Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Thursday, August 12, 2004

The EFF's recommended economics of file-sharing - a Pigouvian tax; or, as they call it 'Voluntary Collective Licensing of Music File Sharing'.

Great for consumers, terrible for publishers(record labels), and - crucially - artists. I wrote a paper about this in b-school; it was actually my first thought when the replication wars broke out - 'why not create an ASCAP/BMI for file-sharing?'

The problem is that, from an incumbent's pov, the economics are less attractive than that of any other solution - even the current one. Think about how ASCAP and BMI haven't exactly encouraged a flourishing songwriting industry - the gains to licensing are simply too small, even if they're redistributed efficiently. As a consequence, we don't see massive entry into the songwriting business. I think the EFF is incredibly cool, but from a strategic pov, I'd be surprised if this is the industry economics that emerges.

-- umair // 7:58 PM // 0 comments


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