Pirate Social

This is from the year 2000 and worth revisiting. Salon magazine published a transcript of Courtney’s speech to the Digital Hollywood online entertainment conference, given in New York:

Today I want to talk about piracy and music. What is piracy? Piracy is the act of stealing an artist’s work without any intention of paying for it. I’m not talking about Napster-type software.

I’m talking about major label recording contracts.

I want to start with a story about rock bands and record companies, and do some recording-contract math:

This story is about a bidding-war band that gets a huge deal with a 20 percent royalty rate and a million-dollar advance. (No bidding-war band ever got a 20 percent royalty, but whatever.) This is my “funny” math based on some reality and I just want to qualify it by saying I’m positive it’s better math than what Edgar Bronfman Jr. [the president and CEO of Seagram, which owns Polygram] would provide.

What happens to that million dollars?

They spend half a million to record their album. That leaves the band with $500,000. They pay $100,000 to their manager for 20 percent commission. They pay $25,000 each to their lawyer and business manager.

That leaves $350,000 for the four band members to split. After $170,000 in taxes, there’s $180,000 left. That comes out to $45,000 per person.

Full story here.

admin Miscellaneous copyright, intellectual property, music

The Internet’s successful global penetration exists, in part, due to “the end-to-end principle, which concentrates functionality at the edges, and relegates most of the network to a ‘dumb pipe’” (Odlyzko, 2004, p.323). Viewed as a transportation system, the Internet is “multimodal…with many technologies and specialized service providers available, and customers selecting the best one for their needs” (p.339). Historically, price discrimination in the form of tariffs on goods was an important economic practice in the development of early transportation industries such as lighthouses, canals, and turnpikes, with service providers having the right of detailed cargo inspection, and differential charges based on their findings (Odlyzko, 2004). These historical presidents help explain the drive by business today to manage the “cargo” of the Internet through control devices such as Digital Rights Management (DRM) and price discrimination.

Originally, “music was something you heard and experienced — it was as much a social event as a purely musical one”(Byrne, 2007)—as such, music was ingrained in the social fabric of communal experience. Technology changed all that, with music becoming a product that could be bought, sold, traded, and replayed endlessly. When music distribution shifted from the analogue LP to the digital CD in 1982, the copying of music was no longer subject to the same quality loss that plagued analogue copying. In 1991, the MP3 (Moving Picture Experts Group-1 Audio Layer 3) music format was ratified (Wikipedia.com) and by 1994, the viral spread of MP3 music files online began. The final piece of disruptive technology to impact the music business model was per-to-peer sharing (p2p). The infamous Napster was launched in July 1999 and within eighteen months, there were close to 80 million registered users. (Lessig, 2004). The RIAA (Recording Industry Association of America) had the courts shut Napster down, but many services have risen to take its place. A study by Ipsos-Insight in 2002 estimated that 28 percent of Americans over the age of 12 have downloaded music. A free-for-all of music sharing and circumvention of “the system that evolved over the past century to market the product, which is to say the container — vinyl, tape, or disc — that carried the music” (Byrne, 2007) has become deeply ingrained in our culture.

Mayhem ensued—the record business sued. Meanwhile, Apple released a little free software product called “iTunes”. iTunes was first promoted under the headline “Rip. Mix. Burn” (Honan, 2001), where users were encouraged to copy music onto their hard drives, mix it into playlists, and then burn the music onto CDs with their newly acquired CD-RW (Read/Write) drives. iTunes eventually evolved into the “iTunes Store” and in addition to facilitating the copying of one’s own music, it sold music online. Getting the music industry onboard required Apple to create a proprietary DRM system called “Fairplay”. By encoding all music on the iTunes Store with DRM, “Apple was able to negotiate landmark usage rights at the time, which include allowing users to play their DRM protected music on up to 5 computers and on an unlimited number of iPods. Obtaining such rights from the music companies was unprecedented at the time, and even today is unmatched by most other digital music services” (Steve Jobs, 2007).

DRM software simultaneously protects the music producer from unauthorized duplication of its music, while potentially exposing the privacy of its user. Sony BMG in April 2007 settled a suit “regarding its CD DRM software that not only limited access, but also monitored usage and fed information back to the company for marketing purposes” (Broussard, 2007).  Apple’s iTunes Store uses consumer provided information to enforce price discrimination across different countries (Gillepsie, 2007). In April of 2007, a European antitrust probe into the pricing practices of Apple sought to “unravel the complex web of intellectual property agreements which allow music to be sold across the world” (Hodgson, 2007) and to enable consumers to shop for the best prices across Europe. Pressure from this enquiry lead to Apple announcing in January of 2008 that it would lower the charges for music in the UK and standardize prices across Europe (Apple.com, 2008). Apple and Amazon.com both abandoned DRM entirely in 2009.

While the music industry bemoans the death of its business model, “[e]very single aspect of the business is way up — except for the part that’s about selling plastic discs” (Masnick, 2009) with the concert business continuing to set records every year. One could say that there is a return to the old values of live music as a social magnet. Lily Allen (current pop diva) after finishing a recent performance, remarked to the audience, “You were singing along, and it’s only just come out today… you must have been illegally downloading. That’s OK, I don’t make any money from recordings anyway” (Frere-Jones, 2009).

 References:

 Apple to Standardize iTunes Music Prices Throughout Europe. (2008). Retrieved March 23, 2009 from http://www.apple.com/pr/library/2008/01/09itunes.html

 Broussard, S. (2007). The copyleft movement: creative commons licensing. Retrieved March 23, 2009 from http://findarticles.com/p/articles/mi_7081/is_3_26/ai_n28457434

 Byrne, D. (2007). David Byrne’s survival strategies for emerging artists — and megastars. Retrieved March 23, 2009 from http://www.wired.com/entertainment/music/magazine/16-01/ff_byrne?currentPage=all

 Frere-Jones, S. (2009). “The Pop Life” Flashing lights. New Yorker Magazine. p.32.

 Gillepsie, T. (2007). Price Discrimination and the Shape of the Digital Commodity. In Karaganis, J. (Ed.), Structures of Participation in Digital Culture. Social Science Research Council.

 Hodgson, J. (2007). Apple probe will shake up whole music industry. Retrieved March 24, 2009 from http://www.marketwatch.com/news/story/apple-probe-shake-up-whole/story.aspx?guid=%7B13C61718-B575-4E03-A92B-37BEF80AF1B5%7D

 Honan, M. (2001). Rip. Mix. Burn. Steal? Retrieved March 24, 2009 from http://www.macworld.com/article/2509/2001/10/rip.html

 Jobs, S. (2007). Thoughts on Music. Retrieved March 24, 2009 from http://www.apple.com/hotnews/thoughtsonmusic/

 Masnick, M. (2009). There Is No New Business Model For Music? Retrieved March 24, 2009 from http://techdirt.com/articles/20090311/0410024072.shtml

 Odlyzko, A. (2004). The evolution of price discrimination in transportation and its implications for the internet. Review of Network Economics. 3 (3).

admin Miscellaneous DRM, music

This from The Local, the Swedish English language newspaper:

A lawyer representing one of the men convicted in the Pirate Bay trial has called for a retrial after reports that the judge was a member of the same copyright protection organisations as several of the main entertainment industry representatives.

The judge in the Pirate Bay case, Tomas Norström, has been a member of several of the same copyright protection organisations as several of the main entertainment industry representatives, Sveriges Radio’s P3 news programme reports.

I think we may have a problem. Full story here.

admin Miscellaneous law, piracy

Simon Dumenco blogs for Advertising Age, drawing parallels between the housing bubble and the Twitter bubble. What’s left after the crash?

There’s a parallel, of course, to the housing bubble. At some point it suddenly dawns on millions of people that they’ve paid way too much for way too little actual value. (If you’re one of the people who has read every one of Mr. Kutcher’s more than 1,400 Twitter updates … well, just realize that you’ll never, ever get that time back.)

Is it a case of the few exploiting the many? Story here.

admin Miscellaneous social media

Eliot Van Buskirk provides insight into how the Peer-to-Peer model of file sharing is working its way into the business models of media moguls: 

Facebook, MySpace, imeem, YouTube and other social media sites — which the labels now recognize as a major part of their revenue streams going forward — incorporate several aspects of Napster and other early, rogue file sharing networks: buddy lists, user uploads, filtering content by user, viral marketing, ad-supported content and the potential of mining valuable data. The complete DNA of social media was right there, from the very start of P2P.

Full story on Wired.com

admin Miscellaneous music, social media

Pirate Bay was found guilty in Sweden. It’s all over the web, with Corry Doctorow’s post on Boing Boing a good place to start:

A more interesting question is whether The Pirate Bay will disappear now. After the illegal seizure of its servers in 2006, The Pirate Bay supposedly adopted a distributed architecture with failover servers in other jurisdictions that were unlikely to cooperate with EU orders. If The Pirate Bay shuts down, it’s certain that something else will spring up in its wake, of course — just as The Pirate Bay appeared in the wake of the closure of other, more “moderate” services.

The Guardian has a cool timeline and story here. Guess we’ll just have to wait for the appeal.

admin Miscellaneous law, piracy

James Boyle is William Neal Reynolds Professor of Law at Duke Law School and founder of the Center for the Study of the Public Domain. Professor Boyle was one of the original Board Members of  Creative Commons, which works to facilitate the free availability of art, scholarship, and cultural materials by developing innovative, machine-readable licenses that individuals and institutions can attach to their work.

His book The Public Domain: Enclosing the Commons of the Mind is a must read. He posts the book online, for free PDF download, purchase, and for reading in HTML. Chapter 8 is entitled “A Creative Commons”:

If you go to the familiar Google search page and click the intimidating link marked “advanced search,” you come to a page that gives you more fine-grained control over the framing of your query. Nestled among the choices that allow you to pick your desired language, or exclude raunchy content, is an option that says “usage rights.” Click “free to use or share” and then search for “physics textbook” and you can download a 1,200-page physics textbook, copy it, or even print it out and hand it to your students. Search for “Down and Out in the Magic Kingdom” and you will find Cory Doctorow’s fabulous science fiction novel, online, in full, for free.

admin Miscellaneous copyright, law, public domain

When local newspapers fail, can hyperlocal websites deliver? This excerpt from The New York Times:

The sites, like EveryBlock, Outside.in,Placeblogger and Patch, collect links to articles and blogs and often supplement them with data from local governments and other sources. They might let a visitor know about an arrest a block away, the sale of a home down the street and reviews of nearby restaurants.

admin Miscellaneous newspapers, social media

 James “Dela” Delahunty posts:

“Cross-border trade in counterfeit and pirated goods is a growing global problem that often involves organized criminal networks,”

The information released shows how 37 countries are working to find a way to cut copyright infringement and counterfeiting globally. Interestingly, the summary indicates that the countries are trying to figure out how to (if at all) involve Internet Service Providers (ISPs) in the fight against piracy.

Link to PDF document.

admin Miscellaneous piracy, trade

This from Prof. Michael Scott: (twitter-CopyrightLaw):

A working paper coauthored by noted copyright law scholar Prof. Pamela Samuelson of the University of California Law School, and Research Fellow Tara Wheatland, discusses, in depth, various issues regarding statutory damages under the Copyright Act.

PDF of paper here.
Temp. link for Easter weekend.

admin Miscellaneous copyright, law