The most fascinating aspect of this is not *why* it's happening, but the emotional framework that we have built up to make ourselves feel OK about it.
Essentially, we have turned all owners of intellectual property into villains and idiots that deserve what they have coming to them.
- Open source is good. Closed source is evil.
- Patent owners that protect their rights are "trolls".
- The music industry is greedy, so stealing is just.
- Etc.
Ridiculous.
Of course, I do believe the patent system needs some fixing, and I would not defend historical practices of record labels. But we are demonizing the *idea* of IP. And if we lose the ability to protect intellectual property that is not instantiated in physical form, we will lose huge engines of our economy. I am politically left of center, but the idea of some giant robin hood system that takes all IP and redistributes it for free to those that can’t afford it, or more likely *can* afford it but would just rather buy a 10th pair of sweat shop assembled Nikes, is appalling. (Irony alert! Nike = good, record labels = bad)
As I suspect most of you reading this are in some way involved in economic activity that is tied to the creation of IP, we should all be clear. As the current trend and cultural psychology continues to its logical conclusion, many more of you will be working with your hands.
In the end, I do think there is little that can be done about this problem. What we are seeing now is cognitive dissonance on a massive scale. For the most part we have just convinced ourselves that this is all OK. As a culture, we have developed wacky rationales for why obviously unethical, and more importantly self destructive behavior is justified.
Nevertheless, I don’t think the de-valuation of IP can be stopped. And I would not suggest anyone build businesses based on the idea that it can. Thus, my goals here are modest: If, after reading this, just a few of you feel a little bit uneasy about endlessly fattening your Limewire collections, I will consider it a success.
Perhaps the ultimate form of tilting at windmills. But doesn't someone have to say this stuff?
16 comments:
Very valid point, Hank. And I do feel a bit guilty about my limewire habit.
But that said you're not presenting completely balanced arguments here. There's very valid counter-arguments to all of this.
* Software patents aren't evil because they grant IP, but rather because they're being abused:
* they are being granted willy-nilly for things that are not novel or that have clear prior art
* they are being used to *stifle* innovation, instead of their original purpose to foster it
* they make no sense in the world of software, and wind up being a huge impediment to the progress of the field, rather than a benefit
* Why did I find the need to start using limewire? Because the recording industry refused to sell us the customers what we really wanted - downloadable, non-DRM'ed, music by the song, at a reasonable price. Does that give us the right to download music for free? Clearly not. But a) there's no question that if the record companies had joined with Napster (who wanted to provide us with that very service) back in the dot-com days, this wouldn't be nearly the problem it is today, and b) EVERY business needs to give their customers what they want - or risk losing business to someone who will (in this case Apple and Amazon).
It was against the law to drink back in prohibition days. But that didn't take away people's desire to drink, and so they drank anyway! All it did was force them to hide in speak-easy's and buy their liquor from organized crime.
Stupid laws eventually need to change. And our IP laws are no exception. I don't want IP to go away either (I'm in the IP field too!) - and it won't. But the world has changed, and we need new IP laws that recognize the reality that IP now exists in a world of abundance and instantaneous and widespread distribution. The old laws built on scarcity and monopolistic distribution need to go the way of the dodo.
David,
Thanks very much for the comment. It is greatly appreciated.
But as I said, I am not defending practices of the record companies, and I am not suggesting that changes to patent law are not a good idea. Actually many good changes to patent law have happened in the last year.
But the point of this is that we as a culture have decided that IP has no value. How we got here is irrelevant. The standard modus operandi is to justify what we are doing (which you do in your comment here) by saying that there are causes. But the cause ("how we got here" as you say it) is irrelevant. The point is that we have convinced ourselves that unethical and more importantly self destructive behavior is OK.
I am not against adjusting laws and that is not what this piece is about. It is about the growing perception that IP has no value. The meme is everywhere, and it is very dangerous to all of us who get paid from IP, and to the economy as a whole.
Hi Hank,
I agree with your sentiments, however, you put your finger on the bigger issue: everything in the U.S. is divided into Good v. Bad.
The reality is that the area is complex--but people don't have time for that. Lawrence Lessig doesn't argue against copyright per se--although many try to say he does. He says we should stick to the original intent: a "limited" period of time. Our friends at Disney have it up to 95 years (from originally 14).
Even the use of the word "property" has distorted the debate. The Constitution uses "property" only in the sense of physical stuff. While it creates the framework for copyright and patents (inventions)--it does NOT use the term "intellectual property"--that was a self-serving turn of phrase developed by IP "owners".
I believe in IP, and the right to benefit from it privately--for a limited time.
The other issue is that the kids just don't want to pay for music--and they will rationalize it any way they can. And I do not know a person one, not one, who doesn't have a burned CD or a copied MP3.
Where are you based? I'm in Oakland.
Hank, the funny thing is I was having that thought (digital IP = 0) just the very second I read it on your blog post!
I was thinking of how Amazon's aggressive moves in digital content services will play out. Especially in respect to Apple and iTunes. The conclusion I came to was that ultimately, unless Amazon's hardware business grows significantly in the short term, Apple wins. That is to say, those who actually have hardware to sell, or to loan will win. And that's because, like you said, the trend for digital (content) is free. (Incidentally, Amazon is getting into the hardware business on two fronts, Kindle and it's Web Services (servers).)
All of this, ironically, makes the hardware business an important market in the new *digital age*. What we consume our digital goods on will continue be important in the longer term.
Now here's a thought/question. How well does demand and supply and the notion of scarcity, which is what mostly determines prices, hold up in the digital age? Does it eliminate the idea of scarcity, the idea that all the *manufacturer* has to do is produce once (viz. a music track), and that that single copy can be reproduced to create an infinite number of copies? If it does, it seems then that the primary concern becomes making a return on the initial investment to produce the original copy. There is a lot of play-on from this that I wont get into, but suffice if to say that this model doesn't work for big media companies; but it seems better suited to the individual entrepreneur. Take Radiohead's little experiment as an example. All you need is a few people to pay to recoup your initial costs and make a healthy profit. You can rinse and repeat a few times and retire with a healthy pension. A big corporation is a beast that needs constant feeding, and is never satisfied.
Free seems to be the future but there are a lot of forces at play.
Spincycle, I agree with everything you said. I am not against the Lawrence Lessig position. I think he is someone who has thought deeply about these issues and come to very rational conclusions. And I am in New York City.
Nerdbrain, Lots of good and interesting thoughts there. Regarding amazon, thankfully for them they primarily make money from atoms and not bits. Bytes is a relatively new business for them which they rightfully believe they must be engaged in. But their bread is buttered with atoms.
Regarding content, the interesting thing is that it really does, today, take a lot of money to produce a great record. Or a lot of time (meaning you are unemployed along with all of your band and/or producers). Marketing costs money. Etc. What you are suggesting, probably correctly is that the professionalization of music may have to disappear. It may have to become a more amateur endeavor. This kinda works with music but it doesnt at all work with filmed entertainment that just cant, for the most part, be done on the cheap.
Your question of supply and demand in the digital age is purely tied to our own perception of right and wrong. If we believe that the only value to IP is tied to the cost to distribute it, then indeed there will ultimately be no value to IP. I do believe that it is going to go to zero. If it hurts the economy enough, punishments may become draconian enough to deter the unacceptable behavior. This might happen in some parts of the world and not others. Of course I really have no idea but it is interesting to consider.
This is the same ballaching you can hear from every dinosaur as its product becomes commodified. An important part of the whine is the disingenuous conflation of value and cost.
The answer is to provide something that is not yet, or cannot be, commodified. For example, Google spends a shit-ton of money creating astoundingly sophisticated and brilliant software, they don't charge a cent for it, and yet they're rich as hell. They've found a way to get paid even in an era of frictionless copying of intellectual "property". (To use the term "intellectual property" is, of course, to intellectually FAIL. You can claim you own it all you want, but if it's not scarce...)
Google made their quintillions by assuming that the marginal cost of information production would continue to decrease. I bet that's not a coincidence.
Linux (and open source generally) commodified the operating system... and yet Microsoft and Apple continue to rake in the dough, because they provide something that cannot be commodified. (Contrast with Sun, who in fact were offering only what can be commodified: that they have any customers left at all reflects the fact that scalable resource allocation algorithms are still a bit hard. Sure, Sun wins on massive scale single-image systems. That'll probably always be necessary to a certain small extent -- but IBM can tell you that you'd better move from mainframes to smaller, linked systems, or services, and fast.)
Another example is the movement of programming jobs to India, where the price of a programmer who can only write mediocre accounting software is lower than in the States. I've heard a lot of whining about that... from losers. Losers who almost inevitably start sounding like retarded racists. The smart people upgraded their skills and started offering something that is not yet cheap. Next year, the Indians will be even smarter and more hard-working, and more whiners in the States will be demoted or fired. It hardly means that as a culture we've decided programmers have no value -- it just means the market changes and you have to keep up to compete.
-- Written on evil, society-ruining open source Linux after a long, hard day of selling ideas at a nice profit
Anonymous
You seem to have missed the *entire* point.
There is nothing evil about linux. I didnt say it. I dont think it. I use it. There is nothing wrong with open source. What *is* wrong is open source folks saying that closed source is *evil*. Thats all I have a problem with because it contributes to the idea that making money off of software is wrong.
Your argument that the answer is to make thing that can't be comoditized is off point. Are you suggesting the problem with the music industry is that the product is not unique? That silly. The problem is that no matter how unique music is, we have decided as a culture that it does not need to be paid for. This is regardless of how unique it is. Again, I am focused on people's *attitudes* about IP.
I don't think there is anything wrong with foreign programmers. I have several working for me now. I don't see anything wrong with an honest days work regardless of where it comes from.
In short, the point here is simple. Stealing and devaluing other peoples IP work is wrong. When people work let a *real* market place decided what the value is. NOTE: limewire is not a real market.
Hank,
With regards to music becoming an amateur profession, I beg to differ. I just think that more musicians are going to have to make their minds up to tour. The general gist of your post is that atoms sell, bits don't - and I believe it is no different for entertainment. More musicians seem to be touring, and many are making quite a lot of money doing it.
Luckily, filmed entertainment lends itself well to advertising. And there is scope for innovation here too. It's not impossible to make money. People just don't like changing.
Come to think of it, most of this stuff has been given away free for a long time. Commercial radio has done it for years. So too has television. The problem here is that IP owners haven't been able to adapt to the internet fast enough.
I'm not an expert on the dynamics of the software industry, but in the physical world too software has traditionally been given away. People expect their Dell to come with Windows, they're typically not paying extra for it. Same with Apple, it's hard to know how much you are paying for the software. You're more concerned that you like how the machine works overall.
Again, you will have a better perspective on this but I think that the real problem is online software. There is no hardware sales to monetize it.
So, come to think of it, free isn't new. I think what's happened is that we now have the capacity to store and easily access IP (with regards music and the like), which then disrupts the advertising model. IP is now infinitely re-produceable and storable. And the internet is a powerful distributive tool for soft wares. This gives people the option of how they want to consume them.
A very interesting topic
"With regards to music becoming an amateur profession, I beg to differ. I just think that more musicians are going to have to make their minds up to tour."
You are mistaken here. There are few artists that dont like the idea of touring. For new artists, the cost of touring is subsidized by the label because it is very hard to sell even 100 tickets. to anything. 100 tickets at 30 (a lot) is 3000. Now you have to split that among your band members, cover gas transportation and any other support. Then, how often can you do that? Once a week? Perhaps. Again, 100 seats is a lot of tickets. And of course the artist doesnt get all of that money. And they have to pay someone to book the shows, etc. Most artists cannot make money selling tickets to shows.
The reason labels have historically been so important to new artists is because they put up a bunch of money, to make the record (producers, songwriters, studio time, photographers, album art, marketing). They put advance cash in the artist's pocket, and they generally lose all of that money because the artist fails. They take risks on artists. And they make it up when a few pop. Without such a system in place, artist will not be able to pay song writers, producers, background singers, etc. And they wont have a label to book or subsidize a tour. So that is why I say it will be amateur. Because artists will not be able to do all of the things at the same level they have in the past. Without the labels making these *huge* investments it will not be possible.
"Luckily, filmed entertainment lends itself well to advertising. And there is scope for innovation here too. It's not impossible to make money. People just don't like changing."
As our pipes get bigger, people will steal everything. And they will not sit through commercials. Tivo or the equivalent will be everywhere. And what we are finding is that people *hate* sitting through online video commercials. They ditch more than 50% of the time when they see a pre-roll. I think it is going to be very hard to monetize video. Not impossible, but at far lower levels than TV has been up until now.
It is an interesting subject and I don't have any of the answers. I am merely point out that these are *very* hard problems and they are very real.
Hank,
Your last point on advertising is similar to what I said: "So, come to think of it, free isn't new. I think what's happened is that we now have the capacity to store and easily access IP (with regards music and the like), which then disrupts the advertising model. IP is now infinitely re-produceable and storable. And the internet is a powerful distributive tool for soft wares. This gives people the option of how they want to consume them."
Musicians don't just sell tickets, they sell a brand. There are lots of things they can flog. (Rap musicians have been pretty industrious.) Plus nowadays advertisers are happy to sponsor tours. It's not impossible. Just hard work.
Also, I think Anonymous makes some really good points. Even the law recognizes that ideas aren't themselves unique. IP law seems to aim to commercialize industry. That is, it is an encouragement to commercial activity and by way of such activity, taxes. But the fact those ideas are not (weren't?) protected forever means that you can never truly *own* an idea.
Again, interesting subject.
"Musicians don't just sell tickets, they sell a brand. There are lots of things they can flog. (Rap musicians have been pretty industrious.) Plus nowadays advertisers are happy to sponsor tours. It's not impossible. Just hard work."
Again, you are mistaken about this. There are a very few musicians that can get sponsorship. Particularly in Rap where it is *much* harder. There are a handful of artists that can get sponsorship. An artist that is only selling 100 tickets will *never* have any sponorship. You have to be selling out multi-thousand seat theatres to get the attention of sponsors.
By the way, you mentioned rap. Most rap artists make *no* money touring. Unlike rock bands that can play small clubs, there are no equivalent venues for rap artists. Most young or not huge rap artists survive by selling bootleg songs to mixtape producers. The labels look the other way because the artists need to survive. What you see on TV is not, for the most part real. For all but the biggest artists it is a tough life.
I know a little bit - ok a lot - about this because in 2002 when I was disolusioned with tech after the crash. I played around with the idea of starting a record label. We produced a great record, but I decided it would just be way to expensive to get it off the ground so I killed the project. It was a rap record. Also from running Clickradio I became friendly with lots of people in at every level of the music business - artists, labels, agents, etc. I learned the dynamics. Your suggestion that people just dont want to work hard is off. This is one of the most competitive businesses on the planet. Everyone wants to be in it because they think it is glamorous.
"Also, I think Anonymous makes some really good points... But the fact those ideas are not (weren't?) protected forever means that you can never truly *own* an idea "
I think you mean spincycle. And as I said I generally agree with what he said. But regarding whether you *own* an idea or not is really irrelevant. If I rent an apartment instead of own it, it doesnt give you the right to break in and sleep there. IP law gives rights. People accessing my IP without permission are stealing. If you want to say I don't "own" that IP its fine. It still doesn't give you the right, by our laws, to use it for free, without my permission.
Ohhh yeahhhh, it's "me" again.
Where to begin.
1. On open source/proprietary software, you're conflating two issues: closedness vs. openness, and non-/for-profit. Pretty much nobody thinks it's evil to make money on software, including open source software. Everybody does make money on it: Google gets a cheap operating system they can customize, so they save money that would otherwise have gone to an OS vendor. And/Or, their programmers are their OS vendor, who make money on it in the form of a salary. Win-win. Oracle gets a higher margin on their database because their software runs on a now-cheap complement product. Red Hat makes money selling a premium version of the free thing. Numerous small businesses make money selling sys admin services for free osftware. Etc. Even Richard Stallman -- surely, the free software ideologue par excellence -- felt perfectly happy charging lots of money for GNU.
Second, no matter what trips your "EVIL" alarm, proprietary software can be credibly argued to be evil. Free market religionist? Attempts to embrace and extend the competition are anti-competitive; open source is a market corrector. Communist? Open source is the yearned-for utopic revolution against the evil capitalists. Privacy and/or security nut? Proprietary software can't be easily understood, audited, modified to be safer, and it often (Windows, OS X) actively works *against* the user's threat model. Lawyer? Proprietary software licenses, when they can be understood at all, are rife with dubious claims, outright unlawful claims, abusive claims, and weird crap.
2. The music industry is having trouble because its product is not unique. Yeah. All the nu-metal sounds the same, all the Lolita-child-porn pop sounds the same, all the "urban contemporary" sounds the same. Their shit is sub fucking standard, end of story.
3. Yeah, musicians should go back to providing something that can't be a commodity, like they used to. They are. They should do it outside the context of the mafia. They increasingly are. Maybe they can get their 100 listeners a night/week by using the massive free advertising engine we call "the cyberwebs". My little local bands pulled that off once a month, surely a real band could do at least as well.
4. Stealing is wrong. Infringement, which is part of what you're talking about, is a market research problem far more so than a crime (and when it is a crime, it's a completely different class than theft). Limewire *is* a market... of people eager to buy concert tickets and merch, of advertisers, of twenty-something kids with disposable income, of proven music lovers, of fashionistas. They want to buy something, if sellers can just figure out how to sell it.
"Devaluing" "intellectual property", better stated as "people coming to a consensus that the law is not aligned with market reality as regards the proper cost of non-scarce goods", is inevitable. Stated another way: black markets, like Limewire, are indicative of a market inefficiency.
Hank, you remind me of my friend who religiously buys every sellable item (LPs, CDs, shirts, tickets, photo albums) from all his favorite bands, all of whom are on non-mafia-affiliated labels. He doesn't get that the web is the medium; he wants the large artwork that comes inside the $50 4-disc limited edition LP. But most of all, he just wants these damn kids to get off his lawn.
5. Oops, I made more money selling ideas again today. How do I keep doing this, even as our culture "devalues" my "property"? It's like a conundrum or something! Shits!
Good article. On the particular issue of music, there are two factors that need to be addresses. Who buys new albums? Teenagers. Why? Having cool records makes you cool. How do they pay for it? Minimum wage jobs.
1984. Minimum wage is $3.35. A new album with a large colorful cover costs $6.99 - 2 hrs work.
2008. Minimum wage is $5.85. A new CD with a tiny boring cover costs $22 - 3.5 hrs of work.
The price no longer reflects the value, that's why teens are not buying. And the dangerous side effect is that an entire generation has learned to steal because the pricing was wrong.
Second point. How can a kid hear cool new music? in 1984 the answers were mtv and the radio. It is 2008. All radio stations are owned by ClearChannel. Everything they play is extremely UNcool corporate drek. MTV plays irrelevant nonsense as well. The groups I hear kids listening to today get NO airtime on the radio or MTV. Corporate music sucks and they have dug their own grave.
That is the real reason the music industry has hit bottom.
"Stealing is wrong. Infringement, which is part of what you're talking about, is a market research problem far more so than a crime (and when it is a crime, it's a completely different class than theft)."
Anonymous. Most of what you say in your argument is nonsensical or just factually inaccurate (like the suggestion that artist can make all this money touring) or circular logic (like saying that no music is unique as a rational for stealing something. if you don't want it why steal it?)
But the above quote from you is really at the core of the issue.
An artist makes a song. It makes you smile. It makes you dance. It touches your heart. It transports you. You listen to it again and again and again because it makes getting through the day just a little easier. And you feel no impropriety in not paying for that. Its not theft you say. Its not that bad.
I strenuously disagree.
To the extent you disagree with me on this, you have no soul. Human beings created that product. And no empty diatribe about evil record companies (you have no idea what the financial arrangements i.e. indie label, big record co advance, etc, are behind a given record) gives you the right to fill your emotional coffers and leave the tip jar dry.
On behalf of every musician that has ever made you smile, shame on you. Not paying for music hurts them, and there are few *musicians* that would disagree with that.
"To the extent you disagree with me on this, you have no soul."
I knew I could eke an ad hominem out of you. I'm sorry for laughing but it's just so funny.
The irony is that I am a maniacal music lover, amateur musician, and an astoundingly good customer. I spent $400 on music in December alone, not counting the music I gave to other people as presents. The most wonderful musicians in the world, like Ornette Coleman, Neko Case, Vernon Reid/Living Colour, Pharaoh Sanders, ... have made good money from me. I'm glad to pay them. I wish I could pay them directly instead of giving them a tiny fraction of the overly high price of a CD. I am ironically almost alone among my peers (except my "get off my lawn" friend) for infringing copyright very rarely, and I only do so as a "try before I buy" thing. Really. On my desk right now is a stack of 22 CDs I bought a couple weeks ago, some of which I discovered from the USB thumb drive of a friend. Copyright un-infringed. A wrong righted? A market served.
Most of what you're saying is factually inaccurate, like that we can ignore the profound changes technology has on markets, mores, and the applicability of laws; or like that musicians got any better deal under the old regime. (To be fair, I guess you're only implying that with your nostalgia. But let's get it out there: the reason I hate the mafia so much is that they hurt musicians so bad artistically and financially. Have you even read Steve Albini's rant? Can you credibly counter it?)
And my argument is not circular. Have you ever noticed that Big Champagne's market research differs sometimes quite markedly from the official corporate label line? Meredith Burgess' post is no surprise. The Kids These Days have their own agenda, preferences, and methods. Kids rightfully rule the world, because it's theirs. The way to get rich is to give them what they want.
Anonymous
Please quote me properly:
"And you feel no impropriety in not paying for that. Its not theft you say. I strenuously disagree. To the extent you disagree with me on this, you have no soul."
That is not an ad hominem attack. It is a reflection of characterizing values. I did not call you Hitler, or say you are an asshole (which I dont think) or something like that. To me, not *feeling* its wrong to play someones music and not to compensate them and not thinking that there is anything wrong is soulless. I really don't mind that people do it - no one is perfect. I mind that there is a guiltless "I'm not doing anything wrong" attitude.
I am *very* glad to hear that you do indeed pay for music. It also reflects that you do not *really* disagree with me and that this discussion is really just sport.
"Most of what you're saying is factually inaccurate, like that we can ignore the profound changes technology has on markets, mores, and the applicability of laws."
You are confusing facts and opinions. My views on what should or should not be done (or really how we should feel) are just opinions. You stated things as facts (which I pointed out) that are inaccurate.
Your point about hating the "mafia" is fine. I totally understand. But arguing that theft of music is OK because it hurts the "mafia" is problematic because it also hurts musicians. If all musicians (or the union or whatever) took a vote and decided that copyright for music should be abolished, I would agree with you strenuously. I am *very* pro musician. But the economics of music are very complex. Most musicians don't want to eliminate copyright and would like to sell their music - through a label, or from the back of their car. To the extent we make that concept seem "silly" we are all collectively damaged. As a society, supporting our creatives is an important value that I will not concede.
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