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Open-source music and movies could make everyone happy.

Like a lot of people, I have a vast collection of CDs, which strains my entertainment center more than any of its components. I plead the Fifth as far as what percentage of my discs were purchased, as opposed to “archived” copies. But, at the risk of being sued for a billion dollars, I will admit that I have occasionally burned a copy of a disc from the public library. I don’t much care for burning MP3 tracks from the Internet. Why download when you can burn a mix of tunes checked out from the library? Still, the vast majority of my collection was purchased after hearing it in some other venue. And I would never have bought any of my discs if I hadn’t first heard them somewhere else first.

My experience with music is quite common. Yet for some reason, the Recording Industry Association of America (RIAA) has a problem with it. You might think it absurd to sue me at all, let alone for a billion dollars, but the RIAA is suing four college kids for $98 billion each because they’ve run file-sharing networks out of their dorm rooms (according to a New York Times story). How the RIAA got the $98 billion figure is beyond me–it certainly is not based on the defendants’ abilities to pay. Apparently, they calculated the price of each song shared as equal to the price of a CD and multiplied by the number of downloads. Never mind the fact that the MP3 files are of inferior quality to CD tracks, or that some of the CDs related to the downloaded tracks were later purchased after the students sampled the MP3 files. And never mind the fact that none of these CDs would have been purchased without the MP3 exposure because radio is essentially a closed medium in which independent and other out-of-the-way music is rarely played.

As a publisher, I understand the value of protecting intellectual property (IP). Still isn’t suing your customers for $98 billion a bit extreme? You would think these people have a better understanding of the realities of digital entertainment. Note to the RIAA: Digital music is here to stay. Get over it and stop with the lawsuits! How about doing something more productive, like developing a new model of extracting revenue from digital music that is fair to you, your artists, and your customer base? Until you make a credible effort to do this, all the legal wrangling only hurts your credibility and makes your customer base more defiant.

I wouldn’t be so cross were it not for the effect the RIAA’s actions have on the computing industry. The conventional wisdom has it that the consumer computing industry has been in a slump ever since the RIAA shut down Napster. Small wonder that HP is the only company outside of Apple to push the convergence of computers and entertainment devices in any meaningful way. You might say Sony is into this, but its own music label is a member of the RIAA, so its music and technology units aren’t getting along too well these days. Still, users want to get more out of the digital tracks, pictures, and movies they use. Hence the topic of this issue. Between the cover story, a complementary feature on home networking, and my Q&A with Dick Grote, the VP of R&D for HP, we’ll lay out the major challenges facing convergence and help users make wise decisions about integrating their PCs with their home entertainment systems.

The biggest challenge to the industry is the RIAA’s threat to disable the market through lawsuits and scare tactics. Rather than repeat the same arguments you can find in any other computer-related magazine, let me offer a constructive solution–a start of a model for digital music content.

Some say the Motion Picture Association of America (MPAA) is on the right track. Well, yes and mostly no. Yes, unlike the record labels, the studios actually offer value-priced DVDs–often for less than the exorbitant $20 retail price for CDs. And services like Netflix do offer a convenient and affordable way to get movie content. But no, as Grote said in our interview, the studios don’t want to do anything with downloadable movies until credible rights management and revenue models are in place. Until then, the MPAA will block all attempts to copy, mix, or share digital movie content over a network. I guess keeping the genie in the bottle beats the RIAA’s attempts to put it back in. Either way, we are in serious need of a model to contain the genie outside of the bottle.

We don’t have to look further than the software industry for help. What has happened to the software industry since the advent of open source is instructive of what could happen if something like open source were sanctioned by the music and movie industries. Let me explain. In software (which is just another form of IP), you have a series of tiers. The top tier consists of premium-priced software packages from the likes of Microsoft and Adobe. The second tier–value-priced software offerings–includes packages like Jasc Paint Shop Pro and Sun Star Office. The third tier is occupied by shareware products like EasyOffice, which typically offer both free- and fee-based packages. The fifth tier is free but closed software. And the bottom tier is open-source free software.

Note that the six tiers form a pyramid in which price and rights management are interrelated. The pricier the product, the tighter the rights. Microsoft doesn’t allow users to load a second copy of Windows XP, for example. Adobe and Microsoft fund the Business Software Alliance (BSA), which performs the same function as the RIAA for the record labels. But as the lower tiers compete on features, speed, and stability with the upper tiers, the upper tiers have to adjust to the competition by lowering their prices and easing their licensing restrictions. For example, Adobe had to beef up its value-priced Photoshop LE product to compete with Paint Shop Pro. I predict that Microsoft will need to ease its licensing policies to keep up with free and open-source software.

Still, the basic pyramid structure will not go away. There will always be a need for premium software packages, and users will pay the price and endure the tight IP restrictions for it. Just so in music and movies: Consumers will pay the premium price for copy-proof CDs and DVDs of the best music and movies. And there is room for a lot of other value-priced layers and even free and open layers underneath the top tier. What consumers won’t put up with is a limited selection of copy-proof garbage for $20 a pop. The minute the record labels stop blaming poor college kids and start offering consumers value for their money, CD sales will go up. The industries should just let the open source movie and music movements thrive and they will be fair to themselves, their artists, and their customer bases.

And I can stop worrying about that “Best of Howlin’ Wolf” disc I’m burning.

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