More often than not, startups are in pursuit of venture dynamics that exhibit benevolent economies of scale: cost per unit, or per user fall as the number of users increases. When licensing key inputs, rational startups pursue ceilings and not floors: license terms that place limits on the obligations rather than really high minimums for the obligation. Music service startups face their own very special sort of “anti-scale.” Really high minimum obligations alongside ceilings that scale 1:1 with user growth or music use. Eric Eldon of Techcrunch claims to have…read more
The verdict is in… Media Pirates are undeniably and economically irrational, just like the rest of us.
A seemingly endless stream of statistics are in play these day suggesting (or proving, in the minds of some) that so-called pirates also buy music, movies, and other forms of digital media. What few if any of these authors discuss openly, however, is the fact that this strange behavior—buying some files and downloading others through unlicensed venues—is, for lack of a better phrase, undeniably and economically irrational. Two of these recent findings would be: Where do music collections come from?, from the American Assembly Downloaden neemt niet af ondanks bestrijding,…read more
Nearly fifteen years ago I began hashing the plans for what would become, as far as I can tell, the first subscription-based music service online. What we built was pretty straightforward and, as a result, the initial business model was nearly identical to that model later adopted by services such as Spotify. (Aside: True old-timers will remember that Patronet would also launch, but it offered music from only one artist, Todd Rundgren—who built Patronet). Importantly, neither technology nor copyright law were ever really the roadblock to opportunity, even back in the…read more
Since the season of “he said she said” in copyright licensing is now in full bloom, I thought it wise to reveal a model I have developed for understanding the copyright licensing paradox. To be clear, the paradox is not that the parties involved don’t understand this model. The paradox leads to confusion over the right wrench to throw into the machine to make the model stop. The model: Note: The following steps can be performed in any order. In particular, steps One and Two are often performed in reverse…read more
Innovation at the edge: An investigation of music licensing efforts and the process of opportunity development
I have been finishing up a rather lengthy working paper, “Innovation at the edge: Making sense of opportunity at the boundary of technology and copyright.” I reckoned the raw findings from the work were better suited for a summary brief, however, in the form of a two-pager PDF and the post below. The academic working paper is, well, rather academic — making it not the easiest sort of thing for everyone (including myself) to digest. Essentially, in an effort to understand the process of opportunity development — the academic interest —…read more