Megnut

Rehashing the same stale file sharing argument

Over on Dangerousmeta I saw a link to this Op-Ed by Daniel Henninger from the Wall Street Journal,Can Justice Scalia Solve the Riddles Of the Internet? Without profit even the digital world will break down. Having recently read the excellent profile of Justice Scalia in The New Yorker (which frustratingly doesn't appear to be online), I was curious to read the article. I was disappointed to discover it rehashed the same old fallacious arguments about people "stealing" music online, and worse, that it got mired in questions of morals.

One would expect the article, beginning with its subtitle, "Without profit even the digital world will break down," to espouse a pro free-market stance (it is the Wall Street Journal, after all), but one only has to read half of the piece before Mr. Henninger begins to crow for old business models to be locked in place by the government if "the people" (Pirates, I'm looking in your direction...) won't follow the old rules:

[T]here will always be another wave of digitized aliens hacking through the copyright walls. There has to be a better way.

There is. It's called right and wrong.

It may seem quaintly old school to suggest that people should stop downloading culture without paying simply because it's the right thing to do. But that may be the best option available.

For starters, if "the people" don't solve this problem themselves, Congress will, and you won't like the solution--unless you enjoy the tax code.

Why it's up to "the people" to solve a problem that's surely not theirs I don't know. Worse, the presumably pro free market writer Mr. Henninger, (who is the deputy editor of The Wall Street Journal's editorial page) threatens/encourages/suggests government intervention rather than identify the real source of the problem: the media companies themselves. Instead he hints that downloaders may just well be a bunch of Commie freeloaders!

I would push this even further; it requires a moral or at least philosophical commitment to the legitimacy of profit. Absent that, there's no hope.

If only Mr. Henninger, the RIAA, and those enamored of their old business models predicated on tangible media would stop litigating for the past, they would see there's a whole lot of hope out there.

According to this Pew Internet & American Life Project March 2005 Data Memo (warning: pdf):

Current file downloaders are now more likely to say they use online music services like iTunes than they are to report using p2p services. The percentage of music downloaders who have tried paid services has grown from 24% in 2004 to 43% in our most recent survey.

There are two things happening with online file sharing:

1. It's the market's way of saying not that it doesn't see profit, per se, as legitimate but that the prices charged, for example, by BMG for Shakira's CD don't reflect its perceived value.

2. People are willing to pay when there's a means available for them to do so that embraces what's great about the digitization of media (easy access, portability, recommendations/sharing with friends and family, etc.).

Just because large companies chose to ignore this technology rather than embrace it doesn't mean the market should as well. The market is actually working as it should, and consumer demand is driving the development of stores like iTunes. The people/market aren't wrong, it's the companies who'd rather litigate instead of catching up, or leading.

What if big media companies -- instead of pouring millions into lawsuits like Metro-Goldwyn-Mayer v. Grokster -- invested money to:

1. Digitize all the content in their catalogs, and offer it for sale through iTunes or some other online music store of choice. During the 2003 Eldred v. Ashcroft case, the Supreme Court found that 98 percent of all copyrighted works are not commercially available. Digitize all that, and suddenly there's a whole lot more to sell.

2. Continue to explore and expand ancillary revenue streams from all the album extras like concerts and merchandise. I seem to recall from a New Yorker article that this is where a lot of the money comes from anyway, and a large amount isn't from CD sales.

3. Embrace the web -- not just to create a distribution mechanism for the digital bits, but also for the fans. Create lively sites for each artist, populate them with real consistent content, create conversation space for aficionados (what fans have already done with sites like green plastic radiohead, a fan site for the band Radiohead) and build the traffic. Make money off of the ad revenue.

How hard is it to adapt and evolve one's business model to the changing time? I think that's what irks me the most about all this -- taking it to the courts to ensure that because something once was, it should (be legislated to) always be. All this "copyright" is just code for "profit."

P.S. What about a bumper sticker that says, "Your failed business model is not my problem"?

P.P.S. In retrospect, this is such a stupid article, I can't believe I wasted any time responding to it, when I could be enjoying the glories of Paris!

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