[Marxism] File Sharing

Jose G. Perez elgusanorojo at bellsouth.net
Mon May 31 05:40:05 MDT 2004

	I think file sharing is a much more interesting phenomenon than
Ben's "nifty" gives it credit for.

	More on that in a moment, first on the RIAA statistics.

	RIAA statistics are concocted among other reasons because record
company claimed shipments are concocted. That's why Soundscan exists. 

	An ex girlfriend lawyer that does divorces and the like in
California tells me that if there has been a major label audit by an
artist that showed the artist hadn't been short changed, it must've
happened before the invention of writing, because history does not
record it.

	So the decline in recorded music sales in the U.S. has been much
less than is claimed, and came from different causes than Napster and
its children. 

	One big cause was the death of the cassette format as a
"convenience" format. This was caused by a combination of old age, the
availability of CD burners, and the emergence of a new convenience
format, the MP3 file. And of course, the record companies chose to
deprive themselves of the income they could have had by selling disks
full of MP3 encoded music. 

	Another was the death of the CD single, and its replacement with
lame compilations like "now that's music!" (Can you hear the
50-something baby boomer executives congratulating themselves when they
came up with such a "cool" title?) CD singles made no economic sense to
the record industry, they cost just as much to produce and distribute
and market than a full album CD but you had to sell it much more
cheaply, at a much lower margin. So there are very few single releases

	A third is a decline in sales among teens. The record companies
after the mini-boom of Disney-originated toy boy bands and Lolita
singers in the late 90's couldn't come up with anything new that caught
the popular imagination. The record companies have no one but themselves
to blame for they stamped out what seemed to be rising as the hottest
idea in music since Brian Wilson crossed the Theremin with an electric
guitar, sampling. The costs and clearances became so outrageous as to
make it non-commercial, although it is still out there, witness the gray

	A fourth was the decline in the format change market. Everyone
who had wanted the white album on CD had gotten it by then. This was a
little bit ameliorated by repackaging (the Beatles One) and even
remixing (let it be ... naked). But there's diminishing returns, 

	And then there's the tiny little problem of value. I think DVD's
knifed the CD market. When you could get the full Evita movie for half
the price of just the sound track --and with the movie having a superior
audio format-- people knew you were getting screwed by the record
companies. Everyone knows the price of everything digital keeps going
down, CD's kept going up.

	What the record companies desperately need is a new *format.*
CD technology is digital, but barely. The sampling rate is too low. Two
channels may have been cool when Nat King Cole was around, but movies
have been multi-channel for decades. CD's are so old all the patents
have expired. It is mid 1970's tech, literally, before personal
computers had even been invented, and LONG before people figured out
what they were really for, which is downloading music and movies,

	The new formats exist, but the record and electronics companies
are having a brawl about who gets royalties for using what patents, so
there are competing formats in the marketplace, which means no one wants
to carry them or buy them. How quickly DVD's swept the market shows the
potential. And it would be a boon to DVD makers, as --done right-- it
would require at least a firmware update for players, which most people
wouldn't do and that would mean just a massive wave or replacement of
DVD players. 

	Meticulous studies have been done (especially by Jupiter Media
Metrix when Aram Sinnreich was still there) showing that, in fact, file
sharing was associated with increased spending on music generally. True,
some people bought less. But the number who bought more far outweighed
them. Recently, an extremely sophisticated statistical exercise was
carried out by some economists. One of the file sharing network's
technologies allowed them to track the volume of downloads for selected
artists and songs. They found that *at most* it took many hundreds of
downloads to replace one CD sale, and more likely, downloads had a
slightly positive effect.

	The RIAA's own surveys showed the same thing. How do I know?
Because they REFUSE TO RELEASE the full data from their own surveys. The
will take a figure like that 28% of downloaders say they buy less music,
but if you ask them what the OTHER 72% percent said, they refuse to

	Janis Ian (of Society's Child fame for those of us who were
around in 1966) did an experiment and found that by posting her songs in
MP3 format on her web site, her sales of CD's increased. Roger McGuinn
(of the Byrds) testified before Congress that Napster had led to a new
generation discovering their music and an increase in sales of their old
albums (there are no new albums, of course, they broke up long ago).

	Why would people PAY for something they can get for free? That
was the argument of the record companies trying to get royalties for
their music played on the radio (the fact that they were paying money
under the table to get their songs on the air squashed that one pretty
good). That was also the argument of Hollywood when they tried to get
VCR's declared illegal, and they came within a hair's breadth of
succeeding calling the infernal Japanese machines the "Jack the ripper"
of the movie industry.

	I don't know if Jack Valenti, who recently retired as chief
flack of the studios, and made the Jack the Ripper crack, has ever
recognized that by a mere one vote in the SONY betamax case, the Supreme
Court kept the movie industry from flushing down the toilet a huge new
market, the home video market. But it's the truth.

	The fact is people DO pay for stuff they can get for free. It's
called commodity fetishism. It is also true than an MP3 rip may be good
for casual listening, but it doesn't compare to what a 5.1 channel
remastering of Pet Sounds would be like -- or even the CD version.
However, most people aren't audiophiles and eventually MP3's and
successor formats will eat the CD market.

*  *  *
	On Napster, etc.

	What Napster showed is how rotten-ripe capitalism is for
replacement by socialism, from a technological point of view.

	I don't know if people have noticed, but the cost of
manufactured *things* and especially electronics has come crashing down
and the tendency for that is to continue and expand. Just about anything
you can think of that can be made can be made by robots, and can be made
better by incorporating the same kind of digital tech used in robots.
Couple megapixel imaging with gigahertz 64-bit processing and you will
see the typical results of Moore's law seeping into more and more

	In an ideal sort of way (abstracted from a number of
practicalities) the culmination of these tendencies is the replicator
from the Enterprise. You'll notice no one ever pays for anything in Star
Trek and there's a reason for that. That's the 23rd Century, and no
human labor is involved in creating useful things. A machine called the
replicator does that. The human labor time involved is the average time
it takes to say "Earl Grey Tea, Hot,"  or whatever else it is you want,
and that isn't labor that can be alienated. Thus freed from drudge and
toil, William Shatner was freed to go gallivanting around the galaxy
pretending he was an actor.

	(One unforeseen benefit of p2p is that Shatner's efforts as a
singer have now been immortalized and become accessible to all, showing
his skills as an actor extend to other fields.)

	Napster and its (purer, from an engineering design point of
view) successors are the first concrete manifestation of the replicator
in real life and how it works. Immediately the *options* multiply beyond
anything you could have imagined months before. On Napster and Kazaa,
I've found songs I grew up with in Cuba and left behind on the island in
1960. Everything you could possibly want by Silvio Rodríguez, the U.S.
blockade against Cuba and artistic genius notwithstanding. Despite the
RIAA's lawsuit campaign (3,000 and counting), file sharing is driving a
huge boom in broadband takeup by U.S. consumers (in part because no
company TODAY will allow you to download music, unlike a couple of years
ago, so people have to do it from home).

	Does this mean an end to capitalism in the music business?
Hardly. The Electronic Frontier Foundation and people like law professor
Lawrence Lessig have mooted several different models for putting
file-sharing on a firm, capitalist footing. 

	One is to make it a subscription service. You pay $50 a year,
someone keeps track (roughly) of what gets downloaded and the money is
divvied up on that basis. Another is an
advertising-and-commissions-on-sales variant on the same thing. My
favorite one is a small tax on internet connections that would go into a
royalty compensation fund. Capitalism is perfectly compatible with file
sharing. Thinking about it, it isn't really all that different from

	What IS incompatible with file sharing is the music monopoly
mafia. On various levels. 

	First, because if Congress were to say, ok, let's create the
internet download royalty fund, the first question that comes up is, who
does the money go to. Well, the "authors." In music, there are two
involved, the songwriter(s), and then the performers, the creators of
that particular sound recording of the composition. Now for half or more
of the recorded music out there, the record companies are supposedly the
rights holders of the performance. 

	Except that those contracts were signed decades and seven
mergers ago and no one is quite sure where they are, what they said, and
whether they were really valid contracts to begin with. 

	One example of this is the Kingsmen, who recorded Louie Louie.
They signed away their rights to the recording in exchange for a miserly
royalty. And they never received a cent in royalties. EVER. The band
broke up, it was a one-hit wonder and the recording was a local hit
which didn't mean anything. A larger label bought the recording and
issued it nationally and it became a big hit, but the kids who had done
it had gone on to other things. It was only many years later when it was
used in Animal House and became a hit again that one of the guys tracked
down the others and sued. Now here's the cute part.

	You know how taking music without paying for it is piracy? Well,
what about selling it without paying? By law, an artist can only recover
the last four years' worth of royalties. So the Kingsmen didn't ask for
royalties, they asked for the contract to be voided, which they got.

	By default, the owner of the copyright is the featured
performer. If the label on the record says Let It Be by the Beatles,
then the presumption is the Beatles own the copyright to that recording,
no matter that they were outnumbered 25-1 by the orchestra (the
copyright to the composition is different, but that is handled
automatically: there is a set fee, so many cents, that goes to the
composer, distributed through ASCAP or some other similar outfit).

	The problem (for the record companies) is that they would need
to *prove* ownership of the rights to get money from the fund. Right
now, the money is in their hand and they just pay themselves. Unless so
much money is involved that only four years worth of rights make it
worthwhile to hire lawyers, auditors, and so on and sue them, as a
practical matter there is nothing the artist can do.

	And Congress may well decide, as a matter of public policy, that
old contracts just don't cover the internet rights, those could not be
sold back in 1966 because they did not yet exist, therefore they belong
to the recording artist. 

	But this is the smaller problem for the recording industry. As
file format improve, and computer audio reproduction improves, and
hybrid devices that are in reality computers but function as hi fi
components proliferate, and bandwidth improves, so that more and more
people opt to get their music p2p, what is there left for a capitalist
recording label to do? AS publishers, they have control because they
control production and distribution. They get a master from the artist,
press copies, send them out.

	But if making copies and distributing them becomes the same
thing over p2p file sharing networks, then they have no way of
maintaining their monopoly control. All the other "services" they claim
to provide artists, like promotion, hooking them up with producers,
finding songs, and so on, could easily be contracted from specialty
boutiques or one stop shops, but could no longer be *imposed*.

	There are also subtler things about p2p networks and their
technology that right now are being disrupted by the legal offensive
against them, but that I think are likely to re-emerge as possibly the
pre-eminent aspect of them once the RIAA deadwood gets taken out with
the trash. And that is the idea that music wants to be free, free not
just from the commodity form, but free also to hang out with similar
music, expressing really the affinities of the people who like that kind
of music. 

	The social/community aspect of this is as yet very
underdeveloped, but I believe it is one of the main ways new music comes
your way on a p2p network. For example, seeing what other files someone
who has an artist you really like that you are downloading  has. Or
simply hearing a band mentioned, finding it on the network, and begin
downloading it only to discover via a message that you're downloading
from one of the band members. Or message boards for people who like a
given type of music, or a given band, and the virtual community that
gets built around that (not different at all from this one, in

	So the idea that its just an individual "consumer" sitting in
their bedroom downloading, which was projected here, I think that's
wrong. What atomizes people into individual consumers is more the store
model, which is vertical one store to many buyers. The horizontal
structure of p2p inherently tends to favor social interaction and
development of communities. You see that all over the internet in all
sorts of ways, and you see it here, also, and will do much more clearly
once it gets legalized, which I believe is inevitable.

*  *  *
	I've spoken here of music and the p2p network form of
distribution but this is goes beyond Kazaa or the gnutelliums or mules,
donkeys and assorted other flora or fauna. One vehicle for distributing
copyrighted content, for example, are the newsgroup feeds and servers.
Another are instant messenger clients, which have incorporated
file-sharing capabilities. Another are http and ftp servers (now moving
to odd ports or requiring the user to know some tricky way to access the
content, like specifying a "hidden" subdirectory. This isn't just about
music, and it isn't going away.





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