Tag Archives: intellectual property

Canada Should Embrace Trump Presidency Opportunities

From: Chris Christie
To: Nervous Canadians 
Date: November 6, 2024 
Re: Canada Should Embrace the Opportunities of a Second Trump Presidency

A second Donald Trump presidency, if approached strategically, offers Canada more opportunities than risks.

Donald Trump’s campaign rhetoric is often erratic, of that there is no doubt. And I, as you might have heard, am not a Donald Trump advocate.

But what happens in governance under Trump is a far cry from his provocative online posts or bombastic speeches, as I argued in the latest C.D. Howe Institute Regent Debate. His track record speaks for itself, and whether you choose to acknowledge it or not, Canada has already benefitted from Trump-era policies.

Let’s take the US-Mexico-Canada Agreement – CUSMA in the Canadian rendering – as a prime example. Trump’s renegotiation of NAFTA wasn’t just about putting “America first.” It was about reshaping trade relationships in North America to benefit all three countries. The agreement secured economic ties between the US, Canada, and Mexico in a way that ensures long-term growth for all parties involved.

Trump views that agreement as one of his crowning achievements, and rest assured, it’s not going anywhere. It is a durable platform for growth in North American trade.

Looking forward, the question isn’t whether Trump is unpredictable. It’s whether Canada can recognize and leverage the opportunities his policies present.

With Trump re-elected, his administration will continue to focus on policies that drive economic growth – lower taxes, reduced regulations, and energy independence. A booming US economy means a stronger Canada, as our two economies are deeply intertwined. When one prospers, the other stands to benefit through increased trade and investment.

Trump’s approach to trade – especially tariffs – has often been misunderstood. Yes, his speech-making is aggressive. But we need to separate rhetoric from reality. Trump’s actual policies were more measured than many anticipated. And they will be again. 

The real adversary for Donald Trump is China, not Canada. If Trump tightens the screws on China’s unfair trade practices, it could create space for Canadian companies to flourish on a more level playing field, particularly in sectors like technology and intellectual property, where China has been a major violator.

Trump’s economic philosophy – focused on cutting taxes and regulations to unleash private-sector growth – should also serve as a wake-up call for Canada. Under Prime Minister Trudeau, Canada has taken a ruinous policy road, with higher taxes and more government intervention in business.

But what if Canada aligned itself more closely with the pro-growth policies Trump advocates? 

Imagine the potential for Canadian businesses if they operated in an environment with fewer barriers to growth. A thriving private sector in Canada would strengthen the economy and create more opportunities for collaboration and trade with the US.

I won’t pretend that a second term comes without challenges. But instead of focusing on the personality occupying the Oval Office, Canada should focus on how to navigate the opportunities presented by our shared future as neighbours and trade partners.

It’s time to stop seeing Trump as an unpredictable threat and start recognizing the potential opportunities his policies can bring. Canada stands to benefit if it plays its cards right. For the Silo, Chris Christie.

Chris Christie was the 55th Governor of New Jersey and a participant in the C.D. Howe Institute’s recent Regent Debate. Send comments to Chris via this link.

OPED: Made by Human: The Threat of Artificial Intelligence on Human Labor

This Article is 95.6% Made by Human / 4.4% by Artificial Intelligence

One of the most concerning uncertainties surrounding the emergence of artificial intelligence is the impact on human jobs.

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Let us start with a specific example – the customer support specialist. This is a human-facing role. The primary objective of a Customer Support Specialist is to ensure customer satisfaction.

The Gradual Extinction of Customer Support Roles

Within the past decade or so, several milestone transformations have influenced the decline of customer support specialists. Automated responses for customer support telephone lines. Globalization. And chat-bots. 

Chat-bots evolved with the human input of information to service clients. SaaS-based products soon engineered fancy pop-ups for everyone. Just look at Uber if you want a solid case-study – getting through to a person is like trying to contact the King of Thailand. 

The introduction of new artificial intelligence for customer support solutions will make chat-bots look like an AM/FM frequency radio at the antique market. 

The Raging Battle: A Salute to Those on the Front Lines

There are a handful of professions waging a battle against the ominous presence of artificial intelligence. This is a new frontier – not only for technology, but for legal precedent and our appetite for consumption. 

OpenAI is serving our appetite in two fundamental ways: text-based content (i.e. ChatGPT) and visual-based content (i.e. DALL·E). How we consume this content boils down to our own taste-buds, perceptions and individual needs. It is all very human-driven, and it is our degrees of palpable fulfillment that will ultimately dictate how far this penetrates the fate of other professions. 

Sarah Silverman, writer, comedian and actress sued the ChatGPT developer OpenAI and Mark Zuckerberg’s Meta for copyright infringement. 

We need a way to leave a human mark. Literally, a Made by Human insignia that traces origins of our labor, like certifying products as “organic”.

If we’re building the weapon that threatens our very livelihood, we can engineer the solution that safeguards it. 

The Ouroboros Effect

If we seek retribution for labor and the preservation of human work, we need to remain ahead of innovation. There are several action-items that may safeguard human interests:

  • Consolidation of Interest. Concentration of efforts within formal structures or establish new ones tailored to this subject;
  • Litigation. Swift legal action based on existing laws to remedy breaches and establish legal precedents for future litigation;
  • Technological Innovation. Cutting-edge technology that: (a) engineers firewalls for preventing AI scraping technologies; (b) analyzes human work products; and (c) permits tracking of intellectual property.
  • Regulatory Oversight. Formation of a robust framework for monitoring, enforcing and balancing critical issues arising from artificial intelligence. United Nations, but without the thick, glacial layers of bureaucracy.  

These front-line professionals are just the first wave – yet if this front falls, it will be a fatal blow to intellectual property rights. We will have denied ourselves the ideological shields and weapons needed to preserve and protect origins of human creativity

At present, the influence of artificial intelligence on labor markets is in our own hands. If you think this is circular reasoning, like some ouroboros, you would be correct. The very nature of artificial intelligence relies on humans.

Ouroboros expresses the unity of all things, material and spiritual, which never disappear but perpetually change form in an eternal cycle of destruction and re-creation.

Equitable Remuneration 

Human productivity will continue to blend with artificial intelligence. We need to account for what is of human origin versus what has been interwoven with artificial intelligence. Like royalties for streaming music, with the notes of your original melody plucked-out. Even if it’s mashed-up, Mixed by Berry and sold overseas. 

These are complex quantum-powered algorithms. The technology exists. It is along the same lines of code that is empowering artificial intelligence. Consider a brief example: 

A 16-year old boy named Olu decides to write a book about growing-up in a war torn nation. 

 Congratulations on your work, Olu! 

47.893% Human /  52.107% Artificial

Meanwhile, back in London, a 57-year old historian named Elizabeth receives an email:

 Congratulations Elizabeth, your work has been recycled! 

34.546% of your writing on the civil war torn nation has been used in an upcoming book publication. Click here to learn more.

We need a framework that preserves and protects sweat-of-the-brow labor. 

As those on the front-line know: Progress begets progress while flying under the banner of innovation. If we’re going to spill blood to save our income streams – from content writers and hand models to lawyers and software engineers – the fruit of our labor cannot be genetically modified without equitable remuneration. 

Why McLaren Formula 1 Teamed Up With Dropbox

Every second counts when a racing team’s intellectual property is their competitive edge.

Dropbox has partnered up with McLaren Racing as an Official Technology Partner of the McLaren Formula 1 Team.

McLaren car with Dropbox logo on the back.

From Mission Control to Track, Formula 1 is a team effort.

The best teams, like cars, are more than the sum of their parts. They’re built for performance and continually pushing for more. Dropbox gives McLaren the tools they need to unlock an extra gear. Now they can share info instantly and collaborate on files in real time, wherever they’re racing around the world. All while being confident their IP is safe and secure.

Our track record of fast, efficient, and easy-to-use products makes Dropbox a perfect partner for the McLaren Formula 1 Team. And our newest products push beyond storage, to support teams the way they work today. We help teams get the best results across the finish line. Dropbox is the one tool they rely on to stay organized and share info while safeguarding their business-critical content.

McLaren driver sitting in car.
A team’s intellectual property is their competitive edge. The McLaren Formula 1 Team trusts Dropbox to keep their most important content protected. With features like advanced sharing permissions and access management, we help keep McLaren’s confidential information private and secure, so they can focus on pushing for more podiums. Stay secure 
In a race against time, McLaren counts on Dropbox.
Organization is key to unlocking optimal performance. With shared workspaces and folders, Dropbox makes it easy for the McLaren Formula 1 Team to stay in sync, and spend more time on the work that matters. Staying organized helps teams move faster, and that’s a huge advantage when every second counts. Get organized 

The record time to change four tires is 1.8 seconds.
The McLaren Formula 1 Team set that record last year. Their success depends on everyone working together in perfect sync. And Dropbox enables easy, efficient collaboration across the team. Now they can: Quickly and safely share large, high-res files with internal or external stakeholders. Track sent files to see who’s opened them and what they’ve viewed. Review creative assets or race footage in real-time, even when the team is all around the world

Metaverse Trademark Applications Surging

Over 5,800 Metaverse Trademark Applications Filed Last Year = Surging 200% Year-Over-Year

In 2022, there was a significant surge in trademark applications related to the Metaverse and non-fungible tokens (NFTs), indicating the growing importance and potential profitability of these emerging industries.

According to data collected by Blockchain Centre, there were 5,850 new Metaverse trademark applications and 7,746 NFT trademark applications registered last year.

This represents a growth rate of 205.64% and 259.61%, respectively, from the previous year. The monthly trends for trademark registrations steadily increased throughout the year, with at least 300 new applications filed every month.

Increasing interest in the Metaverse

Many big companies, including Meta, Formula One, Mastercard, McDonald’s, Gatorade, and the US Space Force, have also filed applications with the USPTO in 2022, indicating their interest in virtual products and involvement with crypto and blockchain.

The rise in trademark applications related to the Metaverse and NFTs has prompted an investigation by the US Patent and Trademark Office and US Copyright Office to examine how NFTs impact intellectual property rights.

According to the research:

“Recently, several prominent brands have faced challenges when their intellectual property or products were infringed upon by NFT marketplaces or platforms.”

Despite the ongoing ‘crypto winter’, the rise in trademark applications and growing interest in metaverse products have served as a counterbalance to concerns that the market is being negatively impacted. For the Silo, Lina Alisauskaite.

Threat to Prosperity: Canada Should Mind Business Investment Gap

August, 2022 – Business investment in Canada is so weak that capital per member of the labour force is falling, and the implications for incomes and competitiveness are ominous. Governments, particularly the federal government, need to get serious about growth to get workers more of the tools they require to compete and thrive, according to a new report from the C.D. Howe Institute.

In “Decapitalization: Weak Business Investment Threatens Canadian Prosperity”, authors William B.P. Robson and Mawakina Bafale write that since 2015 Canada’s stock of capital per available worker has been declining and its rate of gross investment per worker has been well below that in the United States and other OECD countries.

Capital= Business “bread and butter”

They examine why Canada might be lagging as well as what action to take.

“Business investment and productivity are closely related: productivity growth inspires investment by creating opportunities, and investment drives productivity growth by equipping workers with more and better tools,” says Robson. “Investment per available worker lower in Canada than abroad tells us that businesses see less opportunity in Canada, and prefigures weaker growth in Canadian earnings and living standards than in other OECD countries.”

New investment per available worker in Canada, adjusted for purchasing power, was only slightly above 50 cents for every dollar of investment per available United States worker in 2021 – lower than at any point since the beginning of the 1990s. In addition, in 2022, OECD projections show that Canadian workers will likely enjoy only 73 cents of new capital for every dollar enjoyed by their counterparts in the OECD excluding the US, according to Robson and Bafale.

The authors’ calculations from OECD projections for 2022 show $20,400 of new capital per available worker this year for OECD countries excluding the United States, compared to $14,800 for Canada.

In other words, new capital per available worker in Canada will be more than one-quarter less than in those countries this year.

Declines in the stock of machinery and equipment (M&E) and intellectual property (IPP) per member of the workforce are particularly worrisome, the authors explain, because those types of capital may be particularly important for economy-wide productivity. “Whatever special messages the recent M&E and IPP numbers may convey, the message from stocks of business capital overall is clear: the average member of Canada’s labour force began 2022 with less capital to work with than she or he had in 2014,” says Bafale.

Robson and Bafale identify a few probable causes for Canada’s dismal investment performance. These include: weak business in the natural resource industries; restricted access to finance for small and mid-size firms; a loss in Canada’s competitive edge in business taxation, notably against the United States; an uncongenial environment for IP investment; regulatory uncertainly; unpredictable fiscal policy; and governments’ in-house spending and transfers to households that are steering resources into consumption and housing rather than non-residential investment.

Is business investment capital trajectory predetermined?

“The prospect that Canadians will find themselves increasingly relegated to lower value-added activities relative to workers in the United States and elsewhere, who are raising their productivity and earnings faster, should spur Canadian policymakers to action,” conclude Robson and Bafale. “The first step is to recognize that recent trends are a symptom of threats to Canada’s prosperity and competitiveness – that low business investment is a problem that governments can and should address.”

Supplemental- Are you a small Canadian business frustrated with the difficulties involved in accessing capital? For example, our experience has shown that the multitude of Business Development Corporations operate with autonomy but without accountability, poor vision and nepotism. Essentially, gleaning business plans and strategies before revealing ‘jump through these application hoops” which include personal finance and personal life details. It is sobering to discover that they also receive a hefty commission % for every applicant they ‘certify as successful’. Do you agree or have you had a more positive experience? We want to hear from you in the comments below.

Theft Of Artist Ideas May Not Be Theft At All

Recently, one of my readers wrote that “there is another kind of generosity that comes much harder to me. I know I shouldn’t be stingy in this way, but I find myself stubbornly so. It’s the generosity of sharing my ideas, my connections, or giving a leg up to those who could benefit sometimes from my knowledge – whether that’s contacts, networks, tips, or the meat of my ideas themselves.”

This concern, of course, is not unique and strikes at the heart of something that all those in creative professions fear and must face. The ownership of ideas is difficult to prove. If you tell someone your plan in confidence and they, in turn, use it for their own purposes, there is very little you can do to show that you are the originator. Spreading this rumor is likely to make you look like the bad guy. It’s no wonder that this sort of generosity is cause for concern.

Arguably, no one would really offer up their original ideas before they have been fleshed out and no one would expect this from another artist. Talking about work in progress in general terms is one thing, but detailing the entire plan is another altogether. There is nothing wrong with being a little protective of your creative capital, it is the lifeblood of what you do.

Steve Jobs and Apple on stealing ideasBut what about sharing your networks or some trade secrets that helped you get to where you are today? While you may have worked tooth and nail for everything you’ve gained, there were surely people along the way who said yes at the right moment and assisted your progress. No one can ask more than this, and as an artist of a certain standing, there is nothing wrong with offering this sort of help.

It’s important to ask yourself what you may gain or lose by offering your assistance in any way. While this may not sound like a very altruistic way of thinking, remember that you are indeed running a business and there is nothing wrong with a bit of shrewd thinking. Further, though, when you stop and think about the outcome of sharing your network, it is unlikely that helping an emerging artist by introducing people who might be able to help will in any way affect your position as a more established artist.

No one exists in a vacuum. Even you, who may have scraped and fought your way to where you are today, benefited from the acceptance and help of others. Sure, you may have pounded the pavement endlessly in order to secure your position but that is no reason not to pay forward the success you have achieved. It is too easy to forget, once you have achieved a certain status, the myriad small moments that led you there. While it may seem as though hardly anyone was out to help you in the early days, surely there were some, otherwise you could not be where you are today. Even if it was just a few gallerists who were finally willing to take a chance, there are always rungs of assistance in the ladder to every success, no matter how small.

In our present times, we live in a world where community is very much at our fingertips. The rules of social engagement have definitely changed. This is both a benefit and a burden. While the new landscape of online social engagement can absolutely open up opportunities that didn’t exist prior to this revolution in social connection, the online community can also present a world of its own difficulties. It is impossible to know who you are actually dealing with and with virtually everyone in the entire art world present online, it can easily overwhelm a newcomer to the scene.

For these reasons, there is a lot to be said for good old-fashioned face-to-face interaction. Being the sort of artist who is willing to mentor in the real world sets you apart. Establishing this sort of reputation, for being the one who will gladly share the bounty you have created, seldom reverses one’s own success and frequently opens new doors you may never have considered.

Getting back to the idea of sharing artistic ideas and concepts, this is a bit trickier. As I said before, it may be unwise to give away your nascent, unfruited plans to just anyone. On the other hand, allowing others to view works in progress isn’t likely to cause too much harm.

Arguably, there is no such thing as original art. Even some of the most contemporary artists’ work is derivative of past creations. Marina Abramovic, in her unique style, has absolutely drawn from (and occasionally been accused of copying) works by other artists. Pablo Picasso (and perhaps more famously, Steve Jobs who quoted him) said, “good artists copy, great artists steal.” This doesn’t mean that you should open yourself up to idea theft, but it does mean that perhaps being stingy with your concepts, your network, your position as an established artist, doesn’t count for as much security as you might think. Be smart about things, but in general, it is always a good idea to reach down the ladder and help those coming up behind you find the next rung.  For the Silo, Brainard Carey.

Brainard  is currently giving free webinars on how to write a better Artist bio and statement and how to get a show in a gallery – you can register for that live webinar and ask questions live by clicking here.

Featured image: Jarrod Barker.

Streaming Companies Spotify And Labels Sony Making The Money Not Artists

Potter Box

Definition:

Is it ethical for media streaming companies, such as Spotify, to take advantage of IP loopholes, which are known to negatively impact artist revenues?

Values:

>Balance & Fairness

>Legal Values

Loyalties:

a. Duty to service

b. Duty to subscribers

c. Duty to shareholders

d. Duty to Intellectual Property

e. Duty to Art & Commerce

Principles:

Aristotle’s Mean: “Moral virtue is a middle state determined by practical wisdom.” Virtuous people will arrive at a fair and reasonable agreement for the legitimate claims of both sides somewhere in the middle of two extreme claims.The two sides must negotiate a compromise in good faith. “Generally speaking,in extremely complicated situations with layers of ambiguity and uncertainty, Aristotle’s principle has the most intellectual appeal.”

BASIC CONCEPT:

Negotiated compromise.

>>Streaming Media Company

For the Purpose of analyzing an isolated streaming media company, Spotify will be examined through the lens of the potter box. Spotify is a streaming service with cross-platform availability that specializes in music, and generates income from its 20 million premium and 75 million free users, respectively. Spotify boasts an extensive catalogue for free and for a nominal fee. Spotify’s extensive catalogue is made possible due to established agreements between various record labels and media companies. Agreements that are known to negatively affect artists, while benefiting both Spotify & Record labels, plague the music industry. Payout deals between Spotify and record companies range from royalty payout to equity deals.

Spotify does not want to make adjustments to the model of its free service, because if their users are not able to find it on Spotify, they will utilize other streaming services such as youtube, which is likely to have the content. They have identified this free offering as being their driving force for getting new subscribers to the service. New subscribers that turn into increased revenue for record labels, as 70% of revenue from $10 per month subscriptions and advertisements are paid to record labels, artists, and song publishers.

>>Artists—Influence: Art/Media Creators

The Artists on Spotify collectively stream over 30 million songs across 58 different markets. Despite collectively making up a heart from which Spotify thrives, Artists receive 6.8% of streaming revenue, the smallest share of the pie.

Artists receive 10.9% of the post tax payout between artists, labels, and songwriters/publishers. Many artists including Adele, Taylor Swift, the Beatles, and Coldplay have opted for keeping music off of Spotify.

Spotify Breakdown Chart1

Spotify does not have direct agreements with most artists. The streaming company has agreements with labels, whom are responsible for not only securing licenses to music, but to are also responsible for payouts to artists. So essentially, Spotify pays labels, and the label is empowered with payout to artists. The problem is not that Spotify refuses to fairly pay for royalties; it is the trickling down of payment from labels to the respective artists. Spotify has wholesale access to music catalogues from record labels, which makes it hard to fairly split royalty payments amongst artists that are under contractual agreements with respective label.

Even with leaked contract between Spotify and Sony Music available, it is still unclear how much of payouts to record labels actually get to the hands of the artist. It is clear that Sony Music is getting a hefty payout annually, but the question is still whether or not these hefty payouts are passed on to the artists.

>>Major Record Companies

The music catalogue on Spotify is mostly populated by content from major record labels that include Sony Music, Universal Music Group, EMI, Warner Music, Merlin, and The Orchard. Self-published artists as well as artists from independent labels also help makeup Spotify’s catalogue.

Record companies have begun to further question Spotify’s free model since Taylor Swift and other artists have proactively opposed Spotify’s extensive free offerings to users. Streaming consumers of music increased by 54% between 2013 and 2014 according to the Nielsen SoundScan. Major record companies are often made better deals, which disproportionately disadvantage independent artists and labels.

Executives at major record label such as Universal Music and Warner Music have made statements about the extensive free offering of its licensed music is not sustainable long-term. It was suggested that there needs to be a more clear differentiation between content available to free and premium users. Bjork has suggested that Spotify should not allow access for certain content right when it comes out, but should allow for content to go through certain rounds of monetization before ending up on Spotify, similar to Netflix’s rollout method for its content. Major record labels are currently in the process of renegotiating agreements, and are mostly pushing for adjustments to free service offered.

Their goal is to have the “freemium” model disappear as time persists.

What is the current policy?

A legal agreement between Sony, the second largest record company in the world, and Spotify recently leaked, which further intensifies questions about fair payouts for artists. The contract confirmed that major record companies benefit from the success of the streaming service Spotify. The contract details advance payments of over $40 million, with a $9 million advertising credit. Sony has declined to comment on the leaked contract, as it was illegally obtained. Labels routinely keep advances for themselves according to an industry insider.

The leaked contract detailed agreements between Sony Music and Spotify, but not between Sony Music and artists. Such fruits of private agreements don’t necessarily trickle down to the artist, because in most cases they are not even aware of an under the table deal unless a leak has occurred. Unstated under the table deals are not ethical, because artists do not benefit from funds received on account of their intellectual property. The International Music Managers Forum urges European and American authorities alike to use the Sony leak as an example of why more transparence is necessary.

Artists are not being fairly compensated for use of their intellectual property.

Streaming companies have established a revenue arrangement with major Record Companies that often does not favor artists. The obvious shortfalls with existing policy include the lack of transparency when it comes to agreements between record labels and Spotify. There are no systems of checks and balances for ensuring that labels adequately and fairly share Spotify revenue with artists. There needs to be a streamlined system that puts everything on the table in clear view, for fair agreements between artists, label, and streaming company to be arrived at. Current policy also allows Spotify to take up to 15% off the top from revenue generated from ad sales.

What needs to be changed?

Spotify seems to be fairly paying for royalties, but the flow of cash does not always get to the artists. Substitute apps; try to compete with Spotify, by challenging the freemium model. Other apps such as Tidal aim to provide audience with exclusive content that they won’t find anywhere else. The problem is that apps such as Tidal market themselves as a music-streaming app by the artists for the artists. Nowhere in that equation is the interest of the average potential consumer considered. Artists may receive more money per stream, but the service is double the price of Spotify. Record companies, and artists alike, are moving away from Spotify’s freemium model. The digitization of music is not the problem, as most artists and labels generally trust certain digital services such as itunes, because it translates into revenue for artists with no veil or strings attached. Extensive free offerings seem to be the major issue that involved parties have with Spotify, but it is the only thing that drives traffic according to Spotify. The freemium offerings need to be changed in some way, but in a way that is non-disruptive to Spotify’s commerce. Since Spotify pays its fair share of royalties, a more streamlined agreement between record labels and artists should be established and transparent, as should deals made between Spotify and record labels.

Major record labels need to stop double dipping. Not only do they receive cash advances & royalties, but they also benefit from Spotify’s overall revenue stream as they have equity in Spotify of up to 18%. Billboard magazine interviewed two dozen record executives and they agreed that they were confused as to what Spotify was replacing, whether being a substitute for sales or piracy. Examples of setting limitations of the freemium service have showed signs of slowing down subscription growth rate. Spotify has stated that if artists are not fairly compensated from stream revenue, then it is a result of recording contracts and or label accounting practices. Some major record labels are fine with Spotify using their music to build business, because of their equity; they are looking ahead for profit from a future IPO. The artists would not benefit in the same manner, despite their content being the driving force for the app in the first place.

Click me! Future Art Sound
Click me! Future Art Sound

Scenarios

In a time of changing platforms and distribution methods, consumer trends has undoubtedly been in transition. The radio still accounts for an estimated 35% of music consumption, followed by CD consumption at 20%, free streaming at 19%, and paid streaming at 1%. Multichannel consumers, mostly millennia’s, account for 66% of music consumers. A multichannel consumer may pay for a streaming subscription, and make a physical and/or a virtual music purchase. The most common multichannel consumption combination is free streaming coupled with CD listening which accounts for 49% of multichannel listeners, followed by free streaming coupled with music downloads which accounts for 44%. Millennia’s are also known to engage in both free streaming and downloading.

Evidence

During the first quarter of 2014, Pharrell Williams garnered 43 million Pandora streams, which only paid him $2,700 as a songwriter. A statement from Pandora indicates that all rights holders were paid upwards of $150,000 within the first 3 months, and that the real issue is the financial dispute between labels and publishers. Pandora also indicated in the statement that labels are free to split royalties between themselves and artists, however they see fit. Clearly there needs to be more transparency for the cash flow between streaming company, label, and the artist.

Spotify returns 70% of its revenue to rights holders, with information about each artist to aid in the royalty split process. Streaming companies are engaged in fair due diligence where payment of royalties are concerned. The evidence is as follows:

Spotify Breakdown Chart2

Actionable Policy

The music industry needs a streamlined agreement between streaming companies, record labels, publishers, and artists. It is imperative that there is increased transparency, especially where cash flow is concerned. Artists should be able to see all cash and data exchanged between streaming company and label. Royalty holders need to publicly split funds amongst themselves and artists. Record labels need to be accountable to both their artists and streaming company, because an artist that feels swindled can create bad blood between the artist and the label and/or the artist and streaming company.

Recommendation

>>Actionable

1. Artists are cut into equity deals based on audience pull to streaming service per qtr

>>Streaming Services should provide analytics with specific data to aid audience pull observation for given artists

2.Major Labels are transparent with cash flow of compensation from Streaming Companies

Is it ethical for media streaming companies, such as Spotify, to take advantage of IP loopholes, which are known to negatively impact artist revenues?

Judgment:

It is ethical for streaming services to take advantage of IP loopholes, which are known to negatively impact artist revenues. Music platform are changing, and as such, better agreements need to be drafted to complement this change. Streaming companies have shown the numbers, and they are paying for royalties, which is essentially paying for the use of the music in their catalogue. Music streaming is an emerging market, which record companies themselves are invested in. The common mode of music monetization is moving away from CD sales, and that is undeniable. Music downloads take up a lot of data, so streaming is the most practical way for consumers to enjoy their music.

The freemium model of Spotify should not be eliminated, but it should certainly be reconsidered, or at least limited in music access. Premium, new, and sought after music should not be as accessible as music that has already exited the promotion stage. Their needs to be some sort of compromise between record labels and Spotify, to better differentiate between premium content and freemium content. Spotify does not want to compromise the availability of its music on either platform, and labels reserve right to pull any of their artists from Spotify as they wish. Spotify should do a better job differentiating free content from premium content, it’s only fair. Spotify should not compromise to the point that it becomes impractical, but should compromise in a way that is cost-effective for all parties. If this were to be attained, streaming companies, record labels, and artists would be happy, circumventing social dilemma.  Jordan Muthra The New School University, M.A., Media Studies, Graduate Student

Click here to read PDF version: The_Ethics_of_Streaming_Music