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Comment by fabbari | Hacker News Reader

> where wave function collapse just means a contract that has different terms for a digital purchase instead of a physical purchase

That's not what the article states. The author is saying that the same transaction - IE: my 'buying' a track on iTunes, for example - is considered a license transfer, between me and the record company, and a sale, between the record company and the artist.

This superposition of license and sale for the same transaction is collapsed into a license - so: no transfer rights, no right to make copies, etc. - when the record company it talking to me.

On the other hand - when the record company is talking to the artist - the superposition collapses to a sale, so the artist gets 13% of the value instead of the 50% they would get if it was a license sale.

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It's just a sale of a licence.

If I'm a Domino's franchisee, and I pay Domino's a different commission for an order placed online vs a customer walking into the store, the pizza isn't in a state of quantum superposition - that's just making a simple concept overly complex by incorrectly throwing quantum words at it. The concept is just that different things have different prices in the master agreement.

If I'm a movie theatre that happens to sell a DVD of the same movie, when a customer comes in they also aren't in a shrodingers-cat quantum dilemma superposition state, it's just the simple idea that different things have different prices and different compensation structures for artists.

The quantum superposition thing is just a cheeky metaphor for a sketchy-sounding accounting practice, I wouldn’t read too much into the wave-function collapse analogy.

It's a metaphor which makes it sound more complex than it is.

All they are describing is that they have agreed to different royalty rates for different types of sale.

I have zero doubt that the contracts will have very clear definitions of what counts as a 'sale' and what counts as 'licensing', but this article just pretends that it is highly ambiguous in order to make a strange analogy to quantum mechanics.

You're trying to prove your point, but you haven't really understood what it is about. The transaction is treated differently from an accounting perspective, as a license and a sale at the same time (this is what the wave collapse joke is about), with the effect both of ripping off the artists and limiting buyer rights.

They get the rights management from licensing on the user side (no "giving away old albums to a friend" possible), while giving artists the lower cut as if it was a physical album sale with high distribution costs. It has nothing to do with digital vs physical sales, you could play the same trick with a CD sale.

Why are the labels paying the "sale" royalty to their artists if no such thing is occurring? Was the track sold or was it licensed?

They sold a license.

This is like saying "Was a movie ticket sold or was it admission?" - you can purchase admission, so it's a nonsense question.

The contracts will then define what a particular transaction means in a particular context, and what the royalty rate is. Without seeing the exact contracts and definitions of 'sale' and 'license', which are suspiciously absent in the article, then the whole premise of the article is IMO missing substance.

Fair enough on the contract details. Neither of us know the language used in the artist contracts. I'm willing to bet many of those were drawn up in the age before digital distribution, hence the arguments.

I'm not confused by the concept of purchasing ("buying") a license. I get that! But if the label is using one concept to determine the royalty rate, but switching to a difference concept to determine the customer's rights, then there's still a problem. Again, I don't know the details of the artists' contracts. But I do know this is probably relevant for some subset of artists whose contracts don't deal directly with digital distribution. In those cases, when terms like "license" and "sale" are used to denote different things, there's a problem if the labels use "sale" on one hand, and "license" on the other hand. If they sell me a license, the artist should be paid the "license" rate.

If we follow that train of reasoning, that it counts as a "sale" when a license is sold, then what are the license royalty rates for? All paid licenses are sold!

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