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This week, the French government decided to adopt a”three strikes” policy against illegal file sharers on the  Internet. Effectively, it means that if you are caught illegally sharing music, you risk a large fine and a one year Internet ban. The law is soon to be adopted in UK, and there are signs that other European countries will follow with similar laws of their own.

On one hand, government action seems reasonable. Musicians and music companies spend significant time and energy creating and promoting new music. It seems unfair that, after all this hard work, the product of their efforts is subject to a free-for-all with no obvious flow of money back to the producers. There is a parallel here with common theft.  Arguments such as “the record companies make enough money, so a free copy of my own won’t make a difference” are equally applicable in the case of shoplifting, for instance.

On the other hand the Internet is totally unsuitable for a pay-per-copy model. It’s impossible to police without draconian measures that have impacts way beyond the stated intent of preventing piracy. From the viewpoint of the file sharers, it costs the music companies nothing to distribute their songs and the products are infinitely available, so the whole meaning of theft needs to be re-assessed in this new digital environment. There is also the argument that copyright restrictions greatly limit creativity in the digital realm, although this issue applies to many physical products also.

Personally, I don’t file share. I’m happy enough to get what music I want through iTunes without resorting to BitTorrent or Limewire. Call me a traditionalist, but the idea of having thousands of illegally obtained video and music titles clogging up my hard disk space is somewhat distasteful. If I like a piece of music, I’ll buy it, and I don’t have a problem with that.  However I can also understand the argument that, with the Internet, the world has changed. I think the idea of limitations being placed on personal usage of digital products (i.e. Digital Rights Management, or DRM) repulsive. I think there are serious issues with governments and private firms monitoring our Internet usage. I’m inclined to agree that a radical re-assessment of the whole business is necessary.

With the Internet, we seem to be moving into a world of openness, rather than protection. Openness implies sharing, collaboration, continuous improvement and mass-participation. Although it’s obvious that many traditional businesses are suffering in these circumstances, it’s not obvious to me why there would be a whole-scale business implosion over time. Indeed the Internet might well create new ways of generating wealth, through, for instance, extension of brand image and mind-share leading to greater demand for performances, merchandise and premium downloads.  The examples of Radiohead and Trent Reznor certainly point to some interesting ideas in this area.

I’m interested in your thoughts on this. Is file-sharing just a polite word for stealing or is it symptomatic of a changing world order? What are your thoughts about file-sharing and why you think it’s good or bad?

This is the third entry in my 2019 Time Capsule series, where I discuss questions that may well have answers within the next decade. Today I take a brief look at technology. 

The Internet Copyright Wars

Internet mapWe are currently living through a period of time when many big industries are under threat. The industries in question are publishing, music recording, telephony and movie-making, and the threat is the Internet. For the first time in history, the expression of human thought in pictures, words and sound can be sent around the world in the blink of an eye, and for free. It is the ultimate vision of Gutenberg, and the vested interests who wish to make scarce this infinitely available commodity are fighting a losing battle, mainly resorting to courts and politicians. But like Gutenberg, such wars cannot last forever and the world will some day settle into a new economic relationship with the Internet. What will it look like? How will we enjoy music and art and films 10 or 20 years from now? Will the battles continue to rage in the courts or will relatively new players such as Google eventually render the incumbents powerless? What will the business models look like? What scarcities will these businesses exploit? Who will be the winners? 

The Human / Computer Interface

HALI have a feeling that the next decade will be a time of big changes in how we interact with computers. For years we have communicated mainly through the use of keyboards, and although I don’t see them disappearing anytime soon, I suspect that very different forms of computer interaction are going rising to prominence. Take Multitouch for instance: the technology popularised by the movie “Minority Report“. The iPhone has given us an example of how natural and engaging this technology is – a small child can understand it intuitively. Another technology that seems to be whispering it’s way towards us is Recognition. Voice Recognition – the ability of a compute to recognise and respond correctly to voice commands – is probably the best known. It’s been around for a while and results can still be somewhat patchy. But it’s improving and other forms of recognition are also appearing: face recognition (e.g. iPhoto) and music recognition (e.g. Shazam). Given that, I don’t see why we would not be communicating in very different ways with computers in just ten years time. 

Stem Cell Research

Stem cellsWe are being told that we are on the brink of a revolution in medical care. Diseased and damaged organs can be replaced, not via anonymous donors, but grown instead from cells found in the patient’s own body. These miracle cells are known as stem-cells: generalist cells that can be conditioned to transform into specialised cells: heart muscle, kidneys, skin – anything you like. From there they can be grown in laboratories into complete organs – thus allowing people to gain to have transplants with no concerns about rejection. I have already seen footage showing replacement teeth and bladders being developed. It is possible that this breakthrough will transform medicine in the next ten years. It will be interesting to see to what extent it will have developed.

Up next: Global Threats.

 

Digital products

 

This weekend I will be taking a trip up to Dublin to accept an award for my master’s thesis. I’m looking forward to it, but it strikes me that I have never mentioned much about it in this blog. So here’s the basic idea. 

We live in a world of physical supply chains. If you want a product, a whole load of people are involved in making sure that it is available when you come in to a shop to get it. Some months or even years ago, people had to mine or harvest all the components or ingredients. Other people worked in factories to refine it, mill it or make it. Yet more people drove the stuff around to different locations. Presumably there was a place where final assembly was required. Then the products were stored in warehouses and finally distributors and retailers got involved to that it could be bought by you.  Lots of people. Lots of complexity. Lots of cost. Lots of things that could possibly go wrong. 

But some products – digital products – don’t seem to require this complexity. They have these unique, almost magical qualities that physical products don’t have. They can replicate themselves perfectly and with ease (i.e. copy / paste). The production of an additional copies does not require any new materials – there’s no resource drag. Digital products move around the internet for free and at high speed. This means that in the world of digital products there is no need for purchasing, manufacturing, transportation, assembly or any of the other related functions needed to support physical products. 

There are a number of different approaches to manage digital supply chains. First of all, there is the “pseudo physical” approach where people treat digital products as if they were physical. They limit distribution through DRM or copy-protection. They apply restrictive licensing. They threaten dire consequences against incorrect usage. They run complex processes to distribute keys to authorised individuals. It’s complex and messy. Customers get frustrated by them. Lawyers love them and given the recent history of the music business, this strategy is being forced into a long, painful retreat as file-sharing and peer-to-peer networking becomes more commonplace. 

The opposite side of the argument is super-abundance: a digital product, by its nature, cannot be controlled. Once it’s out there, it’s wild – downloadable by anyone. What I discovered was that companies are adapting to this. They still make money by wrapping their digital products into physical supply chains; by customising them so that they can’t easily be used by other people even if they were free to download; by using them to complement other (paid) services; and by using advertising based models. 

Digital products represent a big opportunity for companies, because all the infrastructure necessary to duplicate and distribute them is increasingly tending towards zero. The downside is that the price of digital products is also being forced towards zero, so sellers of digital products need to radically rethink how they organise their supply chains if they want to make money for themselves. 

And that, in a nutshell, is my thesis. Clear as mud?

Charlie McCreevy

Our recently departed* finance Minister is causing a stir in Brussels by wishing to change the definition of copyright from an economic incentive into a welfare system for musicians. Techdirt doesn’t pull any punches, calling it “a total and complete bastardization of copyright law”. (There are echoes of the Spatial Strategy and Decentralisation here, methinks).

In addition, he supports the implementation of a levy on various recording devices, so that you pay for piracy even if you don’t pirate! Nice..

Copyright is where all the battles seem to be these days, with insufficient people looking at alternative ways of earning money in the Internet era, where copying is what makes the Internet so powerful in the first place.

* to Brussels, that is. Same thing, usually.

I had a very good night last night. Leslie Dowdall and Mike Hanrahan, two of Ireland’s best singer/songwriters and formerly of In Tua Nua and Stockton’s Wing, were playing a gig in McDaid’s Pub in Midleton. It was a great gig – a real feast of music! There were about 30 people present, so it was cosy, relaxed and intimate. Boy, does Leslie know how to sing! It was captivating stuff. I was not familiar with many of the songs, but “Wonderful Thing” and “Beautiful Affair” brought back good memories. They also played a few Annie Lennox and Nick Cave songs along with their own work such as the very touching “Garden of Roses”.

Nights like these, when you don’t really know what to expect, are often the best.

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