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Eindpaper Code & Culture Spotify verus Despotify, or when the Bazaar surrounded the Cathedral.

Lineage: Code and Copyright

Student: Teacher: Course: Date: Word count:

Wanne van den Bos M. Stevenson Code and Culture June 10, 2010. 4803

Innovation led through the development of the Internet has undoubtedly changed the world. One definite area of change can be signaled in the modes of production. Traditional economic schemes have become obsolete, and it is interesting to see what new schemes can be formed. In this paper I will use the piece of social music software that is called Spotify to exemplify the implantation of these new schemes, and the way they contribute to a new type of economy, popularly dubbed the high-tech gift economy(Barbrook, 1998). This new economy hasnt appeared out of nothing. As early as 1960, technological determinist Marshall McLuhan noted that new media have made our world into a single unit.1 With the anticipated disappearance of the spatial factor in models of production, new possibilities lingered. The continued technological innovation has led to a new economy, the digital economy. This economy is led by different principles than its analog counterpart, and subsequently encounters different problems. When it comes to music, most of these problems deal with copyright law. In the analog age, the act of duplicating music was a physical activity, taping one cassette to another. Pertaining to copyright-law, it was easy to make a compensation for lost revenue by adding a small fee to the price to blank media. Digital storage media do not posses this kind of modularity. It has therefore proven difficult to provide for a system that deals with digital copyrights. Lawrence Lessig is an avid supporter of the struggle for digital liberties, starting the Creative Commons project on December 12th, 2002.2 Spotify, being an online music service, has had to deal with copyright issues and I will discuss these issues in the light of Lessigs philosophy. I will look at Spotify from two angles, being the programmers perspective, and the one of the end user. These two sides of the program will tell different stories. The programmers have used the traditional model of the cathedral to build their initial release (Raymond, 1998). They had betatesters from around the world look for bugs, and then made a stable version. The source was closed, and it didnt allow for other programmers to contribute or alter functions. The reason for this is that Spotify is a commercial company that is looking to make a profit. To guard this profit, they dont want to allow for anyone to meddle with the source code. This has led to the countermovement of DeSpotify, a Swedish based hacker-platform who have deconstructed Spotify and turned it into an open source program. This is an interesting development since it shows that under the current regime, every program wanting hegemony
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McLuhan, Marshall. Explorations. YouTube, last watched June 3, 2010. < http://www.youtube.com/watch?v=-C6FDcUutj8&feature=player_embedded#!> 2 Lessig, Lawrence. CC Launch<http://lessig.org/blog/creative_commons/> Last accessed June 3, 2010.

can be challenged. This group is not fundamentally positioned against Spotify, they want to release its full potential by evading the copyright agreements that the legal version of Spotify has implemented in their program. The (passive) users are at the other end of the spectrum. They are being used as a resource through their (free) beta-testing and the subscription fees they may choose to pay. If they choose not to pay a subscription fee, they still bring in money through advertisements that are placed at intervals between songs. By recommending certain songs to friends and family, the user actively contributes to the network value of Spotify. Network value has become a pillar of the new digital economy, and I will discuss this value in the light of Pasquinellis discussion of Googles PageRank. The users are in fact being used.

Source: Spotify.com Spotify is a piece of software that successfully exemplifies the way in which the gift economy and the commercial economy coexist in symbiosis. Created by Martin Ek and Martin Lorenzon in 2006, it has taken the music-streaming industry by storm. Simply put, it is a piece of music software that offers the (unlimited) streaming of music from different catalogues. It was released for usage in The Netherlands on May 18th, 2010. Contrary to browser-based competition such as GrooveShark, Spotify is a separate program that runs on its own. Bloggers have defined it as being Pandora mixed in with Last.FM, with a dash of imeem and a dollop of iTunes sauce, but better.3 How does it work? Better is not a subjective term in this argument. Technically, Spotify is superior. It usually takes only milliseconds to start a song when using Spotify, which is much faster than flash-based competitor Grooveshark. The reason why this is so fast is brilliant yet simple. Spotify only stores the first bit of a song on their central server. The rest is transferred through an elaborate peer-to-peer streaming scheme, not unlike the way BitTorrent works. Towards the end of the current song, Spotify already starts prefetching the beginning of the next song. In practice, this translates to a continual, uninterrupted listening experience. The bit-rate quality of the songs streamed through Spotify is a lot higher than its competitors. Spotify currently offers 160 kb/s streaming quality for Free, Open and Unlimited plans, and a staggering 320 kb/s bitrate for the Premium plan. In comparison, GrooveShark VIP offers a
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maximum of 192 kb/sec. The quality of the songs and the speed of the playback have increased Spotifys popularity very fast. It was first released in (private) beta, in accordance with Neff and Starks ideas about software development. They state beta testing is real world testing that could never be fully emulated inside software laboratories (Neff and Stark, 2002). The beta test phase gives customers an early peek into new programs, and provides for a platform to suggest innovations. This gives the user a feeling of importance, and by treating your beta tester as your most valuable resource [] they will respond by becoming your most valuable resource(Raymond, 1998). The fact that it was initially invitation based enlarged the attraction of the program. Following marketing laws, an artificial scarcity led to a higher demand.

The private beta was completely free, and it seemed as if the eventual program would be free as well. Instead, Spotify has opted for 4 different structures, or plans. 1. Spotify Open

This is the most basic version. In agreement with the record companies, the user of an Open client can only listen to Spotifys material for twenty hours a month. In addition, it implemented a mp3-playback function so that users could play their own music in Spotify as well. It also includes the Spotify Social function, an issue which I will return to in a later section of this paper. Advertisments are placed at irregular intervals, which bring in money for Spotify. 2. Spotify Free Basically the same rights and functions as the Open plan, but without the limitation of listening time per month. There is no fee required for this particular plan, but scarcity is imposed by implementing the same invitation structure previously used for the beta-phase. Advertisments are still present. 3. Spotify Unlimited This plan is currently available in the Netherlands for a subscription fee of 4.99 euro a month. In exchange, there are no advertisements between the songs, and there is no limitation on the amount of time you can listen to the whole catalogue. Another added feature is that, opposed to the other two more basic versions, you can log in to Spotify from any computer and or mobile device, and access the same options. 5

4. Spotify Premium Noted as being Spotify in its purest form(Spotify.com). The most notable difference between this plan and its cheaper counterparts is the ability to access the vast Spotify database from a mobile device. At the moment, 3 major mobile operating systems (Iphone OS, Google Android and Symbian) are compatible with Spotify, and more are expected to follow. (Spotify.com) A last option that has been pushed by Spotify as being the ultimate party-maker is the purchase of a day-pass. This pass provides Premium access for a limited amount of time, twenty four hours. This option didnt prove to be specifically successful, and at the time of writing the daypass was no longer available. These options leave little room for interpretation. As stated in the business set-up, users that choose not to go for a paid plan, were still being exploited through the advertisements they would encounter (Kreitz, 2007). Advertisments can be found for either signing up for a paid plan, or promoting new albums available on Spotify. This way, the artists still get promoted through the free version, and it is still lucrative to make your songs available on Spotify. The way Spotify uses both free and paid plans are in accordance with ideas about the new economy that has appeared the last few decades.

Screenshot of Spotify

Spotify Social Another reason why Spotify has become very popular in a relatively short amount of time is its wide array of social features. Teaming up with prominent social networking site Facebook, miniblog service Twitter and fellow music platform Last.FM, it has increased its appeal to many customers, making it, in their own words, a music lovers paradise (Spotify.com, 2010). When creating a Spotify profile, which is needed to access the program, you have to fill in your email address, which is used for verification of the user. This e-mail address is presumably the same as the user has provided for the activation of his or her Facebook profile. These emaiadresses are easily linked, and the connection between the two platforms is made. Spotify uses Facebook to allow the user to share music with his or her friends, and discover which friends are using Spotify as well. Once connected to a Facebook friend, you can simply drag and drop songs to his or her username to share the song. A similar function is supported in combination with Twitter. A simple click on a button can instantly create a tweet containing the link to the track. When someone else clicks this link, the particular song is opened in Spotify. Finally, Spotify integrated an own messaging service which allowed the user to share playlists and songs within the program itself. The teaming with Last.FM can be seen as the straw that broke the camels back, and finally persuaded the public to pick Spotify as its favorite music streaming agent. This alliance initially raised a few eyebrows, since Last.FM also offers a radio-style streaming service that suggests other similar artists the user may like, based on his or her previous searches. Enabling the option to scrobble, or log the songs a user is listening to on Last.FM, the two players simultaneously increased each others network value. Everything is interconnected, both users and programs themselves. This is in accordance with Manuel Castells vision of the network society. When asked to define the network society, Castell gave the following answer: the definition, if you wish, in concrete terms of a network society is a society where the key social structures and activities are organized around electronically processed information networks. So it's not just about networks or social networks, because social networks have been very old forms of social organization. It's about social networks which process and manage information and are using micro-electronic based technologies.4 By using these social features, the user is not only helping him or herself, the users friends and relations, but also Spotify itself. The network value, described in Pasquinellis work on Googles
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Conversation with Manuel Castells, P 4 of 6 <http://globetrotter.berkeley.edu/people/Castells/castellscon4.html> Last accessed 5-06-2010.

algorithm PageRank, is constructed by the usage. The programmers have laid out the algorithm, done the work and can subsequently sit back and reap the profits. (Pasquinelli, 2009).

The New Economy In Richard Barbrooks 1998 text The High-Tech Gift Economy he places the development of the internet in a historical perspective. The digital libertarians believed that the internet had powers that would liberate the world and would create a new form of anarcho-communism in which everything was evenly shared and accessible for all (Barbrook, 1998). This form can be found on the internet, which was in fact designed to facilitate free and open information sharing between large groups of people. Parallels can be drawn between this phenomenon and the open structure of academic works. Scientists wish to contribute to the field, to increase knowledge, not necessarily for personal gains. The reason why the gift-economy has proven to be so effective on the web is more egocentric than purist communists would like. The self-interest of Net users ensures that the hi-tech gift economy continues to flourish (Barbrook,1998). By claiming this, Barbrook concedes that the utopian visions of the sixties have not become reality. The current economy is a mixed economy, where for instance, the free circulation of information between users relies upon the capitalist production of computers, software and telecommunications. (Barbrook, 1998). The two different worlds, the corporations versus the free information agents live in symbiosis. This is exemplified in Spotify. In the music industry, the battle between free information and copyrighted content has been the number one issue for the past two decades. Music is an important factor in everyday Western lifestyles, proven by claims like the average Westeners brain probably spends around twentyfive percent of its lifetime registering,monitoring and decoding popular music (Tagg,1982). The fact that we spend so much time listening to music has helped to move music piracy to the top of the public agenda. One of the most obvious examples of music-sharing software in conflict with copyright law has been Napster. Created by Shawn Fanning in 1999, it quickly grew to have a user-base of over ten million people. So many people sharing music files was considered a major threat for the recording industry, and subsequently the Recording Industry Association of America sued Napster. Napster was shut down in 2004(Alves, 2004). This left the internet user scrambling for other options to get access to free music, since before buying information, every sensible person checks whether you can download it for free (Barbrook, 2005). Various (illegal) alternatives to Napster sprouted quickly after 2004, the most notable being LimeWire, Kazaa and the BitTorrent protocol, the last one enabling peer-to-peer data exchange without the need for a central index. With lawsuits persisting, resulting in for

instance a subpoena which ordered the closure of Pirate Bay,5 there was need for a compromise between the agents of free information and the big record companies. Lawrence Lessig has tried to create such a compromise. Coming from the field of law, he had different ideas than native computer scientists when it came to code. In computer science, code refers to the programming structure of a software piece. In law, code applies to the rules. It decides what is allowed and what is prohibited. According to Yochai Benkler, there are three layers on the internet, all with different codes or laws governing it. The first layer is the physical layer. This layer consists of the wires and buttons, the actual hardware that makes interactivity possible. The second layer is the logical layer. This layer consists of the protocols that enable and restrict usage of this interactive network. According to Lessig, the protocols on the internet were designed in a way to disregard copyrights, and enable a free sharing of information. He writes: The protocols were designed for sharing, not exclusive use. Discrimination, at the heart of a property system, was not possible at the heart of this system. This system was coded to be free. That was its nature (Lessig, 2002). The final layer is the content layer, which is the end product, the things that are actually transferred between people over this interconnected network. On the logical layer, the internet was first created as having an open end-to-end structure, using the network simply to transfer information from point A to point B. With the development of broadband internet, Lessig spots an important difference. As a cable is modified to be able to suit internet traffic. In this modification lies a big difference between the old dial-up days and the broadband traffic of nowadays. The cable companies have the power to discriminate in content, and in this way the code, or laws of the internet has been changed (Lessig, 2002). Lessig however also spots a change in the content section of the division. Due to the changes in the logical layer, the cable companies have the power to cut off copyright infringing websites, and are often ordered to do so by judges, as can be seen in the Pirate-Bay case mentioned above. In response to this fierce enforcing of the copyright, Lawrence Lessig e co-founded the Creative Commons project in 2002. In doing so, he tried to break with the default stamp of all rights reserved that was usually put on published works. Instead they opted for a some-rights reserved structure. In doing so, they provided a license to work alongside copyright and advance the free movement of information. They currently have jurisdiction in 53 countries, with 9 more expected to follow.6 Summarized, the Creative Commons copyright project
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Pirate Bay Unplugged on Gizmodo.com Last accessed 04-06-2010 < http://gizmodo.com/5344842/piratebay-unplugged-by-swedish-court-already-back-again-sorta> 6 http://creativecommons.org/international/

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searches to create opportunities for innovation. The voice against this movement is coming from the original enforcers of copyright, who fear that they will be worse off under the new regime. As Lessig notes, we live in an ideology that tells us that property is a good thing, and that more property can only be a good thing.

In line with this ideology, Spotifys source code, and therefore the program itself, is copyrighted. In development however, they did rely on the participation of fellow computer programmers. In line with Eric Raymonds vision of the Bazaar style programming, in the beginning, the Spotify team treated the users as co-developers, and it led to the least hassle route to rapid code improvement and effective debugging (Raymond, 1998). Subsequently, the beta-test phase has led to vast improvements. Started out in 2006, it took two years of private beta-testing to provide for a stable version. This stable version was released for public usage in the United Kingdom and Sweden in late 2008. The 4 plans were available from the beginning, and it became clear that Spotify would be a commercial enterprise. What is interesting to see however, is that the content they offer is (often) copyrighted. The music belongs to either the artist or the record company, and deals had to cut with the reigning forces in the music industry. In the end, by the time of public launch, the major record labels conceded and made deals with Spotify as can be seen in the statement below:

Weve been looking forward to posting this message for quite some time now. This morning we announced that we have signed groundbreaking licensing deals with a list of companies that include Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin, The Orchard and Bonnier Amigo. 7 The record companies agreed to a deal because they believed that Spotify would provide a profitable alternative to illegal pirate sites. According to internal record company research, there are three kinds of music enthausiasts: those who buy music, those who get a kick in getting it for free, and the occasional pirate. The dinner party pirate (Wells,2009) is the user who downloads music because it is simply much easier and the costs between illegal and legal alternatives differ too much. It is in this last section where the record companies saw a place for Spotify. The ease of use, the high quality

http://www.spotify.com/nl/blog/archives/2008/10/07/weve-only-just-begun/

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and the easy-to-understand, low-price structure has convinced the record companies that Swedish based music service would lure a lot of occasional pirates their services. Spotify rewards artists according to the amount of plays they get through the Spotify player. It is also possible to purchase the particular music for home storage through Spotify. The exact amount of money the artist gets for each play or download remains unclear. There has however, been criticism claiming that Spotify doesnt reward the artist enough. Pop singer Lady Gaga reportedly received 167 dollar for one million plays of her song Poker Face on Spotify. 8 In relation to the beta-testers, Spotify issued this statement on the day of the official release: What this means to us, is that after just over two years, thousands of lines of code, and even more cups of coffee, Spotify will launch today. We plan to roll out invites to our free service gradually over the coming months, while premium access to Spotify has now been made fully available. So what does this mean for our beta test community? Existing accounts will immediately transition to become a free Spotify account. This means that you get to keep all of your playlists. As we have refreshed our database you might find that some music needs to be replaced or is no longer available. We are in the process of uploading lots of freshly licensed music and will continue to scour the globe in our mission to bring you any song you want, so please bear with us. We really appreciate all of your brilliant support so far and look forward to starting this new stage of the journey.9 In short, the message was clear: Beta-testers, thank you very much for helping to improve our program, and now switch to a paid subscription in order to keep the functionalities you have grown accustomed to in the past year and a half. The test was done, and the bazaar was shut down in favor of a centralized, closed system.

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http://econsultancy.com/blog/5003-lady-gaga-cashes-in-on-spotify-not http://www.spotify.com/nl/blog/archives/2008/10/07/weve-only-just-begun/

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Its End User Agreement clearly states that by clicking yet another ubiquitous I Agree button, you are aware that you are not allowed to reverse-engineer, decompile, disassemble, modify or create derivative works based on the Spotify Software Application or the Spotify Service or any part thereof. 10 This means that there is no room for open-source editing of the program. Spotify is not a piece of free software, free in the sense of being able to do with it what you want. Instead, it is a piece of proprietary software, where the code is considered to be a domain for the proprietor only(Stallman, 1999). In many ways, this conflicts with the lineage of Spotify, where it did need the effort from the beta-testers to improve its program. It has set off a lot of people who believe this switch is unfair to them, and they have taken action against Spotify.

Despotify
Despotify is the name of the hacked, reverse-engineered version of Spotify. It is a play on words using the title of the original program combined with the word despot. They claim that they dont believe anyone should control music the way despots control their countries.11 They didnt start the program, however, to burn Spotify to the ground. Their main reason for starting the project was to make the Spotify experience available on as many media and operating systems as possible. This has led to the developments of applications for Iphone and Ipad such as Spot, based on the Despotify code. Another reason why they started the Despotify program is a(n) (alleged) breach in security that existed in previous versions of Spotify. Without getting to technical, Spotifys servers exchanged sensitive personal information such as a users password and screen name, over unsecured paths. The hackers of Despotify was quick to notice this breach in security and stored some information on their computers to expose this threat. Despotifys hackers were criminalized by the press, and they quickly responded by saying that it was not their intention to steal anyones information. Contrary to Spotify, Despotifys source code is open, and it is free for anyone to have a go at it and try to implement some changes. Its written in an easy to understand programming language, to further increase the accessibility of the freeware. The first version of Despotify circumvented the restrictions that came with different plans that were implemented in the original Spotify source code. Despotify users had the advantages of the
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http://www.spotify.com/nl/legal/end-user-agreement/ http://despotify.se/faq/

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Spotify Premium package, without having to pay for it. Obviously, this has upset the people at Spotify, who reacted by blocking the Free users from using Despotify. They had this power through the control of the user accounts. You still need a Spotify user account to access Despotify. In order to be able to continue the use of Despotify through the original Spotify servers, they quickly conceded that they would not try to circumvent this restriction, leaving the option open for engineers that werent affiliated with them. But what would motivate people to contribute to a project that would mean no monetary gains for them? Economic Yochai Benkler has come up with an interesting theory for this. Paralleling this new trend to a classic economical theory, he describes this development in Coases Penguin, or Linux and the Nature of the Firm. In Ronald Coases classic economic theory The Nature of the Firm he provided with easy parameters to come up with financial equations. Human agency was the input, and (indirect) monetary rewards were the output. As I have argued before, this reward structure doesnt seem to be applicable to the new economy. Benkler in fact argues that alongside with money, sociopsycological rewards are important when determining motivation (Benkler, 2005). In this way, he tries to define in economic terms a phenomenon that doesnt seem fit for economic theory. This motivational structure can be seen with open source projects such as Despotify. The hackers do not get any money for their efforts. They operate on a progressive ideology, hoping to be able to unleash the full potential of the protocols used by Spotify. Their social reward, measured in users and compliments, is enough for them to continue to make an effort.

The beauty of open source is that anyone can have a go at the program, and innovation lurks just around the corner. With open source, you can harness the attention and brainpower of entire communities (Raymond, 1998), unimaginable with the old style of programming. We can see that Spotify and Despotify are, at the moment, happy to coexist. The cathedral, being Spotify, is surrounded by the bazaar of Despotify. The central building still remains the most important feature of the square, but in its periphery, the free agents are at liberty to play with the code.

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Conclusion Spotify and subsequently Despotify have proven to be clear cut examples of the way the new economy combines free and paid-for services in complete symbiosis. In line with the new challenges the rise of the internet gave the world, a new economy and new type of society came into being. For development, the Bazaar style of programming has been widely accepted and heralded as being a good thing. When it comes to exploiting that project, however, old laws of property (e.g. the Cathedral) still seem to persist. Spotify is an example that uses this structure. They used beta-testers to enhance their program, but still cash in on their own. The way they offer their music however, is in line with the Bazaar. Artists get a reward according to the amount of effort they put into the project, in this reading translated to the amount of plays they get through Spotify. The counter-movement can be identified in Despotify. This libertarian platform encourages smart programmers to fully unleash the potential of the Spotify protocols, and is a clear example of the Bazaar style. Although the Cathedral is still standing, the Bazaar is rambling on its sides.

Wanne van den Bos.

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Bibliography: Barbrook, Richard. 1998. The Hi-Tech Gift Economy. First Monday, 3, 12, http://www.firstmonday.org/issues/issue3_12/barbrook/

Benkler, Yochai. 2005. Coases Penquin, or, Linux and the Nature of the Firm, in Rishab Aiyer Ghosh (ed.) Code: Collaborative Ownership and the Digital Economy. Cambridge, MA: MIT Press, 169-206.

Castells, Manuel. Rise of the Network Society, second edition. Oxford : Blackwell 2000. CreativeCommons.org <www.creativecommons.org> Last accessed 04-06-2010. Despotify <www.despotify.se> Last accessed 05-06-2010.

Heff, Gina and David Stark. 2004. Permanently Beta: Responsive Organization in the Internet Era. in Howard, Philip N., and Steve Jones (eds). Society Online: The Internet in Context. London: Sage, 173-188.

Lessig, Lawrence. 2002. The Architecture of Innovation. Duke Law Journal. 51, 1783-1801. Pasquinelli, Matteo. 2009. "Googles PageRank Algorithm: A Diagram of Cognitive Capitalism and the Rentier of the Common Intellect," unpublished ms. <http://matteopasquinelli.com/docs/Pasquineli_PageRank.pdf>

Raymond, Eric S. 1998. The Cathedral and the Bazaar. First Monday. 3, 3, http://www.firstmonday.org/issues/issue3_3/raymond/

Spotify <www.spotify.com> Last accessed 10-06-2010. Stallman, Richard. 1992. "The GNU Operating System and the Free Software Movement," in Chris DiBona, Sam Ockman and Mark Stone, eds. Open Sources: Voices from the Open Source Revolution. Sebastopol: O'Reilly, 53-70.

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