"When you average it out (not the best approach in my opinion, but that's a different thread), the average loss is STILL less than 1 new CD per year."
Which brings up a couple more reasons why the data, as quoted, is useless: we don't know how many CDs the average person buys. If they spend $25 on CDs a year, that's a 25% decrease. If it's $100, that's a 5% decrease. Big difference. We also don't know if deltas in retail pricing has been accounted for; even a $0.50 change in ASP year over year would have a significant effect.
"Think of it as a step function, until the decline equals a whole unit there is no decline."
That's not how we count it in the retail industry (I sell peripherals for a computer company that everybody here has heard of). I'm guessing you're coming from a math/IT background, so you probably think we're wrong, but nonetheless, we talk about ASPs which have no bearing on actual retail prices, take rates and conversion rates which have no relevance to individual sales (whether somebody buys that iPod case or not is a binary, but we refer to take rates in terms of percentages), and so on. If you try to do pricing theory and sales analysis using only step functions, you won't get far.
So, I can understand how a delta of less than the retail price boggled you (as well as those who modded your post up), but those of us in this nasty business didn't blink. However, I think the data is absurdly suspect for a whole different set of reasons.
"If they're dividing the group into computer owners and non-oners, then they need to look at the amount of money spent on the computer every year. They are BOTH entertainment expenses."
Another good point. I think you and I have established that in this context, the statement in the article is absolutely useless. I'd like to get my hands on the original study, but I think I'd find it just as useless.
"When CD's were release they promised that they would cost around $5 in a few years as the costs of R&D were covered and mass production set in."
I was around when CDs were first launched, and I never heard anything of the sort. In fact, the only place I've heard this is on Slashdot. Like all tall tales, it changes with the retelling. Yours is the first variant I've heard which adds the "$5" angle.
Question for you: Magnatune, who claim that they are "not evil" and do a lot of things right (no DRM, et al) charge about the same as a CD you'd get from a major label, and Magnatune doesn't have the two-tier distribution, or the overhead of traditional record companies (e.g. Magnatune relies on you to produce your own masters; they won't cover the cost of production). Why do you think they charge so much, then? Are they greedy? Do you think it would be more appropriate for them to charge $5 or $2 or even $1, rather than charging what the market will bear?
"As for DRM protected content for $1 a song, the protection limits my ability to move to a new ipod every year without loosing music."
As others have pointed out, moving your music from iPod to iPod is trivial. I'm on my third iPod or so and I've not have a problem in moving my iTMS content. Have you really run into this problem, or is this in the realm of the "record companies promised CDs would cost $5" statement -- it sounds good, and backs up your argument, but isn't necessarily correct?
"Amen, it looks like the top 2 albums this week will be Justin Timberlake's solo production and Clay Aiken...'nuff said"
Here some of the top tracks of the year:
1999: "Believe" by Cher
1996: That fucking Macarena song
1991: "Everything I Do, I Do For You" by Bryan Adams (Messrs. Bush and McCain are currently disputing whether this song is an acceptable means of torture.)
1986: "That's What Friends are For" by Dionne Warwick
1982: "Physical" by Olivia Newton-John (#2 was "Eye of the Tiger" by Survivor.)
1979: "My Sharona" by The Knack
1978: "Shadow Dancing" by Andy Gibb
1973: "Tie A Yellow Ribbon 'Round The Old Oak Tree" by Tony Orlando and Dawn
1966: "The Ballad of the Green Berets" by Staff Sargeant Barry Sadler (for those of you who remember this song: I am very, very sorry if this is stuck in your head for the rest of the day.)
I hope this helps clear things up, and that you're a little closer to understanding why people chuckle when younger people think that "today's music sucks" is some sort of unique epiphany.
"Said it before, say it again. It's not the Internet, it's the product. Music today sucks compared to years ago."
This is a constant. People approaching middle age in the 1950s claimed that modern music sucked compared to music of previous decades. As did people in the 1920s and 1870s.
People who believe in the quality of music of past generations vs. today's music are often quite certain that they are correct in an objective sense, despite the overwhelming evidence to the contrary. Nonetheless, this phenomenon is so common that there is a word to describe it: nostalgia.
I'm aware that this provides a quandary for P2P fans: if "today's music sucks" is a constant over T, then it's not a significant contributor to declining music sales. Another sticky issue is that the top pirated tracks match up with the top sold tracks pretty closely. "Today's music sucks" is not driving P2P fans to download old stuff in lieu of new stuff. The demand for the new stuff is strong; P2P simply provides another channel.
I think your confusion lies in the fact that TFA omitted the word "average" in the sentence you quote. These are averages of consumer behavior, not typical consumers. It's fun with averages that allow the average family to have (say) 2.3 children, despite the fact that most people count their children in whole numbers.
However, the write-up omits so much of the background that it's useless out of context. My music purchases per year have probably increased five-fold since the advent of CDs, yet my CD purchases have dropped dramatically. This is because I buy music a track at a time online, and I do not pirate.
The bottom line is that this is nothing new. People will continue either produce or tout studies that back up their point of view, and the earth will continue to orbit the sun. Microsoft will continue to tout studies that make Windows look better than Linux. The record companies will continue to show off studies that indicate that most pirates do so to save money, and file sharing advocates will continue to quote studies that imply that P2P is the artist's best friend.
"Sounds to me like there's a need / demand for some sort of open-source / creative commons - type plays."
Of course, in the spirit of open source and the creative commons, the best thing to say is not "somebody else should write plays for free" but "I will write plays for free." But keep in mind that schools and theatre companies must make a profit, or at least break even. If I have the opportunity to pay a royalty to produce $_HUGE_MUSICAL vs. a play released under the Creative Commons from a playwright that nobody's heard of, it's likely a better investment to go with the former. However, I'll note that there's a ton of plays in the public domain from Shakespeare, the ancient Greeks, Moliere, et al that will draw crowds under the proper circumstances.
"Of course, all this begs the question as to why schools that teach play writing as a class don't produce stuff worth "producing" (I know, bad pun:-)."
Tons of plays out there were originally workshopped in academic settings, and lots of professional playwrights have BAs or MFAs in a theatrical field. Your observation applies to the arts in general: most people who go to art school do not become successful painters. Most people who attend USC film school do not become successful filmmakers. Most people who take acting classes do not become professional actors, and most people who take music classes do not become successful musicians.
"from the private, copyright valid, intellectual property of students. It's one thing for professors to have a document scanned for cheating. It's another thing for the company to profit off that work from students. While many of us are comfortable with downloading music, I doubt many of us would back someone who was building a business on selling that music they had downloaded."
During the Kazaa trials it was revealed that the woman who runs Sharman was worth some $40MM -- I forget if that was US$ or AUS$, but either way, it's a lot. Sam and Jed were making close to $1MM per month in advertising revenues at eDonkey before they were shut down. By all accounts, Bram Cohen has made his million bucks. Other major P2P services have similar success stories behind them -- legal issues aside, it's a great business to be in. People want free music. Sharman, eDonkey, etc. were glad to make that happen, and they were richly rewarded.
Now, it just might be the case that you also have a problem with this -- if the appeal of P2P services is the wide variety of copyrighted music that's available for free, then it's unfair for the providers of those services to have a profit motive, or to make the millions and millions that they have. But you would probably be in the minority around here... Kazaa and eDonkey get lots of sympathy for their legal woes.
When a musician or songwriter wanders onto Slashdot and points out that they resent having their stuff on the P2P networks and being traded without their permission, the collective Slashdot response it just suck it up and deal with it, not to be so greedy, and an admonishment that information wants to be free.
Looks like students deserve more respect than musicians, and if you make your money off of others' IP, you deserve more respect if it's MP3s rather than term papers.
"See, the thing is, they are selling this service to other schools and institutions. The service they are selling relies on the IP, and as a result, they are making money off of IP which they acquired from students without their consent. That's the problem."
Good point. Out of curiosity, do you begrudge the people behind Kazaa, eDonkey, ad nauseum for the millions of dollars they have made in the P2P business?
My guess is that many people reading that will answer that with a clear "no," the reason being that the P2P operators deserve to be richly rewarded for making such a great service available, and enabling so many people to easily share music. Since P2P operators provide a service to students, and turnitin.com provides the service to schools, my guess is that many Slashdotters will tell you that it's completely different.
"Selective enforcement then? P2P sharing is not OK (not like people are making money off of it) but this is (this service is making money off the teachers who sign up for the service)? I consider the second to be worse- if the RIAA has a case in the first one, then these students certainly have a case in the second one."
There's tons of money to be made in P2P. eDonkey was making close to $1MM in advertising revenue per month before they were shut down. The principals of Kazaa are all multi-millionaires, and Bram is doing very very well, too. Legal headaches notwithstanding, the P2P business can be very, very good. It's quite likely that the folks behind the major P2P services make money on an order of magnitude higher than the folks who run turnitin.com.
"I consider the second to be worse- if the RIAA has a case in the first one, then these students certainly have a case in the second one."
I think an explanation of what these services do is in order. They do not take your paper and re-sell it; it's uploaded for the purpose of checking against a database. If this ever got to a court, I think this would be summarily dismissed as well within the boundaries of fair use.
"They are the only fully legit music service to able to offer IPod compatible tracks and have taken the No2 slot after ITunes because of it."
For what it's worth, they're a distant second... 11% to Apple's 67% in July. But still... #2 is a pretty good accomplishment.
"That's exactly what eMusic has done. This was not a moral decision, it was purely a business one and they don't seem to be suffering from rampant piracy either."
This is because emusic's userbase skews older, with customers who have more refined tastes in music. While emusic is a success, I am not confident that their model will ever work in the mainstream, selling popular music with a broad appeal among teenagers and young adults -- who, I am guessing, do the most pirating.
"Electronic distribution should mean cheap distribution, and more variety, after all, how much would it cost to put ever lables back catalog on line? Instead, we have the labels doing what they have always done, take more from the artist, take more from the vendor, and keep more for themself. And yes, I know, the best we can do, is to try and starve them out, not buy stuff that comes from a major label, and I am not talking pirating."
Magnatune, whose motto is "We Are Not Evil," has overhead that is much, much lower than that of a typical indie label (ie. they don't give a penny to bands to cover the costs of recording). Yet they still ask you to pay $8 per album, or about a buck a song. Why do you suppose that is? Do you believe they are being greedy?
It seems that many Slashdotters believe something that the big evil labels and even the small non-evil labels do not: music should be free, or $0.20 a song at most. Just to amplify Stubear's suggestion, this is a great opportunity for you. Start your own label, and sell tracks for $0.20. Or, start small... find a band to manage (and there are tons of bands out there that can use a good manager) and help them sell their tracks for $0.20 each (or better yet, $0.10 or even free). You know all those Slashdotters who say (in so many words) "I'll stop pirating when music is a reasonable price, like $0.10?" You would so totally OWN that market. Do it! Seriously, dude.
"To bad it is not working because most people, even artists, don't recognize that the internet gives them the option of droping the labels out of the loop. So instead they continue to empower what should be an antiquiated system."
I think you've nailed it. Many Slashdotters say "the recording industry business model is obsolete" but what they really mean is that it should be obsolete. It must be frustrating to see record companies continuing to do reasonably well, for artists to continue to seek out contracts, and for consumers to still pay for that music. I guess the problem is that record companies produce what customers want, at a price that they are willing to pay.
If the traditional model were antiquated, then we'd see companies like Magnatunes doing well, and enterprises like the iTunes Music Store foundering.
If I've bought a CD and I haven't made arrangements for a public performance license (such as with BMI or ASCAP), wouldn't playing that CD at a public venue put me at risk of running afoul of the "unauthorized public performance" clause that's usually in the copyright statement on a CD?
"Uh, not any more. A decent studio consists of a home computer, a good soundcard, and some software (often included with the computer or sound card). A decent studio engineer can be yourself or a friend. If you think otherwise, either you haven't followed what's been happening in the last years in music software, or you have different concepts of what's "decent" when it comes to music studios and to programming labs."
Tools get better and cheaper, no matter what business you're in, but you still have to have that talent. It's quite possible to create something that sounds decent in your home studio, and it's quite possible (but unlikely) that you or somebody you know happens to be a trained recording engineer. Good engineers and good producers make it look easy, but it's not -- most stuff recorded at home by amateurs still sounds like it was recorded at home, by amateurs. Talented engineers and producers are generally worth the money.
With regard to the gear, a decent sound card is not enough if you do not have quality microphones and proper acoustics. Even the folks who create entirely electronic music largely do not rely on the free or the cheap software -- BT told me once that he prototypes stuff on Acid Express, but his full set of tools goes way beyond that.
No doubt -- the explosion in inexpensive audio gear has allowed thousands upon thousands of amateur musicians to putter around with their home studios, and as covered above, there are indeed examples of high quality, popular music being produced quite cheaply. But good recordings generally still cost some serious money to make.
"If big labels lowered their CD prices, their sales would ramp up and more people would be interested in their artists shows. It's called Loss leader."
Record companies get 99% of their revenue from the sale of records, so selling at a loss is not an option. As it is, many record companies end up with net margins of less than 20% (I believe the Canadian recording industry as a whole barely hit 10% last year) so they don't have a lot of room to play with on pricing, either. This will be wholly misunderstood by those who don't get the difference between gross margin and net margin, but it is correct. However, things might be totally different in Brazil.
"Moreover, I refuse to see how can one music piracy is related to software piracy after all. When you need software, you can (mostly) always set for a free/open version. When you want music (aka culture), there is no such option."
Curse those greedy musicians for refusing to let their recordings be freely distributed!
Seriously, though, there are lots of options. That old standby, radio (both terrestrial and streaming) is still a viable choice. If you want free MP3s, there's legaltorrents, and mp3.com and garageband.com have free downloads. Those are just aggregators -- many indie and unsigned artists release tracks on their web sites or via the P2P networks. MySpace and a few of the social networking sites have lots of bands online that will allow you to stream or download their stuff. But, I understand that as a Brazilian, you might be required by law to only use Orkut.
If anybody's unsure as to why it's often easier to find good open source software than it is to find good free music, it's important to understand that it's typically easier on an order of magnatude to contribute to an open source project than it is to rent a studio (or build your own), engineer and produce your own music. I've contributed to open source projects just by using my $500 Mac Mini and a few hours of my time. By comparison, a decent studio and engineer might cost you $500 a day. However, this fact does not make music piracy "different" than software piracy. We should respect others' rights, whether their tool of choice is a QWERTY keyboard or a Roland keyboard.
"It seems strange to me that a copyright lawyer hasn't heard of the fair use rights granted by US copyright law (Title 17, section 107)."
You'd better check your assumptions, then!
"The person asking the legal question is better informed than the lawyer!"
Do you really think that?
This same thing happened to me not too long ago. A young Slashdotter with an only cursory knowledge of pricing theory (not even "just enough to be dangerous") informed me that he was shocked -- shocked -- that although I've been doing this for $BIGNUM years, I wasn't familiar with the basic concept of the supply/demand curve. The notion completely boggled him and it didn't even occur to him that he might not know what he was talking about, or even to check on Wikipedia to get up to speed. It was as if his brain was wired so he couldn't even comprehend the concept of somebody knowing more than him.
And so it goes with Slashdotters' famous assessment of their own skills. Yesterday it was economics. Today, it's that perennial favorite, fair use doctrine. The copyright lawyer doesn't understand fair use doctrine, and it couldn't possibly be that you misunderstood, or that his understanding of the subject is at a level that's three jumps ahead of you.
"Wow, I always thought this was a fair use issue."
Don't worry... Slashdotters are famous for their misunderstanding of fair use doctrine. Falsely claiming that something is fair use is quite common around here.
"I know fair use isn't what it used to be. I didn't realize it was completely negated."
The section of copyright law that describes the fair use test has not been changed, to my knowledge, for many, many years. Where a lot of people get caught up is when copyright holders use anti-copying techniques that prohibit activity which many people consider to be fair use, such as format-shifting. Yes, you are likely legally allowed to format-shift, but the owner of the copyright is still welcome to stop you from doing so. To use a less high-tech example... small-scale Xeroxing of documents for educational use is often permitted under fair use, but nothing's stopping me from distributing my magazine on copy-proof paper, if I so choose.
Fair use doctrine is not like a mathematical formula where you can plug in a set of facts on one side of the equation and get a definite answer on the other side. This is why we have courts. Realistically, your scenario is not likely to see you brought into a court. Even if you had 1,000 CDs which were scratched and you downloaded them from a P2P network and left them in your share directory, you would be in legal trouble for sharing them, not downloading them. Sharing them is what nails you, no matter how you got the music.
"I'm depressed there had to be an answer, or a question, in the first place."
Agreed. I think the lawyer was kind. If somebody asked me if losing a CD gave one the legal right to download copyrighted music from a P2P network without the owner's permission, my response would have the phrase "freaking moron" somewhere in it. Then I would hit him with something heavy before he got to the "f" sound in his "but isn't it fair use?" retort.
"From now on, if someone says IANAL at the top of their post, that tells me the probably know MORE about the subject, not LESS."
...and in 25 words, you have encapsulated the prevailing attitude on Slashdot toward legal matters. I'll make a clumsy attempt to elaborate on this attitude:
The law is consistent, and thus it's easy to draw correct analogies: the law about X says this, and X can be compared to Y, therefore Z must be true!
The law is easy to understand. If applying Occam's Razor contradicts your understanding, go with your understanding. (Recent example: Slashdotters have found lots of obvious prior art, yet Apple paid $100MM to license the Zen patent, thus Apple's lawyers must be stupid and/or uninformed. The prior art is valid simply because Slashdotters think it is.)
Complex legal issues can be authoritavely answered in just a few sentences. If the answer is "I don't know" or "that depends" or "that's for a court to decide, keep finding analogies per #1 until you're sure you're right.
Judges and others involved in the legal profession are largely luddites, or are incapable of understanding technology on a level of that of Slashdotters (reading decisions and other documents dispells this notion).
"However, I think the real reason legal music downloads is working is because iTunes is a better experience. That's it. I think they're wasting their own time and money with DRM and lawsuits and whatever. All they've ever had to do was provide a better experience and people will pay. People with money will, anyways. They've seen this but they won't believe it. And if they wanted to take it further down the "better experience" path, they'd drop DRM and lawsuits. But whatever; they won't."
Agreed with you for the most part, put from a business perspective, piracy is like shoplifting; there will always people who will rationalize a way to do it. Retail stores can lower prices all they want and provide as many positive incentives not to shoplift as they can, but they still invest in screening gear and will kick your ass right proper if they catch you.
Remember five years ago when the selection of legitimate online music was awful, tracks cost $3 each, and the DRM was hideous? Folks said that the value proposition simply wasn't good enough, and they would switch from P2P to buying online when online music was cheaper, better, and more plentiful. Today music is less than a buck, DRM is almost invisible for most people, and selection is plentiful. The iTMS has been a huge success, but the die-hard P2P (and now, Russian music site) fans claim that it's still overpriced, and $0.50 - $0.75 is a fair price. You can be sure that if Apple loosens their DRM even more, drops the price to $0.50, and offers in a dozen encoding formats and bitrates, the P2P fans will claim that $0.25 is the fair price, and that they will continue to P2P because Apple and the record companies "don't get it."
Economics is all about incentives. There are positive incentives, like pricing and selection. There are negative incentives, like making it difficult to break the law, or pursuing those who do. Like the brick and mortar retail industry, successful online industries will continue to do both.
"finally, the russians do claim that they are sending a percent of the fees to the artists. I can trust that as much as I trust the riaa sending its 'cut' to its artists."
The licensing fees that the Russian sites pay are estimated to be on the order of a few hundred bucks a month. Divide that by the tens of thousands of tracks they sell per month, and it's hundredths of a cent. However, the Russian sites refuse to divulge which tracks are being downloaded. Some indie artists have asked. They refuse to tell.
By comparison, an iTunes sale will net the artist around $0.15. And, yes, iTunes reports and pays. Sell a thousand tracks a month and that's $150 per month, vs. zero for sales on the Russian sites.
Now, you might think that $150 means nothing to your average recording artist, and that they can easily eat this loss. But the reality is that the typical recording artist has a standard of living that's much closer to your own (and quite likely worse) than the image you might have from watching MTV. If you would miss that $150 a month -- or, better put, if you would be angry if somebody cheated you out of $150 on the rationale that they thought you didn't need it -- then it's a safe assumption that your favorite artist would, too.
Make no mistake -- it's perfectly acceptable to say something like "I don't give fuck all if an artist makes $15 or $150 or $1500 a month. Just give me all the DRM-free music I can handle, baby!". As the Electric Company pointed out, the most important person in the world is YOU, and not some random artist. Pirate all you want if that works with your moral code. But it is intellectually dishonest to state that you use a Russian site for your music because it is no worse a deal for the artist than buying it legitimately.
"Unfortunately for the artists, they conceded all the rights of their creations to the recording industries when they signed those contracts, so, the recording corporations are in their right to protect THEIR intellectual property."
Are you sure about that? I am of the understanding that the artists typically retain the rights to the words and music, while the record company gets the rights to said recording of the music. The record company did not write the words or music, but they do finance the recording.
"I wonder how long would it take until artists wake up and see how hard are music corporations screwing them..."
Some musicians and artists pursue recording contracts. Some don't. Of those who have recording contracts, some like them, some don't. There will always be more artists who want contracts than can get contracts, so they will generally get poor deals, but I doubt very much that Slashdotters are the white knights that will cause the millions of signed artists and musicians to "wake up."
It's the same sad story in my profession, the computer peripheral industry. I think I'm worth about 5X of what I'm being paid, but there's the small problem of there being dozens of other folks who eagerly want to do what I'm doing. Thus, it is generally the companies in the computer peripherals industry who set the salaries.
I have a question about the term "excessive greed" as it applies to copyright violation.
If you are selling an easily-copyable item for $X, and you insist that people pay you for it, rather than copy it for free, so that you can be $X richer, I think most Slashdotters would agree that this is "excessive greed."
But if I insist on copying it rather than paying you for it, so that I don't have to be $X poorer, is that also "excessive greed?"
"And your friend is probably not a member of RIAA/MPAA. Even if he was, do you think he would see anything from that $30M?"
The way he put it once was "I'm a member of the RIAA, but they do not speak for me." ie. he joined for the usual reasons that one joins a trade group, but he was not a fan of their policies.
I don't think the RIAA is divvying up that $30 and sending checks to every teeny little record company, if that's what you mean. I don't think the AMA sends checks to doctors when the AMA gets judgement or settlement money, either.
"Your friend is no where near the RIAA execs. It is laughable to even compare them. Now when your friends has 200 clients and is paying himself 250K a year then you can compare."
Larry Ellison is a billionaire. There are many millionaires in the software and IT biz, too. But the vast majority of software companies are really teeny, and the vast majority of people who ply their trade in the software and IT biz are everyday Joes who make a middle class living. I'm not going to, say, dig up a crack for a $10 shareware app that some guy is selling simply because there are people like Larry Ellison who are very, very rich.
The record industry is the same way. Most industries are the same way. If it helps you rationalize piracy by imagining that everybody in the record industry is a millionare executive, then God bless you, but it is assuredly not the case.
"What can they do when 100 million people break a law?"
Stop what they can, and manage their business so they can accomodate the rest. Just like every other business does.
If you're not sure what I mean, think of Fry's, Best Buy, or Safeway, or Macy's. They know that people will always find an excuse to shoplift. There's ultimately nothing that they can do about it. Yet they will still kick your ass right proper if they catch you.
Slashdot Mirror
"When you average it out (not the best approach in my opinion, but that's a different thread), the average loss is STILL less than 1 new CD per year."
Which brings up a couple more reasons why the data, as quoted, is useless: we don't know how many CDs the average person buys. If they spend $25 on CDs a year, that's a 25% decrease. If it's $100, that's a 5% decrease. Big difference. We also don't know if deltas in retail pricing has been accounted for; even a $0.50 change in ASP year over year would have a significant effect.
"Think of it as a step function, until the decline equals a whole unit there is no decline."
That's not how we count it in the retail industry (I sell peripherals for a computer company that everybody here has heard of). I'm guessing you're coming from a math/IT background, so you probably think we're wrong, but nonetheless, we talk about ASPs which have no bearing on actual retail prices, take rates and conversion rates which have no relevance to individual sales (whether somebody buys that iPod case or not is a binary, but we refer to take rates in terms of percentages), and so on. If you try to do pricing theory and sales analysis using only step functions, you won't get far.
So, I can understand how a delta of less than the retail price boggled you (as well as those who modded your post up), but those of us in this nasty business didn't blink. However, I think the data is absurdly suspect for a whole different set of reasons.
"If they're dividing the group into computer owners and non-oners, then they need to look at the amount of money spent on the computer every year. They are BOTH entertainment expenses."
Another good point. I think you and I have established that in this context, the statement in the article is absolutely useless. I'd like to get my hands on the original study, but I think I'd find it just as useless.
"When CD's were release they promised that they would cost around $5 in a few years as the costs of R&D were covered and mass production set in."
I was around when CDs were first launched, and I never heard anything of the sort. In fact, the only place I've heard this is on Slashdot. Like all tall tales, it changes with the retelling. Yours is the first variant I've heard which adds the "$5" angle.
Question for you: Magnatune, who claim that they are "not evil" and do a lot of things right (no DRM, et al) charge about the same as a CD you'd get from a major label, and Magnatune doesn't have the two-tier distribution, or the overhead of traditional record companies (e.g. Magnatune relies on you to produce your own masters; they won't cover the cost of production). Why do you think they charge so much, then? Are they greedy? Do you think it would be more appropriate for them to charge $5 or $2 or even $1, rather than charging what the market will bear?
"As for DRM protected content for $1 a song, the protection limits my ability to move to a new ipod every year without loosing music."
As others have pointed out, moving your music from iPod to iPod is trivial. I'm on my third iPod or so and I've not have a problem in moving my iTMS content. Have you really run into this problem, or is this in the realm of the "record companies promised CDs would cost $5" statement -- it sounds good, and backs up your argument, but isn't necessarily correct?
"Amen, it looks like the top 2 albums this week will be Justin Timberlake's solo production and Clay Aiken...'nuff said"
Here some of the top tracks of the year:
I hope this helps clear things up, and that you're a little closer to understanding why people chuckle when younger people think that "today's music sucks" is some sort of unique epiphany.
"Said it before, say it again. It's not the Internet, it's the product. Music today sucks compared to years ago."
This is a constant. People approaching middle age in the 1950s claimed that modern music sucked compared to music of previous decades. As did people in the 1920s and 1870s.
People who believe in the quality of music of past generations vs. today's music are often quite certain that they are correct in an objective sense, despite the overwhelming evidence to the contrary. Nonetheless, this phenomenon is so common that there is a word to describe it: nostalgia.
I'm aware that this provides a quandary for P2P fans: if "today's music sucks" is a constant over T, then it's not a significant contributor to declining music sales. Another sticky issue is that the top pirated tracks match up with the top sold tracks pretty closely. "Today's music sucks" is not driving P2P fans to download old stuff in lieu of new stuff. The demand for the new stuff is strong; P2P simply provides another channel.
I think your confusion lies in the fact that TFA omitted the word "average" in the sentence you quote. These are averages of consumer behavior, not typical consumers. It's fun with averages that allow the average family to have (say) 2.3 children, despite the fact that most people count their children in whole numbers.
However, the write-up omits so much of the background that it's useless out of context. My music purchases per year have probably increased five-fold since the advent of CDs, yet my CD purchases have dropped dramatically. This is because I buy music a track at a time online, and I do not pirate.
The bottom line is that this is nothing new. People will continue either produce or tout studies that back up their point of view, and the earth will continue to orbit the sun. Microsoft will continue to tout studies that make Windows look better than Linux. The record companies will continue to show off studies that indicate that most pirates do so to save money, and file sharing advocates will continue to quote studies that imply that P2P is the artist's best friend.
"Sounds to me like there's a need / demand for some sort of open-source / creative commons - type plays."
Of course, in the spirit of open source and the creative commons, the best thing to say is not "somebody else should write plays for free" but "I will write plays for free." But keep in mind that schools and theatre companies must make a profit, or at least break even. If I have the opportunity to pay a royalty to produce $_HUGE_MUSICAL vs. a play released under the Creative Commons from a playwright that nobody's heard of, it's likely a better investment to go with the former. However, I'll note that there's a ton of plays in the public domain from Shakespeare, the ancient Greeks, Moliere, et al that will draw crowds under the proper circumstances.
"Of course, all this begs the question as to why schools that teach play writing as a class don't produce stuff worth "producing" (I know, bad pun :-)."
Tons of plays out there were originally workshopped in academic settings, and lots of professional playwrights have BAs or MFAs in a theatrical field. Your observation applies to the arts in general: most people who go to art school do not become successful painters. Most people who attend USC film school do not become successful filmmakers. Most people who take acting classes do not become professional actors, and most people who take music classes do not become successful musicians.
"from the private, copyright valid, intellectual property of students. It's one thing for professors to have a document scanned for cheating. It's another thing for the company to profit off that work from students. While many of us are comfortable with downloading music, I doubt many of us would back someone who was building a business on selling that music they had downloaded."
During the Kazaa trials it was revealed that the woman who runs Sharman was worth some $40MM -- I forget if that was US$ or AUS$, but either way, it's a lot. Sam and Jed were making close to $1MM per month in advertising revenues at eDonkey before they were shut down. By all accounts, Bram Cohen has made his million bucks. Other major P2P services have similar success stories behind them -- legal issues aside, it's a great business to be in. People want free music. Sharman, eDonkey, etc. were glad to make that happen, and they were richly rewarded.
Now, it just might be the case that you also have a problem with this -- if the appeal of P2P services is the wide variety of copyrighted music that's available for free, then it's unfair for the providers of those services to have a profit motive, or to make the millions and millions that they have. But you would probably be in the minority around here... Kazaa and eDonkey get lots of sympathy for their legal woes.
When a musician or songwriter wanders onto Slashdot and points out that they resent having their stuff on the P2P networks and being traded without their permission, the collective Slashdot response it just suck it up and deal with it, not to be so greedy, and an admonishment that information wants to be free.
Looks like students deserve more respect than musicians, and if you make your money off of others' IP, you deserve more respect if it's MP3s rather than term papers.
"See, the thing is, they are selling this service to other schools and institutions. The service they are selling relies on the IP, and as a result, they are making money off of IP which they acquired from students without their consent. That's the problem."
Good point. Out of curiosity, do you begrudge the people behind Kazaa, eDonkey, ad nauseum for the millions of dollars they have made in the P2P business?
My guess is that many people reading that will answer that with a clear "no," the reason being that the P2P operators deserve to be richly rewarded for making such a great service available, and enabling so many people to easily share music. Since P2P operators provide a service to students, and turnitin.com provides the service to schools, my guess is that many Slashdotters will tell you that it's completely different.
"Selective enforcement then? P2P sharing is not OK (not like people are making money off of it) but this is (this service is making money off the teachers who sign up for the service)? I consider the second to be worse- if the RIAA has a case in the first one, then these students certainly have a case in the second one."
There's tons of money to be made in P2P. eDonkey was making close to $1MM in advertising revenue per month before they were shut down. The principals of Kazaa are all multi-millionaires, and Bram is doing very very well, too. Legal headaches notwithstanding, the P2P business can be very, very good. It's quite likely that the folks behind the major P2P services make money on an order of magnitude higher than the folks who run turnitin.com.
"I consider the second to be worse- if the RIAA has a case in the first one, then these students certainly have a case in the second one."
I think an explanation of what these services do is in order. They do not take your paper and re-sell it; it's uploaded for the purpose of checking against a database. If this ever got to a court, I think this would be summarily dismissed as well within the boundaries of fair use.
"They are the only fully legit music service to able to offer IPod compatible tracks and have taken the No2 slot after ITunes because of it."
For what it's worth, they're a distant second... 11% to Apple's 67% in July. But still... #2 is a pretty good accomplishment.
"That's exactly what eMusic has done. This was not a moral decision, it was purely a business one and they don't seem to be suffering from rampant piracy either."
This is because emusic's userbase skews older, with customers who have more refined tastes in music. While emusic is a success, I am not confident that their model will ever work in the mainstream, selling popular music with a broad appeal among teenagers and young adults -- who, I am guessing, do the most pirating.
"Electronic distribution should mean cheap distribution, and more variety, after all, how much would it cost to put ever lables back catalog on line? Instead, we have the labels doing what they have always done, take more from the artist, take more from the vendor, and keep more for themself. And yes, I know, the best we can do, is to try and starve them out, not buy stuff that comes from a major label, and I am not talking pirating."
Magnatune, whose motto is "We Are Not Evil," has overhead that is much, much lower than that of a typical indie label (ie. they don't give a penny to bands to cover the costs of recording). Yet they still ask you to pay $8 per album, or about a buck a song. Why do you suppose that is? Do you believe they are being greedy?
It seems that many Slashdotters believe something that the big evil labels and even the small non-evil labels do not: music should be free, or $0.20 a song at most. Just to amplify Stubear's suggestion, this is a great opportunity for you. Start your own label, and sell tracks for $0.20. Or, start small... find a band to manage (and there are tons of bands out there that can use a good manager) and help them sell their tracks for $0.20 each (or better yet, $0.10 or even free). You know all those Slashdotters who say (in so many words) "I'll stop pirating when music is a reasonable price, like $0.10?" You would so totally OWN that market. Do it! Seriously, dude.
"To bad it is not working because most people, even artists, don't recognize that the internet gives them the option of droping the labels out of the loop. So instead they continue to empower what should be an antiquiated system."
I think you've nailed it. Many Slashdotters say "the recording industry business model is obsolete" but what they really mean is that it should be obsolete. It must be frustrating to see record companies continuing to do reasonably well, for artists to continue to seek out contracts, and for consumers to still pay for that music. I guess the problem is that record companies produce what customers want, at a price that they are willing to pay.
If the traditional model were antiquated, then we'd see companies like Magnatunes doing well, and enterprises like the iTunes Music Store foundering.
You had zeros? We had to use the letter "O".
"Playing it at a party (private or public)? YES"
If I've bought a CD and I haven't made arrangements for a public performance license (such as with BMI or ASCAP), wouldn't playing that CD at a public venue put me at risk of running afoul of the "unauthorized public performance" clause that's usually in the copyright statement on a CD?
"Uh, not any more. A decent studio consists of a home computer, a good soundcard, and some software (often included with the computer or sound card). A decent studio engineer can be yourself or a friend. If you think otherwise, either you haven't followed what's been happening in the last years in music software, or you have different concepts of what's "decent" when it comes to music studios and to programming labs."
Tools get better and cheaper, no matter what business you're in, but you still have to have that talent. It's quite possible to create something that sounds decent in your home studio, and it's quite possible (but unlikely) that you or somebody you know happens to be a trained recording engineer. Good engineers and good producers make it look easy, but it's not -- most stuff recorded at home by amateurs still sounds like it was recorded at home, by amateurs. Talented engineers and producers are generally worth the money.
With regard to the gear, a decent sound card is not enough if you do not have quality microphones and proper acoustics. Even the folks who create entirely electronic music largely do not rely on the free or the cheap software -- BT told me once that he prototypes stuff on Acid Express, but his full set of tools goes way beyond that.
No doubt -- the explosion in inexpensive audio gear has allowed thousands upon thousands of amateur musicians to putter around with their home studios, and as covered above, there are indeed examples of high quality, popular music being produced quite cheaply. But good recordings generally still cost some serious money to make.
"If big labels lowered their CD prices, their sales would ramp up and more people would be interested in their artists shows. It's called Loss leader."
Record companies get 99% of their revenue from the sale of records, so selling at a loss is not an option. As it is, many record companies end up with net margins of less than 20% (I believe the Canadian recording industry as a whole barely hit 10% last year) so they don't have a lot of room to play with on pricing, either. This will be wholly misunderstood by those who don't get the difference between gross margin and net margin, but it is correct. However, things might be totally different in Brazil.
"Moreover, I refuse to see how can one music piracy is related to software piracy after all. When you need software, you can (mostly) always set for a free/open version. When you want music (aka culture), there is no such option."
Curse those greedy musicians for refusing to let their recordings be freely distributed!
Seriously, though, there are lots of options. That old standby, radio (both terrestrial and streaming) is still a viable choice. If you want free MP3s, there's legaltorrents, and mp3.com and garageband.com have free downloads. Those are just aggregators -- many indie and unsigned artists release tracks on their web sites or via the P2P networks. MySpace and a few of the social networking sites have lots of bands online that will allow you to stream or download their stuff. But, I understand that as a Brazilian, you might be required by law to only use Orkut.
If anybody's unsure as to why it's often easier to find good open source software than it is to find good free music, it's important to understand that it's typically easier on an order of magnatude to contribute to an open source project than it is to rent a studio (or build your own), engineer and produce your own music. I've contributed to open source projects just by using my $500 Mac Mini and a few hours of my time. By comparison, a decent studio and engineer might cost you $500 a day. However, this fact does not make music piracy "different" than software piracy. We should respect others' rights, whether their tool of choice is a QWERTY keyboard or a Roland keyboard.
"It seems strange to me that a copyright lawyer hasn't heard of the fair use rights granted by US copyright law (Title 17, section 107)."
You'd better check your assumptions, then!
"The person asking the legal question is better informed than the lawyer!"
Do you really think that?
This same thing happened to me not too long ago. A young Slashdotter with an only cursory knowledge of pricing theory (not even "just enough to be dangerous") informed me that he was shocked -- shocked -- that although I've been doing this for $BIGNUM years, I wasn't familiar with the basic concept of the supply/demand curve. The notion completely boggled him and it didn't even occur to him that he might not know what he was talking about, or even to check on Wikipedia to get up to speed. It was as if his brain was wired so he couldn't even comprehend the concept of somebody knowing more than him.
And so it goes with Slashdotters' famous assessment of their own skills. Yesterday it was economics. Today, it's that perennial favorite, fair use doctrine. The copyright lawyer doesn't understand fair use doctrine, and it couldn't possibly be that you misunderstood, or that his understanding of the subject is at a level that's three jumps ahead of you.
"Wow, I always thought this was a fair use issue."
Don't worry... Slashdotters are famous for their misunderstanding of fair use doctrine. Falsely claiming that something is fair use is quite common around here.
"I know fair use isn't what it used to be. I didn't realize it was completely negated."
The section of copyright law that describes the fair use test has not been changed, to my knowledge, for many, many years. Where a lot of people get caught up is when copyright holders use anti-copying techniques that prohibit activity which many people consider to be fair use, such as format-shifting. Yes, you are likely legally allowed to format-shift, but the owner of the copyright is still welcome to stop you from doing so. To use a less high-tech example... small-scale Xeroxing of documents for educational use is often permitted under fair use, but nothing's stopping me from distributing my magazine on copy-proof paper, if I so choose.
Fair use doctrine is not like a mathematical formula where you can plug in a set of facts on one side of the equation and get a definite answer on the other side. This is why we have courts. Realistically, your scenario is not likely to see you brought into a court. Even if you had 1,000 CDs which were scratched and you downloaded them from a P2P network and left them in your share directory, you would be in legal trouble for sharing them, not downloading them. Sharing them is what nails you, no matter how you got the music.
"I'm depressed there had to be an answer, or a question, in the first place."
Agreed. I think the lawyer was kind. If somebody asked me if losing a CD gave one the legal right to download copyrighted music from a P2P network without the owner's permission, my response would have the phrase "freaking moron" somewhere in it. Then I would hit him with something heavy before he got to the "f" sound in his "but isn't it fair use?" retort.
"From now on, if someone says IANAL at the top of their post, that tells me the probably know MORE about the subject, not LESS."
...and in 25 words, you have encapsulated the prevailing attitude on Slashdot toward legal matters. I'll make a clumsy attempt to elaborate on this attitude:
"However, I think the real reason legal music downloads is working is because iTunes is a better experience. That's it. I think they're wasting their own time and money with DRM and lawsuits and whatever. All they've ever had to do was provide a better experience and people will pay. People with money will, anyways. They've seen this but they won't believe it. And if they wanted to take it further down the "better experience" path, they'd drop DRM and lawsuits. But whatever; they won't."
Agreed with you for the most part, put from a business perspective, piracy is like shoplifting; there will always people who will rationalize a way to do it. Retail stores can lower prices all they want and provide as many positive incentives not to shoplift as they can, but they still invest in screening gear and will kick your ass right proper if they catch you.
Remember five years ago when the selection of legitimate online music was awful, tracks cost $3 each, and the DRM was hideous? Folks said that the value proposition simply wasn't good enough, and they would switch from P2P to buying online when online music was cheaper, better, and more plentiful. Today music is less than a buck, DRM is almost invisible for most people, and selection is plentiful. The iTMS has been a huge success, but the die-hard P2P (and now, Russian music site) fans claim that it's still overpriced, and $0.50 - $0.75 is a fair price. You can be sure that if Apple loosens their DRM even more, drops the price to $0.50, and offers in a dozen encoding formats and bitrates, the P2P fans will claim that $0.25 is the fair price, and that they will continue to P2P because Apple and the record companies "don't get it."
Economics is all about incentives. There are positive incentives, like pricing and selection. There are negative incentives, like making it difficult to break the law, or pursuing those who do. Like the brick and mortar retail industry, successful online industries will continue to do both.
"finally, the russians do claim that they are sending a percent of the fees to the artists. I can trust that as much as I trust the riaa sending its 'cut' to its artists."
The licensing fees that the Russian sites pay are estimated to be on the order of a few hundred bucks a month. Divide that by the tens of thousands of tracks they sell per month, and it's hundredths of a cent. However, the Russian sites refuse to divulge which tracks are being downloaded. Some indie artists have asked. They refuse to tell.
By comparison, an iTunes sale will net the artist around $0.15. And, yes, iTunes reports and pays. Sell a thousand tracks a month and that's $150 per month, vs. zero for sales on the Russian sites.
Now, you might think that $150 means nothing to your average recording artist, and that they can easily eat this loss. But the reality is that the typical recording artist has a standard of living that's much closer to your own (and quite likely worse) than the image you might have from watching MTV. If you would miss that $150 a month -- or, better put, if you would be angry if somebody cheated you out of $150 on the rationale that they thought you didn't need it -- then it's a safe assumption that your favorite artist would, too.
Make no mistake -- it's perfectly acceptable to say something like "I don't give fuck all if an artist makes $15 or $150 or $1500 a month. Just give me all the DRM-free music I can handle, baby!". As the Electric Company pointed out, the most important person in the world is YOU, and not some random artist. Pirate all you want if that works with your moral code. But it is intellectually dishonest to state that you use a Russian site for your music because it is no worse a deal for the artist than buying it legitimately.
"Unfortunately for the artists, they conceded all the rights of their creations to the recording industries when they signed those contracts, so, the recording corporations are in their right to protect THEIR intellectual property."
Are you sure about that? I am of the understanding that the artists typically retain the rights to the words and music, while the record company gets the rights to said recording of the music. The record company did not write the words or music, but they do finance the recording.
"I wonder how long would it take until artists wake up and see how hard are music corporations screwing them..."
Some musicians and artists pursue recording contracts. Some don't. Of those who have recording contracts, some like them, some don't. There will always be more artists who want contracts than can get contracts, so they will generally get poor deals, but I doubt very much that Slashdotters are the white knights that will cause the millions of signed artists and musicians to "wake up."
It's the same sad story in my profession, the computer peripheral industry. I think I'm worth about 5X of what I'm being paid, but there's the small problem of there being dozens of other folks who eagerly want to do what I'm doing. Thus, it is generally the companies in the computer peripherals industry who set the salaries.
"Because this is excessive greed."
I have a question about the term "excessive greed" as it applies to copyright violation.
If you are selling an easily-copyable item for $X, and you insist that people pay you for it, rather than copy it for free, so that you can be $X richer, I think most Slashdotters would agree that this is "excessive greed."
But if I insist on copying it rather than paying you for it, so that I don't have to be $X poorer, is that also "excessive greed?"
"It goes to pay the record labels, who don't give one red cent to the artists (after all, it's not in their contracts.)"
And next week, the meme will be that artists are way overpaid, and piracy is our way of taking them down a notch.
Depending on how the "5, Insightfuls" fly, the Slashdot groupthink varies between "the artists are needy" and "the artists are greedy."
"And your friend is probably not a member of RIAA/MPAA. Even if he was, do you think he would see anything from that $30M?"
The way he put it once was "I'm a member of the RIAA, but they do not speak for me." ie. he joined for the usual reasons that one joins a trade group, but he was not a fan of their policies.
I don't think the RIAA is divvying up that $30 and sending checks to every teeny little record company, if that's what you mean. I don't think the AMA sends checks to doctors when the AMA gets judgement or settlement money, either.
Let me know if you have any other questions.
"Your friend is no where near the RIAA execs. It is laughable to even compare them. Now when your friends has 200 clients and is paying himself 250K a year then you can compare."
Larry Ellison is a billionaire. There are many millionaires in the software and IT biz, too. But the vast majority of software companies are really teeny, and the vast majority of people who ply their trade in the software and IT biz are everyday Joes who make a middle class living. I'm not going to, say, dig up a crack for a $10 shareware app that some guy is selling simply because there are people like Larry Ellison who are very, very rich.
The record industry is the same way. Most industries are the same way. If it helps you rationalize piracy by imagining that everybody in the record industry is a millionare executive, then God bless you, but it is assuredly not the case.
"What can they do when 100 million people break a law?"
Stop what they can, and manage their business so they can accomodate the rest. Just like every other business does.
If you're not sure what I mean, think of Fry's, Best Buy, or Safeway, or Macy's. They know that people will always find an excuse to shoplift. There's ultimately nothing that they can do about it. Yet they will still kick your ass right proper if they catch you.