24f
“‘When I was a boy … in front of every house in the summer evenings you would find young people together singing the songs of the day or the old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cords will be eliminated by a process of evolution, as was the tail of man when he came from the ape.’” He quotes somebody.

Economists can’t decide whether file sharing has a negative influence on the music industry or artists or not.

vii
Definition-creative-industries:
“The organization of “creative industries,’ in which the product or service contains a substantial element of artistic or creative endeavor, has received surprisingly little attention from economists, with a sole exception: the question whether public subsidy is warranted for the performing arts.”

1
Definition-creative-industries:
“One has been largely missed, however – the “creative” industries supplying goods and services that we broadly associate with cultural, artistic, or simply entertainment value. They include book and magazine publishing, the visual arts (painting, sculpture), the performing arts (theatre, opera, concerts, dance), sound recordings, cinema and TV films, even fashion and toys and games.”

xix
Definition-entertainment:
“the act of diverting, amusing, or causing someone’s time to pass agreeably; something that diverts, amuses, or occupies the attention agreeably.” From Webster’s Third New Unabridged International Dictionary, 1967.

Definition-entertainment:
“Entertainment – the cause – is thus obversely defined through its effect: a satisfied and happy psychological state. Yet, somehow, it matters not whether the effect is achieved through active or passive means. Playing the piano can be just as pleasurable as playing the stereo.”

Definition-entertainment:
“Entertainment indeed means so many different things to so many people that a manageable analysis requires sharper boundaries to be drawn. Such boundaries are here established by classifying entertainment activities into industry segments, that is, enterprises or organizations of significant size that have similar technological structures of production and that produce or supply goods, services, or sources of income that are substitutable.”
He defines entertainment from an industrial perspective.

4
Definition-entertainment:
“The concept of entertainment is thus subordinate to that of recreation: It is more specifically defined through its direct and primarily psychological and emotional effects.”

13
“As this post-war generation matures past its years of family formation and into years of peak earnings power and then retirement, spending may be naturally expected to collectively shift to areas such as casinos, cultural events, and tourism and travel, and away from areas that are usually of the greatest interest to people in their teens or early twenties.”

494
“[There] are several frequently observed industry characteristics.”

“Many are called, but few are chosen: Perhaps the most noticeable tendency of entertainment businesses is that in the steady-state growth phase (i.e., after a segment has attained a size at which long-run domination by several large companies has been established), profits from a very few highly popular products are generally required to offset losses from many mediocrities.”

“Marketing expenditures per unit are proportionally large: [...]“

“Ancillary markets provide disproportionately large returns: [...]“

494f
“Capital costs are relatively high; oligopolist tendencies are prevalent: As happens in many other industries, once beyond the very early stages of a segment’s development, the cost of capital and the amount of it required for operations becomes a formidable barrier to entry by new competitors. Most entertainment industry segments thus come to be ruled by large companies with relatively easy access to large pools of capital. Such oligopolistic tendencies can, for example, be seen in distribution of recorded music and movies, and in the gaming, theme park, cable, video game, and broadcasting industries.”

495
“Public-good characteristics are often present: With pure public goods, the cost of production is independent of the number of consumers; that is, consumption by one person does not reduce the amount available for consumption by another. Although delivered to consumers in the form of private goods, many entertainment products and services, including movies, records, television programs, and sports contests, have public-good characteristics.”

“Many products and services are not standardized (which is good for entrepreneurs and bad for relative-productivity gains): There are four important consequences of such nonstandardization:

1. Despite the oligopolistic framework, there is considerable freedom for the entrepreneurial spirit to thrive. That is, operas, plays, movies, ballets, songs, and video games are uniquely produced and are normally originated by individuals working alone or in small groups and not by giant corporate committees. One can become rich and famous as a direct result of one’s own creative efforts.
2. The entrepreneurial spirit and thus the importance of the individual to the productive process is accommodated by means of widely varying, and uniquely tailored, financing arrangements. This is especially evident in movies, recorded music, and sports. Option contracts are central.
3. Where the production is the product itself (e.g., live performance of music or dance), it is difficult to enhance productivity. To some extent, this aspect also appears in areas as diverse as filmmaking, sports, and casino gaming.
4. Under the aforementioned conditions, the costs of creating and marketing entertainment products such as movies and television programs tend to rise at above-average rates.

”

“Technological advances provide the saving grace: Fortunately, ongoing technological development makes it ever easier and less expensive to manufacture, distribute, and receive entertainment products and services.”

“New entertainment media tend not to render older ones extinct: New ways to deliver entertainment products and services are constantly evolving. Although introduction of new entertainment media may diminish the importance of existing forms, the older forms are rarely rendered extinct.”
-> Thesis

496
“Entertainment products and services have universal appeal: Demand for entertainment cuts across all cultural and national boundaries”

501
“Yet the industries are already quite mature in the United States, and expansion will increasingly be linked to the rate of growth of middle-class populations outside North America.”

]]> http://www.woitek.org/vogel-h-entertainment-industry-economics/feed 0 http://www.woitek.org/david-m-peer-to-peer-and-the-music-industry http://www.woitek.org/david-m-peer-to-peer-and-the-music-industry#comments Sat, 07 Aug 2010 07:16:45 +0000 Woitek Konzal http://www.woitek.org/?p=1174 you organise & structure them -> together they achieve what nobody alone would be able to achieve -> record [...]]]> David, Matthew
2010
Peer to Peer and the Music Industry: The Criminalization of Sharing @ OII (07.08.2010)

Around 1:19:00
Definition-creativity:
4 (not 5?) different conceptions of creativity are out there:

1. Manhattan Project version: clever people -> you organise & structure them -> together they achieve what nobody alone would be able to achieve -> record industry model -> producers -> the maestro behind it -> they should earn 90%
2. The mad genius: all in his head
3. Genius in the community: the community creates together -> Mississippi blues delta
4. The jam session: “Rather than the individual genius there is the synthesis of things that happens when you get ??? people together in a rather unstructured free form kind of way.
5. The live event: never to be repeated, will never be the same again -> you were there, you were part of the magic

Young people think 5. is what is creative. => There will be a shift. It’s not about perfection, it’s about being live and real.
“A younger generation, they think creativity is something messy, something that happens in the field, that they can talk about because they were there, they were part of it. And it’s actually reconfiguring the notion of creativity.”

]]> http://www.woitek.org/david-m-peer-to-peer-and-the-music-industry/feed 0 http://www.woitek.org/montgomery-l-space-to-grow http://www.woitek.org/montgomery-l-space-to-grow#comments Sat, 05 Dec 2009 10:02:02 +0000 Woitek Konzal http://www.woitek.org/?p=693 Business models adapt to IP way faster than the other way round. See Montgomery, L et al ~ Global reuse and adaptation in the creative industries.

37
IP allowed specific kinds of businesses to flourish.

38f
“As Alford (1995) discusses, China possessed no indigenous equivalent to concepts of “intellectual property”. Notions of individual creativity and ownership of ideas were not easily reconciled with Confucian concepts of creativity, knowledge and learning (Alford, 1995, p. 9). For these and various other reasons, the PRC remained without a copyright law until 1990.”
“The business models that dominated the global recorded music industry in the second half of the twentieth century were based around record labels providing artists with access to recording equipment, mass production and distribution channels, marketing and promotion services, and remunerating them on a royalty basis.
Legally enforceable intellectual property rights and physical technologies that made controlled mass production and distribution of music possible (Bettig, 1996) were key factors in the rise of a handful of highly integrated, transnational music corporations that accounted for 90% of gross sales of recorded music in 1994 (Burnett, 1995, p. 2). Although developments in physical technology, such as cassette tapes and recorders, presented challenges to the industry’s ability to control copying, these changes occurred after markets, industry structures, professional organizations and group collection infrastructures had become established. As a result, the industry was generally able to respond in a systematic way and incremental developments in analogue technologies of copying did little to disrupt its overall structure (Frith, 2002).
In China, on the other hand, technologies for mass reproduction and consumption of recorded music became available in the absence of copyright law, an organized domestic music industry, or clear legitimate channels for the distribution of most foreign content.”

39
“Not only are new technologies being adopted with enormous speed across the country, they are being embraced fastest by groups traditionally considered most likely to pay for music in other markets. Young, educated city-dwellers with relatively high disposable incomes are now the group most likely to have access to broadband connections, cheap MP3 players and next-generation mobile devices.”
“So [record labels] have gone from the frying pan into the fire. They hadn’t even put a dent in pirate physical copies before P2P and MP3 downloading came along.” Kaiser Kuo quoted by Montgomery.

40
“The dominance of a few developed nations in global trades in culture has led many to question the fairness of expanding global intellectual property system. According to UNESCO, developing countries account for less than 1% share of exports of cultural goods.”

41
“While the traditional record label model isn’t exactly going through a golden age in the west, it never even had a golden age in the Middle Kingdom.” originally from The Register ~ Music in China (04.12.2009)
“While major international labels have been unwilling to invest heavily in the promotion of international artists in a market where mass-scale returns are difficult to secure, local artists and labels have been actively working to develop business strategies capable of generating income in spite of very high levels of piracy. One strategy for doing this has been to rely on personal appearances by artists, which cannot be replicated. As a result, there is less emphasis on producing popular albums, and more emphasis on gaining popularity and profile through single hits that lead to lucrative product endorsement and live appearance or performance deals”

42
“In contrast to Western markets, where artist management and music are generally separate, in China assigning a record label with management rights is considered one of the most important aspects of an artist’s contract, forming a vital income source for domestic labels.”
“However, even for Chinese labels, relying on personal appearance and advertising revenue presents practical problems. Personal appearances have limited scalability. Neither advertising nor personal appearance fit well with the “long tail” approach, which, in other markets, allows back-catalogues to continue generating revenue for labels and artists long after the artist has been eclipsed by the latest trend.”
“China’s own capacity to capture commercial opportunities associated with music is increasing as media commercialization becomes more entrenched.”
“It is extremely difficult to make money by licensing copyright in China and gaining access to the market is expensive and difficult, so Western labels have devoted few resources to promoting their products to Chinese audiences.”

43
“In China [...] unauthorized networks for the distribution of physical copies of music are well established, independent monitoring agencies do not exist and users have demonstrated low levels of willingness to pay a premium for “legitimate” content.”

44
“Unlike ring-tones, which are generally stored on individual mobile phones, CRBT [caller ring-back-tones] services are managed centrally, through mobile service providers.”

45
“[Mobile phone] service providers, distributors, labels and music publishers share an initial ‘‘sign-up fee’’ when a subscriber first signs on to a CRBT package. After the initial sign-up fee has been divided between these parties, subsequent full monthly subscription fees are kept solely by China Mobile.”
“[Music] labels are in a position to connect artists with mobile operators, manage advertising deals and to ensure that publishing and performance licences are obtained – all key components of the music business in today’s China.” But very different from the western model of a music label.
“Although there have been some amazing stories of amateur musicians who have produced a hit ring-tone from their bedroom and made millions, commercial spaces are quickly being filled by large, vertically integrated content providers.”

46
“In the case of the music industry, it appears that cultural policies that make it harder to publish foreign content, strict regulations governing foreign investment in content industries, and low levels of copyright enforcement have worked together to provide Chinese media businesses with space to develop effectively.”
“the success of new music distribution technologies and a growing capacity to provide local content in forms that satisfy the demands of local consumers, in spite of very high levels of unauthorized copying and distribution of physical media, suggests that copyright has not been the key impediment to the success of international artists and labels in the Chinese market.”
“Rather than falling victim to globally dominant exporters of intellectual property, China’s domestic music industry is successfully developing a market for local content, alongside its own capacity to provide the content and services demanded by Chinese consumers.”
“Unwillingness to adapt to an environment where ownership of intellectual property rights cannot guarantee control over how music is used and distributed, and reluctance to explore alternative approaches to music distribution and licensing have [...] contributed to [the] lack of success [of major international record labels].”
“The apparent association between this distribution bottleneck and the growth of an organized, profitable commercial music industry in China highlights the continuing role of monopoly structures in the commercialization of culture in a digital age.” It’s true but I don’t like that.

]]> http://www.woitek.org/montgomery-l-space-to-grow/feed 0 http://www.woitek.org/montgomery-l-et-al-copyright-and-the-creative-industries-in-china http://www.woitek.org/montgomery-l-et-al-copyright-and-the-creative-industries-in-china#comments Sat, 05 Dec 2009 03:54:06 +0000 Woitek Konzal http://www.woitek.org/?p=688 408
“While economies with high levels of copyright enforcement are able to protect creative output and provide a basis for its exploitation and commercialization in the marketplace through well-enforced intellectual property systems, China’s creative industries must find other ways of extracting value from their work.”
“Both Confucian and socialist concepts of creativity provide a rich tapestry for Chinese intellectual property lawyers to draw upon as they seek a balance between strict enforcement of individualized rights and mapping out limitations or exceptions to those rights, as well as promoting alterna- tive models for managing copyright in certain sectors or spaces – such as Creative Commons and Science Commons models. Confucian philosophy emphasized the transmission or passing down of creative works for others to build on, rather than learning or creation as in individualized activity. The Confucian statement: ‘I transmit rather than create – I believe in and love the Ancients’ (The Analects) is an example of this approach.”

409
“The recognition of individual proprietary rights in creative works marked a historic shift – on paper at least – away from notions of sharing, distribution and collaborative production, emphasizing instead the role of the individual author and his or her right to dictate the terms on which a work can be modified or distributed.”

411
“Reduced levels of government funding [since the early 1990s], combined with new opportunities provided by the market economy, are placing film-makers and musicians under heavy pressure to find new sources of funding and to build commercially sustain- able businesses. Complicating matters is the fact that levels of piracy in China mean that the royalty-based business models that dominate other markets are simply not yet viable in China.”

411f
Some companies are enforcing copyright legally, with some success.

412f
Huayi Brothers make extensive use of product placement.

413
“advertisers whose products appear in Huayi Brothers films do not really care whether the films featuring their product are distributed legally or illegally. As long as people watch Huayi’s films and are exposed to the products being displayed within them, companies that have paid money to help develop a brand profile are satisfied. As in other markets, this strategy helps take pressure off royalty payments as the only source of income for film producers.”

413f
Mp3 downloading sites are fairly easy to fight in China, because the Internet is so strictly controlled. P2P, however, might change this entirely.

414
“The paltry income that can be derived from these sources [CDs and the Internet] leaves them with artist management and live events as their most significant sources of revenue.”

415
FLOSS (Free Libre Open Source Software) and Creative Commons “help reduce enforcement costs and refocus copyright management on creativity and distribution, rather than control.”

416
“At present, pressure for enforcement of copyright in China is still driven to a large extent by foreign governments and corporations that wish to see their intellectual property protected. Once this motivation is more directly related to China’s own creative sector it might be expected that copyright law and enforcement will be more closely scrutinized and invested in by government and local businesses.”
“the demand for creative products – particularly by emerging upwardly mobile urban middle classes – and the successes in extracting income from content experienced by music copyright owners in relation to mobile phone ringtones, suggest that with a combination of pricing, local product, technology and legal enforcement, such a cultural shift [such changes in copyright practices] may not be impossible.”

]]> http://www.woitek.org/montgomery-l-et-al-copyright-and-the-creative-industries-in-china/feed 0 http://www.woitek.org/montgomery-l-et-al-global-reuse-and-adaptation-in-the-creative-industries http://www.woitek.org/montgomery-l-et-al-global-reuse-and-adaptation-in-the-creative-industries#comments Fri, 04 Dec 2009 12:32:36 +0000 Woitek Konzal http://www.woitek.org/?p=683 19
“Business models that rely heavily on public performance and personal appearances by artists, and which are unlikely to produce revenue on a large scale from the sale of physical units, provide limited opportunities for international labels hoping to break into the Chinese market.”

20
“Live performances, advertising and personal appearances have emerged as important revenue sources for the domestic [music] industry.”

21
“Relying on personal appearance by artists limits scalability. Neither advertising nor personal appearance fit well with the ‘long tail’ approach, which, in other markets, allows back-catalogues to continue generating revenue for labels and artists long after the artist has been eclipsed by the latest trend.”

22f
“This paper began with an examination of the legal case for radical reformation of the copyright system. We then moved to consider the current economic theory for this case before exploring this specifically in the case of creative industries, from which we extracted three further arguments: global markets, re-use and value creation, and business model adaptation. We think these three factors have been widely overlooked, and that there (!) re-inclusion into the intellectual property value debate may be of value.”

22
strong IP encourages creation -> weak IP encourages re-use (remix?) -> they claim the benefits of re-use are way bigger than the benefits of creation (is that true?) -> weak IP is to be preferred
business models adapt to IP (not the other way round) -> businesses will always find a way to make money (which makes the economy grow which benefits the entire population) -> weak IP is to be preferred

Also see:
O’Reilly, T ~ Piracy is Progressive Taxation
The Register ~ Music in China

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