The Coming Showdown over Free Music

Many people, including myself, have said it’s inevitable: digital music is going to be given away legally for free, while musicians and songwriters try to make livings in other ways.  But just how inevitable is it?

The United States is currently a redoubt against the two major types of major-label-supported models in which third parties subsidize the cost of music: ad-supported (Spotify, Deezer, We7) and device maker supported (Play Now Plus, Nokia Ovi Music Unlimited).  There’s constant talk of Spotify launching in the US market, but it resembles past talk about iPhones on Verizon Wireless: mostly rumors and wishful thinking.

I have found, through work that I’m doing for another startup experimenting with a subsidized model, that there’s a schism in the music industry which can only become more pronounced as downward pressure on music pricing increases.  The schism is this: generally speaking, record labels don’t mind free music as long as they get their revenue from somewhere, while music publishers are against the idea.  Of course there are exceptions, but that’s the rule.

The reason for this schism is fairly simple when you think about it: recorded music companies are mostly publicly traded corporations on the quarterly-earnings treadmill.  While some major music publishers are owned by publicly traded companies (e.g. UMG Music Publishing or Sony ATV), songwriters and publishers are represented by collecting societies, which have no such near-term pressures.

Moreover, songwriters do not stand to gain much from the alternative business models that are appearing in the Age of the Free.  Songwriters don’t tour, sell T-shirts, or do 360 deals.  And collecting societies, because of their nonprofit status and longer-term financial views, can afford to be philosophically committed to preserving the value that consumers perceive from music.

Some of the major collecting societies are going to fight free music to the death.  It will be very hard to dismiss them, and if one of them refuses to license to a free-to-consumers service, it means that service doesn’t launch in the country where the collecting society operates.

Although music publishing is less glamorous than the record business, it’s growing in revenue and becoming more powerful while record labels shrink.  (For a good glimpse at current music-biz economics, read the article in the current issue of The Economist.)  If and when publishers and their collecting-society allies call the shots, legal music giveaways may not happen, or will at least be postponed.

One clue to the schism can be found in the FAQ of the Music Anywhere service that Catch Media launched with Carphone Warehouse in the UK a couple of months ago.  For a small monthly subscription fee, the service lets users take music files they already have and sync them onto other devices and stream them from any web browser.

The marketing materials for this service contain references to terminating user accounts “in extreme cases where it becomes apparent that most of a person’s music collection has been [in] fact pirated.”  When I first wrote about this, I thought that statement absurd: the service is offering record labels royalties from music that was probably not obtained legally.  I would have thought that the record labels would welcome the chance to get paid from so-called pirated content.

That last sentence is probably true.  But in at least the case of one major European collecting society, it’s not: this would be considered “amnesty for pirates” and is therefore morally repugnant.  Lots of music publisher and collecting society propaganda talks about the need to preserve the public’s perceived value of content.  I’ve expressed this view myself.

So far, no one has “cracked the code” on subsidized music models; none of them have achieved much volume.  Spotify has been trying to steer its free users towards paying while it also tries to get wireless carriers to subsidize users.  Nokia’s Comes With Music is being rebranded in an attempt to accelerate its slow growth.  Pandora seems to be increasing the frequency of ads on its free service — and I doubt they’re all paid for; they are repetitive ads from the same businesses — in a gambit to drive users to upgrade to the paid Pandora One (hey, it worked for me).

But the day may come when someone builds a subsidized music model with the potential to displace iTunes.  When that happens, a lot of soul-searching and difficult conversations about free music will take place within the industry.

33 comments

  1. Instead of selling copies, streams, or performance licenses, why do so many pundits omit the business model of actually selling the music?

    The music is not the copy, but the intellectual work and the talented labour of the studio performance. Why do so few musicians ever think of selling this to their fans directly? They know how to sell live performances, but recorded studio performances seem to elude them. What’s to stop any musician selling e-tickets to such a thing? Those who buy the ticket get a copy of the performance. If enough aren’t sold, there isn’t one (money refunded).

    Kickstarter is beginning to show people that such things are possible, but it’s astounding that so many think that selling copies is the only way of selling a recording. And yet if anything, it should be blatantly obvious that you can’t sell copies if people can make their own for nothing. So sell the music, not the copies!

  2. Crosbie,

    I’m sorry, I don’t get it. Please explain to me how “selling an e-ticket to a studio performance and getting a copy of the performance” differs from selling “the copy.”

    If you’re talking about the pre-pay model (if enough people commit to pre-paying $X each, I’ll record an album), this is one of Kevin Kelly’s “1000 True Fans” ideas which has been floating around for a couple of years. A couple of midlevel artists (Jill Sobule) have made it work, but otherwise the model is not a success, and besides, most of the few artists who have done it would not have enough fans to make it work without having gotten exposure through the traditional label system.

  3. If concert tickets enable sale of music performed at a concert, then studio tickets enable sale of music performed in a studio.

    The difference is, people don’t need to turn up to the studio in person, they simply receive a copy of the studio recording’s digital master (copyleft).

    When fans commission a concert it is the music performance they’re after, NOT the tickets.

    Similarly, when fans commission a studio recording it is the recording of the music performance they’re after, NOT the tickets – NOR the copies.

    Remember, people can make their own copies for nothing. They are not buying the copies. The copy is simply a means of communicating the recording to those who’ve paid for it, just as the amplifiers at a concert are a means of communicating the live performance to those who’ve paid for it.

    To understand the future of music business models you have to recognise what it is that is being paid for – the music, the performance, the recording – NOT the act of making a copy. My dog can make copies, but he can’t make good music.

    Yes, I often use ‘thousand fans’ to resonate with Kevin Kelly’s article. It is always the case that one swallow does not make a summer, that a few drops of rain do not make a torrential downpour. However, the fact remains that the sale of music (without copyright) is always discounted by pundits, if not omitted from discussion entirely. The most I can do is prompt a begrudging excuse as to why it is omitted and must be discounted.

    We have an avalanche of evidence against copyright, and yet people persist in hoping copyright based models can be made to work, and on the other hand non-copyright models are rejected due to no avalanche of evidence for their success.

    While the copyright congregation refuses to countenance the possibility of business occurring outside its church then I will take the opportunity to point out this error of omission. For those of us already outside, it is obvious that artists can sell their music to their fans, or rather that fans can commission their artists to make more music (commission studio as well as live performances).

    People are venturing outside the vestibule every day. See Eric Hellman’s Bounty Markets for Open-Access eBooks of a week or so ago. You can sell the work. You don’t need to sell copies that cost nothing to make at monopoly protected prices.

  4. Sorry, I still don’t get it.

    Under your model, the consumer is still getting a copy of a studio performance. What she is allowed to do with that copy under law is irrelevant for these purposes. If you want to call it a “studio performance e-ticket,” that’s fine. How about if I call it “Ralph.”

    Explain to me how someone gets value from this that’s different from the value one gets from “buying a copy.” In other words, explain to me how your idea is not just about nomenclature.

  5. You’re still obsessed with the copy and cannot see the music.

    Music lovers want music. They don’t give a damn about copies. Only copyright lawyers and recording industry denizens care about copies.

    A music lover pays good money for the production of good music. It is that music production that takes the talent and expense.

    We should all know by now that manufacture and distribution of copies costs nothing, so that’s the last expense on any music lover’s mind. They are no longer concerned to get good value for money in the form of glossy and informative packaging. The Internet excels in being informative and everything else at near zero prices apart from producing the music. For that critical task, the musician is needed. The piper must be paid.

    The fans of a musician will gladly commission the production of a studio recording just as much as (if not more than) a live performance.

    If they don’t commission that performance it either won’t happen, or will happen years hence at the behest of keener fans. If they’re lucky they might get the benefit of loss-leading promotional performances, but these are not guaranteed.

    It is the performance that the fans are paying for, that they value.

    You may observe a familiar outcome, that these fans still appear to end up with copies on their hard drives (promptly shared across the Internet), but these copies cost nothing to make. It is not the copy that people have paid for – such things are given away. It is only when looking through the copy-tinted spectacles of copyright that people delude themselves into believing that copies have been purchased. This is not the case at all. A studio performance has been commissioned. Any copies are incidental, epiphenomenal. It is the musician’s work that has been paid for. The fans have taken over the role of the record label – disintermediated them.

  6. You still haven’t explained anything, other than some notion of the music fan pre-paying for a studio performance.

    The consumer gets some bits representing a studio performance of music. Whether she cares that she is getting “a copy” or “some music” (and she probably doesn’t care, she just wants to listen to the music) is completely beside the point. What happens to get the bits from the artist to the fan, who gets paid, what agreements and laws are involved, are IRRELEVANT to this discussion.

    I am not the one who’s obsessed; you are. I swear, you’re like a toddler with a hammer, to whom everything is a nail. In your case the hammer is one marked “copyright abolition.”

  7. Who has the money, who gets paid, who produces the music, who gets the music, and the agreements to exchange, these are all critical.

    An 18th century privilege is an irrelevant anachronism. Its patent ineffectiveness should make it clear to all but those blinded by their faith that it will play no part in the future of the music business.

    If copyright was still effective this blog wouldn’t exist and neither would this article.

    Copyright cannot put a price on copies that cost nothing to make. It is just a hammer to hit people with.

    For a price you need a free market and an agreement to equitable exchange voluntarily entered into by both parties to a bargain.

    The market for copies has ended. The market for music continues.

  8. Ben Wright · ·

    Bill,

    Glad you’re questioning the inevitability of the race to the bottom price of recorded music trend and hope you post more articles in this vein, I like keeping up with your blog.
    As an aside, I think CF misses the point entirely. Music copyright is not an 18th century privilege, now an anachronism: it is an important legal recognition of a type of capital which is more relevant in contemporary societies than ever before because we are more inventive than ever before. If we denude music of its copyrights we begin to attack all copyright – and frankly, that just isn’t going to happen! We should keep asking ourselves how we have arrived at a situation where people are content to continued infringement of one group’s rights in this way.

  9. I think the $64,000 question is whether public perception of value of content is going to affect its market value.

    You (Crosbie) are suggesting that you can take away copyright and leave behind a free market for music in which fans will pay to have their favorite artists record music for them, so that they can get copies of it (that’s right).

    Others suggest that if you do this, you create expectation among consumers that music should be free — and thereby greatly diminish, if not entirely eliminate, the pool of artists who will get paid anything at all. And thereby greatly diminish if not eliminate the incentive for creating content.

    Still others will argue further that the Internet and other technologies are making so much easier for everyone to create content, without “facilitators” such as record labels and collecting societies, and that the Internet creates non-monetary incentives for creating content (see Clay Shirky, Here Comes Everybody) — and therefore that the forces will balance each other out and we’ll still have content that’s there because people want it and not because some advertiser is subsidizing it in order to sell sneakers or cars or soft drinks.

    I don’t know the answer, but to me this argument ought to be about whether there should be some mechanism to preserve the public’s perceived value of content, regardless of how that mechanism is implemented, i.e. whether or not that mechanism looks like what we call copyright.

    One thing is for sure: copyright isn’t helping much to stem the tide of content that’s available for free, whether legally or not.

  10. Ben Wright · ·

    Bill – I think the mechanism you mention will over time be a meshing of a number of factors – the need for editorial judgement of content, quality of delivery and the fundamental need to make a return on risk. These factors should combine to mark a paradigm shift from the current parameters of the debate, on the one side those arguing that the current content business models are out of date and a generation of consumers on the other hand who expect to be able to share content for free and are able to do so by virtue of the safe harbour provisions of the DCMA and its international equivalents. Now that the next generation of digital pipes are being unrolled in Europe and with similar exciting developments in the US, I hope that the Internet will grow from its wild-west beginnings into something more mature, where there is a balance between those who want to share their ideas for free and enjoy free exchange of them, and those who seek to make a living from generating quality content for a target market for an on-going return. In the meantime, copyright (far from outdated -though it is much abused) can ensure that such a network can come into existence.

  11. Bill,

    I am not suggesting that you can take away copyright. I contend that it has already been taken away in effect and all but statute. I might suggest wresting the weapon from all publishing corporations’ unearthly hands to throw into Mount Doom, if not rendering it incapable of use against mortals, but that’s a matter of ethics, not effect.

    Again, if people wanted copies instead of music they’d keep their printers going day and night, and their hard disks whirring, endlessly filling up with copies of copies upon copies. Most filesharers are beset by the task of deleting unwanted copies, not producing more!

    The expectation is not that music should be free, but that copies should be free – because copies do indeed cost nothing to make.

    Creating the expectation among music lovers that copies should be free diminishes if not entirely eliminates the pool of record labels who will get paid anything at all for manufacturing copies, and thereby eliminates the incentive to print and retail copies that no-one needs or wants to buy.

    Meanwhile, people still want music produced, and people will still pay musicians to compose, produce, perform, and record music.

    There is no need to preserve the public’s perceived value of music because it is not in jeopardy of diminishing.

    While you term music as ‘content’ to be shifted in containers you call copies, you will fail to recognise that the value is in the intellectual and manually skilled work that creates music, not in the copyright protected ‘content’ and containers or copies thereof.

    A monopoly can be lucrative if it is effective, but it is not productive, nor does it create value. If a shoemaker is granted the privilege to prohibit all but himself from tying the laces to the shoes he’s made, then such a monopoly is lucrative to lace tyers, but it is not productive, and does not create value. If everyone can tie their own laces they laugh in the face of any such monopoly. It’s the same for copyright, given everyone can make their own copies.

    You recognise that copyright is not effective. So let’s move on from the business of selling copies that people can now make themselves for nothing. The future of the music and recording industry is selling music and recordings – NOT COPIES!

  12. Crosbie,

    OK, now at least I understand in what way you are disconnected from reality.

    The public does not distinguish between “music” and “copies” the way you do. No one cares about this distinction. Music exists in the form of “copies” of piles of bits. That is never going to change; it is an immutable law of physics (read Lessig’s first book, the bit on the Four Factors).

    In other words, there is no practical distinction between “people still want music produced” (your axiom) and the actual “people still want copies of piles of bits that can be rendered as music” (the reality). The distinction is merely academic; your theory has no practical value.

    We all know that it doesn’t take a record label anymore to make copies of piles of bits and distribute them to the world; anyone can do it. We also know that various musicians have succeeded in distributing music directly to the public, without record companies and without regard for copyright.

    The problem is that something like 99% of such music is not interesting to anyone, and 99.99% of the artists never make a dime from it. This exists now; it’s called MySpace.

    The missing part of this equation is the resources to get your music noticed, so that you get fans in the first place – whether you want money or sex or ego stroking or whatever it is that you want in return for putting your music out there. Most models like yours fail without fans in place to begin with. In addition to creating an environment that fosters an explosion of content, the Internet is also an environment where getting noticed is a mounting challenge with solutions that shift constantly.

    Unless you’re just plain lucky, you need resources to get noticed and get fans. Does that mean you need a record label? Not necessarily, but you need something, and the odds are great that that something costs money. Who will provide that money? Someone who wants to invest in the artist, normally some entity with a vested interest. This could be a record label, but it could also be an advertiser or consumer products company (see recent article in the NY Times). With no investment, there is no return. See MySpace.

    BTW, none of the above has anything to do with copyright.

  13. AGAIN, you are focusing on the copy, the bits, the digits. You appear unable to see the intellectual work or labour of creativity, but instead can see only its digital representation and communication.

    There is no labour in the latter. There is therefore no exchange of labour to be made – no commerce. It is all in the former.

    Copyright should certainly have nothing to do with this since it should never have been legislated. However, it does indoctrinate those in the copyright based industries to believe that it’s the copies that are valuable and not the creative labour, the intellectual work.

    Unfortunately, when copyright has dissolved into ineffectiveness, and publishers must also discount it from consideration, they find they cannot. It still infects their understanding of commerce in intellectual work – that the copy must be valuable, not the labour it is a communication of.

    You are evidently still shackled by copyright ideology (bordering upon cultist brainwashing) to believe that the copy is valuable, despite all evidence to the contrary.

    It is not my ‘reality’ that is having a problem with people failing to observe a holy tenet of “Thou shalt not copy!”.

    Otherwise, yes, discovery and promotion remain issues, but they are surmountable. Enabling oneself and one’s art to be discovered by those who may be interested is facilitated by the Internet and those who use it. Indeed the more one unencumbers one’s work from prohibitions against dissemination, the more easily and rapidly one’s audience builds. But, there is no right to an audience. It is possible that not a single person on the planet might like one’s art, in which case there is no prospect of a commission to produce more. It depends upon whether one is in the business of producing art for which there is a market, or whether one is pursuing art for art’s sake.

    We do not pay others for that which we can produce ourself at no cost (copies). We pay others for that which we cannot produce ourselves – good music and recordings thereof. Finding those who can produce it is a soluble problem for the music lover. Being found is a soluble problem for the musician. Enabling music lovers and musicians to exchange their money and music production & recording services once they’ve found each other is the intractable problem I’ve solved, and it is the solution I am developing.

  14. ben Wright · ·

    CF, maybe you do understand (but it sounds like you don’t) the nature of the copyrights in music. The fundemental (freehold) right is the performance right, which resides in the creator of the original composition. The copyright you dislike so much is the mechanical (reproduction) right and it’s associated right, the performers’ right. But taking the view that you do, you ignore the contribution that people who come together to create a sound recording bring to the table – which historically and still is a significant contribution involving skill, time and money (not just VC but the labour involved. You are not alone in arguing against ‘Music Copyright’ solely from the angle of the mechanical right – most commentators who espouse file-sharing do this.

  15. Ben,

    No, Crosbie is a one-note ideologue who doesn’t actually understand copyright.

    Crosbie,

    You’re the one who doesn’t understand the difference. I understand the difference perfectly well. I never said that the copy is valuable. In fact, most of what I have said is quite the contrary. And BTW my father made the vast bulk of his living (as a musician) from playing concerts and teaching; only a sliver from recording royalties.

    I will explain this one more time even though I know it won’t sink in with you: the copy is the manifestation of the work. Without copies, no one experiences the work. Therefore as a practical matter you have to focus on copies. Three is nothing else to focus on as a good or service to build a market around. Even if the copies are part of a broader relationship with the artist (copies of music + blog posts + chat dialog + concerts + etc.), the copies are still what people listen to. And once again, this has nothing to do with copyright; this is just physics.

    As for “Enabling oneself and one’s art to be discovered by those who may be interested is facilitated by the Internet and those who use it”, I already explained that this is counterbalanced by the sheer numbers of people who have taken advantage of this and found nothing. MySpace is a failure for 99.99% of the zillions of independent musicians who upload their stuff there.

    OK, now you can go back to singing your lonesome copyright-abolitionist song…

  16. Bill, yes, the information of the work has to be physically communicated from the artist’s performance or fixation to the human senses of the recipient. In terms of copies and communications medium people are already gladly paying computer hardware and media manufacturers and ISPs for this. The only thing that remains to be paid for is the artist’s labour – by those who would commission that labour (formerly the vendor of copyright protected copies, latterly the fans).

    It seems we have reached an impasse. You’ll evangelise copyright/DRM protected commerce in copies. I’ll evangelise free market commerce in intellectual work.

  17. Ben, whose contribution to music production am I ignoring or discounting?

    Do you really think people who make copies contribute? Or copyright lawyers?

    They certainly take a large cut of revenue, but that’s the opposite of a contribution.

  18. Crosbie,

    Actually I think we agree on some things: people don’t need to pay for copies. But they need to get copies in order to enjoy music or other creative works. It is true that aspects of the copyright law focus on copies, but that’s irrelevant to the present discussion, which is one of business models, not copyright law.

    Apart from that, let’s be clear on one thing: I do not “evangelize copyright/DRM protected commerce in copies.” You continue to interpret my writings through your own peculiar lens. If I evangelize anything, it’s artists getting paid for their work. I think we agree on that too.

    Where I think we disagree is that I am deeply skeptical of artists’ ability to get paid when the cost of manufacturing and distribution of their goods is zero. I am not an economist, but I know enough to understand that if there is a substitute good available at lower (or no) cost, people will choose the substitute good. With regard to music, this will be true for what I expect to be a number of fans that shrinks and shrinks over time.

  19. ben Wright · ·

    Right now, a group of musicians are playing in the next door house. They’re a tight band, not my cup of tea but that’s besides the point. If they were to record their performance tonight, the rights to the song would belong to the composer, the rights to their performance would belong to all of them and the rights of the recording to whichever entity they had granted the right to record them (which could be themselves). Without the mechanical right (which you dislike) none of them bar the songwriter would have any equality under the law for the contribution to the combined effort other than the songwriter. That’s important.
    Copyright in the general sense and not even mechanical copyright is not something that exists for the protection and exploitation of multinational companies, it is a rather miraculous and precious set of principles that have been established to protect all types of artistic and intellectual effort. How copyright has come to be controlled by a few large players is another matter entirely, and I have some sympathy with those who are frustrated by that. But seeking to demolish the Sheriff of Nottingham’s castle by first stealing his bricks and then declaring that architecture no longer exists is absurd – it is unfortunately an absurdity that has gained traction (see the ‘Madness of Crowds’ by Charles Mackay for insight on this sort of thing). Better to use the bricks to build your own kind of castle, better even to understand how to make bricks rather than steal them!

  20. Bill, only shifters of ‘content’ consider music substitutable. If you’ve ever been a fan of a musician you should instantly recognise that no other musician can substitute for any other.

    Maybe you’ll go to a tribute band when the band you like is dead or dissolved, but you at least know the difference and pay accordingly.

    If Damonna sells her music recordings at $1,000 why are Madonna’s fans consequently going to spurn hers at $100,000? Do you really think music is substitutable?

  21. Ben, you’ve failed to show how I’ve discounted the contribution of composer, songwriter, singer, instrumentalist, mixer, or recording engineer.

    Remember, the 18th century privilege of copyright has nothing to do with making music.

    You said “you ignore the contribution that people who come together to create a sound recording bring to the table”.

    Which of these people who contribute am I ignoring? Whose contribution am I ignoring?

    I think you’ll find that I ignore no contribution, that I wholeheartedly respect all those who contribute, and would enable them to be paid by those who value their work.

  22. No, you misunderstand.

    Given the choice between a paid and free version of the same track, a rational person would choose the free one every time, presuming that there is no deterrent (legal, technical, karmic, whatever) to doing so. That’s a substitute good. I am not talking about name-brand vs. store-brand corn flakes at the supermarket.

    And yes, I am a passionate, obsessive music fan who has been known to snap up LPs of old obscure stuff and digitize it (agonizingly) by hand, if that’s the only way to get it.

    And generally speaking I do not “own” music if I can help it. I subscribe to streaming services (Rhapsody, Pandora). I have almost never paid for a download in my life. My wife and I own thousands of LPs and CDs that we acquired over the years; we hardly ever listen to any of them.

    Just saying…

  23. Bill, so if even you won’t pay for a copy if you can get one for nothing, and you wouldn’t pay another artist to imitate the artist you are a fan of, you have eliminated everything except paying the artist you are a fan of to produce more music.

    It’s an inescapable conclusion.

    The future of the music business is fans paying the musicians they love to make more beautiful music.

    Copies are free (copyright is ineffective).
    Imitations aren’t acceptable (music is non-substitutable).
    Intellectual work is the only thing left to pay for.

    QED?

  24. ben Wright · ·

    Sorry CF – I’ve tried in a few different ways to outline this to you. I can only imagine that you’re in favour of going back to a world in which artists were dependent upon courtly patronage for their living. You keep using the 18th century line as if just because copyright (in it’s most basic sense) emerged then it’s somehow old and out of date. That’s a daft position to take. I’m afraid I can’t answer your question about whom you ignore because I get no sense from you that you understand the function and purpose of copyright – it’s a legal thing it’s got nothing to with Music and everything to do with Liberty. You’re right, everyone can make music, the law has nothing to with creation. But creating things takes time and resources – the resources of the creator not the least – and copyright merely recognises that and gives this effort protection under the law.

  25. First of all, I am far from the typical music listener, so what I would pay for is not very important.

    But frankly, no. The model you describe doesn’t apply to me.

    I would not pay an artist directly to create music. I don’t stick with individual artists that long; I like to explore. Most of the artists I like are dead, not performing anymore, or long past their prime. In fact I can’t name a single artist whose next album I eagerly anticipate.

    I would and do pay for services that curate and provide access to music for me according to my tastes. I hope and assume that they pay the artists. Pandora is my “surprise me — within limits” service; Rhapsody is my “research” and “I feel like hearing X now” service.

    This idea that people pay for “intellectual property” is a conceptual construct that bears little relation to the real world. What you are really describing is a patronage model. This is a limited model with a very limited future, especially as other models — like the ones I just described — crowd it out for consumer dollars/pounds/whatever and as the notion that music has no value spreads among the general public.

    A handful of people may feel like they want to become patrons of artists, but tell them that they are “paying for intellectual property” and they’ll look at you like you have three heads.

  26. Bill, I said people will pay for intellectual work.

    That includes the work in selecting music as much as in producing it.

    Those who select it may in turn pay others to produce or select it.

    Exchanging money for work or labour is quite familiar to people.

    Copyright law is not at all familiar – except as an esoteric hazard understood only by expensive lawyers.

  27. Ahhhhh…… You almost got it right.

    “Copyright law is not at all familiar – except as an esoteric hazard understood only by expensive lawyers” is almost correct. To be completely correct, you should say “Intellectual property is not at all familiar – except as an esoteric hazard understood only by expensive lawyers.”

    If you understand this, then the rest ought to fall into place for you.

  28. ben Wright · ·

    Bill, maybe sometime in the future you could create a post (paper) concerning the difference between music business models (which is what CF is going on about) and copyright. Perhaps you already have. I’ve attended workshops and conferences for the last two years put on for the good of internet start ups and music industry people and so often the kind of thing CF is saying comes up in one form or another. I’ve gathered the impression that people who are passionate music fans (some of whom also create Internet Music Startups) think that Copyright is a noose around the creators neck. The thinking goes:

    All creators want to do is create and grow an audience/Copyright is for the Multinational oppressor – the old Record Companies that used to make indentured servants of artists by giving them big loans (advances) and then never accounted to them accurately/Copyright is for the Multinationals who fought Napster and can’t adapt to the new Internet paradigm etc….etc…

    Of course, the big problem for Internet Startups is not Copyright or Multinationals, it’s licensing.

    CF, one of the exciting things about Copyright (in the general sense) is that it recognises that an artistic work can add value to a product over and over again. For example, Radio Waves, Television, your local bar and so on. Music makes these products better than they would be without them and copyright ensures that where people exploit music to enhance their product they pay their dues to the creator of the music. Over and over again. Which is fair enough.

  29. Ben,

    First of all, as someone who is deeply involved in a music startup right now, I completely agree that the problem is with licensing. Not copyright per se. There are certain licensing entities (which shall go nameless for the moment) that in my view make a mockery of copyright and are mainly interested in self-preservation.

    Secondly, CF was not going on about business models at all; I was. He was going on about a bunch of abstract concepts that have only tangential relationships to both business models and any actual user behavior. I kept trying to get him to explain how his “theories” relate to the real world, and he didn’t, because he can’t.

    Anyway, your idea about writing something on the relationship between business models and copyright is interesting — it could be the subject of an entire book, and then some.

    The best writing I’ve seen on this is actually Larry Lessig — not that I agree with some (many) of his opinions, but what he says about Fair Use (the US concept roughly equivalent to UK Fair Dealing) is right on the mark: because copyright is based on making copies of things, the “Fair Use” concept is getting overburdened with what used to be corner cases in the pre-digital era but are now what we might call the cornerstones of business models. Because Fair Use is intentionally murky, it’s open to interpretation by entities such as licensing agencies who, of course, interpret it according to their best interests. The result is a big stinking mess.

  30. Chris Brand · ·

    Interesting that you suggest that some of the major collecting societies will refuse to license to a free-to-consumers service. Why wouldn’t that just lead to a compulsory license ?

  31. Chris,

    I’m not sure I understand: Collecting societies are private entities; compulsory licenses are legislated.

    Are you are suggesting that a music service provider can complain to government about a collecting society’s refusal to license and get government to enact a compulsory license?

    Bear in mind that I’m not talking about the United States; I’m talking about Europe…

  32. Chris Brand · ·

    Hi Bill,

    Yes, that’s exactly what I was thinking. There seems to be significantly less sympathy these days for the music industry’s failure to give consumers what they want – I could certainly see something like that being the final straw that got a compulsory license put into place.

    Chris

  33. Chris,

    This scenario seems unlikely. There are service providers like Google that have lobbying groups in Brussels. Companies like that don’t complain to governments in search of compulsory licenses; they just launch services and effectively dare anyone to sue them. This turns out to be quite a bit more efficient than complaining to governments in 27 different countries.

    On the other hand, the smaller service providers don’t even have the lobbying presence in Europe to get this done. You should bear in mind that the collecting societies are deeply entrenched with their countries’ governments, whereas technology lobbyists are relative newcomers.

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