"Since there are no damages for society, I believe the move is sufficient as a sign of assuming responsibility. I was convinced that this agreement would be beneficial for Bulgaria. Even now experts say its positive effects would outweigh the negative ones."
It's unclear which 'experts' the Minister is referring to. It's also a little hard to believe that someone would offer their resignation when they were convinced they were doing the right thing. Especially when the Prime Minister instructs his party to vote against ACTA in the European Parliament:
"The PM further vowed that the Members of the European Parliament from his ruling, center-right Citizens for European Development of Bulgaria party, GERB, would not endorse the ratification of ACTA."
What is certain is that the nationwide protests last weekend such as in the video below, which saw impressive numbers on the streets of 16 cities in a country of 7.5 million people, have startled the government sufficiently to understand they need to be more wary about the types of treaties they sign, especially when those treaties infringe on civil liberties. While proponents of stronger IP protection get more audacious, an increasing amount of people are taking to the streets to hold their governments accountable for signing these treaties or comparable laws.
Perhaps the biggest illusion in content-centric industries is the belief that the content itself is the main product. For the end-consumer, music is not a product or a service. End-consumers rarely pay for music. They put down money for copies of music, such as CDs, sheet music or music downloads. They put down money for tickets to live experiences. They put down money for subscriptions to music services. Those are all products, but music itself is not. Arguably, the only way to directly 'pay for music' is through commission or donation.
So what is music, or any other type of content? It's what adds value to the CD in the box. It's what makes 2 covers separated by a stack of paper worth buying from the book shop. It's what brings hundreds of people to one place for a shared experience. But it's not a product.
For people that have effectively programmed their minds to see their content as a product, this might be an uncomfortable revelation. Yet while uncomfortable, it can also be very empowering and here's why:
Digital-proof. For a long time the music industry 'got away' with believing that the content is what people buy. However as music went digital, an increasing amount of people were able to separate the content from the product; thus leading to an uncontrollable proliferation of the content through unauthorized networks. Understanding that music ≠ the product fully acknowledges the digital reality, which is the first step to finding viable alternatives for products.
Flexibility. Understanding that music is not the same thing as the product which creates the financial reward is a great way to rethink the products that are created surrounding your music. Music is neither a CD nor a download. It can add value to anything. Some people actually create content around physical things to make them more valuable and easier to sell (it's called Significant Objects).
Fan-centrism. Separating product and content means you no longer have to sell fans what you want them to buy. You can sell them what they want to buy and let the music add value. By understanding who your most avid fans are, you can provide them with something they'll be happy to spend money on. Example (oversimplification alert): got hipster fans? Sell subscriptions to exclusive content via an iPhone app. Got teenage girl fans? When doing a live show, give them a number to send a text message to for an x amount of money & give them exclusive backstage content from the show when they return home. You can do anything; just understand your audience by being connected with them and realize that it's not the content itself that's being sold.
This way, everybody wins. The fans win, because what they pay for is more relevant to them. The artists win, because not only do you have increased chances to monetize, but you will also create a stronger connection with your fans by giving (or selling) them what they want.
Some great, classic examples of artists & labels that 'get it' are:
Remember the story about the composer who found his music featured in anti-piracy ads and had a difficult time getting paid out, triggering a corruption scandal at collection society Buma/Stemra? It was obviously a bit ironic that the music in question was used in anti-piracy ads, but it appears the irony truck forgot to unload a package - filled to the brim with humiliation.
The tool only covers about 4 to 6% of what's available on the networks it tracks, so it's possible that there's a lot more sharing evil piracy going on from their offices as well.
If anything, this scandal really shouldn't be a scandal. Anti-piracy lobbying and campaigning has led to sharing becoming a taboo, while the money spent could have been used to facilitate sharing and to build sustainable business models on top of that. Despite pirates among their own ranks, organizations like Buma/Stemra feel that the Dutch policy of downloading from unauthorized sources for personal use being legal should be altered (read their statement). Even though the Dutch parliament disagrees, the Dutch government is trying to get exactly such laws altered citing EU pressure, even though the Digital Agenda Commissioner, Neelie Kroes (herself Dutch), has stated opposite goals. With people in parliament who do not know "what or who is a torrent," it's not entirely unlikely that the govt actually manages to get the law changed after all.
Buma/Stemra was quick to respond and acknowledge that IPs are not reliable to determine infringers. Apparently the IP addresses used for piracy (ending in .246 and .248) cannot be used by employees to access the web internet, so the collection society claims they were spoofed. (Update: their, now removed (cache), statement said internet, instead of web - apologies). Oddly, the IP from which the email with the press announcement was sent, ~.247, hasn't been spoofed. Did I mention they brought up spoofing after a spokesperson first claimed that the IP addresses could have originated from anywhere in the business park even though everything from ~.240 to ~.255 is linked to Buma/Stemra's office?
Sure, this scandal is humiliating, but it's not as embarrassing as the war against innovation. You can use this moment to better understand the human nature of sharing, to understand that downloads don't translate directly to lost sales, and to rethink your lobbying strategy to push for a more sane framework. Or, you know, you can continue to upset fans whilst amusingly tumbling from one scandal into the next.
Meanwhile, it will be interesting to see if there are more pirates in disguise amongst hardline politicians, RIAA & MPAA folks, and other classic opponents of more flexible copyright legislation. You all know where to find the tool now, so perhaps it can happen through a lesson about crowdsourcing. That is, have fun and see what you can find...
Recently Spotify launched its app platform, a significant step into a future where music licensing can function like an API. Which of course should have been made possible a long time ago, but corporations' loss of control was preventing that until they finally found a way to out-leverage the indies - or maybe that's just a coincidence.
So recently we've been seeing a phenomenon I like to call the Rage Against The Stream, where artists & labels have been pulling their content from services like the aforementioned. I probably don't have to point out that in a reality where everyone is competing with free, attention has become more scarce and valuable than ever before and thus the categorical dismissal of access models such as subscription services is unlikely to pay off in the long run (p.s. I love understatements).
The day after Spotify launched its platform, articles started popping up, commenting on the fact that it's impossible to 'monetize apps' and there thus being "no clear upside to developers." And that's where I grab my BS-defense-stick and start drawing the line.
No, you can't put ads in your app. No, you can't charge for the app or create in-app purchases. No, Spotify doesn't give you part of the revenue of music streamed through your app. So?
Want to make money by building a Spotify app? Build one that uses Facebook Connect for user registration, focus on building a great experience that's non-obtrusive, make it easy to share this experience and funnel that back to your main platform (that's outside Spotify) - focus on discovery and then sell the premium. The SongKick app is a good example, but it can be applied in many more ways. Since it's going to be primarily power users and music geeks using the apps for now, items like vinyl copies come to mind. Focus on gaining & holding the attention - which is scarce, then build your way towards monetization by doing something that Spotify is not.
Spotify Apps are highly monetizable, you just have to be creative. Just like with music.
Besides circumventing censorship, one of VPN services' main functions is safeguarding users' privacy. To find out how far these services go to protect their customers' privacy, Torrentfreak conducted a 2-question survey among VPN providers, with mixed results.
As I was looking for a VPN provider myself and got tipped about HideMyNet, which is missing from Torrentfreak's overview, I decided to ask them the two questions myself:
Your service has been recommended to me multiple times, but before I start using your service, I have two questions.
1. Do you keep ANY logs which would allow you or a 3rd party to match an IP address and a time stamp to a user of your service? If so, exactly what information do you hold?
2. Under what jurisdictions does your company operate and under what exact circumstances will you share the information you hold with a 3rd party?
A few hours later I received their response:
1) Yes, any serious company would. I would be concerned about the quality of a company who did not. If no logs are kept it'd be impossible to respond to a DMCA complaint which puts the company liable for a 100,000$ fine. I highly doubt you're going to find any company willing to risk that sort of liability on a 5$/month vpn account. Good luck!
2) USA - Also, it's the jurisdiction of the server endpoint -- Not the company itself.
A baffling response which, besides being rude, also shows the company is completely clueless about the DMCA. We got in touch with a lawyer who's a DMCA expert who had the following to say:
"Sounds bogus to me. 17 USC 512(m) says the safe harbor is not conditioned on "monitoring the service." However, the service provider will be asked for evidence of its takedown practices, but the service provider only has to give what it's got. The $100k fine is made up too."
Classy, HideMyNet. Inventing a $100,000 fine to scare potential customers into using your service instead of a competitor's. Lesson learned: always make sure a service actually knows what it's talking about before handing over your money and beware of VPN providers that will sacrifice your privacy regardless of whether you are in violation of some country's copyright laws or not.
So what was it HideMyNet: simply unaware of the law? A case of untrained sales representatives being allowed to make up facts? Scared of the weight and money the entertainment industry's lobbies are throwing at suing the hell out of honest companies? Or do you have other motives to hide behind the DMCA?
One phenomenon we often write about on Techdirt is how the internet has completely killed the music industry and how it has turned our world into a culturally barren wasteland, deprived of art and even joy. More accurately, we write about people who say such things and point out the inaccuracies, ignorance or basic flaws in their logic.
Critically acclaimed pop culture critic Simon Reynolds was recently interviewed by Andrew Keen and made a bunch of generalizations and claims that are in seeming contrast with his progressive outlook previously shown in musings about punk and post-punk, as well as rave culture.
The interview starts off as you expect it would:
"It's much less likely that you'll be able to make a living doing it."
And how have you measured that 'likelihood'? Even if there are less people making a living from making or performing music, a claim for which I have yet to see good proof, is it really less likely that anyone will be able to make a living off of it?
Instead of backing up his claim, Reynolds continues and discusses the way things used to be in a romantic tone which doesn't change as he compares the old label-centric model to a "lottery", with artists usually having to get "in the red." Misplaced nostalgia. What a long way we have come from that - from a world where artists were at the mercy of corporations to a world of empowered artists in which they are at the mercy of their fans, their customers.
In fact, people have a much larger chance to make a living from music these days. This can be witnessed very clearly in electronic genres, where it is the norm for people to start as 'bedroom producers' and, if they're good enough, they'll get picked up by blogs, then labels and will then be able to build a proper studio and make a living from touring. If they're good enough, according to fans and curators within their niche - not according to label execs or music journalists. Anyone can become a producer and anyone that manages to find an audience and connects with them properly has the opportunity to start making a living from it. It's not easy, but at least it's not a lottery.
"A generation has come along who don't think they should pay for music."
Then explain Justin Bieber. Where does the demand for his merchandise come from? Who is attending his tour events? About 30% of all music recordings are still bought by people under 30, the generation that grew up with the internet. Even the RIAA's numbers show it. That does not take into account live shows or other ways of 'paying for music'. True, the same group used to be responsible for 45% of the purchases, but that still doesn't mean they don't believe in paying for music. Just because only 20% of teenagers will clean up their room out of their own free will, that doesn't mean an entire generation has come along who don't think they should clean. Then again, where would music be without people talking about new generations they do not understand.
"I think there's something about paying for music that makes it more intense; you've got to listen harder to music. If you pay for it you're going to pay attention to the record you bought and get your money's worth."
Does music that depends on the psychological phenomenon of cognitive dissonance really deserve to be bought? At the end of the day, music being available in a 'feels like free' manner, for instance via YouTube or Spotify, means that your music has to stand out. Either by being really good or by having a unique sound. Preferably both. Quality gets rewarded with attention and attention is what can be monetized down the line. No more lotteries.
Then follows a breakdown of mash-ups. Two lines really stand out:
"A mash-up is not something that you'd really want to listen to more than a few times because it's like a joke, isn't it, really?"
"And they're not adding anything. They're not adding--they're not a contribution to the future of music, I don't think."
Come on! That's what my parents said about house music when I first heard it as a kid. Those statements, especially the latter, sound like an echo of the criticisms early rave innovators like Shut Up And Dance and The KLF received from the previous generation that did not understand the new revolution in music.
Perhaps some explanation is needed. Part of the mash-up culture is indeed like an out of control meme - nerd humor at its finest, focused more on the joke than on the art. However that's definitely not what all mash-ups are. Take a look at this live mash-up by Madeon, which we covered a while back:
Or look at Girl Talk. Or look at absolute classics like De La Soul's 3 Feet High And Rising album, which is basically composed of intricate mash-ups layered with raps. The same for the Beastie Boys' Paul's Boutique album, of which someone composed a great Spotify playlist with all the tracks that were sampled on the album by the way.
Many new, trendsetting genres, such as dubstep or moombahton, rely or have relied heavily on remixing, altering or mashing-up previous works. The outright dismissal of mash-ups as a contribution to the future of music is nothing new though. This dismissal was false when hiphop and house DJs started mashing up disco and funk records in the late 70s and early 80s, and it is false today. Mash-up culture is pop art on steroids.
After Keen notes that "you're not allowed to be on TechCrunch and be too miserable," they aim to end the interview on a cheerful note and start talking about radio (yes, really).
"Anything that can take on the role that radio used to have and deliver new things to people that they're gonna like. It's gonna prosper."
I think he's on to something there. Personally I have very high hopes for something called... the internet. It's common to see people looking for ways in which 'new technology X' can replace 'old technology Y', although that's never the people that grew up using the new technology. The internet's purpose was never to create a way to replace old technologies with some a single new alternative. What the internet has done is take all the different roles of radio such as curator, broadcaster, gatekeeper, commentator, critic, entertainer and more, and it has separated or perhaps eliminated some. Now anyone can take on one of those roles or any combination thereof. It's no longer something exclusive.
Hope you don't mind the sarcasm here and there, Simon. You've got a great mind, but I couldn't let these claims go by unchallenged. If you'd like to retort, please get in touch. We'd be glad to feature it on here.
Personally, I think this is an awesome time for both musical artists and fans right now. There is so much opportunity and freedom. I think it's a great time for music and perhaps it will take some more years and further disruption for some folks to finally be able to see that -- just like the general music industry's shifted opinion about that De La Soul album mentioned above, which was initially met with plenty of animosity from the traditional industry. Luckily, true pioneers ignore such animosity, move on and set the standards for tomorrow for both musical artists and fans.
While Venezuelan president Hugo Chavez was recently in Cuba to undergo cancer treatment, several media outlets reported on Chavez using Twitter to run Venezuela. Tweets included an approval of a million dollar garbage collection program and the announcement of a new park in Caracas. As fantastic as the headlines dealing with this news sound, a little nuance is probably needed. Any of the actual decision-making was obviously done in more than 140 characters, and only the actual announcements of decisions were made by Chavez on Twitter. Instead of using it to 'run Venezuela', it would be more accurate to say that Twitter has allowed Chavez to retain a strong image in the run up to upcoming presidential elections. Probably a better strategy than censoring the internet.
If you follow music industry news, you probably didn't miss Spotify's launch in the US last week. Prior to this launch, a Swedish music executive was interviewed about what to expect when Spotify launches in the US. One part of the interview stood out in particular:
[Spotify] has eradicated music piracy almost on its own. Sweden was the home of Pirate Bay. They even had their own political party and made the prime minister in national television declare "Off (sic) course the youth shall be able to download music for free".
Three years later, The Pirate Bay is not mentioned by anyone anymore. Spotify is, on the other hand, mentioned by almost everyone - including the old Pirate bay fans.
This did not happen because some new radical law or brutal police force were implemented. Neither because a confused prime minister changed his mind again and embraced the music industry. It all happened simply because the users found a new legal service that they actually thought was much better than the old Piracy one.
What is interesting here is that innovation through business helped reduce 'unauthorized consumption' of music, while many a record label exec prefers to invest in legal changes that have not really made all that much impact so far. Personally, I think the recording industry missed a huge opportunity 10 to 15 years ago. Instead of using the legal system to fight Napster and the wave of peer-to-peer filesharing that followed, innovation through business would probably have been more worthwhile (and a lot less costly). Besides that, legal changes on the scale some of the folks in the recording industry envision would create a market that's even more broken than it already is, preventing other business (like Spotify) from driving innovation and competing in their industry, and would be threatening to civil rights (the rights to free speech and privacy in particular). Enforcing the interests of one group or industry by sacrificing innovation and civil rights surely must be one of the most undesirable things we as a society face today.
Even though Spotify displays a good model for success, it does have its drawbacks. One rights organization highlights an important issue with Spotify: the inability to port data.
Because streaming customers do not own their music, they cannot take it with them. Should they decide to try another service (or if a service goes under), users should be able to easily export titles of songs in playlists they created or a list of favorite music, etc. Users should also be able to choose independent add-ons that make the service more valuable, such as alternative means of organizing their music "collections." Without this kind of functionality, users are going to be disappointed, and we are unlikely to see the real competition that helps drive innovation.
We're only just entering the digital age. Blocking innovation with legislation and lawsuits is a shortsighted approach, especially with innovation proving to solve issues that legal changes can't. If the recording industry doesn't live up to their responsibility to innovate and service their fans, others will.
This chart seems to indicate that there are different groups within pirates. As is obvious from the chart, the group on the left side is more likely to have bought music recently than 'non-pirates' (people who engage in filesharing less than once a month or never). I thought this was an interesting result from the survey, especially since some people are generally too quick to disqualify pirates as economically interesting music consumers.
I asked surveyees to respond to the statement "One US dollar ($1.-) is not too much to ask for a song." This resulted in two groups that were almost evenly split. Around half of the respondents agreed, and the other half disagreed. This indicates that prices of music should perhaps be much more variable than they are today and real attention needs to be paid to one's target group when trying to sell copies.
Instead of inventing numbers to argue how things should be - as a marketeer, I'm much more interested at looking at the reality and using that reality to maximize the potential. So what do you do when your business model (that relies on control) gets disrupted through peer-to-peer filesharing and other types of non-linear communication? You adjust to the new reality and make use of that non-linear communication.
The solution that originates from this non-linear communication is 'the ecosystem' and this excerpt from my thesis probably describes it best:
The ecosystem is an active fanbase which is interconnected through non-linear communication. This means producing a story worth telling to turn the internet's non-linear communication and loss of control over distribution into an opportunity to get discovered. The second step is retaining the attention by connecting with listeners and connecting them to each other like the host of a party would with guests. Turning the ecosystem into a fun party helps energize the fanbase and amplifies the aforementioned "story that's worth telling". Marketing opportunities come from listening to the ecosystem and releasing the products they want, as opposed to the classic approach of pushing the product that you want them to buy. Internet-enabled concepts such as pre-ordering and digital releases allow labels to offer their ecosystem abundant choice to play into all the different expectations regarding price and product characteristics. This most likely will involve a mix of (feels like) free and publishing products or services that are better than free.
The answer is the ecosystem. Note that in the below picture, both the artist/label as well as the target audience are part of the same ecosystem.
If anything, Apple's announcement of iTunes MusicMatch has made opposing sides equally uncomfortable (a sign of disruption?). Whereas some are concerned about its possible use as a tool to identify infringers, others are more concerned about it 'legitimizing piracy' and are not afraid to pull numbers out of thin air to back up their claims.
One of these people is PRS for Music's chief executive Robert Ashcroft. Ashcroft claims collection societies like PRS for Music could experience an 80% drop in online licensing revenue if unauthorized downloads were to be admitted in locker services and then legitimized. It seems very unlikely that collection societies would even exist if one innovation would cut 80% of their business, but I'm very curious to see evidence to back up this claim.
I've been trying to come up with a scenario that would warrant this 80%, but most would be too far-fetched for a non-fiction blog like Techdirt. The existence of these locker services would have to lead to governments deciding there is no reason to keep downloading illegal. Then either new 'pirate' platforms would have to start outcompeting already existing platforms or most legitimate platforms would have to decide there is no value in having good relations with the artists and labels their users adore. Then most users must stop spending money on music. Why is this not realistic? Despite the increasing convenience of unauthorized downloads, authorized platforms such as Netflix are beating piracy in terms of traffic. If the suggested 80% decline would be realistic, it would have already happened. It didn't.
He further stated that:
“We are at a turning point. Either the internet becomes an economically viable replacement to CDs or else there is an admission you can’t get fair value from the internet, which would lead to lasting damage to the music industry.”
No, just no. Either the internet becomes an economically viable replacement to CDs or else? The internet is a revolution in computer networking and communication - it was never intended to be a replacement to CDs. The internet is a disruptive technology which among many great things has helped thousands (if not millions) of artists and musicians reach global audiences they would otherwise not have reached. It has helped artists gain exposure and popularity to generate the licensing revenue which helps pay for the salary of collection societies' staff. For this reason the new generation doesn't blame the internet (although sometimes they forget where they came from). Just recently I interviewed Para One, a successful French electro producer, who said:
“I personally see the internet as a blessing. It would be unfair to hate it, since it pretty much kickstarted our careers through forums, then MySpace, etc, a while ago.”
Let's just label the part where he says that the internet should be a CD replacement "or else" as the FUD that it is and move on. Actual research into this suggests there's actually money to be made for the music industry. Of course that remains to be seen and depends on a few factors such as how good consumers are at predicting their own behaviour. It's also dependent on the moves of other competing platforms such as Spotify and Google Music.
However, these are intelligent platforms, built in a reality where they have to compete with free and in which they must convert 'free users' into paying users. This is why I cringe when I hear people from a less reality-based side of the business say "piracy" needs to be stopped in order for these startups to succeed. A piracy-free internet would have to be so restricted (three strikes is not enough) that it would devastate these startups and most other future innovation along with human rights.
Although the below image has been circulating the internet as a satirical warning for some time now, Dutch telco KPN recently announced that it's actually going to implement something like this due to declining revenue.
The company stated that starting this summer it will be blocking chat-messaging applications such as WhatsApp (competes with SMS), VoIP services (competes with calls) and heavy streaming services. All these services will get their own price tag, just like what is currently the case with calling and text messaging. The problem with that logic of course is that calling and SMS are actually different services that the telco offers; but in the case of creating pay packages for internet services, probably none of the services are from the telco itself. Some other telcos, such as Vodafone, already stated that it, too, is interested in plans like these (Vodafone is already blocking VoIP and selling access to VoIP services for 5 EUR per month).
Unfortunately for KPN, this plan might actually backfire. The majority of the Dutch parliament has spoken out against the plans and have urged the Minister to protect net neutrality. Currently the Dutch Telecommunications Law does not provide a good safe harbor for net neutrality, but it soon might... because of this. One parliament member who is part of a ruling coalition party even suggested that if telcos are going to charge more for usage, perhaps the tariffs for normal phone calls should be lowered. Sadly, the Minister is less outspoken and has claimed that "mobile internet is really something different than an internet connection at home".
It will be interesting to see what happens next. Will service providers like Wikipedia start charging telcos for "using their content for free?" Will Skype start demanding royalties? As we've said before: "it's a pipedream for [...] some mobile operators, but the likelihood of it actually becoming the norm seems pretty damn low."
Even though The Netherlands' plans for copyright enforcement are quite far reaching, the Dutch Publisher Association, which includes about 90% of Dutch publishers among its members, says it does not go far enough, and is now asking for criminal prosecution of filesharers. The Association also claims that the new policy justifies sanctions against downloaders, such as fines, "if only for the preventive effect." What stands out, is that the Association also wants equal rules for "paper and digital copies," which could possibly equate counterfeiting to filesharing. To top things off, the statement also opposes the state secretary's plans for introducing a fair use policy in The Netherlands.
While much of the response is predictable and needs no further discussion on my part (comments are open, discuss away!), I would like to highlight again the fact that they're arguing for bringing filesharers to criminal, instead of civil, courts. This, in my opinion, clearly displays the way current copyright law and its developments clash with certain civil rights (and perhaps human rights). This is not the first time such a measure has been suggested and it will not be the last time; the lobbies and the companies they represent are rapidly draining money. Making this a matter of criminal prosecution instead of civil suits would mean that these lawsuits would rapidly decrease in cost for the industry -- but puts that cost on the taxpayer. This burdens the overall government and taxpayer, but enables organizations to continue their fight against the internet, third party innovation and the loss of control.
On the same day that Dutch Minister of Economic Affairs Verhagen announced efforts to prevent the export of internet filters to repressive regimes, State Secretary of Justice and Security Teeven announced the introduction of the national blacklisting of websites. The press conference expressly 'filtered out' critical Dutch civil rights organization Bits of Freedom and consumer rights organization Consumentenbond.
The Minister of Economic Affairs stated Monday that companies should support internet freedom and that the danger of exporting filters to repressive regimes is that they can be used to withhold information from civilians. A good start of the day for Dutch cyberactivists, breathing a sigh of relief to see that the government actually seems to understand what they’re talking about.
However, later the very same day the State Secretary of Justice and Security announced a 'download ban' making the unauthorized downloading of copyrighted material illegal. Although it was stated that the privacy of internet users who only download limited amounts of copyrighted material from unauthorized sources is protected, the actual definition of 'limited' has not been given.
Whereas a previous parliamentary commission told the entertainment industry that they should innovate before any such ban would be introduced, this government decision turns it around, saying they'll make it illegal first in order to stimulate motivation.
Of course there are a lot of parties who have criticized these plans. Holland's biggest consumer rights organization, Consumentenbond, has claimed that the law doesn't protect users from getting sued for downloading. In the past they have argued for an internet levy and making both uploading as well as downloading legal.
Instead of forcing copyright monopolies to adjust to the realities of recent technological developments, the government has opted to try to protect them, while at the same time extending their own power and control over society and the internet. Instead of spending these resources to stimulate innovation, they'll now be spent to limit freedoms and put a further strain on the justice system.
Meanwhile nothing will change. The traditional concept of copyrights is dated and has to be altered drastically. We're only just entering an age where anyone can make a copy of nearly any type of information or culture at basically zero cost and effort. Legislature or no legislature, the giants of copyrights will crumble. Technological progress is relentless. Which is why it's even more sad that laws like these are introduced.
Fact 1: According to analysts, the New York Times only needs to convert 1 to 10 per cent of the online visitors in order for the model to pay off.
Fact 2: NY Times chief executive Janet Robinson has stated that they only expect about 15 per cent of visitors to encounter the paywall, since visitors can read 20 articles per month for free.
Fact 3: Full website access and the mobile app are bundled for $15 per month. For the iPad app + web you pay $20 per month. $35 for all three.
Fact 4: One analyst argues that the NY Times could earn $66m per year if it converted just 1 per cent of the visitors. This would mean they go from paying nothing, to paying (at least) $195 a year.
There is no way these numbers add up. Consider fact 1 and fact 2. First of all only 1 per cent might actually not be all that easy, let alone 10 per cent. Secondly, the 1 per cent is misleading, as they'll actually have to convert 1 to 10 out of every 15 visitors to encounter the paywall. So they actually have to convert 6 to 66 (!) per cent.
Next, the pricing might be too high. $15 per month is a lot for consumers who are not used to pay for news online, especially since there's no additional value as Mike commented last week. I'm not saying nobody will pay, but dragging in the 6 to 66 per cent of the visitors will be challenging, to say the least.
I cannot imagine this paywall to be successful. They can probably kiss the $40m investment in the development goodbye.
One of the spectacular developments in music in the last 20 years or so, has been the democratization of the means to produce music. Combined with the internet and the social web, this democratization has enabled a lot of people to create and publish music that probably wouldn't have been able to otherwise. As Seth Godin says:
"This is the greatest moment in the history of music if your dream is to distribute as much music as possible to as many people as possible, or if your goal is to make it as easy as possible to become heard as a musician."
So what some producers do when they blow up, make it big, or (for the 'haters') sell out, is they start sharing their expertise with their ecosystem of fans. Being a professional DJ/producer is very intense and time-consuming, so I figured I'd highlight some exceptional cases of DJs that free up their time to engage with a part of their ecosystem in a language they all understand: that of making music (and English).
The first is simply connecting with fans by asking them to send in demos which will be critiqued publicly. There are a couple of examples I've come across, such as dubstep-producer Plastician, Steve Angello's Size Records (apparently), but most notably Swedish electro house producers Dada Life. The latter replied to their fans via video, shown below, but also via a much more detailed blog post.
A second way in which some producers connect with their fans is by actually revealing their production methods. My favourite example of this is dubstep-producer High Rankin's 'sub bass tutorial', which isn't just a good lesson in production, but also highly entertaining like all of his YouTube videos (even for those that have and will never produce music, so check it out!).
Finally, there is a more DJ-specific way of connecting with fans. Dutch house-producer Chuckie recently did his second 'DJ drops' (embedded below, warning: NSFW). On Facebook, he asked DJ fans to drop their names and he'd give them shout outs that they will be able to use for their own mixtapes.
What these guys are doing is building a very strong connection with an influential part of their fanbase. Personally, I prefer the phrase 'ecosystem' since fanbase suggests a distance between fan and artist, whereas an ecosystem places an artist right in the center of it. They are not just "connecting with fans", as Mike would put it, but they are participating in their own ecosystem. As said before, when you have a strong ecosystem, that's when business opportunities start presenting themselves.
Some call it a tribe, others say 1,000 true fans, but it all boils down to one thing: finding original ways to engage with the most valuable people around you... your fans.
The chief of police of the greater Rotterdam area has called for the creation of a DNA-database for all 16.6 million Dutch citizens. There is already a DNA-database in existence, but it only contains the DNA of 11,000 people since the policy is to only take DNA from people sentenced to prison for at least four years.
According to the chief of police the privacy of civilians is not as important as tracking down criminals, stating that society is "too careful" and that "if you want to make the world safer, there's a price to pay." In a statement released later he added that safety is partly paid for by reducing privacy.
Of course, one could argue that it's not the privacy-concerned people being "too careful," but that there are some people that are so obsessed with security that they're willing to have others pay the price in giving up their privacy. Such a database will not prevent crime, since most crimes don't originate from rational risk-calculation. Any errors in the database could also have disastrous effects on people's lives in the case of a mistaken identity for instance, not to mention the implications of potential function creep. It really is a big price to pay for a small piece of security in one of the safest places in the world.
After a few hours of outrage from civilians and politicians, the Dutch Ministry of Justice and Security released a statement that they do not support the plan and stated that it was not the first time such ideas have been suggested. It is probably not the last time, either.
I go through huge amounts of links and information each day when it comes to the music business, but this is by far the coolest and funniest way of getting your music discovered I've seen in a very long time (OK Go, eat your heart out).
The idea of The Ugly Dance is very simple. You go to the site, upload your picture, it's placed on top of a (slightly customizable) body and you can choose all kinds of maniacal ways of dancing. Here's yours truly dancing like nobody’s watching:
It’s a project by Swedish band Fulkultur and appears to have been around for about half a year right now. Obviously, this type of thing spreads; getting their music heard by a lot of people (and what a catchy song it is). When I wanted to create a second dancer (to send to a friend), I got the following message:
A very reasonable thing to ask... and since I was in such a great mood and figured the donation would not be much effort anyway, I went ahead and gave them some money, even though I believed clicking the Donate Nothing button would still allow you to create more dancers, although I later found out that this is in fact not so.
These videos are the result of the ecosystem at work! It's a fanbase that co-creates, amplifies and adds value to your original message. It's a perfect example of using something viral to getting your music discovered, but also of creating a movement which is easy to join, because it’s obvious what you have to do to participate (also read Derek Sivers' post about this).
I got in touch with the band and asked about the success. Anders Tjernblom, one of the band members, filled me in (even though he was on holiday!):
"TheUglyDance.com was actually not a result of some great promotional master plan. It just happened.
It started off as an idea to get visitors to my band Fulkultur's (meaning Ugly Culture/Crap Culture) Myspace page. I have had this idea about a dance application for about a decade. In January last year I started programming it in my spare time, and a couple of months later I wrote the song Fuldans (Ugly Dance) specifically for the application. It was not the other way around, as most people think.
On May 17 we released fuldans.se and sent the link to some friends. When I checked the stats a couple of days later a few thousand people had made their own dancers. I could feel something was about to happen. Just the day after someone shared a link on a Swedish blog, and it generated a tsunami of visitors. 30 000 people rushed in in just a few hours. The week after we hade a few hundred thousand hits, and it was a continous struggle to keep the server alive. Two weeks after the release, and 700 000 visitors later, I thought everything was under control. Then the Americans came.
Someone had written English instructions for the website, and had published it on some major American website. Our current server could not handle that amount of visitors. We decided to close the server for international visitors, to find a better solution.
During June/July we created an English clone of fuldans.se. It was going to be called theuglydance.com. Even the music was translated, and our aim was to raise money for the band to write and record more music. The clone was released by the end of August.
Now, to answer your question:
TheUglyDance.com have had 7 milllion completely unique visitors. A few very kind people have donated, but they are very few. If we should have done anything differently, we should probably have sold T-shirts or something. Something real for the massive amount of visitors to buy. But we are still very happy for what we have accomplished. We will try to keep the website alive for as long as possible, although it is not a cash cow at all."
I think partly due to the fact that this success "just happened", they never really got the chance to think things through very well. They did a spectacular and exemplary job at getting people's attention and making the initial connection, but there appears to be no focus at all on retention. There appears to be no link to the band's MySpace, which they were trying to promote. Due to the fact that most people are on Facebook and Twitter now, I think it would have been a better idea to put those links in the foreground, but most importantly; there has to be a way for people to connect. A simple Facebook 'Like' button below the Flash application would have gone a long way.
The second part is the business model. I think it's great that the band went into this without a very clear picture of a business model. They just had an exciting idea and executed it and this genuineness shows in the final result (and echoes throughout the ecosystem as you can see through the fan vids on YouTube). From a marketing perspective, asking for a donation or getting people to buy your music out of sympathy is a bad business model. As Mike always says, it's about giving fans a reason to buy. A good thought experiment is to imagine a totally selfish consumer and to see what you could offer them so that they spend money on you. They should spend it for themselves, not for you.
This means making sure you retain as much of the original traffic as you can without getting obtrusive. This means shining a light on the early followers and encouraging them in what they do, because they're helping you amplify your message and are providing social proof. At the same time you should connect these people to each other, forming an ecosystem. You're still the reason why these people are connected, but the communication in the fanbase should be non-linear (as opposed to artist-fan), because that's how the ecosystem can start to come alive (think of it as hosting a party where nearly nobody knows each other). The business models simply come from listening to the ecosystem and playing into their desires (just like Younger Brother did).
In the end, giving fans a great reason to buy is the ultimate way of connecting with them.
This weekend we came across a post by Karin Kosina which highlighted the problem in saying that sometimes it's okay to 'filter' (censor) certain websites.
"Tunisian state secretary Sami Zaoui just announced (mirror) that they will keep blocking websites that are "against decency, contain violent elements or incite to hate". When criticised that this is inacceptable in a democracy, he responded (mirror): "Wrong! Even the countries that are most evolved when it comes to freedom block terrorist sites"."
In the case of Tunisia, which just had a revolution or perhaps is still in the process of a revolution, it becomes immediately clear what the problem with such filtering is. Basically, the government is keeping a tool in place which has been used to silence critics in the past. Also, the conditions for which websites are censored are quite vague. Inciting hate and containing violent elements seem quite clear, but as we've seen in Turkey, such conditions can easily be stretched and that's without even taking the 'decency' condition into consideration.
Both the US and the EU are obviously failing to be a rolemodel when they should be. Many politicians in the EU have embraced the idea of an internet filter to block child pornography. As for the US, they could be seen seizing domain names of 'rogue websites'. On the one hand, politicians of the west love talking about the principles of freedom, but on the other hand they hate to actually live up to their own standards when something like WikiLeaks or a music blog comes along. The problems of this for the US and the EU have been discussed here in detail before.
What such censorship also does, is create a dangerous precedent, because it allows for repressive governments to create excuses for censorship. This is to be expected, and we've predicted similar things in the past. If Western countries are really serious about stopping internet censorship (and they're probably not that serious), they need to actually learn to live up to that ideal. Otherwise, we're going to see more and more state-supported censorship defended by the fact that Western nations are just as bad.
deadmau5 (pronounced 'dead mouse') is a great example for artists that want to make it in the music business. He is famed for his great production and unique style, which helped get him noticed and separated from the crowd. That's a good thing, because then it's worth talking about. What's remarkable about deadmau5 stretches further than his unique production style and performances (he wears this huge mouse-mask on his head). His level of engagement with his ecosystem (or fanbase, if you will) is exemplary.
Minecraft has been talked about before on Techdirt. Back in November, deadmau5 set up his own server for this sandbox-game in which players can craft their own world. His fans love it, and deadmau5 regularly pops in to hang out with them in 'mau5ville.' In a way, both deadmau5 and his fans emerge themselves in fan art. There are tons of videos of mau5ville online, so you can take a tour. One user even used the game's tools to make a cover of a song by deadmau5, which deadmau5 then shared with over 2 million of his fans. Other artists sometimes prefer to go the way of a takedown notice when a fan puts his energy into making fan art -- but deadmau5 prefers to promote it. You can see both videos below:
However, deadmau5 is not like other artists, and recently he showed this by buying about 20 Minecraft accounts and posting the gift codes on his Facebook page. He understands that having fun with your fanbase and spending a little money on it can be much more important than telling them to buy your music. He listens to his fans, and he informs them when they can buy new music, because that's what his fans want. But it's about more than just pushing what you have to buy.
In the beginning of December, deadmau5' marketing team decided they should get involved in communicating to his fans.
Apparently deadmau5 didn't like the fact that his management was disturbing the trust and rapport he had built up with the ecosystem, because those status updates were followed by deadmau5's:
Then he checked the backend of his Facebook page…
Excellent choice, in my opinion. This is the best thing he could do to earn back the trust of the ecosystem, because you really don't want to get on the bad side of the ecosystem. The ecosystem can reject you, the ecosystem can move on, the ecosystem doesn't need YOU in order to survive.
And the cool thing is, he wasn't thinking about marketing or self-preservation or strategy in the process of making his choices. It's just him, genuinely. And I guess the status update he posted 1 minute later shows just that:
It looks like deadmau5 recognizes his fans have more value than just a few purchases. Instead of complaining that his fans should buy his album for 15 euros, he is actually buying them Minecraft accounts for 15 euros a piece. This might be hard to understand for his management and a lot of other people in the industry, because if fans are free, how can they have value?
Over the last month or so, things have been quite busy at Techdirt, and we haven't had time to add to our case studies section, even though we have a few more lined up. However, Bas Grasmayer, sent over the following case study (also posted on his blog), which is a part of his thesis (which we've mentioned before). The case study is about Shpongle, a much respected group of musicians in a very specific niche, psychedelic chill-out, but it has attracted many fans of other genres too and is generally categorized as 'electronica'.
A while before they released their latest album 'Ineffable Mysteries From Shpongleland,' it leaked onto filesharing networks and fans of Shpongle started discussing the new album on the internet forum of Shpongle’s record label, Twisted Music. Obviously, Simon Posford, the main person behind Shpongle and owner of the Twisted Music label, was very unhappy about this and lashed out:
"So some fucker has released the album on the internet already.... thanks a lot, whoever it was... Maybe twisted will still recoup, maybe not... all i know is that we are teetering on bankruptcy, and are seeking deals elsewhere.... the 12 loyal fans on this forum are not enough to sustain a record label.... How much do you think Twisted has in the bank account? Have a guess? More than $10,000 ? More than $20,000 ? Well it is actually less than $1,000..... Raj and i haven't even been paid our advance for this album.... All the artists on twisted are seeking deals with other labels now... We can't pay a label manager, and we can't pay the artists.... always putting our hope in 'just ONE more release'.... "We'll be ok if the DVD sells"...."Surely the Shpongle CD will sell, right?"
This sucks, for Twisted, for myself and Raj who have spent 3 years working on the album.... Just as i started looking around and posting on this forum again, i remembered why i shouldn't bother.... I'm outta here... Soon to be followed by Younger Brother [another project by Simon Posford] and probably Twisted...
He got understandably emotional, but misdirected his anger towards perhaps the most dedicated fans: those who really cannot wait until the release and decided to preview it. After all, Shpongle hadn't released an album in four years and their following is quite fanatical about their music. Later in the same forum topic, he adds some more thoughts, which are also relevant to this case study:
"It's all very well to speculate, but i can tell you as a fact, we made more money before file sharing... we could survive... now not so.... and i think you will find it the same all over the music business... the argument that "file sharing is promotion" is probably valid.... in fact, i agree...in a way it serves a similar purpose to radio.... but the argument that "file sharing is promotion and therefore you will sell more CDs" is clearly absolute bollocks, otherwise the music industry would be booming right now!
Also i'm sorry that "And if it weren't for the internet, I would have given up on music entirely".... for me, the internet makes me want to give up music wink But i guess i'm from a different generation.... I started making some of the trance that probably fills your 100Gigs hard drive before i'd even heard of the internet... and i didn't need the internet to find a deep love of music... the rush of buying a new vinyl, of collecting every release/picture disc by my favourite artists…. discovering new music i liked, all underground, no radio-plugged mix CDs or whatever... ALL without the internet!"
Later on in the topic, which currently carries over 600 replies, fans started to suggest ideas to Simon. They encouraged each other to buy more merchandise, to replace old t-shirts or hoodies, to buy an extra album to give to a friend and they came up with ideas to help out Simon Posford, Shpongle, and Twisted Music.
And it seems Simon has also learned from the fact that you indeed will not sell more CDs even when filesharing is good promotion, as he noted. Being a fan myself, I was very delighted to receive a newsletter, one year after the leak, which featured some interesting new business models and experiments. It does a few things very well and I'll highlight this bit by bit. The opening paragraph is as follows:
"Dear Twisted fans,
The new Prometheus album has been doing very well on Beatport with 4 of his tracks reaching the Top10 of the electronica charts. If you haven't got your copy yet then Benji and Twisted would be happy if you could get onto Beatport and purchase at least the electronica tracks. We'd love to see him get to Number 1!
Ott is beginning his 6 date tour of the USA starting tonight! You can see and buy tickets to all his tour dates at the bottom of this newsletter. You can also join his Facebook Fan Page here.
We've also got two new tracks of Younger Brother and Shpongle available as a free download, keep reading to find out how to get hold of them."
What a dramatic change of tone, compared to the rants on the forum. This is how you connect with fans! First of all, it acknowledges fan support in terms of chart positions and makes a polite request (as opposed to lashing out or guilt-tripping fans, like on the forum). Also, it tries to unite the fans and give them a purpose; a mission. People love accomplishments, individually or in groups, if only for the little dopamine rewards our brains release.
They then give the fans more information and ways to connect with one of the labels artist's and finally reward fans with free music. That's a great way to open a newsletter.
As for the free tracks, the newsletter featured two images with links to the place to download the song. Once on the page, the page showed a download button, which when clicked, becomes a box in which people must enter their email address (as seen on the left). So actually, they can see which email addresses support which artists, but also, when people choose to use one of the share buttons, they help Twisted Music get more email addresses than just the ones they already had for the newsletter.
Younger Brother's page was a little more complex (see screenshot on the right), with more information, but basically boils down to the same thing.
The newsletter then continues with another exciting way of dealing with the reality created by the internet, which is crowd-funding:
"Many of you have already pledged on the Younger Brother album 'Vaccine'. We're working with pledge to raise money and to set up the best possible foundation to promote and release the record next year.
We're calling on the loyal and faithful to help. In exchange we're offering loads of interesting things from studio time with the band to limited artwork and access to rehearsals."
Again, a great way to involve fans and to offer them something exciting. It basically offers them a reason to do it for themselves, instead of telling them to please buy a CD because the label needs it (see forum post). Some of the 'items' on the list for people that pledge: signed CD (£15), new album and entire back catalogue (£25), coming to one of their rehearsals (£40), studio workshop (£300), being in one of their videos (£150), a unique personal remix of your favourite track of the album (£600), and much more.
The newsletter closes with more standard stuff, such as tour dates and the like.
The strategy here is simple, yet complex. First of all, the label releases some very unique, high-quality music, which has given them a fanatical and evangelical following (Seth Godin would call this a tribe). Secondly, this following, together with the label, has turned into an ecosystem; when things were not going well, the ecosystem started figuring out ways in which it could survive as a whole. Thirdly, Simon Posford started paying close attention to his tribe and started catering directly to their needs. When reduced to a communication and business strategy, it becomes the formula of CwF (Connecting with Fans) and giving fans a RtB (Reason to Buy).
Giving away free songs is a good example of connecting with fans by rewarding them. The clearest reasons to buy in this mailing are the mission to get one of the label's artists to number 1, as well as all the rewards for pledging money for the new album.
It is important to note that this should not be done to generate profit, but should genuinely be done to please the fans and to give them what they want. I thoroughly believe that if you betray your fans' trust, you will lose them and your (potential) income.
Intentional misinformation in the video, for what I think is dramatic effect.
They claim Russia jailed Pussy Riot for a YouTube video, but they were arrested before even leaving the scene of their performance.
I agree with the message but intentional misinformation annoys me. It's terrible enough not to have to mislead people. Besides, this is likely to touch a nerve with most Russian audience, who then will be less likely to take action, perhaps because they'd feel it looks like US propaganda.
I really like Tim, but this shows little understanding of Russia to be honest.
Obviously the tablet will fail. Nobody in the government is interested in this: they all prefer their iPads and other western luxuries. This tablet is being developed for symbolic reasons, period.
Anyway, the issue I have with the article is that it is not balanced. Since moving to Moscow, I've been pretty annoyed with how inaccurate and biased western media often is... repeating the same oversimplifications of rather complex events and processes. The problem with this is that you turn a country that's conflicted, has difficulties stemming from its history, has significant problems in its bureaucracy, and you turn it into something 'evil' while it's actually not a black and white thing.
It's bullshit and it's dangerous, because few stand to gain from a black and white world - and those that do stand to gain usually do not have the best intentions. Therefore I'm quite often finding myself disappointed to see even previously trusted media and NGOs also feeding this black/white picture.
I'm not trying to say I agree with everything the Russian government does, far from it, and that's fine. But systematic generalizations are so uncalled for - especially when it comes to countries which people already have a hard time understanding...
Making a caricature of Russia, fine. The country is funny enough without having to portray it as something evil.
(by the way, turning things into something 'evil' dehumanizes them... Which is why every time your bring up anything WW2-related in a discussion, it's immediately dismissed... as if it couldn't happen again. As if suddenly half of Europe went crazy for a few years and such a thing could never happen again. It's nonsense. There's no such thing as pure evil: all these things are human problems. If we cannot discuss it in a human context, then it will be increasingly difficult to find humane ways to solve differences between countries and their peoples.
Look at Israel & Iran now for instance. Both are reducing each other to something evil. They dehumanize each other, demonize each other, and obstructing humane solutions.)
Sorry Tim, you don't deserve all this, but after a bunch of western bias influenced pieces here on TD, I couldn't really hold it in. Again, I'm not disagreeing, I just get annoyed by the oversimplifications.
Not sure, I think it might be loss aversion. I think it's loss aversion which also drives people to ignore the realities of price elasticity (or lack thereof).
For instance; people know that they will make more money if they sell a product at $1, because more people will buy it. Yet they sell it for $10, because after someone buy for $1, that's that and you've lost their $10 potential (of course not, but if you're not innovative about your business model, sure).
It's stupid, but a lot of people would rather make less money, than lose the 'potential' of 9 more dollars per sale, per person... even though that potential will never fulfill itself, loss aversion prevents people from acting rational and applying some creativity to their business model.