- The latest Mediaclarity: Aspirational Reading! paper.li/JeremyS1?editi… Thanks to @debrisinaction 15 minutes ago
- RT @sjevansuk: Looking forward to speaking at #CogX2020 next week and discussing how advanced #digital technologies can help achieve the UK… 5 hours ago
- RT @DigiCatapult: Immersive opens up new commercial opportunities across manufacturing & creative industry sectors. @DigiCatapult's #Augme… 5 hours ago
- RT @eve_ofori: Calling #VR and #AR companies looking for investment ready. @DigiCatapult has just launched its 12 week Augmentor programme… 5 hours ago
- RT @creativeengland: Hear from 50+ pioneers & experts streamed live from the #Createch stage at @cognition_x, inc @Marthalanefox, fashion j… 5 hours ago
Check out old stuff you might have missed…
Tag Archives: p2p
It has been a tumultuous few weeks in the Compatible World – a raging debate about file-sharing has got a lot of people very emotional. It’s mostly been in the music world, but all sorts of creators and creatives in different sectors have been watching with breath held trying to see which way this argument goes. There is nothing like a threat of regulation and legislation to sharpen a debate. There is nothing like a recession, loss of jobs and incomes, to make it emotional. After all, file-sharing is at least ten years old now, but this has only served to amplify the arguments.
On the one side, the libertarian argument – on the other, the conservative view – there’s been little middle ground. On the one hand those that argue there is much promotional value to be had in file-sharing – on the other, those that argue it is totally destructive and leads to an inevitable decline in sales.
With regard to new business models – everyone argues that we need them – even the labels agree. But the conservative argument is that as long as file-sharing persists it hampers the launching of new products and therefore file-sharing must be suppressed. The libertarians argue that file-sharing cannot be suppressed and that the new models need to be encouraged as quickly as possible and that the labels are preventing them by not licensing more innovative models. But, even as one label tries to innovate, another holds back – afraid of cannibalising with a new model the only digital revenues they already have (iTunes).
The new proposal from Lord Peter Mandelson for the UK to adopt a policy of broadband account suspension to be applied to the heaviest sharers, the now famous “egregious offenders” has sparked the new row. The Featured Artists Coalition voiced strong opposition to this and fuelled a heated internal argument inside the music industry. Lily Allen piped up in a strong voice – unexpectedly putting the conservative argument and saying “it’s not alright” to file-share. As a result the labels got very excited and did everything they could to “help” her and a huge amount of abuse came down on her head from the online community.
But Lily did speak out in a significant way. Her intervention highlighted the conflicted feelings of many musicians and artists. On the one hand they recognise the incredible potential and value of the net – on the other hand they can’t feel entirely comfortable knowing that their ability to make a living from their own creativity is being reduced by the actions of millions of people who consume without valuing their work – because they can.
So on Thursday night last week we gathered together at Air Studios in Hampstead, north west London, a group of about eighty recording artists – some well known – some more obscure – to try to explore the issues and where artists stood. Members from all sorts of bands like Pink Floyd, Radiohead, Blur, Travis, Keane, Marillion were there, Billy Bragg who is as impassioned and politically savvy as they come, David Arnold who writes the Bond music, Mike Batt who is an artist and the vice-chairman of the BPI all sat there together – ready for a ding dong. In an upstairs room, with his ear to the wall, George Michael was getting reports of the proceedings. Annie Lennox had her digital representative relaying events by phone. We sat in the round, in the studio’s cosy wood back-room with the old church stained-glass windows looking down on us, the paraphernalia of recording equipment shoved back to the walls and a couple of microphones to give people something to hold on to when they talked. About fifteen minutes or so after the discussion began, a timid and tearful Lily Allen came into the room, crouching behind the back row at first. She was encouraged forward and applauded for attending – and was quickly given a seat on the front row to take part in the debate which I had the dubious honour to be chairing. She was tearful, she was angry, she was foul-mouthed and she was eloquent. The whole debate didn’t entirely revolve around her, but she and Billy Bragg became the respective voices of the opposing positions.
The arguments swung back and forth. The conservative view is as strong among many artists as is the libertarian position. There was no particular rationale to which artists adopted which position and for an hour or so the debate simply swung back and forth. One guy from the Long Pigs, got very angry and walked out, saying something about how he “couldn’t understand why you’re being so soft on them – they need to be told”. Billy Bragg delivered an incredible, rowsing speech to huge applause about the need to be nurturing fans and the relationship that an artist has with them is the only one that counts. As the clock reached towards nine pm, I tried to push the room towards a vote. I thought that perhaps while they wouldn’t get agreement on the key issue of suspending peoples’ accounts, maybe we could all agree on the long term educational, cultural change that was needed and that new models were now critically required, perhaps we could conclude by emphasising the positive stuff we do all share.
But then something remarkable happened. As I pushed them to close, they wanted to argue on and the energy in the room suddenly lifted. Someone suggested that perhaps not suspension but bandwidth slowing could be a solution. Perhaps the ability to use email and basic web-serving could be preserved but the high bandwidth needed to make file-sharing worthwhile could be reduced. The room leapt on this compromise with a speed and a degree of excitement that we hadn’t seen all evening. No matter that it would cost the ISPs more to do this than to cut people off. No matter that people could still file-share just more slowly. No matter that squeezing might require as much of an invasion of privacy as suspension – a compromise position was in the air – and everyone leapt on it.
I called for a show of hands and about sixty percent of them went up, including Lily’s and Billy’s in favour of bandwidth squeezing. A significant minority voted against – mostly because they were libertarian, but a few who strongly insisted that hanging and flogging was too good for file sharers. There was a feeling of elation. Euphoria was in the air. Never mind the fine detail, much more importantly, the artist community had become united. Talking face to face, not through the distorting lenses of the media but in privacy with no reporters and no photographers in the room – the artists found common cause and we all celebrated that.
And so the meeting ended with a feverish capturing of the sentiment in a brief statement that was put out to the waiting media. And, as the hour neared midnight, the crowd drifted away with a sense that something important, even historic had just happened; something greater than reaching a consensus on a view about what to do about file-sharing to give to the government. Everyone had the feeling that the power of the artists’ community could be more powerful in this story going forward and that together they could work out solutions that might actually satisfy everyone – and that they were capable of practical deal making – more effectively than some of the other participants in the debate. Argue? of course they did! Compromise? Hell yeah! Who said tearful, emotional, angry artists – couldn’t also occasionally surprise themselves and act more like adults than the corporate grown ups could?
I was asked to contribute a few words following Ed O’Brien from Radiohead’s announcement of a keynote interview at Midem next year. I contributed a brief update on the progress and perspective of the FAC.
The excited reporting in the FT today of Spotify’s most recent fund-raising round raises the question of whether the upstart freemium subscription service might actually represent a challenge to the mighty iTunes.
The question is no doubt weighing heavily in the minds of the Apple executives who are to make a decision whether to accept the Spotify iPhone app into the hallowed portal of the iPhone App store.
Having raised the ire of the FTC earlier this week by rejecting Google’s talk app – which would enable voice over ip on the iPhone and threaten Apple Telco partners AT&T’s business model, they now have to ask themselves which is the greater risk – stopping Spotify and possibly incurring further Federal Trade wrath or letting in a possible competitor to the mighty lynchpin of their own content sales effort?
Of course, arguably the value of iTunes as a sales channel is much less than its role as the cement between the user and the i-devices that sell for lots of money, but recurrent revenue from content over time has got to be attractive – particularly with the new high priced codename “cocktail” service sitting in the wings alongside new devices which, if the rumour mill is to be believed include: a souped up ipod touch with microphone and a new tablet netbook.
So are the aptly named Li Ka Shing Foundation, simply Kashing in (sorry!) on the success to date of Spotify, are Wellington partners to enjoy a Waterloo at Apple’s expense? Will the US of A adopt Spotify with open arms? The opportunities are exciting, the platform is subtly sophisticated with its simple interface and its powerful backend p2p infrastructure. And the move into neighbouring verticals of film, tv and even games are all so alluring to the beady eyed investor. But of course, Spotify still has to raise enough advertising revenue to interfere with its free service just enough to give people the incentive to upgrade to the paid subscription service – no easy shout in a recession where ad spending has been sliding over the cliff. So this is an exciting company – but now it’s not all down to execution – it’s also about how Apple chooses to respond to the invitation to joust.
Watch this space.
A few weeks ago, on a sunny spring evening in Stockholm, a friend of mine asked me to come and have dinner with a guy who he thought I might find interesting. We arranged to meet at a fabulous old restaurant located high above the city, looking out over the water – over the original Pirate Bay itself in fact. As we went up in the rickety elevator reached through a rather down-at-heel office building, my friend turned to me and said: “Oh yes, by the way, he has an interesting idea, he wants to buy Pirate Bay.”
We sat down and were shortly afterwards joined by Hans Pandeya. A native Swede, Hans comes from an Asian Indian family and spent several years working in Sydney Australia before returning to his native Sweden. His current company specialises in running internet cafes in various locations around the world. Hans is clearly an entrepreneur in the classic mould. We spent the evening discussing the pros and cons of the deal, the way in which it might look like a repeat of the Napster scenario, how we might avoid that and what my partner and I might do to help with a little scheme we were hatching.
I explained to him at length that whatever he thought he was buying, if he changed the service to one that pays rights owners and charges users – almost by definition – the users would flee – en masse. All that he would really be able to buy is the brand.
And a brand whose values and business model are radically altered from what they were built from is a decidedly diminished asset.
Not to mention the lawsuits – the current one – and the ones that haven’t woken up yet…
Nonetheless, Hans remained determined. For a start, the tax benefits of one Swedish business investing in another might mean that he would only end up paying 50% of the asking price – so his investment is not $7.8m but nearer to just under $4m. Secondly, Hans felt certain that if the Pirate Bay had 100 million users and that only 10% of them stayed with the brand, then there was a great business to be built. My partner and I disagreed, but we had an interesting and enjoyable meal and as the sun set over the winking waters of the bay , it was clear that Hans was determined to go ahead with his plan. We wish him luck.
In Brighton at The Great Escape festival, I had the interesting opportunity to interview Nathan Lovejoy from Limewire Networks Inc in New York. Limewire, as you know, has 50 million users, is one of the longest running filesharing clients and sits on top of the opens source gnutella network.
They are also being sued by all the major record labels in the US in a case that has been running for two or three years now. Their key defence is “substantially non-infringing uses” ie: there are a lot of really cool things that you can do with our application that are entirely legal and that, gosh, we never thought anyone would use it for filesharing in an unauthorised way that might infringe someone else’s copyright. Oh and by the way – we have absolutely no idea what goes across our client – we simply make the software and hope people will pay us money for the upgrade to our super Pro version – but we really have no idea what people use us for.
Now Nathan Lovejoy, as his name suggests, is a very nice, smart and engaging gentleman. However, he is also not totally unaware of the British TV series of that name featuring, as Wikipedia puts it “a British antiques dealer based in East Anglia whose scruples are not always the highest”.
Sadly, disingenuous is a word that springs to mind.
But I’m not really interested in giving them a hard time. There are plenty of lawyers paid by dinosaurs out there to do that. After all if it wasn’t them it would be someone else – and they didn’t invent the gnutella network – someone else did that – they’ve just given it a reason to live. The key question is really, having established a user base of 50 million, and having a lawsuit that you would have thought they ought to be able to settle soon, what kind of value-creation can be generated here going forward? How do we avoid a repetition of the wasted experience and potential that was Napster?
In other words, never mind if they’ve been naughty boys (and girls but, actually, mostly it seems boys) in the past, is there anything here of value that can be preserved, learned, expanded upon or taken seriously from a business and creative perspective?
Now some would argue that they are the perfect interface to place over a network to which you had applied a blanket licence. So all the music could be freed up by the ISP having charged a small monthly licence fee – and then for the users Limewire could continue to feel like free. And this might be ok – if we could believe that ontop of that real money could then be made with so-called value added services – like recommendation, discovery, bundling etc. I want to be convinced of this, but so far I have yet to see anyone produce the economic model or financial case study to prove it.
So for the moment, as far asLimewire is concerned, the future, based on my interview with Nathan, would seem sadly to not hold much of value for their experiment. The main problem seems to be that the lawsuit prevents them from either admitting much or developing more interesting features. But they do have about 75 developers so may be they are beavering away as we speak inventing the future in an ingenious fashion. We can only hope so.
Because while they can talk creatively and constructively about contextual advertising and recommendations and discovery, the reality is that they can’t currently be seen to offer either since they profess to have no idea what’s going on across their application or the network is attaches too. Never mind the fact that Eric Garland’s Big Champagne has been monitoring and analysing the flow quite successfully for several years now.
So, nice and simple though the interface is, Limewire is going to have get its act together techicallly, legally and commercially pretty fast if it’s going to convince any of us that it has some means of leading us all into a more enlightened and profitable future by monetising the behaviour, interests and passion of its 50 million music lover users.
The irony of the current parallel engagements of the UK ISPs with both the film and TV industries and the music industries is that their conversations are coming from completely different directions. The ISPs are running to the broadcasters and complaining about the BBC’s iPlayer and the imminent Kangaroo player which will have ITV and Channel 4 content on it as well. The complaint is very clear – you are soaking up all our bandwidth and gaining revenue at our expense. In the case of the BBC – the argument is uniquely British – you are fulfilling your Public Service Charter by reaching more people in the community at the expense of commercial service providers who are having to “subsidise” the additional bandwidth usages. In the case of the commercial broadcasters, the argument could be even simpler, but equally difficult to resolve: you are raising ad revenue through programs transmitted not on your broadcast network but on our broadband network – we want a piece of that.
In the case of the music companies the argument is the exact opposite. The music folk are going to the ISPs and saying – you are making money out of our content. All this p2p activity on your networks is illegal and it’s not yielding us rights owners a penny, while you continue to compete with each other on better bandwidth for your buck packages. We want some of your money.
Seems to me, given the size and health of the respective industry sectors and the general balance of power in the cultural stakes, that the music companies might be a lot better served trying to persuade the p2p folk to go legal and share the ad revenues accordingly – or to try to persuade the ISPs that only legal, ad revenue or subscription revenue bearing schemes should be allowed on their networks and illegal p2p should be closed down – and then negotiating for the right splits.
That would of course require that the music companies be prepared to license a few services to show the ISPs that they mean business. At the moment, they seem very concerned about doing that. Let’s hope that the majors don’t go try to down the usual control and command route and offer some home-brewed service of their own, but act on some of their words and collaborate with some of the new businesses out there that might just add value to the whole sector – given the right licensing terms.
Perhaps for the first time, the Music industry could be unified enough and easy enough to deal with so that it might make common cause with film and tv – rather than lagging behind them in the commercial stakes. But even so, it will need to back some players – wether they be last.fm or playlouder in the UK – to be the added value providers on top of the network capabilities of the ISPs. That means new players in a new value-chain and margins that might be not end up being all that different from the old distributor and retail cuts…