There’s been a lot of concern in some corners of the world about the Finch Report‘s preference for Gold open access, and the RCUK policy‘s similar leaning. Much of the complaining has focussed on the cost of Gold OA publishing: Article Processing Charges (APCs) are very offputting to researchers with limited budgets. I thought it would be useful to provide a page that I (and you) can link to when facing such concerns.This is long and (frankly) a bit boring. But I think it’s important and needs saying.
Source: What does it cost to publish a Gold Open Access article? | Sauropod Vertebra Picture of the Week
Two weeks ago, the entire editorial board of the journal Lingua quit and announced they would launch a new journal named Glossa. Lingua’s executive editor Johan Rooryck said the reason for the resignation was that Elsevier, which publishes Lingua, did not comply with the editors’ request to turn the journal into an open access publication. Lingua has existed since 1949 and is among the top-3 linguistic journals on Google Scholar. The Lingua/Glossa case is a good opportunity to reflect upon our understanding of open access.
Source: Is our understanding of Open Access too shortsighted? Rethinking publishing infrastructure and ownership.
Elsevier journals — some facts Update: figures now in from Imperial. See below.Further update: figures in from Nottingham too.Further update: figures now in from Oxford.Final update: figures in from LSE.
Source: Elsevier journals — some facts | Gowers’s Weblog
So I’d been asked to write a book about whatever I wanted, and this editor didn’t even know whether I’d written anything before. It didn’t matter. It would sell its 300 copies regardless. Not to people with an interest in reading the book, but to librarians who would put it on a shelf and then, a few years later, probably bury it in a storeroom.Most academics get these requests. A colleague was recently courted by an editor who, after confessing they only published expensive hardbacks (at around £200), explained that this was an opportunity for my colleague to enhance his academic record. He was told he could give them pretty much anything, like an old report, or some old articles.“I can’t believe anyone would write a book that would be too expensive for anyone to buy,” the colleague told me over the phone. “Just to add a line to your cv.”Another colleague, on discovering his published book was getting widespread attention but was too expensive to buy, tried to get the publishers to rush out a cheaper paperback version. They ignored his request.These may sound like stories of concern to academics alone. But the problem is this: much of the time that goes into writing these books is made possible through taxpayers’ money. And who buys these books? Well, university libraries – and they, too, are paid for by taxpayers. Meanwhile, the books are not available for taxpayers to read – unless they have a university library card.In the US, taxpayers are said to be spending $139bn a year on research, and in the UK, £4.7bn. Too much of that money is disappearing into big pockets.So what are the alternatives? We could stop publishing these books altogether – which may be advisable in a time of hysterical mass publication . Or we publish only with decent publishers, who believe that books are meant to be read and not simply profited from. And if it’s only a matter of making research available, then of course there’s open source publishing, which most academics are aware of by now.So why don’t academics simply stay away from the greedy publishers? The only answer I can think of is vanity.
Source: Academics are being hoodwinked into writing books nobody can buy | Higher Education Network | The Guardian
The Institute for Prospective Technological Studies in Seville organized a workshop on the interaction between legal and pirated books sales. Imke Reimers presented her findings on the effect of copyright protection on e-book sales, I presented my LG study.
Pep Vallbe and I presented our study on Alternative compensation systems at the Copyright 4 Innovation conference in the Hague.
More below the fold.
Read the rest of this entry »
This paper discusses whether a compensation system (CS) for recorded music – endowing private Internet subscribers with the right to download and use works in return for a fee – would be welfare increasing under current market conditions. It reports the results of a discrete choice experiment conducted with a representative sample of the Dutch population consisting of 4,986 participants. The Internet penetration rate in the Netherlands is 95%, one of the highest worldwide (Eurostat 2014). The Netherlands also entertain a system of levies on copying technology, so that basic elements of a CS should be familiar to many residence.
We find that applied only to recorded music, a mandatory CS could increase the welfare of rights holders and users in the Netherlands by over €600 million per year (over €35 per capita). This far exceeds the current sales value of recorded music of ca. €144 million. Even if a CS were to substitute all of the current sales of recorded music and provided no cost savings, it could simultaneously increase user welfare and rights holder revenues at a price that constitutes a reasonable surplus split. According to our results, this is achieved over a broad range of CS user fees, for example between ca. €1.74 and €9.25 for a CS that is mandatory for all households with Internet subscription.
Read the rest of this entry »
“IP Industries’ Contribution to Economic Performance and the Public’s Perception Thereof” was the grand title of a session at this year’s Fordham IP Conference that was moderated by Coenraad Visser (University of South Africa, Pretoria). First to speak was Katfriend Paul Maier (Director, The European Observatory on Infringement of Intellectual Property Rights, Alicante), who reviewed two recently-prepared EU studies on the economic importance of IP and consumer perception. Paul took us through the statistics recorded in these studies, warning us that they represented a mere snapshot of how things currently look — they say nothing, in terms of causation, as to whether prosperity, employment or anything else is caused by IP rights or only accompanies their presence or use. The two studies to which Paul made reference, printed copies of which were provided in the black bag packs of all conference registrants, are
Intellectual property rights intensive industries: contribution to economic performance and employment in the European Union (Industry-Level Analysis Report, September 2013: A joint project between the European Patent Office and the Office for Harmonization in the Internal Market) here
European Citizens and Intellectual Property: Perception, Awareness and Behaviour, here
via The IPKat: Fordham Report 2014: IP Industries’ Contribution to Economic Performance and the Public’s Perception Thereof.
The Government of Antigua is planning to launch a website selling movies, music and software, without paying U.S. copyright holders. The Caribbean island is taking the unprecedented step because the United States refuses to lift a trade “blockade” preventing the island from offering Internet gambling services, despite several WTO decisions in Antigua’s favor. The country now hopes to recoup some of the lost income through a WTO approved “warez” site.
Antigua and Barbuda is a small country in the Caribbean that for years had a flourishing gambling industry.
A few years ago 5% of all Antiguans worked at gambling related companies. However, when the U.S. prevented the island from accessing their market the industry collapsed.
“What was once a multi-billion dollar industry in our country, employing almost 5% of our population has now shrunk to virtually nothing,” Antigua’s High Commissioner to London, Carl Roberts, said previously.
Hoping to rebuild the gambling business Antigua filed a dispute at the World Trade Organization (WTO), which they won.
In 2005 the WTO ruled that the US refusal to let Antiguan gambling companies access their market violated free-trade, as domestic companies were allowed to operate freely. In 2007 the WTO went a step further and granted Antigua the right to suspend U.S. copyrights up to $21 million annually.
TorrentFreak is informed by a source close to Antigua’s Government that the country now plans to capitalize on this option. The authorities want to launch a website selling U.S. media to customers worldwide, without compensating the makers.
The plan has been in the works for several months already and Antigua is ready to proceed once they have informed the WTO about their plan. Initially the island put the topic on the WTO meeting last month, but the U.S. blocked it from being discussed by arguing that the request was “untimely.”
This month Antigua will try again, and if they succeed their media hub is expected to launch soon after.
Antigua’s attorney Mark Mendel told TorrentFreak that he can’t reveal any details on the plans. However, he emphasized that the term “piracy” doesn’t apply here as the WTO has granted Antigua the right to suspend U.S. copyrights.
“There is no body in the world that can stop us from doing this, as we already have approval from the international governing body WTO,” Mendel told us.
TorrentFreak is in the process of obtaining details of the content to be offered and the prices to be charged. One option would be to ask users for $5 a month in return for unlimited access to U.S. media.
As predicted, the suggestion to suspend U.S. copyrights is already meeting resistance from United States authorities.
“If Antigua actually proceeds with a plan for its government to authorize the theft of intellectual property, it would only serve to hurt Antigua’s own interests,” the U.S warned in a letter to the WTO last month.
According to the letter Antigua will ruin their chances of getting a settlement should they approve a site that sels U.S. copyrighted goods without compensating the makers.
“Government-authorized piracy would undermine chances for a settlement that would provide real benefits to Antigua. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries,” the U.S. added.
Antigua doesn’t appear to be impressed much by these threats and is continuing with its plan.
If the Antiguan media portal indeed launches, it will make headlines all across the world, which may result in the site becoming one of the larger authorized suppliers of U.S. media on the Internet.
via Antigua Government Set to Launch “Pirate” Website To Punish United States | TorrentFreak.
Excellent study on the Dutch file-sharing scene.
highlights:
About one in five people who download from illegal sources had in the past year bought a CD or LP that they had previously downloaded from an illegal source. The same was found for DVDs, Blurays and for printed books. The opposite – downloading a book from an illegal source that had been previously purchased in print – is also very common. This shows that for a substantial group of
consumers printed books and e-books are complementary.
People who download from an illegal source are more frequently also consumers from legal sources, and they are more likely go to concerts and the cinema and to purchase derived products Respondents who had downloaded music, films, series, games and books from illegal sources in the past year were more likely to use legal channels as well. Only in the case of music purchased on CDs or LPs, however, no difference is observed between those who had on occasion downloaded from an illegal source in the past year and people who had never done so. The differences are particularly marked in the case of paid-for downloading and streaming from a legal source: respondents who have never downloaded from an illegal source are also little inclined to pay for online content. The survey also showed that people who had, on occasion, downloaded from an illegal source in the past year bought more music and film merchandise and went to concerts or the cinema more often.
The survey shows that roughly one third to half of the respondents would not be interested in the latest download from an illegal source if it would not be available for free. The rest have an average maximum willingness to pay that is close to the normal selling price. Similarly, about one third of all book readers are interested in and willing to pay to borrow e-books from a library or bookshop, there being a slight preference for libraries and for a flat rate per year rather than a price per title borrowed.
http://www.ivir.nl/publications/poort/Filesharing_2012.pdf’
Excellent study on the Dutch file-sharing scene.
highlights:
About one in five people who download from illegal sources had in the past year bought a CD or LP that they had previously downloaded from an illegal source. The same was found for DVDs, Blurays and for printed books. The opposite – downloading a book from an illegal source that had been previously purchased in print – is also very common. This shows that for a substantial group of
consumers printed books and e-books are complementary.
People who download from an illegal source are more frequently also consumers from legal sources, and they are more likely go to concerts and the cinema and to purchase derived products Respondents who had downloaded music, films, series, games and books from illegal sources in the past year were more likely to use legal channels as well. Only in the case of music purchased on CDs or LPs, however, no difference is observed between those who had on occasion downloaded from an illegal source in the past year and people who had never done so. The differences are particularly marked in the case of paid-for downloading and streaming from a legal source: respondents who have never downloaded from an illegal source are also little inclined to pay for online content. The survey also showed that people who had, on occasion, downloaded from an illegal source in the past year bought more music and film merchandise and went to concerts or the cinema more often.
The survey shows that roughly one third to half of the respondents would not be interested in the latest download from an illegal source if it would not be available for free. The rest have an average maximum willingness to pay that is close to the normal selling price. Similarly, about one third of all book readers are interested in and willing to pay to borrow e-books from a library or bookshop, there being a slight preference for libraries and for a flat rate per year rather than a price per title borrowed.
http://www.ivir.nl/publications/poort/Filesharing_2012.pdf’
The beauty of P2P and BitTorrent is that it’s a distributed system. Indeed, as far as sites are concerned bandwidth between users (and of course content) are both available for free and running in basic mode requires only a few dollars a month on top to pay for a server. Trading in the big gas guzzler for a something a little more frugal should be a survival option.
Of course, in many cases this could potentially mean file-sharing backing up in sophistication to 2004, to what may as well be the stone age to many of today’s younger enthusiasts. That said, ask anyone who was around at the time if it was so bad. Yes, at times Suprnova required 30 refreshes until a page actually loaded and yes, initial seeders uploaded at a snail’s pace, but the scene was buzzing and people were having fun. And if it’s not about having fun anymore, something has gone wrong along the way.
Maybe a fresh start and a resurgence of some old fashioned non-monetary gain values is what is needed. The money can’t be targeted if there isn’t any.
via Bombing BitTorrent and File-Sharing Websites Back to the Stone Age | TorrentFreak.The beauty of P2P and BitTorrent is that it’s a distributed system. Indeed, as far as sites are concerned bandwidth between users (and of course content) are both available for free and running in basic mode requires only a few dollars a month on top to pay for a server. Trading in the big gas guzzler for a something a little more frugal should be a survival option.
Of course, in many cases this could potentially mean file-sharing backing up in sophistication to 2004, to what may as well be the stone age to many of today’s younger enthusiasts. That said, ask anyone who was around at the time if it was so bad. Yes, at times Suprnova required 30 refreshes until a page actually loaded and yes, initial seeders uploaded at a snail’s pace, but the scene was buzzing and people were having fun. And if it’s not about having fun anymore, something has gone wrong along the way.
Maybe a fresh start and a resurgence of some old fashioned non-monetary gain values is what is needed. The money can’t be targeted if there isn’t any.
via Bombing BitTorrent and File-Sharing Websites Back to the Stone Age | TorrentFreak.
Buffett is concentrating on small and medium papers in defensible markets, while steering clear of metro markets, where costs are high and competition is fierce. But he says he has no transformational ideas in mind.
“I do not have any secret sauce,” Buffett told the New York Times. “There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you’ll see a much better-defined pattern of operations online and in print by papers.”
via Reflections of a Newsosaur: What’s next for newspapers?.Buffett is concentrating on small and medium papers in defensible markets, while steering clear of metro markets, where costs are high and competition is fierce. But he says he has no transformational ideas in mind.
“I do not have any secret sauce,” Buffett told the New York Times. “There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you’ll see a much better-defined pattern of operations online and in print by papers.”
via Reflections of a Newsosaur: What’s next for newspapers?.
“Just 30 minutes after Whitney Houston died, Sony Music raised the price of Houston’s greatest hits album, ‘Ultimate Collection,’ on iTunes and Amazon. Many technologists, including chairman of the NY Tech Meetup Andrew Rasiej, suggests that Sony should be boycotted for the move. In a tweet, Rasiej wrote, ‘Geez Sony raised price on Whitney Houston’s music 30 min after death was announced. #FAIL…We should boycott Sony.'”
via Sony Raises Price of Whitney Houston’s Music 30 Minutes After Death – Slashdot.“Just 30 minutes after Whitney Houston died, Sony Music raised the price of Houston’s greatest hits album, ‘Ultimate Collection,’ on iTunes and Amazon. Many technologists, including chairman of the NY Tech Meetup Andrew Rasiej, suggests that Sony should be boycotted for the move. In a tweet, Rasiej wrote, ‘Geez Sony raised price on Whitney Houston’s music 30 min after death was announced. #FAIL…We should boycott Sony.'”
via Sony Raises Price of Whitney Houston’s Music 30 Minutes After Death – Slashdot.
We’ve pointed it out numerous times in the past. Despite the rampant piracy, Hollywood and other entertainment industries continue to break revenue and sales records year after year.
In an excellent report commissioned by the CCIA, Techdirt’s Mike Masnick has has made an excellent overview of how well things go in the various entertainment industry sectors.
The report titled “The Sky is Rising” was presented at the MIDEM music business conference earlier today.
A summary of some of the key findings:
* According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.
* Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.
* From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion
* Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.
* BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.
In addition to statistics, the report also lists many of the case studies that we’ve covered here at TorrentFreak, from Paulo Coelho to Louis CK.
In large part, the report is meant to counter the entertainment industry claims that their businesses have been ruined by piracy, and that the Internet has to be monitored and censored.
via What Piracy? The Entertainment Industry is BOOMING! | TorrentFreak.We’ve pointed it out numerous times in the past. Despite the rampant piracy, Hollywood and other entertainment industries continue to break revenue and sales records year after year.
In an excellent report commissioned by the CCIA, Techdirt’s Mike Masnick has has made an excellent overview of how well things go in the various entertainment industry sectors.
The report titled “The Sky is Rising” was presented at the MIDEM music business conference earlier today.
A summary of some of the key findings:
* According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.
* Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.
* From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion
* Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.
* BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.
In addition to statistics, the report also lists many of the case studies that we’ve covered here at TorrentFreak, from Paulo Coelho to Louis CK.
In large part, the report is meant to counter the entertainment industry claims that their businesses have been ruined by piracy, and that the Internet has to be monitored and censored.
via What Piracy? The Entertainment Industry is BOOMING! | TorrentFreak.
Signing a deal that makes anyone a net profit participant in a Hollywood movie deal has always been a sucker’s bet. In an era where studios have all but eliminated first dollar gross and invited talent to share the risk and potential rewards, guess what? Net profit deals are still a sucker’s bet. I was slipped a net profit statement below for Harry Potter and The Order of the Phoenix, the 2007 Warner Bros sequel. Though the film grossed $938.2 million worldwide, the accounting statement below conveys that the film is still over $167 million in the red. Text continues below…harry potter net profits
via STUDIO SHAME! Even Harry Potter Pic Loses Money Because Of Warner Bros’ Phony Baloney Net Profit Accounting – Deadline.com.
Q&A: Why money doesn’t motivate file-sharers | Interviews | News | PC Pro
Q&A: Why money doesn’t motivate file-sharers
By Nicole Kobie
Posted on 8 Dec 2010 at 14:11
Piracy is so difficult to battle because file-sharers are motivated by altruism and not financial gain, according to one academic.
Joe Cox, an economist at the Portsmouth Business School, believes file-sharers who post content online see themselves as the “Robin Hoods of the digital age,” according to a study he’s published in the journal Information Economics and Policy.
Such insight could help drive policy and find ways to prevent illegal downloads, he claims. We spoke to him to find out more.
Q. Why did you decide to look at file-sharing?
A. A lot of the academic effort which has focused on file-sharing has been on lost revenues, to say how much the record industry and the film industry has lost as a result of people illegally downloading content.
I was more interested in the behavioural motivations. To me it seems pretty obvious why you might want to illegally download a music track or a film or a video game, but what I was really interested in is the people who make the content available in the first place, because there doesn’t seem to be much to be gained for them, at least not materially. They presumably already bought the material to make it available in the first place.
I called them seeders – it’s a pretty standard term for people who make the material available – distinguishing them from leechers, who just take material from others but don’t give any back. I’ve never seen anything published which looks at those two groups to look at their different motivations.
Q. What was the motivation for seeders?
A. For the leechers, pretty obviously, the major motivation was financial. They wanted to acquire music or films without paying for it because it was cheaper than going out to buy it.
What was interesting was the difference with the seeders, and it was quite apparent that financial motivations were nowhere near as prevelant; it was a kind of altruism.
Their main motivation was that they were seeking notoriety, peer recognition, peer esteem, some sort of feeling of getting one over on the system. It was a much richer tapestry of different things contributing to the decision to go ahead and make the content available.
Q. With that in mind, how should illegal sharing be prevented?
A. The survey data suggested there was a deep-seated belief that this type of activity shouldn’t be illegal, that there was no criminal act involved.
That makes it very hard to deter with advertising to suggest that you’re funding piracy, that you’re a cheap knock-off merchant, because they believe what they’re doing is morally right. And it’s these guys that record labels and movie studios are most interested in getting to. They’re the source.
Q. You’ve said the Digital Economy Act won’t work, so what do you suggest?
A. Technology has developed to such a point now that you can’t turn back the clock and you can’t change the digital revolution – it’s a bit like King Canute trying to halt the advance of the tides.
I think there needs to be a more radical rethink in how the arts and the creative industries are funded.
The phenomena of the record label and the movie studio pretty much come into their own in the 20th century and I think they are a 20th century phenomena. Before that opera, ballet, and music were funded on a system of patronage.
I think we need to consider potential funding from the public sector. Coming at this from an economics perspective – I’m an economist – we have a particular type of common good that we look at, called a public good.
I would argue that these days music and movies are public goods: you can’t really exclude people from using them
The characteristics of this are you can’t exclude people from enjoying the benefits of it if they don’t pay for it, and if any one person consumes the good it doesn’t affect anyone else’s ability to consume it too. Classic examples are things like street lighting or national defence.
I would argue that these days music and movies are public goods. You can’t really exclude people from using them. The internet is giving them the availability to share this material at will and it’s virtually impossible to stop that. And with the digital nature of material, you can make perfect reproductions and share it to others.
What economists say will happen if you have a public good and look to the free market, the market won’t provide any output because everyone will just look to free-ride, and not pay themselves. But if no-one pays the good doesn’t get produced.
Q. And public funding is the way to get around that?
A. With street lighting or national defence, these are things that government funds through taxation. It would probably be a bit radical to say the government should fund the creative industries through taxation, but there are creative ways knocking around at the moment.
For example, you could try introducing non-commercial use levies on iPods or DVD players. It’s a lump sum you would pay over and above the purchase price when you buy the device, with the understand that you’re going to use it to access digital content.
If that money was collected into a pot, it could be distributed to record labels and movie studios to give proper compensation to rights owners. And then there could be a relaxation on how people access the material. You could keep track of downloads to make sure the most popular artists get the most money.
Internet piracy taking big toll on jobs | Reuters
A study into Internet piracy by a Paris-based consultancy published on Wednesday showed that 1.2 million jobs in the European Union could be lost over the next five years if more is not done to clamp down on illegal downloading.
The study by TERA Consultants for the International Chamber of Commerce focused on piracy in Europe’s music, film, television and software industries.
Those industries generated 860 billion euros ($1.186 trillion) and employed 14.4 million people in 2008. But in the same year, 10 billion euros and 186,000 jobs were lost to piracy, the study found.
If that trend continues — and the rapid increase in illegal downloads and advancing piracy techniques suggest it will — then up to 1.2 million jobs and 240 billion euros worth of European commerce could be wiped out by 2015.
“In the near future and even today in 2010, we observe increasing bandwidth, increasing penetration rate in terms of the Internet,” said TERA Consultant’s Patrice Geoffron, explaining that piracy was only likely to escalate.
“If we combine all those elements, obviously the impact in a few years won’t remain stable compared to what it was in 2008.”
ARTISTS SUFFER
The bulk of illegal downloading targets music, television and video sites, with consumers using “peer-to-peer” formats to download songs and video clips onto their laptops and home computers from websites without paying a fee.
In that respect it has a disproportionate impact on the creative industries, with musicians, actors and artists standing to lose the most from unfettered downloading, experts say.
Agnete Haaland, the president of the International Actors’ Federation, believes consumers need to be made more aware of the damaging economic and social impact of their illegal activity.
“We should change the word piracy,” she told reporters at the unveiling of the report on Wednesday.
“To me, piracy is something adventurous, it makes you think about Johnny Depp. We all want to be a bit like Johnny Depp. But we’re talking about a criminal act. We’re talking about making it impossible to make a living from what you do,” she said.
Haaland, whose group supported the study, said one of the best ways to reverse the situation would be stricter EU legislation to enforce existing laws against piracy.
Broadband consumers to foot £500m bill to tackle online piracy – Times Online
Proposals to suspend the internet connections of those who repeatedly share music and films online will leave consumers with a bill for £500 million, ministers have admitted.
The Digital Economy Bill would force internet service providers (ISPs) to send warning letters to anyone caught swapping copyright material illegally, and to suspend or slow the connections of those who refused to stop. ISPs say that such interference with their customers’ connections would add £25 a year to a broadband subscription.
Ministers have not estimated the cost of the measures but say that the cost of the initial letter-writing campaign, estimated at an extra £1.40 per subscription, will lead to 40,000 households giving up their internet connections. Impact assessments published alongside the Bill predict that the measures will generate £1.7 billion in extra sales for the film and music industries over the next ten years, as well as £350 million for the Government in extra VAT.
ISPs have called on the content industries to lessen the burden on broadband consumers by contributing to the costs. Charles Dunstone, chief executive of Carphone Warehouse, whose subsidiary TalkTalk is the biggest consumer provider of broadband, said: “Broadband consumers shouldn’t have to bail out the music industry. If they really think it’s worth spending vast sums of money on these measures then they should be footing the bill; not the consumer.”
Related Links
* Internet pirates will be cut off from 2011
* Piracy means less money to make films
* Mandelson targets web piracy after meal with mogul
BT also stepped up its attack on the plans, which it said represented “collective punishment that goes against natural justice”. John Petter, managing director of BT Retail’s consumer division, said: “Put yourself in the shoes of a small businessman who has a rogue member of staff. Your internet access could get cut off because of the actions of one individual. It really feels like the UK is out on a limb with these proposals compared to the rest of the world.”
Mr Petter said that the Bill, which is being rushed through Parliament before the general election next year, had been poorly thought out. He said: “The whole tenor of the way this is being introduced makes us really worried that this is all a false game. It’s like the dangerous dogs legislation, which was introduced quickly and was not effective.”
The Conservatives, who are broadly supportive of the plans, also called on the Government to spare consumers the bulk of the costs. Jeremy Hunt, the Shadow Culture Secretary, said: “It is grossly unfair that Labour expects millions of innocent customers to pay extra each month because of the actions of a minority. By their own admission this will make broadband unaffordable for tens of thousands of people, which flies in the face of government policy to increase take-up in disadvantaged communities.”
A spokesman for the Department for Business, Innovation and Skills said: “Many of the figures in the impact assessment for the Digital Economy Bill are expressed in ranges and some of the costs will be borne by the rightholders and some by the ISPs. The overall benefits to the country far outweigh the costs.”
A spokesman for the BPI, which represents the record industry, said: “It is in everyone’s interest that ISPs’ statutory obligations can be discharged as cost efficiently as possible — particularly those law-abiding broadband customers who currently carry the burden of infringers.
“We are confident that those costs will be a mere fraction of the stratospheric sums suggested by some ISPs, and negligibly small when set against their vast annual revenues.” The latest Star Trek movie was dowloaded illegally almost 11 million times this year, according to Torrentfreak, a download-monitoring weblog.
This year the FBI started an investigation after an unfinished version of X-Men Origins: Wolverine, was posted online and watched by thousands of people a month before its release.
p2pnet news » Blog Archive » RIAA v Tenenbaum: what might have been
Quoted in the Harvard Law Review, he was referring to the Joel Tenenbaum vs the RIAA farce, going on the final judgment was “both disappointing and absurdly excessive”.
Beyond Binary – CNET News
Of all the losses suffered by the music industry, one of the biggest may be the fact that nearly all of the investors that once were building digital music services have moved on.
“There are not a lot of entrepreneurs involved in this space,” said David Pakman, a music industry veteran and now venture capitalist at Venrock Associates.
By Pakman’s count, there have been 109 venture-backed digital music start-ups. Fewer than five, though, produced a substantial return, he said.
“Investors lost a lot of money in this space,” he said, speaking on a breakfast panel at the Fortune Brainstorm: Tech conference here. The loss for the industry, he said is that entrepreneurs have moved on to areas like Twitter and Facebook.
The Becker-Posner Blog
Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.
I wonder if Judge Posner will stop writing his blog because I linked to his post.
BBC NEWS | Technology
YouTube will not reverse its decision to block music videos to UK users despite a plea from the Performing Rights Society to change its mind.
It is removing all premium music videos to UK users after failing to reach a new licensing agreement with the PRS.
Patrick Walker, YouTube’s director of video partnerships said it remained committed to agreeing terms.
But such agreement needed to be done “at a rate which is sustainable to all”, he told the BBC.
Thousands of videos were made unavailable to YouTube users from late on 9 March.
Patrick Walker, YouTube’s director of video partnerships, told BBC News that the move was “regrettable” but that it continued to talk to the PRS.
“The more music videos YouTube streams, and the more popular those music videos are, the more money YouTube will generate to share with the PRS and its song writers. It’s a win-win arrangement.
YouTube, however, cannot be expected to engage in a business in which it loses money every time a music video is played – that is simply not a sustainable business model.” he said.
Steve Porter, head of the PRS, said he was “outraged… shocked and disappointed” by YouTube’s decision.
In a statement, Mr Porter said the move “punishes British consumers and the songwriters whose interests we protect and represent”.
The PRS has asked YouTube to reconsider its decision as a “matter of urgency”.
This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties
PRS statement
The body, which represents music publishers, added: “Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing.
“This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties.”
The Music Publishers Association (MPA) joined with the PRS is urging Google to rethink.
“Music publishers are in the business of getting their music heard by as wide an audience as possible, and websites such as YouTube rely on this music to attract traffic. It is difficult to see how anyone’s interests are served by denying the YouTube community the content they most enjoy,” said MPA chief executive Stephen Navin.
Lord Carter, the UK’s Minister for Communications, Technology and Broadcasting, has also waded into the debate.
Giving evidence before the Business Select Committee the minister said he suspected a degree of “commercial posturing on the part of both parties” but said the row was indicative of a wider issue.
“It is an example of the question of how do you price and fund content in the digital world?” he said.
“We have had decades of content being funded in one way – via the license fee and advertising – and that model is changing at a rapid speed,” he told MPs.
Mr Walker told BBC News the PRS was seeking a rise in fees “many, many factors” higher than the previous agreement.
He said: “We feel we are so far apart that we have to remove content while we continue to negotiate with the PRS.”
“We are making the message public because it will be noticeable to users on the site.”
Consumers must be scratching their heads in amazement at such obstacles to delivering legal content in a timely and straightforward fashion.
Darren Waters, Technology editor, BBC News website
Read more on the Dot.Life blog
The majority of videos will be made inaccessible over the next two days.
YouTube pays a licence to the PRS which covers the streaming of music videos from three of the four major music labels and many independent labels.
Stream online
While deals with individual record labels cover the use of the visual element and sound recording in a music video, firms that want to stream online also have to have a separate deal with music publishers which covers the music and lyrics.
In the UK, the PRS acts as a collecting society on behalf of member publishers for licensing fees relating to use of music.
YouTube stressed that it continued to have “strong partnerships” with three of the four largest record labels in the world.
Mr Walker said the PRS was asking for a “prohibitive” rise in the cost of a new licence.
While not specifying the rate the PRS was seeking, he said: “It has to be a rate that can drive a business model. We are in the business for the long run and we want to drive the use of online video.
“The rate they are applying would mean we would lose significant amounts of money on every stream of a music video. It is not a reasonable rate to ask.”
New deal
YouTube has also complained of a lack of transparency by the PRS, saying the organisation would not specify exactly which artists would be covered by any new deal.
“That’s like asking a consumer to buy a blank CD without knowing what musicians are on it,” a statement from YouTube UK says on its official blog.
YouTube is the world’s most popular online video site but has been under increased pressure to generate more revenue since its purchase by Google for $1.65bn in 2006.
“We are not willing to do this [new licensing deal] at any cost,” said Mr Walker.
He said the issue was an industry-wide one and not just related to YouTube.
“By setting rates that don’t allow new business models to flourish, nobody wins.”
Services such as Pandora.com, MySpace UK and Imeem have also had issues securing licence deals in the UK in the past 12 months.
Newswise Business News
Abolishing patent and copyright law sounds radical, but two economists at Washington University in St. Louis say it’s an idea whose time has come. Michele Boldrin and David K. Levine see innovation as a key to reviving the economy. They believe the current patent/copyright system discourages and prevents inventions from entering the marketplace. The two professors have published their views in a new book, Against Intellectual Monopoly, from Cambridge University Press.
“From a public policy view, we’d ideally like to eliminate patent and copyright laws altogether,” says Levine, John H. Biggs Distinguished Professor of Economics. “There’s plenty of protection for inventors and plenty of protection and opportunities to make money for creators. It’s not that we see this as some sort of charitable act that people are going to invent and create things without earning money. Evidence shows very strongly there are lots of ways to make money without patents and copyright.”
Levine and Boldrin point to students being sued for ‘pirating’ music on the internet and AIDS patients in Africa dying because they cannot afford expensive drugs produced by patent holders as examples of the failure of the current system. Boldrin, the Joseph Gibson Hoyt Distinguished Professor in Arts & Sciences and Chair of the economics department says, “Intellectual property is in fact an intellectual monopoly that hinders rather than helps the competitive free market regime that has delivered wealth and innovation to our doorsteps.”
The authors argue that license fees, regulations and patents are now so misused that they drive up the cost of creation and slow down the rate of diffusion of new ideas. Levine explains, “Most patents are not acquired by innovators hoping to protect their innovations from competitors in order to get a short term edge over the rest of the market. Most patents are obtained by large corporations who have built portfolios of patents for defense purposes, to prevent other people from suing them over patent violations.”
Boldrin and Levine promote a drastic reform of the patent system in their book. They propose the law should be restored to match the intent of the U.S. Constitution which states: Congress may “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writing and discoveries.”
They call on Congress to reverse the burden of the proof on patent seekers by granting patents only to those capable of proving that:
• their invention has social value
• a patent is not likely to block even more valuable innovations
• the innovation would not be cost-effective absent a patent
The authors acknowledge that such drastic reform is unlikely and outline an incremental approach for Congress to gradually reduce the scope of patents, regulation and licensing.
Nevertheless, their call for changing the system is urgent. The economists compare intellectual monopoly (patents) to medieval trade monopolies which were proven to be economically detrimental. They write, “For centuries, the cause of economic progress has identified with that of free trade. In the decades to come, sustaining economic progress will depend, more and more, on our ability to progressively reduce and eventually eliminate intellectual monopoly.”
Professors Boldrin and Levine maintain a blog on this topic: www.Againstmonopoly.org.
22 December 2008 – New Scientist
Will Page and Gary Eggleton at the MCPS-PRS Alliance – a UK body that collects royalties for musicians when their songs are played on air or downloaded – and Andrew Bud from the cellphone software company mBlox have analysed a year’s worth of downloads from a well-known internet music store. They found that of the 13 million tracks available, 52,000 – just 0.4 per cent – accounted for 80 per cent of downloads.
Slyck News
If you could total the quantity of unlicensed tracks within the vastness of the P2P community, then apply a reasonable fee to those tracks, you would end up with a very large monetary number. $10 billion? $50 billion? Just how much untapped money, relevant to the music industry, is circulating in the P2P community? MultiMedia Intelligence, who recently stated P2P growth will top 400% in 5 years, has pegged a monetary number to unlicensed music. The number: $69 billion.
Ars Technica
If you pay any attention to the endless debates over intellectual property policy in the United States, you’ll hear two numbers invoked over and over again, like the stuttering chorus of some Philip Glass opera: 750,000 and $200 to $250 billion. The first is the number of U.S. jobs supposedly lost to intellectual property theft; the second is the annual dollar cost of IP infringement to the U.S. economy. These statistics are brandished like a talisman each time Congress is asked to step up enforcement to protect the ever-beleaguered U.S. content industry. And both, as far as an extended investigation by Ars Technica has been able to determine, are utterly bogus.
Wired 13.01:
Anathema is a so-called topsite, one of 30 or so underground, highly secretive servers where nearly all of the unlicensed music, movies, and videogames available on the Internet originate. Outside of a pirate elite and the Feds who track them, few know that topsites exist. Even fewer can log in.
HEXUS.gaming
On receiving an honorary doctorate from Queen’s University Belfast last week for his services to computer gaming, the Northern Irish video game developer, David Perry, whose creations include Earthworm Jim, MDK, Messiah , Wild 9 and Enter the Matrix, believes that the Western games industry will eventually combat piracy problem by offering games for free.
Perry believes that the western world will soon follow the same business model that has worked well in Asia, where software is offered as a free download and revenue is made from micro-payments for extras such as new characters and weapons.
Speaking in Belfast after his award, Perry said:
“They had so much piracy that they decided to stop charging for the games. Instead, there’ll be a charge for things you might want to use in the game.”
“Your character might have a plain white T-shirt. If you wanted a nicer one you could have it for a dollar. Or perhaps you could buy a magic sword for a knight for a dollar.”
Though the idea may sound far-fetched, EA has already paved the way for the invasion of free games into the Western world by launching its ‘Play 4 Free’ business model and its first free game, Battlefield Heroes, due for release this summer.
It remains to be seen whether others will follow, but with an estimated £2bn lost every year due to piracy, developers may not have much of an option.
IBNLive
Mumbai: TV actor Rajeev Khandelwal, who’s basking under the success of his debut in recently released film Aamir, is now on a mission to stop piracy. The actor recently released the DVD and VCD of his power-packed film.
“You can easily get pirated DVDs in the market, which is really unfortunate. So I feel it makes sense to release the original DVD of the film even while it’s still in theatres,” Rajeev said.
“The film is still hot and there will be many people who would like to keep this as a collectors item. I think it is a wise decision because the market is probably already flooded with the pirated DVDs,” the actor added.
TorrentFreak
Jesse Alexander has co-produced and written for both ‘Heroes’ and ‘Lost’, two of the most successful TV-series today. In addition to millions of viewers on TV, both shows are are also extremely popular on BitTorrent. In fact, millions of people share a single episode and this can go on to 10 million downloads per episode.
One could argue that their availability on BitTorrent actually helped ‘Lost’ and ‘Heroes’ to build a stronger fanbase. With torrents, no-one has to miss an episode anymore which keeps the fans more engaged. So called “pirates” advertise the shows to their friends, or write about it on their blogs. Accordingly, when we asked Jesse Alexander whether he thinks that BitTorrent might have helped to reach a broader audience, he answered with a clear cut “Yes”.
Not that Jesse wants everybody to get the shows off BitTorrent, but he said that it certainly signals that there is a market for on-demand and interactive TV. “People watching shows such as Lost and Heroes on BitTorrent is the present world reality,” Jesse told TorrentFreak. TV networks have to recognize this, give their viewers more ways to interact with the shows, and find ways to generate revenue from every member of the global audience.”
“It’s the same for music artists. The reality is, people share music. Artist now make money by driving people to concerts, through community websites, and by offering exclusive events. TV networks are focusing too much on one exclusive product, instead of building a community. This is a mistake I think.”
The success of Heroes on BitTorrent didn’t pass by the cast of the show unnoticed either. “The cast and the people behind the scenes have all been talking about it,” Jesse said. As an example he mentioned last year’s promotional tour in France, where the actors were recognized by hundreds of fans, even though the show had not even premiered on TV yet.
Alexander has hit the nail on the head. This is in fact one of the main reasons why shows like ‘Heroes’ are so popular on filesharing networks. It can take up to six months after the US premiere before these shows are aired in Europe, Australia and other parts of the world. Jesse agreed that this is indeed one of the major causes of piracy. “This gap is something that is certainly going to change in the future,” he added.
Jesse went on to say that in the near future, thanks to the Internet, the viewers of TV-shows will see more interactive components and alternate realities they can participate in. The future of TV will be more international, with real interaction, and shows will be more and more integrated into the core part of an online community.
When we asked Jesse if he has ever downloaded TV-shows off BitTorrent, he told us: “I can’t confirm or deny, but I’m familiar with all kind of new technologies.” I guess we all know what he’s trying to say.
It is no surprise that Jesse is more positive towards new technologies than some others in the entertainment industry. Last week we reported on the upcoming “Pirate TV” show that he is working on, together with Matt Mason, the author of ‘The Pirate’s Dilemma’.
“Matt’s book needs to get a broader audience,” said Jesse. “We want to discuss the negative and the positive side of piracy, and place things in a broader historical context. We want to start a real conversation about the future of intellectual property.”
We’re happy to join the debate, what about you?
Science Journal – WSJ.com
We all bristle at people who put themselves ahead of the common good, whether it is by evading taxes, shirking military service, cheating on bus fares or littering. Many of us will go out of our way to shame, shun or otherwise punish them, researchers have shown. That’s how we foster a community that benefits everyone, even at some cost to ourselves.
Economists analyzing ingredients of the social glue that holds us all together wonder whether that public spirit of rebuke and reward is an innate human value or a byproduct of the particular society in which we live. Until recently, however, they rarely have reached across cultural boundaries to compare how people in disparate communities actually weigh private gain against public good.
In the most sweeping global study yet of cooperation, a team of experimental economists tested university students in 15 countries to see how people contribute to joint ventures and what happens to them when they don’t. The European research team discovered startling differences in how groups around the world react when punishment is handed out for antisocial behavior.
WSJ’s Robert Lee Hotz speaks to Kelsey Hubbard about an important study that looked at how people responded to peer pressure in cooperative ventures across many societies.
In some countries, researchers found, almost no good turn went unpunished. “What kept popping up is this element of retaliation,” said economist Benedikt Herrmann at the U.K.’s University of Nottingham, who reported the experiment this past March in Science. “It took us by surprise.”
Among students in the U.S., Switzerland, China and the U.K., those identified as freeloaders most often took their punishment as a spur to contribute more generously. But in Oman, Saudi Arabia, Turkey, Greece and Russia, the freeloaders more often struck back, retaliating against those who punished them, even against those who had given most to everyone’s benefit. It was akin to rapping the knuckles of the helping hand.
To explore cooperation across cultures, Dr. Herrmann and his colleagues recruited 1,120 college students in 16 cities around the globe for a public-good game. The exercise is one of several devised by economists in recent years to distill the complex variables of human behavior into transactions simple enough to be studied under controlled laboratory conditions.
The volunteers played in anonymous groups of four. Each player started with 20 tokens that could be redeemed for cash after 10 rounds. Players could contribute tokens to a common account or keep them all to themselves.
After each round, the pooled funds paid a dividend shared equally by all, even those who didn’t contribute. Previous research shows that a single selfish individual riding on the generosity of others can so irritate other players that contributions soon drop to nothing.
That changes when players can identify and punish those who don’t contribute (in this case, by deducting points that can quickly add up to serious money). Once such peer pressure comes into play, everyone — including the shamed freeloader — starts to chip in.
“Freeloaders are disliked everywhere,” said study co-author Simon Gachter, who studies economic decision-making at Nottingham. “Cooperation always breaks down if people can’t punish.”
The students behaved the same way in all 16 cities until given the chance to punish those taking a free ride on the shared investment. Punishment was done anonymously, and it cost one token to discipline another player.
Among those punished, differences emerged immediately. Students in Seoul, Istanbul, Minsk in Belarus, Samara in Russia, Riyadh in Saudi Arabia, Athens, and Muscat in Oman were most likely to take revenge by deducting points from other players — and to give up a token themselves to do it.
“They didn’t believe they did anything wrong,” said economist Herbert Gintis at New Mexico’s Santa Fe Institute. And because the spiteful freeloaders had no way of knowing who had punished them, they often took out their ire on those who helped others most, suspecting they must be to blame.
Such a readiness to retaliate, researchers said, reflected relatively lower levels of trust, civic cooperation and the rule of law as measured by social scientists in the World Values Survey, which periodically assesses basic values and beliefs in more than 80 societies. In countries with democratic market economies, peer pressure goaded people to cooperate. Among authoritarian societies or those dominated more by ties of kinship, freeloaders instead lashed out at those who censured them, the researchers found.
“The question is why?” said Harvard political economist Richard Zeckhauser.
No one is sure. The freeloaders might be angry at being trumped by strangers, or be unwilling to share with people they don’t know. They also might believe they are being treated unfairly.
But social appearances and the good opinion of others do regulate our behavior. In the only other major cross-cultural study of this sort, Dr. Gintis and his colleagues several years ago examined 15 primitive societies of farmers, foragers, hunters and nomads in 12 countries, not unlike those in which humanity might have first evolved. The researchers found that these people all cared as much about fairness as the economic outcome of a trade. “They care about the ethical value of what they do,” said Dr. Gintis.
Independent brain-imaging teams in Japan and the U.S. have shown just how valuable approval can be, as they reported in April in Neuron. Researchers at Japan’s National Institute for Psychological Sciences found that when they watched the brain respond to reputation and social status, the excited synapses looked awfully familiar: They were the same ones activated by money.
The researchers also ranked the national responses against the World Values Survey4, which periodically assesses values and cultural changes in societies all over the world. Searching for the
origins of economic behavior, an international research team studied 15
primitive cultures in 12 countries and reported their findings in
Techdirt:
I’ve been noticing an interesting trend lately. While more folks aren’t totally averse to the idea that they need to somehow embrace “free,” they’re mishandling what they do with “free” and then going on to complain how “free” doesn’t work. The basic problem is this: they hear about the importance of “free” and so they give something away for free. But they don’t have a business model around the free content. They don’t understand the economic forces at work. They just give stuff away and pray… and then whine when nothing happens. As we’ve pointed out before, no one says that “free” by itself pays the bills. You need to have a more complete strategy than that — and it involves a lot more than “give it away and pray.” It’s good that they’re at least trying, but if they don’t understand the real issues and fail at the experiments, they suddenly come back and claim that “free” isn’t the answer, and suddenly rule out all business models involving free. And that is a real recipe for failure.
Digital Music News
How should paid downloads be priced? Apple believes in a uniform pricing scheme, majors want a tiered structure, and most music fans want everything for free. Somewhere in-between lies Amie Street, a company that sets download pricing based on user demand.
That means that songs start at free, and ramp to 98-cents if the demand is great enough. But is the model working? Just recently, the group announced the addition of catalog from Beggars Group, Matador Records, and Polyvinyl Recording Co. The list of bands includes Interpol, Sigur Ros, Pavement, Yo La Tengo, Devendra Banhart, Belle and Sebastian, Architecture in Helsinki, and other indie luminaries.
But it remains unclear if the sales story is developing, at least at this stage of the game. In a discussion Monday, company cofounder and chief marketing officer Joshua Boltuch declined to offer sales figures or average pricing data. Boltuch did point to strong album purchasing, and an album-to-single sales ratio of 1:1. “We attribute this incredible ratio to our fan-driven pricing model finding the best market price for albums, and therefore maximizing sales,” Boltuch explained.
February 11th, 2008| advertising, archives, books, DRM, economics, google, image, In Focus, isps, legislation, market data, middlemen, movies, music, politics, technology, theory, this is bad, tv, virtual | Comments:Kommentek: 0
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FT.com / Home UK /
Anti-piracy moves ‘hurt sales’By Andrew Edgecliiffe-Johnson for Financial TimesPublished: November 20 2007 02:00 | Last updated: November 20 2007 02:00Retailers are urging the music industry to drop piracy protection for online downloads after new figures showed the average Briton has bought fewer than three digital tracks in the past three years.Incompatible proprietary technologies, aimed at defeating rampant piracy in the digital music era, are instead “stifling growth and working against the consumer interest”, said Kim Bayley, director-general of the Entertainment Retailers Association (ERA).Her warning comes as high street retailers and digital music specialists watch pre-Christmas sales trends nervously. The music industry makes at least 40 per cent of its revenues in the fourth quarter, but the traditional sales build-up has started later than usual.Although Leona Lewis – the X Factor winner backed by Simon Cowell’s Syco label – this month notched up the highest first-week album sales for a debut artist, album volumes are down 11 per cent, or 12m units, for the year to date, according to the Official UK Charts Company and Music Week.Recorded music companies had been “quick to complain” that the slide in CD sales had not been offset by growth in digital music, Ms Bayley said, but their embrace of digital rights management (DRM) systems “might have added to the slow take-up of legal digital services”.Just 150m tracks have been downloaded legally in the UK over the past three years, she added. “Sadly, that amounts to an average of less than one 79p per download per head of population per year.”The ERA’s appeal comes as more companies experiment with the DRM-freeMP3 format, following a pre-emptive challenge in February by Apple’s Steve Jobs. Most recently, Universal Music this month began offering its classical and jazz catalogue in MP3 format.In April, EMI “unlocked” its catalogue, charging consumers a premium for DRM-free versions of its music on Apple’s iTunes store, and has since signed deals with other digital retailers for MP3 files encoded at more than twice the quality of standard audio files.”There are certainly experiments, but there’s still a certain element of resistance within the music industry,” Ms Bayley said. “At the moment, [DRM] just puts consumers off,” she said, adding that confusion about formats was driving people toward illegal downloads.She cited research this month that found consumers were almost four times as likely to choose an MP3 file as a DRM-protected track when the two were offered alongside each other.The ERA, which represents high street retailers and online sites, said it was making the appeal now in the hope that music companies would drop DRM protections before the Christmas season and the January sales rise, when consumers load up the iPods they receive at Christmas.
kottke.org
Marginal Revolution and CNN (and New York magazine and Reddit and etc.) asked their respective readers: how much did you pay for In Rainbows, Radiohead’s new album which is only available as a pay-what-you-want download.
CCIA
Fair Use exceptions to U.S. copyright laws are responsible for more than $4.5 trillion in annual revenue for the United States, according to the findings of an unprecedented economic study released today. According to the study commissioned by the Computer and Communications Industry Association (CCIA) and conducted in accordance with a World Intellectual Property Organization methodology, companies benefiting from limitations on copyright-holders’ exclusive rights, such as “fair use” – generate substantial revenue, employ millions of workers, and, in 2006, represented one-sixth of total U.S. GDP.
The exhaustive report, released today at a briefing on Capitol Hill, quantifies for the first time ever the critical contributions of fair use to the U.S. economy. The timing proves particularly important as the debates over copyright law in the digital age move increasingly to center stage on Capitol Hill. As the report summarizes, in the past twenty years as digital technology has increased, so too has the importance of fair use. With more than $4.5 trillion in revenue generated by fair use dependent industries in 2006, a 31% increase since 2002, fair use industries are directly responsible for more than 18% of U.S. economic growth and nearly 11 million American jobs. In fact, nearly one out of every eight American jobs is in an industry that benefits from current limitations on copyright.
by Douglas Galbi on August 19th 2007
From 1985 to 2004, video rentals from U.S. public libraries grew 340%. Over the same period, video rentals from U.S. commercial rental businesses grew 140%. Public libraries’ video rental activity did grow from a smaller base: 70 million videos loaned in 1985 (6% of the number of videos commercial outfits turned in that year), to 300 million videos loaned in 2004 (12% of the number of videos rented commercially). The growth of video lending from public libraries has been amazing, and largely unnoticed.
Pricing is probably a large part of the explanation for this performance differential. The average price for commercially renting a video in 1985 was $2.38. The average price for borrowing a video from a public library in 1987 was $0.39 (30.4% of libraries charged for borrowing video, and those libraries charged an average of $1.29). In 2004, the average price for commercially renting a video was $3.43. The average price for borrowing a video from a library was then approximately zero. Lower price induces greater demand, and free (zero price) is a highly appealing price.
This video example does not depend on some of the factors thought to be producing the death of paid text content. From 1985 to 2004, there wasn’t a proliferation of free video content on the web. I would guess that, overall, commercial video rental stores have a video inventory that most persons would value more highly than the video inventory of a library. Consumer may like free content. But video is quite expensive to consume. Given that the average video takes perhaps an hour and a half to watch, the higher inventory value of commercial video rental firms might have easily outweighed the lower video rental price from libraries. But it didn’t.
Persons seem to have a high time-discount rate in content choices. The benefit of watching a relatively good video comes later than the cost of paying the rental fee. A high discount rate lowers the importance of the former, and raises the importance of the later. So perhaps a significant part of the challenge of making a paid content model work is delivering benefits soon relative to payments.
* * *
The table below summarizes the facts. Subsequent notes describe the sources and estimates.
U.S. Public Libraries and Video Stores
|
1985 |
2004 |
% inc. |
| total public library circulation |
1150 |
2010 |
75% |
| video share of library circulation |
6% |
15% |
|
| video borrowing price from libraries |
$0.50 |
0 |
|
| videos borrowed from libraries |
69 |
302 |
337% |
| video rental price from video stores |
$2.38 |
$3.43 |
|
| videos rented from video stores |
1100 |
2592 |
136% |
| All counts in millions. Video includes Betamax, VHS, and DVDs. |
Sources
Public library circulation: For 1985, interpolated from figures for 1983 (Goldhor (1995)) and 1990 (NCES/ALA). The Goldhor figures are given in Galbi (2007a). For 2004, figure from NCES.
Video share of public library circulation: Dewing (1988) presents results from a survey in early 1987 of about 3000 public libraries having video cassette collections. The survey received 841 valid responses. Id. p. 69, Table 6.19, gives average tapes loaned, by size of the community the public library served. The survey did not include data on total library circulation. Using NCES Public Library Statistics for 1987, I calculated average circulation per week for the four community size categories used in reporting the video survey results (less than 20,000; 20,001 to 50,000; 50,001 to 100,000; greater than 100,000). Average videos loaned were 18%, 7.5%, 7.7%, and 7.4% of average library circulation for the four community size categories, respectively. Responses in the smallest community size category may not have been representative of all small libraries in that category. Since the video survey addressed only public libraries having a video collection, the survey doesn’t account for the zero circulation share in libraries that didn’t have a video collection. For a conservative estimate of the growth rate, I estimate the 1985 video circulation share to be 6%. One small additional piece of evidence: In West Virginia about 1984, the Morgantown Public Library reported that video circulation accounted for more than 6% of annual circulation. See Caron (1984). The video share estimate for 2004 is based on the data in Galbi (2007b). While the data could support a higher estimate for the video share in 2004, I’ve used a rather low estimate to generate a conservative estimate of the growth rate.
Videos borrowed from public libraries: Calculated from library circulation and video share.
Video borrowing price from libraries: Dewing (1988) pp. 70-71 provides the data on prices for borrowing videos from libraries in 1987. Most libraries (73%) had a loan period of about a week. I roughly estimate the price in 1985 to be $0.50, and also roughly estimate the price in 2004 to be 0. The later estimate is based on the declining purchase price of videos and personal knowledge of library operations. Elgin (1992), p. 12, recorded that libraries that eliminated charges for borrowing videos experienced increased video borrowing.
Video rentals from video stores: From EMA, A History of Home Video and Video Game Retailing.
Video rental prices: EMA gives the 1985 average price. I calculated the 2004 average price from rental units and total rental revenue (Adams Media Research data).
References
American Library Association [ALA], Public Libraries in the United States Statistical trends, 1990-2003.
Caron, Barbara (Fall 1984), “Video Cassettes in the Public Library,” West Virginia Public Libraries; cited in Elgin (1992) p. 6.
Dewing, Martha, ed. (1988), Home Video in Libraries (Boston, Mass.: Knowledge Industry Publications).
Elgin, Romona R. (1992), Comparison of Book and Video Circulation in Public Libraries, Student Report, Northern Illinois University, Department of Library and Information Studies.
Galbi, Douglas (2007a), Book Circulation Per U.S. Public Library User Since 1856, available at galbithink.org
Galbi, Douglas (2007b), “library users like audiovisuals,” available on purplemotes.net.
Goldhor, Herbert (1985). A Summary and Review of the Indexes of American Public Library Statistics: 1939-1983. Library Research Center Report (Eric Document # ED264879). Urbana, IL, Illinois University.
National Center for Education Statistics [NCES], Public Libraries.
In this report, we revisit our “Long Tail” thesis on the entertainment industry. As we
wrote last year, digital technology and economics are loosening the barriers to entry
in the video production business. In our view, this augurs a significant increase in
supply of video content from many sources, which could lead to slowing growth for
incumbents and a shift in value from content creators to aggregators/packagers of
content in the middle of the supply chain that can best connect users’ individual
tastes with theoretically infinite choice. This report delves further into this theme and
addresses key questions we have received from investors and industry contacts on
this topic.
LINK
LSE
Platforming is for low budget films, foreign films, idiosyncratic films. Blitzing is for expensive films; those that might turn into ‘blockbusters’ – but also those that might be too expensive to expose to audience opinion, too expensive to ‘discover’ that demand is low.
Music industry attacks Sunday newspaper’s free Prince CD | | Guardian Unlimited Business
The eagerly awaited new album by Prince is being launched as a free CD with a national Sunday newspaper in a move that has drawn widespread criticism from music retailers.
The Mail on Sunday revealed yesterday that the 10-track Planet Earth CD will be available with an “imminent” edition, making it the first place in the world to get the album. Planet Earth will go on sale on July 24.
One music store executive described the plan as “madness” while others said it was a huge insult to an industry battling fierce competition from supermarkets and online stores. Prince’s label has cut its ties with the album in the UK to try to appease music stores.
The Entertainment Retailers Association said the giveaway “beggars belief”. “It would be an insult to all those record stores who have supported Prince throughout his career,” ERA co-chairman Paul Quirk told a music conference. “It would be yet another example of the damaging covermount culture which is destroying any perception of value around recorded music.
“The Artist Formerly Known as Prince should know that with behaviour like this he will soon be the Artist Formerly Available in Record Stores. And I say that to all the other artists who may be tempted to dally with the Mail on Sunday.”
Market capitalization
Cisco: 162.24B, Time Warner: 78.95B
2006 Gross Profit
Cisco:
18.747B, Time Warner:
17.811B
Cisco addresses legit P2P in Supervisor enhancement – CBRonline.com
Cisco Systems has unveiled both a product enhancement and a series of architectural templates to enable enterprise networks to address the challenge of legitimate peer-to-peer apps such as the Groove feature in Microsoft Office.
The product side of the announcement involves a deep packet inspection capability, delivered via a hardware upgrade to the Supervisor engine on its flagship 6500 switches, essentially introducing additional Cisco-designed ASICs to handle “DPI at multi-gigabit rates,” said Neil Walker, the company’s head of product marketing for core and foundation technologies in Europe.
There arises a need to be able to differentiate between good P2P and bad, which is where the Programmable Intelligent Services Accelerator (PISA) upgrade to Supe32 comes in. “It’s akin to what we’re doing on the carrier side with the P-Cube technology for broadband policy management,” said Walker.
“There the carrier can determine who you are, what you’re doing and the bandwidth you’re consuming to do it. In this case, we’re enabling enterprises to enable wanted P2P and block the unwanted,” he went on. “For instance, two employees might be allowed to exchange IM messages, but not if one of them has just accessed some sensitive data on an internal database.” PISA is not, however, in any way based on the P-Cube technology, but rather the result of internal development, he went on.
Jobs says Apple customers not into renting music | Technology | Reuters
Apple Inc. Chief Executive Steve Jobs indicated on Wednesday he is unlikely to give in to calls from the music industry to add a subscription-based model to Apple’s wildly popular iTunes online music store.
“Never say never, but customers don’t seem to be interested in it,” Jobs told Reuters in an interview after Apple reported blow-out quarterly results. “The subscription model has failed so far.”
His comments come as the company he co-founded gears up for contract renewal negotiations with the major record labels over the next month.
Since Apple launched iTunes in 2003, it has sold more than 2.5 billion songs and now offers increasing numbers of television shows and movies.
Many in the music industry hope iTunes will ultimately start, in effect, renting music online, so record companies can make more money from recurring income. But Jobs said he had seen little consumer demand for that.
“People want to own their music,” he said.
At least this is what proprietary software people prefer…
Microsoft executive: Pirating software? Choose Microsoft!
At the Morgan Stanley Technology conference last week in San Francisco, Microsoft business group president Jeff Raikes commented on the benefits of software counterfeiting. “If they’re going to pirate somebody, we want it to be us rather than somebody else,” he said. “We understand that in the long run the fundamental asset is the installed base of people who are using our products. What you hope to do over time is convert them to licensing the software.”
Chron.com – Houston Chronicle
Radio listeners weary of hearing the same songs over and over may have something to cheer about: Broadcasters have tentatively agreed to anti-payola settlements that could shake up music playlists at some of the nation’s largest radio chains.
Four major broadcast companies would pay the government $12.5 million and provide 8,400 half-hour segments of free airtime for independent record labels and local artists, The Associated Press has learned.
The agreement is aimed at curbing payola — generally defined as radio stations accepting cash or other consideration from record companies in exchange for airplay. The practice has been around as long as the radio industry and was made illegal after scandals in the late 1950s.
Two Federal Communications Commission officials, who spoke on condition of anonymity because final language has not been approved by the full commission, said the monetary settlement is part of a consent decree between the FCC and Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.
The settlement was reached at the same time as a separate deal designed to lead to more airtime for smaller record companies and their lesser-known artists as well as local musicians.
The American Association of Independent Music, a group of independent record labels, has received a commitment from the same four broadcasters for the free airtime, the officials said.
In addition to airplay, the broadcasters and the independent labels have also negotiated a set of “rules of engagement” that will guide how record company representatives and radio programmers interact.
The free airtime would be granted to companies not owned or controlled by the nation’s four dominant music labels — Sony BMG Music Entertainment, Warner Music Group, Universal Music Group and EMI Group.
Music executives judge Jobs, lament losses | CNET News.com
Apple, digital rights management (DRM) and the public’s willingness to pirate music were discussed, debated and lamented once more by attendees of the Digital Music Forum East conference.
“We’re running out of time,” Ted Cohen, managing director of music consulting firm TAG Strategic, told the roughly 200 attendees. “We need to get money flowing from consumers and get them used to paying for music again.”
The call to arms by Cohen, who was moderating a panel discussion titled “The State of the Digital Union,” comes as the music industry suffers through one of the worst slumps in its history.
CD sales fell 23 percent worldwide between 2000 and 2006. Legal sales of digital songs aren’t making up the difference either. Last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue.
That has the industry pointing fingers at a number of things they believe caused the decline.
At the opening of the conference, some of the panel members lashed out at Jobs. Members said Jobs’ call three weeks ago for DRM-free music was “insincere” and a “red herring.”
“Imagine a world where every online store sells DRM-free music encoded in open licensable formats,” Jobs wrote in a letter that rocked the music industry. “In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.”
Jobs’ position was perceived by many in the music industry as a 180-degree shift in direction. The view expressed at the conference is that Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM.
Cohen told the audience that if Jobs was really sincere about doing away with DRM, he would soon release movies from Disney–the studio Jobs holds a major stake in–without any software protection. An Apple representative declined to comment on Tuesday on remarks made by the panel.
Panel member Mike Bebel, CEO of Ruckus music service, said: “Look, I don’t think anybody is necessarily down on Apple. The problem is the proprietary implementation of technology…and it’s causing everybody else who is participating in the marketplace–the other service providers, the labels, the users–a lot of pain. If they could simply open it up, everybody would love them.”
The role of DRM
Panel members–who included Thomas Gewecke, Sony BMG senior vice president, and Gabriel Levy, general manager of RealNetworks Europe–were divided about what the music industry should do about DRM in general.
Most of the panel members, save for Greg Scholl, CEO of independent music label The Orchard, believe that some form of DRM is necessary.
Scholl said flatly that DRM doesn’t work. “The idea that DRM gives us choice isn’t right,” he said.
“The economics of the business are over for good and aren’t ever going to be the way they were before,” Scholl said. This is a position that some in the music industry are starting to warm up to.
In January, EMI said it was reviewing a request
by the Electronic Frontier Foundation to allow reverse engineering of
its digital rights management software. That EMI would even consider
the proposal was seen in many circles as a step forward by the anti-DRM
camp.
Gewecke also defended record labels against the criticism that the
music industry has its head in the sand and just doesn’t understand the
Digital Age. He said that Sony BMG is working with technologists and
retailers, and is constantly is looking for technological solutions to
some of the industry’s problems.
He also said that despite all the bad news, there’s plenty for the sector to be encouraged about.
“We
routinely talk to companies about what’s different,” Gewecke said.
“We’re constantly looking for where value is being created in a
business model. We are being flexible. There’s still an evolution that
has to happen. I say it’s an optimistic time considering there’s more
music being listened to now than ever before. There’s more
opportunities to monetize the music. We want to be out there looking
for new ideas and companies.”
| The Register
Australian TV viewers are waiting longer than ever to view their favourite overseas produced televisions shows, driving them to use BitTorrent and other internet-based peer-to-peer programs to download programmes from overseas, prior to their local broadcast.
According to a survey based on a sample of 119 current or recent free-to-air TV series’, Australian viewers are waiting an average of almost 17 months for the first run series’ first seen overseas. Over the past two years, average Australian broadcast delays for free-to-air television viewers have more than doubled from 7.9 to 16.7 months.
A survey of TV programmes found that while some aired very close to their US air date, many popular programmes were significantly delayed.
Average broadcast delays were shortest for TV series’ on the Seven and Ten Networks, at around nine months. The average delay for TV series’ airing on the Nine Network was 22 months, while TV series’ on ABC and SBS aired on average 23 and 30 months behind the US.
Among popular programs, fans of Nine’s Without a Trace had to wait nearly nine months for an episode that aired in the US. A recent episode of Seven’s My Name Is Earl aired a year after its US broadcast date. Fans of Ten’s American Idol have just seen last season’s finals – nine months after they were seen in America, while Americans vote for the new Idol.
The ABC recently showed an episode of The West Wing 21 months after its US broadcast date, but Nine’s Antiques Roadshow and SBS’s Iron Chef take the cake with recent first run episodes shown over 11 years after their first overseas broadcast.
The survey followed a similar survey from two years ago which found the average delay for first run TV programmes on free-to-air TV at the time was just under eight months. Popular prime time TV programmes currently subject to substantial delays including the following:
* Close To Home (8.6 months)
* CSI: N.Y. (9.3 months)
* Desperate Housewives (4.4 months)
* Grey’s Anatomy (4.9 months)
* Heroes (4.2 months)
* House (5 months)
* NCIS (4.1 months)
* Third Watch (22.1 months)
While film and music content owners have attempted to cater for digital consumers through services like iTunes, Australian TV networks appear to be unable or unwilling to change their programming policies or provide new digital based options for consumers that don’t want to wait to view their favourite shows.
openPR.com –
As Mr. Gupta explains, “Bollywood is not just India, it is not just for local consumption, but Bollywood is also very voraciously consumed overseas. In addition, there is the ripple effect as Indian culture is quite akin to Middle Eastern and Eastern European culture making Indian cinema stars, Indian movies and Indian songs super hits throughout these regions.”
However, as the film industry has grown to new levels, so has the problem of video and movie piracy. In fact, in India it is estimated that movie piracy basically nullifies theatre revenue after only 3 months, nearly half that of a typical U.S. theatrical window. This of course significantly cuts into the film industry’s bottom line. As a result the Indian government has made dealing with piracy a priority.
BELGRADE (Reuters) – Rada Banjanin plans to stay up late on Sunday, fingers crossed that “Babel” will take the best picture Oscar at the 79th Academy Awards.
Not that she watched the inter-continental saga on the big screen. Rada hasn’t been to the cinema for over a year, but has seen nearly all this year’s Oscar nominees for 2.5 euros ($1.3) a copy in the comfort of her Belgrade living room.
“I like to see the latest hits, and I get them all on DVD,” she said ahead of the Oscars ceremony in Los Angeles on February 25.
Belgrade’s “King Aleksandar” boulevard is packed with vendors selling the latest movies from cardboard crates on wooden stands, often before they open in European cinemas.
“The Last King of Scotland” and “Rocky Balboa” were available this week. “The Departed” went on sale months ago.
This year, the Motown musical “Dreamgirls” is in big demand in Serbia. “Everyone wants ‘Dreamgirls’. But we’ve run out of copies,” said one street vendor, who asked not to be named.
It’s a poke in the eye for Serbian authorities, who say they have cracked down on the film piracy that gave Serbs one up on the rest of the world while their country sank under war, sanctions and isolation in the 1990s.
BOSNIA, ALBANIA, MACEDONIA TOO
Things have improved since then, says Zoran Savic, Serbia’s anti-piracy chief. But according to some estimates, he says, “pirate copies arrive in Belgrade between five and seven days after the movie premieres in the United State”.
“The main problem here is the copies are so easy to get hold of on the streets, and sometimes via Internet,” Savic said.
Video clubs offer under-the-counter lists of pirate offers to loyal customers, sometimes including screening copies sent out for review only and marked “not for public viewing”.
In the United Nations-administered Serbian province of Kosovo, the bootleg trade is wide open.
At the gates of NATO headquarters, aptly named ‘Film City’, brightly colored four-storey shops sell thousands of pirated films and music CDs, as well as fake Breitling wristwatches.
The customers are international police officers in an array of uniforms and gun-toting NATO peace troops in camouflage.
And it’s not only Serbia.
“It’s the same here in Sarajevo. It’s easy and everyone is doing it,” said Reuters Bosnia correspondent Daria Sito-Sucic.
In the Macedonian capital, Skopje, correspondent Kole Casule says films such as the James Bond hit “Casino Royale” and Scorsese’s “Departed” sell for 80 denars (1.5 euros).
Albania correspondent Benet Koleka bought “The Queen” and “Next President” from a Tirana shop loaded with bootlegs.
Officially, the sales are illegal in all four countries. Of the former Yugoslav republics, only Croatia has clamped down with success on the suitcase DVD trade, says correspondent Zoran Radosalvjevic. “It’s mostly illegal downloads now,” he said.
WE’RE NO ANGELS
The fact pirates still thrive in the Balkans will hardly dampen spirits at the Oscar ceremonies.
But piracy undermines the home-grown movie industry, which is unable to offer good financial rewards because so few people go the cinema. Research shows under 20 percent of the 7.5 million people in Serbia went to the movies in 2006.
“People don’t have the feeling they are doing anything wrong by buying pirate DVDs and watching them at home,” says Danijela Milosevic of Taramount, which distributes Disney movies here.
In 2005, Serbian ‘blockbuster’ “Mi Nismo Andjeli” (We’re No Angels) lost an estimated 400,000 cinema-goers when pirate copies hit the stalls just days after the film premiered in Belgrade, according to its director, Srdjan Dragojevic.
Director Miroslav Momcilovic said his 2006 movie “Sedam i po” (Seven-and-a-half), a bitter-sweet take on the sinking of postwar Serbian society, suffered a similar fate.
But he didn’t have the heart to put up a fight when he saw fake copies of his own movie being sold on the streets.
“Pirates have given me such pleasure over the years. I can’t just forget a dozen years of watching those films and turn around and be radically against piracy.”
February 2nd, 2007| economics | Comments:Kommentek: 1
Romania ‘built our country on pirated Windows’
ROMANIAN PRESIDENT Traian Basescu told Microsoft’s Supreme Vole, William Gates III that his country’s IT industry would be nothing if it was not for pirated Windows software.
Basescu met Gates at the opening of a global technical centre in Bucharest.
According to Reuters, Basescu said, during a joint news conference with Gates, that piracy helped the younger generation discover computers. It set off the development of the IT industry in Romania.
It also helped Romanians improve their creative capacity in the IT industry, which has become famous around the world. He claimed that all this piracy “ten years ago” was an investment in Romania’s friendship with Microsoft and with Bill Gates.
Variety.com – Spanish pirates flip for disk drives
Spain’s uphill battle against piracy is getting steeper.
The reason: small modem-like boxes, with remote controls and a computer USB plugs. Sold in department stores, they sport names like Best Buy’s Easy Player Jumbo Plus HD 400GB or Argosy’s Mobile Video GDD 400 GB.
They’re hard disk drives that plug into PCs and then TV sets, allowing downloaded movies easy TV play. Their sales are rising fast. “They’re steady little earners,” said one retailer over the Christmas season.
Prices have held, ranging from the Easy Player’s E379 ($493) to $194 for a drive from Woxster, a Spanish brand. But with sales ramping up, the drives are increasing capacity and features, such as photo and memory disk storage.
As hard disk usage seeps from Spanish geekdom to the mainstream, Spanish Internet piracy has hit Himalayan heights. According to consultancy Gfk, 43% of Spaniards pirate movies.
International Herald Tribune
“FIFA 07,” a video game for soccer fans, costs around €50 in Europe. In South Korea, five million players have downloaded the online version free — yet Electronic Arts, the publisher, is cheering them on.
Realizing that it was impossible to sell “FIFA Online” in a country where piracy is rampant, Electronic Arts started giving away the game last spring. Once the players were hooked, the company offered for sale ways to gain an edge on opponents; extending the career of a star player, for instance, costs less than $1. Since May, Electronic Arts has sold 700,000 of these enhancements.
In the traditional media world, as well, readers
are turning to free: According to the World Association of Newspapers
in Paris, at least 28 million free newspapers are distributed every day
around the world, 19 million of them in Europe, where the total has
doubled over the past three years. And digital over-the-air TV systems
like Freeview in Britain now offer dozens of channels, providing an
alternative to pay-TV for consumers who refuse to limit themselves to a
handful of viewing options.
Qtrax will resemble illegal file-sharing
networks, using peer-to-peer technology to help users find and download
music. But executives hope that the promise of a licensed, safe and
legitimate service will attract users weaned on digital music but
unwilling to pay for it.
“There’s a whole generation of consumers who think free music is a
birthright,” said Allan Klepfisz, chief executive of Brilliant
Technologies, which is developing Qtrax. “The closer you are with a
business model to current consumer behavior, the better your chance of
success.”
Worldwide, media spending by consumers and
business users still handily outstrips advertising, by $944 billion to
$385 billion, according to PricewaterhouseCoopers. But growth in
consumer spending on media in the United States has slowed sharply in
the past few years, analysts say.
Worldwide, PricewaterhouseCoopers expects spending on high-speed
Internet access, which delivers digitized media, to increase faster
than outlays on content that traditionally comes with a price tag —
books, magazines, cinema tickets and CDs, for instance. Global consumer
spending on Internet access is expected to rise at an 11.9 percent
annual rate through 2010, according to the firm.
To be sure, consumer spending on media is not
going to disappear anytime soon. According to a survey of 130 media
executives from around the world, conducted recently by Accenture, 31
percent forecast that subscription models would be the dominant
business model in five years’ time, with 25 percent opting for
so-called pay-per-play funding.
But 37 percent said advertiser financing would be the predominant business model in five years’ time.
Can media companies adapt to a world in which “free is the new paid”?
via New York Times
Last week, a new contender entered the field with a radically
different approach to Internet movies: Netflix.
The company has done away with expiration
dates, copy protection and multi-megabyte downloads. That’s because
you don’t actually download any of Netflix’s movies; instead, they
“stream” in real time from the Internet to your computer.
Netflix has also done away with per-movie fees — in fact, there are
no additional fees for watching movies online at all. Instead, the
Netflix service is free if you’re already a Netflix DVD-by-mail
subscriber.
The hours of movie watching you get each month depends on which
DVD-by-mail plan you have. You get one hour of online movies per
dollar of your monthly fee. So if you pay $6 a month (for the
one-DVD-at-a-time plan), you can watch six hours of movies online; if
you pay $18 (for the three-DVD plan), you can gorge yourself on 18
hours of online movies. And so on.
FT.com / Companies / Media & internet – Online ads ‘shun user-generated video’
User-generated video sites such as YouTube and MySpace will earn only a fraction of the advertising budgets available for more professional online programming, according to a study.
Such sites’ advertising revenues stand to grow from $200m last year to $875m by 2010, but this will account for just 15 per cent of the total online video advertising budget, according to Screen Digest, the media analysis company.
The report echoes News Corp’s admission that its Fox movie studio
and television content will be more important than home-made clips for
capturing online video advertising, a market which Screen Digest
expects to expand from $1.1bn last year to $6.2bn by 2010.
Peter
Chernin, News Corp president said at a recent conference: “We do not
see big advertisers advertising with YouTube or MySpace. They have
concerns about the content … and there is no scarcity value for the
content … so there is very little ability to monetise video
advertising on user-generated video.”
January 24th, 2007| economics | Comments:Kommentek: 0
An oldie but goodie. I just don’t want t loose it.
CNN.com – Web sites change prices based on customers’ habits – Jun 24, 2005
According to a recent study, many consumers are unaware that price discrimination occurs over the Internet. But apparently, it does.
FCC proposal could end payola probe
WASHINGTON — FCC commissioners are mulling a staff proposal that could resolve the agency’s investigation into payola allegations between the record labels and major radio broadcasters, according to industry and government sources. While details of the Enforcement Bureau’s proposal were sketchy, sources said that radio station groups would be required to set aside a certain amount of airtime for music produced independently. The radio groups also would agree to a code of conduct and an education program, the sources said. As part of the deal, the radio broadcasters would not admit to any wrongdoing.
The interesting thing is that when payola first emerged it was used by independents to promote a genre not carried by the majors then: rock’n’roll. Payola was a tool to crack the majors’ grip on the distribution channels. I wonder if p2p and CC distribution is the new way to crack the majors’ (who how own all the then independents) grip on the marketing and distribution channels.
Technorati Tags: payola, p2p
p2pnet.net – the original daily p2p and digital media news site
“The new site will offer all of Universal’s classical and jazz releases, including classic imprints such as Deutsche Grammophon, Decca, Verve and Impulse, running to 125,000 tracks taken from nearly 8,000 CDs,”
“Clare Nash, who heads the classics and jazz unit’s new media business,
said the company decided to enter the market after industry research
showed digital stores were not providing high enough quality download
files and suitable search engines,” says Reuters.
“So they’re getting there and have the right idea. They just need to
drop the price, get rid of the DRM, offer alternate encodings and
digitise their whole back catalogue.”
Technorati Tags: music, DRM, back catalog, digitization, vivendi
powered by performancing firefox
Marketplace: The end of musicals?
Lloyd Webber has three hit shows running in London, including his version of the Sound of Music.
But he warns the sound in the seven West End theatres he owns could become inaudible. The wireless mics his productions rely on could get too expensive to run.
Britain’s telecom regulator is to blame, he says. The regulator is planning to auction off to the highest bidder the airwaves used by theatres and concert venues.
A cell phone company with deep pockets is likely to win. The fees could then soar and the theatres could be priced out.
The regulator refuses to listen to the growing chorus of disapproval. Lloyd Webber warns the West End could fall silent, .that the end of Musical Theatre in Britain is nigh.
I am being mean now, but this is interesting.
AT&T Plans Push in Wireless, Ads – WSJ.com
AT&T Inc., which became the world’s largest telecom company by closing the $86 billion acquisition of BellSouth Corp., will aggressively push new wireless services to corporate customers and consumers, and make advertising a key revenue stream, according to Chairman and Chief Executive Edward E. Whitacre Jr.
With full control of cellphone operator Cingular Wireless, formerly a joint-venture with BellSouth, the San Antonio-based phone company will begin selling AT&T-branded wireless services to its large pool of corporate phone and Internet customers, allowing it to offer discounts for bundles that were impossible when Cingular was a separate entity. AT&T corporate users will be able to access their files and desktops remotely, whether they are plugged into a land-line Internet connection or connected to the Web wirelessly.
[Edward Whitacre Jr]
Consumers will have a choice of signing up for a new package of cellphone and Internet service rather than just the traditional bundle of land-line phone and Internet service, the company says. Until now AT&T had worried about cannibalizing its land-line phone business. AT&T has also been testing cellphones that can run on Wi-Fi networks when at home, letting consumers save money on their cellphone bills and potentially get better reception indoors.
“The biggest asset we bought here was Cingular,” said Mr. Whitacre. “We’re about to become a company with wireless at its heart.”
AT&T also will begin selling advertising on cellphones, television and its Internet-access service this year, allowing advertisers to reach consumers across multiple platforms with a single operator. Advertisers will be able to buy spots for TV and broadband beginning early this year, with wireless ads following suit later this year. The advertising business could generate several billion dollars in revenue per year in the next five years, the company says.
The Register:
The leading DRM digital download service, Apple’s iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research.
While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring’s rebound wasn’t repeated this year.
Forrester revealed some fascinating details about iTunes purchasing habits. Some 3.2 per cent of online households (around 60 per cent of the wider population) bought at least one download, and these dabblers made on average 5.6 transactions, with the median household making just three a year. The median transaction was slightly under $3.
“iTunes sales are not cutting into CD sales,” he elaborated to us, “they’re an incremental purchase at best.
“There’s a problem here. CD sales have fallen 20 per cent over five years. The message here is not that CD sales are coming back, the ability to obtain pirated music is now so widespread the DRM looks to consumers more like a problem than a benefit.”
Forrester and Nielsen’s figures merely confirm that what the industry is losing in falling CD sales, it isn’t gaining in DRM downloads.
cherry picking
Germany slaps cap on fines for illegal music downloads:
Berlin – Music company lawyers who impose huge fines for illegal music downloads are to face a cap of 50 euros (64 dollars) per case in Germany, the government in Berlin announced Friday. ‘The limitation for the first warning letter from a lawyer ensures that we don’t exaggerate in punishing copyright breaches,’ said Justice Minister Brigitte Zypries. The maximum applies to those who download music without intending to resell it. German teenagers have been keen users of online sites offering MP3 music files, many of them illegally copied. To fine the downloaders, the music industry has been using a provision of German law that allows lawyers to force wrongdoers to write apologies, and then to pay the law firm’s entire bill. In future, the law firms would only be able to charge members of the public 50 euros per incident for this service. Announcing draft legislation, Zypries said it would also increase powers to prevent product piracy, enabling German customs agents to rapidly destroy counterfeit goods that imitate famous brands.
Ongoing crisis in academic-journal pricing is the focus of recent colloquium:
From 1986 to 2003, the unit cost of serials purchased by academic research libraries rose by 215 percent compared with a 68 percent rise in the consumer price index over the same time period, said Doug Brutlag, professor of biochemistry and current chairman of the Academic Council’s Committee on Libraries.
There is a big discrepancy between the prices charged by for-profit and nonprofit journals, reported Ted Bergstrom, professor of economics at the University of California-Santa Barbara, in a talk titled “The Changing Economics of Scholarly Journals.” Bergstrom presented data comparing journal costs in 2004 that showed that the price-per-page of for-profit journals was about three times the average price-per-page of nonprofit journals.
As far as I can understand from the accounts (not being sucked into the SL world myself), piracy just has been introduced to Second Life via a script or bot, that is able to copy SL assets.
Now the economy of SL is based on users paying rent to the Linden Labs company and trying to recoup their living costs by developing and selling digital stuff that enhances avatars: textures, digital flik-flaks, sword, whatever.
Now this whole ecosystem is in danger because there is no more scarcity in SL life. The reactions of users are staggering: shops selling these assets closing down, protests staged. It is interesting how these people will cope with the idea of piracy in SL. Well, actually “piracy” was there before as these users were beaming rented videos to flocks of other users, and i am quite sure that many of them have not only the SL client but bittorrent on their machines, but still, when it comes to someone stealing their stuff, it gets ruff.
Here is the reuters story.
Here are some comments from the SL blog:
“Has anyone been inworld lately? It’s intensely creepy:stores closing right and left, noobs freakin’ out, IMs flying fast and furious. I’ll stay offworld tonight and read a good book.”
“I have removed my items from SLBoutique, SLExchange, and on my shop.”
“The CopyBot is a violation. The people who take their time to create stuff for their good and other peoples good should be able to see it at their own risk. We as SL citizens should not go out to buy the CopyBot. We should work together to get rid of this CopyBot so we can keep our Businesses up and running.We will not let a CopyBot stand in our way of creating what is right for us. SO BOYCOTT THE COPYBOT!!!!!!!”
“My favourite venue to play has closed in protest. Not only do I lose this amazing place to play for amazing people, but I am also out a good chunk of change every month.”
“I see alot of people on here talking about piracy when it comes to movies on sl.. before you go off about that, know that those of us that have had to put hours into learning how to work sl to get products that sell so we can help maybe try and pay the rent really need to know that our products arnt being copied and sold off. Agreed, pirating movies is wrong, the people that make them need it to help pay the bills, and some of us on here need our products to help pay our bills as well. Thats the reason were in a huff about this, its because some of us cant afford to hear “It got out of our hands, OOPS””
”
I’m actually not against libSL. It sounds like they do what is needed here; developing things that show weaknesses in SLs functionality, and revealing them. What I AM against is the idea that they do it by showing every noob, greifer, hacker and moron on SL how to exploit those problems and weaknesses, yet aren’t being truly held accountable for them.
Way up at the top of this thread, someone suggested internalizing the entire project, and it sounds like a good idea. Let them do what they’re doing… just make sure they report their findings before anything gets leaked, and that someone else then gets on that exploit to remove it.
As for the idea of opensource in a world that has so many people all at once doing different things in it? Foolishness. Opensouring should be kept to test servers at best because, due to their very nature, programmers like to innovate, and doing so always comes up with something that is uncontainable and bad in general for the place they’re playing around in, as well as the good things.
Also, Copybot was leaving people like myself, who aren’t programmers or scripters or builders, just people who come into the game to meet friends and socialize, with the problem of paying for things that are unique, then having them copied and spread all over, which defeats the point of having them made in the first place.””This is a virtual world, coping someones product is theft/stealing. It’s not copyright infringement in the metaverse. If I go into a shop and run off with some clothes its theft. Its the real world concept in virtual terms.”
”
Hello, I took great passion in creating my content spending more time in this game then I have anything in my entire life. I had created a very very profitable business. People loved my creations. I was down to nothing in my real life untill I found secondlife. Ever since then life has been getting better, slowly but surely. I even had people are blogs about me! Now the same company I stood behind through thick and thin just killed my only hope in life. Linden labs, you made my dream a reality, and you just destroyed it.
Reporting someone who stole your content is pointless. Once 1 person gets a hold of your creation full permission, anyone and everyone now has it full permissions.
I never expected my business to go out like this.”
Finding the analogy with RL piracy
“As I tell others, it is a huge overreaction on the part of content creators, to the same tune as the RIAA/MPAA make about “music/movie piracy!! ZOMG!”.
Copyright infringement has always been against the ToS. Anyone caught doing it will be banned, and can be subject to civil and criminal penalties for doing so.
What has changed?
Nothing, except a bunch of folks getting their panties up around their armpits, artificially causing more of a problem than the offending application ever could represent by itself.
Now, let’s all take a collective deep breath, and move on to more pressing concerns.
In the meantime, if you catch people copying your stuff without your consent, REPORT THEM! If you catch people selling unauthorized copies of your stuff, REPORT THEM, and then go to http://secondlife.com/corporate/dmca.php and do your duty! The only way people get the message is when it is sent LOUD and CLEAR. Don’t equivocate, hesitate, or otherwise dilly-dally/pussyfoot around. PROTECT YOUR RIGHTS! Hell, offer a bounty for anyone reporting copyright infringement of your works which results in a banning or a successful DMCA takedown or a winning court case. Make the bounties tiered if you like!
Complaining about the POTENTIAL of your rights being violated is ABSOLUTELY pointless. They will be, I GUARANTEE it. YOU should be prepared to fight for them, when and where it happens.”
“I have to say… I think it is dumb how all of you people are blinded.. and all… It’s really sad, Yes it is sad that things like this exist. But how come you people all decide to use the movies here in SL and stuff like that. I am sorry but a lot of you people that are against copy bot are kind of biggots. I don’t mean all of you because I am sure not all of you watch pirated movies here in SL. But look at that, You don’t complain about that but when it comes to your own creations your right on top of it. That is kind of sad really. ”
“And this is the 100% perfect exmaple of the bigots, one who cares about their own works being used, but not of others.”
Arguing for proprietary technology instead of open source:
“I would yet strongly suggest to stop all activities connected to libsecondlife. Your ownership of protocol is an enormous asset, if you can not communicate running an environment that allows business if you do not have transaction security in your protocol. If you support activity that can weaken this hard point of every system that desires an own economy, then you will appear unprofessional.
This is not the first hassle connected to libsl, as prokofy pointed out griefers that LL permbanned seem to have used the project to even educate themselves.
So you run Sl as a platform we users and businesses can use. We users and business people rely on the security of the platform, it’s stability and availability. If you intend to continue the libsl project and head for a client/server open source in the end, i think this now is the right point to tell us, the community that this is indeed the case.
But if you do so, you also need to make a statement how asset and transaction security will be handled in an open source development environment. Will we see clients designed to “click and copy” every asset then? Or will this be efficiently prevented. You as company need planing security, we do so too.
You speak of incentives that libsl gave certain sub communities of Sl users. Many of us yet had hassles like with the god mode tool, which enabled highly efficient stalking and other things. Whats a valuable feature for some is a dangerous weapon for others. Checks and balances here, if you have implemented indeed much of the security in the client, then you have to move it to the server level asap and ensure that knowledge of the protocl can not cause harm to ownership of assets.
I really and sincerely hope, that SL moving to open source does not mean the abandonment of in system asset security. I know very well that this would be the end for the in system content creators, the small vibrant community that built sl with so much creativity. The ones who do not need that security of assets are the newcomers, the rl businesses who do not care if a milk box texture is copied and reused, who only care for a click and the rl revenue generated by using SL as sales platform for rl goods. In RL, they have somethign we cant rely on Sl now. Propper protection of property.”
And here is the official response:
”
Today I met with a large group of Residents, members of the Sellers Guild, to talk about the implications of a recently-developed LibSL product called CopyBot. CopyBot allows the user to create a replication of an object, including textures, that is fully permissive. Needless to say this product has caused tremendous worry among content creators who want to understand how its use may possibly affect their business. In particular, they are concerned about theft of their creations, and the potential for unscrupulous people to undercut their prices and essentially take away their business.
First a caveat. Copying does not always mean theft. There can be legitimate uses for copying, just as there are on the web. As Cory has written previously, copying is not necessarily theft, and in fact nowhere in the copyright laws does the word “theft” appear. Instead, the language focuses on the idea of violating a copyright — i.e. I have an idea which I own a copyright on, and you have profited from presenting that idea as your own. You have violated my copyright.
Merely copying something doesn’t mean that a copyright violation has occurred. The law discusses ‘fair use’, for example, as one type of copying that is not a violation. If you DO think someone has copied something you made and is violating your copyright by profiting from the copying then you do have the option of using the DMCA process to file a complaint. It’s a difficult process, but it is one that we’re willing to help enable because we agree that copying is a disincentive to creation.
Ideally we’ll build ways that you can better identify your work as your own so that copying it is not profitable. For example, here are some ideas that we’re pursuing to help you prove your ownership of an idea or object:
* You may have heard us talk about “first use metadata”, that is a time stamp that is attached to your creations, including uploaded textures, that shows first use. First use is an important part of being able to claim copyright ownership. This work is started, and we are committed to completing it quickly.
* We could work to reduce how much avatar/clothing data is downloaded, so that a copy can be made of the baked texture and shape but not the pieces. We’re interested in your thoughts on that option.
* We can reduce incentives to copying content within the system, by preserving the creator attribution such as with creative commons licensing.
* We could create hover text which would act like a garment label does, exposing both the first use metadata and also a brand name, reducing the incentive to copy by making it obvious that copying is occurring. If your work is “signed”, and clearly you developed it first, then the person who purchases the copy is not unlike the person who buys the fake Rolex off the back of a truck. Plus the signature becomes a recognizable asset and could be coupled with a landmark as a form of advertising.
These options allow you to prove that your creation is in fact yours, but ultimately it’s the DMCA process that provides you with the channel to protect your investment. It’s to your benefit to review the government’s rules for filing a copyright and protecting it, posted at http://www.copyright.gov/title17/92chap5.html. More government-provided information on copyrights can be found here: http://www.copyright.gov.
Copyright law is very complex, and for those of you building businesses protecting your investment will be an on-going challenge. We recognize the importance of helping you to manage your copyrights, and will make every effort to build features into the system to mitigate the negative impact of copying. Beyond that we will help you initiate the DMCA takedown process when appropriate.
I know you will have ideas and suggestions, so please feel free to post them here. While we can’t answer every post, we will be reading your comments and taking them into account in our ongoing development efforts.”
BBC NEWS | Entertainment
The past year has also seen the rise of social networking sites such as MySpace, seen by some as a great way to reach potential fans and, with unsigned acts, talent-spotters who can offer record deals. But it is easy for material to be placed online illegally – and singer-songwriter Billy Bragg, now in his 30th year in the business, has particular concerns.
“The majority of people posting songs on to social-networking sites don’t have a record deal,” he says.
“They’re using the site as a way of getting attention to get a deal, so often the first legal contract they’re entering into regarding their work will be through the terms and conditions of that site.
“If we’re in a situation where sites are harvesting intellectual property rights, it almost becomes impossible to use these sites without consulting a lawyer.”
…
“I reckon if they’d been around 25 years ago, it would have saved me two years of playing in dingy pubs in south London,” he says.
…
“Undoubtedly Rupert Murdoch is making a lot of money selling advertising on MySpace and he’s not paying a penny for content.”
…
“The supply to Tesco, Sainsbury’s and Asda is going to lead to the collapse of HMV as a record business,” he predicts.
…
Jenner believes that the record industry has been wrong to license tracks which appear on CDs given away by magazines and newspapers.
This signalled discs “did not have a great value – that they were incredibly cheap to make”, he says.
“I suspect that making them cheaper is the record companies’ latest own-goal. They’re cheapening their premium product.”
He also fears the internet is misunderstood by labels.
“They weren’t really able to come to grips with the essential truth of the internet, which is that it’s all about sharing of files.”
RED HERRING
Lawsuits against P2P applications are old news in the peer file sharing market. So the story goes, a company gets sued, makes a few compromises to please the record industry and stays alive if it has the financial means to do so. But another application or service pops up to fill its place.
Now some analysts think the record industry should stop suing and instead look for ways to benefit from the technology. “The major label recording business is in heaps of trouble… they’ve [spent time] building a strategy to knock down P2P that might have been better spent on some other initiatives. But they’re certainly showing no signs of moving off it,” said Joe Fleischer, CEO of media research firm Big Champagne.
Despite being in the middle of a legal battle with the record industry, P2P service LimeWire is in talks with record labels and working on a “conversion plans for users,” said LimeWire consultant Laura Tunberg with consulting firm We Get It. She explains that LimeWire wants to give users legal purchasing options.
“A lot of users want a legitimate product,” said Ms. Tunberg. “We believe a certain percentage of our user base will be converted, and that this is a viable business model.”
“If you take away the free, a lot of the appeal of peer-to-peer clearly goes away,” said Mr. Mitchell. “It’s going to take some innovative and clever software development to drive the legitimate marketplace.”
Fox to sell films in China to help reduce piracy – Los Angeles Times:
News Corp.’s 20th Century Fox film group will sell movies in China through an agreement with Zoke Culture Group, the largest video distributor there, to help cut down on DVD piracy.
Twentieth Century Fox Home Entertainment will start selling videos including “Garfield: A Tail of Two Kitties” and films such as “X-Men: The Last Stand” this month with Zoke, the News Corp. unit said Monday.
Moviemakers such as Fox are trying to recoup some of the $1.2 billion that the Motion Picture Assn. of America estimates its members, the world’s six largest studios, lost in Asian sales last year because of piracy. Time Warner Inc. in September said it might sell movies on DVDs in China when they were released in U.S. theaters to discourage illegal copying.
Time Warner’s Quarterly Profit Nearly Triples – washingtonpost.com:
In a conference call with investors today, Time Warner chief executive Richard D. Parsons and others said their strategy of changing AOL into a free service, supported by advertising, had produced a 46 percent jump in ad revenue and the successful “migration” of millions of AOL users to free accounts. They said the company was close to beginning to increase the amount of overall traffic to its Web sites — critical if its ad revenue is to continue growing.
While overall revenue at AOL declined 3 percent, to $2 billion, for the three months that ended in September, advertising revenue increased by $151 million, to $479 million.
Interview with Peter Jenner on The Register:
So how long can the big labels keep up this charade?
Earlier I was talking about the ground moving underneath the industry. At In The City people are beginning to realise they have to do something. So I think in two or three years blanket licenses will be with us in most countries.
So it’s a fear of losing the distribution channels?
They won’t have any control over distribution. A blanket license is a blanket non-license, really – it’s simply saying “we won’t sue you”. But if you have commercial services exploiting music, we will want to pay you more. You’re licensing the anarchy.
It’s interesting where we’ll end up drawing the line between commercial and non-commercial, but in the end the numbers will be so huge it’ll iron itself out. Someone from England might pull in a lot of hits from Spain – but again, it doesn’t matter. I don’t then worry how they’ll pass the money to each other, but it’ll all come out in the wash.
via MarketWatch:
On May 24, lawyers for Viacom Inc.’s Paramount Pictures convinced a federal judge in San Francisco to issue a subpoena requiring YouTube to turn over details about a user who uploaded dialog from the movie studio’s “Twin Towers,” according to a copy of the document.
YouTube promptly handed over the data to Paramount, which on June 16 sued the creator of the 12-minute clip, New York City-based filmmaker Chris Moukarbel, for copyright infringement, in federal court in Washington.
That YouTube chose to turn over the data, rather than simply remove the offending video from its site — as it did Friday when it agreed to take down 30,000 videos at the request of a group of Japanese media companies — came as a surprise to copyright experts.
What Comes After YouTube:
Not so long ago, such a collaboration would have been unthinkable; even today, most files downloaded using BitTorrent are illegal.
But Warner hopes that by competing side by side it can convert at least 10% of those users to buyers. “The industry has to be willing to take chances,” says Darcy Antonellis, executive vice-president for distribution and technology operations at Warner.
BBC NEWS | Technology | iPod fans ‘shunning iTunes store’:
They estimate that during 2006 Europeans will spend more than 385m euros (£260m) on digital music – the majority of this spending will be on tracks from Apple’s iTunes store. However, the report into the habits of iPod users reveals that 83% of iPod owners do not buy digital music regularly. The minority, 17%, buy and download music, usually single tracks, at least once per month. On average, the study reports, only 5% of the music on an iPod will be bought from online music stores. The rest will be from CDs the owner of an MP3 player already has or tracks they have downloaded from file-sharing sites.
Slyck News – iPod Sales help Apple Soar:
Today Apple is a premier technology firm. But don’t thank the Mac, at least not entirely. According to Apple’s financial report from last quarter, the company sold over 8.7 million iPods in the last quarter. Mac sales were also impressive, with a record 1.6 million units sold. Total revenue generated by the iPod equaled $1.6 billion, while the Macs made up the difference with over $2.2 billion in sales. What about the left over billion?
iTunes continued to played a small role in Apple’s revenue with about $452 million in sales. This represents a substantial increase of 70% from the same quarter in 2005, but is actually a drop of 1% from the 3rd quarter of this year. It’s clear from Apple’s financial report that the iTunes music store is no where near the money maker that the iPod or Mac represent. Although $452 million is hardly a number to dismiss, iPod’s dominance in the market is powered by factors other than Tunes.
Free-for-all over Russian music site – Print Version – International Herald Tribune:
Free-for-all over Russian music site By Thomas Crampton International Herald Tribune WEDNESDAY, OCTOBER 18, 2006 PARIS A Moscow-based Web site that the U.S. Commerce Department has branded as the world’s highest- volume online seller of pirated music announced plans Tuesday to release hundreds of thousands of albums free. Low prices and ease of use have made AllofMP3 a consumer favorite among music download sites, but the site – which claims to operate legally under Russian copyright law – faces continuing legal battles with the music industry and harsh criticism from the U.S. government. On Tuesday, the credit card company Visa International said it had suspended card service to the site, citing concerns over copyright issues. The U.S. trade representative, Susan Schwab, has warned that continued operation of the site signals a lack of respect for intellectual property law that could jeopardize Russia’s long-sought entry into the World Trade Organization. The company, which lists no telephone number on its Web site and normally declines all comment, undertook a rare public relations offensive Tuesday. Vadim Mamotin, director general of the site’s parent company, Mediaservices, spoke through a translator during an interview by telephone with the International Herald Tribune and then participated in an online chat with 59 journalists. Defiant, Mamotin maintained that the company operated legally under Russian law. “In six years of operation we have never been convicted by a Russian court or declared illegal,” Mamotin said, speaking through the translator. “Under Russian law we are 100 percent legal.” The site, which claims five million subscribers and a growth rate of 5,000 a day, remunerates artists by paying 15 percent of its revenue to a collecting agency, the Russian Multimedia and Internet Society, or ROMS by its initials in Russian, Mamotin said.
Wallflower at the Web Party – New York Times:
JONATHAN ABRAMS was in a spot. He could take the safe bet and accept the $30 million that Google was offering him for Friendster, the social networking Web start-up he began only a year earlier, in 2002. Saying yes to Google would provide a quick and stunning payout for relatively little work and instantly place the Friendster Web site in front of hundreds of millions of users across the globe.
Rolling Stone : Wal-Mart Wants $10 CDs:
Getting Wal-Mart excited about carrying a record is at the top of every label’s to-do list, but it’s harder than it sounds. There is an immense cultural chasm between slick industry executives and Severson’s team of three music buyers at Wal-Mart headquarters in Bentonville, Arkansas. Only one of the three had ever worked in music retailing — until that person moved to a new division in August and was replaced by someone who previously bought Wal-Mart’s salty snacks.
p2pnet.net – the original daily p2p and digital media news site:
While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart’s total sales.
“If they got out of selling music, it would mean nothing to them,” the story has a label executive saying. “This keeps me awake at night.”
That’s end of the Ars Technical excerpt, but there’s more – a lot more – in the Rolling Stone story, and the conclusion is especially interesting.
“Major labels insist that the low prices mass retailers such as Wal-Mart and Best Buy demand are impossible for them to achieve,” it says, talking about whether or not the Big Four will ever drop their CD prices. But it has Best Buy senior vice president Gary Arnold saying,
“The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn’t properly priced.”
So? So maybe WalMart can get CD prices lowered across the board, says Hannibal
Time to cash in on the network externaly in Africa?
via p2pnet.net – the original daily p2p and digital media news site:
The Microsoft reality configuration team is getting plenty of mileage out of a shock-horror claim that 81% of computer software now in use in Africa is illegal or, put another way, it wasn’t bought from Microsoft. And this is costing governments and the high-tech industry [read Bill and the Boyz], “billions of dollars in revenue and choking growth,” say “experts” quoted by Agence France-Presse. What to do if Africa wants information technology to “help jumpstart development and reduce poverty”? Enhance and enforce intellectual property laws. And this time the BSA (Business Software Alliance), whose imaginative stats have been called into question, and of which Microsoft is a member, wasn’t pumping out the numbers. Instead, “Meeting at a recent workshop in the Kenyan capital, representatives of software companies, including United States giant Microsoft, government and media companies heard stunning piracy figures and the costs to local economies,” says AFP. The “stunning figures” of course came from Microsoft in the shape of Abed Hlatshwayo, the company’s anti-piracy manager for Eastern and Southern Africa who, says the story, claims the region is, “awash in illegal copies and downloads worth more than $12,4-billion”. Zimbabwe, Nigeria, Botswana and Kenya are named as the principal culprits and, “As a result of piracy in Africa, Microsoft lost $31 million between 2004 and 2006,” says the Angola Press, also quoting Hlatshwayo.
iTWire
The Jobs interview, which marked the fifth anniversary of iPod, revealed that the Apple co-founder claims that if you charge the market a price it will accept for music, users will forgo illegal downloads and pay iTunes to download tracks.
What Jobs didn’t say, however, is that the strategy only works up to a point. Of the hundreds and sometimes thousands of tracks that each iPod owner has on his or her player, on average only 20 to 25 were bought through iTunes.
via Slyck News
“Despite the growth of legal online music services over the past year, free downloads outpaced online sales of music files by a wide margin among all age groups. Among respondents with Internet access, 30% said they downloaded free music tracks, compared with 11% who bought tracks online. Teenagers are the top downloaders, with 68% of those aged 15 to 20 saying they downloaded tracks for free last year and 23% making at least one online purchase.” This might be an indication that ‘try before you buy’ is something practiced by Canadians.
Canadians are also said be be attending concerts: “Live Music Performances Two thirds of Canadians saw live music performances last year, with 46% attending one to five concerts, 11% attending six to 10, and 11% attending more than 10 concerts. Performances by Canadian artists made up approximately three quarters of all concerts attended. “Around 29% of concert attendees bought CDs or DVDs at the shows and 19% bought other concertrelated merchandise.”
The Future of Music: New Artist Model at Work:
Barenaked Ladies grossed $978,127.99 in revenue from intellectual property in its first week music sales from their new album, Barenaked Ladies Are Free (Desperation Records/Nettwerk Music Group). Understanding this sales figure requires looking beyond the numbers on the charts, according to Terry McBride, band manager and CEO of the Nettwerk Music. McBride notes BNL released their album on their own artist-run label, Desperation Records, in multiple formats, from physical CDs to digital albums, deluxe editions, USB flash drives, ring tones, multi-tracks for remixing, streams, etc.
via paidContent.org:
There’s plenty to iron out, not least the complex rights issues of movies. While new media rights are becoming a staple for new content deals, archive content is fraught with complications. “It’s the library that’s difficult because the stakeholders are many, and in some cases there’s no single owner. There might be contingent stakeholders, a guild, foreign distributors with a stake in foreign markets – it’s very difficult to get a library cleared for a new distribution model. That’s something the studios are working on now that we can’t influence.”
Ashwin Navin Of BitTorrent
via paidContent.org:
“We understand now that piracy is a business model,” said Sweeney. “It exists to serve a need in the market for consumers who want TV content on demand. Pirates compete the same way we do – through quality, price and availability. We don’t like the model but we realize it’s competitive enough to make it a major competitor going forward.” That’s an incentive for Disney to make its content available easily and legally,
Disney Co-Chair Anne Sweeney
O’Reilly Radar > Oops – Only 4% of Titles Are Being Commercially Exploited:
on November 04, 2005 In a recent post, I made the assertion that 10-20% of titles published were still in print and being commercially exploited, with another 20% clearly in the public domain, leaving approximately 60% in what I called “the twilight zone” — with no clear rights. Farhad Manjoo of Salon, who is writing a followup story, emailed me for confirmation of those numbers, and in so doing, made me realize an error in my calculations. I had taken the number supplied by the OCLC, of 10.5 million unique titles in the five libraries cooperating with the Google Print Library Project, and applied to that the recent report by Nielsen Bookscan that 1.2 million unique titles sold at least one copy in 2004, and came up with the estimate of 12% I used in that prior post, which I generously expanded to 10-20% by assuming that books that didn’t sell even one copy might still be considered “active” by some publishers.
September 29th, 2006| economics | Comments:Kommentek: 0
Oct 20th 2005 From The Economist print edition:
Intellectual-property protection can be good for the technology industry as well as for its customers, says Kenneth Cukier (interviewed here). But it requires careful handling “The granting [of] patents ‘inflames cupidity’, excites fraud, stimulates men to run after schemes that may enable them to levy a tax on the public, begets disputes and quarrels betwixt inventors, provokes endless lawsuits…The principle of the law from which such consequences flow cannot be just.” The Economist may have put it rather strongly in 1851, but its disapproval of patents represented conventional wisdom at the time. A century earlier, Adam Smith had described them as necessary evils, to be handed out sparingly, and many other economists have since echoed his reservations. Patents amount to temporary monopolies on useful new inventions. In recent years intellectual property has received a lot more attention because ideas and innovations have become the most important resource, replacing land, energy and raw materials. As much as three-quarters of the value of publicly traded companies in America comes from intangible assets, up from around 40% in the early 1980s. “The economic product of the United States”, says Alan Greenspan, the chairman of America’s Federal Reserve, has become “predominantly conceptual”. Intellectual property forms part of those conceptual assets. In information technology and telecoms in particular, the role of intellectual property has changed radically. What used to be the preserve of corporate lawyers and engineers in R&D labs has been speedily embraced by the boardroom. “Intellectual-asset management” now figures as a strategic business issue. In America alone, technology licensing revenue accounts for an estimated $45 billion annually; worldwide, the figure is around $100 billion and growing fast. Technology firms are seeking more patents, expanding their scope, licensing more, litigating more and overhauling their business models around intellectual property. Yet paradoxically, as some companies batten down the hatches, other firms have found ways of making money by opening up their treasure-chest of innovation and sharing it with others. The rise of open-source software is just one example. And a new breed of companies has appeared on the periphery of today’s tech firms, acting as intellectual-property intermediaries and creating a market for ideas. Mind the keep-out signs At the same time, however, the legitimacy of many patents granted is in question as patent offices struggle with the huge increase in demand. Over the past decade the number of patent applications has nearly doubled and continues to climb. Much of that growth has been in the IT and telecoms field: in America alone, that sector’s overall share of patents has increased from around 30% in 1990 to almost 40% today. Also climbing, alas, is the number of lawsuits over patent infringement, the cost of litigation, and the amount of money plaintiffs are winning. Meanwhile, emerging technology powerhouses such as China and India are competing to move up from lower-end work such as hardware manufacturing and software coding to more sophisticated projects requiring their own innovation. This could pose serious challenges to today’s incumbents. The number of patents granted at China’s patent office has trebled in the past four years alone. “Intellectual property has become more central to the industry,” says Greg Papadopoulos, chief technology officer of Sun Microsystems. “I don’t know if that is a function of a mature industry, or simply a confused one.” Licensed to make money The facts and figures speak for themselves. IBM alone now earns over $1 billion annually from its intellectual-property portfolio. HP’s revenue from licensing has quadrupled in less than three years, to over $200m this year. Microsoft is on course to file 3,000 patents this year, when in 1990 it received a mere five. Earlier this year it set up an entirely new corporate division to exchange its technology for cash or equity in start-up firms. Nokia has recently started licensing its technology to other firms and plans to do more. And some companies, such as ARM, a British firm that designs the blueprints for microchips used in wireless devices, do little other than create and sell intellectual property. According to a survey of business executives last year by McKinsey, a consultancy, 54% of companies saw growth in licensing of 10-50% between 2000 and 2002. Almost 75% of executives say they expect to buy as well as sell more licences over the next two to five years, and 43% expect a dramatic increase in their licensing revenue. And they think the market is still embryonic. “Many companies generate a lot of intellectual property and do not capture the value from it,” says Jay Jubas of McKinsey. The new predominance of intellectual property in technology industries is fed by a number of broader industry trends. First, IT and telecoms have become so complex that there is a greater willingness to accept the innovations of others. Gone are the days when vertically integrated firms handled every step of a product, from initial design to final sale. Now, a small army of specialist firms focus on narrow portions of technology, using intellectual-property rights to protect their inventions when they are licensed out. Second, as many new technologies quickly turn into commodities, firms increasingly rely on innovation to remain competitive. Yet the return on investment in R&D is short-lived because more people innovate at a far faster pace than before. That means margins have shrivelled, explains Ragu Gurumurthy of Adventis, an IT and telecoms consultancy. “How to recoup the cost of innovation? By licensing the technology,” he says. Third, customers are demanding “interoperability” and common standards rather than proprietary systems, which means different firms’ technologies must work together smoothly. This often requires pooling patents or cross-licensing agreements. Fourth, generating intellectual property is less capital-intensive than other aspects of the IT businesses because it relies mainly on people rather than bricks, mortar and machinery. That makes it attractive to many start-up firms. Venture capitalists often demand that firms patent technology, both to block rivals and to have assets to sell in case the firm flounders. This was particularly apparent during the internet boom in 2000. “In addition to the dotcom bubble, we had a patent bubble,” says Mark Webbink of Red Hat, a firm that sells Linux, an open-source operating system. Companies cannot simply turn their back on what is happening in intellectual property. Even if they refuse to play the game, they may be unwittingly infringing someone else’s patents because there are so many more of them around. Unless firms have patents of their own to assert so they can reach a cross-licensing agreement (often with money changing hands too), they will be in trouble. Thus many companies are acquiring large numbers of patents for purely defensive reasons, for use only to keep others’ patent threats at bay. Legally, the intellectual-property system covers four areas: copyrights (used to protect artistic, musical or literary works); trademarks (for things like brands); patents (for inventions); and an ill-defined category of “trade secrets”, for practices that are kept confidential. The system provides legal protection against counterfeiters and copiers and is vital to many fields, such as biotechnology and nanotechnology. And it matters not only to companies: universities, too, have recently become big patent holders and licensers. In IT and telecoms, the area of intellectual property that is creating particular upheaval is patents (see article). This is because patents confer a “negative right” to exclude others from using the same technique; yet information technology and telecommunications rely on “network effects”, meaning that as more people use a system, it becomes that much more useful. To make the most of such network effects, interoperability between different technologies is essential. This can be achieved either by a single standard set by a dominant firm (which tends to generate resistance from customers and competitors), or by using a mixture of different technologies, with the patent system providing legal protection for inventions. The more the merrier As the system of intellectual property evolves, the ethos seems to be that if a little is good, then more is better. That is to say, if some property rights on inventions are beneficial, then increasing those rights—in scope, strength or duration—will increase the benefits. But that is a large assumption. There is even a body of evidence to suggest it is flatly wrong. The technology industry faces the question of whether today’s abundance of patents, rather than lubricating the gears of innovation, may be clogging them up. Already, businesses are having to negotiate with other firms in order to do basic things such as reading files from different proprietary formats; and the design of new technology products now involves lawyers as well as engineers. The proliferation of patents might prove a serious encumbrance to businesses, just as travellers along the Rhine in medieval Europe were slowed down by having to pay a toll at every castle. James Boyle, a legal scholar at Duke Law School in North Carolina, claims that the current increase in intellectual-property rights represents nothing less than a second “enclosure movement”. In the first enclosures, in 18th- and 19th-century Britain, the commons—open fields used by many, belonging to all, owned by none—were fenced in, and nearly all land became private property. By analogy, the granting of property rights on ideas, to the extent it is happening today, is plundering the intellectual commons of our public domain. Others see the expansion of intellectual-property rights as hugely beneficial, leading not only to more innovation but to more openness. The standard justification for the patent system is that it provides an incentive for innovation, allowing the inventor to reap rewards by protecting the work from imitators who would otherwise hitch a free ride on the investment. But that is a simplification. The initial intention was in fact to make inventions available to the public as well. Before the 18th century, innovations were mainly kept secret through trade guilds. Sometimes monarchs capriciously granted indefinite exclusive rights to someone they favoured. Intellectual-property law was meant to remedy this by requiring the invention to be vetted by experts, limiting the right to a set period and making knowledge more widely accessible through public disclosure. Its development was part of the drive towards democracy and capitalism and the abolition of royal privileges and monopolies. In principle, patents open up innovations in two ways. First, they confer only temporary rights; once patents expire or are abandoned, the intellectual property they are designed to protect passes into the public domain. Second, they require the details of the invention to be disclosed so they can be replicated. This permits follow-on innovation, which is essential for industrial progress. More recently, as the patent system has evolved, it has been seen to provide other benefits. It leads to a degree of economic specialisation that makes business more efficient. Patents are transferable assets, and by the early 20th century they had made it possible to separate the person who makes an invention from the one who commercialises it. This recognised the fact that someone who is good at coming up with ideas is not necessarily the best person to bring those ideas to market. Such specialisation is now so common that it is taken for granted. Semiconductors, the silicon chips that power digital devices, are typically designed by specialist firms that are good at engineering, but physically produced by other firms whose expertise lies in manufacturing. As the patent system has matured and licensing has become much more widespread, these transfers are turning business relationships on their head. Some economists argue that the growth of patent transactions is establishing a proper “market for technology”. The creation of any market takes time and trouble. When such an institution develops, those outside the system feel threatened by it and condemn it. Yet just as the banking system created a market for capital and the insurance industry created a market for risk, the growth of the patent system may be creating a market for innovation. This provides a sort of “liquidity” to knowledge that did not previously exist, argue Ashish Arora, Andrea Fosfuri and Alfonso Gambardella in their 2001 book, “Markets for Technology, the Economics of Innovation and Corporate Strategy”. Seen that way, the evolution of the patent system in IT and telecoms is simply part of a broader movement to create an institutional mechanism for the transfer of ideas to fuel economic progress. Mutually assured destruction That is the context in which commercial battles are taking place in the technology industry today. The convergence of IT and telecoms is forcing companies to work together in new ways in order both to protect and exchange their technology. “How do you create a marketplace for ideas in that converged marketplace?” asks David Kaefer, director of intellectual-property licensing at Microsoft. “That is really the big question. In the past, two parties would haggle over a pound of wheat. Today, they haggle over the patent of the week.” These markets for technology are expanding. For instance, 60% of technology and telecoms firms report an increase in licensing compared with the previous decade, and 70% report fewer obstacles to reaching such agreements, according to a survey by the Organisation for Economic Co-operation and Development in 2004. “Intellectual property is the next asset class. Companies are creating a market,” says Eric Gillespie, the co-founder of ipIQ, one of the new crop of firms that are fuelling patent transactions. But when talking to executives in the technology firms themselves, the language you hear most often is that of “the arms race” and “mutually assured destruction”. Companies amass patents as much to defend themselves against attacks by their competitors as to protect their inventions. Many technology companies have recently championed reform of the patent system to deal with spuriously awarded patents, licensing extortion and massive lawsuits. “There is a broad recognition in the US that the patent system, if not reformed, will…begin to impede American competitiveness around the world,” says Bruce Sewell, general counsel of Intel, the world’s biggest chipmaker. This survey will argue that, despite such adjustment problems, the huge changes in intellectual property currently taking place in the IT sector will in time produce more efficient markets. But what do the IT firms themselves make of it all?
BBC NEWS:
In the midst of an explosion in digital music sales, and a flourishing new music scene, industry executives are lobbying the UK government to extend protection for sound recordings from 50 years to 95.
This, they say, would protect existing revenue streams that bands like the Beatles and the Rolling Stones provide.
The argument for the extension of copyright is often presented as win-win situation for all. If we do not extend copyright, then the Beatles’ sound recordings could be packaged and released by anybody, and the recording artists would not receive any money from future sales of the songs they recorded and made popular.
The debate surrounding whether it is right or wrong to increase copyright term is often presented as a choice between all or nothing: either continue to protect the Beatles’ songs or give them away for nothing, and allow artists to be ripped off and the music industry to suffer.
But this false polarisation is not very helpful. The majority of works produced in the 50s and 60s are no longer of any commercial value. Many are out of circulation and unavailable to would be listeners.
Opportunities offered by the internet and digital distribution could allow niche providers to re-package and re-distribute old recordings, bringing previously ‘lost’ creative content to contemporary ears.
If you walk into a bookshop you can buy a copy of Dickens’ Bleak House, or Austen’s Pride and Prejudice for about £1.50. The copyright in these works has long expired so different publishers can compete to offer them at lower prices. Consumers have benefited from the works being out of protection.
So perhaps the expiration of copyright in sound recordings for the Beatles should not be seen as the end of music. Instead it could be the end of an era, perhaps.
It arrives at the start of new careers for new artists producing new and exciting music.
Publishers aim for some control of search results | Tech&Sci | Internet | Reuters.com:
Global publishers, fearing that Web search engines such as Google Inc. are encroaching on their ability to generate revenue, plan to launch an automated system for granting permission on how to use their content. Buoyed by a Belgian court ruling this week that Google was infringing on the copyright of French and German language newspapers by reproducing article snippets in search results, the publishers said on Friday they plan to start testing the service before the end of the year. “This industry-wide initiative positively answers the growing frustration of publishers, who continue to invest heavily in generating content for online dissemination and use,” said Gavin O’Reilly, chairman of the World Association of Newspapers, which is spearheading the initiative.
Variety.com – Yahoo tests ‘Right’ to MP3 downloads:
In a first for mainstream pop music, Yahoo! will sell Jesse McCartney’s new album “Right Where You Want Me,” from Disney-owned Hollywood Records, in the unprotected MP3 format.
“We’re trying to be realistic,” said Ken Bunt, senior VP of marketing at Hollywood Records. “Jesse’s single is already online and we haven’t put it out. Piracy happens regardless of what we do. So we’re going to see how Jesse’s album goes (as an MP3) and then decide on others going forward.”
“We think this is a really good experiment, because copy protection is not doing anything to stop people from stealing when you can just get unprotected tracks off of a CD or get music illegally online,” said Yahoo! Music topper Dave Goldberg. “We think it’s good to make it easy for consumers to get digital music on whatever device they want and for companies like us to not be reliant on one particular technology company for how our consumers can access music.”
Because Apple doesn’t license the copy-protection technology behind iTunes, musicstores like Yahoo!, Napster and Rhapsody that want to sell major-label music have to use Microsoft’s alternative.
EMusic is currently the only online musicstore that sells songs in MP3 format, but it specializes in indie music and doesn’t have any major-label tracks.
FT.com / Companies / Media & internet – Disney’s iTunes sales hit 125,000:
Disney has sold 125,000 online film downloads less than a week after agreeing to make its titles available on Apple’s iTunes store. The sales have added about $1m in incremental revenue to the media company, according to chief executive Bob Iger, who expressed confidence that revenues from the new film venture could reach $50m in its first year. “Clearly, customers are saying to us that they want content available in multiple ways,” Mr Iger said at an investor conference sponsored by Goldman Sachs. Disney broke with other Hollywood studios when it agreed last week to make 75 titles available on iTunes at prices ranging from $9.99 to $14.99.
Boing Boing: Amazon Unbox to customers: Eat shit and die:
Amazon’s new video-on-demand store may sound like a good idea, but once you take a look at the “agreement” you enter into by giving them your money, that changes. The Amazon terms-of-service are among the worst I’ve ever seen, a document through which you surrender your rights to privacy, integrity of your personal data, and control over your computer, in exchange for a chance to pay near-retail cost to watch Police Academy n-1. As Ben Franklin might have said: They that can give up general purpose computers for the sake of a little eye candy deserve neither computers nor eye candy.
The Korea Times : Online Music Sharing Flourishes:
Soribada, the largest peer-to-peer music sharing service in South Korea, said yesterday the number of its paying subscribers exceeded 500,000 as of Saturday. The number of users who pay 3,000 won (3.12 USD, 671 HUF) per month for unlimited music downloads has steadily increased since the charging system was first adopted on July 10, it said. In August alone, over 300,000 have registered as new subscribers.
There is some discussion going on in the economic literature whether copyright creates a monopoly for the author or there are many substitutes to any work protected copyright (see the reading list for relevant literature).
The monopoly argument is important because economists do not like monopolies and look at them as strong reasons for regulatory intervention. The fair use provisions are part of any copyright legislation just because of this: they serve as escape routes from the monopolistic power of creators.
So far I have not seen any convincing argument for or against the monopoly case. Maybe because there is none. So here is a solution, that defines monopoly (a very economic term) with the help of culture.
Anyone, who wishes to read the the book for which author Imre Kertesz won the Nobel price will be in difficult position to find a substitute. Other Nobel price winners or other works from Mr. Kertesz simply wont do the job. So whoever owns the rights for that work has indeed monopoly power ower the work.
This is also the case when we think about fan communities. For a die-hard Star Wars fan a film about Superman wont be a good substitute, morover it wont be a substitute at all.
On the other hand, for someone like me, who dislikes most of the movies from hollywood, it makes no difference if -having nothing else to do-, my local cinema does not play You Me and Dupree, only Superman Returns. I am not loyal, I am not fan, I am not member of that culture that values that specific piece of culture as his own. These two movies compete for me, and they are perfect substitutes for that night.
The bottom line is: intellectual property legislation creates monopoly for those whom a piace of cultural good really matters, and is an imperfect monopoly for those who do not care.
Mass produced, low shelf-life entertainment products tend to fall into the non-monopoly category, as few of them have loyal fanbase. Other cultural items, classics, cult pieces, things part of ‘high culture’ (meaning that they have a consumer base that values them on very sophisticated terms) tend to be monopolies.
But either way. If we can talk about a cultural monopoly in cases where there are consumers who really care, than it is a monopoly, even if there are consumer segments where it behaves like a competing product.
August 23rd, 2006| economics | Comments:Kommentek: 0
James Boyle: Cruel, Mean or Lavish? Economic Analisys, Price Discrimination and Digital Intellectual property.
Now this is important because there is no sign of people going out from business because of piracy. Or is there? Please leave a comment if you know about artists, producers who had to look for another job because of piracy!
A quick note on the differences of who pays the price of copyright infringements in the US and in Europe.
In the US RIAA and other organizations as well as the copyright owners pay the lawyers and people to track down infringers and they use the money they win from settlements to initiate more actions. So finally those who have (or in many cases those who have not) committed unlawful acts pay the price of enforcement.
In Europe copyright crime is pursued by the police and the prosecutors. Thus taxpayers pay the price of unlawful behaviour of some members of society. They pay for the extra resources necessary to pursue illegal activities and where resources are limited and resources are diverted from pursuing other crimes to pursue copyright infringers they pay the price in the form of rising crime-rate in other fields. In this latter case the cost of strict copyright laws might be the rise in other crimes. Well, well…
Here I collect the texts I have written as part of the research:
The Club model of cultural consumption and distribution
When it comes to the market of digital goods, clubs –buyers teaming up to buy a single item and share it among themselves– seem to have little or no economic significance. Digital files are either perfectly controlled, thus the producer can appropriate all of the consumer surplus that could have arose by forming a club, or there is no way to control unauthorized copying thus there is no price at which it would be reasonable to sell a good on the market.
But if we include other, noneconomic aspects of clubs, notably their ability to negotiate and
enforce norms on how a given good is accessed and used, clubs can have a significant effect
on markets. So far we have seen that technological protection measures and copyright laws cannot effectively curb unauthorized uses of digital content. User communities around jambands can be an exception from this general trend as together with the artists they have created a normative environment that is able to police and enforce undesirable actions.
Is there a way to propagate the emergence of such communities through adequate
technologies designed to connect artists and fans? What can we do to help fans and artists to negotiate rules they are both are happy with?
Bodó Balázs- Gyenge Anikó: A könyvtári kölcsönzések után fizetendő jogdíj közgazdasági
szempontú elemzése
A nyilvános könyvtári kölcsönzések után a jogosultaknak fizetendő jogdíj (Public Lending
Right – a továbbiakban PLR) ötlete több sebből is vérzik.
Ha a PLR-re mint a nemzeti kulturális politikától független eszközre tekintünk, mely e jogot természetjogi érveléssel a tulajdonhoz való jogból vezeti le, minden esetben oda jutunk, hogy a jogosultak monopoljogát kiterjesztjük és az ezzel járó járadékot növeljük. Ennek következménye jelentős fogyasztói csoportok kulturális fogyasztásból való kiszorulása lehet, melyre eddig a legolcsóbb és hatékonyabb megoldás a könyvtári kölcsönzés szabadsága volt.
Ha a PLR nemzeti kultúrpolitikai eszköz, akkor viszont azt a megállapítást tehetjük, hogy a PLR a meglévő kultúratámogatási rendszerek mellett való üzemeltetése indokolatlanul
bonyolult, és költséges, és ha az állami döntéshozók úgy találják, hogy van a költségvetésben kultúratámogatásra fordítható tartalék, akkor azt érdemes a meglévő intézményrendszeren keresztül szétosztani.
Végül pedig a jogosultak, szerzők szemszögéből megvizsgálva a kérdést: nincs olyan szerző a földön, aki visszavonná egy megjelent művét a könyvtárakból csak azért mert azt vélelmezi, hogy a kölcsönzések miatt eladásoktól esik el. Ennek az egyetlen oka az, hogy a szerzők számára a könyvtárban való jelenlét haszna nagyobb, mint a könyvtári olvasók által okozott kiesett kereslet. Már csak emiatt sem érdemes a PLR bevezetése.
The Pirates of The Pirates of the Caribbean
This is the PowerPoint presentation of the talk I gave on the Chicago Kent Law School this March.
Robin Hood Digital – english
“File-sharing communities are also remembering communities. They direct attention and thus demand, they discuss and thus keep alive cultural goods. When something is posted as available for download, not only those fetch it have requested a particular item, but also those who were standing nearby. These individuals are reciting work long forgotten like those who in Bradbury’s Fahrenheit 451 memorize books to be able to share them with others.”
Sobri Joska Digital – in hungarian
Megjelent a Café Babel 2006 decemberi, Hiány c. számában.
“A Csendes Könyvtár és az összes többi hasonló szolgáltatás az úgynevezett közjavakra épülő internetes kooperációs hálózatokra (commons based peer production networks) példa. A piac által (kényszerűségből) szabadon hagyott résekben, marginális igények, érdekek körül a semmiből jönnek létre olyan közösségek, melyek a hálózat tagjai között elosztott különböző képességeket, erőforrásokat (időt, szkennert, karakterfelismerő programot, korrektúrázó képességet) képesek hatékonyan összehangolni egy olyan feladat érdekében, melynek gyümölcseit aztán mindenki szabadon és ingyenesen élvezheti.”
A szerzői jog gazdaságtana az online világban
Frissen elkészült könyvfejezet.
“A szerzői jog közgazdasági elemzése során a szerzőknek biztosított monopoljog különös figyelmet vívott ki magának. Ennek az az oka, hogy a monopol helyzetben levő termelők maguk határozzák meg a piaci árat, és ez az ár jellemzően nagyobb, mint amennyi versenyhelyzetben lenne. Tökéletes verseny esetén a piaci ár megegyezik a termék határköltségével, azaz azzal az összeggel, amennyibe a legutolsó példány elkészítése kerül. A monopóliumok határköltségnél magasabb ára azzal jár, hogy a piaci kereslet egy
része nem tudja megfizetni a monopolista szabta árat.”
A szőnyeg alá söpört archívum
Megjelent a Manager Magazin 2006. Decemberi számában Tartalomraktárak címen.
“Ma Magyarországon az a kérdés, hogy a piacra várnunk-e, hogy ezeket az archívumokat kiépítsék, a nehézkesen működő és alulfinanszírozott közintézményekre lőcsöljük-e ezt a feladatot, vagy megteremtjük annak lehetőségét, hogy a magyar kulturális közösség fenntartsa önmagát. A Neumann-ház megrendelésére elkészített Nemzeti Digitális Adattár 2.0 vitaanyag a közösségi archiválás lehetőségének kiterjesztését tartalmazza, az első lépés tehát ezügyben megtörtént. Még egy lépés azonban hátra van. Dekriminalizálni kellene kirillt, scan_dalt, helpert és társaik. Hogy ne fordulhasson elő az, hogy ennek az örökségnek piaci, személyes érdekeket sértő részei esetleg nem maradnak fenn. Hogy ne legyen bűnöző az a soktízezres közösség, amelyik a magyar audiovizuális örökség archiválásán dolgozik – társadalmi munkában.”
A retardált archívum
Megjelent az Élet és Irodalom 2007. január 5-i számában.
“A közpénzből finanszírozott, közszolgálati archívum kapuit minél szélesebbre kell tárni. A hat havi elérhetőséget nem szűkíteni kell, hanem az archívum digitalizálásával bővíteni. Az archívumi anyagok lementését, felhasználását, adott esetben átalakítását nem megakadályozni kell hanem a megfelelő jogi konstrukció kidolgozásával megengedni , támogatni, bátorítani. Ezt követeli a finanszírozás módja. Ezt követeli a közszolgálatiság jelentése. Ezt követeli a piaci értékesítés igénye. Ezt követeli a józan ész.”
PhD 2-page research proposal in english
A short description of my research.
Régebbi cikkek/ older writings
A „mély link”
Internetes tartalomszolgáltatók vs. internet
Megjelent a Beszélő 2003 szeptemberi számában.
“Mély link valójában nincs. Link van, mely mutathat bárhová: egy portál címoldalára, a legutolsó, senki által nem olvasott cikkére, képre, linkgyűjteményre, bárhova. A mély linkelést nem lehet megtiltani, csupán azt lehet technológiai eszközökkel elérni, hogy egy adott gyűjteménybe csak egy, a hivatalos kapun keresztül lehessen bejutni. Ott pedig, ahol korábban szabad volt az átjárás, jogi vagy technológiai falak kezdenek épülni, melyek az internet mindent mindennel összekötő hipertextuális szövetéből kiragadnak, elérhetetlenné tesznek tartalmakat. Az intertextualitásból kiemelt, a többi szöveggel való kapcsolatától megfosztott valami pedig megszűnik szövegnek lenni.”
Bolyongás egy áldás nélküli térben
Graffiti és street art mint a társadalmi diskurzus eszköze
Megjelent a Café Babelben 2004-ben.
“Az egyre lezáródó fizikai, média- és kulturális terekben az autonómia megteremtése egyre költségesebb: magas a lebukás veszélye és nagy a várható büntetés, megfizethetetlenek a kártérítési és nem utolsó sorban jogi költségek. Nehéz felbecsülni, hogy az egyre szigorodó ellenőrzési technikák milyen mértékben gátolják üzenetek megjelenését, hiszen a leginkább kockázatvállalókat kivéve az alkotóknak nem áll érdekükben láthatóvá válni, nem szeretnék magukra felhívni a figyelmet. Ha mégis, akkor a szólás szabadságát keresők szükségszerűen mozognak a gyengébb ellenállás, tehát olyan médiumok felé, melyek könnyebben támadhatók, azaz ellenőrzésük architekturális okokból nehezebben megoldható”
MarketWatch reports:
Google Inc. later this month will begin distributing free, commercially-supported video clips from Viacom Inc.’s MTV Networks to about 200 Web sites catering to young adults and teen-agers, in effect syndicating the programming to the Internet.
As we knw there are three different ways to charge for a content: sell it by the piece (view), sell it for a flat rate (subscripition based) and package it with advertising. As for now video content was not really available for advertising, at least the majors were reluctant to engage in such a business model. Now it seems the time has come. Will it be strong enough to catch on with other cultural goods like movies or music as well?
From experience goods to search goods
There has been several measurements on how illegal downloading affects markets of cultural goods. Although the results sometimes contradict each other, there is a consensus that in fact there is a conversion of illegal downloaders into purchasers. There are several explanations offered: downloaders pay for items they were not exposed to before (the publicity value argument), downloaders are not evil, and they are willing to pay to artists they like (community support argument), downloaders are buying because there is a market they are happy to use or they are threatened to use by lawsuits (industry argument) or illegal downloads are not (good enough) substitutes for a DVD or a CD.
In this essay I would like to offer a different approach that explains the coexistence of illegal downloading and legal purchases by a shift that affects the status of cultural goods. A shift that made culture to act like a search good instead of an experience good, a shift that at the end completely rewrites the rules of cultural markets.
In the economic literature cultural goods are described as experience goods the value of which can only become apparent to its consumer after it has been consumed. Unlike drinking just another bottle of coke, one cannot tell if she liked a concert, a movie or the new album of an artist until she has experienced it. This attribute of cultural goods defines a very special economic context to these goods as this uncertainty on the experience creates a factor of risk on the consumer side, a risk which heavily affects prices and demand for the goods, thus creating a risk for the supply side as well.
There are several methods by which both the consumers and the suppliers try to lower the level of uncertainty on the demand side. On the consumer side listening to word of mouth and peer reviews and the general avoidance of things unheard of and unknown are the tools to reduce the risk of paying for something that might turn up as a bad experience. Suppliers give away free previews in form of trailers, teasers; a whole media system of commercial radio airs these goods in exchange for commercials; professional or paid reviewers are writing about these goods; charts and top-lists are complied; massive multi-million dollar marketing campaigns are launched; stars with known reputation are bred and employed. These techniques are designed to provide the potential consumers with extra information and thus lower their uncertainty.
Today the efforts and resources of cultural industries are equally divided between the production of cultural goods and their marketing. Production costs are in the same range as marketing budgets and the marketing has spawn a distinct culture of celebrities and parasite media dealing with celebrities, reinforced by the cross-ownership of media conglomerates in every media type.
Despite all these efforts consumers might end up not being satisfied. There are several signs of this ‘post-coital sadness’: bad reviews on blogs, quickly dying films after the opening weekend, weak DVD rentals and sales and falling reputation of stars. This signals the distance between the actual and the promised experience, the size of the information asymmetry between the consumer and the supplier.
With the advent of file-sharing technologies this situation has changed. The risk of consuming a cultural good is not a financial risk anymore if one can download a song freely before purchasing it. Of course there are costs still associated with consumption: the cost of acquiring information about a good, the cost of searching, the cost of downloading, the cost of possible lawsuits, etc., but one does not have to pay at the counter only to realize that all the other songs on that album are not at all that good as the one played all the time on the radio, or that the trailer actually contains every enjoyable second of a feature film. Consuming a cultural good for free is the cheapest way to get to know the actual value of it. As the risks of consuming something unknown decrease, cultural goods shift to be search goods in economic terms, as no transaction is takes place before the actual experience.
But that does not mean that market transactions cannot and will not happen afterwards. But in this case a purchase will happen only if the consumer had a positive experience, when she actually had full information on the goods that she was about to purchase.
Will this shift result is a loss in sales? Well, the supplier will lose only the sales that were happening only because the information asymmetry – in other words sales that at the end resulted in an unhappy customer. Will new sales occur? Certainly, from consumers for whom the risk of paying for something unknown was too high of an entry barrier to make the actual purchase in the first place. Illegal downloading is lowering the entry barrier of consumers to markets.
Many still argue that illegal downloading is actually replacing or rather killing markets. I would argue that the efforts trying to keep cultural goods as experience goods are killing markets. Trailers, paid-for radio broadcasts, 30 second online listening-in services do not lower the uncertainty barrier enough to draw significant amount of new customers to markets outside of the mainstream. And for those consumers who are free-riding on this system will eventually face a serious problem: the end of supply of the goods they actually liked but never paid for.
August 2nd, 2006| economics | Comments:Kommentek: 1
I will soon post my theory on how the fact that cultural goods’ shift from being experience goods to search goods actually changes the market. Till then read p2pnet.net’s stroy on how it is happening in practice:
“The p2p networks are invaluable. My young daughter, Emma, and I use them to sort out the garbage, meaning most Hollywood product. Does that mean we don’t go to the movies any more? Nope. We (I should say I) downloaded The Incredibles, Over the Hedge, March of the Penguins and Corpse Bride and we not only went to see them at our local cinema (a half-hour’s drove away, BTW), we also bought DVDs of the last two. That’s not huge. But we saw, and bought, what we, not Hollywood, wanted. On top of that, we home-school Emma and she enjoyed the extras that come with the DVDs. And since we’re not loaded, think of the money we’ve saved! Trying-before-buying? As a dad without a vast income, I like it. Thank you, p2p networks ………”
icLiverpool reports: “TECHNOLOGY allowing bands to sell their music direct to fans on the internet and protect against piracy will give more power to musicians. That’s the claim of Liverpool firm Safesell which is behind the system that plays on any Windows-compatible pc or mobile.
It can be sent to friends by email or peer-to-peer file sharing. At the end of a promotional period anyone wishing to play the track again is invited to buy a license online.
Co-founder Brian Pond said: “Safesell is the first product in the world to offer everything you need to sell music or video direct to customers. “It provides downloading in a format which cannot be pirated; it allows the artist to control pricing of tracks and album and the quality of download, the territories and currencies they want to deal with; and it manages the payments.””
Now that is really interesting, a real alternative to the traditional middlemen like record companies and marketplaces. I hope it will work out at the end, and it will charge reasonable transaction fees.
On WSJ.com
Lee Gomes has posted a critique on Chris Andresons The Long tail by the title: “It May Be a Long Time Before the Long Tail Is Wagging the Web”. His crucial point is whether data supports Anderson’s claim that with availability the aggregate demand for less popular goods is comparable to those of the hits.
“Ecast told me that now, with a much bigger inventory than when Mr. Anderson spoke to them two years ago, the quarterly no-play rate has risen from 2% to 12%. March data for the 1.1 million songs of Rhapsody, another streamer, shows a 22% no-play rate; another 19% got just one or two plays.”
“By Mr. Anderson’s calculation, 25% of Amazon’s sales are from its tail, as they involve books you can’t find at a traditional retailer. But using another analysis of those numbers — an analysis that Mr. Anderson argues isn’t meaningful — you can show that 2.7% of Amazon’s titles produce a whopping 75% of its revenues. Not quite as impressive.
Another theme of the book is that “hits are starting to rule less.” But when I looked online, I was surprised to see what seemed like the opposite. Ecast says 10% of its songs account for roughly 90% of its streams; monthly data from Rhapsody showed the top 10% songs getting 86% of streams.”
In his reply Anderson is not very convincing.
“Let’s say you have 1,000 items and the top 100 (10%) account for 50% of the sales. Then you add another 99,000 items to the catalog, and the sales of that top 100 fall to just 25% of the total, while it takes another 900 items to make up the next 25%. I would say that demand has shifted down the tail, because those top 100 items have dropped from half the market to just a quarter of it and the rest of the demand is spread over more items.
But by Gomes’ math, we’ve gone from a market where 10% of products make 50% of the revenues to one where 1% of the products make 50% of the revenues–in other words, it’s become more hit-centric. I think this is simply a misunderstanding of basic statistics, and I’m disappointed that Gomes, despite many emails from me and at least one economist to him on this point, chose to simply say that I don’t agree with that approach (but not why).”
Battle of giants.
Anderson: “I think this is simply a misunderstanding of basic statistics! And I have an economist to support this!”
Gomes: “I don’t agree with that approach!”
You know, the joke about the rabbi who listens to the complaints of two feuding congregants. One explains why the other guy is wrong, and the rabbi answers, “You are right!” Then the other guy states his case and the rabbi says, “You’re right.” Then a third man who was listening asks, “Rabbi, they are at odds, how can they both be right?” The rabbi then turns to the third man and says, “You’re right, too.”
Because this is not the real question. Erik Brynjolfsson, Michael D. Smith, Yu (Jeffrey) Hu has an article titled “Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers” (MIT Sloan School of Management Working Paper 4305-03 June 2003) in which they estimate that the increased product variety of online booksellers has resulted in $1 billion consumer surplus. Battling over the market concentration is a dead end. Measuring the consumer benefit is the real issue here i guess.
This is the question everyone wants the answer to. Well we have data on the Pirates of the Caribbean II. And they are anything but easy to interpret.
Variety reports on 26/07 that “The smooth sailing continues for Disney’s “Pirates of the Caribbean: Dead Man’s Chest. Pic dominated four new entries and easily won the weekend box office with $35 million at 4,133 playdates.”
This film is all about breaking new records:
“Disney’s swashbuckling sequel grossed $18.1 million Monday, shattering the previous nonholiday Monday benchmark of $14.4 million set by “Star Wars: Episode III — Revenge of the Sith” last year.” etc, etc.
Well, PotC is not only #1 in the box office but also on p2p networks:It was downloded (as of 22/26) 1,485,734 times worldwide and 887,392 times in the US.
Now the question arises: what has happened to that nearly 900.000 downloads? Did they go and see it on the big screen? Or they have tuned out because they thought the movie sucked?
Well, one effect of watching the movie illegally before going to the cinema might be that people who would have been discontent with the movie eventually end up not paying for it. Is that so bad? I dont think so.
There is always a huge uncertainty associated with the consumption of cultural goods. Will I like it? Are all the movie reviews telling the truth? This uncertainty means extra cost on the buyer side and lost income on the seller side. So the seller (and the buyers) would do anything to lower that lack of information. How? The tools are apperent:
– large marketing campaign (including publishing good reviews and word of mouth)
– saturation of the market (try to avoid the wide release)
– using as many stars as you can pay for
– and use references to stuff the buyers already know (do a sequel, recycle a comics character).
With free downloads cultural goods stop being “experience goods” – or something that reveals its true value after the consuption. They become “search goods” – something that has a known value from the first moment.
So my bet would be that with this shift content producers will loose those customers, who were trying to lower their uncertainty using the proxies mentioned above, but they were cheated, misinformed or simply let down. They loose only those revenues that they do not deserve.And the fact that PotC II does well in theatres and on p2p might mean that it is actually a movie people are willing to see, because they already know it is good…
Ever wondered what is the point in piracy (besides providing free access to things that are too expensive/late/unavailable on the market?) They teach corporations the new rules. Reuters reports: “Hollywood studio Warner Bros. is taking on the pirates in China’s film market, using lightning-fast home video release and low prices to beat DVD counterfeiters at their own game.
Warner’s China film-making joint venture released its first picture, a low-budget film called “Crazy Stone”, in cinemas on June 30, then followed with a DVD version selling for as little as 10 yuan ($1.25) just 12 days later.”
This is what it means not to be in a monopol position and exposed to competition. But at least it has turned out, that $1.25 is still a price worth going after. Talking about a nearly pure information good this should be natural, shouldn’t it.
I have found this browsing through Michael Geist’ s site. In his Rethinking the Public in Public Broadcasting article he mentiones” The Danish Broadcasting Corporation, which already features hundreds of hours of archival material on its website, recently announced plans to provide content to the wikipedia project, thereby enabling users to build on its materials. Later this month officials in the Netherlands intend to unveil plans to digitize 700,000 hours of feature films, documentaries, television shows, and radio programs. This remarkable project, which will take several years to complete, will transfer an incredible array of historical materials into the hands of the public.”
Well, in Hungary, the fate of the archives of the public television MTV are -how to say- interesting. In 2005 nearly 11 thousand hours of archive material was sold for 4.2 billion HUF (20 million USD, 1800 USD /hour) to the National Audiovisual Archives responsible for digitally archiving contemporary and historic audiovisual material. MTV could choose what material she handed over. The transaction will repeat itself this year.
MTV is notoriously underfinanced (or to put it in another way notoriously mismanaged), and this 4 billion per year is a hidden support from the government to the station. The price for this? They loose their archives, or that part that was not stolen in the last two decades. The National Audiovisual Archive makes these materials available at dedicated terminals set up in libraries. Wow. Talk about open access to materials the taxpayers had payed for at least twice: at the production and at the sale.
Michael Geist has an excellent piece on the alternative business models the online ditribution allows for individual creators:
Video and the Internet an Explosive Mix: ” Released for free on the Internet in early June, Globe and Voltz are featured combining 101 two-litre bottles of Diet Coke with 523 mentos. Less than two months after it was first posted, the video has attracted an audience of millions and has become a commercial success story.
Filmed with a US$300 budget, it has already generated nearly US$30,000 in advertising revenue for the two creators. Globe and Voltz posted their video on Revver, a new video site that places a short advertisement at the conclusion of user-generated videos (Revver shares the resulting revenue with the creator).”
Sometimes I feel ashamed (dont forget to scroll down on the target page to see why) for spending my time with copyright issues while in the world outside the wars in the middle east, escalating conflicts over energy supplies, the global ecological catastrophy we are heading to is happening, and instead of doing something for those issues I am in a comfortable, air conditioned room thinking about the rights of artists and users. Seems like entertaintment compared to what is happening out there right now.
But I am more worried when it comes to the assessment of the results of the G8 summit: pump more oil , ignore the ecologic consequences, turn a blind eye to the middle east and the developing nations and strenghten the IP protection – this is how the result of the meeting of the world’s strongest people can be summed up.
Anyway. The world leaders have issued the document”Combating IPR Piracy and Counterfeiting‘ in which they say: “We consider it necessary to give priority to promoting and upholding laws, regulations and/or procedures to strengthen intellectual property enforcement, raising awareness in civil society and in the business community of the legal ways to protect and enforce intellectual property rights and of the threats of piracy and counterfeiting, and also to providing technical assistance in that area to developing countries. Close cooperation between law enforcement agencies, including customs authorities, is also of great importance.” This means more FBI raids in Hungarian university campuses, and i guess more publicly financed police squads patrolling the interests of the entertainment industry (A police unit dedicated to combating movie piracy and those responsible for the manufacture and distribution of pirated films has launched in London. – BBC) Thank You, just what we need.
One of the first victims of this can be the russian AllOfMP3.com, which is a legal service selling music and paying royalties under russian copyright laws. So that is the problem with allofmp3? “The labels demand, and get, between 60 and 85 cents wholesale for each music file. This means iTunes, for example, wants £9.79 (almost $18.20) for an album where an AllofMP3.comn typically pays only about £0.75 (about $1.40) for a download. ” (P2Pnet)
We are talking about information products here. The marginal cost of any song in mp3 format is very-very close to zero. So what is the reason behind charging 1 dollar/song, and puuting this on the agenda of G8? I tell you: GREED.
July 14th, 2006| economics | Comments:Kommentek: 0
The great thing in being in DC is that I can attend meeting like this:
The Great Debate: What Is Net Neutrality?
Featured Speakers: Vinton G. Cerf, Vice President and Chief Internet Evangelist, Google Dave Farber, Distinguished Career Professor of Computer Science and Public Policy, Carnegie Mellon University
Moderated by: Carl Malamud, Senior Fellow and Chief Technology Officer, Center for American Progress
Net Neutrality has become a hot issue this summer in Washington, with ominous cries of impeding doom if we don’t do something. Discussions in the House and Senate have become more heated, and coalitions are forming through the internet. What are the real issues? The Center for American Progress is pleased to present a debate on this important issue featuring two Internet experts, both known for their pioneering work on creating the Internet and for their ability to explain technical concepts to non-technical audiences.
More here. Report will follow.
PC Pro reports that “P2P downloads made up 18 per cent of the digital tunes, with a further 11 per cent copied from friends’ CDs’; 65 per cent were ripped from purchased CDs with the remaining six per cent from paid-for download” in the UK. The study was done by British Music Rights (BMR), “an umbrella organisation representing a number of composers’, songwriters’ and music publishers’ bodies.”
These numbers seem to be a bit low for me, but this is not the point now. BMR wishes to use these numbers to push for a licence fee collected from hardware manufacturers and ISPs. I quess I can understand that, this is where cash is abundant, fight for a stake where there is a bounty.
But, the name they have coined:Value Recognition Right, is a telling us about an intent of making telcos and ISP’ part of the content value chain. This not only is damaging of Net Neutrality, but serious intrusion of the privacy of the users. Someone watching my packages, peeping into whether they are part of an illegal mp3, and metering these packages? Lobbying for rent seeking, instead of trying to create economic/legal/cultural models to gain revenue on the right of their own? Come on, this is plain wrong.
For accessibility reasons mentioned in my previous post for those of You, whose local library doesn’t carry WSJ, or you dont have a credit card or the necessary means to pay for that article, here is a reprint of a copyrighted WSJ article. The rest of you, go and buy it, so they can write such articles in the future.
“Picks Rare Art Films Surface Online By IAN MOUNT July 8, 2006; Page P2
A groundbreaking experimental Man Ray film, made in 1923, is now available for anyone to watch free online. It isn’t on the Web sites of the Library of Congress or the Internet Moving Image Archive. But you’ll find it at both YouTube and Google Video, two amateur-video-sharing sites. Increasingly, rare and avant-garde films are showing up on sites like these, best known for hosting homemade video spoofs. On YouTube, there are 1969 art videos by Nam June Paik, a 1967 student movie by George Lucas and an iconic 1930 film by Luis Buñuel and Salvador Dalí, as well as a clip of Dalí in a chocolate commercial (pictured).
It’s the latest reflection of an online culture where fans can function as curators of digital entertainment, bypassing libraries and museums with their own collections of music or movies. In many cases, these rare film clips are posted by amateur film buffs who’ve scooped up film reels or rare VHS tapes from eBay or local sales, and then digitized them for online viewing. A handful of Web sites and blogs, such as the Greylodge Podcasting Company (www.greylodge.org/gpc), link to the clips, many of which aren’t available on DVD.
The posting of these rare films can raise legal issues, however. Some of the films are still under copyright, and will be taken down if a copyright holder objects. Two short films by director David Lynch, for instance, were recently removed from YouTube when Mr. Lynch’s production company complained. People who post these films say they’re only trying to increase awareness of overlooked cinematic gems, and say they receive few complaints. Because the posters generally aren’t profiting from the film clips, and aren’t cutting into anyone’s profits in cases where the films aren’t sold commercially, lawsuits over these film clips are rare. “Is George Lucas going to spend money chasing down his grad-school films? Probably not,” says attorney Daniel Harris, who heads the intellectual-property group at the law firm of Clifford Chance in Menlo Park, Calif. HOW TO FIND IT: For an index of rare films on YouTube, go to http://www.greylodge.org/gpc and choose “link dump” under “categories.” — Ian Mount”
(Note: CC licence does not apply to the WSJ article).
Well, this is very much like the point i am trying to make here. A Nam June Paik video piece might be interesting for 1620 people worldwide, and that might be enough to make a business model on. But aggregating this demand on the physical infrastructure is impossible. The question whether all of these 1620 people would be willing to pay for watching the film is yet to be answered. But the risk of the answer being no, might be a pretty high entry barrier for copyright owners when it comes to digitizing the archives in large quantities.
But what is costly and risky for one entity is cheap, easy, (but not quite) risk-free for the users.
Distributing the costs of digitization among the network members is a wise choice, even if it means you have to think about copyright in different terms.
Hollywood started experimenting with sellinbg movies online and offline using very different prices. In the UK “Universal Pictures and Wippit, the music file-sharing site [offer] Universal films on the day of DVD release. As for pricing, new releases are going to cost £19.99 with older films costing £4.99. Whilst this might look incredibly expensive on the outset, Universal notes that buyers will get three versions of the film. One for a computer download, one for a portable device and a hard copy through the post.” (source: bit-tech news).
Meanwhile according to p2pnet in a galaxy far-far away “Warner Bros is selling “selected” movies for a mere $2.75 in major Chinese cities.” They aim to gain some market in a country where illegal copies costing less than a buck are ubiquitous.
So let me start listing the factors of cultural accessibility:
– affordability
– availability on time – no more release strategies set by the producers?
– physical accessibility – download online, or buy it in a store, or rent it or go to a library?
and most probably:
– cultural capital – now simply substituted by marketing.
“The reason why piracy’s come along is that there weren’t enough products at the right price soon enough,”– Tony Vaughan, managing director of CAV Warner Home Entertainment Co, Warner Bros’ joint venture distribution company in China.
Write that down.
Derek Slater was lucky enough to receive a copy of Andersons book the “The Long Tail“. In his review he mentiones one statement:
“Hollywood economics is not the same as Web video economics, and Madonna’s financial expectations are not the same as Clap Your Hands Say Yeah’s. But when Congress extends copyright terms for anothe decade at the request of the Disney lobby, they’re playing just to the top of the curve. What’s good for Disney is not necessarily what’s good for America. Likewise for legislation restricting technologies that allow digital file copying or video transmissions. The problem is that the Long Tail doesn’t have a lobby, so all too often only the Short Head is heard.”
I am happy to read this. I would continue this line of thought: What’s good for America is not necessarily good for other big cultural entities (like for example the French, see their effort on “Cultural Exception“), and what is good for the French is not necessarily good for small languages and cultures, like Hungarian.
Different country sizes, different number of native speakers, GDP per capita, different scope of cultural markets, different systems of cultural production and distribution.
To what extent does the uniform global IP legislation leave space for local specifities? Can they, shold they be regulated in a single policy space? I hope to have answers in a few months.
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