Music industry watch

Legal downloads for $6 a month

Professor William W. Fisher has dreamt up a half-assed approach to compulsory licencing and The Register's Andrew Orlowski just ambled along and published an article to extoll his cluelessness: Free legal downloads for $6 a month. DRM free. The artists get paid. We explain how...

The article (and Prof. Fisher's paper I suspect) spends most of its time on the financials that could support such a model. Sounds plausible, but then again I have an intuitive feeling that the financials behind compulsory licensing would work ok. However, Aaron's Alternative Compensation System points out a lot of problems with this approach -- something that Prof Fisher naively glossed over.

The article talks about how watermarks would be used to track the listening habits of music consumers. Watermarks suck -- Prof Felten and his students have shown how easy it is to remove a watermark from a file. And I would venture a guess that it wouldn't be difficult to remove one watermark and replace it with another. So, if I were a crook trying to cheat Prof Fisher's system I would take songs from popular artists, remove their watermarks and replace them with my watermarks and put them back into circulation via P2P networks. Volia, I'm scamming Buttney out of money.

Then for Divvying up the pot Prof Fisher suggests that the Nielsen ratings model could be used. Unfortunately the Nielsen rating system is quite inaccurate, but it works just enough to be believable for mass media. Applying this model to the music is not likely going to give us desirable results since the Nielsen model is a based on statistics. If the sample that is fed into the model is not large enough, then the output is going to be wildly inaccurate. How can small artists ever get compensated for their music? If an artist is popular in one small city, they should get some compensation, right? But if that city is not being covered by the ratings scheme then they will not make it onto the money distribution plan and get nothing. This scheme would make it harder than ever for a small artist to make a living -- doesn't sound like the system that I want to participate in.

Finally, the kicker that illustrates the severity of cluelessness in this article:

The most significant disincentive to ballot stuffing is the model itself: most people would simply want the model to work. Unlike the current situation, where there's a monetary advantage to be gained by breaking the system.

They want the model to work, and thus everyone will abide by it? How naive can you get?? Everyone wants the government and our laws to work, but amazingly enough there are still criminals in this world. And everyone wants PayPal to work too, but that doesn't stop thousands of crooks from trying to scam PayPal users. PayPal needs to process millions of transactions before it can offset all the fraud prevention/mitigation measures in order to turn a profit. Just wanting a system to work is naive and stupid.

Prof Fisher's thinking that breaking his system has no monetary incentive is simply out to lunch. Crooks would have a great time sucking money out of this system -- see my first point above. And to think that the record companies would even take part in such a system is also half baked. Unless they have total control, they won't even consider it.

Perhaps the numbers add up -- whopee! Unless you can ground your proposals in something resembling reality you should keep your mouth shut Prof Fisher. And you too Orlowski!

Posted by Mayhem at February 4, 2004 05:31 PM