Techdirt. Stories filed under "interviews"

Your Word Against Ours: How The FBI's 'No Electronic Recording' Policy Rigs The Game... And Destroys Its Credibility

Tim Cushing — Mon, 20 May 2013 08:53:09 PDT

Considering the FBI's unseemly interest in recording phone calls and inserting itself into all sorts of electronic conversations (all without asking permission first), it's incredibly strange that it refuses to use one of the most basic electronic devices available: a voice recorder. In fact, as Harvey Silvergate's op-ed for the Boston Globe points out, it's forbidden to use any sort of recording device when interviewing suspects.

FBI agents always interview in pairs. One agent asks the questions, while the other writes up what is called a “form 302 report” based on his notes. The 302 report, which the interviewee does not normally see, becomes the official record of the exchange; any interviewee who contests its accuracy risks prosecution for lying to a federal official, a felony. And here is the key problem that throws the accuracy of all such statements and reports into doubt: FBI agents almost never electronically record their interrogations; to do so would be against written policy.

Without a recording to compare the transcript to, we are expected to trust the FBI's version of the interrogation. If we can't trust it, we are left to draw one of the following conclusions.

1. The transcript is completely false.
2. The transcript is heavily editorialized.
3. The transcript interprets certain statements, but is otherwise accurate.
4. The transcript is completely accurate.

Of all of these choices, number 4 seem least likely. In fact, one wonders why the FBI bothers interviewing anyone when it could simply put two agents in a room and allow them to bang out a confession on behalf of the accused.

If a suspect claims the transcription is erroneous, it's his word against theirs. His words, of course, disappeared into the ether as soon as they were spoken. The FBI's version lives on, printed on paper.

We don't need to ask "why" this is a problem. There are rhetorical questions and then there are stupid questions, the sort helpful teachers and guidance counselors continue to pretend don't exist. A better question is, "Why hasn't this been changed?" Silvergate notes this policy is an updated version of a 1990's policy, crafted in 2006, long long long long after recording devices were ubiquitous. The excuse that this policy was "logistically necessary" because of technological limitations was ridiculous in 1990, much less 16 years later.

This is a problem. More specifically, this is Robel Phillipos' problem.

Phillipos is a 19-year-old Cambridge resident, former UMass Dartmouth student, and friend of alleged Marathon bomber Dzhokhar Tsarnaev. He faces charges of making materially false statements during a series of interviews with FBI agents. If convicted, he could get up to eight years in federal prison and a $250,000 fine.

How do we know he did this? Because the FBI says he did. It has the "paperwork" to "prove" it. As was pointed out above, simply questioning the transcript opens the questioner up for charges of "making false statements." Phillipos could be completely innocent but that means nothing when the accusers are writing the narrative. Scott Greenfield shows just how easily an innocent answer could turn into damning "evidence" in the hands of an FBI interrogation team.

Q: We found files on your computer showing that you went to a website with instructions on how to make a bomb, so we know you did it. When did you first go to the bomb website?

A: I surf the web constantly and go through, like, a million pages. I have no idea what pages I searched or when. How could I possibly know?

Notated in 302: D cannot recall when he first went to bomb website. Went "constantly."

Slick, isn't it? And when someone points out a misquote, the accusation is turned on them just as easily. "Are you lying now or were you lying earlier?"

This is nasty business but it gets even nastier. Beyond the hilarious claim that tech simply hasn't advanced enough since 1990 to allow reliable voice recording, there's a much darker rationale guiding this ridiculous (and dangerous) policy.

The more honest — and more terrifying — justification for non-recording given in the memo reads as follows: “. . . perfectly lawful and acceptable interviewing techniques do not always come across in recorded fashion to lay persons as proper means of obtaining information from defendants. Initial resistance may be interpreted as involuntariness and misleading a defendant as to the quality of the evidence against him may appear to be unfair deceit.” Translated from bureaucratese: When viewed in the light of day, recorded witness statements could appear to a reasonable jury of laypersons to have been coercively or misleadingly obtained.

Sometimes the "reasonable jury" would be right -- the statement has been "coercively or misleadingly obtained." Other times, it may not be as clear-cut. But in a day and age where recording interviews and interrogations is the expectation, the FBI continues to play by its own (convenient) rules. And if the person being interrogated doesn't like it, he can expect additional charges to brought. This puts the alleged criminal in the unenviable position of having "anything he says" twisted, rewritten and heavily paraphrased before being used against him.

Silvergate cautions to withhold judgement on Phillipos until all the facts are in. But as long as the FBI continues to use this "recording" technique, don't grant its statements any credibility. They have none.

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Should We Outlaw Employers From Asking For Social Networking Logins?

Mike Masnick — Thu, 22 Mar 2012 08:12:08 PDT

In 2009, we wrote about the city of Bozeman, Montana asking job applicants for all of their passwords to social networking sites, so that the city could look more closely to see if they had "high moral character." Public outrage over that plan resulted in the city dropping the requirement. Last year, we noted that some places in Maryland were doing the same, leading to a lawsuit. However, the Boston Globe is now reporting that more and more jobseekers are being asked for their social network logins, as a simplified "background check" by employers. It's a newspaper trend piece, so in typically maddening fashion it makes no effort to indicate how widespread this really is -- but the fact that it's not a big story any time an employer does this certainly suggests that it's becoming at least somewhat more standard.

Still, does that mean we should pass a law? Senator Richard Blumenthal -- who has long been in favor of laws against all kinds of internet companies -- is apparently working on exactly that kind of legislation. Somehow, I doubt it's an accident that the Boston Globe trend piece came out at about the same time as Blumenthal's plans were discussed. Frankly, I still think that it's pretty sketchy and questionable for companies to ask for logins, but is it so bad that we need a law? Is there at least some sort of data on how widespread this practice is?

In the meantime, for those interviewing for jobs who do get asked for such things, it seems only proper to respond as the first individual profiled in the original article does—by walking away:

Bassett, a New York City statistician, had just finished answering a few character questions when the interviewer turned to her computer to search for his Facebook page. But she couldn't see his private profile. She turned back and asked him to hand over his login information.

Bassett refused and withdrew his application, saying he didn't want to work for a company that would seek such personal information.

I would still guess this isn't quite as common as the article tries to suggest, but either way I'm curious if people feel this practice is so egregious that it needs a new federal law?

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Interview With Will Page, Music Industry Economist

Mike Masnick — Thu, 29 Apr 2010 15:48:00 PDT

While I have some very serious concerns about the way the UK's collection agency PRS for Music conducts its business when it comes to threatening small businesses -- including going after a woman playing music to her horses and woman singing while stocking the shelves at a store -- over the past few months I've been having a series of interesting conversations with Will Page, the Chief Economist for PRS.

Page, of course, put out that famous report last summer, that pointed out that the music industry in the UK appeared to be getting bigger, not smaller (contrary to what you hear from many people). Page is a fun guy to talk with about music industry economics, and we decided to run a little interview with him here. There's plenty that I disagree with him about, but plenty that we agree on too. There's so much in this interview that I'd like to dig deeper on, and I hope to do that in a series of posts in the future -- and some more back and forth with Page -- but I figured at this point it was worth getting our discussion as it stands out there for people to read.

We wrote about your study last year showing that the UK music industry was actually increasing -- contrary to most of the headlines were saying. Can you give a quick summary of why your numbers show a very different story than the popular press keeps saying?

It's a 'different story' to what people are accustomed to simply because, for too long, people have characterised the music industry as being about just the recorded music industry. That's largely due to the fact that the only data out there for people to discuss is recorded music statistics. When we published 'Adding Up The Music Industry for 2008' last year, it was an important step towards showing (i) how much the whole music industry was worth and more importantly (ii) how it all hangs together. One of the many audiences we aimed this work at was Government, who need to understand the broader picture of what the music industry comprises of, and the value that it brings. The Insight paper allowed two new pieces of the pie to be illustrated and properly understood: firstly live music revenues of £1.4 billion and secondly business-to-business licensing revenues which were over £900 million. From a total pie worth £3.6 billion, that implied that recorded music made up a nudge over a third of the total revenues -- that's a significant sum, but definitely not the only show in town.

Both of us are skeptical that the digital music sales market will ever replace the physical music market. Can you summarize why and what numbers you've seen about the digital market?

My concerns about the digital market start with the same word that introduced me to economics: 'scarcity' -- there is little scarcity in selling digital media goods and that inevitably affects price. I think the best way to illustrate this is to look, instead, at the live music industry as those folks are the masters of pricing scarcity -- they view tickets as 'lots' and want to maximise the willingness to pay for each. Live music mastered their demand curve a long time ago; digital music is still trying to discover theirs. Another problem with this topic is that interpreting digital music revenues is not a straightforward exercise, especially in Europe. We published a paper on 'Understanding and Interpreting the Digital Market' two years ago to help folks try and get their head around this complex market, and it's not got any easier since!

I'd like to flag two observations for your readers. Firstly, don't view digital in isolation, when it's shown that one-in-five albums sold in America were digital, that tells you more about the collapse in the five, that the outperformance of the one. Secondly, the UK has really outperformed its European neighbours in developing a large, and importantly diverse, digital market. UK digital revenues per capita are twice, maybe three times, that of our main European neighbours, which is a great testimony to the work that Jez Bell at PRS for Music and folks like Francis Keeling at Universal have done on the licensing front as well as the incredible achievements of the services like We7, Spotify and 7 Digital which have taken out the licences and launched here.

Finally, whilst the digital makes up 20% of recorded music revenues, and 5% of PRS for Music collections, what I really have learnt to appreciate is that these digital services are legal 'venues' -- a concept that Eric Garland drilled home to me -- and somewhere north of four million folks in the UK are going to sites like Spotify or We7 and doing their thing -- now it might not be producing the monies people once wished for but they are arguably not going to Mininova, an illegal venue, and that's an important achievement -- especially when Mininova celebrated its 10 billionth torrent download three months before iTunes celebrated theirs. Engagement with legal venues is worth more than the top line revenues might initially suggest.

You mention 'scarcity' in the context of live vs. digital, but live has a real scarcity (seats -- over which they can control access). Digital doesn't have that kind of scarcity. You say that digital hasn't 'discovered their demand curve,' but might the bigger issue really be that without the scarcity the supply curve is the issue? My view has always been that the digital market is a red herring due to the lack of scarcity, but instead the music world should focus on external scarcities that widespread digital music creates (including things like seats at concerts). Is the real issue not the demand curve but the supply and the failure (of some) to recognize that they need to think broader in terms of what they're selling?

That's a very insightful question -- and you're right as one of the many mistakes economists make is to forget about the supply side dynamics of a problem, and instead focus on demand. It's worth citing Jean Baptiste Say, and his Law of Markets which is that "supply creates demand." What this means, with regards to your question, is that "overproduction" in a free economy is actually impossible. That's a controversial proposition though, as I think it comes up against another trade off which we could call the attention economy, where a wealth of information leads to a poverty of attention. Stepping back from the theory, there is clearly more noise in the market place -- more artists, more songs, more places to hear them -- therefore more investment is needed to stand above the noise, to enable the benefits of your 'external scarcities' to kick in. One final piece of twisted economics is this idea of a 'freemium' model, which is cool but has a flaw -- if everyone did it, the less successful it would be. Point being there would be more noise in the free market, which erodes the value of the premium offering -- an increase is supply depresses price, and we shouldn't lose sight of that basic principle.

You call services like Spotify and We7 "legal venues" and things like Mininova as an "illegal venue," which I assume many of our readers may have an issue with -- especially given that Mininova has long had a program for artists to offer up their own content, and there certainly are a small, but growing, number of artists who have embraced those venues for legitimate marketing reasons. Is there an argument to be made that, given the size of some of the userbases of those venues that you (and many) deem illegal, that there may be ways to embrace and engage with them, rather than write them off as such?

The best way to embrace those users is to ensure the services they use are licensed and respect the value of music. Now, we have over a thousand digital music licencees here in the UK, and we've been granting online licenses since 2002, long before iTunes -- a fact often overlooked. The best way to approach the unlicensed services is to think of it this way -- we're all chatting about whether Spotify will sink or swim, right? That's the hot debate at the moment. Well, I would argue that at the margin Spotify would have far more chance of swimming, or up selling the subscription service, had they not had to face this unfair competition of illegal free. That's a powerful argument when you run it through, as it moves away from the old arguments and towards a more plausible observation: what opportunities are being foregone in the legal digital market due to the unfair competition of illegal free? One last thing on Spotify, which is that they went legal before going popular, bucking a regrettable trend. When you explain that to an emerging artist or songwriter, offering a counterfactual of many other sites which have become incredibly popular (and then flipped for incredible amounts of money) before taking out licences -- it really hits the message home.

Both of us are still quite optimistic that there's still a huge opportunity for the overall music market to grow. Where do you think that opportunity exists -- and why is it mostly ignored?

If we pick up on 'Business-to-Business' revenues, or licensing income, this makes music free at the point of consumption with compensation taking place elsewhere. This part of the music industry is likely to make up an increasing part of an increasing pie, and that by default presents opportunities However, what's frustrating is that music licensing is an area of the industry that's often least understood by emerging bands and songwriters -- the MySpace generation -- who are trying to get one foot on the ladder to success. To realise those opportunities, the first thing artists and songwriters need to do is protect their rights by joining PPL and PRS for Music in the UK, or their equivalents in their respective territories. Secondly, it's very important that the licensing bodies around the world get involved with the artists and songwriters. Here at PRS for Music, we've got Myles Keller leading our membership development and we're getting increasingly involved with our songwriters through programming events like The Great Escape on the 13^th May, whereas in America you have 'walking encyclopaedias' like Todd and Jeff Brabec who are very accessible on the panel circuit and their bible 'Music Money and Success' is required reading. I guess my point is that the best way to realise the licensing opportunities that exist is to get involved. Passivity doesn't pay.

You stress the importance of getting people to sign up for collection societies/licensing organizations -- which isn't surprising, given your employer -- but myself and many of our readers are concerned about the incentive structures when musicians rely on such organizations (even when-- as in many cases -- they're non-profits). With such organizations, you can take away some aspect of market-pricing, especially when there are issues of compulsory licensing and/or only one provider in the market. It also creates situations where those organizations constantly push for greater rights, or the ability to collect from more places for more reasons-- often upsetting other aspects of the market (for example: bars and restaurants no longer letting bands play live or hosting open mic nights to avoid having to pay licensing fees). While I agree that, given today's setup, it makes sense for musicians not to pass up revenue that's there for them via these organizations, isn't there a risk that these types of organizations distort the market from a purely economic viewpoint?

Each collecting society is different, so firstly -- let's be wary of generalisations. In America, for example, you are absolutely unique in that you have competition within collecting societies with ASCAP, SESAC and BMI -- the latter which is owned by the broadcasters! Similarly, the story behind SoundExchange is unique too -- and in many cases the US is playing 'catch up' with the rest of the world when it comes to neighbouring rights. So, I just want to be clear for a predominantly US Techdirt audience, the US experience with collective rights organisations will be unlike anywhere else in the world. I really mean that too -- it's such an exception to the rule.

Now to your question -- let's start by asking what is the rational for collecting societies. I would argue that the answer is three-fold: (i) reducing transaction costs for both rights holder and user, (ii) preventing fragmentation and (iii) solving co-ordination in many-to-many markets. The bottom line is this: PRS for Music enables start ups to start up, and songwriters to get paid. If you wiped the board clean and tried to devise a new model, which can hold together a blanket licence and balance the needs of unprecedented digital services, you would probably end up with what PRS for Music is doing just now. It's not an easy task, and armchair critics would do well to consider the complexity in this two-sided market and the trade-offs that we face every day, but to read that We7 now feel that add funded music can add up is heartening as it suggests we're getting this delicate balancing act right.

You've noted that the UK music market appears to have again gone up in 2009 over 2008 and appears to be growing faster than other countries. Why do you think the UK market has been different than elsewhere?

Firstly, The UK is not alone in bucking the downward trend as Sweden, Denmark and Australia can also claim to be outliers in some form. However, these are the exceptions as opposed to the rule, and it's a stark contrast to the downbeat sentiments I'm hearing from the US, and chalk-and-cheese to the situation in Spain which really is frightening on many levels. I'd offer three exceptions which have bucked global trends rule. Firstly, the live music industry has continued to exhibit robust growth in the UK even in the middle of a credit crunch, whereas other territories suggest the market might have matured. Secondly, UK labels have arguably done a better job of diversifying their revenue streams , due in part to the success story that is PPL, and I doubt that level of diversification is being reflected by labels in many other regions. Third, the UK really values music. It's a simple point, but it really matters. Think: the role of the BBC in championing emerging bands, the explosion in music festivals in every corner of the country, the insane amount of work of Feargal Sharkey at UK Music has put in to get all the stakeholders (including ISPs) to banging heads together to face up to the challenges -- all these ingredients help illustrate that this thing called "music" actually matters to the UK. Conversely, I'm spending an increasing amount of time in Spain now, and what you see there is that music doesn't matter as much...if at all. It's one of the few western countries that can claim a thriving digital AND physical piracy problem and investment in domestic talent is drying up as there simply no return. It's actually kind of eerie when you compare the quality of debate and level of activity being had in the UK to that of other countries, it's not that we've solved all the problems, far from it, but it's more about not dodging them and actually doing something about them.

On Spain, I know the IFPI's recent report said the industry is in trouble there, and you do the same here, but we keep hearing from people who claim otherwise -- that there's a renaissance of music in Spain due to more widespread ability to promote and distribute musicians. Anecdotally, in the last year, I've actually picked up (yes, legally bought, on CD) albums from a few Spanish bands. Do you have some numbers for Spain -- since between the two of us, we seem to have very different anecdotal experiences? Could it just be that the business models haven't adapted yet?

Neither of us is from Spain, nor do we currently live there -- so we have to work this one out based on our own anecdotal experiences. What I've noticed is that trade revenues of record labels have halved in less than a decade, in nominal terms. I've also noticed incredible resentment to 'paying for music' in Spain, there's a real 'stick it to the man' attitude which is puzzling. I come back to the point on domestic investment -- given the situation there, would you (and that could be a label, publisher, manager or third party) invest in developing domestic talent in Spain, or would you invest somewhere else with a lower risk profile and then import into Spain. I'm sure there are lots of opportunities down there on the ground, but how many of those opportunities lead to a sustainable living for professional artists and songwriters. For me, Spain's situation is like a tipping point which other countries should take note of.

One point that you've noted is that the live music market has grown and actually surpassed revenue from recorded in the UK. Critics dismiss this, claiming that the live numbers are dominated by "heritage" or "legacy" acts. Is this true? You claim that the revenue for live covers "more bands, more tickets, more seats, more events." Who's right?

You're right to pick up on the changing of the guard observation from last year, and it's incredible to think that five years prior, live was less than half the size of recorded -- which makes you ask three questions: (i) how has live captured so much value, (ii) how has recorded lost so much value and (iii) is there a link. However, read beneath the top line and you can consider the distribution of those revenues: who got what share of the spoils. As with recorded music, in live we're witnessing a hit heavy skinny tail distribution, and that intuitively makes sense. The bigger you are, the more forms of revenues you're able to exploit and the distribution skews to the head naturally. When Take That played to over a million people, that's an example of more tickets, more seats and more events but it's just one band. Down in the tail, the picture is less clear -- with worrying stories of support bands having to pay to play needing to be balanced with the fact that the explosion in festivals gives more opportunities for acts to get wider exposure. There's some interesting signals coming out of the market place though, for example I was told that there was noticeably less record label A&R presence at SXSW this year, with agents and promoters filling up the bars on Sixth Street -- perhaps that's a sign of the times.

You've noted in the past that 60% of the UK population don't buy music anyway and that "you can't cannibalize zero" when it comes to things like file sharing "taking away" revenue. Do you believe there's evidence that the 60% of people who don't buy music are helping to contribute revenue elsewhere -- and if so how and where?

It's a vital observation that needs to be rammed home as the rights holders are understandably obsessed with cannibalisation, but sometimes blinkered to the wider problem. The legendary Rory Sutherland remarked on that "Can't Cannibalize Zero" phrase as a masterpiece and told me that it reminded him:

"Of working with ATOC, and First Great Western. They were obsessed with the risk of Revenue Abstraction -- the rail phrase for cannibalisation. In other words, any special off-peak offer was viewed with terror, lest it attract people prepared to pay full fare. But, just like music, 60% of people don't use trains - ever!"

Rory makes you think about the problems differently -- and here, the problem is how can we re-engage the lost majority? I collaborated with Spotify on a piece of research called "How to dance to ARPU" which allows rights holders and users to approach that infamous acronym with more clarity. At the back of my mind, though, is this: most of the folk of my parents generation love Spotify and none of them ever bought music ...ever. Engagement is the horse, and monetisation is the cart -- if services like Spotify are helping re-engaging those who gave us nothing, there's a better chance of getting something going forward.

Following up on the B2B side of the market, some also point out that this part of the market may also be dominated by large legacy acts who can score big sponsorship deals. Do you think that's true and if not why not? What opportunities are there for less well known bands in this area?

To quote from the paper, 'brands investing in music trough sponsorship are drawn to it through the potential audience affinity and reach; this means that much of the major expenditure is biased towards the larger priorities and artists, which provide larger fan bases.' That means that it's tough in the tail for bands wanting to strike sponsorship deals. That said, there is a lot of scope to use initiative to innovate in this sector. Here in the UK, we have organisations like Music Ally and FRUKT who are doing some great work in this sector, especially in terms of offering training and workshops for artists and managers -- their material is well worth tracking as opportunities in this sector don't find you, you have to find them.

Lots of people have suggested that even if live is now outpacing album sales, it was still the record labels that really financed tours and the growth of live. Are there mechanisms to support and nurture live if the record labels continue to decline? Where might it come from?

The kicker is this -- the money is live is centred around the head, and much of that head is heritage in status -- so the question I always ask is who's going to offer the tour support for new bands to build the sort of fan bases that provide the live industry with the heritage acts of the future. That's a legitimate question to ask, and not an easy one to answer, but you've got to look forwards not backwards, and I'm really hype on the company Songkick it's basically Facebook for folk who love going to gigs with full functionality for ticketing, recommendations et al. I think that what Ian Hogarth has done there is a real game changer when you fully think it through -- and it also helps level a heavily tilted playing field as emerging acts can benefit as much as the established bands from Songkick's functionality. You have to manage expectations as it won't make touring across a country in a bus sitting next to a drummer with an odour problem any less unpleasant, but it does have the potential to lead to more bands performing to more fans, and importantly more data to build upon that success.

Notably absent from your discussions on these numbers is anything (outside of live) having to do with direct-to-fan opportunities that we've discussed on Techdirt. These numbers may get mixed in elsewhere as they sometimes include album sales and sometimes include live, but do you have any thoughts on that market? Do you have any numbers on how those efforts are doing?

Firstly, I've recommended your excellent Trent Reznor case study to literally everyone and their dog. What's really good about that is that you echo what I've stressed every time I've explained 'In Rainbows, On Torrents' case study which was that this was a solution for Radiohead, and was NOT a solution for the music industry. That said, what Radiohead and NIN did were 'experiments' and we've got to learn from these experiments. You got to ask the right questions -- so 'of what worked, what's transferable?' Second, whilst Topspin was behind your Trent Reznor case study, there's another Toronto based company worth checking out called Official Community. They're providing direct artist to fan infrastructure which allows for disintermediation of the value chain, more empowerment of the artist and faster cash flow. When you look into these models though, it's important to keep a balanced perspective and manage expectations -- it's not going to change the world, and it might not even change the actors involved in a 'conventional deal,' but this existence of more options should, if anything, allow artists and songwriters to negotiate better terms. Third and finally, I agree with the premise of the question -- what's happening outside the conventional radar is probably bucking the southward trend, but because it's not being picked up -- the trend continues southward. I learnt recently that the annual Cambridge Folk Festival is a massive player in selling CDs of those folk artists to fans -- literally tens of thousands of CDs being shifted on location. Now, you may be tempted to dismiss this as just a niche festival and just niche CDs, but they're shifting lots of them and there's are lots more similar festivals up and down the country who are increasingly doing the same thing and its questionable how much of this is getting picked up on the conventional radar. That offers optimism for the future as regards the "known unknowns" which are out there, but also presents numerous headaches for myself and Chris Carey as we try to calculate this year's 'Adding up the Music Industry' report together which is due for publication in July 2010.

You mention the "skinny tail" and that some of the success today is from heritage acts, but then we see numbers from folks like TuneCore that show a massively successful long tail. It makes me wonder if -- as TuneCore notes -- the long tail success stories simply aren't being seen in the data because it's the wrong data. We hear so many stories of musicians successfully embracing new business models down the tail that it makes me wonder if what's happening down there is simply not being counted. Thoughts? Any ideas on better ways to measure?

Both Chris Anderson's work on Long Tail, and our analysis since, has suffered a lot of misinterpretation because you can't dive into this topic and expect a simple tabloid headline to explain it all. Statistical distributions of large data sets are not the sexiest topic for the music industry to discuss -- on that we can both agree! But let's roll back to what I've stated repeatedly in our work here -- I loved the concept of the Long Tail, still recommend the book to colleagues and wish it would work the way we all hoped. However, it is a book about the supply curve -- here's what happens when lots of goods can get to market. What I was able to do, thanks largely to the mathematical guidance of Andrew Bud, is derive the demand curve for digital music -- which is like saying "okay, once you're on the digital shelf, who actually wants you." You need two curves to tango in economics, and we've been able to develop an unprecedented understanding of this digital music market place as a result. What's great though, is to know where economics needs to hand over to other disciplines, such as psychology, sociology or anthropology -- basically how do we understand culture.

I can illustrate what I mean by offering your readers a genuine exclusive -- by exhibiting the Lorenz curves for We7 and Spotify side by side, and comparing those with the sort of distribution Chris Anderson's theory predicted: The red line is to show what a "great example of the Long Tail at work" should look like, where 95% of the niche inventory (reading from bottom left to bottom right) makes up 75% of the streams -- a fat tail. Clearly, neither We7 nor Spotify look like that, with both curves tugging into the bottom left hand axis point and this is what's meant by a hit heavy, skinny tail distribution. However, the curves are different, and that is to be expected -- as We7 has a strong editorial with excellent artist promotional campaigns, whereas Spotify is editorial free and allows the consumer to graze the field at their leisure. Consequently, you can see that We7 (blue line) is more hit centric with a 90/5 rule and Spotify (green line) is more democratic with an 80/5 rule which, when you step back, is common sense made complicated but it's nice to see the math adds up!

The key thing for Techdirt readers is that's what economics can tell us when rights holders and users collaborate to understand unprecedented markets, and it's great that PRS for Music and Digital Music Services are willing to work together like this -- I think it's a important part of the success story in the UK. However, economic analysis can only tell us so much and it's at this point when the baton must be passed on to folks from other disciplines or backgrounds who can bring new insights to the table to work out what that actually means in terms of this intriguing thing called 'culture' -- which also means this is a good point to conclude this interview.

Thanks to Will for this fun discussion... which I fully expect to continue. If you want to see one of Will's recent presentations on the state of the music market, it's embedded below:

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Metallica Still Struggling With Embracing The Whole File Sharing Thing

Mike Masnick — Tue, 16 Sep 2008 16:16:00 PDT

While Metallica is claiming (this time around) they don't mind that the latest album is being shared online, someone forgot to tell the band's representatives. TorrentFreak notes that the band's European record label, Universal Music (in the US, the label is Warner Brothers Records) has canceled the band's scheduled interview with a Swedish newspaper after a reviewer for the paper reviewed a remixed version of the album that he admitted he had downloaded via The Pirate Bay.

Universal's claim was that this is "totally unacceptable" seems destined to backfire. This is only going to provide a lot more attention to the fact that there's a different remix of the album available online that many people find better than the official version. Plenty of other artists like and encourage others to remix their music, because it tends to get fans much more involved with the music and can help attract new fans while making existing fans more connected to the band. For all of Metallica's talk of really embracing online fandom this time around, it keeps showing that it puts up roadblocks all around, rather than really connecting with the fans.

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