Left Oblique

Wednesday, January 18, 2012

SOPA/PIPA

The price we pay for freedom is that occasionally, someone will figure out a way to subvert an antiquated information delivery system. That's one of the reasons many creative people (authors, artists, game designers, etc.) have switched to a Kickstarter/donation-based model to finance their activities.

When you think about it, it's pretty smart. If you want to write a book or sell a game, you have to create it first. That takes lots of time. Then you have to find a publisher willing to print/distribute it.¹ Then, you hope people buy it. So the success of good artists is predicated on having enough money saved up to get through the creation process, getting someone to publish their work, and having that work promoted and sell well enough to make up for the initial investment plus enough to get through the next project. In this model, if people steal your product, you lose money.

The new model is this: get out there on the internet and get people excited about your new project. Get them to fund it, or part of it. Then do it. Give the people who put up the money their product (plus maybe some goodies for getting in early). Sell your product based on the buzz it generates. If it's good, people will give you money, which you can use to get a head-start on the next project. If you can't generate the buzz, you know ahead of time the product won't be a success and you can choose not to waste your time on it.

In the second model, if people take your product after the fact for zero dollars, it doesn't hurt you. You still get the buzz and word of mouth to drive future sales, and the project was more or less paid for up front anyway.

The second approach also cuts out the publisher. Publishers are doing badly right now. Part of that is due to piracy. Part is due to the fact that - as I just described - for many types of media, traditional publishing is not the right approach. People are buying things electronically. They're buying them due to word of mouth. They don't need a publisher as a gatekeeper and distributor anymore.

So the traditional content distributors are getting antsy. They're trying everything they can to hold onto their business and profits. And that means they're trying increasingly extreme measures to attack the one thing that isn't simply a paradigm shift in the market: piracy. And because they have money and clout in Washington, and because legislators aren't savvy enough to understand the technological implications of what the publishers want, we gets laws like DMCA and SOPA.

We're moving towards a new era. It's an era without gatekeepers. It's an era in which the big productions - movies, games books - still sell, though maybe not quite as well as before. But it's also an era in which small artists and content creators can survive by creating dedicated fanbases, without needing a big publisher to front the money they need to survive from day to day. That means more opportunities for artists, more choice for consumers, and a more diverse and interesting culture. In other words, we should be rejecting laws like SOPA and embracing the new future of media.

Let's just hope our congressmen can see it that way.

¹ Note: contrary to popular belief, this step doesn't cost anything. Traditional publishers pay you to distribute your work. Otherwise, it's a scam.

Posted by Dave at 9:58 AM | Tags: media, tech

Comments

Brian

In the second model, if people take your product after the fact for zero dollars, it doesn't hurt you.

What you don't note here, and what is one of the ROOT fallacies at most guesses at economic losses to piracy, is that you ALSO don't get hurt by this in the first model when your product is taken by someone who wouldn't have otherwise paid for it. While they are most certainly doing something grossly unethical, they aren't harming you directly.

The "cost of piracy" is distorted in other ways (http://www.cato-at-liberty.org/how-copyright-industries-con-congress/), of course, but that's attempted delusion of others. It's common self-delusion that each (or maybe even most) instance of piracy equates to a lost sale.

Anyway. I'm not arguing against anything you said.

Posted on Wednesday, January 18, 2012 at 10:53 AM

Dave

I think there's a sort of Laffer Curve¹ effect here with piracy. At most reasonable price points, yes, the people who pirate are people who would not have bought anyway. However, are they people who would have bought at a lower price point, or people who would not have bought at all?

As the retail price of a product increases, the number of people who choose piracy over purchase necessarily also increases, to a point where there is a diminishing return on profit. Content providers have two options: spend money to prevent privacy (through DRM, copy protection, or lobbying for legislation) or reduce their price to the new equilibrium point that maximizes profit. The second option is the realistic one. The first is a losing battle. It doesn't matter that the piracy is illegal or immoral - it's a feature of the current market and is largely impossible to stop, especially at a cost comparable to the profit that could reasonably be recouped.

¹ To introduce another hobby horse of libertarian think tanks like Cato.

Posted on Wednesday, January 18, 2012 at 12:09 PM | URL