You Can’t Compete With Free

by on November 27, 2007 · 46 comments

This from Mike Masnick is absolutely brutal:

[Universal Music CEO Doug] Morris is so clueless that he chooses the worst possible analogy to explain his position. Lots of entertainment industry execs have thrown up their hands and ignorantly stated that “you can’t make money from free.” That’s wrong, of course, but Morris takes it one step further up the ridiculous scale, with the following example: “If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go. That’s what happened to the record business.” Hmm… and what is coming out of your faucet in your kitchen? That’s right… water. And how much are people willing to pay for water? That’s right, billions. In fact, it’s a larger market than (oops) recorded music. Can someone please explain how Morris keeps his job?

  • http://bennett.com/blog Richard Bennett

    The water that people buy in cute little bottles isn’t the same as the water in the pipes, and that’s why people buy it. In the case of music, it’s all the same. So the point is well-made.

    I’ve yet to read a Techdirt argument on any subject that I found persuasive.

  • http://bennett.com/blog Richard Bennett

    The water that people buy in cute little bottles isn’t the same as the water in the pipes, and that’s why people buy it. In the case of music, it’s all the same. So the point is well-made.

    I’ve yet to read a Techdirt argument on any subject that I found persuasive.

  • v

    As a snob who pays for both bottled water and music, I can assure you Richard, that illicit free music is not the same. Mass P2P downloading all but ensures you’ll get some poor quality content and lot’s of viruses.

  • v

    As a snob who pays for both bottled water and music, I can assure you Richard, that illicit free music is not the same. Mass P2P downloading all but ensures you’ll get some poor quality content and lot’s of viruses.

  • http://techdirt.com/ Mike Masnick

    Richard says: “The water that people buy in cute little bottles isn’t the same as the water in the pipes, and that’s why people buy it.”

    Nice if it were true, but it’s not:

    http://abcnews.go.com/2020/Health/story?id=728070

    “There was actually no difference between the New York City tap water and the bottled waters that we evaluated.”

  • http://techdirt.com/ Mike Masnick

    Richard says: “The water that people buy in cute little bottles isn’t the same as the water in the pipes, and that’s why people buy it.”

    Nice if it were true, but it’s not:

    http://abcnews.go.com/2020/Health/story?id=728070

    “There was actually no difference between the New York City tap water and the bottled waters that we evaluated.”

  • Adam Thierer

    But hasn’t this whole bottled water analogy been taken a bit too far? I mean, what people are buying when they purchase bottled water is convenience. We want to tote our water around. And so we’re willing to spend a little money for that luxury, even if the ultimate product is the same one we could get free from a tap. Essentially, we’re paying for plastic bottles that fit nicely in the cup holders in our cars and gym equipment. And there’s something wonderful about the spill-proof spouts on bottle water compared to open Dixie cups!

    Of course, people want convenience with their music as well, but the difference is that the willingness to pay for music is increasingly much, much lower that even bottled water. No, I’m not going to get into the whole Radiohead numbers spat here, but it seems to be clear that, when given the chance, many people are all too happy grab music off the Net for nothing, especially because that is what is ultimately the most convenient thing to do.

    And therein lies the difference. With bottled water, we are paying for convenience. With digital music, by comparison, the most convenient solution is the one we need pay nothing to receive. In that environment, “competing with free” *does* become more challenging, although I do not think it is impossible.

    I’m just thinking out loud here, and I’m sure Mike will tell me why I’m full of sh*t! But, honestly, I think copyright critics need to find a better example than bottle water.

  • Adam Thierer

    But hasn’t this whole bottled water analogy been taken a bit too far? I mean, what people are buying when they purchase bottled water is convenience. We want to tote our water around. And so we’re willing to spend a little money for that luxury, even if the ultimate product is the same one we could get free from a tap. Essentially, we’re paying for plastic bottles that fit nicely in the cup holders in our cars and gym equipment. And there’s something wonderful about the spill-proof spouts on bottle water compared to open Dixie cups!

    Of course, people want convenience with their music as well, but the difference is that the willingness to pay for music is increasingly much, much lower that even bottled water. No, I’m not going to get into the whole Radiohead numbers spat here, but it seems to be clear that, when given the chance, many people are all too happy grab music off the Net for nothing, especially because that is what is ultimately the most convenient thing to do.

    And therein lies the difference. With bottled water, we are paying for convenience. With digital music, by comparison, the most convenient solution is the one we need pay nothing to receive. In that environment, “competing with free” *does* become more challenging, although I do not think it is impossible.

    I’m just thinking out loud here, and I’m sure Mike will tell me why I’m full of sh*t! But, honestly, I think copyright critics need to find a better example than bottle water.

  • http://techdirt.com/ Mike Masnick

    Adam says: “But, honestly, I think copyright critics need to find a better example than bottle water. ”

    Adam, I actually agree that the bottled water example isn’t a great one, but you are missing the point. I don’t use it. I didn’t use it here. Doug Morris used the example in the other direction by claiming that if soda came out of your faucet who would pay for it? That’s what’s ridiculous here — not the idea that people pay for bottled water. I simply turned around and pointed out how ridiculous *his* analogy was. I was not using the water analogy to explain why free music makes sense and it’s rather silly to imply that I was.

    The key point, though, is that you can *always* find a complementary product that goes along with the infinitely available one. In the case of water, you note that one complementary product is convenience. Richard notes that (incorrect) product of “safety.”

    To suggest that there are no complementary products that can be sold alongside free music is simply incorrect. There are plenty of evidence to the contrary.

  • http://techdirt.com/ Mike Masnick

    Adam says: “But, honestly, I think copyright critics need to find a better example than bottle water. “

    Adam, I actually agree that the bottled water example isn’t a great one, but you are missing the point. I don’t use it. I didn’t use it here. Doug Morris used the example in the other direction by claiming that if soda came out of your faucet who would pay for it? That’s what’s ridiculous here — not the idea that people pay for bottled water. I simply turned around and pointed out how ridiculous *his* analogy was. I was not using the water analogy to explain why free music makes sense and it’s rather silly to imply that I was.

    The key point, though, is that you can *always* find a complementary product that goes along with the infinitely available one. In the case of water, you note that one complementary product is convenience. Richard notes that (incorrect) product of “safety.”

    To suggest that there are no complementary products that can be sold alongside free music is simply incorrect. There are plenty of evidence to the contrary.

  • http://bennett.com/blog Richard Bennett

    Techdirt strawman alert: Masnick claims (incorrectly) that “Richard notes that (incorrect) product of “safety.””

    Nope, Richard noted no such thing, he simply noted that bottled water is not the same as tap water. Now if you need clarification on that, fine, I can address you like a child and give you some:

    Bottled water tastes different than tap water, comes from different sources than tap water, is packaged different than tap water, and often has flavor additives that tap water doesn’t have. You don’t get Fiji water out of a tap.

    And while Third World consumers prefer bottled water over tap water from a safety perspective, that’s not a serious issue in the First World.

    Thanks for playing.

    And on the main point, we certainly understand that “free” can be monetized by advertising. And we certainly understand that some artists/etc will be happy to do that, but that others aren’t at all happy to do that, as we see from the unwillingness of many artists to license their music for commercials.

    And frankly, all those ads all over the place are vulgar, which is why I prefer subscription services like HBO.

  • http://bennett.com/blog Richard Bennett

    Techdirt strawman alert: Masnick claims (incorrectly) that “Richard notes that (incorrect) product of “safety.””

    Nope, Richard noted no such thing, he simply noted that bottled water is not the same as tap water. Now if you need clarification on that, fine, I can address you like a child and give you some:

    Bottled water tastes different than tap water, comes from different sources than tap water, is packaged different than tap water, and often has flavor additives that tap water doesn’t have. You don’t get Fiji water out of a tap.

    And while Third World consumers prefer bottled water over tap water from a safety perspective, that’s not a serious issue in the First World.

    Thanks for playing.

    And on the main point, we certainly understand that “free” can be monetized by advertising. And we certainly understand that some artists/etc will be happy to do that, but that others aren’t at all happy to do that, as we see from the unwillingness of many artists to license their music for commercials.

    And frankly, all those ads all over the place are vulgar, which is why I prefer subscription services like HBO.

  • Adam Thierer

    Mike… Fair points, but let me ask you about those “complementary products” for a moment. By complementary products, do you mean lots of touring, t-shirts, more touring, bumper stickers, more touring, hats, and still more touring? This is the Grateful Dead model, of course, and I’m not denying it can’t work for some. But I’ve often wondering, what is the true cost of that model for most artists, especially if we abandoned copyright altogether? Again, I’m just thinking out loud here, so don’t bite my head off, but isn’t it the case that copyright law has afforded artists the ability (time, facilities, equipment, or whatever else) to be more productive in the studio?

    Here’s what got me thinking about this. Increasingly, my favorite bands seem to ALWAYS be out on the road trying to build their name recognition and, presumably, make some money. Good example would be The Secret Machines, a band I absolutely love. It’s great to catch the machines on these tours but, quite frankly, I’d love to see them in the studio more recording more beautiful music.

    When I think about The Machines and other bands these days, it seems like their aggregate album output is way, way down. The length of time between album releases today seems to be growing longer. (I don’t have any stats to cite here, so perhaps I am wrong. But I doubt it). By contrast, The Stones, The Who, Zeppelin, Van Halen, etc… all the old rock bands used to put out an album every year or two.

    Now, it certainly is true that the move from vinyl to CDs helped changed things first. As artists could fit more music on a CD, they crammed them full of songs (including a lot more crap, in my opinion). In the old vinyl days, you only had around 25 minutes per album side, I think. So that is probably one reason the window between album releases may have grown longer in recent years.

    But I think the changing economics or the industry and the decline of copyright might be partly to blame as well. Without the guarantee of copyright protection, might there be less time for the artists to sit in front of their canvas creating? After all, under the Grateful Dead model, they need to be out making a buck off whatever they had they brief time to put together. I suppose one could argue that that’s the way it should be; we don’t need copyright protection to give them any incentive to be in a studio or be creating much of anything at all. Screw em… let them figure out how to eek out an existence some other way! And so “complementary products” becomes the answer.

    OK, that’s certainly one view. Another is that copyright has afforded artists the chance to be incredibly creative and feel *reasonably* confident they would be *reasonably* compensated for their ACTUAL creative product; not some complementary product (t-shirts, stickers, whatever else) that had little to do with their actual skill set.

    Again, I am certainly not saying there is anything wrong with a lot of touring, or even selling “complementary products,” whatever that means (and please do tell me what you mean by that so I am clear on that point). But I do wonder, what are the opportunity costs associated with artists spending more time doing those things instead of sitting in front of their canvas?

  • Adam Thierer

    Mike… Fair points, but let me ask you about those “complementary products” for a moment. By complementary products, do you mean lots of touring, t-shirts, more touring, bumper stickers, more touring, hats, and still more touring? This is the Grateful Dead model, of course, and I’m not denying it can’t work for some. But I’ve often wondering, what is the true cost of that model for most artists, especially if we abandoned copyright altogether? Again, I’m just thinking out loud here, so don’t bite my head off, but isn’t it the case that copyright law has afforded artists the ability (time, facilities, equipment, or whatever else) to be more productive in the studio?

    Here’s what got me thinking about this. Increasingly, my favorite bands seem to ALWAYS be out on the road trying to build their name recognition and, presumably, make some money. Good example would be The Secret Machines, a band I absolutely love. It’s great to catch the machines on these tours but, quite frankly, I’d love to see them in the studio more recording more beautiful music.

    When I think about The Machines and other bands these days, it seems like their aggregate album output is way, way down. The length of time between album releases today seems to be growing longer. (I don’t have any stats to cite here, so perhaps I am wrong. But I doubt it). By contrast, The Stones, The Who, Zeppelin, Van Halen, etc… all the old rock bands used to put out an album every year or two.

    Now, it certainly is true that the move from vinyl to CDs helped changed things first. As artists could fit more music on a CD, they crammed them full of songs (including a lot more crap, in my opinion). In the old vinyl days, you only had around 25 minutes per album side, I think. So that is probably one reason the window between album releases may have grown longer in recent years.

    But I think the changing economics or the industry and the decline of copyright might be partly to blame as well. Without the guarantee of copyright protection, might there be less time for the artists to sit in front of their canvas creating? After all, under the Grateful Dead model, they need to be out making a buck off whatever they had they brief time to put together. I suppose one could argue that that’s the way it should be; we don’t need copyright protection to give them any incentive to be in a studio or be creating much of anything at all. Screw em… let them figure out how to eek out an existence some other way! And so “complementary products” becomes the answer.

    OK, that’s certainly one view. Another is that copyright has afforded artists the chance to be incredibly creative and feel *reasonably* confident they would be *reasonably* compensated for their ACTUAL creative product; not some complementary product (t-shirts, stickers, whatever else) that had little to do with their actual skill set.

    Again, I am certainly not saying there is anything wrong with a lot of touring, or even selling “complementary products,” whatever that means (and please do tell me what you mean by that so I am clear on that point). But I do wonder, what are the opportunity costs associated with artists spending more time doing those things instead of sitting in front of their canvas?

  • http://bennett.com/blog Richard Bennett

    The burritos and weed sold outside every Dead show were “complementary products,” one supposes.

  • http://bennett.com/blog Richard Bennett

    The burritos and weed sold outside every Dead show were “complementary products,” one supposes.

  • http://techdirt.com/ Mike Masnick

    As an aside, I have to say that I love the fact that Richard simply cannot disagree with anyone without throwing in a totally ridiculous insult.

  • http://techdirt.com/ Mike Masnick

    As an aside, I have to say that I love the fact that Richard simply cannot disagree with anyone without throwing in a totally ridiculous insult.

  • http://techdirt.com/ Mike Masnick

    Richard said: “Nope, Richard noted no such thing, he simply noted that bottled water is not the same as tap water. Now if you need clarification on that, fine, I can address you like a child and give you some”

    Richard, thanks for ignoring my link above that showed that tap water and bottled water are the same things.

    The point of my comment (which you again conveniently ignore) isn’t specific to WHAT the complementary good was, but the fact that you believe it’s a complementary good that helps sell the water… just as it’s a complementary good that helps sell music.

  • http://techdirt.com/ Mike Masnick

    Richard said: “Nope, Richard noted no such thing, he simply noted that bottled water is not the same as tap water. Now if you need clarification on that, fine, I can address you like a child and give you some”

    Richard, thanks for ignoring my link above that showed that tap water and bottled water are the same things.

    The point of my comment (which you again conveniently ignore) isn’t specific to WHAT the complementary good was, but the fact that you believe it’s a complementary good that helps sell the water… just as it’s a complementary good that helps sell music.

  • http://techdirt.com/ Mike Masnick

    Adam, there are numerous complementary goods that musicians can sell related to their music. Touring is a big one, but certainly not the only one. Over the years, I’ve listed out plenty of other examples — and the real point is that there need not be one business model for all musicians.

    For example, I’ve talked about one band that did use the touring model, but actually found another complementary good to help it make lots of money: it set up its own travel agency to help its fans travel around the world to catch its shows!

    However, for bands that don’t want to tour, there are plenty of other options. For years, I’ve talked about the idea of “access” as a complementary good. That could be associated with touring (such as being able to get better seats or backstage passes or private shows) but it could just mean the ability to chat online with the artists or get your name in a song or get to watch them record in the studio… all if you’re a “subscriber” to the band.

    Another model is one where a band asks fans to pony up ahead of time to pay for the studio costs and initial profit to make it worthwhile to record an album. When they start, they start small and don’t need to capture as much money upfront, but then they give away that music, attract more fans, and the next time around they can charge more. And the next time, more… etc.

    I’m not saying that these work for all bands, but there are tons of complementary goods out there, all of which are made more valuable when you free the music.

    As for the opportunity costs, that strikes me as a total red herring argument. After all, there are opportunity costs involved in ditching *any* protectionist economic policy — but the end results tend to be much more efficient for everyone. Yes, if we take away the sugar monopoly from BigSugarCo it means they no longer get easy money and are forced to compete in the marketplace, but the end result is actually greater demand for sugar as well, as people learn new ways to make use of sugar, since it’s now much more affordable. If anything, it should pressure BigSugarCo to innovate and be more efficient in its sugar processing so that it can continue to have decent margins.

    Generally, most of us tend to agree that fewer regulations tend to lead to more efficient results. Yet, somehow that thinking seems to go out the window when it comes to content — and the only reason is that some folks get blinded by the $0, rather than recognizing the same economics applies.

  • http://techdirt.com/ Mike Masnick

    Adam, there are numerous complementary goods that musicians can sell related to their music. Touring is a big one, but certainly not the only one. Over the years, I’ve listed out plenty of other examples — and the real point is that there need not be one business model for all musicians.

    For example, I’ve talked about one band that did use the touring model, but actually found another complementary good to help it make lots of money: it set up its own travel agency to help its fans travel around the world to catch its shows!

    However, for bands that don’t want to tour, there are plenty of other options. For years, I’ve talked about the idea of “access” as a complementary good. That could be associated with touring (such as being able to get better seats or backstage passes or private shows) but it could just mean the ability to chat online with the artists or get your name in a song or get to watch them record in the studio… all if you’re a “subscriber” to the band.

    Another model is one where a band asks fans to pony up ahead of time to pay for the studio costs and initial profit to make it worthwhile to record an album. When they start, they start small and don’t need to capture as much money upfront, but then they give away that music, attract more fans, and the next time around they can charge more. And the next time, more… etc.

    I’m not saying that these work for all bands, but there are tons of complementary goods out there, all of which are made more valuable when you free the music.

    As for the opportunity costs, that strikes me as a total red herring argument. After all, there are opportunity costs involved in ditching *any* protectionist economic policy — but the end results tend to be much more efficient for everyone. Yes, if we take away the sugar monopoly from BigSugarCo it means they no longer get easy money and are forced to compete in the marketplace, but the end result is actually greater demand for sugar as well, as people learn new ways to make use of sugar, since it’s now much more affordable. If anything, it should pressure BigSugarCo to innovate and be more efficient in its sugar processing so that it can continue to have decent margins.

    Generally, most of us tend to agree that fewer regulations tend to lead to more efficient results. Yet, somehow that thinking seems to go out the window when it comes to content — and the only reason is that some folks get blinded by the $0, rather than recognizing the same economics applies.

  • http://bennett.com/blog Richard Bennett

    I don’t particularly enjoy insulting people, Mike, I just don’t like having my arguments distorted.

    I never said a word about safety, yet you claimed I did. That’s annoying, of course, and something you did to make your ridiculous point about water water everywhere.

    If you’re going to rely on personal attacks and distortion in your articles, don’t be surprised when these tactics are turned back on you.

    Protecting creative people from theft of their works in the era of digital production is a hard problem, especially for those of us who favor market-based solutions. That doesn’t mean, however, that it’s OK for those of us who care about policy to dictate business models to artists.

    The sale of music in tangible form can certainly be conducted without promoting theft in closed systems such as iTunes, and for now that model represents the most viable path for artists who want to eat.

    One might argue that it’s bad to compensate musicians with great gobs of money as they’ll simply spend it on drugs and die without giving us as much music as we want. I can sympathize with that argument, so in the spirit of the Techdirt strawman I’ll attribute it to you: “Masnick says copyright theft is good because it keeps musicians from OD’ing.”

  • http://bennett.com/blog Richard Bennett

    I don’t particularly enjoy insulting people, Mike, I just don’t like having my arguments distorted.

    I never said a word about safety, yet you claimed I did. That’s annoying, of course, and something you did to make your ridiculous point about water water everywhere.

    If you’re going to rely on personal attacks and distortion in your articles, don’t be surprised when these tactics are turned back on you.

    Protecting creative people from theft of their works in the era of digital production is a hard problem, especially for those of us who favor market-based solutions. That doesn’t mean, however, that it’s OK for those of us who care about policy to dictate business models to artists.

    The sale of music in tangible form can certainly be conducted without promoting theft in closed systems such as iTunes, and for now that model represents the most viable path for artists who want to eat.

    One might argue that it’s bad to compensate musicians with great gobs of money as they’ll simply spend it on drugs and die without giving us as much music as we want. I can sympathize with that argument, so in the spirit of the Techdirt strawman I’ll attribute it to you: “Masnick says copyright theft is good because it keeps musicians from OD’ing.”

  • eric

    The most viable path for artists who want to eat is to get a real job. That’s harsh, but it is as true for actors or painters as it is for musicians. The fraction of artists who can make a viable career from their art is relatively low. Free music or no, most musicians would be wise not to quit their day jobs.

    Second, I buy bottled water. For convenience and because I don’t like the taste or health concerns of chlorinated tap water (higher incidence of bladder cancer, for one). The MSM may say there’s no difference, but since when did the MSM exhibit any evidence of accuracy?

    Third, I think it would be a wonderful experiment if a magic wand could be waved and all the music on labels associated with the RIAA — you know, the guys suing college kids — could suddenly be completely barred from any sharing on the internets. The only way you could ever have an RIAA song would be to pay for it. This would un-clutter P2P for artists who want to share their music with the world for free, or at least let people sample their wares for free (as Radiohead did) — music made for the love of music instead of the love of mammon. That might be a very revealing test of how well the schlockmeisters of the Big Four record cartels can compete with free.

  • eric

    The most viable path for artists who want to eat is to get a real job. That’s harsh, but it is as true for actors or painters as it is for musicians. The fraction of artists who can make a viable career from their art is relatively low. Free music or no, most musicians would be wise not to quit their day jobs.

    Second, I buy bottled water. For convenience and because I don’t like the taste or health concerns of chlorinated tap water (higher incidence of bladder cancer, for one). The MSM may say there’s no difference, but since when did the MSM exhibit any evidence of accuracy?

    Third, I think it would be a wonderful experiment if a magic wand could be waved and all the music on labels associated with the RIAA — you know, the guys suing college kids — could suddenly be completely barred from any sharing on the internets. The only way you could ever have an RIAA song would be to pay for it. This would un-clutter P2P for artists who want to share their music with the world for free, or at least let people sample their wares for free (as Radiohead did) — music made for the love of music instead of the love of mammon. That might be a very revealing test of how well the schlockmeisters of the Big Four record cartels can compete with free.

  • http://techdirt.com/ Mike Masnick

    Richard: “I don’t particularly enjoy insulting people, Mike, I just don’t like having my arguments distorted.”

    Rather hilarious from someone who spends so much time distorting my arguments, but alas…

    “I never said a word about safety, yet you claimed I did. That’s annoying, of course, and something you did to make your ridiculous point about water water everywhere.”

    No. Again, my point had nothing to do with water, water everywhere, but if you want to distort my point, go right ahead. The point of what complementary good you were pointing out is meaningless. If it wasn’t safety then it was something else. It’s meaningless to the actual point. I’m sorry you’re so offended over such a meaningless point, but it amazes me that you are so offended over such a minor point after getting the entire point of your original comment wrong (i.e., that tap water is different than bottled water — something you still haven’t admitted to getting wrong, despite it being a key part of your argument).

    “If you’re going to rely on personal attacks and distortion in your articles, don’t be surprised when these tactics are turned back on you.”

    Richard, you attacked me first, and chose NOT to follow suit. Yet here you are, distorting my argument and distorting the clearly viewable history above. Stunning if not so obviously wrong.

    “Protecting creative people from theft of their works in the era of digital production is a hard problem, especially for those of us who favor market-based solutions.”

    You make a ton of really bad assumptions in a single sentence. If you favor market-based solutions, why do you need to “protect” anything? Why not let the market decide?

    I won’t even get into the wrongness of calling it “theft.”

    “That doesn’t mean, however, that it’s OK for those of us who care about policy to dictate business models to artists.”

    Indeed. I’d like you to point out where I have “dictated” business models for artists. I have not. I have merely pointed out over and over again how artists can make more money by adopting these business models and not relying on artificial protections. I do not say they need to adopt them. I simply point out that others will adopt them and then old business models will be untenable. I am trying to help musicians recognize these new business models where they can make more money.

    It’s funny that you accuse me of saying something you didn’t say and tear me apart for a really minor thing… and then get the ENTIRE key point of my argument wrong. I have never said that musicians should be forced to adopt this model or that anyone should dictate it. Just the opposite. I am saying that there are plenty of business models and if artists understood the economics they’d recognize it’s in their best interest to embrace them.

    I expect an apology for you so badly getting my argument wrong, especially after you were so offended for me getting yours wrong.

    “and for now that model represents the most viable path for artists who want to eat.”

    For someone who believes in market-based solutions, I’m surprised to hear the phrase “the most viable path” come out of you. What’s wrong with letting the market decide the most viable path.

    “One might argue that it’s bad to compensate musicians with great gobs of money as they’ll simply spend it on drugs and die without giving us as much music as we want.”

    Another odd statement. I have shown that the models I’ve discussed allow musicians to make more money (despite your erroneous claim of “the most viable method”). It’s got nothing to do with artists deserving less. I say let the market decide, and get rid of artificial gov’t subsidies to do so.

    “so in the spirit of the Techdirt strawman I’ll attribute it to you”

    Richard, we pride ourselves on intellectual honesty. If you would point to a single such “strawman statement” on Techdirt, I would appreciate it. Since you have already gotten so many things wrong here and blatantly overreacted to a minor misinterpretation on my part, I somehow doubt you’ll actually be able to back up your statement.

    However, I do expect an apology for all of the incorrect statements you have made above.

  • http://techdirt.com/ Mike Masnick

    Richard: “I don’t particularly enjoy insulting people, Mike, I just don’t like having my arguments distorted.”

    Rather hilarious from someone who spends so much time distorting my arguments, but alas…

    “I never said a word about safety, yet you claimed I did. That’s annoying, of course, and something you did to make your ridiculous point about water water everywhere.”

    No. Again, my point had nothing to do with water, water everywhere, but if you want to distort my point, go right ahead. The point of what complementary good you were pointing out is meaningless. If it wasn’t safety then it was something else. It’s meaningless to the actual point. I’m sorry you’re so offended over such a meaningless point, but it amazes me that you are so offended over such a minor point after getting the entire point of your original comment wrong (i.e., that tap water is different than bottled water — something you still haven’t admitted to getting wrong, despite it being a key part of your argument).

    “If you’re going to rely on personal attacks and distortion in your articles, don’t be surprised when these tactics are turned back on you.”

    Richard, you attacked me first, and chose NOT to follow suit. Yet here you are, distorting my argument and distorting the clearly viewable history above. Stunning if not so obviously wrong.

    “Protecting creative people from theft of their works in the era of digital production is a hard problem, especially for those of us who favor market-based solutions.”

    You make a ton of really bad assumptions in a single sentence. If you favor market-based solutions, why do you need to “protect” anything? Why not let the market decide?

    I won’t even get into the wrongness of calling it “theft.”

    “That doesn’t mean, however, that it’s OK for those of us who care about policy to dictate business models to artists.”

    Indeed. I’d like you to point out where I have “dictated” business models for artists. I have not. I have merely pointed out over and over again how artists can make more money by adopting these business models and not relying on artificial protections. I do not say they need to adopt them. I simply point out that others will adopt them and then old business models will be untenable. I am trying to help musicians recognize these new business models where they can make more money.

    It’s funny that you accuse me of saying something you didn’t say and tear me apart for a really minor thing… and then get the ENTIRE key point of my argument wrong. I have never said that musicians should be forced to adopt this model or that anyone should dictate it. Just the opposite. I am saying that there are plenty of business models and if artists understood the economics they’d recognize it’s in their best interest to embrace them.

    I expect an apology for you so badly getting my argument wrong, especially after you were so offended for me getting yours wrong.

    “and for now that model represents the most viable path for artists who want to eat.”

    For someone who believes in market-based solutions, I’m surprised to hear the phrase “the most viable path” come out of you. What’s wrong with letting the market decide the most viable path.

    “One might argue that it’s bad to compensate musicians with great gobs of money as they’ll simply spend it on drugs and die without giving us as much music as we want.”

    Another odd statement. I have shown that the models I’ve discussed allow musicians to make more money (despite your erroneous claim of “the most viable method”). It’s got nothing to do with artists deserving less. I say let the market decide, and get rid of artificial gov’t subsidies to do so.

    “so in the spirit of the Techdirt strawman I’ll attribute it to you”

    Richard, we pride ourselves on intellectual honesty. If you would point to a single such “strawman statement” on Techdirt, I would appreciate it. Since you have already gotten so many things wrong here and blatantly overreacted to a minor misinterpretation on my part, I somehow doubt you’ll actually be able to back up your statement.

    However, I do expect an apology for all of the incorrect statements you have made above.

  • Solveig Singleton

    -One can make money from “free” by tying or bundling with complementary products. However, the methods that one uses to do so do require exclusion at some level. At concerts one buys tickets, for example, without one you can’t get in. The DRM is a physical barrier. One might sell advertising alongside a product–but it had better not be too easy to strip the advertising out and retransmit the product. What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them. It’s a rather conservative position, and an arbitrary one.

    –The coke flowing out of the faucet analogy can be nitpicked, but it still works as a quick-and-dirty one. I think everyone can agree that if Coke did come out of faucets, Coke would face a different business landscape than they are now. Likely it could be worked out–it’s tougher with information goods–but it would not be trivial.

    And the comparison to water is not necessarily more helpful than Morris’ original analogy. Sellers of bottled water may *not* be selling a different product in many cases (there are exceptions i.e. perrier, pellagrino), but people *perceive* it to be different. Hospitals used to give bottled water only to fragile patients, thinking that it would have a lower bacteria count (in fact, it doesn’t). Because water has never been as homogenous a product as coke, it isn’t surprising that the perception that different sources matter a lot is hard to get rid of and can be marketed to.

    -Solveig Singleton

  • Solveig Singleton

    -One can make money from “free” by tying or bundling with complementary products. However, the methods that one uses to do so do require exclusion at some level. At concerts one buys tickets, for example, without one you can’t get in. The DRM is a physical barrier. One might sell advertising alongside a product–but it had better not be too easy to strip the advertising out and retransmit the product. What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them. It’s a rather conservative position, and an arbitrary one.

    –The coke flowing out of the faucet analogy can be nitpicked, but it still works as a quick-and-dirty one. I think everyone can agree that if Coke did come out of faucets, Coke would face a different business landscape than they are now. Likely it could be worked out–it’s tougher with information goods–but it would not be trivial.

    And the comparison to water is not necessarily more helpful than Morris’ original analogy. Sellers of bottled water may *not* be selling a different product in many cases (there are exceptions i.e. perrier, pellagrino), but people *perceive* it to be different. Hospitals used to give bottled water only to fragile patients, thinking that it would have a lower bacteria count (in fact, it doesn’t). Because water has never been as homogenous a product as coke, it isn’t surprising that the perception that different sources matter a lot is hard to get rid of and can be marketed to.

    -Solveig Singleton

  • http://www.techliberation.com/ Tim Lee

    What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them.

    Well, I can’t speak for “the copyleft,” but personally I oppose DRM because it doesn’t work. The walls of a concert hall keep non-paying customers out. DRM simply inconveniences paying customers while having little if any effect on non-paying customers.

  • http://www.techliberation.com/ Tim Lee

    What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them.

    Well, I can’t speak for “the copyleft,” but personally I oppose DRM because it doesn’t work. The walls of a concert hall keep non-paying customers out. DRM simply inconveniences paying customers while having little if any effect on non-paying customers.

  • DH

    It seems to me that recorded music has already largely become a commodity. The fact that this has come about largely due to copyright infringement facilitated by new technology is irrelevant, it’s already done. You don’t get to go back it time for a do over. Even if the recording industry managed to totally stop this infringement (which I don’t think is possible), all those people used to their free aren’t going to go “Hey, that $15 CD looks pretty good!” The music industry has to figure out how to sell their commodity.

  • DH

    It seems to me that recorded music has already largely become a commodity. The fact that this has come about largely due to copyright infringement facilitated by new technology is irrelevant, it’s already done. You don’t get to go back it time for a do over. Even if the recording industry managed to totally stop this infringement (which I don’t think is possible), all those people used to their free aren’t going to go “Hey, that $15 CD looks pretty good!” The music industry has to figure out how to sell their commodity.

  • Charles

    “One might sell advertising alongside a product–but it had better not be too easy to strip the advertising out and retransmit the product.”

    Slightly off-topic, but I was thinking, reading this, that advertising ought really to be considered as a product or complimentary product in and of itself. There’s no shortage of examples of ads that I keep watching over and over again because they’re beautiful.

    The Honda Cob commercial:

    The sony bravia ads:

    In any case, bundling such ads at the beginning of, say a movie at a movie theater, instead of the generally crap advertising I see in such places might actually increase the level to which I would enjoy my experience.

    Could you imagine the above honda ad in a 15-20 minutes version which would only be shown at the cinema before certain movies? (Granted, that’s basically a movie called ‘Der lauf der Dinge’ but anyhow.) In some way, I guess this would work in much a similar way as the opening act of a show.

    So bottom line, I’m eager to see a time come when advertising will no longer be something to avoid, but something to enjoy, sponsored by the makers of a product.

    (end of unrelated side issue)

  • Charles

    “One might sell advertising alongside a product–but it had better not be too easy to strip the advertising out and retransmit the product.”

    Slightly off-topic, but I was thinking, reading this, that advertising ought really to be considered as a product or complimentary product in and of itself. There’s no shortage of examples of ads that I keep watching over and over again because they’re beautiful.

    The Honda Cob commercial:
    http://www.youtube.com/watch?v=UScbWzhieNc

    The sony bravia ads:
    http://www.youtube.com/watch?v=2Bb8P7dfjVw

    In any case, bundling such ads at the beginning of, say a movie at a movie theater, instead of the generally crap advertising I see in such places might actually increase the level to which I would enjoy my experience.

    Could you imagine the above honda ad in a 15-20 minutes version which would only be shown at the cinema before certain movies? (Granted, that’s basically a movie called ‘Der lauf der Dinge’ but anyhow.) In some way, I guess this would work in much a similar way as the opening act of a show.

    So bottom line, I’m eager to see a time come when advertising will no longer be something to avoid, but something to enjoy, sponsored by the makers of a product.

    (end of unrelated side issue)

  • http://www.techliberation.com/ Tim Lee

    Charles, that’s an excellent insight. As is often the case, Mike Masnick was there years before the rest of us. :-)

  • http://www.techliberation.com/ Tim Lee

    Charles, that’s an excellent insight. As is often the case, Mike Masnick was there years before the rest of us. :-)

  • http://bennett.com/blog Richard Bennett

    The visionary Masnick has written what is probably the most bizarre single comment ever to appear on TLF, and for that he certainly deserves some sort of prize. Perhaps a bottle of Dasani water, purified by reverse osmosis, flavored with mineral salts and then chilled to 35 degrees would be appropriate.

    My favorite Techdirt strawman was this post about the Deloitte & Touche study of Internet bandwidth. This is a post criticizing a study the author hadn’t read on a subject he doesn’t understand, making an argument for a policy he doesn’t want. Classic.

  • http://bennett.com/blog Richard Bennett

    The visionary Masnick has written what is probably the most bizarre single comment ever to appear on TLF, and for that he certainly deserves some sort of prize. Perhaps a bottle of Dasani water, purified by reverse osmosis, flavored with mineral salts and then chilled to 35 degrees would be appropriate.

    My favorite Techdirt strawman was this post about the Deloitte & Touche study of Internet bandwidth. This is a post criticizing a study the author hadn’t read on a subject he doesn’t understand, making an argument for a policy he doesn’t want. Classic.

  • http://linuxworld.com/community/ Don Marti

    Solveig Singleton wrote, “It’s a rather conservative position, and an arbitrary one.”

    Norms and laws around copying reflect the technologies in place at the time. For example, in today’s political campaigns, it’s considered acceptable to use a clip from an opponent’s TV commercial in your own TV commercial.

    The “conservative” position seems safer than the alternative, which is to throw the power of the legal system into a program of changing citizens’ norms — like Prohibition or the 55mph speed limit. The DRM proponents don’t even have the equivalent of the WCTU behind them — just a few vendor-backed lobbying groups.

  • http://linuxworld.com/community/ Don Marti

    Solveig Singleton wrote, “It’s a rather conservative position, and an arbitrary one.”

    Norms and laws around copying reflect the technologies in place at the time. For example, in today’s political campaigns, it’s considered acceptable to use a clip from an opponent’s TV commercial in your own TV commercial.

    The “conservative” position seems safer than the alternative, which is to throw the power of the legal system into a program of changing citizens’ norms — like Prohibition or the 55mph speed limit. The DRM proponents don’t even have the equivalent of the WCTU behind them — just a few vendor-backed lobbying groups.

  • http://techdirt.com/ Mike Masnick

    Richard, I love the fact that you totally and completely ignored everything that I pointed out that you got totally and completely wrong in your statements (and I’ll note your refusal to apologize for getting all of that wrong).

    As for the D&T study, we discussed that in great detail and in the end, while we made one small mistake (again, one small mistake) you pretended that it changed the nature of what we said (which it did not). Also you ignored the fact that the people from whence D&T got their data later claimed that D&T totally misinterpreted it. But, alas, since you never admit that you were wrong and only want to insult me, I’ll assume that you won’t respond to that again.

    I will expect a few more insults, though.

  • http://techdirt.com/ Mike Masnick

    Richard, I love the fact that you totally and completely ignored everything that I pointed out that you got totally and completely wrong in your statements (and I’ll note your refusal to apologize for getting all of that wrong).

    As for the D&T; study, we discussed that in great detail and in the end, while we made one small mistake (again, one small mistake) you pretended that it changed the nature of what we said (which it did not). Also you ignored the fact that the people from whence D&T; got their data later claimed that D&T; totally misinterpreted it. But, alas, since you never admit that you were wrong and only want to insult me, I’ll assume that you won’t respond to that again.

    I will expect a few more insults, though.

  • http://techdirt.com/ Mike Masnick

    Solveig makes the following statement: “One can make money from “free” by tying or bundling with complementary products. However, the methods that one uses to do so do require exclusion at some level. At concerts one buys tickets, for example, without one you can’t get in. The DRM is a physical barrier.”

    No. DRM is not a physical barrier. It’s an *artificial* one. That’s the key here. You are correct (in a roundabout way) in saying that there is exclusion of some kind — which has always been the key to my argument anyway — but the idea is that you make use of the *real* physical barriers, rather than artificial ones.

    Artificial barriers (i.e., protectionism) limit markets. Real barriers *create* markets.

    “What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them. It’s a rather conservative position, and an arbitrary one.”

    I have to be honest, I have no idea what you are saying here. You seem to be ascribing a position to me that I do not hold. I am not asking for arbitrary boundaries at all. I am saying that you let the real boundaries (supply of scarce items) be the boundaries — as that’s how any market is supposed to work. I am against artificial boundaries put on infinite goods. The reason you exclude people with walls is because the space is limited. That’s a physical property of the space. That’s not the case with an infinite good like music.

    “The coke flowing out of the faucet analogy can be nitpicked, but it still works as a quick-and-dirty one. I think everyone can agree that if Coke did come out of faucets, Coke would face a different business landscape than they are now. Likely it could be worked out–it’s tougher with information goods–but it would not be trivial.”

    Huh? This does not support your point. It supports mine. Coke would face a different landscape they do now, but it’s not a hypothetical. It’s a real situation. The bottled water business is a huge one. So you toss it up as if it’s a “well, we’ll never know” situation when that’s not the case at all. We do know. We know that it’s entirely possible to build a huge business even if the liquid is coming at free or close to free out of a tap.

    “Sellers of bottled water may *not* be selling a different product in many cases (there are exceptions i.e. perrier, pellagrino), but people *perceive* it to be different.”

    Again, I don’t understand the point you are trying to make, unless you really believe that the recording industry can’t do the same thing. I’d agree that someone like Morris is clearly too shortsighted to understand how to make a perceived difference in purchased music, but that doesn’t mean it’s impossible. It was done with water, and it’s actually much easier to do with an entertainment good, as we’ve pointed out over and over and over again.

    It surprises me that you would make these arguments.

  • http://techdirt.com/ Mike Masnick

    Solveig makes the following statement: “One can make money from “free” by tying or bundling with complementary products. However, the methods that one uses to do so do require exclusion at some level. At concerts one buys tickets, for example, without one you can’t get in. The DRM is a physical barrier.”

    No. DRM is not a physical barrier. It’s an *artificial* one. That’s the key here. You are correct (in a roundabout way) in saying that there is exclusion of some kind — which has always been the key to my argument anyway — but the idea is that you make use of the *real* physical barriers, rather than artificial ones.

    Artificial barriers (i.e., protectionism) limit markets. Real barriers *create* markets.

    “What is puzzling is why from a copyleft standpoint the primitive means of excluding a non-paying audience with walls, contracts, and so on, are fine, but trying to do something more sophisticated to get enforceable boundaries apparently isn’t–apparently just because those boundaries weren’t built in to the tech from the beginning, so people just aren’t used to them. It’s a rather conservative position, and an arbitrary one.”

    I have to be honest, I have no idea what you are saying here. You seem to be ascribing a position to me that I do not hold. I am not asking for arbitrary boundaries at all. I am saying that you let the real boundaries (supply of scarce items) be the boundaries — as that’s how any market is supposed to work. I am against artificial boundaries put on infinite goods. The reason you exclude people with walls is because the space is limited. That’s a physical property of the space. That’s not the case with an infinite good like music.

    “The coke flowing out of the faucet analogy can be nitpicked, but it still works as a quick-and-dirty one. I think everyone can agree that if Coke did come out of faucets, Coke would face a different business landscape than they are now. Likely it could be worked out–it’s tougher with information goods–but it would not be trivial.”

    Huh? This does not support your point. It supports mine. Coke would face a different landscape they do now, but it’s not a hypothetical. It’s a real situation. The bottled water business is a huge one. So you toss it up as if it’s a “well, we’ll never know” situation when that’s not the case at all. We do know. We know that it’s entirely possible to build a huge business even if the liquid is coming at free or close to free out of a tap.

    “Sellers of bottled water may *not* be selling a different product in many cases (there are exceptions i.e. perrier, pellagrino), but people *perceive* it to be different.”

    Again, I don’t understand the point you are trying to make, unless you really believe that the recording industry can’t do the same thing. I’d agree that someone like Morris is clearly too shortsighted to understand how to make a perceived difference in purchased music, but that doesn’t mean it’s impossible. It was done with water, and it’s actually much easier to do with an entertainment good, as we’ve pointed out over and over and over again.

    It surprises me that you would make these arguments.

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