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Copyright and confirmation bias
Old 11th November 2009
  #1
Copyright and confirmation bias

Confirmation bias is a tendency to search for, interpret or remember information in a way that confirms preconceptions or working hypotheses.

Don Dodge (former VP of product development at Napster) estimates, based on internal Napster research, that Napster could have generated $3 billion per year for the industry, with minimal overhead. ... In the case of Napster, the copyright monopoly seems to have delayed the innovation we now call iTunes by a good part of a decade, and diddled musicians out of billions of dollars in the process, but copyright ideologues will not hear of it.

You can read the full article if you wish. It's a response/retrospective about the original Napster article.
Old 12th November 2009
  #2
Quote:
Originally Posted by Clueless View Post
Don Dodge (former VP of product development at Napster) estimates, based on internal Napster research, that Napster could have generated $3 billion per year for the industry, with minimal overhead. ...
I'd like to see that report and the assumptions it makes...

Considering Don is a former VP at the company, and Itunes now rules the world - some revisionist history might just make the best resume'...
Old 12th November 2009
  #3
Quote:
Originally Posted by redvelvetstudios View Post
I'd like to see that report and the assumptions it makes...

Considering Don is a former VP at the company, and Itunes now rules the world - some revisionist history might just make the best resume'...
Well he cites a paper that was published in 2005, well before iTunes had achieved its dominance. I linked to it from my posting, but here it is again.
Old 12th November 2009
  #4
the paper isn't there - just him talking about it - or is there another link?

where's the cost analysis that calculates 3 billion a year?

[EDIT]

ok - here it is...

The goal at Napster was to be the online distribution channel for the record labels, much like iTunes and the *new* Napster is today.

There were several offers made to the labels that would have given them the vast majority of all of the revenue. The numbers were staggering.

We had over 50 million users, many of whom were willing to pay $5 per month or $1 per download for digital music.

That translates to about $250M a month or $3B per year.

Even if Napster kept just 10% of the revenue that would be $300M per year against expenses of less than $10M.

At the stock market multiples of the day that would have been a $15B IPO.

###

$5 per month or $1 per download... hmmm... which would you choose? and how many of those 50m really would just not ever pay anything and move onto another service... I appreciate what he's saying, but it's still all revisionist.
Old 12th November 2009
  #5
Quote:
Originally Posted by redvelvetstudios View Post
$5 per month or $1 per download... hmmm... which would you choose? and how many of those 50m really would just not ever pay anything and move onto another service... I appreciate what he's saying, but it's still all revisionist.
I think I see the disconnect between our interpretations. To me, the fact that these statements were made in 2005 makes them much less revisionistic than if they had come out in 2009. I agree with you that since the whole Napster story went nuclear in 2000-2001, anything written in 2005 has a taint of revisionism.

On the other hand, Napster had "discovered" by practice the extraordinary demand that people had to access catalogs song-by-song instead of album-by-album. As to the pricing model, I can tell you from past experience living in Silicon Valley that there is *no way* that Napster could have had 50M users without dozens of VCs telling them "you can charge $1 per song and make $BILLIONS". In 2000, when Napster was at its peak, every discussion in the valley was trying to find ways to get just $1 for some thing that had a billion units. That was, by definition, "the next big thing." The fact that the RIAA sued Napster for $20B tells you just what the estimates of its value were, and Napster was saying "look, people don't want to buy a $17 CD, they want to buy 2-3 songs". $20B is more than 1B CDs, and 2-3 songs gets you the multibillion dollar payback that all the VCs and entrepreneurs were chasing.

Apple walked into the vacuum created by Napster with a $1 pricing model, and the rest is history. But when this article was written in late 2005, Apple was somewhere between selling 500M and 850M songs through their store (see iTunes Store - Wikipedia, the free encyclopedia). Napster was serving 3x that volume 5 years prior. Today, Apple has now sold 8.5B songs though the iTunes store; nobody is a close second.

And the other point is that Napster basically offered the industry a sweetheart deal--that they could earn most of the revenue. After Napster crashed, and the music industry crashed, Steve Jobs cleverly copied the model, negotiated far better than Napster ever did, and got a much higher percentage than Napster ever dreamed of, for a song. And so instead of the industry having more revenues, profits, and control, now Apple has it all, and a $200 stock price. And the industry is in no position whatsoever to take that back from Apple. They had their chance, and they preferred to litigate rather than innovate. Now they have been innovated into oblivion.

Given the facts of what happened, and knowledge of the climate, whatever revisionism may be in this 2005 article, it's at the margins, not the core.
Old 12th November 2009
  #6
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I wonder if something similar to the spotify model could have worked:

An amount per user is paid to the site. This could come through ads, a subscription, or a combination. Let's say 10 bucks per person, 2 bucks for company overhead, and 8 dollars for royalties.

If I downloaded nothing but the Beatles, my 8 dollars for that month would go to them. If half my downloads were Beatles and the other half Rolling Stones, 4 dollars would go to each.

I know the Beatles would rather I pay a dollar a song, but we may need to get to a point where the labels agree that it's better to have a part of something than all of nothing.
Old 12th November 2009
  #7
Quote:
Originally Posted by lagavulin16 View Post
I wonder if something similar to the spotify model could have worked:

An amount per user is paid to the site. This could come through ads, a subscription, or a combination. Let's say 10 bucks per person, 2 bucks for company overhead, and 8 dollars for royalties.

If I downloaded nothing but the Beatles, my 8 dollars for that month would go to them. If half my downloads were Beatles and the other half Rolling Stones, 4 dollars would go to each.

I know the Beatles would rather I pay a dollar a song, but we may need to get to a point where the labels agree that it's better to have a part of something than all of nothing.
all of these conversations are secondary to restoring copyright protection - which thank God is being addressed at the highest levels of government, globally.

Of course the "I want it for free" crowd and doom room philosophers will be up in arms that the party is over, and the teleco's, ISPs, and huge websites will also flipout... but hey... the free ride of building your business from our labor and IP is coming to end...

yeah... that sucks for you... put yourself in our shoes.

imagine having the labor of your livelihood be stolen for a decade...

buckle up... people who built business off the free stolen goods of the entertainment industry are on notice...

as a society, we will either respect copyright and intellectual property or we won't... it looks like in the end we will.

Anti-Counterfeiting Trade Agreement
Anti-Counterfeiting Trade Agreement - Wikipedia, the free encyclopedia

Anti-Counterfeiting Trade Agreement (ACTA) | Office of the United States Trade Representative
Old 12th November 2009
  #8
Quote:
Originally Posted by redvelvetstudios View Post
all of these conversations are secondary to restoring copyright protection - which thank God is being addressed at the highest levels of government, globally.
Actually, no: in this thread the primary conversation is that some people will only engage in conversations that reinforce their view that we should have copyright uber alles, and that a consequence of that narrow perspective is confirmation bias. When such bias is introduced to uncurious legislators, it leads to proposals to upset the very balance that the original basis of copyright stood to establish, as if the government should encourage private ownership of ideas and expressions in contradiction to the interests of the general public.

The point of this thread is not to try to figure out how to make a given business model work in the 21st century, but to point out how potentially workable business models were derailed by the level of confirmation bias present in the copyright discussion.
Old 12th November 2009
  #9
Quote:
Originally Posted by Clueless View Post
The point of this thread is not to try to figure out how to make a given business model work in the 21st century,
it is for me!

Quote:
Originally Posted by Clueless View Post
but to point out how potentially workable business models were derailed by the level of confirmation bias present in the copyright discussion.
it's all speculation isn't it? we're both talking about business models - either revisionist or futurist.

a "workable" business model is one that creates a sustainable business model through the protection of copyrights. otherwise - there is no model, it's all just a free for all.

either there are laws/regulations are there are not - I can't see world without rules.

regulations allow capitalism to work by leveling the playing field.

an unfair advantage is getting something for nothing, and repackaging it as a premium to sell with a derivative service - ISP, Music Site, whatever...
Old 12th November 2009
  #10
Quote:
Originally Posted by Clueless View Post

The point of this thread is not to try to figure out how to make a given business model work in the 21st century, but to point out how potentially workable business models were derailed by the level of confirmation bias present in the copyright discussion.
Quote:
Originally Posted by redvelvetstudios View Post
it is for me!



it's all speculation isn't it? we're both talking about business models - either revisionist or futurist.

a "workable" business model is one that creates a sustainable business model through the protection of copyrights. otherwise - there is no model, it's all just a free for all.
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