30 Years Of The CD, Of Digital Piracy, And Of Music Industry Cluelessness

A post on The Next Web reminds us that the CD is thirty years old this month. As the history there explains, work began back in the 1970s at both Philips and Sony on an optical recording medium for music, which culminated in a joint standard launched in 1982. The key attribute of the compact disc was not so much its small size -- although that was the most obvious difference from earlier vinyl -- but that fact that it stored music in a digital, rather than analog format. 

On Techdirt.

EU Copyright Holders Cling To Old Levies, As New Ones Start To Appear On Cloud Storage

Levies on blank storage media are a relic of older times when copying was a new possibility for copyright works. You no longer needed an LP pressing plant, say, you could copy music in the comfort of your own home, first on analog cassette tapes, then later on digital media like CDs and MP3 players. At that time, it was easy to see each of those copies as somehow replacing purchases, and so the argument for levies was born: people should pay indirectly for the "lost" sales their copying caused. 

On Techdirt.

Revolutions

On the first LP I ever owned was Tchaikovsky's Serenade, Ravel's Bolero and Smetana's "Bartered Bride" Overture. It was soon joined by many more vinyl discs, but the problem of storing these 12" leviathans soon became a limiting factor. Things grew rapidly worse when I discovered the wonderful if even bulkier Vox Boxes, with their irresistible promise of "complete X", where X might be Bach flute sonatas or Mozart piano variations.

Fortunately, as the floor of my flat was in serious danger of ceding under the weight of hundreds of boxes and LPs, the CD came along. For reasons that escape me, my first CD was Virgil Thomson's "The Plow that broke the Plains", but this was soon joined by hundreds and then thousands of others.

Once again storage - and organisation - became a crucial issue, and once again, I was saved by technology, this time in the shape of the MP3 file. I bought one of the earliest MP3 players, the Diamond RIO PMP300. This came with a massive 32Mbytes of RAM, allowing up to an hour of listening (albeit at lower quality).

It was an important moment not just for me, but also for the industry, as Wikipedia explains:

On October 8, 1998, the American recording industry group, the Recording Industry Association of America, filed an application for a Temporary Restraining Order to prevent the sale of the Rio player in the Central District Court of California, claiming the player violated the 1992 Audio Home Recording Act.

Judge Andrea Collins issued the temporary order on October 16, but required the RIAA to post a $500,000 bond that would be used to compensate Diamond for damages incurred in the delay if Diamond eventually prevailed in court. Diamond then announced that it would temporarily delay shipment of the Rio.

On October 26, Judge Collins denied the RIAA's application. After the lawsuit ended, Diamond sold 200,000 players.

This was one of the earliest attempts by the RIAA to derail the future of music, and luckily on this occasion it lost.

Of course, once music became digital, Moore's Law ensured that things kept on scaling. Silicon storage capacities went up, and prices went down, until today I have dozens of Gbytes of MP3 files of music stored on various media.

And yet I rarely listen to them, because streaming in the shape of Spotify came along a couple of years ago. Although I understand the issues about not owning the music you listen to, I'm lucky enough to have vast amounts of the music that is most important to me available in multiple backup formats - LPs, CDs and MP3s. If Spotify disappears tomorrow - say, as a result of being destroyed by a patent troll - I can just go back to listening to these. In addition, I feel increasingly guilty about owning anything in a depleted world drowning in stuff, so streaming seems like a good idea anyway.

It's of course regrettable that Spotify isn't open source, but it has certainly taken my experience of listening to music to a new level. The ability to leave the complete works of Mozart, say, running in the background for days, or to hear the same movement of a Beethoven symphony played by 35 different orchestras has never been so easy; both change how you regard well-loved pieces because they provide new contexts that allow you to listen to them more deeply.

Moreover, Spotify gives me the unprecedented capability of listening to something - now matter how obscure (well, almost) - the moment I come across even the merest reference to it. It really is like having practically all music instantly on tap, anywhere there is an Internet connection.

As such, it's a foretaste of how things will soon be for all digital artefacts, when every text, image, sound and video ever created will be just as instantly and effortlessly available. The only thing standing between us and that amazing, mind-expanding world of digital abundance is an 18th-century law that replaced earlier censorship with a framework for the "encouragement of learning" in an age of analogue scarcity. Once anachronistic copyright has been abolished, my journey from LPs through CDs and MP3s will be complete, and the ultimate knowledge revolution can begin.

Follow me @glynmoody on Twitter or identi.ca, Google+

Putting Spotify on the Spot

There has been some criticism that Spotify doesn't really bring in much money for the artists concerned (the labels, of course, do fine). But here's an interesting point that's worth bearing in mind more generally:

Moving on, the data claims that to make minimum wage, an artist would need 4.6M plays on a streaming service like Spotify. While that might be technically true, it's a pretty meaningless calculation. It does not take into account the promotional value of streaming -- and unlike selling 143 CDs, getting 4.6M plays of a digital track would certainly lead to significant revenue elsewhere. Surely an artist would be able to translate that much attention into successful live shows or their own CwF+RtB offering. After all, we've seen time and time again that focusing on something as narrow as money earned per track sold (or streamed play) is a limited way to view a musician's earning potential.

Follow me @glynmoody on Twitter or identi.ca.

Brazil to Allow Private Copying and Mashups

I always said Brazil was a civilised country:

O MinC proporá que a cópia privada de qualquer tipo de obra digital seja permitida sem a autorização expressa ou remuneração ao titular para uso privado e desde que seja apenas um exemplar, além de permitir o uso do conteúdo original em outra mídia que não aquela que o consumidor comprou originalmente.

Na prática, quem comprou um DVD ou um CD poderá criar uma cópia de backup para uso próprio ou então poderá repassar o filme ou as músicas para o computador, trocando o suporte físico (como o disco plástico do CD ou DVD) pelo digital (esteja o arquivo em MP3, WMA e OGG ou AVI e MPEG).

...

A reforma prevê ainda "a utilização (...) de pequenos trechos de obras preexistentes, sempre que a utilização em si não seja o objetivo principal da obra nova e que não prejudique a exploração normal da obra reproduzida", dando respaldo legal à criação de mashups musicais ou visuais.

[Via Google Translate: The MinC propose that private copying of any digital work is permitted without the express permission or compensation to the owner for private use and provided that only one copy, and allows the use of original content in other media than the one that consumer originally purchased.

In practice, those who bought a DVD or CD can create a backup copy for personal use or you can pass on the movie or the music to your computer, changing the physical medium (such as the hard plastic of the CD or DVD) to digital (whether the file to MP3, WMA and OGG or AVI and MPEG).

...

The reform also provides for "(...) the use of short extracts from existing works, where the use itself is not the main purpose of new work and does not prejudice the normal exploitation of the work reproduced, giving legal backing to the creation of mashups music or visual.]

(Via Remixtures.)

Analogue or Digital? - Both, Please

Recently, I bought the complete works of Brahms. Of course, I was faced with the by-now common problem of whether to buy nostalgic CDs, or evanescent MP3s. The price was about the same, so there was no guidance there. Of course, ecologically, I should have gone for the downloads, but in the end I choose the CDs - partly for the liner stuff you never get with an MP3, and partly because I have the option of degrading the CD bits to lossy MP3, which doesn't work so well the other way.

So imagine my surprise - and delight - when I discovered after paying for said CDs that the company - Deutsche Grammophon - had also given me access to most of the CDs as streams from its Web site, for no extra cost (I imagine the same would have been true of the MP3s). This was a shrewd move because (a) it made me feel good about the company, even though it cost them very little, and (b) I'm now telling people about this fact, which is great publicity for them.

But maybe my delight is actually a symptom of something deeper: that having access to both analogue and digital instantiations of information is getting the best of both worlds.

This struck me when I read the following story:

Google will make some 2 million out-of-copyright books that it has digitally scanned available for on-demand printing in a deal announced Thursday. The deal with On Demand Books, a private New York-based company, lets consumers print a book in about 10 minutes, and any title will cost around $8.

The books are part of a 10 million title corpus of texts that Google ( GOOG - news - people ) has scanned from libraries in the U.S. and Europe. The books were published before 1923, and therefore do not fall under the copyright dispute that pits Google against interests in technology, publishing and the public sector that oppose the company's plans to allow access to the full corpus.

That in itself, is intriguing: Google getting into analogue goods? But the real importance of this move is hinted at in the following:

On Demand already has 1.6 million titles available for print, but the Google books are likely to be more popular, as they can be searched for and examined through Google's popular engine.

That's true, but not really the key point, which is that as well as being able to search *for* books, you can search *through* them. That is, Google is giving you an online search capability for the physical books you buy from them.

This is a huge breakthrough. At the moment, you have to choose between the pleasure of reading an analogue artefact, and the convenience of its digital equivalent. With this new scheme, Google will let you find a particular phrase - or even word - in the book you have in your hands, because the latter is a physical embodiment of the one you use on the screen to search through its text.

The trouble is, of course, that this amazing facility is only available for those books out of copyright that Google has scanned. Which gives us yet another reason for repealing the extraordinarily stupid copyright laws that stop this kind of powerful service being offered for *all* text.

Follow me @glynmoody on Twitter or identi.ca.

The Kids Are Spot-on

Interesting figures from new research:

Marrakesh Records and Human Capital surveyed 1,000 15 to 24-year-olds highlighting not just how important music is to young people, but their changing attitudes to paying for content. 70 percent said they don't feel guilty for illegally downloading music from the internet. 61 percent feel they shouldn't have to pay for music. And around 43 percent of the music owned by this age group has not been paid for, increasing to 49 percent for the younger half of the group.

But the battle to get them to pay for music has not been lost entirely:

This age group felt £6.58 is a fair price for CD album, but that a downloaded album should be just £3.91 and a single 39p - almost half the price charged by Apple's iTunes Store.

Clearly, if the music industry wants to stand any chance of retaining people's willingness to pay for content, it had better move its prices down to this level pretty sharply. If they don't, it's not hard to predict what will happen the next time they carry out this research.

The Library as Knowledge Commons

When the going gets tough, the tough...go to the library:

Fewer people bought books, CD’s, and DVD’s in 2008 than in the year before. The number of moviegoers and concertgoers shrank last year, too, though rising ticket prices in both cases offset declining sales. Theater attendance, overall, is also down.

We usually hear about these declines in isolation. But taken together, they seem to suggest that cultural pursuits across the board are on the decline. Indeed, if nobody seems to be out buying books, movies, and music, what are they doing with their leisure time instead?

Apparently: going to the library. The Boston Globe reports that public libraries around the country are posting double-digit percentage increases in circulation and new library-card application

This highlights the *increased* importance of intellectual commons like libraries during times of financial hardship, when people can't afford to own so much stuff. It also suggests why we need support libraries through thick and thin.

Of Digital Abundance and Analogue Scarcity

Recently, I’ve started buying records. I’ve decided that CDs just aren’t enough of a collector’s item. Since I can own all the music I could ever want digitally, I want to buy something that looks nice, special, and something that’s going to be fun to browse through in a couple of years. Records are beautiful collector’s items, CDs don’t even come close; especially because records are almost always available in special limited editions with coloured vinyl, posters, extra sleeves and whatnot. I also prefer the warm, soothing sound of records compared to the sound you get from CDs and especially MP3s, which - contrary to what some may believe - do not have nearly the same sound quality as CDs or records.

This is one way for the music industry to make money: sell *records* again....

Flash of Inspiration

One of the many flashes of insight that the Asus Eee PC has provided me with is that DVDs are dead. The Eee PC has no CD/DVD drive, but lets you plug in both USB drives and flash memory of suitably capacious volumes: who needs spinning bits of plastic when you can have totally poised transistors doing the work?

It seems someone else has had the same flash of inspiration:

AN IRISH OUTFIT, PortoMedia, is to open kiosks at which people can download the latest films straight onto a flash memory card in less than a minute.

The kiosks, in shopping centres or stations, will have up to 5,000 films available for rent or sale using a PIN number.

All punters need do in order to buy or rent a flick is to plug in their memory device, a key bought from the company resembling a standard USB, enter a PIN code, and then when they arrive home, connect the device into a dock attached to their TV and hey presto! Movie madness!

Galway-based PortoMedia reckons that a standard-definition film can be transferred to the card in 8 to 60 seconds, depending on the feature's length and the chip's speed.

Has EMI Finally Heard the Music?

I'm not the biggest fan of private equity companies, but they do have the virtue of being ruthlessly logical: they are not enslaved by history, just by greed. That means they are not frightened of radical thinking or radical solutions if it brings them more of the foldable stuff. Thinking like this:

The record business - in which 85 per cent of artists are lossmaking and EMI pays £25m a year to scrap unsold CDs - "is stuck with a model designed for a world that has changed and gone forever", he says.

His solution is to switch from pushing CDs to pulling consumers towards music in different forms. One element will be focus groups. "People say the music industry is more creative and the customer doesn't know, only the creatives do.

"When you look at which car companies are succeeding it's the ones which work with their customers. Are clothes not creative? Is fashion not creative? Is food not creative? The only real difference is these industries have learnt to work with the customer and not force-feed them," he argues.

So, he seems to get the idea of listening to customers, which is good.

Surprisingly, he says that Radiohead, the band that ditched EMI last year to launch their latest album online, made the right choice. "Radiohead had the right idea. They understand their fans. They realise some of them want the premium box set. I'm one who bought one, and paid the full price. What Radiohead showed the industry was that it isn't one answer for all artists or indeed for every customer."

Which indicates that he also realises what the record business is really about: selling scarce commodities like analogue objects and unique relationships.

Don't Steal This Book, Michael

The Kindle is a breakthrough device, in many ways analogous to the first iPod. Just as the iPod brought MP3 players to the masses, the Kindle will be the device that introduces ebooks to many people.

And while Apple sells lots of songs legally on iTunes, the vast majority of content on most iPods comes from home-ripped CDs or was obtained in violation of copyright laws. I expect the same thing with the Kindle. Users may buy a book or two on Kindle, but many users will simply steal the content they want to read.

Sorry, Michael, violating copyright laws is very different from "stealing", as you should know. Moreover, "home-ripped CDs" are not even violations of copyright laws in many jurisdictions (and shouldn't be in any, since it's clearly a fair use/fair dealing.) Confusing these facts simply plays into the hands of the copyright bullies.

P2P'ers (Heart) CDs

Imagine:

A newly study commissioned by Industry Canada, which includes some of the most extensive surveying to date of the Canadian population on music purchasing habits, finds what many have long suspected (though CRIA has denied) - there is a positive correlation between peer-to-peer downloading and CD purchasing.

So tell me again why the music industry is pursuing the P2P crowd with such ferocity? Death wish, perhaps?

Out of the Mouth of Babes and Sucklings

Look, this content stuff is quite easy. It costs money to make a CD because it's a physical object, and if you take a CD from a shop, the shop no longer has it: that's stealing. It costs (virtually) nothing to make a digital file (electrons are cheap), and if you make a copy of a file, the original owner of that file still has a copy: that's not stealing (it may be copyright infringement, but that's another matter).

See, even nine-year-olds understand the difference:

TF. Do you think you should be paying for stuff off LimeWire? You have to buy CD’s from the shop…

- You have to pay for CD’s because they’re actually on a disc not on the computer. My cousin, right, she uses LimeWire when she doesn’t have any money for CDs.

Simple.

Likely to Take a Bit of Stick

Well, part of the music industry seems to have got half the message - that it needs to offer something beyond the music that is circulating freely around the Internet. But I don't somehow think that "something" is a USB drive:

Universal Music, the world’s biggest music company, is to release singles on USB memory sticks this month, in an attempt to arrest the decline in music sales.

The Vivendi-owned company plans to charge about £4.99 for USB singles starting on October 29 with releases from piano rock band Keane and Nicole, the lead singer of the Pussycat Dolls. That compares with £2.99 for a typical CD single.

However, the hope is that fans will be willing to pay extra because the extra storage capacity on a USB allows the addition of videos and other multimedia.

Riiiight.

So, they think kids are going to rush out to buy overpriced USBs offering some digital tracks plus a couple of music videos that will be available on YouTube? Hm, can't quite see this, myself.... (Via The Reg.)

Full of Sound and Fury

I didn't comment on this piece from TechCrunch entitled "The inevitable march of recorded music towards free" since it largely recapitulates stuff that I've been wittering on about for ages (although it's good to see an A-lister joining the choir).

However, what is really interesting is the level of, er, wrong-headedness exhibited in the comments - about how copying digital files is "stealing" (infringement of an intellectual monopoly, actually), about how musicians never create without concrete financial incentives (oh yeah? Ask Schubert), how no one could make enough money from touring to make up for loss of income from CDs (apart from these musicians, that is) etc. etc.

If the readers of TechCrunch can be so ill informed, maybe this is going to take a little longer than I thought (or maybe TechCrunch readers are dafter than I thought....)

It's Up to Us

Radiohead has a new album that you can download - and choose how much you pay. Alternatively, it has a CD version, two vinyl records, an enhanced CD, artwork, photos and lyrics, all supplied in a hardback book and slipcase for £40. Oh, and you get the download thrown in for free.

In other words, as I've said many times before, the digital is the marketing for the analogue, which is where you make your money (since it's currently hard to make perfect copies of analogue goods).

This is the future - it's just unevenly distributed. Let's hope people support this move and that the future spreads.

Truth Will Out

I was pleased to see that the story about Prince giving away CDs in various ways, and making money from live performances, is starting to get picked up by more news outlets. Obviously, when people are presented with a real-life alternative to making money from CDs, things become a little clearer.

But I was disappointed to come across this story about the Los Angeles Times killing a feature by Patrick Goldstein, one of its own reporters, that suggested it follow suit:

His The Big Picture column for Tuesday was killed, apparently by associate editor John Montorio. Goldstein's offense was to propose that the Times follow the lead of the U.K.'s Mail on Sunday (which distributed 2.9 million free Prince CDs) and partner with older artists to give away music in the paper. He argued it could help make the Times website a destination for fans and reduce the need for front page ads (which the editor of the Times himself calls a huge mistake.)

This was doubly stupid. First, it's a great piece. Here's the conclusion:

Giving music away doesn’t mean it has lost its value, just that its value is no longer moored to the price of a CD. Like it or not, the CD is dying, as is the culture of newsprint. People want their music — and their news — in new ways. It’s time we embraced change instead of always worrying if some brash new idea — like giving away music — would tarnish our sober minded image. When businesses are faced with radical change, they are usually forced to ask — is it a threat or an opportunity? Guess which choice is the right answer.

Spot on.

But spiking this piece was also stupid because it was bound to get out - both the piece and story about its spiking - and people like me were bound to spread the news. Thanks to this new-fangled Internet thing, truth will out - eventually. (via TechDirect.)

Update: And as further proof that you can't just bury this stuff, here's a New York Times piece about the incident.

Not-So-Rough Trade

As I and a few other enlightened individuals have been banging on about for some time, allowing digital files to be copied is not the end of business - just of business as usual. Essentially, people selling physical things - like books or CDs - need to recognise the differences from digital ones, and build on them positively.

Here's a good example:

At a time when CD price wars and music downloads are putting entire High Street chains at risk, independent retailers Rough Trade are opening what they say is the country's biggest music-only specialist store.

...

Despite the company's niche reputation, he feels it can fulfil what he sees as the "enormous demand" for a shop that offers expertise and can recommend music with authority - and he doesn't think downloads are killing the CD.

"With this store, we feel there's a dormant music shopper out there who's not buying music from the High Street simply because they don't like High Street retailers, not because they've gone off physical formats," he says.

"If anything, the people I talk to appreciate vinyl and CDs more than ever in this digital age. It's just that they've gone off the way it's sold.

Exactly. Shops are about the experience of shopping, not just of buying. Similarly, CDs and other analogue obejcts are about the experience of having and holding such objects, not just what they contain. As the new Rough Trade shop shows, some people are beginning to get this. (Via TechDirt.)

Don't Mess With Our Thing

This litany of music industry woes is an object lesson in what happens if you fight the (Net) Family:

The major labels are struggling to reinvent their business models, even as some wonder whether it's too late. "The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. "The labels have wonderful assets -- they just can't make any money off them." One senior music-industry source who requested anonymity went further: "Here we have a business that's dying. There won't be any major labels pretty soon."

Amazingly, it could have all been so different:

Seven years ago, the music industry's top executives gathered for secret talks with Napster CEO Hank Barry. At a July 15th, 2000, meeting, the execs -- including the CEO of Universal's parent company, Edgar Bronfman Jr.; Sony Corp. head Nobuyuki Idei; and Bertelsmann chief Thomas Middelhof -- sat in a hotel in Sun Valley, Idaho, with Barry and told him that they wanted to strike licensing deals with Napster. "Mr. Idei started the meeting," recalls Barry, now a director in the law firm Howard Rice. "He was talking about how Napster was something the customers wanted."

So near and yet so far. (Via IP Democracy.)