The return of the Public Domain
April 8, 2009
Neil Young decided to honor Belgium with another concert, and I decided it was time to see the old grunger live again – it has been a couple of years. Out of the blue though, and into the black, came the price for the ticket: a full 80 Euro, and not even for a top seat. I happily paid this price (which mainly shows that I was born well before the eighties), but it did make me check prices of other shows.
And it is clear: not only the godfather of grunge, but also the prices of concerts of both the queen and king of pop clearly indicate how the old business model of music is as dead as Elvis.
The old business model was, as we know, based on the statutory monopoly imposed by copyright, which guarantees that the author (or his record company) can decide at which price the public can buy his music.
This exceptional system, where government imposes a monopoly right deviating from the basic capitalist freedom to copy, one of the foundations of the free market system, is broken.
The evidence is all around us:
- IFPI estimates the number of illegal music downloads in 2008 at 40 billion. That is about 7 illegal iTunes per human person on the planet. More than 95% of downloads are illegal. IFPI is fighting a brave, but clearly futile battle. Just to be clear: illegal video downloads (video clips) are not included in these numbers.
- Apple has buried its DRM system – music downloaded via iTunes is now compatible with other hardware. Apple had no other choice – the market forced its hand.
- Napster keeps producing (more or less legitimate) offspring, from eMule, via Pirate Bay, to Muziic.
- One of Microsoft products has actually acquired some cult status. The Songsmith application allows you to completely re-arrange an existing song. Check out this hilarious steel drum Caribbean version of the Police’s hit Roxanne. Other victims include Wonderwall by Oasis and Hotel California by the Eagles. However, more than half a million people checked out Caribbean Roxanne (granted, I checked it twice, I just couldn’t believe it first time I heard it) – and who will ensure that the author of Caribbean Roxanne will be properly rewarded for his creation? By the way, who is the author of Caribbean Roxanne? Is it The Police? Microsoft? The (appropriately) anonymous person who unleashed Songsmith? Songsmith itself?
It is no surprise that the music industry has been desperately seeking a new business model. Nokia recently gave away one year of free downloads out of Universal’s complete music catalogue in order to sell certain models of handsets. Music as a lubricant to sell mobile phones.
The most obvious change to the business model is reflected exactly in the price of the tickets: give away studio versions of the music to lure fans to the concerts, which are becoming the real product.
And the interesting phenomenon is this: what used to be a proprietary product, is pushed back into the public domain, notwithstanding such rearguard fights as the New Zealand bill to make ISP’s liable for illegal downloads or the European Parliament’s effort to extend the protection of neighboring rights from 50 to 95 years.
This has important implications: music will need a business model based on the fact that its intellectual property is no longer protected by an (unenforceable) monopoly, but on the observation that that intellectual property is now fully in the public domain, subject to unlimited copying.
This new situation will generate the development of new business models, based on exactly this paradox: how to make money out of something that is freely available – in the Public Domain.
As so often, the music is just the writing on the wall. Examples of the return of the Public Domain are all around us:
- There are now several projects around commercial development of physical products (hardware) based on the open source model originally developed for software. Examples range from the Open Source CAR (www.theoscarproject.org) to mobile phones, wind turbines and CPU’s.
- Software is increasingly being developed by other software (e.g. ww.altova.com). While forty years ago, a high court judge could decide that a software tool could no more own intellectual property rights than a pencil, today such a statement is no longer an oxymoron. Who owns code completely written by other code, on the basis of human instruction or algorithms? What happens when this is done through open source code (i.e. the open source code writes the application code, and the license to the OSS forces the client to throw the code into the public domain)? It is unlikely the human operator will care, or much less, refuse.
- Software generating music, poetry and literature is fast approaching or passing the Turing test (i.e. indistinguishable from music, poetry or literature written by humans)
So, after more than a hundred years of being relentlessly attached by state-driven monopolies, the Public Domain is back, with a vengeance.
And most business models are utterly unprepared for this development. Typically, most business models around innovation rely on enforceable monopolies, as awarded through legally recognized intellectual property rights (copyright, patents, trademarks, etc…).
So, new innovation will be necessary. In order to capture the return of the Public Domain in new business models that will reward innovation in innovative new ways.
A new Dell, rather than a new Google, will probably show the way.
So, what are you waiting for?
Joren De Wachter
