RapidShare Hires Big DC Lobbying Firm To Convince Politicians That The RIAA/MPAA Are Lying About It
from the world-we-live-in dept
Europe-based RapidShare has been taking a lot of heat lately from the entertainment industry, which has tried hard to prove that the company is one of the “worst” operators out there when it comes to file sharing. Earlier this year, RapidShare was listed as one of the five sites that the Congressional “anti-piracy caucus” considered to be the worst offenders of copyright infringement, based almost entirely on complaints by the RIAA and MPAA. Of course, Rapidshare serves plenty of legitimate purposes as well — and the company has been known to fight back against charges of copyright infringement and win, both in the US and in Europe, where courts have noted that simply acting as a hosting provider, which responds to takedown requests, takes away the liability.
The company also has been known to hit back at those who accuse of it of being complicit with copyright infringement, and its latest move is to try to counter all that lobbying by the RIAA and the MPAA by hiring the giant DC-based lobbying firm Dutko (which, admittedly, has been having its own problems lately.
Of course, just hiring a lobbying firm isn’t likely to change things by itself. You can bet that the RIAA and MPAA are spending a hell of a lot more on lobbying against RapidShare. But it really is a sign of the times that a European company feels the need to hire lobbyists just to explain to US politicians that setting up web servers that host content is not automatically about copyright infringement.
Filed Under: copyright, lobbying, politics
Companies: dutko, rapidshare
Comments on “RapidShare Hires Big DC Lobbying Firm To Convince Politicians That The RIAA/MPAA Are Lying About It”
Finally
All the incentives line up for the politicians.
What does Rapidshare do to stop the ridiculous amount of infringing material from being uploaded to their site?
Nothing. They don’t do anything at all.
They deserve everything that gov is going to do to them.
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What do you propose they should do?
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How do they know what is copyrighted and what isn’t? They can’t assume files are copyrighted when they aren’t. Simply put, it’s up to the copyright holders, not RapidShare to police the content.
What does Rapidshare do to stop the ridiculous amount of infringing material from being uploaded to their site?
—Nothing, they don’t have to. They have a TOS in place that states users are not supposed to upload such material.
Nothing. They don’t do anything at all.
—Except for that TOS thingie.
They deserve everything that gov is going to do to them.
—No, they don’t. The entire internet would shut down if every piece of uploaded material had to be scanned for infringement before it was allowed to be posted. I’d assume they’re operating under the assumption: Ok unless shown to be otherwise.
—Oh, btw Anonymous, the letters in your previous post form a pattern I have a copyright on. You now owe me money and deserve what the govt. is going to do to you.
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“How do they know what is copyrighted and what isn’t? “
It’s all copyrighted! (Since ’78, anyway.)
My name halfway spelled out with piss in the snow? Copyrighted! (Expect a DMCA takedown, Flickr.)
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They could try something like this:
http://audiblemagic.com/products-services/contentsvcs/
Seems to have worked for these folks:
http://audiblemagic.com/clients-partners/contentsvcs.asp
The point is, they don’t do anything.
And that’s why they’re going to have trouble.
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So… the government is going to continue allowing losing lawsuits to be filed? They’re going to pressure financial institutions to not do business with them? Just what is it you expect the government to do here?
And the article is about what the RIAA/MPAA was doing to them, not the government. Or do you mean that the RIAA/MPAA owns enough of the government now to be considered ‘the government’.
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Aww, the ignorant people living in the past are so cute.
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Like your life before stuff like this?:
http://www.google.com/support/youtube/bin/answer.py?hl=en&answer=83766
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So because Jim-Bob is doing something more than is legally required: A site which is cooperating with all legal requirements (Taking down when notified via DMCA) of a 3rd party host, than suddenly everyone that isn’t Jim-Bob deserves to lose their business?
Sorry, you are wrong and your stance falls flat on it’s face with even light review.
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Snore. The DMCA doesn’t protect sites that knowingly facilitate infringement.
Whine about it all you want, they’re going to have trouble in 2011. Watch.
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Oh, you mean the stuff not required by law whatsoever?
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Quick, shut down the internets.
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How do they know what’s *authorized* and what isn’t might be a better way to put it.
And they wouldn’t know, since all the algorithms in the world cannot predict such. It’s not on them to know it anyway, it’s the rightsholders responsiblity and no one else’s – not the government’s, nor the taxpayers’, nor RapidShare’s.
“RapidShare Hires Big DC Lobbying Firm To Convince Politicians That The RIAA/MPAA Are Lying About It”
Lobbyists don’t work without campaign contributions. The RIAA/MPAA has an advantage in this regard.
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No matter what is done, there is always “more” that can be done and, even so, there will always be infringement unless the service is completely shut down. The answer isn’t to always require “more” to be done, the answer is to make IP laws more reasonable (ie: they shouldn’t last 95+ years) or, if necessary, to abolish these laws altogether.
Laws that deprive us of our natural rights (to copy) have no business artificially increasing the cost/prices of services like Rapidshare or making such services unavailable. No one is entitled to a monopoly and we need to strictly limit how much these monopoly privileges impede on our rights.
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In foreign countries no less.
Rapidshare is the exact type of service that will end up costing everyone else their 230 protections. More mainstream companies like youtube and such should be pushing hard to make sure these guys don’t ruin it for them.
Hey look, a group on the other side of the copyright debate finally wised up and decided to put a few resources where they might actually count.
I know that hiring a high-powered lobbying agency isn’t nearly as effective at changing legislation as, say, writing a really angry blog, but maybe this approach will have some impact.
It’s endlessly amusing (in a black-comedy way) to see how the anti-IP set can dish out “advice” in spades to Big Content about how to adapt to deal with things like piracy, but then can’t seem to figure out what it takes to make a legislative change.
Access and time are scarce goods, and doubly so when you’re a legislator. Access begets influence. You want it, you’re going to have to compete for it. You can whine all you want about Big Content’s problems with their business models, but they’ve got you hands to nuts on their influence model.
It’s human nature to copy? Great, well it’s also human nature to give access and preference to people who support you and who know how to work the system.
Is that unfair? Well, maybe, but then again many rightsholders will tell you that piracy is unfair too. What’s your advice to them? Oh, right, to just adapt and deal with it, since it’s not going away. Well, as unidealistic as it may be to say this, I’m pretty sure that techniques like lobbying and campaign contributions have been around since the Roman Senate – far longer, even, than copyright – and you’re much more likely to change the latter than the former. So hey guys, adapt and deal with it.
For RapidShare’s part, I find it funny that they have discovered a business model that works better the more willfully ignorant they are about business they are actually in. That’s the hallmark of an upstanding corporate citizen, to be sure.
But good on them for pulling their heads out of their asses and putting some boots on the ground.
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and another thing that needs to be done to make copyright more reasonable is to make it opt in (and have a short time frame that the content must be opted in by) and have a freely accessible central database somewhere that identifies content under such protections so that Rapidshare and others don’t have to hire psychics to identify infringing content.
Again, IP (copyrights and patents) is a privilege, not a right, and we need strictly limit the inconvenience and harm that they cause society and we need to strictly limit how much these monopoly privileges impede on our rights.
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It’s endlessly amusing (in a black-comedy way) to see how the anti-IP set can dish out “advice” in spades to Big Content about how to adapt to deal with things like piracy, but then can’t seem to figure out what it takes to make a legislative change.
Access and time are scarce goods, and doubly so when you’re a legislator. Access begets influence. You want it, you’re going to have to compete for it. You can whine all you want about Big Content’s problems with their business models, but they’ve got you hands to nuts on their influence model.
I think you might be missing the point of our position. Actually, I know you are, but it’s amusing to see you pretend you get it. The reason we talk about file sharing and such is because it’s a MORE EFFICIENT system economically and technologically speaking — and greater efficiency means greater opportunity and a larger pie.
A corrupt political system that relies on money and lobbying for access is the opposite. It’s a gatekeeper system, not an enabling system. It shrinks the pie and makes people worse off.
So, no, not the same. Though, gotta admit it’s really kinda sad to see you entertainment industry types so frequently misstate our position as a crutch in denying that what we have to say might actually have value to you.
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it’s a MORE EFFICIENT system economically and technologically speaking — and greater efficiency means greater opportunity and a larger pie.
When the money is taken out, there is no way for the pie to get bigger. Maybe everyone gets a free zipped video of the pie, but there is no pie.
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“A corrupt political system that relies on money and lobbying for access is the opposite. It’s a gatekeeper system, not an enabling system. It shrinks the pie and makes people worse off.”
I completely agree, a political system where interests are bought isn’t a good thing. Unfortunately, such a system has probably been in place since governance has existed and I don’t see such a system going away anytime soon. It’s a cold, hard reality but, as long as laws are bought (ie: 95+ year copy protection lengths) we might as well try and ensure that the laws that are bought serve the public interest (ie: fewer copy protection laws).
It’s the lessor of the two evils, we can either not buy good laws and have bad laws prevail or we can deal with the economic inefficiency necessary to buy good laws.
Unfortunately, America is starting to turn into what the U.S. used to criticize Russia for. The Russian government has always been known for passing laws that are only intended to protect its big businesses, often at public expense, and in Russia people who question big businesses, point out their misbehavior or demand they be punished for it, or question them and something that serves their interests can wind up dead (and sure, it’s probably happened in the U.S. but fortunately it’s far less likely here). The whole bail out thing was also something that we used to criticize the Russian government for. We’re still a long ways from what Russia is but we do seem to be headed in that direction.
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It really doesn’t matter what your position is or how right you feel it is. You could be arguing for rabbit rights or National Lettuce Day to be made a national holiday. If you have no influence, it’s not going to happen, especially when the other guys (I don’t know, the “rabbits are delicious” and Cabbage Consortia, respectively) have massive lobbies and put their money where their mouths are.
A corrupt political system that relies on money and lobbying for access is the opposite. It’s a gatekeeper system, not an enabling system. It shrinks the pie and makes people worse off.
True or not, and corrupt or not, that’s the system you have. Now you can adapt and deal with it, or you can get steamrolled. Since all these new business models are superior to the old ones, there should be plenty of money and creativity available to go after some of that scarce influence.
I don’t know why you’re mad, we’re just trying to help you.
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It really doesn’t matter what your position is or how right you feel it is.
It’s not about how I feel. It’s about understanding economics.
If you have no influence, it’s not going to happen, especially when the other guys (I don’t know, the “rabbits are delicious” and Cabbage Consortia, respectively) have massive lobbies and put their money where their mouths are.
Indeed. Not sure what point you think you’re making.
True or not, and corrupt or not, that’s the system you have. Now you can adapt and deal with it, or you can get steamrolled.
Indeed. And there are different ways to adapt.
I don’t know why you’re mad, we’re just trying to help you.
I guess you think you’re being funny. I’m not mad. I just think you’re uninformed.
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It’s not about how I feel. It’s about understanding economics.
It’s too bad that solely economic arguments won’t carry the day, then. You have a legislative climate, a judicial climate, and lots of sometimes-rational, sometimes-irrational people to deal with.
Indeed. Not sure what point you think you’re making.
I dunno, I was in here musing on the relative value of different tactics for getting legislation changed, and then you showed up to assert the rightness of your position, which (as I said) really doesn’t matter. I was saying that I find it sort of amusing that the anti-IP set loudly criticizes the pro-IP set for how they deal with the problem of piracy, but then deals with the problem of “buyable” government in much the same way.
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They already do muppet, they have those things is just it doesn’t work because people don’t use the video file they packet inside a encrypted compressed file.
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When others are making money and not you the problem is not others is you.
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True the cold fact is that we live in a corrupt system.
But we can make it better, we now have the tools to create, discuss and put in the public view in ways that will be hard to ignore.
I believe that was is lacking is a target people don’t know on what to vote for, we just need a place where we can get everyone interested to put force their views and vote on those before hand to identify the common grounds that we as a people have and work on them.
A forum outside the reach of lobbies.
We need to create a virtual legislative where people vote on issues and come together to vote in the real world for the things they want. You don’t need to vote for anybody that doesn’t fallow what the people tell them too.
That is why we need something like “LawCreator.com”(made up name). Using cryptographic keys to mitigate the possibility for people to game that system and using graphical maps with lots of bars demonstrating consensus we can see where things are going and handpick politicians for their terms.
Would it make it corrupt free? I doubt it, but it would organize the people and make it difficult to put in place those same old dogs that do nothing.
…and lets not forget we also have what happens in real life.
Sharing happens online and offline it is unstoppable and is not going to change for anything not even governments. That is just another cold fact.
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I don’t think you understand the underlying tech on that thing you keep pointing to.
Rapidshare do have a fingerprinting system it just doesn’t work, people learned quickly how to evade those things, they use a method tried and tested on the field by inumerous virus creators. They pack the damn thing into a different file and that takes care of any fingerprinting software.
Just zip it sunny LoL
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Money is not everything, you know?
I have a pencil. It is not money. But it has its value. If I could get a Star Trek replicator and make a copy of my pencil, the value has just increased. Now I have a larger “pie” I can split with my friends (by giving them the copy I made of my pencil).
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There are still lots of things on the public domain (very old videos, very old books, very old photos). People sometimes upload these to Youtube, Rapidshare, and other sites like them. So you cannot say “it is all copyrighted” in these cases.
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For that there are other solutions.
http://kpvz7ki2v5agwt35.tor2web.org/wiki/index.php/Main_Page (Tor Hidden Services)
http://isis.kodeware.net/home.php (Osiris-Serverless Portal System)
TOR2Web
Retroshare for secure communications with
GNUNet another secure communication tool, more focused on P2P though.
Steghide
Herbivore Theoretical resilient anonymous network.
StealthNet Anonymous P2P app.
Netsukuku anonymous censorship-free distributed network overlay.
I can see who will be crying in December 31, 2011 again about how things are bad and why those pirates just won’t stop. OMG is the end of the world! Run chicken little run!
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You are confusing value and price. You can potential create a bigger value pie, but you cannot create a bigger economic pie. In fact, if you double the supply of pencils, basic economics says the price drops significantly. Further, if pencils can be replicated without thought and without concern, people will also over time stop valuing them in any way except perhaps the transient “I need a pencil right now”.
Doubling the amount of something doesn’t double the pie. It often just means you slice the same pie into skinnier slices. There is no indication that twice the pencils would mean twice the value.
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How to bypass fingerprinting today.
– Invert the video, change some bits on the music or pack it into a encrypted zip file ta-da! it is magical dude.
– More advanced use steganography, first transform the movie to pictures and put another movie inside those pictures. Ta-da!
– To share those files with friends just use a anonymous encrypted app that is available. Ta-da!
– To bypass traffic analysis fingerprinting just listen to webradio on the encrypted channel while transferring files. Ta-da! instant traffic analysis blocker.
I could go on and on, on ways to make the industry look bad and dumb and I don’t even fileshare, now imagine a determined kid wanting that stuff, those tools are not hard to learn, those concepts are ridiculously simple and even if online sharing stopped tomorrow, offline would go on forever. Remember “Don’t copy that floppie!”? That worked well.
Would the record industry and artists care if another industry failed? I doubt it.
Why should tech companies care about that industry. That industry brings nothing to the table but problems and a entitlement mentality, the recording industry is ruthless and not fun to be around why should other companies bother with them? and more important why should other take the responsibilities of that stupid industry?
We all know why the record industry wants other to do their job. It is because they want to use proxies and not be harmed by public backlash that trimmed their revenues in almost 50%, that sharp drop made them shut up in public about suing others.
If they were in the right they would have the support of society they don’t, that is a dead give away that something doesn’t pass the smell test.
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Yes, there is no indication twice the pencils means twice the value, which is why I said “the value has just increased” and not “the value has doubled”. And it is also why I gave the copy to a friend, since I already have a working pencil.
I also fail to see why creating a bigger value pie is not creating a bigger economic pie. What matters is the value, not the price. The price dropping is only bad if it affects the supply, but if I can copy it at will, there is already an infinite supply.
And most people already value pencils only as a transient “I need a pencil right now”. For most people, the value of a pencil comes from its utility as a writing implement. Having a pencil with you has the extra value of you having guaranteed access to a pencil when you need it, but “if pencils can be replicated without thought and without concern”, you already have this extra value.
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BUT PROTECTING THE NON INFRINGING FILES!
WE CAN’T DO IT! IT’S IMPOSSIBLE!
DAMN TECHNOLOGY!
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Everything I want needs to be provided to me for free, right now!!!
If you can’t do that, you need to change your business model!!! Why can’t you understand that???
Go make me a sandwich and bring it to me. Right now.
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A voice of reason in the wilderness that is Mike Masnick’s piracy apologism.
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Everything I want needs to be provided to me for free, right now!!!
I never understand why people think anyone has ever made this argument. They haven’t. Stating it as if people actually do say that makes you look like an idiot. Are you an idiot?
No? Then don’t make such strawmen arguments.
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A spark of accusatory trolling that does nothing to further the discussion and only looks for an opportunity to call Mike a piracy apologist.
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230 protections are a child of the communications industry, mess with that and you will see hordes of lobbyists going to Washington to deal with the problem with billions spent to see that the record industry gets its ass whooped.
That is not and industry to want to f. around.
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Everything think needs to be paid, you are breathing the same air I do pay me now or else!
I want to continue triple dipping and scamming fans, robbing them of hard earned cash because I can.
If you think about my music you need to pay me now, if you hum it you need to pay me now or else do you understand? I am all that exists on the universe and nobody is better than me, I deserve it because I’m smart can’t you see that.
Pay me when you think about my art, pay me when I call you a thieve, pay me when you show what you bought(hahaha the schmucks don’t even notice that you don’t buy anything at best you rent it) to another person, pay me when you go out to eat, pay me when you go out to dance, pay me when you go out to shop, pay me, pay me, pay me forever you dumb people.
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Can’t stop infringing material from being uploaded, they have takedown requests and do act upon them.
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I made you a digital sandwich, for free! Where should I send it?
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Yes, there is no indication twice the pencils means twice the value, which is why I said “the value has just increased” and not “the value has doubled”. And it is also why I gave the copy to a friend, since I already have a working pencil.
What you actually did was shrink the economy in pencils. Rather than your friend buying a pencil, he now has one he got for free. Remember, price is supply / demand at it’s finest. If you can reproduce them for nothing and give them to all your friends, the price is zero.
Value is more tricky, but as is taught in school, to some extent value is elastic to price. While there is no mathematical direct connection, an object with no price (given away) tends to have a lower value in people’s eyes, unless the object is particularly special regardless of price. If someone can get another one instantly and without effort, they are unlikely to value what they have except in the transient moment of using it. The rest of the time, it’s just taking up space.
Filling the world full of extra free pencils doesn’t increase either the economy in pencils (it floods the market and kills the price), and widespread availability for free makes them less valuable to own, less likely to be something you would care for, because you can just get another one anywhere.
Mass free reproduction removes most of the value in the end. It isn’t hard wired like supply / demand, but it is there.
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sudo Go make me a sandwich and bring it to me
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What you actually did was shrink the economy in pencils. Rather than your friend buying a pencil, he now has one he got for free.
And they then used that pencil to make some art. Horrible, I know.
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CTRL-Z
Su – Go troll elsewhere.
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I think I am beginning to understand your point.
But it seems to be missing something. It might have “shrunk the economy in pencils”, but pencils are not the whole of the economy. My friend now has both the pencil and the money he would have had to spent to buy the pencil, instead of just the pencil. This extra money he can use to buy other things, while still writing with the pencil.
So, unless the value of the extra pencil is negative, the total value of the things my friend has is now increased by the value of a pencil. No matter how small it is, it is still an increase.
I agree that the value for the pencil does get smaller for several reasons (the fact that if the market is flooded with pencils their selling price goes to zero, so they do not have value as something to be sold; the fact that if I have over 1000 pencils the value for me of each one is around a thousandth of what if I had only one pencil; and so on). But I do not think it would go below the intrinsic value it has both as a writing implement and as raw material (if it is made of wood, I can burn it for heat, for instance).
And you are assuming a perfect replicator which can instantly create a new pencil out of thin air and which is available everywhere. A more realistic replicator would have some cost in raw materials for each new pencil, and would be something which is either at a fixed location (your home, for instance) or which you have to carry with you everywhere (having some weight and volume, not to mention the weight and volume of the raw materials). So there is a cost to me every time I replicate a pencil (the cost of the raw materials plus the cost of either having to be at home or having to carry the replicator and raw materials with me).
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Sudo: ‘Anonymous Coward’ is not in the sudoers file. This incident will be reported.
Can’t beat them. So use them. The true entrepreneur uses every tool at their disposal no matter how distasteful it is. Be like the government and CEO’s in order to fit in with the big buckers. Use everyone and then dispose those you didn’t like.
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One of the things that makes the economy really go is cycles. Your friend buys a pencil, that moves money through the pencil economy, paying the pencil makers, who in turn buy products perhaps that your friend sells. The real key with money is the number of times it goes through the economy.
It’s in part why the trade imbalance is so stressful, as it removes money from the US economy, where it cannot cycle.
When you shortcut the economy (by giving away a pay product for free), you are right that the money might go elsewhere. But it also removes a certain number of people from the economy. The pencil maker no longer has a job because nobody pays for pencils. He no longer buys wood from the mill, who no longer buys it from the loggers, who no longer drink lots of Dunkin Donuts coffee, and so on. Every non-sale (or sale) has a ripple effect.
The typical answer is “he didn’t buy a pencil, but instead he used that money to X”. That is fine, there is still economic activity. The more people you get involved in the economic activity, the better. You want to create more cycles. If the pencil guy was going to buy the same thing your friend bought instead, one cycle of the economy was removed.
Think of the one industry boom towns. There isn’t just a factory, there are other things. Stores, gas stations, restaurants, and all sorts of other businesses that exist because of the cycle. The factory closes and all the other jobs go away as well, because there is nothing priming the pump.
As for your pencil example, if it is costing you money to make a pencil, then you have sort of killed you own example. You would still be buying the raw materials, and there would still be economic activity as a result of pencils. It would be lower than retail pencil sales, and some people are still cut out of the economy. It is also unlikely that you would give away too many pencils, if each one is costing you money.
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You are so wrong on the issue that they don’t anything.
When Rapidshare gets a letter about and infringing file they remove it.
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Mass free reproduction removes most of the value in the end.
Now I KNOW that you are barking mad!
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It’s too bad that solely economic arguments won’t carry the day, then. You have a legislative climate, a judicial climate, and lots of sometimes-rational, sometimes-irrational people to deal with.
Economics will determine the outcome in the long run – it is based on the laws of nature – not those of man. All those other things you mention will determine:
1) The amount of pain in the meantime.
2) Whether other countries that do things differently will displace the US/Europe from their current position in the world.
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and ill still get all my stuff free for life. Live with that.
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A voice of reason doesn’t even know which law is applicable in this situation? Cool.
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Your argument sounds a lot like the broken window fallacy.
And as for my example: I will not twist an example just to make my own argument stronger. A perfectly costless replicator is as unreal as a perfectly frictionless surface. Even Star Trek replicators probably (I am not a Star Trek expert) need a large energy input, even if they need no matter (e=mc? and all that). Even for one of the most “costless” real-life examples we have (replication of data via a network) there are still several costs (network access costs, maintenance costs, equipment costs, the electricity to make all that work, etc), only that they are small enough (and often enough already “sunk”, since most of these people already have a computer with Internet connection) that most people think of them as free. Even then, they are there and can be visible; compulsive data collectors, for instance, might have to buy several terabytes of external storage.
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the wilderness that is Mike Masnick’s piracy apologism.
Piracy Apologism? Piracy Apologists?
WTF, do you sit around trying to come up with derogatory sounding labels because your side of the argument has no merit?
As far as I can recall, no one here has “apologized” for file sharing. I see it as simple FACT of doing business in a digital age.
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When you shortcut the economy (by giving away a pay product for free), you are right that the money might go elsewhere. But it also removes a certain number of people from the economy.
WRONG
It removes certain activities from the economy but the people are free to deploy themselves usefully elsewhere.
As technology progresses things generally become cheaper, that leaves more resources for other things. That is how economic growth has happened ever since the industrial revolution. History has a name for people who oppose this process – they are called Luddites.
You mislead yourself by concentrating on the money aspect. Money is simply a token of exchange – it has no deeper meaning. Real wealth consists of real goods, money is just a number. Comparing values at different times and levels of technology is notoriously difficult.
If you have 20 pencils that cost you 1$ and I have 20 pencils that cost me 10c we both have 20 pencils and are hence equally wealthy.
If Mike has a pencil replicator which creates pencils at zero cost then the price of our pencils will drop to zero – but we can still write with them.
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“if pencils can be replicated without thought and without concern, people will also over time stop valuing them”
No, having more pencils does not reduce their value. The air you breath and the water you drink is very cheap, there is plenty of it, yet it’s very valuable. Doubling, tripling, quadrupling the number of pencils does not decrease the value, only the price. It is you who is confusing value and price.
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Oh, and if you double, triple, quadruple the amount of water and air that exist on our planet (or in our solar system), the price of water may drop, but the value remains the same. Sure, after a certain point each additional unit of water may have negative value (ie: it may cause floods) but that doesn’t diminish the value of the initial units of water that you need to sustain life.
Of course, if we have pencil replicators, we would naturally replicate them until the marginal value of the last pencil approached zero (we wouldn’t replicate them if the marginal value were negative). But that still doesn’t diminish the value of the first pencil that we created.
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Remember the economic purpose of supply and demand driven markets is to determine what gets made and who gets what and how many **when goods are scarce**.
Your argument fails because you fail to recognize that your conclusion, “Mass free production removes most of the value in the end,” relies on the logic of supply and demand, which in turn is fully dependent upon an assumption of scarcity, which is void* in this situation.
Without the traditional perspective of scarcity, valuation can no longer be accurately modeled by traditional supply and demand pricing. When the true value lies outside the limits of your model you must change your model.
On one hand, this represents a remarkable case where an individual market has reached* a state of hyperefficiency so that the only limiting factors are storage and distribution. So, the zero or near zero price of copies of internet content is NOT an economic problem in and of itself.
The real economic problem associated with this situation is how to manage the interaction of a singular hyperefficient market with the overall aggregate market, that is: how best to determine how much storage, bandwith and content to produce vs guns and butter.
THAT’S where copyright (and exponentially more so, copyright enforcement) CAN DO THE MOST ECONOMIC HARM. Forget the overproduction of storage, bandwith, and content. Those, over time, will level out as the need for more will conceivably continue to grow perpetually.
The huge economic problem is the immeasurable impact of assigning prices to nonscarce goods in such a way that the absurdity of doing so is masked from the market at large. The potential for overinflation in this situation vastly exceeds the normal bounds of an overinflated market, such as the housing bubble.
In the housing bubble, massive mis-valuation took place due to way overvalued mortgages that were not likely to be paid on. As a result a huge chunk of production resources were misallocated, but the impact was to some extent limited by the scarcity of all the inputs. That is, the number of overvalued mortages which was not properly limited by the ability of buyers to pa was still limited on all other sides by scarcity in all other inputs.
What would mark the limits of a content bubble? Especially interesting when rampant piracy fails to drive down the prices.
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*Of course, the limiting factor to this is what the other AC notes in the second reply above (seriously guys, make up a name!): storage, bandwith, and formation (the entry and modification of information). That’s why I said void, rather than non-existent – there is some input scarcity, but the impact is so indirect and small as to be negiligible in terms of pricing.
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So that wasn’t sarcasm?
Personally I would have gone after the line
“If you can’t do that, you need to change your business model!!!”
Simply because its fun to point out that they are about to fail. They are facing massive competition as the tools become available in both music and video on consumer products. Promotion is being figured out. People are forming working groups to do both video and music. Their copyright on music is about to expire and return to the artists.
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Oh and all content is slowly sliding to zero cost to the consumer …
FCC???
US Congress. The idiots that want the FCC to “regulate” the internet. Of course, it isn’t necessary for them to comprehend what they want regulated. It is only important that there is a monetary gain potential in their actions.
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“but the people are free to deploy themselves usefully elsewhere.”
The purpose of having an economy and businesses to begin with is to produce goods and services for consumers. If we can magically produce goods and services at will (ie: pencils) then the purpose of having an economy has already been served and there is no need to have businesses and an economy to serve an already served purpose.
Yay for bribery!