The Free Illusion

The phrase “free is very expensive” suggests that even though something may not cost any money upfront, it may still come at a great cost. In other words, there may be hidden costs or consequences associated with something that appears to be free, which ultimately outweigh the initial savings.

One example of this is the concept of “free” apps or services on the internet. While many apps and services are free to download and use, they often come at a cost to the user’s privacy. These companies may collect and sell user data to advertisers, which can result in targeted ads, data breaches, and identity theft. Users may also have to deal with intrusive ads or limited functionality unless they pay for a premium version of the app or service.

Another example is the impact of “free” goods on the environment. Many products are sold at a low cost or given away for free, but they may be cheaply made or disposable, resulting in a significant amount of waste. The production and disposal of these items can have a negative impact on the environment and lead to long-term costs, such as pollution and resource depletion.

Additionally, the phrase can apply to personal relationships. When someone provides a lot of free support, advice, or services, it can create an expectation of unlimited availability, leading to strain on the relationship and potentially damaging it in the long run.

Overall, “free is very expensive” is a reminder that there are often hidden costs or consequences associated with things that seem too good to be true. It is important to consider the long-term impacts and potential hidden costs before making decisions, even if something appears to be free or low-cost upfront.

The Problem in Brief

We’re used to treating information as “free,” * but the price we pay for the illusion of “free” is only workable so long as most of the overall economy isn’t about information. But as technology advances in this century, our present intuition about the nature of information will be remembered as narrow and shortsighted. We can think of information narrowly only because sectors like manufacturing, energy, health care, and transportation aren’t yet particularly automated or ‘net-centric.

This could start to happen, for instance, once cars and trucks are driven by software instead of human drivers, 3D printers magically turn out what had once been manufactured goods, automated heavy equipment finds and mines natural resources, and robot nurses handle the material aspects of caring for the elderly. Software could be the final industrial revolution. It might subsume all the revolutions to come.

Maybe technology will then make all the needs of life so inexpensive that it will be virtually free to live well, and no one will worry about money, jobs, wealth disparities, or planning for old age but instead, we are probably heading into a period of hyper-unemployment, and the attendant political and social chaos. The outcome of chaos is unpredictable, and we shouldn’t rely on it to design our future.

PROVENANCE

“I haven’t sold my soul yet — well, maybe a couple bars of rhythm and blues here and there,”

― Thomas Pynchon, Bleeding Edge

Biological Realism

Libertarians who oppose universal health care might argue that people should only have to pay for health care when they want it, since it’s a consumer choice. Similarly, the Pirate Party/Linux/openness crowd suggests that instead of making money from recordings, musicians should play live gigs. Both strategies only work reliably for those who will always be healthy and childless. In fact it works best if the person’s parents are still healthy and generous.

Any society that is composed of real biological people has to succeed at providing a balance to the frustrations of biological reality. There must be economic dignity, defined here as knowing you won’t fall off a cliff into abject poverty if you get sick, become a parent, or grow old or get stuck in damage control, helping their family and friends. The recent absurdities of the financial markets served to disenfranchise aging people in particular. Their savings, jobs, and equity evaporated.

Some decades from now all those idealistic people who contributed to open software or Wikipedia will be in the same position as today’s aging jazz musicians. We’ll help one per week through fund-raising on Reddit in order to feel good, even though on average that will be the equivalent of doing nothing.

If we choose to extricate culture away from capitalism while the rest of life is still capitalistic, culture will become Detroit. In fact, online culture increasingly resembles Detroit in many ways where some musicians survive by becoming refugees within the last dwindling pockets of the old-media world they were just assaulting a moment before.

I felt that you can’t have privacy without also forging a new form of private property in the information space . That’s what private property is for . There has to be space around a person for a person to be a person . If everything you share at all is suddenly commoditized by whoever has the biggest , baddest network computer , then you’re doomed to be a spied — upon information serf

Jaron Lanier

The promotion of abstract rights without economic rights is a bad deal for those who are left behind. If making music “ free ” would just result in no one being able to make a living when automation arrives. If the only value left is information (once cybernetics come to be perceived as doing all the work ) and information is to be “ free , ” then ordinary people will become valueless , from an economic point of view .

A primary task in imagining a sustainable information economy must be to imagine a sustainable model for transactions. A key idea that makes a transaction model sustainable is a kind of symmetry between buyer and seller, so that transactions harmonize with a social contract.

Earlier designs for the spread of information had required that records of provenance be maintained. Previous designs were centered on people, not data. Any piece accessed online could be traced to its origin. If there was a link between one thing and another thing on a network, the link went both ways. For example , if one person could download a file , the other person , from whom the file was downloaded, could be notified of who was doing the downloading. Therefore , everything that was downloaded was contextualized , artists could be paid , scammers could be identified , and so on .

Tim Berners — Lee chose to offer a different approach with the World Wide Web , one that was much easier to adopt in the short term, though we’ve paid dearly in the long term .The link went in only one direction. No one could tell if information had been copied. Artists wouldn’t be paid. Context would be lost . Scammers could hide.

The cyberspace way of thinking about bits in a network suggests that it’s a place where you float. You don’t count on help, and you have no responsibilities; you are free to roam. In the service of weightlessness , Internet retailers would not pay the same sales taxes as brick — and — mortar ones ; cloud companies wouldn’t have the same responsibilities to monitor whether they were making money off copyright violations or forgeries.

It would be possible for people to connect without the awkwardness that always attend between free , distinct individuals .Accountability was recast as a burden or a friction , since it costs money ; an affront to weightlessness.

The dream was democracy unburdened by politics . Freedom unburdened by other people’s rights . Anarchy without peril . You get to pick the fruit of the land, the free content. It’s the cowboy idea. Ultimately , though , the top beneficiaries are those who own the biggest cloud computers , just as the real Wild West was all about who owned the railroads and the mines.

The only way to do it was to make people less real . You can’t go around redesigning people . That’s fascism . You have to let people invent themselves, even if they’re annoying. But that’s what we love about humanity, right ? The open — ended unpredictability, the diversity.

A NEW SOCIAL CONTRACT

When a social contract works, you recognize that what’s good for others is ultimately good for you, too, even if it might not seem so at a particular moment. In a particular moment, having to pay for something might not seem so good for you. Ultimately, being paid by other people as part of the deal more than makes up for the initial sacrifice. That also means you empathize with the needs of those who sell to you, because you sometimes play the role of seller.

Right now it might seem draconian to charge for access to information we have come to expect for free, but it would feel very different if you knew that other people were also paying you at the same time for information services you have fractionally contributed to in the course of your life.”

“This is the only way that democracy and capitalism can be in alignment. The current online commerce models create a new kind of class division between full economic participants and partial economic participants. That means that there isn’t enough shared economic interest to support long-term democracy.

Any society that is composed of real biological people has to succeed at providing a balance to the frustrations of biological reality. There must be economic dignity, defined here as knowing you won’t fall off a cliff into abject poverty if you get sick, become a parent, or grow old.

If we demand that everyone turn into a freelancer, then we will all eventually pay an untenable price in heartbreak. Most people won’t be able to pull freelancing off through the contingencies of a lifetime. We need those levees, not because we’re lazy, but because we are real. When enough people lack economic dignity, there’s no way for the economy overall to function well. Even those who are reasonably successful on ”

Pennyroyal Tea

The music industry has undergone a significant transformation in recent years, largely due to the rise of streaming services and internet radio platforms. While these platforms have made it easier than ever for listeners to access and discover new music, they have also created significant challenges for songwriters and musicians who rely on royalty payments for their livelihood.

The issue is particularly acute for songwriters, who often receive only a small fraction of the revenue generated by streaming and internet radio platforms. In fact, even top-charting songs on these platforms can yield surprisingly low royalty payments for their creators. For example, a song that receives 178 million streams on a major streaming platform might only generate $5,679 in royalties for its songwriter.

These low royalty payments have had a devastating impact on songwriters and the music industry as a whole. In Nashville, for example, the home of country music and the heart of the American songwriting industry, the number of professional songwriters has declined sharply since 2000. Some estimates suggest that the city has lost more than 80 percent of its songwriters in the past two decades, as many musicians and writers have struggled to make a living in an industry that values their work so poorly.

The impact of these trends extends far beyond Nashville, however. In cities and towns across the country, songwriters and musicians are struggling to survive in an industry that seems increasingly hostile to their interests. Some have turned to alternative revenue streams, such as touring and merchandise sales, while others have simply left the industry altogether.

Apocalypse Now: The Superstar Economy

The ongoing collapse of the music industry has led to the extinction of many bands, solo artists, and music styles, primarily due to the shift towards free or near-free music. The devaluation of music recordings has resulted in entire generations of listeners who have never paid for music and will continue to resist any requirements to pay for it. This degradation of the music industry has led to the disappearance of bands on their second or third record, unable to evolve alongside industry parameters.

The decline in recording revenues has dismantled the label system, once the most reliable form of artist financing. The music industry failed to create its own platforms to distribute music or partner with others to harness the power to create antifragile forward-looking lines of revenue. Instead, the industry blamed everyone but themselves for their problems, while streaming services like iTunes and Spotify have given rise to another hardware-based, proprietary, walled-garden, non-music-centric, de-facto monopoly.

Web 2.0’s exaggerated perceptions of the evils of the old models of intellectual property have focused on controlling distribution, scale, and domination, and achieving hit-driven, repeatable mass-market success. Audiences have been a “captive audience,” and for many, sharing files is an act of civil disobedience that puts them in the company of Gandhi and Martin Luther King.

The dinosaurs of the old order were given fair notice of the digital revolution to come, but they couldn’t adapt due to their own stubbornness, rigidity, or stupidity. However, blaming them for their fate is not constructive. The damage to our cultural capital from the ongoing collapse of the music industry is hard to overstate. It has led to the extinction of many artists, and the industry’s failures have contributed to the paralysis of the United States in the face of serious challenges at home and abroad.

THE SEARCH

Jaron Lanier made the case that we had a baseline in the form of the musical middle class that was being put out of business by the net.

We ought to at least have found support in the new economy for them. Could 26,000 musicians each find 1,000 true fans? Or could 130,000 each find between 200 and 600 true fans? Furthermore, how long would be too long to wait for this to come about? Thirty years? Three hundred years? Was there anything wrong with enduring a few lost generations of musicians while we wait for the new solution to emerge?

Jaron Lanier

He produced the answer as follows; One would expect is an S curve: there would be only a small number of early adaptors, but a noticeable trend of increase in their numbers. It was common on the net to see incredibly fast adoption of new behaviors — only a few pioneer bloggers for a little while , then, suddenly, millions of them — . The same could happen for musicians.

So twenty plus years after the widespread adoption of music file sharing, how many examples of musicians living by new rules should we expect to find? It would be nice if there were 3,000 by now. Then maybe in a few years there would be 30,000. Then the S curve would manifest in full, and there would be 300,000 thundering onto the scene. There must be tens of thousands already!

CREATIVE DESTRUCTION

we always heard that more opportunities will be created than destroyed. Isn’t twenty plus years long enough to wait before we take a more scientific approach? Are we building the information highway for people or who exactly for? If it’s for people, someone is asleep at the wheel. Something like “We may not know where we’re going anymore, but we’re going to get there a whole lot faster.

Consider Mp3s. A purchase of an Mp3 is not as substantive for the buyer as was a Vinyl purchase in physicality. An Mp3 buyer is no longer a first-class citizen in a marketplace.

When you buy a Vinyl, you can resell it at will, or continue to enjoy it no matter where you decide to buy other books. It might become a collectible book and go up in value, so you might make a profit on your original purchase.

Every purchase of an old-fashioned vinyl opens an opportunity to earn money by enhancing provenance. You can get the author to sign it, to make it more meaningful to you, and to increase its value.

With an Mp3, however, you are not a first-class commercial citizen. Instead, you have only purchased tenuous rights within someone else’s company store. You cannot resell, nor can you do anything else to treat your purchase as an investment. Your decision space is reduced. If you want to use a different reading device, or connect over a different cloud, you will in most cases lose access to the book you “purchased.” It wasn’t really a purchase, but a contract entered into, even though neither you nor anyone else ever reads such contracts.

THE SUPERSTAR ECONOMY

A decision was made to prevent or inhibit the negative consequences at the financial and economic layer by actually spending resources, or burning resources at the cultural level and occupying all available niches destroying the available ecosystems with all manner of tools more reminiscent of mining or oil extraction that have devalued music in a more pernicious way than the problems of hyper-supply and inter-industry jockeying.

The environmental impact of mining includes erosion, formation of sinkholes, loss of biodiversity, and contamination of soil, groundwater, and surface water by chemicals from mining processes. Besides creating environmental damage, the contamination resulting from leakage of chemicals also affects the health of the local population.

Art/discovery stories are subordinate to celebrity news at a systemic level. Industry metrics (chart position and concert ticket sales) becomes a staple of music “news.” In the age of measured clicks the always-on focus grouping has institutionalized the echo chamber stultifying and discouraging meaningful engagement with music.

As of today 10% of artist take 99% of streaming or 1% recent of artist takes 77% of market

The superstar economy is a term used to describe the phenomenon where a small group of high-performing individuals or companies earn a disproportionate share of the rewards in a given market or industry. The term “superstar” refers to those individuals or companies who have achieved an exceptional level of success and fame, often due to their unique skills or talents, network effects, or a combination of both.

The superstar economy is often associated with industries such as entertainment, sports, technology, and finance, where the top performers can earn salaries or profits that are orders of magnitude higher than the average worker or company. For example, in the music industry, a few top-selling artists can earn millions of dollars in revenue, while the majority of musicians struggle to make a living.

The superstar economy is driven by several factors, including increasing globalization, technological advancements, and changing consumer preferences. In the digital age, it’s easier than ever for superstars to reach a global audience and build a dedicated fanbase. Additionally, network effects can reinforce the superstar’s dominance, as their success can attract more followers or customers, further cementing their position as the top performer.

However, the superstar economy can have a number of negative consequences, particularly when it comes to income inequality and access to opportunities. Some of the key negative consequences of the superstar economy include:

  1. Concentration of wealth: The concentration of rewards in the hands of a few top performers can lead to extreme wealth inequality. In industries where the superstar effect is most pronounced, such as sports, entertainment, and technology, a small group of individuals or companies can earn a disproportionate share of the profits, leaving the rest of the industry struggling to make ends meet.
  2. Lack of diversity: The superstar economy can also create a lack of diversity, as new entrants may struggle to gain traction in the face of established superstars. This can lead to a homogenization of the industry, with a limited number of voices and perspectives being represented.
  3. Reduced innovation: The concentration of rewards can also reduce innovation, as new ideas and products may struggle to gain a foothold in the market. This can be particularly problematic in industries that are dominated by a few large players, as these players may be more focused on maintaining their dominance than on innovating.
  4. Increased risk: The superstar economy can also increase risk for those who do not achieve superstar status. For example, in the sports industry, a player who does not achieve superstar status may struggle to earn a living, despite having the same skills and talents as a superstar player. This can make it difficult for individuals to plan for their futures, and can increase the risk of financial instability.
  5. Reduced social mobility: Finally, the superstar economy can reduce social mobility, as those who are born into less affluent backgrounds may struggle to access the same opportunities as those who come from more affluent backgrounds. This can perpetuate existing inequalities, and make it difficult for individuals to move up the economic ladder.

Overall, while the superstar economy can provide opportunities for exceptional performers to achieve great success, it can also create significant challenges for those who do not achieve superstar status, leading to inequality, reduced innovation, and increased risk.

GAME ZERO

The clamor for online attention only turns into money for a token minority of ordinary people, but there is another new, tiny class of people who always benefit. Those who keep the new ledgers, the giant computing services that model you, spy on you, and predict your actions, turn your life activities into the greatest fortunes in history. Those are concrete fortunes made of money.

The largest streaming platform in the world, Google-owned YouTube, doesn’t think that music devaluation is even possible. “It’s amazing how often people invoke that word ‘devalue’ as if it means something,” Google executive Tim Quirk said in 2014. “It doesn’t. You know why? Because you can’t devalue music. It’s impossible. Songs are not worth exactly 99 cents and albums are not worth precisely $9.99.”

Worsening the situation is a circular ‘blame game’ between streaming giants and labels, with artists ultimately shorted. Spotify says they pay the labels, though this is often with huge, multi-million dollar advances and/or equity positions attached. But labels frequently don’t pay their artists, either for legitimate (ie, the artist is unrecouped) or illegitimate (ie, they’re screwing an artist) reasons.

The concept of the long tail seemed like a useful way of understanding how consumers interact with content in digital contexts, and for a while looked like the roadmap for an exciting era of digital content. In fact digital music services have actually intensified the Superstar concentration, not lessened it . The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services — especially on mobile devices — and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.

The long tail does not increase sales, but it does create competition and squeezes prices. Unless artists become a large aggregator of other artists’ works, the long tail offers no path out of minuscule sales.

Not my problem, you say? You could derive value from ubiquity. The solution wasn’t to somehow try to become obscure, to get your song off the (digital) radio. The solution was to change your business. You used to sell plastic and vinyl. Now, you could sell interactivity and souvenirs.” Interactivity couldn’t be copied. Don’t try to sell what was abundant — sell what is scarce.

But after ten years of seeing many, many people try, I fear that it’s just not working. We are all starving because of our failed digital idealism.

Often we talk about mining, oil extraction and fraking like the most damaging activities relating to the environment.

THE DOWNWARD SPIRAL

There’s now a downward technological progression, with vinyl only slightly breaking the chain. With every subsequent format, monetization deteriorates: streaming pays less than downloads; downloads paid less than CDs

In fact, former member of Cracker and current artist activist David Lowery feels that artists are worse off now than they were in the analog era. And, he points to lower payments, less control, a shift in revenue towards tech companies, and less secure copyright protections to prove his case.

Most artists are overwhelmed with tasks that go far beyond making music. That includes everything from Tweeting fans, updating Facebook pages, managing metadata, uploading content, interpreting data, managing Kickstarter campaigns, figuring out online sales strategies, and fixing broken-down vans.

Paid downloads are plunging, with massive declines surfacing this year. That is bad news for artists and labels, given that the payouts on downloads are far higher than streaming (thanks to an upfront payment and more predictable revenue cut.

PENNYROYAL TEA

Songwriters are often paid pennies for successful tracks, even top-charting songs on major streaming and internet radio platforms make just $5,679 for 178 million streams. Lower royalties are killing an entire generation of writers: Nashville has lost more than 80 percent of its songwriters since 2000.

TOURING

Touring is fun, but it can also be extremely demanding and exhausting, especially when its the core revenue generator. Many artists are experiencing difficulties making a sustainable living out of touring, merchandising, or other non-recording activities like ‘experiences’

If you used to make all of your money selling music but now they have to tour the crucial difference there is if you’re making your money selling your your intellectual property well then then that is money that you can continue to make even when you stop working whereas if you were making your money touring you know that there’s a linear relationship between you know every gig and every dollar and once you stop touring you stop making money and that’s that looks very different in your old age as a rock star yeah

Of course if you’re young what you think about is it’s in my interest to not have to pay for this file oh you know right but then you will not stay young forever no matter what weird rhetoric comes out of Google spin-offs you know you will also grow old you will also have a biological body and you will have needs and you will not always have perfect days and this whole idea of intellectual property kind of like a lot of things in our society it you can think of it as something that only benefits elites but actually it was fought for by unions trying to support people who are not elites at all the musicians union battled long and hard to get these rights to create dignity for people who produce information in their lives and to have it lost by people who thought they were doing the right thing is just one of the great tragedies of our era.

Older, arena-filling artists are starting to die. And Many others are touring just to pay the bills, including medical bills. That includes Dick Dale, who remains on the road despite his advanced age to pay for treatment for rectal cancer, renal failure, and massive vertebrae damage.

When this music wants to be free things started happening we just started having weekly fundraisers for people like famous musicians who’d gotten sick in old age and had like no support me more and it was just so tragic recently John Perry Barlow passed away and he had been a songwriter for the Grateful Dead one of the most successful bands which had actually pioneered a lot of this idea by encouraging tapers at their concerts from a very pure feeling from a very generous feeling but then you know at the end even though he’d penned you know these songs and these huge selling records he just basically didn’t have income.

It’s like what I call it a singing for your supper for every single meal you never get to build up any life you know you can’t build up any reserve so that you can have a sick day or grow old or have a kid who needs to go to college you know it’s it’s a everybody goes into this geekycon a you’re basically this disposable element and somebody else’s fortune and that’s what that’s what making music free actually did.

Live Music

A large percentage of live music fans are frustrated with high ticket prices at concerts, not to mention wildly overpriced, in-venue items like beer. And, the secondary ticketing market is often fed before the actual market, thanks to bots, aggressive scalpers, or the artists and ticketing providers themselves.

All of which means that fans now regard live concerts as a one-off, infrequent ‘event,’ instead of a regular outing. In fact, the average consumer goes to just 1.5 shows a year (per Live Nation Entertainment). Meanwhile, service fees continue to outrage fans, even though artist guarantees and advances are often a culprit (then again, Stubhub recently found that ‘all in pricing’ led to fewer sales.)

Ric Amurrio

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