A Copyfighter’s Musings

So with the general review done, let me note one point from The Long Tail that is particularly relevant for copyfighters.  Some argue that draconian copyright legislation, while pushed for primarily by major entertainment companies, is actually about protecting the institution of copyright law as a whole and thus all artists, big and small, hit or niche.  But as Anderson points out:

In fact, while some artists from the Head and Tail certainly share Hollywood’s sentiments, many of both groups do not.

More broadly, such restrictions are bad for our economy as a whole and tremendously harmful to innovators and consumers as well.  We do have a lobby, but we all have to make our voices heard now.

Filed by Derek Slater at 2:27 am under General news
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Chris Anderson’s The Long Tail is coming out soon, and he was nice enough to send bloggers review copies.  You’ve probably already read his earlier article, so I won’t spend time summarizing it — in fact, if you’ve read his article and all his blog entries, you probably don’t need to read the book. 

Anyway, here’s a quick take: This may be the most important work on digital media written in the last two years.  That doesn’t mean the book says something wholly novel or that this will be the one book-about-the-future to rule them all.  Rather, Anderson has made a critical contribution by matching empirical evidence with leading edge cases, pointing out how a long-theorized future is now becoming the present while also recognizing how past projections now need to be rethought.

The Internet and digital technologies have made it far easier to produce and access niche content, changing the power held by traditional mass media gatekeepers — that’s a familiar notion by now.  As The New Yorker’s review points out, Alvin Toffler among many others have made similar insights. Anderson acknowledges such thinkers early on and throughout his book.

But many other authors have started from macro-trends and then tried to deduce particular effects on our society. In contrast, Anderson generally builds out from particular cases (e.g., Amazon, Netflix, and Rhapsody) to a theory of how business and culture as a whole will change. More than naked anecdotes, he presents the most in-depth look at these companies’ sales stats yet.  Anderson’s not just talking about some far off future world — he’s describing our world as it exists today and tomorrow.  In that way, he’s closing the loop on earlier futurists’ visions; at the very least, he’s helped put to bed once and for all many myths built around the mass media world and “hit-ism.”

At the same time, Anderson tempers and adjusts the futurists’ visions.  For instance, Anderson is quick to point out that abundant choice isn’t very useful if consumers can’t adequately navigate those choices with “filters” and recommendation tools.  He also notes that it’s critical to aggregate both the “head” and the “tail,” both hits and niches, so that consumers can start navigating from a comfortable place. All this may seem obvious, but go back just a few years to the time of the original MP3.com’s clutter of niches.  Certainly many of the articles about that site overstated how it would change the game for independent artists.

Most importantly, Anderson doesn’t confuse evidence that niches are becoming more prominent for evidence that mass culture is going to totally die off.

This is a key clarification, one many earlier writers struggled to make well and many critics of Anderson seem to gloss over. Sometimes even Anderson isn’t particularly clear — for instance, he repeats that we’re becoming a culture of niches and opens the book by describing a hypothetical typical teenager jumping effortlessly and continuously between mass culture and random niches, but it’s not clear to what role mass culture is playing.  By book’s end I think he makes clear that his analysis and predictions are actually more modest yet no less significant.

Anderson certainly doesn’t avoid some relatively speculative projections.  Because his stats derive from online entertainment content distributors, his predictions about other “long tail” businesses feel weaker.  The New Yorker’s right that the changes we’re seeing in the music industry won’t necessarily fit other businesses.  But by carefully considering these particular leading edge cases, Anderson’s focusing our attention on where to look next, and that’s quite useful.

I could make other quibbles (for instance, he could have made his chapter countering “Paradox of Choice” author Barry Schwartz much stronger, following thinkers like Virginia Postrel), but on the whole Anderson nails it.

Filed by Derek Slater at 12:32 am under General news
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Mike Gartenberg blogged some common sense on the HD-DVD v. Blu Ray.  Bottom line: like SACD and DVD Audio, these formats might never catch on and thus the format “war” may be entirely irrelevant. As Michael points out, HD and Blu Ray don’t offer significant added value compared to typical DVDs. With hardly any content available that can make the quality difference noticeable, consumers have no reason to shell out for new hardware.  The heightened DRM restrictions certainly don’t help matters.

A good friend of mine is a wholesale AV dealer, and he offered much the same conclusions. He pointed out that older movies look downright crappy on an HD or Blu Ray player — it makes imperfections far more apparent.  With that in mind, why are “Goodfellas” and “Blazing Saddles” among early releases on HD-DVD?

Filed by Derek Slater at 12:04 am under General news
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Bill Patry: “if I have to read any more about John Locke and copyright I will puke.”

Hear hear — read the whole post, Does It Matter if Copyright Is Property?

Filed by Derek Slater at 10:56 am under General news
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Take action to stop the Corruptibles now!

Filed by Derek Slater at 1:22 pm under General news
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About 6 months ago, Gartner’s Mike McGuire and I published a paper called “Consumer Taste Sharing is Driving The Online Music Business and Democratizing Culture.” The paper argued, based on various data, that new taste sharing tools (e.g., playlist sharing, mp3 blogging, private group streaming) can help support the online music distribution business and create important promotional opportunities.  It recommended that rights holders and intermediaries embrace novel sharing tools and predicted that they will play an important role in new services.

Now JupiterResearch has chimed in and apparently reached much the same conclusion:

This also aubstantiates a key trend seen elsewhere, including Gartner’s data — consumers are increasingly “content foragers” (as Mike calls them).  They take a variety of routes to find music and music-related information, often the shortest path at a particular moment.  Sometimes it’s iTunes, sometimes P2P, sometimes it’s a blog, or MySpace, and so on. 

This has important implications not just for recommendation tools, but also for access to and delivery of the music itself. As Mike and I wrote, “What has become critical in the market is being able to create initial demand and then finding as many paths to spread it as quickly as possible. What we are describing is an environment in which the ‘velocity’ with which a new song — or songs from a back catalog —can quickly get from initial distribution (or reintroduction) to the maximum number of paying customers.“

The music industry needs to embrace a fluid music distribution model, allowing individuals to use the acquisition method they want and listen to the music using whatever tools they want.  Cabining them within one particular service won’t cut it.  Whether that takes the form of a VCL model or something else, there would be significant business benefits to trying to accomodate these trends.

Filed by Derek Slater at 12:52 am under General news
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Last month, I pointed out several flaws in the proposed Section 115 Reform Act.  The Act is going to be marked up on Wednesday, and it is far worse than I thought.  Fred’s written up the details – long story short, SIRA could effect subtle but dangerous changes to the scope of copyright holder’s exclusive rights. Take action now to stop this bill in its tracks — music composition licensing needs reform, but the public’s rights shouldn’t be sold out in the process.

Filed by Derek Slater at 12:38 am under General news
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The LA Times reports that “Sharing [Is] Still Divisive,” and this time the tool stirring the fires is LaLa.com, which allows individuals to trade their own CDs with each other.  Someone recently wrote me to say LaLa.com is based on “facilitating piracy.”  It’s sad that any time a novel sharing service comes out, the first instinct is to demonize it rather than find a way to embrace and monetize what music fans so obviously want.

LaLa.com is just like eBay in two senses. First, LaLa.com enables a more efficient market by reducing transaction costs in ways not possible in the offline world.  Second, people already had the ability to sell their CDs via eBay — LaLa just modifies the model.

Don’t get me wrong — some are going to use LaLa.com in illegitimate ways, but many will use it for legitimate purposes. People who bought their CDs — and thus already paid licensors — have
the right to give away their own property in this way.

In today’s world, almost everything facilitates piracy to some extent.  Computers
make copies; the Internet distributes copies. There is P2P, there are
darknets, there are sneakernets, there are campus lans, in 5 years
people may be swapping HD-DVDs worth of music and in the next 15 years maybe
a single keychain memory stick will hold the entire universe of recordings.

Artists will get paid in this world, but they’ll get paid differently and, I would contend, more. 
Lala is certainly part of a larger structure that’s upsetting settled
business models.  That doesn’t mean that it is simply “facilitating
piracy.”  To define it as such is unfair.

Regardless, given the myriad other thoroughly convenient methods people
can unlawfully acquire copyrighted content, excuse me for not worrying
about Lala as a mortal threat.  Downloaders (as opposd to uploaders) on
P2P have little vulnerability.  Swapping CDs filled with mp3s is far easier and costs less than using LaLa.

And for what it’s worth: LaLa is giving 20% of its revenues to artists. 
That’s a better deal than they ever got from used record stores.  What’s more, LaLa is reportedly losing money on every CD trade. 
It’s planning to use CD trading as a loss leader to sell CDs and online downloads — that’s right: LaLa only survives if it helps artists sell more records.

What will it take to embrace sharing and the sales-driver it could be?

Filed by Derek Slater at 1:44 am under General news
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Update, June 6, 2006: Along with the many flaws discussed below, this draft bill of SIRA would do serious damage to fair use – take action now to stop this dangerous proposal!

Yesterday, a House subcommittee held a hearing on proposed reforms to Section 115 of the Copyright Act.  It’s a set of music copyright reforms that are disappointing in all sorts of predictable ways.  IMO, it’s also unlikely to pass in its current form.

For those joining the party late, licensing compositions for online and many other novel uses is an absolute nightmare for reasons described here.  In sum, it is unclear when the section 115 mechanical compulsory license (for distributing recorded copies of compositions) is applicable and over time it has grown wholly unworkable.  More importantly, many services are forced to pay two sets of entities for one particular use of one composition, as publishers through Harry Fox Agency (HFA, the mechanical licensor) and the Performing Rights Organizations claim applicable rights.

One particularly right-thinking approach to this problem was the Register of Copyright’s proposal last year.  It would have guided the market to consolidate reproduction, distribution, and performance in particular entities, probably the current PROs who could offer blanket licenses to all the songs in their catalogs.  Rather than simply solving the licensing issues of the services that brought this issue to the fore — primarily on-demand streaming, which HFA claims requires a license for buffer and server copies — the Register’s proposal would have solved problems for tomorrow’s technologies. After all, in 5 years, interactive streaming may be rather irrelevant.

And thus, in 5 years, Section 115 Reform Act (SIRA) may be irrelevant too.  SIRA does replace the out-dated per-song compulsory license with a blanket license.  But it only extends the section 115 license to cover full downloads, limited subscription service downloads that time out, and on-demand streaming.  It doesn’t clarify what implicates performance or mechanical rights.  Podcasters still will be forced to pay HFA and PROs and face hold-out problems, and so will tomorrow’s novel uses.

SIRA would mean that non-interactive webcasters no longer have to pay for their server and buffer copies (even though interactive webcasters would be forced to).  But SIRA states that any service that enables time-shifting — such as Mercora — still has to pay the compulsory license for these copies. Why should webcasters have to pay extra for helping music fans make a use that, using non-affiliated software, they could make for free?  And why should that payment be related to the ephemeral and server-side copies license?

SIRA minimizes the number of licensors that one would have to go through, by designating one licensing entity (the General Designated Agent) that will by default be able to license all works that are not registered with a licensing entity.  All that means is that HFA, which has been repeatedly criticized for its many inefficiencies, has its place in the value chain secured.  Given their market share, they no doubt will be the GDA, so consolidation of licensing (as under the Register’s proposal) is even more of a pipe dream.

SIRA also requires the DAs to create an electronic searchable database, accessible to the public, that, theoretically, should help people track down licensors and reduce transaction costs. Of course, HFA has been promising to create and improve its licensing system for years, dragging its heels all the way. Given that the language here isn’t particularly strong (allowing for “reasonable confidentiality”), excuse me for not being particularly optimistic.

While it doesn’t solve the root problems facing the music industry and its licensing processes, it will clear the way for current subscription and download services. So why won’t this pass?  Jon Potter, representing music service providers, and the National Music Publishers Association’s David Israelite largely support the Act and used the least confrontational language in any of the many hearings they’ve had. However, RIAA strongly opposes it. 
First, SIRA doesn’t apply to physical and online-offline hybrids. Second, record companies are cut out as pass-through licensors for digital music services (i.e.,
collecting the mechanical monies from Apple or Rhapsody and then
distributing it). In other words, they want to protect the dying physical product revenue stream and they want their position in the online value chain entrenched, just like HFA’s. 

Expect these parties to keep squabbling over how to protect their power as intermediaries. Expect very few beneficial policy changes to occur. Expect disappointment with composition licensing reform.

Filed by Derek Slater at 12:43 am under General news
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Here we go again — tomorrow there will be a hearing on a new effort to reform section 115.  Patry’s blog has the scoop.  Will offer comments of my own after reading the bill.

Update, June 6, 2006: This draft bill of SIRA would do serious damage to fair use – take action now to stop this dangerous proposal!

Filed by Derek Slater at 11:32 am under General news
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Somewhat off-topic, but: ESPN.com announced today Sportscenter Home Video:

Wait – wtf is VHS?

This is a pretty boring way of trying to engage viewers.  Why not help them share their home movies with each other?  Why not host user-produced local sports shows?  It ain’t going to compete with the actual Sportscenter – it’s just going to increase the overall value of ESPN.com and its brand.

Filed by Derek Slater at 9:43 pm under General news
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Interesting conversation going on here and here regarding whether net neutrality regs would get in the way of services that require lots of bandwidth, like high def video.  I don’t mean to weigh in favoring or opposing net neutrality regulation, and I don’t want to rehash the big picture trade-offs at issue here — how enabling the sort of market experimentation by ISPs that Thierer lauds could come at great cost to innovators at the edges of the network. (FWIW: Christopher Yoo and Tim Wu’s recent debate in Legal Affairs lays both sides out nicely.)

Instead, let me briefly suggest how Thierer may be overstating the threat to delivering large files.  Tim Lee rightly points out that there are ways to assist distribution of large files without discriminating in favor of particular service providers’ packets. I don’t think the Akamai-style caching Lee describes is what net neutrality legislation advocates are concerned with, since it doesn’t monkey with the end-to-end principle and thus does not enable the discrimination typically at issue.

Providing more bandwidth to Net users may provide a sufficient — and perhaps superior — solution.  The VP of the Internet2 project stated the following at a House hearing on net neutrality: (found via David Isenberg’s presentation at Berkman)

Filed by Derek Slater at 1:12 am under General news
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Pleased to see Napster’s new free service, I sent my brother a link to Vitalic’s OK Cowboy, since I hadn’t had a chance to play it for him during our last visit.  He wrote back to say that he could still only get 30 second samples.  Being the little brother that I am, I simply took this as evidence that Napster’s service was not yet idiot-proof. I wrote back remarking on the lopsided way that intelligence can be distributed amongst siblings.

But I should have known better.  Contrary to what I said in my last post, not every song in Napster’s catalog is available for full length playback.  My brother quickly ran into another gap in his next search. Now customers will have to check four different attributes on every song: free streaming, available for a la carte purchase, Napster Unlimited accessible, ready To Go. You’ll likely find all possible combinations.

What a nuisance.  Napster’s new free streaming is still a potentially huge announcement, mostly because I think Yahoo and Rhapsody will do it even better in a matter of months.  But even they probably will have these gaps, as they’re a current problem in all subscription services.

Filed by Derek Slater at 2:28 am under General news
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A prediction of mine actually came true for once.  David Card has the full run down – stepping up the competition with Rhapsody, Napster is offering free streaming of its entire catalog.  Every song can be listened to 5 times.  You can access the service through the client software, but you can also use their website with a Flash app that works on Linux and Mac. However, the web streams are of lower quality and every three songs there’s a short advertisement.  Another downside: unlike Rhapsody, Napster has apparently not made its subscription service available via its website. (I’m not sure why this would be, given the flash interface should work just fine for that too – but the site still says “PC Only, Windows XP/2000 ….”)

Napster is also imitating Rhapsody’s linking tools with Napster Links and adding some community features called Narchives. What’s more, they have apparently started an affiliate program where they give you a kickback for placing ads and Napster Links that lead to purchases or subscriptions.

Though Napster’s website is still messy and the Flash interface isn’t great, this could be a pretty big deal.  Allowing full streams radically improves the try-before-you-buy, music discovery experience.  It also will greatly enhance peer recommendations. Want to tell your friends about the great band that’s coming to town?  How about music blogging?  Napster Links can help you to introduce others to music.

But Napster has made a big mistake by not allowing Mac and Linux subscribers – they can’t convert those users from the free streamers to paying customers.

Filed by Derek Slater at 4:03 pm under General news
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According to DesignTechnica,
Philips has patented a “technology … [that] would prevent users from
changing channels to avoid watching television commercials as well as
prevent viewers from fast-forwarding through recorded advertisements.”

Why would Philips invent such an absurd restriction when it will
never be voluntarily licensed? After all, in a competitive market,
technology companies who adopt Philips’ patented system will be shunned
by customers; no one wants a device that says, “Now improved — blocks
changing channels during commercials!”

Perhaps Philips believes that, at some point in the future,
Hollywood might push for a government mandate forcing technology
companies to incorporate anti-skipping technology. If that happens,
this patent could be the federally-set standard, and tech creators
would have to pay Philips every time they want to sell a new device.

Instead of wasting its time with this anti-user opportunism, Philips
should focus on building technologies that satisfy its customers.

(Cross posted at Deep Links)

Filed by Derek Slater at 9:51 pm under General news
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