French Government subsidises online news websites.

The year of the paywall | The Economist.

Aber er begreift diese Diskussionen wohl auch als eine Art öffentliche Dienstleistung, als Bohren verdammt dicker Bretter vor den Köpfen mancher Menschen, die immer größere Schwierigkeiten haben, die sich progressiv virtualisierende Realität in ihre mentalen Interpretationsschemata zu pressen, so wie sie das beim Ausdrucken von Netzinhalten auf Din-A4-Seiten versuchen. Das Netz hat halt keine Seitenbegrenzungen.

Die Überwindung dieses konzeptionellen Grabens und die zumindest tendenzielle Beantwortung der wirtschaftlichen und sozialen Fragestellungen, die sich aus der Digitalisierung, dem Informationsparadoxon und der so immer schlechter funktionierenden “unsichtbaren Hand” des Marktes ergeben sind eine Generationenaufgabe, in der man Redundanz vermutlich vor allem als eine Art kognitives Stützrad ansehen muß. In der Wiederholung liegt zumindest ein Teil der Kraft, denn Ideen, die sich nur als Folge von Zeichen, nicht aber in Köpfen manifestieren, sind eigentlich keine. Die Annahme der Aufgabe, mit Redundanz mentale Überzeugungsarbeit zu leisten, ist daher auch ein Zeichen der Anerkenntnis von gesellschaftlicher Verantwortung.

Der Weinerlichkeit des Heidelberger Appels und der Hamburger Erklärung wird heute von einigen Journalisten und Bloggern eine Alternative entgegengesetzt, die Handlungs- und Gestaltungsfähigkeit annimmt, und nicht den Untergang des Abendlandes, sollte bei diesem Internet nicht bald mal jemand den Stecker ziehen. Steht nix Neues drin, klar, und Probleme werden darin auch nicht gelöst. Wie auch? So geht das eben nicht. Das ist ja gerade der problematische Punkt an der Sache.

Aber das Manifest ist – wie die Piratenpartei und wie der Kulturkampf um die Netzsperren in diesem Sommer – ein Zeichen für die in meiner Generation wachsende Erkenntnis, daß man sich nicht mehr unter Berufung auf vermeintliche oder tatsächliche superiore Sachkenntnis oder die nicht seltene Unterträglichkeit von institutionellen Auseinandersetzungen aus diesen heraushalten darf. Der Preis wäre zu hoch.

Und daher werde auch ich das an sich redundante Internet-Manifest mitzeichnen, sobald es die Möglichkeit dazu gibt.

http://www.nerdcore.de/wp/2008/08/18/johannes-kreidlers-song-aus-70200-samples-den-er-bei-der-gema-anmelden-will/

And here’s a video by the artist himself. Also in German.

hat tip: nerdcore

“What fuckery is this? It looks like the French government, having failed to impose an awful record-industry inspired snooping act at home, is trying to policy-launder it through the European Union. The so-called “3 strikes” law foresaw that ISPs would be required to cut off service to anyone who was found downloading or distributing copyrighted material three times – which of course implied that the ISPs would be expected to filter all traffic by content, a wildly grandiose, authoritarian, and insecure idea. (Wonderfully, Nicolas Sarkozy outsourced his Internet policy to a committee led by the owner of a chain of record shops; a little like putting the manufacturers of candles in charge of street lighting.)

But the legislation failed in France; so here it is, coming straight back via the European Parliament. The odd bit, though, seeing as it’s a French idea chiefly backed by the EPP (=European Conservative group), is that it’s being pushed by the British Tories in Brussels – half of whom don’t believe there even should be a European Parliament. Specifically, according to Heise.de (German link), it’s the Tory MEPs Malcolm Harbour and Sayed Kamal. Kamal is responsible for possibly the most egregious tagnut of a clause in the whole thing, which would permit essentially unrestricted telecoms surveillance for the (naturally undefined) “security of a public or private communications system”, and Harbour for the copyright/content-sniffing bit.”

Der vielfach gescholtene 2. Korb des neuen Urheberrechtes ist nach Meinung des Künstlers und Ökonoms Walter M. Miller nicht nur das “Beste, was es seit langem gab”, er wird auch die Arbeitslosigkeit endgültig beenden. Telepolis gab das medienscheue Genie eines seiner wenigen Interviews.

[E]s [gebe] beim Thema “Raubkopie” ein nicht besonders großes Unrechtsbewusstsein in der Bevölkerung. “Wenn man wahllos eine Durchsuchung machen würde, würde man vermutlich bei jedem Zweiten eine gebrannte CD finden”

Gebrannte CDs sind zwar nicht a priori illegal – meine zum Beispiel enthalten zumeist meine eigenen Songs – und es gibt schließlich auch nach wie vor ein Recht auf Privatkopie, wenn auch schon deutlich durchlöchert. Allerdings stimmt die Einschätzung natürlich tendenziell – wenn er auch noch nicht den nächsten gedanklichen Schritt vollzogen hat, nämlich den, nicht länger zu versuchen, sich mit rechtlichen Mitteln gegen die Veänderung der ökonomischen Struktur einer Branche zu wehren. Da ist er allerdings nicht allein – allerdings stirbt die Hoffnung ja bekanntlich zuletzt.

Ob er wohl am Abend bei seinen Kindern nach gebrannten CDs gesucht hat?

Die Bundesregierung sich zumindest in einem ersten Schritt der von der “Inhalteindustrie” vertretenen Sichtweise angeschlossen, das eine weitere Aushöhlung des Rechts auf Privatkopien (jetzt mit Strafandrohung bei Verstoß auch im nicht-kommerziellen Bereich) im Zusammenspiel mit technischen Maßnahmen zum Schutz geistigen Eigentums, dem sogenannten Digital Rights Management (DRM), sinnvoller sind als eine konzeptionelle Anpassung von überholten Eigentumsbegriffen in der digitalen Welt.

Dabei war vermutlich auch ausschlaggebend, daß die Vorlage so wie heute beschlossen wohl kaum in Karlsruhe bestand haben dürfte, angesichts der Tatsache, daß es einen zivilrechtlichen Auskunftsanspruch gegenüber Internet Service Anbietern schaffen wird, der sämtlichen bestehenden Datenschutzdoktrinen zuwider läuft.

Ebenfalls dürfte eine Rolle gespielt haben, daß das Gesetz generell, insbesondere aber ohne diesen Anspruch generell nicht durchsetzbar sein wird.

Daß die deutsche Politik sich hiermit erneut von ihrem gesellschaftlichen Gestaltungsanspruch verabschiedet ist traurig, gerade angesichts der Tatsache, daß die französische Assemblée Nationale sich in dieser für die Zukunft von Wissensgesellschaften so eminent wichtigen Frage wieder als Ort gesellschaftlicher Debatte etablieren konnte – auch wenn das gestern verabschiedete franzäsische Ergebnis auch nicht wirklich zur Lösung des Problems taugt.

Man wird sehen, ob das französische Beispiel im Bundestag Früchte tragen wird. Allerdings ist meine Hoffnung gering.

Netzpolitik.org hat jede Menge anderer Reaktionen zum Kabinettsbeschluß zum 2. Korb des Urheberrechts.

The occasional quote in German, you’ll just have to trust me that it confirms my statement above… – via heise.de -

Volker Grassmuck, Forscher an der Humboldt-Universität zu Berlin und Mitgründer der Initiative Privatkopie.net, beklagte auf der Konferenz einen “Mental Lock-in” bei den Politikern. Diese würden sich allein an dem Mantra festklammern, dass der immer stärkere Schutz geistiger Eigentumsrechte die Innovation fördere. Als Beispiel nannte er etwa die erste Evaluation zur umstrittenen EU-Datenbankrichtlinie. Darin sei klipp und klar nachgewiesen worden, dass das neue Schutzrecht den Informationsmarkt behindere, und nicht beflügele. Trotzdem habe die Kommission Gründe gefunden, um den eingeschrittenen Irrweg nicht zu verlassen. Ähnlich verhalte es sich beim Festklammern an der “chimärische Technologie” des digitalen Rechtekontrollmanagements (DRM). Grassmuck geht davon aus, dass es erst eine “massive Wissens- und Informationskatastrophe braucht, um die geistige Blockade aufzubrechen”.

When I went to meet him and some other bloggers I had never seen or even heard of before, I was not too sure what to expect beyond a pint of wheat beer. But what developed were indeed very intristing debates about the future -as we develop it.

No doubt about it, blogs, or personal publishing, is quickly changing some parts of the communicational transactional infrastructure of the societies we live in. But what exactly is going to happen – no one has really figured that out yet.

It is great to be among people who are fascinated by what they do, people who firmly believe that they are true revolutionaries, tearing down the old walls of informational constraints and top-down control. Ideas really are a powerful motivator.

Yet just like love can make us blind with regard to things we do not want to see or know about our loved ones, enthusiasm tends to blind us with respect to the nasty little details. I am mentioning the German technological adventure “Toll Collect” only for the fun of it.

On Monday, Loic LeMeur was asked about the future of printed newspapers and magazines by one of the attending non-bloggers. His reaction could not have been faster – it’s dead, he said, and I am sure, he firmly believes this.

However, I am not so certain about the future of printed paper. The medium has certain qualities that are not yet easily replicated by electronic media – most doctors’ waiting rooms still feature papers and not free W-Lan. And while this may even change sooner than I imagine, there will a market for printed information and commentary, and if only because the higher cost will serve as a signalling mechanism for quality – in whichever changed format this may be the case – the “RSS-Times -once a week, the stuff that is actually worth reading”

Ross Mayfield apparently also starts to think that blogs are different, and therefore a medium with a very specific set of core competences: Broad coverage, he writes today, is not one of them. He’s (mostly) right – coverage of important events involved an infrastructure and professionalism that (most) blogs simply cannot and do not possess.

Things are different in situations, where no infrastructure is present. I remember the advantages of neighbourhood bloggers over the established media last year when half of California burnt down. But when it comes to attending press-conferences and filtering official information like, say, following the Madrid attacks, it becomes obvious that journalists and bloggers are still operating in largely distinct, though complimentary market segments.

Op-Ed journalists should be far more afraid of all the opinion that is now out there.

“… opening day downloads equaled the number of songs legally downloaded over a six-month period last year.”

But it is nonetheless bereft with a pricing dilemma. A dollar a tune is not always a justifiable price, even though NY Times columnist David Pogue is ridiculing criticism of this pricing policy.

In fact, for most downloads it is clearly too much, even though things are cheaper when an entire Album is downloaded – for 10 dollars. While a tenner a disk makes downloading for some albums cheaper than your local record store, it is, on the other hand, probably a prohibitive price for DRM protected material, and, moreover, a price justifiable only due to the channel conflict with the non-digital distribution universe, which still makes it necessary to spend millions on marketing songs to people who are not interested in them anyway. It is a price only justified if the advantages of the internet, especially in the realm of marketing to a smaller, but more appropriate audience, are not exploited.

Thus, a dollar a buck can just be the beginning. People will continue to negotiate this price by using KaZaa and Grokster. Record companies will continue to try to scare unwitting conservative politicians about “the end of property” as well as send cease-and-desist letters to people sharing songs.

The big unknown variable is the political one. Will politicians be willing to understand the conventional definitions of property are just not appropriate in the digital age? Or will they allow the record industry to gain a windfall from perpetuating the economic structures of previous times for an unknown amount of time? I firmly believe that eventually, the social and economic institutions will adjust to a new reality.

But again, it is a matter of pricing. This time, a matter of the price that our information societies will be willing to pay for patrolling people’s hard drives and digitally fingreprinting their lives. Maybe US Sen. Santorum’s intervention telling homosexuals that they do not have a right to privacy came at the right time. I don’t know. But it is more important now than ever to tell people that digital privacy is an important issue. Something, many people were concerned about when it wasn’t a real issue yet, back in the 1980s.

Now that it is one, people don’t seem to realise that the same mechanism that allows to reduce the prices of individual songs could be the reason for the end of civil liberties as we know it. [ author off to pay to see a film in a real movie theatre...]

Actually, the journalist Gregory Palast is not unjustifiedly wondering whether the combination of sharia and the DMCA would result in hands being chopped off for filesharing. Hmm, I guess I am favoring a kinder, gentler version – just chop off the index-finger. After all, isn’t it always that bad guy that clicks on ‘download’?

“Critics of media concentration will now wonder how much more wheeling and dealing can go on before there are but one or two juggernauts controlling every image, syllable, and sound of information and entertainment.”

He also explained why he believed that more hierarchy would not yet pose a problem for the world -

“Actually, the industry has a long way to go yet before it reaches that point. There are more than 100 media companies worldwide, with more than $1 billion in revenues; and entertainment and media are still fragmented compared with other industries such as pharmaceuticals or aerospace.”

That was last year. Just when the whole Iraq thing started. And last year, I think I agreed with Mr. Wolf’s efficiency conclusion and pharmaceuticals analogy, arguing like he that

“[w]hile the media mogul archetype may be Charles Foster Kane, the better analogy is Jack Welch in his early GE days, in pursuit of strategic fit and maximum returns…” -

or, to make the argument more fun, along the lines of Michael Kinsley’s brilliant article “Six Degrees of America Online” (which is now premium, how surprising…).

Kinsley’s still rather useful point was that hierarchical control of today’s media conglomerates is probably not as dangerous as many may think because, well, it’s incestous and competitive at the same time. AOL owns a chunk of this parent of that joint venture with Microsoft who are in bed with Murdoch in Asia and cooperate with the state run television in Bulgaria. And never forget the promiscous EMI. Kinsley had a point. Upstream or downstream, the convergence value chain does look like a conglomerate soap opera. Or, if you prefer the same conclusion in McKinsey-speech -

For a German example of this just look at some of the people who are going to be on the ProSiebenSat1 Media oversight board once Haim Saban will have finalised his purchase of roughly 25% of the German eyeballs in early June this year. His Malibu neighbour Thomas Gottschalk, who’s a host on ZDF television, and Helmut Thoma, former CEO of RTL+, part of the Bertelsmann owned RTL group, for which he is still apparently still consulting.

But now, after seeing the enourmous power the media had in establishing what behavior is right or wrong on both sides of the transatlantic media rift, I no longer agree. Of course, it is not hierarchical control of large chunks of access to people’s brains per se that is problematic. But I’d say, it does become a huge problem if some big players succeed in setting the agenda for everyone else. Think of the American “WarNow!LetsGoAndKickSomeAss”, or its European antithesis, “NoWarEverBushIsSaddamInDisguise”.

There comes a point when deescalation is just no longer possible, when myths of reality established by the media become an imperative for themselves. When whatever could be true becomes true by pure repetition. And having more, and more smaller, media entitites will allow for a slowdown of this process.

Media is a content business where there are economies of scale primarily in the realm of risk structuring and distribution. Economics of scope primarily exist in cross-media publishing and promotion. So there are reasons for integration. But having witnessed the consequences of the described mechanism on a previously unintelligible scale, I believe efficiency considerations for media corpoations have to be looked at from a different angle if a merger is considered the appropriate therapy.

I am not proposing any policy here. But I’d say media concentration control has become more important now than ever. I am not proposing state interventionism per se – that would probably cause as many problems as it would be trying to solve – but there must be other ways to ease the economic pressures than merging. Less taxes for tv? I don’t know. But I think this is an issue that should be put on the public agenda here, there, and everywhere rather sooner than later.

Having just written this, I can already hear people scream – yeah, but what about the end of the bandwidth restriction, what about the internet, what about those amazing new context filtering technology, blogging – isn’t that offsetting the Murdochs of this world?

Hmm, well. As much as I like doing this, I’d have to say ‘blogging-schmogging‘. The internet is not as decentralised as one would believe (how many internet booksellers do you know off-hand?), and for the time being – despite all the blog-bubble-induced discussion how it is changing the face of journalism on this planent – much of blogging is predominantly a different, extremely useful, qualitative (ie, non statistical) kind of collaborative filtering (like the amazon recommendations), bringing together people – “Other people who looked at this blog also read this article in the NYTimes.” I’m not saying it can’t work.

But it cannot offset the reality shaping power of conventional publishing. At least not yet.

Update

Please note that the legal situation regarding file sharing in Germany has changed since and is likely to change again.

Now that , a US court has denied the forced closure of P2P services like KaZaa (from heise online), as they are also used for legitimate purposes, look forward to intensified attempts to target individual users, in the US (from Salon), as well as over here (from heise online). BUT: private downloads of songs are in all likelyhood not illegal in Germany (as even the European president of BMG accepted in 2002).

did i miss something? i thought the revolution was still very much going on? what is this supposed to mean? is p2p filesharing already a part of history? could that be the reason no major label objected to this exhibition and it was even sponsored by Steinberg GmbH, maker of the well known studio software “cubase”.

i don’t know, but now is not the time to answer question of historic importance, so i will return to the party and leave you probably as puzzled as i am – albeit without champagne.

One of the big issues which currently receive a lot less attention than they deserve is the war concerning intellectual property rights. Yesterday, Berkeley’s Bradford DeLong posteda list of what he believes are the five most important questions facing the world economy today. Number three reads as follows -

“3. How will the current intellectual property wars be resolved? Will they be resolved in a way that greatly increases the profits of CD and movie companies and that slows the adoption of broadband and other advanced information technologies? Or will they be resolved in a way that implicitly or explicitly confiscates a bunch of the intellectual property of CD and movie companies, but that gives consumers and other users enormous incentives to adopt broadband and other advanced information technologies? It is clear to me that the second would be better for economic growth, but that the first is more likely.”

He’s right. Ttwo weeks ago, the US Supreme Court ruled in the case Eldred vs. Ashcroft that it was legal for the US Congress to extend the copyright protection, the “Sonny Bono Copyright Term Extension Act”, which extended by 20 years both existing copyrights and future copyrights, for the law does not extend the protection forever. For Disney (and the like), it was a case about cash flow from exploiting the Mickey Mouse’s of this world. For everybody else (immediately only for those living in the US, of course), it was a case about the balance of private vs. public interests – in the economic realm but also far beyond. The plaintiff’s case had been supported by an amazing amount of intellectual capacity, including various Nobel Price laureates.

But private interests prevailed. It really looks as if owners of intellectual property are able to use their current economic clout and and a socialised narrow, conventional definition of property to put their short term interests above the social long term ones.

The next big battle in the IP war is probably the EU directive 2001/29/EG, which is an attempt to harmonize European copyright regimes with respect to the digital age. While theoretically maintaining the right to a limited amount of personal digital copies of copyrighted work one owns, the directive also contains a clause prohibiting the circumvention of any technical copyright device in order to exercise the right to a personal copy. Thus the private copy clause will in all likelihood be useless following the implementation of the EU directive into the member states’ national legal frameworks.

But resistance is not futile. So far, the directive has only become national law in Greece and Denmark. All other nations let the deadline pass. Debate and opposition are growing, and there are even legal doubts about the directive’s validity. It may be late, but not too late. Click here for a summary of the state of the national legislative processes of all EU member states.

The site also features the web addresses of online petitions in most European countries. It is not too late to sign.

To sign the German petition, just click here.

Yesterday Wired News informed about a policy conference held by the Future of Music Coalition in Washington, DC this week. The predominant idea was apparently that everybody involved in the business – musicians, independent and major labels, politicians, consumer electroncis and computer manufacturers as well as consumers should try to seek a compromise regarding the alleged problem of unpaid digital downloads. Jenny Toomey, exectuive director of the organising committee summerised the general approach as follows – “I think we’re looking for a kinder, gentler, more equitable model where more people can make a living off of this stuff.”

Sweet. Lovely. But I don’t get just why so many people in the industry can’t seem to see the wood for trees. There’s no real need to sit down and hold hands for all these groups with seriously conflicting interests. This is one of the instances where the market is actually going to solve the problem (in the longer run).

Sitting down and holding hands will only serve the interests of those who are trying to extend the cash flows of times past into the digital age while they are transforming their business to become less dependent on record sales – there’s a reason why vertically integrated media conglomerates are flooding our screens with instant-star shows. Teenagers (still one of the industry’s most important target group) may buy (~15%) less records these days than they did before Napster, but now they watch more advertisments.

Information goods are tricky when it comes to economic analysis. This even more true in the case of music. As opposed to most other products, economics have a hard time telling us about “the optimal level” of music production and consumption. What’s even more important – most models don’t take the intrinsic musical motivation into account. Given that most people create music without ever even intending to make money with it, those models are not exactly representing reality.

The new digital distribution model allows to target smaller audiences and make more money than before – if you do it correctly. However, while a lot of musicians who have not been able to live off of their art in the past will increasingly be able to do so in the future, it will be much more difficult to get into the average Madonna income range by performing music. The current winner-take-all market structure will likely disappear.

I find it startling that artists like John Flansburgh of They Might Be Giants say that they would prefer the semiotic control of a major label’s product manager to the control exercised by an audience/market. Wired cites Flansburgh saying that “it’s ironic that we’ll miss the majors when they are gone.” Madonna might. You probably won’t.

While electronic markets for music are still in their infancy, things are already changing with the advent of useful machine listening software. Just think about a catalogue of all the music that matches your style preferences, whoever wrote it, whoever performed it.

According to the article, The Hooter’s Eric Bazilian stipulated that “[t]here’s an incredible amount of mediocrity,” due to the reduced costs to produce songs and put them on the web. That is very true. But there are also so many gifted, struggling musicians who never had a chance to create a market for their music because of the Major label’s gate keeper function. Now they are able to reach an audience and transform their cultural achievements into a product. I don’t understand why a musician would believe that it is a good thing to keep music from being published?

There will be new sources of information, like trustworthy journalists reviewing new songs, online fora. People providing valuable services, possibly for money. Or, as I believe, there will be quality settings in the machine listening software allowing the customer to get exactly the recording quality she wants.

Don’t tell me people would not want to pay for such a search engine which, in turn, would be able to pay for the creativity. Not the amount BMG pays Withney Houston, obviously.

But there will be a whole new middle class of artists. And they don’t need to sit down with anyone. They just let the technological development work in their favour. And in ten years, they will teach the music industry case study. If the latter should not be able to use its political clout to perpetuate its current powerful structure into the digital age.

The guy is a former semi-popular soap opera actor. And he has had a hit in 1998 with yet another cover version. All that sounds favourably to the account managers of the banking industry labels havbe become today.

Now I don’t think that starring in a soap opera automatically disqualifies people to call themselves musical artists, as the Kylie experiment clearly demonstrates. But it doesn’t reduce the burden of proof. For Oli P that burden is clearly too much to bear.

But back to the press statement referred to above. It’s announcing yet another study regarding the once famed and now bashed market for digital music. Forrester is basically agreeing with me and the record industry manager Argumention below that things will get better once the industry finally comes to terms with reduced excludability and concentrates on improving the customer value of its product. This is the core of the statement (note: The music bill of rights is a set of features designed to enhance the musical expericence defined by Forrester):

In the next two years, labels will struggle to deliver on the promise of digital music, but their services will fall short because they fail to match the Music Bill of Rights. But by 2005, labels will endorse a standard download contract that supports burning and a greater range of devices. Downloading will start to soar in 2005 as finding content becomes effortless and impulse buys easy. Labels will make content available on equal terms to all distributors, while online retailers become hubs for downloading. By 2007, the new business model will generate $2.1 billion, or 17 percent of the music business. Big hits will spark traffic, as people download music directly to their cell phones, portable players, or PCs.

We’ll see if they will still need semi-singing semi-popular soap opera semi-heros by then.

Firstly, my spacebar justbroke for no obvious reason (but being sick of being hit several thousand times a day).

Secondly, AOLTW is a tad bit late to establish a general shopping platform. It will cost them a fortune to get the critical mass anytime soon which limits their ability to lower prices as the competitors can and do (and is important especially in these economically troublesome days). This leads me to the last� – only somewhat related point:

Thirdly, I wanted to let you know the one quote that will make you relax about everything digital-good-commerce-profitbility related for at least three years to come. It is from some now likely fired e-record-company executive who mentioned back in 1999 that Ecommerce companies (especially those companies trading digital goods) “… will fuck up the pricing for at least five years.” Very true. But they haven’t quite understood yet that negotiating tougher measures on Capitol Hill and its equivalents, coming up with yet more international regulation will not solve the fundamental problem of creating value for the customer. Scientifically put, you can find the argument in this article from ! 1988 -

Pethig, Rüdiger, Copyright and copying costs, Journal of Institutional and Theoretical Economics/Zeitschrift für die gesamte Staatswissenschaft, 144 (1988), 462-495

The same point has been made a little more eloquently by some Microsoft employees who last week published this paper. Here’s a useful quote:

Consider an MP3 file sold on a web site: this costs money, but the purchased object is as useful as a version acquired from the darknet. However, a securely DRM [aka Digital-Rights-Management -the system in your computer that is supposed to stop you from copying from a CD, for ecample] wrapped song is strictly less attractive: although the industry is striving for flexible licensing rules, customers will be restricted in their actions if the system is to provide meaningful security. This means that a vendor will probably make more money by selling unprotected objects than protected objects.

Interesting, isn’t it? Well, legality can increase utility for a customer. Virus-proof downloading can do the same. A whole series of other stuff can, too. There’s a lot of variables to be worked on.

But as long as the relevant people don’t understand that they need to make buying a download more valuable than getting it at the p2p-service of the day, as long as they don’t understand that hackers are negotiating the prices for the rest of the digital community, the will continue to fuck up their pricing.

That record company executive said five years backin 1999. Actually, I think he was an optimist.

But time will tell.

That is absolutely legal in Germany, as long as you don’t take money from your friends. The soon to be implemented European directive on digital age copyright makes things a lot more complicated, but at least tries to keep that fundamental right in the legislation – personal non profit copies will generally remain legal (then Europewide).

No one has ever disputed that offering ripped mp3 files through a file sharing service is an infringement of copyrights. The person offering has no license to do so and the anonymity and amount of downloads of p2p services basically does not favour arguments based on the “copy to friends”-provision.

But downloading is a bit trickier. Lawyers were arguing back and forth to come a conclusion wether it would matter for a download to be covered by the protection of §53 UrhG if the copy obtained by the person downloading has been legally licensed for distribution or if the person downloading would have acted in bad faith on the presumption that was not. The record industry’s position was always that a legally licensed original was necessary for the private copy privilege. That is – until last thursday, I suppose. I was so shocked by the statement that I almost forgot to mention it:

The President of BMG Europe, Thomas M. Stein, was a guest at Johannes B. Kerner’s daily talkshow because he’s a member of the Jury of the currently broadcast German version of “American Idol”. And after admitting that he could have never become a “German Idol” due to his bad voice he simply let it slip out like the most natural thing in the world. Downloading mp3s is legal in Germany, according to Thomas Stein, CEO of BMG Europe.

Now I don’t know if that is a consequence of a court ruling or of a revised industry policy in light of the soon to be implemented EU directive or legally correct (to make that necessary disclaimer). But it certainly is a bold statement for a record company executive.

This is a video file of Mr Stein’s appearance on the show. You will find the statement I am talking at about 12′ 08” – the host asks – “downloading mp3 files is illegal?” to which Mr. Stein replies “not if you do it only for private purposes…”. Those of you speaking German, please check, as I still don’t believe what I heard.

You will probably remember that the music industry is currently involved in a severe battle concerning the perpetuation of non-digital age copyright structures into the digital age. I have already explained at lenghth in this “diary” why their success would be economically inefficient and socially problematic, to say the least.

What you haven’t heard a lot about in the last years is that the copyright battle is only one front of the war that is changing this world’s cultural landscape. And while you might think that the music recognition technology alluded to in article linked to above is only about a giving you a hand in remembering tunes you heard on the radio once or twice, its implications are much bigger. Think about it – most of the songs you hear on the radio today have been selected or produced by the oligopolic major labels for one reason or another. Given the enormous amount of music out there, we need some sort of screening as we do not have the time to listen to all of the material on the market – of which, in addition, we would not like a lot.

While screening the market is a necessary element in the “music value chain”, the gatekeeper function of the major record labels is somewhat problematic in a cultural sense. There’s a lot of music out there which you might like, but will never be able to hear because it lacks the commifying support of the record industry, aka marketing and distribution. Digital distribution has already reduced the importance of the latter element in that equation, but the first one is still the most important service provided by record labels. In fact, their basic role in the industry is that of a specialised venture capital provider – and given the traditional (non-digital) cost structure of marketing a new act and their average success/failure rates, the comparison does indeed make sense. As a consequence, our record stores are mirroring a “winner take all”-market, in which very few earn very much and most earn very little.

The internet, especially sites like, most prominently, mp3.com, now owned by the French media conglomerate Vivendi, have alredy reduced the salience of physical distribution for new acts. But even with advanced systems of collaborative filtering, comparing your personal taste to that of other users on the same system, a statistically significant amount of initial consumption is needed. So marketing is still an issue, although digital distribution has increased the options for a lot of musicians previously unable to earn a living by making music. However, for broad consumption, these days, they still need a bank.

But with advent of machine listening, as described above, things will probably change considerably. It is advancing a reduction in the expected value of a specific piece of music (now that value increases with the amount of marketing put behind an act) and thus creating a musical landscape less characterised by “winners who take all”. It is doing this by really cutting the middle man, the oligopolic gatekeeper’s and fund provider’s current commidification services, out of the connection between the artist and the consumer. Think of a big market place which artists can put their music on, and consumers can look for music they like, regardless of the support they have previously received from a label. The computer has a list of criteria to listen to, possibly including production quality, lyric content, and the like – I doubt, the support by record labels will be an important element of the song’s meta data.

No wonder the middle man is scared, don’t you think?

David Weinberger said something very reasonable about intellectual property:

All contending parties agree, I believe, that (1) the goal is to build a marketplace that encourages innovation and (2) that the way to do that is to let the market reward innovation. Unfortunately, to spread the value of innovation, two things have to happen that are contradictory from the market point of view: First, someone has to have a great idea for which she is rewarded. Second, you want that idea to spread and be built upon as rapidly as possible and requiring that the creator be rewarded slows down the spread. Much butting of heads ensues…

To which David Winer replied as if Weinberger had said something really stupid:

For crying out loud David, it’s super simple. If I build a house I can live in it as long as I want. If I want to rent out rooms I can do that too, as long as I want.

The peculiar thing about this David Winer position–this “Mine! I thought of it! Mine! It’s my intellectual property forever! All Mine!” position–is that Winer could not hold it had he looked up and around at the intellectual property house he happens to live in. If he did so, he would notice that he has–without getting their permission or approval–used a huge amount of intellectual property thought up by other people, and has neither compensated them nor acquired from them a license to do so.

To pick just one thing at random, there is the case of Ez-Eki-Baal and his cousin Ish-Baal, residents of Tyre in 1160 B.C. They first thought up the idea of using a stylized picture of an ox to represent the phoneme “A” (and the idea of using a bunch of other stylized pictures of other things to represent other phonemes). This invention of the “alpha-bet,” as I have been told it is called, is in the estimation of some a very important piece of intellectual property. Some commentators have even claimed that most of us use it during most of our waking hours.

But have Ish-Baal, Ez-Eki-Baal, or their heirs received one red cent in the past century in return for other people’s appropriation and use of their intellectual property? No. Does David Winer have a valid license authorizing him to use the alphabet–to move into the intellectual property house built by Ish-Baal and Ez-Eki-Baal and trash the place? No. Has David Winer made any effort at all to identify and compensate those to whom–on his own theories about the moral obligations imposed on those who make use of intellectual property–he owes a fortune? No.

So does he believe his own theories? It’s hard to know at what level he does. It’s genuinely hard to know what to do with people who argue that all the intellectual property they make is “Mine! All Mine! All Mine Forever!” and yet classify all the intellectual property they use as the common and free inheritance of all humanity. It’s a “heads I win, tails you lose” kind of argument…

What I am referring to is the war about who is allowed to benefit from a copyright on Mickey Mouse for how long after its creation. In short, the war about intellectual property rights, the fundamental distributive conflict of the digital age. Another episode in this war is going to take place in the U.S. constitutional court. I am not going to outline the Eldred vs. Ashcroft lawsuit which will be decided soon. Click on the big “e” and find out for yourself. But mark my words: The decision will affect the future of public life in Western societies deeply and possibly lastingly.

As I have argued before, current copyright holders are about to exploit the existing socially institutionalised notion of property rights in order to perpetuate legal institutions for a future in which they will likely be entirely inadequate. The problem with such institutionalised myths of rationality is that people take them for granted. And with a deeply engrained (important!) institution as property, most people will never ask any questions.

Thus, I am grateful that the list of supporters of the plaintiffs in the lawsuit (those in favour of moderate copyright extensions) includes some sort of who-is-who of famous and inflential economists, quite a few of which have been awarded the Nobel Price in Economics: George A. Akerlof, Kenneth J. Arrow, Timothy F. Bresnahan, James M. Buchanan, Ronald H. Coase, Linda R. Cohen, Milton Friedman, Jerry R. Green, Robert W. Hahn, Thomas W. Hazlett, C. Scott Hemphill, Robert E. Litan, Roger G. Noll, Richard Schmalensee, Steven Shavell, Hal R. Varian, and Richard J. Zeckhauser. One of their lawyers is Harvard’s William Fisher whose thoughts on the challenges of digital reproduction and distribution for copyright law I have already recommended.

Hopefully they will be able to have a calming influence on the panel of judges.

Again: The copyright war is a secret war. But – in my opinion – will have more important consequences for our societies than the one currently fought on the screens. So check the lawsuit’s website and help out Mickey!