It's all about the...cha-ching!!

In the early days of video the studios didn't want their movies rented.  They viewed each unit/copy as a single transaction item.  When the stores rented the video for let's say $4.00 the consumer would rent it, copy it onto a blank vhs tape and get a good copy at much less then the studio wanted to see it sold at...never mind that the stores were paying $60-$100 per unit.  So in the late 80's Copy Guard was used by the studios (which was easily defeated by technology) to try to prevent the consumers from being able to copy the movies.  And their battle to "protect" IP rights had just begun and is continuing (i.e. Sony).

But with the music companies this is a problem that never seemed to be an issue.  Back in the day of cassette tapes one eprson would buy a copy and often make multiple copies of the cassette for his/her pals.  It was all about exposure.  Nothing was ever done to the music cassettes to inhibit efforts to make copies of their music because in the big picture it actually promoted their artist(s).  That has changed with the advent and explosion of the popularity of p2p technology and high speed internet connections that allow downloads to be done in a matter of seconds.

There is a problem if the sales of music CD's are being negatively affected.  But as Matt points out how much of a negative impact is being felt overall?  I have purchased Led Zeppelin I on vinyl, cassette and CD.  Would I be a criminal if I felt like d/l'ng the song How Many More Times from a p2p to burn onto a homemade "favorites" CD?  How many more times should I be expected to pay for the right to own the song?  But it does all come down to the $$$ in terms of IP.  In fact it has extended to the on-line world when the New York Times expects us to pay to read the opinions of Dowd, Friedman, Brooks et al...I refuse to pay for the right to read someones "opinion" and with the music company's efforts to "crack down" on file sharers I tend not to buy as many CD's and listen to "free" radio...but with efforts to launch Sirius and other pay-per-listen venues that might also be a thing of the past, like cassette tapes, in the near future.

Nothing is free but how many times are we expected to pay for the same thing?  CHA-CHING!!!

Lee is wrong. He admits the "analog hole" will remain.

Where he is wrong is that in the future, it will only take ONE hacker with the right gear to record a full-fidelity copy of any media. With digitalization and the Internet, that one copy will go everywhere.

As Ed Felten has stated, as long as the audio or visual signal has to cross from the digital to the human eyes and ears, it will be possible to copy that signal.

Like Mr. Universe in the movie "Serenity" says: "You can't stop the signal!" 

Equally importantly, while you might be able to lock-down a media sufficiently to reduce copying "somewhat", the resulting media will be all but unusable by most people due to the complications of using it introduced by the security considerations. This alone will cut sales of such media by such an amount that it will be unprofitable to do it.

This reminds me of the Las Vegas casinos attempts to do away with blackjack players who used point count systems to make "excessive" (by the casinos take) winnings. The casinos attempted to change the rules of the game to ensure that the advantage always stayed with the house, instead of fluctuating as it does under the normal rules. When word of this got out, the gamblers stopped playing blackjack in droves, and the casinos lost so much money, they immediately reinstated the old rules. Now they just watch for point counters, use four decks and shuffle more frequently, which reduces the point counting advantage enough to make the game profitable for the casinos without completely eliminating the possibility of winning for the gambler.

The same will happen with DRM technology. The music and movie industries will just cut their own throats, and open the industry to indie players who don't care about security - just exposure. 

So, to quote our Fearless Leader, "Bring it on!" 

Lee is wrong. He admits the "analog hole" will remain.

Where he is wrong is that in the future, it will only take ONE hacker with the right gear to record a full-fidelity copy of any media. With digitalization and the Internet, that one copy will go everywhere.

That's already the situation.  It's less a question of the theoretical feasibility of copying and distributing than it is one of the practical scope of that activity.  After all, even before CSS was cracked you could buy bootleg DVDs. Big releases will always be pirated in some form or another, but the breadth and variety of those releases will be affected.  And you'll have to go to more trouble and accept more legal exposure in order to make a copy of a movie or album that you legitimately own.

It's not a yes/no question.  Copying, in some form, will remain possible.  But relying on the analog hole is not the way to go. 

"Sales go down for the top quarter of artists in ex ante popularity, and up for the other three quarters." Good point. Arguments tend to polarize between a populist "make everything free" (sometimes as a cover for "gimme!") and a defensive "protect artists" (sometimes as a cover for "protect corporate profits"). There's a pointed parallel here to the polarization of means of exposing people to new work, between the mindboggling proliferation of blogs, where you almost have to know what you want, and the centralized ownership of radio stations and theater chains, where it no longer matters what you want. Either makes it chancy at best for ew creative work.

I'm still spoiled by the old days of free-form FM radio and movie houses before the multiplex. Without those, it does appear that the bottom three-quarters has a better shot at being heard thanks to what amounts to sheer theft.

It'd be better to break the polarization, but I would love to hear how. Low-cost but regulated downloads might help; so might the growth of Internet radio (or the equivalent for movies). There's something truly ideal in the realm of books, I think, with Googol's plan for the ultimate, user-responsive card catalogue: searchable everything, but with no downloads at all. Naturally it's being both pilloried and elevated as a step toward free books, when factually it's neither. The poles return. Makes me wonder whether the Authors Guild, leading the charge against Googol, doesn't equate "authors" with best-sellers.

But we all recognize the concept of private property, even if it is IP --  Intellectual Property.  What's wrong with the NYT charging for TimeSelect if they can get away with it?  What's wrong with Madonna keeping every cent her fans are willing to pay?

There are certainly important reasons to protect IP.  Creative works are the fruit of someone's labor, and that person should pretty much have say over the disposition of what they have created.  What is not acceptable is for laws to consolidate this ownership into the hands of a few entrenched companies, rather than promoting an open and robust market place.

File-sharing is only part of the music industry's problems (and the publishing industry momentarily - because the MP3 player of books, electronic paper, is right around the corner).  The music industry was built on a vertical integration of three components: production, marketing and promotion, and distribution.  The combination of the three allowed them to pay artists a small fraction of the final retail cost of the music, and artists had little choice, because the costs of doing any of the three oneself were prohibitive.  These days, however the cost of entry to produce or distribute music of professional quality is vastly lower.  The record companies are already losing control of production, and if file-sharing introduces a distribution system that's essentially uncontrolled by them, they will be completely de-integrated, and will face a competitive market for the individual services they provide.  After all, why would you as an artist sign your work over to a big label if all you're really buying is promotion?  Why not just buy the promotion directly, or with the help of a small label, or not at all if you can get the music onto the most important "shelves" (e.g. iTunes) yourself?  Record company margins will likely plummet correspondingly.  Note that indie labels are doing just peachy these days - their business model is not built around pouring vast promotional dollars into designated hit acts.

With a little guidance from marketers, editors, reviewers and community sites a la blogs, consumers can basically buy music straight from a label.  When digital music reaches commodity prices, I believe most consumers (in the developed world, at least) will be willing to pay for it rather than deal with file-sharing.  That type of competitive market benefits consumers and producers.

Since when is stealing a "new technology"?

Loss of sales at a record company affrects the regular people employed by a record company more so than the superstars or the execs.

Many times companies react to diminishing sales by cutting expenses, and that is usually accomplished by reducing the number of employees.

If many workers of an industry lose their jobs at about the same time, then it is so much harder for them to find another job.

So their lives, and those of their families are devastated, and since their buying power is reduced, so are many of the retailers that they use are affected by lost sales.

Industries that supply services and goods to the recording industry would also be affected.

It is easy to say "screw the record companies." Put you have to think about ramifications of actions.

Some file sharing I think is okay. People always loaned out albums, tapes and cds for people to make copies, but this is informal, among friends. This is not a site set up for thousands to download countless songs for free.

And if record companies are smart, there will always be free downloads for sharing because it supports their base of artists, new and established.

I tracked down the original study and read it because I was interested in the claim that file-sharing yields a gain to society three times the loss to the music industry in lost sales.
First, the study states the gain is to each consumer, not to society. One might argue that gains for individual consumers are not the same as a gain to society, though perhaps they are for purposes of economics. Anyway, about 36 percent of the gain to consumers was from downloading music for free that they would have been willing to pay for. The rest of the gain was from valuing the downloaded music more than the amount of money they would have been willing to pay for it. Since respondents in the study valued downloaded music less than purchased music to begin with, their expectations were lower and their degree of enjoyment was therefore higher in comparison.
So people like free stuff, and people like stuff that's cheap. I don't really see what's remarkable about this.

Granted current IP laws stink.  They give huge mega-media corporations way too much power and every time Mickey Mouse is in danger of becoming a public domain property Disney runs to Congress and gets their copyright extended another 20 years ago.

But just because huge corporations are evil and greedy, it doesn't follow that the individual doesn't have the right to absolutely control the fruits of his or her creative processes and deserve full government protection of that property.  He or she should be able to count on the government to protect his or her property as much as an individual homeowner has the right to expect the local government to protect real property rights. 

But just because huge corporations are evil and greedy, it doesn't follow that the individual doesn't have the right to absolutely control the fruits of his or her creative processes and deserve full government protection of that property.

This sounds good, but it's very abstract and almost completely irrelevant to the music world. Musicians routinely lose control of the fruits of their labor to the music companies. (In the most extreme case, John Fogerty of Creedence Clearwater revival was sued for releasing songs which sounded like the old Creedence songs to which he had lost title.)

In a court of law, arguments like the one I just made are irrelevant -- Fogerty did sign away his rights. But if you're trying to make a political case, statements like the one you just made are ridiculous. Musicians routinely lose control of the "fruits of their creative process"; it's such a common story that no one really wants to hear it.

Since when is stealing a "new technology"?

Thank you! I was afraid I was going to read the entire string and not find a single comment about that. Of course we all want the things we desire to be free. Why not? General Motors makes a huge profit (or they did until Toyota, et al came along.) so why shouldn't we all just pick up a free car at the dealers lot whenever we want one?

Intellectual property is property just as physical property is. If a company produces recordings of music, paying an artist to record that music, that company is entitled to sell those recordings without concern over people pirating copies to sell or for their friends. That is the same principle that applies when a book is published. Any number of people can read the book or listen to the music, but copying it is prohibited by copyright laws and it should be.

Matt, I continue to be disappointed in your stand on this.

Novakant --

did somebody piss on your turkey, or are you a failed musician?

Temper, temper, little boy. You'll never make the prime time that way.

By definition, 99.9% of musicians, including some of the best, are "failed musicians". That's why your legalistic argument will be ignored by almost all of them.

My original point was that, in music, IP laws only serve to protect the big music people, and that the big music people do nothing to make music happen. They're just distributors, and BTW, the way they control venues and radioplay might in fact be monopolistic. So we get no more music and no better with IP laws than we would without. And most musicians don't benefit either.

In publishing, was your 7.5% bottom end I was questioning. Perhaps it's true in some formal way but 0% is common enough, after various deductions.

IP became a big issue only when Disney and Microsoft stepped in, first to rewrite the laws to their benefit (even though they DO pirate others' work) and second to beef up enforcement.

“Why not just buy the promotion directly, or with the help of a small label, or not at all if you can get the music onto the most important "shelves" (e.g. iTunes) yourself?”
 
Seems to me one of the biggest lessons of all this is that it doesn’t really change the concept that a musician has to struggle with an outside entity to put their product out there; it just changes the gatekeeper (iTunes, MySpace, etc.).
 
When the iTunes Store chooses to “invest” in certain artists by promoting them to preferential places on the “shelf”, it becomes harder and harder for me to differentiate them from the other, more traditional, music industry players-or a grocery store, for that matter.
 
Will the “Frito Lay” musicians who can afford the best shelf space be the new winners? (Or to quote The Who- “Meet the new boss; same as the old boss...")

well, I'm sure whining, cantankerous recluses with reading comprehension problems like yourself will be a big help in improving the situation of struggling artists

I fail to see any real understanding of the reason why IP laws exist in the first place. The "common sense" view is that they exist to give ideas the same standing as property. But this is not true and it certainly isn't desirable, given the nature of ideas (knowledge) versus physical property.