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How It Works The owners of copyrights in audio, video, still image, and document files grant licenses to reproduce and distribute the files and they upload a good copy of each one to our server. Copyright owners include film, television, and record producers, music and print publishers, as well as individuals. In addition, the Noank catalog includes many public-domain and Creative Commons archives. Everyone is welcome; there are no restrictions on suppliers' access to the system and no registration fees. When contributing a file, a copyright owner chooses one of two licenses. License #1 authorizes all participants in the Noank system to: (a) reproduce the file; (b) prepare derivative works; (c) distribute the file (and derivatives of it) to other participants in the system; and (d) publicly perform the recording via digital transmissions to other participants in the system. License #2 is identical except that it does not include the rights to prepare or distribute derivative works. Copyright owners who wish to preserve their "rights of integrity" (i.e., their rights to prevent their creations from being modified) pick the second license and are compensated at a slightly lower rate than those who pick the first license. All of these licenses are nonexclusive; copyright owners remain free to distribute their recordings through other channels. We do not deal directly with consumers. Instead, our "customers" are service providers that provide online access through their broadband, wireless, mobile, and campus networks. They pay a monthly content fee for each of their end-users (subscribers, students, staff). Some service providers may pass the cost to their users while others may absorb the cost. Still others may charge their users more than they pay us. It's up to them. We provide each user of a participating service provider a software file (like iTunes and Limewire do). The Noank software integrates a web-type browser and search function, recommendations, file-sharing distribution, a media player, a counting system, and social networking, such as playlists and chat. Using these features, users can download unlimited numbers of files in Noank's catalog in a variety of formats (none of which is subject to technological protection measures). Users can use a player of their choice, including iTunes or Windows Media Player. A component of the software counts the number of times that a file in the Noank catalog is played and periodically sends that information to us (although not the information about who played the file), so the content fees can be fairly distributed to all creators and producers, whether they are big or small companies, or just individuals. The code for the software will be periodically examined by reliable and trusted third parties, to verify that it is designed to respect users' privacy. We encourage third parties to supply members with added-value complementary services, such as high-speed streaming, special recommendation engines, and customized user interfaces. For a fee, we will make available to advertisers and others aggregated (not individualized) data concerning participants' listening and viewing habits. For a separate fee, we will permit advertisers to place ads on our system. 85% of the content fees that we collect is distributed to the copyright owners (This is a higher percentage than by any other comparable organization in the world.) A small portion of the remaining 15% will be paid to an online arbitration service that will provide fast, fair resolution of disputes concerning ownership of the copyrights in registered recordings. Much of the remainder will be used to pay our employees and administrative expenses and a portion of the profits will be distributed to a non-profit foundation that will fund media research and support creators throughout the world. The following chart summarizes the relationships among the various components of this system:
(Black arrows designate copyright licenses. Red arrows show how the recordings and ancillary services are delivered. Green arrows show where the money comes from and where it ends up.) The one word that best characterizes the system is "open." It is open to artists, any of whom can participate. The files we make available are "open" in the sense that they are not subject to any technological protection measures and thus can be played with any devices. It is open for business in the sense that we welcome partners who will add to the value and convenience of the service. And much of the Noank source code is open software. |
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