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Wednesday
Oct142009

The Lottery Model, The Free Culture Model, The Click Control Model

Q: What happens when you put a lawyer, an economist, a business executive, a government bureaucrat and an artist into a locked room?  A: The business executive assaults the economists, the lawyer sues the executive, the bureaucrat falls asleep, and the artist writes a song about it.  This is the copyright debate.

Over the last couple of years, and as a background task, I have tried to make sense of the copyright / copy restriction debate.  Is more or less copy restriction better or worse for rightsholders?

The debate, which requires multiple, advanced degrees and a slug of caffeine to follow, is often dominated by intellectual giants that toss around economic concepts such as ‘rivalrous resources’ and ‘marginal cost of production’.  I have to admit, I still feel a little stupid when it comes to debating with the debaters.  I am the person (the dreamer/entrepreneur) they didn’t let into the room to begin with.

So after two years of listening to all sides (and I am still listening), I have decided that today (October, 2009), I am not for loosening copyright restrictions.


The Lottery Model and Bubble Marketing
The graphic above depicts how the music industry operates today.

  • Money is spent to launch an artist or song.
  • A revenue / market traction bubble is created (depicted in green).
  • More often than not, after the bubble-budget runs out, measurable market traction resembles pre-bubble spending.
  • Breakeven on investment is occasionally achieved.
  • And on rare occasions, a song or artist achieves post-bubble popularity over time (this would be a lottery hit).

Therefore, if one was concerned about the wellbeing of artists, and if he or she also happened to be a student of economics and intellectual property philosophy, I can see how this person would conclude (after looking at the current industry model) that less copyright restriction leads to more exposure, and thus profits, for artists.


The Free Culture ‘Model’
The graphic just above (source: www.questioncopyright.org) depicts the thinking behind the Free Culture model; it goes something like this: if restrictions are removed, content flows freely between humans, and then (song/artist) popularity (and thus profits) increase over time (see the maroon line).  Alternatively (to the free culture model), content gets ‘locked up’ after the marketing/launch blitz in copyright monopolies; thus preventing the content (books, songs, video, etc.) from ever achieving the market traction they deserve (depicted by the green line).

I think I get it.  Nobody can (today) ‘control’ content; it wants to be ‘free’.  Songs are not rivalrous resources and the marginal cost of production is zero. Nobody gets hurt except those that have a vested interest (for example: record labels and publishers) in copyright monopolies.  And even these ‘vested interests’ could benefit if they adopted new business model.  Do I have this right?

My objections to the Free Culture model are as follows:

Beyond the fact that there’s no shelf life on the Internet and digital goods don’t go out of print, once a country, state, organization or individual - legislatively, legally or individually (via Creative Commons), dials back (loosens restrictions on) copyrights, they cannot easily be reclaimed or dialed back.  I have a problem with this.  I could be missing something here, but I can’t lend support to a model/mindset that fails to contemplate a day when global copyright can be controlled (turned on and off) via the click of a mouse (Jeff Shattuck - Cheers).

Just because the business models of rightsholders have not kept pace with the realities of Internet culture, it does not mean we should be throwing the baby out with the bathwater.  There is another way, and interestingly enough, I believe the industry is organically moving/evolving in this direction.

 


The Click Control Model
The Click Control business-copyright model is one in which rightsholders will (someday) simply and easily suspend and reclaim their copyrights.  It makes sense to be able to temporarily and selectively suspend one’s copyrights to encourage adoption (including commercial usage), and then (via the click of a mouse) reclaim their suspended rights someplace along the way to becoming a classic; provided that is where the song is headed (why bother otherwise?).

As a practical matter, in world where people still love to physically control their music (as in downloading it to their hard drives), this vision / model would be nearly impossible to absolutely enforce (non-absolute versions are surely possible).  However as we transition from an ownership model to a streaming model (and we are), point-and-click copyright control makes a lot more sense. 

The Click Control Model is in touch with where the industry is going.

The business models of rightsholders are finally catching up with Internet culture.  Not only are labels figuring out that there’s not enough ROI in the bubble/lottery model to keep it going, they are also embracing 360 deals which create an alignment of economic interests between artists and investors.  In these deals, music can be set free (preferably for period) to encourage viral promotion of a song or an artist; then it’s in every stakeholder’s interest, once some optimal level of viral exposure has been obtained, to be able to fully reclaim some or all rights.  There are other benefits, as this model more closely tracks the slow-build, organic growth curve that most products (there are exceptions) on the Internet have to follow.

As I said at the top of this post, I am for more (extended) copyright control, not less; provided that we can someday move to the click-control model I just covered.   However as I stated prior, I am not for any sort of broad government-driven controls on file sharing, as I view this as a reduction rather than an extension of (artist/rightsholders) rights.


Note: Please don’t confuse my authoritative writing style with my willingness to adopt a different position on this subject.  I readily admit that I may have even mixed up terms and concepts within this post.  Discussion and debate is what I am after here…


about Bruce Warila

Reader Comments (25)

There are several issues with this line of thought.

1. If an artist were to license something CC. What happens to those who downloaded the work(s) while it was under CC now that the license has changed? They can't share it any more? If not, why not?

2.The notion that a creator can't make money if the rights to his/her creation aren't controlled strikes me as nonsense, or at the very least, only assumed but has never been proven. You don't think an fairly priced, artist approved release isn't going to sell better than any other release? Every publisher is going to release their own version of everyone's material? Why focus on controlling infinite or cheaply made/distributed products? Focus on selling scarce goods.

3. Rights to the left, rights to the right, rights up and rights down, rights going backwards, rights going forward. When every last usage has to be licensed and have it's own agreement it interferes with availability and growth of culture. There are plenty of examples of TV series and films that can't be released today because the licenses they acquired years ago couldn't have anticipated new technology and obtaining new licenses are either too expensive or the rights holders simple won't enter into the necessary agreements.

4. The fundamental problem I have with any kind of copy/usage rights is that it's premised on a fantasy world in which the creator work is completely his/her own borrowing nothing from the surrounding culture. Everyone stands on the shoulders of those who came before.

5. And of course, there is the other basic problem. Those demanding more rights and more protection are really only concerned about their own material being copied, it doesn't bother them in the slightest to infringe on others rights (ie. Disney, Lily Allen, Warner Music Group, Universal Music).

Whether or not some sort of click control model is possible, I suspect that once we are through the chaos created by the digital world, we will find that those that make their digital material freely available and actively foster a real relationship with their fans will find the most success.

Whether or not a click control model is possible, the very act of reclaiming those rights defines the creator/fan relationship as a commercial relationship. I pity the first few creators that click that button.

I'd suggest not wasting your time on click control models and copy/usage rights. I suspect it's a dead end. Work on new business models that take advantage of the fact that the cost to copy and distribute digital bits is $0.00.

October 14 | Unregistered Commenterrjk

RJK,

Thanks for the input. I have read many points prior such as the ones you bring up here. In the future, when a majority of the world is streaming music, for new songs (not old songs), is there really a right, left, up, down, forward and back? Is it not only a question then of free or not? I think the click-control model can/would cover most of the use cases.

As for standing on the shoulders of others, or for answering the question of where does art or invention come from and who really owns it? I come down on the side of the artists or inventor that can legitimately lay claim to the rights that are accorded to them by law. Does the law favor the strong over the meek? Probably, but that's another topic.

I really appreciate this type of input. As I stated in my post, I am willing to be swayed, but I have not been fully convinced by the free culture argument.

October 14 | Registered CommenterBruce Warila

Interesting post.

Your idea for extending copyright seems to be that once something is popular the artist should reclaim control of it. Aside from the technical impossibilities there, I think there is a simpler answer.

There is no need to release everything from the get go. And what you release doesn't always have to be music, it could be a video blog for example.

If you release your best and hold onto the rest. Whilst still creating when you do reach that threshold, then where you wanted to reclaim everything, you then have content to use that you still own.

Owen

October 14 | Unregistered CommenterOwen Kelly

Owen,

Agreed. Spot on with the release schedule idea.

I would not say "impossible" on the click-control concept. I can envision a day when most people don't want to/need to own music (control copies); combine that with streams that cost a fraction of a penny and I can easily envision artists flicking the free/paid switch off and on. As far as commercial deals (soundtracks, etc), they could be all on 'timers'.

-Bruce

October 14 | Registered CommenterBruce Warila

Thats the one part of the article I cannot fathom.

There is but one instance where I can see a 'click-control' copyright method working, and that is inside of a closed ecosystem. For example, iTunes or Spotify. Though with the removal of DRM I think iTunes is moving away from this possibility anyway.

If a soundtrack is on a timer, what happens after the timer? Do we have the same issue we have now whereby the film creator has to go about and find a new track? Or remove the track? And then, who does that benefit?

Owen

October 14 | Unregistered CommenterOwen Kelly

On the soundtrack / timer concept...

I am thinking about an emerging paradigm where consumers don't desire to control their music. Having a pointer to it is good enough when all you have to pay is a fraction of a cent for the stream. The 'bookmark' becomes more (or as) valuable than the 5 megabytes of electrons.

Soundtracks are folders of bookmarks. It easy (for me I guess) to envision selling windows of access to folders full of bookmarks (streams). For example: unlimited access to the Titanic soundtrack for one year; after that, it will cost you a few cents once and a while..

October 14 | Registered CommenterBruce Warila

I agree with RJK that the problem with copyright is not a question of when does one harvest, but rather the problem that the radical fragmentation of culture into a million little pieces of owned property has done great harm to the sustainability and relevance of music itself. I recommend reading The Gift by Lewis Hyde to understand this argument in pre-Lessig form.

October 14 | Unregistered CommenterMichael Tiemann

I would have to agree with you and Gerd Leonhard in seeing the trend towards access over ownership. So i can understand what you mean. But only in the context of a closed ecosystem, much like the iTunes store.

If it's simple enough to capture the consumer then you could be onto something..

October 14 | Unregistered CommenterOwen Kelly

Is there really a trend to access over ownership?

I mean...nobody using Pandora or Spotify is throwing out their music collection. Adoption rates for streaming doesn't equate to a "loss" for ownership. Personally, I trust the cloud like I trust my government and I'm going to be sticking with "ownership" for life. (Born 1981 so I might be slightly too dinosaur for "digital native" status.)

Are there number I've missed on this?

October 14 | Unregistered CommenterJustin Boland

Michael - I browsed your Amazon list yesterday.. interestingly enough, I spent a bit of time reading the reviews on The Gift. didn't order it though; now I may have to... You don't think "fragmentation" gets sorted out going forward (ten years from now)?

Justin - you're a survivalist? I'm sure your music collection will be safe from nuclear war and the government's swine flu epidemic. Get yourself back to VT and you will be all set.

October 14 | Registered CommenterBruce Warila

I wouldn't say I'm a survivalist, although I am a big fan of survival. I've just had inconsistent internet so much of my life I don't feel that stream services are a stable alternative to actually having the music, which is a fairly bulletproof method. I enjoy Pandora as a discovery engine, but then I go acquire the actual mp3 files (or, more rarely, buy an album) when I find something I dig.

Bruce, would the "reclaim rights" function be as simple as just 1) recognizing you've got a hit thanks to your metrics, and 2) manufacturing a product around your hit and then selling that? Since any kind of click you make won't be affecting all the digital copies in existence, it seems like it's more practical to skip that step and just take control by creating an official product and a platform to sell it from. (Or just sell it on someone else's platform. Maybe Steve Jobs.)

October 14 | Unregistered CommenterJustin Boland

Justin - I think you are referring to predictive metrics or algorithms? Go back to the song adoption formula I wrote about a couple of months ago. Songs need 'context' first and that's hard to predict (whether a song will get it or not - irregardless of how 'good' it is). Analogy - predicting which way a swarm or bees will fly.. So building a 'product' around something so unpredictable is tough (look at the failure rates we witness now)..

I would rather see a situation where rights are suspended, mass-exposure is generated (if the generators like the song), and then decide how to proceed after (build a high margin digital product (iPhone App for example), sign a deal based upon mass acceptance, reclaim your rights, etc..).. Moreover, this would all happen very quickly (creation to mass-exposure).

Signing deals, building expensive products, worrying about copyrights - all prior to the mass-market taking a test drive is just silly to me.. There is a better way..

Signing off for the night..

-Bruce

October 14 | Registered CommenterMusic Think Tank

No, predictive algorithms have proven themselves to be of limited use. (I seem to recall they recently gutted the entire global economy, for instance.)

I meant metrics after the fact -- when on-site downloads are in the 4-5 digit range, you know you've got a hit. When you get blogs talking about your track showing up in your Google Alerts every day for several weeks, you know you've got a hit. Certainly not a blockbuster but enough to make the case that a physical/digital product would be a reasonable investment.

In other words, release free, see what people love, then sell that.

"Indie" hip hop poster boy Drake recently did this with "So Far Gone" -- selling 162,000 copies of an EP of material that already existed for free.

October 14 | Unregistered CommenterJustin Boland

Justin - we are on the same page.. But I don't think it's mutually exclusive to reclaiming all your rights (all your potential revenue streams) someday in the distant future..

October 14 | Unregistered CommenterBruce Warila

This suggestion is nonsense.

Right now, CC licenses do not allow "reclaiming" the rights, and reversely revoking the self-propagating licenses already handed out. So you would have to design a new kind of revoke-able license.

A license that can be revoked is like an invitation to get sued, once the "journey to Jerusalem" stops. As an artist, if you have built upon someone else's work, it means that from the point of reclamation, your work can no longer be distributed.

It's a dangling Damocles sword for people building upon and sharing the work of others, and thus the gradually building popularity curve ceases to exist - free content publishers will simply shop around.

I don't see why you are trying to "fix" the situation, for there's already a new way of doing things. Commercial idiots will do what they always did until hell freezes over. CC artists like me will build business on top of a growing popularity curve.

October 15 | Unregistered Commenterpaniq

paniq,

I agree with you. The idea of "you have many rights now that you will not be able to enjoy in the future" stands in perfect opposition to the very basis of the copyright bargain, which is that the public tolerates its own limited rights in the short term for the promise of virtually unlimited rights in the future. And never forget that copyright is fundamentally a bargain between private parties and the public. Any discussion of copyrights that look only at the private side of the equation, without recognizing the public's side of the same equation, is a deceit. A self-deceit perhaps, but a deceit nonetheless.

I think that reversing the sense of the copyright bargain, while intellectually creative, demonstrates the larger problem pointed out previously, which is that technology has blessed us with a perfect solution to the distribution problem, and those who continue to try to force a cost onto distribution when such cost no longer exists, are preventing the rest of us from exploring new business models that the absence of such cost allows.

O Teatro Magico, discovered this about 3-4 years ago, and they have used that discovery to become the #1 club band in Brazil.

October 15 | Unregistered CommenterMichael Tiemann

@paniq

Mixing one work into another is not a use case that's covered by this model. Right, that would have to handled separately. Remixing only covers a small fraction of uses.

Dig deep and imagine a world where songs are not owned, they are rented. On some months the rent may be free, and on other months the rent may be a fraction of cent.

The self-propagating model is possibly fine for lumps of MP3s, but when we are talking about spreading around bookmarks or pointers to songs, you don't need a CC license to do that.

Also, do you have any evidence that the use of CC licenses is growing. I use CC licenses and we build sites and software that supports CC licenses. However I can tell you firsthand that the use of CC is a very small fraction of users.

It cracks me up that CC users come across as 'enlightened' compared to the rest of the "commercial idiots". OK, show the world some proof that CC users are benefiting far or beyond non-CC users... You can't because the evidence does not exist.

Under the hypothetical click-control model, with the possible exception of remixing, please tell me (don't yell at me - just explain it) what benefits are lost, as I can see that numerous benefits are gained.

Please try to imagine a world where people do not own MP3s, everything is delivered from the cloud. Hypothetical? Perhaps. Convenience is super important to consumers. When you can access the music you like (not own) from any time / any place, ownership will no longer be desired.

October 15 | Registered CommenterBruce Warila

@ Michael,

"those who continue to try to force a cost onto distribution when such cost no longer exists, are preventing the rest of us from exploring new business models that the absence of such cost allows"

One business model is to deliver the value proposition of 'convenience'. The price of convenience / any time / any place access to music is a minimal price that consumers will pay (as an alternative to ownership). The ownership model / possession mindset does far more damage to the music economy than copyright ever will (in my humble opinion).

I can argue both sides of the fence; today I just happen to be on this side.. Thanks for weighing in.

Speaking or O Teatro Magico - take a look at Microfundo (www.microfundo.com). Brad has a great model that he's building around the Brazil music model you are referring to.

-Bruce

October 15 | Registered CommenterBruce Warila

Bruce,

Thanks for pointing me to www.microfundo.com. I like it!

October 15 | Unregistered CommenterMichael Tiemann

I'm not the first to suggest it, but who says we need professional full time musicians? I personally like the idea of a world where a person can make a living at music, but I don't see the overwhelming need for that to be extrapolated to the maximum capitalist extreme. Many seem to see copyrights as some sort of perptual and far reaching shield that allows them to dictate the use or reuse of an idea.

I wish they could be seen as limited protections against exploitation and I have a hard time thinking of a person who downloads a song for their personal use and then shares that song with others as exploiting the artist. Ideas are for sharing and building upon -- that's how you get better ideas.

October 16 | Unregistered Commentergorilla

This idea obviously hinges on the prediction that streaming, or 'music rentals,' will eventually overtake ownership as the primary way music is consumed. I do see the market moving in that direction now, with Spotify and other services gaining traction.

However, there's been a lot of talk about significant increases in digital storage space in the not-too-distant future. Storage space that could fit the entire world catalogue of music, even at the consumer level. When that becomes reality will streaming really make sense? If I can fit all the music I want on my home computer, why stream it from the cloud?

In that situation a subscription model or something similar will likely make a lot more sense. Do you see click-control as a viable option if the market goes that way in the future?

October 16 | Unregistered Commenterrefe

Refe,

I have 40GB of additional hard drive space now that I can't use... Synchronizing the drives I have today is a challenge. There's other benefits to the cloud beyond the fact the you never have to synchronize (playlists, play history, etc.); there's the social / sharing benefit; knowing what my friends are listening to; recommendation; injected personality (why not?); etc..

Plus I am trying to imagine how you would price a drive that comes with a massive catalog?

Good question though..

-Bruce

October 17 | Registered CommenterBruce Warila

Why own a hard drive at all, when the entire history of recorded music is available on demand from the cloud in the form of audio, performance video,tablature, MIDI or notation? No digital native, me, but I think people like owning objects, particularly decorative objects that enhance their lives and surroundings, and will likely continue to do so; I think that when you separate the music from the object it's embedded in, it loses all value, because it can then be infinitely copied at no cost. On the other hand, we now have picture frames that play slide shows with musical accompaniment. We've never really sold the music itself, what we've been selling is the soundtrack to our fans' lives; a subtle yet significant distinction. We provide not content, but lifestyle.Music consumers (odd term, that; what exactly gets consumed?) pay very little for terrestrial radio; the price of the player, possibly a few batteries and the amount of our time and attention the advertisements take up-THAT is last century's discovery engine, and the new ones are faster, better, more efficient. Still, I think there'll be a place for a musical object.I hope the next one will be as beautiful as the stacks of vinyl LPs I still keep around.

October 21 | Unregistered CommenterMojo Bone

Nice post..
I also don't see the overwhelming need for that to be extrapolated to the maximum capitalist extreme. Many seem to see copyrights as some sort of perpetual and far reaching shield that allows them to dictate the use or reuse of an idea.

March 8 | Unregistered Commenterdewayne

I'm a composer, a Mexican, a member of SACM (the Mexican Rights Management Monopoly -or should I say 30 year old dictatorship) and many other things as well. For the past 4 years I've been one of the leaders of the opposition to the antidemocratic corrupt ways of SACM which makes some very rich and others very poor forever and ever. Khadaffi falls short.

As a result I've delved into finding a solution to the problematic so we opened a series of blogs and Facebook pages for Spanish-speaking composers and the results have been really interesting. First of all, we have people from all over the Spanish speaking world, including many Mexican residents in the US. We have the traditional crowd which are tired of SACM and its evil ways but find it hard to think of any other business model, we have the micro-entrpreneurs who never read or contribute anything to the blog but are only interested in posting their CDs on the site, we have the young crowd who wants opinions on their songs and a pointer about how to right better songs, we have the avant-guard youngsters (mainly Spaniards and Argentinian rockers) who are copyleft fans, we have some indigenous composers (amerindians from Mexico, Ecuador, Bolivia and Perú) who need all kinds of things and help and pointers, and we have the classical musicians who don't really know what they want.

The problem seems to be lack of information on everything: licences, digital commerce for music, free culture, alternative business models, differencies between BMI and all others, laws, world events affecting the composers, copyright, copyleft, techniques of songwriting, someone to check songs, scholarships, someone to talk to, someone to complain to, someone to expose their particular situation as ethnic composers, etc, etc.

So what are we to do to help them all? The object is to help composers in general make a decent living composing music, quite independently of whether you are a rock star or some Indian in the middle of Oaxaca or Chiapas or Lake Titicaca. I've come up with al plural model (based on multinationality and multiculturality) which caters for the different needs and desires and musical cultures and worldviews (well beyond the usual copyright-copyleft dychotomy) of all the people who visit us.

I still don't have it all figured out and I would really welcome some suggestions of all of you since you seem to know a lot...

November 24 | Unregistered CommenterMonica Saenz

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