2008-02-21

In addition to free (Part 2: How to revive non-free)

We need to have the 'paid' business model as well. In most cases, if not all, more choices are better than fewer in a market. Here are some things that I think we need to do to make it viable.

We should control piracy.

I have not had this conclusion for a long time, ever since I got interested in the digital content business model around 2000. Not because I was not sure about the value of intellectual property, but because I thought that the cost of stopping piracy would be too high.

But now I believe that with proper measures, piracy can be effectively contained. We won't be able to remove all piracy. We don't need to. We only need to make 90% (or 95%... Suffice to say "high enough") of the market safe to protect creators' (of paid contents, of course) compensation from being materially affected.

Based on experiences of Korea (see the table in part 1), which is still far and probably farther than the US or Japan from piracy-free, piracy control does increase the total content markets. I have read Sheryl Crow interview, but it is much worse in Korea. Here is Haechul Shin, who is a well-known rock singer in Korea

"Let's say we harvested 10 crops. Thieves steal 9, and the 1 left is divided and distributed. And the thieves sometimes give us a lecture." Also, "They call the buyers of CDs fools, but they are the ones musicians really thank. But we have so few of them. I wish there were at least 2 or 3 times of them who could be guards to keep the minimum."

I don't think it is a good idea for us, the audience, to make the musicians frustrated and angry.

(He also said that some musicians just use a Melodeo instrument, which seems like a kind of a musical synthesizer, to make a song targeted at the ring-tone, the most commercially viable format for the past few years in Korea. No orchestra, no band because you cannot tell the difference anyway in the ring-tone. Having played guitar in a rock band myself, I will be very disappointed if this is the future of music.)

We should have more standardized copyright options.

One point I want to make clear again is that I am not against 'free' models. Innomove Lab, which is my business, has free web services. And I am personally writing Mass Niche openly. I am just against using non-free contents without paying the price.

I like Creative Commons concept in that it gives more options than "nothing can be done" or "you can do anything". I am still learning about it, but it seems to me that we need more licenses. All CC licenses seem to allow non-commercial use of the entire content (and grant some other rights or not). However, for many musicians and other creators, this may not work, as I said in part 1.

I think we need to have something like "Sampling/quotation is fine. But using the whole work, for commercial or non-commercial purposes, is not." That way, creators who want to encourage people to create more creative works using parts of their work (quoting paragraphs of a book, sampling a melody of a song, etc.) without going through complex clearance process. Creators may apply this to non-commercial and/or commerical purposes.

If we have this kind of license and probably more options, I am certain that there will be much less tension between free vs. non-free camps. "We have all spectrum, now it is your choice."

Another reason why I like CC initiative is that it makes copyrights understandable to people. I guess you could custom make your own copyright terms, but small businesses or individuals don't have that kind of knowledge or resources. Having standardized licenses from which one can pick is such a great thing for them.

We need a DRM (or call it differently, if you hate the term) that is associated with a person, not a device.

One interesting survey I found was done by mybytes.com. If you look at week2 poll, you will find that most students think they should be allowed to burn a CD whenever they can.

I am with them. If you don't want me to make copies and give them away to other people, I would not (maybe other than to my family. Maybe another license for 'sharing with family allowed' needed?). But, if you say I cannot burn a CD so that I can enjoy it in my car, I am going to say 'you know what'.

But it seems many of current DRM solutions do not allow you to move your content around between different devices. I can understand what they are worried about, but it is just so inconvenient. In this case, the price of an MP3 music, which is usually lower than that of a CD, suddeny appear too high. Rather than trying to change our behavior and sense of what is right and wrong, I recommend developing solutions that are more in line with our common sense.

I know that there are people who want to remove DRM completely. They seem to think protecting something, which otherwise can be shared by everyone is wrong or at least a waste. I would like to point that people like to share but not everything. Sometimes we want to get compensated for sharing something, and other times we don't want to share at any price (e.g. privacy). And talking about waste, there are so many wastes we would not need if we could change our protective behavior: fence, your locker in the gym, private meeting rooms, and to some degree your bank accounts.

If you think that kind of behavior is wrong and we should be educated or forced to share more, I have nothing to say. That is a topic for politics or philosophy. I am just thinking about business models to satisfy existing needs. If you want to change (or regulate) people's needs, go ahead and do it. But meanwhile, please allow solutions for them to be developed.

We need a more user-friendly micropayment solution.

I often meet contents, that are priced like 5 dollars. I am tempted to buy, but often do not. And the primary reason is not that I think the price is too high. I don't like to spend time taking out credit card from my wallet and entering my information. In my mind, that time costs a lot more than 5 dollars. Also, I don't like giving out those sensitive information here and there. I am sure many of you are similar.

I wish there were something like offline cash on the Internet. Take out my cash, give it, and I am gone with the purchase. It takes just a few clicks and there is no sensitive information given. It is just like you going into a convenience store and buying a can of cola with cash.

I know there have been a lot of attempts at micropayment business models, but haven't heard anything successful yet. PayPal is probably close, but not efficient enough. Companies like Mobilians and Danal (at which my colleague Chihyung worked) in Korea provide simple mobile phone payment which is quite close to my ideal solution. The problem is that they are widely used in Korea but not globally available yet. I hear they are developing businesses in China, the US, etc.

Anyway, if there were such a solution, I would certainly be buying a lot more contents. And I believe there are many people like me.

Other parts:

3 comments:

  1. I'm commenting on this post but it's mostly on your whole "in addition..." series here.

    I agree with you that CC copyrighting is a big step in improving copyrights. However, a lot of the copyrighting options that you list are already what copyrighting is. Copyrighting is largely regulated by individual creators and companies, because copyrights are created as soon as anything creative comes into existence, and because infringements only really matter when the holder of the copyright feels violated. The bigger problem with copyrights, in my opinion, is that they're largely not held by the people who created the things. For example, someone may write a song, but any company that might publish the song with require that the writer sell the copyrights to the company. So if that writer wanted to use that song for something else, he could get sued for copyright infringement because now the company holds the copyrights. That is how most copyrights work for creative content.

    This may seem unlikely, but that fact is that if there had never been DRM in the first place, less piracy would have occurred in the long run. It is in human nature to break down barriers that are set up. Most music users saw DRM as an affront to their loyalty as consumers. "You think I'm going to go around pirating music? Fine I'll just fulfill your expectations!" Basically, I would never have even thought to steal from you if you hadn't implied that you didn't trust me.
    I don't think the industry needs to control piracy so much as it needs to examine the reasons why it is happening. If piracy were a small and rare thing, of course we would need to punish the pirates. But the fact that it has become such a huge problem means that consumers are crying out that something is wrong with the way things are. Let's say we harvested 10 crops and thieves steal 9, well then of course we've been wronged. But let's say our city harvests 10,000 crops and thieves steal 9,000. Clearly someone is going hungry. Clearly something is wrong.

    Lastly, there ARE profits from free things. Why else would businesses be on the "free" craze these days? Because "free" creates more profit. Businesses are becoming more and more aware that they can make more money by using "free". There are lots of ways. And sometimes, it is really truly free for the consumer, because the money is coming from somewhere else.

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  2. I appreciate your points.

    On copyright issues, first of all I am not a lawyer. But maybe that's the point. I did not know that the existing copyrights already included what I listed. What I am suggesting is just making a few more easy-to-understand options like CC licenses. That way, people like me are less scared, and the poor ones could make clear what they allow others to do with their contentx without lawyers.

    In terms of creators not having copyrights, I don't because I have no experiences. But don't you have a choice? If you think you can do the recording and marketing and all that without a label supporting you, why not do it yourself and keep your copyrights? This might have been only feasible theoretically before, but in this networked world now I would think it is a very viable option.

    I like your comments on The DRM issue. Fundamentally, I think it has to do with philosphy. I try to avoid this kind of discussion, as it often becomes political ideological debates. I would say this much. I believe most people want to be good citizens. But good citizens sometimes violate rules. Have I downloaded illegal music files? Yes, I have. Do I regret that? Yes, I do. And I stopped illegal downloading a while ago. The thing is, without clear consensus that this is a violation of others' right, people treated illegal downloading too casually. And the effect of being tough on illegal downloading is not the punishment per se but the message to the people that it is a crime.

    You said that DRM actually induce people to transfer files illegally. I do think that DRM should be improved, as I mentioned in the post. But the fact that there is a protection cannot be the core reason there is theft. Is there theft in the world because we have unnecessary security services and solutions around our supermarkets, websites, and banks? I don't think so. The key is to make it less annoying, not to remove it entirely.

    On your point of 'why there is piracy'. Well, if it was really that 90% of foods were stolen, I agree that it is time to think about the entire societal system. But this is music. Are they all dying if we ban illegal downloads?

    I agree with your last point. As an entrepreneur, I do use free models (see my affiliated sites) and I am not rejecting free models. I am just saying there is nothing wrong about paid model, and we should make it a viable choice. And also a different kind of free model, in addition to current 'free + alpha'.

    At a high level, I am wishing (and predicting positively) that the world to be a better place creative crowds. I call this mass niche, and I am writing about it. Especially, have a look at "rise of online fashion boutiques". I think we can build markets like that in everywhere, and music will be an easy case. Welcome your comments there.

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  3. Great post! Really insightful. I have not monetized by blog in any way, I didn’t even know where to begin. but you’ve given some helpful tips.

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