Copyright commerce and the street musician protocol

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[ To: Perry's Crypto List, Cypherpunks ## Date: 11/01/97 ##
  Subject: Copyright commerce and the street musician protocol ]

I've been working on various copyright protection schemes
from time to time over the last three years.  The general
goal is (naturally enough) to make some digital data hard to
copy without some kind of permission or payment or record
being made.  Thus, a user may have a book (mostly text,
perhaps with some illustrations) he is reading on his
computer, and the publisher wants to make sure that that
user can't give copies of the book to all his friends, or
post it to the net, or whatever.

I'm convinced that there will never be a secure solution to
this problem.  (I can't imagine that this is news to anyone
on these two lists.)  I have somewhat mixed feelings about
this--I'd hate to see my favorite authors and musicians
either waiting tables for a living, or having to insert
references to their sponsors' products in their stories.
(``And then he bought her a Coke, and her eyes lit up.'') On
the other hand, a widespread copyright commerce system that
really works is most of the infrastructure for a massive
censorship mechanism.  (Reset the price of books you don't
like to a billion dollars US per copy made.)

Suppose I want to get paid for the next chapter of my
thrilling novel.  A whole bunch of people want to see me
publish my next chapter.  So, I make some statement like
``When I get $1,000 in donations, I will publish
the next chapter in this novel.''  Readers can go to my
website, see how much further there is to go, and donate
money to the cause of getting my novel out.  Note that I,
the author, don't care *who* pays to get the next chapter
out; nor do I care about free riders.  Instead, I just care
that my $1,000 pot gets filled.  When it does, I publish the
next chapter.

There are basically three things that can go wrong here:

a.  I set my price too high, and never reach my amount.  (It
might be possible to decrease the total amount required
later, though it would be a little questionable to do this
often.)

b.  I set my price too low, and get lots less than I could
have gotten.  (This is self-correcting.)

c.  I get my amount filled, but still don't publish the next
chapter of my novel.

The trust issues, especially with (c), are worth
considering.  The obvious (clunky) way to solve this is to
have a trusted third party handle the whole transaction.  We
will call him the Publisher.

Now, I submit my novel, or parts of it, to the Publisher.
He has his editors review it to see if it's worth trying to
sell (like any publisher, albeit with rather low
printing/binding costs).  If so, he and I agree on a price
and split.  For unknown authors, the first several chapters,
or even the first few books, may be freely available, in
hopes of drawing in customers.  For known authors, perhaps
the first chapter or two is free, and the rest go through
the payment mechanism.  He has my whole novel, and on his
web site, he makes available, say, chapters 1-3 for free,
and chapter 4 will become available when $1000 is donated to
the cause of getting it out, or on January 1, 1998.

If enough readers want to hurry up and see the next chapter,
they can make a payment.  The publisher needs no
identification for this, so anonymous payment systems work
quite well.  The Publisher holds the payments in escrow
until the chapter is released, and then sends me my cut.

I think I can build a similar protocol without the Publisher
taking anything but a backup role--he gets the money
transfers and holds them in escrow, and if the chpater isn't
released, either he can release it or he can return the
money, or donate it to some charity, or whatever.  (The
whatever has to be spelled out beforehand, and the money
mustn't go to the author, directly or indirectly.)

This is obviously not a complete solution.  The neat thing
is, it can be used with other systems.  (Thus, if you want
to include a shareware/guiltware message on each copy, or
try to use some kind of software or hardware protection for
the chapters once they're published, then this system
doesn't alter that much--the donors simply get prepurchased
copies of the book, released on the normal release date.)

Similar ideas may work in other areas.  In software, I
suspect it would be a way of getting a feel from the market
for what new features are wanted.  In music, perhaps this
could be used for individual songs, or maybe it would work
better for whole albums.  Television and movie serials could
work this way (it works for PBS, doesn't it?).  Some books,
music, and movies would be *awful* to release this way,
though.  I wish I had a more useful general solution, but
maybe this will help a little.

Comments?  This is clearly not all that new, but I've never
seen it in a crypto context from anyone but me.

   --John Kelsey, Counterpane Systems, kelsey@counterpane.com
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   --John Kelsey, Counterpane Systems, kelsey@counterpane.com
 PGP 2.6 fingerprint = 4FE2 F421 100F BB0A 03D1 FE06 A435 7E36

>Comments?  This is clearly not all that new, but I've never
>seen it in a crypto context from anyone but me.

The first somewhat serious treatment of this I saw was Hughes's DEFCON IV
presentation entitled, I believe, "Universal Piracy System."   The first
part proposed an Eternity-like system to anonymously publish information
which was compatible with most Web index engines.

In the second part, Eric predicted that because of the Net's economics and
anonymous mailing and publication potential copyrights were on their way
out.  He acknowledged that some workable method of artist compensation was
still needed and proposed the movie industry as a possible model.  In this
scenario a multi-level money collection and product distribution scheme
would be supported by artist reputation and completion bonds.

--Steve

(Esther Dyson is a supporter of alternative publication economics, and I've
heard Eric's approach.)

At 5:20 PM -0500 11/5/1997, Robert Hettinga wrote:
>At 7:13 pm -0500 on 11/2/97, Steve Schear wrote:
>
>
>> The first somewhat serious treatment of this I saw was Hughes's DEFCON IV
>> presentation entitled, I believe, "Universal Piracy System."
>
>I'm curious about this...
>
>Did DEFCON IV happen before, or after, the rump session of FC97 (February
>26? 1997), when Jason Cronk talked about recursive auctions on geodesic
>networks? Actually, now that I think about it, Ian Grigg did a talk about
>the sell-side inverse of the same idea in the same session...

Eric's came first.  It was in July 1996.

--Steve

At 7:13 pm -0500 on 11/2/97, Steve Schear wrote:


> The first somewhat serious treatment of this I saw was Hughes's DEFCON IV
> presentation entitled, I believe, "Universal Piracy System."

I'm curious about this...

Did DEFCON IV happen before, or after, the rump session of FC97 (February
26? 1997), when Jason Cronk talked about recursive auctions on geodesic
networks? Actually, now that I think about it, Ian Grigg did a talk about
the sell-side inverse of the same idea in the same session...

Cheers,
Bob Hettinga

-----------------
Robert Hettinga (rah@shipwright.com), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
The e$ Home Page: http://www.shipwright.com/
Ask me about FC98 in Anguilla!: <http://www.fc98.ai/>

Robert Hettinga wrote:
> 
> At 7:13 pm -0500 on 11/2/97, Steve Schear wrote:
> 
> > The first somewhat serious treatment of this I saw was Hughes's DEFCON IV
> > presentation entitled, I believe, "Universal Piracy System."
> 
> I'm curious about this...
> 
> Did DEFCON IV happen before, or after, the rump session of FC97 (February
> 26? 1997), when Jason Cronk talked about recursive auctions on geodesic
> networks? Actually, now that I think about it, Ian Grigg did a talk about
> the sell-side inverse of the same idea in the same session...

DEFCON IV was well before FC97.  This was an issue I was chasing Eric
Hughes on.  As far as I understand it, this was unpublished in any form,
just presented, but many people have saw it (must have been a big
conference :-).  If anyone knows any different, please let me know
(except, "get in touch with Eric" because that was not resultful).

-- 
iang                                      systemics.com

FP: 1189 4417 F202 5DBD  5DF3 4FCD 3685 FDDE on pgp.com

>Since it seems -- for the time being -- Eric was the first person to figure
>this stuff out and talk about it publically (so, what else is new? :-)), we
>should give him credit for it.


While we do need a shorter name and I don't really care what name is used
to describe it, I do think somebody needs to figure out exactly what "it"
is.  Since I don't know what Eric Hughes was talking about at DEFCON IV, I
can't know whether his "it" is the same thing I'm talking about.
Especially since everybody else I've seen talking about "it" seems to leave
out what I think is the most important part -- value added.

So far I have yet to see anyone write a clear and concise article
describing the economic system we've been discussing.  I've tried, but to
date I haven't had the time.  I'm too busy trying to steer my business in
that directon to write about it.

I leave as an exercise for everyone, describe the difference between a
recursive geodesic auction market and a chain letter or a multi-level
marketing scheme (which I might add are rampant on the net).  What prevents
the latter from being a subset of the former?


Jason Cronk









>
>A whole bunch of people are now talking about these cash-settled recursive
>auction processes, and they're a direct, and now obvious, consequence of
>bearer (or at least instant) settlement markets for information on geodesic
>networks. When you add anonymity to the transaction, you pretty much have
>the final straw for "rights" tracking. Watermarks just tell you who the
>information was stolen from, for instance. So, one more industrial
>information process bites the dust.
>
>And, since a lot of people, like myself :-), claim that anonymous bearer
>settlement will be the cheapest way to effect a transaction in an
>internetworked environment, then this kind of market process should
>approach ubiquity sooner or later, and we should have a nice short name for
>it. :-).
>
>So, I propose that we call these things "Hughes markets" or "Hughes
>auctions" or something. At least until we find the apocryphal 1940's
>Atlantic Monthly article, like they did with hypertext. :-).
>
>If it *does* turn out that Eric was the first person to see this, he might
>end up with a trip to Stockholm someday...
>
>Cheers,
>Bob Hettinga
>
>
>
>
>
>
>-----------------
>Robert Hettinga (rah@shipwright.com), Philodox
>e$, 44 Farquhar Street, Boston, MA 02131 USA
>"... however it may deserve respect for its usefulness and antiquity,
>[predicting the end of the world] has not been found agreeable to
>experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
>The e$ Home Page: http://www.shipwright.com/
>Ask me about FC98 in Anguilla!: <http://www.fc98.ai/>
>
>
>
>For help on using this list (especially unsubscribing), send a message to
>"dcsb-request@ai.mit.edu" with one line of text: "help".

At 8:24 pm -0500 on 11/5/97, Ian Grigg wrote:

> DEFCON IV was well before FC97.  This was an issue I was chasing Eric
> Hughes on.  As far as I understand it, this was unpublished in any form,
> just presented, but many people have saw it (must have been a big
> conference :-).  If anyone knows any different, please let me know
> (except, "get in touch with Eric" because that was not resultful).

Fine.

Since it seems -- for the time being -- Eric was the first person to figure
this stuff out and talk about it publically (so, what else is new? :-)), we
should give him credit for it.

A whole bunch of people are now talking about these cash-settled recursive
auction processes, and they're a direct, and now obvious, consequence of
bearer (or at least instant) settlement markets for information on geodesic
networks. When you add anonymity to the transaction, you pretty much have
the final straw for "rights" tracking. Watermarks just tell you who the
information was stolen from, for instance. So, one more industrial
information process bites the dust.

And, since a lot of people, like myself :-), claim that anonymous bearer
settlement will be the cheapest way to effect a transaction in an
internetworked environment, then this kind of market process should
approach ubiquity sooner or later, and we should have a nice short name for
it. :-).

So, I propose that we call these things "Hughes markets" or "Hughes
auctions" or something. At least until we find the apocryphal 1940's
Atlantic Monthly article, like they did with hypertext. :-).

If it *does* turn out that Eric was the first person to see this, he might
end up with a trip to Stockholm someday...

Cheers,
Bob Hettinga






-----------------
Robert Hettinga (rah@shipwright.com), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
The e$ Home Page: http://www.shipwright.com/
Ask me about FC98 in Anguilla!: <http://www.fc98.ai/>

Someone recently told me that game manufacturers have stopped worrying
about piracy.  Why?  Because most new games come on CD-ROM, and
copying a CD-ROM is an expensive, time-consuming operation.  Bulk
duplication of CD's is substantially cheaper than one-off duplication,
and since games are cheap, people will usually buy them rather than
copy them.

While the cost of one-off CD duplication will certainly drop, I see no
reason that media will not change form in the future.  As long as it's
cheaper or more convenient to buy digital media from the publisher
than to copy it yourself, the piracy problem basically doesn't exist.
This is exactly what makes copyright work for books: I can duplicate a
book, but it will cost more than buying it legitimately.  (There is
still the problem of systematic large-scale piracy, but this is
relatively easy to notice and prosecute under existing law.)

Short works (newspapers, magazines, journals, etc.) will need a
different mechanism, such as advertising, but that infrastructure is
creating itself today.

I'm unconvinced that there really is an Internet copyright problem,
outside of traditional media publishers inventing it.

		Marc

On 3 Nov 1997, Marc Horowitz wrote:
> Someone recently told me that game manufacturers have stopped worrying
> about piracy.  Why?  Because most new games come on CD-ROM, and
> copying a CD-ROM is an expensive, time-consuming operation.  Bulk
> duplication of CD's is substantially cheaper than one-off duplication,
> and since games are cheap, people will usually buy them rather than
> copy them.

hmm... Besides the initial cost of a CD writer (which is coming down alot),
blank CDs cost $8AU (or about $5US).  I would not call that expensive relative
to the game cost (about $90AU).  On a double speed drive it takes about 30
minutes to duplicate a 600meg game, lots less for those that don't fill the
CD :-).

I think this is starting to become a real problem.

> I'm unconvinced that there really is an Internet copyright problem,
> outside of traditional media publishers inventing it.

Having visited some friends recently that had most of the recent interesting
games written onto a few CDs (multiple games on single CDs) I don't agree.

eric

On Thu, 6 Nov 1997, Eric Young wrote:
> 
> Having visited some friends recently that had most of the recent interesting
> games written onto a few CDs (multiple games on single CDs) I don't agree.

Things will get even better once DVD writers hit the street.

-- Lucky Green <shamrock@cypherpunks.to> PGP v5 encrypted email preferred.
   "Tonga? Where the hell is Tonga? They have Cypherpunks there?"

On 3 Nov 1997, Marc Horowitz wrote:

> Someone recently told me that game manufacturers have stopped worrying
> about piracy.  Why?  Because most new games come on CD-ROM, and
> copying a CD-ROM is an expensive, time-consuming operation.  Bulk
> duplication of CD's is substantially cheaper than one-off duplication,
> and since games are cheap, people will usually buy them rather than
> copy them.

No, most game manufacturers have stopped worrying about piracy because no
matter wht ehy do about it, some cracker defeats it in under a week and
posts the whole game (or a useable subet) to the Internet.

Take Diablo, one of the more popular games of the last year.  It filled a
CD - 600 megabytes of sound, animations, etc.  It was *one* big file,
encrypted, with dlls stored inside it.

The guy who cracked it broke this in a week, chopped out a bunch of the
sounds that weren't adding anything to the game (most of the music, and
the voices of all the characters).  He ended up with 1 150 megabyte
version.  This got passed around the net.

This is *common*!  Over the last 20 years, the long-time game companies
have realized that it simply isn't worth th effort.  ID for example
doesn't even bother with a pretense of copy protection (at least with
Quake they didn't).  This probably contribted to the overwhelming success
of Quake.

In an even mildly technical group of friends, even teen-agers, somebody
probably has access to a CD-Rom burner.  It's trivial to spend a coupld of
days connnected to the net downloading the archives of a game, and burn
them onto a cCD to pass around to several friend to play.  (Or, have one
person buy the game, copy all the CDs, and return it.  This is trivial
with large computer chains such as CompUSA and Computer City)


Typically it will costy $6-$12 for a copy of a popular game in incremental
costs, with the game costing either $0 ro $50 depending on whether or not
someone wants the manuals (increasingly useless portion of the product,
BTW).  Startup hardwar costs are typicall $300-$500, and occassionally the
access is through work or school, reducing even this to virtually nothing.

It is interesting to note, however, that this problem seems to exist where
the lack of jobs and income prevent people from purchasing the games.
Typicall this is with students of middle-class (to upper-middle class)
families that are going to college and have little spare cash.  As soon as
this group begins to get the income necessary to support such a habit,
this trend changes.  So, I'm not sure it's something the game companies
care about, becuase they're simply locking in a portion of the market that
wasn't going to purchase the games anyway.

Ryan Anderson - Alpha Geek
PGP fp: 7E 8E C6 54 96 AC D9 57  E4 F8 AE 9C 10 7E 78 C9
print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<>
)]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`

Marc Horowitz <marc@cygnus.com> writes:
> As long as it's cheaper or more convenient to buy digital media from
> the publisher than to copy it yourself, the piracy problem basically
> doesn't exist.
> [...]
> I'm unconvinced that there really is an Internet copyright problem,
> outside of traditional media publishers inventing it.

That principle works to some extent, particularly for the bandwidth
impoverished, and the currently bloated games software trying to fill
CD-ROMs with unnecessary junk for one presumes this very purpose.

Leave the bandwidth a while, and the problem may arise again.

I wonder at 2c/minute, say 2k/sec (28.8 modem) that's 6Mb/$ for me
(don't have free local call UK side).  That's $100 for a 600Mb CD!

So as long as the CD costs under $100 and the unnecessary bloatware is
hard for a warez hacker to strip out, that makes it worth buying the
CD.

Another advantage of having the CD is that it's a backup copy, and you
can keep large stuff (say electronic copies of manuals) on it without
chewing up disk space which is more expensive.

Be interesting to see what happens to software copyright as bandwidth
gets more plentiful, as huge solid state mass storage gets cheaper,
and as information becomes harder to track with widespread crypto, and
nicer anonymous protocols enabled by high bandwidth everywhere come
online.

Adam
-- 
Now officially an EAR violation...
Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/

print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<>
)]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`

A couple of real-world examples to go with your (good) ideas:

* Richard Stallman gives away the software, but sells the support.  This
technique has the perverse incentive for the author to make the software
require support.

* The Grateful Dead permitted taping at their concerts and did not object
to the non-commercial exchange of the tapes.  It is hard to tell whether
they made most of their money from performances or from sales of
recordings.  In general musicians can make money from live performance.
(Song writers have a different problem, more like that of poets.)

BTW - Marc Steigler tells me he has had a story accepted at Analog (but not
yet published) called something like, "The future of (eat more cheetos)
Copyright."

Cheers - Bill


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