incorporates it into their playlist, they will also be rewarded by earning a small percentage on commission. Hence Marks states that 'there is no incentive to "cut out the middleman" and distribute straight from the artist either', as the mathematics of his chain of sales is designed to grant the distributor their full share of the revenue generated.
The economics of mediAgora are designed to work within a file-sharing environment, as Marks believes that sharing encourages sales. He is unwilling to use copy-protection systems, as he believes that this destroys the value of the work; instead he believes that the only way to encourage people to pay for a downloaded work is to make this process easier than a gratis download - his solution being to reward the customer. A person may play more than one role in the chain of supply from creator to promoter to customer, and indeed the mediAgora model does provide incentive for an artist to distribute their own works. But the most important implication of such a model is that the power is returned to the creator of a work, who negotiates the terms for promotional fees and distribution of monies. The middleman plays just the role which his/her title suggests, and is no longer in a position to wield oppressive contracts against the artist.
Copyleft licensing works well within the mediAgora model, which acknowledges that the artist, promoter and listening public all play a vital role in the music marketplace - and so may well offer a workable alternative under which all may enjoy their freedom to work, share and create. But mediAgora makes one additional requirement, that purchasers of a derivative work must also buy the original. Marks explains this as a solution to the question of how to reward a creator while permitting copying: 'Both copyleft and Creative Commons suffer from creating a hard separation between non-commercial and commercial re-use. This reinforces classical publishing models, which are designed around a hit-driven fashion business, with a power-law distribution. mediAgora's model is designed to work well for creators too small for conventional publishing to care about, but to be able to scale up smoothly. The model for derivative works is that you can create and sell one freely, but any customers who buy your work have to have bought the source work it is based on. This is similar to copyleft when both works are free, but it adds the notion of payment in a fair manner.'

Posted 11:23 PM by Kevin Marks

Business & Trust

Kottke's donut anecdote applies admirably to fundamental aspects of the mediAgora model: e.g. customers are not simply criminals waiting to happen, but potential participants in a trusted relationship. Donuts or music or film, most people aren't interested in cheating the system.

A while ago I was asked about DRM. This was my reply:

A few months ago, I purchased a digital version of an album that I liked online. I downloaded all the tracks, which were in a Windows Media Player format that allowed me to burn one copy of them onto a CD. I really liked that ability, because there were times when I wanted to be able to listen to my CD in the car, even though most of the time I'd probably be listening to it in the office at my desk, on the computer to which I'd downloaded the files.

Well, a week or two later, my friend Matt and I drove up to Vancouver, BC for the day. Somehow or another, while we were out walking around, my car got broken into. Fortunately for me, the car isn't particularly valuable and nothing in it was particularly valuable either, but that didn't stop the thief from taking my portable CD player which had my new CD that I'd burned in it (the player was probably worth $20, and the physical CD was probably not even $1).

Well, in one sense, this isn't a big deal. I can still listen to the album at work, where I spend 8 hours a day anyway. And, if I hadn't purchased the album digitally, if it had been a regular CD, I'd be out of luck; I'd have to go buy that album again. Also, it doesn't take a super-genius or a power user to realize that I can record sounds into MP3 format off my computer, so if I wanted to circumvent the Windows Media Player protection on that album, I could simply re-record each track and burn another CD.

The stupid thing is, though, that I shouldn't have to. The brilliance, the key, and the power to digital media is its reproduceability. However, for some reason, certain companies find this a huge threat. Admittedly, if someone took it into their head to illegally copy and distribute that media (and people do this), that will cause financial harm to a company. But all I want to do is have another CD to replace the one that was stolen from me. I get punished because whoever put the protection scheme on this album assumed I was going to behave criminally and use the album in an illegal way. Assumed guilty before I even had a chance to commit a crime.

Posted 6:24 PM by Andrea James

Movie's power curve changing too?

Glenn Reynolds notes the fall off in box office and the growth of independent film, and the parallel with music, as I discussed in the Liebowitz piece below.

Posted 11:28 AM by Kevin Marks

Couldn't put it better myself

As the Apple Turns explains DRM:
this is the way that DRM always seems to move: it becomes more and more annoying to honest people trying to use their songs/ebooks/whatever in legal ways, whereas dishonest people will always find a way to steal what they want no matter how much protection is slathered on top. But hey, that's what makes it so much fun! Assuming this all shakes out as rumored, we eagerly await Apple's workaround to the workaround to the workaround of the workaround.

Posted 10:32 PM by Kevin Marks

Derivative works need encouraging too

Jon Pareles writes an interesting article about influence between media, and when one should pay money as well as homage.
The mediAgora derivations model simplifies this hugely.

Similarly, Lessig cites an asynchronous collaboration:

So one of the million things I've not had time to do while finishing this draft (answering a b'gillion emails is another) was to listen to this. As I described before, Colin Mutchler posted a guitar track to Opsound. Opsound makes its content available to others under a Creative Commons Attribution-Share-Alike license. Cora Beth, a 17 year old violinist, took the track and added a violin track. The result is this.

As Brian Flemming commented on the post, "a great way to illustrate the value of CC to someone who perhaps doesn’t quite get it." Indeed it is. Listen to this, and you'll can't help but get it.

mediAgora make such collaborations possible too, but leaves open the opportunity for the Creators to get paid.

Posted 12:27 AM by Kevin Marks

Liebowitz blames downloading. But downloading what?

Stan Liebowitz has posted an updated and revised examination of the impact of MP3 downloads on record sales.

The bottom line: MP3 downloading is harming sales. No other explanations that have been put forward to explain the recent decline hold up under analysis.
Nevertheless, how far should we be willing to go to protect the record industry from a 20-25%
decline in business? Are recent proposals, such as the Berman bill going too far? My own view is that
such proposals are going too far. Should we switch to a non-market alternative as suggested by Lessig,
Natenal, and Romer? I believe that switching to a non-market alternative should be an absolutely
last-resort policy [...] Allowing record companies to protect their wares using digital right management technology seems to be a far more reasonable alternative.

I've just managed to read this through in detail; it is a thorough piece of work, as before, and measured in its conclusions, but it is still missing a few key measures.

Stan notes that the 'amount of time spent on activities' survey he uses to dismiss displacement of music by DVD or other activities, is methodologically flawed.

The librarying of DVDs rather than albums is not really tested. Seeing per capita DVD sales (and rentals) on the same composite chart showing the different music formats would be very interesting.

The cell-phone/text messaging/chat displacement should not be underestimated either. The amount spent on cellphone connectivity by the text-message generation is enough to displace a fair bit of prerecorded entertainment spending.

These quibbles aside, there is a key methodological problem at the core of the project. It works from the assumption that the RIAA records sold represent the totality of music consumption, and that any online music downloaded necessarily is an infringement of RIAA copyrights.

In fact, there is a great deal of music available online that is from artists outside the RIAA orbit, and freely made available, sometimes to promote CD sales, sometimes just for pleasure. This does reduce RIAA profits, but by displacement, not by theft.

A more subtle point is that network theory predicts that as interconnections between customers grow, the chance of a big cascade hit grows at first, but then as they are exposed to a more diverse range of advice and opinions, it falls off. The hugely increased connectivity that the net and cellphones enable may have caused the phase transition on the customer base.

This is discussed in Duncan Watts' classic paper.
In either of these two scenarios, the independent labels and musicians do better.

Posted 2:56 AM by Kevin Marks

UK Musicians interested in mediAgora

Miriam Rainsford's article on alternatives to standard publishing contracts for musicians puts a word in for mediAgora, as well as pointing out the UK problems with the MCPS monopoly:

One difficulty which bLiP records encountered in releasing the Madonna Remix Project album was that MCPS (UK Mechanical Copyright Protection Society) licensing is at present incompatible with copyleft licensing. Weston wished to draft his own license which would permit his customers to enjoy sharing mp3s of the album. When he approached the MCPS, their response was that a copyleft license would be "inappropriate."

On further enquiry it seems that, as an artist signs an exclusive license to the MCPS for royalty collection, the MCPS are then unwilling to extend this license to include file sharing. This is somewhat understandable when one considers that the MCPS takes an 8.5 percent cut from every album or digital distribution in the United Kingdom. The MCPS are willing for their members to use copyleft licensing as long as they sign a waiver for royalty collection. But what made Weston's job difficult is that, under UK law, it is illegal to press an album without an MCPS license. And an album license will not be granted by the MCPS if the album uses copyleft material.

Posted 6:32 PM by Kevin Marks

The need for sensible defaults in derivative licensing

DJ Z-Trip explains how hard it is to commercially publish his creative work, as it consists of mixing other peoples music in interesting ways:

As most of you know, I am in the middle of trying to make this album happen. It's a bit of a struggle due to the large amount of songs that require such heavy sample clearances. It seems like lately, trying to get OK's from everyone involved in the artists career, has turned out to be my new job....
[...]
Its hard to explain how my mixes are bringing new life to the game, but they are. Some of this music would never have gotten to the audiences ears had I not put it in my record crate. It could be anything? Brand new music, music that's been forgotten, old, new, whatever?or?. better yet (my favorite) a new fan of mine AND of the new style of music, or song, or artist I turned them on to. I get nothing but good feedback from how my mixing these songs makes people feel. Even though the artists I use to do this might not understand what is going on, it helps them out. If I've got people looking for old "Kansas" records after hearing me spin?. Then one way or another "Kansas" is winning.
But this is hard to explain to "Kansas"

This is is where we need a new model. Creative Commons works to disclaim payment, but not to claim it. Compulsories are there for songwriters but not for performers.

The model I propose for this is quite simple, and it can be thought of as an adaptation of both the compulsory licensing notion, and the doctrine of first sale to the world of infinite replicability.

Under the mediAgora model, each Work has a price set by its Creators. If Works are incorporated into another one, such as a mash-up, then the default price for the new Work should be the sum of the prices for the originals, plus whatever the Creator of the mash-up wants to set.

This can be done automatically, without any need for negotiation, though of course the possibility of negotiating is always there

For example, when I buy Z-Trip's mix featuring Kansas, I buy the source tracks as well. Kansas and teh oether sources get paid for the full price of their songs, and Z-Trip gets his margin for the work he did.

Some wrinkles and subtleties - you don't have to buy the same Work twice. Had I already owned the Kansas track, I would only have paid Z-Trip and the other artists in the mix.

The second subtlety is the Promotion Fee model, whereby some of the sale price is set aside to reward Promoters. Z-Trip would be acting as promoter for both the other songs, and would reap the benefits of the downstream promotion fees. Conceivably this could be enough that he didn't need to charge much if at all for the mash-up directly.

Posted 11:23 AM by Kevin Marks

Taste Tribes

Johnathan points me to Joshua Ellis writing eloquently about "Taste Tribes", his term for the loose clusters people from around common cultural interests

In the end, it is not the record labels and the movie studios who decide what's cool. We do. The media suppliers follow our cue, rather than the other way around ? which is the way it should be. Taste tribes may turn out to be the best way to filter out the bad media and let in the good ? to turn up the signal and wipe out the noise, as Peter Gabriel says on his most recent album. Which is great, by the way. You should go get it. Trust me.

mediAgora is designed to reinforce this natural tendency and harness it so Creators can be paid for their creations, and those who recommend them can get some remuneration too.

Posted 10:43 AM by Kevin Marks

Major labels dig their own hole

Independent record labels doing well while the majors crumble. Build your business model to break even further down the power law curve, then reap the windfalls if an act does better:

Caplan, who spent 21 years as an A&R (artist & repertoire) man with Sony-owned Epic Records, says big labels also have lost sight of what music is about - the artists, not the songs.

By seeking home-run hitters at the expense of solid team members, he notes, "They're just ceding a whole big part of the marketplace that we can go after."

Posted 2:29 AM by Kevin Marks

Bricklin gets that it is all about payment, not enforcement

Dan Bricklin writes a detailed and thoughtful piece on how artists get paid:
There is a lot of controversy about digital media, copy protection, fair use, and internetworking. In most cases from the viewpoint of legislators trying to react to lobbyists, as I understand it, it boils down to one question: How will the artists get paid? My answer is simple: The same way artists have always gotten paid. Let's examine that issue to see how it applies to today's world.

Posted 2:25 AM by Kevin Marks

Winer wants a media revolution

Dave Winer's Speech and Weblogs:
But gradually we're putting together the Napster system as a bootstrap, using the Web as a basis, and we can do it safely because our tools are used by creative people in totally non-infringing ways and in areas where the fat smelly guys are evacuating, the written word. They aren't smart enough to see our end-run. And even if they were, they'd have to convince the Supreme Court to revoke the First Amendment. Don't worry, they've tried, remember the CDA, passed by Congress, signed by the President, but overturned by the court.

Dave is on exactly the mediAgora track. We need to build payment systems from the bottom up to enable the independent creators to get paid, and encourage those who help people find them to pay too by cutting them in on the sales they generate. What they should sell is a perpetual right to have a good quality copy of the work, not a download, and not a medium.

Posted 4:30 PM by Kevin Marks

Retarded CDs

News.com has a story on copy-protected CDs:
SunnComm recently struck a deal with Microsoft to work together on a package of copy-protection techniques for labels. The smaller company will protect the ordinary CD audio tracks against copying, while Microsoft will provide tools to put additional copy-protected versions of the songs on the CD that can be copied to a computer hard drive or MP3 player but not traded online.
This so-called second session, containing files that can be used by computer music aficionados but not widely distributed, has come to be a key goal for the labels.

Second session technology is nearly 10 years old. CD Plus or CD Extra (Blue Book) adds a second session to the CD. Audio CD players play the Red Book session; computers can see it and the Data session as well.

Smart companies use the second session to add extra material - lyrics, videos, photos games etc.

The thriving 'singles' market in the UK largely consists of CD-Plus CDs. They succeed because they add the CD experience, creating extra value for computer users, who are thus willing to pay more for them.

Abusing second session technology to create CDs that are less useful in a computer is stupid. It will reduce the value of the CDs to the computer user, as Jupiter shows below, and make them less likely to be bought.

I hope whomever owns the trademark on 'CD-Plus' and 'Enhanced CD' refuses its use in this case - they should be called CD-Minus or Retarded CDs.

Posted 4:33 PM by Kevin Marks

DRM Destroys Value - Jupiter has proof

DRM Destroys Value - I've been saying this for a while, but Jupiter's new survey backs it up with figures:
According to the study, nearly twice as many online consumers are willing to pay $17.99 for a CD that has unrestricted copy abilities versus a CD at only $9.99 that cannot be copied.

That is a somewhat convoluted sentence, but it is pretty clear that DRM would cost the companies more than their profit margin to use (and it wouldn't stop copying in any case).

Posted 10:51 PM by Kevin Marks

World of Ends

David and Doc explain the nature of the internet in terms anyone can understand.

I QuickTopic'd this one too. annotate it here

Posted 7:55 PM by Kevin Marks

Yet another 'destroy the internet to make it safe for music' proposal

I've put Lionel S. Sobel's DRM as an Enabler of Business Models: ISPs as Digital Retailers proposal up on QuickTopic so it can be commented on point by point. You can read just the commented paragraphs. too

Posted 4:19 AM by Kevin Marks

When did you stop beating your business model?

The Harvard 'Digital Media in Cyberspace' project may be promising, but it's premises concern me.
it says
How can we control piracy and protect consumers' rights?

This very question is phrased in a tendentious form. They're customers, not consumers. Piracy is boarding ships and stealing the contents. If you're concerned about copyright enfringement, say so.

Should the government regulate digital media, or should the market be left alone?

There is no market yet. One needs to be created, and the government will not be able to do so easily. There is scope for private market creation though.

Must technology inventors be accountable to content creators?

No, but they will empower creators over publishers and distributors.

While the answers to these types of questions have been pondered, the future of digital media distribution remains uncertain.

Distribution is not the problem. Payment is.

Any potential solution must balance the interests of consumers, artists, entertainment industry and technology manufacturers—only then will we have a foundation for future growth.

My solution balances the interests of Creators, Promoters and Customers. The industries involved should adopt it, or something like it, or they'll be washed away in a classic Christensen 'Innovators Dilemma'

Posted 12:17 AM by Kevin Marks

Wolff at the door

Michael Wolff sees how pay per view fails, and talks to media execs:
The thing that I always try to say to the movie and music executives frothing at the mouth about this stealing issue (accusing my children and, one might fairly suspect, their own) is that everybody can’t be an outlaw. If everybody does it, it’s normal rather than aberrant behavior. It’s not so much the consumer who is on the wrong side of the law, but the entertainment industry that’s on the wrong side of economic laws.

For better or worse, the media business has created a world where consumers feel content is worth less and less and they are entitled to more and more of it. And now the chickens have come home to roost.

The veins on the necks of these execs are distended and throbbing, and they really have a hideous look in their eyes.

Posted 12:55 AM by Kevin Marks

A VC on labels' failing business model

Tim Oren extends the power law discussion to music. I wish I could get hold of SoundScan data or even mp3.com's download stats to plot some power-law charts. I've already pointed to Bentley and Maschner's study that shows album charts follow power laws.

Here's Tim:
As a guy who spends a lot of time thinking about business models, it's interesting to use the recent discussions on power laws to construct an explicit framework analyzing the MP3 challenge to the music biz. Probably little original here, but it's a way of seeing why these guys react so viscerally, and just how badly screwed they are if they keep along the same path.

[...]While we don't have rock solid proof, we certainly have suggestive evidence everywhere from the evolution of television, to the number of links pointing to blogs, that the small-audience tail of the power law distribution grows by displacing money and attention previously given to large audience plays, be they television broadcasters, AOL, or multi-platinum music albums. If the soundness of your business model, your portfolio risk management strategy, depends on the size of the big hits, then this is a scenario for being nibbled to death by ducks. The ducks being those harmless looking niche and back label artists and their low-rent business models. What our exec wants is 20 to 30 of them on his list. What he's going to get are 3000 of them, and none on his list. And the blogs? We're the word-of-mouth medium that's going to do the same thing to the media and promotional business that exists in symbiosis with the labels.

Whether the RIAA truly believes that direct theft by MP3 filesharing is the root of their problems, I have no way of knowing. There certainly seems to be evidence that it's a wash - displacing some sales, but causing others. What is certain is it's just collateral damage compared to the mortal threat of channel conflict pinning the labels into place, while their audience is eroded by a power law distribution with a much longer, commercially viable tail.

Posted 11:20 PM by Kevin Marks

Praise and Questions

Derek Slater likes mediAgora, and then asks:
Kevin talks about sharing music as a promoter as being something done between friends. In actuality, file trading is done between complete strangers. It could take other shapes, particularly if there were media companies provided more legal avenues to download digital media. But, it's likely that a lot of the trading will still remain in a P2P, stranger-to-stranger medium.

This may be so; the point is to provide an incentive for ongoing identity and reputation among Promoters, as well as rewarding those who add value by commenting on music, or collating it well. The determined non-payers will always have an outlet. Also, the need for 'media companies' is less clear lower down the power law curve - their cost structures don't fit, but independent Creators can be rewarded directly.

If that's the case, why won't this end up like Altnet? If you get on KaZaA you can get legal content through Altnet, but no one really does. Why? Because all of the legal content, pay-for-use content appears right next to the illegal, free content.
Sure, the promotion fee will make some people work within the system. But, will it make enough people do so?

Well, that depends on your definition of enough. Depending on how it is implemented, it could be set up as a way to legitimate existing downloaded content - it would then be feasible to offer amnesties and have a carrot rather than a stick for the existing downloaders.

If the music and movie companies aren't licensing their content online right now, why would they do it under this system? I know, there's Listen.com and such - but, really, we've got MusicNet, PressPlay, and Movielink. That's about it. What's going to change that under mediAgora?

I would not expect them to do so immediately - I would expect the independent creators to adopt it first, as they are excluded from the current system. My power law paper linked below suggest that there would be a lot of them, and that in aggregate they may outweigh the existing media companies. I suspect that in time the media companies would adopt the mediAgora system, where it made sense for them as an alternative to existing expensive distribution channels.

And what's to stop media creators from using DRM to limit legitimate private/fair uses other than copying? How will we embed in the system an incentive to not do that? Is the fact that limiting private/fair uses makes a product less valuable to the consumer enough to prevent such controls from being employed?

If I were running a mediAgora service, I'd make 'no DRM' a condition of participation for Creators. I've expiated at length before now on its futility. However I fully believe that it's inherent value destruction is enough to deter Customers, and this prediction has been borne out by the successive failures of all media distribution companies who rely on DRM (LiquidAudio, DataPlay etc.)

Posted 7:53 PM by Kevin Marks

Distributions of weblogs

I've done a detailed analysis of Power laws as applied to Weblogs, Newspapers and Movies.

The conclusions I come to are:

1. Weblog links do follow a power law
2. This saturates less quickly than other media, due to low barriers to entry
3. Therefore the many lightly linked weblogs outnumber the few heavily linked ones

You can discuss it here.

Posted 4:50 AM by Kevin Marks