Labels’ back catalogues already belong to us!
p2pnet news view | P2P | Music:- “OK, Crosbie,” p2pnet said recently, “You’ve been talking about this for quite a while — let’s have some more 
– Cheers!”
We posted that under an item by our friend Crosbie Fitch under thoughts of his we re-ran with the title Enabling musicians to sell their music.
Now, “I recently did a rough ‘back of the envelope’ calculation that gives 2015 as the year in which all the music ever released on CD can fit on a $100 hard disk drive – The Total Music Vortex as I put it,” he says, going on »»»
Now let’s imagine that in 2015, in some part of the world (where copyright isn’t as respected as some might wish it were) there’s a company that has obtained a copy of all music ever released and is selling copies of it on 120TB hard disk drives (that sell bare at $100).
What I want to know is how much you’d offer for such a drive for your sole personal use? Let’s pretend it has no resale value beyond the $100 of the drive.
Is your price $101? $150? $200? $400? or even $1,000?
Would you get anywhere near the $12,600,100 mark that it would cost were you to pay say $10 per CD?
Let’s say you calculated that over the next 20 years you might buy 20 CDs that had been released in the previous 35 years (and would thus be included on that hard drive) – you’d probably buy ten times as many new releases (but they won’t be on that hard drive). That would make your price $300 ($100+20x$10). Let’s say if the CDs had been priced more cheaply you might have bought twice as many. That makes your price $400 ($100+40x$7.50).
So, being relatively generous about it by a factor of 2, if the average person would value a hard drive with all music ever released at $700, that puts the average value of a CD at $0.000476 ($600/1.26m), or less than a twentieth of a cent.
Note that the CDs you do buy, you do value at around $10 (you may value some at even more than the retail price), but there are over a million that you wouldn’t pay even a penny for.
Now if the average CD is valued at a twentieth of a cent, I suggest the record labels could make 2,000% markups if they started auctioning off their back catalogue at a minimum bid of 1 cent per CD. They’ve only got half a dozen years in which to do this, because after that it’s too late, people will have shared it all for next to nothing already.
How would such a digital art auction work? Well, a label would create a website where for every CD ever published they invite punters to bid how much they’d pay to have a copy of that CD with a copyleft license (their cultural liberty to it restored). Let’s say 1,000,000 people bid at least 5 cents for the copyleft release of the CD album recording of Imagine by John Lennon. The label could make $50,000 if they sold it at 5 cents. It’s possible 60,000 people might bid at least $1, in which case it would be better sold at $1 for $60,000. 4,000 of those might even have bid at least $10, but $40,000 isn’t so good. This form of auction enables the determination of the effective market price of a digital work as if it were sold as equally priced copies. The auction of each CD continues indefinitely until the label decides its market price has been reached (as it soon will as the market price descends to zero).
There are 1.5 billion punters online (not all of whom can afford CDs at $10 a pop). Anyway, the theoretical maximum realisable value of a CD is about $700,000 (on average). Being realistic about it, I’d say a label selling a CD for $60,000 (once and for all) is pretty good going (if it can be sustained as an average). But, more critically, if they don’t start selling their back catalogue now, they’ll never sell it.
So, there’s a swansong business model for record labels (artists will have a different model as they’ll be selling the production of their music to their audiences, not copies of monopoly protected published works). Even if the average album only fetches $10,000 this means the labels can make $120 billion over the next 6 years, i.e. $21 billion per annum ($14 per online user per annum). After that, they’ve sold their assets and can focus on selling the value they can still add (if any). The alternative is to sit on back catalogue and watch its sale value decrease to a few hundred dollars, given everyone else will soon also have a copy of it anyway.
You might think this is an example of the difference I often try to explain between selling music and selling copies. It isn’t, it’s selling the public’s liberty back to it, inviting the public to pay for its own manumission concerning a copyright protected work. Selling music is what musicians do, and in the future they’ll sell it to their audiences instead of to record labels as they have done in the past.
So, ethically, the labels’ back catalogue already belongs to the public and the labels shouldn’t get a penny for it (given they’ve been unethically granted the suspension of the public’s liberty to share and build upon it). So, realising its asset value (while it still has one) would be prudent from an unscrupulous and mercenary perspective (a perspective one infers the industry is familiar with).
“The final question is though, can the labels dare to acknowledge even tacitly that their monopoly on the distribution of copies may not last forever (let alone 6 years)? – asks Crosbie, adding:
“As some of us know only too well, it has already ended, but it’s going to take a few years before everyone else realises it. That’s just enough time for the labels to have a closing down sale –- unless of course, they’re hoping for a GM style government bailout in 6 years time –- assuming the taxpayer’s credit rating hasn’t already been used up by other bailouts by then.”
Crosbie Fitch – Digital Productions
[Fitch says he's researching and developing revenue mechanisms and business models for producers of digital art and in the process, 'has discovered that copyright is not only an ineffective anachronism, but is unethical and unconstitutional'.]
May, 2009
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June 1st, 2009 at 4:15 pm
C_F wrote:
“I suggest the record labels could make 2,000% markups if they started auctioning off their back catalogue at a minimum bid of 1 cent per CD. They’ve only got half a dozen years in which to do this, because after that it’s too late, people will have shared it all for next to nothing already.”
your suggestion has one problem. The labels (while probably aware of that problem) are not willing to surrender. that’s why they have this highly secret ACTA thingy on their agenda.
So by 2020 there will be NO possibility for harddrive owners to transfer all this nice little cultural heritage with each other. Welcome to the “new world order” of control and surveillance then! Not only “papers please!” by border guards and police, but also “you have any digital storage device on you?”
What was that film called again where a guy transported the digital data in his brain?
June 1st, 2009 at 5:30 pm
Johnny Mnemonics
June 1st, 2009 at 5:38 pm
Extrapolation through hypotheticals doesn’t work.
We are assuming nothing bad will happen to the world or what’s left of its economy for another six years. Then, breakthroughs in research will bring about 120TB hard drives. Then they will become affordable.
Then we must assume somehow all music can be gathered together in one place and it somehow can be made to fit in 120TB (which, even now, it can’t). Then we must assume that NO NEW MUSIC IS MADE so it can remain “all music ever”.
Even if we limit it to “all recorded music 18xx-2014″, this must by nature include everything ever made by amateurs without recording deals, endless bootlegs of concerts, piano recitals, YouTube videos of idiots playing the harmonica with their butts…
OK, assume we mean just professionally recorded music. Now comes a different assumption that makes the whole thing impossible.
How would it all be gathered together in one place? Someone would have to coordinate and label them to prevent duplications. Then, all the files would have to be checked for integrity (do you know how many MP3s I’ve gotten with the end of the song cut off? Or extraneous material added to it?)
This would take more than six years, even if a hundred people got together to work on it non-stop.
Oh, and just copying 120TB will take a long time. How long would the waiting list be for it?
June 1st, 2009 at 6:43 pm
“Oh, and just copying 120TB will take a long time. How long would the waiting list be for it?”
stw
Transfer speeds continue to increase by leaps and bounds, its feasable that you could do a
120 TB copy in just a few minutes!!
June 3rd, 2009 at 12:44 am
A_F:
You’re actually assuming a point where ONLY closed-formats/drm’ed bullshit survives.
This ignores the basic fact that anything that can be ‘locked” can be “unlocked’ — or do you actually believe there can be such a thing as “unbreakable” DRM? If so, the RIAA/MPAA pigz would love to know about it, because it’s their ultimate wet-dream (or should we say, pipe-dream?)
Crosbie:
I really have my doubts that anybody knows about “everything ever recorded”. Are you including only “big-label” hit releases, or the vast undercurrent of independent stuff/obscure stuff?
Jandek?
The Shaggs?
I have my doubt that “everything ever recorded” could ever be gathered, OR packaged in the way that you’re advocating, even assuming a “copyleft” license.
Deafeatist nonsense (A_F) and Pollyanna Pipedreams (120 GB hard drives containing the sum total of every recording ever released) are equally useless.
June 3rd, 2009 at 12:56 am
As to ACTA somehow “stopping” file-sharing or suchlike:
Sure — just like drug laws have “stopped” people from smoking weed.
Just like “sodomy” laws “stopped” anal sex.
Just like Sarin gas not being legal “stopped” that Japanese Sarin gas attack some years ago.
Feh.
All it takes is for DRM to be broken/circumvented/sidestepped ONCE. After that, the “un-crippled” version will spread exponentially. (Good example of this: the game “Spore”. The company wasted a whole mess of money on that Secure-rom bullshit, and the thing was cracked and downloaded millions of times on p2p networks within weeks.
Another factor that severely militates against the notion of “unbreakable” DRM, is the fact that companies that have TRIED to use DRM have ended up having to teach their users to break it. Good example was when Wal-mart (I think) wanted to shut down their DRM system, and people would no longer have been able to play back files they’d “bought” from them, so they had to explicitly teach their own customers how to defeat the DRM, because if they hadn’t their customers would have been royally pissed.
So, despite all their posturing to the contrary, the corporate megaliths know that DRM is a lost cause by virtue of how digital media works as such — EVERYTHING is “copying” — transfer of data, displaying on your screen, streaming to your sound-card (where it always gets turned back into analog anyway, defeating the DRM at that point, anyhow.)
Honestly, the pro-p2p folks and “copyfighters” do more damage to our OWN cause when we dream up these doomsday scenarios, than the Corporate Megaliths ever could.
June 3rd, 2009 at 6:43 am
Henry, I’m only talking about all music ever published on CD by record labels, i.e. CDs with an ASIN. Obviously that is just a fraction of all music ever recorded.
There’s a related article on TechDirt: When You Can Hold Every Song Ever Recorded In Your Pocket… Does $1/Song Still Make Sense?.
These thought experiments help people realise that copies are not naturally valuable, that it is only the monopoly of copyright that pretends to make copies valuable. Naturally, only music has value. Copies are just a means of storing and communicating it. That’s why I will one day find a neat way of explaining why musicians should be paid for their music and not copies of it.
I can make a copy of a Mozart symphony for nothing, does that make his music worthless? Is Mozart turning in his grave in fury because so many people are making copies of his music without paying his heirs for it?
When you realise that the Earth orbits the Sun it can be very frustrating trying to persuade people that the Sun doesn’t orbit the Earth – given a lack of clear evidence to demonstrate it. It should be obvious. Unfortunately, the proof takes a lot of time and work to produce. I am trying to demonstrate how a musician’s audience can pay the musician for their music. Unfortunately, when people get hold of the corollary that copies can be made without payment, they decide that the musician can’t be paid if copies cost nothing and then their brains shut down, denying any further consideration of the possibility that music can be sold. A bit like people who upon hearing the heresy that the Earth isn’t the centre of the universe shut down any consideration of the theory that the Earth orbits the Sun.
June 3rd, 2009 at 10:49 pm
Henry, I have said nothing about DRM.
ACTA and the proposed rights for border guards/police to confiscate “infringing goods” without any rightsholders “initiative” (read lawsuit/claim) was what I mentioned.