RIAApple--render unto cesar romero...

Tom tomwhore at slack.net
Fri Nov 7 09:06:33 PST 2003

Viva la sheeple revolution...sukaaaaaas.

Your 99c belong to the RIAA - Steve Jobs
By Andrew Orlowski in San Francisco
Posted: 07/11/2003 at 11:20 GMT

Wasn't the Internet, this weightless kingdom of bits and bytes, supposed
to make distribution costs just vanish? Apparently not.

At an Apple financial analyst conference on Wednesday CEO Steve Jobs
admitted that Apple makes no revenue from the online download service, the
iTunes Music Store, that he launched in April. As iTMS is the leading
download service, with 80 per cent market share (or so Jobs claimed),
where's your 99 cents per song going?

Well, although it costs nothing for the record industry pigopolists, this
small ragged army, to make a digital version of one of its hoardings
available to hear, somebody must pay. It costs Apple real dollars to
provide the hosting service that delivers that digital file to you, and to
write the sophisticated software that delivers it. Meanwhile, almost all
the cash is flowing back to the copyright holders. Who, when you last
looked, were a dinosaur oligopoly of five record labels, desperately
seeking a way to preserve their copyright cartel into a new century. They
were down, and they were out: but Steve Jobs rode to their rescue.

"Most of the money goes to the music companies," admitted Jobs.

"We would like to break even/make a little bit of money but it's not a
money maker," he said, candidly.

So now we have it on record: the music store is a loss leader. Jobs said
Apple would pay its dues to the RIAA, then seek to make money where it
could, from its line of hardware accessories. When the conversation turned
to rivals such as eTunes and Napster, Jobs said: "They don't make iPods,
so they don't have a related business where they do [make money]".

Running counter to several thousand years of basic human observation,
Apple decided it could afford to control those points where we share
music. It developed an opportunistic business with such compromises built
in: a plan is to infect as many computers it could with restrictive DRM
technology to allow us to rights we once took for granted. But why, you
ask, is Apple helping an extinct, and unworthy industry back on its feet?
Precisely why does this strike you as greedy, desperate and gasping? Let
us explain.

DRM is non-negotiable
Digital media presents with a particularly nasty social problem: we love
to share and enjoy our common culture, but we want the artists to be
rewarded, too. But when the distribution medium is as careless and fluid
as the Internet, dues are easily overlooked. We're simply too lazy to
reward the artists. However, inspired by NGO-backed initiatives as the
move to low-costs drugs, a global consensus is coalescing around the idea
of something called "compulsory licensing".

This can take many forms, but if you want it simple, it means a cent on
your income tax, or your blank CD purchases. Are you still standing? Good,
for this creates a vast pool of wealth from which the artists can be
rewarded. It's not alien to most people: we pay taxes everyday for roads
we don't use, or healthcare for neighbours brats we'd rather see
strangled. But that's how society works: with a bit of give and take. And
if it means the artists gets a guaranteed income, that, we can generally
agree, is a good thing. Fortunately the technology helps us here: because
unlike most taxes, we'll be able to target the most popular. And all this
can be done while preserving your anonymity, too.

Imagine such a model: you could click, download and play your favorite as
much as you wanted, safely knowing that artists wouldn't be being ripped
off, and that your clicks were earning them more money. Doesn't that make
you feel warm and fuzzy?

Stripped to the core, compulsory licensing resolve two real social nasties
without each side losing face. A flat tax is simply the easiest way of
getting rid of the problem: we all get to swap music, and all the artists
get paid. Now, problem: go away. And it's gone.

It doesn't make Steve Jobs feel warm and fuzzy, however, because he thinks
he sees a real nasty, short-term business opportunity. Always a nervous
kind of character, one to jump too early, Jobs sees a window of
opportunity, by tying Apple to be the RIAA's slave.

When that 99 cents leaves your wallet, the RIAA monopoly swallows most of
it, and the credit card companies swallow the rest. As the supplicant in
this relationship, Apple is left holding the can.

While much of the received wisdom in both the music industries and
technology industries see compulsory licenses in one form or another as
inevitable, both Apple and RIAA are agreed on the short-term solution. One
where the ancient copyright rules spin the money back to the pigopolists,
and some sucker, like Apple, is left holding a brand of dubious (and soon
to be extinct) value.

Alas it's Jobs who wants to be first - the first tech CEO - to offer
himself up for a beheading. Having got so much right about personal
computer ergonomics, it's initially surprising to find Jobs accepting a
deal on such bad terms. At Wednesday's conference call, Jobs sounded
positively happy that he was losing money on iTunes, so he could make the
RIAA that little bit richer. But vanity plays havoc with even the finest

At the end of the day it's for Apple's board to peg Jobs' peculiar
exercises with such diametric labels as "excusable vanity" or "hopeless
cause". But however you sliced it, and with the weight of history bearing
pretty heavy, Steve Jobs' decision to give the RIAA a perpetual monopoly
doesn't look so smart. As Jobs admitted, Apple is in a supplicant position
in which it makes no money.

We like having Steve around, as the Jobs judgement is typically both
coherent and devoid of technoutopian fantasies, but this could be fatal.

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