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Music as the New Currency?
Nintendrew
Registered User regular
Registered User regular
Your local record store acts as a 'value' agent. The retail value of a given album and it's total sales determine how much money it will move through a given economic marketplace. However, once an album has left the store, it is no longer valued as a product in the marketplace. iTunes uses a similar effect. Once a song has been purchased through iTunes, it no longer has a value in the iTunes marketplace. So for both the local record store and iTunes, the end of the year represents a total number of sales for a fiscal year then roll back to zero for the next year.
Through the use of the software 'licensing' business model, Microsoft has opened a new value-based aspect in a Virtual Economy, where a static value can be assigned to a given non-physical item over an indefinite period. Using new DRM-based superdistribution systems based on the 'licensing' business model, music and entertainment as an industry now has the potential to turn the virtual economy into an infinitely inflatable marketplace, given an endless supply of human creativity.
Because these new distribution systems create a form of 'store-in-the-file' where each file keeps track of it's own unique register in the global DRM databases, these digital media files effectively become products that never leaves the marketplace. As the more advanced systems also incorporate an incentive-based payment model for people who fairly share their purchased music, the system also creates an unlimited potential value for each unique file. As such, each year as new products are created, the value becomes cumulative instead of resetting with each new year. Given a properly-coded DRM distribution model, a supply of human creativity, and an audience of receptive ears and eyes, one could theoretically create an infinite supply of entertainment-based products.
Now for the strange question:
After WW1, Germany printed extra currency to repay war debts. This extra currency devalued itself and sent the price of goods through the roof.
If it were possible to reverse the situation, to create an infinite supply of static and dynamic products with a set value in the virtual marketplace, would the value of real currency go up?
Discuss.
Through the use of the software 'licensing' business model, Microsoft has opened a new value-based aspect in a Virtual Economy, where a static value can be assigned to a given non-physical item over an indefinite period. Using new DRM-based superdistribution systems based on the 'licensing' business model, music and entertainment as an industry now has the potential to turn the virtual economy into an infinitely inflatable marketplace, given an endless supply of human creativity.
Because these new distribution systems create a form of 'store-in-the-file' where each file keeps track of it's own unique register in the global DRM databases, these digital media files effectively become products that never leaves the marketplace. As the more advanced systems also incorporate an incentive-based payment model for people who fairly share their purchased music, the system also creates an unlimited potential value for each unique file. As such, each year as new products are created, the value becomes cumulative instead of resetting with each new year. Given a properly-coded DRM distribution model, a supply of human creativity, and an audience of receptive ears and eyes, one could theoretically create an infinite supply of entertainment-based products.
Now for the strange question:
After WW1, Germany printed extra currency to repay war debts. This extra currency devalued itself and sent the price of goods through the roof.
If it were possible to reverse the situation, to create an infinite supply of static and dynamic products with a set value in the virtual marketplace, would the value of real currency go up?
Discuss.
Nintendrew on
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This discussion has been closed.
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That's the part that isn't exactly true.
In any case, I still buy music on CD. It's the same price (more or less), and I get the music in a lossless, DRM-free format.
As for what would happen if supply of everything went up uncontrollably, the prices of everything would go down. Econ 101.
Even if Apple said "fuck you, our products are still $1," then a competing service would undercut them.
IE: $5 30GB Zune with every MacDonald's Happy Meal?
Production costs are production costs.
What you may see are $5 mp3 players that aren't 30GB Zunes, though.
Wait...what?
Germany's economy bottomed out after World War One because their money had literally no value due to their mass production of currency.
What does that have to do with mp3s? And how would an infinite supply of MP3s have any impact on the value of "real" currency?
I think that the entire comparison of mp3s/mp3 players to currency is fundamentally flawed.
Well for one we're talking about DRM files, which aren't usually in .mp3 format. If you're dealing with the 'Plays For Sure' brand, you're looking at windows media audio and video files.
As for the comparison of mp3 players and mp3s to currency, is there that much difference between real and virtual money? Most of the world runs on plastic already. If you create another register system that allows for a new value structure, it should amount to the same thing.
As for the 30GB Zune... if your production costs are only materials plus manufacturing, and your Zune has the ability to store upwards of 4000 songs and therefore $4000 dollars worth of music, it should pay its production cost off pretty quickly.
Two problems with your comparison of mp3s to currency:
1) mp3s can't be used to buy other goods and services. Currency has to be liquid and flexible; once you trade in your currency for a good or service (in this case, the mp3), you lose a bit of financial flexibility as you would need to either resell the good or barter with someone else. The comparison is inherently flawed because an mp3 is a not a currency in this sense, but rather a good and not a particularly liquid one.
2) The cost of mp3s is both too high and too low. $.99 is too high for consumers to fill their mp3 players and/or hard drives with legally purchased music, which is why most listeners buy some music and illegally download other music. At the same time, that same $.99 is too low since it is not high enough to turn a substantial profit for music companies as currently constructed.
Therefore, the Zune that could hold $4,000 worth of songs probably will produce far less than that in revenue for the producer of the Zune, while the music that is purchased legally does not provide enough revenue for current music companies to turn a meaningful profit. Your scenario has several flaws when compared to actual consumer and business realities.
Right.
music can't be used as currency because it's not standard.
"here i will give you six britney spears songs for this table"
i mean
what?
Nintendrew, could you please restate your OP in a sensible manner?
Perhaps in this format?
I think this: X
For this reason: X
As you trade files p2p, you will see a return on your initial investment. A song purchased for $1 can be traded to 5 people to see a return on that $1. Beyond that additional trades accure additional value. Once purchased a song is owned and can be traded in perpetuity. A mere 5 trades will repay it's initial purchase price.
I'm not suggesting that music becomes a liquid currency. But we no longer have a gold standard for currency and the oil standard is causing more trouble than it's worth.
In an Information Age, would a digital media standard based on education and entertainment be just as valid as Gold or Oil?
No. Because Digital media can be replicated.
Think of it this way: You have $500 in your wallet. You somehow copy that $500 so that you and 500,000 other people have that $500.
Has the value of the $500 gone up or down?
But if your $500 has a digital tag embedded in it that prevents you from duplicating it as you've just mentioned unless 'real' currency has changed hands?
The other huge gaping hole in this is that while normal money can be stacked - ie, two five-dollar bills gives me ten, buying "Oops I did it again" does not give me twice it's value, and in fact trading it will see diminishing return over time.
Similarly, a super-rare issue of "GRANDMASTER FLASH ON THE WHEELS OF STEEL REMIXED BY JAMASTER JAY AND SCOTT LEROCK WITH JAMES BROWN FREESTYLING" may be valuable for a week or tow after it's first released, but it's value would quickly fall as it spreads.
I don't even know what you're arguing anymore. It sounds like you're talking about a way to make p2p profitable, but you're trying to frame it as a new kind of Money, or something.
Everything can be hacked.
If the world existed such that I could go to Wal-Mart and give the cashier an mp3 of Hollaback Girl in exchange for a loaf of bread...
Wait, no, that's retarded.
Digital media does not function as a form of currency for the same reason that Baseball cards do not function as a form of currency.
Currency is the basis by which we judge value. Things are worth $X. In order to change that we would have to completely change our entire economic structure.
It's one of the things that gives currency value, yes.
If band A sells 10,000,000 songs during 2007, a sum of 10,000,000 individual products are created in the marketplace for that 2007. However, as 2008 rolls around those 10,000,000 songs are still in existence and can be traded. This has an effect on largescale economics, not personal scale.
Personal value works on a system of diminishing returns as you can only trade a song so many times before everyone in the whole world has it. Since your inital purchase price was about the same as a track on an iPod, you're not really losing anything. Money that you accrue from trading would still be spent as real money. But hopefully the creation of an infinite supply market economy should drive the prices of real goods down.
As for 'hacking'... anything is hackable. But if you could create something that paid for itself and gave incentive not to hack it, it might as well be hack-proof.
AL:KWEHLAKEJGHEAKLJH
What the hell is wrong with you?
Edit: I'm sorry. That was a bit harsh. But, really, you seem to exhibit no understanding of how economies work or why gold, labor, or oil would be the basis for establishing the value of currency.
Simply: Gold, labor, and oil are commodities which are needed and scarce to the degree that they have value in and of their selves. Music does not have this or any of the other qualities necessary for it to be the foundation upon which currency can have value.
Here's *another* example.
I have a CD full of music that I've purchased through one of these systems. It has 100 songs on it, each valued at $1 a piece.
The CD cost me 50 cents to make.
If I sell it for $2, I've made a tidy profit.
Any sales that come from someone buying a portion of my personal record collection would be additional profit above and beyond the inital 50 production cost.
The problem is that you are talking about the value of your music CD in terms of $ and you, in my understanding, are trying to place the value of $ on the music cd itself.
That $2 has value independent of the CD used to gain that $2.
To talk about the system you are attempting to establish you would have to talk about the value of the CD to itself and not to its value in terms of $.
$2 has a value in its purchasing power.
What is the purchasing power of your CD?
Jack shit.
Edit: Unless you want to talk about how your CD can purchase $2 from someone...but...again...that misses the point.
See, I'm confused when you bring up the purchasing power issue.
If I sell that cd for $2, then someone buys 10 songs from that CD, I'll earn an additional $2 from that initial 50 cent investment.
The CD itself should then have a 'potential value' based on the quality of the music.
....ok. Which of these two things are you saying?
1) Music, like baseball cards, magic cards, bubble gum, yo-yos, and fucking everything under the god damned sun can be sold for a value described in terms of some universal currency?
2) Music can become a basis for establishing the value of currency in a manner similar to that of gold, oil, and labor.
A little bit of column A, a little bit of column B?
Oh, so that's why none of this makes any sense.
Those columns are mutually exclusive.
Here's where I see the link. Music can have a value like trading cards, yes. That's column A.
But to have any real value as a means of currency, you'd have to be operating on a limited supply in some regards, similar to gold, oil or labour. In this situation, because people themselves are giving value to the music, the people become the link that creates the limited supply.
Hence, music as a means for valuing currency can only be limitless if given a limitless number of people to sell the music to.
People become the link in the economic chain that creates the new value distribution system. But that's implicit in the p2p aspect of the system anyways.
And someone mentioned how sales work from a CD? These tagged files required an internet connected computer to preview and purchase.
...
"the people become the link that creates the limited supply."
THAT'S
NOT
HOW
IT
WORKS
Yet Linkin Park continues to sell albums. Go figure.
Is the licensing value based on the computers instead of the people that people that use them?
Because really, if there's a computer with a copy of windows on it, you're expecting someone to sit down in front of it eventually.
....the hell?
Software Licenses are not currency. They are SOLD to people in EXCHANGE for currency. But they are not, themselves, currency.