Photo: sindicato de la imagen. Used under licence.
Paul Carr recently did a blog post entitled “Mentioning the Arctic Monkeys to prove a copyright point is the new Godwin’s law“ which states:
Seriously – can anybody send me a link to a single decent argument for reforming copyright law in favour of thieves? Just one. Or better still, does anyone who argrees with Arrington/Welsh want to write a guest post on the subject for this blog?
First convincing economic argument wins. Closing date – I dunno, whenever. I suspect it might take a while for someone to prove Arrington right on this particular subject. Those pigs aren’t going to teach themself to fly.
I’m sure Mike Arrington can stick up for himself and I’m equally aware of the link bait/book promoting aspect of Paul’s post – but needs must.
To look at the economic argument, you must first understand how the rules of the game have changed and why, therefore, existing norms now need to be updated to these new circumstances.
So what has changed?
0. The network is the computer
It’s become a precondition of technological devices to have computer and/or Internet connectivity.
1. The production chain has gone digital.
Audio, video and text production is now possible to produce in an end-to-end digital chain.
2. The distribution chain has gone digital.
Moving digital voice, video or text is only a matter of how fast you can do it.
3. The means of production and distribution have been decentralised.
The rise of the PC and the Internet to connect them.
4. The cost of digital storage has fallen.
Cost per MB now makes storage of vast quantities of data seem reasonable.
5. The speed of broadband has risen.
Moving vast quantities of data now seems reasonable.
6. The open source model has given developers an open platform.
If no one owns the platform then no one controls it.
7. The open standards model has given innovative companies a level playing field.
Open standards allows new ecosystems to develop and grow unhindered by incumbent players.
8. The increase in instant communication and social networking tools.
We now live in a world where the mobile phone, instant messaging and sharing links to data is the norm.
9. The use of digital content as cultural shorthand.
YouTube, Dailymotion, Flickr, Photobucket, WordPress, Blogger, etc.
Combined these have lowered barriers to entry, encouraged innovation and allowed data to be shared freely.
How have these changes affected the cultural environment?
What do you see as the digital future?
5 years out – Explosion in cheap consumer products that theoretically allows you to have digital content “anytime, any place anywhere”. Network architecture that doesn’t. Spectrum sale warms up. Computer gaming continues to grow as the pastime for teenagers. Convergence of electronic products is the norm. Fracturing of channels accelerates with growth in “online only” broad/pod/vod/IPcasters. Sky and BT merge. IPTV starts to be seen as a viable distribution model. Mainstream broadcasters content struggles to compete with online user generated content and consumers find access to content not an issue but finding the time to watch it the constraint. Branding imperative to “tag” your content, as people may well consume it without ever using your delivery vehicle. Standards and DRM come to the fore as delivery companies try to tie you into their preferred platform. Mobile delivery considered to be the next big thing (and this time we mean it!)
10 years out – Network architecture catches up. Sky/BT have their 21st Century Network in place, the BBC is delivering digital-only content (Except for FM still!) and shooting everything in HD – so is everyone else – network architecture falls behind again. Those who bought the freed up spectrum try to sweat every bit of content for as much revenue as possible to get a return on investment. Online archive of past week’s linear broadcast available on-demand and can be streamed as live. Channels fracture some more as IPTV allows for thousands of channels. Spectrum no longer the scarce resource, so BBC’s Unique Selling Point is primarily it’s quality. Mobile delivery considered to be the next big thing (and this time we mean it! No, really we do!)
20 years out – Network architecture catches up. Online archive of past year’s linear broadcast available on-demand and can be streamed as live. Ultra High Definition on the horizon – network architecture falls behind again. Mobile delivery considered to be the next big thing (and this time we mean it! No really we do! You just watch!)
What is really happening with the convergence of electronic appliances is not necessarily the shifting of all content to one platform but the freedom to substitute one digital good for another, both of which are in competition for the scarce resource – time.
The marginal cost of production – where a digital reproduction is claimed to have a zero marginal cost, as you still have the original but I have a perfect copy for free, as the cost of storage heads to zero, – is missing the point as far as I’m concerned.
I don’t wish to consume something only because it is free.
When the substitutable alternatives available to me are free of cost but require my investment of time then I have no incentive to add a monetary cost to the equation.
If what you have to offer costs me in monetary terms and time then you need to add value in a way that turns the substitute good into a complementary one.
The trick is to recognise who in the market are playing by the economic rules (mostly the consumers on the Internet) and who are seeking protectionist measures (mostly the rights holders – DRM etc.) and to show those seeking protection from the market how rational the market actually is behaving and that if they innovate, they can reposition themselves from being protectionists in a declining business model to being on the growth curve in a new business model.
Once your stuff goes digital you have to compete with free.
Free is not a bad/good thing in itself but it is important that you recognise it as your starting point.
Adding value to the experience is where the sweet spot is in terms of being on the upward growth curve.
I won’t jump into the straw man argument of arguing for reforming copyright in favour of thieves but I will make the case that any law which states that format shifting is illegal – thus making everyone with an MP3 player guilty – is one which is being infringed on such a scale as to make it meaningless.