Home > 1. technology, 2. politics > Avast ye!

Avast ye!

February 5th, 2009

I really cannot stand the pirate analogy that seeks to demonize sharing. Consider this ridiculous quote from the front page of the NYT:

Hollywood may at last be having its Napster moment — struggling against the video version of the digital looting that capsized the music business. Media companies say that piracy — some prefer to call it “digital theft” to emphasize the criminal nature of the act — is an increasingly mainstream pursuit.

Looting? Capsizing? Theft? Piracy? Really?!? To remind everyone, here’s a picture of real pirates in Somalia today:

Notice the use of violent weapons: guns and rocket launchers. Recall that they are attempting deprive someone of physical property. Physical property, unlike so-called intellectual property, can only be owned by one person at a time. Also, they take the crew hostage and hold them for ransom.

In contrast, sharing of digital goods increases the public good at no harm, on the margins, to the original owner. Remember kindergarten? Sharing is good!

The only plausible argument against sharing is that freely sharing may reduce the incentive to create content in the first place. But that argument only holds if (1) less entertainment content were created because of sharing and (2) the amount of lost value exceed the massive benefit to consumer of cheaply and easily accessing the content. As far as I can see, there has been no discernible decrease in the creation of good or crappy content in the five years or so.

Labels and studios may hurt from online sharing because it disrupts their control over distribution. But the artists? New artists that are creating the new content actually benefit from this alternative distribution mechanism that avoids the usual payola necessary through labels and studios. In fact, I think that digital distribution is creating a greater incentive to create content than previously. If we waste all our resources in a futile effort to protect vested interests, we are certainly going to get passed by other countries that side with the future and not the past.

Stop the insanity!

1. technology, 2. politics , ,

  1. MH
    February 19th, 2009 at 18:36 | #1

    Another interesting comment I received by email:

    I am coming to this party late, but I have a couple of comments. As I sort of recall, the music industry didn't want people to record songs, even for personal use of friends and family — not involving sale. The problem for those wanting to protect the interests of those who developed, paid for and sold music both to recover their costs and for profit when costs were covered, was basically the impossibility of preventing and policing sharing beyond the most public uses like Napster. They have been pushed back in many ways and sharing is pretty widespread, regardless of where the law stands. Digital goods are facing much the same problem, and there may be a similar erosion of digital propriety rights because they are decreasingly less enforceable. Add on top of this the messianic devotion of the computer community to preventing any “regulation” of the internet and you have a combustible situation.

    The value of intellectual property is not only about whether it is scarce or would benefit freeloaders. The salient issue is whether it is equally or more of a public good to encourage the costs, creative efforts, foregoing of other opportunities, etc., which motivate and allow individuals and industries to produce movies, music books, computer programs and anything else that can be shared digitally. I think that the public good is best served by protecting the intellectual, artistic, technological and other expertise that people invest in digital and “digitizable” goods so that their costs can be recovered and they can make a reasonable profit if their goods are publicly desirable. I see no difference between digital goods and patents for new medicines for a reasonable time, given the same kind of costs of development and the ease of analyzing and publicizing or competing with the product. How long to try to protect them is another question, as are penalties. But I see real dangers to the public in the idea that if you create it and it is communicated digitally, iot belongs to the public.

  2. February 19th, 2009 at 18:37 | #2

    Great comment! I agree that the issue is to maximize the public good, so there must be incentive to create the goods in the first place. But distribution is a key part of the equation too. Simply put, it's: total public good = goods created * goods consumed. At least with music, it seems that sharing has untapped more public good than the entire rest of the music industry by a factor of 10x or so.

    But you are also right to point out the similarity to drugs. The key cost of many drugs is discovery not production or distribution. Hence, some AIDS drugs are distributed for pennies on the dollar in Africa because the pharmas recognize that they do not benefit from causing unnecessary suffering in poor people.

    So, I return to my original points. One, we should not demonize sharing as piracy or other violent crime. Two, we should consider thoughfully policies to prevent sharing. Three, when considering these new policies, the new economics of digital distribution mean that the current legal restrictions on sharing almost certainly are too stringent for the purposes of maximizing the public good.

  3. N
    February 19th, 2009 at 18:35 | #3

    Comment that I received by email:

    Wow, I have to get to work (so I can come down for sleepover!), but I have strong disagreements with your metal gymnastics to justify theft. Theft is an activity of pirates, but I agree digital theft has no swords or walking the plank.

    1- Photoshop 10 is a $1,000 program. There are hundreds of employs whose time went into building the code, the look, the feel etc to develop that program. Stealing it without payment to the company that created it is no different then stealing a kids bicycle. The 'marginal cost' of a bicycle is damn low (once factory starts churning them out, probably $15 for the metal) but the bike costs $250 at the store. How can that price be held so far above marginal cost with all the competition, because you must factor in the overhead costs that are used in allowing for a product to be made if you care to stay in business.

    2. Movies are large employers. Stealing a movie without payment puts the employment of 60,000 at risk. These are carpenters, stage hands, make-up, bit actors not the 100 or so millionaires that we all know. Talk about holding a crew captive!!

    With your argument, Loews AMC should stop paying Hollywood and just stream stolen movies! If it is fine for you to 'share', then it can's be wrong for them! I am sure if this happened, so many movies would keep being made.

    Digital theft is not a victimless crime just because you don't see or like the victim.

  4. February 19th, 2009 at 18:36 | #4

    I think that you've miscontrued my argument. I concede in my post that, in theory, encouraging sharing could reduce the creation of digital goods. And I am glad that you concede my main point: the violent language used by those with vested interests in digital goods is inappropriate.

    That said, you miss a fundamental point about the economics of digital goods. It is just a plain fact that there is no scarcity, especially when distribution costs are completely born by the end users. Bikes, airplane seats, theatre seats all are fundamentally scare goods.

    Given this massive disruption to the economics of digital goods, I am merely stating that we need to rethink what public policy maximizes the public good. The terms of the debate should be: what limits to sharing maximize the public good? These restrictions are *way* too great right, and the pendulum needs to swing a long way back. But it is counterproductive to talk either about (1) some sort of “right” to profit from digital creation–there is none except that which promotes the public good nor (2) piracy, theft, or other morally-charged language to discuss restrictions on sharing.

  5. Nikki
    February 26th, 2009 at 11:11 | #5

    I'm not going to argue with your reasoning in general but Photoshop is a bad example. To me it's not at all clear that Adobe has lost money from this. Quite the opposite. Piracy has made Photoshop so available that almost everyone has it, cementing it's position as an industry standard. If people couldn't afford Photoshop, cheaper software would have a far greater market. As it is now either you buy Photoshop, or you pirate it – there's no (major) demand for competitors, giving Adobe a de facto monopoly in this market segment.

    It IS stealing, by law, regardless of if there are alternative models that might work better. Seriously, if you want to live in a market economy, then follow the rules of the market. I'm fine with “pirates” who are socialist or anti-market/different market/whatever, but being pro-market and a “pirate” is somewhat inconsistent (for the record, I'm not pro-market, but not a socialist either).

    “Copying is free” can be a problem. Unlike manual labor, “intellectual/creative” work mostly needs to be done to create progress which means that once something is “done” you're out of work. Imagine for example if there was a huge library of graphics and art, freely available. If you could easily find what you needed there, why would you want (to pay) for an artist/photographer? It's just unfair to expect creative people to work just as hard as everyone else on day jobs, and then come home and work for free. I'm fine with SHARING things, but not being used. It's a bit like in the filesharing world – everybody hates leechers who only take and never give. A bit ironic, no?

    By the way, I'm somewhat pro-piracy – doesn't really sound like it above huh? ;p

  6. February 26th, 2009 at 12:48 | #6

    I mostly agree with your comment. I think it is interesting that photoshop, and microsoft to a greater extent, do benefit to a degree from shared software. I think the key point is to change the law which, as you point out, currently criminalizes sharing.

    Thanks for your comment!

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