Does it get any more brilliant than this?
bq. Each Snapster share carries ownership rights to those 100,000 CDs. You see, Snapster is a kind of mutual fund, so every investor is a beneficial owner of all 100,000 CDs. Each share also carries the right to download backup or media-shifting copies for $0.05 per song or $0.50 per CD, that download coming from a separate company we'll call Snapster Download that is 100 percent owned by Snapster. With one million co-owners each downloading one CD per month, gross revenue would be $6 million per year. If they download an average of 10 CDs per month revenue grows to $60 million per year. At these download volumes and with the very low cost of running the service, the $200 million market cap is justified even at the lower sales level. At the $60 million sales level, the share price ought to rise. Now grow the business to its logical size of 60 million users. At 10 CDs per user per year, Snapster download revenue would be $3.6 billion or about a quarter the size of the current recording industry, which it would effectively replace. With 90 percent profit margins, Snapster would be making $3.2 billion per year in profit. Based on a modest price-to-earnings ratio of 10-to-1 (I am choosing this low number because of the obvious legal issues involved in this business) Snapster's market capitalization is now up to $33 billion, which is more than any current record company. Investors who paid $20 at the IPO will now find each of those shares worth $33,000, which is comparable to Microsoft or Dell or Cisco in success except that Snapster would do this all in one year. - Robert X. Cringely
The problem with file-sharing like Kazaa and Napster is that the people sharing the files don't own the files being shared. Bob Cringely's idea circumvents this problem superbly - all the users of the system (i.e. Snapster) own all the files being circulated in system. OH MY GOD. BRILLIANT. Why didn't anyone think of this before? If you own the music, certainly, you can't be accused of any copyright infringements! How do you steal from yourself?!
Ok, let's do it. All members of PPS share the cost of buying 100 of the latest CDs.
100 x RM$35 per CD = RM$3500
100 PPS members = RM$35 "share" per member (each "share" entitles us to joint ownership of those 100 CDs).
Digital copies of these CDs (we can rip them - why not? We own them after all, and Fair Use laws allows us to make digital copies of CDs we own) will be made available on a central server from which we, as owners, can download the music whenever we want.
Therefore, a RM$35 allows each of us to have unlimited access to 525 songs (assuming that each CD has 15 songs on average). A pretty damn good deal. And legal too. Any lawyers out there willing to challenge the legality of this idea?
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