The New World of P2P Advertising

Katascope writes "Salon is running an article about targeted advertising on Napster and Gnotella. The worrysome part is the co-opting of P2P search databases to build profiles and advertise using instant messaging" I've always believed that targetted marketing might actually make advertising useful again (Any 24 year old who occasionally watches MTV and doesn't need zit cream knows this). This one is scary because people are sending you IMs based on the tunes in your napster share. Course I don't have IM, and use napster super infrequently, so I guess thats one way to not be annoyed. But frankly if I got junk mail about obscure Who stuff, I'd be happy. Much better then credit cards, viagra, and stock tips. As long as its opt-in. (michael: A number of people have written in with Cringely's comparison of Napster and subways. Good read.)

Comments

One of the things that sucks about America...

[d.valued]

We have no national privacy policy. In the EU, the consumer has pretty good control over the information that they give out. They have to be told what information is gathered, why it's being gathered, and that the information cannot be redistributed to anyone else wothout the consumer's consent. From Europe's Privacy Cops, a BusinessWeek article from '98 I dredged up:

The directive, which was negotiated among the EU governments over six years, guarantees European citizens absolute control over data concerning them. If a company wants personal information, it must get that person's permission and explain what the information will be used for. It must also promise not to use it for anything else without the citizen's consent. A company selling birdseed, for example, can't use its mailing list to hawk Audubon calendars. Citizens have the right to know where information about them came from, to demand to see it, to correct it if wrong, and to delete it if objectionable. And they have a right to file suits against any person or company they feel is misusing their data. One piece of the law is particularly stringent. Article 29 demands that foreign governments provide data protections every bit as rigorous as Europe's, under a similar regulatory structure. Those that fail, the EU warns, could find their data flows with Europe, the world's largest economy, outlawed.

Now, I like the idea that in the EU, my info is protected ad nauseum. Hell, there are police forces whose job it is to protect private data! The US is a database nation. By the time you're 18, dozens of companies have harassed you by phone, mail, Internet. Then, when you turn 18, dozens upon hundreds more start to crawl down your throat. I would like a law that gave the American citizen the same protections as our counterparts in the EU.
Ruling The World, One Moron At A Time(tm)
"As Kosher As A Bacon-Cheeseburger"(tmp)

What was the conclusion again?

[OlympicSponsor]

"I've always believed that targetted marketing might actually make advertising useful again..."

It's good!

"This one is scary because people are sending you IMs based on the tunes in your napster share."

And now it's bad!

"Course I don't have IM, and use napster super infrequently, so I guess thats one way to not be annoyed."

Still bad, but now not quite so!

"But frankly if I got junk mail about obscure Who stuff, I'd be happy."

Back to good! Incredible play folks--a full 360 in the course of 4 sentences--not just a "360" that's really a 180, but a literal 360.
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Cringely suggests a tax on CDR?

[typical geek]

What the hell is he thinking? Why should I want to subsidize record companies?

For the record, a few times a month I copy a commercially recorded CD on a CDR, but this is as an archival method. Almost all of the CDRs that I burn are for music that is allowed to be copied for no profit, ie. the Grateful Dead. If the artist who holds the copyright encourages me to make free copies, how would the RIAA get off in demanding that I pay them a tax?????????

If I want this kind of government intervention in my computer media, I'll move to Canada.

Re:Cringely suggests a tax on CDR?

[garett_spencley]

I for one never make copies of audio cds. My mp3s are stored on my hd and I have never burned a cd with mp3s on them. I do however burn cds all the time. They are mostly linux isos that I download from the web or gpl software that I want to archive for easy retrieval later on. Why the fuck should I pay the RIAA money on cds that aren't even used for making audio?!!??

A lot of people just don't fucking get it! Yeah let's tax pens because they may be used to forge signatures that'll cost some companies money!

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Garett

Re:Cringely suggests a tax on CDR?

[cpt kangarooski]

Gah?

1) Recording your own music (that is if you're a musician) should not be subject to taxes. That's a tax on speech, which is blatantly unconstitutional.

2) Musicians can copy music to which they hold the copyright an infinte number of times. A law mandating that they can't do so unless they pay a tax both infringes on their freedom of speech and copyright (if the tax goes to some entity other than the govt., which it does)

3) Recording other people's music can, under some circumstances, be quite legal. The normal set of fair uses of course. Time shifting if it's coming off of broadcast. No copyright infringement occurs in either case, so there's no justification for a tax.

4) Public domain recordings are legal to copy an infinite number of times, and preventing people from doing so again tramples on both the first amendment and on copyright (b/c copyrighted content has to become p.d. - effectively preventing that is unconstitutional)

5) The reason that DAT never took off was that it was killed at birth by the RIAA. They didn't want anyone to use the damn thing. If it had become popular we'd probably have CD and DAT as standards, and some migration to DVDA by now (though if they were that flexible, you'd also see CDMP3 and DVDMP3 compilations in stores...)

I also say to hell with taxes and restrictions on legal and protected speech and copying. The RIAA members have no more right whatsoever to make, sell and copy music than anyone else. There should be no special treatment.

Let's hope Lars and Dre don't pick up this trend

[screwballicus]

Using P2P network data for advertising is one thing ("I see you have our music. Our new CD is available at..."), but the same technique could very well be used by labels to distribute threats to those possessing their music ("I see you have our music. Get rid of it or we'll sue").

Every time I use Napster from now on I'll live in fear of receiving a message from Dr. Dre, informing me that "he still got love for the streets, but if the streets should fail to cease and decist, forthwith, from trading his intellectual property over Internet file-sharing media, he will be forced to pursue legal action in persuance of reparations, personal ownership of said intellectual property, notwithstanding."

Both articles are pretty good...

[lar3ry]

There is a flaw in both articles.

With regard to the IM-spam described in the Salon article, it won't work if the Napster user isn't running IM or IRC. It is quite possible to run Napster without being able to receive IM's, and to ignore stuff happening in the IRC window.

With regard to Cringely's suggestion of a CD-R "tax," I'd like to point out that not every CD-R is being used to make copies of audio CD's, or even archives of MP3's. A CDROM can hold ANYTHING, including a backup of one or more partitions on your system. Why should ANY money of mine be paid to lazy record company execs just because I want to make a copy of /usr/local? What if instead of audio tracks, I was making an archive of DIVX movies?

In all, I prefer the method mentioned in the Salon article, as there is an "opt-in" method, if you don't mind the spam.

The Cringely "tax" is regressive, and is as obnoxious as the "Microsoft tax" that people pay when they purchase PC's with Windows pre-installed on them, when they have no desire to run that operating system.

Interestingly, though, both articles show that more than one person is honestly thinking of how to make the Napster model work. Good try, Cringely. Better luck next time!
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Killing the Goose, etc

[Alien54]

The recording companies seem intent on killing the goose that lays the golden eggs. The look at the goose, and seeing that the eggs are this weird soft metal, the goose can't be worth anything.

To save their millions they are throwing away billions, because they want 100% of a small pie, rather than 10% of a fantastically huge pie.

reminds me of the old monkey traps.

For those who do not know:

you have a large heavy pot with a hole just large enough to except a fruit like an apple or an organge, etc. (whatever the monkey likes. The hole is also just large enought for you hand. But it is too small for you (or a monkey) to take the hand out while holding on to the fruit. You have to tip the jar over.

You as a human can figure this out. but a monkey can not. It grabs on to the fruit, and won't let go.

Voila! One monkey dinner

The record companies are like the trapped monkey. They won't let go, they can't let go, even if it kills them.

Of Value, Subways, and Napster

[VanL]

There are serious flaws with Cringely's argument.
Most people only value things (privileges, objects, whatever) in proportion to their perceived cost of acquiring the thing.

My Mom used to be a social worker and anti-drug counselor. Initially, she gave her services free to those who couldn't pay. Relatively quickly, however, she was forced to change that policy; people would not show up for appointments, or expect unrealistic results in unrealistic timeframes, or even treat her badly. They didn't appreciate what they were getting for free. As soon as my Mom started charging a nominal fee ($5 I think it was), those problems went away. People valued her service more when they felt like they had invested in it.

Similarly, if the subways were "free", i.e., completely tax-supported, there would probably be positive side-effects not unlike those that Cringely mentioned. However, there would probably be more negative side-effects. The majority of people would start to think of the subways as having no value, or even worse, an entitlement. Vandalism would probably go up, and the amount of abuse on the system would jump exponentially.

Napster has the same problem. If the music were free, a lot of people would start to consider it an entitlement -- in fact, many already do. I predict that the amount of "abuse" of the artists would increase; people would expect new songs without appreciating the creative work it took to produce them. And even if the market for CD writers and such was temporarily greater than the market for music, the effect of what Cringely is proposing would be the crippling of *both* markets as soon as the market for elelctronic delivery and storage (the Cd-writers, etc) was saturated.

There are problems with my argument, just as there are problems with Cringely's. For instance, the evidence that CD sales go up because of Napster would seem to contradict my point. But that is only because having the CD adds value to the music -- lyrics, cover art, a physical medium, etc. However, if digital distribution of the *entire album* - including cover art, lyrics, etc - became the norm, there would be no additional value in buying the pressed CD.

Replies and rebuttals are welcome. I'm not saying that what Cringely proposes is bad; in fact, on some levels I support it. But the costs incurred by the tragedy of the commons must be addressed as well.

Want to make $$$$ really quick? It's easy:
1. Hold down the Shift key.

Funny how...

[JohnSmith1138]

I know I'm gonna get flamed for this, but it's kind of funny to see everyone up in arms about this. Lots of people are upset about THEM getting into YOUR stuff and giving it away(personal info), but you don't mind YOU getting THEIR stuff and giving it away. Anyone using Napster for sharing files that are in the public-domain (ie not copywritten) I apologize.

Cringely is wrong about the NYC subway

[XLawyer]

I don't know how it is in other cities, but here in Sodom-on-Hudson, fares pay a lot more than 15% of the operating cost of the subways.

Going to the MTA's web site, you can see budget figures for 1998. The New York City transit division's (that is, NYC subways, buses, paratransit, and the Staten Island railway) operating cost was $3.8 billion. There were just over 5 million paid rides on each weekday, and a subway fare is $1.50.

So let's do some back-of-the-envelope calculations. Assume that on weekends, ridership is 30% of what it is on weekdays. (I admit I have no basis for this assumption, but it seems reasonably conservative.) This works out to fare revenues of $2.2 billion for that year, or almost 60% of the operating cost.

The actual percentage for the subways is probably higher. That 60% includes the subsidized paratransit division, and the Staten Island railway. I have heard (but I don't recall where) that fares actually cover about 85% of the cost of running the subway.

Which is why they charge for it.

Disturbing...

[HooDHoo]

This seems to be a disturbing precident. I know that Napster directories are available to be read by everyone, but I really don't like the idea of being target-marketed based on what's on my hard drive ("According to our glance at your Quicken folder, you seem to cheat heavily on your taxes. Perhaps you'd care to make use of our legal services!"). Furthermore, I find it hard to believe that they hire human spammers to do all this dirty work. Dollars to doughnuts that they're running bots on Napster's valued no-bot network. Is Napster doing anything about this?

Re:The problem could be solved....

[acroyear]

This still has the same problem. Hardware guys aren't going to negotiate rates with every single little label and individual artist out there -- they're going to negotiate blanket licenses with the umbrella firms : RIAA, ASCAP, BMI, SOCAN. And that's it. And those firms will distribute the royalty portion of the license fees as they see fit: it goes to the most played material on the radio.

That's not going to change until enough artists bitch about it. Robert Fripp and Courtney Love and Prince and a few rappers here and there aren't enough...especially not with Metallica being the spokespeople for the RIAA and ASCAP's position.

Music Industry shouldn't get a red cent from me.

[Dino]

From Cringly's article.

The cassette tape and VCR businesses faced this exact problem and eventually came up with invisible programs to pay the music, TV, and film industries a small royalty on each blank tape. The same thing should happen for CD-Rs and RWs INSTANTLY. Add a few cents to the cost of every blank disk, throw in a few dollars for every CD burner, and suddenly you have $1 billion or so to pay to artists, writers, and publishers in the exact proportions specified by the Napster servers. That $1 billion is approximately equal to the entire profits of the recording industry, and it is $1 billion they aren't getting now.

The problem I have with this is that in all of my CD-Rs I have ever burned, only ONE (1) was used to burn music. And it was a collection of indy, non-signed artists. So, in essence, I would be paying a TAX to the MUSIC INDUSTRY (and not the artists) just because I'm using a file-storage mechanism that CAN record audio. That's fsck'ed up! I have burnt probably at least 150 CD-Rs and I don't feel the music industry should get a cent from me.

Now the movie industry, on the other hand.... well let's just say I don't use all of my CD-Rs for data storage.... ;-)
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one problem w/ Cringley's view of Napster

[acroyear]

And its also a problem with my.mp3.com and any other service that negotiates to pay the RIAA or the publishing firms (ASCAP, etc...) for the right to exist:

Not everybody is covered under those organizations. Many smaller artists who's material is traded by napster users will never see income from the RIAA license. they're only chance for income is that the listeners like the material and purchase a cd directly from them later on.

ASCAP and BMI (and presumably, the RIAA would do the same for their cut) distribute income from site-licenses (such as public restaurants, bars, store p.a. systems, etc) based on one market value only: Radio Airplay. It doesn't matter that, e.g., Live365.com can log exactly what was played, and to how many listeners. It doesn't matter that a local pub is an Irish pub that never plays pop music.

Brittany Spears, her songwriters, and her producer will all get most of the money.

ummm... Cringley?

[AugstWest]

How exactly do the record companies make money on PC sales? And how exactly do musicians make money on them?

And what's this supposed to mean?

So Napster, which cost almost nothing to create

Let's see, 800,0000 simultaneous users. 1.7 billion downloads. I think there might be a penny or two spent on infrastructure there, and maybe a coupla nickels for bandwidth.

People just don't seem to understand what kinda costs go into server architecture and bandwidth these days...