Alternative Business Models

As a result to the new debate about copyright, new ways of approaching the problem about how to properly protect copyright, please consumers, and make money when creating websites that are in the business of distributing MP3 files. Such prescriptive models have implications for all other digital information as well. These models focus on consumer choice and control of materials.

Trusted Systems

In his article "Trusted Systems," Mark Stefik defines a trusted system as "hardware and software that can be relied upon to follow certain rules. Those rules, called usage rights, specify the cost and a series of terms and conditions under which a digital work can be used" (Stefik 2). He adds that "what trusted systems prevent . . . is the wholesale copying and distribution of perfect digital originals" (Stefik 3). Such systems protect copyright holders from piracy. Many argue that these security devices will also benefit consumers (Stefik 1) (Bello, ePoll, 3), (RIAA). By providing some protection against piracy, a trusted system sets copyright holders at ease. They feel they can put more, or their best products on the Internet for consumers to buy, download and enjoy. As a result consumers will have a greater variety of options to choose from and are more likely to find what they like.

The Secure Digital Music Initiative (SDMI) has developed the trusted system favored by the music industry. The iniative involves recording companies and members of the music industry from around the world who seek a technological solution to the problem of protecting copyright on the Internet. Together they are working to develop a specification so that they may distribute music securely online. It seems that security features will become ubiquitous. The RIAA website does not specify what these specifications are, but according to Sarah Robinson SDMI involves watermarks and can play only on players that meet their standards. Moreover, consumers will not be able to compress music to make audio files on their computers if they do not use the software that inserts these watermarks.

The Choice Argument:

Arguments in favor of SDMI point out that this method may yield higher quality sound than MP3 and, therefore, consumers will prefer SDMI to MP3 as long as the download time and price remain as low as those of MP3. Yet, one advocat adds, this difference may be too small for consumers to notice. Nevertheless, he claims that to win consumers over one needs to offer high quality and a broad selection (Bello, ePoll 2). With SDMI, proponents argue, record labels will be more willing to provide copyrighted materials on the web because they will be protected from piracy. As a result, a wider variety of music will be available and consumers will be sure to find something they like (Bello, ePoll 2) (Goodman 39). Yet the security that SDMI provides is not flawless. There is already software available on the web that can be used to sidestep these protections (Robinson) (Bello, ePoll 3).

The Control Argument:

Opponents of SDMI argue that this technology limits consumer freedom. Consumers will not embrace SDMI, they assert, because it limits what they can do with the music once they have it paid for and downloaded (Bello, ePoll 3). Also, some fear that SDMI's features, if they become too established, will be carried over to the physical medium of CDs thus further restricting consumers (Bello, ePoll 2). By adding these restrictions the music business not only makes the medium inconvenient but also sends the message to consumers that they are not trusted. (Bello, Int 3). Consequently consumers will grow resentful of the RIAA and loose any respect for copyright that they may have had before (Parker) (Robinson). As Bello points out, SDMI may be "irrelevant" anyway because devices equipped with SDMI allow listeners to playback "unrestricted files like MP3" (Bello, ePoll 3).

Another security measure taken by the music industry is the International Standard Recording Code (ISRC). The ISRC is a "digital license plate for each sound recording remaining identifiable throughout any journey on the information superhighway" (RIAA). Used to track and prosecute pirates, ISRC inserts 12 character codes in tracks on sound and music-video recordings. Such codes are already being put on CDs burned in Philips CD Recorders (Robinson).


One of the primary uses of MP3 files is for promotional reasons. Instead of investing in demo tapes, musicians now have a very inexpensive alternative--that is after the initial hardware and software costs. Also, for established groups, MP3 files can be used to release extra tracks or previews of upcoming albums (Goodman 25). Fans will appreciate having new or different versions of songs to listen to and collect.

Similarly, the Greatful Dead allowed fans to tape concerts and give the tapes away thus creating networks between fans and increasing the cult-like popularity of the band. The band would stop those who attempted to sell the tapes, however. Now, bootlegging is seen a major contributor to the Dead's massive success (Bettig 236) (Besser, lecture, Fall 1999) (Mann part 2, 6). Doing something similar over the Internet, with fans trading MP3 files, could raise sales and audience sizes of other bands as well (Goodman 25). This sort of model however, would not be possible if the RIAA saturated the market with security devices which would erase files and only allow a certain number of copies to be made.


Similar to the sponsorship of artists by the rich during the Renaissance, John Perry Barlow suggests that corporate sponsorship might be an option for art/music on the Internet (Mann part 2, 7). But if "corporations . . . package art with advertisements" (Mann part 2, 7) it seems they would have too much influence over the work. Also, many artists, I suspect, would object to this sheerly on principal.


Kristen Hersh from the band Throwing Muses has a website called through which she makes new songs available to subscribing fans. Subscriptions are $14.95 a year and the subscriber receives one song each month (Goodman 39).

Adult Entertainment

In his article "Analysis: Adult Content as a Model," Siddiq Bello notes the parallels between the online adult entertainment industry and the online music industry. In each products are collected and used multiple times. Each have fans of particular genres, artists, and styles which can vary widely. Also, they share a concern about piracy, yet the piracy of pornographic materials is much more prevalent and effective than the piracy of music. Nevertheless, online adult entertainment is "at minimum a billion-dollar industry" (Bello, Analysis 2). Bello suggests that the music industry may have something to learn from the adult entertainment industry about dealing with piracy. Talking with successful figures in online adult entertainment Bello learns that they accept that they have no control over the material once it has been downloaded, and they do not spend time or money trying to prevent piracy. Instead they make a high volume of material available and have a high turnover of this material. This way consumers can find what they want in the legal website more easily than they can with pirated materials. Also, they give away a great deal of material. They find that this gives the visitor the incentive to buy. Moreover, they know that if someone buys something once, they will probably do it again. Bello concludes claiming that if the online music industry acted similarly, it could be very profitable.

The adult content model makes use of at least three of the models discussed above. First of all, it uses the promotional model when material is given away to lure in the consumer. Secondly, it makes use of the control model in which the consumer can use the material as he/she pleases. Thirdly, the consumer's need for choice is also catered to. This model emphasizes giving the consumer as wide a variety of content as possible so that he/she will be sure to find something he/she likes. Before the control and choice models were presented as oppositions to one another. Yet the adult content model simultaneously gives the consumer the maximum amount of control and the maximum amount of choice. They consumer is kept happy and continues to spend money.

Interestingly, Chuck D seems to have an attitude similar to that of those in the online adult entertainment industry. He says, let the pirates pirate, they will only help him be more of a success because "if someone is going to pirate something of [his], [he will] just have to make sure to do nine or ten new things" (Freund).