Those Other Alternative Biz Models

The current trend in digital media services is the Digital Music Store – more or less, you pay to download or stream copies of songs.  Whether you pay by the song or by the month, you’re paying that particular service to give you access to those copies. Though people now have the ability to spread copies far and wide, these services hope that that won’t be a major problem.  To an extent, the Stores are predicated on a combination of technology and law making P2P distribution and downloading significantly costly to the user.  In this way, they imagine a future in which copies can still be controlled.

ACS’ jump off from a different spot.  For one, you wouldn’t really pay for access to a particular service in the co-op or mandatory models (note: this a new draft from Professor Fisher).  Anyone could be a streamer or download service, so long as they counted the relevant downloads.  Also, they try to build on rather than fight against the ability to make copies of digital media.  But they don’t do so by simply accepting that the exclusive right to copy and distribute are dead.  Rather, they try to monetize those actions in alternative ways.

In terms of current dialogue, I’d say these two models dominate the current landscape.  Before, people talked more about a myriad of other alternative models that accepted that copies could no longer be controlled and thus focusing on that revenue stream should greatly lessened if not abandoned in the digital age.  Raymond Ku and Mark Nadel (among others) have fleshed out the ideas well. Mary explains the basics, and many models are listed here by the EFF.  Among them: tip jars and donations; live performance, merchandising, and other complementary products generating revenue; ad-driven models; and charging for the first copy only (see: Digital Art Auction and Street Performer Protocol).  Even Magnatune, which sells copies of albums, follows this pattern to some extent – the sales are almost donations, because the songs are CC licensed, there’s nearly unlimited high qualify try before you buy options, and you choose your own price – basically, Magnatune is banking on fans in niche markets will be highly devoted to the artists they support. 

Two things occur to me about these models.  First, they are both more and less sustainable than some people in the past have asserted.  When I first read about these models, tip jars in particular (I don’t know when), they were talked up a lot – when Stephen King stopped writing his book online, people said that these schemes were pure hype.  The truth is likely somewhere in between.  These models can make money – the question is how much and for whom, and what meaning does that have for our media environment. 

The second point, then, is just that.  How far do these models go towards creating a thriving artistic culture? Start with these general counterarguments (pg 74). Because of cost savings, one need not necessarily replace the entirety of the revenue streams from copying and distribution; however, those are sizeable streams to make up.  Perhaps we don’t need to make them up – we’re content with a lower amount of revenue and thus maybe a smaller, or at least a different, media market.  Fine, many musicians don’t currently make money off of selling copies anyway, but many artists also don’t make much money from the other streams.  Are we expecting a tiered and varied industry, with some nationally popular artists, some regionally, many indies, et al?  Or will we see a ton smaller indies be sustainable but unable to make revenue, exposure, and success go beyond that?  Will we have a lot of people like Magnatune’s artists, focusing on niche markets but not moving above, and are there any negative consequences of that?  And what about the consequences of having artists overly dependent on selling merch or pushing ads – aren’t only certain types of media and artists capable of doing well this way? 

There is no satisfactory or unsatisfactory answer here.  Rather, I want to get a sense of why people think these models will or won’t work, and what it means for them to work.  What does that world of alternative biz models look like?

Digital Media Trends in Asia-Pacific

Renny Hwang reports in what one will be one of many Digital Media Project papers coming out in the near future.  Highly recommended reading.

Two Under the Radar EFF Items

1.  “Record Industry Cuts Corners in Crusade Against File-Sharers
Public Citizen, Electronic Frontier Foundation and ACLU Say “File Lawsuits Properly”. The groups do not question the seriousness of the illegal activity alleged by the record companies, but object to the process the companies have tried to use to obtain the file-sharers’ identities.”

I’m glad they are sticking to their guns and ensuring that this entire process is carried out as fairly as possible.  At the same time, the more they push, the more they leave themselves open to attacks that they are really trying to protect infringers.  An unforunate consequence, but one that I expect they will struggle with more and more.

2.  “MacArthur Foundation Awards $600,000 to Electronic Frontier Foundation
“There are a number of influential members of the entertainment industry that use industry standard setting meetings – such as the Digital Video Broadcasting Project in Europe – as opportunities to mandate technological features that control digital media, such as devices for digital television that limit the user’s ability to copy programming for personal use or to skip commercials,” said Jonathan F. Fanton, President of the MacArthur Foundation. “By participating in such meetings, the Electronic Frontier Foundation is working to protect the rights of the user and ensure that future uses of technology are not restricted by the industry.””

It is impressive to see the MacArthur Foundation throw its weight behind this project, among others, in this field.  One, two, three years ago – would you have expected this?

Wippit Good?

This article mentions a few new legit services that take advantage of P2P. Wippit seems particularly interesting.  It filters in content using audio fingerprinting.  The rest is a little hazy to me.  The company advertises that you can share filtered in files with others, but this article says you can’t.  Pretty sure the former is true.  The company advertises MP3 downloads, but that same article says it’s DRMed WMA.  Pretty sure the latter is true, at least with EMI on board.  According to EMI executive Ted Cohen (in an email to the pho list), songs are currently only downloadable from EMI servers, not from other peers.  What is really surprising is that you can supposedly keep all the songs after the subscription ends – these are not rentals; they are sales – I swear I read the opposite somewhere else, but the website attests to that, too.

So a little more research is needed. In any case, it’s heading much closer to blanket collective licensing – not quite an ACS, but similar in terms of the payment and distribution model.  A very interesting development indeed.

Expectations of a Closed Environment

One commenter questioned my statement: “How will people become accustomed to a digital world in which you have to rebuy all of your software players and music catalog whenever a better format, player, or service comes out?”  Yes, people have had to shift formats over time, but I think there are three countervailing factors at work here

1.  First, the old barriers don’t apply in the same way now.  Bits are bits.  You can’t upgrade a tape player to play CDs.  You can (theoretically) upgrade the firmware on your MP3/CD player to also play AAC.  You can’t turn your tape into a CD.  You can (theoretically) convert your MP3 into AAC to play it on a compatible player. 

2.  That said, I think people will only tolerate circumstances in which they actually get an improved sound quality, like moving from tape to CD.  Sure, if a new codec came around that sounded a lot better than MP3, people might rebuy their entire catalog.  But, unlike in the analog world, they wouldn’t necessarily have to do so to make use of a new player – they wouldn’t have to have one player for MP3 and one for New-Codec – they wouldn’t have to choose between Beta and VHS.

3.  Given that people are used to a world in which MP3 is ubiquitous, there is little reason for them to shift laterally to a codec linked to a proprietary DRM format.  I don’t see people becoming accustomed to the walls between iTunes, Real, and WMA-based services and players.

Reports on Grokster

I’ll add more later, but here’s one from the SJ Merc.  From this and reports on pho, I gather that that things went well – two judges seemed to be favorable to the P2P defendants.  Doesn’t mean much now, but it’s better than nothing.