Putting the lid on Pandora's box

When the iPhone 2.0 software came out about a week ago, I downloaded one of the most popular applications for it: Pandora. Basically, you enter a genre/artist/song, and from there it uses data from the Music Genome Project to find similar songs, which it plays to you. You indicate to the software what you like by giving the songs it plays a thumbs up or thumbs down. The songs are pretty random, so it's a lot like radio – you can listen to lots of music, but you don't have precise control over what plays. It's great for discovering new bands and songs and it's free, and since the songs are unpredictable and streaming, you can't use it as a way to listen to whatever music you want without paying for it. Anecdotal evidence suggests that it could be a boon for the music industry, as people buy music that they discover using Pandora.

So, naturally, the record companies are trying to shut it down. Just another example of government favors (in this case, copyrights) interfering with market signals and putting power in the hands of people who haven't legitimately earned it, who in turn are oblivious to true market forces and therefore litigate and legislate themselves out of business. It would be nice if artists stood up for themselves and their future profits and demanded that their labels stop this nonsense, but that doesn't seem likely.

To be continued...

So, I'm leaving tomorrow for All Good and won't be back till Sunday night. My brain will probably be pretty fried, so I'll likely resume blogging on about Tuesday and a half. I trust that you'll all be good while I'm gone. In the meantime, enjoy a random Wikipedia article.

Defending the indefensible

The Guardian has an article in defense of piracy – at least, the intellectual property kind. Though the industry might try to convince us that stealing music is just as bad as real stealing, people aren't buying it. The Guardian article (which I found via Reason's Hit & Run blog) discusses some of the virtues of piracy:

When an online copy of Scrabble called Scrabulous appeared on Facebook, it quickly amassed 2.3 million fans who played it every day. It was an amazing user-generated ad campaign, and sales of real Scrabble boards increased. All Hasbro and Mattel (the owners of Scrabble) had to do was swoop in with their cheque books and make it legit; instead they treated Scrabulous as a simple case of piracy and threatened to sue. It may have been smarter to cut a deal rather than anger potential customers. Thousands signed up to the "Save Scrabulous" Facebook group. One fan threatened a hunger strike. Hasbro and Mattel are still talking tough, but if the backlash continues they may be forced to eat their words.

Managing directors take note! Don't let your legal department make a decision about pirates without talking to marketing first, because pirates can sometimes refresh the parts other ad strategies cannot reach.

Of course, there are plenty of artists and creators of non-physical media who have embraced piracy.

Amazon's DRM-free store is #2 online music seller

Only six months after opening, Amazon's MP3 service has become the second-largest online music retailer. To differentiate themselves from iTunes Music Store, they only sell DRM-free music which comes in MP3 form that you can easily share with anyone you'd like. While Apple is moving in that direction, as of yet only about a third of their catalog is DRM-free, and Amazon has more than twice the amount of DRM-free songs available.

Socialized music?

Of the many bizarre things to come from SXWX, your latest* act of rent-seeking: from Wired, "Music Industry Proposes a Piracy Surcharge on ISPs." Jim Griffin of the IFPI (RIAA international, basically) wants a $5/month charge on broadband connections, ostensibly mandatory, although they blabber on about seeking voluntary solutions (as if the price elasticity of demand for any given ISP were so inelastic that no one will notice a 10-20% increase in cost). They say that they will divide the money up based on the frequency of an artist showing up on file sharing websites. This is not at all unprecedented – many western countries have them on most, if not all, recording media, from cassette players to iPods. Among recording media, the US is relatively lax in that it only levies a 3% tax on stand-alone CD burners and those stupid enough to buy the Music CD-Rs. Finland has some of the most onerous levies, with a sliding scale tax up to €21 on DVRs and MP3 players with over 250 GB capacity.

The implications of it, though, are kind of perverse: who could honestly say that you were being unethical if you downloaded your fair share of music? The law, however, leaves no provision for you to download $5 worth of illegal music per month. And at today's rate, that comes to about $6 billion dollars per year, which probably is probably a small chunk of total music sales in America. And if illegal downloading doesn't slow down, they'll be in a better position to either ask for either more money or force ISPs to filter illegal downloads (legally and technologically awkward). Who knows – maybe the surcharge will increase so much that the mainstream music industry will be essentially nationalized?

*not really – there have probably been millions of acts of rent-seeking throughout the world in the few days since this article was published.