P2P To Get Some Jedi Knights?

Last One For A While

This will probably be the last look in this area for some time, simply because, as I’ll explain, not too much is going to be going on for a while.

Sales Up, P2P Use Down

Record sales rebounded strongly during the Christmas quarter, with unit sales for the last quarter up 10% over 2002, reversing a downward trend. P2P indicators also generally show a downward trend in usage.

What does this mean?

What it rather decisively says is that efforts to boycott RIAA and Company to punish them for their lawsuits completely failed. It also says that there has been no unorganized consumer backlash, either.

This is hardly surprising due to the complete incompetence of those who up to now have been leading the “fight.” So far, they act more like the former Iraqi Information Minister than any serious threat.

However, we’ll explain later in the article why not much is likely to happen in 2004, and by 2005, some very different people are likely to take charge of these efforts.

Other than that, it really doesn’t say much, despite much, much spinning to the contrary.

Some have been saying that this proves that file-sharing doesn’t hurt CD sales. It does nothing of the sort. While the RIAA and Company were prone to pin it all on P2P a year or so ago, their claims have been toned down once statistical data compiled since then started becoming available. They seem to indicate that:

  • P2P use probably accounts for about a third to a half of the drop and
  • the impact of P2P use is still largely confined to the very young (i.e., college-age and younger).
  • heavy P2P use tends to lower the number of albums purchased significantly but not drastically.

    The statistical data suggests that P2P as it is now is a self-limiting phenomenon used by the young and/or poor, much like taping songs off the radio in earlier days.

    And indeed, if the P2P environment was to remain as it is today, it would be more an irritant than a terminal threat to the music industry.

    The problem is that the P2P environment won’t stay the same in the future, and that is primarily due to broadband. The RIAA and Company’s biggest ally so far hasn’t been its lawyers. It’s not the DMCA. It’s a 56K modem. It is that, and that alone, which has stunted P2P.

    And it’s slowly but surely going away.

    Once broadband becomes the norm rather than the exception, MP3s will be obsoleted, to be replaced by some lossless compression standard.

    This will make music files roughly six times bigger than they are today, but given broadband’s steady increase in popularity and normal improvements in hardware capacity, accomodating the extra size ought to not be a big deal within a couple years.

    It is the threat of exact equivalents being spread around like the plague that scares (or ought to scare) the music industry.

    You notice that the RIAA and Company isn’t claiming any decisive victories. They know the battle is just beginning.

    Once broadband becomes commonplace and hardware gets beefier, then there will be no reason outside of legality to buy a CD rather than download (except for those few with an album cover fetish).

    Now if you could control the type of files found on P2P network to allow low-quality files but not high-quality ones, there would be at least a fighting chance P2Ping could be legitimized.

    But since “control” is the only true obscenity in the P2P ideologue’s vocabulary, this is unlikely to be workable, which means sterner steps (DRM, criminalization of P2P use) will be very likely.

    Hardcore and Softcore

    Depending on what statistics you see, you can say that there’s been a dramatic or minor drop in P2P use. What has been happening rather consistently is that those measurements counting users have dropped quite a bit, while measurements of overall usage have dropped much more modestly.

    A contradiction? Not at all.

    The P2P population is hardly monolithic. That’s a myth. It has a softcore and a hardcore. “Softcore” P2Pers aren’t against the notion of paying; they just want a better deal than they’ve been getting. “Hardcore” users don’t want to pay, or pay anything beyond a nominal amount, like a few cents, period.

    Based on our own and other Internet surveys, “softcore” P2Pers account for about 60% of the P2P population. “Hardcore” P2Pers account for the rest.

    While there is reason to have doubts as to the degree of the drops reported by some surveying companies (for instance, Pew reports a 50% drop, but they come with that number just by asking people, the RIAA lawsuits probably inhibited some from saying “Yes” when asked about P2P use); it’s probably pretty likely that the lawsuits did peel away the softest layers of the softcore (or at least Mommy and Daddy peeled Junior away), while leaving the hardcore virtually intact.

    Something else to keep in mind is that this is probably not a very static population. Older users drop out because they feel they have more to lose (or, more likely mostly due to satiation/boredom/new interests), but younger ones discover the gravy train.

    So claims that P2Ping has been delivered a crippling blow are just silly. Claims that P2Ping hasn’t been affected at all are just as silly. You know you’re reading an extremist if you see that.

    The truth seems to be a modest, hardly decisive, perhaps temporary, drop in usage.




    All Quiet On the American Front

    2004 is a presidential election year in the United States. That means not only the President gets elected, but also all the members of the House of Representatives, and a third of the members in the Senate.

    Traditionally, major new legislation doesn’t usually get passed in these years because neither party is going to be inclined to vote for anything that the other party might use to its advantage.

    Right now, this is regarded as a backburner issue by most of Congress, and the typical responses by Congressmen to inquiries straddle the issue.

    Nor has this become a campaign issue on the Presidential level. Not even the alleged Internet candidate, Howard Dean (more on this a little later), has taken a position on this issue.

    Outside of relatively uncontroversial legislation (the criminalization of recording and releasing pre-released movies is the proposed legislation that might fit the bill), it is unlikely we’ll see serious legislative action in this area this year.

    It should be noted that keeping people from distributing the contents of a pre-release DVD or filming an advance screening of a movie is uncontroversial only in the real world. In the world of P2P, the right to bring a camcorder and film a movie is a constitutional right (though apparently one written in invisible ink). That constitutional right seems to be “What can be done should be done.”

    It is logically ludicrous to say that just because you can do something means you should be able to do something. It is technically possible for me to get a semi and mow down half my block. Does that make it OK? If someone comes up with a “Chemical Warfare For Idiots” kit so I can take out most of my neighborhood instead, and you happen to be one of my neighbors, will your last dying words be, “You can’t stop progress?”

    The only other area that might see legislative change would be some technical corrections to the language in the DMCA which would overturn the recent Verizon case which ended “quicky” subpoenas. Since the changes required are so minor, I would bet that if anything happens here, it will come in the form of an attachment to a more important bill in an attempt to sneak it through. I wouldn’t bet on that happening.

    No, this issue will be on the backburner until 2005 in the U.S.

    Some have moaned and groaned about a number of provisions in the Free Trade Area of the Americas (FTAA) Treaty. This treaty is having major, major problems on a whole lot of grounds, so there’s little prospect of anything happening there any time soon.

    Not So Quiet On the Western and Eastern (European) Front

    Europe will be a different story. The EU Copyright Directive will be enacted by most of those nations in (or entering) the EU in 2004. Increased law enforcement activity has generally followed legal enactment in those countries that have already passed it, so it is likely that stories on this issue will take on a decidedly European hue.

    After the U.S. Presidential election, the pendulum of activity will swing back to the U.S., with a interesting new player coming out of left field

    The Howard Dean Boot Camp…


    The Howard Dean Boot Camp

    There has been much nonsense written about the Dean campaign. It is not some geek conquest, which seems to be half presidential campaign, half group therapy session.

    That may sound like an insult, but it actually isn’t. Both aspects are very important in the Dean candidacy, and in the very long run, it’s the group therapy part that will have the greatest impact on American politics for a long time to come.

    In one sense, there is nothing revolutionary about the Dean candidacy, no more so than Newegg is a revolution in retail over Sears and Roebuck.

    What both Newegg and the Dean candidacy do is take advantage of the Internet’s ability to cheaply communicate with a relatively small number of widely scattered people.

    This works very well when you don’t need a ton of participants to be successful, which is quite true for both retail and Presidential party nominations.

    However, it is the psychological rather than the technical aspects of the Dean candidacy that is of more long-term importance.

    The Dean candidacy pretty much stumbled into the potentialities of the Internet, as they’ve readily admitted. A number of fortuitous accidents then occurred:

  • Using the Internet tapped into the Internet culture. By that I mean relatively young, relatively well-educated people for whom the Internet is second-nature, but who were disinclined towards being reached politically through more conventional means. The Dean candidacy became literally the virtual equipment of people going door-to-door asking for support. As hardly twenty-first century (he’s been dead ten years) Tip O’Neill once pointed out, “People like to be asked.” The Dean candidacy asked.
  • The candidate’s personality resonated with that Internet culture. Howard Dean comes across as being honestly pretty irritated, if not flat-out pissed off about the state of the world today. This jives pretty well with irritated, pissed-off members of the Internet culture. They say, “I’m for him, he feels like I do.” You can’t imagine that same person thinking the same way about Dick Gephardt or Joseph Lieberman, no matter how many blogs or websites they set up.
  • The candidate and audience found they had complementary needs. There is a very big difference between how the Dean candidacy views its volunteers and how the volunteers view the Dean candidacy.

    A year ago, Howard Dean was like a garage band with a few MP3s. Any free publicity was good publicity, and if it meant giving up some control over what is essentially donkey work, well, free publicity is better than no publicity.

    Fund-raising proved to be another big benefit of the Internet. Political fund-raising is normally a very expensive proposition. You send out tons of printed material to lists of people who have given before, and even with that screening, only a low percentage of people actually send money. Usually, most of the contributions you do get end up paying for the mailing.

    Compare that to the cost of putting up a request for money on a website. What does that cost? Effectively, nothing. Even better, you reach people unlikely to be on any political mailing list, again, for nothing.

    The Dean Internet fund-raising efforts are actually much more impressive than the gross dollar amounts because their costs to raise the money are lower than through conventional means.

    So, from the perspective of the official Dean campaign, the Internet is a sort of hyper-efficient power pack. Not much more than that, though.

    No substantive control has been passed over to the volunteers. They don’t decide Howard Dean’s positions (he hasn’t taken one on file-sharing, for instance). They won’t decide who the Secretary of Defense will be should in any Dean Administration.

    However, that doesn’t matter. The volunteers view this campaign quite differently.

    What do they get out of it? To the average Internet-based Dean volunteer, the primary reward for his or her efforts is personal fulfillment. Specifically, it give them a sense of community and empowerment they haven’t found elsewhere in their lives. Often, they find that rather more important than Howard Dean himself.

    This is nothing new for political campaigns, but it is the relative alienation of this groups from more conventional means of community, and a pervasive feeling of powerlessness over the big world that gives this portion of the Dean candidacy its particular intensity. It really is about personal fulfillment on a more intimate level than some relatively abstract notion of doing something societally good.

    The Dean folks don’t seem to be running an on-going group therapy session; they are running an on-going online group therapy session. To the volunteers, the therapy isn’t a by-product of the campaign; the campaign is a by-product of the therapy.

    On the surface, this may seem near-psychotic, but it isn’t at all. It’s just people in a new, different environment trying to meet the same old human need to find something good bigger than oneself.

    What is important to realize is what makes this work. It’s not a technical feat. To appeal to this group (which inevitably will get bigger and bigger in the next few decades), you don’t need to focus on their specific political beliefs. You first need to satisfy their emotional needs.

    Eventually (though this probably won’t be a factor in 2004), emotional satisfaction will become necessary but not sufficient. People will demand a bigger say than deciding how to do the donkey work, but that is the subject for the future.

    What does this cost the Dean candidacy (at least for the moment)? A little extra hand-holding and sweet words (and the cost of even that can be minimized through electronic means).

    None of these elements are new or revolutionary, but implementing them over the Internet gives you the opportunity to build a cheap, efficient grass-roots movement and lets you tap into a certain group of people otherwise untappable.

    And those who participate learn how to do that later on for other causes, other times.

    When historians write histories of the United States a century from now, they will likely find the Dean candidacy, win or lose, to be important not because of the electoral results, but because it will give a ton of young Americans some real hands-on experience with grass-roots politics and organizing, and more than enough of them will stick around in the decades to come.

    In 1972, George McGovern lost in a campaign that structurally was a pre-Internet version of the Dean candidacy. The lasting legacy of the McGovern campaign was not the electoral results, but the subsequent political activities of those youngsters first blooded in 1972. From that date, they’ve played a significant role in American political, and to this day, they still do.

    I don’t point out the McGovern campaign because a repeat of the electoral results is inevitable, but rather to point out that the Dean candidacy, again, win or lose, is very likely to have the same long-term legacy of getting a new generation into American politics for a long time to come, no matter what the results of this particular election.

    What The Hell Does All This Have To Do With P2P?

    That’s very simple. Up to now, those who have fought the “fight” against the RIAA and Company have been a joke when it comes to any form of organization. They pretty much set up websites and spend their time competing to see who can call RIAA and Company the nastiest names, put out crackpot theories, and call each other wonderful and successful.

    With enemies like that, the RIAA doesn’t need friends.

    Elsewhere, though, a large group of like-minded people are being trained, disciplined and armed to organize the grassroots and go to battle for a cause. They’re going to get a crash course in political activity and organization.

    If you think getting Internet people organized is like herding cats, well, just what are these cats doing?

    What do you think at least some of them are going to want to do with those new-acquired skills and networks of people, in say, 2005, just to exercise their newly acquired political muscles a little bit?

    This could get very interesting. Will the cats get herded, or will we just end up with a cat fight?


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