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The Songwriters Association of Canada Wants To Embrace File Sharing, But Does It Have the Right Approach?

This post originally appeared on Techdirt.

in 2007, the Songwriters Association of Canada gained some international headlines with a proposal to legalize non-commercial peer-to-peer file sharing through an ISP levy. This sort of proposal wasn’t new, but had not been so prominently put forth by an artist organization before. There were serious problems with the proposal, but it stimulated a healthy debate and it started from many correct premises — that file sharing should be embraced, that digital locks and lawsuits were not a way forward, etc. But it was a non-voluntary, “you’re a criminal” tax that could open the floodgates for other industries to demand similar levies.

I was a member of the Songwriters Association of Canada from 2007-2011, and I had the opportunity to express my concerns about the proposal to many people involved. Last year, I attended a session with an update on the proposal, and was surprised how much it had changed. The proposal had dropped the legislative angle in favor of a business to business approach, with an actual opt-out option for both creators and customers of participating ISPs. Unlike groups behind other licensing proposals, the SAC has actually been responsive to many concerns, and unlike other artist groups, the SAC takes a decidedly positive view on sharing music and the opportunities technology provides to creators. This attitude comes through in the proposal:

Rather than a legislative approach to the monetization of music file-sharing as we originally envisioned, the S.A.C. is now focused on a “business to business” model that requires no new legislation be enacted in Canada.

Our basic belief however remains the same: Music file-sharing is a vibrant, open, global distribution system for music of all kinds, and presents a tremendous opportunity to both creators and rights-holders. […]

People have always shared music and always will. The music we share defines who we are, and who our friends and peers are. The importance of music in the fabric of our own culture, as well as those around the world, is inextricably bound to the experience of sharing. [emphasis changed]

As the copyright debate heats up again in Canada in light of SOPA and new pressures on pending legislation, this positive attitude towards peer-to-peer file sharing was expressed again in a recent TorrentFreak interview with the SAC VP, Jean-Robert Bisaillon:

We think the practice [of file-sharing] is great and unstoppable. This is why we want to establish a regime that allows everyone to keep on doing it without stigmatizing the public and, instead, find a way for artists and rights holders to be fairly compensated for the music files that are being shared. […]

Other positive aspects include being able to find music that is not available in the commercial realm offer, finding a higher quality of digital files, being able to afford music even if you are poor and being able to discover new artists or recommend them to friends. […]

Music is much better off with the Web. The internet network allows for musical discovery despite distance and time of the day. It has sparked collaborations between musicians unimaginable before. It has helped artists to book international tours without expensive long-distances charges and postal delays we knew before. [emphasis added]

However, significant problems remain with the proposal. For example, the original criticism still stands as to how this would scale for other industries — what about book publishers, newspapers, movie studies, video game manufacturers and other industries that are also crying foul about “piracy”? The SAC dismisses other cultural industries pretty quickly, as if only the music industry is concerned about unauthorized copying. And, just like private copying levies have suffered from scope creep, as people no longer buy blank audio cassettes or CDs, or short-sightedness, as technology changes rapidly, it’s not clear how the SAC model would adapt to growing wireless and mobile computing or more distributed file sharing. Many more questions remain: Would small, independent artists, who are not charting through traditional means, get fair treatment? Is it wise to largely rely on a single, proprietary vendor, Big Champagne, for tracking all distribution? Would consumers be paying multiple times for music? What does it mean to “self-declare not to music file-share” in order to opt-out?

But the central problem with the proposal is the SAC’s copyright crutch. Jean-Robert Bisaillon says things like,

The Internet has dramatically increased the private non-commercial sharing of music, which we support. All that is missing a means to compensate music creators for this massive use of their work. [emphasis added]

And the proposal says things like,

Once a fair and reasonable monetization system is in place, all stakeholders including consumers and Internet service providers will benefit substantially. [emphasis added]

The SAC seems obsessed with a “monetization system,” when the truth is there is no one model, no magic bullet. Rather, the the sky is rising and the path to success involves all sorts of different models and creative approaches, most of which don’t depend on copyright or worrying about getting paid for every use. Even a voluntary license plan is still a bad idea. The means to compensate music creators isn’t missing, it’s just increasingly found outside of copyright.

Still, it’s important for the SAC’s voice to be heard as the copyright debate heats up again in Canada. As a creator group offering a positive take on peer-to-peer file sharing, and denouncing an “adversarial relationship” between creators and fans, they offer an important counterpoint to the SOPA-style provisions being pushed by Canadian record industry groups. I would take the SAC’s constructive and responsive approach over record industry astroturfing and fear mongering any day.

Read the comments on Techdirt.

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Toronto Copyright Townhall: Canadian Record Industry Mobilizes In Panic, Everyone Loses Out

This post originally appeared on Techdirt.

Last Thursday, I attended the Canadian Copyright Consultation Toronto Town Hall (video). Despite the stated intention of soliciting a “breadth of perspectives,” the record industry dominated the event. Michael Geist described it as the “Toronto Music Industry Town Hall” and a local publication called it the “town hall that didn’t invite the town”. Tickets were limited and speakers chosen by lottery, yet half the speakers were from the entertainment industry — collection societies, record labels, industry lawyers. Twice as many industry representatives spoke as artists or creators. There was the odd librarian, student or programmer (and I had a chance to speak), but otherwise the participants seemed so skewed towards the same perspective that one person greeted the audience, “hello, music industry,” and some non-industry (though admittedly not very eloquent) speakers were heckled towards the end. When asked afterwards about the strong music industry presence, the Minister who ran the town hall joked, “I guess they had the night off.” There are lots of questions about the sincerity and efficacy of the consultations (though, also some indication that the government might take the time to try and get things right), but what was most disappointing, albeit least surprising, was what the entertainment industry actually had to say.

Most industry speakers presented emotional pleas, with little in the way of serious suggestions. They focused on a “right to get paid” and “fair compensation” (without talk of providing a reason to buy), while Canada was portrayed as a “lawless society,” rampant with property “theft” and hostile to “legitimate” business (despite evidence to the contrary). A writer stunningly declared that “[more flexible] fair dealing would be a disaster for creators,” while SOCAN claimed that adding “unwarranted” fair dealing provisions would be asking creators “work for nothing” (even though flexible fair dealing would be a lot like fair use in the US — hardly a disaster). The President of Warner Music Canada talked about disappearing jobs, and many industry employees painted a dire picture of colleagues and artists struggling to make ends meet (with little mention of any success stories). Yet, when the occasional concrete recommendation was made, it was to implement a notice-and-takedown system (ripe for abuse), extend the “you must be a criminal” tax blank media levy to digital audio players (an idea that’s been struck down twice), or enshrine an inducement doctrine into law — extreme measures which have provided little solace to failing businesses elsewhere.

It wasn’t argument. It was the language of moral panics.

The Canadian record industry was demanding to be lied to, to be told that more restrictive copyright laws will save their business. Though fewer and fewer people can convincingly tell the lie, they seemed perfectly capable of convincing each other that restrictive copyright legislation might somehow stop the market from changing (even with a decade of hindsight on the DMCA). It’s tragic, because hard working people who love music and love working for artists are losing their jobs, but the industry continues to block the sort of innovations that could provide it with a way forward. A lawyer described the music industry as a “copyright industry,” even though most artists and companies who are figuring out how to make money in the digital economy are successful despite copyright — not because of it.

Artist voices were few (nevermind consumer voices), which is disappointing because many Canadian creator groups are adopting more forward thinking approaches, proposing solutions that don’t involve criminalizing common consumer behaviour. Now… most creators echoed the industry in supporting the levy and its expansion to digital audio players and even ISPs, and some asked for new royalties and more collective licensing, but that’s much better than demanding stricter laws and enforcement mechanisms. The problem remains though, that although collective licensing may be a move in the right direction, short-term revenue from additional royalties and levies also increases barriers to innovation, making it harder for new sustainable long-term business models to emerge. Artists and creators need to find a way to earn money that’s based on a solid economic ground, instead of depending on levies that can quickly become absurd. That’s where the record industry should be able to help them out.

Artists and creators need to be able to experiment with new business models, but the copyright crutch gets in the way. They turn to levies and licensing because they can’t imagine how else to make money, but successes have been outside of the copyright system. Canada needs innovative companies to help artists and creators find digital business models, not to chase fictive legislative solutions. If the Canadian record industry isn’t willing to help creators with what’s next, they need to clear out of the way.

Read the comments on Techdirt.

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The Formula For Future Music Business Models: The Trent Reznor Case Study

On January 17th, 2009, the heroic Mike Masnick (of Techdirt fame) descended into a lion’s den wielding a sword of flame to guide a lost people to salvation. Ok, well, it didn’t happen quite like that, but it was pretty close. Just think music business conference instead of lion’s den, 280 Powerpoint slides instead of a flaming sword, financial success instead of salvation and the record industry instead of… no, I guess that part is accurate. Masnick gave a presentation on Trent Reznor and the Formula for Future Music Business Models at MidemNet in Cannes, Frances and, at only 15 minutes long, it’s definitely a must watch for anyone remotely interested in a future in the music business.

It’s a case study on Reznor, whose provided countless examples of these business models in practice, but Mike abstracts the common pattern in them all:

Connection with Fans (CwF) + Reason to Buy (RtB) = The Business Model $$$

(And no, it’s not about royalties, micropayments or forcing people to buy stuff!)

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