Chad,
Thanks for the information.� ITS is not
endorsing Ruckus nor have we made any plans to license the product.� Ruckus
representatives asked if they could demo their product and I wouldn’t be
doing my due diligence if I didn’t at least take a look.� I thought
students would also be interested which is why I invited representatives from
the Student Senate.�
Anyone that wants to see their product is
invited although I would ask you to please let me know as my conference room is
small and I may need to get a larger room.
-tim
From:
[EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Chad Mohler
Sent: Monday, October 25, 2004
5:43 PM
To: [EMAIL PROTECTED]
Subject: [fsck] Raising a Ruckus
In response to Iosif's notice on the Ruckus meeting:
Ruckus is part of the Evil DRM (Digital Rights Management)
Empire. Some relevant facts about it (from Ruckus' FAQ,
http://www.ruckus.net/help/ruckus_faqs.htm, and its Help Pages,
http://www.ruckus.net/help/ruckus_help.htm):
- Music from Ruckus is encoded in Windows Media
Audio (WMA) format and only works on Windows 2000 or XP computers
(recommended specs: 800+ MHz processor, 256+ MB RAM).
- Music from Ruckus only plays on the computer
itself. It cannot be burned to CDs to be played on a
non-Ruckus-authorized computer, nor can it be transferred to MP3 players.
- Music from Ruckus is "tethered"; it
only plays as long as you have access to Ruckus...which means only as long
as you are a student at a university subscribing to Ruckus (Ruckus is not
available to the general public).
- Music from Ruckus can only be downloaded from on
campus, not from off campus.
- While I couldn't tell for sure from Ruckus'
online documentation, many services like Ruckus are offered only on a
campus-wide basis, rather than on an individualized "per campus
user" basis. That means that the university will be paying a licensing
fee for the service that will be passed on, either directly or indirectly,
to all the students, regardless of whether they use or can use the
service.
- (Chad's editorial points):
- DRM-encrypted music like that available from
Ruckus cedes to the recording industry one's right to "fair use"
of the music one legitimately purchases.
- Since DRM is usually pretty easy to crack, it
does not prevent illegal sharing of music. Instead, it only
penalizes music listeners who legally purchase music.
- Support of DRM'ed-music-offering services like
Ruckus and Napster makes it less likely that the recording industry will
undergo true reform in its business model for offering music
content. Harvard's Terry Fisher has proposed a business model that
would reward artists and allow folks to legally access all the non-DRM'ed
music they want, all for only $6/month! See The Register
article at the end of this message for more info.
I strongly encourage all of you to express to ITS and to your Student
Senate representatives your opinion regarding the possibility of Truman
subscribing to Ruckus.
>Student Senate Members:
>
>
>
>Any members of Student Senate are invited to attend an informational
>meeting this Wednesday, October 27 at 3pm in the McClain 107 Conference
>Room regarding legal file sharing. A representative from Ruckus will
>be making a presentation on his product, which offers a legal
>alternative to file sharing and music downloading.
>
>
>
>Please pass this information to Student Senate representatives
>interested in attending.
>
>
>
>Thank you and have a great day.
>
>
>
>~Jillian Schulte
>
>Information Technology Services
>
>Truman State University
>
>McClain 107
>
>Phone: 660-785-4163 Fax: 660-785-7632
>
>
>
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Article on an alternative model for selling music:
from The
Register,
http://www.theregister.co.uk/content/6/35260.html
Free legal downloads for $6 a month. DRM free. The artists get paid. We
explain how...
By Andrew Orlowski in San Francisco
Posted:
01/02/2004 at 12:05 GMT
Imagine a world where music and movies could be freely exchanged online, where
artists are recompensed and the labels don't lose a cent, and where 12-year old
girls need not fear harboring an MP3 of their favorite TV show theme tune on
their PC.
All that could be yours for less than the price of a subscription to Napster:
for less than $6 a month. Harvard University Professor Terry Fisher has
completed the first comprehensive examination of various alternative models and
the one we outline here offers such tantalizing social benefits, that even the
most jaded sceptic ought to pay attention. Professor Fisher belongs to the
school of sceptic clerks rather than the school of wide-eyed techno-utopians,
and he's spent three years trying to make the sums add up. We think it's worth
a look, and we think you ought to take a look too. (To make his task even more
difficult, Fisher's license model also takes on the additional onerous task of
compensating Hollywood, too).
How does it work? Let's look at the sums: what level of compensation do the
labels, studios and artists need to make it worthwhile?
Fisher actually lays his philosophical armory down for us to inspect at a very
early stage, and it's thus. Economies have had a lot of trouble with public
goods that are 'nonrivalrous' - if you use it you're not depriving someone from
access - and 'nonexcludable' - it's actually hard to make them exclusive.
Examples of the latter include roads, defense, and culture. It's a real danger
that if no one pays, then nothing gets done: the roads crumble, the country
becomes vulnerable, and aspiring pop stars give up their dreams of one day
snorting cocaine from an expensive prostitutes thighs.
But our flippant illustration of the final example is not entirely accidental. Many
artists forsake fame for fame's sake - but the beauty of alternative reward
models is that there's no disincentive for them to become popular, either. To
cite an example, when we've discussed flat fees before, someone usually writes
in with some anguish to complain how this would only reward Michael Jackson for
being popular. But what's wrong with that? There was a time when he was very
popular, and deservedly so.
So let's start at an accountant's year zero.
Calculating lost revenue
In the year 2000, the record labels earned $7 billion on retail
sales of $13 billion. For the sake of argument, let's assume that in the first
year 20 per cent of retail sales were lost to unlimited copying. That's $1.4
billion, although they'd save $210 in manufacturing costs, and approximately
$145 million in mechanical royalties. That brings the compensation to $1.045
billion for the recordings royalties and $138 million for songwriters, plus an
amount for lost radio-related royalties.
For the movie industry, calculating the potential loss is extremely
difficult. Firstly it's hard to estimate how much the industry earns now from
DVD and VCR sales and rentals, and cable and satellite deals. And it's even
harder to gauge the loss from file swapping. Even with the advent of Bitorrent,
downloads are slow, and few have the patience or resources to find value in
them compared to the availability on offer at plentiful late night retail
outlets. Fisher reckons five per cent, rather than twenty per cent for the
music business, of a $10 billion industry, or $479 million.
So combined, that's $1.677 billion to keep the RIAA and the MPAA happy.
But of course that's not all it would cost: the model requires an organization
to calculate and distribute the royalties, performing the duties of ASCAP or
BMI today. ASCAP reported that its 1998 administrative overhead was 16 per
cent, so Fisher generously estimates 20 per cent. (It's pretty generous, as
we'll see, because the digital overhea ds may actually be much lower). This
takes - and bear with us, because it also generously throws in a 10 per cent
charge for inflation between 2000 and 2004 - the net result to $2.306 billion.
So who pays?
Raising the money
If it was implemented as a regressive poll tax, with 87 million household filing
IRS returns, each household would pay a mere $27 extra a year: a little over $2
a month, or $51 cents a week. That's half the price of a single iTunes Music
Store song.
That's the most efficient way, with the lowest overheads.
However, any kind of income tax increase is obviously a hard sell,
especially in God and Gubbment-fearing America. And there are many sound
objections. Why should the poor subsidize the rich? Why, notes Fisher (who
clearly must remember the culture wars of the early 1990s), should a proportion
of the population which finds the entertainment products blasphemous be asked
to subsidize their creators? And why should Net-free households want to
subsidize the broadband users who are actually taking advantage of the system?
Fisher then exhaustively discusses four other options: taxing the playback
devices and/or burners, levies on the physical media, levies on the delivery
service, such as KaZaa, or on the Internet access point (your ISP). The latter
is by far the largest: spending on broadband in the US in 2004 is estimated to
be $16.4 billion. By contrast, blank media sales generate $2 billion in
revenue. In total, these four categories gross $20.248 billion. And so to get
our $2.3 billion to compensate artists, studios and labels would require an 11
per cent hike.
But what if it fell entirely on broadband users? Some might find the figure
surprising: excluding all of the other penny taxes we've just mentioned, the
cost will be $6 per broadband user per month. Um, is that all? Well, actually,
yes it is.
So what do consumers gain from suddenly being able to exchange music? It's
perhaps the most delicious question that's ever been asked - and there are so
many advantages to the free exchange of culture that we may have forgotten what
they are.
Fisher puts it thus -
"Consumers would pay less for more entertainment.
Artists would be fairly compensated. The set of artists who made their
creations available to the world at large - and consequently the range of
entertainment products available to consumers - would increase.
Musicians would be less dependent on record companies, and filmmakers
would be less dependent on studios, for the distribution of their creations.
Both consumers and artists would enjoy greater freedom to modify and
redistribute audio and video recordings. Although the prices of consumer
electronic equipment and broadband access would increase somewhat, demand for
them would rise, thus benefiting the suppliers of those goods and services.
Finally, society at large would benefit from a sharp reduction in litigation
and other transaction costs."
Is that enough? Well, there are two other benefits Professor Fisher
doesn't list. The high street music chainstore would find itself in competition
with informal music distribution points - such as concert venues, clubs or
coffee shops. Given the availability of cheap wireless playback hardware
(phones or Bluepods) every caf� or laundrette could become a 'record store'.
The stores that survive would of necessity focus on their expertise and social
relationships. It's hard to see what would draw customers into a Virgin
chainstore, but it's easy to see an Aquarius Records (a feted specialist store
in San Francisco's Mission district continuing to draw a loyal following). Social
spaces could be transformed. Nor does Fisher attempt to calculate the demand
for Internet infrastructure which might result, with the consequential
macroeconomic benefits.
Divvying up the pot
So what's the fairest way to divide the revenues? Professor Fisher points out
that only a representative sample is required: the model need not involve Big
Brother surveillance and aggregation of every song played. TV advertising
buyers trust a system already: Neilsen's ratings are calculated from only a few
thousand households. And in any case, it's doubtful any agency could afford the
IT infrastructure required to aggregate such a vast data warehouse. However
Fisher has a technical proposal which could simplify auditing enormously. He
suggests that digital media carries embedded watermarks which would not
restrict the playback of the song but would help auditors.
Fisher says that the "ballot stuffing" is the biggest technical
hurdle.
"You can never eliminate but you can minimize the ballot stuffing
problem," he tells us. "This most promising solution is an automated
sampling system that counts the frequency members of the sample play a song all
the way through. It's possible for artists to inflate the figure somewhat, to
persuade family members to leave computers on 24x7, but that static is
tolerable."
The most significant disincentive to ballot stuffing is the model itself: most
people would simply want the model to work. Unlike the current situation, where
there's a monetary advantage to be gained by breaking the system.
As for cross-border 'leakage' - Fisher says it is troubling from a fairness
standpoint and this could limit its political appeal. "But it could work
internationally especially when compared to a regime that leaks like crazy -
the regime currently using illicit P2P."
The simple idea is very powerful. Fisher identifies four constituencies
necessary to accept the model: consumers, artists, device manufacturers and
finally the intermediaries: the studios and labels. The model has huge
advantages for three of the four. And what incentives, we asked, would the
labels and studios have?
After hearing his presentations, Fisher says industry is intrigued but hardly
feels impelled to jump. The biggest 'carrot' is that it would see its revenues
guaranteed at 2000 levels. If it believes its own rhetoric, that could be a
very powerful incentive indeed.
Aside from a fringe of partisans, consumers are likely to embrace it
enthuasiastically. Several months into the infancy of DRM-locked music sales,
the online stores are dwarfed by the quantity of peer to peer file swapping,
which is again on the rise. Consumers will likely face two futures.
In one, the music industry succeeds in locking music sales through DRM
restrictions on MP3s, and equally restricted CDs. It's then at liberty to
'reinvent' itself, introducing such multi-sales opportunities we outlined here,
and that Ross Anderson suggested in his TCPA FAQ: one-time plays, songs that
only play on your birthday, graduated pricing models that charge a 'premium'
for higher bit rates. Our favorite has already been suggested by the RIAA's
Cary Sherman: a locked iPod full of all the music you'll ever need, which you
can pay and unlock at your leisure. (It's deliciously illustrative of the lobby
group, which has made the cynical, and not entirely false calculation that most
of the people in the world have the same record collection. Or one that varies
only by such sufficient degrees that it can apply the logic of the battery
farm.)
The other comes at a price, but a predictable and low price, and promises to
see high street and the economy rejuvenated. That isn't a hard choice for
consumers to make, but it will be need to be fought against entrenched
lobbyists. Our thanks to Professor Fisher for his exhaustive research in making
our choices clear. �
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