dslreports logo
site
 
    All Forums Hot Topics Gallery
spc

spacer




how-to block ads


Search Topic:
uniqs
1814
share rss forum feed

jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

Business End of Piracy In The Media Industries

From: »jkoblovsky.wordpress.com/2013/01···-part-1/

I’m writing this post in hopes that it might shed some light on what our current situation is within copyright. I’ve been on a learning quest for years on this, because I used to work in the music industry. I have aspirations of opening up a record label one day of my own. Due to these aspirations, I’ve had to learn a lot about copyright, and how to promote potential clients moving forward. The part of the music industry I was a part of, is responsible for forcing a lot of technological change in the music industry as a whole. As a result of that technological change, the way the music industry now does business has changed. The current situation we’re in right now with copyright predates the current debates around file sharing. This information I think is important to bring forward to have an informed discussion. To do this, I want to join you in on a learning quest that started for me in 1995. I’d like to share with you some of my observations.

Before we move forward here we need to define an economic term called creative destruction. Basically it’s an economic term that’s applied to situations in the economy when disruptive technology is introduced into the equation. When disruptive technology is introduced into the economy, sectors of that economy, market or industry become obsolete, but at the same time there’s an explosion of innovation and growth as a result of that disruption. While one sector of an industry is dying, other new and more profitable sectors are emerging at the same time. That’s basically the theory behind it, and I’ve observed this happening in real time on the business end of the music industry.

When we look at media, the first thing that needs to be understood is where technological disruption is occurring in sectors of the media industry, and which sectors are pushing technological advancements in the media market. For video, it’s the porn industry. The porn industry is responsible for introducing and pushing new technology in the video and film sectors of that portion of the economy. VHS, DVD, and HD Blue Rays were all introduced into this market by the porn industry, which forced other players to adopt this technology.

For the music industry, it’s been the Electronic Dance Music (EDM) sector. This is where I will be focusing my efforts to explain things in this post. I was worked within side this sector of the music industry as an industry, club, bar, radio DJ, and in 2009 I was within inches of starting up my own record label. Many of you who lived in Ontario in the 90’s and are my age, should remember a dude by the name of Chris Sheppard. Chris and I have a lot of mutual friends in the music industry. Chris hosted a show on the Ontario airwaves called “Pirate Radio”. Chris named this show after a situation in the UK where a lot of pirate radio stations were popping up at the time in England. This is where our journey into the business side of media piracy begins.

In the mid-late 80’s is when digital synthesizers, editing, and sampling technology started to become available and affordable to DJ’s. What happened as a result was a lot of DJ’s basically “remixing” old tunes, creating new ones with samples and what not. This was done in home studios due to the affordability of the equipment, and is what gave birth to what is now known as “house music”. When DJ’s and remix artists started approaching radio stations to play their new creations, stations completely backed off from the idea due to the copyright infringement that this new genre purposed, and what it would mean for the station in law if they aired it.

Djs desperately wanted to push their new creations out and share them so what they started to do, was hold parties called “gatherings”, and started up their own neighborhood radio stations to broadcast this music. Hence “pirate radio”. When these stations started broadcasting, there was usually a spotter outside on watch for law enforcement. In fact it became quite the battle in the UK with pirate broadcasters, and law enforcement at the time. Similar to what we are seeing now in P2P file sharing. Often times these broadcasters would get caught, the smart ones usually had elaborate plans of evasion when law enforcement caught on.

As a result of the interest generated of this battle between good and evil in pirate radio in the UK, gatherings increased from a few people at home to several hundred in open fields, with these gatherings happening more and more frequent, and the movement spread to different countries including Canada. As a result of the noticeable public interest in the music that was being played, labels started picking up on tracks, and legally clearing within copyright the samples so that the remixes could be sold and used in the marketplace. What resulted was an explosion of creativity. Different genres of house music started to spawn, Techo, Dance Music, Trance were all genres that spawned from house and the fight in pirated radio stations in the UK, giving birth to a new sector of the music industry called the electronic dance music sector. Chris Sheppard introduced this genre into the Canadian market, and as a result this market became a huge money bag for the big labels, and introduced for the first time Canadian content into the mix, in which became known worldwide.

I started my DJ career in 1995. I had a late night show on a public radio station in Waterloo. Eventually through chance, I was introduced to the people behind Chris Sheppard’s success and Chris’s best friend at the time became a mentor figure, while I was learning the ropes of not just the industry, but what’s expected of me as a DJ within the industry, how I should conduct myself with fans, the Canadian history to the introduction of EDM into the Canadian market. All of which I found extremely fascinating. It’s now all very relevant to the debate around file sharing as well, as you probably have picked up on already. I think this story needs to be told.

I would often end up in Toronto once a week to pick up music at DJ surplus stores in Toronto which serviced the EDM genre. This is where I was introduced to “White labels”. A lot of very internet savvy people have probably come across this term before. Basically what this means is that it’s a remix of a track, or artist that hasn’t been signed yet to a label. These were tracks that essentially had just the track name on it, but not the artist. If it’s a remix with uncleared samples it was technically “illegal”. White labels were also sold for profit, and the success was tracked through sales of the track, DJ’s providing direct reviews on how the track went over in the clubs, and they were often also played on Canadian airwaves.

This was an accepted use of illegal activity at the time, due to what transpired in the UK , on the premise that eventually if the track got big, a label would clear the samples to be released into the market and what every the infringement cost would eventually pay off in the long run. Essentially commercial copyright infringement was used as a form of a test market for new talent as a result, and was fully accepted by industry at the time because if a track got big in the clubs, it would essentially pay itself off. All of the big labels were quietly supporting this practice.

The EDM industry has changed the way the music industry does business from stemming from the days of “pirate radio”. The next post will bring in some current day examples of this and on how the discovery of new music for the industry on whole has moved to the P2P networks.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/

Expand your moderator at work


Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2
reply to jkoblovsky

Re: Business End of Piracy In The Media Industries

said by jkoblovsky:

From: »jkoblovsky.wordpress.com/2013/01···-part-1/

Many of you who lived in Ontario in the 90’s and are my age, should remember a dude by the name of Chris Sheppard. Chris and I have a lot of mutual friends in the music industry. Chris hosted a show on the Ontario airwaves called “Pirate Radio”.

Hah. I listened religiously to it, and to his live-to-air broadcasts from the many clubs in the early and mid 90s specifically on the long defunct energy 108 FM from notable places like RPM. Met him once or twice at The Lyric night club where I would drive more than an hour to hear him DJ and of course to get drunk.

He was the god of dance/house at the time.
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca

funny0

join:2010-12-22
reply to jkoblovsky

can you write all that in one paragraph?lol


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2
reply to Inssomniak

said by Inssomniak See Profile
Hah. I listened religiously to it, and to his live-to-air broadcasts from the many clubs in the early and mid 90s specifically on the long defunct energy 108 FM from notable places like RPM. Met him once or twice at The Lyric night club where I would drive more than an hour to hear him DJ and of course to get drunk.

He was the god of dance/house at the time.

Had friends that used to work at the Lyric, and Metropolis That's how I met these guys. The vibe at the Lyric is incredible. Miss those days. Also used to hang out at Stages as well. Opening night at Metropolis, the floor nearly caved in.

Still very much friends with everyone expect Shep. He's become like Bigfoot. Someone will spot him now and then and snap a fuzzy picture and post it..lol
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/


Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2

You were there too for opening night.. I remember that floor. I really miss the Lyric, I was recently there under whatever they call it now, its changed a lot. The two fireworks that went from stage front to the back were great!. And that single green laser thru the cigarette smoke.

You and I perhaps have met.
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

Quite possibly. I was in the booth most of the time, learning from these guys. This was pretty much when I first started out. I got a pretty cool "behind the scene's" take on the live to air stuff. I got to know the crew quite well. That was my gap year before college. I eventually went into Radio, and then on to computer sciences.

I had a show on CKWR. We were the only dance show on that station during this time. Did you ever listen in?
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/



Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2

said by jkoblovsky:

I had a show on CKWR. We were the only dance show on that station during this time. Did you ever listen in?

Heh I cant specifically recall it but could not possibly be picked up where I lived, so it would had to have been while I was there, and in those days, it was just to go to clubs And my gap year, (if I went to college), would have been 1995-1996. I mostly stopped going to clubs regularly around 2002-2003. Damn you, life.

Talk about off topic. lol
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca

jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

said by Inssomniak See Profile
Heh I cant specifically recall it but could not possibly be picked up where I lived, so it would had to have been while I was there, and in those days, it was just to go to clubs And my gap year, (if I went to college), would have been 1995-1996. I mostly stopped going to clubs regularly around 2002-2003. Damn you, life.

Talk about off topic. lol

That's exactly my gap year as well, and when we were all clubbing too. This is pretty much who you are talking to right now. This is an interview under my stage name:

»www.maxumi.co.uk/2010/01/07/excl···terview/

I stopped DJ'ing shortly after this interview. I blew my eardums out mixing
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/
Expand your moderator at work


Inssomniak
The Glitch
Premium
join:2005-04-06
Cayuga, ON
kudos:2
reply to jkoblovsky

Re: Business End of Piracy In The Media Industries

Ya know there is virtually no evidence of the existence of Lyric nightclub on the Internet. One of the great clubs of the day, not even can I find a video, or even a picture of it inside or out, let alone any written words about the place. I suppose this is long before the widespread use of cell phones and digital cameras.
--
OptionsDSL Wireless Internet
»www.optionsdsl.ca


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

Well the owner of the Lyric is the owner of Elements in Kitchener. I was last there in 2003, about a month before they tore down the Lyric. From the looks of the photo's he's renovated since then. Striking resemblance to the layout of the Lyric. The lowered dance floor, just above that the bar. The railings. The Lyric was his favorite club. Super nice dude too.

»partytown.ca/elements/

I'll ask around. I don't have any pics myself. DJ KC (Friday Nights) that used to work there is still a good friend of mine. A few years ago he posted some of him in the booth at the Lyric but can't find them now. I'll message him too see if he's got any more or if he can repost. Thanks for the memory trip man. I'll have to message you about the stars above the DJ booth. Don't know if you heard any of those rumors, but if you did, they're all true.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/



Anon92

@teksavvy.com
reply to jkoblovsky

Enjoyed reading stuff that took me back in time. There were parts that (While not completely incorrect) didn't go into too much depth.

For example white labels. Your statement on the subject weren't false. But the truth is, a pretty decent % of white labels were in fact from labels (Both indies and majors). For a few different reasons like early promotion to see what kinda of buzz a track or mix would make before any decent manufacturing and distribution was committed. And by the end of the 90's "White Labels" really became pretty much a marketing gimmick instead of breaking a track. Plenty of records were sold just because it was a "White Label", even if the record was shit.

Don't get me wrong. There were bootlegs and it did work the way you mention in part. But there can be a debate that the reasons much of the industry let whites/boots slide, was because there was plenty of involvement by the labels.

Much like hip hop using promos and mix tapes in the 90's and 2000's. Put promo records in stores and big name DJ's hands and mix tapes were made and sold, with it being thought of as a promotion and marketing tool in the grand scheme of things.

Anyways, interesting read. Thx... I met Chris a couple of times back in the day when I was a kid. He was a friend of the family of sorts because we had business dealings. Anytime I think of Chris, the first thing that comes to my head is his signature call out of "CRAAZZZYYYY" during his early radio days. Hearing him do it on his TV dance show didn't have the same effect IMO.


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

2 edits

said by Anon92But there can be a debate that the reasons much of the industry let whites/boots slide, was because there was plenty of involvement by the labels.

Exactly, what I'm trying to bring out. My observations are this is exactly how the effects of P2P are being used. Essentially P2P is being used as a test market in the same way white labels were and there's economic evidence to back that up. That test market died as a result of P2P, it had to evolve with it.

I have to explain white labels a bit here to people before moving forward. Essentially P2P may be a necessary evil. I included a link last night in the post to explain white labels fully to people. That link:

»en.m.wikipedia.org/wiki/Whitelabel

Play close attention to the copyright explanation. To be continued in Pt. 2
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/

jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

A good industry example of this is deadmua5. Joel released his first track on the P2P networks as a joke. It took off huge, so they threw it up on beatport. It became that year one of the top SELLING tracks on the site. Joel first signed to Nettwork music group who has a very strong ideology that fans should not be sued for downloading off of the P2P networks.

Now I can't prove that, because it's industry inside knowledge, I have to do it in a way where the economic data supports my business observations and it makes sense to everyone.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/



rodjames
Premium
join:2010-06-19
Gloucester, ON

Trent Reznor did that for an album with NIN. I can't recall exactly which one.



xsbell

join:2008-12-22
Canada
kudos:8
Reviews:
·Primus Telecommu..

1 edit
reply to jkoblovsky

said by jkoblovsky:

DJ KC (Friday Nights) that used to work there is still a good friend of mine. A few years ago he posted some of him in the booth at the Lyric but can't find them now. I'll message him too see if he's got any more or if he can repost. Thanks for the memory trip man. I'll have to message you about the stars above the DJ booth. Don't know if you heard any of those rumors, but if you did, they're all true.

Didn't he also used to work at The Palace in Guelph (while he was going on school)?

The Lyric was definitely the place to be back in the day. I was 15 the first time I saw Chris Sheppard there, I still remember the intro and the first track he played.. Tree Frog by Hope!:)

edit: sorry for keeping this thread off-topic

jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2
reply to rodjames

The economic data I've seen and my own observations suggests it's happening more than you are lead to believe. The whole argument around illegal downloading is hugely hipocritical, and the reason why I get so heated on this subject. What also needs.to come to light is how that is also used to undermine competition, which is why I've chosen not to open up my own label. For me it's too much of a business risk, and I have to use P2P to properly represent and test new talents potential. I'll be writing more on this in my blog. Just trying to find the best way to frame it.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

The indepedant researchers are starting to catch on with that respect. Here's some of the economic data I plan on quoting:

»musicbusinessresearch.wordpress.···part-24/

Seems that leaked tracks are having a positive impact on sales.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

2 edits
reply to xsbell

said by xsbell See Profile
Didn't he also used to work at The Palace in Guelph (while he was going on school)?

The Lyric was definitely the place to be back in the day. I was 15 the first time I saw Chris Sheppard there, I still remember the intro and the first track he played.. Tree Frog by Hope!:)

edit: sorry for keeping this thread off-topic

It's okay, you guys need to know my connections here, that's important. Yes he did work at The Palace in Guelph. The Palace was owned by the same owner as the Lyric. DJ KC (Walter) was Tony Monaco's main DJ for a long time as well. He was also Canada's first live to air DJ, at the clubs. Him and Monaco essentially paved the path for Shep with the live to air stuff.

He was also part of the Pirate Radio crew in Kitchener. The first few hours of Saturday nights were live from Metro, and Walter was spinning for about a half an hour to an hour while the crew got set up at the Lyric. I was often bouncing back and forth between the two clubs on Saturday nights. Whenever you heard "Nightcrawlers - Push the Feeling on" was usually when Walter started. That was and still is his favorite track.

Walter also owned his own label. He helped pushed a lot of the freestyle stuff out for Monaco and friends.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/

jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

4 edits
reply to jkoblovsky

Business End of Piracy In The Media Industries Part 2

»jkoblovsky.wordpress.com/2013/01···-part-2/

This is a continuation of Business End of Piracy In The Media Industries Part 1.

As explained in the last post, white label’s were used as sort of a test market within the Electronic Dance Music sector. The industry pretty much tolerated commercial copyright infringement, because white labeling became an essential test market that proved to be quite successful when testing out product before market. Today white labeling product is widely used and excepted practice by many businesses to test their products before release. The film industry does this by using DVD screeners.

When P2P was introduced to the market, DJ’s were still picking up their white labels from surplus stores. Eventually what happened is that many DJ only white labels made their way to the P2P networks. As a result amateur DJ’s quickly picked up on the term white label or bootleg. Around the time amateur DJ’s started to clue in, is about the time when studio audio software started to become affordable to the masses. What resulted, was a mass explosion of creativity and remixing on the P2P networks. Amateurs now had the tools to start creating their own white labels or bootlegs, and gave birth to what we now know as “user generated content”.

Now knowing the explosion of creativity on the P2P networks, many DJ’s started to get their white labels from the P2P networks. Amateurs quickly became pros, essentially moving the traditional while label ideology on to the P2P networks. Researchers have been studying this evolution now for years, but they can’t come up with an explanation as to the cause of what they are seeing because they haven’t been following the evolution of technology and the way the music industry has evolved its business model.

In 2012 a working paper was released by Robert G. Hammond of North Carolina State University on the impact of album pre-releases in file-sharing networks on physical and digital album sales. What they are essentially studying is industry's test market, evolved from the white label days to the P2P file sharing networks, and it’s now industry wide. The report summarized:

The paper comes to the conclusion that album sales benefit from album leaks. “[A]n album that became available in file-sharing networks one month earlier would sell 60 additional units”. In addition the results also suggest that popular artists benefit more from file-sharing than newcomers and less establised artists.
That paper concluded (emphasis added):

Considering all model specifications, file sharing has a positive effect on physical and digital album sales. “[A]n album that leaked one month earlier will receive 59.6 additional sales” (p. 15). However, more established artists – with two previous albums, both of which sold at least 100,000 units – benefit more from file sharing than less established ones. The author speculates “(…) that artists with established fan bases are positively predisposed toward the [new] album” than younger and less established artists (p.19).

In respect of music genres the file sharing effect on more popular genres such as pop, country and hiphop/rap is larger on less popular or niche genres such as folk, metal, jazz. In addition, major labels benefit more from pre-releases on file sharing networks than major-distributed indie labels, which outperform pure independent labels. Among the major companies Sony Music Entertainment benefits most from file sharing, followed by Universal Music Group, EMI and Warner Music Group.
It is essential for the media industries to test their return on investment before investing in their talent. It also forms an avenue for promotion and exposure for that talent, young to the industry or established. That’s been the case in the media industries for quite some time. They've had no choice due to technological innovation to evolve and adapt to this test market, and without adapting to this may have served to severely cripple the industry. More coming in the final part 3 of this series.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/
Expand your moderator at work

abcjak

join:2012-12-18
reply to jkoblovsky

Re: Business End of Piracy In The Media Industries


not related to music, but it runs along the same idea.

I think it's Gates who said he attributes the very success and marketshare dominance of Windows to pirated installations. Piracy established a user base who of course would want to use or buy it for their offices and workplaces purely out of familiarity. At the time it came out, all the graphical desktop operating systems were new and Windows, even as crappy and unstable as it was, beat out more robust and stable OS's such as OS/2 because Windows was familiar. Businesses are smart to keep using Windows because the learning curve for new employees is nearly non-existent. All this kept the money rolling through M$ doors for 30 years.


jkoblovsky

join:2011-09-27
Keswick, ON
kudos:2

said by abcjak:

not related to music, but it runs along the same idea.

I think it's Gates who said he attributes the very success and marketshare dominance of Windows to pirated installations. Piracy established a user base who of course would want to use or buy it for their offices and workplaces purely out of familiarity. At the time it came out, all the graphical desktop operating systems were new and Windows, even as crappy and unstable as it was, beat out more robust and stable OS's such as OS/2 because Windows was familiar. Businesses are smart to keep using Windows because the learning curve for new employees is nearly non-existent. All this kept the money rolling through M$ doors for 30 years.

Too some extent yes relating specifically to Windows XP. Windows XP was one of the most pirated operating systems. Back a few years ago, Gates wanted to correct that, but backed off because it would have essentially caused a lot of security issues for business. Microsoft today is still the world leader in business solutions. There's a whole story as well on how Gates himself pirated Windows GUI from Jobs.

The issue I'm trying to bring up here is restoring balance to the equation. It's not right when you give a tremendous amount of power to rights holders to essentially put an enormous amount of pressure on the innocent, to the point now where it is costing human lives.

»www.thestar.com/opinion/editoria···ditorial

I find this imbalance unacceptable especially when you look at the economic data that's coming from independent sources. I think political leadership needs to look the how the technological evolution has changed business models in industry to properly restore that balance. With this latest news on Swartz, I think we're heading down that eventual path, and those responsible for creating this imbalance will have less credibility moving forward. At least that should be the human response to all of this.
--
My Canadian Tech Podcast: »canadiantechnetwork.podbean.com/
My Self Help and Digital Policy Blog: »jkoblovsky.wordpress.com/