Post by Johnkenn on Sept 28, 2015 14:35:34 GMT -6
songs. Basically saying that there should be direct licensing "auctions" available for radio. I think the big problem is this - how in the hell would radio EVER decide what gets played? What are there - a billion songs to choose from? They are suggestion getting rid of the PRO's and have the consumers buy licenses directly from the creators...
Not sure I agree with this...And it's a freaking BEAR to get though (I scanned through and got the gist)...but it is claiming that PRO's are doing more harm than good by demanding radio agree to blanket licenses. Deep into the paper, it outlines this scenario:
Using online auctions for music licensing requires little else than applying the
licensing technology already in use by widespread global platforms such as Google or
eBay to performance rights licensing. As noted earlier, Google has recently deployed
an auction system allowing for the automated sale and allocation of advertising space
in offline radio broadcasting.160 If, as suggested in this article, authors were to be
allowed the same transactional freedoms as regular radio advertisers, then application
of advertising through online platforms would be straightforward.
Naturally, online licensing platforms do not require the use of auctions.
Individual prices for songs can just as easily be set by authors allowing as many radio
stations as desired to purchase public performance licenses and air the licensed songs
in an automated way. While as I will suggest shortly, using auctions to determine the
price of songs has some advantages over having authors determine the price of each
of their songs, an additional advantage of online licensing platforms is that different
pricing mechanisms can simultaneously be used for different songs without
introducing unmanageable complexity into the system. One of the key advantages of
modern markets is their ability to adopt and fluidly alter a variety of pricing schemes
with ELEGANCE, that is, with Electronic Licensing Engines that Grant Authors
Non-Collusive Environments.
This system which entirely displaces PROs from pricing songs has the
advantage of creating an environment where different platforms, say EBay, iTunes
and Google, simultaneously compete for serving buyers and sellers of music, which
are nevertheless able to price their products individually. Also, minimal
interoperability standards could be used to induce competing platforms to adopt
uniform standards that would allow free flow of songwriters and users between
competing platforms preventing the proliferation of the lock-in effects that have beset
PRO members since these organizations began operating.
Modern transactional platforms already allow for most of the pricing
characteristics proposed in this paper, but three novel features currently not present in
auction markets, I suggest, are likely to further improve the performance of these
markets: (a) the introduction of negative prices for songs, deployed in the form of
negative reservation prices for particular songs (think of a per-song advertising
budget); and (b) the introduction of exclusive rights and (c) congestion pricing. The
first feature, negative prices, would capture the positive features of payola, but
instead of forcing songwriters or record companies to transact with each station
individually to purchase air-time, it would allow all radio stations to compete
simultaneously for “payola” customers in a competitive environment that could
actually turn the initial payola offer into a positive price paid for a song by the radio
station. Given that the distinction between negative and positive prices for songs, as
we have seen, has always been an artificial one, this feature would allow markets to
become truly competitive across the entire spectrum of prices.
The second feature, exclusive licenses, restores to songwriters the ability to
license public performances—a de facto impossibility under the blanket license
regime—to limited groups for specific prices, and arbitrary periods of time, allowing
songwriters to maximize the value of the entire bundle of products they produce and
providing optimal creative and consumption incentives for songwriters and radio
stations respectively.
Further enhancing the ability to grant exclusive licenses, the third feature,
congestion pricing, can allow songwriters to determine optimal levels of simultaneous
song usage by radio stations within specific geographic markets, and optimally price
total song output.
The system may work in the following way: a radio station wishing to acquire
licenses for playing songs would log onto an online licensing platform, let us call it
“eBay Songs” and would browse or search for a given song under any of an array of
possible categories including price, genre, artist, year, etc. Once the desired song has
been identified, the radio station would verify whether the author has set a specific
price for the right to publicly perform the song at a given time, or whether the author
has left the pricing to an auction system by which radio stations are allowed to bid for
particular songs to be played at a particular time (performance licenses for playing
songs during primetime would likely cost more than the rights to play the same songs
during less popular hours). So far, the only departure from any ordinary eBay
transaction would be the addition of multiple airing times for a single song. This,
however, may be thought of as different products auctioned separately, each product
being “the right to perform publicly a specific song during a specified framework”
(e.g. the right to play “Across the Universe” by the Beatles once on August 17,
anytime between 5:30 pm and 6:00 pm).
Beyond the fairly ordinary pricing system just described, however, auctions
allow for a significant qualitative improvement over current licensing: the ability to
place bids for exclusive rights and non-exclusive rights simultaneously. As noted
earlier in this article, both positive and negative externalities pervade radio
broadcasting. In turn, the presence of negative externalities turns songs into rival
goods in their consumption by radio stations. This rivalry is not determined by the
limited availability of the resource songs, but rather due to the fact that concomitant
use of a particular song by multiple radio stations may decrease the advertising
revenues a radio station can extract by using that song. For example, if all radio
stations decided to play the same songs simultaneously, advertisers may begin to see
radio stations as perfect substitutes for each other in terms of advertising, and the
price of advertising on some radios would fall as a consequence. Under a blanket
license system this may also decrease the revenue authors extract from airing songs
on radio (as revenues are directly dependent on advertising revenue by radio stations
and the sale of CDs or other complementary goods).
Not sure I agree with this...And it's a freaking BEAR to get though (I scanned through and got the gist)...but it is claiming that PRO's are doing more harm than good by demanding radio agree to blanket licenses. Deep into the paper, it outlines this scenario:
Using online auctions for music licensing requires little else than applying the
licensing technology already in use by widespread global platforms such as Google or
eBay to performance rights licensing. As noted earlier, Google has recently deployed
an auction system allowing for the automated sale and allocation of advertising space
in offline radio broadcasting.160 If, as suggested in this article, authors were to be
allowed the same transactional freedoms as regular radio advertisers, then application
of advertising through online platforms would be straightforward.
Naturally, online licensing platforms do not require the use of auctions.
Individual prices for songs can just as easily be set by authors allowing as many radio
stations as desired to purchase public performance licenses and air the licensed songs
in an automated way. While as I will suggest shortly, using auctions to determine the
price of songs has some advantages over having authors determine the price of each
of their songs, an additional advantage of online licensing platforms is that different
pricing mechanisms can simultaneously be used for different songs without
introducing unmanageable complexity into the system. One of the key advantages of
modern markets is their ability to adopt and fluidly alter a variety of pricing schemes
with ELEGANCE, that is, with Electronic Licensing Engines that Grant Authors
Non-Collusive Environments.
This system which entirely displaces PROs from pricing songs has the
advantage of creating an environment where different platforms, say EBay, iTunes
and Google, simultaneously compete for serving buyers and sellers of music, which
are nevertheless able to price their products individually. Also, minimal
interoperability standards could be used to induce competing platforms to adopt
uniform standards that would allow free flow of songwriters and users between
competing platforms preventing the proliferation of the lock-in effects that have beset
PRO members since these organizations began operating.
Modern transactional platforms already allow for most of the pricing
characteristics proposed in this paper, but three novel features currently not present in
auction markets, I suggest, are likely to further improve the performance of these
markets: (a) the introduction of negative prices for songs, deployed in the form of
negative reservation prices for particular songs (think of a per-song advertising
budget); and (b) the introduction of exclusive rights and (c) congestion pricing. The
first feature, negative prices, would capture the positive features of payola, but
instead of forcing songwriters or record companies to transact with each station
individually to purchase air-time, it would allow all radio stations to compete
simultaneously for “payola” customers in a competitive environment that could
actually turn the initial payola offer into a positive price paid for a song by the radio
station. Given that the distinction between negative and positive prices for songs, as
we have seen, has always been an artificial one, this feature would allow markets to
become truly competitive across the entire spectrum of prices.
The second feature, exclusive licenses, restores to songwriters the ability to
license public performances—a de facto impossibility under the blanket license
regime—to limited groups for specific prices, and arbitrary periods of time, allowing
songwriters to maximize the value of the entire bundle of products they produce and
providing optimal creative and consumption incentives for songwriters and radio
stations respectively.
Further enhancing the ability to grant exclusive licenses, the third feature,
congestion pricing, can allow songwriters to determine optimal levels of simultaneous
song usage by radio stations within specific geographic markets, and optimally price
total song output.
The system may work in the following way: a radio station wishing to acquire
licenses for playing songs would log onto an online licensing platform, let us call it
“eBay Songs” and would browse or search for a given song under any of an array of
possible categories including price, genre, artist, year, etc. Once the desired song has
been identified, the radio station would verify whether the author has set a specific
price for the right to publicly perform the song at a given time, or whether the author
has left the pricing to an auction system by which radio stations are allowed to bid for
particular songs to be played at a particular time (performance licenses for playing
songs during primetime would likely cost more than the rights to play the same songs
during less popular hours). So far, the only departure from any ordinary eBay
transaction would be the addition of multiple airing times for a single song. This,
however, may be thought of as different products auctioned separately, each product
being “the right to perform publicly a specific song during a specified framework”
(e.g. the right to play “Across the Universe” by the Beatles once on August 17,
anytime between 5:30 pm and 6:00 pm).
Beyond the fairly ordinary pricing system just described, however, auctions
allow for a significant qualitative improvement over current licensing: the ability to
place bids for exclusive rights and non-exclusive rights simultaneously. As noted
earlier in this article, both positive and negative externalities pervade radio
broadcasting. In turn, the presence of negative externalities turns songs into rival
goods in their consumption by radio stations. This rivalry is not determined by the
limited availability of the resource songs, but rather due to the fact that concomitant
use of a particular song by multiple radio stations may decrease the advertising
revenues a radio station can extract by using that song. For example, if all radio
stations decided to play the same songs simultaneously, advertisers may begin to see
radio stations as perfect substitutes for each other in terms of advertising, and the
price of advertising on some radios would fall as a consequence. Under a blanket
license system this may also decrease the revenue authors extract from airing songs
on radio (as revenues are directly dependent on advertising revenue by radio stations
and the sale of CDs or other complementary goods).