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Cringely Proposes a Music Sharing Alternative
WEFUNK writes "The I, Cringely 'Pulpit' column at PBS presents an interesting idea for a new business model to take on the RIAA. He suggests that a publicly traded company could legally and profitably buy a single copy of each record which could then be freely copied and listened to by its shareholders under fair use. His 'Snapster' (Son of Napster) proposal is essentially a digital music co-op that would let shareholders/consumers bring copyrighted material into a quasi-public domain. While fair use and the public domain continue to be lost in our courts and congresses, maybe the capital markets will offer an alternative." While a neat idea, it's doubtful that it'll ever be implemented. Still, it's a good read.
Essentially they operate as a co-operative. On the surface, it is the same as paying a membership fee - but on paper it is a different story (i.e. Snapster would be just like Napster on the surface, but largely different on paper).
Here's a snip from their about page:
..mork
This idea is very flawed. A much better idea would be a netflix type CD rental, except they keep the CD in escrow for you and you own it rather than rent it. CDs could be bought or sold on the open 'virtual' market. You only get remote access to it. If you want physical access you pay for shipping. That remote access can be in a number of fomats from ISO,WAV,MP3 etc.
Once you have owned the CD for a day, sell it to someone else and erase your fair use copy. Next time you want to listen to it buy it again and sell it again.
Just like Cringely send some of those IPO shares to http://www.pcast.com.
Brad.
I can see it now, Snapster starts up, buys a few CDs, and all of a sudden every new CD that is bought comes with a draconian Microsoft-style license which explictly states that you may not play the CD on more than one audio system at a time, without the express written consent of the RIAA, which comes only comes with an unrealistic royalty fee. If you don't like it, you can return the CD to the record store. Or, not.
Unfortunately, it's going to be a long struggle before the Record Industry is forced to submit to the fact that recorded music is becoming an economic public good -- because of pratically infinite distribution (at the cost of bandwidth and storage), the good has become non-rivalrous. This does not mean music will disappear, but it does mean that it will not be profitable for a music company to distribute CDs.
Once the RIAA is forced to accept that, and takes the huge accompanying profit cut, their real business will be the promotion and distribution of the music itself -- it will lower its overhead by allowing P2P-style downloads (let the consumers give up their bandwidth), and will profit by sponsoring artists tours.
The downside is that record stores will, for the most part, go out of business. Were that there was another way to save our slave-wage friends who are knowledgable, but in every war, there are casualties.
But sorry, Cringely -- Snapster won't work for long. The fight for free music will be much longer than we hope.
It probably (almost certainly, but IANAL) wouldn't work.
Remember, the corporation and its shareholders are legally separate entities. Thus the shareholders don't own the music (or any rights to it, more properly); they own a company which owns the rights to the music. And since it's doubtful that the RIAA grants a right to rent the music (first sale would not cover renting), the corporation doesn't have the ability to give its shareholders its rights.
In theory, you could do something within the confines of first-sale; it could be implemented as follows:
However, there are kinks in that plan; first, it's doubtful that files made by fair-use rights could be incorporated into this (fair-use as it's been understood by the courts only extends to personal copying; as soon as it's transferred, any legitimacy conferred by fair-use is lost). However, files downloaded without taking advantage of fair-use (iTMS for instance) would not have this issue. Then there's the final requirement; in order to qualify for a first-sale defense, the file would have to be deleted from the server after being transferred. This is somewhat difficult to accomplish, even if you could DRM stuff. However, perhaps copying the file which you obtained through this system to another location would be fair-use (and the system might even employ a hash database to prevent further transfers).
Back to the topic. Even if the corporation could rent/sell it to its shareholders, some portion of the actual value of the data would likely be counted as a dividend, or at least income, for the shareholder, who may end up paying taxes on it.
You've never paid taxes, part of which go to fund libraries? Or you've never gotten a library card, which usually has a nominal fee? Gee, if nobody pays for libraries, I wonder where they get the money to build them, staff them, and fill them with copyrighted material...
"Freedom means freedom for everybody" -- Dick Cheney
Not being a lawyer, I found Cringely's idea very imaginative and stimulating. Other readers have mentioned possible legal flaws, but I think the scheme has an even bigger problem: it ignores the fact that we really don't need a music downloading business. Of any kind. The recording industry might need one, but musicians don't need one and the public certainly doesn't. The idea that anybody has to make money distributing individual copies of songs is an artifact we can afford to lose.
In an editorial mentioned on Slashdot a couple days ago, Doc Searls said something about television that I think is highly relevant: that it is a mistake to think of television shows as products and viewers as customers. Searls points out that the television industry makes its money selling eyeballs to advertisers. Shows aren't the product, they are merely bait that converts ordinary people into ad absorbers who might buy products later.
Likewise, from a musician's viewpoint, recordings are a way to convert people into future concert ticket buyers. It's been pointed out abundantly on Slashdot and elsewhere that musicians make money by performing, not by CD sales. What musicians get out of distribution (of any sort) is the fame that generates better gigs. For some reason everybody seems to have a hard time letting go of the idea that somebody has to make money selling copies of songs.
Try looking at it this way. The recording industry is in the position television set manufacturers could have been in if they had thought of building tv's like pay phones, collecting the coins, dictating which shows could be broadcast and demanding most of the rights. If that were the case, television set makers would now be right in the middle of the fray over video file swapping, claiming to be losing money with every download, probably also claiming to be protecting the creative artists who produce the shows (but who get none of the coins), and perhaps suing everybody like the RIAA is doing.
Obviously all that is unnecessary and sounds ridiculous, but it might not seem so if we were used to it. After a century of constantly feeding quarters into televisions, it might well seem like something was morally wrong unless someone was getting paid whenever a show was viewed.
There is in place right now plenty of infrastructure to freely distribute the songs of anybody who wants their songs distributed. What musicians and the public get from this technology is a way to eliminate the filtering imposed by the music business, do the distribution automatically, get the exposure for free and let the public pick the winners. Replacing the recording industry with a different middleman is completely unnecessary.