It’s no secret that I read Techdirt a lot. I think they have a lot of good ideas, and a good attitude about things. A lot of the ideas behind Manfred Macx are ideas that Techdirt talks about all the time.
I was arguing with a friend about this article, which talks about creating artificial scarcity in place of something in infinite supply. They give an analogy – what if we had Star Trek replicators for food, so everyone in the world could always have enough food, and no one would have to pay for it? Who, then, would take this food away from the starving? My friend argued that this would be terrible, taking jobs from everyone who works in the food industry.
Unfortunately, it’s not a very good analogy. There’s no real substitute for food – people have to eat. Whether or not you consider high-fructose corn syrup to be food, you can’t escape the need for calories to survive. For the analogy to hold, we’d have to replace the entire music industry, or the entire publishing industry, with something free. No one is talking about doing this.
A better analogy would be if the replicator only made tomatoes. You could have as many tomatoes as you wanted, they’d always be perfect and delicious, and they’d always be free. This would put tomato farmers out of business. But these tomato farmers could likely start growing something else instead. And what happens to the rest of the economy? Pizza and pasta restaurants suddenly find that a major ingredient in many of their dishes just became free. Now, for the same dish, they can charge less, or buy higher quality ingredients, or make more profit. And if you’re a really talented cook specializing in tomatoes? Your skills are now in very high demand.
And there is still a demand for the people who bring the tomatoes from the replicator to your table. There is still a demand for the person who stews and cans the tomatoes, or dices and seasons them. And all the other food items, the ones that aren’t in infitnite supply, still need people to produce, process, and distribute them.
This is what’s happening in the music industry, and starting to happen in the publishing industry. Some parts of the industries are finding their functions obsolete. Instead of looking at the money they could save with electronic distribution, and what good use they could put that money to, the industry is seeking new laws and regulations to limit the infinite supply so business can continue as usual.
Even if every single song, book, and movie was distributed digitally for free, there would still be a need for the music, publishing, and movie industries. There would still be demand for editors, producers, marketers, and all sorts of other services that these industries have always provided.
Reasonable people aren’t calling for the abolition of the music, publishing, and movie industries. They’re just asking these industries to look to the future, and stop trying to limit supply to protect obsolete business models.
Edit to add: This post has been translated to Spanish by a reader. My Spanish isn’t good enough to read the whole thing, but the parts I understand look good.
“Even if every single song, book, and movie was distributed digitally for free, there would still be a need for the music, publishing, and movie industries. There would still be demand for editors, producers, marketers, and all sorts of other services that these industries have always provided.”
You’ve not really thought this through have you,
Ok, I will, Do you know how a movie is created? someone writes a script, the finds a backer to fund the movie, that backer will look at the script and if the backer thinks that the movie would be popular and TURN A PROFIT, the backer will invest in the movie, or a group of backers will invest.
IF the script sucks, and the backers do not think the movie will successful then it is re-written or scraped.
The BOTTOM LINE is simply this, IF you do have have a mechanism of getter revinue rewards for your investment that investment wont take place.
Movies cost millions and millions of dollars to make, actors, editors, producers, directors, crew and so on, ALL NEED TO GET PAID. Not to mention the cost of equipment or sets and insurance and so on, it’s endless.
Youre utopian scheme is a pipe dream there is no mechanism for these movies, songs to be created. There is no incentive to create a product people are willing to pay for.
That is also what is wrong with FOSS, there is no incentive to create “commercial quality” product and services with free and unpaid / volenteer lagour.
Sorry, but it’s the same the drug industry, it cost millions of dollars to develop and test new products, if there was no reward for this development that development will not take place.
Your economic analysis is sound. It’s a pity more people didn’t think like economists. Instead we get economic “stimulus” that only function to depress the economy.
@Darryl – I’m not saying that there should be no reward for creating new content. Movies, for example – many of the most popular movies on filesharing sites are also at the top of the box office. This is because going to a movie is more than just the movie – it’s about the social experience or just getting out of the house. You can still charge for this – it’s not an infinite good.
@Black Ash – Thanks. I can’t call myself an economist – I think it takes more than two semesters of undergrad econ to be an economist. But I do prefer the economy to be good rather than bad.
@darryl – your drug industry description is more correct as it is more difficult to become an expert, have the required lab, chemicals, testing facilities/animals/people, and to meet all the requirements set by law.
the entertainment industry is not the same thing. there are good movies being made on small budgets. budgets so small that a return of a few million dollars is enough. will those budgets be able to produce the next iteration of transformers, spiderman, or how fast and furious can we be? no. ..or at least not yet. so the market for those movies is still largely closed to anyone but a select few.
but very small movies and, more fittingly, music of all types is open to the public. anyone can produce music. and maybe it isn’t all good, but it never was. now there is a lot more of it, both good and bad. and the move towards more inclusive production of art (visual, aural, text) will only increase as technology increases. assuming otherwise is being willfully blind to progress.
and if you only like your entertainment produced by large corporations, for whatever reason, you don’t need to worry. they are unwilling to change and raking in more money now than in years past. the industries (aside from plastic disc manufacturers) are fine and probably will be for some time.
Hi Jon Renaut, looking for information in Internet I found your post. Thank you very much for your analogy and ideas, it helps to understand easier what it would happen if Copyright laws were different. I have translated your post into spanish in my blog about the Copyleft, where it can be found also more information about my final degree project. On it I argue that Copyleft will help to the society´s development.
@Darryl: some comments on your post:
“Youre utopian scheme is a pipe dream there is no mechanism for these movies, songs to be created. There is no incentive to create a product people are willing to pay for.”
Without going into detail on whether the ideas are utopian or not, there is nothing in the article to suggest the product should be free. The product can be charged for but there are cleverer ways of doing so than by annoying your customers.
“That is also what is wrong with FOSS, there is no incentive to create “commercial quality†product and services with free and unpaid / volenteer lagour.”
You are speaking from (I must assume) complete ignorance. FOSS products are excellent and often superior to similar commercial products “within the context of their purpose” which is not always identical to “similar” commercial products. In addition, companies (including IT giants like IBM) have made billions in services revenues supporting FOSS. It actually proves the exact opposite of your view.
“Sorry, but it’s the same the drug industry, it cost millions of dollars to develop and test new products, if there was no reward for this development that development will not take place.”
This is also a debatable matter. Big Pharma made billions in profits even before patents were prevalent, for over a hundred years, back in the days when drugs were not nearly as expensive as patented drugs are today. In addition, drug branding has been shown to work well in markets where it has been tested leading to high profits for non-patented drugs. Keeping drugs patented and expensive has never been adequately proved to be necessary for high profits, it has simply been demanded by Big Pharma. It can be argued that it is only due to their desire for “super-normal” profits, which the market does not owe them (according to free-market principles).
From an R&D perspective (relevant for pharma and software, patents and tight IP laws have been extensively proven to stifle innovation and slow down development which in the medium to long-run hurts the companies that practice them. Unfortunately, management typically does not see this or is not brave enough to act on it….
darryl you’re right. At some point, someone will sell an ebook reader that consists of a plastic sheet, maybe with a cover, with about a gig or two of memory and wifi and bluetooth for connectivity, and a rechargeable battery. AND they’ll be able to SHARE FILES wirelessly, a feature that Apple assiduously avoids putting in their products. It won’t be perfect. But here’s the thing; if you order a million of them, they’ll only cost THREE BUCKS to make. So, Wired and everybody like that will give them away as a promotion. School districts will give one to every student. Pretty soon, everyone who can read will have one.
At that point, the value of print books will go to ZERO. Not even chumps will pay $25 for a hard cover book, or $6.99 for a paperback, since the book is FREE online and everyone knows it. If the book has any merit at all, someone will scan it and make it available FREE within days of publication. Magazines will be scanned, and the ads removed automatically and the magazine sans ads will be available FREE. News sites will be downloaded, the text and article photos extracted, and made available FREE within minutes of online publication.
If your friend has a book, magazine or news article you like, just put his reader next to yours. Voila! Your friend has all of your stuff, and vice versa, if you want.
There will be NO MONEY in writing.
As soon as the resolution on this virtually free ebook reader gets good enough, they’ll do the same thing for movies, tv shows and every other form of media that can be transmitted electronically. (You’ll listen to it on your Bluetooth headphones.) The day after a movie is released, it will be FREE online.
There will be NO MONEY in movie making, tv shows, documentaries or any other form of media creation.
Oh yes, I know what you’re thinking. Big companies will PAY to have content created, and then it will be released with their branding as a promotion. WRONG! Hard-working content thieves will release versions that have all of that offensive promotional material removed within minutes of release.
Do you like the mashups that the copyleft morons tout as creative? Great! Because that’s all you’ll get.
Do you like quickie blog posts that take just a few minutes of thought (and Internet “research”) to make? Great! That’s all you’ll get.
Because everyone with any brains or talent will be using their brains and talent to support themselves and their families, doing something that makes MONEY, because everyone needs money. (That’s why they call it MONEY.)
@Ed – Lucky for all of us who love quality creative content, there are plenty of ways to make money with creative works that don’t involve selling the actual works. A lot of bands are already doing it, and you’re going to see other parts of the content industry moving that way as soon as the business models get hashed out.
Because you’re right – the scenarios you explain are not entirely unreasonable. The only unreasonable part of your argument is the assumption that no one will ever be able to make any money from creative content.
Jon –
I know I’m putting forward a somewhat extreme scenario. I’m just saying: without sensible copyright laws that allow creative people to make real money by writing, even during the age of the Internet, adults simply won’t spend their time making things with zero value.
The extreme part of my scenario is the ZERO part. Sure, you can run a nice blog these days and let people read it for FREE, and yet make some money off the ads that run with it. You CAN make money – about enough to live in your parent’s basement and still afford a nice car.
I’m not saying that there is no way anyone will ever make money off creative content. I’m saying that there isn’t enough there to raise a family. And that’s what adults wind up doing, because that’s how human beings are.
You might be surprised at how many of the world’s creative artists did what they did for money. Especially writers. Sure, maybe they might have dashed off a short story for free here and there. But a career full of work? Only for money. Because writers have families and families need a regular flow of money.
Hmm. You’ve gotten me thinking. There have been many periods in history when artists made money to live by creating artistic works for the wealthy. The problem is that only the wealthy got to see many of those great works, when they visited each others mansions and palaces.
So, how about this. A really talented writer, just pick Charlie Stross as an example, needs money. So, he writes a novel because a zillionaire paid him $100K to do it. And Charlie prints one copy, that’s ONE print copy, for the zillionaire and then destroys all of his files, per agreement.
Just like the Medici paid artists for beautiful statues and paintings, and then kept those works for themselves, so modern artists – the ones with real talent – will make one-of-a-kind masterpieces for the wealthy.
Pity you and I will never read them.
There was only one way to make money – real money, money to support a family – as a creative artist in Florence in the 1400’s. (In their case, the average person had zero money for art, so there was no other way to get paid.) You demanded a commission from a wealthy patron. From Wikipedia on the Medici:
‘The Medici were responsible for the majority of Florentine art during their reign. Their money was significant because during this period, artists generally only made their works when they received commissions in advance.’
No money, no art.
Like I said, it’s a pity that you and I will never see them.
@Ed – You sure are good at thinking of ways to not make money from creative content. Do you work for the RIAA?
Seriously, though, let’s take your example of the zillionaire and Charlie Stross. I agree, one person reading the book would suck for everyone except the zillionaire and Charlie (And maybe even for him, since he might feel his hard work was wasted). Did you read “Halting State”, Charlie’s book where major plot points happen inside a MMORPG? It doesn’t matter if you haven’t read it – I just gave you the only really relevant part for my example.
So, rather than an eccentric zillionaire, what if, for example, World of Warcraft paid him to write a novel? It would center around the game, maybe some of it would take place in the game. They could sell raffle tickets for the chance to have your in-game character be a character in the book. They could have a contest for additional chances. Fans could even “participate” in a chapter of the story that happens in the game, and then Charlie finesses it into the story.
Then, WoW pays Charlie, so he’s happy. WoW players get to take part in a cool promotion, and maybe get their character name into the book, so they’re happy. WoW gets great publicity, probably some new subscriptions, and renewed interest from old ones, so they’re happy.
Everyone is happy, and they didn’t even have to sell a copy of the book. They could give away free copies of the ebook at the end of the promotion to help build buzz for the next promotion.
Now, maybe Charlie wouldn’t be interested, or maybe WoW wouldn’t be interested, but it’s a feasible model for making money on creative works without selling the actual content. And it doesn’t depend on strong copyright, or even any copyright at all.