The MP3 Problem

What is Mp3?

380_sound_wavesMp3 is a compression algorithm invented by the Motion Picture Experts Group, layer 3, and is of itself in no way illegal. The purpose of this is to reduce the size of an audio file, say a PCM WAV file on a PC or an AIFF on a mac from roughly 10 MB per minute to roughly 1 MB per minute. This is accomplished by taking advantage of a psycho acoustic phenomenon called perceptual masking, whereby certain frequency bands of an audio signal are obscured by other parts of the signal with lower frequency and more energy, which therefore cannot be heard by the human ear. By not reproducing these inaudible parts of the signal and with the application of a little number crunching, the algorithm can compress the file size by ninety percent with little loss of quality.

The advantages to this are obvious. A hundred and fifty songs of three and a half minute duration can fit onto a standard compact disc rather than fifteen. Files can be transferred over a 56K modem connection in minutes rather than hours and over a broadband connection in seconds. Songs can be reasonably uploaded onto web servers like Myspace, or Song Planet, giving artists an avenue to promote their work without having to pay out large sums of advertising revenue.


That Sounds Good, So What's The Problem?

The problem is that certain people who have traditionally been in control of the distribution and promotion of music have found that their influence has been diminished by the new found availability of technology that allows the man in the street to share mp3 audio files over the internet. Combined with his ability to produce first generation digital copies with CD recorders on a very modest computer for a very low financial outlay, this has shifted power away from the recording industry executive and onto the black marketeer, making him a force not to be taken lightly.

Since the invention of cheap reliable CD recorders and software like Nero to control them, combined with the rise of the peer to peer networks like Napster, Kazaa or Limewire, the revenue generated by the black market is well into billions of dollars per year, money which is being lost by the legitimate distributors, not to mention the creators of the intellectual property in question.

It has been alleged that the music industry has been too slow to react to this paradigm shift, but in truth, with the open nature of the internet, there is very little they could have done to stymie it. Anyone can upload mp3's to the net, and peer to peer sharing isn't illegal per se, there are many uses of this kind of technology that can be applied legitimately. Even if this were not the case, close down one peer to peer network, as Napster was after being sued by Metallica and by the RIAA (Recording Industry Association of America), and another three will appear, like Kazza, WinMX and Limewire. Like the content of Pandora's box, now that the code for these peer to peer sharing programs is in the public domain, it is too late for it to be stopped.


So Who Is At Fault?

Both sides of this debate have pretty compelling arguments to back up there stance. If one were to purchase a car, or a computer or a musical instrument, they might expect to try the machine before they paid for it. So why should anyone shell out fifteen bucks of their hard earned cash for an album without hearing some songs from it first? Don't the record companies over charge us anyway? Aren't they releasing a lot of bland and predictable music and aren't the bosses in the suits coining it in anyway? If a pirate can sell a CD for a couple of bucks and still make a profit, why can't the record companies, with all the power they have behind them? Since record companies have been indulging self interest so flagrantly for so long, why should anyone have sympathy for them now the balance of power has shifted?

The bottom line of the other argument commonly used by consumers is that many of them believe that after buying a recording, they should be able to do what they want with it and that copying is fair use. This notion is endorsed by intellectual property law in most developed countries to a certain extent in that copies of restricted works can be made for the purposes of education, criticism, news reporting or research. There is however, almost without exception, a restriction on the making of copies for further distribution.

On the other side of the fence, why should a record company spend half a million pounds and the best part of a year producing an epic album when no one is going to pay for it anyway? Surely that doesn't make economic sense? Don't people understand that if the industry was to lower the price of a CD into line with what the pirates are charging, the stock holders would be reaching for the blood pressure pills?

There is no doubt that the economic losses due to piracy are enormous and are felt throughout the value chain. The many people who lose out include the artist whose creativity provides him with less or no remuneration, the governments who lose hundreds of millions of dollars in tax, businesses that are deprived of investment, the consumers who see a reduction in creative diversity; and the record labels who are forced to reduce the scope of their artistic output because it is impossible to compete against theft.


How Can Both Sides Give Rational Arguments To Justify Their Position?

Looking at the way our society operates, it is clear that there is a great gulf in the cost-benefit analysis of the consumer and the distributor in this scenario. To break this down into simplistic terms, I'm going to use a job I had before I went back to college as an example. When I was a young man I worked in various positions in a prestigious hotel. At certain times of year the hotel was busy and at other times it was quiet. Some years were better than others. We referred to this oscillation as swings and roundabouts.

The sales management team would wish for the Summer in the hotel to be busy, because this not only reflects that fact that they are doing their job well, a fact I'm sure they trust will be remembered when the spoils are divided, but also because it causes no great extra burden of work on them. For them, the cost-benefit analysis is clearly weighted on the side of the hotel being busy.

For a hall porter, it may also be beneficial to have the hotel busy as he will receive extra remuneration in the form of gratuities from the people he moves luggage and provides service for. In my experience it is possible to double for a hall porter to double his wages in the Summer months, however, the cost-benefit analysis is not weighted quite so heavily as it is for the sales managers because he will have a far greater workload than he would when the hotel is quiet.

Now, considering the position of the store man, who collects and distributes the requisitions for each department in the hotel as they are delivered, the situation is different again. He will receive the same amount of income for working his contracted hours whether the hotel is busy or quiet. It makes no odds to him financially whether he moves a hundred weight of supplies in an hour or five hundred weight, so as long as he has enough work to keep him in a job, he has no reason to wish for the hotel to be busy. The cost-benefit analysis for him is weighted in favour of the hotel being quiet.

So, for the mp3 downloader, the consumer, the cost-benefit analysis is weighted on the side of endorsing peer to peer sharing as a way of life and a way of distributing music, since it requires him to pay far less to listen to the music he wants, and provides far higher degrees of flexibility in his ability to obtain whatever music he wants.

For the recording company operatives, loss of revenue and investment caused by intellectual property theft means that the cost-benefit analysis is heavily weighted on the side of bringing down the peer to peer networks, since his way of life is being threatened by the loss of revenue, which is being haemorrhaged from his company into the hands of the black marketeers.

Looking at this phenomenon in this way, it is quite clear that the majority of people on both sides of the schism are motivated not by idealism, but by self interest. Each side invents a narrative that paints them out to be Robin Hood if they are liberating intellectual property, or a hard bitten victim of cowardly knaves if they are a record company executive. Both sides are justifying their position by creating out and out falsehoods as both sides have been demonstrably feathering their own nest through callous disregard of the rights of others for many years now.


The Broader Picture

Looking at the broader picture, in the modern era we now live in a society that is not well designed to provide high degrees of flexibility in catering for the different needs of people who have divergent cost-benefit analysis in different aspects of their lives. We probably never did live in that kind of society. There is very little doubt that in most, if not all societies, there has always been a drive to force people into living a certain regimen regardless of whether it benefited them or not; the difference now is that a major weakness has emerged in the system. A crack has been opened in the castle walls, one that is being widely exploited by the angry peasants.

The recording industry is now owned almost entirely by five giant multinational labels. This is not an atmosphere conducive to healthy competition. For any new company starting out in this environment, competing with the establishment in any meaningful way is almost impossible. Even if a small independent label does produce an artist who becomes a run away success, the "next big thing" as they say in the industry, the multinationals simply buy the smaller label, sometimes letting them retain their own nameplate above the door to give the illusion of independence. This is not a healthy atmosphere for diversity. The small labels with little in the way of resources take all the risks while the multinationals reap the rewards.

After the industrial revolution in the nineteenth century, it took society a lifetime to adapt to the demographic changes that had been forced on its rank and file. The end result was a hitherto fore unknown degree of democratization. The ordinary working people were needed to provide labour for manufacturing, and by withholding their labour in an organised way were capable of making demands that had to be reckoned with. Now that we are living in a period where a revolution has been unfolding over the last few decades with equally far reaching implications; an electronic and digital revolution that has placed the power of technology that was previously available only to the rich and powerful in the hands of the masses, it may take a lifetime to adapt to the paradigm shift in the balance yet again.

In buying a CD recorder and an internet connection, there would be an initial outlay of about twenty or thirty dollars for the CD unit and another twenty dollars a month for the rental of a broadband connection. Download more than three albums a month, and it is not long until the purchaser of these items is well into making a profit. Of course, there is no doubt that in the long term everyone is going to suffer because of the far reaching consequences of this behaviour. On both sides of the fence, the arguments are absolutely right, and absolutely wrong.

This problem is not going to go away. Music is not a commodity like a loaf of bread where one must purchase it to survive, the world can still turn without a music industry, but this particular schism is unfortunately merely a symptom of a larger disease. Society must accept that in recent years, huge demographic changes have occurred and it must, if it expects loyalty and honourable behaviour from the individual, become more flexible in catering for the diversely different interests that its members have.


What Are The Solutions?

We can solve these problems if we accept the need for change in the manner that distribution occurs and if we make the right choices in this. The first step is to realise that Mp3, the CD recorder and the internet are like any other tools, they are neither good nor evil until somebody uses them, and then this is dependent on a cost-benefit analysis from the observers point of view. Unfortunately most of the solutions proposed so far seem to involve trying to use force to stop mp3 sharing. That is absurd. There is nothing in our experience of electronic intellectual property theft that would indicate this to be anything like a sensible approach.

Since the earliest days of home computers, software piracy, hacking and cracking of software and illegal distribution have been rife, and anyone who has ever typed the search term "warez" into an internet search engine will know that the problem in now more prolific than ever. No matter what form of electronic protection is devised, a way will be found to circumvent it. If you can play a song, it stands to reason that you can find a way to copy it.

The battle to have Napster shut down accomplished precisely nothing except to make the RIAA and Metallica a laughing stock, alternative sharing programs were already up and running smoothly before Napster was pulled into line. Of course, there is little moral high ground on Napster's side of the fence either. Napster, the infamous flouter of copyright legislation were far from idealistic when it came to freedom of exchange of intellectual property. The very logos and imagery used by the Napster program were copyrighted.

Force has been brought to bear by the RIAA in bringing lawsuits against people who download mp3's as well, but this is a token gesture. Intellectual property theft is endemic to the developed nations to the point where it is impossible to intimidate people in this manner. Taking a few dozen people to task in the USA, even if they are punished in the harshest possible way, is not going to intimidate most mp3 users since statistically the chances of them being called to account are negligible.

A more sensible solution to the problem might be to add a small royalty tariff onto the price of a broadband connection and onto mp3 players and CD recorders. If this was kept to levels similar to the levels of about 3% that are charged in preforming rights or in broadcasting in the United Kingdom, this would generate royalties that could be distributed to the artists in the same manner that the PRS do in the UK, without the user of the broadband connection or the purchaser even noticing that they were paying anything. After all, we are willing to swallow 17.5% VAT in the United Kingdom.

Another possible solution might be to reduce the price of compact discs so that the pirates can no longer compete with the legitimate industry. After all, if I can produce music discs for around ten pence each, then surely the industry can mass produce them for far cheaper than that? I'm no economist, but perhaps this has not been seriously thought of because no one is willing to swallow the cost of such a move, perhaps due to fear of a backlash from stockholders if the price of their shares was reduced?

Unless a sensible solution is found that is acceptable to all sides of this argument, the free internet that we all know and love could be living on borrowed time. An obvious solution to stopping downloading in it's tracks would be for the powers that be to pull down the temple around our heads. The internet would not have to be switched off as such, just heavily regulated. This is not a decision I should think would be taken lightly as the internet generates vast amounts of revenue in itself, but there are certainly people in high places who might have a vested political interest in bringing the internet under much tighter regulation. This would certainly not benefit the rank and file of internet users.

One thing is for sure. If intellectual property theft in music and in other areas such as film and computer software continues to cause companies to haemorrhage money to the extent that they are today, drastic measures ultimately will be brought to bear on the situation to bring us all to heal, whether we have ever downloaded mp3's illegally or not. The time will come when the people of the digital age will have to stand up and be counted on this matter. Unfortunately, greater availability of information through digital technology does not seem to have made the moral majority of us any more erudite.

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About Graeme Young

graeme_young_smallGraeme Young is a sound engineer based in the South of Scotland, starting his career after being presented with a Yamaha MD8 in the late 1990's by a friend who had despaired of figuring out how "the damned thing" worked. Brimming with enthusiasm as he learned his way around his new toy, he immediately set to work with gusto, creating some of the most abominable sound recordings of musical doodling ever committed to tape.

Nevertheless, the heady times of fun and friendship that were built up in the early days convinced Graeme to go back to college and expand his knowledge and skill set, meeting contacts and learning the tradesman's tricks from industry professionals. In the meantime student loans were spent on studio equipment to expand on the trusty MD8 while the O2R96 and the old StudioMaster at the college provided experience of working in both the analogue and digital domains.

Now, Graeme has gained years of industry experience working on a number of studio recordings and location recordings with professional musicians and in directing and editing video projects for professionals in various fields. Graeme has fronted two bands, the now discontinued Popping666Cherries alongside Gwen Smith, who had fifteen minutes of fame on the X-Factor before being told by Simon Cowell that she would "never do anything" and now his own Moonstruck Project, with a loose collaboration of musical friends.

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One can't deny what has happened to us in the past. The secret is to enjoy and be proud of the music we've created and the people with whom we have been linked. It's all a long chain of involvement in the world, and we are proud to be yet another link in this chain.”
Graham Nash