Thursday, May 19, 2005

Mark Kleiman points approvingly to public policy professor Michael O'Hare's rather bizarre proposed solution to the problem of music copyright protection: simply have the government pay musicians to create music. The idea is for music makers to allow anyone to record, play, trade, distribute and otherwise use their music--in return for a government subsidy, which would presumably be in proportion to their music's "popularity".

Let us put aside for a moment the enormous temptations to corruption and politicization that would beset any government effort to compensate artists based on their popularity. What purpose is such a scheme even meant to serve? What is the social value of compensating musicians for their popularity, anyway?

Traditionally, the function of intellectual property is to spur creativity. Patents, for instance, create an incentive for inventors to come up with useful inventions, by granting them a limited-term monopoly on their proceeds. By the same token, compensation for the creation of music would presumably have the goal of spurring the creation of new "good" music. How important is that?

One way to answer that question is to look at forms of music where intellectual property is less prominent a factor. Instrumental jazz, for example, is largely a performance art form, with many accomplished players obtaining little compensation from recordings. Those who earn a living from their music do so largely through performance fees--as they presumably would under the proposed government compensation scheme, since their music has little mass appeal.

Now, one could certainly say that instrumental jazz musicians don't work overly hard at creating wildly popular music. After all, their product is appreciated only by a niche audience. But they work very hard indeed to meet their own, and their audience's, definition of quality. And by that standard, they certainly succeed. Few fans in cities with any significant jazz audience find themselves bereft of good jazz musicians to listen to. And the top musicians tour constantly all over the country, bringing their music to clubs even in relatively obscure locales.

Why, then, would we expect musicians who produce popular music not to do the same? After all, their music isn't any harder to create than jazz. Their concert revenues would almost certainly be larger than that of jazz musicians. And they would have an additional incentive--great fame and widespread adulation--that jazz musicians can never realistically hope for.

Of course, most of the money earned today as a result of intellectual property rights to music goes into music marketing anyway, not music creation. And perhaps music marketers would work less hard under a regime in which music is not granted intellectual property rights. Is that really such a bad thing?


EKR said...

I can think of a (at least) two arguments for a scheme which bases compensation on popularity:

(1) Popularity is a plausible rough proxy for the amount of utility being provided by the product. That leads to efficient levels of production. You argue that current jazz musicians are good, but maybe if there were Britney Spears-levels of money to be made they'd be even better. (No good arguing that Britney Spears sucks because the market says she doesn't and that's the relevant measure here).

(2) It's the metric that most closely emulates current compensation levels, and so is politically most feasible.

That said, I'm skeptical of this scheme on a bunch of technical reasons, with the fraud problem being chief among them.

Dan Simon said...

To clarify, I'm not in any way against "a scheme which bases compensation on popularity". The two questions at issue are how popularity should be measured, and what steps the government should take to assist in the conversion of popularity into musicians' revenue.

Today, popularity is measured primarily by sales of recordings, and the government enforces intellectual property rights on music to facilitate the conversion of popularity into revenue. Kleiman and O'Hare propose an unspecified government-determined measure of popularity, and an unspecified level of direct government subsidies as the vehicle for converting popularity into revenue. I suggest simply measuring popularity by concert revenue, and having the government do nothing (beyond, of course, allowing concert venues to charge for access) to assist musicians in earning revenue from their popularity.

The main objection raised to my approach, as far as I can tell, is not that it in any way distorts the market (indeed, I'd argue that it does so less than the other two methods). Rather, it is that my approach simply doesn't supply artists with enough revenue to keep them producing music that people enjoy. My posting was largely devoted to countering that argument.

Michael O'Hare said...

An op-ed leaves little space to explain a complicated piece of machinery. My current view on assessing utility is that every music file contains (if the authors wish) an inaudible code, possibly authenticated by matching to a hash code, registered with the copyright office. Anything connected to the internet, but especially (now) computers, run a little applet that reports to the copyright office whenever a file with a code is opened (presumably to be played), and that code's annual count is incremented. Longer pieces get more "counts" on play. There are some problems with diverting the royalty fund with "fake" songs, but we have ways to deal with this. It's essential, of course, that the applet not report who is playing the song, just that it's being played.

I like logging play much better than downloads because the latter is such a noisy indicator (how many cd's do you have that you played once and put on the shelf? but they paid the same royalties as the ones you play all the time). I'd also like to get away from having to store files locally; if a file is available somewhere on the internet there's little value in having it on one's own hard disk.

Michael O'Hare

LTEC said...

to Michael O'Hare --

As an expert, I see many technical problems with your suggestion.
For one: I think that the inherent insecurities in your system would allow people to artificially increase the popularity of recordings. For another: for at least a long while, people will not want to live their lives online; when they play stuff offline -- which technically and socially you will not be able to stop -- this will artificially decrease the popularity of recordings.

to Michael O'Hare and Dan --

Please realize we are not only talking about music. We are -- eventually -- talking about music and books and movies and software and ...

to Dan --

You are essentially saying that you have no concern about a future where no one makes money (directly) from music recordings, but only from music performance. Do you also have no concern about a future where authors only make money from public readings, where DVDs are replace by live theatre, where software ... (I haven't figured this one out yet)? I think your main fallacy is assuming that because a lot of money is spent on music marketing, that the amount spent on creativity is therefore negligible. Surely you wouldn't argue that a software company isn't providing anything useful if it happens to be the case that the majority of its budget is spent on marketing.

A much more minor point is the following. Mass marketing has its good point, namely it creates a common culture. It is important to have sources of quotations, such as the Bible or Shakespeare, that are commonly recognized. Without mass marketing, think about how much poorer the lives would be of all those people who love Britney Spears or who love to rant about how much they hate Britney Spears. There was much more of a common culture when "I Love Lucy" was all there was to watch on TV, and there was something good about that. Of course, there is also something good about a world where there are a huge number of options about what to watch and what to listen to.

But I'm afraid we are facing a world where we lack a common culture and where a variety of quality books, music, etc. is no longer available.

Here is a reasonably short term prediction: unless "something is done", within five years, movie studios will stop issuing DVD's. The reason is that DVD's cut into box office receipts but (because of piracy) they (will) no longer offer counterbalancing revenue.

to the world --

Here is one possible future I don't find so bad.
We develop new devices for "playing" stuff in formats where readers and copiers don't exist. Of course, people can create hardware for getting around this. But because of laws against selling this hardware, the relative cheapness of the content, and evolved public standards of morality, the whole thing more or less works.

Dan Simon said...

First of all, thank you, Michael, for responding to my blog posting (assuming that's really you). One of the reasons that I started this blog in the first place was frustration over not being able to reply to published articles in a way that wouldn't be entirely ignored (as most emails and letters to authors and editors seem to be). You've thus just validated the entire purpose of my blog. I'm most grateful.

Regarding your scheme, though, I think the problem goes even deeper than the huge security vulnerability that LTEC rightly points out. Consider that even when used entirely correctly (that is, without any attempt to subvert the measurement mechanism), a system that allows anyone to direct a government subsidy at anyone else by a simple act (playing that person's music) is tailor-made for hijacking by kickback schemes, political or religious movements, or just groups of friends out to make a little cash. The underlying problem, of course, is that the "vote" that you give listeners comes, by design, without any cost--and as any evolutionary biologist will tell you, signals that cost nothing to send will be sent dishonestly.

Regarding the issue of "common culture", it's telling that LTEC mentions Shakespeare and the Bible as praiseworthy examples. Obviously, neither rose to its status as a cultural icon because of profit-driven marketing. To the extent that there is a common culture, and to the extent that it's a good thing, it's a result not of such marketing, but rather of the existence of certain institutions--schools, museums, religions, and so on--that devote themselves to defining and preserving a common culture. What we learn in school or in a place of worship creates a common culture far more powerful and enduring than the pop music industry, or even than the big three television networks at the height of their dominance.

As for your hypothetical dystopia, LTEC, in which cultural artifacts are only available in limited forms, because these are the only forms that offer artists remuneration--does that mean that you expect blogging to disappear altogether, once our readers stop paying us? Indeed, can you think of a single historical example of the phenomenon you describe actually happening? To take an obvious, directly analogous example, did videocassette copying end the sale of movie videos? And for that matter, I might add, suppose that the sale of DVDs did end, and audiences were forced to watch films in (gasp!) movie theaters--how disastrous, exactly, would that be?

My key point is really this: we should all stop worrying about artists starving. They've always been starving--non-starving artists have been an incredible rarity throughout history--and yet we've never really had a shortage of them. Heck, even governments that resort to brutal suppression can't seem to stanch their flow of creativity very effectively. The idea that they'll suddenly pack up and stop creating simply because the money's no good flies in the face of our historical experience. How about if we all just stop worrying about them, sit back, relax, and enjoy the show?

LTEC said...

Dan --
When you say, "What we learn in school or in a place of worship creates a common culture far more powerful and enduring than the pop music industry", it's obvious you're a young'un who did not come of age in the sixties. And even if some things are more important than other things, one should not minimize the importance of those other things. Regarding the Bible and Shakespeare: I meant those merely as examples of pop culture; I could also have used the Beatles and Monty Python. In any case, I think it not at all unlikely that Shakespeare "rose to its status as a cultural icon because of profit-driven marketing".

But I'm really not that interested in common culture issues. My main concern is the possible relative absence of digital content (or content that can easily be made digital) in the future. I say "digital content" because it (unlike pre-ultra-high-speed-internet VHS) can be perfectly copied and efficiently transmitted. I, for one, am pretty much a shut-in and I will greatly miss my DVDs. You won't because you aren't. I'm sure there are many things (perhaps baseball?) that you would miss that I wouldn't. Baseball isn't threatened, but books (for example) are (once we figure out how to "print" them nicely) and I think those are of value to you. (It is interesting to note that Baseball is one thing whose digital version is of absolutely no value to anyone.)

I say "relative" absence because I am aware there will always be people writing free polemic or writing free books or recording free music or creating free software. I'm sure you are aware of EFF types who would welcome the absence of for-profit software, but I don't think you would. I don't see why you are so happy to sit back and enjoy the absence of for-profit recordings, books, etc. O'Hare and I have made tentative, poorly thought out suggestions. Your suggestion seems to be to do nothing, or perhaps to hope for "brutal suppression" which, I agree, would lead to an outpouring of high quality, free, creative digital content.