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Sunday, November 2, 2014

Where We've Been/Dialogue on

Although we have been busy practicing law, raising a family, etc. the Chronicle of a Solution continues unabated. The content industries (movies, music, books and games) are no closer to a solution than they were when we last posted. We had a meeting with Neal Harmon recently who obviously "gets it".  

We have also been active on various comboxes and message boards. A notable one of which is a recent exchange on, reproduced below.   The dialogue started around the article about industrial-rock pioneer Trent Reznor, who has been hired by Apple to do... well, er, something.   

"Ownership is waning. Everybody is comfortable with the cloud -- your documents, who knows where they are? They are there when you need them. That idea that I've got my records on the shelf doesn't feel as important even to me as it used to. I just think we haven't quite hit the right formula yet."

  • Trent is confusing ownership with location. I own my stuff in the cloud, too. I better, anyway, or we have a problem... No, I dont care "where it is", but I do own it.

    2) Laz Laz  2 days ago
    This is one of the best interviews I've read, props to the interviewer. Some really excellent questions, and TR really comes across as a smart guy. He's an artist who's been on the cutting edge of the writing/ packaging/releasing music for decades, it's interesting to see what happens next - combining the weight of Apple and the expertise of Reznor...

    Have to disagree. Being on the cutting edge of writing/ packaging/releasing music has nothing to do with coming up with something unique to solve the technical/design/business problem

    I don't get that. I didn't say TR would be the guy to 'run' the business. But there's very few people with MORE knowledge about what works and doesn't work in the music industry. If anyone can come up with how to transform the music industry, TR is a good bet.

    I get that. Maybe we disagree about what the problem is, then. It is not a problem of what "works or does not work in the music industry", like a problem of which genre, which sound, which album cover, which marketing campaign.
    What we have is a technical problem. It is a problem that was unleashed in the 1980s when the record industry rushed headlong into selling a new product (CDs) in the same old way that they had sold the old product (vinyl and cassettes). That problem has never been addressed. Instead, the problem has been ignored, with everyone just hoping, with blind fideism, that some new revenue stream will make everybody forget that there is a problem and just be happy with the money they are making. Hence, the freefall that the music industry has been in ever since then. (Incidentally, it has never been solved for videos, books, and games either).
    If you keep turning to "music guys" (e.g., Jimmy Iovine, Dr. Dre, Trent Reznor), the problem is never going to get fixed. Like any other problem that you want fixed, you have to turn to innovators, i.e inventors. We are actually a very innovative country (the USA). There has hardly been a problem we have not been able to solve. But you have to actually turn to the people to fix it, or it is not going to get done. The music industry has never had to do that in its entire history. (Sure, scientists have brought them new technologies, and they have employed them. But they have never had a technical problem before that has cratered the industry like this one).
    What about Google, Apple and Amazon, you say? Aren't they innovators?? Yeah, sure. And they could fix it if they wanted to. But it is not their problem, it is the content industries' problem. Why should they fix the content industries' problem? The chances of it conflicting with one of their business models are too high (e.g. the venerable "Opt-out" rather than "opt-in" at Google.)

    Monday, June 25, 2012

    Precursor to Freemium?

    On June 28, 1915, the Brooklyn Tip-Tops of the Federal (baseball) League hosted the Chicago Whales in a contest at which all would be admitted for free.  Brooklyn owner Robert B Ward had a substantial bakery in New York.  Perhaps he figured that more fans would see his outfield ads for bread and so forth.  Of course we know what happened to the Brooklyn Tip Tops and the whole Federal League.

    Friday, October 21, 2011

    Wagons Circling: APM Marketplace Tech Report Rings Our Bell Twice This Week

    In the past week, Marketplace Tech Report from American Public Media has been picking up on some themes that have been voiced on Chronicle of a Solution, and nowhere else.  First, on October 13, 2011,   Max Dawson, professor of radio, TV and film at Northwestern University, in critiquing Ultraviolet (the new digital rights authentication and cloud-based licensing system introduced by some major motion picture studios), said:
    "Its success will largely depend on two factors. If this requires you to ditch your entire media collection you got through iTunes, the consumer will reject it. The other thing is compelling content; neither "Green Lantern" or "Horrible Bosses" falls into that category. As much as I'd like to see studios be able to achieve success, I'm not too sure this is the right solution."
    These problems cited by Professor Dawson are problems we've highlighted here.  And of course are problems that only the DCE can fix.    

    Firstyou do not have "to  ditch your entire media collection" with the DCE's patent-pending backward-compatibility method.   In fact, the DCE is somewhat counting on your not ditching your old media collection.  We want the vinyl records, VHS tapes, everything that was legally issued.  All of those past issues have some value.  We would not want those legacy media items to be off-exchange any more so than a stockbroker would want your grandmother to keep her old shares of IBM in a coffee can under the sink. *

    Second, we have long said, going back to our US patent application, our original white paper and our Google book case Amicus brief,  that we are the only answer to the problem of selection.  We even solve the ultimate problem of lack of selection, the orphan works problem.  Videos which are registered at the request of the buyer and then immobilized in the cloud, become a modern  Alexandrine Library (with music and books included of course).  Next, our method of verification enables this library to be loaned digitally.  Finally, in contrast to the limited offerings for sale at Ultraviolet, the DCE creates a market of upwards of every movie ever commercially released, to the extent that there is at least one DCE user who is willing to part with a movie they own for the right price, (in the securities industry, this is called an offer).     

    And then today, again on the radio, discussing "the Cloud":

    Of course, "cloud" is a woefully inaccurate name for what's going on here. It's not up in the sky, floating, ethereal. We're talking about real computers owned by someone else, stored somewhere else ....  [Security expert Cristofer] Hoff says don't think of it like meteorology, "It's kind of like a bank. You give them stuff that matters to you, you expect that they'll take good care of it."
    ~Marketplace Tech Report from American Public Media, October 21, 2011
    We at the Digital Content Exchange have been making this comparison for a long time.  The comparison is contained in the very header of this blog.  Our white papers and slide decks always make reference to banking or securities. And we have been a virtual Paul Revere on counterfeit media.     

    The question for you if you are in the media or tech industry becomes this: "Now that you recognize that there is a banking-like quality to a cloud, are you so sure that your media executives/developers know everything there is to know about handling fungible bank-like commodities that have value?  Or do you want to bring in someone who has worked with these types of digital assets all his life?  Is there nothing you can learn from the securities industry, which is well-recognized as having learned how to handle and move fungible commodities and prevent forgeries?".  

    *The backward compatibility feature of the DCE solves "the legacy problem".  Note that the legacy problem has been successfully overcome by the securities industry. Shares of stock were voluntarily turned in for registration and immobilized so that the shareholder could do more with them, more efficiently. Registration was preferred by users because the advantages of the new technology outweighed the old user preferences (including the illicit user preference of being able to use forgeries in place of authentic).  The addition of physical items to a board of exchange is no big deal . It has been done with physical shares of stock and is done at the bank every day when you turn in cash. The DCE grants access to people's music through cloud storage. Just like a bank or a stock brokerage gives its customers access to their accounts on the internet.

    Wednesday, October 12, 2011

    Worldwide multi-million dollar fencing operation for illegal music sets up shop today

    iCloud launches today. The iCloud is an example of content owners (the big 4 music labels) encouraging people to illegally download material. (Yes, you read that sentence right).  This is because there is no verification of legal ownership in the iCloud.

    As of today, we become the sole voice on the Internet for the proposition that the cloud should not be a massive fencing operation for illegally obtained stuff.

    Why media streaming apps need to be licensing-free to survive

    Recent analysis has it that Spotify is incurring "gargantuan" losses, $68 million in four years.  And this is even with paying artists bupkus.  And it is all being blamed on licenses with content providers which are crippling Spotify and, according to some prognosticators, bent on killing it.

    This highlights another superiority of the digital content exchange. We don't need no stinking licenses! If you understand the Amazon cloud player, if you understand Google music beta, you understand the DCE. We put stuff that you own in the cloud and serve it back to you. (And let you sell it to other users and let you lend it to friends or strangers just like a library would do, i.e., on a one for one basis ... no copies!). 

    But unlike Amazon and Google we make sure you really own it. So, whether it is a video, a book, or a piece of music, we are providing a basic service to a user, are doing it on an ethical basis, and doing it better than anyone else because we are the only ones that have the securities industry background (where they really know how to handle and move fungible commodities and prevent forgeries).

    That being said ("we don't need your license"), we invite content owners to participate. It is very easy in this system to pay royalties to people that want to cooperate in helping us scale up and keep to scale long-term. Nonetheless, just like IBM cannot prevent IBM stockholders from trading their shares of IBM, no one can stop a user from doing what he or she paid for when he became an owner of a media item.

    Once everything that you've ever bought in books music and video is placed on the exchange, immobilized in the cloud, it becomes the lingua franca of your media collection. Content owners can then come in and authorize as many units of new material as they want, and charge what they want and get nearly 100% of what you, the buyer, pay them.

    Moral of the story: Spotify and its ilk have overpaid for licenses in an attempt to get to scale.  In helping Apple get to scale, the Big 4 have given a license which rewards anybody who grabs free music by "matching" the counterfeit in the cloud.  You, the user, will bring the DCE to scale, piece by piece by joining the DCE. The more the DCE acquires scale, the more it will thwart the usability of counterfeits and the more it will provide buyers who will, in turn, provide  struggling artists, authors and filmmakers (who get to keep nearly 100% of all buying and borrowing fees) with a steady income.