exec #1: Boy, who would have thought our payola efforts would have come back to haunt us like this?
exec #2: Not me! Sure miss the old days when a smaller amount of our billions bought way more influence.
exec #1: This whole consolidated radio network thing stinks. I wish we could just get rid of radio.
exec #2: But we NEED radio to keep distributing free music so people will want to buy CDs!
exec #1: I know. I just can't get around that. If only there were some other avenue for distributing our music freely so that people could listen to it and decide they want to buy it.
[silence]
exec #2: Well, the good news is that we've managed to successfully shut down Napster and some of its ilk. At least we'll have more money from those sales we would have lost to make the payola!
exec #1: Maybe we could sue Clear Channel, or lobby congress for a new law that would favor us! You're brilliant, #2!
Tuesday, 25 June 2002
Music radios corruption
Continuing the radio theme, Salon describes how the labels are fed up with bribing the radio stations to play their records, but dare not stop. This inspired namespan on slashdot to imagine their thinking:
Monday, 24 June 2002
radio days
Doc said of my idea below I think it wouldn't be radio, exactly. Also that it would preclude the old-fashioned radio art of talking over parts of a tune.
Of course it wouldn't be radio. Internet Radio isn't radio. Let me tell you about what radio means to me.
I grew up in England in the 60s and 70s listening to radio - Listen With Mother on Radio 4 every day - the nice lady would say 'Are you sitting comfortably?' in her perfect RP tones, 'Yes!' I'd reply, leaning forwards toward the set - a big old yellow bakelite and burled wood Valve set my parents had brought back from Sweden, with lots of shortwave bands and European stations marked on it in Swedish, and a special green-glowing valve set into the front to indicate signal strength - 'Good, then I'll begin.'
Radio 4 was on long wave only then, and was used to send shipping forecasts to ships at sea just before every hour. These were hypnotic, like dada poetry, 'Tyne, Dogger, German Bight, seven. Rising more slowly. Good. Channel Light Vessel Automatic, five rising six. Fair. Pip Pip Pip Pip Peeeep. This is BBC Radio 4 It is 1pm Greenwich Mean Time. Here is the news...'
At 12.27 every day, just after the news, and before 'The World at One' did its stentorian current affairs roundup, a panel game would be aired - 'Just a Minute', 'Brain of Britain', 'Round the Horne', later 'The News Quiz ', but always to be hoped for 'I'm Sorry I Haven't a Clue', whose sublime improvised silliness satirized the rest of them very well.
Later, when I was 11 or so, I remember lying in bed at 11.30pm with a small transistor set and an earpiece, listening to the first broadcast of 'The Hitch-Hikers Guide to the Galaxy'. Shortly afterwards I became hooked on the Top 40 chart show, broadcast on Radio 1 on Sunday afternoons for two hours. This was the one and only national chart that mattered, and I wrote down each weeks list in a little notebook, and sat poised at my radio/cassette to record the songs I liked onto tape. Talking over parts of the tune was a curse, and not appreciated at all.
What I did appreciate was Kenny Everret's show on Capital, the London Independent station, which must have taken him most of the week to mix and prepare, combining current and classic music with bizzare sound effects, running gags and more inspired silliness.
These days, I would never think to turn on the radio in the house - it something I listen to while driving, generally KQED, and there are programs there I enjoy, such as 'This American Life', but they aren't part of the cultural fabric of the era for me like the state monopoly radio stations of my youth.
Web radio is no more radio than blogging is journalism - there are some commonalities in the form and the media (sound, words) involved, but the dynamic is going to be different.
Part of what enabled the web to explode was the ability to easily and universally cite a particular page and discuss it, freely and without permission, and with no endorsement implied. If you misrepresent or unfairly attack someone you link to, your readers can follow the link and see for themselves whom they find more persuasive. That NPR is attempting to disallow this shows a shocking misunderstanding of the power of this new freedom.
This is what we need for other media - a canonical, universal way to refer to a particular piece of music or other recording, that we can excerpt and link to as part of our own creation. Sending compressed copies of tunes synchronously once to a few listeners is imposing the limitations of radio onto a new medium that has the potential to be far more flexible and expressive - it is like early cinema, where a single fixed camera would film a whole play, with the proscenium arch neatly framed in the shot.
Of course it wouldn't be radio. Internet Radio isn't radio. Let me tell you about what radio means to me.
I grew up in England in the 60s and 70s listening to radio - Listen With Mother on Radio 4 every day - the nice lady would say 'Are you sitting comfortably?' in her perfect RP tones, 'Yes!' I'd reply, leaning forwards toward the set - a big old yellow bakelite and burled wood Valve set my parents had brought back from Sweden, with lots of shortwave bands and European stations marked on it in Swedish, and a special green-glowing valve set into the front to indicate signal strength - 'Good, then I'll begin.'
Radio 4 was on long wave only then, and was used to send shipping forecasts to ships at sea just before every hour. These were hypnotic, like dada poetry, 'Tyne, Dogger, German Bight, seven. Rising more slowly. Good. Channel Light Vessel Automatic, five rising six. Fair. Pip Pip Pip Pip Peeeep. This is BBC Radio 4 It is 1pm Greenwich Mean Time. Here is the news...'
At 12.27 every day, just after the news, and before 'The World at One' did its stentorian current affairs roundup, a panel game would be aired - 'Just a Minute', 'Brain of Britain', 'Round the Horne', later 'The News Quiz ', but always to be hoped for 'I'm Sorry I Haven't a Clue', whose sublime improvised silliness satirized the rest of them very well.
Later, when I was 11 or so, I remember lying in bed at 11.30pm with a small transistor set and an earpiece, listening to the first broadcast of 'The Hitch-Hikers Guide to the Galaxy'. Shortly afterwards I became hooked on the Top 40 chart show, broadcast on Radio 1 on Sunday afternoons for two hours. This was the one and only national chart that mattered, and I wrote down each weeks list in a little notebook, and sat poised at my radio/cassette to record the songs I liked onto tape. Talking over parts of the tune was a curse, and not appreciated at all.
What I did appreciate was Kenny Everret's show on Capital, the London Independent station, which must have taken him most of the week to mix and prepare, combining current and classic music with bizzare sound effects, running gags and more inspired silliness.
These days, I would never think to turn on the radio in the house - it something I listen to while driving, generally KQED, and there are programs there I enjoy, such as 'This American Life', but they aren't part of the cultural fabric of the era for me like the state monopoly radio stations of my youth.
Web radio is no more radio than blogging is journalism - there are some commonalities in the form and the media (sound, words) involved, but the dynamic is going to be different.
Part of what enabled the web to explode was the ability to easily and universally cite a particular page and discuss it, freely and without permission, and with no endorsement implied. If you misrepresent or unfairly attack someone you link to, your readers can follow the link and see for themselves whom they find more persuasive. That NPR is attempting to disallow this shows a shocking misunderstanding of the power of this new freedom.
This is what we need for other media - a canonical, universal way to refer to a particular piece of music or other recording, that we can excerpt and link to as part of our own creation. Sending compressed copies of tunes synchronously once to a few listeners is imposing the limitations of radio onto a new medium that has the potential to be far more flexible and expressive - it is like early cinema, where a single fixed camera would film a whole play, with the proscenium arch neatly framed in the shot.
Classical delusions
Given the name of my weblog, I may not in a strong position to make fun of technologists' classical allusions, but I suggest that the Microsoft engineer who came up with Palladium go and read Robert Graves' 'the Greek Myths'.
The Palladium was a statue built by Athene to memorialise her friend Pallas, who she accidentally killed during a tournament. Perhaps this is Microsoft's memorial to the open Internet?
One of the claims they make:
Controls your information after you send it . Palladium is being offered to the studios and record labels as a way to distribute music and film with �digital rights management� (DRM). This could allow users to exercise �fair use� (like making personal copies of a CD) and publishers could at least start releasing works that cut a compromise between free and locked-down. But a more interesting possibility is that Palladium could help introduce DRM to business and just plain people. �It�s a funny thing,� says Bill Gates. �We came at this thinking about music, but then we realized that e-mail and documents were far more interesting domains.� For instance, Palladium might allow you to send out e-mail so that no one (or only certain people) can copy it or forward it to others. Or you could create Word documents that could be read only in the next week. In all cases, it would be the user, not Microsoft, who sets these policies.
This is the crux of the hubris. This is about trusting computers more than people. The Palladium hardware/software in the reader's computer becomes your trusted counterparty, not the person reading the document.
Anyone not running Palladium will not see your document at all. While this may be very attractive to Bill Gates, given what his emails have shown of his plans when read out in court, most of us have different needs.
We are more concerned about persuading people to read our thoughts than preventing them, and through bitter experience we trust people with our inner secrets more than computers.
The Palladium was a statue built by Athene to memorialise her friend Pallas, who she accidentally killed during a tournament. Perhaps this is Microsoft's memorial to the open Internet?
One of the claims they make:
Controls your information after you send it . Palladium is being offered to the studios and record labels as a way to distribute music and film with �digital rights management� (DRM). This could allow users to exercise �fair use� (like making personal copies of a CD) and publishers could at least start releasing works that cut a compromise between free and locked-down. But a more interesting possibility is that Palladium could help introduce DRM to business and just plain people. �It�s a funny thing,� says Bill Gates. �We came at this thinking about music, but then we realized that e-mail and documents were far more interesting domains.� For instance, Palladium might allow you to send out e-mail so that no one (or only certain people) can copy it or forward it to others. Or you could create Word documents that could be read only in the next week. In all cases, it would be the user, not Microsoft, who sets these policies.
This is the crux of the hubris. This is about trusting computers more than people. The Palladium hardware/software in the reader's computer becomes your trusted counterparty, not the person reading the document.
Anyone not running Palladium will not see your document at all. While this may be very attractive to Bill Gates, given what his emails have shown of his plans when read out in court, most of us have different needs.
We are more concerned about persuading people to read our thoughts than preventing them, and through bitter experience we trust people with our inner secrets more than computers.
Saturday, 22 June 2002
How to save net radio
Reading the CARP terms and 17:114 conditions again, I think I see a way to save internet radio and improve it at the same time.
The statutory licensing says the radio station can't be interactive, and needs to send song title etc information, but not in advance- you musn't know what is coming up.
In practice, on the radio you'll often hear a song you own - when Sirens of Song is playing Dido, I probably have a higher quality version on my hard drive already.
So how about the radio station sending just an id defining the song to play - a CDDB id would work fine. If the client on my end knows I have it, it plays the local copy; only if I don't have it locally does it tune in to the radio station to stream it. Because of clauses C ii & xi, you'd have to miss the very beginning of the song this way (no advance notification), but you could keep this down to a couple of ping round-trips.
As the radio station pays per performance, it only pays for performing songs I don't already have, and saves a chunk of bandwidth as well as fees.
The client can help you buy the songs you don't own as a high-quality download or CD.
The statutory licensing says the radio station can't be interactive, and needs to send song title etc information, but not in advance- you musn't know what is coming up.
In practice, on the radio you'll often hear a song you own - when Sirens of Song is playing Dido, I probably have a higher quality version on my hard drive already.
So how about the radio station sending just an id defining the song to play - a CDDB id would work fine. If the client on my end knows I have it, it plays the local copy; only if I don't have it locally does it tune in to the radio station to stream it. Because of clauses C ii & xi, you'd have to miss the very beginning of the song this way (no advance notification), but you could keep this down to a couple of ping round-trips.
As the radio station pays per performance, it only pays for performing songs I don't already have, and saves a chunk of bandwidth as well as fees.
The client can help you buy the songs you don't own as a high-quality download or CD.
Thursday, 20 June 2002
CARP decides
The Library of Congress's decision on the CARP webcasting rates is up
The most significant difference between the CARP's determination and the Librarian's decision is that the Librarian has abandoned the CARP's two-tiered rate structure of 0.14c per performance for 'internet-only' transmissions and 0.07c for each retransmission of a performance in an AM/FM radio broadcast, and has decided that the rate of 0.07c will apply to both types of transmission. Some of the rates for noncommercial broadcasters have also been decreased, and the fee webcasters and broadcasters must pay for the making of ephemeral recordings has been reduced from 9% of the performance fees to 8.8%. The minimum payment for business establishment services was increased to $10,000.
So, the basic structure still stands, the webcasters are still charged huge back royalties,and they still don't have the freedom to offer interactive programming in any meaningful way. The logic of record companies of paying thousands to get airplay on the radio, but trying to extract thousands for wireplay on the net escapes me still. Here are the terms of the licence, which have lots of vague clauses about DRM type stuff that look as if they were deliberately written to be only settleable in court at great cost:
(v) the transmitting entity cooperates to prevent, to the extent feasible without imposing substantial costs or burdens, a transmission recipient or any other person or entity from automatically scanning the transmitting entity's transmissions alone or together with transmissions by other transmitting entities in order to select a particular sound recording to be transmitted to the transmission recipient, except that the requirement of this clause shall not apply to a satellite digital audio service that is in operation, or that is licensed by the Federal Communications Commission, on or before July 31, 1998;
Is this an Anti-TiVo clause?
(vi) the transmitting entity takes no affirmative steps to cause or induce the making of a phonorecord by the transmission recipient, and if the technology used by the transmitting entity enables the transmitting entity to limit the making by the transmission recipient of phonorecords of the transmission directly in a digital format, the transmitting entity sets such technology to limit such making of phonorecords to the extent permitted by such technology;
viii) the transmitting entity accommodates and does not interfere with the transmission of technical measures that are widely used by sound recording copyright owners to identify or protect copyrighted works, and that are technically feasible of being transmitted by the transmitting entity without imposing substantial costs on the transmitting entity or resulting in perceptible aural or visual degradation of the digital signal, except that the requirement of this clause shall not apply to a satellite digital audio service that is in operation, or that is licensed under the authority of the Federal Communications Commission, on or before July 31, 1998, to the extent that such service has designed, developed, or made commitments to procure equipment or technology that is not compatible with such technical measures before such technical measures are widely adopted by sound recording copyright owners;
The most significant difference between the CARP's determination and the Librarian's decision is that the Librarian has abandoned the CARP's two-tiered rate structure of 0.14c per performance for 'internet-only' transmissions and 0.07c for each retransmission of a performance in an AM/FM radio broadcast, and has decided that the rate of 0.07c will apply to both types of transmission. Some of the rates for noncommercial broadcasters have also been decreased, and the fee webcasters and broadcasters must pay for the making of ephemeral recordings has been reduced from 9% of the performance fees to 8.8%. The minimum payment for business establishment services was increased to $10,000.
So, the basic structure still stands, the webcasters are still charged huge back royalties,and they still don't have the freedom to offer interactive programming in any meaningful way. The logic of record companies of paying thousands to get airplay on the radio, but trying to extract thousands for wireplay on the net escapes me still. Here are the terms of the licence, which have lots of vague clauses about DRM type stuff that look as if they were deliberately written to be only settleable in court at great cost:
(v) the transmitting entity cooperates to prevent, to the extent feasible without imposing substantial costs or burdens, a transmission recipient or any other person or entity from automatically scanning the transmitting entity's transmissions alone or together with transmissions by other transmitting entities in order to select a particular sound recording to be transmitted to the transmission recipient, except that the requirement of this clause shall not apply to a satellite digital audio service that is in operation, or that is licensed by the Federal Communications Commission, on or before July 31, 1998;
Is this an Anti-TiVo clause?
(vi) the transmitting entity takes no affirmative steps to cause or induce the making of a phonorecord by the transmission recipient, and if the technology used by the transmitting entity enables the transmitting entity to limit the making by the transmission recipient of phonorecords of the transmission directly in a digital format, the transmitting entity sets such technology to limit such making of phonorecords to the extent permitted by such technology;
viii) the transmitting entity accommodates and does not interfere with the transmission of technical measures that are widely used by sound recording copyright owners to identify or protect copyrighted works, and that are technically feasible of being transmitted by the transmitting entity without imposing substantial costs on the transmitting entity or resulting in perceptible aural or visual degradation of the digital signal, except that the requirement of this clause shall not apply to a satellite digital audio service that is in operation, or that is licensed under the authority of the Federal Communications Commission, on or before July 31, 1998, to the extent that such service has designed, developed, or made commitments to procure equipment or technology that is not compatible with such technical measures before such technical measures are widely adopted by sound recording copyright owners;
Wednesday, 19 June 2002
Music piracy not hurting recording industry after all
Michael Fraase notices thatMusic piracy not hurting recording industry after all
The short-term solution for the recording industry is simple: continue to sell your units of atoms in the form of CDs at about one-half the current prices and sell all-you-can-eat subscriptions to the component bits - the real, complete, open, non-DRM, and non-protected bits - on the net at, say, US$30 per month. Oh, and realize that your days are numbered in any case. The smartest artists and fans have already realized that they don't need you.
Good summary and links to things I cover below.
The short-term solution for the recording industry is simple: continue to sell your units of atoms in the form of CDs at about one-half the current prices and sell all-you-can-eat subscriptions to the component bits - the real, complete, open, non-DRM, and non-protected bits - on the net at, say, US$30 per month. Oh, and realize that your days are numbered in any case. The smartest artists and fans have already realized that they don't need you.
Good summary and links to things I cover below.
Tuesday, 18 June 2002
Class Action against CD protection racket
Denise Notes that:
The Milberg Wiess law firm, known for its pursuit of shareholder derivative class actions, filed a lawsuit against five record labels last week on behalf of consumers injured by anti-copy protection incorporated into music CDs
The two of us discussed the possibility of criminal prosecution a while back
The Milberg Wiess law firm, known for its pursuit of shareholder derivative class actions, filed a lawsuit against five record labels last week on behalf of consumers injured by anti-copy protection incorporated into music CDs
The two of us discussed the possibility of criminal prosecution a while back
Monday, 17 June 2002
404 page beats front page for utility
Compare and contrast:
The 404 page from The Mercury News
Links to popular SiliconValley.com sections and features are listed below; please adjust your bookmarks accordingly.
The front page from The Mercury News
Far slower to load, more cluttered, though it does finally have above the fold direct links to the popular pages like Dan Gillmor and Good Morning Silicon Valley.
I was going to upate my bookmark, but the 404 page is better - I'm getting really bad dialup speeds here in the Capital of Silicon Valley tonight, so every bit counts.
The 404 page from The Mercury News
Links to popular SiliconValley.com sections and features are listed below; please adjust your bookmarks accordingly.
The front page from The Mercury News
Far slower to load, more cluttered, though it does finally have above the fold direct links to the popular pages like Dan Gillmor and Good Morning Silicon Valley.
I was going to upate my bookmark, but the 404 page is better - I'm getting really bad dialup speeds here in the Capital of Silicon Valley tonight, so every bit counts.
Thursday, 13 June 2002
Warners release Harry Potter DVD without Macrovision - a good sign. Warners have consistently been more clueful than other media companies, releasing music online in undamaged formats, and not making corrupt CDs that crash computers like Sony.
Stan Liebowitz (cited below) claimed that Macrovison's obvious violations of content creators rights was not DRM. Thus DRM, like Socialism, can be redefined to be what he likes and not what he dislikes. Macrovision is deliberate content damage - degrading video siganls so that the AGC circuitry in VCRs fails. Modern VCRs are required by the DMCA to have stupid AGC circuitry so Macrovision still works.
The language there about Professional recorders vs consumer ones could only be more blatant if it mandated a DRM helmet or TuneBlock:
Sixth, the exclusion of professional analog video cassette recorders is necessary in order to allow the motion picture, broadcasting, and other legitimate industries and individual businesses to obtain and use equipment that is essential to their normal, lawful business operations. As a further explanation of the types of equipment that are to be subject to this exception, the following factors should be used in evaluating whether a specific product is a "professional'" product:
(1) whether, in the preceding year, only a small number of the devices that are of the same kind, nature, and description were sold to consumers other than professionals employing such devices in a lawful business or industrial use;
(2) whether the device has special features designed for use by professionals employing the device in a lawful business or industrial use;
(3) whether the advertising, promotional and descriptive literature or other materials used to market the device were directed at professionals employing such devices in a lawful business or industrial use;
(4) whether the distribution channels and retail outlets through which the device is distributed and sold are ones used primarily to make sales to professionals employing such devices in a lawful business or industrial use; and
(5) whether the uses to which the device is most commonly put are those associated with the work of professionals employing the device in a lawful business or industrial use.
So amateurs can't copy videotapes, only legitimate professionals. No presumption of innocence. Now they want to apply the same ideas to all computers. Glad to see Warner are smart enough to realise that people might want to pass their DVD signal through a VCR.
Stan Liebowitz (cited below) claimed that Macrovison's obvious violations of content creators rights was not DRM. Thus DRM, like Socialism, can be redefined to be what he likes and not what he dislikes. Macrovision is deliberate content damage - degrading video siganls so that the AGC circuitry in VCRs fails. Modern VCRs are required by the DMCA to have stupid AGC circuitry so Macrovision still works.
The language there about Professional recorders vs consumer ones could only be more blatant if it mandated a DRM helmet or TuneBlock:
Sixth, the exclusion of professional analog video cassette recorders is necessary in order to allow the motion picture, broadcasting, and other legitimate industries and individual businesses to obtain and use equipment that is essential to their normal, lawful business operations. As a further explanation of the types of equipment that are to be subject to this exception, the following factors should be used in evaluating whether a specific product is a "professional'" product:
(1) whether, in the preceding year, only a small number of the devices that are of the same kind, nature, and description were sold to consumers other than professionals employing such devices in a lawful business or industrial use;
(2) whether the device has special features designed for use by professionals employing the device in a lawful business or industrial use;
(3) whether the advertising, promotional and descriptive literature or other materials used to market the device were directed at professionals employing such devices in a lawful business or industrial use;
(4) whether the distribution channels and retail outlets through which the device is distributed and sold are ones used primarily to make sales to professionals employing such devices in a lawful business or industrial use; and
(5) whether the uses to which the device is most commonly put are those associated with the work of professionals employing the device in a lawful business or industrial use.
So amateurs can't copy videotapes, only legitimate professionals. No presumption of innocence. Now they want to apply the same ideas to all computers. Glad to see Warner are smart enough to realise that people might want to pass their DVD signal through a VCR.
An economist almost gets a clue
Damien Cave inteveriews Stan Liebowitz on DRM It sounds like he is slowly grasping the truth about digital media - that DRM destroys value, but copying doesn't.
The problem is that the number of downloads appears to be larger than the total number of CDs purchased. Worldwide annual downloads, according to estimates from places like Webnoize, would indicate that the number of downloads -- if you assume there are 10 songs on a CD -- is something like five times the total number of CDs sold in the U.S. in a year, and one-and-a-half times the worldwide sales. That's so large that you have to say: Look, if downloads are substitutes [for CDs] in any significant way, we should see really big declines -- unless there's something else going on. [..]
It may wind up that people just like to purchase because it's the honest thing to do. There's another possible explanation though, which is something that I'm trying to get harder data on. If we had a degree of copying [now] not that different from in the past, and it's just switched from audiotapes to downloads, then we may not notice an impact on CD sales.
Or perhaps the downloading is a substitute for radio listening, and what it is doing is varying the purchases more - shifting the Pareto distribution away from what the record companies are paying to play on air?
Certainly, if they're going to sell music that you can't make copies of, people aren't likely to pay as much for it. I don't know that the record companies really understand that. I think the pricing that they have for these services doesn't make any sense.
Bingo.
DRM, as I see it, is merely the protection in the software, on a CD or whatever, that would allow micro-payments. It doesn't do this yet, but in principle it could. That's what I view as closer to ideal. They can let you do a lot and you pay a higher price, or let you do only a little in which case you'd be paying a lower price. It solves a lot of peculiar economic problems that arise when you're dealing with intellectual property. If it stopped copying, if it was fairly effective -- it will never stop all the hardcore crackers -- then the copyright owners will get a reasonably good deal and users will get a reasonably good deal.
This is missing the point that once it's cracked its cracked. You need economic incentives to operate the right way round, not backwards like this. DRM schemes reduce the value of the content, but are hackable. Thus the only people who can realise the true value are the hackers. You need to reward those who pay, not punish them.
The micro-payments idea has been floating around for years and it's never happened. Why do you think it would work and why hasn't it worked so far?
I have to believe the computer people who think that DRM is viable. The micro-payment part is the harder part because the credit card companies won't accept payments as small as micro-payments would need to be. If someone can come along who is able to accept small micro-payments -- one of the credit-card type companies -- then it could be viable. Right now, that's probably the biggest impediment: There's a fixed cost for using a credit card that's bigger than what a lot of these payments would be.
PayPal accepts payments of 1 cent. But that isn't the problem. The problem is that most people don't like micropayments - the mental cost of keeping track of them is more expensive than they are worth - hence the phrase 'nickled and dimed to death'.
What makes you so sure that DRM won't turn off consumers and make them focus on the rogue file-sharing services?
If it turns off consumers, they'll have to remove it or lower the price. The people selling these things want to make money, which means they want to give people whatever it is that they want to pay the most for. They want to maximize profits and if they change their product and no one wants to buy it, they'll change it back in a heartbeat. That's the beauty of the market. That's why it can't get too far afield. If they get every consumer mad at them, they'll be in big trouble.
What if they don't change their product, but no-one wants to buy it?
The problem is that the number of downloads appears to be larger than the total number of CDs purchased. Worldwide annual downloads, according to estimates from places like Webnoize, would indicate that the number of downloads -- if you assume there are 10 songs on a CD -- is something like five times the total number of CDs sold in the U.S. in a year, and one-and-a-half times the worldwide sales. That's so large that you have to say: Look, if downloads are substitutes [for CDs] in any significant way, we should see really big declines -- unless there's something else going on. [..]
It may wind up that people just like to purchase because it's the honest thing to do. There's another possible explanation though, which is something that I'm trying to get harder data on. If we had a degree of copying [now] not that different from in the past, and it's just switched from audiotapes to downloads, then we may not notice an impact on CD sales.
Or perhaps the downloading is a substitute for radio listening, and what it is doing is varying the purchases more - shifting the Pareto distribution away from what the record companies are paying to play on air?
Certainly, if they're going to sell music that you can't make copies of, people aren't likely to pay as much for it. I don't know that the record companies really understand that. I think the pricing that they have for these services doesn't make any sense.
Bingo.
DRM, as I see it, is merely the protection in the software, on a CD or whatever, that would allow micro-payments. It doesn't do this yet, but in principle it could. That's what I view as closer to ideal. They can let you do a lot and you pay a higher price, or let you do only a little in which case you'd be paying a lower price. It solves a lot of peculiar economic problems that arise when you're dealing with intellectual property. If it stopped copying, if it was fairly effective -- it will never stop all the hardcore crackers -- then the copyright owners will get a reasonably good deal and users will get a reasonably good deal.
This is missing the point that once it's cracked its cracked. You need economic incentives to operate the right way round, not backwards like this. DRM schemes reduce the value of the content, but are hackable. Thus the only people who can realise the true value are the hackers. You need to reward those who pay, not punish them.
The micro-payments idea has been floating around for years and it's never happened. Why do you think it would work and why hasn't it worked so far?
I have to believe the computer people who think that DRM is viable. The micro-payment part is the harder part because the credit card companies won't accept payments as small as micro-payments would need to be. If someone can come along who is able to accept small micro-payments -- one of the credit-card type companies -- then it could be viable. Right now, that's probably the biggest impediment: There's a fixed cost for using a credit card that's bigger than what a lot of these payments would be.
PayPal accepts payments of 1 cent. But that isn't the problem. The problem is that most people don't like micropayments - the mental cost of keeping track of them is more expensive than they are worth - hence the phrase 'nickled and dimed to death'.
What makes you so sure that DRM won't turn off consumers and make them focus on the rogue file-sharing services?
If it turns off consumers, they'll have to remove it or lower the price. The people selling these things want to make money, which means they want to give people whatever it is that they want to pay the most for. They want to maximize profits and if they change their product and no one wants to buy it, they'll change it back in a heartbeat. That's the beauty of the market. That's why it can't get too far afield. If they get every consumer mad at them, they'll be in big trouble.
What if they don't change their product, but no-one wants to buy it?
How it feels to be in a collapsing cartel
How it feels to be in a collapsing cartel:
Dan Fendel of the Director's Guild of America
That's what we sell, folks. Attention Span. We sell pairs of eyes and ears paying attention to something--a book, a magazine, a movie, a tv show, a website, a radio program, etc. etc. We charge for it in various ways, from admission tickets and buttered popcorn to actually using its very own currency--attention span--to pay for it by making you pay attention to commercials in between our entertaining content, and we give a lot of it away for "free" just for the privilege of trying to monetize it by inspiring a purchase later.
But either way, there's trouble in the Attention Span business we call Show Business[...]
The problem is this: The number of pairs of eyes/ears available to gain attention span from is not growing as fast as the number of venues where such attention span is being sought, and that means that any one of those venues, even the biggest, cannot possibly get the same "market share" it used to get. When there were 3 networks, 9 studios, half-a-dozen major publishing houses and two weekly news magazines, even if you "lost" the "timeslot," you got a LOT of eyes and ears, and you could charge, relatively speaking, a LOT for the privilege of being exposed to them.
Dan Fendel of the Director's Guild of America
That's what we sell, folks. Attention Span. We sell pairs of eyes and ears paying attention to something--a book, a magazine, a movie, a tv show, a website, a radio program, etc. etc. We charge for it in various ways, from admission tickets and buttered popcorn to actually using its very own currency--attention span--to pay for it by making you pay attention to commercials in between our entertaining content, and we give a lot of it away for "free" just for the privilege of trying to monetize it by inspiring a purchase later.
But either way, there's trouble in the Attention Span business we call Show Business[...]
The problem is this: The number of pairs of eyes/ears available to gain attention span from is not growing as fast as the number of venues where such attention span is being sought, and that means that any one of those venues, even the biggest, cannot possibly get the same "market share" it used to get. When there were 3 networks, 9 studios, half-a-dozen major publishing houses and two weekly news magazines, even if you "lost" the "timeslot," you got a LOT of eyes and ears, and you could charge, relatively speaking, a LOT for the privilege of being exposed to them.
Wednesday, 12 June 2002
Tuesday, 11 June 2002
A lot of blog-zagging led me to Brad de-Longe's Old Rules for the New Economy:
After the heroic age, firms make money by giving customers exactly what they want.
As long as automobile prices were falling and quality rising rapidly, Henry Ford could do very, very well by riding the leading edge of the technology wave: making a leading-edge car and letting the customer choose the color and the options, as long as the options were zero and the color was black. But after the 1920s Ford got overwhelmed by Alfred P. Sloan's General Motors, which figured out how to retain most of Ford's economies of scale while at the same time proliferating brands, models, styles, and colors to get close to individual consumer demand. Before GM, no one knew what kind of options car buyers really wanted. Today, no one knows what kind of options computer and internet access purchasers really want--and no one will until a computer and communications counterpart emerges to play GM against Microsoft and Intel's version of Ford.
Which reminds me of Bob Frankston's on-going campaign.
it is important to frame the problem in terms of simple principles:
* Connectivity. This is simply transport without favoring any particular service whether it is voice or the web or television or other data. The underlying transport technologies must enable the creation of new services rather than favoring the old ones.
* Advocacy. With the inherent conflict of interests between the transport and service business the only way to assure that the incentives are aligned is to separate the two. Again and again the incumbents demonstrate the lack of incentive.
Indeed, Brad's been doing it for years
After the heroic age, firms make money by giving customers exactly what they want.
As long as automobile prices were falling and quality rising rapidly, Henry Ford could do very, very well by riding the leading edge of the technology wave: making a leading-edge car and letting the customer choose the color and the options, as long as the options were zero and the color was black. But after the 1920s Ford got overwhelmed by Alfred P. Sloan's General Motors, which figured out how to retain most of Ford's economies of scale while at the same time proliferating brands, models, styles, and colors to get close to individual consumer demand. Before GM, no one knew what kind of options car buyers really wanted. Today, no one knows what kind of options computer and internet access purchasers really want--and no one will until a computer and communications counterpart emerges to play GM against Microsoft and Intel's version of Ford.
Which reminds me of Bob Frankston's on-going campaign.
it is important to frame the problem in terms of simple principles:
* Connectivity. This is simply transport without favoring any particular service whether it is voice or the web or television or other data. The underlying transport technologies must enable the creation of new services rather than favoring the old ones.
* Advocacy. With the inherent conflict of interests between the transport and service business the only way to assure that the incentives are aligned is to separate the two. Again and again the incumbents demonstrate the lack of incentive.
Indeed, Brad's been doing it for years
Monday, 10 June 2002
DRM Helmets
DRM Helmets: An Idea Whose Time Has Come
The proposed CBDTPA law could require billions of individual "digital media devices" -- every TV, stereo, speaker, PC, walkman, hard drive, monitor, and scanner -- to carry enforcement circuitry -- but there are only 300 million people in the country. Mathematically astute readers will note that's less than 600 million each of eyes and ears.
Further, a single economical helmet can cover four of these analog holes at once!
A modest proposal indeed.
The proposed CBDTPA law could require billions of individual "digital media devices" -- every TV, stereo, speaker, PC, walkman, hard drive, monitor, and scanner -- to carry enforcement circuitry -- but there are only 300 million people in the country. Mathematically astute readers will note that's less than 600 million each of eyes and ears.
Further, a single economical helmet can cover four of these analog holes at once!
A modest proposal indeed.
Thursday, 6 June 2002
Two quick but good links on music's fate
Two quick but good links on music's fate:
How pop stars are becoming like novelists (which reminds me of a quote from the TV coverage of the Queen's Jubilee 'the crowd are treating William and Harry like rock stars' - remember when rock stars were 'treated like royalty' (The two princes being respectively 2nd and 3rd in line to the throne...)).
Wired realises that DRM is a value destruction mechanism. No-one wants to buy locked up music. See lots of posts below and back to last year...
How pop stars are becoming like novelists (which reminds me of a quote from the TV coverage of the Queen's Jubilee 'the crowd are treating William and Harry like rock stars' - remember when rock stars were 'treated like royalty' (The two princes being respectively 2nd and 3rd in line to the throne...)).
Wired realises that DRM is a value destruction mechanism. No-one wants to buy locked up music. See lots of posts below and back to last year...
Wednesday, 5 June 2002
Shiny new links - thanks to Dorothea's tutorials I've now got a template with space for more than 5 links, so I've added a few. (Look right, or scroll all the way to the bottom if your window is narrow or your browser old and confused).
If I have unaccountably overlooked you, or you've said something interesting, or nice things about me or Andrew and I haven't reciprocated, let me know.
If I have unaccountably overlooked you, or you've said something interesting, or nice things about me or Andrew and I haven't reciprocated, let me know.
This is satire:
In their continuing struggle to selflessly save the musicians of the world from penury, all of the leading record company executives have pledged to "stamp out free humming, wherever it may occur".
"For years people have gone about humming their favourite songs whenever it took their fancy. Normally this would be a source of pleasure. But this pleasure came at the expense of lots of hard work from the musicians who are clearly not getting any compensation for this," screamed an indignant Rilary Hosen of the Recording Industry Association of America.
To further prove that the RIAA's motivation is not selfish, she flourished statistics which prove that artists only get about 2.3 per cent of all money that their work generates. "So they really need every penny they can get," sniffled Ms. Hosen through a cascade of tears.
[...]
"I think it is up to the end users of larynxes to prove that they have substantial other non-copyright infringing uses than humming songs for free. Mute people and those with serious throat cancer would be excluded from this new levy," said a salivating Rilary.
Whereas this is a parody. Clear?
In their continuing struggle to selflessly save the musicians of the world from penury, all of the leading record company executives have pledged to "stamp out free humming, wherever it may occur".
"For years people have gone about humming their favourite songs whenever it took their fancy. Normally this would be a source of pleasure. But this pleasure came at the expense of lots of hard work from the musicians who are clearly not getting any compensation for this," screamed an indignant Rilary Hosen of the Recording Industry Association of America.
To further prove that the RIAA's motivation is not selfish, she flourished statistics which prove that artists only get about 2.3 per cent of all money that their work generates. "So they really need every penny they can get," sniffled Ms. Hosen through a cascade of tears.
[...]
"I think it is up to the end users of larynxes to prove that they have substantial other non-copyright infringing uses than humming songs for free. Mute people and those with serious throat cancer would be excluded from this new levy," said a salivating Rilary.
Whereas this is a parody. Clear?
A VC writes on music businesses
Distribution technology and services are just ways of helping someone else sell their valuable assets, and are certainly not a basis for entrepreneurship. It's the control over the assets themselves, and not the pipes to deliver them, that will drive shareholder value in new music companies. The online distribution of music is not about technology. More than enough technology exists to produce any consumer music service you could possibly imagine. The game will really get interesting when the very heart of the music industry--the creation and sourcing of music--is challenged.
It sounds like he is asking for a startup pitch focused on new ways of fleecing musicians, but maybe he just didn't express himself well.
Distribution technology and services are just ways of helping someone else sell their valuable assets, and are certainly not a basis for entrepreneurship. It's the control over the assets themselves, and not the pipes to deliver them, that will drive shareholder value in new music companies. The online distribution of music is not about technology. More than enough technology exists to produce any consumer music service you could possibly imagine. The game will really get interesting when the very heart of the music industry--the creation and sourcing of music--is challenged.
It sounds like he is asking for a startup pitch focused on new ways of fleecing musicians, but maybe he just didn't express himself well.
The usually measured and smart Dan Gillmor seems to be projecting his own confusion about libertarianism onto others. 802.11 is an example where deregulation works. Asking for incumbent Phone and Cable companies to be subject to competition, instead of being allowed to turn commodity connectivity into their own private walled garden is not inconsistent with this. David Reed puts it well:
This advocate of high bandwidth connectivity would like just one thing, and it has nothing to do with "federal assistance". It has everything to do with removing federal and state granted monopolies from ILECs and cable companies, so it is possible to compete by innovation.
[...]
Just as we gave prime spectrum to the NAB members because they "promised" to do HDTV, and gave AOLTW a pass in antitrust because they promised to "open" up their network to ISPs...
Now we are going to give federal support to the ILECs and cable guys, because they "promise" broadband to the home.
I predict in 5 years we'll be exactly where we are today, with the ILEC and cable guys saying they don't see a "business model". And no one will wonder where all the federal money went...
Dan, here's a challenge for you. Use the Merc's bully pulpit to get San Jose to allow open access to the poles and conduits attached to all our houses for anyone who will run fibre alongside the phones and CATV wires already strung.
This advocate of high bandwidth connectivity would like just one thing, and it has nothing to do with "federal assistance". It has everything to do with removing federal and state granted monopolies from ILECs and cable companies, so it is possible to compete by innovation.
[...]
Just as we gave prime spectrum to the NAB members because they "promised" to do HDTV, and gave AOLTW a pass in antitrust because they promised to "open" up their network to ISPs...
Now we are going to give federal support to the ILECs and cable guys, because they "promise" broadband to the home.
I predict in 5 years we'll be exactly where we are today, with the ILEC and cable guys saying they don't see a "business model". And no one will wonder where all the federal money went...
Dan, here's a challenge for you. Use the Merc's bully pulpit to get San Jose to allow open access to the poles and conduits attached to all our houses for anyone who will run fibre alongside the phones and CATV wires already strung.
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