Technology360

Fair Use Online

The Center for Social Media at American University has a video and related report, Code of Best Practicies in Fair Use for Online Video.  In spite of the "tv-ist" title, it all applies to audio also, of course.  Also check out the video, Remix Culture: Fair Use Is Your Friend.  --Dennis

Better Than Free + Free! Why $0.00 Is the Future of Business

Maybe some regular reader can set me straight, but I swear that recently I linked to Kevin Kelly's terrific piece with this in his blog, The Technium (Kelly was one of the founders of Wired)  However, can't find it, so I either dreamed it or accidentally deleted it.  Seriously, it is the best thing I've read this year as part of this blogging effort and was a core part of a brief presentation that I made to last month's Public Media 2008 conference in L.A.  Now comes Chris Anderson with a lengthy article in Wired that's previewing a new book, FREE, that will be out next year.

Kelly begins by noting:

The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free. ...

He goes on:

... From my study of the network economy I see roughly eight categories of intangible value that we buy when we pay for something that could be free. ...

These eight "generatives," as he calls them ("A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced.") are as follows:

• Immediacy
• Personalization
• Interpretation
• Authenticity
• Accessibility
• Embodiment
• Patronage
• Findability

Link:  The Technium.

Anderson looks at "free" a different way (though if you think advertising, for example, is truly free, think about how much of the cost of the products you buy goes into making you aware of and desire them).  Here's his taxonomy:

• "Freemium" (basic version free, premium version costs you)
• Advertising
• Cross-subsidies (free product entices you to buy something else)
• Zero marginal cost (e.g., online music)
• Gift economy (e.g., open source software)

Link:  Wired.

We can learn from both these guys, but for those of us making the transition from legacy media to emerging forms, I think Kelly's offers especially valuable insights.  --Dennis

Public Media in a Zero-Distance World

Doc Searls begins a post with this title by linking to Michelle Thorne's post, Public Broadcasters Opt for CC (as in Creative Commons) in iCommons.org, itself a worthy reading excursion.  But he goes on to make this interesting observation:

... We’re one good UI away from the cell phone becoming a radio. (Thanks to the iPhone, it already serves as a TV.) And we’re one smart cell company away from radio- and TV-as-we-know-it from being replaced entirely — or from moving up the next step of the evolutionary ladder.  ¶  Public broadcasters know that. That’s one reason they now call themselves “public media”, a move that separates the category from its transport methods. It’s also why they’re thinking hard and long about the role their online transmissions and archives play in a world without physical borders. ...

Link:  The Doc Searls Weblog. 

I'd add that it's not just cell phones, but other portable devices as well that blur the lines among computers, phones, PDAs, etc.  I just got a Nokia N810, a Linux computer the size of a PDA with a spectacular screen and the first decent speakers I've seen in a portable device.  Oh, and its browser supports Flash.  Oh again, it comes with Skype, so it's a WiFi phone.  My intent was for it to replace my HP PDA and a Sprint smartphone with pretty good media software but pathetic speakers.  It lacks PIM software but the media portion is great.  The development community should have a PIM up and running in no time.  I'm using it mostly for radio, email and RSS.  --Dennis

Primer on Copyright Liability and Fair Use

David Ardia writes:

As a lead up to next week's launch of the Citizen Media Law Project's Legal Guide, we are putting up longer, substantive blog posts on various subjects covered in the guide. This post, which discusses copyright and fair use in the context of citizen media, is the second in our series of legal primers. The first addressed the subject of immunity and liability for third-party content under section 230 of the Communications Decency Act. ...

Link:  MediaShift Idea Lab @ PBS.org.  --Dennis

Funnier now?

Is it just me or are Jon Stewart, Jay Leno and many of their colleagues funnier now than before the writers' strike?  I've learned in recent weeks that many plants send out blossoms when they "think" they're going to die from under-watering.  Some people even stab at their roots with a knife to create this distress.  Maybe the same thing is going on.  --Dennis

Congressmen: Higher ed must police file sharing or lose financial aid

Cory Doctorow writes:

Democratic legislators have introduced a bill that will tie university financial aid funding to universities imposing stiff penalties for file-sharing, and to universities subsidizing student subscriptions to failed DRM-based systems like Napster and Ruckus. This is about as ugly as pork-barrel politics can get: politicians are so in debt to four of five ailing giants from the entertainment industry that they're prepared to deny low-income children access to a college education if universities don't punish kids for listening to music and piss away money on a useless service that no one wants to use. ...

Link:  BoingBoing.  --Dennis

Artists: Radio surely can afford royalty

Brooks Boliek writes:

Proponents of a new royalty for music that is broadcast over-the-air contend that a government study bolsters their argument that the radio industry can afford to pay.  ¶  The artist-industry alliance known as the MusicFirst coalition points to an FCC study that examined radio market concentration and said it shows that broadcasters have been jacking up their rates.  ¶  Annual growth of radio advertising rates since 1996 was about 10%, while the CPI has averaged a 3% increase per year over that span, FCC senior economist George Williams found in his study that examined the market through March 2007. ...

Link:  Hollywood Reporter.

Updated 12 November 2007:
Also see Andrew Glass, Singers: Stations should pay (them) to play:

Lyle Lovett wants to get paid for music he made famous with his bluesy twang. Sen. Patrick Leahy (D-Vt.) is giving him a stage to make it happen. Leahy is scheduled to hold a hearing Tuesday to review a nearly century-old law saying radio stations don’t have to give the four-time Grammy winner a dime when they play music he performed that was written by someone else. ...

Link:  Politico.  --Dennis

Radiohead and why P2P can be a hard habit to break

"Free as in free beer" is such a powerful impulse among us that even when something is offered free for voluntary payment, most people opt for not paying.  Gee, where have I learned that in my public broadcasting career?  The band, Radiohead, is the latest business to discover this as Nate Anderson writes:

Radiohead's innovative digital distribution arrangement for their new album, In Rainbows, lets people pay whatever they want for the music, including nothing at all. Despite that, BitTorrent swapping of the album has been on the level of other major releases. Are people really so cheap that they won't even register with the band in order to snag a free download? The answer appears to be yes. ...

... Once the album became available for download, though, it spilled immediately onto P2P networks, primarily BitTorrent. ...

Link:  Ars Technica. 

Of course, as Radiohead is discovering, that's not to say that the collective economic impact of those who choose to pay isn't a sufficiently compelling business model.  Umair Haque calls this open pricing and points to this post in Valleywag (Radiohead estimates doom record labels):

... What nobody knew was whether fans would pay for a Radiohead album if they didn't have to. Certainly, the record labels had to be hoping they wouldn't. Too bad for the fat cats, because reports are that the average price paid for "In Rainbows" fell between $5 and $8. A low estimate of Radiohead's take in two days is $6 million. Sounds like bands with a following now have permission to skip labels.

Read Haque's analysis in Bubblegeneration, Research Note: Open Pricing and Revolutionizing Value Creation:

... open pricing is the most revolutionary innovation to hit the economy for a long time; how it will absolutely eviscerate massconomy business models; etc.

Also see his Research Note: Death of an Industry and Research Note: Why Radiohead Will Revolutionize Music, also in Bubblegeneration.

  --Dennis (the Dennis who frequently fast-forwards his DVR through commercials to avoid "paying" for what he's watching, but who does contribute to public broadcasting).

The iPod touch: great ID meets the robber baron tradition

No doubt about it, Apple's iPhone and iPod touch continue that company's record of high class industrial design.  But if Steve Jobs's taste and focus make for great-looking consumer products, his tightly-integrated hardware/DRM/software business model is more a throwback to the great (and sometimes unfairly labeled) "robber baron" industrialists of the late 19th and early 20th centuries.  Ironically, this business style is about as far from the culture of the Web as any company active in this space today.  I hope Apple's design sense goes on forever, but the days for its business model are numbered.

The touch takes the iPhone, removes the mediocre camera and mediocre 2G GSM radio, and substitutes a Wi-Fi radio, and the maximum memory is a small 16 GB (though that is double the iPhone's).  My son, writing from Rotterdam, had the following reaction to the touch:

... This ipod, the full touchscreen ipod, I've been waiting for so long, it's incredible, exactly what we all wanted - except - 8gb/16gb?  This is next to nothing!  My ipod, the grandpa of ipods from a whole 4 years ago, is a 15gb.  ...

Most importantly to folks in my business, it continues the crippled version of the Safari browser.  Like a TV cable box with parental controls, it lets you access only media on the web that "Dad" Jobs wants you to access -- in this case, the iTunes Store of course, YouTube and one of the newest media companies, Starbucks (see Gerd Leonhard's reaction to the Starbucks announcement).  Only this isn't to keep you from naughty lyrics, it's to ensure you don't use any media that doesn't give Apple a cut.

The paucity of memory on the touch is puzzling, especially when Apple simultaneously released the iPod Classic with 160 GB of storage.  Why limit what you can store on the only device they have that permits paid downloads from iTunes?

On the subject of the Classic's large storage, read Bob Lefsetz's progressive vision of what Apple should do with this storage:

... It’s like we’re living in the twilight zone. The labels are stuck in the nineties and the public is in the twenty first century. Who even HAS 4,000 albums?  ¶  A lot of people. Oh, not as CDs. But as MP3s, stolen from the Net, their friends, their family.  ¶  People WANT music. The labels just can’t figure out how to sell it to them.  ¶  Took them over three years to even deliver it easily online at a reasonable price (2003’s iTunes Store). But, they still haven’t given people what they want. How about a 160 gig iPod PRELOADED with the greatest hits of the sixties? Or the history of dance music? Don’t bother to steal the music, you can get it, for an extra fifty bucks. ...

Link:  Lefsetz Letter.  Right on.  In the end, preloading will win out over even the iTunes Store -- because folks will realize that its superior pricing rationality and security will kill off virtually all piracy.  If the 2007 iPod Classic holds 40,000 songs.  With Moore's Law progression, we'll have a 1 TB iPod in five years.  Will be a nice retirement gift.  Hint, hint.

--Dennis

P.S.:  The picture above (taken at about the same age as Steve Jobs is now) is of "robber baron" James J. Hill, "The Empire Builder," whose railroad's advertising in Scandinavia and then its tracks were largely responsible for getting my grandparents and thousands of others to Minnesota in the 1880s.

Are people who pay for content just chumps?

It's been said many times that content wants to be free.  Or perhaps it's really that we want content to be free. 

Parents who lecture their children on not downloading illegal content are themselves tapping the mute or TiVo fast-forward buttons during commercials, thereby robbing advertisers of some part of the audience they're buying.  That describes my house pretty well.  Voluntary payments don't work very well either.   We pubcasters say that some nine in ten listeners or viewers do not contribute in a given year -- but actually that over-estimates the contributing percentage because the denominator is taken from weekly cume, while annual cume is a much greater number.

We've seen anti-DRM sentiments become an ideology among an influential segment of Internet and DVR users.  Mainstream file-sharers and commercial-skippers all have some personal justification for what they do:  Like, commercials are annoying -- time is precious and skipping saves me 20 minutes an hour -- record companies rip off their artists anyway -- the RIAA and MPAA are bullies -- I've already paid for it here, but want to use it there and their stupid DRM won't let me do that.  Young people generally just hear "blah-blah-blah" when parents warn about downloading movies or music.  You might as well be speaking Latvian. 

Are people who pay for content just chumps?

If so, there  are a lot of content professionals who are depending on those chumps to make a living -- a very few make a very nice living.  Unlike Andrew Keen, I think it's wonderful that amateur content can now be distributed so easily and I'm doing whatever I can to encourage that.  But for those of us in the content business, a way of encouraging both wide distribution and discovery of amateur content and at the same time providing an economic base for excellent professional content is the central problem of our industry today.

The best thing I've read in a long time from a content creator's point of view comes from singer-songwriter Jill Sobule -- though, frankly, I'd not heard of her before this.  She's a professional, but like all professionals, her work needs discovery also.  In an essay titled, Calling All Recording Gurus: I've Got Nothing to Prove, but I Still Need Your Help (See My Video!), she writes of the dilemma for artists like her:

... None of my musician friends are mourning the demise of the record industry. Most of us got crummy deals anyway and never saw a penny of royalties. My nephews expect really expensive birthday gifts from me, as they think that I must be rolling in dough, having been on MTV a few times. I always acquiesce, not wanting to tell them the truth.  ¶  For us, in this YouTube, long-tail, Kara-and-Walt world, it’s an exciting time. But it’s also confusing. How do I release my next recordings? Do I still put out a CD in the traditional way, or just go digital? Do I send demos one last time to the remaining majors or go indie (this time with a company that lasts longer than a year) and get a, say, 50/50 deal? Do I just finance the whole thing myself–musicians, studio, marketing, publicist, radio, promo, video, etc.? And where do I get the money? How do I pay the rent? How do I support my gambling and morphine habits? ...

Link:  All Things Digital.  Yes, watch her video there and go to her web site and download the (legitimately) free 90-minute live performance.  It's terrific!  --Dennis