5 ms·

> "On the contrary, it seems quite likely that others should be paying more." Not that have knowledge of royalty proportionality, but it also seems unfair to h

> "On the contrary, it seems quite likely that others should be paying more." Not that have knowledge of royalty proportionality, but it also seems unfair to have royalty costs dwarf any other business costs. I have no idea how much it costs Pandora to stream a song, but if it's a fraction of the ~$0.0012/listen they seem to pay in royalties, it seems like the royalty is disproportionate and unfair. On the other hand, if the royalty is more than ~2 orders of magnitude less than cost to stream a song, then maybe there is an argument that it's too low. (of course the above is assuming you agree with royalties at all.)

ianterrell 13y ago
Why do you think other business costs are pertinent to royalty rates at all?
- ChuckMcM 13y ago
  One way they would be pertinent would be if the royalty rates are the reason the business is unsustainable, then the question arises if the goal is to have other folks hear the music or not. So there is a cost to deliver songs (servers, bandwidth, devops, engineering) which is analogous to the old radio days of the engineer, power, transmitter, tower maintenance, etc. And there is the revenue from advertising and/or subscriptions. And there is the royalty rate. If you are managing your on-going costs to a minimum, your ability to sell advertising/subscriptions is a market thing (people will or won't buy the service based on the perceived value to them) and then your royalties come out of that. How would make an argument that royalty rates aren't pertinent?
- Glyptodon 13y ago
  Well, I don't really believe in royalties to begin with, but if you're going to have them... I think royalties should be set in a way that maximizes what I'd call the versatility of utility. If royalty costs are far beyond the actual infrastructure or service costs, it seems as though entire industries and uses of content cease to exist. It also seems pretty clear that huge differences between prices and real world costs are what lead to extensive piracy - people develop a perception of being cheated when you try to charge $25 for an e-book or album download. On the other hand most consumers seem to feel fine about paying $1 or $5 for a song/album/e-book. You could argue that 'oh, the creator should have the right to control what they make as much as they want and charge whatever they feel like,' but it seems pretty clear that given free reign, copyright holders feel entitled and abuse copyright in ways that entirely undermine the whole system. I'd say that if you believe in copyright there's a legitimate interest in restraining royalties to reasonable amounts so as reinforce the legitimacy of the whole system. After all, the perceptions of gouging and rights abuses create large masses of people like me who no longer believe in copyright as a whole to any great extent. Ensuring the liberalization of restraints and apparent reasonableness of exercised privileges allowed creators seems key to creating a copyright institution that can survive and appear legitimate in the long run.
whiddershins 13y ago
I'm sorry, but what you are writing here is incoherent. If what you were suggesting made any sense, as Pandora lowers their infrastructure costs and overhead, so too would the royalty payment go down, and all the profit would go to Pandora only. The one has nothing to do with the other.
- Glyptodon 13y ago
  You're the one expressing a non-sequitur. Proportionality of royalty should enable other services to compete with Pandora on the same playing field, so profit would also be proportional to decreased costs or Pandora would risk being wiped out by competition. There'd be no ability for collusive cartels of copyright holders to act as market deciders, or for single players to succeed at profiting disproportionately with respect to their costs. I guess maybe this would require a corollary of compulsory licensing, but I'm pretty sure that already exists to a large extent.
samspenc 13y ago
NetFlix has the exact same problem. Its an issue with any industry where you are trying to resell a primary service.
klodolph 13y ago
Amazon pays a 70% royalty for ebooks that were published directly by the author. Is it unfair for this royalty to be so large? (I realize that this is more complicated than "70%", see https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O...) I think it's a sign of efficiency that a large portion of the money goes to content creators. Content creation will get cheaper as technology improves, sure, but in fields like music and writing, content creators struggle to make a decent wage. Therefore as content distribution technology improves, the percentage of money given to content creators should increase.
- strickjb9 13y ago
  Apples and oranges. Amazon - a customer pays them money - 30% net margin Pandora - ad-based revenue
- mullingitover 13y ago
  > Content creation will get cheaper as technology improves, sure, but in fields like music and writing, content creators struggle to make a decent wage. As well they should--it's an ultra-competitive field, swarming with competitors, the market is so flooded it makes New Orleans after Katrina look like a kiddie pool. Unless you're the cream of the cream of the crop, you're going to struggle in this industry. And not one of the content creators has an inherent 'right' to make a profit from their work. The market decides winners and losers, and inevitably in this market it's going to be mostly losers. Whether or not it's 'fair' is irrelevant, life isn't fair.
  - klodolph 13y ago
    > And not one of the content creators has an inherent 'right' to make a profit from their work. Agreed. > The market decides winners and losers, and inevitably in this market it's going to be mostly losers. But the problem is that royalty rates are decided by law, rather than by negotiation between interested parties. This isn't a market economy, this is a planned economy.
    - 13y ago
dillona 13y ago
> Not that have knowledge of royalty proportionality, but it also seems unfair to have royalty costs dwarf any other business costs. Why? Their business model is to take other people's work and distribute it to subscribers. It seems to me that acquisition of the actual product should be the majority of their cost.
- Glyptodon 13y ago
  Excessiveness in the injection of normative notions to a market seems like a bad idea. In any case, the content is only an aspect of the value, and without the value add many services would be rather useless. If the cost of content dwarfs the use's value add, something with potential becomes something untenable. I mean without streaming, multiple platform support, browsing/searching, etc., what would Netflix be? The delivery method and interface themselves have value, and it's not insignificant at all. Remember the purpose of copyright isn't to give creators rights. It's to drag as much out of them for as little cost as possible for the sake of the enrichment of society as a whole.
  - monkeyspaw 13y ago
    Apple's store does the same stuff and takes a 30% cut. They aren't directly comparable, but they are charging the 30% for similar services (streaming/downloading, platform support, browsing/discovery, and they add payment and distribution on top of that...)
chaz 13y ago
I think content is always the majority of the cost in these revenue share deals. Hulu: 70% [1] YouTube: 55% [2] Google Adsense: 68% [3] Spotify: 70% [4] [1] http://www.businessinsider.com/henry-blodget-hulu-turns-profitable-we-eat-crow-2010-4 http://www.businessinsider.com/henry-blodget-hulu-turns-prof... [2] http://www.theverge.com/2013/3/4/4062810/youtube-partners-complain-revenue-sharing-google-ads http://www.theverge.com/2013/3/4/4062810/youtube-partners-co... [3] https://support.google.com/adsense/answer/180195?hl=en https://support.google.com/adsense/answer/180195?hl=en [4] http://m.diamondbackonline.com/mobile/diversions/article_f94b8596-97fa-11e2-b430-001a4bcf6878.html http://m.diamondbackonline.com/mobile/diversions/article_f94...

ianterrell 13y ago

Why do you think other business costs are pertinent to royalty rates at all?

ChuckMcM 13y ago
One way they would be pertinent would be if the royalty rates are the reason the business is unsustainable, then the question arises if the goal is to have other folks hear the music or not. So there is a cost to deliver songs (servers, bandwidth, devops, engineering) which is analogous to the old radio days of the engineer, power, transmitter, tower maintenance, etc. And there is the revenue from advertising and/or subscriptions. And there is the royalty rate. If you are managing your on-going costs to a minimum, your ability to sell advertising/subscriptions is a market thing (people will or won't buy the service based on the perceived value to them) and then your royalties come out of that. How would make an argument that royalty rates aren't pertinent?
Glyptodon 13y ago
Well, I don't really believe in royalties to begin with, but if you're going to have them... I think royalties should be set in a way that maximizes what I'd call the versatility of utility. If royalty costs are far beyond the actual infrastructure or service costs, it seems as though entire industries and uses of content cease to exist. It also seems pretty clear that huge differences between prices and real world costs are what lead to extensive piracy - people develop a perception of being cheated when you try to charge $25 for an e-book or album download. On the other hand most consumers seem to feel fine about paying $1 or $5 for a song/album/e-book. You could argue that 'oh, the creator should have the right to control what they make as much as they want and charge whatever they feel like,' but it seems pretty clear that given free reign, copyright holders feel entitled and abuse copyright in ways that entirely undermine the whole system. I'd say that if you believe in copyright there's a legitimate interest in restraining royalties to reasonable amounts so as reinforce the legitimacy of the whole system. After all, the perceptions of gouging and rights abuses create large masses of people like me who no longer believe in copyright as a whole to any great extent. Ensuring the liberalization of restraints and apparent reasonableness of exercised privileges allowed creators seems key to creating a copyright institution that can survive and appear legitimate in the long run.

whiddershins 13y ago

I'm sorry, but what you are writing here is incoherent. If what you were suggesting made any sense, as Pandora lowers their infrastructure costs and overhead, so too would the royalty payment go down, and all the profit would go to Pandora only. The one has nothing to do with the other.

Glyptodon 13y ago
You're the one expressing a non-sequitur. Proportionality of royalty should enable other services to compete with Pandora on the same playing field, so profit would also be proportional to decreased costs or Pandora would risk being wiped out by competition. There'd be no ability for collusive cartels of copyright holders to act as market deciders, or for single players to succeed at profiting disproportionately with respect to their costs. I guess maybe this would require a corollary of compulsory licensing, but I'm pretty sure that already exists to a large extent.

samspenc 13y ago

NetFlix has the exact same problem. Its an issue with any industry where you are trying to resell a primary service.

klodolph 13y ago

Amazon pays a 70% royalty for ebooks that were published directly by the author. Is it unfair for this royalty to be so large? (I realize that this is more complicated than "70%", see https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O...) I think it's a sign of efficiency that a large portion of the money goes to content creators. Content creation will get cheaper as technology improves, sure, but in fields like music and writing, content creators struggle to make a decent wage. Therefore as content distribution technology improves, the percentage of money given to content creators should increase.

strickjb9 13y ago
Apples and oranges. Amazon - a customer pays them money - 30% net margin Pandora - ad-based revenue
mullingitover 13y ago
> Content creation will get cheaper as technology improves, sure, but in fields like music and writing, content creators struggle to make a decent wage. As well they should--it's an ultra-competitive field, swarming with competitors, the market is so flooded it makes New Orleans after Katrina look like a kiddie pool. Unless you're the cream of the cream of the crop, you're going to struggle in this industry. And not one of the content creators has an inherent 'right' to make a profit from their work. The market decides winners and losers, and inevitably in this market it's going to be mostly losers. Whether or not it's 'fair' is irrelevant, life isn't fair.
- klodolph 13y ago
  > And not one of the content creators has an inherent 'right' to make a profit from their work. Agreed. > The market decides winners and losers, and inevitably in this market it's going to be mostly losers. But the problem is that royalty rates are decided by law, rather than by negotiation between interested parties. This isn't a market economy, this is a planned economy.
  - 13y ago

dillona 13y ago

> Not that have knowledge of royalty proportionality, but it also seems unfair to have royalty costs dwarf any other business costs. Why? Their business model is to take other people's work and distribute it to subscribers. It seems to me that acquisition of the actual product should be the majority of their cost.

Glyptodon 13y ago
Excessiveness in the injection of normative notions to a market seems like a bad idea. In any case, the content is only an aspect of the value, and without the value add many services would be rather useless. If the cost of content dwarfs the use's value add, something with potential becomes something untenable. I mean without streaming, multiple platform support, browsing/searching, etc., what would Netflix be? The delivery method and interface themselves have value, and it's not insignificant at all. Remember the purpose of copyright isn't to give creators rights. It's to drag as much out of them for as little cost as possible for the sake of the enrichment of society as a whole.
- monkeyspaw 13y ago
  Apple's store does the same stuff and takes a 30% cut. They aren't directly comparable, but they are charging the 30% for similar services (streaming/downloading, platform support, browsing/discovery, and they add payment and distribution on top of that...)

chaz 13y ago

I think content is always the majority of the cost in these revenue share deals. Hulu: 70% [1] YouTube: 55% [2] Google Adsense: 68% [3] Spotify: 70% [4] [1] http://www.businessinsider.com/henry-blodget-hulu-turns-profitable-we-eat-crow-2010-4 http://www.businessinsider.com/henry-blodget-hulu-turns-prof... [2] http://www.theverge.com/2013/3/4/4062810/youtube-partners-complain-revenue-sharing-google-ads http://www.theverge.com/2013/3/4/4062810/youtube-partners-co... [3] https://support.google.com/adsense/answer/180195?hl=en https://support.google.com/adsense/answer/180195?hl=en [4] http://m.diamondbackonline.com/mobile/diversions/article_f94b8596-97fa-11e2-b430-001a4bcf6878.html http://m.diamondbackonline.com/mobile/diversions/article_f94...