Just give me six minutes with the RIAA…

Ladies and Gentlemen of the Recording industry, thank you for allowing me to speak.

I am nobody special. I am not a rock star, an industry insider or an executive. I am the voice that is never heard. The voice of the customer. What I have to say gives me no pleasure, but I’m going to say it anyway, because somebody has to.

Ladies and gentlemen, your industry stinks. Only the Oil business is more hated and reviled by its customers. Unlike them, however, your commodity is a luxury, and you consider your customers to be thieves.

And what, exactly, is your business? Here’s the surprise - you are not in the Music business.

You are not in the Art business either, even though your suppliers are called Artists.

You are not in the publishing business.

You are in the business of selling little plastic disks, and have been for over half a century. Everything else is secondary to that. The music, the artwork, the packaging, the record deals, the distribution are all concerned with maximizing the price and sales volume of those little plastic disks.

While it is true that music can now be supplied in digital form, sans disque plastique, I am sure that if you could wave a magic wand and make MP3, iTunes et al vanish, you would do so without hesitation. How do I know? Because you have a consistent track record of trying to destroy any technology that threatens your plastic-disk model. The Compact Cassette was nearly destroyed, the MiniDisk was effectively castrated because of your actions; your hatred of the PC, which you consider to be a clear and present danger to your business model, is well documented.

The world has changed. Get over it.

Your paranoia is showing: You have bought and paid for horribly draconian legislation like the DMCA that forces the Government to do your dirty work while making it a felony for your customers to put their music on their iPods because you put some lame “protection” on those plastic disks - protection that does not work, is an inconvenience at best and breaks computers at worst - and that’s ok, because your rights are the only ones that matter enough to need protecting.

Your blatant hostility to digital music is a matter of record. When Apple first came to you in 2000 with iTunes, MP3 was already about five years old; the genie was already out of the bottle; yet they had to wrap it in DRM at your insistence. Now you have a love-hate relationship with iTunes; you would love to raise the prices, but they won’t. You would love to walk away, but cannot say goodbye to the profit

When a Russian site called AllOfMP3 started selling music files online you tried to shut them down. Your claim that they were “illegal” made no sense - you make your plastic disks in China, because it is cheaper, but when your customers wanted to buy their music in Russia for precisely the same reason, that was suddenly “illegal”. They continued to be a thorn in your side until the State Department pressured the World Trade Organization to shut the site down as part of Russia’s price of admission.

In your stampede to put them out of business, however, you missed the point. They thrived, not because people are thieves but because they supplied something you wouldn’t - choice, convenience and freedom from DRM at a price the customer is willing to pay.

You insist that a song download is worth at least a dollar; I disagree - music has become a background task; something we do while jogging, driving or working. It has been years since “listening to music” was considered a pastime. Like long-distance phone service, it has lost its value.

Personally I would pay 25-50c for a high-quality song, $5 for a downloadable album. You may consider that too little, but given that it is almost all profit, with a cost to you of almost zero. At that price people purchase without thinking, and will not care for resale rights. Wrapping it in DRM lowers its versatility, and hence its value to me - so if you want to add DRM, you had better cut the price even further.

You currently insist on charging $10 for a downloaded Album, even though a used CD can be procured for less. You insist on $1 per song, even though it has been proven that halving the price results in a sixfold increase in sales. As Mr. Spock would say, “Fascinating”.

You also insist on pricing new music the same as old music, which makes no sense to me. Personally I believe that copyright on music should expire after ten years - copyright was intended to be temporary - but since your paychecks depend on eternal residuals I have absolutely no chance of persuading you of that.

My purpose here is not to destroy your business, but to point out that your business model no longer works and needs changing. If you are serious about improving your profits, here are some suggestions:

1. Lower your prices - $1 per song is ok for hot new releases, but once the hotness has worn off the price should drop. 25c to 50c per song, depending on quality, is good. Anything over 50c per song means that your customers will think before buying; people pick up dropped dollars or quarters; anything smaller they usually ignore.
2. You’ve sold plastic disks, why not sell data? A per-megabyte cost works. Higher quality and longer tracks can and should cost more.
3. Don’t try to control digital music distribution - iTunes can sell more music and do it better than you can. Let the sellers do what they do best. Stay out of that business.
4. DRM does not work - drop it. This has been proven time and time again. If the price is right, people will repurchase if they cannot find their old purchase.
5. Simplify the royalty structure. 25% for the distributor (e.g. iTunes), 25% for the artist and 50% for you is more than fair. How many industries make 50% profit? Don’t be greedy.
6. Relax… we’re not all thieves, and at 25-50c per song you can compete with free. Just ask the guy who dreamed up AllOfMP3.
7. While on the subject, find him and hire him. If you can hire a white house staffer who accidentally “corrected” a law in your favor, you can certainly hire a guy with a proven business model.

Make these changes and I will happily buy digital music instead of used or cut-price CDs. You will get $10+ per month out of me that you weren’t getting before. That’s “easy money”; or to put it another way, “money for nothin’”

Thank you for your time.

Seven lessons that the Music business can learn from AllofMP3 (RIP)

For those who do not know, AllOfMP3 was a website based in Russia, from which music could be downloaded at approximately one-quarter of the cost from domestic providers such as iTunes. I use the past tense because the Internal Music Cartel known as the RIAA (AKA the “Music Mafia”) had them shut down as part of the price of Russia’s entry into the World Trade Organization.

However, there are lessons to be learned from the experience; lessons that the music business refuses to learn. The world has changed, but they cling to the old ways. AoMP3 was a signpost to the future - a signpost that the music business is, apparently, desperate to avoid.

1. Piracy is not the issue - price is. People who love to paint AoMP3 as a “piracy organization” conveniently forget that people actually paid real money to download songs from AoMP3. These people could have used peer-to-peer to get free music, but didn’t. It follows that there are a whole lot of folks who will happily pay 25c for a song, but not the $1 that you insist is not enough to keep the music industry in the style to which it has become accustomed addicted. eMusic proved this  point some years ago, when they halved the cost of their (legal) music downloads, and sales rocketed sixfold. Unfortunately the music business insisted on their full rate, forcing eMusic  to operate at a loss, so the experiment had to be abandoned.
2. Give the customer what they want. Don’t like MP3 format - Want your music as OGG files of even WAV format? AoMP3 did that. You still haven’t gotten the clue.
3. Quality matters. AoMP3 offered downloads at all bit rates - higher quality at higher prices. For some of us, 160kbps is simply not enough - we want higher quality options than is on offer.
4. You’re not in the art business… Music stops being art when the artist hands over the masters. After that it’s mass-produced synth-pap, and should be treated as such.
5. …you’ re in the data business. AoMP3 charged by the megabyte - bigger files cost more. The longer the song, the higher the quality the more you paid. Seems fair to me, though I am sure that  the “musies” disagree.
6. DRM doesn’t work: The music business things that our “rights” need to be “managed”. Why? Because they don’t trust their customers. AoMP3 distributed unprotected MP3s which play on any device at a price which was low enough that it “wasn’t worth burglary”. All this tedious mucking about with licenses and “trusted devices” just serves to annoy your customers. As those who purchased music with Microsoft’s “PlaysForSure” DRM found  out when it would not play on their brand-new Microsoft Zune player. “For Sure”, indeed!
7. Your customers are not thieves: People did not go to AoMP3 because they were looking for something free - they can do that already. They were willing to pay for the product. This fact seems to be blissfully ignored by big music, perhaps because they feel that they, rather than the market, get to set the value of the product. Sorry to bust your bubble, but that is not an option. You can insist on your “rights” if you wish, but you cannot stop your customers from walking out the door.

Why Content is no longer King

In Act I: Sumner Redstone doesn’t get it, we see an old geezer who came from a movie-theater background to head up Viacom, a movie conglomerate, boldly declare If Content Is King, Copyright Is Its Castle. He actually believes that - Viacom is currently suing YouTube (owned by Google) for Billions of Dollars. This suit has no base, due to Viacom’s fundamental misunderstanding about what Copyright is, and what it isn’t.

What Copyright is, is a limited exclusive right to commercially exploit one’s work. What is isn’t is a semi-permanent right of ownership and the consequent ability to prohibit use of the work in any shape, form or fashion, which is what Redstone and his ilk seem to believe.

YouTube has become immensely popular because it allows people to express themselves by posting their own videos, including mashups - pastiches of material that may include copyrighted work, along with clips, trailers, parodies etc.

While Viacom are obviously welcome to ask YouTube to remove genuine examples of infringement - where, for instance, enough of a work is posted to threaten the Copyright Holder’s right to make money - I have yet to see an example of this. Indeed, Viacom seem to believe that YouTube has to pay them for the right to “Our Stuff”, while failing to realize that YouTube is actually doing them a favor by providing free word-of-mouth.

In Act II: A lawyer who gets it, we see a communications lawyer with a remarkably mature grasp of the situation. The only thing that I would add is that as a result of decades of lobbying by the content industry, Copyright Periods are now way too long. For example, I recently read a book called “The Richest Man in Babylon”, which was written in 1926… and is still under copyright over eight years later.

This is clearly ridiculous. How long they should be depends on the medium. I would suggest Five years for movies and TV shows and twenty-five years for books.

Finally, in Act III: The future of Copyright, we see that the copyright laws are archaic and largely irrelevant in the digital age. Professor Larry Lessig of Stanford University gives a fascinating talk on “How creativity is being strangled by the law“. The fact that this part contains a clip that I personally find offensive just goes to show that everyone has the right to make an ass* of himself in public, which is one of the freedoms we in America hold most dear.

In conclusion, Mr Redstone, content is not king. It never was.

The Customer is king, and always has been.

You sir, and your cohorts seem to have forgotten that. But then, coming from the theater business it is easy for you to keep yourselves in the dark.

I’m just glad that Shakespeare did not patent the three-act play when he had the chance.

* A word that means “Donkey”. Any other use is prohibited, or at least in very poor taste.

IBM patents patents

Found this pearl of wisdom:IBM patents making money from patents | The Register

I wonder if it passes the straight-face test?

Doubt it.

The Dangers of Software Patents

IFSO: Richard Stallman: The Dangers of Software Patents

Richard Stallman speaks out on Software Patents and why “intellectual property” is an oxymoron. I don’t agree with him on everything, but he’s dead on here.

RIP AoMP3

Well, it finally happened. AllOfMP3.com is dead. Killed by the Russian Authorities, apparently at the behest of the music industry, in a manner that looks more like a gangland hit than a legal process.

For those of you who didn’t know, AllOfMP3 sold music via download. The music was completely unprotected, with a wide range of options of format and quality. Unlike the music business, who charge by the song, they charged by the megabyte. This meant that a high-quality MP3 costs more than the same song encoded at a lower bitrate.

Firstly, AoMP3 broke no laws - they insisted that they were operating within Russian Law (the IP folks thin that US IP laws should apply worldwide), and successfully defended against several legal challenges. That was before the Russian Government shut down the company under pressure from the US. Apparently AoMP3 had to die before Russia could join the WTO - the World Trade Organization.

Their web page is non-existent - not even a static page to explain what has happened. It’s as if they were wiped off the face of the Earth.

I am sure that the people behind this are laughing today; but I am also sure that this action, like so many of their tactics in recent years, will not save them. Why? Because they missed the point. That allofmp3 was never about piracy.

Think about it. People paid for their allofmp3 music. Music that they probably could have gotten elsewhere for free. The only difference was the price.

The music business consider themselves art dealers, and price their wares accordingly. For the rest of us, music is no longer an art form. We no longer listen to music as a pastime - gone are the days when we would sit around and listen to music. It is normally a background to something else; working, playing, exercising, driving. In these enlightened times we listen to music while doing something else. Music has become essentially devalued… and the music business seem to have missed this. They are still complaining that $1 per song is too cheap for them, though it is too expensive for the rest of us.

Sell me unprotected music the way I want it at a reasonable price. 25-50c per track - twice what AoMP3 charged - is reasonable. $1 for a DRM-infested song is not.

AllofMP3 was not in the art business, they were selling data. And they were selling it as the disposable commodity that it has become, not as the irreplaceable art that it used to be.

More here.

Patently Ridiculous

An interesting story from the New York Times, in which the writer compares the Microsoft of 16 years ago with the Microsoft of today.

In 1991, Bill Gates said “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today… some large company will patent some obvious thing [and use the patent to] take as much of our profits as they want.”

That was then, but this is now. Microsoft now holds 6000+ patents and is not afraid to use them to bludgeon the competition.

I make a living writing software, and I have done for over twenty years. In that time I have never felt the need to use a software patent, neither have I ever advised an employer or client to do so.

Why? Because it is wrong. Software is copyrightable. It is not patentable. Software is a creation - not an invention. There are perhaps, what look like a few notable exceptions - encryption algorithms, for instance - but it is the mechanism, not the implementation, that is patentable. So even when software is patentable, it isn’t.

Since inventions are patentable and “works” are copyrightable, it follows that nothing can be both. Perhaps one way to discourage this would be to revoke the copyright when the patent runs out. I suspect that Microsoft et al would change their minds if faced with that particular dilemma…

But then I think that all source code should be escrowed and released to the public domain after about ten years. Not because I subscribe to some kind of neo-communist ideology - I don’t - but because the ability to “build a better mousetrap” is the heart of innovation - and you can’t do that when some megacorp has patented and copyrighted the design of the mousetrap.

In a supreme twist of irony, the New York Times OP-Ed piece was written by one Tim B Lee. For those watching in black-and-white, that would be Tim Berners-Lee, the man who invented hyperlinks and fathered the world-wide web. Where do you think we would be today if he had patented the idea?

Patents are the enemy of innovation. Some might disagree; ask who is paying their salary.

Now Reading: The Tipping Point, by Malcolm Gladwell

When Cops Go Fishing

Story Here. And here and here and here and here and here and here and here and here…

Sam Peterson is a man in a hurry. So during his busy day he takes time out to park next to a coffee shop offering free wi-fi, open up his laptop and grab his e-mail before going off on his merry way.

Unfortunately, he lives in Sparta, Michigan, where the police seem to have little grasp of technology and even less of a sense of humor.

Here’s how it went down. One day, he is checking his e-mail when the local Police Chief spots him in the parking lot. Concerned that he might be stalking a local hairdresser the cop asks him what he is doing. Sam tells him. Cop says “ok” and lets him go.

Later, the cop had a change of heart. He later said “I had a feeling a law was being broken, but I didn’t know exactly what“

**Ahem**A cop didn’t know what law was being broken? So what was he arrested for - thoughtcrime? Did he feel something in his water? Was there a grave disturbance in the force?

This has “fishing expedition” written all over it - without a bass boat or even the obligatory six-pack of beer.

This is wrong on so many levels.

They charged him under Michigan’s “Fraudulent access to computers, computer systems, and computer networks” law. That’s right: They used an anti-hacking law to prosecute someone for checking his e-mail in the parking lot. Sam was the first person to be charged under that law, which dates back to 1979 and was revised in 2000.

He could have fought the charge - and would probably have won - but the legal fees would have been more than he could afford, and the penalty had he been found guilty would have been severe.

And don’t even think of using the “theft of services” defense;  the monetary value of the “theft” was less than a discarded sandwich-wrapper in the parking lot. And if there was a theft, it is a civil matter, not a criminal one - and the coffee-shop should sue, which is a completely different legal process.

The “crime” was not what he did, but where he was sitting when he did it. He could have been sending porn span while downloading movies, but if he had been in the coffee shop while he did it, that would have been ok.

Over the past few years, there have been several cases where people who have been piggybacking on someone else’s wi-fi - even for innocent purposes - have been subjected to similar draconian treatment.

The two best analogies that I can think of are reading a newspaper by someone else’s porch-light, and reading over someone else’s shoulder. Both are easily preventable. Neither are criminal offense - at least in places other than Sparta, Michigan.

The prosecution stands on the premise that Sam “did not have permission to use the network“. From an engineering standpoint that’s simply not true. A client’s laptop sends out a request for wireless service, and the Access Point (AP) grants it. It is also not always possible to determine which AP you have connected to. In an airport, your laptop might connect to a restaurant’s “for-customers-only” AP instead of the airport’s “public” one. It is therefore possible to be committing a felony without intending to or even being aware of it. It is therefore simply inappropriate to use a “no-permission” defense in this situation.

As things stand, the law does not put any requirement on the owner of a network to secure it. It ain’t hard, even in a coffee shop. Use a password. Change it daily or weekly, put up a sign or print the password on receipts.

Paradoxically, if someone connected to my AP and started downloading music, and the RIAA caught wind of it, I would be on the receiving end of their ire; they would not accept a “someone hacked my network” defense, because (they say) I am legally responsible for what happens on my network, and I am expected to do my due diligence to ensure that no illegal activity occurs on it. Yet here, the AP owner is not held responsible in any shape form or fashion.

Looks like a double standard to me - one law for businesses, one law for people.

I do not believe that it is the purpose of these laws to serve as a refuge for idiots who are too lazy and sloppy to take even the most basic steps to protect themselves. The law should be amended so that unprotected networks are fair game. It is easy enough to put up the equivalent of a “Private Beach - Keep Out sign”

I find it amusing that a coffee shop will spend hundreds or thousands of dollars getting trained professionals to install a state-of-the-art burglar alarm system, but can’t be bothered with the hassle of taking the most rudimentary steps to secure their network.

Any road up, Sparta MI is high on the list of places I don’t want to go.

The Mystery - and Misery - of Gas Prices

Every ten days or so, something mysterious happens in my town. It is as if all the gas stations exchange knowing smiles, rub their hands together… and raise their prices by 15-30 cents.

There is no logical explanation for this phenomenon. It does not restrict itself to any day of the week or hour of the day. It has nothing to do with crude oil prices (gas prices have been known to go up while crude oil is coming down), and it is worse when demand is greater - like Thanksgiving, holiday weekends and whenever the circus comes to town. Apparently these folks are strangers to the phrase “economies of scale”.

It starts with a few gas stations - usually from one particular chain - but within a matter of hours it spreads like a rash to all the other stations, until the entire county has been “readjusted”.

Then one of the gas stations lowers its price by a penny. They call this “competition“.

This starts off the second phase of the cycle. Over the next week-and-a-half, the gas stations slowly lower their prices a few pennies per day, until they decide that we have had enough “cheap” gas… then the vicious cycle starts all over again. I have no idea why the gas in the underground storage tanks is suddenly worth 25c/gal more, but there you are.

I am a big fan of the free market. However, I am also enough of a realist to understand that corporations do not like to compete, and will resist competition whenever possible. In many markets (such as computer hardware) they have no choice… but when the market is dominated by a small number of big players (like software, music, entertainment, phone service, internet service… and oil), the rules of the free market no longer apply.

I am sure that the oil companies are competing hard. So hard in fact, that in any given quarter, at least one of them will post losses; for that is the nature of the free market - winners and losers. I am sure that Oil company CEOs will swear on a stack of bibles that they are abiding by the rules of the market and are not doing anything untoward. I am equally sure that if you asked a dozen ordinary people - also known as a jury - if the oil companies were rigging the market, the answer would be convincingly - if not unanimously - guilty.

So what can we, the people, do to keep them honest? I have some suggestions that might help.

• Restrict one-day price movements. Prices rarely come down by more than 5c/day, so why the 25c/gal spike? Simple: Because they can. Restrict price movements to ONE adjustment per day of no more than 5c/gal. An alternative is to allow them to set prices however they wish, but only when they get a delivery - once a week.
• Finally, make it illegal for a gas station to refuse to give their price when requested by phone. This would force a station to compete with all stations in the area, rather than just the one across the road.

Simple spot fines would be quite sufficient to enforce this law, and receipts are more than sufficient proof.

Of course, the oil companies would kick, scream, resist… and lobby like crazy to overturn such a law.
And the Government will tell them “NO”.
And like a kid who wants ice-cream, they will keep begging, cajoling and wheedling.
And the government will reply with the threat of regulation.

It seems to me that there is nothing that instills fear and loathing in oil companies like the threat of oversight and regulation. Every time this threat appears on the horizon, they apply the brakes, like speeding motorists who see a policeman in the distance. Time after time, the price of gas has come down dramatically whenever they have been faced with the specter of Government-level investigation.

This is not as ridiculous as it sounds. The five basic necessities are food, shelter, clothing, bills and transportation. For many, transportation=gasoline. Food, drinking water, electricity, and phone service are  all regulated, so there is a good reason to at least consider it. Without gasoline, many of us are unable to get to work and thereby produce those taxes that our Government requires to do its job. I therefore submit that there is a problem here, and it is time to do something about it.

My Proposed Movie Copyright Law

Premises:

1. It is legal to videotape from TV and keep it for as long as you like.
2. Technology is irrelevant. Downloading is not a crime, it is a way of moving information around.
3. Providers of entertainment deserve and require the ability to profit from their work.
4. Such protection is provided by copyright laws.
5. Copyright is “for a limited time”, not forever.
6. Eventually copyright comes into conflict with premise 1).

Therefore…

• If a movie has not yet come out in any form that you can access, downloading and sharing shall both be felonies, punishable by jail time.
• If a movie has come out in the theater but is not yet out on DVD, sharing should be a felony and downloading should be misdemeanors.
• If the movie has been released on DVD (or has finished its theater run with no DVD issue scheduled), but has not yet been broadcasted on TV, sharing should be a misdemeanor and downloading should not be a crime.
• If the movie has been on TV or has reached five years from its original release date, recording is legal, therefore neither sharing nor downloading shall be a crime.

It’s just an idea… but I doubt that the MPAA would like it.