Perspectives, News & Opinions From The Researchers At Edison

A Modest Proposal to Reduce Illegal File Sharing

Entry by Tom Webster | Monday, October 25th, 2004 | Permalink

By Tom Webster, Edison Vice President


While spending the better part of last Sunday assembling a stroller (I’m not that smart), I took some time to browse through my CD archives in search of something “classic” to listen to. I hit upon _Solid Air_, by John Martyn, and settled in for a leisurely autumn afternoon of inserting Tab A into Slot B. As I was listening, I was struck by two things–first, how great that album still sounds today, and second, that it was released in 1973–over 30 years ago.
There are times when I have been tempted to go out and buy all the John Martyn CD’s I don’t have just so I can dump the whole discography on my iPod. A quick search of Amazon, however, revealed that this lark would probably cost me over $1000.00, (even at the “Nice Price”) and that much of his back catalog is long out of print (see for yourself). Mindful of the metric ton of diapers I will soon need to purchase, I decided to restrain the impulse. I could have just downloaded them at the iTunes music store, but that would be the same price, really–and I am still not sure that I should pay exactly 99 cents for both the new U2 single and “Fountain of Sorrow.”

Devising a system that both enables fair use and fairly compensates the copyright holder(s) has proven to be problematic and controversial.

I should, however, pay something. The artist deserves my money, of course–but the label does, as well, for taking the risk and promoting the product. The decision to charge me the same amount of money for a 30-year old song that I would pay for the latest Fiery Furnaces, however, strikes me as worth further exploration. After all, hardcovers go paperback, and theatrical releases go to video, so why not a similar scheme for the music industry? Many have explored that path, however, and found that there are significant differences between music and books. Yes, video rentals and paperbacks are cheaper than their first-run predecessors, but they are also significantly _different products_. An MP3 file is an MP3 file, no matter how old the song may be, and there are plenty of evil-doers with file servers out there who will do their utmost to thwart any differential pricing scheme. There is substantially less friction involved with ripping and sharing music than there is to reproducing hardcovers and videos (yes, I know it’s possible…but until there is a Hollywood-style version of iTunes, I’m not trying it.)
No, music is a different beast. There are plenty of studies out there that show that the majority of people who flaut copyright law do so not because they are inherently evil, but because they perceive the current system as “unfair”–and copyright is, after all, a system to balance the rights of the creator with the right of “fair use.” Devising a system that both enables fair use and fairly compensates the copyright holder(s) has proven to be problematic and controversial.

The Greedy vs. The Needy

One complication is the fact that there are several different types of content shared by peer-to-peer downloaders. In his superb new book, Free Culture, Lawrence Lessig makes the argument that there are four types of content sought by file sharers. The first one is obvious–content that people could otherwise easily purchase, but choose not to despite the relative ease in doing so (through, say, iTunes, Rhapsody or even Wal-Mart.) People who seek to obtain this type of content through illegal means are clearly breaking the law and depriving the artists and all who support them of their fair share (and livelihood). There are, however, other types of content that file sharers seek, and they are not so sinister. These can be found in Lessig’s book (buy it, already!) so I won’t spoil the plot, but one of them is particularly relevant to my initial John Martyn dilemma.
Some file sharers seek content that is either no longer available (e.g., out of print) or cannot be purchased without prohibitive transaction costs (and here I mean the cost of flying to Ville Platte, Lousiana to Floyd’s Record Shop because they are the only source for that obscure zydeco record you “need.”) Acquiring content through file sharing that is either unavailable or prohibitively expensive due to _transaction costs_ (and not through its retail price, per se) may not be _entirely_ kosher, but it isn’t as overtly evil as stealing the new Nelly, either. To me, my quest for the John Martyn back catalog falls into this category. How to deter illegal file sharing and ensure fair compensation is a topic well beyond this (or any) short article–but there may be ways to solve my John Martyn problem that won’t leave me broke or in handcuffs.

Shareware vs. “Ransomware”

Music files are basically software, so let’s tackle this from a software perspective. Most of us couldn’t get through our day without a standard OS (Windows or Mac) and some derivation of Microsoft Office. These products are big, complicated and in high demand–and are priced accordingly. Think of Office like the latest Maroon 5 CD–everyone has to buy it, cause the old one’s no good anymore. But there are loads of smaller, niche software products that have more limited appeal or solve smaller problems. These applications are typically sold as “shareware” and are given away in either a crippled or time-limited form to induce users to try them and pay to register.
Cynics would stop me right here–there already is “shareware” for music files, and it’s called eDonkey. And you’d be right to stop me–statistics show that most shareware never gets registered. Recently, however, I discovered another type of “ware” that I found very interesting. Some developers have come up with a different model–”Ransomware.” The concept is simple. A credible developer (and credibility is very important in this model) builds a small, useful application, demonstrates its functionality, and then “ransoms” it to the user community. The developer estimates how much he or she would need to make it worth their while to write the code (many put this at $100.00 or so) and then accept micropayments via PayPal or Dropcash in any amount from anyone interested in the plugin. Once the ransom amount has been met, the developer releases the source code for free to the public–no strings attached.
This mechanic accomplishes a number of things. First, it ensures that the developer will make a reasonable profit. Second, it does so in a way that _anyone_ would deem fair–those who would pay for the application do so, while those that would rather “obtain” it and/or share it on a peer-to-peer network may also do so. Since the application is not released until the ransom is paid, there are no “illegal copies” floating around, and once the developer’s price is met, sharing the file is not only allowed, it is encouraged. It’s almost…communist.
Why would anyone pay, you might ask? Well, you might really want or need the application, for one reason! Also, different people will or can pay differing amounts. If someone released a plugin to translate weblog articles into other languages, for instance, hundreds of bloggers in other countries would surely pony up a dollar to automatically post in English, while some businesses might chip in $100 or more for this functionality. It would sure cost a lot more than that to actually build or buy the application yourself, and if the idea is good, and the price fair, the ransom will surely be met.

Free John Martyn!

So here is my idea–and again, I am only talking about back catalog music, from albums (yes, albums) long out of print or too difficult to find. Why not ransom them? What if Universal calculated the terminal value of the annuity that John Martyn sales bring each year, and set that as “bail” for his digital files? Once the ransom has been released, the files are posted on public servers–take all you want, but eat all you take. Since we are probably talking about more than $100 here, let’s tweak the system to more of a “pledge drive”–your credit card is only charged if the ransom is raised. With that tweak, what is the risk? I may not pay $1000 for John Martyn’s discography, but I would gladly pledge $100 (again, removing the risk by not charging until the ransom is met) to get it all digitally. True, a bunch of people will get it for free. So what? Universal made what it needed to make, and I got a copy of _Bless the Weather_.
Such a system might also be used to fund records that haven’t even been made yet! For instance, GMT Games, a niche wargame developer out of California, uses a system called _Project 500_ to fund all of their games. They post an interesting wargame proposal from a non-mainstream topic (say, the 30 Years War) and open it up to pledges at a special reduced price. Once they get enough pledges to profitably produce the game (originally 500–hence the name) they charge the pledges to their customers’ credit cards and then produce the game, selling the finished product to non-pledgers at full price. Pledgers get a discount, and, most importantly, they get a product that might otherwise not get produced in a very risk-averse climate.
Artists could exact similar pledges from their fan base to produce records that their labels might not be too keen on. Want that long-awaited album of acoustic ballads from Iron Maiden? Pledge $20 on their site, and when the pledges are enough to finance it, enjoy your lovingly-crafted rendition of “Powerslave,” secure in the knowledge that you are not only a fan, you are a modern-day venture capitalist! You might even get your name on the liner notes, if those still exist.
I know this won’t work for every artist–you certainly couldn’t ransom Michael Jackson. Or maybe even Joe Jackson. But how about Millie Jackson? I’d “Free Millie” for 50 bucks or so, if only to put some of the finest album covers ever shot into the public domain. Now that…is sharing.

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