Perceptric Forum

If you Cant afford the Law, Then you must be an Outlaw

Tom Koltai — Mon, 09 Nov 2009 15:13:23 +1100

When I was fifteen, I slipped in a puddle of Nitric acid that had spilled onto the roadway in Wellington from an insecure load.

Of course when 90 proof Nitric Acid meets skin, usually the skin suffers second or third degree burns.

It did and I was hospitalized for the next eighteen months, in and out of hospital, getting skin grafts etc.

Two good things came from that mishap.

Firstly, the RNZAF (Royal New Zealand Air Force) to whom I had applied as a cadet flying officer, turned me down for medical reasons. (Think about it, Tom Koltai flying a Phantom F4 over New Zealand? – It was a good thing, believe me, although at the time I was heartbroken. My dreams of being a dashing fighter pilot were, um, dashed.)

The second good thing was the timing of the incident. It occurred in November, just two weeks before exam time.

Father Minto, St. Patrick’s College Rector came to visit me, (in a “burn room”, no visitors without gowns and facemasks; my hands were covered in glycerine gauze) and ask if I wanted to take the exam in hospital, so I told him that I needed someone to do the written part for me as I couldn’t even hold cutlery to feed myself.

Consequently I didn’t have to sit my University entrance examinations thanks to a new phrase that was then introduced into my vocabulary, “aggregate pass”. I liked those words, they meant that my exam results would be assessed on the basis of handed in assignments during the year.

(It was a bit worrying at first, as I considered my cavalier responses to some of my homework assignments but as nurse JJ said to me later, “Who the hell would dare to fail a young man that had received severe nitric acid burns?” )

She was right, now I had my UE (SAT or “A” levels) and all I needed to do was find a university that would take a hospitalized 15 year old.

Which was rather easy really because I was already doing elective classical literature at Victoria. (One of those accelerated learning programs they loved doing in the seventies with anyone with an IQ over 50.)

As I received “going out” privileges at the hospital, I got interested in the legal case that was being mounted on my behalf by the venerable and extremely talented Mr. Arndt. He was suing the Wharfies, the stevedoring company, the trucking company and anyone else he could find.

I decided that I would study to be a lawyer.

My father of course, had different ideas. Accountancy is the name of the game son. Lawyers merely trade insults, but accountants build real wealth.

We compromised and it was decided that I would read for economics.

After all, economists used to tell Prime Ministers what to do. I guessed that was almost as good as flying a Phantom F4.

Fast Forward, to two Thursday’s ago at a Rotary formational dinner being held at the Oatleigh Bowls Club, in honour of the departing and incoming Vietnamese Trade Commissioners.

We all had to stand up and introduce ourselves. I stood up, and said, Hi, My name is Tom and until the Global Financial Crisis I used to be an economist.

The cliché received the mandatory laugh.

What really bothered is that when the barristers and lawyers arose, no-one laughed.

Hey what about the famous “1001 things to do with a lawyer?

Obviously, lawyers have more community respect than economists. Maybe it’s just me…

That brings me to the topic of today’s blog.

I was in court today, pretending that I was a lawyer.

Registrar, I have just taken over this matter from the firm of previous solicitors…

Mr. Koltai, are you not the plaintiff.

Yes sir, I am, however this is a small matter not exceeding fifty thousand and yet my solicitors tell me it’s an extremely complicated case that required me to put ten thousand on deposit with them for barristers fees.

On top of the twenty thousand they’ve already billed me, it would appear your honour that this matter can no longer afford the luxury of legal representation.

It’s complicated your honour, because they sued only the principle of the firm instead of the firm and the principal.

Therefore today, by consent, I am requesting leave to file an amended statement of claim which will take me about a week to ten days your honour and the other side would like fourteen days to reply, so we would expect a date in about a…..

Five weeks Mr. Koltai. Will that be sufficient?

Thank-you your honour.

Boy this lawyer stuff is easy…..

Just then a voice on my left piped up, “We would reserve costs registrar” said the solicitor for the other side.

Costs? What’s this costs business?

Even when I ain’t paying solicitors someone is talking about costs.

I’ll have to look into this lawyer business a bit more. Maybe one could make a good living out of this.

So where did today’s article title come from?

“You’re Either Rich Enough to Afford the Law or You’re a Complete Outlaw.”

Watch the Trailer.

Another Remix film hits the theaters this month. Telling the tale of how the content industry that made a fortune out of “re-sampling” is now going after the re-sampling criminals.

Hmmm. Copyright Lawyers. Now there’s something that is worthwhile becoming.

Sue everyone. Keep all the money and still be the hero.

OK.

Sue everyone, keep most of the money apart from the political donations and still be the hero.

I wish my dad had told me about copyright in 1973.

N.B. It’s not available to Aussies yet. So I guess you’ll just have to watch the trailer over and over again.

Well boys and girls, to make you feel right at home, we have included today a special cutout logo to printout and paste onto the bottom right corner of your TV screen.

-----------------------------------------------Cut Here

There, doesn’t that make the repeating trailer palatable?

In Praise Of Increased Margin

Chris Gilbey — Sun, 08 Nov 2009 16:22:35 +1100

Back in the 1970's I went to work for Alberts - the publishing and record company - in Sydney, Australia.

Back in those days the entire music business ran with publishing and record deals that these days are regarded as usurious and unfair. Back then songwriters hardly ever got legal advice before signing a contract, even though they were advised to. And back then deals where revenues were split 50/50 were the norm.

Somewhere in the late 70's or early 80's things changed radically. It started with some of the major songwriting acts of the 60's coming out of contract and then using the opportunity to negotiate significantly different terms - like 80/20 on their mechanicals and a short retention period rather than the traditional life of copyright deals.

That new structure gradually permeated the music industry and became the norm, and the way that music industry operated changed too.

It changed partly because of the change in margin.

When you have a bigger margin you have a different philosophy.

When I worked at Alberts essentially leading the restructuring of the label from a dormant entity into something that became a beacon of success in Australia I didn't have to meet plan. I didn't have to get a certain number of hits. I was just told to go off and do what I wanted.

What I wanted was to get hit records. And I had a lot of problems to overcome to get there as I soon found out.

The fundamental problem was that Alberts owned radio stations. Yes - imagine it - when a record label owning radio stations becomes a problem. The problem was that Alberts owned 2UW in Sydney, which was an AM station (pre-FM) whose music policy can only be described as All Over The Road (AOR was Adult Oriented Rock). 2UW was everything to everyone and very little to teens. But they did have Laws and that enabled them to get really good ratings and great revenues.

The big station for teens was 2SM. Without getting airplay on 2SM you would never get a hit with a pop record. The occasional country or MOR record that cut through all age groups and started on 2UE or 2UW would occasionally get through, but there was never an occasion back then when a pop or rock record started on 2UW and became a hit.

I knew I had to get airplay on 2SM if I was going to build the label into something, and bear in mind that this was at a time before Alberts had become a success story with John Paul Young, AC/DC and others. This was ground zero.

I presented records to John Burnley the station manager at 2SM. I played records to Trevor Smith, the program manager. I went drinking with the DJ's at the pub they all drank at. I built relationships. But I couldn't get a guernsey for the music that we were producing.

On one occasion I talked to John Burnley about the problem and he told me that my records didn't sound as good as the internationally sourced music that was on the playlist; that when our productions were as good as the ones from overseas we would get airplay. I squirreled away and played more music to John. Then he suggested that even if we did better mixes, with better songs, and better artists, that we would still have a problem. The problem was that Alberts owned 2UW.

I had a bright idea. I took Ray Bean, the station manager of 2UW, out to lunch. I asked him for a favour. The favour was to not play any Alberts record on 2UW until it was on someone else's playlist. He thought I was crazy, asked me whether Ted Albert (my boss) had agreed to it. When I told him that I hadn't discussed it with him he told me that I would probably get fired for the idea, but agreed to do it.

When John Burnley heard the idea, he too told me that I would probably get fired. But clearly John thought it was pretty ballsy and so when shortly after that, we released Evie by Stevie Wright, it was added in high rotation, and that was the way that Alberts became a real label.

The point here is that back then I (and we) did things in music that we were passionate about. We didn't have to make plan. We just had to do what we loved.

A week ago, my wife, Robyn, who was also in the music business back then, told me that she had been talking to someone from one of the labels that we both knew back then. He is still in the business and doing reasonably well. He signed a lot of successful acts over the years. But he is now working at a label plodding along, working to meet plan. Its passionless. Its about profit for the company. And its soulless.

That is why there is so little important music being made these days. It is the byproduct of the money men running the business. But that is the byproduct of the default industry agreement moving most of the profit into the hands of the artist and the songwriter.

What has happened is that the recorded music business moved from being an entrepreneurs' game into being a game where you need volume to make up for reduced margin. And when you get into being in a volume business you might just as well be selling breakfast cereal or soap powder.

That is also the reason that P2P has built up critical mass.

Think about it. P2P is largely promoted by geeks who are passionate about technology, while the labels are run by people who have done their MBA's and are now trying to work in the corporate system in the knowledge that they are going to need to fight their way to the top using the corporate rule book. That rule book rewards corporate sociopaths driving profits without conscious need to deliver art. It may sound ugly but it is true.

Clearly record companies are never going to win against the level of networked passion to disrupt that is in the community. And its not disruption for disruption's sake. It is disruption because some people are still passionate about music.

As you download or upload a song, or as you A&R a record from inside a company, please think about this though: Without a decent margin you are going to find yourself needing to spread yourself thin and seek volume instead of quality. And once you do that, you have lost your way...

Bring back more margin for the intellectual property entrepreneurs, I say. And then we might see the re-emergence of a new era of Dylans and Beatles, and Stones, and dare I say, AC/DC's.

The Laws Of Robotics

Chris Gilbey — Fri, 06 Nov 2009 07:21:52 +1100

In 1942 Isaac Asimov, the science fiction writer, wrote a short story about robots and developed what would be regarded as the definitive approach to a "law" of robotics.

It was this:

A robot may not injure a human being or, through inaction, allow a human being to come to harm.
A robot must obey any orders given to it by human beings, except where such orders would conflict with the First Law.
A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

At the time that Asimov wrote the above robots were a thing of the imagination. Now they are real. And the problem is that the laws laid out by Asimov have been broken already.

The so-called "drones" that are used to deliver ordnance - or in common parlance, to bomb - places in Pakistan and Afghanistan are nothing less than robots. And they are designed to kill.

These "robots" are presumably controlled by someone back at a remote location sitting in front of a screen with a joystick guiding the drone. The next generation of robots will presumably be programmed to respond to outside stimuli and to make decisions in a nano-second, faster than humans can respond.

Shouldn't we feel some concern about this?

Particularly when we all know how computers can be hacked, can have back doors built into them, and can generally go on the fritz. Remember that old adage: "There are two kinds of computers - those that have crashed, and those that will crash." The fact that robots are being designed right now to break the simple first law of robotics may seem like it is of little consequence at present, but we are planting the seeds of our children's future every day...

P2P - Honesty With The Facts

Chris Gilbey — Fri, 06 Nov 2009 06:43:15 +1100

Back in 2002 an opinion piece was published in the Christian Science Monitor debunking the concept of Al Qaida as the "top brand" in terrorism, and how, in doing creating this myth, western security forces were creating a rod for their own backs.

The article went on to talk about the phenomenon of "exaggerated enemies" and concluded by saying "we must be honest with the facts in order to construct a viable long-term strategy to combat terrorism."

This concept of an exaggerated enemy is exactly what the content industries continue to do with their attacks on file sharers, on music venues, and a host of other users of music.

I totally understand and agree with the idea of people paying for music, so I am not condoning theft - but I don't believe that sharing files is any more theft than listening to the radio is theft, or even recording a radio show and then moving it to my iPod...

Connecting file sharers to piracy is so ludicrous - and dangerous - that comedians make fun of the idea of Somali pirates boarding boats to steal copies of the crew's CD's and DVD's to duplicate them. When you get the comedians chasing your tail and making fun of you, you have to realize that you are not on the right side of the equation. Comedy is what finally did in George Bush and comedy is what will finally do in the music business in particular.

I don't have it in for the music business. I just think that they really need to get a decent strategy.

And, as far as Australia goes, our government needs to realize (as I am sure they do) that when the recorded music industry in this country speaks, it doesn't speak for Australian record producers and artists, it speaks for American corporate interests.

Just as with the CIA setting the agenda in the US and globally for security by linking all terrorism to Al Qaida, so too with the music industry connecting all uses of music to piracy - this policy is showing that it is sadly off course.

We must be honest with the facts in order to construct a viable long-term strategy to support the sustainability of the recorded music industry. That means embracing P2P as a delivery system and developing a business model that works. This is not actually difficult, but it does require some out of the box thinking.

Clubs Australia And The Record Labels

Chris Gilbey — Tue, 03 Nov 2009 21:44:29 +1100

There was a a brief follow up story to this one in the Sydney Morning Herald this morning that Clubs Australia is planning to help local unsigned musicians get their music played in restaurants and venues - as long as those musicians are not signed to a major label.

The premise is that the planned increase in fees for the performance of recorded music copyrights controlled by the record industry are so usurious that there is now this push back.

The music industry is clearly not listening to the advice for how to win in Afghanistan from David Kilcullen, an Australian who has some refreshing insights into what is going wrong there.

Kilcullen talks about how on one occasion an Al Quaida ambush took place of US troops. All the locals got involved too and kept the US troops pinned down for over eight hours. Later when Kilcullen interviewed some of the local who had participated and were thought to be friendly, he found out that their view was that their hadn't been that much excitement in the area for years, and if there was going to be a fight the locals wanted to excercise their trigger fingers too. And clearly, as they said, they had to fight against the foreign infidels, because they were the foreigners...

The record industry seems to be doing the same thing. First they pick a fight with their customers, the public in relation to downloads. Then they pick a fight with the telcos about downloads. Now they are picking a fight with the venues that play recorded music. You would think that on that basis the next thing they would do would be to try to pick a fight with radio stations and get them to pay more for playing music.

The record companies are just like the US military.

In going in to a foreign country and wearing a uniform that identifies them specifically as the foreigner they automatically identify themselves as the common enemy.

The record companies are becoming the common enemy for not just consumers used to paying high prices for CD's, but now are the common enemy of the venue owners. They may think that they can rely on the law to fix their problems, but as generals in the past have found out, if you open up the war on too many fronts you run out of an ability to win. And that leads to your troops becoming demoralized. And that leads to defeat.

Music shouldn't be free, but there is no reason why it can't be open source.

Music Industry Losses/Profits – Maxims.

Tom Koltai — Tue, 03 Nov 2009 08:37:36 +1100

An anecdotal statistical examination of music industry potential income with no file sharing.

The music industry have managed to convince global Governments that they should have special protectionist legislation enacted.

No-one has bothered to have a look at the logic behind their claims.

Forget file sharing for a moment.

The question should be, how much discretionary income do the music Industry feel that they should receive and how much do they receive and what portion is that revenue when measured against all other products necessary for living life.

The other day I calculated the average schlepping citizens (being me) music appreciation library as constituting 1400 tracks collected over 36 years of buying 45’s, LP’s, cassette tapes, 8-tracks and CD’s.

This brought up an interesting question. If I represented the average citizen, what then did this mean for the music industry?

Bear with me for a few moments. Read the boring stuff and assume (just for now) it is correct.

There are six billion people on planet earth.

The average age is thirty-four years old.

Historically the average person purchases 3.027 CD’s per annum.

The average CD holds 12 tracks of music.

The retail value of a music track is $0.99.

If we assume that all planet earth want to listen to all the same type of music – i.e. Hip Hop, heavy metal, classical, country and western, with no differentiation, or preferences, then we can say that the maxim potential for music sales in the world today is:

Population (6 Bn) by average CD’s times 12 tracks @ $0.99 which equals $ 18,162,162,162 P.A.

If we adjust that by language bias. i.e.: Not everyone would appreciate an English lass singing “Fuck You very much” and may well prefer the gentle crooning voice of a sitar accompanied local language ballad.

In fact it may be a surprise to the music industry, but 67% of the world don’t speak English as their first language.

So if we knock out the 67% to whom most english music is of questionable value, how are we doing.

Then the total revenue per annum to the industry would be in the order of $ 5,993,513,513 or approximately $1.00 per Global citizen per year.

Unfortunately as we explained in how the content industry won the West, not every citizen has a dollar a year to spend on music. e,g,: Burundi, the poorest nation on earth where the residents have only $120 per annum to live on.

Therefore, we must consider music a discretionary expense that comes after the basics of food, shelter and clothing and of course considerably behind the purchase of a music player device, (like a CD-player for $50.00); oh did I also say that playing music normally requires electricity?

The poverty level of Americans in 2005 was calculated (by the ACS) as being $7765 per adult.

In the table at the end of the above mentioned article, there is an entry for the global aggregate income per annum.

Entry number 133 is for the World and reads World $8,230.

The sources for that table originated from various datasets supplied by the IMF, World Bank, CIA Factbook and the OECD.

In other words, 6,000,000 are aggregated to having a discretionary income of only $465 per annum.

If you had $465 to buy all or your non food, shelter or clothing items per year, how much music would you buy?

Yes, that includes petrol for the car that you can’t afford to buy.

Yes that includes presents for your kids

Yes that includes dinner at Level 41 for 2 which comes to gee, about $465 (including two good bottles of wine).

In other words, the entire worlds discretionary income is only $2,790,000,000,000 which is spent on the produce of all industries.

So before we pass any legislation forcing people to spend their $465 on music that is culturally irrelevant let’s just see how the numbers work out for Australia. One of the lucky countries in the world Australia at position 175 in the list with an income of $42,020 or 5.4 timers higher than the American definition of poverty.

Our population is 22 million. Therefore retail music sales in Australia should account for 22 million and some change.

In 2008, Aussies spent (wholesale value only) $177,901,624 in the period January to June.

In other words, in the first six months, they exceeded the statistical expectation of the music industry by 3.99 times or 7.97 times for the entire year.

Remember above I said that Australians had 5.4 times more discretionary income than the definition for poverty?

It would seem that we are doing 2.57 times better that the world average. In other words, Australia as a country spends way too much of it’s discretionary income on music.

Add the retail markup of 35% (total now $240,167,192) and we creamed the music industries expectations.

This now represents 0.015% of Australia’s imports.

To put that into perspective, our food only imports account for 10.9% of our overseas import trade.

We have already determined that the average Australian is in fact spending $ 10.91 per annum on music. That's eleven music tracks per year.

WOW!

But Koltai, there are two things wrong with your assumptions.

1. All Australians speak English.

2. The Aria numbers include wholesale revenue from other sources, like licensing music in games and Ringtones.

Good points.

In relation to point 1:

Australia is no longer the WASP country it was in the fifties. We are now a multi-cultural integrated cosmopolitan society with multiple heritage streams in some cases overtaking and dominating the earlier prevailing English ones.

e.g.: Fish and Chips shops compared to Kebab stands.

Therefore the language spoken at home in this multi-cultural society is an important consideration.

i.e.: Is an Australian Hindi mum going to be enamoured of her 12 year old daughter playing Metalica at full volume throughout the house? Possibly not.

According to the ABS, four million Australians were born overseas. These four million have had ten million children born in Australia.

Whilst it is obvious that the children born in Australia are likely to speak English with their peers, at home, 64% of Australians still speak a foreign language and this also impacts to an extent on their viewing and listening habits and consequently their music language purchases.

We could use a further analysis of my music collection to assist us in this determination.

I was born in New Zealand of Hungarian refugee parents. I have spent the majority of my adult life in Australia with a few years in Hungary and approximately eighteen months in countries like America, Nauru, Iran, Hong Kong, Germany and the UK.

Of my music collection, (114 CD’s/albums/cassettes) 17 CD’s/tapes are Hungarian, 3 are German, 2 are French, 2 are Romanian and 2 are European language compilations.

Here we depart momentarily from the norm. I may not represent the epitome of average consumer having been able in my lifetime to travel to multiple countries.

However, I do speak languages other than English and consequently my music interests roughly approximate the social interaction I have with the world in those languages or 22.8% of my total music library.

Now the question that one has to ask, is how many of those foreign language CD’s/cassettes did I purchase in Australia?

The answer?

Not one.

In regards to point 2.

$4,028,088 is for Digital Ringtones

$2,673,480 is for digital other.

Therefore deduct 6.7 million if we’re being picky. However, as Digital Ringtones and digital other are a development of the same technology that evolved P2P, I have left the numbers in.

In other words, it is incorrect to selectively discriminate statistics.

Ringtones are sales of music copyright, as are digital other; they would not exist without the same tools that the industry now blame for their declining revenues.

So, in summary, I have to ask, why are our politicians listening to music industry claims about file sharing damaging their business?

Why is Australia about to sign up for ACTA?

The numbers quite clearly state categorically, that the industry is doing far better than could be economically expected.

References:

MAIN LANGUAGE OTHER THAN ENGLISH SPOKEN AT HOME / PROFICIENCY IN SPOKEN ENGLISH

http://www.abs.gov.au/AUSSTATS/abs@.nsf/0/5C5E4429075FC19FCA25737F001682F6?opendocument

General Social Survey, 2002

http://www.abs.gov.au/ausstats/subscriber.nsf/log?openagent&34150ds0008_2002_gss_migrants.xls&3415.0&Data%20Cubes&DFE976F1822288D8CA25754000185F00&0&2008&19.01.2009&Latest

Income, Earnings, and Poverty Data From the 2005 American Community Survey

http://www.usinfo.org/enus/economy/workforce/docs/acs-02.pdf

TABLE 13a. MERCHANDISE IMPORTS, Standard International Trade Classification (1 and 2 digit), Customs Value

http://www.abs.gov.au/ausstats/meisubs.NSF/log?openagent&5368013a.xls&5368.0&Time%20Series%20Spreadsheet&D24ABD2E821C06B0CA2576430012C8AB&0&Aug%202009&06.10.2009&Latest

Are iPods the real File Sharing Causational Culprit?

Tom Koltai — Mon, 02 Nov 2009 02:59:44 +1100

The Music Industry continuously claims that it has been harmed by file sharing.

Yet it has also, failed to provide empirical evidence of the actual damage.

Whilst we disagree with their modus operandi in criminalizing their consumers, we do find that there would appear to be a difference in the reality of music sales and the storage capacity of the devices that are made available by the disruptive mp3 player manufacturing companies.

From an article on the Apple Website:

The first iPod was sold five and a half years ago, in November 2001, and since then Apple has introduced more than 10 new iPod models, including five generations of iPod, two generations of iPod mini, two generations of iPod nano and two generations of iPod shuffle. Along with iTunes® and the iTunes online music store, the iPod has transformed how tens of millions of music lovers acquire, manage and listen to their music.

iTunes have sold 6 billion music tracks.

Total revenue to the music industry? 6 Billion dollars.

Number of iPods sold to 9^th September, 2009 = 220,000,000 ranging in size from 2 GB to 80 GB.

Logic tells us that no-one is going to have a spare two to eighty thousand dollars to fill up their iPods with $0.99 per music track.

But let’s do the exercise.

For the purposes of this (non empirical) exercise, lets argue that the average mean ipod sold is 40 GB in size.

Storage capacity of a (theoretical) 40 GB iPod? 8,750 songs.

Global (Theoretical) iPod Storage Space	1,925,000,000,000
Songs Sold via iTunes	6,000,000,000
Difference	1,919,000,000,000

So the logic would suggest that there are 1.9 trillion tunes missing.

Is this the loss the industry is referring to?

In response to my article last month, “Members of Parliament – Why Did Your Son Just Buy a One Terabyte Hard-disk?” a friend of mine commented: “ i only buy cd's BECAUSE i prefer not to be 'controlled' by someone elses DRM that may dissapear in the future. Sorry i'll pay the $15 once and own for good even though i rip all my content to store on my own servers.
I still think a lot of people store content on terrabyte disks BUT they paid for the content in a different format.”

I responded to Dean’s comment:

How much is a CD? is my first question.
And who the F*** has got 3 million different CDs available for sale ?

There only 97 million music tracks in the entire music industry's combined catalogues. (Luckily for you that equals 7,461,538.46
different CD's.)

And lets be realistic - even if you pay a buck per CD, it will take you (@ 12 minutes per CD) 182.75 years to rip them all.

Now let’s analyse his comment in relation to iPods.

Just how much music do people own that they can put on their (average sized) 40 GB iPods?

Over 35 years of music appreciation, (starting with my first album, Experience, by Jimmy Hendrix), I have collected over 100 albums, CD’s and cassette tapes.

I have ripped all of these tracks onto my computer. The total number of tracks equals 1475 which relates to 21 GB of digital Music.

(N.B. It did however take me over six months to rip my music - in my spare time.)

I have also purchased a few tracks (<20) from digital resellers but unfortunately due to DRM, ceased that practice.

I purchased a 4GB iPod in 2004. At that time I used iTunes to rotate my music.

If we accept that I am the average music purchaser, then the difference between purchased music and iPods sold now equals

iPod Storage Space	1,925,000,000,000
Songs Sold (iTunes)	6,000,000,000
Existing Music LP/CD (iPod owners only)	4,620,000,000,000,000,000
Difference	- 4,619,998,081,000,000,000

In other words, there are 4 trillion (quintillion) more music tracks than iPods sold.

So that would suggest that iPods have not been responsible for illegal file sharing and that the music industry is crying wolf.

Critics may elect to discount the numbers based on my age (51) and the fact that I have been collecting music since I was 15.

However in doing so, you must then include the statistics of my friend, Bill Bilalis who is 15 years younger than I and has over 300 CD Albums; which of course results in much higher numbers.

Even if we chop my numbers in half, and say the average person only has 50 CD's, the worlds iPods are still overserviced by at least two trillion tracks.

Music file-sharing? Bah Humbug!

NB: A trillion in the United States equals twelve zeroes (1,000,000,000,000) A trillion in other countries: eighteen zeroes (1,000,000,000,000,000,000)

References:

100 Million iPods Sold

http://www.apple.com/pr/library/2007/04/09ipod.html

IP Infringement

Chris Gilbey — Sun, 01 Nov 2009 14:09:59 +1100

Infringement is one of those things that generates enormous amounts of ink because it is inherently paradoxical. For the most part I believe that infringement happens unwittingly. Then there is the amount that happens with premeditation. And thirdly there is the infringement that takes place initially unwittingly, but then the perpetrators, when discovered try to hide it...

And often someone, not necessarily the perpetrator, tries to hide the wrong for the worst of commercial motives.

Fortunately sometimes, someone is prepared to stand tall and do the right thing, and it is often not who you would suspect.

Take the case of the Men At Work song, "Downunder". It was a #1 hit all round the world.

Did it infringe "Kookaburra Sits On The Old Oak Tree"?

Music Sales, the parent company of Larrikin Music certainly thought so. They took EMI, the publisher of the Men At Work song, to court recently.

There are several sides to this story that bear discussion which are critical to understanding the case.

1. The part of "Downunder" that is claimed to have caused the infringement is a flute refrain in the song. One lawyer I spoke to told me that he didn't think that this should be cause for an infringement as it was part of the arrangement and as such was not necessarily part of many of the versions of the song that have been recorded over time. My response was that while that might be true, the fact is that the flute passage was a key part of the original version that became a hit, and therefore could be considered to be part of the song, regardless of whether it was left out on some subsequent versions. (In the same way that jazz singers often sing a substantially different melody to the original song, but nevertheless the song is still the song and not considered to be a new song).

2. From my understanding of the Music Sales view on copyright, they see the offending piece of flute melody as being akin to a digital sample - a piece of an original song that is used in another song providing a rationale sometimes for that new song's existence. That works for me as an argument. Not sure how it will go down with the judge, though.

3. There are two other factors at play here that are really sidebars to the case itself but for those interested in infringement legal actions, they may add colour.

(a) A lot of people have not been aware that "Kookaburra Sits In The Old Oak Tree" is actually in copyright (just as they are not aware that "Happy Birthday" is still in copyright. From a strategic viewpoint it would appear that Music Sales have invested in a legal action to show that the work is still in copyright and that they are prepared to vigorously defend that copyright.
(b) Music Sales took what may be a quite unprecedented step in running the case, in that they retained a publicist right from the get go, and invested in getting media attention. It would have helped that both songs are Australian icons of course. They have done an exceedingly good job at getting regular front page (below the fold) stories in the local Sydney papers, and I suspect across the nation.

Meanwhile EMI, the other publisher in the case, has been at pains to remain stolidly unseen.

You would have to think that as a result of these two tactical viewpoints, Music Sales will be seen as the staunch defender of the rights of local songwriters, going up like David against Goliath, to attack the big multinational, and presumably spending somewhere north of $500k along the way in legals (that is my guesstimate - I have no inside knowledge).

And it would have had to have cost EMI more, I would think.

And who will lose in the end? If the judge finds for Music Sales, no doubt EMI will be deducting costs from royalty cheques to the Men Who Didn't Think They Would Ever Have To Work Again... They would be able to because most songwriter agreements provide warranties on the part of the writers that the work they are assigning to the publisher is 100% original with indemnities in the event that this information is incorrect.

I see this as a particularly interesting development because there are a lot of songs that have been assigned to publishers in Australia where there is potential for legal action. One of the more interesting areas for such action is that relating to the terms of the agreements that songwriters entered into, particularly before lawyers became a fixture in the negotiating process.

Back in the old days, songwriters would assign the rights of their works to publishers on a 50/50 basis for the life of the copyright. I suspect that there are quite a few songwriters that would be interested in seeing if they could get those original songwriting agreements set aside. This case, although not about that matter, puts the spotlight onto publishers and the relationship that they have with writers.

Somewhere in the next six months I expect there to be more action. And it will also add some interesting fuel to the fire of P2P to see copyright owners put on the spot by their creatives.

Super Vectors

Chris Gilbey — Sun, 01 Nov 2009 11:53:51 +1100

Super Vectors

I was watching an episode of The Wire last night (last episode of Series 3). In it we see the denouement of an experiment in social engineering. The story, which evolves over a number of episodes, is of one of the senior police getting an idea of how to reduce the murder rate and putting it into action without reference to the Commissioner.

The idea is to create one arrest free zone in Baltimore provided that the dealers don’t occupy the “corners” where they normally deal, and, as a result, where violent crime follows.

The results of the experiment are, as you would expect, counter-intuitively that crime and murder rates fall immediately. However, this is happening under the radar and eventually, in the last episode, the Commissioner finds out, the Mayor finds out, and the media find out. And then you see them all juggling to position themselves so as so serve the public good by leaving things as they are and creating beneficial social outcomes (reduced crime stats, increased testing for disease etc); or by shutting the whole thing down (looking strong on law and order, working to reduce the amount of suffering as a result of drug addiction) etc.

And then when the media gets hold of it, they spin the populist angle and everything goes to hell in a handbasket and the cop with the original idea gets hung out to dry as everyone rushes to position themselves on the side of moral purity as the Drug Czar comes down from Washington looking for scalps from anyone who is not aligned with Federal Public Policy.

If you haven’t seen it, I am sure you get the picture. Its that Public Policy one…

It got me thinking about how sometimes the best outcomes for the public are not delivered by policy, which is nevertheless driven, for the most part, by the idea of serving the public good.

In the case of illegal drugs, the key subject of every episode of The Wire, one of the things that I find fascinating is that there is a real schism that seems to be happening across the world with regard to policy.

In the UK this week, the scientist responsible for advising the government on drugs was fired. He stated categorically that both Ecstasy and Pot are less harmful to people than either alcohol or tobacco. He was apparently told to tone it down by the PM, but continued to speak out, and was summarily sacked.

In the US there has been a shift in Washington with regard to the legality of medical marijuana. It seems that Washington is going to allow States Rights to prevail, meaning that where the public has voted to change local statutes, marijuana can be sold legally as long as there is a prescription. There are doctors in some states who only write scrips for medical marijuana.

So there appears to be some movement at the station on this topic.

This is one of those issues where there has been so much rhetoric over the years, driving an emotional agenda, that the economics of the situation, which normally drive policy, were tossed out the window years ago.

So facts disappear under the veil of whether soft drugs lead to hard drugs, and what the health side effects are from smoking too much pot and how people can become addicted to pot.

In California there is evidence that marijuana is the largest cash crop in the state. And this is the state that is the fruit bowl of America. Lots of cash in marijuana.

And cash is what it is all about.

There are a lot of vested interests in keeping pot illegal – along with other drugs. Drugs are the black economy, pure and simple. They drive a huge amount of money through the system. That may be one of the reasons that the US is in Afghanistan, according to some people. Not to wipe out the opium crop, but to ensure that the opium crop is treated as a strategic resource.

Now before you think I have lost my mind on this, just consider history. The British used opium as a means to colonize and control China during the heyday of Empire. This is well documented. Why would it not be possible for a power nowadays to use opium and its by-products, to disrupt foreign nations and to exert leverage over them?

For most of us this is too horrible to contemplate, but these things do happen.

They are the result of understanding and creating super vectors. These are the forces that align economic outcomes with strong emotional triggers.

One of the key areas for seeing the rise of super vectors is in the area of climate change policy. Most of the debate is on global warming, but the real game here is the larger topic of climate change.

The undisputable fact here is not whether it is getting hotter, or getting colder. The fact is that governments around the world are jockeying for position to make it look like they are doing something. The people in the governments may be believers or they may be sceptics. To be honest, that doesn’t matter. What matters to anyone in the public should be that the people in power believe that they need to do something. They saw what happened to President Bush after Katrina. His ratings plummeted. That can happen to any of the politicians. And all politicians are addicted to the concept of going down in history as a wise, benevolent statesman, regardless of how many fingers they may have had in the cookie jar.

So when you have a super vector like climate change, it obviously makes sense to be in a business that enables profit to ensue as a result with the least possible effort. Certainly that is what the people in the roofing insulation business have figured out, anyway.

Climate change is going to be one of the great wealth drivers over the next ten years. People, companies, universities, enterprises that can find a way to sit under the waterfall of cash that the government will be throwing at the problem will be some of the great winners economically.

One of the other super vectors is aging. We all treat aging as an emotional problem. Perhaps that is because we all know that we are getting closer, day by day, to having to face it ourselves.

But again, if we treat this as an economic problem rather than as an emotional problem, we should realize that the costs to the country of taking care of elderly and infirm people is increasing to a point where it won’t be possible. That is a real problem for government.

The good news is that there are solutions. As long as we can turn emotional problems into rational economic issues, there is a way to fix them, by funding them. Being old happens to all of us, but it should not be necessary for us to have to go into hospitals or old age homes as quickly as we do. If we can keep people not only mobile, but working too, a set of major problems is solved.

I am not trying to put aged people into the workhouse. Quite the contrary. But people don’t want to do nothing. People want to be active and want to contribute to society.

So funding research into how to reduce the impact on mobility of age related diseases becomes an imperative, as does finding ways to get those aged people who are mobile to look after those who are not – and paying them to do it. Create peer driven aged care and enable people in aged care to be shown how to make things, and how to sell things. This is not going to solve aging. But it is going to start to take the pressure off of the people in the economy who are going to be faced with paying the bulk of the costs of care.

We need to identify these super vectors wherever possible and try to position industries and business models around them so as to create greater leverage with government, so as to generate more revenue and profit, and so as to create socially beneficial outcomes..

How Copyright became the number one item on your Governments Todo list.

Tom Koltai — Sat, 31 Oct 2009 16:31:03 +1100

Setting the Scene.

Consultants are people/firms that are hired to divorce an organisations internal politics from a result and quite often, consultants bring with them a differential focused expertise in the area requiring their expert attention.

There’s an accepted modus operandi for consultancy firms in business, “When you get hired, look for more ways to expand the consultancy and extend our tenure.”

Therefore one can think of consultants twofold, firstly as a necessary adjunct providing a mostly unbiased external professional opinion assisting the hirer or, as the commercial assassins of the business world, quite literally referred to as Guns For Hire.

Legislation and your Government.

We have previously discussed how legislation was hard to understand for the layman and have posited that legislation is obviously written by lawyers to provide loopholes for other lawyers, thereby ensuring a healthy, happy and profitable legal system; constituting principally, lawyers, members of the judiciary, clerks and public servants.

Letters and emails to Government employees inquiring about the meaning of specific legislation, are sometimes not answered specifically, or are responded to sometimes unhelpfully, “We are the public service, we don’t know what the legislators mean. Get an opinion from a lawyer.”

If the Governments own employees are not able give a clear cut explanation of what the law means, then why are they called “public servants”?

I always thought the definition of a public servant was one who acted as a conduit between the public and the elected officials.

Of course lawyers won’t want to give an opinion because that requires a specialist so a barrister needs to be called on, who is an expert in the area of the law.

So let’s examine the question of “May I loan my iPod full of music to my girlfriend/boyfriend who does not live at my residential address?”

No-one knows. It’s a grey area of law.

On the one hand, the law states “No.”

On the other hand, there might be cohabitation in the future from which there might spring new taxpayers, so tentatively the answer could be yes.

For purposes of social security benefits, the test is whether her clothes are hanging in your closet, in other words, are there sleep-overs?

The confusion surrounding our copyright laws as currently drafted can only result in further ill will and a general contempt and total disregard for the copyright legislation.

Lets examine the cost of that. Finding a lawyer, asking the question, appointment of a barrister (because this is an untested aspect of the legislation) and obtaining his opinion.

Using a junior barrister would no doubt require approximately two to thee hours of research, an hour for drafting the reply, which would then need to be reviewed by the attorney who would then draft a letter and send it to you with the Barristers opinion attached.

Solicitor at $350 per hour, junior Barrister at $400 per hour would mean that this question would cost about $2,000 to have answered.

Is it any wonder that the public don’t bother to obtain clarification on copyright matters before embarking on a course of action?

So how did we get here?

Background History

The RIAA (the Recording Industry Association of America) was formed as a consultancy lobbying and enforcement group to combat commercial piracy.

As any good consultancy firm, they expanded their mantle of responsibility to encompass VCR’s and Cassette tape home recordings.

As all organisations, they needed to grow to provide security of tenure for their employees.

Their funding is elicited from their members which are comprised of the recording labels.

Therefore similar to a research organisation seeking Grants from Government, the RIAA have to seek funds from their members to continue to survive.

This has forced the organisation to continually seek for new revenue possibilities merely to survive.

However, some of their purported member organisations (996) no longer want to be on the membership roll (21) and are fighting bitterly for a divorce and it’s not only the small indie labels that are concerned of being tarred by the RIAA membership brush.

In an article entitled “Under pressure from EMI, RIAA could disappear” Arstechnica wrote :

Major label music has had a hard time of it the last few years; even as the labels have moved plenty of music (due in large part to the growth of digital downloads), more lucrative CD sales have plummeted. The IFPI admits that its internal review is prompted in large part "by falling industry revenues resulting from the decline in global music sales."

While EMI's threat to pull its funding might seem like a cost-cutting measure, Variety's source claims that isn't the case at all. Rather, "Functions and structure need to make sense to all major labels. Right now, funding them doesn't make sense."

EMI has been unhappy with the trade groups' work for some time. Back in November, we noted that EMI was considering a major cut to its funding of industry trade groups. EMI, the smallest of the four major labels, was recently purchased by a private equity fund that is looking to reinvigorate the label and cut expenses.

EMI was the first of the majors to drop DRM at iTunes and Amazon, moves that have made its digital music a more attractive option. But if EMI can force a restructuring of the IFPI and RIAA, the impact could be just as significant for the industry.

So EMI, the smallest of the big four is doubting it’s allegiance and involvement with an organisation that is suing children, blind people, dead people and grandmothers.

EMI is also the company that two years ago recognised the changing times in Radiohead’s decision to sell direct to the public in an internal memo to EMI staff from Guy Hands, EMI’s CEO.

We all know how the Radiohead experiment played out.

Extremely successfully for Radiohead and alarmingly for the big Record labels who saw the Radiohead initiative as the final nail in the coffin for their industry..

RIAA being a loyal (but nevertheless self-serving) consultant have been the protagonists responsible for the several legislative changes we have had in the last fifteen years.

Legislation that now makes it illegal to loan your iPod to your best friend.

How does it work?

Industry organisations hire lawyers who draft legislation and pass it on to lobbyists to effect meaningful change in the countries they work in.

Initially, lobbying efforts were focused on the main trading partners of the USA.

Of course, for lawyers and lobbyists to be able to influence legislation, they need to make political donations.

Here’s a graph of US based Legal practitioners political donations from 2000 till September 2009.

No, in Australia, we don’t have lawyers donating $1,211,596,434 to our political parties. Yep, that was a billion, no mistake.

Source: https://www.opensecrets.org/industries/indus.php?ind=K&goButt2.x=7&goButt2.y=9&goButt2=Submit

And if we add in all the other groups, the TV, Movie, Music, Lobbyists, we get another billion+ dollars.

Basically the RIAA are guns for hire, constantly looking for new ways to justify their members funding and their own continued survival.

We know that their methods are not always morally acceptable and that they quite often issue press releases and statements that are not exactly well researched, or in fact have any empirically confirmed supporting evidence.

i.e.: File sharing hurts our members business.

The money we collect from legal suites is for distribution to the artists. (We have yet to see a single distribution publicised. For an organisation that has been collecting money form alleged file sharers since 2002, I would seem to be taking them a long time to formally distribute the collected monies.

So the RIAA lie to consumers?

It would appear so.

Does that include lying to their members?

Does it include lying to their lobbyists?

Does it include that lie being believed by Governments?

Yep. Yep and unfortunately, hell yes.

Unfortunately, this is the way that Government have always governed and it will take considerable effort to change the system.

Fortunately in Australia, this is set to change.

Senator Kate Lundy and other politicians in the Labour Government have commenced the dialogue between politicians and the public necessary for open and transparent Government.

So our future looks rosy. Providing of course that Senator Lundy and the other Politicians who are not scared to be judged by their public peers don’t get steamrolled by the old school.

As in the famous “Yes Prime Minister” TV series,

“Good lord Prime Minister, we can’t tell the public, what would they think?”

“But Humphrey, they have a right to know.”

“Well that depends Prime Minister, the general consensus in the Ministry is that we don’t want them knowing because that might mean they start thinking. And we certainly don’t want the public thinking Prime Minister, that would never do.”

“Why Humphrey?”

“Because they would then start asking questions Prime Minister and we don’t have all the answers to all the questions. So we have decided not to tell them anything. Saves an awful lot of headache Prime Minister.”

“Yes, I see Humphrey.”

References:

Record industry cutting off nose to spite face

Will Sturgeon - Thu 8 May 2003 11:52AM BST

http://web.archive.org/web/20030512215456/http://www.silicon.com/news/500019/1/4071.html

Indie Labels Seek to Sever Ties with RIAA

November 26, 2003

Independent record labels are fighting to have their names removed from the list of members posted on the Recording Industry Association of America's Web site. Many of the indie labels say they are not RIAA members. Some worry that the association with the music industry's crackdown on file sharers will hurt their image with fans. Joel Rose of member station WHYY reports.

http://www.npr.org/templates/story/story.php?storyId=1522790

"I sue dead people..."

The RIAA gets overzealous again in its battle against file sharing.

http://arstechnica.com/old/content/2005/02/4587.ars

Under pressure from EMI, RIAA could disappear

http://arstechnica.com/old/content/2008/01/under-pressure-from-emi-riaa-could-disappear.ars

Recording industry withdraws suit

http://www.boston.com/business/articles/2003/09/24/recording_industry_withdraws_suit/

Full Text Of Leaked Guy Hands' Letter To EMI Staff

http://hypebot.typepad.com/hypebot/2007/10/full-text-of-le.html