THIS OPEN BUSINESS o f MUSIC

Max Gaines / Thesis Paper

2011

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Charles (Max) Gaines DES – 699A - 03 Thesis Paper Professor Tom Klinkowstein Pratt Institute MS Communications Design 2011

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Table of contents

Introduction 4

Section 1: This Business of Music 7

A Star Is Born 8

Money Cash Hoes 9

The Golden Age of Grotesque 12

The Artist & The Law 12

The Designer 13

Goodbye Babylon 15

This Apparatus Must be Unearthed 16

Section 1 – Works Cited 17

Section 2: The Modern Era 18

The Day The Whole World Went Away 19

Change The Game 20

No, You Don’t 22

F**K This Industry 25

I’m Free From The Chain Gang Now 30

Section 2 – Works Cited 32

Section 3: Culture & The Open Future 33

Mere Anarchy Is Loosed Upon The World 34

HIP HOP 34

PUNK 35

Generation Y-Pay 36

The Fee-ist of Free Market Capitalism 37

Conclusion 39

Section 3 – Works Cited 43

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Introduction It is not the purpose of this thesis paper to denigrate the design traditions

of the past. Far from it. The ultimate purpose to move design forward.

Capitalism has served the Music Industry well. It was quite literally a

palace that created millionaires and icons. It also delivered to fans what

they crave most – Music. Their business and distribution system were

seemingly indestructible. That was until the late 1990’s when havoc was

cried and the dogs of war slipped through the palace walls unleashing mere

anarchy.

The Music Industry in its current incarnation is a commercial empire in

crises. But they are not alone. The music industry’s fate has been closely

watched by other media companies — television, film, software, and print

publications – all whose traditional businesses and distribution models are

also under siege.

The upheaval of commercial industries like the Music Industry is a market

signal. Currently the world of communications design is going through its

own set of growing pains much like commercial industries. So what’s the

answer for the survival of commercial industries and communications

designers? It starts with hip-hop – or at least its attitude. That certain

brazen audacity that is often re-interpreted as conceited adolescent

rebellion. What is rebellion but simply questioning the status quo –

questioning why things are the way they are and figuring out ways to make

them better. What lead Rick Rubin and Russell Simons to create the now

iconic Def Jam Recordings? chalk it up to brazen audacity. At a time when

the status quo labeled hip-hop culture and rap music not “commercially

reliable”, a fad, or “not real music” Rubin and Simmons saw past fog of

criticism to facilitate the creation of record label to fit the needs of their

culture.

It was brazen audacity, which lead Shawn Fanning to create Napster in

1999, and forever altered the course of distribution for commercial

industries. The invention of Napster and all that has followed may soon

deliver its greatest legacy – an opportunity for an open source future.

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Neither Russell Simmons, Rick Rubin nor Shawn Fanning were

Communications Designers. But what they have designers can learn from.

All three maintained a purity of vision. All three had the ability to see the

picture, not just the letter spacing. They had the ability to aggregate

resources, information, skills sets and technology – understand cultural

shifts and were able to capitalize with a viable commercial business (Def

Jam) and a revolutionary system (Napster) respectively.

All three were combined creativity and action and reasonably put into place

systems that solved a problem and achieve results.

Napster was a cross cultural phenomenon years ahead of its time. The

mainstream understanding of peer-to-peer systems is that they primarily

about getting free music. While this is true, its only a partial truth. People

don’t steal music to make money off it – they do so because they love the

music. The old style of distribution simple doesn’t fill the need – so an

alternative (piracy) is sought. For millennials it’s about culture and the

community they created. Some aren’t old enough to remember the days of

going to dingy record store in the east village and listen to the velvet

underground for the first time – but they do remember their first download

on Napster.

Music is personal. Music has no judgment. Your favorite record will never

make you feel self-conscious. In fact, quite the contrary – music has power

to make you feel euphoric about your life. Personally I had nothing to do

with the creation of Napster. Nothing at all. But it felt like it was mine. I felt

like I was apart of something bigger – something new. I felt a connection

not only to the community but to the artist behind the songs beyond words

and sound, public appearances, interviews and live performances - because

the music was so infinite and so available.

This thesis is contingent on the hypothesis that new decentralized

preferences for creating, accessing and exchanging copyrighted materials,

i.e., popular music, call for the creation of a new system for the

compensation and distribution of this material. Because of the Designer’s

ability to aggregate resources, ideas, skills and information, the position

will be assumed that designers will, within this context, assume the role of

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a ‘process facilitator ‘– a great architect contributing to the systemic

design necessary for compensation and distribution within a ‘free

exchange’ framework on the open market.

The challenges and opportunities that are faced will not be solved by

designers alone, but will be solved none the less. Can the music industry be

great again? Can designers be great again as well? Can the courage be

summoned to present roles for Communication Designers within

commercial industries that are beyond the traditional to make use integral

once again?

There once was a palace called the music industry. It was a palace and it

can be a palace again, in which there are no kings and queens – dukes or

earls, but subjects all – subjects behold to one another to use creativity and

action to reasonably and rationally put into place that which is possible

and practical.

My aim will not be for the destruction of the music industry, but rather to

help save it. I do not call for the abandonment of physical music (in

whatever form it may take) but rather a new system for its enchantment.

If nothing is done designers and commercial industries alike are nothing

more then sheep’s being lead into the final slaughter. I will not go down

that way. I choose to fight back – to live, not die – to rise, not fall.

We will rise above it. We will rise above it all. For the value of music is

infinite and so do are the possibilities for the Designer.

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Section 1: This Business of Music Exploring the technical side of the Music Industry; from its creation up to the modern era and the relationship between this industry, the artist and the designer.

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A Star Is Born (Album: Blueprint 3, Jay-Z + J.Cole, 2009)

The Music Industry has its roots in the invention by Thomas Edison

invented of the phonographic record player in 1877. Ironically musicians

branded enough Edison a pirate and a thief at the time. They believed

Edison had intentions to steal their work and that his phonographic records

would destroy the live music business. That was until a system was worked

out so that everyone could be paid royalties.

With onset of widespread radio communications, the way music is heard

was changed forever. Opera houses, concert halls, and clubs continued to

produce music and perform live, but the power of radio allowed even the

most obscure bands to form and become popular on a nationwide and

sometimes worldwide scale. 1

The “Record Label” eventually replaced the sheet music publishers as the

industry’s largest force. Some note worthy labels of the earlier decades

include Columbia Records, Crystalate, Decca Records, Edison Bell, The

Gramophone Company, Invicta, Pathé, Victor Talking Machine Company

and many others. 1

Many record labels died out as quickly as they had formed. By the end by

of the 1980’s, the “Big 6” as they would come to be known as included the

media conglomerates of: EMI, CBS, BMG, PolyGram, WEA and MCA

dominated the industry. Within these are the record labels. Sony bought

CBS Records in 1987 and changed its name to Sony Music in 1991. In mid

1998 PolyGram merged into Universal Music Group (formerly MCA),

dropping the leaders down to a “Big 5”. It wasn’t until 2004 when BMG

merged with Sony to become Sony BMG that they became the “Big 4.” 1

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Money Cash Hoes (Album: Vol. 2... Hard Knock Life, Jay-Z, 1998)

Music is big business on the United States. There are about 13,525

commercial radio and 1,748 television stations in operation and an

estimated 600 million radios and 254 million television sets in use. Ninety-

nine percent of American homes have radios and 98% have at least one

television set. The average person listens to the radio for an estimated

1,068 hours per year and watches 1,770 hours of television. 3

The two satellite radio companies that cover the United States and parts of

Canada are XM and Sirius. Total US subscribers are currently reported 55

million. 3

Music is also an essential part of many DVD’s included feature films. By

2002, over 1 billion DVD’s had been produced, making it then the fasted

recorded medium the mark. In 2004, DVD sales reached 16. 1 billion. 3

Music for video games is also big business. The quality of a video games

soundtrack is as important as a selling point for the game itself. According

to a survey conducted by Electronic Gaming Monthly, in 2005, 30% of

gammers purchase a CD containing music they first heard playing a game.

Every year over 250 million games are sold. 3

The music industry itself comprises various players, including individuals,

companies, trade unions, not for profit associations, rights collectives, and

other bodies. Professional musicians, including band leaders, rhythm

section members, musical ensembles, vocalists, conductors,

composers/arrangers, and sound engineers create sound recordings of

music or perform live in venues ranging from small clubs to stadia.

Occasionally professional musicians negotiate their wages,

contractual conditions, and other conditions of work through Musicians’

Unions or other guilds. 3

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Composers and songwriters create the music and lyrics to songs and other

musical works, which are sold in print form as sheet music by music

publishers. Composers and performers get part of their income from

writers’ copyright collectives and performance rights organization such as

the ASCAP and BMI. These organizations that ensure that composers and

performers are compensated when their works are used on the radio or TV

or in films. 3

When musicians and singers make a CD or DVD, the creative process is

often coordinated by a record producer, whose role in the recording may

range from suggesting songs and backing musicians to having a

direct hands-on role in the studio, coaching singers, giving advice to

session musicians on playing styles and working with the senior sound

engineer to shape the recorded sound through effects and mixing. 3

Record label manage brands and trademarks in the course of marketing

the recordings, and they can also oversee the production of videos for

broadcast or retail sale. Labels may comprise a record group — one or

more label companies, plus ancillary businesses such as manufacturers

and distributors. A record group may be, in turn, part of a music group

which includes music publishers. Publishers represent the rights in the

compositions—the music as written, rather than as recorded—and are

traditionally separate entities from the record label companies. The

publisher of the composition for each recording may or may not be part of

the record label’s music group.3

Record labels that are not part of or under the control of the “Big Four”

music groups are often classified as independent or “indie” labels, even if

they are part of large, well-financed corporations with complex structures.

Some music critics prefer to use the term indie label to refer to only those

independent labels that adhere to criteria of corporate structure and size,

and some consider an indie label to be almost any label that releases non-

mainstream music, regardless of its corporate structure. 1

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Record labels may use a “A&R” (Artist and Repertoire) manager not just to

seek out bands and singers to sign, but also to help develop the performing

style of those already signed to the label. A&R managers may organize

shared tours with similar bands or find playing opportunities for the label’s

groups which will broaden their musical experience.1

A record distributor company works with record labels to promote and

distribute sound recordings. Once a CD is produced, record distribution

companies organize the shipping of the CD’s to music stores and

department stores. This chain is no different than most other commercial

industries in the business of selling physical items.1

Successful artists may hire a number of people from other fields to assist

them with their career. The band manager oversees all aspects of an

artist’s career in exchange for a percentage of the artist’s income. An

entertainment lawyer assists them with the details of their contracts with

record companies and other deals. A business manager handles financial

transactions, taxes and bookkeeping. A booking agency represents the

artist to promoters, makes deals and books performances. A road crew is a

semi-permanent touring organization that travels with the artist. This is

headed by a tour manager and includes staff to move equipment on and

off-stage, drive tour buses or vans, and do stage lighting, live sound

reinforcement and musical instrument tuning and maintenance. In rare

cases a successful artist may add to the staff a ‘creative’ in the form of a

personal photographer and/or videographer, a graphic designer or a multi

disciplined creative director. 1

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The Golden Age Of Grotesque (Album: The Golden Age Of Gro tesque, Marilyn Manson,

2003)

Beginning in the mid 1950’s sales of sound recordings grew an average of

20% a year. In the 1970’s sales rose from less than $2 billion at the

beginning of the decade to $4 billion in 1978; that year, however, sales

began to fall sharply reflecting in par the American economy as well as

effect of home taping. 3

But the situation changed in 1984. When Compact Discs entered the

consumer market, sales once again reached $4 billion. By 1988, the

combined dollar volume or record, tape and CD shipments rose $ 6.25

billion. By 1998 sales figures for combined audio and music video product

has risen to $13.7 billion. Between 1997 and 1998 CD sales grew %15.1.

By 2000 CD’s dominated unit sales pushing sales to $14 billion. 3

During the 1990’s it became clear that the selling of CD was the bread and

butter for the Music Industry. Their distribution channel followed the same

model used by other commercial industries. The basic channel is a

one-way street between producer who hands off to distributor who sells to

retailer who sell to you.

The Artist & the law

In this system the Artist often is lost in the shuffle though is the driving

engine behind CD’s. As columnist Kevin Maney wrote for the USA Today:

“Only a relatively few American rockers ever sell enough CD’s to get

fabulously rich. Should society care if rockers cant afford to build their own

backyard amusement parks? 2 The Artists typically will receive less than

.60 cents per unit sold. 3

A recording agreement is usually written as an employment contract, and

therefore the record company will claim that the results and proceeds of

the artists’ services belong to the record company as a work for hire. This

means that the artist retains no interest in the physical tapes or masters of

the copyright in sound recordings and is restricted to a claim for

contractual compensation and royalties. 3

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Under US Copyright Act, exclusive rights in sound recordings are limited to

reproduction, the preparation of derivative works, and distribution.

Traditional when we buy a CD, the musicians actually get very little of the

money we spend on it. Most of the money goes to the music company, and

most of the costs incurred by the music company go towards marketing

not towards the production of the music. 3

When a CD is purchased the majority of income from that sale move

directly to the Music Industry, not the artist. Is it possible that without

copyright protection the quality of music would actually increase? Instead

of relying on expensive marketing campaigns to become popular,

musicians would actually have to rely on the quality of their music.

The Designer

In this in this system the Designers role was involved with the marketing,

packaging, branding and advertising process. On the individual artist level

they’re involved somewhere with “the look”. Websites, promotional

material, music videos, stage design as well as more traditionally the

album cover.

The album cover is a component of the over all packaging of an album.

Especially in the case of vinyl records with cardboard sleeves, these

packages are prone to wear and tear, although wear and tear does often

take place to some degree on covers contained within plastic cases. 1

Album covers serve the purpose of advertising the musical contents on the

LP, through the use of graphic design, photography, and/or illustration. An

album cover normally has the artist’s name, sometimes in logo form; and

the album title. Other information is seldom included on the cover, and is

usually contained on the rear or interior of the packaging, such as a track

listing together with a more detailed list of those involved in making the

record, band members, guest performers, engineers and producer. On the

spine of the package, the artist, title, and reference number are usually

repeated so that albums can be identified while tightly packed on a

shelf.1

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With the increasing popularity of digital music downloading service and the

inflating cost of conducting business, the purpose and prevalence of the

album cover is evolving.

While the music industry tries to keep up with technological and cultural

shifts, the role that packaging (and thus the traditional role of the designer)

will play in consumer music sales in the near future is uncertain, although

its role is certainly changing, and digital forms of packaging will continue to

surface, which, to some degree (and to some consumers) take the place of

physical packaging. 1

However, as of 2008 it should be noted that physical music products, with

a physical “album cover”, continue to outsell digital downloads by a

substantial margin. 9

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Goodbye Babylon (Album: Magic Potion, The Black Keys, 2006)

In the 21st century, consumers spent less money on recorded music than

they had in 1990’s, in all formats. Total revenues for CD’s, vinyl, cassettes

and digital downloads in the world dropped 25% from $38.6 billion in

1999 to $27.5 billion in 2008 according to IFPI. Same revenues in the U.S.

dropped from a high of $14.6 billion in 1999 to $10.4 billion in 2008. The

Economist and The New York Times report that the downward trend is

expected to continue for the foreseeable future.7

Forrester Research predicts that by 2013, revenues in USA may reach as

low as $9.2 billion.7 This dramatic decline in revenue has caused large-

scale layoffs inside the industry, driven retailers (such as Tower Records)

out of business and forced record companies, record producers, studios,

recording engineers and musicians to seek new business models. 9 Many

top industry executives agree that the music industry is in a downward

spiral and advise all up and coming artists, especially the plethora of trend

following pop and hip hop artists and producers, to “get out while they still

can” 1

The IFPI (International Federation of Phonographic Industries) estimates

that lost sales due to piracy amounted to $4.6 billion worldwide in 2004.

According the RIAA (Recording Industry Association of America), out of the

27,000 records released annually in the United States only 10% are

profitable, and it’s often the hit records that are the target of pirates. 3

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This Apparatus Must Be Unearthed (Album: De-Loused In The Comatorium, The Marts Volta,

2003)

Not long ago, if you wished to get your hands on a piece of music you had

to take the money saved up in your pocket, take a trip to the local record

store and sift through the racks. The good ol’ days. 4 Now it’s infinite and

instant. And above all, for those who want to accept it or not – it’s almost

all free. As consumers relationship with music change, through

technological advances and cultural shifts – so to must the commercial

industry built around the distribution of popular music. 5

Every time technological advances came along – at every step, the people

invested in the music business at the time look at it as a threat to their

livelihoods. The knee-jerk reaction is to seek and destroy. 6 If you had a

phonograph player in your house, why would you ever go outside of your

house to listen to live music again? In the 1980’s the music industry took

out full-page ads in Billboard and other magazines saying, “Home taping is

killing music”. They thought that because people had cassette tapes, they

would just tape their friends’ music and never buy albums again. 6

Advances did not decrease the desire for music, but rather exponentially

increases it. More people are listening to more music now, than at any

other time in history. Why is that a bad thing? 6

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Works Cited – Section 1 1) Music Industry, Wikipedia, 2009,

http://en.wikipedia.org/wiki/Music_industry, 10,

October 2010

2) Matt Mason, The Pirates Dilemma: How Youth Culture is Reinventing

Capitalism (New York: Free Press, 2008) 148 – 160

3) M.William Krasilovsky, Sydney Shemel, This Business of Music 10th Edition

(Crown Publishing Group, 2007) 4-12

4) Music’s Lost Decade: Sales Cut in Half, David Goldman, 2010,

http://money.cnn.com/2010/02/02/news/companies/napster_music_ind

ustry/, 10, October 2010

5) The Golden Age if Infinite music, John Harris, 2010,

http://news.bbc.co.uk/2/hi/8330633.stm, 10, October 2010

6) Greg Kot: How the Internet Changed Music, Claire Suddath, Times, 21

May 2009, http://www.time.com/time/printout/0,8816,1900054,00.html,

7) Digital Sales Surpass CDs at Atlantic, Tim Arango, November 25, 2008 .

The New York Times.

http://www.nytimes.com/2008/11/26/business/media/26music.html. 1,

October 2010.

8) Steve Knopper, Appetite for Self-Destruction: the Spectacular Crash of the

Record Industry in the Digital Age. (Free Press 2009)

9) Digital album packaging should improve in 2008, Antony Bruno,

Reuters, December 31, 2007,

www.reuters.com/article/idUSN3049009520071231?sp=true, 1 October

2010

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Section 2: The Modern Era Exploring the upheaval of the Music Industry within the past decade and what these changes could mean for the future of this commercial industry and its relationship to all who support it.

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The Day The Whole World Went Away (Album: Fragile, Nine Inch Nails 1999) In June of 1999 a US teenager wrote a computer program that turned the

music industry on its head. It created shockwaves that are still being felt by

the global entertainment business over a decade later. 4

Shawn Fanning was a 19 year old undergraduate in Boston when he

created Napster. Fanning’s program let friends connect and share music

on their computers, a precursor to Facebook. Initially, it seemed innocent

enough but Napster unleashed a social, technical and commercial

revolution. 2

By letting friends swap MP3 tracks, perfect digital copies of music, Napster

made the casual copying and exchanging of music among friends into a

global, automated and simple process that threatened the music industry,

whose business model was in no way geared or even prepared, for the

digital online age. 4

Napster allowed connected users to share the MP3 contents of their hard

drives, using peer to peer technology to move the files from one machine to

another. The program was the first mainstream peer-to-peer technology

and a giant wake up call for the music industry, particularly record labels,

who had not come to terms with the impact the net would have on their

business models. 4

In a few months, Napster exploded beyond the university campus and was

being used by 85 million people around the world, with a billion searches

for music every day. 4

For the music industry, Napster represented the gravest possible threat to

music and to the business model that had served it so well for almost 50

years. Within months of the service launching, the Recording Industry

Association of America (RIAA), The lobbyist organization for the music

industry sued Napster. In 2002 Napster was shut down. 4

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File sharing didn’t go away with Napster. Hardly. They evolved, got smarter

and built decentralized servers. Napsters Achilles heel was that it ran on a

centralized server. 7 Illegal file-sharing remains rampant, despite a host of

other legal actions against websites and computer programs as well as

lawsuits against thousands of individuals charged with facilitating file

sharing. 4

Change The Game (Album: The Dynasty Roc La Familia, Jay-Z, 2000)

Following in Napsters stead came systems like BitTorrent, and programs

like OiNK Pink Palace. OiNK Pink Palace (a precursor to iTunes) was an

invitation only BitTorrent tracking community with about 180,000 users

created by programmer Alan Ellis in 2004. 8 It was a genuine community.

OiNK placed an emphasis of the sharing of torrents for high quality MP3’s

and multiple lossless audio formats such as FLAC. One of OiNK’s rules was

that users could not pay to gain membership to the site, but had an

opportunity to donate money to the site. 8

BitTorrent is a peer 2 peer protocol, or method, that allows people to share

data much more efficiently and at greater transfer speeds than previous file

sharing software. What BitTorrent does is remove limitations by allowing

for a virtually unlimited number of people to connect to one another and

share the same file at the same time. The idea behind BitTorrent is to allow

massive distribution of popular files without penalizing the source by

soaring bandwidth costs and possible crashes due to demand that exceeds

the capability of the server. In this way, anyone who creates a popular

program, music file or other product can make it available to the public

regardless of assets, even if the file becomes highly popular. 10

To some OiNK Pink Palace the worlds greatest record store. Pretty much

anything you could imagine, it was there and in any format you wanted. 9 In

2007 after years of legal battles, OiNK was shutdown by copyright

authorities.

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But its legacy lives on. What the Music Industry cant understand is that

OiNK, like Napster before it was about the culture – the millennial and the

community it created. Some aren’t old enough to remember the days of

going to dingy record store in the east village and listen to the Velvet

Underground for the first time – but they do remember their first download

on Napster. 8

CD sales are falling, while legal services have yet to make up for the lost

revenue. 4 Every month 2.6 billion music files are downloaded illegally.

That number doesn’t include the movies, TV shows, software and video

games that circulate online. 7 U.S. album sales tumbled for the eighth time

in nine years as the rate of growth in legal digital downloads slid in a

turnaround from recent years, according to industry figures. Sales have

plummeted 52 percent from the industry’s high-water mark of 785.1

million units in 2000. 6

But the unanswerable question – the pink elephant in the room is what

would have happened to the music industry if Napster had not emerged. 4

Better yet, what would the industry look like today – if they embraced

radical new forms of distribution?

The undeniable truth is that the music industry would be in better shape

now if it had engaged with Napster or OiNK Pink Palace rather than their

seek and destroy attitude.

However it is also true that music industry in 1999, when Napster debuted,

would have struggled to create that business model because of rights

issues, a lack of good copyright protection software and an inability to

track downloads so that royalties were properly awarded. The music

industry took on Napster because the file-sharing system had no interest in

developing the elements needed to turn it into a business. 5 The business

model for the music industry was based around the selling of CD’s. In that

sense the what’s really struggling in not the music industry but the

business of selling plastic disc.

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But that doesn’t mean they should’ve have at least tried. With some

innovation, emphasis on research and development investment and “other”

facilities making decisions (besides those traditional peeps of the music

industry) who knows what could’ve been achieved.

To the RIAA Napster was a form of piracy. But what piracy is, at its core, is

a market signal. It is a wake up for business making them aware of the fact

that something in their model is either outdated or need shifting.

Today the music industry has a better understanding of with digital

distribution. The Industry currently licenses hundreds of thousands of their

music to downloaded on popular web based record store iTunes. But file-

sharing sites and technologies that have since emerged since the late 90’s

are doing damage to the music industry business model. Clearly an

opportunity was missed some ten years ago. Much like cassettes in the

1980’s the music industry saw Napster as a threat. Their mission became

seek and destroy rather than, at the minimum, developing an

understanding of cultural shifts and technological advances. 5

No, You Don't (Album: The Fragile Nine Inch Nails 1999)

Radical new forms of distribution of popular music within the framework of

a commercial business are currently in their puppetry years. The fight to

stifle contain or seek and destroy piracy represents an

industry going though growing pains.

The Music Industry is very busy in its efforts to clamp down on illicit P2P –

the same treatment they gave Napster in 1999 only this time enlisting the

help of the Federal Government. By trying to get the government to clamp

down on users, they risk alienating music’s greatest fans, and bringing

copyright into disrepute. 5 You can’t simple sue your way back to

someone’s heart.

The 10th annual Future of Music Policy Summit was a three day conference

filled with presentations and dialogue among tech heads, policy makers,

artists and record-label executives - all plotting a new future for the music

industry.

23

In attendance was US President Barack Obama’s new copyright czar,

Victoria Espinel. A few months ago she introduced a strategy for dealing

with Internet file-sharing (or “smash and grab” as it was described by Vice

President Joe Biden), which has been linked to a 50 percent decline in

music-industry revenue over the last decade. 5

The music industry’s implosion has become a cause that even the federal

government can’t ignore because the same issue – unfettered exchange of

Internet files – has bled into the movie, publishing and even the Adult

Entertainment industry. Now any intellectual property that can be digitized

can also be shared/stolen/cannibalized within seconds of hitting the

Internet, and multibillion-dollar businesses, most of them with roots firmly

planted in the pre-digital 20th Century distribution are crying foul. 5

Without directly indicting consumers, she outlined a strategy for containing

file-sharing that suggested that many digital music fans will need to alter

their behavior or else risk being cut off from the Internet at the very least.

However 95 percent of file-sharers consume music “illegally.” That is, they

traffic in copyrighted music files that are readily available on the Internet. 5

Does that mean tens of millions of Americans are technically “criminals” by

federal standards? Or does piracy represent a better way to consume

content for a growing section of the population?

When questioned about the disconnect between policy and the way many

American citizens behave when using their computers or cellphones, she

merely insisted that there is “no inherent conflict” and that “the majority of

consumers don’t want to engage in illegal content.” 5

“The last thing we need is more sticks” to beat down file sharers, said

Eddie Schwartz, president of the Songwriters Association of Canada. “We

need to find legal ways to file-share.” 5

The most popular trend is to insist the Internet service providers become

part of the solution. A number of European countries have enlisted service

providers to police their customers; those who engage in illegal file sharing

have their Internet access restricted or cut off.

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Steve Marks of the Recording Industry Association of America, which

represents the major labels, said, “It’s not a secret that all content holders

are interested in pursuing deals with ISP’s that make sense.” That could

mean the imposition of additional fees on Internet users, which opens up

another set of issues: Who would collect the fees and who would distribute

them not only to license-holders but to the artists themselves -- often the

bottom of any revenue food chain? 5

No one questioned that music still has considerable value -- more people

are listening to more music than at any time in history. But how to turn

that stream into a river of green for artists remains unresolved. Reconciling

a legion of business interests all looking for a stake in a new form of

distribution and a nation of consumers who are used to getting their music

digitally for free will not be easy.

For years, the music industry was confined to four multinational

corporations that dominated the revenue stream of 70% of the music

coming in, and four or five radio conglomerates that controlled what music

was going out. 2

Today consumers are broken up into millions and of little pieces and

subcultures and niches that are serving small, really dedicated

communities of music lovers.

Listeners may not necessarily pay for that one song or the one album, but

if they’re intrigued enough, they’re going to start following an artist or

band. Fans will show up at your show or buy the merchandise or buy the

next CD or the vinyl version of the MP3 they just downloaded. 2 If you’re a

good band and making quality music, your fans are going to want every

piece of what you put out. Once an audience is there, all sort of money

making opportunities emerge.

25

F**K This Industry (Album: Flockaveli, Waka Flocka Flame, 2010)

It’s no secret there’s lot of concern these days about what the music

industry will look like going forward – especially from those who work on

the label side of the business and have been around for some time. A

variety of things have caused rapid change in the market. 14

Competition from other forms of entertainment have, such as the internet,

movies and video games, have put more pressure on the industry, as

consumers have been presented with significantly more options for their

entertainment attention and dollars. And of course there is file-sharing – or

as the industry prefers to call it (accurately or not) “piracy.” 14

There is solution seems to be simple: “stop worrying and learn to embrace

the business models that are already helping musicians make plenty of

money and use file sharing to their advantage, even in the absence of

licensing or copyright enforcement.” The model can be defined as:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model. 14

Trent Reznor, the man behind the band Nine Inch Nails, has done so many

experiments that show how this model works that it’s difficult to describe

them all. He’s become a true leader in showing how this model works in a

way that has earned him millions while making fans happy, rather than

turning them into the enemy. Reznor has always reached out to his fans,

and has an amazingly comprehensive website, with forums, chat rooms

and many other ways of interacting. He encourages fans to better connect

with each other as well. 14

With his release of the album Ghosts I-IV, he released all the tracks under a

Creative Commons license allowing anyone to share them online for free.

Yet, he also set up some “reasons to buy.” 14 You could get the two disc

CD, if you wanted, for just $10. Above that, though, was a Deluxe Edition

Package, for $75. It was, effectively, a box set, but around a single

album. Beyond the two CD’s it also included a DVD and a Blu-Ray and a

photobook of images.

26

Where the experiment got even more interesting was that he offered up the

$300 Ultra-Deluxe Limited Edition Package -- of which there was a limit of

just 2,500 available. This was an even more impressive “box” that also

included the songs on high quality vinyl, and some beautiful giclée print

images. 14

It took just 30 hours for all 2,500 to sell out, bringing in $750,000 in just

over a day. For music he was giving away for free. But, by connecting

with fans, and giving them a reason to buy, they did. In the first week

alone, combining all the other offerings for Ghosts I-IV, Reznor brought in

$1.6 million. Again, this is for music he was giving away for free.14 The idea

that you “can’t compete with free” or that free means there’s no business

model is a myth.

Reznor’s next album, The Slip, was released just a few months later, and

again, was given away entirely free, but it was released the very same day

as he announced his next Nine Inch Nails tour. All he asked, if you wanted

to download the music, was that you provide an email address. He then

gave fans the option of what quality to download the songs -- all the way up

to lossless FLAC files. All for free. But, if you downloaded the files, you also

learned about the tour, and the tickets were quickly snapped up. The free

music didn’t hurt Reznor’s ability to earn money. It enhanced it. 14

Some have complained that Reznor is not a practicalexample. After all, that

huge fanbase came about in large part because of his success under the

“old” model, where he was signed to a major record label who helped

promote his album and turn him into an international rock star.

In the earlier part of this decade, Cory Smith was a high school teacher,

playing open mic nights on weekends. But then, he started focusing on

building his music career. He started playing numerous live shows, and

really worked hard to connect with fans. He gave away all of his music for

free off of his website, and used that to drive more fans to his shows. 14

27

On top of that, he offered special $5 pre-sale tickets to many shows, which

has a useful side effect: his biggest fans would convince many others to go

as well, building up his fan base, and getting more people to go to more

shows. He tried pulling his free music off of his website as an experiment,

and saw that his sales on iTunes actually dropped when he did that. 14

In 2008, mostly thanks to live shows, Corey was able to gross nearly $4

million. While giving his music away for free. Connecting with fans and

giving them a reason to buy worked wonders. 14

Jonathon Coulton was a computer programmer. In September of 2006, he

decided to write, record and release a new song every week for a year --

with all of the songs being released under a Creative Commons license, so

anyone could share them. And share them they did. Coulton became a cult

sensation, and was making a good living within months of this decision. His

fans were supporting him along the way, even creating music videos for

every song he released. 14

He started using services like Eventful to more strategically target concert

opportunities. If enough people requested a show in a certain location, he

knew it would be profitable and started “parachuting” in to do shows that

he knew would make him money. Again, by connecting with fans and giving

them a real reason to buy, he was able to build up a great following and

make a good living.14

Amanda Palmer is a singer who made a name for herself as a member of

the “punk cabaret duo” The Dresden Dolls. While she put out a solo album

on Roadrunner Records (a subsidiary of Warner Music), she found that they

had little interest in promoting her, so she decided to take matters into her

own hands. She reached out directly to fans on services like Twitter, often

setting up “flash gigs” where people would show up wherever she wanted to

perform. In June of 2008, one such flash gig at a beach in Los Angeles

ended up with an impromptu music video for a song that Palmer had just

learned that morning, due to a suggestion from a fan on Twitter. And she’s

doing a good job making money, as well. 14

28

Bored in her apartment one evening, she started twittering with fans and

came up with a jokey t-shirt suggestion, and set up an immediate store,

selling $11,000 worth of t-shirts in days. Another night, she started a live

video stream from her apartment, and started an impromptu online auction

for various items in her apartment associated with a recent tour, often with

a personalized twist. In three hours, she brought in $6,000. Connecting

with fans and offering them something fun and unique to buy worked

wonders. 14

To date, she hasn’t received a single royalty check from Warner Music on

her album. 14

Hip Hop as a culture grew up In part because if freely distribution is the

form of mixtapes. It’s a way to connect with fans. Popular rapper Lil

Wayne spent two years giving away music for free in the form of mixtapes,

radio spots, and guest spots on other artist’s songs.

In 2007 his album The Carter III, in spite of the album being leaked, sold

over one million CD’s its first week, a figure unheard of in this market.

Fans and artists are connecting directly and doing so in a way that works

and makes money. Putting in place middlemen only takes a cut away from

the musicians and serves to make the markets less efficient. They need to

deal with overhead and bureaucracy. They need to deal with collections and

allocation. They make it less likely for fans to support bands directly,

because the money is going elsewhere. Even when licensing fees are

officially paid further up the line, those costs are passed on to the end

users, and the money might not actually go to supporting the music they

really like. 14

Music with a price is content. Music that is shared freely acts as

information. One is used to sell the other. Ultimately what music is an

experience. It’s hard to get “experience” off of free audio files.

29

Freely distributing music online independently has been easy, allowing acts

to grow a fan base and turn a profit of their music. Suddenly radio

playlists, MTV, and A&R are not the all-powerful gatekeepers to success. 13

But we must stop thinking of free as in a free beer and more along the lines

of free speech.

30

Im Free From the Chain Gang Now (Album: American V: A Hundred Highways, Johnny Cash,

2006)

Lets assume the position that the music industry isn’t loosing money –

they’re just not making as much money as they want. And the blame for all

their woes falls squarely on their shoulders.

More music is being produced today than ever before and plenty of people

are still making a ton of money in the music business. What’s actually in

trouble is the traditional form commercial distribution and centralized

ownership of the means of production, not the music industry itself.

Somewhere along with way record companies figured out that it’s a lot

more profitable to control the distribution system (plastic disc) than to

artists. And since the companies didn’t have any real competition, artist

had no other place to go. 13 Record companies controlled the promotion

and marketing; only they had the ability to get lots or radio play and get

records into all the big chain stores. The power them above the artist and

the audience. They owned the plantation. 13

The Recording Industry Association of America (RIAA) blames file sharing

for the industries decline, ignoring many other factors. Radio ratings have

plummeted in recent years, as more people tune into MP3 players (making

their own play list) or talk on their cell phones rather than listening to the

top forty on their drive home from work. 13

A 2004 Harvard study that matched the hard data on downloading against

the actual market performance of the song sand albums being downloaded

found that any negative effects downloading has on CD sales was

“statistically indistinguishable from zero. The study concluded that file

sharing was actually boosting CD sales for the top 25 percent of albums

that had more than six hundred thousand sales. 15

According to the study for every 150 songs downloaded, sales jumped by

one CD, because those downloading these songs and albums were not the

people who would have bought these albums or singles in the first place. 15

31

A study by the Pew Internet & American Life Project asked three thousand

musicians and songwriters their views on file sharing in April 2004. A total

of 35 percent of those polled said that file sharing was not necessarily bad,

because it helped market and distribute their work: 35 percent said file-

sharing had actually boosted their reputation. Only 23 percent of those

asked agreed that file-sharing was harmful: 83 percent said they had

deliberately put free samples of their music online. 13

The fact of the matter is that theirs is no hard evidence to support the idea

that free distribution of music is leading to a decline in profit. The truth is

that the CD market went into decline because it’s become an obsolete

format, peddled by an out-of-touch industry too stubborn the change. The

only reason why the majors had it so good for song long was they could

keep selling people back their entire record collections on records, then

tapes then CD. Once the majors became multinationals, complacency set

in and output suffered, Add to this the consolidation of radio stations into

smaller conglomerates and suddenly you have a business with a range of

products as diverse as a McDonalds menu. The death of the record

industry was the best thing that could’ve happened to the business of

making music. 13

So lets we can now set aside the myth that the music industry is in trouble.

Its only in trouble if you’re solely in the business of selling little plastic

discs – and that’s because those discs are increasingly obsolete.

The story of the record industries response to file sharing is relevant to

every other business, because the communities and technologies that

changed music could affect every area of our economy. As new economic

systems underpinned by sharing begin to out compete markets,

understanding piracy will become a priority for nations organizations and

individuals alike.

32

Works Cited – Section 2 1) The Golden Age if Infinite music, John Harris, 2010,

http://news.bbc.co.uk/2/hi/8330633.stm, 10, October 2010

2) Greg Kot: How the Internet Changed Music, Claire Suddath, 21 May 2009,

http://www.time.com/time/printout/0,8816,1900054,00.html, 1, October 2010

3) Future of Music 2010: The Wild, wild west new sheriff has a tough job ahead of her,

Greg Kot, 6 October 2010,

http://leisureblogs.chicagotribune.com/turn_it_up/2010/10/future-of-music-2010-the-

wild-wild-wests-new-sheriff-has-a-tough-job-ahead-of-her.html, 9 November 2010

4) Napster: 10 years of change, Darren Waters, 8 June 2009,

http://news.bbc.co.uk/2/hi/technology/8089221.stm, 9 October 2010

5) Music Industry ‘missed’ Napster, BBC News, 26 June 2009,

http://news.bbc.co.uk/2/hi/technology/8120552.stm, 9 November 2010

6) U.S. Album Sales dropped in 2009, Reuters, 10 January 2010,

http://www.washingtonpost.com/wp-

dyn/content/article/2010/01/07/AR2010010704483.html, 24 May 2010.

8) Oink Pink Palace, Wikipedia, 2009,

http://en.wikipedia.org/wiki/Oink%27s_Pink_Palace, 4 October 2010.

9) Trent Reznor: OiNK Was Better Than iTunes, Eliot Buskirk, 31 October 2007,

http://www.wired.com/listening_post/2007/10/trent-reznor-on/, 4 October 2010

10) What is BitTorrent? A Beginners Guide, Jared Moya, 2 April 2008,

http://www.zeropaid.com/news/9378/what_is_bittorrent_a_beginners_guide/, 9

November 2010

12) The Music Industry, Mike Masnikc, 17th August 2007,

http://www.techdirect.com/articles/20070817/024502.shtml, 4 October 2010

13) Matt Mason, The Pirates Dilemma: How Youth Culture is Reinventing Capitalism (New

York: Free Press, 2008) 148 – 160, 125

14) The Future of Music Business Models (And Those Who Are Already There), Mike

Masnikc, 25th January 2010,

http://www.techdirect.com/articles/20070817/024502.shtml, 4 October 2010

15) File Sharing May Boost CD Sales, Beth Potier / Harvard News Office, 15th April 2004,

http://www.news.harvard.edu/gazette/2004/04.15/09-filesharing.html, 4 October 2010

33

Section 3: Culture & The Open Future

A brief overview of cultural shifts (both past and present) as they relate towards trends in ‘sharing’ and a conclusive summation of what changes are needed to meet these demands.

34

Mere Anarchy Is Loosed Upon The World Youth culture tends to act as social experiments. They are catalyst for

change. For the last 60 years, capitalism has run a pretty tight ship in the

West. But in increasing numbers, pirates are hacking into the hull and

holes are starting to appear. Privately owned property, ideas, and privileges

are leaking out into the public domain beyond anyone’s control.

The idea of free has to be looked at in a different light not as in a free beer,

but as in free speech. Acts of free distribution will not only change

distribution in general, but have been integral to some of the most

influential youth cultures of our time.

Hip Hop

Hip hop has long since dominated youth culture for decades, and has bred

brilliant entrepreneurs who are now among the richest people in America.

In the beginning, Hip Hop got its license to operate in the South Bronx

because it was an escape, a way for people to stop fighting and to channel

that energy into breaking, rapping, DJ-ing and graffiti. Hip Hop doesn’t

recognize or respect tradition in the traditional sense. It grew from a

community who’d had their history stolen. It got its acceptance outside the

Bronx by borrowing and remixing elements from other scenes, such as

punk, funk and disco. Anyone can be part of Hip Hop, anyone can borrow

it, but nobody can own it. 3

In hip hop’s earliest days, the music only existed in live form, and the

music was spread via tapes of parties and shows Hip hop mixtapes first

appeared in the mid 1970’s in New York City. 5 As more tapes became

available, they began to be collected and traded by fans. In the mid-1980’s,

Djs began recording their live music and distributing their own mixtapes

and the mixtapes of obscure Artists. Soon this was followed by other Djs. 6

Mixtapes became increasingly popular by the mid-1990s and fans

increasingly looked for exclusive tracks and freestyles on the tapes.

Mixtapes are now commonly used by labels and new artists as a

promotional tool as a way of generating hype in a sales model relying on

word of mouth to increase the artist’s credibility. Often each track on a

promotional hip hop mixtape will feature the same artist, thus making it

35

more difficult to differentiate from a standard album. Mixtapes will usually

have much lower production values than a studio album or roughly mixed

versions of the tracks and contain numerous collaborations, remixes,

freestyles and voice-overs. 5

Hip Hop as a culture was able to spread because of the freely distributed

music in the form of mixtapes. The Recording Industry Association of

America, a political lobby group funded by the major record corporations,

classifies these mixtapes as bootleg or pirated music CD’s. 5

PUNK

In the 1970’s Punk was a youth culture. In Britain it was a reaction to

unemployment, boredom and the lack of opportunity many young people

saw in their future. Punk empowered ordinary people. Not only did they

encourage others to start making music, but also to deign their own

clothes, start their own magazines and set up gigs, demonstrations, record

stores and record labels. Punk resisted authority, saw anarchy as the path

to a brighter future and inspired a generation to do it yourself. 3

The ideas punk amplified are reaching a fever pitch. Today we see the

aftereffects of punk everywhere. Once disregarded, Punk is now an

accepted and idealized. But this counter-culture could’ve only serviced if

not for it illegal broadcasting and distribution of its content. 3

As music historian Clinton Heylins suggests in Bootleg: The Secret History

of the Other Recording Industry, “It could be argued that the influence and

impact of the original punk bands lingered on only because their

music was bootlegged.” 3

36

Generation Y-Pay

Call it the curse of availability but less than one in two 16 to 34 years olds

believe they should pay to download TV and movies from the web, says The

Industry Trust for IP Awareness (Itipa), a UK based organization set up to

promote “copyright and all the good stuff it does” within the UK. 1 They are

referred to as Generation Y-Pay – an entire generation predisposition to

free. Every month 2.6 billion files are downloaded illegally, and that for

music. 2 What this generation represents is the pirate dilemma. The

question is, do we fight pirates, or do we learn from them? 1

There was a time when information was treated a property. Current

copyright laws reflect this Information would fly out in only one direction

between producers and consumers, broadcasters and receivers. Now

information is a two way street. Now, its not always treated as property and

anyone can broadcast a signal of their own – producing, remixing or re-

purposing information.

As a result commercial industries, like the music industry are breaking

down under their own weight and old business models are beginning to

disappear. Are commercial industries being bleed dry by generation y or

are they simple highlighting that their business models are outdated, their

distribution is out of touch and the technology they’re peddling is obsolete?

37

The Free-ist of Free Market Capitalism.

As Machiavelli once said: “It must be remembered that there is nothing

more difficult to plan, more doubtful of success, nor more dangerous to

management than the creation of a new system. For the initiator has the

enmity of all would profit by the preservation of the old institutions and

merely lukewarm defenders in those who gain by the new ones.

What gives something value? Is it the set price? Is it the quality? Is it the

content?

When people began sharing MP3’s and changed the way the music

business does business once again – they created a better distribution

system. iTunes and Prince’s NPG Music Club were the first attempts at

making major steps towards legitimizing this business model. As Steve Job

puts it: “If you want to stop piracy – the way to stop it is by competing with

it” Today selling of plastic discs only accounts for a quarter of what we

consider to be the music business. Piracy was a market signal. 3

Like Punk and Hip Hop - Generation Y understands that there was a better

way to consume music.

CD sales in 2009 have dropped nearly 55% since their peak tin 1999 –

including digital album sales.

When something is given away for free, the conventional wisdom is that it

hold no value – it makes no money. But this might be wrong. What gives

something value? Is it the set price? Is it the quality? Is it the content?

Paulo Coelho wrote a book called The Alchemist. It was released in the late

80’s and has become a worldwide best seller – until they reached Russia.

For one reason or another his publishers couldn’t figure out why this book,

which is loved everywhere else, wasn’t selling in Russia. So behind his

publishers back Coelho started a blog called the Pirate Coelho – and

started posting links to where fans could get pirated e-books of The

Alchemist for free. 3

38

The Alchemist went from selling 1000 copies a year to 100,000 copies a

year in Russia? Coelho realized that the free e-book was information and

the hard copy was property – he used one to sell the other.

The same is true for cable network AMC’s recent hit series The Walking

Dead. Not only did this television series break ratings records for the

network, but also it was the most pirated television series of 2010. 7 Piracy

didn’t hurt the series – it enhanced it. It allowed the message of the show

to spread without borders or restrictions thus adding to its popularity. 7

Freely consumed content through piracy acted as information – information

that increased the popularity of the series which is the

property.

Popular British sketch comedy series Monty Python was televised from

1969 to 1975. In recent years Monty Python decided to launch a “crazy”

campaign which included posting all of their Monty Python content on

youtube, for free. They asked, in return, that those who view consider

buying the actual DVD through a provided link. And you know what? It

worked. Python’s DVD’s climbed to No. 2 on Amazon’s Movies & TV

bestsellers list in 2009, with increased sales of 23,000 percent. 10 The

freely distributed content on their youtube channel acted as information –

the property in the form of DVD’s was helped. 10

Just as commercial industries are under like the music industry are in a

state a chaos – so to is the role of a designer within these industries. We no

longer pay attention. Bad advertising is no longer working. You now have a

choice as to whether you engage with traditional advertising. Traditional

roles for designer include crafted forms of communication – that are

becoming less and less relevant to people’s lives. People are now able to

filter out the crap. It doesn’t how big you make your logo or your price

point, we can filter it out and our brains will just ignore it.

Chicago ad agency BBDO Energy came to the same conclusion in a study

done in 2005. “Consumers are no longer buying what everyone else is

selling,” they announced. “What happened? For starters, being ‘different’ is

no longer a difference for a brand. And being disruptive no longer gets

consumers attention. After years of being of being told what to buy,

39

consumers have changed their minds. They view brands as less relevant,

they say they feel disconnected and unimportant – bystanders rather than

participants.” 3 So many ads shout at us all the time, one on its own is

about as relevant as a single scribbled tag in a train car full of them. We

simple tune them out like white noise.

As we spread this world with complex technical systems – on top of the

natural and social systems already here – old style, top down, outside in

design simple wont work. The days of the celebrity designer are over.

Complex systems are shaped by all the people who use them, and in the

new era of collaborative innovation, designers are having to evolve form

being the individual authors of objects or buildings, to being facilitators of

change among large groups of people. 4

Designers are more than just individuals clever at desktop publishing

software. Designers are creators. They breathe life into dust. We see

beyond restrictions and take on challenges to turn the impossible into the

possible. The value from creation is infinite, and so to are the possibilities

for designers. Music is a form of creation. The value from creation is not

restricted to dimes and nickels – for it is infinite.

Conclusion

Since 2000 the music industry and their political platform the Recording

Industry of America (RIAA) have spent over $90 million in lobbying policy

makers in the United States alone for copyright protection and to maintain

the status quo. 8 It is clear that any effort to bring about change in the

business of music will require change copyright laws - change that will

actually reflect how a growing section of the population consume content.

Many content creators who have copyright available to them clearly don’t

value that copyright very much. A huge percentage of content creators

simply chose not to renew their copyrights, because they knew there was

little or no value in the copyright itself. Only 35% is ever renewed. In fact,

the only type of work that had a renewal rate higher than 50% was movies,

which came in at 74%. 9

40

The content creator clearly is no longer getting any benefit out of the

copyright at that stage, and thus reverting the work to the public domain

makes the most sense. 9

Music is content that can and should be available to make the public

domain more fruitful and to enable new creative works -- and yet it gets

locked up anyway, even though the very people copyright law is supposed

to protect clearly don’t value what copyright gives them. So why do we still

automatically give them copyrights, thereby harming the public domain,

while adding little to no benefit to the content creators themselves? 9

What is called for is a counter to the lobbying efforts by the music industry

and the RIAA.

A collective platform modeled after political lobbyists and think tanks for

the formulation and promotion of the structural reinvention of the way

content (popular music) is distributed and consumed.

This platform, other lobbyist groups and think tanks will take its message

directly to policy makers and individuals alike by pushing for: (1) The

decentralization of the music industry (2) Copyright reform to reflect how

content is currently consumed that will free up content from its current

restrictions. (3) The systemic design necessary for a legal, open and free

form of file sharing for the creation, sharing and distribution of popular

music. (4) Realization that such reforms and such will equal a viable

economic model.

Parenthetically, the aim of such a platform will not be to destroy the music

industry, but rather to save it. We will not call for the abandonment of

physical music (in whatever form it may take) but rather a new system for

its enchantment.

41

Tomorrow’s business of music will not just be about open source, or free

distribution or copyright reform – but rather it will be about the people over

the process; about responding to change not following a plan; about

collaboration over laws and negotiations; and about design an business and

system for the sharing of popular music that is actionable and relatable in

peoples daily lives.

The designer will organize collective platform for the formulation and

implementation of business models and public policy around the creation,

distribution and sharing of music. The designer will act as process

facilitators, but bring together those who have shared sensibility including,

but no limited to: lawyers, engineers, computer scientist, popular musical

acts, marketers and those who work in the music industry - into a shared

collective.

Such a file sharing system will rely on the principles of open source

technology. That is to say: (1) The system must be freely available or it

can be part of a package that is sold. (2) Any artist (content maker) must

be allowed to add to (or modify to) with content individually or as part of a

package. Modified versions can be redistributed. (3) And fans must be

allowed to freely access (take) and share (put in) all content.

The designer will organize this collective platform (process facilitators), but

bring together those who have shared sensibility including, but no limited

to: lawyers, engineers, computer scientist, popular musical acts, marketers

and those who work in the music industry into a shared collective.

What the Music Industry represents with centralization of ownership and

means of production is not the free market at work, but rather an extension

of Feudalism. It is the enemy of freedom. Systems based on open source

technology work like the youth the youth cultures that dreamed them up,

open environments that can infect people with the passion of those who

built them and become self-perpetuating, growing sustainable and often

substantially. In essence, they are the free-ist of free market capitalism.

42

Successful open source based projects are driven by the passions of their

audience. Open source projects inspire people with new ideas and will gain

support because there is nothing else like it. The same is true for such an

existing system like Wikipedia whose cause is amassing all out knowledge

in one place, for free, is a worthy one. The lawyers who contribute to open

source projects such as Lawunderground.org do so for the same reasons

Hip Hop DJ’s promoted obscure music in the 1980’s for very little pay: they

believed in carving out a different way of doing things.

A business model based on an open free file sharing system will strike a

balance between encouraging innovation and creation without giving away

so much that you cannot sustain the model. For example, using freely

distributed music as information and using the physical form and content.

The information helps give fans a reason to buy the content.

Some would also argue that what is proposed is actually digital

communication. But this is wrong. In fact is exactly the opposite. What an

open and free form of file sharing system for the distribution of popular

music will accomplish is the laying of a foundation for new ecosystems of

private enterprise that will reinvigorate competition and break inefficient

conglomerates.

43

Works Cited – Section 3 1) Generation Y-Pay refuses to pay for downloads, Carrie Ann Skinner, 7 September 2009,

http://www.networkworld.com/news/2009/090709-generation-y-pay-refuses-to-pay.html,

4 October 2010

2) It’s All Free! Lev Grossman, 5 May 2003,

http://www.time.com/time/magazine/article/0,9171,1101030505-447204,00.html, 1

October 2010.

3) Matt Mason, The Pirates Dilemma: How Youth Culture is Reinventing Capitalism (New York:

Free Press, 2008) 174-176, 142

4) John Thackara, In The Bubble: Designing In A Complex World (MIT Press, 2006) 7

5) Peter Mason, The Rough Guide to Hip-Hop (Rough Guides, 2005) 332-333

6) Piracy Fight Shuts Down Music Blogs , Ben Sisario, 13 December 2010,

http://www.nytimes.com/2010/12/14/business/media/14music.html?_r=2&ref=technolo

gy&pagewanted=print, 13 December 2010

7) The Walking Dead Currently The Most Pirated Series, Mitch Michaels , 12 December

2010, http://www.411mania.com/movies/news/165075/%5BTV%5D-The-Walking-Dead-

Currently-The-Most-Pirated-Series.htm, 13 December 2010

8) Special Report: Music Industry’s Lavish Lobby Campaign For Digital Rights, Bruce Gain

for Intellectual Property Watch, 16 January 2011, http://www.ip-

watch.org/weblog/2011/01/06/special-report-music-industrys-lavish-lobby-campaign-for-

digital-rights/ 20 January 2011

9) If Artists Don’t Value Copyright On Their Works, Why Do We Force It On Them? Mike

Masnick, 8 February 2011,

http://www.techdirt.com/articles/20110207/02222612989/if-artists-dont-value-

copyright-their-works-why-do-we-force-it-them.shtml, 9 Febuary 2011

10) Can Free Content Boost Your Sales? Yes, It Can, Stan Shroeder, 22 January 2009,

http://mashable.com/2009/01/22/youtube-boost-sales/, 9 February 2011

44

“it is finished”