Comments for Business models for digital goods in the face of the ‘culture of free’? Florescu Ana-Maria 21 February 2018 Napster is a file-sharing peer-to-peer (p2p) network created by Sean Fanning and has been in operation since June 1999. Fanning wanted to find an easier way to share music in MP3 format. The result was a system whose popularity generated a huge selection of music for download. Although the music industry has proclaimed the exchange of music through p2p networks…Read moreNapster is a file-sharing peer-to-peer (p2p) network created by Sean Fanning and has been in operation since June 1999. Fanning wanted to find an easier way to share music in MP3 format. The result was a system whose popularity generated a huge selection of music for download. Although the music industry has proclaimed the exchange of music through p2p networks by theft, many Napster’s users have considered such downloads justified for many reasons. Many believed that by the mid-90s, the quality of new albums had dropped to a level where a typical album contained only one or two good songs and a “musical filler” – dummy songs. So they were grateful to Napster for the opportunity to download several songs without having to pay for the whole album. Also Napster provided an excellent opportunity for music lovers to exchange songs that are difficult to find – old records and songs from concerts, bootlegs. It was one of the first digital platform, where people could listen, download and exchange music files for free. The development of technologies made the process of copying materials such as music, films, software, games, videos accessible to almost any user. It is difficult to find a company working in the field of digital goods, which would not suffer from pirates. The degree of development of piracy in a particular country depends directly on how well developed its economy is. The higher the average salary in the country is, the higher the level of “information culture” is and the lower the percentage of the market belongs to pirate companies. Why do people “steal” digital goods (whether it’s music, movies, games)? Why it is easier for us to “steal than buy”? Macro-causes: • Imperfection of the regulatory framework. In many cases, users are not convicted of a crime. • The general interest in the existence of a pirate segment of some well-organized financial groups. • Mental beliefs. A lot of people do not see anything shameful in not buying, but simply downloading. Micro-causes: • Inconvenience of payment procedures. • Easier access to pirated copies than legal content (more search results, the ability to speed up and simplify the procedure for obtaining content). • Absence of a visual and functional difference between licensed and pirated content. • Unfair pricing. The creation of Creative Commons Licenses was a response to some causes and problems. The number of Creative Commons-licensed works is increasing every day. It is very popular among YouTube creators. Creative Commons licenses give everyone – from individual authors to huge companies and institutions – a simple, standardized way that an author can allow to use his creative work (within copyright). It is a non-profit organization founded in 2001 in the USA. The company’s mission is to increase the number of author’s works open for legal use and distribution. Thanks to the free licenses developed by the organization, the author can independently decide what rights he wants to transfer to other people who wish to use his work. Free licenses are in a certain aspect the opposite of ordinary copyright, undermining its monopolistic basis. Among the ways in which a monopoly can harm society and the economy: inflated prices, understated quality of goods and services, corruption to maintain monopoly and inhibition of technological progress. It is important to understand the relationship between monopolies and technological progress, since, on the one hand, monopolies affect the development and use of new technologies, and on the other hand, the technologies themselves play a significant role in economic growth and prosperity. If there is CopyRight, then there must be a CopyLeft. Supporters of the copyleft movement believe that no one can restrict a person the right to use, modify and distribute the original work and other materials derived from it. Instead of the categorical formulation of copyright “all rights reserved,” the creators of the concept of the copyleft offer authors a softer – “some rights are reserved.” Are business models based on Creative Commons Licenses profitable? Who will pay artists? “How artists will make money?” Is the most frequent question that we hear during the debates about the copyright reform for the legalization of file sharing. Ten years ago this question was very difficult to answer, and few could say with certainty whether the “cultural” sector would be financially viable in the new era. But today we have more than ten years of experience in the world, in which everyone can download for free whatever they want, and in which a large part of the population regularly does it. Now we know that the cultural sphere remains economically viable, despite the unrestrained p2p file sharing. It is found, that over the decade, during which file sharing increased exponentially, incomes for the cultural sphere as a whole, and for every single segment of it, for example, movies, music or computer games, grew year after year. The greatest changes are observed in the music industry. In the 21st century, sales of audio records plummeted. But at the same time the music industry has never been healthier than now. A detailed article published in October 2010 in The Economist says that it’s amazing how many artists and music companies have opportunities to make money today. The music business does not die, but undergoes deep restructuring. The longest and most stunning boom is in a live performance. Between 1999 and 2009, concert tickets sales in America tripled, jumping from $ 1.5 to $ 4.6 billion. Growing incomes from live performances, attribute trade, sponsorship, printing, streaming and new music markets balanced the losses from a decline in sales of CDs. If we look at the statistics, we will see that the same amount of money comes to the culture sector as ten years ago (and even more, due to the growth of the overall standard of living). People spend on culture as much as they always do. Music fans continue to spend money, but as they spend less on records and discs, they spend more on live concerts. This is bad news for recording companies, but great news for artists whose piece of cake has become bigger. The cultural sector has more money than ever, but sometimes in a roundabout way. File sharing is not a problem that needs to be solved. It is profitable for artists, consumers, and society as a whole. What now needs to be done is to bring legislation on copyright into line with the new positive reality. The fight against piracy is one of the most important vector for the development of the digital goods market. After all, the state and even the existence of this market largely depends on how effective the protection of copyrights of film, software, games and music will be. And although in the last few years there have been positive trends in the world considering the fight against piracy, we can only hope that such dynamics will become stable, and the number of countries in which it is accepted to buy only licensed products will continue to grow. Sources: https://www.nytimes.com/2014/12/08/technology/grappling-with-the-culture-of-free-in-napsters-aftermath.html https://en.wikipedia.org/wiki/Napster https://creativecommons.org/licenses/ https://www.gnu.org/gwm/libredocxml/x53.html https://legalvision.com.au/whats-the-difference-between-copyright-and-copyleft/ https://wiki.creativecommons.org/images/f/f7/BusinessModelsforCreativeWorks.pdf http://www.economist.com/node/17199460 Show less Reply Paul Belleflamme 23 February 2018 Well-thought and well-documented comment. Thanks! Florent RUGI 21 February 2017 In a world where music distribution has become faster and faster, and more free than ever, what creative innovations related to music have found their place and succeed, in a middle of a battle where benefits increasing only policies from labels from one side and listening more music for free from users from the other side seemed like a never-ending…Read moreIn a world where music distribution has become faster and faster, and more free than ever, what creative innovations related to music have found their place and succeed, in a middle of a battle where benefits increasing only policies from labels from one side and listening more music for free from users from the other side seemed like a never-ending fight? First of all, we have the online streaming platforms (such as Spotify, soundcloud, deezer …) where we have 2 different models : one which allows user to pay for getting some musics (soundcloud, Beatport, Apple Music), it’s a bit like music on demand (which looks like for some platforms a lot to video on demand platforms) and the other which puts ads in the middle of the listening (one ad every four music listened for instance). This system is benefit for two kind of artists : the one who is well known because he can get good incomes through this and his label also, and for the unknown one as well, because it can be a way of sharing his music for free, and, eventually, getting income too if a lot of people listen to it. But, as music creation never get to this level (no need of reviews for this, just go on a website like Soundcloud and you’ll get how many original songs are uploaded every day), how copyright’s infringements are avoided? Because, it is a reality, the more music is created, the more likely you risk to infringe some copyrights. The term of “original song” tend to change his meaning nowadays with the development of electronic music. Nowadays, especially in subgenres like techno, house music and some EDMs, sampling isn’t only a way of making music, it’s a prerequisite. When you start creating electronic music, you need a computer, a software and a sound bank. Almost all of producers’ sound banks come from the internet, where you can download or upload yours (and if you have the rights, try to sell it). That’s one reason among many others why sampling in electronic music isn’t seem as a copyright infringement. But, there are a lot of contentions anyway. That’s why sites like soundcloud, the number one site for techno producers (new ones or famous ones), has decided to include the creative commons inside his uploading system. When you upload a song on their platforms, at the end, you can choose either if you want a standard copyright licence (all rights reserved) or a creative commons licence (and you can choose which one you want or don’t want), I know it because I used to do this. Platforms, by using copyright (or copyleft) tools such as creative commons, can make a good arbitration between trying to stay profitable on one hand, and let the culture of free (like we saw it in electronic music producing) keep developing itself. Independent artists (no labels ones) are willing to use creative commons in order to impede creativity (even if it’s not 100% original) and labels are willing too (more and more but not every label) in a way that it doesn’t affect their benefits. The drawback is that, in techno music, we don’t observe a lot of originality, novelty in music creation from the last 10 years, as in the same time we never saw this amount of new music created everyday. If I’m sure that copyleft impede creations (and creativity), I’m not sure it’s impeding originality, and, it will be apply one day in economic tools like patents for example. http://www.thedrum.com/news/2017/02/15/measuring-sound-how-data-and-streaming-impacting-the-music-industry http://www.lesinrocks.com/2016/06/18/musique/sample-collage-underground-a-pratique-institutionnalisee-11846770/ https://www.varsity.co.uk/science/11929 Show less Reply Música libre – MEDIONEGRO 18 February 2017 […] Business models for digital goods in the face of the ‘culture of free’? […] Reply Clemens Schreiber 21 December 2016 According to the Entertainment Retailers Association in the UK, the amount of money that is spend on vinyl (£2.5m) in the UK overtook the amount that is spend on music downloads (£2.1m) in December this year (1). This is in fact a reasonable development that fits into the framework of increasing Creative Commons-licensed work and low royalty payments for music consumption…Read moreAccording to the Entertainment Retailers Association in the UK, the amount of money that is spend on vinyl (£2.5m) in the UK overtook the amount that is spend on music downloads (£2.1m) in December this year (1). This is in fact a reasonable development that fits into the framework of increasing Creative Commons-licensed work and low royalty payments for music consumption (as a consequence of an increased use of streaming platforms and illegal music sharing platforms as described in the video). Creative commons licenses help the artists to increase their popularity and give them the chance to sell premium versions of their productions. According to The Guardian the demand for vinyl has steadily increased in the UK (2). It is also interesting that a lot of the vinyl buyers don’t actually use the vinyl to listen to the songs. It is questionable if this trend is only a kind of temporary fashion. But I think that it somehow shows that people are still willing to pay for the work of an artist if they feel attached to his or her music. If artists find new ways to monetize on their art, creative commons-licensed work could be a useful fundament. (1) https://www.theguardian.com/music/2016/dec/06/tables-turned-as-vinyl-records-outsell-digital-in-uk-for-first-time (2) https://www.theguardian.com/music/2016/aug/12/vinyl-destination-who-is-actually-buying-records Show less Reply Bozhichkov Ruslan 21 December 2016 Digitization has changed the way of doing business in the music industry as seen in the video. Napster with its sharing peer-to-peer system has shifted the traditional distribution of tunes to music consummers and this had some negative effects for artists and the music industry compagnies. The technology is changing and traditional music industries have to change their business models…Read moreDigitization has changed the way of doing business in the music industry as seen in the video. Napster with its sharing peer-to-peer system has shifted the traditional distribution of tunes to music consummers and this had some negative effects for artists and the music industry compagnies. The technology is changing and traditional music industries have to change their business models to adapt to those changes. The problem with this transformation of the market is to find a way to capture some of the consummer surplus that piracy has taken from producers. The same issue goes for the movie industry. Nowadays people can download recent movies or series for free from different internet platforms. This may hurt movie producers because people may not go to theatre but rather stay home, download and thus save money to the detriment of movie maker’s profits. In the long term this may discourage artists endeavours for making news works. But this situation must be seen as motif for searching new opportunities rather than abondon efforts. Solutions exist such as the fan-funding platform Kickstarter or other ways of support by people how appreciate one given artist. Because of the emotional effect that a given production of a movie maker has on the consumer and the experience the same consummer gets from it, value is created and people who percieve it would be willing to pay for it. As for the television industry the traditional way of broadcasting movies and series faces new clients behavior where people want fast, cheaper and quick access to them. Declining revenus for tv channels from advertising can be compensated by offering to consumer the possibility to “watch streaming video of television shows and movies for free” at any other timeframe after the “episode has aired on live television” and by this generating aditionnal advertising revenus. By this mean the television industry won’t lose much from the digitization but quite the reverse it can take advantages from this new source of distribution for their products. https://www.techdirt.com/articles/20101220/00032812332/piracy-isnt-problem-bad-business-model-is-problem.shtml Sean Jungels, PIRACY AND THE MOVIE INDUSTRY: CHANGE YOUR BUSINESS MODEL NOW OR END UP LIKE THE MUSIC INDUSTRY Show less Reply Virgile Pypaert 21 December 2016 Creative Commons are a good way to facilitate the free (but restricted) distribution of certain types of contents while at the same time providing some (optional) protection for the intellectual property . Indeed, we can see on the second chart that more than a third (34%) of the works are released under a non-commercial licence (NC) leaving the monopoly to…Read moreCreative Commons are a good way to facilitate the free (but restricted) distribution of certain types of contents while at the same time providing some (optional) protection for the intellectual property . Indeed, we can see on the second chart that more than a third (34%) of the works are released under a non-commercial licence (NC) leaving the monopoly to the author to monetize their work . Creative Commons should be seen as a way of accessing new people and opening new doors through licences facilitating the diffusion but not as a substitute for legal enforcement. Indeed, CC licences must be used as frameworks providing different possibilities to release the rights of a piece of work as it does not offer any form of automatic protection if someone else decides to override the licence (you still need to go to a court of law to defend your rights) . Another issue is the non-retractability of the licence, after defining it and broadcasting the content, it cannot be changed afterwards to make it more restrictive. I do not believe that the media industry would be able to break-even when we look at today’s way of consuming media. Indeed, with such an abundance of produced content, we do not tend to re-play or re-read the same content multiple times (exc. music): we are more in a Download/Watch/Delete scheme. When we look at the music industry for instance, the new business model shifted from records as the main source of income to focus on non-substitutable goods (derived products and live performances f.i.) . Switching to `freemium’ solutions, such as Spotify, does not seem to be viable at the moment for the artists with the relatively low percentage of paying users even though it represents around $1 billion for the US alone . Behind the large increase of Creative Commons-licenced artworks, a major player is the Wikimedia Foundation (Wikipedia’s owner) who gave a large impetus by promoting CC-BY-SA (Attribution/Share Alike) as the default licence for all the artwork uploaded by their users . The cultural ambience behind the Foundation is prone to similar values. References  http://www.pcworld.com/article/255602/how_to_protect_your_artistic_works_with_a_creative_commons_license.html  https://stateof.creativecommons.org/2015/  https://creativecommons.org/faq/  http://www.rollingstone.com/music/lists/9-ways-musicians-actually-make-money-today-20120828/talk-show-band-19691231  https://www.ft.com/content/5645cf6c-ce73-11e4-900c-00144feab7de  https://meta.wikimedia.org/wiki/Terms_of_use/Creative_Commons_4.0 Show less Reply Kombo Prince Bontala 21 December 2016 This video tackles the main challenge of the music industry, being “finding new ways to monetize their products”. This infographic focuses on the idea of “unlocking the full potential of the Internet to drive a new era of development, growth, and productivity”. Grounded on those two key concepts, I would like to examine the profitability of a business model based on…Read moreThis video tackles the main challenge of the music industry, being “finding new ways to monetize their products”. This infographic focuses on the idea of “unlocking the full potential of the Internet to drive a new era of development, growth, and productivity”. Grounded on those two key concepts, I would like to examine the profitability of a business model based on the functional economy and applied to the home theater market for a company such as Samsung. Firstly, the functional economy is defined by Walter R. Stahel as, “one that optimizes the use (or function) of goods and services and thus the management of existing wealth (goods, knowledge, and nature). The economic objective of the functional economy is to create the highest possible use value. […] This functional economy is therefore considerably more sustainable, or dematerialized, than the present economy, which is focused on production and related material flows as its principal means to create wealth.” Secondly, on the one hand, Statista reported recently that “as of 2015, an estimated 1.57 billion households around the world owned at least one TV set, while the surge of the internet has further extended the penetration rates and daily consumption of video content around the world”. On the other hand, Technavio’s latest report provides an analysis of the main trends that are expected to impact the world home theatre market. This report insists on “the growing number of smart homes as a key emerging trend due to growing adoption of cloud services[..] Furthermore, Cloud technology is paving the way for customers to access videos and music online legally”. [..] Therefore, vendors in the home audio market are manufacturing advanced home theater systems that can connect to the Internet and access online streaming content”. In fact, the world home theater market is expected to exceed $ 28 billion by 2020, making it a potential asset for any company that is willing to stand out as a leader. On the basis of these observations, it would be interesting to promote a new type of offer, such as the one proposed by the French company AVN (Audio Vidéo Nord), which defines it as ” la vente d’un temps d’usage ” (AVN: L’audio-vidéo, en service accompagné, 2015). A company such as Samsung that sells and installs digital equipment, image and sound, could use the same model as Spotify and carry out the complete programming work upstream, offer services and tools that connect all their installations to very simple control boxes. A stable rent for all the equipment would be proposed for five years before turning into a decreasing loan, in order to extend the period of use. The home theater installation will be subject to preventive and curative maintenance. All the media that would be used on the installation could be purchased, stocked in a cloud and streamed. Further intangible benefit could be added such as training, accompaniment and continuous improvement for improved usage.  This idea is in synergy with the new vision of Samsung Electronics for this new decade, which is “Inspire the world, create the future”. This concept of business model could help Samsung’s specific plan to reach $ 400 billion in revenue and become one of the top five brands in the world by 2020. (The functional economy: Cultural and organizational change, 2005) https://www.statista.com/statistics/276748/average-daily-tv-viewing-time-per-person-in-selected-countries/ Staff, a. (2016) Top Four emerging trends Impacting the global home theater market 2016-2020. Available at: http://www.audioxpress.com/article/Top-Four-Emerging-Trends-Impacting-the-Global-Home-Theatre-Market-2016-2020.html (Accessed: 21 December 2016). AVN: L’audio-vidéo, en service accompagné (2015) Available at: http://www.cerdd.org/Parcours-thematiques/Transitions-economiques-vers-le-DD/Initiatives-du-parcours-2/AVN-l-audio-video-en-service-accompagne (Accessed: 21 December 2016). Show less Reply Ncunganyi Bejo 21 December 2016 The development of the « culture of free » came with the rise of the internet and the infinity of information that became available to the people at almost no cost. This new technology also facilitated the distribution of copied goods. Indeed, products ( music, movies, games) can be copied at no cost or just the cost of a storage device and…Read moreThe development of the « culture of free » came with the rise of the internet and the infinity of information that became available to the people at almost no cost. This new technology also facilitated the distribution of copied goods. Indeed, products ( music, movies, games) can be copied at no cost or just the cost of a storage device and at a relatively high quality. The copied contents are then made available to hundred millions of people for free. If music or movie producers were to reach that many consumers, it would cost a lot and this would reflect in the price. Technology has changed the way people consume digital product, especially with the presence the network effect for goods such TV shows and music where everybody want to see “the” show that everyone is talking about for a very low cost. It allows to reach much more potential consumers without paying for a lot of advertisement or allows to just make advertisement online. Therefore can take advantage of it and not see it as a source of revenu loss. For example, in the case of TV show industries a lot if the channels have understood the importance of the network effect and allow viewers to watch episode online on their website in streaming and then post comments about it on Twitter or Facebook. And by making their product easily available, it allows producers to have control of their content and make copies product less attractive. And I think that is the reason why there is more commons-licensed. I think that the reason why streaming companies such as Netflix and Spotify are so successful is because they allow very easy access to a large number of authentic products. It’s easier than copying when people have to search between numerous of various files before downloading the right one. This access is not free, but people are willing to pay for the ease of use. And also discovering new music, movies and Tv shows is much easier with the profiling that these websites do. Show less Reply Benjamin Croix 21 December 2016 The "culture of free" In the video, "Napster: Culture of Free", some said that the new generations have been use to a free access to cultural contents, such as music or video games. This is due to piracy and the growth of the Internet letting people share pieces of art easier than ever. Nowadays, we don’t want to pay for music…Read moreThe “culture of free” In the video, “Napster: Culture of Free”, some said that the new generations have been use to a free access to cultural contents, such as music or video games. This is due to piracy and the growth of the Internet letting people share pieces of art easier than ever. Nowadays, we don’t want to pay for music anymore, we assume that it is a free product. Assuming that this assumption is true, which is obviously not the case for everybody, we could translate this into a utility function. The monetary value a consumer has for a piece of art is equal to 0. Despite, pieces of art are still being sold at a price significantly different to 0. This is due to some variables such as the support to the artist or the desire to see another piece being produced by this artist. All those variables can be summed into a single one which could be considered as the ‘loyalty’. The more you like an artist, the more you are willing to pay him for another album or movie and the more you want to reward him for his good job. This ‘loyalty effect’ can be observed on several online-TV such as Twitch, where people can donate to the streamers. Those donations vary from under a dollar to nearly a thousand. There is also Patreon which let people give an artist tips or some sort of salary depending on how much they love him. This illustrates that even with a free-product, some people want to reward the artist for his good job. Even after ‘stealing’ his hard work by watching it for free, they pay him in accord to the quality of the content. The ‘loyalty effect’ can thus make a free-product profitable but this implies that the quality of the product must be good enough to satisfy the consumers’ expectation. If your product is not good, you don’t deserve to be paid. At first, you could think that it would encourage artist to make music that satisfies the majority, in order to maximize his profit, and thus lower the diversity, which would be a ‘bad thing’ for the consumers. This is the case for TV, with all those clone-programs on cable-TV. But assuming that all the music is available on the internet for free, it is easier to discover new artists and find what you really want to listen to. This allows also some ‘special’ artist to create a small but loyal community which couldn’t have happened with a standard distribution network. And knowing that following the ‘loyalty effect’ the income of an artist is proportional to the appreciation of his work, this may be more profitable to have a niche-market with a very loyal community. Furthermore, those small communities are often existing already thanks to forums of blogs and thus when a new artist arrives, it is much more easier for him to get known through those social networks, e.g. groups on facebook or forums about some very specific music-styles (corestep, metalstep) or film genres (midnight movies). (This also shows that when the distributor is not the producer/artist, the production process of art pieces his not driven by art itself but ruled by demand and supply.) Furthermore, if a piece of art is only available after a purchase, if it is bad or not as good as expected, you won’t buy the next one, this is a too risky bet. You don’t want to pay for another bad product. There is a probability that the product will be bad that make you hesitate before buying it. This probability is suppressed with the free access and if it is good enough, you will buy it. Despite, this is true that free access to art would harm the art-distribution industry, but is it a bad thing ? Artist had to use the distribution network to deliver their work. But with the internet, this network has become obsolete. This old system was extracting too much value from the consumers and giving it to a too small number of artists. It has been satirically well depicted in the 9th episode of the 7th season of South Park, “Christian Rock Hard “ where we can see Lars Ulrich, drummer of Metallica, crying in his enormous villa “[…]forced to live in semi-luxury[…]” because of music-piracy. The ancient system of art distribution was not efficient and was not reflecting the true form and spirit of art. A true artist doesn’t make a piece to be rich, but to share it with the world. References : – Wikipedia, “Patreon”, https://en.wikipedia.org/wiki/Patreon, retrieved 21 December 2016 Show less Reply Harold de Thibault 21 December 2016 This video illustrates the considerably change in the people’s consumption of the CD during the last two decades. Technology is always evolving and our consumption’s behaviours need to be adapted to this change. That is exactly what the funders of Napster understood and wanted to implement. By using the benefit that internet offers they wanted to give people the opportunity…Read moreThis video illustrates the considerably change in the people’s consumption of the CD during the last two decades. Technology is always evolving and our consumption’s behaviours need to be adapted to this change. That is exactly what the funders of Napster understood and wanted to implement. By using the benefit that internet offers they wanted to give people the opportunity to access to a larger panel of music’s. Their idea was to allow people to share music not only with their friends or family but with more and more individuals. In that way, Napster started to change the tradition business model of the music distribution to a new one. Therefore, there were important consequences on this industry like the closing of many record store because at that time stores were the only place where people could purchase music. Even if Napster lost the legal battle, the idea was still present which created a real revolution for the music sector. Through this comment, I would like to transpose the case of Napster to the Films as well as the Video Games through two examples. Nowadays the movie sector is facing an important change in the way people watch films as well as TV series. Indeed, like the case of the music sector the technology has changed the consumer behaviours. In a legal way, some platforms like Netflix appeared by offering consumers access to many films with an abonnement. In only three years, the users of Netflix increased from 23 million to more than 80 million (https://www.statista.com). Moreover, Internet also allows people to obtain a huge amount of films without paying for them thanks to an illegal way which is the piracy. These two new methods show that the movie sector is knowing the same change as the music did. As consequences the closing of most of video libraries and DVD shops. Actually, most of the new laptops do not provide a disc reader anymore which illustrates well the transition of the DVD to others way to watch films and series. Furthermore, the world of the video game highlights a good example of the “culture of free”. The 27 October 2009, the editor “Riot Games” released its completely free (except the fact players are able to purchase items to develop their characters) video game called “League of Legends”. According to Riot Games in 2014, more than 27 million people played daily this game and their revenue raised to $1.6 billion. Two years later, more than 100 million of people play every month which is currently the most popular online games. In the same mentality of Napster, the developers of League of Legend wanted to provide a free game for people. The idea was to attract people with a free game and then finding other way to make money rather than selling the game at $60-$70. Riot Games analyses very good the behaviour of the players in order to attract them. Revenue come from different methods like organising tournament with huge sponsor like Coca Cola or Korean Air, letting people purchase extra items, the creation of an application … To my view the digitalization world are going to evolve more and more. Industries should be aware of the importance of the technology evolution and always be prepared to change the way they provide their products instead of trying to keep more traditional methods. https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribers http://fortune.com/2016/09/14/league-of-legends-100-million/ http://uk.businessinsider.com Show less Reply Céline de Vos 20 December 2016 I will talk about the lesson we have learn from music industry and apply it to a new kind of entertainment we can find on free media as YouTube. It’s different “channels” include many contents : humorous, informations specialized on one field, etc. and all of them take many form. Recently a very famous french “youtuber” Antoine Daniel announced his idea…Read moreI will talk about the lesson we have learn from music industry and apply it to a new kind of entertainment we can find on free media as YouTube. It’s different “channels” include many contents : humorous, informations specialized on one field, etc. and all of them take many form. Recently a very famous french “youtuber” Antoine Daniel announced his idea of making a free film on his channel. User of YouTube can follow their favorites channels, interact with the author and discover new ones everything for free! It is a real new way of entertainment, by example in America the platform reaches more 18- to 49-year-olds than any U.S. cable network. In one decade, YouTube became a kind of threat to the conventional business model of television. The traditional TV landscape is challenged by all those new video-streaming services and this increasing popularity is called “the television experience for the digital age.” by Kordestani. On its early stage many television, movie and music companies thought about the possibility that their copyrighted material would be stolen and post it online for free. But it never really happen, the searing video platform offer content that cooperate with television. Younger audiences use it in particular to discover new content, thanks to new features such video suggestions and auto-play. And as free video-streaming services continue to grow, original programming has become the key reason for people to select their future subscription. Moreover with the ease of access of video cameras and digital editing software, it became easy for anyone to start their own YouTube channel and ride it to huge success. Even if it’s a small minority some “YouTuber” are able to live from their channel using YouTube’s ad-revenue sharing partner program. They create “Buzz” and they manage huge community of fans. Thanks to their popularity they can achieve project, as Norman and his one man show, that the wouldn’t have expected if the I had to go through the “old-fashioned way”. Yet television is still seen more prestigious than the Internet, and online creativity foster TV program but it could change with new generation. Sources : http://www.huffingtonpost.com/entry/youtube-vs-cable_us_55acf44fe4b0d2ded39f5370 http://time.com/3828217/youtube-decade/ Show less Reply Bertin Pierre 19 December 2016 On my humble opinion, I think that successful downloading sites as Napster are one of the consequences of a property right system which did not adapted itself fast enough to the digitalization and more generally to the evolution the technologies and consequently to new innovations. As we saw in the video, produced by RetroReport.org, summarizing the recent events in history of…Read moreOn my humble opinion, I think that successful downloading sites as Napster are one of the consequences of a property right system which did not adapted itself fast enough to the digitalization and more generally to the evolution the technologies and consequently to new innovations. As we saw in the video, produced by RetroReport.org, summarizing the recent events in history of the music industry, even if the lobbies of CD manufactured industry won their lawsuit against Napster them did not succeed to stop the other rising Peer2Peer filed sharing programs. Indeed, thanks to the digitalisation Napster made a huge innovation and change the business model of music industry. With the help of the high-speed internet people are now able to access music in quickly, freely and without displacement costs ways. How could the old CD industry companies compete with that? Definitively not with their old business model. Because after having tasted free music, a lot of people will not want to go back to buy expensive CDs anymore and furthermore for many people the advantages of downloading site were sufficiently advantageous in comparison with its disadvantages (illegality, feeling of guilt after an immoral act, risks link to the opening of their hard drive, quality…) Furthermore, the London School of Economics and Political Science report shows that punitive enforcement strategies are not as effective as the entertainment industries claim.  So even if it is true that Napster’s business model is legally punishable, it is difficult to punish those downloading firms through the traditional system of intellectual property right protection, consequently there were a need of innovation in this legislation and this is where Creative Commons are important, but I will come back on them later. So as downloading and sharing files can have a positive effect on the entertainment industry thanks to digital sales, subscription service, streaming and life performance which compensate the loss of revenues from the sale of CDs, big entertainment company should try to develop business model to use this change to earn money, namely thanks to marketing. So, as I mention it before, there is a need for more suitable copyright licenses and that’s is the goal of Creative Commons licenses. They are developed by an American non-profit organization which wants to increase the range of creative works available to other in order to develop them legally and to share them. These licenses allow creators to communicate which rights they give up for the benefit of other creators and which ones they reserve for themselves. One of the innovation of this creative commons licences is that they are developed in a particular way. Indeed, each license begins with a traditional legal text but as most of non-jurist people do not understand this specific language, these licenses also have a readable by “normal human’s” version, which summarize the most important terms and conditions. Furthermore, the license is made in a way which enable the internet to read these licenses.  So according to me, as they are taking into account, not only lawyers but also normal people and the machines, these new licenses are well adapted to deal with the digitalization of the industry in general and as there were a real need for them this explain the increase of their use. Consequently, they will help to develop those kind of business model in other industry facing digitalization. These licenses allow to increase the use of the innovation which is really good for the social welfare and they are more suitable than the previous legislation which is good for the innovators. Furthermore, I think that the number of these Creative Commons licenses will continue to rise and that they can become one of the most crucial factors in the development of future laws and technologies.  https://torrentfreak.com/piracy-isnt-hurting-the-entertainment-industry-121003/ based on https://fr.scribd.com/document/172985274/LSE-MPP-Policy-Brief-9-Copyright-and-Creation  https://creativecommons.org/licenses/?lang=en  https://stateof.creativecommons.org/2015/ Show less Reply Axelle Charlier 17 December 2016 The main purpose of this comment is to give my opinion on the « culture of free » through the music industry and then comment on the business model that would be applicable to other industries facing digitalization. Internet is a game changer in many industries like musics, cinema, books, and even grocery shopping, … and the music industry is…Read moreThe main purpose of this comment is to give my opinion on the « culture of free » through the music industry and then comment on the business model that would be applicable to other industries facing digitalization. Internet is a game changer in many industries like musics, cinema, books, and even grocery shopping, … and the music industry is a perfect example on how people’s behavior and mindset can change when given free access to a product. Back in 1999 when Napster was introduced, the main sources of music industry revenues was strongly challenged by a 18 years old student giving free access to any kind of music you would like. Reactions didn’t wait and Napster was obliged to shut down his business and pay high fees to artists and copyrights owners. But the change had already happened in the mind of the population, THE next generation born in the era of internet might never had to buy a cd to listen to his favorite music. Coming back to CD stores wasn’t possible and the industry needed to find a new way of operating and find new revenue streams to survive. Now, what are the implications for the artists ? Initially there WAS only one path for them to reach their dream and become a star: get signed to a record label. Now, let’s take the example shown in the video. Macklemore and Ryan Lewis had already their crowN of fan even before signing with a record label house which would have been possible other way due to all expenses that should have been made. Prior to the world of digital, renting a recording studio of quality varied between $500 – $5,000 a day. To record a 12 songs album, a band would usually spend a few weeks (months in some cases) in the studio just laying down the raw tracks. If an artist wanted to sell 10,000 CDs, they needed to front invest the money to make 10,000 CDs and then hope to god they sold. And let’s not forget distribution and marketing in the addition. However some would call it a lack of education, all artists now have a shot and can express their creativity without worrying about the opinion of the record house if they want to come up with some disruptive and innovative ideas idea (still kept in some limits). That’s definitely how many of well-known artists such as Civil Wars, Alex Day, Boyce Avenue, Hoodie Allen, Blood On The Dancefloor, Lecrae, Colt Ford, Ron Pope, … are now on international stages and we have access to a wide branch of music styles How did the industry react ? Given that now in the new system, the experience and emotion matter more than the content. Product must have SPARC: Social:Put the crowd in the cloud. Participative: Make them interactive and immersive. Accessible: Ownership still matters but access matters more. Relevant: Ensure they co-exist and join the dots in the fragmented digital environment. Connected: 174 million Europeans have two or more connected devices. Music fans are connected and expect their music experiences to follow suit. Let’s now analyse the different business models that were applied to music industry and how they could be applied to other industries. ITunes uses a subscription model: Disrupts through “lock-in” by taking a product or service that is traditionally purchased on, and locking-in repeat custom by charging a subscription fee for continued access to the product/service. Spotify and SoundCloud are more of the Freemium model; Disrupts through digital sampling, where users pay for a basic service or product with their data or ‘eyeballs’, rather than money, and then charging to upgrade to the full offer. Works where marginal cost for extra units and distribution are lower than advertising revenue or the sale of personal data. If we take the example of data storage, it used to be stored on shelves, in books, on papers, it was a very large department of any administration offices as everything had to be kept in order. Nowadays we have many different tools to store our files, data, … even to share it easily and on one click. Dropbox, a well-know online storage tool, adopted the Freemium model by allowing users to enjoy some limited space and once you’ve tried it, you want it, and then only you’ll have to pay for more storage space in your Dropbox account. Unfortunately Dropbox has been loosing customer over Drive by Google for example which offers a totally free access to unlimited storage and online sharing of documents and data. But this involve personal data sharing which doesn’t seem to be a barrier to lot of users. As conclusion I think the digitalization model/process will keep on evolving and all industries should be ready to face new competition coming from unexpected corners and as we saw with the music industry it’s not only bad for the economy it also gives the chance to many different kind of people to express their opinion and talent. But of course, in my opinion, some boundaries have to be kept but that’s an other debate. http://www.hypebot.com/hypebot/2012/09/the-end-of-the-new-music-industry-transformation-how-technology-destroyed-the-traditional-music-indu.html http://www.nytimes.com/2014/12/15/opinion/the-internet-not-the-labels-hurt-the-music-industry.html?_r=1 http://mashable.com/2011/02/04/music-industry-digital-natives/#IrCkaDiL8kqW http://digitalintelligencetoday.com/the-10-business-models-of-digital-disruption-and-how-to-respond-to-them/ http://www.thedailybeast.com/articles/2014/06/06/15-years-after-napster-how-the-music-service-changed-the-industry.html http://tech.co/tech-music-industry-evolution-2015-02 http://www.wikiwand.com/en/Creative_Commons https://stateof.creativecommons.org/2015/ Show less Reply Zoé Godeaux 15 December 2016 The first resource goes over the evolution of the music industry since Napster, the first large scale peer to peer file-sharing program, was created. Its launching was the first step to how Internet revolutionized consumption habits of music buyers. From there, more and more website and torrent allowing the download of files for free appeared online. Napster was founded thinking that…Read moreThe first resource goes over the evolution of the music industry since Napster, the first large scale peer to peer file-sharing program, was created. Its launching was the first step to how Internet revolutionized consumption habits of music buyers. From there, more and more website and torrent allowing the download of files for free appeared online. Napster was founded thinking that it would bring artists and fans closer together but big names of the industry saw it as a threat. Some tried fighting it; others such as Steve jobs took advantage of the spread of this new technology. That is how ITunes was born. This new application allowed clients to download files legally. This led later on to the appearance of online streaming platforms. The video portrays two different points of view on the impact of online piracy on the music industry. On one side, some people think that it initiated the slow downfall of sales and irreversibly hurt the market. Some think of it as a lack of respect and recognition of the work of the artists. On the other side certain consider that, with the invention of Internet and the world becoming more and more digitalized, it was the natural evolution of the industry. It was necessary for it to adapt to the new ways of consumption. The second resource represents the growth in the number of creative commons-licensed works. A creative commons-license is a license applied to a work that is protected by copyright. It gives the public the right to distribute freely the work of another. By filing a CC license, the author of this work gives to anyone the right to share, use and modify it. Of course the creator has the right to include conditions and limits to the use of its piece. We see that the number of creative commons-licensed works increases throughout the years. We could think of it as a solution to the problems mentioned in the first resource. By using CC licenses, authors could take advantage of the Internet, which is the cheapest, most effective distribution service they have access to. This way they could share their work and reach this constantly growing community with very little marketing expenses. Sharing websites such as YouTube even allow users to monetize their work through the use of advertisement. https://creativecommons.org/about/history/ https://en.wikipedia.org/wiki/Creative_Commons_license http://www.workmadeforhire.net/the-rest/whats-the-difference-between-copyright-and-creative-commons/ Show less Reply Mathieu Phuong Henaux 30 November 2016 Technology keeps on evolving, making it hard for everybody to precisely define boarders. Internet is one of the most popular (if not the most popular) service used today. It has tons of different purposes, from intensive research to access material all around the world. The internet as service might look very good, yet there are issues as well. An example of…Read moreTechnology keeps on evolving, making it hard for everybody to precisely define boarders. Internet is one of the most popular (if not the most popular) service used today. It has tons of different purposes, from intensive research to access material all around the world. The internet as service might look very good, yet there are issues as well. An example of such an issue is piracy. Piracy can be defined as “the activity of manufacturing unauthorized copies (‘pirate copies’) of protected material and dealing with such copies by way of distribution and sale” . A typical and very popular example of piracy is peer-to-peer (P2P) file sharing. This service uses internet as conduit where every client (“peer”) is equal on the network. One case of the past made P2P very popular, it is the Napster case, as very well explained in the video of retroreport.org shown in the article. Today, there are even more P2P clients and lots of people use them. This service can be used for everything on computers, from simple documents to newly released Blu-Ray discs. The real question is what is legal and what is not. I was once told, or I read once that downloading is not illegal, but uploading is. This makes sense… The problem here is that everybody can upload what he wants. This is where piracy intervenes. To get back to the Blu-Ray discs. Let’s imagine : a new Blu-Ray movie comes out, a peer buys it, “rips” it and uploads it on a P2P network, where every (other) client can download it. From my point of view, the peer uploading the movie is the pirate but not directly the peer downloading it. Another form of piracy, for some people, is streaming. Surprisingly, in Europe, streaming is considered legal “if done correctly” . According to European laws, when a user is viewing content directly through a browser, the user is doing nothing wrong.  One case is the one of the British Meltwater redux.  In this case, the clients had to pay a license fee for the emails they received. Heading back to streaming and the European law, this is a rule where I must agree. Streaming should not be illegal as it would be unfair for some consumers. For instance, when looking at TV shows or series or even movies, some consumers can be discriminated according to where they reside. Without streaming, Europeans might have to wait weeks, if not months to watch movies or series that were released in the USA. Therefore I think that streaming should “remain legal”, unless international laws arrive, which would totally erase the eventual consumer discrimination in this domain of digital media. When thinking about the video of retroreport.org, I can understand the reaction of the recording labels against Napster at that time. The problem is that today, with the evolution of technology and internet, it is unlikely that a way will be born where music or films can only be bought. Streaming services and P2P networks make multimedia accessible to every internet user and little knowledge is needed for the “basic use” of these services. An option could be to shut down all these service but how can that be done ? Would it even be worth the shot ? These are questions to bear in mind. As illustration, we can think of the Megaupload case.  Megaupload used to be one of the most used downloading platform for multimedia content until it was shut down. Yet, an idea which I found interesting was what Apple did with iTunes. As said in the video, it is midway between the artist and the consumers because the consumer pays a little price but still pays. A final example is the video games industry. The big companies know that there are multiple ways to “hack” video games but today it has become harder for users of the PS4 (Sony) for example. Sony has launched the Playstation Plus subscription, giving free games each month while the subscription is active. Sony also regularly releases updates to their console. This way, it becomes harder to “hack” the console like it was done with the previous version. This is one way of dealing with piracy and it seems to be working quite well for the moment. This system needs some extra features though. We will see how it evolves in time. To conclude, Internet is present everywhere and really needs to be taken into account. All the cases discussed show us that protecting digital material and fighting piracy is a really hard matter. Thanks to the technology evolution there are always other ways to attain what the shut services allowed us to reach. Piracy still needs long discussion and regulation before being erased, considering piracy can be stopped. The multimedia industry is very hard to protect and will have to find ways to create incentives for consumers to buy digital material instead of (illegally) downloading it. Apple and Sony are examples showing that they are on their way to find a kind of solution.  http://portal.unesco.org/culture/en/files/28696/11513329261panethiere_en.pdf/panethiere_en.pdf  http://bgr.com/2014/06/05/streaming-movies-and-tv-shows-for-free/  http://bgr.com/2014/06/05/streaming-movies-and-tv-shows-for-free/  https://gigaom.com/2014/06/05/you-cant-break-copyright-by-looking-at-something-online-europes-top-court-rules/  https://en.wikipedia.org/wiki/Megaupload_legal_case Show less Reply Margot Detollenaere 10 February 2016 The main purpose of this comment regarding the article above is to express my opinion about the culture of free, specifically in the field of music industry. I will then comment profitable business models based on creative commons licenses. In 1999, the music industry has radically changed with the launching of a file-sharing program known as Napster. The software founded by…Read moreThe main purpose of this comment regarding the article above is to express my opinion about the culture of free, specifically in the field of music industry. I will then comment profitable business models based on creative commons licenses. In 1999, the music industry has radically changed with the launching of a file-sharing program known as Napster. The software founded by an 18-year-old college permitted computer users to swap and share their tunes, and led to a generation of people who expect their music for free. It is clear that digital music revolution could not be stopped. I must say that I agree with the reaction of Vivien Lewit, Director of Music Content Partnerships at YouTube. She raised the fact that there are two parts to this phenomenon: the revolutionary of the music industry and the destruction of the record industry. (1) In the light of Napster’s success, getting music off the Internet became simple and reliable. I am convinced that it hugely expanded everyone’s musical horizons because the digital distribution permitted any unknown artists to perform and possibly become famous. “By the summer of 2000, Napster had dramatically expanded and about 14.000 songs were being downloaded every minute”(2). Before Napster, anyone with enough money could make a record but it did not guarantee that the song would go to store (which was the only place where people actually bought CDs). On the other hand, this new technology disrupted the power of music business distribution. No longer did artists have to go to record company to be heard. Turning now to the question of “who controls what artists create”, Dave Stewart of the Eurythmics raised the fact that “[Napster] makes artists ask why they are not in control of what they are doing. Artists of any worth or strength will rise up and take control of the situation”(3). To my mind, creative commons licenses could be a means for artists to control their work and provide licensing tools that are free to use. Creative commons licenses can help people to share and download digital content legally and inform people that they can reuse personal work. Actually, this kind of licenses includes several license elements and I decided to define some of them. Attribution (BY) involves that product can be reused, shared or derived by someone else only if the person acknowledges the author. Non-commercial (NC) means that no one else but the author is permitted to make money from the product. No derivative (ND) entails that the author prohibits any derivatives of the product. Share-alike (SA) requires that new creations using the product have to carry the same license. It is worth noting that there are many combinations of these elements that make up creative commons licences. (4)(5) We may indeed ask ourselves if artists can still make money from a work they make available under a creative commons license. The response of CC Wiki staff is yes. In fact, they want “to encourage creators and rights holders to experiment with new ways to promote and market their work”. A possible way of doing this could be using an non-commercial license. (6) The most crucial point made so far is that the rise of digital distribution became a real challenge for many companies from several traditional retails. Consequently, organizations have to face new consumer needs and should adapt their business models to satisfy them. To put it another way, they must take into account innovative directions, such as creative commons licenses or copyleft, in order to stay profitable and competitive. SOURCES (1) Napster. s.d. “Napster: then and now”. Online. http://iml.jou.ufl.edu/projects/spring01/burkhalter/napster%20history.html. (Page consulted on February 8, 2016) (2) Lamont, Tom. 2013. “Napster: the day the music was set free”. Online. http://www.theguardian.com/music/2013/feb/24/napster-music-free-file-sharing. (Page consulted on February 9, 2016) (3) Napster. 2011. “Artists sound off”. Online. http://www.singsing.org/files/causacivile/napster/. (Page consulted on February 9, 2016) (4) Creative Commons. s.d. “Creative Commons Kiwi”. Online. https://creativecommons.org/videos/creative-commons-kiwi/. (Page consulted on February 10, 2016) (5) Wikiwand. s.d. “Creative Commons”. Online. http://www.wikiwand.com/en/Creative_Commons. (Page consulted on February 10, 2016) (6) Creative Commons. s.d. “Frequently asked questions”. Online. https://wiki.creativecommons.org/index.php/Frequently_Asked_Questions#Can_I_still_make_money_from_a_work_I_make_available_under_a_Creative_Commons_license.3F. (Page consulted on February 10, 2016) Show less Reply Coeck Chesley 10 February 2016 Thanks to the new technology, Internet has taken a huge place in our lives. Smartphones and computers allow us to have an entire access to worldwide information, videos... Unfortunately, it also brings a lot of complication in terms of online piracy: Online piracy is a term used to elucidate on the illegal copying of licensed and copyrighted materials from the…Read moreThanks to the new technology, Internet has taken a huge place in our lives. Smartphones and computers allow us to have an entire access to worldwide information, videos… Unfortunately, it also brings a lot of complication in terms of online piracy: Online piracy is a term used to elucidate on the illegal copying of licensed and copyrighted materials from the Internet. Online piracy, as a term, is widely used and upheld by agents who distribute licenses and trademarks for Internet companies in a multitude of industries. In just one click, it is possible to download the last song of Coldplay, the last movie of Tarantino for free. And that is a real problem for those artists who have taken time to create a new masterpiece. We can see that the music issues showed by the video can be applied in different sector : movies, e-books and so one thanks to the digitization of goods. There exists a lot of website and torrent allowing the download of files for free. But some big companies suggest some alternatives to compensate and find a middle ground between the hardworking of artists and the willingness to pay of the consumers like Apple did with ITunes. It is possible for the consumers to download at a reasonable price some digital media like a jukebox. Of course ITunes has to face to issues because the principle of downloading stay a sensitive field. But unlike Napster, ITunes provides to the consumers not to share their files with other one, but to download it in a legal way. And we can see in the last decade that the number of licenses like the Creatives Common Licenses have highly increased due to all the possibilities that the consumers has to do “illegal” piracy. In conclusion, artists and industries have to take account of the Internet. It is a way for them to share their music and be famous, and their right will be always be protected by some organizations or convention like the convention established by the World Intellectual Property Organization (WIPO). But it is also the responsability of consumers to buy and download music, movies or even e-books in a legal way. References: http://insurance.laws.com/online-piracy http://electronics.howstuffworks.com/itunes8.htm http://www.wipo.int/edocs/pubdocs/en/intproperty/909/wipo_pub_909.pdf http://www.wipo.int/copyright/en/ Show less Reply Michael Borron 10 February 2016 The internet was a game changer that left current regulations and companies ill equip to deal with the change. The reason that the music industry was hit so hard was because the distribution of music became dramatically easier over the internet which was most the publishers add value. This left them fighting for an obsolete system with a generation of…Read moreThe internet was a game changer that left current regulations and companies ill equip to deal with the change. The reason that the music industry was hit so hard was because the distribution of music became dramatically easier over the internet which was most the publishers add value. This left them fighting for an obsolete system with a generation of consumers on the opposite side. And since then the trend has only continued (blockbuster going bankrupt). To me the internet is a double edged sword, on the one hand it makes it much easier for people to get your product for free, but it is also a tool that can get word of your product out to millions of people faster than was ever possible before. I think It is the responsibility of companies and government regulators to adapt to this changing environment. For governments, to write laws that reflect the current reality of the industry and environment, and for companies, to find where the value lies in what they create. There are many companies and artists who have adopted this reality and still manage to succeed and even thrive. Including companies like Netflix, and HBO (despite game of thrones being the most pirated TV shows of all time) with the success of there subscription model. And an additional example is Rooster teeth productions, a company based out of Austin Texas that releases almost all of the content that it generates online for free. http://business.roosterteeth.com/ http://www.forbes.com/sites/insertcoin/2015/05/12/game-of-thrones-again-sets-piracy-world-record-and-hbo-is-to-blame/#29feb85d760d Piracy however is still a rampant problem in the music industry and also in the video game industry. In the video game industry, it is not uncommon for illegal copies of games to be online days after their initial release. However, something fascinating is currently happening. A recent game called Just Cause 3 was released in December 2015 still has not been cracked by hackers (Chinese hacking group 3DM admits defeat), now this does not mean that it will never be hacked however a large portion of game sales come from the initial release so a games protection during this time is very important. Some are now speculating that the piracy of video games could be a thing of the past if current trends continue. However, many have called into question how much piracy actually does affect video game sales and weather all the piracy that companies quote as lost sales in reality actually convert into sales. In fact, the same hacking Chinese hacking group 3DM is saying that they are suspending current activities to measure the impact that piracy actually has on sales (weather or not that is there true reason is still up for debate). http://gamerant.com/video-game-piracy-damage-opinion/ http://tech.firstpost.com/news-analysis/game-piracy-may-be-at-an-end-says-3dm-announces-suspension-of-activities-298471.html http://gamerant.com/piracy-sales-impact-test-336/ http://www.cnbc.com/2016/01/14/can-video-game-piracy-be-stopped-in-two-years.html The emergence of CC seems like midpoint between copyright protection and the culture of free. While the internet has created an explosion of creativity and information sharing, it makes sense that a new form of copy right protection would reflect the reality of the sharing culture. You could say that this is the exact opposite of laws what has occurred on the legal side with copy right laws in the US. In 1998 in the U.S laws were changed to extend copy right laws well beyond what they were before. This led to a significant reduction in the amount of works that have entered the public domain since then. This means that this is the first generation that legally cannot add to works from the past the same way that we have before. https://www.youtube.com/watch?v=SiEXgpp37No But in the end what this is all about is access to information. The internet is the most revolutionary development in mankind’s ability to access information since the invention of the printing press. And to a generation that has grown up with access to the internet, sharing every picture they take on Facebook and sharing every thought they have on twitter, the sharing culture and culture of free will only continue to grow. https://dadimadesign.wordpress.com/2012/10/16/internet-vs-printing-press-impact-on-society-by-alido-rodriguez/ Show less Reply Paul Belleflamme 10 February 2016 Very interesting comment. I was interviewed yesterday (by a journalist of Le Soir) about piracy in the video game industry. The article should be published soon. charlotte catfolis 8 February 2016 Initially there was an innovative change: internet. It was a challenge, but the industry has not understood that. This issue has become a threat to the industry. Indeed, the industry has not understood that we could begin to distribute, exchange throughout a new way. The CD industry offered a good that would be digitized thanks to the new technology. The…Read moreInitially there was an innovative change: internet. It was a challenge, but the industry has not understood that. This issue has become a threat to the industry. Indeed, the industry has not understood that we could begin to distribute, exchange throughout a new way. The CD industry offered a good that would be digitized thanks to the new technology. The product could be easily exchangeable and this was free. This is not really the fault of the industry, he did not know that their product was going to be digitized. The opportunity was taken by the consumer and not by the issuer. There was a lack of legislation and thus the consumer was took this advantage. If the CD industry directly had do the first step, “snapster” never existed. Their business model was too rigid. But can we blame the industry when today we continue to sell physical while technology is adapted? When an industry is powerful, it can be a strength. The sector has great benefits, it will not look further. “Core capabilities Become core rigidities”. This could explain why the industry did not think about digital distribution upfront. However we are not yet fully digital. Indeed this is explained by the fact that the way to read the contents (console, TV, …) is sold by seller that also provide contents. This is why Sony is still physical. Take the example of media markt which sells PlayStation video but also the games. In conclusion, the problem is the same for all industries that offers content that can be digitized. Music, film, video game … In the future we could talk about the 3D printer. This one would be able to digitize products for which it is currently not the case. Some industries should worry. Should companies think about a new way to distribute and sell their products, using a 3D-printer?We can take the example of ikea. Who else would go to ikea if the construction plans of furniture, chairs … were free access available online and could be print at home? source: https://www.youtube.com/watch?v=AWzjTxuhImQ Show less Reply Tiphaine Vanderstokt 8 February 2016 With the emergence of Internet, industries (as music, movie book…) had to adapt their business model. People began to share contents on the Internet and online communities appeared and grew quickly. Their belief changed about what they had to pay. Indeed, the idea that information had to be free emerged because, among other things, it’s cheap to deliver on the…Read moreWith the emergence of Internet, industries (as music, movie book…) had to adapt their business model. People began to share contents on the Internet and online communities appeared and grew quickly. Their belief changed about what they had to pay. Indeed, the idea that information had to be free emerged because, among other things, it’s cheap to deliver on the internet. So, new ways of delivering and pricing had to be think of. The traditional way of selling is not the same than before in those industries: the key now is to diversify their offer and find what people are prepared to pay for, is to say, what people want that they can’t get for free elsewhere. Music industry was too slow and I think that’s why piracy grew so fast in this industry. I believe that it was really difficult for the companies to adapt because, when they react to this new way of sharing music, people had already changed the way they absorbed music and their belief system in what they should pay. People expected at that moment to have music for free and had the way, even if it’s illegal, to have it for free. Now, according to me, artists have to be less focus on copyright and more open to copyleft. Indeed, I think that, now, if a song is retaken by other people, that means that the artist is good and the more people sing or share this song, the more the artist is known and the more money he can do with concerts or other events. I believe that’s why the number of creative commons-licensed works increased so much during the last years. As for the film or series industry, the internet was and still is threatening because, even if it’s cheaper to deliver on the internet, the cost of producing is very high. They can lose a lot of money if people are watching movies or series for free illegally. Hopefully, I think that thanks to TV, the impact on this industry, at the beginning, was less important and solutions as VOD emerged faster than for the music industry or we also have seen names as Netflix appeared and gained popularity. Those offers don’t correspond to the traditional business model: the targeted people are not all the same, they are younger and the channels are not only on TV but also on Internet, on all devices, the key activities also are different, etc. If we have a look on the book industry, publishers have to find ways to make money out of e-books, making for example agreements with companies as Amazon. Their big problem is that solutions as subscription for unlimited reading can be threatening because people that read a lot can access more books for a fixed price. But, internet didn’t totally threaten the market. In fact, e-books are complementary to print books and so, it helped the entire market to grow. Since 2008, book sales have improved and it has to do with the arrival of e-books. E-books sales have grown very fast and print book sales have fall just a little. Companies like Amazon build a new business model that is really profitable: people buy more books because it’s faster to buy a new one once they’ve finished the last one. So, the sales through Internet opened the market and gives the possibility to buy more and faster. It gives also opportunities to amateurs to be known sharing their work on the Internet or to fans to continue existing books. So, we can say 3 industries are pretty close and have develop the same kind of response to the market: we can make a parallel between Spotify, Netflix and Amazon’s Kindle Unlimited. There are 3 new business model in those 3 industries (music, movie and books) that offers subscriptions to listen to music/watch movies and series/read books unlimited and on all kind of devices. But we also see that Spotify, for example, offer a free proposal for people that just want to listen a bit of music on their computer. So, they personalize their offers to make a maximum of profit.They are profitable models because there are legal ways to have access to contents and the prices, according what they want, are acceptable for the consumers and, so, they are ready to pay. References: http://www.theguardian.com/media/2011/aug/14/robert-levine-digital-free-ride http://www.fool.com/investing/general/2015/11/15/netflix-subscribers.aspx http://www.thewire.com/business/2010/09/blockbusted-the-rise-and-fall-of-a-video-chain/22927/ http://www.nytimes.com/2014/12/08/technology/grappling-with-the-culture-of-free-in-napsters-aftermath.html?_r=0 http://www.theguardian.com/media/greenslade/2010/sep/21/charging-for-content-newspapers http://finance.yahoo.com/blogs/the-exchange/the-book-industry-isn-t-dying–it-s-thriving-with-an-ebook-assist-191025547.html Show less Reply Paul Belleflamme 8 February 2016 Thanks for proposing the first comment of this year! Sambit Das 9 December 2015 It is not only the growing avenues for piracy in the digital domain, but also a shift in consumer preference of consuming content online that makes it necessary to have profitable business models for digital goods. In this comment I shall focus on the evolution of digital content for books, ie e-books and if a profitable model can be made…Read moreIt is not only the growing avenues for piracy in the digital domain, but also a shift in consumer preference of consuming content online that makes it necessary to have profitable business models for digital goods. In this comment I shall focus on the evolution of digital content for books, ie e-books and if a profitable model can be made around it. The e-book industry is much different from the music industry as the behaviour of readers towards paid digital services is completely different in the two areas. We may not have a Youtube for books, but something like Netflix for sure. While Amazon kindle and google books have built a pay per service model around e-books, Scribd and Oyster are few of the companies that have tried to build a profitable subscription model around e-books. They are likened to the Spotify of music industry wherein a customer pays a monthly subscription and has access to all resources that he or she can consume. The model of Kindle is the one in which publishers are compensated without any risk, and the company is not at much risk of not making profits either. However, adoption of such services still remain low and people prefer borrowed of second-hand books to do the trick. This is where the Oyster like model enters. The possibility of paying a monthly fee and having access to all books attracts a lot of readers, and this is where the seller and the publisher are at risk. With too many voracious readers, publishers gain their rightful share but the company has to pass on a lot of profits. On the other hand, if there are not many readers after subscription, the subscription seller pockets a large amount. Publishers think they are not adequately compensated and that is why not many of them have partnered for such a service. But publishers cannot ignore this kind of service for long. A few possibilities are looking at models like services with differential pricing for different kinds of books or puuting up only the non latest ones up for reads. With the ease of having predictive models, individual users’ reading habits can be observed and a differential pricing can accordingly be levied. Most importantly, digital subscription based ‘all you can read model’ is a great way for small publishers to gain popularity. This could also be the best platform for authors who do not get publishers to display their work, effectively revolutionalising the book industry. At the end of the day all three; publishers, sellers and readers need each other to survive. A sustainable model will be the one that compensates publishers and makes the readers read more, while ensuring that the readers are getting their preferred content at a low price. References: http://blog.smashwords.com/2013/10/examining-business-model-of-ebook.html http://www.publishingtechnology.com/2013/09/netflix-for-books/ http://www.entrepreneur.com/article/247762 http://www.digitalbookworld.com/2014/announcing-dbw-debates-ebook-subscription-services/ Show less Reply Christopher Preining 9 December 2015 Technological advancement provides increasingly affects a growing number of industries such as the e-book, movies and music markets. In the reportage published by the New York Times on the founding, fall and aftermath of an online file-sharing platform highlight theses effects. The title ‘Napster: Culture of free’ discusses the issues the music industry faced when their main revenue sources (their…Read moreTechnological advancement provides increasingly affects a growing number of industries such as the e-book, movies and music markets. In the reportage published by the New York Times on the founding, fall and aftermath of an online file-sharing platform highlight theses effects. The title ‘Napster: Culture of free’ discusses the issues the music industry faced when their main revenue sources (their extensive distribution networks) was challenged. In this comment I will discuss a similar trend in the book/e-book market and whether or not this development allows for profitable business models. Around the end of the last decade (2008-2010) e-book sales really took off and contemporary book stores and publishers feared their future in the market. Although e-book sales increased drastically in the years from 2008-2010. As data from Statista supports, e-boom sales are to surpass print book sales in 2017 reaching a revenue of approximately US$8 billion. At the same time the data provided illustrates a decreasing number of Print and audiobook sales in the United States down by 50% from around US$16 – US$8 billion. (2) In the light of these numbers it seems rather strange the New York Times (NYT) titled one of its articles “The Plot Twist: E-Book Sales Slip, and Print Is Far From Dead”. The author states, “the digital apocalypse never arrived, or at least not on schedule. While analysts once predicted that e-books would overtake print by 2015, digital sales have instead slowed sharply” (1), which is actually supported by our data from Statista. Another graph provided by Statista exhibits an increasing number of book stores in the United States. The data was compiled from 2009 to 2015 and shows an increase from 1.401 to a projected 1.712 book stores in the US, which represents an increase of roughly 22% over the six-year time-frame. (3) Rather than following the previous hypothesis that decreasing book sales will lead to a decreasing number of book stores we observe the opposite trend. Possible answers to these questions lie within consumer behaviour and the increased efficiency of another sector – logistics. An industry executive summarized the apparent resilience the book publishing industry boasts to have: “People talked about the demise of physical books as if it was only a matter of time, but even 50 to 100 years from now, print will be a big chunk of our business”, exclaims Markus Dohle from Penguim Random House (1). While some critics might describe the statement as wishful thinking, publishers have actually adapted to the increased competition from e-books. Penguin Random House for example relies on massive collecting to make projections and recommend book vendors amounts of books they should buy to decrease the number of books having to be sent back to publishers on their costs. Another possible reason for the stabilization of hard-copy book sales is the publisher’s recent renegotiating of terms with Amazon. As “paperback editions of some popular titles […] are several dollars cheaper than their digital counterparts […] [paperback] sales rose by 8.4 percent in the first five months of this year”. (1) So in the short-run it seems like publishers have levelled the playing field. This development, however, could drastically change in the future as new methods of publishing are developed. Take for instance Amazons self-published e-books., “which often cost less than a dollar.” (1) In 2013 Amazon CreateSpace, a self-publishing platform, published roughly 185.000 titles, followed by 85.500 works published by Smashwords. (4) The data visualizes another apparent trend in today’s economy. A decentralisation of producers and artists. We can draw comparisons to YouTube, which allowed individuals to upload their own remix or “original” music tracks on their platform to receive revenues from the subscriptions to their channels and from advertisements. In a similar fashion the self-published e-books allow authors to evade publishers and directly place their products with the consumers. This trend also allows to relativize the relative decrease of e-books to hard-copies, as “publishers do not account for the millions of readers who have migrated to cheap and plentiful self-published e-books”, which is why “at Amazon digital book sales have maintained their upward trajectory”. (1) Furthermore, as with the music, Amazon has allowed customers to pay a monthly fee in order to access over a million titles. Hence, multiple trends and changes in consumer behaviour do not allow for a pre-emptive conclusion on the future of the publishing and hard-copy book markets. The infographic mentioned in the article above by Prof. Dr. Belleflamme provides some further insights to the current developments. The graphics found under https://stateof.creativecommons.org/2015/ illustrate the increasing number of works published under creative commons licenses. Around 48.4 million texts, articles and book have been made available through their licenses. Another infographic shows the increase from 141 million to over 1.1 billion creative commons licenses. (5) With authors making their articles, books and texts readily available to the public the question remains to which extent this trend will proceed in the future. Out of the 48.4 million texts, articles and books licensed under creative commons, merely 1.4 million were research journals/articles and only 76.000 were educational resources. (5) The vast majority of CC licensed goods are documents and the such and are nowhere close to whole books published under CC licenses. Synoptically, we can see that the trend to digitalisation has evolved in the book market and that publishers are having increasing difficulties to cope with the structural changes in the industry. At the same time the decentralisation of publishers is made possible through platforms such as Amazon CreateSpace and Smashwords, which allow for self-published books to be sold digitally often for a lot lower price than works stemming from large publishers. Creative Commons licenses and the free public licensing have yet to emerge in the market. Until then, writing books and publishing then will remain a profitable market even though payoffs are shifted between publishers, authors and online platforms. (1) Alter, Alexandra. “The Plot Twist: E-Book Sales Slip, and Print Is Far From Dead.” The New York Times. The New York Times, 22 Sept. 2015. Web. 09 Dec. 2015. (2) Richter, Felix. “US Ebook Sales to Surpass Print in 2017.” Statista. N.p., 6 June 2013. Web. 9 Dec. 2015. (3) American Booksellers Association, and Website (gizmodo.com). “Number of Independent Bookstores in The United States from 2009 to 2014.” Statista – The Statistics Portal. Statista. 09 Dec 2015. http://www.statista.com/statistics/282808/number-of-independent-bookstores-in-the-us/ (4) Bowker. “Largest Self-publishing Companies in The United States in 2013, by Number of Titles Published.” Statista – The Statistics Portal. Statista. 09 Dec 2015. http://www.statista.com/statistics/249043/largest-self-publishing-companies-in-the-us-by-number-of-titles-published/ (5) “State of the Commons.” State of the Commons. Creative Commons, 2015. Web. 09 Dec. 2015. Show less Reply Auguste Debroise 9 December 2015 Can we say that music and films are comparable in each point, and that we can use the positive impact that the piracy had on the music, to the movie industry? I will give you my personal point of view on the question, but I can already tell you that my opinion is divided. We know that some business plans which…Read moreCan we say that music and films are comparable in each point, and that we can use the positive impact that the piracy had on the music, to the movie industry? I will give you my personal point of view on the question, but I can already tell you that my opinion is divided. We know that some business plans which are consequences from piracy, work well for music and for films. For example, Spotify and Netflix work both with monthly fees, and the number of consumer who use these types of services increase more and more. For Netflix, the number of subscriber in 2012 was 26 million, and now they have more than 69 million people who has bought an abonnement. But there are also some differences for me. We could say with no hesitation that having music for free has a good impact on the music market. More and more people listen and discover new artists every day for free. In that case, it increases the fan base of an artist, increasing his possibilities of touring, increasing the size of the concert hall where he will play, etc… A way to see it, is to say that the artist gives up on a part of the profit he could make with cd sales, or online sales, to increase his expected future profit from touring, getting more famous etc… Most of the time in that case, I think that the gain is higher than the loss. For a film, I have more difficulties to see it on this point of view. Why? If you give up on profit you can make today, the expected profit that you win from it will be lower, because the film will be on cinema for a period, there are no live projections where you can make money, etc… In addition, I expect (most of the time) that the cost of making a movie is much higher than the cost of making a song. You are giving for free something that cost you a lot, with less hope of getting some profit back, and the profit will be then lower than the cost. In conclusion, I think we can use some teaching coming from the music market to analyze the movie market, but it remains some differences. Source : http://www.fool.com/investing/general/2015/11/15/netflix-subscribers.aspx Show less Reply Francois Lutz 9 December 2015 First of all, it is important to establish the basis of my perception about the evolution of the digital world : the consumption of goods and content has moved towards a very ephemeral model. It is as if people wanted to rent everything, even content. They want to listen to music streaming (via YouTube, Spotify, Deezer, Pandora, etc), watch movies…Read moreFirst of all, it is important to establish the basis of my perception about the evolution of the digital world : the consumption of goods and content has moved towards a very ephemeral model. It is as if people wanted to rent everything, even content. They want to listen to music streaming (via YouTube, Spotify, Deezer, Pandora, etc), watch movies & TV shows on streaming platforms (Netflix, Hulu, all the illegal streaming platforms), Video clips, etc. Recently, the streaming platform Twitch.tv has gained quite a lot of popularity. It allows gamers from all around the world to stream their gameplay. It might be from professional players from eSports teams, from amateurs or even game editors themselves! For example, Riot Games is streaming their “League of Legends” game weekly and the viewership from their “worlds finals” is in tens of millions. The business (supported by ads, partnerships and optional subscriptions) is quite a success, as Twitch.tv has been bought by Amazon for nearly $1 billion last year. The point I want to make is that people don’t want to buy physical copies of the digital goods they consume. Furthermore, they might not want to pay anything at all sometimes. The reason I insisted on Twitch is because it is, in my opinion, the future model of online services. It offers the basic service to anyone for free (the ability to watch people play games, draw, or even watch old paintings shows with Bob Ross) while commenting in the chat room. However, it allows streamers to earn money through various systems : first of all, they can choose whenever they broadcast ads (both the streamer and Twitch earns a share of the revenue). They can also allow viewers to “subscribe” to them for $5 a month, which allow users to have extra features such as new emotes, the ability to talk more, etc. The entire process is of course free advertising for game publishers, and they can even partner (in private, subject to fees) with “famous” streamers to have their games played and promoted. So how can this business model be applied to other entertainment industries? Pandora & Youtube both understood that free streaming simply wasn’t possible without a counterpart for the content creators. For every song streamed, Pandora pays a small fee to the owner. Youtube is pushing content creators by allowing them to activate ads in their videos, allowing them to earn some money for each ad viewed. Spotify uses a monthly subscription system. In the movie industry, Netflix and Hulu also use a subscription fee. Amazon uses the Kindle tablets, that have an eInk display which “emulates the comfort of reading on real paper” (source: kindle.amazon.com). What is the link between this (the evolution of the digital goods in the “culture of free”) and the Creative-Commons licensed works? Well, it goes back to the main idea : people don’t want to own digital goods anymore, they want to use it. The Creative-Commons license allows some of that. While it allows users to use the licensed content, it keeps it in a regulated environment. Furthermore, it provides the original creator some credit thanks to the “CC-BY” license (and its variants). Overall, the internet is heading towards a very free world, where content creators still get rewarded one way or another; either by sharing a part of the streaming revenues, for example, or by getting free advertisement through the diffusion of their products or artistic work, while getting credited for it. Alistair Barr, Ben Fritz. (2015). YouTube Seeks Streaming Rights to TV Shows, Movies. The Wall Street Journal. Online http://www.wsj.com/articles/youtube-seeks-streaming-right-to-tv-shows-movies-1449104356, consulted on December 5th, 2015. Eugene Kim. (2014). YouTube Seeks Streaming Rights to TV Shows, Movies. Business Insider. Online http://www.businessinsider.com/amazon-buys-twitch-2014-8?IR=T, consulted on December 5th, 2015. Creative Commons. (2015). About licenses. Online http://creativecommons.org/licenses/, consulted on December 5th, 2015. Show less Reply Andrea Italiano 9 December 2015 I really think that the culture of free permeates many technology users today. As stated in the video “it just can’t be stopped” the diffusion of copyrighted or even patented material on the web, that by definition can’t be fully controlled. Individual piracy is an issue now, and will be an issue forever. Whenever such dramatic changes happens the only…Read moreI really think that the culture of free permeates many technology users today. As stated in the video “it just can’t be stopped” the diffusion of copyrighted or even patented material on the web, that by definition can’t be fully controlled. Individual piracy is an issue now, and will be an issue forever. Whenever such dramatic changes happens the only way to deal with them, by the authors or the firms, is trying to understand how to pursue the same old goals, namely profit, in this new environment. What’s sure is that opposing this trend reveals to be useless. I’ve read a nice article (1) where the focus was on the real threat for possessors of IP rights on digital material is identified in the so called “commercial pirates”, third-party entities that use pirated materials selling it to consumers unable to use technology in such a way to individually “pirating” by themselves. This is a threat because the market in which the possessors of IP rights sell their products becomes crowded by the consumers pirates which of course sell at a lower price and the profits decrease. Hopefully in the long run the very existence of this commercial pirates will be put at high risk because of the progressive digitalization of the greater part of the global population, but of course this would result in the opposite for individual piracy. The point is that this should not worry too much IP right possessors, especially whenever they are large firms because a number of effective business strategies has already been identified (2). I want to stress the fact that what I see as a common feature for the near future is that in order to sell something to the potential consumers, the producers will be increasingly incentivized in understanding exactly the needs of their buyers expanding the range of services even on individual terms, thus increasing consumer welfare. In this view individual piracy of is to be considered ‘almost’ inexpensive marketing strategy pursued directly by who (the potential consumers) traditionally has always been the end side of expensive the marketing process. References: (1) https://www.gsb.stanford.edu/insights/how-music-industry-can-use-piracy-strategic-advantage (2) Belleflamme, Platz Digital Piracy, Encyclopedia of Law and Economics, DOI 10.1007/978-1-4614-7883-6_13-1 Springer Sience+Business Media New York 2014 Show less Reply Antoine Mounzer 9 December 2015 The globalization of the economy has changed the way we use internet. Without going too much into details, the main subject here is about sharing creative world protected by copyrights. Now with the dawn of illegal download (with is basically someone somewhere uploading something for some-other-one to somehow download it) there have been some disturbance whether it is about the…Read moreThe globalization of the economy has changed the way we use internet. Without going too much into details, the main subject here is about sharing creative world protected by copyrights. Now with the dawn of illegal download (with is basically someone somewhere uploading something for some-other-one to somehow download it) there have been some disturbance whether it is about the music industry that pains to make revenues, new creator using illegally previous work to edit it without asking or new ways to promote and share piece of work. The invention of copyleft (personalized copyright) and Creative Commons (organization specialized for art work) have changed the way we build a business model around digital goods (1) It’s important to take into account that there is at least 2 types of community. The first one suggests that music sales is about money and revenue and places art free progression in the background (those are the ones fighting fiercely YouTube, Napster or any other piracy platform). And then there is the opposite, Common Creative organization and copyleft followers that want to promote creativity and progression of a certain industry. In my mind, people seem to favour Common Creative licences work and thus progression of free works based on the graph (from 50M liscences to 1,1B in 9 years)(2)(3) In my opinion, there are two obvious stages in an artist’s life. In the first one, he wants to gain popularity, he wants his talent to be discovered and appreciated. Nowadays, with technological progress it is possible to record good quality songs and with sharing platform such as YouTube it is an ideal environment to spread your work(4). But then arrives the second stage where you are supposed to make a living out of it and you don’t really care whether or not someone recreates your work as long as you get paid. Computer programming is in some way similar to music industry. In order to be protected it also uses copyright (remember in the patent lecture, software and other computer programs cannot benefit from patents). Nowadays, it is common to illegally download Microsoft office licences or programs like that. However, some great programmer considered that a software in order to be developed had to be updated by a whole community and therefore free of access. Copyleft made that possible without losing control of the initial idea/creation. (3) But programming and music industry affinities with illegal download is not comparable. Music industry led to other problems such as distribution collapse. However this is just the result of progress and whether or not you pay to download, it’s much easier to download a song than buying it in a record store. When it comes to the music industry it will be hard to track down every piracy platform to shut them down. Piracy and the ‘culture of the free’ is and always will be part of our community until it is replaced by something better. So one must take advantage of it instead of fighting it. At the second stage of his life, the artist will have to think of an innovative way to earn money knowing people will illegally download his songs. There will always be the thrill of seeing your favourite band live on stage, outstanding video clips from your favourite artist to watch on YouTube. It is up to the artist to contract with sponsors and other brands and agree on commercials to earn his fair share etc. So in my mind there will also be money even if piracy consumes a big share of the cake. sources: (1)https://www.youtube.com/watch?v=8YkbeycRa2A (2)https://stateof.creativecommons.org/2015/ (3)http://www.thembj.org/2013/05/the-copyleft-tradition/ (4) https://vimeo.com/113949334 Show less Reply Corentin Decock 9 December 2015 In this comment, I would like to adapt the shift of the music industry to other contents. The main lesson (adapted from http://cdn.oreillystatic.com/en/assets/1/event/1/DRM,%20Digital%20Content,%20and%20the%20Consumer%20Experience_%20Lessons%20Learned%20from%20the%20Music%20Industry%20Presentation.pdf) we can draw is that the future has to be dematerialized, digital. The music industry resisted to this change and stuck to its old distribution channels not adapted to the technology: the physical support. When they finally…Read moreIn this comment, I would like to adapt the shift of the music industry to other contents. The main lesson (adapted from http://cdn.oreillystatic.com/en/assets/1/event/1/DRM,%20Digital%20Content,%20and%20the%20Consumer%20Experience_%20Lessons%20Learned%20from%20the%20Music%20Industry%20Presentation.pdf) we can draw is that the future has to be dematerialized, digital. The music industry resisted to this change and stuck to its old distribution channels not adapted to the technology: the physical support. When they finally changed, their response wasn’t adapted to the demand of the consumers, therefore not answering their needs. When contents were mainly played on MP3 through computers or MP3-players, traditional companies were still trying to sell CD’s. In a nutshell, they were resistant to change, not addressing the needs of the consumers and stuck to outdated business model that weren’t adapted to the current technologies. In the same vein as the music industry, the video industry struggled at the beginning of the century. This industry experienced the same threats as in the music industry as their contents and supports are slightly similar and they both faced the same market change. Even with an existing renting infrastructure, the video industry was facing new challenges: why would you drive and pay for something you can have for free at home. However and contrary to the music industry, there were quickly paying alternatives available, probably because televisions are widely used and part of our daily life. The VOD (stands for Video On Demand) appeared in our life in various ways: pay-per-view libraries (consumers “rent” a digital version of the film) or subscription models (consumers pay fees to access a large library – Netflix, Hulu, Amazon, etc.). The fact that this transition wasn’t as rude as the shift to digital music is linked to, as I said, the omnipresence of television in our life and the existing renting infrastructures (we were already used to pay to have the right to see a film for instance). http://www.thewire.com/business/2010/09/blockbusted-the-rise-and-fall-of-a-video-chain/22927/ Things are different with the video game industry. It indeed took actions and developed a dematerialized market where games are no longer sold on physical disks but can be downloaded directly from the consoles’ servers (like Microsoft did with Xbox Live in 2002). The recently launched consoles also face the concurrence of streaming consoles such as the Stream Machines where games are only digitals and widely open. What is different is that while developing this streaming market they also ensure that consumers won’t be able to exchange their games (through second hand markets, game sharing …) and therefore taking advantage of the shift to the cloud gaming (https://en.wikipedia.org/wiki/Cloud_gaming). In that way, they were able to address correctly the changings in the technologies and adapt their product to today’s technologies and needs. Show less Reply Alicia Bastings 9 December 2015 With the emergence of the Internet, many industries (music, movie…) once protected by copyright faced a drop in their sales: Copyright is no more sufficient to protect them from people getting their content for free. Indeed, the 90’s have seen the birth of software allowing users to download music, movies, games and so on for free. Therefore, these industries have…Read moreWith the emergence of the Internet, many industries (music, movie…) once protected by copyright faced a drop in their sales: Copyright is no more sufficient to protect them from people getting their content for free. Indeed, the 90’s have seen the birth of software allowing users to download music, movies, games and so on for free. Therefore, these industries have to reinvent themselves and find other ways to create cashable value. First, let’s take the example of the music industry. Because of these changes, it had to find another way to survive than selling records. Now, musicians and singers make most of their money by performing. Only the most famous of them have the privilege of earning significant revenues from their record selling activities. At the beginning, firms from the music industry tried to fight this illegal sharing of digital contents, but the phenomenon was too large and impossible to stop. Hence, it was better to try to find a way to get something out of it, rather than endlessly and pointlessly try to go against it. And what they gained, in my opinion, from the wider spreading of their content is visibility and free advertisement for their artists. Now, the Internet is a place where you can discover an artist for free, thanks to YouTube for example. Also, owing to the Internet, artists can make a name for themselves and become famous without having to find a big label to support and broadcast them. Yet, being famous is what gives artists (and thus their record label) market power. For instance, the singer Adele chose to release her long-awaited new album “25” only in stores, forcing its fans to buy the CD version. And it worked: 2,3 million copies were sold during the album’s first weekend. In my opinion, what convinced people to go physically buy it is not only that it wasn’t available on the digital market (people can still illegally download it) but the attachment Adele’s fan have for her and her music, to which the internet contributed a lot. Moreover, this huge success could only be achieved through the buzz created by the release of the first hit of the album, “hello”, on the Internet a few weeks before the rest of the album. Here the Internet thus permitted to “prepare” the public, make it impatient for the new album, freely of charge for the record company. I also believe that streaming companies like Spotify or Netflix are a good mean for records selling companies to regain a little of their lost profits. Indeed, instead of downloading illegally but for free, these firms offer consumers the possibility to legally stream their content for a monthly subscription fee. Afterwards, they redistribute a part of their profits to the copyrights owners of their content. To convince consumers to pay for their platforms, they offer benefits (compared to illegal downloads) such as high quality videos and music, many playlists for Spotify and film selection for Netflix, huge amount of content (Netflix still has to work on that in Europe), gain of time (all is on one platform, no searching time or long downloading time)… And it works: Spotify went from 0,5 millions paying subscribers worldwide in July 2010 to 20 millions in only five years! To see the graph, surf on: http://www.statista.com/statistics/244995/number-of-paying-spotify-subscribers/ Also, I wanted to point out that, yes illegal downloading disturbed greatly the music industry, but is it really a bad thing? Indeed, thanks to the digital revolution, the once very closed music industry opened up, creating more competition by letting new entrants in. The market is thus more efficient. Nowadays, it is way easier to create one’s own label since huge and powerful actors no longer control the distribution channels. It has also other perks such as the enhanced cultural diversity and affluence since many more artists can diffuse their art in a broad way without having to be supported by a big label. For instance, the website Jamendo allows unknown artists to be downloaded for free using the creative commons licenses. Creative commons allows artists to give samples of their work for free, as vendors do with perfume samples in their perfumery. Therefore, for me, Jamendo is an other way provided by the Internet to become known by the public in order to later be able to sell one’s music. Jamendo is thus a profitable business model working on the creative commons licenses, using them to become a kind of new advertising actor for new unknown artists, and gets money from it by selling commercial licenses. To end, I think that the industries concerned by this matter will still see a lot of changes in the years to come and have to continue trying to find ways to take the best from it, and not try to keep things as they are. Change is inevitable. Therefore, they’d better embrace it. References: Cox, J. (2015, December 4). Adele’s 25 is going to set another record with its second-week sales. Retrieved December 6th, 2015 onThe Verge: http://www.theverge.com/2015/12/4/9851878/adele-25-second-week-sales-million-copies Statista. (2015). Number of paying Spotify subscribers worldwide from July 2010 to June 2015 (in millions). Retrieved December 6th, 2015 on Statista: http://www.statista.com/statistics/244995/number-of-paying-spotify-subscribers/ Show less Reply Christelle Viatour 9 December 2015 During the nineties, CDs knew a golden age, as said in the video. People needed to buy the whole CD if they wanted to get the one song they needed. Copyrights and the royalties linked to it made musicians and music companies rich. Then, came Napster and with it, a whole new idea. What if you used Internet to…Read moreDuring the nineties, CDs knew a golden age, as said in the video. People needed to buy the whole CD if they wanted to get the one song they needed. Copyrights and the royalties linked to it made musicians and music companies rich. Then, came Napster and with it, a whole new idea. What if you used Internet to do what everybody was already doing, but this time, worldwide? What if sharing music was not limited to friends and family, but with anyone having access to the Internet? What if you could access to the content for free with a simple click? The digital age made it possible for people to have in one place (a hard drive) what once took a whole lot more physical space (stacks of CDs). Now, anyone could share his or her digital library with everyone. Once that idea was inserted into people’s mind, it was impossible to take it back. The music companies were mad. And what made it even worse were platforms like YouTube. It could be used by anyone to make him or her known. No need to go through music companies to reach the public anymore. This shift in mentalities rendered old business models ancient. Sure, people still buy CDs, books, DVDs (or Blu-ray’s). For some, books need to have a physical presence, a smell to be truly enjoyed; or CDs are useful if you want to listen to them in the car (even though you can use an iPod for that, now). However, more and more, people crave for digital, as shown by the appearance of the Kindle and eBooks, for example. New models need to be found. Steve Jobs did just that when he launched iTunes: he went with the flow of the digital age. This shift also brought back another problem: creativity is just a remix. Do copyrights really help innovation? After all, all creative process is based on already existing content. Kirby Ferguson, in his “TED talk” , mentions several musics that only were remixes of previous ones. Does inspiring oneself of something already existing is stealing? Where do we put the limit of “sufficiently diluted material”? This problem created a new way of doing things: “copyleft” . People now allow others to modify their document under the condition that the distribution terms remain the same. People realise more and more that it is by sharing that ideas will come, and will be greater. This explains why the amount of creative common-licensed works increases every year. This other model allows legal sharing, and it is successful. Every age offers different solutions to problems, based on which technology is available. Now that digital is so predominant in our lives, people need to take it into account when developing business models. This is what copyleft and common licenses offer, and this explains their success. Sources:  https://www.ted.com/talks/kirby_ferguson_embrace_the_remix?language=en#t-3931  https://www.gnu.org/gwm/libredocxml/x53.html Show less Reply Laurence Vanhove 8 December 2015 In this comment regarding the business models for digital goods in the face of the “culture of free”, I will express my opinion on the “Free or fee” options by going trough several changes that occurred across time and by assessing today’s situation in the music industry. The Napster short story started in 1999, when an 18-year-old college student set…Read moreIn this comment regarding the business models for digital goods in the face of the “culture of free”, I will express my opinion on the “Free or fee” options by going trough several changes that occurred across time and by assessing today’s situation in the music industry. The Napster short story started in 1999, when an 18-year-old college student set up a file-sharing program allowing computer users to download, share and swap files stored on a centralized server, all of this for free. He could not anticipate that this innovation would completely change the music industry. The demand from music lovers for making music available for free in an MP3 format was (and still is) huge. However, because of this massive demand, there was inevitably liability for facilitating copyright violations. Not surprisingly, Napster faced a lawsuit from the Recording Industry Association of America (RIAA) in 2000 and was charged with tributary copyright infringement. Napster was actually not accused of violating copyright directly, but of encouraging other people in that direction. When Napster lost the case, it also faced severe restrictions as they were imposed to stop all activities in 2001. Napster went bankrupt and was purchased by other companies in 2002 while the brand itself survived. Nevertheless, the need for getting free services was born and the media-coverage of the Napster case actually provided a huge marketing effect. The company saw its customer base and followers dramatically increase. The “culture of free” phenomenon could not be stopped. I think that not any business model can be set once and forever. Customer needs, technologies and environment evolve all the time and companies need to adjust their business to all kind of industrial revolutions. It happened in the music industry and beyond the for free aspect already in 1982, when Sony and Philips together launched the compact disc. After a period of reluctance, customers progressively switched from vinyl’s to CDs and bought appropriate CD players. Although initially restricted to classic music lovers who could appreciate the increased sound quality, CDs invaded the whole music industry. In 2013, Blockbuster, the well-known DVD rental company, closed 300 stores in the US as they did not anticipate the success of online video content distributions and did not adjust their business model. The content was switching from one support to another, more user friendly one that met customer needs. As soon as in 1998 Netflkix, on the other hand, understood the DVD rental industry turnaround (people did not want to go to DVD rental stores anymore but requested a direct service, from home) and launched an unlimited DVD rental system on the Internet. Spotify is an equivalent service provider focusing on music content. More particularly, this music-streaming platform has mentioned to grasp the business potential behind the “culture of free”. Indeed, the “deal” is quite simple: customers can listen to music “freely” provided that they listen to advertisements now and then. Getting rid of these ads (and enjoying some extra features) then comes to a more common cost: money. More recently, Youtube launched “Youtube Red” at the end of October based on the same ad-removal business model as Spotify. Users can now ad-freely access the video platform by paying a monthly subscription. In my sense, as firms have been able to spot the business behind it, the “culture of free” has now proven that it is rather becoming the “culture of almost-free”. Its cost: advertising and/or access to customer data. It is very easy for me, as a computer user, music lover and video watcher, to put myself in the shoes of a “culture of free” partisan. On a daily basis, I expect from a music or video platform to provide fast and free quality services. With today’s culture of free, one must acknowledge that media content itself is not anymore the main source of revenues. Successful artists and companies know they can benefit from the “for free” appeal to reach customers. It is all about using this appeal right away. They first create a buzz on Internet, direct the spotlight to their creation, and thereafter only create money. Artists now say they stopped the fight against free music content available on Internet platforms. Indeed, Karavoulias managed to gather the opinions of well-known musicians illegal music downloads one of which I will directly quote from the website: ” “Lars Ulrich (Metallica): Remember the band that took down Napster back in 2000? “It is sickening to know that our art is being traded like a commodity rather than the art that it is” However, in 2008, Lars was a bit more supportive: “Listen, we’re ten days from release. I mean, from here, we’re golden. If this thing leaks all over the world today or tomorrow, happy days. Happy days. Trust me. Ten days out and it hasn’t quote-unquote fallen off the truck yet? Everybody’s happy. It’s 2008 and it’s part of how it is these days, so it’s fine. We’re happy.”” (Karavoulias) From Artist’s side, it is thus now all about creating THE piece of music that will drag attention, the one thousands, millions of people will listen to and speak about in communities and on social networks. Artists acknowledge that they now prefer to “give” their music for free and rely more on concerts to make money, which is also the business they really like, with direct contact with their audience and real, life art. “Lady Gaga: “You know how much you can earn off touring, right? Big artists can make anywhere from $50 millon for one cycle of two years’ touring. Giant artists make upwards of $100 million. Make music–then tour. It’s just the way it is today.”” (Karavoulias) From the internet platforms side, it is about using the buzz to sell the information behind customers’ clicks on music, video or information content to companies willing to pay for such data for the development of their own business. What is true for music content on Internet is thus also true for videos, information, etc. Consumers’ preferences and profiles do not stay private anymore. Free content and customer privacy do not get along but it is the price to “pay” in the culture of free world. As our economy and salaries do not evolve as fast as Internet technologies, we cannot afford paying for all the content we want to download. We can however understand systems where free content is available for customers who accept that some of their information is used, while the same content is be available upon payment for other computer users who are more restrictive on their privacy. To come back on Spotify mentioned earlier, this is the kind of solution they propose to customers who are upset with the advertising that interrupts every 2 min the music they are listening to or downloading. The same content and service are available without advertising … but with a minimal fee. We cannot stop today’s evolution of technologies, new ways of doing business and emerging needs. Free or fee? I think both solutions must exist with transparency for customers about how their personal information might be used in each case. No doubt customers can be selective and decide what they are ready to pay for: content or privacy. It’s their choice. SOURCES: Minot , J., & Frantsvog, D. A. (2012). All Rights Reversed: A Study Of Copyleft, Open-Source, And Open-Content Licensing. Contemporary Issues In Education Research , 5 (1). BBC News. (2013, December 12). Blockbuster to close remaining stores. Consulté le December 8, 2015, sur BBC News: http://www.bbc.com/news/business-25345257 Google. (2015). Join YouTube Red. Consulté le December 8, 2015, sur Youtube: https://support.google.com/youtube/answer/6305537?hl=en&ref_topic=6305525 Ingram, M. (2015, October 22). YouTube Red: Google wants to compete with Netflix and Spotify at the same time. Consulté le December 8, 2015, sur Fortune: http://fortune.com/2015/10/22/youtube-red-netflix-spotify/ Karavoulias, T. (s.d.). Artists Speak Out On Music Piracy. Consulté le December 8, 2015, sur Up Venue: https://www.upvenue.com/article/1590-musician-stances-on-music-piracy.html https://www.youtube.com/watch?v=YL9RetC0ook Show less Reply Laureen de Barsy 8 December 2015 I would like to start with one theory behind the economic rational to freely share new knowledge usually protected by copyright. Then, I will explain how this free sharing can be achieved by using Creative Commons. The economics literature on intellectual property rights generally presents the introduction of property rights as a mean to prevent a specific market failure, i.e. the…Read moreI would like to start with one theory behind the economic rational to freely share new knowledge usually protected by copyright. Then, I will explain how this free sharing can be achieved by using Creative Commons. The economics literature on intellectual property rights generally presents the introduction of property rights as a mean to prevent a specific market failure, i.e. the under-production of knowledge as an output. However, a copyright also leads to a decrease in the supply of knowledge as an input due to its exclusionary effect (Ramello, 2005). This last effect is detrimental to further creation because of the presence of increasing returns to number of users: “Most innovators stand on the shoulders of giants” (Scotchmer, 1991). For this reason, Ramello (2005) claims that the current legal tendency to extend and strengthen copyrights may lead to the under-exploitation of the collective resource. Moreover, since knowledge has been put online, the idea of a ‘copy’ has become far less clear and “not everyone wants or needs the full suite of copyrights on every single item they author and distribute” (Le Dieu, director of iCommons, 2007). To solve the problem of under-exploitation of knowledge and adapt to this evolution in the way to tackle property rights, a non-profit organization called ‘Creative Commons’ has been created. The aim of this organization is to promote access to knowledge by limiting the exclusion generated by copyrights. To do so, Creative Commons offers a set of licenses that are less restrictive (only some rights are reserved) than those issued under copyright. These CC licenses have three main advantages (Le Dieu, 2007): • They give ﬂexibility to the author: There are six types of CC licences, depending on the rights the author agrees to give on his/her work. This ability to choose the right tool is critical, particularly in the increasingly diversified world of online distribution. • They are easy to use: A work published under Creative Commons can be easily identified by the CC logo. All the information needed to ﬁnd out what usage rights are given by the author is contained in this logo. • They are easy to understand: While copyrights are usually understood by a few people, either with strong vested interests in their rights or lawyers, Creative Commons provide three ways of reading the licence – legalese, plain language and machine readable. This ensures that difficult legal concepts are accessible to the general public. These features of Creative Commons decrease transaction costs, and therefore incentivize the sharing of knowledge. Sources: Le Dieu, P. (2007), ‘Digital distribution and Creative Commons’, The Handbook of European Intellectual Property Management: Developing, Managing and Protecting Your Company’s Intellectual Property, pp. 226-29. Ramello, G. (2005), ‘Private Appropriability and Sharing of Knowledge: Convergence or Contradiction? The Opposite Tragedy of the Creative Commons’, Developments in the Economics of Copyright: Research and Analysis, pp. 120-41. Scotchmer, S. (1991), ‘Standing on the Shoulders of Giants: Cumulative Research and the Patent Law’, Journal of Economic Perspective, 5, p.29. Show less Reply David Lhoir 3 December 2015 This video illustrate perfectly the real change internet brought : the ability for the users themselves to give to the world a content, without going through the classical distribution model. Today, a lot of creative commons licenses are produced thanks to this amazing tool and we have the ability to entertain or inform ourselves as much as we can with…Read moreThis video illustrate perfectly the real change internet brought : the ability for the users themselves to give to the world a content, without going through the classical distribution model. Today, a lot of creative commons licenses are produced thanks to this amazing tool and we have the ability to entertain or inform ourselves as much as we can with other medias, just with content that are not concerned by profit consideration. This said, I would like to focus on the music industry, which was one of the first harmed by the piracy problem. The core issue was of course that peer-to-peer was free, but also that it was simple. That’s why the response of Itunes (which was even simpler that installing a software and understand and believe in peer-to-peer system) was quite relevant. But today, people have way more knowledge about the system, and the music industry needs to tackle this issue differently. It could take the form of an promoting utilization of creative commons licenses : by using a music/episode which would be given for free, content creators could make a little add about new models of content distribution. For this latter I’m thinking software like Spotify, or Netflix system. But those system could have a strategy to differentiate themselves from a simple download : by creating services to the customers by examples : interviews, documentary, exclusive pre-release informations,… all of that could be an added value to convince the consumer to pay for those kind of new “distribution model” rather than just keep downloading the content with illegal ways. The key here is to find a way to add value to a purchased content in comparison with a pirated content. And in a market where digital becomes the only distribution canal, services to customers looks pretty relevant rather than other digitalized goods, who can be pirated. Show less Reply David Vanraes 17 December 2014 In this comment I’ll explain why the “culture of free” has been making copyleft more appropriate. I’ll illustrate it with examples of open soft ware and open content licensing for educational resources and finally I’ll say what other ideologies besides capitalism can say about the rising copyleft phenomenon. It is clear that a « culture of free » is creating more…Read moreIn this comment I’ll explain why the “culture of free” has been making copyleft more appropriate. I’ll illustrate it with examples of open soft ware and open content licensing for educational resources and finally I’ll say what other ideologies besides capitalism can say about the rising copyleft phenomenon. It is clear that a « culture of free » is creating more room for copyleft. The copyleft is better known as a general public licence(GPL). The copyleft is applicable everywhere where copyrights are used. Today, in the context of social media, the copyright can be also used not to restrict but to grant some rights to the audience, so the well-known « all rights reserved » becomes « some rights reserved » or even « no rights reserved ». Copyleft means therefore also that there is a shift going on from « pure property » towards more licensing. Some well-known examples of copyleft are wikipedia, written and edited in an open source manner. Or open-cola which is a brand of open-source cola where the instructions for making it are freely available and modifiable. Initially opencola was setted up to explain the principle of free and open source software. At the level of open source software, despite the fact that programmers have less compensation for their work they are strongly motivated by the concept of copyleft. They know that copyleft/open source software can have more impact and that finally there the possibility and probability that their program will be improved by consumers/users of the program is higher. Mustonen (2005) http://akgul.bilkent.edu.tr/telekom/MI_mustonen.pdf In the context of education it is clear that open educational resources i.e. open content licensing can strongly contribute to the human development but also to the improvement of the education itself. In a digital world where educational users will increasingly engage with a culture of cut and paste, remix, collaboration and instant Internet access open content licencing will provide a vitally important facility for sharing and reshaping knowledge in the name of culture, education and innovation. While respecting the basic principle of copyright open content licencing allows a broader understanding of information management in a way which builds on the existing system. There is only little doubt that open content licencing will become an important option in the copyright management, distribution and utilisation of educational resources. http://www.oecd.org/edu/ceri/38645489.pdf (Fitzergald, 2005) Not surprisingly, other ideologies besides capitalism like Marxism perceive initially, the Idea of the free software and copyleft, positive. Copyright was invented by and for early capitalism, and its importance to that system has grown ever since. To oppose copyright is to oppose capitalism (Johan Söderberg,2002) In the context of free software Söderberg says that development of free software provides an early model of the contradictions inherent to information capitalism, and that free software development has a wider relevance to all future production of information. Furthermore, Marxism finds it very positive to fight against corporate piracy by giving property rights status to communities. Copyleft uses copyright law, but flips it over to serve the opposite purpose: instead of a means of privatizing software, it becomes a means of keeping software free. (Johan Söderberg) Resources: http://akgul.bilkent.edu.tr/telekom/MI_mustonen.pdf http://www.oecd.org/edu/ceri/38645489.pdf http://firstmonday.org/article/view/938/860#s17 Show less Reply Bernard Vonèche 17 December 2014 It is obvious that the sales of recorded music declined with the entry of Napster and large scale file-sharing systems. Indeed, Naptser just cracked the key success factor of the traditional music industry, as mentioned Greg Hammer (Managing Director at Red Bull Studios) : “(…)In stores, which was actually the only place where you could buy a record. That was…Read moreIt is obvious that the sales of recorded music declined with the entry of Napster and large scale file-sharing systems. Indeed, Naptser just cracked the key success factor of the traditional music industry, as mentioned Greg Hammer (Managing Director at Red Bull Studios) : “(…)In stores, which was actually the only place where you could buy a record. That was the power of music business : the distribution !”. In my opinion, the music industry just had to face the consumer’s behaviour changes of the Internet bubble. As people no more buy books in library but through Amazon.com (on e-book format sometimes); people go to the iTunes Store or download by Torrent to listen their favourite records. Concerning the music industry, we have seen that when the physical CD sales were falling; the live concerts venues skyrocketed. Stein-Sacks (2006) identified the use of advertising and sponsorships, and the selling of additional products and services as key driving factors today. In the same sense, Mortimer & al. (2012) came also to the conclusion that: “To the extent that content in these industries becomes available to a larger potential customer base, some of the decline in revenue from traditional sources may be offset by increased demand for complementary products (NDLR: live concerts and other revenues like Spotify Artists”. (see the excellent “Spotify Explained” article here : http://www.spotifyartists.com/spotify-explained/ ). In the same idea, the various costs of bringing music to market have come down substantially since Napster, as an artist can make his song available on iTunes for $9.99.. A second example, in order to link the Creative Commons infographic and the RetroReport video, could be the rising number of so-called “Internet stars” and their awareness. The creative commons rules and related worldwide platforms like YouTube or Flickr helped an incredible number of young talents to rise and sometimes become professional artists or photographers (e.g.: Justin Bieber, Norman or Mackelmore). In fact, as Waldfogel (2011) said: “Record companies have traditionally made consumers aware of their products by promoting their new releases on radio. Even prior to the Internet, the labels produced more music than radio stations could air, so the labels paid the stations to promote their music”. The need for a change in the music industry is present. It begins, in my opinion and the Mortimer (2012) one’s by “a ‘loss leader’ approach to some of its music products in order to gain revenues from others, a theory also supported by Glynn (2001; cited in Fox, 2004)” In addition to use, through the Internet substantial opportunities to engage more and more the consumers in the activities of their favourite artists. Nevertheless, some business models already exists like the Opsound label which consider consumer like artists and enforce the cooperation between their community (see http://goo.gl/ouO6zZ). Finally, I personally think we should continue to support the Creative Commons and more widely the open access as it is obvious that it leads to more innovation in different sectors (music, videos,..) but we don’t have yet the perfect business model… Bibliography: 1) Julie Holland Mortimer, Chris Nosko, Alan Sorensen. (2012). Supply responses to digital distribution: Recorded music and live performances, Information Economics and Policy, Volume 24, Issue , Pages 3-14, ISSN 0167-6245, http://dx.doi.org/10.1016/j.infoecopol.2012.01.007 2) Waldfogel, J., & National Bureau of Economic Research. (2011). Bye, bye, miss American pie?: The supply of new recorded music since Napster. Available at http://www.nber.org/papers/w16882 3) Fox, M., 2004. E-commerce business models for the music industry. Popular Music and Society 27 (2), 201–220. DOI:10.1080/03007760410001685831 4) Stein-Sacks, S., 2006. The Canadian independent music industry: an examination of distribution and access. Prepared for the Department of Canadian Heritage, Sound Recording Policy and Programs Directorate. Available at http://publications.gc.ca/collections/Collection/CH44-81-2006E.pdf Show less Reply Saurabh Gupta 16 December 2014 Being a music listener and a musician at a same time, I believe I can understand both the sides from a better angle. As a music lover - consumer of this product (songs), I would always prefer to buy my music next door (as easily as possible). To top that, if that music is available free of cost, I may…Read moreBeing a music listener and a musician at a same time, I believe I can understand both the sides from a better angle. As a music lover – consumer of this product (songs), I would always prefer to buy my music next door (as easily as possible). To top that, if that music is available free of cost, I may just be on cloud 9. When the culture of free music started with Napster, I doubt if consumers even thought about any legal issues attached to just fell into the trap of this super easy way of distribution of music. At first look, things look so simple – I have a song, I like it, I’ll give it to a friend – of course, free of cost. However, when the legal issues shows its face, I still might not be an advocate paying for a music that is free of cost. The fight here is of another level – the fight is of one’s morale. And often, the love of music and other factors (like inability to pay, no access to brick-and-mortar stores, etc.) pave in and lead a consumer to choose an option which even though is morally wrong, fulfills their need. On the other side, when we talk about music and the artists, the things that top our mind are the love for music, the way it makes you happy and related things. However, beneath all this, there is a profession – of an artist and the related labels and company, who rely (or at least used to rely) on the income through their songs for their living. The time Napster launched, the major (for many – the only) source of income was the money they used to make through the sale of physical records. And when Napster (and later, other piracy platforms) paved in, they distorted this earlier model of income, which led to the frustration of many (including giants like Metallica). No matter how much distortion these piracy platforms created then, I feel that the model that music industry is following now, would be in benefit of both the producers and consumers in the coming time. It already has been a success in economies like US and EU, which have a stricter legal system and try to avoid piracy as much as possible. With time, artists (and production companies) have realized the importance of the online platform and have started to make the best out of it. Using the platform for online sales has been the topmost thing, which has not only restricted the sales through pirated means, but also helped a lot of artists to grow faster than they otherwise could have (as is also mentioned in the video). The increase in the commons-licensed works can be attributed to this reason itself. The artists have been surrendering to the online world, and thus trying the best to make the most out of it. Commons license help them here. By giving partial rights to the giant online platforms, they make sure that their songs are heard and they get famous. Once this is achieved, they can use other ways (live shows being one of them) to monetize upon their talent. The similar trend is already visible in other digital content industries with the e-books, movies and video games. However, the factors like – still a lot of people like to watch movies in cinema halls and a lot of people like to read physical copies of books, have slowed down the phenomenon in these industries. Having said that, it is quite evident that the process is in continuation and soon we will observe the same thing happening in these industries, which happened in the music industry. Show less Reply Pierre-Ami Maudoux 16 December 2014 The revolutionary large scale distribution of free media content initiated by Napster in the music industry is only one side of the ongoing free digital content revolution: not only the music industry, but also the newspapers, movies and books industries are undergoing dramatic changes. In this small essay, I will argue that the movies/series industry has no choice but to open…Read moreThe revolutionary large scale distribution of free media content initiated by Napster in the music industry is only one side of the ongoing free digital content revolution: not only the music industry, but also the newspapers, movies and books industries are undergoing dramatic changes. In this small essay, I will argue that the movies/series industry has no choice but to open its eyes to this new reality and accept the fact that it will never be able to force consumers back to the old, yet very profitable model of centralised distribution of digital content in physical stores. Instead, the modern challenge for this industry is to find creative ways to monetize its content in this new environment where most consumers (especially among the younger generations) will get their movies and series freely from illegal sources (e.i. online streaming sites, peer-to-peer platforms). In this context, one successful strategy has been to offer an alternative to illegal download of digital content by offering cheap, unlimited streaming subscriptions (e.g. Spotify in the music industry). This is where the example of Netflix is particularly interesting. The California-based company completely changed its business model from a physical DVD rental to an online movie streaming service in 2007. In essence, what it did was to apply the Spotify business model to the movies/series industry. It decided to offer its users unlimited video streaming, charging them a subscription rate of around $10 per month. This was extremely low compared to the traditional ways of acquiring video content (i.e. renting physical DVDs for $3 a piece or buying them for around $15 each), to the point that millions of consumers subscribed to the service despite having easy access to free, illegal downloading or streaming platforms (Netflix now has 50+ millions users across the world). The success of this business model as a credible answer to the mass-scale illegal downloads issue has led it to conquer more and more industries. One example of this phenomenon is Amazon’s kindle unlimited subscription for eBooks (less than $10 per month). Digital content publishers can draw three lessons from the success of Netflix and Spotify’s innovative business models. Firstly, consumers do not care about being owners of the digital content they consume as much as before. If they are offered a low price, they will accept to pay a fixed monthly subscription just to rent unlimited amount of media (music, movies, series, etc.). Indeed, when subscribers of these services stop their subscription, they are not allowed to keep any of the content but it does not seem to bother them. Secondly, rather than focus on the bad side of these new online distribution models (e.g. lower prices charged), firms must look at the new opportunities they offer: with marginal costs close to zero to distribute movies or series on the internet, your costs are really low and you do not need to charge much to make good profits. Instead, the major part of the costs of such streaming companies are license fees paid for the content they offer on their platforms. Another major opportunity offered by a streaming-based business model is an instant access to a huge amount of potential consumers. Finally, firms cannot justify a charge on digital content just because they provide it, as nowadays users can access that content for free very easily. The key is to offer distinctive features related to the consumption of digital content that the users are ready to pay for: Netflix has very well understood this and has developed a very efficient movie recommendation system on its platform. Other ideas for such distinctive features might involve enhanced social interaction among users (e.g. promoting discussion among users with roughly the same tastes on what they have just seen, allowing users to create and share playlists or to make playlists as a group of users, etc.). Sources: Chevallier, M. (2014), Netflix : la révolution attendra, in Alternatives Economiques N°338, Septembre 2014, pp. 32-34 https://www.amazon.com/Kindle-eBooks/b?_encoding=UTF8&*Version*=1&*entries*=0&ie=UTF8&node=9578129011&pfShowFeatures=&redirect=true Show less Reply Eva-Maria Scholz 17 December 2014 Thanks for this very interesting and thought through comment. You not only give some examples of companies that start to embrace this “culture-of-free”, but also highlight key features of their strategy that others may want to adopt. Rosa Elena Alvarez 16 December 2014 The video showed the end of the traditional business model for music industry produced by Napster. The service was launched on June 1, 1999 and by March of 2000, Napster had 20 million users. Due to the Recording Industry Association of America lawsuit, Napster was obliged to shut down in July 2001, its creators had to pay millions of dollars…Read moreThe video showed the end of the traditional business model for music industry produced by Napster. The service was launched on June 1, 1999 and by March of 2000, Napster had 20 million users. Due to the Recording Industry Association of America lawsuit, Napster was obliged to shut down in July 2001, its creators had to pay millions of dollars to artists and copyright holders (1). Nowadays, Napster represents a controversial cultural paradigm change in music distribution and consumption. It can be considered as in disruptive innovation. On one hand, it almost finished with one of the sources of power of music industry “the distribution” in record stores and to the extent that it paved the way for legal download services with online stores and streaming services. Amazon, iTunes, Facebook and more are the ones received the benefits of that now. On the other hand, Napster changed in a revolutionary way the frontier in music consumption. The consumer learned to get music for free downloading directly from internet and with the power of acquire individual tracks. However, the possibility to obtain music for free instantly has reduced its value. In the culture of free, the Creative commons (CC) licences encourage creators to share freely and legally their work with consumers. Here are some examples of how creators are using Creative commons licenses in their business models: Cory Doctorow, a science fiction writer, has released some of his books under CC licenses. It has allowed him to promote himself, expand his audience and increase his book sales. His CC-licensed books have consistently outperformed his publisher’s expectations. According to Doctorow “This “market research” of giving away e-books sells printed books. What’s more, having my books more widely read opens many other opportunities for me to earn a living from activities around my writing, such as the Fulbright Chair I got at USC this year, this high-paying article in Forbes, speaking engagements and other opportunities to teach, write and license my work for translation and adaptation. My fans’ tireless evangelism for my work doesn’t just sell books–it sells me.” (2) According to Masnick (3), musicians can use CC licenses to connect with fans offering them free online music, but then giving them a reason to buy. Creators can then generate revenue by charging for premium versions of their product (e.g. deluxe editions or hard copies) or related goods (concert tickets, t-shirts, etc.). Finally, CC licenses allow financing projects. Crowdsourcing is an increasingly popular way to fund projects (4). (1) http://www.thedailybeast.com/articles/2014/06/06/15-years-after-napster-how-the-music-service-changed-the-industry.html# (2) Doctorow, Cory. “Giving It Away.” 12 January 2006. http://www.forbes.com/2006/11/30/cory-doctorow-copyright-tech-media_cz_cd_books06_1201doctorow.html (3) Masnick, Mike. “The Future of Music Business Models (And Those Who Are Already There).” 25 January 2010. https://www.techdirt.com/articles/20091119/1634117011/future-music-business-models-those-who-are-already-there.shtml (4) https://www.kickstarter.com/pages/creativecommons Show less Reply Christopher Staudigl 16 December 2014 In think both the video and article nicely illustrate the facilitation of private user’s access to information goods which evolved within the last decades and seems to be an unstoppable trend. Although I understand that record companies have fought protecting their traditional revenue models, for example in having a legal battle against platforms like Napster, I think they should rather…Read moreIn think both the video and article nicely illustrate the facilitation of private user’s access to information goods which evolved within the last decades and seems to be an unstoppable trend. Although I understand that record companies have fought protecting their traditional revenue models, for example in having a legal battle against platforms like Napster, I think they should rather focus on changing the idea of their revenue model and prosper by more modern opportunities like creative common licenses but even piracy itself. This aspect I would like to briefly discuss in the following. First, it should be considered that the total amount of users of information goods (combining legally and illegally in one) has been strongly increasing in the last decade. Thanks to platforms like YouTube, millions of people may access a song within a short period of time, which was impossible in times of buying a CD in order to get access to a song. For this, creative commons licenses had a great impact and it comes with no surprise that their usage increased by17 times from 2006 until 2014. With the copyleft movement, creative work should be freely available to be modified, while at the same time it is required that all modified versions are free as well. And this enhancement of access to information goods makes economic sense. While it is true that most empirical studies conclude a negative effect of file sharing on legal sales, other sources of revenue may compensate for this in future. What I am thinking about is that in its nature digital products are experienced goods. So it is understandable that consumers would like to get a feeling of the experience before paying for it like in the case of a CD. The important part is that creative common licenses but also piracy, ultimately increase the amount of experience made by total population. So a good way for creative authors would be to focus on generating profit based on this increased experience made and shared by more people. Here I think for example of live concerts. Many stars argue that these are the main source of their revenues nowadays, which comes clear as consumers are offered some additional value. And for concerts for example, file sharing is a positive contribution because it creates more buzz and interest in an actor. This also connects to the positive effect of networks. As more people use a product (like a copy of a song shared online), demand for the high quality version in form of a CD or going to a concert can increase. But also additional ideas or products could be monetized by musicians in future just because of the fact that more people will have already made an experience with their art (in form of listening to their music online for example). The bottom line is that I think there are ways to generate profits through the increase of free experience, that could compensate for the loss of revenues piracy incurs. At the same time, models like the ITunes store are a promising avenue for recording companies. In my opinion, private consumer piracy emerged because it is an easy way to get quick access to information goods. A store like ITunes, can offer a similar value proposition and if charging a price is simplified and security standards can be kept high, then many consumers proved to be willing to pay for digital music. In this case piracy, for example, may have an indirect positive effect on ITunes sales, through offering a comparison product which helps consumers assigning value to the product they purchased. Considering videos that are videotaped in the cinema and then put online for example, it may become clear to end-users that the original version on iTunes offers better quality and is worth it to be purchased. Again, I think this is why instead of fighting against a phenomenon that is become so wide spread i.e. sharing information goods online, I propose creative authors to find ways capture the benefits inherit. To conclude, I want to stress that many other aspects like static vs. dynamic efficiency or how to separate between private and commercial piracy should be further discussed, in order to draw any final recommendations. Still, I see that there are many opportunities for creative authors and in order to best capture them, time and energy should be focused on these latter instead of being concerned too much with legal issues. Sources: http://retroreport.org http://www.wikiwand.com/en/Creative_Commons Waldfogel, J. (2011). Bye, bye, miss American pie? the supply of new recorded music since napster (No. w16882). National Bureau of Economic Research. Wunsch-Vincent S. (2013). The Economics of Copyright and the Internet: Moving to an Empirical Assessment Relevant in the Digital Age. WIPO Economics & Sta7s7cs Series, Economic Research Working Paper No. 9. Show less Reply Leave a Reply Cancel reply Your email address will not be published. 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