April 8th, 2004
took the credit
your second symphony,
Rewritten by machine
And now I understand
problems you can see.
Oh-a oh” – The Buggles, Video Killed The Radio
One of the inevitable problems with digital material is
that it is ripe for piracy.
The recorded music industry has taken it on the
chin over the past five years with music file swapping
becoming rampant. The
main reason that music was hit first is that the file
sizes were relatively small.
A few megabytes of music could be downloaded
somewhat painlessly over a 56.6K modem.
But broadband made instant gratification
the other night for example.
Going to a party where the birthday girl
absolutely needed to hear “A Little Less
Conversation” by Elvis, I took about five minutes of
my time to “borrow” someone else’s recording and
burn it with the rest of my ripped songs.
Is this song “borrowing” right?
We know it’s damn easy.
Where do we land on the ethic-o-meter on this?
Is it like running a yellow light?
Or is it more like shoplifting a candy bar from
the 7-11? Or is it worse? Free music has become almost
as “acceptable” as free satellite/cable.
Everyone else is doing it, so why not me?
As broadband explodes further in the next few years,
video game developers and the television/movie industry
will be next up for ease of use and instant
gratification by the digital “sharers”.
Six hundred megabytes gets you a great game.
Five gigabytes will get you 90 minute DVD movie.
So, it was with great interest that I watched the events
unfold last week in
with regards to the Canadian Recording Industry
Association’s court battle to get the ISPs to reveal
massive “sharers” of music.
In case you missed it, a Canadian judge equated
shared folders on a peer-to-peer network to a
photocopier in a library.
A photocopier is merely a tool that allows
copyright violation (copying printed material is
illegal), but is not the violator, so to speak.
Ergo, a shared directory is not breaking any laws
because they are not advertising or receiving money for
the copyrighted material therein.
Releasing the names of the owners of those
directories to be prosecuted by the CRIA would be wrong.
Now, we are talking about a privacy legal
precedent, not a piracy one.
The ISPs can protect the privacy of those who
choose to share, said the judge.
As you can guess, privacy advocates and
libertarians tripped all over their Birkenstock’s to
champion the Canadian ruling.
My favourite quote from the coverage, “The joke
in the office was let's move to Canada," said Greg
Bildson, referring to other issues where Canada has
taken a different path than the United States, such as
gay marriage and moves to decriminalize marijuana
is just a little more hip these days."
Great. Our national emblems have been updated from
Mounties and Moose to anonymous, pot-smoking, gay
I tend to agree with the judge on the technicalities of
the privacy violation.
If I left all of my CDs out on the porch in a big
box that said, “Top Forty – Today and Yesterday”
and someone came along and rummaged through and took all
of my Milli Vanilli CDs, who is the thief?
It’s not me!
Makes sense, eh?
So why is it that the same week the Canadian judge has
this moment of clarity, the US House of Representatives
proposed a bill (Piracy Deterrence and Education Act of
2004) that if passed into law, would create penalties of
up to $250,000 (U.S.) and impose up to three years of
prison time on anybody caught with more than $1,000
worth of copyrighted content knowingly held in a shared
lobby groups are better than the Canadian ones.
This lunacy of going after the networking services and
software will not hold up.
congress action, it is not the solution.
Time is probably the cure-all here.
Remember my reference to the Elvis tune I
truth be told, I went to puretracks.com and paid $0.99
for it… legally. It’s mine, I did not borrow it.
Why? Because the shared peer-to-peer services have
become a victim of the Internet’s great equalizer of
They are cesspools of viruses, pop-ups, spyware
and spam. Kazaa,
and its ilk, have fallen victim to the same progress
that made free e-mail, ICQ and free “adult” sites
annoying and mostly useless.
In every case, the business model on the Web has
become: a) free, but Kitty-bar-the-door, it’s the Wild
West out there; b) some small fee and with it some
protection and better service and c) larger fee for all
the bells and whistles and no ads or other crap.
You see where I’m headed here… some segment
of the population will always put up with the garbage to
get “free” stuff.
Most of us will actually pay something to get
clutter free, fast access to the digital content we
best thing the Recorded Music Industry could do to bring
back their revenues is embrace the paid download model
slimy underbelly of the Internet will make “free”
access to copyrighted digital material an adventure for
only the bravest of us.
Digital content is a massive business opportunity going
forward, not anywhere near the “sky is falling”
industry destroying threat that it is made out to be by
the artists and their labels.
Wireless digital content is absolutely booming in
Asia and Europe. iTunes,
RealPlayer Music Store and the Canadian PureTracks.com
are proving that downloadable music is the next billion
dollar industry. One
last point about the music industry:
For those of you under the age of 35, there used
to be this compact analog medium called “tape casette”
that was, in the early 80’s, the end of the music
industry, v1.0. You
could by 1 LP (made of vinyl, about 30 cm across,
black… you remember?) and make unlimited tape cassette
The lost revenue potential was staggering.
Laws were introduced.
Industry goliaths threatened to sue the pirates
that copied LPs. When
the cops pulled you over, you stashed the cassettes in
the glove compartment in case they saw that your
“blank” Maxell tape had “AC/DC – Back in
Black” scrawled in marker on the side.
Paranoia ran deep.
Then, a funny thing happened.
People fell in love with the quality and
consistency of the new CD-A format. LPs were tossed like
cheap suits. And
the record industry made a boatload of money charging
more for the “premium” quality on CDs.
The video game business had better pay attention,
because on the sliding bandwidth meter, they are likely
up next before the Gigabyte movie industry is
beef I have already?
Seventy dollars a game and it’s useless after
your 8 yr old “beats” it in less than a month.
Also, the multiplayer requires a “key” for
every concurrent computer… so if I purchase one copy,
I can’t play Battlefield Vietnam with my brother on
the other computer.
Unless I fork out another seventy dollars.
Disgruntled buyers with easy access to “free”
alternatives will seek them.
I think it’s wrong to not pay for your content.
But I also think it’s wrong, and damned
foolish, for industries to fight in the courts and the
governments to protect old business models.
But I’m not a $500,000 a year industry
lobbyist, so what do I know.
What Do You Think? Talk
Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
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