[ EEPI-Discuss ] Re: back to property rights etc

[David Tomlinson <d.tomlinson@tiscali.co.uk>]

> Sorry, Coase espouses a utilitarian strategy as I have learned it (in an
> economics class) -- the idea is to create a market expression for social
> value that otherwise does not enter into market dynamics.  I learned Coase
> specifically in the context of allowing public/common goods and/or
> externalities to be given market expression in the sense of "Pareto
> efficiency" which is what economists talk about when they use the word
> "efficiency" -- i.e., negotiations for outcomes where there is a net gain
> or at least no net loss in value for all negotiators.  As I was taught,
> Coase argued specifically that assigning property rights could allow
> efficient outcomes under fair negotiations in cases where otherwise those
> goods were not expressed in market incentives.
> 
> Copyright in the US is not about moral rights ("natural law"), it's purely
> about economic issues.  US pushed hard to keep moral rights out of WIPO and
> TRIPS.  It's only about incentives and compensation, here.
> 
I am sorry too, for the context in which you learned Coase is not the 
context in which you are now trying to apply it.

I take it you learned Coase in the context used in
http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/econ230b.html

* Local Goods

* Low (zero) Transaction Costs

* Property are evenly allocated (endowed).

* Externalites are negative.

* Perfect Competion

However:
http://ideas.repec.org/p/fip/fedmsr/142.html

Abstract:
"We examine the validity of one version of the Coase Theorem: In any 
economy in which property rights are fully allocated, competition will 
lead to efficient allocations. This version of the theorem implies that 
the public goods problem can be solved by allocating property rights 
fully and letting markets do their work. We show that this mechanism is 
not likely to work well in economies with either pure public goods or 
global externalities. The reason is that the privatized economy turns 
out to be highly susceptible to strategic behavior in that the 
free-rider problem in public goods economies manifests itself as a 
complementary monopoly problem in the private goods economy. If the 
public goods or externalities are local in nature, however, market 
mechanisms are likely to work well. ; Our work is related to the recent 
literature on the foundations of Walrasian equilibrium in that it 
highlights a relationship among the appropriateness of Walrasian 
equilibrium as a solution concept, the incentives for strategic play, 
the aggregate level of complementarities in the economy, and the problem 
of coordinating economic activity."

The choice is between a private monopoly and free riding by the public, 
on pure public goods (non-rival, non-exclusive). And transaction (legal) 
costs are huge, and are to varying degrees on the public.

>>
>>Coase or the Utilitarian view you can't have both.
> 

Coase in this context produces a private monopoly.

> I am allowed to disagree with Schaumann. 

Schaumann ? Niels ?


> 
> Sure there are limits:  the market decides what it will use or not, and
> that determines the remuneration to the creator (or assigned rightsholder).
> If the market doesn't use (and remunerate) much, then the artist has less
> resources to create more, and even a filthy rich artist can only create a
> finite amount of works per unit time.
> 
> But yes, it is all about collective licensing.  I stand by that as a viable
> option.
> 
The goods are non-rival, therefore everyone can potentailly consume the 
same work

> 
> There *is* a market:  rightsholders get remunerated according to popularity
> of the use of the work.  It's proportional in the same way that aggregation
> of individual transactions adds up to total social/market value.  (And the
> overall rates are collectively negotiated -- collective negotiations still
> constitute a market.)
> 
A market consisting of Government and the Monopoly (Collective) Rights 
Holders, where the public can't effectively vote on their willness to 
pay a tax or otherwise send price signals.

> Remember, I described a service model that does not entail a universal tax,
> merely a surcharge on a dedicated music service which customers may
> subscribe to or not as they wish, voluntarily.  Not all collective
> licensing is compulsory and not all of it entails taxation.
> 

This service model would have to exist in the context of free 
availability of content at a lower level of service (P2P). I don't know 
how effective this could be as a source of revenue for artists.

A hypothicated tax on a music service implies exclusion of content from 
open distribution.
> 
> 

> Promotion *is* distribution, online, at the end of the road (we're still in
> transition, but we need to prepare for the endgame).  The only way to deal
> with it is to merge the two characteristics in a single integrated system.
> It can be on a per-service basis or it could be on a per-Internet basis.
> One way it becomes simply a license fee incurred by the music service, the
> other way it looks like a sort of universal tax.  Personally I prefer the
> dedicated service model, but if we can't get there I'd accept the
> full-Internet model (as long as the auto-recommendation engines work well
> on a distributed basis).
> 

It is possible that returning to 'Commercial Exploitation' model of 
copyright could generate revenue. After all it worked before private 
distribution, but it too will have to exist in the context of private 
distribution (P2P).

> 
> Only big stars can make living off of live performing.  I know, I've done
> the dance myself and danced with others as a sideman.  Here are some
> structural problems with it (ignored by John Perry Barlow, of course -- the
> Grateful Dead were a star act in the live performance world, massive
> celebrities):
> 
>  - Small venues can only hold a moderate number of audience members, thus
> limiting the productivity (dollars per performance) of live performing.
>
Life's a bitch

>  - Getting into large venues requires also being able to guarantee large
> audiences, and only stars can do that without significant risk.  (Venues
> tend not to bring their own regular audiences.)
> 
Risk varies with venue size from small to large as does income. A 
performance could be predicated on advanced ticket sales.

Some venues bring their own audiences e.g. Jazz Club.

>  - If your audience is geographically spread out, then it may be impossible
> to get them together in one place at one time (everyone has different
> schedules) in order to make a profit from live performing for them.
>
Large cities concentrate audiences, people can and do travel to venues.

>  - Depending on the scheduling of gigs, travel and accommodations on the
> road can more than eat up performance fees.  The grass-roots live
> performance market is highly unpredictable, spotty, and inefficient, with
> tons of friction in the market.
> 
You can use the Internet to comunicate and co-ordinate with your fans, 
live performances and costs can be predicated against online sales.

> Perhaps you'd like to see all non-star musicians get into the T-shirt
> business.  But then they are in the T-shirt business and not the music
> business.  That's the celebrity model right there: tangential value, not
> direct value.  It skews the market incentives very badly.  A artist with a
> great T-shirt and lousy music will sell more T-shirts than an artist with
> great music and a lousy T-shirt.
> 
That depends on the fans desire to be associated with good/bad music 
and/or good graphics.

> As a musician, I want to get value because of the great music I make, and
> not have to depend on getting into a completely different business selling
> T-shirts (or whatever other tangential value you propose).
> 
You can have direct interaction with your fan, online and in person.

> Without some sort of direct compensation for the *recorded* music, I'm
> screwed, plain and simple.  Getting a fair return for recorded music is my
> only hope for self-sufficiency as an independent musical artist making
> high-quality music that appeals to a moderately sized audience.
> 
If you have a moderately size audience you should be able to get 
compensation from live performance, however nothing prevents direct CD 
sales, or even a tip jar.

> 
> Who said we were talking only about *popular* music?????  Geezes pieces.
> 
Popular not pop (I didn't want to get in the Pop/Rock/Rap and endless 
genre. In this context Jazz can be seen as popular, it has a market.

> I make progressive jazz and free improv.  I've worked with talented
> singer-songwriters who make music that is not designed to get airplay on
> ClearChannel radio.  There is an opportunity here in the new-technology
> platform, but only if recorded music retains remuneration rights.
> 
The Internet would enable special interest webcasts, downloading, 
community forming etc.


>
> 
> Non-rival goods, yes.  Also non-excludable goods.  Add the two together and
> you get public goods:
> 
> i.e., No Market
> 
> In order to create a market, you have to assign some rights.  Control
> rights don't work (that's been part of my point from the beginning), so
> fall back to remuneration rights.
> 
The only markets that would remain, is a commercial rights market or a 
tax funded market (on whatever the tax is imposed or hypothicated).


> 
> You have, say, free P2P systems.  However, those who can pay for the extra
> added value of an integrated service will still be attracted to the paid
> service and generate royalties to the artists or assigned rightsholders.
> (I'm assuming here that only the few acts that still crave fame and
> celebrity will assign their rights, other DIYers will retain them.)
> 
> I'm sensitive to the difference between an elite market and the mass of
> people in developing nations that cannot afford elite market prices.  So
> let them have it for free legally.  But charge the premium service.  Or,
> create taxation in the developing countries that is appropriate to their
> income levels, but still allocate from collective pools according to use.
> 
> There are solutions to the inequities of IP that can be found without
> destroying IP outright.  They are no more impractical than obliterating IP,
> both would be difficult to push, given the strength of the IP industry
> lobbies.  I don't see that your model is any more inevitable than mine --
> in fact, both are tough hills to climb.
> 
> 
You may be able to maintain 'Commercial exploitation' rights, and these 
may have sufficient value.

> 
> You don't understand the reality of live performing as I've noted above.
> This is not a viable market for anyone but the big stars, anyway.  Barlow
> is an elite and I view his ideas as dangerous for artists taken as a whole.
> In fact, Barlow makes his music money from publishing royalties (he is a
> co-author of several Dead songs, and he gets mechanical and performance
> royalties from sale and license of Dead recordings).
> 
> Your whole premise seems to be based on a fallacy.  If we rely on live
> performance only, then we have absolutely given the market away to the
> stars and celebrities only.  The grass-roots will *never* climb up into the
> game without revenue from recordings according to actual merit.
> 
> 
Commercial exploitation rights may well be enough, if not the live 
market is all you have left. Rap managed to emerge with active 
resistance from the Music Industry.

> 
> "Sell celebrity" is what you're saying here.  That's not good enough for
> me.  I want to sell the art, not the artist.  The artist is not what is of
> value to society, only the art is what is of value to society.  The artist
> is of value only as long as the artist continues to make valuable art.
> 
That's just a model for the record companies to continue to operate.
> 
> 
> I think you are at the very least premature in calling the game at this time.
> 
Sixty million people in the USA using the original Napster.

> The social contract may be a myth, but it could actually become reality.
> Especially because the rhetoric of the social contract has been so deeply
> embedded in the conceptuality of the present day.  If the social contract
> became a reality, it would be good for society, because the star system
> distorts culture in negative ways.
> 
> The problem with new tech is that content is now non-excludable (and making
> it excludable would be too Draconian to contemplate).  Content does have
> social value, and without a market expression for content in and of itself
> society will have less of it and less quality of what it does have.
> Culture will suffer (it has already suffered because the market has been
> hijacked by non-content-based incentives).
> 
> I'm not suggesting my view is the low-hanging fruit by any means, but it is
> the *right* thing to do for society, for artists, and for the balance of
> culture.
> 
> 

Solutions: (Decreasing in desirability, but can be combined)

Recorded music free-ride as promotional material for live performance 
and direct to the public sales.

'Commercial Exploitation' rights as per Jessica Litman (the original 
effect of copyright), but in the context of availability of 
non-commercial distribution. i.e. Commercial use of recorded music 
attracts a Licence Fee.

Taxation on various services, a Music Service, Internet access etc.
(Compulsory Collective Licencing).

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