Oct 162012

Musician’s rights advocate David Lowrie has a takedown on his Trichordist of Pandora’s campaign to change the US music royalty payment system through the Internet Radio Fairness Act.

Pandora and other online streaming services claim the current arrangement is unfair and puts them at a disadvantage to terrestrial AM and FM radio stations. Artists and record labels claim this is just a way to cut rights payments.

David suggests that Pandora’s founders either lied about the sustainability of their business at the time of their IPO last year or are just being plain greedy.

Regardless of what is true, or whether David is overstating the case against the IRFA, a truth remains that many Internet business models are unsustainable and Pandora’s may be one of them.

Most unsustainable of all are those who rely on free content.

Eventually the market works to filter out those who won’t pay for content – the good writers and artists move onto something more profitable, like driving buses or serving hamburgers, or they figure out they may as well control their own works rather than let some Internet company profit from their talents and labor.

The website or service offering nothing in return for the contributor’s hard work eventually ends up distributing garbage – Demand Media or Ask are examples of this.

In a marketplace where crap is everywhere, just pumping out more crap is not a way to make money.

Those looking at investing in businesses which rely on free content need to remember this, if no-one values the product then you have no business.

Sadly too many internet entrepreneurs, and corporate managers, believe the road to their wealth is through not paying artists, musicians or writers. They are the modern robber barons.

  4 Responses to “Free content’s shaky foundations”

  1. Isn’t this a little short-sighted? Many authors (technically most) never make as much from the copyrights on their work as they do from either other means related to their work (eg selling pieces with the right provenance, taking commissions, performing), or from ‘real’ jobs. As a result, even with our current excessive copyrights, authors are leaving the field all the time because they cannot really succeed. No surprise there, as copyright is not meant to guarantee success or wealth, just to at most enable it.

    But just as authors keep leaving, there always seem to be large numbers of authors arriving, who are confident that they will be the ones to succeed. Most of them are wrong, the vast majority, in fact, but why should we refrain from exploiting their naivety? And why should we kowtow to the disillusioned authors of the previous wave so long as we can reliably replace them with newbies that still have stars in their eyes?

    So long as there is a reliable quantity of works that can be free, why shouldn’t they be? The resource as it were, renews itself and no one is being strong armed into doing anything they don’t want to do.

    And lest you raise the specter of quality, remember that copyright doesn’t care about quality; copyrights are granted equally to works of high and low quality, and no level of quality is a prerequisite. Besides, quality is subjective, and we really don’t need government bureaucrats or politicians deciding who are the better authors and which are the better works, which deserve more (or any) rights than the others. Instead, copyright encourages quantity, with the hope that an increased number of works will include an increased number of high quality works, with the sorting of wheat and chaff left to the market, the tastes of which are frequently surprising anyway.

    Is there a crisis in the quantity of works? Maybe, though I certainly don’t see it. But is stronger copyright the way to get more? (And it is funny, isn’t it, how the copyright maximalists only have the one hammer — their answer to anything is always more copyright, stronger copyright. Never fine-tuned copyright, or less copyright where we’ve gone too far. No, for them we’ve never gone too far enough.) I’d like to hear about some non copyright based proposals for increasing the quantity of work, just for a change. We know that copyright isn’t the only (or most important) incentive for authors. There are many reasons to create and publish, most of which predate copyright, too.

    How about getting the various mafias –strike that, publishing industry associations, guilds, and performing rights societies, together to champion the idea of a negative income tax or single payer health care, so that all Americans can be relieved of some of their pressing financial worries and can afford to dedicate some time to creative pursuits, if they wish, instead of a constant struggle to pay the bills. Not everyone would turn out to be an author if able to spare the time for it after such a reform (which, to be fair, should be enjoyed by everyone, not just authors), but I bet a lot of people would. Few authors wait tables because they’re angry at people for enjoying works for free and want to get even with their audience; they just need money. If they didn’t need quite as much as that, they might not need to resort to it.

    But schmucks like Lowery only want more copyright, as though that will change anything.

    • Good points Anonymous and I agree with what you say about copyright not necessarily leading to better quality.

      The angle I’m coming from is from the business perspective – right now we have a bunch of businesses whose model is based upon scraping or leeching off other people’s content.

      It’s always been the case that most writers, artists and musics won’t succeed and many of those who do only become truly recognised long after they died in relative obscurity and poverty. There’s nothing new there.

      The difference today is we have a whole business model based around taking those creative works, regardless of quality, and using them without payment. This is what I’m writing about and critiquing.

      Schmucks like Lowery might want more content copyright, but these businesses rely on schmucks like us to give them high quality content for nothing so their founders can sell out to a big corporation and buy a yacht. At least the Medicis paid their painters.

      Thanks for reading and making a comment.

  2. Paul,
    So people are using other people’s works without paying the copyright holder. So what? A used bookstore or record shop does that too, and they seem not to have destroyed literature or music. (Not that this has stopped people from criticizing the practice or worse. I still recall Garth Brooks railing against stores that sold used records, the software industry more or less shut down their used market, and console game developers are presently at war with used video game stores)

    The purpose of copyright is to encourage the publication of more creative works so as to enlarge the public domain as rapidly and fully as possible, not to drive every penny related to those works to the author. So long as the author gets enough — or thinks he will — to publish, directing any more money (or more accurately, rights that can be exploited for money) his way would be wasted.

    If a musician is willing to release music under the present deal, he deserves no better; he’s established his price. If he wants more, he will need to hold out and not release music at all.

    Home taping didn’t kill music. CDRs (not Audio CDRs) didn’t kill music. Napster didn’t kill music. Nor have the iPod, Bit Torrent, Internet streaming, or whatever the kids are using these days. (Nothing will top the White Album on orchestrion rolls, IMO)

    Music is resilient, it seems. Musicians are willing to work for relatively little, it seems. (Indeed, I bet we could dial copyright down substantially without seeing many musicians quit — short terms, strong formalities, expanded exemptions for the public, etc.) The change in rates will likely not harm musicians, it’ll just annoy them that they are not getting more money in exchange for no additional work on their part. Boo hoo. I’ll have to play a song for them on the world’s smallest violin.

    Really it sounds like more of the crack negotiating skills that lead musicians to get screwed over by labels now. I have more faith that Pandora would shut down over unfavorable rates (which just pushes people toward piracy — you’d do well to remember that half a loaf is better than none) than I do that all the musicians who rely on the US market would go on strike and that the strike could overcome the continuing exploitation of their existing releases.

    Also, I didn’t say that Lowery wanted more content. I said that he wanted more copyrights. That is, he wants more control over works, regardless of whether it is in keeping with the public interest. AFAICT he seems to be no different than any of the publishers in terms of trying to squeeze the public. He just doesn’t want to share with publishers.

    • Again I agree with most of your points, particularly that home taping and copying CDs didn’t kill the music industry. It’s something I’ve written on before on this blog.

      Comparing second hand booksellers to today’s online content farms isn’t quite the same, for a start the second hand bookshops usually paid the previous owners for the books. The business models of Pandora, the Huffington Post and many other web start ups is in grabbing content as close to free as possible, as soon as the concept of paying for their business’ raw product is introduced, the profitability starts to wobble.

      We also didn’t see whole publishing empires founded on flogging used novels and we certainly didn’t see the owners of bookshops being funded by venture capital firms with the aim of selling the enterprise to a big operator for many millions.

      I fear we’re arguing at cross purposes here, I don’t disagree with your views on copyright or that musicians will still compose new works or writers still write regardless of the copyright arrangements.

      My point is that businesses which rely on free content are ultimately doomed as there is always a price – those writers and musicians aren’t doing it to make a bunch of guys with MBAs and nice offices rich.

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