Ten Reasons Why

The digital watermarking concept in my previous post sparked an idea. I’ve written before that music retail (and eventually video and book retail) as we know it is in its death throes. The oh-so-twentieth-century “grocery store” model of bins of physical media (CDs, DVDs, books) won’t last. Music retail is not not doomed because of file-sharing, which I think will turn out to be just a blip in the history of how we deliver and consume content, but because it’s just bad business: why pay the enormous overhead of manufacturing, shipping, warehousing inventory, rent and utilities, employee salaries, etc. to sell and distribute content that, thanks to the digital age, can be reproduced and distributed for a miniscule fraction of those costs?
The primary reason we continue to do so that the mega-corporations that control the content also own, control or are invested in a many of the manufacturing and distribution channels. For the last several hundred years, content has been a manufacturing industry, with big factories that churn out physical media that just happen to have this abstract stuff called content cut, stuck, or burned on them. Likewise, some of the distribution channels, e.g. Wal-Mart, are as powerful (if not more so) in our culture than the media conglomerates.
Eventually greed eliminates even a powerful status quo, though. The media industry will find a way to divest themselves of the physical distribution infrastructure, because, as the software industry alread realized, you can make better margins selling just the bits. Which brings me back to the digital watermarking.
The challenge of piracy to the content distributor is that, currently, content is pretty much untrackable. I can rip a CD, share it, and once it’s shared it’s nearly impossible to track that particular file back to me. Big value (e.g. free content), little risk (e.g. hard to track me down), leads to lots of file sharing.
However, suppose you go to an online store, enter your account information, and every song you download is stamped with a digital watermark identifying you as the purchaser? What if you didn’t purchase a CD that was a duplicate of 5 million other CD’s, but instead went to a retail kiosk, entered your account information, and had a CD custom-burned for you (or even more likely the files transferred wirelessly to your MP3 player/personal content storage device), again with a digital watermark identifying you as the purchaser? Suddenly it becomes much simpler for the copyright infringement to be tracked back to you, thus providing a disincentive to illegally share the file, but — and this is the important part — this custom digital watermark does so without squashing fair use.
That model requires some pretty drastic changes, not the least of which is the eradication of the retail content industry (record stores, video stores, and eventually book stores), but also probably some advances in the speed of burning/transferring content (I need to be able to get 50 songs nearly as quickly as a clerk can ring up 5 CDs), advances in digital watermarking, and a significant mind-shift among consumers. Also, it only works moving forward — back catalogs are already lost to file sharing because they were never watermarked (but, for the most part, it’s the new content where the money is made).
If, for the purposes of this thought experiment, I can fiat all those assumptions into existence, I think the custom digital watermarking idea might work.
I can’t be the first person to have thought of this, can I?

Intellectual Property

Okay, the whole “enemy of the people” bit is a little over the top, but the Motion Picture Association of America (MPAA) and its director, Jack Valenti, run a close second behind the Recording Industry Association of America (RIAA) for actions designed to stomp out every use of intellectual property that doesn’t directy line the coffers of big move/recording studios. In Why inspecting a turkey sandwich won’t stop movie piracy, film critic Roger Ebert writes about a recent Valenti edict that basically takes independent film out of the running for Academy Awards:

[Valenti] announced that signatories of the Motion Picture Association of America would be forbidden to send out the thousands of advance DVD ‘’screeners” that jam the year-end mailboxes of Academy members and critics compiling Best 10 lists.
His reason is that screeners have been used by video pirates to make illegal copies of movies. That is true. It is also true that pirates will find a way to steal prints anyway.
The Valenti Decree would cripple the chance of a small independent film getting an Oscar nomination. With dozens of films opening at year end, the academy population lacks the time and energy to attend all those screenings in theaters. The DVDs pile up at home, and when the buzz turns hot on a title, they look at it.

Ebert goes on in the article to provide an excellent alternate solution for Academy screening purposes: “disposable” digital video discs which self destruct after one viewing and are digital watermarked with the name of the Academy member to whom it is distributed.

Intellectual Property

Wired News: Music Label Cashes in by Sharing:

Berkeley-based Magnatune calls its approach “open music,” a blend of shareware, open source and grass-roots activism.
The idea is to let users try music before they buy, and when they do, to give half of every sale to the artist.
Magnatune’s motto: “We are not evil.”

Nice motto. :)

Intellectual Property

Excellent article by Jonathan Zittrain of Harvard’s Berkman Center, titled The Copyright Cage. It’s a terrific overview of some of the insanely twisty legalities of copyright law. [link via Online Learning Daily]

Intellectual Property

In yet another stroke of being brilliantly out of touch with reality, the RIAA announced today that they would provide amnesty for users sharing files:

The RIAA’s offer would require Internet users to complete a notarized amnesty form that includes promises to delete any illegally downloaded music and not participate in illegal file-trading in the future. In exchange, the RIAA would agree not to file a potentially expensive infringement lawsuit.

I mean, good grief, who do they think is going to take them up on this besides the uber-paranoid? Yeah, those are the customers you want to cultivate. They probably only listen to the Collected Spoken Word Recordings of Oliver Stone.
In related news, Universal appears to be about to slash audio CD prices, potentially lowering retail CD prices into the $10-$12 range. Of course, it still only takes less than a buck fifty to produce the CD’s.
What we’re seeing here folks is the death of music retail. Tim Oren wrote about this [link via Scripting News]:

Remember there were once software specialty stores? For a variety of reasons, but particularly including Internet ordering and downloading as an alternate channel, those stores first consolidated, then vanished, followed by most of the broad line computer stores. Now software is smallish section at Office Depot or Best Buys, a pale shadow of the old channel. Today, the music business may have taken its first overt step down that same path.

Like we said auf wiedersehen to the Software Etc. and Egghead Software shops at the mall, it’s now time to bid au revoir to our pal Sam Goody, say sayanora to good ol’ Kemp Mill (only DC locals get that reference), and adios to aisles of music at the Barnes & Noble.
I’m not going to predict how long it will take, but I will predict that eventually music retail will consist of two channels:
1. Downloading music via the Internet onto your own computer for a per song fee.
2. Kiosks in retail locations that download (via the Internet or a private network) and burn CDs (and print cover art) on the spot.
The latter is a necessary transitional technology because many people, particularly outside the first world, still don’t have sufficient connectivity to support a robust music habit.
Once the margin dips below a certain point, record industry distributors will cease to pay the physical distribution costs (burning, printing, shipping, etc.), and retailers won’t be able to afford their own costs (rent, employees, etc.). Then we can dispense with all this physical distribution and retail infrastructure just to move digital bits around.
Of course, even with the two retail channels above, there will still continue to be a robust back-channel of consumer-to-consumer file-sharing.
Amnesty or not.

Intellectual Property

Evan’s analysis of file-sharing legalities starts out with consideration of whether Canadian copyright law makes file-sharing through peer-to-peer networks legal, but Evan goes on to provide an excellent (as usual) analysis of alternative financial models for the recording industry. Good reading.

Intellectual Property

From this morning’s Washington Post, A Fight for Free Access To Medical Research:

[T]he vast majority of the 50,000 to 60,000 research articles published each year as a result of federally funded science ends up in the hands of for-profit publishers — the largest of them based overseas — that charge as much as $50 to view the results of a single study online. . . .
Why is it, a growing number of people are asking, that anyone can download medical nonsense from the Web for free, but citizens must pay to see the results of carefully conducted biomedical research that was financed by their taxes?
The Public Library of Science aims to change that. The organization, founded by a Nobel Prize-winning biologist and two colleagues, is plotting the overthrow of the system by which scientific results are made known to the world — a $9 billion publishing juggernaut with subscription charges that range into thousands of dollars per year.
In its place the organization is constructing a system that would put scientific findings on the Web — for free.

The Public Library of Science is using a Creative Commons license, although Creative Commons is never mentioned in the article.

Intellectual Property

Matt Haughey, posting on Metafilter, about the difference between stealing and copyright infringment

Stealing is walking into a Art Gallery and taking a painting under your arm and leaving.
Copyright Infringement is going to a national gallery and taking a digital photograph of a painting, then going home and printing it for placement on your wall.
One involves the theft of property, making it so there is 1 less painting in a gallery, the other does not. In either case, no money exchanges hands with the gallery, but in the second case there was potential for a sale of a painting.
It’s a thorny issue, and neither side is completely in the right, but there is a difference between “stealing” and “copyright infringement” that is worth noting, and perhaps, worth thinking about when drafting new laws to deal with it (please, please, please don’t use old property laws for copyright infringement).

About as good an explanation fo the difference as I’ve read.
Part of the problem with the whole debate over file-sharing, MP3s, et al is that “intellectual property” is a term that misleads people into believe that the creative works must be treated the same as physical “property.” In fact, they simply aren’t. Don’t believe me? Try this experiment:
Give someone your blender. Let them take it home with them. Now sit in your house, and try to make a smoothie in your blender.
Now, give someone your idea. Let them take it home with them. Now sit in your house, and try to make use of your idea.
You can’t do the former because physical property is “rivalrous.” It is a limited resource and can’t be owned or consumed concurrently. If I steal the Mona Lisa, you can’t go to the museum and see it. If you take my blender, I can no longer use it. Intellectual property is a “non-rivalrous” resource. My consumption of it doesn’t impact yours. If I take a photo of the Mona Lisa, the original is still hanging on the wall of the museum. You can take my idea, but I haven’t lost it by you taking it.

Intellectual Property

This letter to the editor, The Law and DVDs, in the Washington Post infuriated me when I read it this morning. The letter is a response to Rob Pegoraro’s June 22 Fast Forward column, DVD-Piracy Paranoia Proves Counterproductive.
The letter’s author, Roberth Sugarman, is counsel for the DVD Copy Control Association, the people who control the Content Scramble System (CSS), the DVD copy-protection mechanism.
Sugarman’s letter is full of blatant, outright lies about copyright law. I’m not a regular writer of letters to the editor, but I couldn’t let this one pass. Here’s the letter I wrote and sent today:
Dear Editor:
It disappoints me to see Richard Sugarman misrepresenting the law in his July 3 letter to the editor. ["The Law and DVDs"].

Read more…

Intellectual Property

Hormel Foods, makers of Spam (the canned ham, not the unsolicited bulk email) is suing SpamArrest for trademark infringment.

Intellectual Property