Tag Archive for 'p2pnet.net'

Welcome to the Age of the Free Album

Published
by
Mic Mell
on December 28, 2007
in Blog
. 3 Comments

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Spotted on: Techdirt

A new idea has surfaced in the music business this year: giving away tons of free CDs. First Prince did it through UK newspapers, causing quite a stir in the industry. Now Big Head Todd and the Monsters are giving away 500,000 copies of their new album to radio stations and fans, splitting the cost with radio to get the copies out there. The albums will be available as giveaways from radio stations, and on the band’s site. The album is available as a free download for fans, and according to the BHTM site, the physical album is “Available SOON from our merchandise store for just $5 or FREE with any merchandise purchase of $15 or more.”

At first glance this appears to be another groundbreaking model for the industry. BHTM used to be on a major label, and has the industry recognition and viability as a touring outfit (they are preparing for a 60 city US tour as we speak) that comes with major label artist development and promotion.

Looking closer, even at dirt cheap prices (including postage), the investment here would be a minimum of $200,000. Apparently, fans are jumping at the bit to get the free album, a testament to the credibility of BHTM. But what does this action say for the rest of us in the industry? Although not as widely recognized as Prince or Radiohead (and few artists are), BHTM has the credibility and resources to launch this kind of campaign. For the rest of us who have not had major label development, access to create a quarter million in investment, tons of willing radio contacts, and the ability to book a viable 60 date US tour, this tactic may not be fruitful in the short term.

Based on the flopping CD sales over the holiday season, CDs are set to lose major amounts of retail shelf space next year, except in major retail outlets like Wal-Mart and Target. Consider that without retail shelf space, physical distributors will rapidly become obsolete. These days, selling 100,000 copies of a CD gets you high up on the charts. Give the sorry state of CD sales, it appears that musicians will need to have some kind of sure money maker (like touring) to buffer this kind of massive promo giveaway, unless one is willing to invest tens of thousands of dollars and ’see what happens’.

So what about the horde of mid level musicians that don’t have the clout to give away half a million (or even ten thousand) CDs? It’s a brilliant marketing ploy, but without the ability to book a viable tour with sweet guarantees and juicy crowds or the guarantee of radio play it becomes a major loss leader in an industry that is rapidly losing revenue streams.

Giving away albums to generate buzz has become the modern equivalent of the single. Let the fans hear the music, and give them the opportunity to support the band live, or by buying merch or CDs. This tactic will drastically undercut the Big Four’s ability to set prices and control music distribution over 2008.

Bottom Line: It is beginning to appear that the only way to transform the music business is to devalue music and start again with a whole new model, where art is free and the money comes from something else.

Throttling Bit Torrent:

Published
by
Mic Mell
on November 28, 2007
in Blog
. 0 Comments

Spotted on: Half Life Source

Bit Torrent throttling is becoming a real issue. Although it has not yet seen much mainstream attention, controlling users access to internet bandwidth is a disturbing precedent to flow of free information. Seemingly an effort to control the illegal sharing of files, the impact of throttling can be far reaching.

Somewhere around a third of all web traffic is Bit Torrent File Sharing. Keep in mind that a significant amount of Bit Torrent traffic is legitimate, such as file backups for large companies, or as a tool for academic research. A neurocognitive scientist posted on the DSLReports forum how bandwidth throttling is hindering scientific research in a field where leading researchers live great distances from each other. In other words, limiting people’s ability to use their internet waves affects more than porn and Britney Spears.

People transferring large files across the internet can affect other uses online experience negatvely. However, if the uses are legal (and more and more users of Bit Torrent are using it for legal purposes), what legal right do ISPs have to limit our uses of their service? As Slashdot elegantly posed the question in February, “Do they want to irritate their BitTorrent-using contingent, or let BitTorrent flow unhindered at the risk degrading the experience of those who don’t download torrents?’”

Comcast, the # 2 internet provider in the United States, is being served a class action suit for limiting the bandwidth of Bit Torrent users. The suit alleges that it is a breach of contract for a user’s bandwidth to be limited. “The filing asserts that Hart upgraded his internet service to Comcast’s high-speed internet… package in September 2007 to gain faster speeds specifically for the blocked applications in question. In the subscriber agreement… none of the terms stated that Comcast would impede or limit the blocked applications.” (quoted from the Half Life Source article).

According to the The Consumerist, A recent internal ComCast memo gave call senter emplyees a strict script to deliver if customers had questions. Any employee who says anything not in the script would be subject to immediate termination. Adding oddness to the issue is a recent MSNBC article that shows tests confirm the throttling is happening.

Recently, a major Canadian ISP admitted they have been throttling Bit Torrent traffic for months, even going as far as to refuse service to users that consume large amount of bandwidth. An analysis on Bell Sympatico’s tactics can be seen on p2pnet.net.

The CEO of Bit Torrent, Ashwin Navin, said in an interview that throttling is “a symptom of a larger problem”.

Net Neutrality - Not just a fancy term

Network neutrality “…refers to a principle that is applied to residential broadband networks, and potentially to all networks. Precise definitions vary, but a broadband network free of restrictions on the kinds of equipment that may be attached and the modes of communication allowed…” (quoted from Wikipedia).

Simply put, once companies can set limits on our ability to use the internet, where will it stop? Once the door cracks open, how do we close it?

I can sympathize with broadband companies that are concerned with Bit Torrent users sucking up all their bandwidth. It can get quite expensive to have to conitnually upgrade internet servers to meet capacity. The same thing happens in grocery stores when they have to open another checkout line. In capitalism, we often refer to this as “the cost of doing business”.

Bottom Line: Bit Torrent is the biggest single use of internet traffic. ISPs can save lots of money by throttling our use of bandwidth, or charging us if we pass monthly limits. To do so based on what we are doing violates network neutrality, and sets a precedent for controlling the internet.

Album Sales: A Realistic Perspective

Published
by
Mic Mell
on October 15, 2007
in Blog
. 0 Comments

In getting a picture of what’s next for the music business, let’s take a moment to look at reality right now.  There are a few reports from mid-2007 that CD sales are way down (15% from the first half of last year), while digital sales are up over 48% (If you find any more recent industry sales reports, I invite you to post them as a comment to this post).

CD sales are dropping, set to be a small fraction of overall sales - and sooner, rather than later.  A recent survey of high school students showed that there is a downward trend in music downloading in that age group..  This is the next generation of music buyers.  Perhaps their actions are pointing to something.

The Freakonomics blog posted an editorial recently with analysis of the record industry by five people who ought to know.  Koleman Strumpf, an economics professor at the University of Kansas, had this to say:

“If file sharing hurts record sales, then albums that are more heavily downloaded should experience lower sales than comparable albums that are less downloaded. But, after controlling for the role of popularity, we found that downloads had little effect on album sales.”  He wrote a whole paper on the subject, if you want to find out more.

In other words, file sharing is not the source of the drop in album sales.  A powerful insight like this is the last word on file sharing for me (although not for the RIAA).

Audioholics.com posted a great editorial on whether CDs are approaching the event horizon of obsolescence.  They include a buffet of statistics showing that while physical sales are slumping, digital sales are growing with velocity.

As the digital music market overtakes physical sales, CDs will become less available (relegated to major chain stores like Wal-Mart).  We can see this shift with the demise of  Tower Records.  When people can get all the music they want without going to overpriced record stores, they will.  This trend has yet to infect mom and POP record stores, like Orlando’s own Park Avenue CDs, and since most of these stores are seen as boutiques rather than purveyors of the lastest industry tripe, most of them will likely survive (don’t forget that most small record shops deal with smaller and indie labels, and used CDs and vinyl).

People are still buying tons of music, and if digital music sales are any indication, music will continue to be a commodity.  Although most commentary is still focused on what major labels can do to revive sales, the real issue is becoming what can artists do to empower themselves in this new realm.

People are exposed to a larger variety of sounds than ever before.  Demand for music has skyrocketed, while profits are shrinking.   The idea that music has lost much of its monetary value in the current market is a two fold effect:  the novelty of file sharing and mega hard drives, and the price difference between a digital single or download and a CD.

We live in an era of convenience, and audiences consistently choose the format which is most user friendly (think audio tapes in the 80’s). The shift toward digital libraries has been predicted for years, and even with DRM, digital is already the industry standard.  I’m still surprised that such a well-known and predicted phenomenon can cause such panic among executives.  It’s almost as if upper management in the record industry has been ignoring the experts.

The quality of the music is a major factor in sales when people have access to massive catalogs, too.  Hip Hop is a great example of this trend.  Collapsing under the weight of violence and misogyny, some hip hop artist still enjoy huge mainstream and underground success.  And the cause of this slump seems to be the choices made my industry executives over the last ten years.

The reality is this:  The fate of major record labels has nothing to do with whether or not musicians will be able to create fulfilling careers.  Absolutely nothing.  With unlimited access, people aren’t compelled to buy any album unless they absolutely want it.

And in case you wanted to know the secret to success in the music business in any climate:
Make Great Music!

Media Defender Defenseless against 1337 h4X0r5

Published
by
Mic Mell
on September 24, 2007
in Blog
. 1 Comment

Spotted on: ArsTechnica

Before I break down the long and short of this issue, I want to bring your attention to something.

Companies like Media Defender are not protecting copyright and content interests. They are actually encouraging people not to buy content. The more intrusively and forcefully companies like Media Defender attempt to control our content consumption, the more the general public will revolt. If companies want to protect their revenue, the way is to embrace P2P culture, not to subvert it.

On to the details:

MediaDefender is in the business of protecting content from piiracy. Specifically, they seek
out and protect content on peer to peer networks. They use a variety or sneaky tactics, including decoy files, to catch people who are downloading music.

Here’s how they describe their services on their site: “MediaDefender uses a range of non-invasive technological countermeasures employed on P2P networks to frustrate users’ attempts to steal/trade copyrighted content…Decoying and Spoofing are the most commonly known techniques that we employ. We send blank files and data noise that look exactly like a real response to an initiated search requests for a particular title…”

Oddly enough, they also offer service to seed content onto peer to peer networks. From the Media Defender site: “Peer-to-Peer* Marketing is when we capture live search requests from your targeted demographic and respond with your clients’ files”

In other words, not only are they hunting down file sharers, they are using the data they obtain for marketing purposes. This would be like the TSA using travel information to provide us with travel discounts and promotions.
Recently, a huge amount of internal corporate documents were leaked to the public through (insert dramatic irony) Bit Torrent. The documents were obtained by a group called MediaDefender-Defenders

It appears that Media Defender has been running a secret site where uploaded files can be tracked - without any permission. I believe the legal term for this kinf od action is entrapment. I find it amusing that the same file sharing networks that are being manipulated by companies like Media Defender are being subverting for the uses of major media conglomerates by companies including Media Defender.

Even better, according to the documents, Major record companies and movie studios were paying Media Defender to protect their albums from file sharing (and for a hefty fee, too). As if it wasn;t sketchy enough, the documents show that Media Defender actively sought to divert P2P traffic to their own p2 website (the now defunct Miivi.com), so they could catch people in the act of downloading. This kind of action is similar to sending a drug dealer door to door, and then arresting people who buy something.

As if all of this isn’t embarassing enough for Media Defender, executives of the company insisted in July that “MediaDefender was working on an internal project that involved video and didn’t realize that people would be trying to go to it and so we didn’t password-protect the site” (source- ArsTechnica).
I can understand that compaines like Media Defender can make a great living out of protecting content. As a label owner, I can even understand the desire to want to sell units. However, Media Defender is denying they intentionally attempted to entrap users (can you say liar?) . And if that isn’t enough, they are using the same information to create marketing strategies.

In spite of the fact that people can get any media they want for free, records still sell. Album sales may be dropping like hailstones, but record sales continue to be a multi-billion dollar industry.

Consumers have the power now, and we get to say what has value, not corporations.