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.

I listen, therefore iPod

If you had told me three years ago that mine would be a two-iPod household, I would have doubted your sanity. I would have told you that Apple’s dedication to DRM would forever render the presence of an iPod in my life as an impossibility.

That was before a relative gave Milady a 2GB black iPod Nano that he wasn’t using. Funny how deeply-held convictions can melt in the face of free stuff, isn’t it?

When the CD player in my car quit working, I took to borrowing her iPod for trips to work. I got quite attached to the little gizmo. It soon reached the point that she rarely got to use it anymore, and when she did, she inevitably found out that it was full of the weird stuff that I preferred. We both agreed that I needed an iPod of my own. But 2GB was not enough. Neither was 4 or even 8.

You see, my music collection weighed in at about 27GB.

The problem was that the big iPods cost a lot of money; too much for me. After a few weeks of research, I snagged a used 40GB one from eBay for $71+shipping. I hope to get two good years out of it before upgrading again.

The purists among you may point out that I have sold out to Apple’s DRM lock-in, but I would point out that of my collection consists of approximately 2800 MP3s and precisely three songs purchased from the iTunes Store. Songs I could not easily get legitimately from elsewhere.

Like the iPod itself, the iTunes store “just works”. It is easy to purchase and download a song - even if I still think that 99c/song is too high (and the record companies think is too low). And if the DRM does prove too onerous, it is easy enough to break - for my own use, of course. Problem solved.

And Milady has her iPod back.

Show us your papers…

While attempting to install SQL Server 2005 Express (free) Edition on a computer running Windows 2000, I was instructed to upgrade a component of windows called MDAC.

Microsoft has the latest version of MDAC, along with an MDAC version checker, available at their website. Unfortunately, in order to access these downloads, I have to submit to the ignominy of Windows Genuine Advantage.

For some reason I thought that WGA was only applicable to XP and Vista; somehow they have decided that Windows 2000 users are untrustworthy as well. I don’t know when they started doing this, but it’s news to me.

No, no, a thousand times no. I will NOT give Microsoft permission to go sniffing around my system to see if it is “legit”; it was legit six years ago when I bought it, and it still is today; that’s good enough for me, it should be good enough for them.

Windows 2000 and XP are very similar under the skin (Just look at the version numbers: Win2k=5.0, XP=5.1). However, that similarity does not stretch to running Internet Explorer 7 or the Media Player 11 - those products are unavailable to Windows 2000 users.

So the latest generation of tools are unavailable to me, but is is ok to saddle me with the latest generation of DRM.

Don’t get me wrong… I do not hate Microsoft, but I do feel that they have been allowed to get away with a lot of stuff we would not put up with from anybody else. That’s why I say “no” to XP and “hell, no” to Vista.

I didn’t sign up for WGA, and I don’t want it now.

Wal-Mart does it again!

The music business is known for its reluctance to embrace digital music sales without wrapping said music in horribly restrictive DRM that all too often means that their collection of bought-and-paid-for product will not work with the next generation of players. A classic example of this was when music that was “protected” by Microsoft’s “PlaysforSure” DRM would not work with their new “Zune” music player.

Milady has had an iPod for over a year. My music collection - all legit, I hasten to add - runs to about 26GB. To date we have bought two songs from iTunes.

As you can see, I’m not exactly crazy about DRM.

Once again, Wal-Mart has gone where the music business fears to tread. Until recently they sold only DRM-protected WMA music, which only worked on Windows machines and select WMA-enabled digital music players. The good news is that they have now started offering selling MP3 music downloads on their website. These files will work on your any MP3 player, including both the iPod and the Zune.

The MP3s are 256kbit (good quality, but could be better) and at 94c per file, cost a little more than the 88c WMA downloads, and a lot more than they should be (they should be about half that at most)

After a wander around their website, I see that only a small subset of the WMA files are available as MP3 download - some artists (such as “Madness) have none at all. In addition, a small number are not available in either format - but hopefully the selection available for MP3 download will grow with time.

I still think that $1/song is at least double the price that it should be (buying all the tracks on an album is about the same price as buying the CD), but that’s mostly due to MusicBiz greed - I strongly suspect that Wal-Mart gets only a few pennies per download and they pocket the rest.

It is, however, a huge leap of faith, as the MP3s are unprotected and can be easily shared. If that happens on a large scale, this experiment will fail and the music business’ bleating for more protection from their own customers will gain credibility - so let’s do out bit to make sure that does not happen by supporting legal unprotected MP3s in the marketplace…

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.

Why downloadable movies will fail

There have been several video download services in the past; all have failed.

A few months ago, Amazon announced their Video Download service, which they dubbed “Amazon Unbox”. What is unusual about this offering is its “direct-to-TiVo” download option. This allows watching on TV (which most people do) instead of on a computer (which few will do).

I’ve had a TiVo for about eighteen months now, and I’m a big fan. Amazon kick-started the service by offering a $15 credit for new customers - which roughly translates as FREE MOVIES - so I was happy to give them a try.

I have downloaded three movies in this way. In spite of some teething troubles, I am very impressed at the service. However, I do not believe that Unbox will succeed. There are two reasons why.

First up is our old friend, DRM. Digital Rights Management is where content providers (movie studios, in this case) decide what consumers (you and me) can and cannot do with the content we legally purchased. While the TiVo has DRM, it is so seamless that it is hardly noticeable  - in my book, that is the only kind of DRM that works - but Unbox adds another couple of restrictions that make me want to take my custom elsewhere. When you purchase a download, you have thirty days to watch it before it will “softly and silently vanish away”. This is not unreasonable. The other restriction is a little more onerous: once you start watching the movie you have 24 hours before it, too, vanishes. This is a deal-breaker for me, as not everyone who wishes to watch a movie around at any given time. Extend this period to a week or get rid of this “feature” entirely.

The second reason is price. Or rather, value - what you pay for vs. what you get. Four bucks is not unreasonable for a video rental from a local store. For that you get a DVD with liner notes, subtitles (a big deal for me), audio streams, commentaries, extra goodies, etc, and the assistance of a salesperson. You also get a tangible item that you can hold in your hands that you can watch and re-watch as often as you like. You can even extend the rental period if you wish. When you rent a DVD, the store - a local business - gets a cut, as does their distribution network and the manufacturer, so you have the knowledge that you are helping out a local business. The publisher probably gets around $1 or $2. When you download a video you do not get any of those goodies, and the lack of human interaction means that the distributor makes a few pennies and the rest goes straight to the publisher. So with a movie download you pay more and get less, while the publisher does less and gets more. This is what the content industry is pushing hardest for - charging the same price to your customers while cutting out the middleman; Dire Straits said it so well - “Money fer nuthin and yer checks fer free…“

I’m not saying that movie downloads are a bad idea; I am saying that they are overpriced. I’ll be using up my free credit; after that I will use it only occasionally.

So what does it take to change my mind? Simple. Halve the price - at $2 a movie I will probably watch one or two a week. Not likely, methinks, but I honestly believe that a little more flexibility from the movie industry will result in far greater profits. The same is true of music downloads, but that is another story.

Now Reading: Favorite Dog Stories, by James Herriot

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