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"Introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well-established distribution mechanisms."
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 380 F.3d 1154, 1167 (9th Cir. 2004), rev'd, 545 U.S. 913 (2005) |
| | McLuhan added nothing here but a toney quotation: it's exactly the point Woody Allen was making in the movie. Why not drop it and use the space for something of your own? |
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> | I might have set myself up for the Annie Hall reference, but I think it's a good top level perspective to take and then move down towards how it applies to modern legal IP systems. As I re-read my post, I realize I need more focus on some sort of issue or point, so instead I'll focus on the "sale" "license" distinction embodied in the recent FBT Productions v. Aftermath and how the changing technology has come back to bite some of the record labels who gave different royalty rates based on the type of transaction |
| | With the invention of the sound recording, music changed from an experience that could only be heard live (or on the radio) to a commodity that could be owned. Consider that in 1910, prior to the creation of sound recordings, 374,000 pianos were manufactured in the US for use in the home—by 1984, the number was 206,000 (pianos were the only way to create music "on demand").
No, not the only way. |
| | Thorstein Veblen is the economist you need
here. |
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> | Not the only way, I agree. Will change it. But it's a useful example (when not paired with hyperbolic qualifiers) to show how the experience of "music" changes based on the technology to consume it |
| | The commoditization of sound recordings provided a limited amount of content to the purchaser, who could then listen to it at his or her convenience. Since records were relatively expensive and entailed a high marginal cost for those with limited resources, consumers selected small amounts of music to own based on personal taste and the promotional reach of each artist.
That's a pretty crabbed |
| | of that account, let alone the whole of the argument, you made it
up. |
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> | Instead of small I should use a word such as "limited". The point is that you can't buy everything, so you must make a choice based on available options. Unfortunately our choice menu is often limited, so we must rely on things like word of mouth, personal knowledge or promotion |
| | The "record" defined the business model of the music industry, which consolidated to form four major multinational profit-maximizing corporate record labels that collectively owned over 80% of sound recording copyrights and accounted for more than 77% of all retail music sales by 1998. These labels also owned ancillary businesses such as the distribution network to reap huge profits. The music industry thrived under this system until the late 1990's, when technology destroyed institutional control and made established revenue streams obsolete (practically overnight).
You're forgetting the |
| | institutional control and made established revenue streams obsolete
practically overnight. |
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> | These changed weren't "transformative" but "incremental". I'm looking at a similar change from sheet music to recordings that essentially destroyed Tin Pan Alley. See Steve Lawson, Transformative Vs Incremental Change, MUSIC THINK TANK (Nov. 14, 2009), http://www.musicthinktank.com/blog/transformative-vs-incremental-change.html |
| | These three technologies, 1) p2p file sharing (distribution); 2) MP3 compression; and 3) increased storage capacity (the iPod and other similar devices) had a profound impact on the way consumers interacted with music. Previous generations had viewed music as a commodity to be bought at a store, as one would buy a car or furniture.
Well, 1.5 generations |
| | of the previous 1.46+/-0.27 generations relevant?
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> | We're looking at music in its modern conception, as well as analysis of the next few generations (but possibly before we get to universally free content) |
| | With "free", albeit illegal, access to an infinite digital library, modern consumers began to accumulate huge collections of previously inaccessible or prohibitively expensive music from a wide variety of artists. Importantly, consumers would have never bought the music from many of these artists in the form of a CD.
How do you know this? |
| | situation, or to a problem requiring solution.
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> | That is true, but you're missing my point. I may be myopic in limiting my research to my own generation, but through personal experience with college campuses and other young people, I know that many individuals who amassed collections of +10,000 songs (and I don't think that's unusual). This is simply not feasible with physical mediums, think of how much space it would take to store 1,000 CD's! I know people who share are more likely to buy CD's-- but the amount of music owned or pirated is now enormous compared to previous generations |
| | As sociological expectations changed and consumers began to expect to hear any song on demand, music shifted from something acquired to something accessed. No longer were consumers forced to savor an unowned song as one would savor a sunset without a camera—-new technology (especially the advances in mobile telephony and storage capacity) fundamentally changed the entire business model, but record labels stubbornly refused to accept the new media landscape, especially facing the diminishing importance of their control over the business. As noted by the EU Commission, "The failed music industry business model causes online piracy."
Not noted by the |
| | total nonsense for which no evidence whatever is available.
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> | Ownership doesn't always translate to exclusive right to share at a price. If there is unlimited access but not cache availability, thee are still ways to monetize the product without charging consumers directly. The fact of the matter is I can't get what I want for a reasonable price or in a reasonable manner, and that is why I'm more likely to pirate music. |
| | While online piracy ran rampant through the 2000's, the record labels frantically tried to retain their control over all aspects of music from studio to (digital) shelf. They created their own online stores; licensed catalogs with incredibly burdensome DRM technology; and viciously prosecuted their former consumers for file sharing, but ultimately none of these strategies sated the growing consumer thirst for (illegal) universal music access.
Recently, the growth of "streaming" technologies has provided a new monetizable distribution mechanism for the universal access business model. Consumers are now able to access any song wherever their phone has a wireless connection, making the "celestial jukebox" a reality, but labels continue to exert unnecessary control over music consumption. |
| | downloads of unprotected data files people can get quickly from
thousands of other places? |
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> | I take it you don't think streaming is the future, but I'm arguing streaming is the present |
| | The labels' "control" is a function of the IP protection schemes that have evolved over the years. Most copyright legislation is not the result of some well thought out plan, but instead a sort of compromise with the content industries. "Streaming" IP rights, found in §114 of the copyright act, provide an illustrative example of how the record labels abuse their market position in a concentrated industry.
Any OnDemand? service such as Grooveshark or Spotify needs to attain blanket licenses to each major label's entire catalog to make their service competitive. Without one of the major labels' permission, the service will not be able to offer "universal" access and faces a competitive disadvantage. Recognizing their superior bargaining power, the labels have abused their position to the detriment of new, innovative companies. When the interactive service Sonific closed in 2008, CEO and co-founder Gerd Leonherd blamed the intransigence of the record labels in licensing their catalogs as the main reason for the company's failure: |
| | intellectual aridity to be spending too much time worrying about the
particular convulsions in the death throes. |
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> | I take it you're referring to the joint course next semester with TW and the B School Professor? I don't think I should ignore current conditions because you think there is an inevitability of it all falling apart. You say it's an "absolute guarantee of intellectual aridity" but you don't explain why |
| | There are countless startups providing access to any and all music streams without any license whatsoever. However, when we approached the major record label decision makers in order to obtain licenses for some of the music in their catalogs we have routinely faced demands for very large cash advances and fixed per-stream minimum payments, pressure to give them 'free' company equity, and requirements of utterly bizarre usage restrictions. It seems that the industry's major stakeholders still prefer this turf to remain unlicensed rather than to allow real-life, workable and market-based solutions to emerge by working with new companies such as Sonific.
For the companies that have managed to secure licenses, the terms are far from fair. Not only have the labels reportedly taken an equity stake in these companies, the compensation paid to non-major (independent) labels is substantially less, meaning an artist will make less money if they are not signed to a major. In addition, many artists are hugely undercompensated for their popularity on these services, while the labels get paid twice (royalties in addition to their equity stakes). Not until the labels are forced to provide their catalogs at a reasonable price will consumers truly benefit. |