Tag Archives: Wired

The day the (free) music (almost) died

According to Wired, today marks the 10th anniversary of the music industry’s lawsuit against file-sharing site Napster.

You may remember that Napster’s defense in the suit, before laying down and playing dead, was that it did not give away copyrighted music — rather it provided a platform for users to share their own files with each other. The RIAA’s argument was that Napster was a bunch of fire demons with cloven feet who were sure to turn the nation’s children into gay communist ax murderers.

After suing Napster for everything it had, the RIAA turned its fire on Bertelsmann, the German media conglomerate that had loaned Napster money:

The lawsuits accused Bertelsmann of copyright infringement for propping up Napster financially with loans totaling $85 million. The lawsuits claimed the firm wanted “to preserve Napster’s user base for Bertelsmann’s own commercial advantage.”

At the time of the loans, Bertelsmann’s chairman, Thomas Middelhoff, explained that “Napster has pointed the way for a new direction for music distribution, and we believe it will form the basis of important and exciting new business models for the future of the music industry.”

Bertelsmann paid millions of dollars to settle the claims. The media concern agreed in 2006 to pay the world’s largest label, Universal Music Group, $60 million to settle the allegations. EMI got an undisclosed amount in 2007, and Warner Music Group settled that same year for $110 million.

The music industry has come a long way since the original Napster lawsuit. Not only has it recognized the promotional value of easily-copied digital music files, but it has engineered a successful shift in its core business model to compensate for the corresponding decline in CD sales.

Hahahaha, just kidding — they’ve been suing the shit out of college students and stay-at-home moms.

Oh, and stiffing the talent.

Witness the saga of Tim Quirk, bassist for Too Much Joy. Recently Warner Music sent Quirk a royalty statement that allegedly accounted for digital sales of the band’s music. The statement showed that Quirk’s band had earned a grand total of $62.47 over the prior five years (which was simply subtracted from the band’s “unrecouped” advances*). This is where Quirk’s day job helped him get to work:

Here’s the thing: I work at Rhapsody. I know what we pay Warner Bros. for every stream and download, and I can look up exactly how many plays and downloads we’ve paid them for each TMJ tune that Warner controls. Moreover, Warner Bros. knows this, as my gig at Rhapsody is the only reason I was able to get them to add my digital royalties to my statement in the first place. For years I’d been pestering the label, but I hadn’t gotten anywhere till I was on a panel with a reasonably big wig in Warner Music Group’s business affairs team about a year ago.

I knew that each online service was reporting every download, and every play, for every track, to thousands of labels (more labels, I’m guessing, than Warner has artists to report to). And I also knew that IODA was able to tell me exactly how much money my band earned the previous month from Amazon ($11.05), Verizon (74 cents), Nokia (11 cents), MySpace (4 sad cents) and many more. I didn’t understand why Warner wasn’t reporting similar information back to my band – and if they weren’t doing it for Too Much Joy, I assumed they weren’t doing it for other artists.

So a major player in the industry that spent years and millions attacking its own best customers has yet to build a reliable system for reporting to the artists how much they’re selling or not selling. Then when someone pesters them for real numbers, they sit on the request for a year and send him a half-assed statement that is clearly, indisputably wrong. And they know he’s a music industry insider, so they can’t possibly think they’ll get away with it.

In conclusion, the music industry is so hopelessly stupid it makes the newspaper industry look like Google. Oops. Bad choice of words?

Dec. 7, 1999: RIAA Sues Napster [Wired]

* Here is Quirk’s explanation of how advances and the concept of recouping works:

A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $395,214.71 after that $62.47 digital windfall), this doesn’t mean Warner “lost” nearly $400,000 on the band. That’s how much they spent on us, and we don’t see any royalty checks until it’s paid back, but it doesn’t get paid back out of the full price of every album sold. It gets paid back out of the band’s share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let’s say Warner Bros. spent something like $450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $10 each, they would have earned back the $450,000. But if those records were retailing for $15, TMJ would have only paid back $67,500, and our statement would show an unrecouped balance of $382,500.

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What the F is Rolling Stone doing?

Pax Arcana

Mike Masnick of Techdirt points our attention to a week-old story in the New York Times that says some magazines are considering raising their prices.

This makes sense to me. I just paid $10 for a year’s worth of my second-favorite print publication on the planet (Wired). You can get a full year (47 issues) of the greatest print publication on Earth — the New Yorker — for under $1 per issue. Seems like a price increase in these situations wouldn’t make anyone freak, recession be damned.

This idea also made me wonder just what in the sam hell Rolling Stone magazine is doing. About eight months ago I started receiving the magazine at my house despite never having subscribed. Don’t get me wrong, I don’t dislike Rolling Stone. It just seemed curious that they would comp me a mystery subscription for no reason whatsoever.

Then last week I pull open the lid on my gold-plated mailbox to find not one but TWO copies of Rolling Stone magazine. One was addressed to me — the other was addressed to the discerning and epic Mrs. Pax Arcana.

Allow me to illustrate my point. I subscribed to this:

zero

And received this:

rsrs1

I don’t pretend to be an economist, but this seems like a curious approach. Perhaps they’re artificially inflating circulation to drive up advertising rates.  I don’t know. It’s confusing. And when I get confused, I get hungry. And when I get hungry, I ask questions. And when I ask questions, I forget to eat. I think you can see what kind of deadly spiral I am in right now.

In Switch, Magazines Think About Raising Prices [NYT]
Magazines Looking To Raise Prices? [Techdirt]

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Teller will blind you with science

Pax Arcana

True story: Teller of Penn & Teller fame was once a teacher at my high school — The Central New Jersey Academy of IROC  and Invective.

Also true — he will literally blind you with science.

teller2This month’s Wired features a cool interview with the silent, diminutive half of the avant garde magic duo. In the interview we learn that Teller is a student of cognitive psychology — exploiting the brain’s hard-wiring to play a trick on you that seems obvious after the fact.

Consider “the Cowboy Trick,” in which an audience volunteer is asked to videotape Penn, who is holding a plastic cow in his hand  and promising to make it disappear. While the volunteer stares through the viewfinder of the camera, Teller silently rearranges the entire stage around him. The trick is that the volunteer is so focused on one object and waiting for it to change, he doesn’t notice that every single OTHER thing around him has changed while he waits:

“The idea for this trick came straight from science,” Teller says. “We thought it would be fun to show people how bad they are at noticing stuff.” Called change blindness, the phenomenon is illustrated in a video (on YouTube) that inspired the duo. Shot in 2007 by British psychologist Richard Wiseman, it ostensibly documents a simple card trick—the backs of the cards in a deck are magically transformed from blue to red. But during the course of the video, Wiseman’s shirt, his assistant’s shirt, the tablecloth, and the backdrop all change color, too. Most viewers watch the card trick unspool and miss the other alterations. Attention, it turns out, is like a spotlight. When it’s focused on something, we become oblivious to even obvious changes outside its narrow beam. What magicians do, essentially, is misdirect—pivot that spotlight toward the wrong place at the right time.

At the risk of giving away too much, I confess that I have borrowed from Penn & Teller’s technique. While you were reading this post, I placed a single downy goose feather on top of your head.

Also, I fucked your mom.

GOTCHA! THERE’S NO FEATHER!

Magic and the Brain: Teller Reveals the Neuroscience of Illusion [Wired]

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He shall be buried in a six-sided casket

Pax Arcana

ddSad news from the realm of adult virgins and LARPers today, as we mourn the death of Dave Arneson, co-creator of the popular Dungeons & Dragons game.

According to Wired, Arneson and D&D were a key influence on the fantasy world:

It may not directly relate to the world of electronic videogames, but it’s impossible to ignore the influence Arneson’s work has had on the gaming developers we all hold so dear.

Not only did D&D force gamers to think creatively and reason their way to safety, it’s also the single greatest source of high fantasy creatures and ideas since Lord of the Rings author J.R.R. Tolkien. I attempted to come up with any fantasy title that doesn’t somehow lift from D&D, and after 20 minutes of contemplation, I’m still drawing a blank.

When I was a kid, my older brother would sometimes play D&D with his friends. Occasionally I would bust in the room and steal their goofy dice huck them in the backyard or something. He’s now a top executive at the largest software company on earth and I write a blog about popcorn that looks like Yoda. SO I GUESS WE KNOW WHO MOM LOVES MORE, DON’T WE?

Dungeons & Dragons Co-Creator Dead At 61 [Wired]

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Dinochicken is not a good idea

Pax Arcana

When the ashes have returned to ashes and the dust is dust, it will be known that humankind did not succumb to global warming or the aftereffects of nuclear war.

Rather, the people of earth were slowly pecked apart by dinochicken — the brainchild of an early 21st century paleontologist named Jack Horner — and were then pooped out in pellets.

From Wired, who interviewed Horner upon the release of his new book How To Build A Dinosaur: Why I Decided to Fuck All of Humanity in the Ass Extinction Doesn’t Have to Be Forever:

Birds are descendants of dinosaurs. They carry their DNA. So in its early stages, a chicken embryo will develop dinosaur traits like a long tail, teeth, and three-fingered hands. If you can find the genes that cancel the tail and fuse the fingers to build a wing—and turn those genes off—you can grow animals with dinosaur characteristics.

If you tie a rock to your genitals and throw it off a bridge, you’ll look like a Ken doll. Doesn’t make it a good idea, doc.

dinochicken

Dinosaurs are not extinct; they’re still with us in this sense. Birds look different, but it’s all cosmetic. By tweaking some genes, we can bring out the underlying similarities. Yes, it’s a wild plan, but I like to think about things backwards.

I like to think about things backward also. Right now I’m thinking about whether I rented the car I used to blow up your lab or just used my own.

Look, it’s not like dinochicken will overrun the world. If he mates with a chicken, you still get a chicken. Eventually we might make animals that look more like dinosaurs, but we won’t have velociraptors on the loose.

You’re goddamn right we won’t have velociraptors on the loose. BECAUSE THEY’LL ALL BE EATEN BY DINOCHICKEN, YOU DOUCHE!

If you think we’re playing God, maybe. But we’re already modifying plants and mice. I don’t see a lot of people jumping up and down complaining about better tomatoes.

They would if you combined their tomatoes with rampaging dinosaurs. Just a hunch.

Scientists who play by someone else’s rules don’t have much chance of making discoveries.

Scientists who create dinochicken don’t have much chance of getting to the parking lot before their heads are pecked off.

Ultimately, we hope it can lead to a cure for genetic defects. Once we understand just how to control genes, we have the potential for spinal cord regeneration, bone regeneration, and so on. It might also give us plumper chickens.

Plumper chickens with razor-sharp teeth, that is.

The creature would be its own sound bite. It’ll go a long way toward convincing people that we can learn a lot from this sort of experimentation—about biology, development, evolution. Otherwise we’re just a bunch of wild scientists building monsters in our laboratories.

We can also learn a lot about the eating and — God forbid — mating habits of the dinochicken. If we could manipulate dinochicken’s genes to give it the ability to talk, we could even ask it what humans tasted like. Wouldn’t it be funny if it said “Tastes like chicken”??!!!?!! Oh man, we’d laugh and laugh. And then get eaten.

Q and A: Jack Horner Wants to Re-Create T. Rex From Chickens — What Could Possibly Go Wrong? [Wired]

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Hey let’s all blame this guy!!

Pax Arcana

The worst parts of our accelerating economic depression are pretty obvious — joblessness, retirement insecurity, loss of national confidence, eating sawdust pancakes, etc… But there are bright spots, if only you look hard enough. For one thing, it gives us a sterling opportunity to BLAME THE SHIT OUT OF SOMEBODY for our misfortune. Lord knows we love a good scapegoating in these parts.

wallstreetbullNarrowing the list of suspects has proven difficult, however. First there were the predatory lenders, then the idiots who borrowed beyond their means, then the investment banking community that threw caution to the wind and let it ride on risky investments, then the regulators for failing to stop the nonsense before it got this far.

Unfortunately it’s really difficult to scapegoat a diverse and faceless crowd, so we looked for individual people to pin the blame on. Bernie Madoff worked for a while, but too many of the people he ripped off were seen as high rollers in an exclusive club — and let’s face it, they can go fuck themselves. Alan Greenspan was a popular target, too, but then he taught Luke to lift the X-Wing out of the muck in the Dagobah System and we forgave him.

Thankfully, Wired has found us another guy to blame. Now, I don’t want to get too excited here, but this guy might be perfect. For one thing, he’s Chinese, and you know how they are. Also, he’s a mathematician, and like most right-thinking Americans I have long distrusted anyone who tries to rearrange the numbers that God himself has put in order.

Meet David X. Li:

In 2000, while working at JPMorgan Chase, Li published a paper in The Journal of Fixed Income titled “On Default Correlation: A Copula Function Approach.” (In statistics, a copula is used to couple the behavior of two or more variables.) Using some relatively simple math—by Wall Street standards, anyway—Li came up with an ingenious way to model default correlation without even looking at historical default data. Instead, he used market data about the prices of instruments known as credit default swaps.

The breakthrough of Li’s formula is that instead of modeling default correlation based on historical data of defaults (they were too rare to gather much data), he pegged correlation to historical price data. Wired says the flaw in this plan was that it assumed the market could accurately price the risk of default:

The effect on the securitization market was electric. Armed with Li’s formula, Wall Street’s quants saw a new world of possibilities. And the first thing they did was start creating a huge number of brand-new triple-A securities. Using Li’s copula approach meant that ratings agencies like Moody’s—or anybody wanting to model the risk of a tranche—no longer needed to puzzle over the underlying securities. All they needed was that correlation number, and out would come a rating telling them how safe or risky the tranche was.

As a result, just about anything could be bundled and turned into a triple-A bond—corporate bonds, bank loans, mortgage-backed securities, whatever you liked. The consequent pools were often known as collateralized debt obligations, or CDOs. You could tranche that pool and create a triple-A security even if none of the components were themselves triple-A. You could even take lower-rated tranches of other CDOs, put them in a pool, and tranche them—an instrument known as a CDO-squared, which at that point was so far removed from any actual underlying bond or loan or mortgage that no one really had a clue what it included. But it didn’t matter. All you needed was Li’s copula function.

Let’s cut that motherfucker!

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David Li is like Jet Li, only with math. Pictured above, Jet Li.

Of course there are some that say Li isn’t to blame. After all, he simply invented a model that had limitations that should have been obvious to anyone with a firm grasp of the math and some common sense. Li himself told the Wall Street Journal in 2005 that Wall Street had misinterpreted the model and should not always believe the results it seemed to give. Of course the people who run banks are less into common sense and more into eating diamonds to make their own shit sparkle, so the results were pretty predictable:

They didn’t know, or didn’t ask. One reason was that the outputs came from “black box” computer models and were hard to subject to a commonsense smell test. Another was that the quants, who should have been more aware of the copula’s weaknesses, weren’t the ones making the big asset-allocation decisions. Their managers, who made the actual calls, lacked the math skills to understand what the models were doing or how they worked. They could, however, understand something as simple as a single correlation number. That was the problem.

Anyway, at least we have finally found a root cause for much of the quagmire. And even if we can’t run Li out of the country (he already did that, moving back to China last year), at least we can finally ditch the faulty formula that he created. Next on the list, by the way, is Formula 44D. WHY ARE YOU HIDING FORMULA 44E WHEN YOU KNOW IT’S ONE LETTER BETTER?

Recipe for Disaster: The Formula That Killed Wall Street [Wired]

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The playmates are increasingly unreal

Pax Arcana

bunnyIn the beginning, the appeal of Playboy Magazine was that it showcased the proverbial “girl next door” type — allowing men to drift into a world of fantasy where they could peek in on their attractive young neighbor lounging around in her boudoir.

But these days — thanks to cheap carbohydrates and an appalling lack of self-control — the girl next door is more likely to sit on her couch stuffing her increasingly rotund face with chocolate-dipped Slim Jims. And instead of mirroring our growing national corpulence, Playboy has run in the opposite direction.

Those are the findings of this article in Wired, in which author Katharine Gammon plots the body mass index (BMI) of every playmate in history and compares them to the wider population. She found that while the average female BMI has spiked from 22.2 in 1960 to 26.8 in 2002, the average playmate BMI dropped from 19.4 in 1960 to 17.6 in the present day.

And that’s before  subtracting the extra weight of breast implants, which only became popular in Playboy in the past decade or so.

To be fair, I am sure the average BMI of Playboy’s male readership has risen just as dramatically as the national female average, if not more. On the bright side, I remain a chiseled Adonis with windswept forelocks and a look that says “I am listening to every word.”

Infoporn: Today’s Playmates Are More Like Anime Figures Than Real Humans [Wired]

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