Son of Napster: One Possible Future for a Music Business That Must Inevitably Change

[Jason Dunn]

<div class='os_post_top_link'><a href='http://www.pbs.org/cringely/pulpit/pulpit20030724.html' target='_blank'>http://www.pbs.org/cringely/pulpit/...it20030724.html</a><br /><br /></div>"When I mentioned in last week's column that I would this week be writing about a legal way to do a successful music downloading business -- a business that would threaten the Recording Industry Association of America and its hegemony -- dozens of readers wrote to me trying to predict what I would write. Some readers came at the problem from a purely technical perspective, ignoring the fact that the real issues here aren't technical but legal. Some readers took a legal approach, but they tended to ignore the business model. Some were looking solely for the business model. Interestingly, nobody even came close to my idea, which makes me either a total loon or a diabolical genius. Truth be told, I'm probably more of a diabolical loon."<br /><br />Before making a single comment, please go read the article. His idea is so simple, yet powerful, that it made me laugh out loud when I realized where he was going with it. It's a fascinating idea, although it seems more focused on getting older music into a shared scenario, rather than cultivating new music. One thing that people forget is the food chain involved with finding, creating, and marketing great music. One person with a guitar and a microphone hooked up to their computer does not a rock star make. It's technically possible for anyone with an Internet connection to be a billion-dollar music artist, but the reality is much different than that. Still, this idea that Robert has is an exciting one. I bet the RIAA is already moving to stop it from becoming a reality...

[Janak Parekh]

Brilliant! Simply brilliant! :lol:

And no way in hell will it happen. :cry:

--janak

[GoldKey]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

[Jason Dunn]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

[dh]

I'd invest in it just to piss off those ar$eholes in the record companies.

[GoldKey]

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

Let me play a little devils advocate before I go to sleep. Given I am a part owner of a CD, then I have a right to make an use a backup copy. So, if I went out an bought one share of stock of each of the publicly traded record companies, I should legally be entitled to make copies of everything in each of their catalogs since I am a part owner of the copyright to every CD.

There is something missing in this scheme, maybe I will be able to think of it after a good nights sleep. :sleeping:

[wired_less]

i bet this would work for e-books too :devilboy:

jim from austin

[szamot]

Can someone please forward this to Bill, $2mill is about 40 minutes of work for him these days isn't it? I think this is absolutely brilliant and it should be done off the cost of Africa on some remote island or somewhere in the deep siberian fortest where RIAA has no infulence. WOW!!

[sambeckett]

I read this last week, and I thought it was a bad idea all around.

The future of eveything is free and decentrilized. This is neither.

[Wes Salmon]

What he seems to be missing is that just because a company is "public" does not mean the public has rights to the assets of that company. If you own Disney stock, can you claim the right to download a copy of Toy Story? No.

I guess what I find more concerning is that people would go through so much trouble to get out of buying copyrighted works that for all intents and purposes, are relatively fairly priced. People complain today that there isn't enough variety in music, and the RIAA is gouging them. So what happens when 60 million people can pay $20 for a lifetime "free pass" to every CD made? You'll get even less choice and the prices for those CD's will climb ten fold.

There is also the fact that fair use does not in itself mean that if ten people own a CD, that ten people have the right to the entire CD simultaneously. Mathematically, each has the right to one tenth of the CD. With the scheme described in this article, if you were one of the 60 million, you would be entitled to one sixty-millionth of the collection at any one time. If the CD collection is one million and each CD is about 60 minutes, that would make your fair share about one minute long. Not enough for even one song.

Fair use allows for duplication for backup and time/space shifting, not distribution to "co-owners" in full.

I think if people spent half the time trying to fix the system that they do trying to defraud it, we would all be better off in the end.

Of course I'm not a lawyer nor very smart in general, so your mileage may vary.

[T-Will]

I've got my $20 ready! :D

[Thinkingmandavid]

I personally dont think I am going to be interested in it, but I will go by the site when it is up to check it out. What has been said so far is interesting, I am going to watchand think about it more as the events unfold.

[Solarix]

Honestly, I think this idea is wonderful. I have no problem "stealing" music from file-sharing services whatsoever. I am also willing to pay for a CD if I like what I have downloaded. But as many of you already know, the band barely makes any money from the sale of their music, its the record companies that do. Where bands make their money is on two planes; Concerts & Merchandising. This process would not hurt the bands at all.

I only have two quarls with this.
1) If this would occur then it would be alot different on how bands got their singles played over the radio. Lest us not forget this great and wonderful tool that so many of us put the wayside. I know that of the new bands I hear (or hear of) 75% are from listening to the Radio.
2) With the record companies gone, who would be able to fund the band and its indevours? Just because you can play music, doesn't mean you have the skills to record and mix it yourself. And then on top of this, let us not forget the other great way to get free Music legally; The Music Video. I personally have more music videos on my PC than illegally downloaded MP3's (or the like). Who would be able to fund this task? Snapster?

The idea is great. The RIAA (which have proven themselves *******s since the popularity of Napster) would fall to the ground. But what would it mean for the way we listen and enjoy our music cuyrrently? I have no problem with change. Just as long as the change is a step forward in all directions, not a step back.

[wired_less]

cant we just muse gaily over the concept before you shoot holes through the idea :wink:

actually i think this can be done legally per my Harvard degree. Now i just need an island with a mailbox.

[damager]

Uhhhh - I think this idea is silly. For all the reasons Wes Saloman so eloquently laid out a few posts back.

[NeilE]

Well, I've pretty much given up on all this hoopla and get music from www.buymusic.com. It's pretty cool, it's basically iTunes for people who want Windows Media content.

There's no membership fee, you just pay per song download. Songs are usually $.99 each, although for some reason John Mayer thinks he's worth $1.14 a song :) You usually get rights to use the song on three computers, as many transfers to a mobile device as you like, and ten CD burns. I'm not sure if the music'll pay on a Pocket PC, I haven't had a chance to try it yet.

I wouldn't buy entire CDs this way, but for the one-off songs that I like on the radio it's a great way to legally get the music. For whole CDs I'll still go and buy the CD so I've got a permanent copy somewhere.

[damager]

I completely agree - the .99 (or .75, or .50) single song purchase is a no brainer for those singles you cant get out of you head. My only concern about this way of purchasing is that MANY of my favorite songs of all time aren't the most popular song on an album, but rather more obscure tunes on the albums.

[yada88]

I think this was overall a brilliant effort. I am not a lawyer, but I know something about the stock market (or I think I do).

I see two main faults in this model. The first is that it's a self ending prophesy. Assuming all went as planned, the record companies would collapse, leaving no one to get music out there. Essentially, there'd be no one left to "steal" from. Snapster wouldn't have the mechanisms for bringing new artists to the limelite. And here's the kicker. Assuming they figure out how to do it, you just turned four or five major record companies and a handfull of independent labels into 1 UBER record company. And, as 1 person, or group of people will own 90% of the company, there is nothing to stop him/her/them from being more tyrannical than the current record companies.

Also, your price projections are ludicrous. 60 million people from around the world downloaded a free program to get them free music. You think you could get 60 million for this? I don't think there are 30 million people who buy stocks in north america. Secondly, you can't expect each person to only buy one share. I'd buy 500. Meaning every time it splits I just make more money. And if the record industry made a hostile takeover bid, even just for that 10%, they would be "inhaling" their own profits.

I have to give props for coming up with such an intelligent scheme. While it doesn't break any laws, and I hate the RIAA, it sounds like something illegal to me, I doubt it would take a year for the supreme court to say so. I think the courts would decide it before congress.

[smashcasi]

Yeah, I can't believe this is legal either - if I own Microsoft stock does that mean I'm entitled to "backup copies" of every piece of software the company has ever purchased? I'm thinking no.

Personally I think an iTunes-like model is what will eventually win out. If I can easily find all of the music I want and play / copy it to my portable device unlimited times, I'm willing to pay $0.99 for that. Through litigation the record industry can (eventually) make it difficult enough to find what you're looking for via illegal channels that most people will be willing to pay for the convienence.

In my opinion, the issue really comes down to price. People are willing to pay $15 for a DVD, but not for the two songs they want to hear on a CD.

On a semi-related note, who came up with these MPAA commercials they're showing in theaters? Piracy is taking away some boom operator's health insurance? First of all, I'm in the theater, I paid to be here....no, I'm just going to drop that. I don't think I can really comprehend the lack of coherent thought behind those ads.

[theone3]

8)

[Bruno]

I'd invest in it just to piss off those ar$eholes in the record companies.

I´ll do everything to kick the record Industrys greedy ass. :grinning devil:

[Bob S]

Well, I've pretty much given up on all this hoopla and get music from www.buymusic.com. It's pretty cool, it's basically iTunes for people who want Windows Media content.

There's no membership fee, you just pay per song download. Songs are usually $.99 each, although for some reason John Mayer thinks he's worth $1.14 a song :) You usually get rights to use the song on three computers, as many transfers to a mobile device as you like, and ten CD burns. I'm not sure if the music'll pay on a Pocket PC, I haven't had a chance to try it yet.

I wouldn't buy entire CDs this way, but for the one-off songs that I like on the radio it's a great way to legally get the music. For whole CDs I'll still go and buy the CD so I've got a permanent copy somewhere.

Did you happen to read their privacy statement? You give them the right to use your personal info for any reason they want. As well as pass it along to their "Partners". Stopped me dead during signup. Read the fine print.

[Phunkphantom]

Wes's comments which have been quoted by others as the reason this would not work, I dont believe are correct.

Just because I own Disney stock( to use someone elses example) I do not have the right to download a copy of Toy Story, True. But is this not because of Disneys rights? If THEY choose to let us dowload a copy of Toy Story, then that is a commercial decision by them and that is ok??

Personally I think it is good idea that will never happen.

But I think it would be fun to do this with say 2 discs and 20 people and then have a bit of fun with the RIAA! :twisted:

[Duncan]

When you buy stock in Disney or Microsoft what you actually own is defined in such a way that you don't have part ownership of any copyrights etc. Buy stock in Snapster and you will be specifically given joint ownership of the company's CDs.

The idea is fatally flawed on two counts however:

1) This will only work in the US where there are 'fair use' laws. Record companies will be free, therefore, to effectively blackmail the US public by threatening to move all operations to Europe (more than enough income) and cutting off the US music supply. Yes - that is a far-fetched response, but I feel it highlights the that the author has not thought beyond his own shores...

2) Surely recent events have made it clear that the media giants effectively own the US legislature (at least - getting any law they want passed no matter how absurd is so akin to 'ownership' as to make no difference). As such it will take minutes for this to be made illegal.

[theone3]

sounds nice, but its doomed to failure.

[Crystal Eitle]

The future of eveything is free and decentrilized. This is neither.
Umm, no. The future of everything may be low-cost, but I highly doubt that it will be free. How would people eat and pay their bills?

(Unless you're thinking of some Cory Doctorow-type scenario where we all get paid in "whuffie" [sort of like reputation points], but I think those days are a long way off.)

[Crystal Eitle]

I guess what I find more concerning is that people would go through so much trouble to get out of buying copyrighted works that for all intents and purposes, are relatively fairly priced.
CDs are not "relatively fairly priced." You may think they are, but I think the vast majority of the buying public does not. At $15-$18 a CD, I feel robbed every time I buy a new CD at a record store. So, I don't do it very often. (I don't pirate music either). I just mostly listen to my old stuff or the radio.

If CDs were $5-$7 each I'd probably buy at least one or two every week. The record companies would get much more of my money than they're getting now.

They're shooting themselves in the foot by setting their prices so high. Seriously. What is wrong with them?

Another factor fueling resentment against record companies is that it's common knowledge that the artists get only pennies from every record sold. And it's not the kind of "common knowledge" that's erroneous - it is a fact. There are scores of articles backing this up.

[Paul P]

I guess what I find more concerning is that people would go through so much trouble to get out of buying copyrighted works that for all intents and purposes, are relatively fairly priced.
CDs are not "relatively fairly priced." You may think they are, but I think the vast majority of the buying public does not. At $15-$18 a CD, I feel robbed every time I buy a new CD at a record store. So, I don't do it very often. (I don't pirate music either). I just mostly listen to my old stuff or the radio.

The music industry is just like any other industry. The only problem is that its product is highly susceptible to theft. If somehow music was a physical product (literally anything), then we probably wouldn't even be having this discussion right now. Lots of companies overcharge for their products. The only difference is, all people can do is stop buying their products and not get them for free elsewhere.

[Crystal Eitle]

The music industry is just like any other industry. The only problem is that its product is highly susceptible to theft. If somehow music was a physical product (literally anything), then we probably wouldn't even be having this discussion right now. Lots of companies overcharge for their products. The only difference is, all people can do is stop buying their products and not get them for free elsewhere.
However, I think lots of other products are fairly priced. I just got a brand-new Dell computer for $469. That was a good price and I didn't feel ripped off. Think about going into Target or any other discount retailer and think about what you can buy for $20. When companies overcharge for their products, people buy substitutes. You can always find a better price on dishes, sheets, clothing, or almost any product you care to name.

Perhaps the reason record companies get away with charging so much is that they have an effective monopoly on each artist, each album. If I want a Bjork cd, my only choice is to get it from Elektra for $16.99 (unless I have the good fortune to find it used). I can't go to "Brand X" record label and get it for $5.99.

[Jimmy Dodd]

Perhaps the reason record companies get away with charging so much is that they have an effective monopoly on each artist, each album. If I want a Bjork cd, my only choice is to get it from Elektra for $16.99 (unless I have the good fortune to find it used). I can't go to "Brand X" record label and get it for $5.99.

Of course, by the same logic every company has an "effective monopoly" over their products. If I want a BMW Z4 and I don't want to pay $40k for it I cannot go to "Brand X" auto manufacturer and buy it for $20k. I have to buy it from BMW.

[MonkeyGrass]

Unless the record companies willingly decide to turn into massive marketing organizations to support some commune-type music ownership in which only one CD is purchased and 60 million people get to use it, (which I find HIGHLY unlikely) - This is not gonna happen folks.

Seriously, think about it... Yes, this "Snapster" can structure it's charter any way it wants. BUT - the US gov't has the ability (and the willingness) to go to insane (and some would say unconstitutional) lengths to protect the existing RIAA structure thru bizarre legislation. We've already seen enough of that to know it's true. Get real - "If it sounds too good to be true..." Even if this fits (barely) within the realms of legality NOW - do you seriously think this concept of "everyone chip in and we'll buy one of each CD and share the content" is going to last a sustained legal challenge? Really? I've got a bridge to sell you then... ;)

This is a nice pipe dream, and even has enough substance to seem tantalizingly *realistic* - but break it down to the bare bones of what it truly *IS* - not just stealing music (and yes, I feel like unlimited access to millions of songs for a $20 investment is stealing) but PROFITING from the stealing of music via some shareholders scam that will not only kill the recording industry as we know it, but also hurt the artists in question. And this will be legal exactly how? :roll:

People keep bringing up the point that artists make pennies off each album sold. To a very real extent, that is the case. But if they hit (IF!) - they are making pennies off of millions of albums... and that adds up. More to the point, many artists sign 3-5 album deals, use the record labels to market them (and seriously, they are the only ones with the clout to do this effectively) and then buy their way out of the deal after 2-3 successful albums. They then go on to form their own label and release their own recordings - from which they reap the majority of the process. The Snapster (so-called) business model would put the labels, and the artists, out of business. How many artists are going to legally want their recordings to be purchased once and shared by 60 million people?? Are you frickin' NUTS!?!? You would have not only every recording company and label, but every artist up in arms and this would be tied up in court until it's realized there is NO WAY IN HADES that this is ever going to work.

Listen - I HATE the RIAA. :devilboy: I am, and have been, a professional musician for over 12 years. BUT - unless you happen to be some kind of uber-genius, that is not only able to write hit songs, but record them, engineer those recordings, mix them down, master them, and do all the artwork involved (sounds like a lot, huh? cuz IT IS), and then get national marketing, radio play, and a CHANCE that a large number of people will hear your recordings - YOU NEED LARGE RECORD LABELS. They didn't get this way by accident, folks... This is how the industry has been set up to work for decades. Yes, the RIAA have made total *******s of themselves. Wouldn't you if your entire business model was threatened by some greasy-headed college punk who was stealing your copywritten material??? They only place they have truly missed the boat is by alienating their client base, and fighting instead of embracing this new technology, that could effectively make them even MORE money! I swear I never thought I would hear the day where I would say something even semi-positive about the RIAA (and really there isn't anything positive - they suck) but the concept of a large, multi-national record label is the only real way to create an international fan base and sell millions of records. Making a living as an artist is a different story completely, and actually easier to achieve without a label getting all up in your biz. But good or bad, there would be no Elvis', no Rolling Stones', no Beatles', no Madonna's, no Michael Jackson's... without large international record labels.

It sounds so nice to say "anyone with a PC can create a recording equivalent to a $500 an hour recording studio". But you know what? You can't. You know why? There 3 HUGE factors involved. One, is called the ROOM - without a tuned, acoustically sound environment to create sound in, you will never, and I mean NEVER - get a "major-label" sound. This particularly pertains to drums. Yeah yeah, you can add some Timeworks 'Verb and *think* you have a drum sound, but until you've recorded in a real studio, with real wood and acoustics - you have no idea what real drums are supposed to sound like. The second, is discrete circuitry. Most (really all) consumer-grade audio and PC gear is microphonic and what is termed "noisy" in the industry. Stuff that you never hear when listening to a CD or MP3 can, and will, render a digital recording useless very quickly. Unless you are going for a high signal-noise ratio and enjoy hearing hiss and static all over your song. :p The third is just simple knowledge of studio techniques and engineering. Unless you are a dual brained genius, with strong tendencies in both creative thinking and art (music) and logic and linear abilities (science), being both artist and engineer is pretty darn impossible. Not only does the music suffer from lack of perspective, but you are going to be better at one, and the other will suffer (great song that is badly produced, or a bad song with great engineering - either one is a non-sell). The $500 studio has something your "digital workstation" can never have - and experienced, professional sound engineer behind the board to make it all work and sound good. Most musicians do not have the FIRST clue about how to engineer a recording (and I know - I've witnessed enough sessions where they *thought* they did and got a very rude and expensive awakening once the tape started rolling).

The only real outcome of a scheme like this is millions of dollars lost in a lawsuit that the RIAA will (in this case rightfully) win.

It's really so simple. LOWER TO COST OF CD'S YOU MONEY-GRUBBING RIAA A$$HOLES! OFFER SONGS BY THE DOWNLOAD. MAKE THE MONEY YOURSELVES - IDIOTS!

&lt;/rant>

I know that was long. But it's something I feel rather strongly about (in case you couldn't tell ;) )

peace out.

[dh]

Perhaps the reason record companies get away with charging so much is that they have an effective monopoly on each artist, each album. If I want a Bjork cd, my only choice is to get it from Elektra for $16.99 (unless I have the good fortune to find it used). I can't go to "Brand X" record label and get it for $5.99.

Of course, by the same logic every company has an "effective monopoly" over their products. If I want a BMW Z4 and I don't want to pay $40k for it I cannot go to "Brand X" auto manufacturer and buy it for $20k. I have to buy it from BMW.

But at least you have some choices with the BMW. You can see if you can get a better price, lease it to get the monthly cost lower, change the options, find a better dealership.

Or you can go to an Audi dealer and get something stylish instead. :lol:

[Jimmy Dodd]

Perhaps the reason record companies get away with charging so much is that they have an effective monopoly on each artist, each album. If I want a Bjork cd, my only choice is to get it from Elektra for $16.99 (unless I have the good fortune to find it used). I can't go to "Brand X" record label and get it for $5.99.

Of course, by the same logic every company has an "effective monopoly" over their products. If I want a BMW Z4 and I don't want to pay $40k for it I cannot go to "Brand X" auto manufacturer and buy it for $20k. I have to buy it from BMW.

But at least you have some choices with the BMW. You can see if you can get a better price, lease it to get the monthly cost lower, change the options, find a better dealership.

Or you can go to an Audi dealer and get something stylish instead. :lol:

Style preferences aside ( :D ) buying from the Audi dealer (or the Yugo dealer) isn't going to get me a Z4 to drive, just like Crystal buying a Slim Whitman album for $2 from the cutout bin isn't going to allow her to listen to Bjork. (Note that I'm not comparing Audi quality or style to Slim Whitman. Also, no offense to the Slim Whitman fans out there. You know who you are.)

You have choices with albums as well. Go to Walmart instead of Sam Goody's (better dealership), borrow it from a friend (lease), by an EP instead of the full album (change options).

The point is, no matter how you buy either product, you have to get it from BWM/Elektra. The only thing you can do is change the middleman.

[Jason Dunn]

Well, I've pretty much given up on all this hoopla and get music from www.buymusic.com. It's pretty cool, it's basically iTunes for people who want Windows Media content.

"We’re sorry, but due to license restrictions, BuyMusic.com content is available only to residents of the United States. Your internet protocol (IP) address shows that you are attempting to access this web site from outside the US. Thank you for your interest in BuyMusic.com. We apologize for any inconvenience this might have caused."

:twak:

&lt;sigh> And here I was all excited. :|

[GoldKey]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

Thought about it over night and it just won't work. You don't own the CD, you own shares of a company that own the CD. Just like my example, buying a share of a record company does not give you the rights to the catalog.

While the concept etc seem legal, it is the definition of ownership at the corp level and the definition of what exactly is a backup/time-shifted copy that will be the downfall.

Now, here is a twist that would make it work. Buy the copies of each CD and set up the company as proposed. Only one owner at a time could listen to each song, so it would be just like buying, selling used CD's every time you play a song. The service would then need to gauge the popularity of each song and buy just enough CD's to cover the peak demand times. You could have a catalog of music downloaded, but would need permission from a server to play the song if a "liscense" was available.

But this starts to sound like a subscription service which is exactly what people seem to not want. I think most people want to own the music and do whatever they want with it.

[icatar]

My main beef with the current business model is why do I have to buy a whole CD when I only want 2 or 3 songs? I would gladly pay a buck or two to download my favorite songs. This would also be great because artists can release songs as they record them and we don't have to wait for them to fill up an album with fluff.

[bucho]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

Thought about it over night and it just won't work. You don't own the CD, you own shares of a company that own the CD. Just like my example, buying a share of a record company does not give you the rights to the catalog.

The author clearly stated that the ownership is based on the mutual fund model. Owning a mutual fund in fact gives you ownership of the underlying stocks. So, it's just matter of how the company sets up the ownership. If the company explicitly states that you own the CDs by owning shares, then you do. As a matter of fact, you could probably argue in court that you do own a copy of a certain works of a record company if you own their stock unless they specifically state that you don't... You could argue, I don't think you'd win though :-)

On the issue of RIAA having enough influence to make this illegal... Maybe, but don't forget that this is the same law that applies to mutual funds. It may not be easy to pass a law that will not implicate the stock market laws and then you're talking a whole different ballgame of influence. As the author stated, the model could be applicable to many other industries, so it will make RIAA's effort of suppressing this lot more difficult then dealing with the college kids... and they can barely handle them.

[Paul P]

At 10 CDs per user per year, Snapster download revenue would be $3.6 billion or about a quarter the size of the current recording industry, which it would effectively replace. With 90 percent profit margins, Snapster would be making $3.2 billion per year in profit. Based on a modest price-to-earnings ratio of 10-to-1 (I am choosing this low number because of the obvious legal issues involved in this business) Snapster's market capitalization is now up to $33 billion, which is more than any current record company.

What about competition? That revenue figure is overly inflated if someone else steps in. If the market suddenly becomes a pie with lots of slices, the 90% margin would collapse within months (more realistically weeks).

[BugDude10]

I don't know what lawyers Cringley talked to, but apparently they aren't very good ones...

I'm not a copyright lawyer (I'm a superhero!), but this plan doesn't work. The purchase of a CD gives you the right to play it & enjoy it, and to make backup copies for your own personal use; however, you do not have the legal right to copy it and to sell the copies to others. Snapster may buy a copy of a particular CD, but as soon as it copies it and sells it, its violating copyright law. The fact that the purchasers are shareholders doesn't make this scheme work; the analogy to Disney shareholders downloading "Toy Story" is appropriate -- you own stock in the owner of the product, you don't own the product itself. (Because Disney owns "Toy Story", it has the right to give it away or to sell it to its shareholders; however, Snapster doesn't own the music that it would be selling to its shareholders, it just owns the CD the music came on). Snapster might pass legal analysis if it "loans" music to its shareholders like a library, but that would make it a subscription streaming or library service, which I don't think is what people are looking for (and there are already a number in existence right now).

Remember the purpose of the law: to attempt to ensure that the creators get paid for their creations. Any scheme that attempts to circumvent this purpose will probably be illegal.

I think Cringley was trying to come up with a distribution plan that would work despite the RIAA's best efforts to prevent any plan from working, but the first element -- buying CDs and allowing shareholders to copy them, even for a price -- is fatally flawed. There's no question that we need a distribution system that works -- fair prices for reasonable quality with some protections against piracy -- but this isn't it.

[BugDude10]

Oh, and the mutual fund analogy fails as well. As an investor in a mutual fund, you own a share of a thing that contains many shares of other companies; however, the thing you own -- your share of the fund -- is not something that can be copied or shared with others. If you photocopy your share certificate and sell copies to your friends, the copies don't have their original value (they are not legitimate shares of the fund); however, if you copy a CD and sell copies to your friends, the copies have the full original value (the music plays).

[GoldKey]

The author clearly stated that the ownership is based on the mutual fund model. Owning a mutual fund in fact gives you ownership of the underlying stocks. So, it's just matter of how the company sets up the ownership. If the company explicitly states that you own the CDs by owning shares, then you do.

Just because he says he is following a mutual fund model does not mean that it is legally applicable to the model he is suggesting. Just because the company explicitly states you own the CD's by owning shares does not trump the copyright holders ownership of the rights to the music.

[Phunkphantom]

Can I just for the record say that I have in the past dowloaded a pirate copy of a song and I do not have greasy hair!!

Comment about BMW having a monopoly:

If you go to a BMW garage and get a price you are the able to go to another BMW garage and get another price!

[Crystal Eitle]

Comment about BMW having a monopoly:

If you go to a BMW garage and get a price you are the able to go to another BMW garage and get another price!
Plus, you have to consider what the purpose of the product is. A car's purpose is to get you from point A to point B. So if you don't want to spend a lot of money for the BMW (or don't have the money), you can get a Hyundai for a quarter of the price and still get where you need to go.

Not so with a CD. If you're itching to hear a certain Bjork song, Slim Whitman (to use Jimmy Dodd's example) just won't do the job.

Ironically, it seems we're getting to a point where intellectual property has more value than physical goods. If a designer handbag is too expensive, you can go to Target and get a bag that's good enough to carry your stuff around for $10 (which is less than the price of a CD!). However, there's no substitute for Bjork.

[Paul P]

However, there's no substitute for Bjork.
[cheap shot]Maybe that's why it is priced accordingly?[/cheap shot] :wink:

[Weyoun6]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

Thought about it over night and it just won't work. You don't own the CD, you own shares of a company that own the CD. Just like my example, buying a share of a record company does not give you the rights to the catalog.

While the concept etc seem legal, it is the definition of ownership at the corp level and the definition of what exactly is a backup/time-shifted copy that will be the downfall.

Now, here is a twist that would make it work. Buy the copies of each CD and set up the company as proposed. Only one owner at a time could listen to each song, so it would be just like buying, selling used CD's every time you play a song. The service would then need to gauge the popularity of each song and buy just enough CD's to cover the peak demand times. You could have a catalog of music downloaded, but would need permission from a server to play the song if a "liscense" was available.

But this starts to sound like a subscription service which is exactly what people seem to not want. I think most people want to own the music and do whatever they want with it. So kindof a cd "Netflix"?

[Programmer]

I guess I am missing something, although it was a quick read. If they buy just one copy of every CD, wouldn't that mean only one person could use it at a time to remain legal. In a way this is just an electronic version of a used CD store.

No, because we're ALL part owners in EVERY CD - and from what I understand, the law says that if you own a CD, you can make backup/time-shifted copies of that CD.

You dont own the CD. You own the right to listen but not to distribute. Fair rights use dont work exactly this way. There is a difference between corporation and shareholder owning assets.

[GoldKey]

So kindof a cd "Netflix"?

Yeah, but you would need to be connected all the time so that it could maintain the license - Yuck.

BUT, your netflix analogy gave me a better idea. This would of course be illegal, but nearly impossible to do anything about.

Follow the Netflix model exactly and ship CD's back and forth just like they do with DVD's. When you get the CD, you could rip all the songs you wanted then send it back. This would be illegal, but how would they catch you? I am sure some people buy CD's copy the songs and then sell the CD's to a used CD store or buy used copy then sell back.

[Jimmy Dodd]

Plus, you have to consider what the purpose of the product is. A car's purpose is to get you from point A to point B. So if you don't want to spend a lot of money for the BMW (or don't have the money), you can get a Hyundai for a quarter of the price and still get where you need to go.

Not so with a CD. If you're itching to hear a certain Bjork song, Slim Whitman (to use Jimmy Dodd's example) just won't do the job.



Saying the purpose of a $40,000 sports car is simply to get from point A to point B is like saying the purpose of a Bjork album is to hear music. The purpose of a Bjork album is to hear Bjork's music. It is a matter of quality and style (or at least perceived quality and style) that makes the difference.

My point, to restate it, is that every company has an "effective monopoly" on its own products. I'm not talking about similar products or "knock-off" products, only the particular product in question. The comment about visiting different garages looking for a better price is the same as visiting different record stores looking for a better price. BMW and Elektra still get their same cut of the sale price. Only the middle-man is reducing his take by selling at a lower price.

By the way, I drive a 1995 Mercury Sable whose sole purpose is to get me from point A to point B (with some measure of comfort and safety), I wouldn't pay $40,000 for a car even if I could, and I don't listen to Slim Whitman albums. :lol:

[Crystal Eitle]

However, there's no substitute for Bjork.
[cheap shot]Maybe that's why it is priced accordingly?[/cheap shot] :wink:

Saying the purpose of a $40,000 sports car is simply to get from point A to point B is like saying the purpose of a Bjork album is to hear music. The purpose of a Bjork album is to hear Bjork's music. It is a matter of quality and style (or at least perceived quality and style) that makes the difference.

Touche. :takethat:

I still think CDs are too expensive, though! :grumble:

[Job]

Robert X. Cringely's suggestion is pompous blather typical of publicly owned PBS.

Scale his grandiose plan back to a personal level: you and nine other guys purchase a cd, or even a few cds to make the analogy more accurate, and make sufficient copies that at any time any one of you could listen to the cd of his choosing. That would be technically illegal, as well as morally and ethically repugnant.

How is Cringely's utopian, socialist dream different?

There is no difference! Cringely's self-declared "lateral thinking" is nothing more than the juvenile fantasy of receiving something for nothing (or, next to nothing).

[Jimmy Dodd]

Touche. :takethat:

I still think CDs are too expensive, though! :grumble:

Me too.

Wait a minute. I'm agreeing with Crystal. :?

[encece]

What if I sold my shares? Does that mean I have to destroy all of the music I previously owned?

What makes that any different from me selling my cd collection on ebay. By rights...I should delete (should have deleted) all of my MP3s as well.

Also...what about competition? If this were allowed wouldn't other companies do the same thing? Including the Music companies themselves? In which case...couldn't they just do it themselves and not allow anyone to compete?

In the end...wouldn't that just lead to the same as what is happening today?

[ctmagnus]

However, there's no substitute for Bjork.
[cheap shot]Maybe that's why it is priced accordingly?[/cheap shot] :wink:

Hey! She's family! :twak:

(rather distantly related, but still family.)

:mrgreen:

[Pat Logsdon]

Interesting idea, but I too think it's fatally flawed. I think the major point here is that it's publicly traded. I think the RIAA, especially at the prices he's talking about, would snap up enough shares to deep six the thing before it got started.

Now if there were 10 of these businesses popping up a month, THEN I can see the RIAA running into some serious problems, or buying Orrin Hatch's soul for some serious legislating (if they don't have it already). :mrgreen:

[CharlesWilcox]

This would be illegal, but how would they catch you?

I've often thought the same thing about an "ipod party". You and 10 or 15 of your closest friends, all who have ipods, get together at a friend's house who has a couple of computers. Everyone walks in the door with 1500, or so, songs. Everybody leaves with 1500, or so, different songs? How long would it take before everone had everyone else's music?

But I agree that this would be... technically illegal, as well as morally and ethically repugnant.