"While these are civil cases, most reasonable people probably feel that saying some grandma with 2 pirated albums has cost some asshole at BMG $300,000 worth of damage is not right. If she has benefited at anyone's expense, it's not any more than the $20 total value those pirated Tom Jones albums."
Can you clarify? I am of the understanding that the intent is to go after the "whales" who typically have at least 1,000 songs in their share directory. There's clear evidence that due to technical errors or just plain shoddy investigative work, some of the defendants are named by mistake (Mr. Beckerman says 50%), but I don't believe that the record companies are deliberately going after people with just 20 songs in their share directory. I believe the threshold is much, much higher than that.
At any rate, the RIAA has been going after the statutory $750 per work, so a suit for 20 songs would be more on the order of $20K, not $300K.
"No, most all of them can be tuned to any frequency in the FM band."
GP is correct, at least until recently. For years I searched for an FM modulator that allowed tuning to anything above 89 or below 106. Recently full-range units have been increasingly available, but at least in my local area, the selection at the local electronics stores is still weighted toward the old-fashioned kind that are limited to the lower reaches.
"And that's why I don't buy CDs, but rather go to the shows. Artists make crap off of CDs, and new/indie artists make even less. But if I go to the show, buy a ticket, and maybe buy a CD or TShirt there, the artist ends up getting more money out of that than if I'd bought their entire anthology from The Record Store."
Just to correct one generalization -- many indie labels pay the artists more than do the big labels. I'm referring to Magnatune as well as traditional indie labels.
Anyway, I've heard from lots of folks like yourself who state that they go to concerts and/or buy t-shirts instead of buying CDs. I'm curious how the logistics work here. Does that mean that for every song or album which you pirate, do you go to a concert and/or buy a t-shirt? That would get really, really expensive, so I'm guessing that maybe you limit it to songs you pirate which it turns out that you like?
What happens in the instance where you would like to torrent an artist's new CD, but they don't tour, or won't be playing in your area, or maybe they're not the type of artist or band who sells t-shirts? In that case, do you do without their album?
"I haven't done the math, but I'm pretty sure the last band I saw got more money from my trip to their concert than they'd gotten from me buying their CDs for the last 10 years."
I have no doubt of that. A concert ticket costs more than a CD, and the band gets a heftier cut. But what about the bands whose CDs you've P2Ped but whom you haven't seen in person?
I truly admire you if you have the time and money to give something back by seeing a show or buying merchandise from every artist or band you enjoy. I know I sure wouldn't be able to do that.
Good point. I think the "$750 per work" language is a remnant of the old days of piracy, where people tended to pirate entire albums, books, or movies at once. It's from before today's song-by-song piracy.
"That's a hefty fee for putting something on Kazaa. (Compare to fines for reckless driving and the like.)"
Yet if your sharing that song with 10,000 people caused the rightsholders a loss of $750 of business, then it's just. Yeah, yeah, I know, the rightsholder might not need the money and might be a cocaine addict, but rich cocaine addicts have the same rights under the law as we do.
"Given the bandwidth most people have it's extremely unlikely that they've uploaded to more then 50 people. (The song itself may be shared more then 50 times, but not by just one person.)"
You've nailed it. I recall some analysis several years back that through fingerprinting or what have you, they found 16K copies of an Eminem song on a P2P network that all came from the same rip. Power in numbers.
"silly questions but......do the artists get an automatic percentage of this tax collected by the music industry in canada?"
To expand on some other answers: it's split up roughly according to sales, and goes to Canadian artists. Which means that the bulk will go to Celine Dion and her songwriters, but your typical recording artist or songwriter who sold maybe 5K CDs last year won't get anything worthwhile.
Many Canadian music fans use the tax as an moral free pass to pirate as much as they want since their piracy is "paid for." While Canada has many fine recording artists, I'd wager that the content of the typical Canadian's iPod is largely non-Canadian artists, and as covered above, they're not entitled to this money.
If you live in Canada and the tax makes you feel better about torrenting or using allofmp3 to get your music, more power to ya -- just as long as you understand that the artist whose work you're pirating will likely never see any of that tax. They stand a much better chance of making money if you were to actually buy their CD.
"The Recording industry lobbied the government to introduce a tax on recordable CDs (and MP3 players IIRC) which was then paid out to the recording industry; later the recording industry wanted to sue individuals in Canada for downloading music and it was ruled that people had already paid for the music through this tax."
Are you sure that it was the CRIA? I thought it was SOCAN that lobbied for and collects the tax -- but please correct me if I'm wrong.
I know it's an easy shorthand to blame "the recording industry" on anybody who tries to interfere with our free and unfettered sharing of music, but sometimes the artists are the bad guys, too.
"Thats crazy... that's like going after P2P admins for users sharing illegal content. It would never fly."
It's not like that at all, but that's due to a distinction that's apparently too fine for some people.
Take a look at your favorite torrent tracker. Unless it's legaltorrents or something of its ilk, you know they set it up to capitalize on the huge demand for pirated material (and to make ad money off same), you know most of the traffic is pirated material, and you know that the admin knows this. Running a tracker with the belief that you will simply be able to tell the authorities that you're "not responsible for your users" might make perfect sense to a 14-year-old, but they're often unaware of a crucible in the legal profession known as "the laugh test." If it has the proper locomotion, vocalizations, and behavior, smart people don't need to be told that it's a duck.
Now, it might be funny and all to say that yes, Microsoft really does sell XP primarily for the purpose of running botnets and sending spam, but again, you, I, and everybody else know that it's simply not true. Again, the laugh test prevails.
"If I'm paying for pirating music before I do so, it's now ethical for me to pirate however much music I want."
Don't be daft. You pay for your local police organization; this does not give you carte blanc to commit crimes. Your iPod's cost may include some software or patent royalties; it doesn't give you the right to pirate software or violate patents.
Microsoft will sell the Zune for whatever the market will bear -- in other words, a price that makes the product appealing and sways enough customers away from the iPod. If Microsoft has made some bad royalty deals, that's their problem and their problem alone -- it's ultimately we customers who set the price of the product.
"GET WITH THE FREAKING PROGRAM, PEOPLE!!! Technology has found a way around your business model, and IT WOULD BE BENEFICIAL FOR YOU TO ADAPT TO IT."
This is precisely what they are attempting to do. This is exactly why Messr. Geffen is quoted in the article as saying "It's a major change for the industry" and "It certainly changes the paradigm." In short, rather than waiting to make profits on sales via the Zune Store (since buying music is so 20th Century, according to many Slashdotters), they are getting some of the money up-front on the sale of the player. I think that is pretty clear.
When Slashdotters exhort the record labels to change their business model, I think they mean this in terms of "be content with less money" or "don't attempt to make a profit" or similar strategies that one should not realistically expect from a for-profit business with shareholders. The record companies are indeed changing their model... it's simply not in a fashion that many Slashdotters would like.
It leads with coverage of the voter intimidation in the Virgina Allen/Web race (in which registered democrats are receiving calls informing them, incorrectly, that their polling place has changed), but does not list the candidates or parties involved. And the description of the incidents was written to make them sound vague:
The reports are sporadic at best, but officials said all will be investigated. One law enforcement source said the FBI is in contact with elections officials in Richmond, who forwarded "three" instances of something that looked "irregular" to them. Of those three, the official said, two look to have been provided to Virginia election officials by secondary sources, and the accounts of what happened were not particularly descriptive.One such instance appeared to consist of a phone call -- a voter answered the phone prior to leaving for the local polling place and the caller asked who the voter was planning to support, then gave the address of a supposed polling station. The address was not correct, leading some in Richmond to think the voter was purposely misdirected. Tracking this handful of reports is going to be "difficult," the source said.
Note the "use" of "quotes" around "single" words when they're really not "necessary."
Okay, so they're not naming names, right? But the second report in the Fox News article gets right to the point:
In New Jersey, Republican Tom Kean Jr.'s New Jersey campaign office was reported vandalized. A chain and padlock was placed on the door and keys were broken off in the locks at the side entrances. "It appears the Democrats have already resorted to Election Day dirty tricks," said Kean campaign manager Evan Kozlow, who said the "desperate ploys" will not prevent the campaign "from informing voters that Bob Menendez is under federal criminal investigation and is unfit to serve in the United States Senate."
<Borat>very nice.</Borat>
And then Fox News found it necessary to report some graffiti with a Republican's name in it:
Graffiti that included a Communist-style hammer and sickle along with the name of Rep. Curt Weldon, R-Pa., was spray-painted on an overpass and a department store outside Springfield. Weldon's campaign accused backers of Democratic challenger Joe Sestak.
...but no mention whatsoever that Colorado Democrat candidate Jay Fawcett's HQ was also vandalized overnight.
And more naming names:
In New Jersey, voters in at least seven jurisdictions attempting to vote for Republican Tom Kean Jr., and found their machines "locked" for Democratic Sen. Bob Menendez, according to GOP Committee attorney Mark Sheridan, who called it a "disturbing and developing trend" emerging at the polls.
Compare this to Fox News' coverage of the incidents reported last week in Florida and Texas, in which people who tried to vote Democrat had their votes changed to Republican. Oh yeah, there wasn't any (please post a link if I'm wrong).
And then back to giving vague details that don't mention party affiliation:
In Louisville, Ky., one poll worker was arrested on charges of assault and interfering with an election after he allegedly choked a voter and tossed the voter out the door. Election officials called police, and the voter wanted to file charges, said Paula McCraney, a spokeswoman for the Jefferson County Clerk.
"If the industry actually "got" it, I'd be one happy camper."
I think the music industry "gets it" just fine. They may have required Steve Jobs to lead them by the nose, but the iTMS has been a rollicking huge success. It may not be your cup of tea because of the DRM, but the important thing is that many, many people use it, and it makes lots and lots of money. Part of developing a business plan includes defining your target audience, and "people who have non-Apple MP3 players or home media servers" -- i.e. you -- are apparently not in their target market.
I absolutely believe that you would not, say, drag all of your iTMS-purchased tracks into your P2P client's share directory if iTMS were to drop DRM, but lots of people would. It's been well established that the honor system doesn't work for shit on the Internet.
"It's not completely impossible - they recognized that AllofMP3 was doing exactly that."
...because, of course, they don't pay for the product. LCD televisions cost a lot at Best Buy, and I'll bet I could show them a thing or two about selling them cheaper, if I didn't have to pay the supplier.
"Then they bawled their eyes out at Visa and Mastercard in attempt to put them out of business (with limited effect, to my understanding). They had a supremely reasonable business model as far as consumers go, though not so much for the artists who almost certainly never saw a penny. But that's no different than online or CD sales - they generally make next to nothing from those, and that's only when they sell enough to cover the fees that they're charged by their label."
This is one of my favorite Slashdot memes... "artists don't make any money from CD sales." An expanded, more accurate version of this is "artists don't make any money from CD sales, except for those who do."
Believe me, I can understand why this meme is so popular on Slashdot... it's a moral free pass for lots of people to justify piracy. "Sure, allofmp3 isn't bothering to pay the artists... but that's okay, neither are the record companies." Sounds good, right? Except many artists do make money from CD sales.
Artists net approximately zero from allofmp3 sales, vs. around $0.15 per track per song on the iTMS. $0.15 may not seem like much, but if 1,000 people per month, opt to use allofmp3 rather than a legitimate source like the iTMS, that's $150 a month. And before you say "but wait... all artists are rich, greedy bastards" -- keep in mind that many aren't. Many songwriters and composers rely on mechanicals to pay the rent.
"Unfortunately for mostly everyone, I still haven't found a model that I agree with. Basically, all profits go to the artists - that's to say, no money to the RIAA."
So, why not set a good example? Loan me $50,000 to start my business. As for the profits, I get to keep them all. that's to say, no money for you. Too bad you invested all that money in my success, but since I did all the hard work, I should keep all the profits. Right? Get in touch with me via email and I'll give you instructions on where to send the money.
"I truly want to support the artists, and I'd happily send them a tenner for each album I've pirated if they went and put a mailing address up on their websites."
But most of them don't... too bad, huh? I guess that $10 stays in your pocket. Keep pirating away, and tell everybody who'll listen that you truly want to support the artists.
"They're just too (stupid|lazy) to implement said model."
Perfect opportunity for you, then. Seriously. If it's so easy and obvious, why not just do it? Try out the "fund the production of music and let the artists have all the money" model. I'm sure artists would love it and you would have them lining up to do business with you. Many Slashdotters would like it as well. I think you may be on to something.
"A little salty, but correct. Which makes their "don't be evil" posture not so much ironic, as extremely clarifying in terms of the philosophy that drives their ethics."
I think for many Slashdotters the moral decision comes down to this:
Typical record company: sales of maybe $500M / year (okay, so that's higher than average; I'm not including all the little indie labels). Operating margin below 15%. Treats content creators like crap. Wants to sell us stuff. Thus, they are bad.
Google: sales of ten billion per year. Operating margin of 30%. Treats content creators like crap. Wants to give stuff away. Thus, they are good.
Again, Google made about three billion in cash last year. TFS states that it's a hassle for the company with the $475 share price to get rights from "actors and music composers." Actors and composers make on average less than $10,000 per year, and must deal with a 90% unemployment rate. Yet the sympathies here are clearly with Google, the ten billion dollar company, because they give things away.
"I'm a totally rational American who supports honest business that's good for the little guy, not the big guy. The big guy doesn't need any help. Plain and simple. I'm not calling for the dismantling of the capialist system like you seem to be."
I agree. YouTube's parent company's stock price is $471 per share. Their operating margin is 34% on revenue of almost ten billion dollars a year. And they're complaining because it's tough to get permission from actors and music composers -- people in a profession where the unemployment rate is > 90% and average incomes are less than $10K a year? Oh, please...
What amazes me is that many people in this discussion are advocating changing the law to make it easier for this ten billion dollar company to run over the rights of actors and composers.
"Our conception of copyright is hampering creativity, not enabling it."
I see this stated a lot, usually in an abstract sense. I can't think of any examples where copyright law has hampered my creativity -- if I want to see that movie or have a copy of that song, I either pay or don't, and go on with my life. Can you cite an example of how copyright law has hampered your creativity?
"Instead, copyright has been extended twice."
Not sure what you mean here -- do you mean "twice in my lifetime?" Terms were increased under US law in 1831, 1909, 1976, and 1998. We also became a Berne signatory at some point in the 1990s, but the Berne "life plus 50" is about 100 years old.
"Instead, copyright has been extended twice. A tree jumped out in front of one of the responsible assholes and took care of him, but it was far too late (trees don't move very fast, so it makes sense.)"
The Sony Bono Term Extension Act was named posthumously in honor of Messr. Bono. It was not named thusly because he created the act. You're correct that he was an asshole, but not for the reason you mention.
"Will MySpace now prevent Weird Al from posting his own songs of his and his producers' own free will, because they also happened to be available for purchase on CD at your local music store?"
As long as he has the distribution rights, no.
"Will there be a way for people to legitimately post their own copyrighted works, or are legit artists now going to have to find a different site to post their own works that they wish to post?"
FINALLY somebody who gets it!
MySpace' success was founded on catering to musicians. They actively invite musicians to create a presence on MySpace, upload music, and so on.
Now along come kids who play and promote tracks which don't happen to be from bands that have a MySpace presence. Or, they play a track from a band that happens to have a MySpace page, but MySpace would really rather have the listener be on the band's page.
MySpace wants to be in control. They want to own the music-delivery experience and have the leverage when it comes to dealing with bands who want to have a MySpace presence. And kicking all the non-MySpace music off of the site is the first step.
"In the last 100 years, has anyone ever been sued over clipping out pictures from magazines and pasting them into their scrapbooks, then showing them off to friends? That's really what myspace is, isn't it?"
In the way that putting stuff on P2P is sharing music with your "friends." Yet I've run into people who (incorrectly) understood that copying a CD for a friend was fair use, and thus putting it in a share directory to share with their 10,000 closest friends was the same thing. Really.
At any rate, this would be a great conversation to pick up again when somebody gets sued for having a copyrighted photo on their MySpace page. In the meantime there's the issue of some MySpace users effectively turning their pages into unlicensed radio stations, and that makes some copyright owners mad. In terrestrial radio, the RIAA doesn't see the license fee (it all goes to the composers and songwriters) but with web radio, the RIAA managed to get the law changed so that they get a cut, and they have more lawyers than ASCAP and BMI.
"Simply because if Hexus has been critical in the past of a ('our') product, then when they release a favorable review regarding another of the company's products, it appears much more honest (and thus more trustworthy) than a site that has always had glowingly positive reviews of our product line."
Hexus asked for the same sku again. No reason why they would have reviewed it differently.
"The editor of Hexus did kinda come across as a dickweed in his e-mail, but that's forgiven because he's British... I don't think they know how to sound polite."
I doubt being British has anything to do with it. Many of the guys who run review sites are amateurs with delusions of entitlement and no sense of professionalism. As another poster put it, they are "children playing at business."
Back when I was hands-on in providing gaming hardware to reviewers, there was a world of difference in working with the print pubs vs. reviewer sites. Hexus' reaction was nothing new... the review sites all seemed to be run by people with the mentality of 16-year-olds who would pull stunts just like Hexus did: printing your private emails if you dared to refuse to send them free stuff.
"Great strategy on Alienware's part. As this circulates the net, most of their potential customers will know never to believe that an Alienware machine is actually good, regardless of what the reviewers are saying. That'll do wonders for their sales."
Well, that's Hexus' hope, at least. This is their attempted revenge against Alienware since Alienware declined to send them a system... the same system that Hexus had already slammed.
You're correct that it may cause some people to learn that this is how the the manufacturer/reviewer relationship generally works, and some may even believe that it is only Alienware who does this. But the fact remains that if some online review site trashes your product, and then asks you to send them the same product again, you're likely to refuse.
"That is what I am still trying to figure out. First they say it's for promotion. Bullshit! Beyond a TRL spot, what advertising is there, unless there is alot more payola going on now."
Many artists now have web sites, and many of them are very nice. Even if a web site with Flash and whatnot only costs $5K per year, that's still around $0.50 per CD if it's moderately successful. There's also co-op advertising... whenever you see a CD advertised by a retailer, the record company likely funded all or part of it. There's also music videos, merchandise and merchandising; ie. in-store displays -- if the record company didn't produce it, then the store did and charged the record company.
"Next, they say production and distribution. Bullshit! The number of record stores is dramatically smaller now (see the closing of Tower Records). People buy most albums in big box stores, or on line. Both have very streamlined ordering processes. There can press much closer to the actual amount."
The big box retailers typically want their suppliers to pay freight, and ask for margins on the order of 40% plus program (Best Buy, for instance, wants 7%+ program on many products). The mom and pop retailers are closer to 25% margin. Although the big box retailers can indeed operate efficiently, they have many vendors by the balls, and have the leverage to ask for -- and get -- more margin. The closing of the indies and smaller chains is actually a very bad thing for the record companies. Remember a few years back when the record companies set up the MAP program with Tower and got busted for price fixing? It was Best Buy and Wal-Mart who ratted them out.
"Next, physical media is expensive. Bullshit! Seriously, if I can get 100 blank cds for $10, the cost can't be more for them."
On the contrary; the cost of pressing a CD has nothing to do with the cost of a blank CD-R. If you're an unsigned artist and you're distributing your stuff on CD-R, then yeah, you can get away with it, but it's a different set of numbers if you're pressing CDs. If this is counter-intuitive to you, keep in mind that a typical music CD might have a press run of 5K - 10K pieces total, while blank CD-Rs are pressed in millions.
You're correct, however, that the physical cost of goods is a small percentage of the total cost of sale. It's like that in lots of industries. Unfortunately, many people who don't work in the retail industry don't get the distinction between "cost of goods" and "cost of sale," and "gross margin" vs. "net margin."
"Finally, how come an album can come out and the first week it's $11, and then two weeks later it's marked up to $18? What causes a 60% markup like that?"
That's one of many tricks the retail industry pulls. They launch at a promo price to drive sales and then raise the price once demand drops off. Or, demand may go up after a few weeks that the product's in the channel, due to the first wave of reviews coming in, or whatever. It might seem counter-intuitive as well, but you can be sure that the retailer does this because they know from experience that it maximizes profits.
"The price *only* decreased because of inflation. The sticker price never changed, on average."
I am not sure why you wrote that. CD prices have been in freefall. Here's some data. I don't even need that data to show me what I already know: CDs were commonly $18 - $20 five or ten years ago, and they're $14 today.
Keep in mind that the overall net on music CDs is on the order of 10%, which is far less than lots of other industries. CD prices can't arbitrarily come down much lower until there's a massive cut in the production costs. Perhaps that needs to happen and will happen, but despite what the "net is the same as gross" crowd will claim, you can't expect retail prices to drop to $10 tomorrow. Even the low-overhead indie labels like MagnaTunes, which don't provide money for music production, still sell their stuff at $8 a CD, which is probably about the sell-in price that the traditional labels offer to distribution.
"I remember commenting to a sales clerk how they were expensive compared to cassettes or something like that and he remarked that "yeah, but as soon as lots of people are buying lots of them, the price will drop down to the price of cassettes, or even lower since they're cheaper to make. A CD costs like 50 cents to make."
Sorry you were mislead by the sales clerk. He may have been misinformed or simply not known what he was talking about; mechanical royalties alone can cost $0.80, and a CD sure as hell didn't cost $0.50 to press back then... I was pressing data CDs in qtys of 10K and more (ie. larger runs than most record companies) ten years ago, and I remember that it was a big deal when the cost went below $0.50.
At any rate, I paid $18 for Tears For Fears' "Songs From The Big Chair" in '85 (a good investment overall); that's $32 in 2006 dollars. Production costs have gone way down, but shipping costs and the salaries of everybody who touches the CD at every stage (including that store clerk) have gone up considerably since then. Given that, a drop of more than 50% in constant dollars isn't bad.
Why is the average $20 price that Slashdotters apparently pay, vs. the $12 - $14 or so that others pay, a big deal? Because any time the question of P2P vs. buy comes up, a fair share of people point out that even $0.99 per track is highway robbery. Thus, the $6 - $8 delta between the CD stores that Slashdotters shop at, vs. most other consumers, might be a big deal.
I agree with you 100% about the ratio of good tracks to fillers. I don't pirate, but I sure as hell don't buy CDs, or even full albums, any more. I buy the one or two tracks I want off of an album, and then buy more incrementally only if I really like what I got. It probably hasn't reduced my overall music spend, but it's allowed me to spread it out across a lot more sources. I've left the CD format behind and I'm not looking back.
"There is a vast, vast gulf of difference between premediated corporate fraud causing direct and demonstrable loss, and casual, non-profit copyright infringement."
As the summary noted, he pleaded guilty to a charge of conspiracy to commit copyright infringement. Elitetorrents was planned to be a warez site (premeditation) and it was a for-profit venture. He was pretty hardcore into the warez scene. Nothing casual about it.
"Doesn't this sort of thing make owning and operating a search engine a risky venture?"
Not really. Legitimate search engine operators are not involved in conspiracies to commit copyright infringement.
Remember, this is the guy who ran elitetorrents. The guy who posted "HEY, WE HAVE STAR WARS!" six hours before it was released into theatres. He wasn't running a legitimate search engine. He was deep into the warez scene.
I don't pay $20 for CDs, either, but I don't avoid this price through piracy. I either buy the track I want on iTunes, or if I really want a CD, I'll pay $14 for it, as is the going rate.
Slashdot Mirror
"While these are civil cases, most reasonable people probably feel that saying some grandma with 2 pirated albums has cost some asshole at BMG $300,000 worth of damage is not right. If she has benefited at anyone's expense, it's not any more than the $20 total value those pirated Tom Jones albums."
Can you clarify? I am of the understanding that the intent is to go after the "whales" who typically have at least 1,000 songs in their share directory. There's clear evidence that due to technical errors or just plain shoddy investigative work, some of the defendants are named by mistake (Mr. Beckerman says 50%), but I don't believe that the record companies are deliberately going after people with just 20 songs in their share directory. I believe the threshold is much, much higher than that.
At any rate, the RIAA has been going after the statutory $750 per work, so a suit for 20 songs would be more on the order of $20K, not $300K.
"No, most all of them can be tuned to any frequency in the FM band."
GP is correct, at least until recently. For years I searched for an FM modulator that allowed tuning to anything above 89 or below 106. Recently full-range units have been increasingly available, but at least in my local area, the selection at the local electronics stores is still weighted toward the old-fashioned kind that are limited to the lower reaches.
"And that's why I don't buy CDs, but rather go to the shows. Artists make crap off of CDs, and new/indie artists make even less. But if I go to the show, buy a ticket, and maybe buy a CD or TShirt there, the artist ends up getting more money out of that than if I'd bought their entire anthology from The Record Store."
Just to correct one generalization -- many indie labels pay the artists more than do the big labels. I'm referring to Magnatune as well as traditional indie labels.
Anyway, I've heard from lots of folks like yourself who state that they go to concerts and/or buy t-shirts instead of buying CDs. I'm curious how the logistics work here. Does that mean that for every song or album which you pirate, do you go to a concert and/or buy a t-shirt? That would get really, really expensive, so I'm guessing that maybe you limit it to songs you pirate which it turns out that you like?
What happens in the instance where you would like to torrent an artist's new CD, but they don't tour, or won't be playing in your area, or maybe they're not the type of artist or band who sells t-shirts? In that case, do you do without their album?
"I haven't done the math, but I'm pretty sure the last band I saw got more money from my trip to their concert than they'd gotten from me buying their CDs for the last 10 years."
I have no doubt of that. A concert ticket costs more than a CD, and the band gets a heftier cut. But what about the bands whose CDs you've P2Ped but whom you haven't seen in person?
I truly admire you if you have the time and money to give something back by seeing a show or buying merchandise from every artist or band you enjoy. I know I sure wouldn't be able to do that.
"That's $750 PER SONG. Share 1(one) CD? $7,500+."
Good point. I think the "$750 per work" language is a remnant of the old days of piracy, where people tended to pirate entire albums, books, or movies at once. It's from before today's song-by-song piracy.
"That's a hefty fee for putting something on Kazaa. (Compare to fines for reckless driving and the like.)"
Yet if your sharing that song with 10,000 people caused the rightsholders a loss of $750 of business, then it's just. Yeah, yeah, I know, the rightsholder might not need the money and might be a cocaine addict, but rich cocaine addicts have the same rights under the law as we do.
"Given the bandwidth most people have it's extremely unlikely that they've uploaded to more then 50 people. (The song itself may be shared more then 50 times, but not by just one person.)"
You've nailed it. I recall some analysis several years back that through fingerprinting or what have you, they found 16K copies of an Eminem song on a P2P network that all came from the same rip. Power in numbers.
"silly questions but... ...do the artists get an automatic percentage of this tax collected by the music industry in canada?"
To expand on some other answers: it's split up roughly according to sales, and goes to Canadian artists. Which means that the bulk will go to Celine Dion and her songwriters, but your typical recording artist or songwriter who sold maybe 5K CDs last year won't get anything worthwhile.
Many Canadian music fans use the tax as an moral free pass to pirate as much as they want since their piracy is "paid for." While Canada has many fine recording artists, I'd wager that the content of the typical Canadian's iPod is largely non-Canadian artists, and as covered above, they're not entitled to this money.
If you live in Canada and the tax makes you feel better about torrenting or using allofmp3 to get your music, more power to ya -- just as long as you understand that the artist whose work you're pirating will likely never see any of that tax. They stand a much better chance of making money if you were to actually buy their CD.
"The Recording industry lobbied the government to introduce a tax on recordable CDs (and MP3 players IIRC) which was then paid out to the recording industry; later the recording industry wanted to sue individuals in Canada for downloading music and it was ruled that people had already paid for the music through this tax."
Are you sure that it was the CRIA? I thought it was SOCAN that lobbied for and collects the tax -- but please correct me if I'm wrong.
I know it's an easy shorthand to blame "the recording industry" on anybody who tries to interfere with our free and unfettered sharing of music, but sometimes the artists are the bad guys, too.
"Thats crazy... that's like going after P2P admins for users sharing illegal content. It would never fly."
It's not like that at all, but that's due to a distinction that's apparently too fine for some people.
Take a look at your favorite torrent tracker. Unless it's legaltorrents or something of its ilk, you know they set it up to capitalize on the huge demand for pirated material (and to make ad money off same), you know most of the traffic is pirated material, and you know that the admin knows this. Running a tracker with the belief that you will simply be able to tell the authorities that you're "not responsible for your users" might make perfect sense to a 14-year-old, but they're often unaware of a crucible in the legal profession known as "the laugh test." If it has the proper locomotion, vocalizations, and behavior, smart people don't need to be told that it's a duck.
Now, it might be funny and all to say that yes, Microsoft really does sell XP primarily for the purpose of running botnets and sending spam, but again, you, I, and everybody else know that it's simply not true. Again, the laugh test prevails.
"If I'm paying for pirating music before I do so, it's now ethical for me to pirate however much music I want."
Don't be daft. You pay for your local police organization; this does not give you carte blanc to commit crimes. Your iPod's cost may include some software or patent royalties; it doesn't give you the right to pirate software or violate patents.
Microsoft will sell the Zune for whatever the market will bear -- in other words, a price that makes the product appealing and sways enough customers away from the iPod. If Microsoft has made some bad royalty deals, that's their problem and their problem alone -- it's ultimately we customers who set the price of the product.
"GET WITH THE FREAKING PROGRAM, PEOPLE!!! Technology has found a way around your business model, and IT WOULD BE BENEFICIAL FOR YOU TO ADAPT TO IT."
This is precisely what they are attempting to do. This is exactly why Messr. Geffen is quoted in the article as saying "It's a major change for the industry" and "It certainly changes the paradigm." In short, rather than waiting to make profits on sales via the Zune Store (since buying music is so 20th Century, according to many Slashdotters), they are getting some of the money up-front on the sale of the player. I think that is pretty clear.
When Slashdotters exhort the record labels to change their business model, I think they mean this in terms of "be content with less money" or "don't attempt to make a profit" or similar strategies that one should not realistically expect from a for-profit business with shareholders. The record companies are indeed changing their model... it's simply not in a fashion that many Slashdotters would like.
Here's Fox News' roundup on the voting shenanigans.
It leads with coverage of the voter intimidation in the Virgina Allen/Web race (in which registered democrats are receiving calls informing them, incorrectly, that their polling place has changed), but does not list the candidates or parties involved. And the description of the incidents was written to make them sound vague:
Note the "use" of "quotes" around "single" words when they're really not "necessary."
Okay, so they're not naming names, right? But the second report in the Fox News article gets right to the point:
<Borat>very nice.</Borat>
And then Fox News found it necessary to report some graffiti with a Republican's name in it:
...but no mention whatsoever that Colorado Democrat candidate Jay Fawcett's HQ was also vandalized overnight.
And more naming names:
Compare this to Fox News' coverage of the incidents reported last week in Florida and Texas, in which people who tried to vote Democrat had their votes changed to Republican. Oh yeah, there wasn't any (please post a link if I'm wrong).
And then back to giving vague details that don't mention party affiliation:
"If the industry actually "got" it, I'd be one happy camper."
I think the music industry "gets it" just fine. They may have required Steve Jobs to lead them by the nose, but the iTMS has been a rollicking huge success. It may not be your cup of tea because of the DRM, but the important thing is that many, many people use it, and it makes lots and lots of money. Part of developing a business plan includes defining your target audience, and "people who have non-Apple MP3 players or home media servers" -- i.e. you -- are apparently not in their target market.
I absolutely believe that you would not, say, drag all of your iTMS-purchased tracks into your P2P client's share directory if iTMS were to drop DRM, but lots of people would. It's been well established that the honor system doesn't work for shit on the Internet.
"It's not completely impossible - they recognized that AllofMP3 was doing exactly that."
...because, of course, they don't pay for the product. LCD televisions cost a lot at Best Buy, and I'll bet I could show them a thing or two about selling them cheaper, if I didn't have to pay the supplier.
"Then they bawled their eyes out at Visa and Mastercard in attempt to put them out of business (with limited effect, to my understanding). They had a supremely reasonable business model as far as consumers go, though not so much for the artists who almost certainly never saw a penny. But that's no different than online or CD sales - they generally make next to nothing from those, and that's only when they sell enough to cover the fees that they're charged by their label."
This is one of my favorite Slashdot memes... "artists don't make any money from CD sales." An expanded, more accurate version of this is "artists don't make any money from CD sales, except for those who do."
Believe me, I can understand why this meme is so popular on Slashdot... it's a moral free pass for lots of people to justify piracy. "Sure, allofmp3 isn't bothering to pay the artists... but that's okay, neither are the record companies." Sounds good, right? Except many artists do make money from CD sales.
Artists net approximately zero from allofmp3 sales, vs. around $0.15 per track per song on the iTMS. $0.15 may not seem like much, but if 1,000 people per month, opt to use allofmp3 rather than a legitimate source like the iTMS, that's $150 a month. And before you say "but wait... all artists are rich, greedy bastards" -- keep in mind that many aren't. Many songwriters and composers rely on mechanicals to pay the rent.
"Unfortunately for mostly everyone, I still haven't found a model that I agree with. Basically, all profits go to the artists - that's to say, no money to the RIAA."
So, why not set a good example? Loan me $50,000 to start my business. As for the profits, I get to keep them all. that's to say, no money for you. Too bad you invested all that money in my success, but since I did all the hard work, I should keep all the profits. Right? Get in touch with me via email and I'll give you instructions on where to send the money.
"I truly want to support the artists, and I'd happily send them a tenner for each album I've pirated if they went and put a mailing address up on their websites."
But most of them don't... too bad, huh? I guess that $10 stays in your pocket. Keep pirating away, and tell everybody who'll listen that you truly want to support the artists.
"They're just too (stupid|lazy) to implement said model."
Perfect opportunity for you, then. Seriously. If it's so easy and obvious, why not just do it? Try out the "fund the production of music and let the artists have all the money" model. I'm sure artists would love it and you would have them lining up to do business with you. Many Slashdotters would like it as well. I think you may be on to something.
"A little salty, but correct. Which makes their "don't be evil" posture not so much ironic, as extremely clarifying in terms of the philosophy that drives their ethics."
I think for many Slashdotters the moral decision comes down to this:
Typical record company: sales of maybe $500M / year (okay, so that's higher than average; I'm not including all the little indie labels). Operating margin below 15%. Treats content creators like crap. Wants to sell us stuff. Thus, they are bad.
Google: sales of ten billion per year. Operating margin of 30%. Treats content creators like crap. Wants to give stuff away. Thus, they are good.
Again, Google made about three billion in cash last year. TFS states that it's a hassle for the company with the $475 share price to get rights from "actors and music composers." Actors and composers make on average less than $10,000 per year, and must deal with a 90% unemployment rate. Yet the sympathies here are clearly with Google, the ten billion dollar company, because they give things away.
"I'm a totally rational American who supports honest business that's good for the little guy, not the big guy. The big guy doesn't need any help. Plain and simple. I'm not calling for the dismantling of the capialist system like you seem to be."
I agree. YouTube's parent company's stock price is $471 per share. Their operating margin is 34% on revenue of almost ten billion dollars a year. And they're complaining because it's tough to get permission from actors and music composers -- people in a profession where the unemployment rate is > 90% and average incomes are less than $10K a year? Oh, please...
What amazes me is that many people in this discussion are advocating changing the law to make it easier for this ten billion dollar company to run over the rights of actors and composers.
"Our conception of copyright is hampering creativity, not enabling it."
I see this stated a lot, usually in an abstract sense. I can't think of any examples where copyright law has hampered my creativity -- if I want to see that movie or have a copy of that song, I either pay or don't, and go on with my life. Can you cite an example of how copyright law has hampered your creativity?
"Instead, copyright has been extended twice."
Not sure what you mean here -- do you mean "twice in my lifetime?" Terms were increased under US law in 1831, 1909, 1976, and 1998. We also became a Berne signatory at some point in the 1990s, but the Berne "life plus 50" is about 100 years old.
"Instead, copyright has been extended twice. A tree jumped out in front of one of the responsible assholes and took care of him, but it was far too late (trees don't move very fast, so it makes sense.)"
The Sony Bono Term Extension Act was named posthumously in honor of Messr. Bono. It was not named thusly because he created the act. You're correct that he was an asshole, but not for the reason you mention.
"Will MySpace now prevent Weird Al from posting his own songs of his and his producers' own free will, because they also happened to be available for purchase on CD at your local music store?"
As long as he has the distribution rights, no.
"Will there be a way for people to legitimately post their own copyrighted works, or are legit artists now going to have to find a different site to post their own works that they wish to post?"
FINALLY somebody who gets it!
MySpace' success was founded on catering to musicians. They actively invite musicians to create a presence on MySpace, upload music, and so on.
Now along come kids who play and promote tracks which don't happen to be from bands that have a MySpace presence. Or, they play a track from a band that happens to have a MySpace page, but MySpace would really rather have the listener be on the band's page.
MySpace wants to be in control. They want to own the music-delivery experience and have the leverage when it comes to dealing with bands who want to have a MySpace presence. And kicking all the non-MySpace music off of the site is the first step.
"In the last 100 years, has anyone ever been sued over clipping out pictures from magazines and pasting them into their scrapbooks, then showing them off to friends? That's really what myspace is, isn't it?"
In the way that putting stuff on P2P is sharing music with your "friends." Yet I've run into people who (incorrectly) understood that copying a CD for a friend was fair use, and thus putting it in a share directory to share with their 10,000 closest friends was the same thing. Really.
At any rate, this would be a great conversation to pick up again when somebody gets sued for having a copyrighted photo on their MySpace page. In the meantime there's the issue of some MySpace users effectively turning their pages into unlicensed radio stations, and that makes some copyright owners mad. In terrestrial radio, the RIAA doesn't see the license fee (it all goes to the composers and songwriters) but with web radio, the RIAA managed to get the law changed so that they get a cut, and they have more lawyers than ASCAP and BMI.
"Simply because if Hexus has been critical in the past of a ('our') product, then when they release a favorable review regarding another of the company's products, it appears much more honest (and thus more trustworthy) than a site that has always had glowingly positive reviews of our product line."
Hexus asked for the same sku again. No reason why they would have reviewed it differently.
"The editor of Hexus did kinda come across as a dickweed in his e-mail, but that's forgiven because he's British... I don't think they know how to sound polite."
I doubt being British has anything to do with it. Many of the guys who run review sites are amateurs with delusions of entitlement and no sense of professionalism. As another poster put it, they are "children playing at business."
Back when I was hands-on in providing gaming hardware to reviewers, there was a world of difference in working with the print pubs vs. reviewer sites. Hexus' reaction was nothing new... the review sites all seemed to be run by people with the mentality of 16-year-olds who would pull stunts just like Hexus did: printing your private emails if you dared to refuse to send them free stuff.
"Great strategy on Alienware's part. As this circulates the net, most of their potential customers will know never to believe that an Alienware machine is actually good, regardless of what the reviewers are saying. That'll do wonders for their sales."
Well, that's Hexus' hope, at least. This is their attempted revenge against Alienware since Alienware declined to send them a system... the same system that Hexus had already slammed.
You're correct that it may cause some people to learn that this is how the the manufacturer/reviewer relationship generally works, and some may even believe that it is only Alienware who does this. But the fact remains that if some online review site trashes your product, and then asks you to send them the same product again, you're likely to refuse.
"That is what I am still trying to figure out. First they say it's for promotion. Bullshit! Beyond a TRL spot, what advertising is there, unless there is alot more payola going on now."
Many artists now have web sites, and many of them are very nice. Even if a web site with Flash and whatnot only costs $5K per year, that's still around $0.50 per CD if it's moderately successful. There's also co-op advertising... whenever you see a CD advertised by a retailer, the record company likely funded all or part of it. There's also music videos, merchandise and merchandising; ie. in-store displays -- if the record company didn't produce it, then the store did and charged the record company.
"Next, they say production and distribution. Bullshit! The number of record stores is dramatically smaller now (see the closing of Tower Records). People buy most albums in big box stores, or on line. Both have very streamlined ordering processes. There can press much closer to the actual amount."
The big box retailers typically want their suppliers to pay freight, and ask for margins on the order of 40% plus program (Best Buy, for instance, wants 7%+ program on many products). The mom and pop retailers are closer to 25% margin. Although the big box retailers can indeed operate efficiently, they have many vendors by the balls, and have the leverage to ask for -- and get -- more margin. The closing of the indies and smaller chains is actually a very bad thing for the record companies. Remember a few years back when the record companies set up the MAP program with Tower and got busted for price fixing? It was Best Buy and Wal-Mart who ratted them out.
"Next, physical media is expensive. Bullshit! Seriously, if I can get 100 blank cds for $10, the cost can't be more for them."
On the contrary; the cost of pressing a CD has nothing to do with the cost of a blank CD-R. If you're an unsigned artist and you're distributing your stuff on CD-R, then yeah, you can get away with it, but it's a different set of numbers if you're pressing CDs. If this is counter-intuitive to you, keep in mind that a typical music CD might have a press run of 5K - 10K pieces total, while blank CD-Rs are pressed in millions.
You're correct, however, that the physical cost of goods is a small percentage of the total cost of sale. It's like that in lots of industries. Unfortunately, many people who don't work in the retail industry don't get the distinction between "cost of goods" and "cost of sale," and "gross margin" vs. "net margin."
"Finally, how come an album can come out and the first week it's $11, and then two weeks later it's marked up to $18? What causes a 60% markup like that?"
That's one of many tricks the retail industry pulls. They launch at a promo price to drive sales and then raise the price once demand drops off. Or, demand may go up after a few weeks that the product's in the channel, due to the first wave of reviews coming in, or whatever. It might seem counter-intuitive as well, but you can be sure that the retailer does this because they know from experience that it maximizes profits.
"The price *only* decreased because of inflation. The sticker price never changed, on average."
I am not sure why you wrote that. CD prices have been in freefall. Here's some data. I don't even need that data to show me what I already know: CDs were commonly $18 - $20 five or ten years ago, and they're $14 today.
Keep in mind that the overall net on music CDs is on the order of 10%, which is far less than lots of other industries. CD prices can't arbitrarily come down much lower until there's a massive cut in the production costs. Perhaps that needs to happen and will happen, but despite what the "net is the same as gross" crowd will claim, you can't expect retail prices to drop to $10 tomorrow. Even the low-overhead indie labels like MagnaTunes, which don't provide money for music production, still sell their stuff at $8 a CD, which is probably about the sell-in price that the traditional labels offer to distribution.
"I remember commenting to a sales clerk how they were expensive compared to cassettes or something like that and he remarked that "yeah, but as soon as lots of people are buying lots of them, the price will drop down to the price of cassettes, or even lower since they're cheaper to make. A CD costs like 50 cents to make."
Sorry you were mislead by the sales clerk. He may have been misinformed or simply not known what he was talking about; mechanical royalties alone can cost $0.80, and a CD sure as hell didn't cost $0.50 to press back then... I was pressing data CDs in qtys of 10K and more (ie. larger runs than most record companies) ten years ago, and I remember that it was a big deal when the cost went below $0.50.
At any rate, I paid $18 for Tears For Fears' "Songs From The Big Chair" in '85 (a good investment overall); that's $32 in 2006 dollars. Production costs have gone way down, but shipping costs and the salaries of everybody who touches the CD at every stage (including that store clerk) have gone up considerably since then. Given that, a drop of more than 50% in constant dollars isn't bad.
"how about charging less than $20 for something"
Once again, the Slashdot $20 CD meme makes its requisite appearance.
Why is the average $20 price that Slashdotters apparently pay, vs. the $12 - $14 or so that others pay, a big deal? Because any time the question of P2P vs. buy comes up, a fair share of people point out that even $0.99 per track is highway robbery. Thus, the $6 - $8 delta between the CD stores that Slashdotters shop at, vs. most other consumers, might be a big deal.
I agree with you 100% about the ratio of good tracks to fillers. I don't pirate, but I sure as hell don't buy CDs, or even full albums, any more. I buy the one or two tracks I want off of an album, and then buy more incrementally only if I really like what I got. It probably hasn't reduced my overall music spend, but it's allowed me to spread it out across a lot more sources. I've left the CD format behind and I'm not looking back.
"There is a vast, vast gulf of difference between premediated corporate fraud causing direct and demonstrable loss, and casual, non-profit copyright infringement."
As the summary noted, he pleaded guilty to a charge of conspiracy to commit copyright infringement. Elitetorrents was planned to be a warez site (premeditation) and it was a for-profit venture. He was pretty hardcore into the warez scene. Nothing casual about it.
"Doesn't this sort of thing make owning and operating a search engine a risky venture?"
Not really. Legitimate search engine operators are not involved in conspiracies to commit copyright infringement.
Remember, this is the guy who ran elitetorrents. The guy who posted "HEY, WE HAVE STAR WARS!" six hours before it was released into theatres. He wasn't running a legitimate search engine. He was deep into the warez scene.
"Some of us are simply not willing to pay $20 for one decent song on a CD."
Ah yes, the $20 CD.
I don't pay $20 for CDs, either, but I don't avoid this price through piracy. I either buy the track I want on iTunes, or if I really want a CD, I'll pay $14 for it, as is the going rate.