Cringely Proposes a Music Sharing Alternative 730
WEFUNK writes "The I, Cringely 'Pulpit' column at PBS presents an interesting idea for a new business model to take on the RIAA. He suggests that a publicly traded company could legally and profitably buy a single copy of each record which could then be freely copied and listened to by its shareholders under fair use. His 'Snapster' (Son of Napster) proposal is essentially a digital music co-op that would let shareholders/consumers bring copyrighted material into a quasi-public domain. While fair use and the public domain continue to be lost in our courts and congresses, maybe the capital markets will offer an alternative." While a neat idea, it's doubtful that it'll ever be implemented. Still, it's a good read.
Wow this usage seems very fair (Score:2, Insightful)
Re:Wow this usage seems very fair (Score:4, Funny)
You got that right, they definitely put the "F-U" in Fair Use!
Re:Wow this usage seems very fair (Score:5, Insightful)
Well, you asked, and after being slashdotted you probably are getting a lot of answers, but I do see a snag or two in your plan. Bear with me... I tried to be concise, but my response ended up being almost as long as your article.
Under the current system, artists depend on a big, evil record company to not only get their albums made, but to get them marketed. Okay, most artists get screwed by this deal, but the most popular acts eventually start making money when the big, evil record company sells enough CD's.
Under your proposal, any artist, with or without a label, would sell exactly one CD to, well, the entire world, because people would be crazy to not participate in "Snapster" if it exists.
So how in the heck does any artist make direct money off an album? A small percentage of 2 Million sales is certainly a better deal than 100% of one sale.
If such a company were to exist, recorded music would be released for the sole purpose of marketing the band, who hopes to make their cash via concerts. (Unless I'm mistaken, Phish pretty much already lives this way, cranking out lots of low-selling albums to drive ticket and t-shirt sales at their shows.)
So long as a CD costs $15, it's folly to think that lots of good albums will continue to be released in such an environment. What will probably happen is albums by established bands, such as U2 or Jewel will suddenly cost $10,000,000 per CD (or more), and albums by bands who are not established will be worth what Snapster is willing to pay (nothing).
Stay with me now, I don't think my conclusions are over-reaching just yet...
The only way to raise the price that Snapster will pay for your albums is by "getting established." The only way most bands will be able to do that is... big shock here... sign a contract with a big, evil record label (now a "marketing service") who is entitled by the contract terms to something like 95% of the sale (not sales, sale) of each CD the band releases under the contract.
Since these big, evil companies will be hungry (something like 40% of their business model is in back-catalog sales, which Snapster will have already erased.) They can then take the following steps to restore as much of their lost profits as they can:
1. Jack up the price of the individual album, including back-catalog disks.
2. Form their own Snapster.
3. Stop selling albums. Completely. If you are not a member of the big, evil labels' version of Snapster, you can't hear the new Avril CD. Instead of being a record sales company, or a music marketing company, they will be in the business of owning content which is not for sale, but is streamed exclusively to their shareholders for a fee.
4. Wait for your Snapster company to die on the vine.
5. Jack up the shareholder download price to the point that it's just as expensive to download as it was to buy CD's.
The only way to stop this would be to claim that Evil Snapster is in violation of anti-trust law. Apart from Standard Oil and Bell, how often does a company lose one of those!? Besides, what politician is going to want to bust up a company when it's partly owned by almost every single American who listens to music?
Fallacy (Score:3, Insightful)
Based on Napster, Kazza, etc . . . that does not seem to be the case. emmnemm had probably the most downloaded album ever, yet he still went platinum.
"The only way to raise the price that Snapster will pay for your albums is by "getting established." The only way most bands will be able to do that is... big shock her
Re:Wow this usage seems very fair (Score:4, Insightful)
Very, very good point, and something that Cringely misses in his article. On possible solution :
Cringely states : "Each share also carries the right to download backup or media-shifting copies for $0.05 per song or $0.50 per CD, that download coming from a separate company we'll call Snapster Download that is 100 percent owned by Snapster."
Why not double this to $0.10 per song, $1.00 per CD and split half with Snapster and half with the artist. Snapster would still have the revenue needed to run, and the artists would make more than they do now. Databases could be built to also make sure that song and lyric writers get a cut. Since each successful download would be logged, each artist would get what they actually earned instead of going by popularity ala ASCAP. Britney would only get what she earned while the independent band who cut a CD and got it on Snapster would actually get a check! This would keep the production of new music viable, and perhaps even more profitable for Musicians, while reducing the end price of music -- a win/win situation.
Re:Wow this usage seems very fair (Score:3, Interesting)
Re:Wow this usage seems very fair (Score:3, Insightful)
No I don't. I can acquire music that is in the public domain, I can listen to free live performances, and I can create my own. The RIAA wants you to believe that you have no alternative but to pay for music.
The reason everybody is so riled up about this is that it flips the burden of proof onto the accused. The RIAA can subpeona anyone they want, then file a lawsuit against that person. That person will probably be contacted by the RIAA pr
Re:Wow this usage seems very fair (Score:3, Insightful)
>it, you must pay for it.
No, there are many ways to get or listen to music without paying (and yes, I am talking about music that still has a copyright on them). I can for example go to a friends home and listen to his music. I can turn on the radio and listen to the music. I can record music of the radio. I can (at least in Sweden), get a copy of music from a friend (since such music is allowed according to our copyright law, at least for now) and so
Re:Wow this usage seems very fair (Score:3, Insightful)
Re:Wow this usage seems very fair (Score:4, Interesting)
But, I've also seen it said that book sales were down about 30 percent.
It seems as if the least hypothesis is that file sharing, rather than costs the RIAA members zillions, is actually costing them statistically nothing.
Re:A better solution in a perfect world. (Score:5, Insightful)
This is a pyramid scheme. The problem is, it only works as long people are buying into the bottom. While I agree that there are lots of alternative ways to sell music, this isn't one of them.
If I'm Joe Indie, why would I want to let someone else take half the profit for "distributing" my music (which amounts to keeping it on their hard drive and running Kazaa or whatever), when I could do the same thing myself and get all of the profit?
I can see it now... (Score:5, Funny)
Uh no. (Score:4, Insightful)
one word: my.mp3.com (Score:5, Informative)
Re:one word: my.mp3.com (Score:5, Informative)
It's a funny idea, but ultimately it's a silly one. It's the surest cause for the legislators to take away fair use, or change it so it's not so fair.
Re: (Score:3, Interesting)
Re:one word: my.mp3.com (Score:3, Interesting)
No such relationship existed at my.mp3.com. The people downloading the software were customers of my.mp3.com, not owners.
Re:one word: my.mp3.com (Score:3, Insightful)
However, there is still a distinction between the assets of the corporation and the assets of the shareholders. The assets of the corporation do not become the assets of the shareholders until the corporation liquidates, and then the shareholders are last i
Re:one word: my.mp3.com (Score:4, Insightful)
Strictly speaking, this is only if the corporation is that modern beast of commerce, the Limited Liability Corporation. You can certainly have -- and indeed, prior to the railroads, often did have -- wholly owned companies which were not LLCs. Of course, no sane investor would ever buy into Snapster if it weren't an LLC, since then the RIAA would be able to sue for that investor's personal wealth as well as that of the company.
Hmmm. I wonder if that could be a way around the ridiculous lawsuits? Incorporate yourself, then file-share as the corporation. Then.... profit!
mp3.com is not relevant (Score:5, Insightful)
The naysayers to this idea forget that the _critical_ component of this plan is that it must IMMEDIATELY go public. It also must limit downloads to owners (shareholders) ONLY. While the cost of going public may be significant, there is not necessarily a need to bring in investment bankers and join the NASDAQ or NYSE... The press would likely provide the marketing for free on the nightly news (due to the sheer audacity of the idea), and the employees of the business could probably sell the shares via telephone. "limit one share per customer"! (or something).
The real problem here is that by sharing the backup or shifted assets of the company among the owners in this way, IF a court later decides the idea is illegal, they (the RIAA) might then seek to recover directly from the owners... Usually by being a corporate entity, this kind of thing is avoided, but since the corporation is distributing it's assets directly to the owners, who can say.
Concerns that users may share their downloads with their non-owner friends are baseless. TODAY, even without this company, people MAY record things from TV and share it with their friends... and TV and radio are legal last I checked.
One final note. In the end, the legality of this plan would not matter. Unless stopped quickly by injunction, Current RIAA distribution methods would become obsolete technically (ok, ok, they are already technically obsolete), and practically. If this became widespread, digital distribution would be the only comercially viable alternative. The distributors would have to change or declare bankruptcy in short order. This company would need to be able to drag out any court proceedings... basically, they'd need to take a page out of Micro$oft'$ playbook. A delay of two to three years is all that is needed...
There will always be a small market for physical distribution, but the days of monopoly-via-artificial-scarsity-of-media would end. And wouldn't that be nice?
CleanFilms avoids MPAA this way already.. (Score:5, Interesting)
Essentially they operate as a co-operative. On the surface, it is the same as paying a membership fee - but on paper it is a different story (i.e. Snapster would be just like Napster on the surface, but largely different on paper).
Here's a snip from their about page [cleanfilms.com]:
Re:CleanFilms avoids MPAA this way already.. (Score:4, Insightful)
For each movie they give to a customer/"co-owner", they've purchased one DVD from the publisher.
Cringley's plan is to somehow achieve a 1:200000 ratio. Buy one copy of each CD, and somehow let multiple shareholders play several of them at the same time.
That's just illegal. One entity (single person, or a corporation) is allowed to buy a CD and make backup copies. But if you play more than 1 of those at a time, you're breaking the law- because playing it isn't a "backup" use.
Cringley's idea is as dumb as suggesting Merril Lynch can buy one copy of Microsoft(tm) Windows XP(r) and install it on 9000 PCs, because they're all property of 1 corporation.
Re:Thats the hard way of doing it! (Score:3, Insightful)
It's been done (Score:5, Insightful)
Re:It's been done (Score:3, Insightful)
Re:It's been done (Score:5, Interesting)
You've never paid taxes, part of which go to fund libraries? Or you've never gotten a library card, which usually has a nominal fee? Gee, if nobody pays for libraries, I wonder where they get the money to build them, staff them, and fill them with copyrighted material...
Re:It's been done (Score:3, Informative)
Large publishing houses have a real love/hate relationship with libraries, on the one hand marketing to them heavily and on the other wishing they'd dry up and blow away.
Small publishers love the shit out of them, some of them making a living doing nothing but marketing to libraries.
KFG
Re:really? (Score:3, Funny)
Say WHAT? (Score:3, Informative)
Re:Say WHAT? (Score:3, Interesting)
Assumptions (Score:5, Insightful)
1. Most people who share music are willing to pay for music.
2. Most people who share music are ethical, and won't give the music to non-shareholders.
I think both assumptions are questionable. (Note: if you share music, I'm not saying you are a freeloader and immoral. But is everyone like you?)
A shortfall (Score:3)
Owning is a better idea (Score:5, Interesting)
Once you have owned the CD for a day, sell it to someone else and erase your fair use copy. Next time you want to listen to it buy it again and sell it again.
Just like Cringely send some of those IPO shares to http://www.pcast.com.
Brad.
Re:Owning is a better idea (Score:3)
You can sell it however.
Re:Owning is a better idea (Score:3)
If it grants me some abilities beyond those inherent in the relevant law (the US Uniform Commercial Code primarily), then I might decide to abide by it. But just because a stranger wrote some words doesn't mean I have to obey them. For example, there's text at the bottom of this post. Will you obey it?
Having just checked a few DVDs, I have learned there is no text forbidding rental. Mine
this is nonsense (Score:3, Insightful)
This is a strange idea.... (Score:4, Insightful)
While on the surface it seems amusing enough there's some things I don't totally get, maybe someone else can explain where I'm wrong...
First off, owning company stock is not necesarially the same thing as wanting to own the company's product. I might want to own the product but not take on any of the risk of owningthe stock. Likewise, there are plenty of companies I'd own the stock for only for the point of making money, not because I want to personally want to use their products (stock in a pharmecutical company comes to mind)
related to this is the idea that there will be tons of people who want to own tons of stock for the point of being rich, namely the insiders or the investment bankers that want to make money off the IPO. Typically a large amount of shares of any company is held by institutions, not individuals. This idea sounds like he wants stock to be held by all the customers which totally goes against the way investments are usually held. I don't think the institutions would like this idea one bit.
Then, what happens to people who own shares of the stock via a mutual fund? People who own the stock that don't even know about the service? Or people who want to download the music but don't have any means of getting shares of stock because they can't open a brokerage for whatever reason (bad credit)?
Lastly, what happens at the shareholder meeting?
Maybe I just don't get this idea, but to sum up, the product / service a company provides is (and should be) totally separate from its stock.
Licenses (Score:3, Interesting)
If I buy stock in a company (even the one I work for), that doesn't mean that I can freely use any software that they buy from another vendor. Most software comes with per-seat licenses, not per-company. What's to stop music companies from just packaging only a single-user license in a CD? Replace the word 'music' with 'software' in this scheme, and it all falls apart.
Cringley lacks basic understanding of economics (Score:5, Insightful)
Why do we need to make a bogus corp (Score:4, Insightful)
They own the rights to begin with!
Yep that'll work... For about three seconds. (Score:4, Interesting)
Unfortunately, it's going to be a long struggle before the Record Industry is forced to submit to the fact that recorded music is becoming an economic public good -- because of pratically infinite distribution (at the cost of bandwidth and storage), the good has become non-rivalrous. This does not mean music will disappear, but it does mean that it will not be profitable for a music company to distribute CDs.
Once the RIAA is forced to accept that, and takes the huge accompanying profit cut, their real business will be the promotion and distribution of the music itself -- it will lower its overhead by allowing P2P-style downloads (let the consumers give up their bandwidth), and will profit by sponsoring artists tours.
The downside is that record stores will, for the most part, go out of business. Were that there was another way to save our slave-wage friends who are knowledgable, but in every war, there are casualties.
But sorry, Cringely -- Snapster won't work for long. The fight for free music will be much longer than we hope.
This is absurd (Score:4, Insightful)
The other point is, why would you want to do this? Does no one here understand the basic concepts of economics? If people don't pay for music, there won't be any music -- or, at least, there will be very little. It costs money to produce. The artists need to eat. Sure the RIAA is evil, but two wrongs don't make a right. How could anyone seriously consider a plan like this without realizing that it is wrong?
Why do you people believe that you are entitled to free (or absurdly cheap) music? If you're unhappy with the RIAA, don't buy their music, but don't steal it either. You have no right to use something that someone else spent time and money to produce if you are not willing to use it under their terms.
Re:This is absurd (Score:5, Insightful)
Yeah, 'cause nobody writes or records music for any reason other than profit.
Maybe if music weren't a multi-billion dollar business, true musicians would again gain prominence.
Re:This is absurd (Score:5, Insightful)
Damn straight! If not for copyright, Bach, Beethoven, and Brahms would never have published any music, so none of their music would be around today, in the public domain!
What? You say there was no such thing as copyright when they were composing? Er... never mind!
Not Fair Use (Score:5, Informative)
The doctrine of fair use was originally adopted by judges ruling in early copyright cases. Ultimately, Congress incorporated the doctrine into the Copyright Act of 1976, where fair use is now codified at Section 107 of Title 17 of the U.S. Code. In creating section 107, Congress listed four factors to be considered in determining whether a use is fair or not:
(1) the purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
These factors are essentially the same factors that had been used over the years by judges, and Congress's stated intent was to preserve the fair use doctrine as it had evolved. However, as many courts have pointed out over the years, whether something constitutes fair use is very fact-specific. It is difficult to craft a clear, bright-line rule that explains which particular uses of a work are fair use and which are infringement. In short, the exact parameters of fair use are often determined based on the facts of specific cases.
Just from a quick look Cringely's idea, while novel, seems to violate several of the 4 criteria. This would be copyright infringement for comercial gain on a massive scale. No way any judge would believe that this falls under the intent of fair use.
What a bozo (Score:5, Insightful)
A simple perusal of copyright laws would show anyone with half a brain that what he proposes is illegal.
Fair use allows for the end user to make a copy for PERSONAL use. Not corporate use, not public use, not any other use. Personal, baby.
Survey says....
BZZZT!
Re:What a bozo (Score:3, Insightful)
He is not proposing to exploit any loophole in fair use. He is proposing to exploit a loophole in co-operative ownership. If you and I pool our money and buy a CD together, can we each listen to a copy of it at the same time?
Now expand that concept to everyone in the "company" buying the single CD together, and listening to it whenever we feel like downloading it. That i
Wheres the beef? (Score:5, Insightful)
Whatever. Considering the average mp3 @ 192kbps
is 4MB x 100,000 mp3's = approximately 390GB served to a large user base. For $100,000.
This guy may have ran his idea by some lawyers, but he didn't ask anyone here...
error-Fair use (Score:3, Redundant)
So Cringely is quite wrong in this concept..
Now a non profit org that gives a used music cd for someone to use in exchange for another music cd fromtha tperson..would probably be very legal..:)
Reductio Ad Absurdum (Score:3, Insightful)
We have two extremes here.
Do you really think #2 is the right answer? Don't give me the standard lines about "music sharing increases record sales." Sure, it might, right now, in the limited sense it's going on. Okay, what if copying anything you want is legal.
A studio spends $100 million dollars making a great movie. Last night I watched Gangs of New York. Fantastic...amazing...Scorsese is a fucking genius. I don't know how much it cost to make, but I'd imagine a shit-ton of money. So, they spend all this money, use all this talent, and equipment, and employ all of these people. The master copy is made. Immediately, somebody gets their hands on it, makes a copy, and puts it on the Internet. Everybody and their brother downloads it. Somebody copies it onto DVDs and sells it for $3 + shipping. How does the studio make money?
Don't tell me it's off ticket sales because people want to see it on the big screen...unless they own all the theaters, it won't do any good. I'll open up a theatre, buy the DVD for $3, and charge $4 for a ticket to see it on the big screen, then charge $8 for popcorn.
Is this the world we want? How will artists make money? Will it all be ads and product placements? Should Daniel Day Lewis have to say "Drink Pepsi" after every stabbing?
There should be a happy medium between options 1 and 2. So, what is it? Should there simply not be big-budget movies anymore, because the idea of "owning the bit pattern on the DVD is nonsensical?"
They can't "make it illegal". (Score:3, Interesting)
The US Supreme Court has already ruled (I can't find the link at the moment, try "supreme court wordperfect" or something similar) that it is legal for you to buy one (1) copy of (say) MS-Office, and install it on all 3,000 workstations at your company.
The trick here is that since you only have one (1) license, only one (1) copy of the software can be active at any time.
A similar thing already exists in the physical world, it's called "loaning a book to a friend".
Where are the musicians? (Score:5, Insightful)
Coupled with the dismissive "Oh, it only takes $500 per hour to do a recording", and with profits being skimmed to support the pyramid scheme, Cringely sounds like one of these guys who think the cost of the average recording looks like this:
1. CD and box, 10 cents
2. ???
$19.90. Profit!!!
DOJ interview says this isn't fair use (Score:3, Insightful)
Fair Use is law of spirit more than of letter -- there is no bright line distinguishing what exactly it is. I don't think you'd find a judge that would let this proposal weasel through.
Idiotic (Score:3, Insightful)
The same would go for music.
what happens when the RIAA buys shares (Score:3, Interesting)
The sad truth is ... (Score:3, Insightful)
That is not to say i wouldn't buy a share or even a few shares when it starts. Even betting on the off chance that something good results from this is better than just sitting around watching the RIAA turn back the wheel until we're back at feudalism. And at least it will tie up some of their lawyers in the courts. Yes, by now i'm so pissed off with the record industry that i'm willing to give away money if it hurts them in any way.
logical next step (Score:5, Funny)
Why not... (Score:3, Interesting)
Frankly, I don't see why the current system of copyright is tolerated. It benefits only a very small number of people while harming tens of millions. Times and technology have changed, and the cost of distribution is now effectively nil. In that sense information _is_ free.
Yes, I know there are other costs asociatated with producing a work, but even those costs are dwarfed by the economies of scale involved here. If every america downloaded just one album a month at 5 cents a song, that'd be around $150 million a month. Plenty to keep the industry going, I should say. I understand that in Napster's heyday, the volume of downloads was much larger than this.
Furthermore, I don't see any reason why violations for copyright infringement should be punished with anything more than requiring the person charged to pay for each item at the going rate. Copyright violations are _not_ stealing. It's copying. That's why it's called copyright. If I steal your car, you have one less car. If I copy a song, you don't have one less song. You've lost a sale, nothing more. The degree of damage is much less.
Not that this'll ever come to pass. Something I figured out a while ago is that just about everyone is secretly hoping to be the guy to stike it rich with copyrights/patents/whatever. So even though they probably never will profit from the system, and will probably end up being screwed over by it, they'll defend it to the death forever looking forward to the day they get to be the ones doing the screwing over.
Mmm, since when have audio CD's been rented? (Score:3, Interesting)
As film director, Richard Linkletter said once, "I thought the film industry was run like a Mafia until I had to deal with the music industry!" He was trying to get rights to a certain song for a film. But my point is the RIAA are not reasonable people. They are Special People with Special Powers. It appears that there was a Secret Admendment to the Constitution pass when we were looking and They would never allow this.
I would just like my DVD rental service to have the right to backup out of print DVD's so they would have a spare when one breaks! And the public domain return to us - 28 years was plenty!
Comment removed (Score:3, Funny)
Business. He's right (Score:3, Insightful)
Several points. You can IPO at whatever the fuck price you want to. Don't give me that, oh, you can't do that because of
Robert's idea is simply brilliant. To put it simply. I work in the world where money matters, and law matters, and his idea is awesome. I see nothing wrong with it. But he is also correct with the fact that this is a small loophole which can be fixed by a quick lobby to Congress. Someone that works for the RIAA (read: intern) is reading this article, and tomorrow they will be reporting this to their supervisor and ni about 2 months this "law" will be lobbied.
I'm sorry to all the people that simply just say that this article is a bunch of horse-shit. This is one of the most comprehensive and simple (to-the-point) articles I've read recently. He's got everything covered (basics) and it is enough for "just about" anyone here to get it started. Just takes a little know how and in order to get it done before the "law" takes hold, just a few connections. I'm sure Robert (Cringley) could get you started...for a small fee of shared
Anyway, the point of this post was to say that all the people that got +5 for saying that this isn't possible. Wake up! Read something relevant. No, Wall Street Journal does NOT count. This is reality, and this is absolutely brilliant. This should go side-by-side with his "I use Linux to play DVD's" article.
A creative, but silly idea (Score:3, Insightful)
One copy = one user at a time. And "fair use" doesn't mean you can make a copy of music and allow multiple people to access that copy at any one time.
Fair use? A library is fair use, but libraries don't photocopy their books for each person carrying a library card.
Beyond Stupid (Score:3, Insightful)
Cringly's idea is really bad. Instead of trying to find loopholes, let's get to the three issues that matter with RIAA:
* Because of the degree of control over distribution, competition in the music industry, at least as far as price goes don't exist.
* Unfair contracts to artists.
* There's no incentive for innovation or new material for derivative work because old stuff doesn't ever move to the public domain.
Different Markets (Score:3, Interesting)
I have an example, but first some assumptions... (Yes I know the joke about assumptions)
First: We will assume that there is a lot of profit in an individual CD sale. I've seen enough evidence of this that I believe it to be true.
Second: We will assume that the music industry WANTS to make as much money as possible FOR ITSELF. (As opposed to making lots of money for it's artists)
Anyway, My example/idea/experiment is this... The next time Madonna, or Brittney, or whoever's hot next week, comes out with a new album, sell it for $6.00. Or maybe $6.50. Work out a price that still gives everyone in the distribution chain at least 1/2 the profit they were making on a 'regular' cd. (Except the Label, who's profit margin would be cut to 1/3 what it is right now.)
I predict that two things would happen. First: A lot more people who wouldn't buy an $18 album will be entirely willing to buy 3 (different) $6.00 albums, thus increasing total cash receipts. Since we halved everyone's profit (Except the record labels, which we cut by 2/3'rds) the artist is seeing 50% more money, and the label is making the same money it was on the expensive albums. This would also have the effect of tripling unit sales. Second: People would be more willing to buy an entire album just to get one or two songs. This also means more money coming in. And Third, people who had been entirely priced out of the market (Example: Young Kids) would now be in a position to buy music. All of this means more cash coming in.
(Short Tangent: If they did this, The Electronics arm of Sony would give every Record Label a big wet sloppy kiss as they cranked out more and more mega-CD-changers....)
This kind of pricing has precident. Anyone remember when Taco Bell used to sell it's regular taco's for like $1.79? They decided to swap volume for price, and they are now one of the Big Three Fast Food Chains.
But it won't happen.
Since the record industry makes it's profit after they pay everyone else, it is in their best interest to keep unit sales low, and costs high. Why go to all this trouble just so the ARTISTS can make a few more bucks? The Label doesn't care if the artists album goes Platinum or not. Just as long as they are raking in the bucks.
On a personal note, there are MANY artists who I own SOME albums of, but not all. If CD's were priced like tacos, I'd own the entire catalog of many musicians, just to say I had them all.
Specific examples: They Might Be Giants, Madonna, and The Nylons (Who?
Also! I'd go out tomorrow and buy up the entire back catalog of "Weird Al" Yankovich. I single out Weird Al because I already own all of his music, but much of it is on Vinal and Cassette. I'd have no problem re-purchasing on CD if the price was right. I bet you'd do the same thing.
Nipok Nek
The Business of Music (Score:3, Interesting)
Date: Fri, 25 Jul 2003 16:26:36 +1000
From: Sam Johnston
User-Agent: Mozilla/5.0 (Windows; U; Windows NT 5.2; en-US; rv:1.5a) Gecko/20030718
X-Accept-Language: en-us, en
MIME-Version: 1.0
To: bob@cringely.com
Subject: The Business of Music
Content-Type: text/plain; charset=us-ascii; format=flowed
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Good Afternoon [Robert Cringeley],
A regular reader of your column, I write from Sydney, Australia to
provide some feedback about your 'One Possible Future for a Music
Business That Must Inevitably Change' article
(http://www.pbs.org/cringely/pulpit/pulpi t20030724
lawyer, so I cannot comment on how successful your model would be
although at first glance it seems to be taking advantage of a loophole
that would soon be plugged. Worse still, initiatives like this are
clearly not in the spirit of 'fair use' and may jeapordise the future of
fair use provisions. I believe the test is 'would it replace a sale',
and on that front you're buggered in a similar fashion to mp3.com.
That said, you have correctly identified the (diminishing) role of music
companies. I currently have some guys in my office churning out HDTV
ready broadcast quality footage using a $1,500 Mac, $500 in software and
a $10k DV camera. Admittedly these guys won the 'Best Comedy' section of
Tropfest (http://www.tropfest.com/) using similar technology earlier in
the year, and thus possess some amount of technical and creative
ability, but the point is that they are not requiring hundreds of
thousands or even millions of dollars of equipment to generate content.
I trust the same applies to the music industry.
Now, if new electronic distribution companies were set up which would
allow content creators (note I'm using the generic term, rather than
musicians) to sell their content with a 95/5 split (or thereabouts) in
the creator's favour rather than the current (reversed) situation, and
if the cost of the content was adjusted to maintain similar returns per
sale, I believe we'd all (with the exception of fat record company execs
and content creators who require significant investment - eg hollywood
studios) be much better off. All of a sudden we're paying 90-95% less
for content. Distribution is much cheaper and so the distributors are
still able to make a profit (which is more in line with effort
expended). Content creators still get $x/sale. However, content
consumers are suddenly able to stretch their content budget much
further. Say I spend $300/annum on CDs - that might be worth 20 CDs
which are bulky, inconvenient and prone to damage. Instead, I get
something like 20 times that, and in a format that is convenient. Note
that even if I spend 1/20th of what I spend today, the artists are no
worse off.
Users don't bother sharing it because:
- the distributors have fast, distributed networks as opposed to slow,
intermittent connections that are oh so common on P2P networks
- their files are high quality, and are able to be converted (ideally
'peeled') to lower bitrates for portable devices
- the integrity of the files is guaranteed by checksums and/or digital
signatures
- digital rights management (if any) is transparent and unobtrusive.
an identifier - maybe a watermark if it could be implemented without
quality degradation, or simply a header and digital signature (without
which integrity could not be guaranteed) could be used in cases of
copyright violation.
- i can still be sued by the distributor or industry associations and
the value proposition is simply not worth the risk. this process is self
funded, and without a secure way of ensuring my identity is concealed,
is an effective deterrent.
- significant value is added in the way of being able to download
content at multiple sites, maintaining and sharing playlists, etc.
Still trying to replicate the recording industry (Score:5, Interesting)
In an editorial mentioned on Slashdot [slashdot.org] a couple days ago, Doc Searls said something about television that I think is highly relevant: that it is a mistake to think of television shows as products and viewers as customers. Searls points out that the television industry makes its money selling eyeballs to advertisers. Shows aren't the product, they are merely bait that converts ordinary people into ad absorbers who might buy products later.
Likewise, from a musician's viewpoint, recordings are a way to convert people into future concert ticket buyers. It's been pointed out abundantly on Slashdot and elsewhere that musicians make money by performing, not by CD sales. What musicians get out of distribution (of any sort) is the fame that generates better gigs. For some reason everybody seems to have a hard time letting go of the idea that somebody has to make money selling copies of songs.
Try looking at it this way. The recording industry is in the position television set manufacturers could have been in if they had thought of building tv's like pay phones, collecting the coins, dictating which shows could be broadcast and demanding most of the rights. If that were the case, television set makers would now be right in the middle of the fray over video file swapping, claiming to be losing money with every download, probably also claiming to be protecting the creative artists who produce the shows (but who get none of the coins), and perhaps suing everybody like the RIAA is doing.
Obviously all that is unnecessary and sounds ridiculous, but it might not seem so if we were used to it. After a century of constantly feeding quarters into televisions, it might well seem like something was morally wrong unless someone was getting paid whenever a show was viewed.
There is in place right now plenty of infrastructure to freely distribute the songs of anybody who wants their songs distributed. What musicians and the public get from this technology is a way to eliminate the filtering imposed by the music business, do the distribution automatically, get the exposure for free and let the public pick the winners. Replacing the recording industry with a different middleman is completely unnecessary.
I think there is a problem (Score:3, Insightful)
Now who has ownership of the CD? I'd say you now have shared ownership of the property. Could both of you make a copy for backup, probably. Could both of you transfer the music to MP3, yes, however my understanding of the law would say that the mp3 copies of the song could not be used at the same time. There is the problem.
Otherwise Blockbuster could make DVD copies of all there VHS tapes and form a a mini-partership which would allow all parterns to have unfettered access to the material.
I think Cringley is onto something though, morph his idea into a music rental system, similar to Blockbuster. Form a company, buy CDs (you'll need multiple copies of popular CDs) and offer streaming access to that music though a subscription service.
However the max amount of people who can listen to the same song at the same time is limited to the number of copies of the song that have been purchased. Example you buy 10 copies of CD "X" you can now offer out 10 streams of each song on CD "X", if an 11th person wanted to listen to that song they would need to be queued.
Would probably be legaly viable now would it be practical from a business view.
Re:Best Article Ever (Score:5, Insightful)
You know those little "by opening this CD you have agreed to.." things? Think a slight modification, here..
Wouldn't be that hard.
Re:Best Article Ever (Score:5, Insightful)
First, he handwaves about going public at $20/share. Maybe in 1999, pal, but not now. You can't just decide to do it, there are significant capitalization requirements, to say nothing of the money the bankers will want for doing the work for you.
But the real guffaw-worthiness of this article is the tremendous misunderstanding of fair use he displays. Number one, it's quite questionable what corporations' fair use rights are - but it's clear that they are less than an individual. Remember mp3.com? They bought 300,000 CDs and made one digital copy of each. That's perfectly legal, under fair use, for you and me. But when a corporation does it for profit (and by definition everything a corporation does is for profit), it's copyright infringement. MP3.com got pwn3ed by the major record labels for this.
Second, and perhaps more importantly, the traditional test of fair use is, "would it replace a sale?" This clearly would. It's legal for you to make a copy of a CD so you can listen to one and home and one at work, since you won't be listening to both simultaneously. If they wanted to build this system so that only one shareholder could listen to a given piece at one time, they MIGHT be able to squeak through. But try this, and they Major Labels will just laugh all the way to the bank.
Re:Best Article Ever (Score:3, Insightful)
1. mp3.com was not owned by people who were downloding copies.
2. $20/share inital outlay per person can be though of as joining the club. It does not even need to be publicly traded, and the price can be kept fixed.
3. Maybe the intention of the law is "would it replace a sale", however that is not the actual wording, otherwise all those poor souls who got hit by RIAA would use that as an easy defense. "But your honor, I would not have bought that CD I downloade
Re:Best Article Ever (Score:5, Insightful)
2. Not relevant, you're already out of business from 1.
3. "Would it replace a sale" is a shorthand way of saying, "would you normally need to buy it to do what you're doing?" The relevant law is 17 U.S.C. 107 [cornell.edu], "Limitations on exclusive rights: Fair use":
I'd say his idea is a slam dunk not-fair-use under section four, as (he freely admits) it would "destroy the potential market for...the copyrighted work." Not fair use, not legal, not a good business idea.
None of this, of course, is trying to make any argument about what the law should be. But these questions aren't hard under the law now, and they're very obviously not legal under the law now. Anyone who tries this is going to get eaten for breakfast by the major labels (and the minor ones, too - they sued mp3.com pretty hard as well).
Re:Why make a copy? (Score:3, Funny)
I also heard about this new place down the street called a "video rental store". I hear it's cool -- I'm gonna go check it out soon.
Re:Why make a copy? (Score:5, Informative)
Which leaves us "renting" the CD through the mail. Ever wonder why you never see CD rental places in the US? Why there's not a "nettunz" to go with "netflix?" It's because they're illegal [cornell.edu]. According to USC Title 17, Section 109, "Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord":
The edits are necessary for clarity because this section also has a lot of cumbersome language about software; go read the original if you doubt my interpretation. Why can actual libraries get away with it? Because the next sentence says, "Nothing in the preceding sentence shall apply to the rental, lease, or lending of a phonorecord for nonprofit purposes by a nonprofit library or nonprofit educational institution."
So, could you set up a nonprofit corporation to do this? I guess so, although it'd face all the normal challenges a nonprofit does in trying to find the money to build its collection. And, your strongly implied personal copy before return would itself be illegal. If it were used pretty much only for this purpose, and got big enough, I bet the RIAA would try to claim that the nonprofit should know there's monkey business going on and try to shut it down. Whether they could would be up to the courts.
Re:Why make a copy? (Score:3, Interesting)
You set up some kind of server that contains all of the music, and only
Re:Best Article Ever (Score:5, Informative)
Your ignorance is equally breathtaking.
Cost to incorporate (where I live): $403.30
Cost to put your corporation on a penny stock [fool.com] market: Minimal (free? I'm not sure).
Amount of bookeeping required: Almost none, short of dealing with taxes. ZERO SEC requires, that's for sure.
You think such a corporation has to be Nasdaq listed or something? At best you might need to hire 1 accountant to get going. Big deal.
By the way, I'm incorporated. Want to buy shares? Well, I'm not selling right now, but the effort required by me is none. The only thing I'd have to send you is a paper saying how much stock you've bought, and get the accountant to record your purchase in the books. I never have to speak with you again, if I didn't want to. Total cost to me? About $0.10 if you include the price of the toilet paper your stock would be printed on along with the accountant's fee (assuming he enters everything in all together when closing the books at the end of the year, like with my corporation).
Here's a few examples [allpennystocks.com] that might be helpful to you. How many of them do you think are going to give out shareholder's packages every year? 2... maybe 3?
Missing the point (Score:3, Insightful)
If I own part of a corporation, and that corporation owns a recording, do I not have rights to that recording? Provided there is nothing in the corporate charter prohibiting this, I see no reason it wouldn't work. The difference between this and my.mp3.com is that the users own the service they are using.
The only hole I can really see is in the distribution method. If it's provided by a corporation as a service to its shareholders that's
Re:Missing the point (Score:5, Informative)
Ownership is not transitive (at least in this sense). The assets of the corporation and the assets of the shareholders are separate (though the shares of the corporation are assets of the shareholders). Part of the definition of a corporation is that it is a separate entity from its shareholders.
Re:Missing the point (Score:4, Insightful)
Uhhh, no? Otherwise why wouldn't you just buy 1 share of Sony and AOL-Time-Warner, etc.? If that argument held any water at all you'd be legally able to download any song you wanted by a company you had a share in.
Re:Missing the point (Score:5, Insightful)
Sorry, that doesn't work, either. It's up to the rest of the stockholders to decide whether or not you have access to the corporations assets and secrets. However, what Cringely is talking about is one where the corporation DOES grant these rights. The problem is I don't think the corporation has the power to grant these rights in the first place, so the point is moot.
Re:Missing the point (Score:5, Insightful)
The best way to look at it is that music is similar to software. If you own a copy, you have a right to make a backup. I own a CD, I can back it up to my computer or mp3 player.
Fair use dictates that the copy is for personal use only. I can listen to my stereo, my computer, or my mp3 player, but I only listen to them one at a time. If I copy it to someone else's device so they can listen simultaneously, it goes beyond "fair use."
If I have a copy of Photoshop, I can only use it on one computer at a time. Same for a corporation. Even if all your emplyees were shareholders, you couldn't buy just one copy of Photoshop and copy it to ALL their computers -- even if they all technically "own" it. It's simply NOT legal.
Cringely's scheme is quite lamebrained...
Re:Missing the point (Score:3, Insightful)
You ask, "If I own part of a corporation, and that corporation owns a recording, do I not have rights to that
Re:Best Article Ever (Score:4, Interesting)
The ignorance of both business and law displayed in his article is nothing short of breathtaking.
Yeah, I had the same feeling when I read some of his articles about software development. He seemed pretty off-the-wall for a guy who has run development groups charged with very large projects including an entire from-scratch operating system for Apple and the first version of AOL.
But I enjoy his columns anyway, because he has so many risky ideas. I like crazy ideas. Which would you rather read about: "lateral solutions" that fail in interesting ways, or more retreads of "industry = evil, so I'm just gonna grab what I can get"?
Re:Best Article Ever (Score:4, Informative)
"Snapster is built on the legal concept of Fair Use, which allows people who purchase records, tapes, and CDs to make copies for backup and for moving the content to other media", says Cringely.
Baloney! That is not at all what Fair Use is. I am not sure what "lawyer friends" he spoke to, but if he bothered to read any of the Fair Use links on his own page, he might have thought twice about publishing this article. Fair use is what I did in the previous paragraph, quoting Cringely for purposes of criticism. It's always about partial copying of a work, and only for very specific enumerated purposes that are listed in the US copyright law (Title 17). Please see the actual law at http://www.copyright.gov/title17/92chap1.html#107 [copyright.gov] if you don't believe me. It's quite an easy read. It discusses what is an infringement, and then lists exceptions, one of which is Fair Use (which is not the process Cringely describes).
Also, I believe media shifting is an entirely different topic. I am not sure where this exception to copyright infringement comes from (IANAL, but I don't see it in title 17. Can anybody post references to the legality of media shifting?). But the one thing I do know is that all the cases I have heard of it being legal have one thing in common: the use does not increase the number of copies being accessed simultaneously. When you make a backup of your media, you're not watching/listening to it at the same time as the original, or letting a friend do so.
This is what RTMark does and it works (Score:4, Interesting)
Read the RTMark FAQ [rtmark.com] if you don't instantly grok the above.
Once the corporation has been established no one is going to the lose their shirts, e.g. college kids won't be forced to give up their life savings. [theinquirer.net] All you can lose is whatever the corporation owns. I think the only thing that breaks the corporate shield is worker's comp.
So Cringly is pulling an RTMark, but instead of activist reasons he's using it to trade music (which could be seen as an activist reason too).
Bravo.
Now here's the fun part. Why not live our lives as corporations? People complain about corporate power all the time, so if we can't beat them, lets join them. What if everyone made a corporation in their name and put all their assests into it? From there you can add shareholders (family, friends) then safely and legally swap MP3s, share ownership of just about *anything*, hire people to do your job at a cheaper rate and pocket the difference, wear a world's sexiest CEO t-shirt, take out loans, form off-shore tax havens (why pay tax?), have a great time knowing that whatever you do will be the fault of the corporation not you personally, etc.
Excellent "What is a corporation" primer here. [nv-inc.com]
Damn straight. I'm off to become a corporate entity.
Why not live our lives as corporations? (Score:4, Informative)
You can't just form a corporation with you as the sole director and owner, and escape liability, or taxes.
In a typical company, the corporate officers, and the board of directors, ARE responsible for what happens, and have a fair deal of personal liability for what the company does. Their assetts are not the company's, true, and if it's merely a matter of the company going bankrupt, they will be okay.. but in many places, if the company dodges taxes, it WILL be taken out of the director's pockets, and if the directors instruct the company to do something illegal... they can be held accountable.
A corporation exists sort of like another person, but not entirely.
Re:Why not live our lives as corporations? (Score:3, Informative)
You're correct, but you can escape A LOT of liability and you can pick and choose what assets go where. Also, there's a lot more flexibility in tax law with corporations than there is with individuals. Essentially, if the income you make goes back into the corporation as capital (that could be a new MP3 player) its a business expense.
Re:Best Article Ever (Score:4, Informative)
Re:Best Article Ever (Score:5, Funny)
1) Buy one share of any RIAA member company.
2) Taking your share certificate with you, walk into their corporate headquarters with a CD burner, and demand to be allowed to make a copy of the IP you "own".
3) Be sure to bring ear plugs, as the laughter may exceed safe decibel levels!
Re:Best Article Ever (Score:4, Insightful)
At best, it can behave like a library: offer the book up, and let one stockholder at a time read it. If the one-at-time method is implemented via electronic downloading of the data, the copyright holder probably has a good claim that the whole system is designed to facilitate infringment.
Re:Best Article Ever (Score:5, Informative)
As I understand the mp3.com situation - and EMusic got bought by Vivendi and our tech got merged with theirs, so I've been down there a number of times and talked to a lot of people involved, and read the court decisions, etc. - what they got in trouble for was making the initial copy needed to compress the CDs to mp3 format. That's it.
The logic of the court is, basically, whatever mp3.com is doing is by definition for profit. If you're doing something for profit, it's by definition not fair use. The point of copyright law is to ensure that, if you make money off copying a copyrighted work, the copyright owner gets paid.
So, while it would be perfectly legal for you as an individual to copy those CDs, compress them and stream them to yourself, because mp3.com did it for you for their own profit, it's clear copyright violation.
It is exactly the same way that you can photocopy a book yourself in your home and it's fair use, but if you pay Kinko's to do it for you it's a copyright violation. On the surface it seems the same and it seems fair that you be able to pay Kinko's to save you the effort and investment of a photocopier, but the whole point of copyright law is that Kinko's can't copy works without paying the copyright owner.
People can rail against this as being cretinous, but I don't see how the current idea of copyright can continue without the law being like this. If you think copyright should exist at all (leaving aside questions like the lunacy of the DMCA's anti-circumvention provisions), then I don't see how the law could be any other than this and still work.
Obviously not everyone thinks there should be copyright, at all, but that's a different issue entirely.
Re:Best Article Ever (Score:4, Insightful)
But, once you get into morality I think the tradition in US copyright is that piracy isn't immoral (whatever the RIAA would tell you aside). The Constitution's enshrinement of intellectual property was controversial at the time and is entirely pragmatic: It is "for the advancement of the useful arts and sciences," not because copyright owners have some moral right to control their works. Tonight I've merely been discussing what the law is. I've made no assertions about what it should be.
Re:Best Article Ever (Score:3, Informative)
The closest thing US law has to a "library copy" for music is that nonprofits are allowed to lend music. For-profit companies are not. The
Re:Best Article Ever (Score:5, Interesting)
It probably (almost certainly, but IANAL) wouldn't work.
Remember, the corporation and its shareholders are legally separate entities. Thus the shareholders don't own the music (or any rights to it, more properly); they own a company which owns the rights to the music. And since it's doubtful that the RIAA grants a right to rent the music (first sale would not cover renting), the corporation doesn't have the ability to give its shareholders its rights.
In theory, you could do something within the confines of first-sale; it could be implemented as follows:
However, there are kinks in that plan; first, it's doubtful that files made by fair-use rights could be incorporated into this (fair-use as it's been understood by the courts only extends to personal copying; as soon as it's transferred, any legitimacy conferred by fair-use is lost). However, files downloaded without taking advantage of fair-use (iTMS for instance) would not have this issue. Then there's the final requirement; in order to qualify for a first-sale defense, the file would have to be deleted from the server after being transferred. This is somewhat difficult to accomplish, even if you could DRM stuff. However, perhaps copying the file which you obtained through this system to another location would be fair-use (and the system might even employ a hash database to prevent further transfers).
Back to the topic. Even if the corporation could rent/sell it to its shareholders, some portion of the actual value of the data would likely be counted as a dividend, or at least income, for the shareholder, who may end up paying taxes on it.
Re:Best Article Ever (Score:4, Insightful)
1) Buy 100,000 CDs
2) Suddenly every shareholder somehow now has a right to have a copy of that CD which they will make full use of (way beyond fair use)
3) Profit!
Wow, I'm impressed. Cringley has uncovered the long-sought step 2.
Really, I think he may run into a little trouble with the idea that a shareholder suddenly has rights to everything the corp has a single copy of. Heck, that wouldn't even fly if the corp held the original copyright. If it did, I'd be set! Buy a share of Microsoft, get a free copy of any MS software I want. Buy a share of SCO, I can run all the unix-like software in the world I want. Heck, I don't need Cringley, I'll just buy a share of each of the 6 or so music companies, and then I'm cool getting whatever I want from Kazaa.
But who knows, maybe in some strange way, he's right. Just in case, I present the open-source version of his plan:
I form a corporation for $100 dollars or so. I issue 10 billion non-public shares. I make each of you an officer in the corp, and issue you a share. You take a CD that you have a copy of, and transfer ownership of it to the corp. This is a distributed corporation, so you will be storing said CD in your home. You then rip the CD in MP3, OGG, etc.. and store on your harddrive. You then join the private corp p2p net. BTW, in order to actually sign up for the corporation and receive your share, you join the p2p network. To indicate that you wish to transfer ownership of your CD, you rip it and make the files available on the p2p network.
I think I'll call it Kazaa.
v2.0 (Score:4, Funny)
We'll sell shares in the Library of Congress. They will be issued to all citizens of the US, and the government can come up with some sort of service to collect revenue to fund it. Then, we'll have the right to a copy of anything in the Library of Congress (inc, tm (r)).
Now to figure out some way to trick all of the producers of copyrighted works into giving a copy to the Library of Congress...
What your reply and others like it miss (Score:3, Interesting)
I've seen this argument three times now: "Just because I own a share of Corporation X doesn't mean that I have rights to copy its corporately owned IP." Granted. This is absolutely true.
But Cringley's Snapster is a compnay that is set up so that owners become part of the corporation, and one of those rights of the corporation is to space shift its corporately owned media. Snapster would be set up so that this was the raison d'etre of the corporation. As part of the corporation I would exercise my corporat
Re:Let me get this straght... (Score:3, Insightful)
The thing is, you become a part of the "they". If 51% of the shares are voted to do something, then it is so. So, if you ever get 51% of the company, it's your call and yours alone. (And, at that point you get to stack the board of directors with people who agree with you...) If a bunch of people who agree with you combine to make 51%, that works too.
Cri
Re:Open Letter to the Media Industry (Score:3, Informative)
Re:I think the problem is... (Score:3, Insightful)
Using headphone jack splitters with a friend sittin
Re:I think the problem is... (Score:3, Insightful)
If we're splitting hairs, though, even with streaming there's still a copy being made. The song will be buffered by the receiver. It may be deleted once the song is played, but it's still a copy. I'm not sure what the lawyers would make of that argument.
The original poster mentioned the console gaming system, where the share