We recently wrote about how India had proposed changes to its copyright law that included a few surprisingly good ideas (and a few really bad ones). However, some other countries have been changing their copyright laws as well. Earlier this year, a friend involved in these things told me to keep an eye out for Chile’s new copyright laws, suggesting that I would be pleasantly surprised. Michael Scott points us to a brief description of the recently approved changes to copyright law in Chile… and, like India, it looks like a mix of good and bad. And, contrary to what I had hoped for, the bad seems to outweigh the good. To be fair, the summary is very cursory, so perhaps there’s more to the changes than what’s written. But the report highlights three changes, and from the summary, it seems like one change is good, one is bad and one is probably neutral.

The changes that will soon go into effect can be divided into three groups: the establishment of a new framework of exceptions and limitations to copyright and related rights, the incorporation of new offences, increased penalties and the consecration of new tools intended to prosecute crimes against intellectual property, and an extensive chapter on the liability of Internet Service Providers (ISP).

The first one is obviously the “good.” More and better exceptions — a la fair use — is an unquestionably good thing. But, looking at the few details provided, it doesn’t look like broad fair use-style exceptions were added. Instead, the exceptions look pretty limited:

For example, extending the framework of action for libraries and nonprofit archives in terms of the reproduction, translation and digitization of a particular work allows for it to be used for criticism, illustration, teaching or research purposes and also expands the use of works that aim to benefit a person with visual or hearing impairment.

Those are good exceptions, but those a pretty small subset of the type of exceptions that any good copyright law should have.

The “bad” is the second one. Increasing penalties makes little sense when penalties for violating copyright law are already way out of line with the “harm” done. The “neutral” one is the last one, concerning liability for service providers. Creating good safe harbors for service providers, so they’re not blamed for the actions of their users, is definitely a good thing. But the devil is very much in the details — and what the requirements are for a service provider to qualify for those safe harbors. While the report says “the ISP must meet certain requirements in order to be exempted from liability,” it does not detail what those “certain requirements” are.

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Eric Goldman alerts us to an interesting response by Method Products, a small natural cleaning supply products company, after receiving a cease & desist letter from cleaning giant Clorox (pdf), demanding that Method stop using a daisy in its packaging on certain cleaning products because of Clorox’s trademarks on “Green Works,” including the use of a yellow flower, related to Green Works products. In response, Method set up VoteDaisy.com, with a little poll asking people “who should own the daisy” with three options: Clorox, Mother Nature or Method. Nicely done.

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Online dating site Match.com sent a letter from its lawyer to rival Plentyoffish.com last week, accusing it of citing statistics about itself and its members (like the fact that they’ll go on 18 million dates this year) that Match says can’t be supported. It then went on to “demand that [Plentyoffish] immediately cease and desist”… or provide Match with user data to back them up. Ever the friendly rival, Match’s lawyer said the company would be glad to sign a confidentiality agreement before taking a gander and Plentyoffish’s proprietary data. POF’s founder basically told Match to get lost, highlighting several figures that Match touts about its service, including one saying that an average of nearly 1000 people per day get married after first meeting on Match. To be honest, a lot of the figures cited by both parties are a little hard to believe, and sound like little more than attempts by the sites to sell hope to prospective users. But starting a fight over a rival’s claims — when all that’s likely to do is call attention to your own — may not be the wisest move for anybody in the online dating business.

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Steve Jobs fired the latest salvo in the ongoing Apple-Adobe spat today, with his “Thoughts on Flash” posted on the Apple site. In short, he says that Adobe looking out just for its own interests in drawing developers to its “100% proprietary” Flash ecosystem while Apple supports a great, open standards-based world. But just as we pointed out a couple of weeks ago when Apple moved to block cross-platform development tools, regardless of what Apple says, its interest is locking developers into its Apple-controlled and dominated ecosystem. Nearly every accusation Jobs levels at Adobe and its products can be made about Apple and the way it seeks to control iPhone app development. Jobs brings up Apple’s support for open Web standards, but that’s really little more than a red herring to distract attention from how Apple wants to lock down developers into its own ecosystem. Jobs makes it clear that he has no interest in developers using any platform apart from the iPhone, and any tool that helps them do so is worthy of his scorn. So for him to talk about supporting Web standards — with the point being that they’re standards, available across platforms — is disingenuous when Apple’s strategy for apps is guilty of pretty much everything he accuses Adobe of. None of this, on a strategic level, is particularly reprehensible, they’re just business decisions (even if we don’t agree with the approach). But Apple’s apparent insistence on playing by a different set of rules to everyone else, and the hot air that accompanies it, grates just a little bit.

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Browser add-on Xmarks introduces a major new synchronization feature for its multiple browser plug-ins that lets users sync open tabs across multiple browsers and computers.

Originally posted at The Download Blog

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While I have some very serious concerns about the way the UK’s collection agency PRS for Music conducts its business when it comes to threatening small businesses — including going after a woman playing music to her horses and woman singing while stocking the shelves at a store — over the past few months I’ve been having a series of interesting conversations with Will Page, the Chief Economist for PRS.

Page, of course, put out that famous report last summer, that pointed out that the music industry in the UK appeared to be getting bigger, not smaller (contrary to what you hear from many people). Page is a fun guy to talk with about music industry economics, and we decided to run a little interview with him here. There’s plenty that I disagree with him about, but plenty that we agree on too. There’s so much in this interview that I’d like to dig deeper on, and I hope to do that in a series of posts in the future — and some more back and forth with Page — but I figured at this point it was worth getting our discussion as it stands out there for people to read.

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We wrote about your study last
year showing that the UK music industry was actually increasing — contrary
to most of the headlines were saying. Can you give a quick summary
of why your numbers show a very different story than the popular press
keeps saying?

It’s a
‘different story’ to what people are accustomed to simply because,
for too long, people have characterised the music industry as being
about just the recorded music industry. That’s largely due to the
fact that the only data out there for people to discuss is recorded
music statistics. When we published ‘Adding
Up The Music Industry for 2008’ last year, it was an important step towards showing (i) how much the
whole music industry was worth and more importantly (ii) how it all
hangs together. One of the many audiences we aimed this work at was
Government, who need to understand the broader picture of what the music
industry comprises of, and the value that it brings.
The Insight paper allowed two new pieces of the pie to be illustrated
and properly understood: firstly live music revenues of
£1.4 billion and secondly business-to-business licensing revenues which
were over £900 million. From a total pie worth
£3.6 billion, that implied that recorded music made up a nudge over
a third of the total revenues — that’s a significant sum, but definitely
not the only show in town.

Both of us are
skeptical that the digital music sales market will ever replace the
physical music market. Can you summarize why and what numbers
you've seen about the digital market?

My concerns about the digital market
start with the same word that introduced me to economics:
‘scarcity’ — there is little scarcity in selling digital media
goods and that inevitably affects price. I think the best way to illustrate
this is to look, instead, at the live music industry as those folks
are the masters of pricing scarcity
— they view tickets as ‘lots’ and want to maximise the willingness
to pay for each. Live music mastered their demand curve a long time
ago; digital music is still trying to discover theirs. Another problem
with this topic is that interpreting digital music revenues is not a
straightforward exercise, especially in Europe. We published a paper
on ‘Understanding
and Interpreting the Digital Market’ two years ago to help folks try and get their head around this
complex market, and it’s not got any easier since!

I’d like to flag two observations
for your readers. Firstly, don’t view digital in isolation, when it’s
shown that one-in-five albums sold in America were digital, that tells
you more about the collapse in the five, that the outperformance of
the one. Secondly, the UK has really outperformed its European neighbours
in developing a large, and importantly diverse, digital market. UK digital
revenues per capita are twice, maybe three times, that of our main European
neighbours, which is a great testimony to the work that Jez Bell at
PRS for Music and folks like Francis Keeling at Universal have done
on the licensing front as well as the
incredible achievements of the services
like We7, Spotify and 7 Digital which have taken out the licences and
launched here.

Finally, whilst the digital makes
up 20% of recorded music revenues, and 5% of PRS for Music collections,
what I really have learnt to appreciate is that these digital services
are legal ‘venues’ — a concept that Eric Garland drilled home
to me — and somewhere north of four million
folks in the UK are going to sites like
Spotify or We7 and doing their thing
— now it might not be producing the monies people once wished for
but they are arguably not going to Mininova, an illegal venue, and that’s
an important achievement — especially when Mininova celebrated its
10 billionth torrent download
three months before iTunes celebrated theirs. Engagement with legal
venues is worth more than the top line
revenues might initially suggest.

You mention ‘scarcity’ in the context of live vs. digital, but live has a real scarcity (seats — over which they can control access). Digital doesn’t have that kind of scarcity. You say that digital hasn’t ‘discovered their demand curve,’ but might the bigger issue really be that without the scarcity the supply curve is the issue? My view has always been that the digital market is a red herring due to the lack of scarcity, but instead the music world should focus on external scarcities that widespread digital music creates (including things like seats at concerts). Is the real issue not the demand curve but the supply and the failure (of some) to recognize that they need to think broader in terms of what they’re selling?

That’s a very insightful question — and you’re right as one of the many mistakes economists make is to forget about the supply side dynamics of a problem, and instead focus on demand. It’s worth citing Jean Baptiste Say, and his Law of Markets which is that “supply creates demand.” What this means, with regards to your question, is that “overproduction” in a free economy is actually impossible. That’s a controversial proposition though, as I think it comes up against another trade off which we could call the attention economy, where a wealth of information leads to a poverty of attention. Stepping back from the theory, there is clearly more noise in the market place — more artists, more songs, more places to hear them — therefore more investment is needed to stand above the noise, to enable the benefits of your ‘external scarcities’ to kick in. One final piece of twisted economics is this idea of a ‘freemium’ model, which is cool but has a flaw — if everyone did it, the less successful it would be. Point being there would be more noise in the free market, which erodes the value of the premium offering — an increase is supply depresses price, and we shouldn’t lose sight of that basic principle.

You call services like Spotify and We7 “legal venues” and things like Mininova as an “illegal venue,” which I assume many of our readers may have an issue with — especially given that Mininova has long had a program for artists to offer up their own content, and there certainly are a small, but growing, number of artists who have embraced those venues for legitimate marketing reasons. Is there an argument to be made that, given the size of some of the userbases of those venues that you (and many) deem illegal, that there may be ways to embrace and engage with them, rather than write them off as such?

The best way to embrace those users is to ensure the services they use are licensed and respect the value of music. Now, we have over a thousand digital music licencees here in the UK, and we’ve been granting online licenses since 2002, long before iTunes — a fact often overlooked. The best way to approach the unlicensed services is to think of it this way — we’re all chatting about whether Spotify will sink or swim, right? That’s the hot debate at the moment. Well, I would argue that at the margin Spotify would have far more chance of swimming, or up selling the subscription service, had they not had to face this unfair competition of illegal free. That’s a powerful argument when you run it through, as it moves away from the old arguments and towards a more plausible observation: what opportunities are being foregone in the legal digital market due to the unfair competition of illegal free? One last thing on Spotify, which is that they went legal before going popular, bucking a regrettable trend. When you explain that to an emerging artist or songwriter, offering a counterfactual of many other sites which have become incredibly popular (and then flipped for incredible amounts of money) before taking out licences — it really hits the message home.

Both of us are still
quite optimistic that there's still a huge opportunity for the overall
music market to grow. Where do you think that opportunity exists
— and why is it mostly ignored?

If we pick up on
‘Business-to-Business’ revenues, or licensing income, this makes
music free at the point of consumption with compensation taking place
elsewhere. This part of the music industry is likely to make up an increasing
part of an increasing pie, and that by default presents opportunities
However, what’s frustrating is that music licensing is an area of
the industry that’s often least understood by emerging bands
and songwriters — the MySpace generation —
who are trying to get one foot on the ladder to success. To realise
those opportunities, the first thing artists and songwriters
need to do is protect their rights by joining PPL and PRS for Music
in the UK, or their equivalents in their respective territories. Secondly,
it’s very important that the licensing bodies
around the world get involved with the artists and songwriters. Here
at PRS for Music, we’ve got Myles Keller leading our membership development
and we’re getting increasingly involved with our songwriters through
programming events like The
Great Escape on the 13^th May, whereas in America you have
‘walking encyclopaedias’ like Todd and Jeff Brabec who are very
accessible on the panel circuit and their bible ‘Music Money and Success’ is required reading. I guess my point is
that the best way to realise the licensing opportunities that exist
is to get involved. Passivity doesn’t pay.

You stress the importance of getting people to sign up for collection societies/licensing organizations — which isn’t surprising, given your employer — but myself and many of our readers are concerned about the incentive structures when musicians rely on such organizations (even when– as in many cases — they’re non-profits). With such organizations, you can take away some aspect of market-pricing, especially when there are issues of compulsory licensing and/or only one provider in the market. It also creates situations where those organizations constantly push for greater rights, or the ability to collect from more places for more reasons– often upsetting other aspects of the market (for example: bars and restaurants no longer letting bands play live or hosting open mic nights to avoid having to pay licensing fees). While I agree that, given today’s setup, it makes sense for musicians not to pass up revenue that’s there for them via these organizations, isn’t there a risk that these types of organizations distort the market from a purely economic viewpoint?

Each collecting society is different, so firstly — let’s be wary of generalisations. In America, for example, you are absolutely unique in that you have competition within collecting societies with ASCAP, SESAC and BMI — the latter which is owned by the broadcasters! Similarly, the story behind SoundExchange is unique too — and in many cases the US is playing ‘catch up’ with the rest of the world when it comes to neighbouring rights. So, I just want to be clear for a predominantly US Techdirt audience, the US experience with collective rights organisations will be unlike anywhere else in the world. I really mean that too — it’s such an exception to the rule.

Now to your question — let’s start by asking what is the rational for collecting societies. I would argue that the answer is three-fold: (i) reducing transaction costs for both rights holder and user, (ii) preventing fragmentation and (iii) solving co-ordination in many-to-many markets. The bottom line is this: PRS for Music enables start ups to start up, and songwriters to get paid. If you wiped the board clean and tried to devise a new model, which can hold together a blanket licence and balance the needs of unprecedented digital services, you would probably end up with what PRS for Music is doing just now. It’s not an easy task, and armchair critics would do well to consider the complexity in this two-sided market and the trade-offs that we face every day, but to read that We7 now feel that add funded music can add up is heartening as it suggests we’re getting this delicate balancing act right.

You've noted that the UK music
market appears to have again gone up in
2009 over 2008 and appears to be growing faster than other countries.
Why do you think the UK market has been different than elsewhere?

Firstly, The UK is not alone in bucking
the downward trend as Sweden, Denmark and Australia can also claim to
be outliers in some form. However, these are the exceptions as
opposed to the rule, and it’s a stark contrast to the downbeat sentiments
I’m hearing from the US, and chalk-and-cheese to the situation in
Spain which really is frightening on many levels. I’d offer three
exceptions which have bucked global trends rule. Firstly, the live music
industry has continued to exhibit robust growth in the UK even in the
middle of a credit crunch, whereas other territories suggest the market
might have matured. Secondly, UK labels have arguably done a better
job of diversifying their revenue streams , due in part to the success
story that is PPL, and I doubt that level of diversification is being
reflected by labels in many other regions. Third, the UK really values
music. It’s a simple point, but it really matters. Think: the role
of the BBC in championing emerging bands, the explosion in music festivals
in every corner of the country, the insane amount of work of Feargal
Sharkey at UK Music has put in to get all the stakeholders (including
ISPs) to banging heads together to face up to the challenges — all
these ingredients help illustrate that this thing called “music”
actually matters to the UK. Conversely, I’m spending an increasing
amount of time in Spain now, and what you see there is that music doesn’t
matter as much…if at all. It’s one of the few western countries
that can claim a thriving digital AND physical piracy problem and investment
in domestic talent is drying up as there simply no return. It’s actually
kind of eerie when you compare the quality of debate and level of activity
being had in the UK to that of other countries, it’s not that we’ve
solved all the problems, far from it, but it’s more about not dodging
them and actually doing something about them.

On Spain, I know the IFPI’s recent report said the industry is in trouble there, and you do the same here, but we keep hearing from people who claim otherwise — that there’s a renaissance of music in Spain due to more widespread ability to promote and distribute musicians. Anecdotally, in the last year, I’ve actually picked up (yes, legally bought, on CD) albums from a few Spanish bands. Do you have some numbers for Spain — since between the two of us, we seem to have very different anecdotal experiences? Could it just be that the business models haven’t adapted yet?

Neither of us is from Spain, nor do we currently live there — so we have to work this one out based on our own anecdotal experiences. What I’ve noticed is that trade revenues of record labels have halved in less than a decade, in nominal terms. I’ve also noticed incredible resentment to ‘paying for music’ in Spain, there’s a real ‘stick it to the man’ attitude which is puzzling. I come back to the point on domestic investment — given the situation there, would you (and that could be a label, publisher, manager or third party) invest in developing domestic talent in Spain, or would you invest somewhere else with a lower risk profile and then import into Spain. I’m sure there are lots of opportunities down there on the ground, but how many of those opportunities lead to a sustainable living for professional artists and songwriters. For me, Spain’s situation is like a tipping point which other countries should take note of.

One point that you’ve noted is
that the live music market has grown and actually
surpassed revenue from recorded in the UK. Critics dismiss this,
claiming that the live numbers are dominated by "heritage"
or "legacy" acts. Is this true? You claim that
the revenue for live covers "more bands, more tickets, more seats,
more events." Who's right?

You’re right to pick up on the changing
of the guard observation from last year, and it’s incredible to think
that five years prior, live was less than half the size of recorded
— which makes you ask three questions: (i) how has live captured so
much value, (ii) how has recorded lost so much value and (iii) is there
a link. However, read beneath the top line and you can consider the
distribution of those revenues: who got what share of the spoils.
As with recorded music, in live we’re witnessing a hit heavy skinny
tail distribution, and that intuitively makes sense. The bigger you
are, the more forms of revenues you’re able to exploit and the distribution
skews to the head naturally. When Take That played to over a million
people, that’s an example of more tickets, more seats and more events
but it’s just one band. Down in the tail, the picture is less clear
— with worrying stories of support bands having to pay to play needing
to be balanced with the fact that the explosion in festivals gives more
opportunities for acts to get wider exposure. There’s some interesting
signals coming out of the market place though, for example I was told
that there was noticeably less record label A&R presence at SXSW
this year, with agents and promoters filling up the bars on Sixth Street
— perhaps that’s a sign of the times.

You've noted in the past that
60% of the UK population don't buy music anyway and that "you can't
cannibalize zero" when it comes to things like file sharing "taking
away" revenue. Do you believe there's evidence that the 60%
of people who don't buy music are helping to contribute revenue elsewhere
— and if so how and where?

It’s a vital observation that needs
to be rammed home as the rights holders are understandably obsessed
with cannibalisation, but sometimes blinkered to the wider problem.
The legendary Rory
Sutherland remarked on
that "Can't Cannibalize Zero" phrase as a masterpiece and
told me that it reminded him:

“Of working with
ATOC, and First Great Western. They were obsessed with the risk of Revenue
Abstraction — the rail phrase for cannibalisation. In other words, any
special off-peak offer was viewed with terror, lest it attract people
prepared to pay full fare. But, just like music, 60% of people don't
use trains – ever!”

Rory makes you think about the problems
differently — and here, the problem is how can we re-engage the lost
majority? I collaborated with Spotify on a piece of research called
“How
to dance to ARPU” which
allows rights holders and users to approach that infamous acronym with
more clarity. At the back of my mind, though, is this: most of the folk
of my parents generation love Spotify and none of them ever bought music
…ever. Engagement is the horse, and monetisation is the cart — if
services like Spotify are helping re-engaging those who gave us nothing,
there’s a better chance of getting something going forward.

Following up on the B2B side
of the market, some also point out that this part of the market may
also be dominated by large legacy acts who can score big sponsorship
deals. Do you think that's true and if not why not? What
opportunities are there for less well known bands in this area?

To quote from the paper, ‘brands
investing in music trough sponsorship are drawn to it through the potential
audience affinity and reach; this means that much of the major expenditure
is biased towards the larger priorities and artists, which provide larger
fan bases.’ That means that it’s tough in the tail for bands wanting
to strike sponsorship deals. That said, there is a lot of scope to use
initiative to innovate in this sector. Here in the UK, we have organisations
like Music Ally and FRUKT who are doing some great work in this sector,
especially in terms of offering training and workshops for artists and
managers — their material is well worth tracking as opportunities
in this sector don’t find you, you have to find them.

Lots of people have suggested
that even if live is now outpacing album sales, it was still the record
labels that really financed tours and the growth of live. Are
there mechanisms to support and nurture live if the record labels continue
to decline? Where might it come from?

The kicker is this — the money is
live is centred around the head, and much of that head is heritage in
status — so the question I always ask is who’s going to offer the
tour support for new bands to build the sort of fan bases that provide
the live industry with the heritage acts of the future. That’s a legitimate
question to ask, and not an easy one to answer, but you’ve got to
look forwards not backwards, and I’m really hype on the company Songkick it’s basically Facebook for folk who
love going to gigs with full functionality for ticketing, recommendations
et al. I think that what Ian Hogarth has done there is a real game changer
when you fully think it through — and it also helps level a heavily
tilted playing field as emerging acts can benefit as much as the established
bands from Songkick’s functionality. You have to manage expectations
as it won’t make touring across a country in a bus sitting next to
a drummer with an odour problem any less unpleasant, but it does have
the potential to lead to more bands performing to more fans, and importantly
more data to build upon that success.

Notably absent from your discussions
on these numbers is anything (outside of live) having to do with direct-to-fan
opportunities that we've discussed on Techdirt. These numbers
may get mixed in elsewhere as they sometimes include
album sales and sometimes include live, but do you have any thoughts
on that market? Do you have any numbers on how those efforts are
doing?

Firstly, I’ve recommended your excellent Trent
Reznor case study to literally
everyone and their dog. What’s really good about that is that you
echo what I’ve stressed every time I’ve explained ‘In Rainbows, On Torrents’ case study which was that this was a solution
for Radiohead, and was NOT a solution for the music industry. That said,
what Radiohead and NIN did were ‘experiments’ and we’ve got to
learn from these experiments. You got to ask the right questions —
so ‘of what worked, what’s transferable?’ Second, whilst Topspin
was behind your Trent Reznor case study, there’s another Toronto based
company worth checking out called Official
Community. They’re providing
direct artist to fan infrastructure which allows for disintermediation
of the value chain, more empowerment of the artist and faster cash flow.
When you look into these models though, it’s important to keep a balanced
perspective and manage expectations — it’s not going to change the
world, and it might not even change the actors involved in a ‘conventional
deal,’ but this existence of more options should, if anything, allow
artists and songwriters to negotiate better terms. Third and
finally, I agree with the premise of the question — what’s happening
outside the conventional radar is probably bucking the southward trend,
but because it’s not being picked up — the trend continues southward.
I learnt recently that the annual Cambridge Folk Festival is a massive
player in selling CDs of those folk artists to fans — literally tens
of thousands of CDs being shifted on location. Now, you may be tempted
to dismiss this as just a niche festival and just niche CDs, but they’re
shifting lots of them and there’s are lots more similar festivals
up and down the country who are increasingly doing the same thing and
its questionable how much of this is getting picked up on the conventional
radar. That offers optimism for the future as regards the “known unknowns”
which are out there, but also presents numerous headaches for myself
and Chris Carey as we try to calculate this year’s ‘Adding up the
Music Industry’ report together which is due for publication in July
2010.

You mention the “skinny tail” and that some of the success today is from heritage acts, but then we see numbers from folks like TuneCore that show a massively successful long tail. It makes me wonder if — as TuneCore notes — the long tail success stories simply aren’t being seen in the data because it’s the wrong data. We hear so many stories of musicians successfully embracing new business models down the tail that it makes me wonder if what’s happening down there is simply not being counted. Thoughts? Any ideas on better ways to measure?

Both Chris Anderson’s work on Long Tail, and our analysis since, has suffered a lot of misinterpretation because you can’t dive into this topic and expect a simple tabloid headline to explain it all. Statistical distributions of large data sets are not the sexiest topic for the music industry to discuss — on that we can both agree! But let’s roll back to what I’ve stated repeatedly in our work here — I loved the concept of the Long Tail, still recommend the book to colleagues and wish it would work the way we all hoped. However, it is a book about the supply curve — here’s what happens when lots of goods can get to market. What I was able to do, thanks largely to the mathematical guidance of Andrew Bud, is derive the demand curve for digital music — which is like saying “okay, once you’re on the digital shelf, who actually wants you.” You need two curves to tango in economics, and we’ve been able to develop an unprecedented understanding of this digital music market place as a result. What’s great though, is to know where economics needs to hand over to other disciplines, such as psychology, sociology or anthropology — basically how do we understand culture.

I can illustrate what I mean by offering your readers a genuine exclusive — by exhibiting the Lorenz curves for We7 and Spotify side by side, and comparing those with the sort of distribution Chris Anderson’s theory predicted:

The red line is to show what a “great example of the Long Tail at work” should look like, where 95% of the niche inventory (reading from bottom left to bottom right) makes up 75% of the streams — a fat tail. Clearly, neither We7 nor Spotify look like that, with both curves tugging into the bottom left hand axis point and this is what’s meant by a hit heavy, skinny tail distribution. However, the curves are different, and that is to be expected — as We7 has a strong editorial with excellent artist promotional campaigns, whereas Spotify is editorial free and allows the consumer to graze the field at their leisure. Consequently, you can see that We7 (blue line) is more hit centric with a 90/5 rule and Spotify (green line) is more democratic with an 80/5 rule which, when you step back, is common sense made complicated but it’s nice to see the math adds up!

The key thing for Techdirt readers is that’s what economics can tell us when rights holders and users collaborate to understand unprecedented markets, and it’s great that PRS for Music and Digital Music Services are willing to work together like this — I think it’s a important part of the success story in the UK. However, economic analysis can only tell us so much and it’s at this point when the baton must be passed on to folks from other disciplines or backgrounds who can bring new insights to the table to work out what that actually means in terms of this intriguing thing called ‘culture’ — which also means this is a good point to conclude this interview.

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Thanks to Will for this fun discussion… which I fully expect to continue. If you want to see one of Will’s recent presentations on the state of the music market, it’s embedded below:

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Google has prevailed in another lawsuit over its policy of allowing advertisers that don’t own certain trademarks to purchase AdWords ads generated by those trademarks.

Originally posted at Relevant Results

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Get schooled by CNET editor Jasmine France. This week: the art of finding love on Facebook.

Originally posted at MP3 Insider

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We recently noted how Sony decided to make their Playstation 3 game console less useful by removing the ability to run alternative operating systems. Sony wanted to retain stricter control of the hardware to battle piracy, but it’s something that annoyed some hobbyists — who’d found a number of creative uses for the feature. The decision made it clear that in the broadband age, the product you thought you purchased isn’t always the product you now own — and it raised the question whether products made less useful post purchase demand a refund. One UK customer thought so, using a UK consumer protection law to force Amazon to give him a 20% rebate. At the time, we noted how a class action lawsuit seemed likely in the U.S., and right on cue — Sony’s now facing a lawsuit:

"The suit claims that the "Install Other OS" function was "extremely valuable." According to the suit, the plaintiff he has not yet installed the latest firmware update so that he can continue to use the Other OS feature. The suit also notes that PS3 owners who choose not to update their firmware cannot access the PlayStation Network, play PS3 games online, nor can they play new games or Blu-ray videos that require firmware 3.21."

So with the recent Avatar DRM flap in mind, users not only lose useful functionality, but if they refuse to update their system with the latest firmware — they also lose the ability to go online, or watch/play the latest Blu-Ray titles or games. In other words, if you refuse a hardware downgrade designed to battle piracy (which punishes paying customers), your PS3 console becomes progressively less useful. So what exactly is a Playstation 3 worth if it can’t be used to do anything?

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Opera’s few minor tweaks for its big-deal iPhone app could leave users cold, especially in light of Skyfire’s new mobile browser advances.

Originally posted at iPhone Atlas

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