I‘ve done quite a bit of thinking about how the social web will make the world a better place. I’ve written about it, and also lectured about the social web, good, and evil.

So when a talk by Evgeny Morozov popped on TED on the topic of how the net aids dictatorships, I was naturally interested. Was somebody going to put up a good argument against my theories?

The answer is yes. And no. Evgeny argues beautifully for the ideas, but simultaneously shows how the dictatorships actually start using the web to reach out and communicate, much like I think companies should. They are proactive, the contribute, they engage, and they are present. They DON’T try to cencor stuff, because they have realized that participation is more effective. And I tell you – if dictatorships do this successfully, companies should too!

Then, of course, these dictatorships abuse their power to flood the system with government biased comments and spam, and commit evil acts, but I’m not as sure as Evgeny is about how effective this is. Compare it for example to this example from the very well designed guidelines at Intel for how to effectively use the social web:

Be transparent. Your honesty—or dishonesty—will be quickly noticed in the social media environment. If you are blogging about your work at Intel, use your real name, identify that you work for Intel, and be clear about your role. If you have a vested interest in something you are discussing, be the first to point it out.

This is not a guideline that the dictatorships exactly follow. On the other hand, perhaps other commenters don’t dare use their real name either for fear of physical abuse, so this way It may actually work for government agents to blend into the anonymous crowd. Again – we see an example of how anonymity leads to evil and abuse.

Incidently, the campaign led by The Cartel to hunt down file sharers also leads to anonymization of the web, making laws like HADOPI and IPRED all the more troublesome – and also promoters of more serious evil.

As Spotify launched their iPhone app, the crowd cheered. The talented SEO-expert (and comedian) Simon Sundén publishes the follwing graph of Spotify Premium sales that went viral amongst us nerds. Half us us thought is was true, and who knows, it may be.

But even if this graphic joke isn’t true, it illustrates something quiet scary. Something scary that starts with an “M”.

Let me tell you a story to explain:

Chapter 1 – The Music Industry

Think for a minute about how the music industry works. This is an industry that has built it’s entire business model around their monopoly on information distribution. Largely, the monopoly has been built on the control over distribution of plastic circles. In recent years, as silver became the new black in the plastic circles industry, the information started to find other ways of distributing itself over the internet, and the monopoly of distribution started to break down.

Desperately, the record industry tried everything to stop these new an superior modes of information distribution by trying to sabotage them with destructive and inefficient “inventions” like DRM. When that didn’t work (because Darwinistic innovation always gravitates towards the efficient), they cried foul, and tried to persuade their friends “in Washington” to legislate and punish anyone who had the audacity to use these new and efficient modes of distribution instead of using theirs.

Why so desperate, you may ask? Well – this was all they knew. It was not them, but the musicians who created the music. What they, the record industry, had to offer was marketing and distribution. And when their monopolized mode of distribution was suddenly outdated, and marketing was suddenly taken over by the music itself, it’s own viral distribution, communities like MySpace, and crowdsourced services like LastFM, the music industry was suddenly cut out of the loop, unable to provide value. And like the dinosaurs before them, their fate looked sealed.

Chapter 2 – The Innovators

But the file sharing systems, though hugely more efficient than the plastic circles, was not perfect. Billions of redundant copies of the information had to be kept on harddrives where you wanted to access the music, sharing the music meant sending over entire files, and meta-information was incongruent. Instead, thought a group of innovative individuals, one would like to take the route of the semantic web and have ONLY ONE instance of every file, with congruent meta data, stored in ONE place so that we could share it by only sending links pointing to the specific files. Then each of us could have access to all information and create a hugely efficient market for sifting out the very best. A more efficient model to be sure, and as we know, Darwinistic innovation always gravitates towards the efficient. The group of geniuses created and productified this new and superior mode of distribution. And they named it – Spotify.

Chapter 3 – The Cartel

And here, the music industry saw it’s chance. In one of the weekly meetings of The Cartel, the organisation they had set up together “to act for the common welfare of artists everywhere”, one executive stood up and said – “we can’t stop every single individual on the internet, but we can stop one company! We can threaten to destroy their new value, and claim part of it as ransom! We can regain our distribution monopoly by using their own value against them! But we have to act quickly! If more inventive companies emerge and compete, like Chilirec for instance, we will loose this last chance for survival of our kind. Sure, Chilirec will try to sue us, in fact, they already did, but that’s no match for our lawyers. We have our own people in the courts”.

One young assistant’s assistant, who had observed them in silence from the end of the table, mumbled quietly “but what value will we contribute? How will we make things more efficient? Will this not stifle competition and put an end to innovation?”? BE QUIET! Roared an executive at the end of the table. THEY NEED US! THEY WILL SUBMIT OR BE DESTROYED!

Said and done. The Cartel cheered and applauded. “If we all agree to let Spotify use our music, and let Chilirec use none, we can cut any deal we want. They have no chance to do this without us. We can use their new invention to return to the times of the distribution monopoly! We can be rich! Maybe we can even keep all new releases within Spotify and NEVER NEVER NEVER release the files to anyone else! Trying to hack Spotify and batch down these files will be easy enough to stop! We couldn’t control the data on the plastic circles, but we CAN control the data on the Spotify servers! We can even demand to own part of Spotify“! The room went silent as his words resonated through the spines of The Cartel directors like a chilling wind. Own the only source of music… on the planet.

Epilogue

When Apple realized what hit them it was too late. A year earlier, soon after The Cartel’s spirited meeting, Apple had given away their last line of defense and allowed the Spotify client on their iPhone. As the power of the iTunes store faded away, Apple tried in a last attempt to launch their version of Spotify, called iTunes Unlimited. The service was impeccably polished, integrated into their brand new Wild Cat operating system, and could play songs while texting on the iPhone, something that the Spotify client couldn’t. But what was the use of all this if they had no music. Or at least, just enough music not to be able to compete with Spotify. The number of Spotify exclusive songs and artists soared and left the rest of the industry in rubble. A lot of people said that “we should have seen this coming when Spotify restricted the iPhone app to paying premium users”. But now it was to late. The war was over. They won.

At least until the rebels on the far moon of MySpace started their indie music rebellion. But that is a whole other story.

When I lectured at Stockholm School of Economics about the future of music and video I remember receiving a few critical questions about mobility: “What about when you’re mobile?”, “What about when you’re on a plane?”, “What about when you don’t have an internet connection?”. Ladies and gentlemen, here is your answer:

And by the way, here’s a little hint to Antipiratbyrån, Ifpi, Sami – Svenska Artisters och Musikers intresseorganisation,SOM (Svenska Oberoende Musikproducenter), Stim, Sveriges Författarförbund, Svenska Förläggareföreningens, Sveriges Filmproducenter och Film i Väst, Svenska Filminstitutet, Dotshop.se, and all you others who think that IPRED is a good idea: INNOVATE don’t LEGISLATE! Without filesharing there would be no such thing as Spotify. Trust me.

In about an hour we will know the verdict in the Pirate Bay-trials. Let’s hope that people are being smart about this. Because a guilty verdict would not be good for anyone. Especially not for art and artists.

A guilty verdict would do little to boost sales. I believe we’ll see the opposite result. Darknets and stealth services (like Pirate Bay’s own would evolve quickly. Innovation incentives in the legal realm would be smaller. We would do little but slowing down inevitable change. From a wider perspective, it is just not intelligent.

If they are found not guilty however, it will be considered a future oriented statement. One that would benefit artists, culture, our country, and eventually the world. The music industry will have to come up with something better and more useful than Pirate Bay, and to be honest, they already have. Though Spotify would perhaps need some healthy competition. Spotify is just one small step, but it is a step in the right direction. This type of evolution is where we are going. A guilty verdict would just make us look dumb. Especially in the history books.

From the angle of the artist, nobody has put it better than Paulo Coelho:
“I didn’t start writing to get rich, I started writing to get read”.

Finally it happened. Spotify released libspotify, thereby making it possible to develop third party applications to interact with the Spotify platform. I know we’ve all been talking about it since the start, and that it has been a long time ambition, but we were never quite sure if they would make the move or when. And now it’s here. It’s a big day.

Besides being a very cool display of culture to us nerds, it is also sound for other reasons. If we look at the Twitter case for example, the avalanche of third party software developed for Twitter is a big reason for Twitter’s success. Also, Spotify has clearly stated that they want to be a music platform – not a community, or a music recommendation service. And now, they don’t have to. While there have been different tweeks before, like Scrobblify, we will now see magic happening with Last FM, Facebook, Twitter, and probably a gazillion other services that I can’t even begin to imagine right now.

This is the future of music. We will laugh at The Pirate Bay trials and IPRED before long. Mark my words.

(Read more here).

We are now starting to see the effects of the Swedish IPRED-law, which states that copyright holders can go after individuals downloading protected content. Apparently, Swedish internet traffic has now dropped by nearly half. And since when is that a good thing? I thought traffic was valuable?

I believe that you can never be quite certain when you make predictions about the future, but in this case I think that the case is quite clear, and that we can now see the evidence emerging.

But first off, I want to be very clear that I am on the side of artists and other creators of value. I have strong opinions about this subject, but they are all about realism. Not about anarchism.

What the IPRED-law is doing is to protect an outdated business model for music, motion pictures, and other content. It’s implementation will remove incentives for product- and business model development like for example Spotify.

What’s worse, however, is that it directs valuable resources to evil forces, such as terrorists and criminals. Why? Well, a lot of people care about music and film. Much more people, in fact, than are criminals and terrorists. And thus there is a broad base for recruiting creatives to help keep music, film and other content free. If we go after file sharing individuals using the IPRED-law, there will be strong incentives to develop stealth file sharing software, and a large and powerful community engaging in it. We will quickly see increasingly sofisticated software of this type appearing and being deployed. With file sharing, we’ll be back to where we started, but criminals and terrorists will have brand new fast stealth tools which they would never have had the resources to develop themselves. And even if this if perhaps an exagerrated fear (there is after all already great stealth services out there, as well as bad guys using them), it clearly shows that this law will be completely useless very soon because of people learning to use these stealth services.

And what about open wireless networks? Will they all disappear now? That will not make brands trying to utilize IPRED very popular, and will actually damage the country’s progress towards connectedness. Read on.

Because another angle is the branding angle. And here it becomes very interesting when opening todays newspaper DN (unfortunately not linkable yet). In one article you can read about how people are boycotting the film- and music industries. Here are some examples of quotes from the public cited in the article:

“I’m completely going to boycott the music- and film industry now. Earlier, I’ve spent an average of 1000kr (ca $100) per month on cinema, DVDs, concerts and CDs. That will now end. All this will be cancelled”.

Or this one from a middle age person:

“I’ve never file shared in my life, but now I have to if only to show them that they can’t scare us. Let’s fight to protect our last rights. I have just downloaded file sharing software and figured out how it works. This will be fun”.

Or this interesting one:

“Let’s demand a seal for artists entirely without association with the major labels”. Now wouldn’t that be interesting.

Like I wrote the other day, we can already see smart companies, like Viasat for example, taking advantage of this, publicly promising NEVER to have anything to do with the IPRED-law, and thereby end up in the same future oriented category as for example Spotify.

If I were a copyright holder today I would think once, twice, and three times before even thinking about using this law. It may very well cost you your brand.

The discussion about Spotsave, an unauthorized program which lets you save Spotify songs to your harddrive, is pretty intense on the net right now. I think it highlights something very important – that Spotify is fairly immune to this type of thing. Here is why:

Since Spotify, unlike iTunes Store for instance, contributes REAL VALUE to the consumer in the form of hosting, searchability and shareability, there is really not much point in downloading from Spotify. The added of value of Spotify dissapears if you do that. Then you have a self hosted MP3 (or OGG) again that is clunky to share and sync and that takes up space on your harddrive. This is why the Spotify model, or any other model that contributes REAL VALUE is impervious to pirates. Or rather, it makes the term “pirate” irrelevant.

And by the way, if you haven’t understood this yet, I’m very much on the side of the artist in these matters, but is realistic about the fact that the artist–”end user” value relationship has to be win-win. This goes for software, films, or any other digitally mass-restristibutionable product.

A few days after the fact I read this article on Realtid.se. The contents of the article are nothing jaw dropping. The comments on the article however, reflect the fact that so much of this discussion is taking place well outside the realm of relevance. People are talking about whether or not artists should be able to be artists, something that would require them to get paid for their work. Fair enough. But it is utterly irrelevant. Art will not dissappear. Neither will the internet. I will not waste energy on this discussion. Like most things, it will evolve Darwinistically.

To be productive we have to discuss value. The business model of charging for copies is obsolete. Some copies, such as physical books, have a certain value and will prevail. CDs are just a hassle. So are digital self hosted files really. So where can we add value? Here are some examples:

1. Hosting. Hosting music and syncing it between players is a hassle for the consumer. Especially if you have to authorize the player (In which case the stolen product is actually superior to the purchased one. Go figure).

2. Shareability. An effect of sharing a central database of music is that sharing music only requires sharing a tiny link. The evolution of sharing services is still somewhere around the stone age.

3. Upping the S/N-Ratio. There is just so much music! Finding the stuff you love could easily be a full time job. In my engineering days we talked about upping the signal to noice ratio. Last FM and Genious has scraped the surface of this field, but here you can create real value. And again, a centralized music database makes this much more effective.

4. Augmented Intelligence. Yes, Jan Guillou, I know you’re upset about your audiobooks and that I’ve been focusing on music. But here is an idea for audiobooks as well: If a centralized service keeps track of what I’ve “read” of what audiobook it can help me mine this data (since audiobooks are also available in text form) and help me draw conclusions that I would perhaps not otherwise have seen. I’ve personally co-developed a service doing knowledge clustering for the television industry. We could just as well do it with this data. Suddenly the person using this service is smarter than the person downloading on Pirate Bay. Again – this is real value. If anyone out there would like to develop this service, give me a call. I’ve made quite a bit of progress here already.

The current discussion about Pirate Bay is a joke. We will laugh at it ten years from now. If that.

I really think that the Pirate Bay trials are a big waste of money. Possibly worse. What is the music industry hoping to achieve? Will people start buying records again? Buying DRM-sabotaged (yes, that is what DRM is) digital files? Hosting them on their own hard drives? It’s the worst of two worlds.

In the unlikely event of a Pirate Bay defeat, things will just move underground. Technically, this is just a matter of time (not so much time). All of a sudden we’ll have a whole movement (huge because everybody loves music) creating great technology for anyone wanting to avoid detection, including terrorists and criminals. Stealth file sharing technology development will explode. In the long term not a smart move for our democratic world.

Instead there should be focus on development of the music industry. If the commercial product is better than the stolen one there is a real value that people will be willing to pay for. I think this is the case with Spotify for example. With Spotify I don’t have to host and structure a huge music library and sharing music is suddenly a breeze. That is real value.

Read more about the trials (in Swedish) here, here, here, and here.

Yesterday Spotify announced that they are removing songs from their database, and imposing country restrictions on others. Again, we see the record labels showing off their power. But it’s really a dangerous game to play.

As I’ve said before, both in lectures and on this blog, the only way to properly fight piracy is to provide a BETTER service than the illegal one. And this is exactly what Spotify has been so successful in achieving. With Spotify you don’t have to host huge amounts of data yourself, and you have a shared library with your friends so that you only have to share links.

But there are potential weaknesses in Spotify. One important weakness is if the database of music is too limited compared to pirated alternatives. Then piracy will start gaining momentum again.

Thus, seeing the labels forcing Spotify into actions like the ones of yesterday is alarming. Are they aware of the long term risks of taking action in this direction, or are they blinded by short term greed?