Turns out that theverge does music reporting of sorts. their recent history of dubstep music (‘beyond lies the wub‘) contains two short passages that highlight the impact of digital technology on art (in this case dubstep music).

The first passage highlights how digital piracy killed the music industry might have actually driven the quality of music production in the past dececade or so:

“They cost nothing if you know how to get them for free, which most people did,” says Martin Clark. “The VSTs [Steinberg’s audio plug-in architecture] were available on peer-to-peer sites. So suddenly it’s democratized, right? You have zero cost to acquire a studio. You have this like, infinite [potential]. Anyone can be a producer if they can get a hold of these. From that pool you have a much larger pool to select who makes interesting music, as opposed to just who can make music. It’s no longer a question of whether you can make music, because the software is distributed, it’s accessible.”

On the other hand it seems that the same technology has also contributed to the decline of the very pirate radio stations which were once considered the backbone of London’s urban music culture. turns out that the same developments that allow pretty much everyone to become a producer, make running a pirate radio station a pretty silly exercise:

“It’s totally changed,” according to Boomnoise. “I mean, if you sit down at a computer with an internet connection, you can find pretty much anything you want to listen to, whether or not it’s in the radio format. And what happened was, I think with the internet was a shift from the local to the global, essentially, a shift away from having a very localized audience.”

Read the full article here

Had a bit of a deja-vu this morning when browsing through the economics section of friday’s NRC Handelsblad: Page two of that section contains a full page article (‘free jukeboxes against piracy’) on music streaming services such as spotify.com (click to enlarge, no online version available):

As you can see from the photo above, the article does come with a nifty info-graphic that illustrates how little artists earn from their music being available on services such as spotify (the number 4.882.758 in the green circle indicates how many times a single song needs to be played by users of spotify in order generate an income that is equal to the minimum wage in the Netherlands).

Now there is nothing wrong with this info-graphic as such, but there are two rather dubious aspects: the article is not providing any information with regards to the source of the data used and i had the strong impression that i had seen this info-graphic before (the deja-vu mentioned above).

A quick google query reveals that this was indeed the case: in april 2010 informationisbeautiful.net published a strikingly similar info-graphic (‘How much do music artists learn online?’) that obviously served as the basis for the illustration in the NRC:

The overall numbers are different, but that is simply the result of the fact that the NRC article is using dutch minimum wage (€1.416) as a reference point while the original used the US minimum wage ($1.160). this results in different sales numbers required to generate minimum-wage level income but for the rest the data used to illustrate the NRC article is identical (even worse they simply took the original artists revenue numbers that were expressed in dollars and simply re-stated them in euros).

It is bad enough that the NRC simply lifts these numbers from a website (which itself did took most of the figures from another blog, but makes that very clear by giving credit both to the originating blog and pointing out additional data sources) without giving credit. This is not only plain old-plagiarism (especially dumb if the subject of the article is ‘piracy’) but also grossly misleading: If the NRC article would have given credit to the source readers would have had the opportunity to take a look at the source themselves and would have learned that the figures presented by the NRC are missing an important caveat that is present in the original blogpost on informationisbeautiful.net:

Note: these figures do not include publishing royalties (paid to composers of songs). The full spreadsheet of data does though. You can see all the numbers and sources here: http://bit.ly/DigitalRoyalty

If you click through to the google docs spreadsheet with the full numbers you will see that if you count publishing royalties the amount of plays of a song on spotify required to make minimum wage is reduced by almost 75%. This still means that you need north of 1 million plays (which still is outrageous) but apparently 4.8 million required plays look a bit better when you want to illustrate an article.

This once again shows that the NRC really needs to realize that the days where they were the ‘quality newspaper’ more or less by default are over. Pointing out your sources is one of the key ingredients of credible journalism and unfortunately for the NRC it seems that new media outlets such as informationisbeautiful.net are lightyears ahead of the NRC here…

Not sure why this is happening, but it appears that commons sense is slowly starting to make a comeback in the discussion about copyright. Yesterday we had the British Prime Minster announce that his government is undertaking a review of the parts of the intellectual property laws in order to enable more flexible use of copyright protected works along the lines of the the US fair-use doctrine:

The second new announcement I can make today is to do with intellectual property.

The founders of Google have said they could never have started their company in Britain. The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States.

Over there, they have what are called ‘fair-use’ provisions, which some people believe gives companies more breathing space to create new products and services. So I can announce today that we are reviewing our IP laws, to see if we can make them fit for the internet age. I want to encourage the sort of creative innovation that exists in America.

This obviously is a huge win for Google (they have been preaching this for years to European and UK policy makers) and also needs to be taken with a huge grain of salt (the UK government basically ignored all the outcomes of the last review that called for less restrictive IP laws and even implemented changes that the review had advised against).

On the other hand the British MP does not seem to be the only high ranking official who seems to have changed his mind when it comes to copyright in the digital environment. Earlier Today Neelie Kroes, the EU’s commissioner in charge of the digital agenda gave a speech in Avignon in which she almost sounds like a copy-fightin-free-culture-activist:

Today our fragmented copyright system is ill-adapted to the real essence of art, which has no frontiers. Instead, that system has ended up giving a more prominent role to intermediaries than to artists. It irritates the public who often cannot access what artists want to offer and leaves a vacuum which is served by illegal content, depriving the artists of their well deserved remuneration. And copyright enforcement is often entangled in sensitive questions about privacy, data protection or even net neutrality.

It may suit some vested interests to avoid a debate, or to frame the debate on copyright in moralistic terms that merely demonize millions of citizens. But that is not a sustainable approach. We need this debate because we need action to promote a legal digital Single Market in Europe.

My position is that we must look beyond national and corporatist self-interest to establish a new approach to copyright. We want “une Europe des cultures” and for this we need a debate at European level.

you can read the full speech here (to be checked against delivery, but since she tweeted the essence here, here & here we can be relatively sure that she actually said this).

Again this needs to be taken with a huge grain of salt, since both the UK government and the EU commission are continuing to push for more restrictive IP rules through the secretive and totally not-evidence-based ACTA process, but maybe we are witnessing something like a turning point here. Another hopeful sign is that even the Americans are doing surprising things these days…

Just came across this brilliant foto while reorganizing my photo folder (i am locked away in a museum basement without any form of internet access: no wireless & no mobile phone reception):

I took this at a stall selling bootleg CDs at the Kwakoe Festival in Amsterdam southeast in the summer of 2006. To me it perfectly captures the essence of the revolution caused by napster when it launched 10 years ago (give or take a couple of weeks): If your work is not available on napster is is probably not good either. accept to be copied or become irrelevant.

Given that this has been going on it is stonishing how few people seem to have understood that this basic shift in how we relate to cultural goods has already happend….

Last Wednesday I attended the launch of ‘Adieu auteursrecht, vaarwel culturele conglomeraten‘ the new book by Joost Smiers. In this book he argues that (a) copyright is harmful, because it has led to large conglomerates dominating the production of culture and that (b) the world would be better off without copyright because it would be better of without these conglomerates and therefore (c) copyright needs to be abolished and the conglomerates must be broken apart. According to Smiers and his co-author Marike Schijndel this will lead to a level playing field for artists and other cultural producers and result in both a more diverse culture and better abilities for artists and cultural producers to live off their work.

Now I have not read his book yet, but I have listened to Smiers for a number of times, and he always looses me at the point where he assumes that the absence of copyright and conglomerates will quasi automatically lead to a more just distribution of attention and wealth among artists and cultural producers.

Regardless of his rather haphazard line of argumentation the public at the Balie seemed to like his ideas a lot (not really surprising since just about everybody can agree on the fact that the current copyright system is not working very well in ensuring that artists can live of their work, and the public that frequents these kind of events sure loves to see the blame laid on American cultural conglomerates) and there was no real discussion about the validity of his analysis or the nature of the ‘new business models’ that Smiers and Schijndel predict to emerge once we have gotten rid of copyright and the conglomerates (the last one being a bit of a shame).

During the non-debate (you were assumed to argue form a the perspective of a society without copyright and conglomerates) a number of people came up with arguments against copyright that were based on a variation of the argument that copyright restricts dialogue and is therefore a constraint on artists practices.

This argument is very much in line with a recent paper¹ by the Canadian copyright scholar Abraham Drassinower. In ‘Authorship as Public Address: On the Specificity of Copyright vis-a-vis Patent and Trade-Mark‘ Drassinower makes the argument that “copyright is not about copying, pure and simple” [p.205] but rather about the right of an author to be associated with his work. Or to put it in Drassinowers own, more legalistic language:

Thus, copyright is less an exclusive right of reproduction than an exclusive right of public presentation. [p.221]

Drassinower arrives at this conclusion by examining the differences between copyright law, patent protection and trademarks. From these differences he tries to distill which particular kind of wrongdoing copyright law sanctions and tries to prevent. According to Drassinower this is not the simple unauthorized use of the a copyrighted work by persons other than the author or his agents, but a very specific form of use:

Put in terms of copyright doctrine, we need to understand (1) that originality is not about the absence of use, (2) that fair dealing is not about the absence of originality, and (3) that therefore originality and fair dealing are not opposing impulses or exceptions to each other, but rather radically continuous and integral aspects of copyright law as a whole. The fundamental problem is that of grasping the nature of the continuity. […] Thus, copyright is less about a prohibition on copying per se than about a distinction between permissible and impermissible copying—that is, between saying things in one’s own words and merely repeating the words of another. Authorship is less about the absence of copying than about the cultivation and exercise of modes of imitation that amount to more than mere repetition. Copyright law can no more prohibit copying per se, than it can prohibit authorship. [p.208-9]

According to Drassinower the fact that copyright law regulates cultural production which he (and many of the participants in the discussion following the book launch in the Balie) sees as a form of speech (or dialogue) means that copyright law can’t exclude others from using protected works as part of their own engagement in this dialogue: “… Persons are entitled to use the works of others provided such use is consistent with the equal authorship of those others” [p.213]. According to this conceptualization of copyright law no harm to the original author is done as long as I do not present someone else’s work as my own work, but rather use it in a way where it is instrumental to my own undertakings.

This gets more interesting once Drassinower expands this argument and applies it to other types of activities regulated by copyright law. In the 2nd part of his paper he applies his concept to copying in the digital context and comes to the conclusion that the mere making of digital should not trigger copyright law, since it rarely happens in order to communicate the copied works as a work:

The distinction between the reproduction of a work in the physical sense and its reproduction as a work in the normatively relevant sense is also at play in the ongoing encounter between copyright law and digital technology. It is generally accepted, for example, that Internet browsing— which requires the making of temporary copies—is legal on the grounds that by posting the work online, the poster is granting an implied license to others to reproduce that work in order to view it. […] Whereas the implied license and public interest approaches more or less successfully cloak the rupture between copyright law and digital technology, the authorship as public address approach interprets the legal significance of technology from the viewpoint of a renewed understanding of the law – that is, of the nature of the right and wrong at issue. Because it dislocates the centrality of reproduction as the organizing principle of copyright law, the authorship as public address approach can find that the reproductions involved in browsing and caching do not amount to uses of the work as such. Instead, since browsing and caching² are neither implied licensing nor public interest exceptions, they constitute user rights precisely because they amount to non-authorial use. [p.227]

While Drassinower’s paper is somewhat complicated and lengthy³ I do think that his approach is well suited to bring copyright law back into line with reality: In a time where copying is one of the most basic cultural technologies it is more and more absurd (and inefficient) that copyright law even attempts to regulate the mere making of copies. The beauty of Drassinowers argument is that he does not depart from this observation but rather arrives at the conclusion that copyright law cannot be about the regulation of copies by looking at the balance between user and author rights. By framing the subject matter of copyright as ‘dialogue’ between author/users and user/authors he saves copyright law from falling prey to the explosion of everyday copying.

Last friday’s edition (‘three baby camels‘) of the NPR planet money podcast contains a wonderful nugget about the economical aspects of how to determine the amount of ransom money that is to be paid to somalian pirates in order to get a hijacked ship back.

The story is based on the negotiations a Danish shipping executive (Per Gullestrup) conducted with someone representing a gang of Somalian pirates (Mr. Ali). The problem both parties are facing is that there are no other buyers or sellers for the merchandise (the hijacked ship) who would provide them with clues about the market price in markets with more sellers or buyers (in economics this situation is called a monopolist monopsonist bargaining problem).

In this situation exchanging information (with fellow pirates or fellow ship-owners) about prices paid for the release of other ships is one of the very few ways of speeding up the often time-consuming process of finding a price that is acceptable to both the seller and the buyer. According to Per Gullestrup the pirates are fairly good at that while the ship-owners are not (emphasis mine):

The owners are escalating the ransom payments because they are not really coordinating how they deal with pirates. The pirates on the other hand are extremely good at sharing information. And we know for a fact […] that they so have piracy workshops, that the pirates are actually meetings ashore and exchanging information.

In march we spend a week in bangalore with jamie and the darkfibre crew. we had flown there to take pictures of them while they were shooting for dark fibre (more pictures will become available later).

It was fun and extremely interesting to watch the production from behind the scenes and i am really looking forward to the film (jamie has promised that there will be a trailer on the 13th of may). in the meanwhile there is an interview with jamie and his co-director peter mann on the website of the center for internet and society in bangalore:

‘Dark Fibre’ is set amongst the cablewallahs of Bangalore, and uses the device of cabling to traverse different aspects of informational life in the city. It follows the lives of real cablewallahs and examines the political status of their activities.The fictional elements arrive in the form of a young apprentice cablewallah who attempts to unite the disparate home-brew networks in the city into a grassroots, horizontal ‘people’s network’. Some support the activity and some vehemently oppose it — but what no one expects is the emergence of a seditious, unlicensed and anonymous new channel which begins to transform people’s imaginations in the city. Our young cable apprentice is tasked with tracking down the channel, as powerful political forces array themselves against it. Not only the ‘security’ of the city, but his own wellbeing depend on whether he finds it, and whether it proves possible to stop its distribution. Meanwhile, mysterious elements from outside India — possibly emissaries of a still-greater power — are appearing on the scene. This quest for the unknown channel is reminiscent of a modern-day ‘Moby Dick’, with the city of Bangalore as the high seas and our cable apprentice a reluctant Ahab. The action is a combination of verite, improvisation and scripted action.

The English translation of the Ups and Downs report on the Economic and cultural effects of file sharing on music, film and games is out [thanks Natali!]. You can download the 130 page report written by a research consortium formed by TNO, SEO & IvIRon the IVIR website [pdf].

I have mentioned the report (commissioned by the ministry of Economic Affairs, the Justice Department and the ministry of Education Culture and Science here before [first thoughts, popular science edition] and as far as i am concerned it is well worth the read… [thanks Natali!]

I just finished reading ‘Ups and Downs – the economic and cultural impact of file sharing for music, film and games’ (see my earlier post for context). All in all the full version does not contain a lot of surprises when compared to the executive summary (which my first post was based on): It is a well written report that, although it makes a lot of sense to someone familiar with the subject, does not really come up with much new insights either. The strength of the report is that it places file-sharing within the wider social and economic context (as opposed to placing it solely within the economic logic of the entertainment industry). While they sometimes appear naive (it does not seem to occur to them that buying CDs or renting DVDs from the video-rental-shop is rapidly becoming obsolete from a technicals point of view) the researchers do seem to have a fairly good understanding of what is going on.

The core of their argument (to be found in sections 5 & 6) is that there is no direct causal relationship between file-sharing and the decline in revenues in the music industry. On top of this the researchers argue that even tough it is likely that there is a substantial decline in revenues for the recording industry as a result of file sharing, this is offset by an even more substantial increase in welfare for the general public (or at least that proportion of the general public that downloads musical works). This finding is based on an economic model that is summarized in figure 6.1:

Figure 6.1 from ‘Ups and downs’ – blue boxes and grey arrows and labels mine (personally i am a bit surprised by the relative amounts of lazy and smart peple implied by this figure. life experience tells me to expect the opposite distribution).

1. The orange block represents the revenue generated by selling recoded music in the absence of file sharing, which equals the maximum possible revenue for the recording industry. In this situation the rich people(a.k.a stupid people) profit (save money) because they would have been willing to pay more than the market price. All the people to the right of the orange colored block simply could not afford to buy recorded music.
2. With the possibility of file sharing available to consumers we see a shift: a certain amount of people who used to buy recorded music now download it for free (‘cheap people‘). In addition the smart people (a.k.a poor people) now have the same access to recorded music as all the others and finally there also is a group of lazy people who simply cannot be bothered to download because they perceive the process as too burdensome.

When comparing the changes between (1.) and (2.) in economic terms the researchers conclude that while there is a negative impact on the recording industry (caused by the cheap people) the fact that the smart people now also have access to recorded music represents a much bigger increase in economic welfare (and does not hurt the recording industry as it is ‘demand without purchasing power’ that is being met)¹. As mentioned in my earlier post the researchers value the damage to the recording industry at a maximum €100 million p.a while they value the socio-economic gain caused by the increased access to recorded music at at least €200 million p.a.

Personally i am not sure if this will be of any consolation to the recording industry, but as far as i can see it is a fairly adequate description of the current transformation process: A business model anchored in an outdated means of distribution is (partially) being replaced by a social practices that are (a) more in line with the technological state of the art and (b) provide greater socio-economic benefits to society at large.

For the rest the report does not contain much news: Chapter 3 (‘the legal framework’) gives a solid and up to date (it even includes last years legislative battle around the EU’s telecom review) overview of the legal implications of file sharing (in the Netherlands) and Chapter 5 gives an overview of recent studies on the economic impact of file sharing². Apart from the economic model described above chapter 6 also lists a number of ‘dynamic and indirect’ effects of file sharing that are fairly obvious but nevertheless worthwhile to repeat: The researchers argue (p.123) that while it is likely that file sharing hurts big successful artists (as cheap people will buy less CDs from them) it has a positive impact on smaller artists (as it allows more people to sample their works, which will turn some of these people into buyers of their CDs or make them attend concerts). More interestingly the researchers also argue (p.125) that acceptance by consumers of the substantial increases in ticket prices for live-concerts has to be seen in the context of file-sharing: The increased willingness to pay high prices for concert tickets may be due to the fact that consumers are aware that they are spending less on recorded music (or the other way around: as they have to pay more for concert-tickets consumers are less willing top pay for recorded music and resort to file sharing).

When it comes to their conclusions the researchers note that file-sharing is here to stay and that we (the recording industry) are beyond the point of no return: It is impossible to build a successful business that is solely based on trading recorded music. According to the researchers is is also highly unlikely that there will be a point in the future where all music will be obtained from authorized sources (p.136). Given this they argue (inter alia, their official recommendation comes down to a pathetic paragraph where they make a plea against criminalization of end users and for more awareness building among file sharers) for a model where internet service provides offer internet subscriptions that include a fee for the access to copyright protected content (a.k.a the content flatrate).

Early last year the Dutch government (the ministry for Economic Affairs, the Justice Department and the ministry for Education Culture and Science to be precise) commissioned a research report on the socio economical aspects of (peer 2 peer) file sharing. Last week the research consortium formed by TNO, SEO & IvIR published the final version of the report titled ‘Ups and Downs – the economic and cultural impact of file sharing for music, film and games’. This 141 page report looks into the economic and cultural consequences of file-sharing for the music, movie and games industries. The central conclusion of the report is that:

The research shows that the economic impact of file sharing on the Dutch economy is strongly positive when viewed from both short term and long term perspectives. As a result of file sharing consumers get access to a wide range of cultural products. This has a positive impact on the economy […] According to estimates the positive economic effects for consumers amount to 200 million euro per year. On the other side the maximum decrease in revenues for producers and publishers of sound recordings is 100 million euro per year. [page 3 of the report, translation mine, an official english translation hereof the entire report is forthcoming]

It is refreshing to see a government sponsored report that recognizes that while one part of the entertainment industry (music) suffers some losses, these don’t necessarily outweigh other – positive – effects of file-sharing: According to the researchers, file-sharing gives access to a wide range of cultural goods and is often used to sample works that are bought later. Most file-sharers would have never bought all the content they downloaded, and having access to such a large media library has positive effects on the social well and economic position of downloaders and the society as a whole.

One of the most interesting observations in the report is that while revenues related to the sale of music are steadily declining, the overall amount of money spend by consumers on media for entertainment (ie music, videos and games) is relatively steady. It appears that money that is not spend on music is instead spend on video games. This can be seen as an indication that the real cause of the decline of revenues in the music industry is not primarily caused by file-sharing consumers, but by intra-industry competition: people simply spend their entertainment euros differently.

Instead of music CDs consumers buy Guitar Hero or Rock Band (plus extension) packs these days. This is one more reason why the recording industries’ push for stricter IP enforcement will probably not do them much good: It gives consumers little reason to not spend money on games and go back to spending it on music CDs. From the consuer perspective a €50 game is much better value for money than a CD that contains one or two really good tracks.

After the presentation of the report on Saturday in Groningen a Buma/Stemra representative called the report ‘scary’ [‘greizelig’ in Dutch]. One can only hope that his fear will transform itself into the insight that the industry will need to change if it wants to ensure it’s survival. But if the past is any indication the most likely reaction to this fear will be a counter study that comes to the conclusion that downloading is extremely bad for the economy and that we need much stricter IP-enformcement. In the meanwhile one third of the Dutch citizens will continue to download and go to concerts and buy CDs and buy DVD and go to the movies and fail at becoming Guitar Heros…