Patents, Copyrights And Trademarks, Oh My!
from the the-big-three dept
Continuing my series of posts on the basics of “intellectual property” (which, yes, is a misnomer, but that’s the next post in the series…), I wanted to just do a quick post highlighting the major differences between the “big three” categories of intellectual property: patents, copyright and trademarks. This is not intended to be a complete description of the three, or a full listing of the differences between them. Just a quick breakdown. And, yes, there are some other things that some people include under the IP umbrella, but we’re going to avoid those for now. Too many people seem to mix up patents, copyrights and trademarks (even the popular press does it all too frequently), and it’s important to at least understand the basics. Also, on the specifics, I’m sticking to US law, rather than international law. There are some major differences across countries, though the key points are pretty similar.
- Patents: A patent is an exclusive right, or a monopoly, granted to someone for a limited time in exchange for publicly disclosing a new and non-obvious invention. The purpose of a patent, as discussed last week, is supposed to be to provide additional incentive for the invention to be created in the first place. While many insist that the purpose of the patent system is to force the disclosure of those inventions, that’s, at best an exaggeration, and at worst, a complete myth. Generally speaking, a patent lasts 20 years from the date of filing. Under current US law, patentable subject matter has expanded quite a bit over the years, and now includes things that at times were not considered patentable, including software and business models or methods.
Getting a patent requires going through an application process, which can be rather involved. Given the current backlog, it can take quite a long time to get a patent approved. These days the percentage of patents being approved at the USPTO has dropped drastically from earlier in the decade. This is due to a few things, including changes in policies at the USPTO and in the US court system (basically forcing changes on the USPTO). Recipients of patents can assign those patents to other parties or license them, if they so choose. Patents are given to inventors, not companies, but are often assigned to companies (many employment agreements require employees to assign all patents to the company).
Infringement over a patent can be for violating specific claims within a patent — even if the accused infringer came up with the same thing independently. Coming up with something independently is not considered a valid defense against a claim of infringement (though there is some effort underway to change this, and some believe that an independent invention should be evidence against obviousness towards a patent). Winning a patent infringement case can involve an injunction, forcing the infringer to stop producing the infringing product (even if the infringement is a small part of a larger product) as well as fines for the infringement.
- Copyrights: Copyright is a right given automatically to the creator of new content, granting them the exclusive right (with some exceptions) to reproduce, perform or display the work. There is no application process for a copyright. Any new work is automatically covered by copyright (this is a change from earlier copyright law). Despite the fact that copyrights are automatically granted after a work is created, you can still register a copyright, and doing so allows you to sue for statutory damages against infringers. Copyrights are officially for “a limited time,” though that limited time has been expanded repeatedly over the years, and currently stands at “life of the creator + 70 years.”
Like patents, the purpose of copyright is solely to encourage the creation of new content. It’s an incentive system of sorts. Contrary to popular opinion, the purpose of copyright has nothing to do with preventing plagiarism or even making sure that someone gets proper “credit” for their works. It also is not designed as a system to guarantee a living for creators. It is merely an extra “right” granted to creators in the hopes that it will help incent the creation of additional content. Copyrights can be sold, and entities other than the original creator can (and often do) own copyrights.
Copyright infringement is for actually copying the work. Unlike patents where something totally independently created can infringe, copyright infringement only covers copies of an existing work, rather than something similar, but different. There are various and important exceptions to copyright law, with “fair use” being a rather important one. These are uses of the copyrighted content that are considered perfectly legal without first requiring permission. There is also a “right of first sale” associated with copyright, which means that you have the right to resell copyrighted products you have purchased. That’s why you can resell a book or a CD that you legally possess.
- Trademarks: Trademarks are generally a company name, brand or logo that is used to distinguish the company and/or product from competitors. I take exception to the idea that trademarks should be lumped in with patents and copyrights, both of which really come out of the Constitutional clause we discussed last week, and are both designed as incentives for the creation of either inventions or new creative works. Trademarks, on the other hand, are really designed as a form of consumer protection. That is, they’re designed to make it so you know who is actually creating a product, and don’t get tricked into believing that a certain product was made by one company when it’s really made by another.
There are common law trademarks, but for the most part, a trademark should be registered. Unlike patents and copyright, trademarks aren’t designed to expire and can last as long as they’re used in commerce and don’t become generic. Also, despite attempts to expand what trademark rights grant, they do not confer the same level of control over the mark. Others can make use of trademarks, just not in commerce in ways that are likely to confuse users. Competitors, for example, can use the mark in a comparison or an advertisement (this is sometimes disputed, but it tends to stand).
Because of the risk of losing a trademark if it becomes generic, there’s a belief that trademark holders are required to police its use — which, again, is a bit of an exaggeration. Yes, trademark holders are required to take certain steps to keep a mark from becoming considered generic and potentially losing the mark, but that doesn’t mean threatening or suing anyone who uses the mark. As we’ve stated, there are many perfectly legitimate ways to make use of someone else’s trademark, and going after those uses is not necessary (though, it still happens all too frequently).
Hopefully that helps explain the key points between the three big types of “intellectual property” highlighting some of the similarities and differences between them. Again, this isn’t designed to be comprehensive — but just to highlight some of the key points, in order to avoid confusion in some of the later discussions. For the next piece, I’ll get into the phrase “intellectual property” itself, and whether it’s an accurate term, as well as look at some of the alternatives.
Links to other posts in the series:
- On The Constitutional Reasons Behind Copyright And Patents
- Patents, Copyrights And Trademarks, Oh My!
- If Intellectual Property Is Neither Intellectual, Nor Property, What Is It?
- What Kind Of Progress Are We Promoting?
- Why Do Patents Tend To Cause More Harm Than Good?
- The Case For And Against Software And Business Model Patents
Filed Under: copyright, intellectual property, patents, trademark
Comments on “Patents, Copyrights And Trademarks, Oh My!”
Privileges - not rights
Come on. Let’s take the opportunity of recognising patent and copyright as commercial privileges.
They are privileges because they place one party (the publisher) above another (the public) by suspending the right of the other (to their liberty to free expression and cultural exchange).
The privileges of patent and copyright are not without cost (in terms of liberty). This is why they are so commercially valuable as monopolies.
Re: Privileges - not rights
Copyright does not “place one party (the publisher) above another (the public)”. It works out in the public’s benefit as well, by allowing the copyright holder to profit from their work, you encourage the creation of more works.
And before you jump all over this post I’ll give you an example from personal experience. I am an author. There is a small demand for my books. I write mostly history books – and my example here is typical of most history authors, and authors in general who make a living from writing. When the copyrighted book gets published, the first run is in the more expensive hardcover. This is done to give the publisher the best chance of recovering investments in the book (editor, cover design, advertising, etc). Also, since a lot of research expenses go into history books, I usually only break even on the first run. When/if that sells out, a paperback will be released. This will happen maybe a year, sometimes a little longer, after the hardcover. This is where the profits are made. Without copyright protection, once the hardback comes out, anyone can copy it and print up cheaper paperbacks and sell them on their own. They can sell it for cheaper then my publisher because they didn’t have all of the investments (editor, cover, etc) that the publisher did. All this would do it cut into the profits of the people who worked on and invested in the book. Most authors who do make a living don’t make all that much – it wouldn’t take much of a profit cut to send them back to the day job – which hurts the public because less books will be on the market. No author’s output is the same when they have to work nine to five then write, and many won’t write at all – how many of us are willing to spend countless hours away from our family, and invest lots of money, just so we can’t make it back.
Remember, most people whose works are protected by copyright are not getting rich off of those works – copyright enables them to continue to produce works, which benefits everybody.
Re: Re: Privileges - not rights
I see where your coming from and I agree. Now, let me ask you a question. If you knew that your most recent book would still be selling in 70 years and you would still be making money off of it, would you continue all that hard work?
I understand that copyright is helping prevent people from just copying your book and releasing it on paperback the next day but, how much incentive is there to create when you know you can milk your one book for the rest of your life. How hard will your children work if they can just mooch off of your book for 70 years after your death?
Re: Re: Re: Privileges - not rights
Well, if its still selling in 70 years, it doesn’t mean its making enough for me and my children and their children to live off of. If it did that wouldn’t mean I’d write any less – I’d only write less if I wasn’t making the money to support it – providing for my family has to come first. That being said, if someone’s product is that successful, good for them. In every other industry, people can rise to the top and become rich, and no one cares – most people work hard to achieve just that. When we start talking about examples of one copyrighted work supporting someone for many years, that is an item that has climbed to the top. If you are at the top of most industries, you can become rich. Why is it only when its artists that we have a problem with it?
George Lucas is a good example of someone who climbed to the top of his profession and been able to retain the rights to his work thanks to copyright. And the money he’s made off of Star Wars has enabled him to invest and create things like THX and Industrial Light and Magic. Good for him.
Re: Re: Privileges - not rights
Yes, but the problem we run into is that too many people have the false belief that they are entitled to profits as if society has a moral responsibility to ensure hard workers are compensated. Sure, I could head out into the open fields and pull weeds all day every day for months until the fields are weed-free. I worked hard, but who is going to pay me? Not even the owner of the land has to pay if I failed to form a business contract with him.
When it comes to things like writing books, authors cannot press on with the mentality that “it takes lots of work, so I need legal protection to make money”. We live in an age of photocopiers, scanners, and the Internet. Plenty of authors have proven that giving their works away for free on the Internet actually INCREASES sales of the physical book. Who wants to read 500+ pages on a screen? I certainly don’t. The free online distribution causes a spike in demand!
In your case, you write history books, which are “less interesting” than other types of books. I still believe you should re-analyze your business model. You are playing a dangerous (and from the sound it, very non-lucrative) game by attempting to place protection on the information you sell. Nothing aggravates me more than to buy a book off the shelf to see an “offer” in the back of it to buy the eBook for $10. Wait, didn’t I just buy the book? I have to buy it again in a format that costs the author NOTHING to distribute?
Recovering the fixed cost of organizing the information is always the tricky part, but relying on copyrights/patents/trademarks and the “honesty” of the people is naturally the worst way to go.
Re: Re: Re: Privileges - not rights
Okay, you’re first paragraph is nonsensical. I never said hard work should equal pay, but if there is a demand for a product you created, you should be allowed to profit off of that. Copyright protection gives you that right, and prevents you from having to compete with your own product.
Otherwise, I love how anytime someone involved in any industry give an example on any topic where they have personal knowledge – someone always responds with “you need to change your business model” and give away anything digital for free. Really? Because some select books have profited from free distribution of free ebooks means ALL books will? (I love how no one here seems to know the difference between micro and macro economics). I give a simpleexample of the value of copyright and get a business model reply that might as well have been written by Mike. I love how everyone here knows more about every business then the people actually running them.
Re: Re: Re:2 Privileges - not rights
But you’ve implied it, even to the point of implying it a few times in this comment I’m replying to.
Not necessarily.
Take, for example, biological weapons. I have little doubt that there are several firms in the US with the capability of making biological weapons, in part because they’re probably under contract from the DoD to research such weapons. I’m fairly certain that there are any number of governments and extra-governmental groups (e.g., al Qaeda) who would like such weapons. There is a demand for the weapons, so clearly the firms should be allowed to sell the weapons, right?
Most people would say “no”. Why? Because there is a clear cost to society for those weapons to be sold to groups who might use them. In this case, the benefit of society as a whole for blocking such sales trumps the benefit to the firms (and their prospective customers).
Copyright exists for one reason and one reason only: as Mike said, it is to “help incent the creation of additional content”. According to Thomas Jefferson and the other architects of our nation’s original “IP” policies, the natural state of ideas is to be free for all, what economists would describe as a non-rivalrous good. The oft-quoted line from Jefferson is “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” (from http://www.movingtofreedom.org/2006/10/06/thomas-jefferson-on-patents-and-freedom-of-ideas/)
Should copyright exist? Yes, but only to the level to ensure creation of new content, not to the point of locking away said content from society indefinitely. A 14-year copyright term? Fantastic. Life plus 70 years? That’s a better term for a murder sentence than a term for a copyright.
I heartily recommend Prof. Lessig’s 2004 presentation on the “Comedy of the Commons” (http://itc.conversationsnetwork.org/shows/detail349.html) for more on rivalrous vs. non-rivalrous goods and its effects on copyright.
With respect to your business model, other than selling hardback books, you haven’t really described it sufficiently for anyone to be saying it’s awesome or sucks.
Speaking as somebody who has great concerns over outlandish CEO pay, I feel quite confident in saying that you are wrong when you say “no one cares”. Heck, just watch Lou Dobbs for a week on CNN, and he’ll beat into your head exactly how much he cares.
Re: Re: Re:3 Privileges - not rights
I debated whether this was even worth responding to since you keep twisting my words.
Again, I never said hard work should equal pay – if you work on something that know one wants, nho you shouldn’t get paid – but if you create something that has value – and I’m not talking about physical value – in books and ebook the content is what’s of value. You analogy isn’t very good – I’m not sure what point you think you’ve proved. How about this – look at the number of books Harry Potter sold. That has value. The author and her publisher should be the ones profiting from that – not other publishers jumping on the bandwagon.
Our economy works very simply. Exchange of money for goods/services. Those people who bought Harry Potter books gave their money in exchange for entertainment. Whether its a hardback or an ebook, they are still getting the entertainment they paid for.
Re: Re: Re:4 Privileges - not rights
Again, I never said hard work should equal pay – if you work on something that know one wants, nho you shouldn’t get paid – but if you create something that has value – and I’m not talking about physical value – in books and ebook the content is what’s of value.
Corey, you are confusing value and price. It’s a common thing to do (even Adam Smith did it at one point!) but it’s wrong. Price does not equal value.
Value is *one* component in demand. But price is set at the interaction of supply and demand. This is an economic fact.
That has value. The author and her publisher should be the ones profiting from that – not other publishers jumping on the bandwagon.
Unfortunately, that’s not how the economy works. Lots of people profit off of the value of someone else’s work. You should learn a little about externalities here. It’ll help move the discussion along.
Our economy works very simply. Exchange of money for goods/services. Those people who bought Harry Potter books gave their money in exchange for entertainment. Whether its a hardback or an ebook, they are still getting the entertainment they paid for.
Again, you have confused value for price and totally ignore the supply side of the equation. It makes for a very weak economic argument.
Re: Re: Re:5 Privileges - not right
I have not confused price for value. These items have more value until you start giving them away for free or getting rid of coyright law and flodding the market place.
“Unfortunately, that’s not how the economy works. Lots of people profit off of the value of someone else’s work. You should learn a little about externalities here. It’ll help move the discussion along.”
Why do you keep misrepresnting what I say. You are taking people profiting of of others works to another level if you got rid of copyrights and patents.
“Again, you have confused value for price and totally ignore the supply side of the equation. It makes for a very weak economic argument.”
And you, as always, you’re saying because a digital file CAN be copied infinitly it MUST BE, thus flooding the market and of course bringing the value down. This doesn’t have to be the case, and its the major flaw in your argument.
Re: Re: Re:6 Privileges - not r
I have not confused price for value. These items have more value until you start giving them away for free or getting rid of coyright law and flodding the market place.
First of all, yes you have confused price for value. The fact that you say the value changes when you give something away for free shows that. Value is an inherent quality. Price is the intersection of supply and demand. Value doesn’t change based on price.
You are taking people profiting of of others works to another level if you got rid of copyrights and patents.
How so? I could say the same thing about taking away the right to any monopoly. Any effort creates externalities. What we’re talking about is profiting off of externalities. You seem to think there’s a problem with that. I disagree, and history disagrees with you. You’ll discover that profiting off of externalities is generally what drives economic growth and opens up new opportunities.
And you, as always, you’re saying because a digital file CAN be copied infinitly it MUST BE, thus flooding the market and of course bringing the value down. This doesn’t have to be the case, and its the major flaw in your argument.
Again, learn the difference between price and value. What you call “flooding the market” is simply the natural market equilibrium.
Re: Re: Re:4 Privileges - not rights
You just aren’t entitled to anything. Period.
It doesn’t matter if other publishers are jumping on the bandwagon or if someone take a piece of your pie. It doesn’t matter if you make none.
You are entitled to NOTHING.
There is no “I should be the only one who profit from that”. There is no “I work hard, I should be compensated”.
Life is unfair. Get with the program.
Re: Re: Re:5 Privileges - not right
Well, AC, that post brings nothing to the table. The entire point of copyright is so the creator DO get compensated and have an insentive to create. You do realize that if that insentive is taken away you will have less content and the consumers will lose.
“There is no “I should be the only one who profit from that”.”
Wrong. Yes there is, its called copyright law, deal with it.
Re: Re: Re:6 Privileges - not r
The entire point of copyright is so the creator DO get compensated and have an insentive to create.
Corey, why do you wrongly insist that copyright is THE ONLY way to get compensated? It’s not so they have “an incentive.” It’s so they have yet *another* artificial incentive. All we’re saying is that there’s plenty of economic evidence that those artificial incentives do more harm than good.
Wrong. Yes there is, its called copyright law, deal with it.
And a few hundred years ago there were official mercantilist monopolies as well. And those who thought they made sense said the same thing you’re saying. They said “deal with it, a sugar monopoly is a good thing.” But then people realized that was wrong, and that it made sense to open up markets and free them up — and they found that the markets EXPANDED, because there was innovation. There was innovation in production methods. There was innovation in business models. There was innovation in product. And I’ll tell you something else, the folks who were making money in the competitive environment made a lot more than those who relied on the monopoly powers of a Mercantilist era.
Why? Because by freeing up the market, it created new opportunities for growth. It opened up new market opportunities.
So, no, we won’t “deal with it.” We’ll show why monopolies are bad for the market.
Re: Re: Re:7 Privileges - n
There is a competitive environment. Authors compete with other authors and books. A Sugar monopoly doesn’t cut it here. If I was the onyl one allowed to write a certain type of book, you’d have a point.
My last book was about a murder-mystery. Anyone who wants to can write about that same case and compete with my book.
Re: Re: Re:6 Privileges - not r
Wrong, the entire point is of copyright is to give incentive for authors to create.
It isn’t to compenstate creators.
My point is that you’re a lucky bastard to be the only one who profits from their work. You’re a lucky bastard to be born in the United States. You’re a lucky bastard to be living in prosperity, etc.
It is meant to express what I considered the truth of life, not whether the law agrees with you.
Re: Re: Re:7 Privileges - n
“the entire point is of copyright is to give incentive for authors to create.”
Exactly what I said. How does copyright give an incentive to authors to create, by allowing them to own the rights to the work and be compensated.
Re: Re: Re:8 Privileges
Exactly what I said. How does copyright give an incentive to authors to create, by allowing them to own the rights to the work and be compensated.
No. You said that the point of copyright was so that authors DO get compensated. It’s up a few posts. Go take a look.
The difference is that you seem to be claiming that the only way to get compensated is with copyright. That’s flat out false.
Copyright is AN incentive. Not THE incentive.
The argument is whether it’s a necessary incentive. You arguing that it’s the only incentive misses the point and argues something entirely different and long disproved.
Re: Re: Re:9 Privil
It is THE incentive. By being an author, over the years I’ve met over a hundered authors. Authors make the VAST MAJORITY of their money from their copyrighted work. Everything else is just to promote that.
Re: Re: Re:10 Pr
It is THE incentive.
No. It’s not. It’s AN incentive.
Authors make the VAST MAJORITY of their money from their copyrighted work.
Yes. Right now. Just like musicians one day made all their money from being travelling troubadors. Then they sold albums. Now they make money from concerts. Markets change.
You can pretend they don’t, but I wouldn’t want to be on the receiving end of the wrecking ball heading in your direction.
Re: Re: Re:11 Re
There’s no wrecking ball in site. Copyright law is here to stay. The only question is if ebooks ever take over, and if future digital protections succeed or fail, but copyright law isn’t going anywhere.
Re: Re: Re:12 Re
There’s no wrecking ball in site. Copyright law is here to stay. The only question is if ebooks ever take over, and if future digital protections succeed or fail, but copyright law isn’t going anywhere.
Then you’re not paying attention. I’m not saying that copyright is going anywhere. I’m saying that as more people realize they don’t need to rely on the crutch it provides, it’s not going to matter any more.
Re: Re: Re:12 Re
The question isn’t about whether Copyright is going away or not, but whether it will be at all relevant in the face of changing technologies and social conditions.
Technology is changing. P2P, for all the bad press it gets, is an advancement in technology with many wonderful uses and many potential uses we haven’t begun to play with. But if those pushing hard for stronger, draconian Copyright enforcement get there way then the entire genre of P2P would become illegal.
Does it make sense for one trend in society to suffer or be stifled simply because of “the way it is done and has been done for years” in other trends?
Seriously, step back from the idea that people are going to steal your books the minute copyright gets shut down. Yes, there would be those vultures who would pounce, and there would be adjustment pains as those relying on “the old way” try to understand the new landscape. But that shouldn’t mean that the new landscape should be abandoned (and I’d argue it cannot be)
Human nature forces us to progress and ready access to information of all types *will* happen, is already happening).
Re: Re: Privileges - not rights
Corey –
I understand your position, and yes, that is what copyright was originally intended to address: encouraging more publishers to pay authors, by codifying the rights to make copies. However, your “hardback versus paperback” model demonstrates the problem with copyright, that of enforced scarcity.
The hardbound version, with its higher profit margins, is often brought out first to the public, then the paperback edition, as publishers hope to recoup production costs. As you rightly point out, selling the publisher the exclusive right to make copies protects him from rival publishers swooping in and printing his books at a lower price.
But that’s not the problem with copyright. Making copies for profit deserves to be a right that can be traded, but making digital copies of artworks is something that copyright laws do not properly address. Nobody worried about this in the past because making a private copy of a book costed more in photocopier paper and toner than a commercial copy. Making a private copy of a music album involved a loss in quality, so music publishers grudgingly accepted that as well. But now digital copying of a work is so cheap that the costs no longer play a role, and that the copies no longer degrade also changes the playing field.
There is also evidence that current copyright limits, with their terms extending long beyond the death of the author, actually harm the creation of new works, and actually keep works away from new audiences when the original publisher refuses to republish, but also refuses to allow others to publish it as well.
I would remind you of the old adage about authors, that although not being paid for their work is terrible, the worst thing for an author is to have his work go unread.
Intellectual property is accurate
Intellectual property is accurate when used to describe what actually is intellectual property as opposed to material property.
However, copyright does not constitute intellectual property. It is an intellectual property privilege (some call it a right), and by dint of being transferable it could be described as a legal property relating to intellectual property.
If you have written a book or drawn a design of a novel mechanism this is your intellectual property. When you make a copy that is also your intellectual property. When you sell that copy the purchaser owns the intellectual property – just as you own the intellectual property within your original.
Unfortunately, patent and copyright interfere with everyone’s intellectual property rights, privileging the copyright or patent holder with exclusive reproduction or manufacture.
It is only because some people have conflated the privileges as intellectual properties that IP can be a confusing term.
Thanks for Posting
Mike,
Thanks for posting this, we could certainly use a better general understanding of these.
Intellectual Property
I wonder if the proponents of “intellectual property” have considered the possibility of “intellectual property taxes”? After all these people claim their intellectual property has value whether they publish, produce or perform the particular work or not. If it has value, it can be taxed. Failure to pay taxes could result in the work being seized for the public domain.
Double Speak?
Quote:
“Contrary to popular opinion, the purpose of copyright has nothing to do with preventing plagiarism or even making sure that someone gets proper “credit” for their works. It also is not designed as a system to guarantee a living for creators. It is merely an extra “right” granted to creators in the hopes that it will help incent the creation of additional content.”
How else would copyright incent the creation of additional content except through preventing plagiarism, making sure creators get proper credit, and providing a method for creators to profit from their creations?
Re: Double Speak?
How else would copyright incent the creation of additional content except through preventing plagiarism, making sure creators get proper credit, and providing a method for creators to profit from their creations?
There is overlap, but they are not the same thing. Copyright merely grants you control over how it can be copied. Part of that can include plagiarism, but they’re two different things.
Copyright infringement has nothing to do with getting the proper credit. That is, you can infringe on copyright by giving total credit to the original source, or you can infringe by not giving credit (which is plagiarism). It makes no difference for copyright.
Does that make sense?
So, plagiarism *can* be copyright infringement (though it need not be) and copyright infringement may not involve plagiarism at all.
Re: Re: Double Speak?
Quote:
“That is, you can infringe on copyright by giving total credit to the original source”
I’m not sure how it’s infringment if you give credit to the original source, which generally means we’re talking about fair use. But let’s ignore the issues of plagiarism and credit and go straight to the important one: money-making ability. I’m normally very sympathetic to your views, Mike, but I am not quite convinced when it comes to the issue of written materials. Again, how else would copyright provide incentive except through the fact that it gives authors a way to profit from their works (which you call “guaranteeing a living”, which is a rather prejudicial way of stating it)? It’s all well and good to talk about new business models using the economics of the free, but until we see a successful one actually demonstrated, it’s all just theoretical. Let’s make sure we can build a new house before we tear down the old one. In a world devoid of copyright, how would authors make money? In your arguments for the music industry, you tout touring and merchandising, which certainly is an effective strategy, but this doesn’t really apply to authors. Tom Clancy t-shirts? John Grisham keychains? The most popular authors (top 1%, maybe?) might be able to make money on a book signing and personal appearance circuit, but let’s be honest – a lot of authors aren’t exactly personable (Thomas Pynchon, anyone?). How would the Thomas Pynchons of the world make money without copyright? Sure, distributing copies of the work for free online drives up book sales, but without copyright publishers would not have to pay the original author royalties on those book sales. Now I understand that there is no fundamental natural law which states that authors must be guaranteed the ability to make money off their works. It could be that in a world free of copyright authors would have to accept that there is no money to be made, and they must either publish their work for free or not at all. But this would clearly drive down the amount of published work dramatically. If that is so, then isn’t copyright an acceptable price to pay so that we can enjoy a wider variety of published work?
Re: Re: Re: Double Speak?
Good post. Now its time for Mike and his hard-core disciples to give a few isolated examples that in their minds mean it can work across the board. But it is still theory until a much larger percentage of business from a particular group prove it otherwise.
My take has always been its not black and white – free works for some industries, not for others. I can give away free cell phones because people need to buy the plan for it to work, but yes, the Tom Clancy t-shirts might not do so well.
Re: Re: Re:2 Double Speak?
Good post. Now its time for Mike and his hard-core disciples to give a few isolated examples that in their minds mean it can work across the board.
Corey, we’ve pointed to example after example after example after example. For you to say we haven’t is willful misrepresentation.
But it is still theory until a much larger percentage of business from a particular group prove it otherwise.
That’s like the buggy whip seller after Henry Ford introduces the Model T insisting that it means nothing until a much larger percentage of people own cars.
You can place your head in the sand to the new business models that are out there. It won’t change the economics at play. I wish you the best of luck, but if you want to deny the basic market factors you’re dealing with, that’s up to you.
Re: Re: Re:3 Double Speak?
Mike, honestly, is 5, 10 or even 50 examples representitive of the market as a whole? Your examples are still islolated cases, you can repeat them if you’d like, but it doesn’t change that.
Re: Re: Re:4 Double Speak?
Mike, honestly, is 5, 10 or even 50 examples representitive of the market as a whole? Your examples are still islolated cases, you can repeat them if you’d like, but it doesn’t change that.
Corey, I was merely responding to you, who said: “Now its time for Mike and his hard-core disciples to give a few isolated examples.”
I was showing that we have given examples.
I find it hilarious that when we give an example you say “that doesn’t work for everyone!” Then when we explain the theory behind why it would work for everyone you say “I need to see examples!” and when we point to the examples again, you say “I won’t believe it until it works for everyone!”
By then it’s too late. As I said, I’m sure the buggy whip makes wanted more evidence that the Model T would sell. And look where they are now.
Re: Re: Re:5 Double Speak?
Mike, I wasn’t saying “Now its time for Mike and his hard-core disciples to give a few isolated examples.” because I wanted you to give examples. I said that that because that’s what always happens when someone challenges the everything must be free theory on here. My point was tht isolated examples are meaningless.
Re: Re: Re:6 Double Speak?
My point was tht isolated examples are meaningless.
Well, there’s your problem. They’re not isolated. We show theory and then we show examples to prove the theory works. So now we’ve explained *why* it works and then given examples showing that the theory works in practice too.
I don’t quite understand why you would need more.
Re: Re: Re:7 Double Speak?
Actually, even then I’ll expand on that.
We’ve explained theory. We’ve given examples to show that the theory works in practice. Plus we’ve shown historical evidence and peer reviewed research showing that the concept works on a macro scale.
So, now we’ve shown the theory to explain it. We’ve shown examples of it working on a micro level. And we’ve shown economic experiments that show it works on a macro level.
I’d think that covers all the bases.
Re: Re: Re:2 Double Speak?
Corey,
I have no problem paying for someone’s work once. Say I buy your book. It is a good book, and I read it all the time. One day I buy a pocket PC and discover I like to read books on it. I can do searches and find the info I want more readily, should I now have to compensate you again so that I can have your book on my Pocket PC, remember I already bought you book once. That is what is happening. I buy a DVD movie, but I want to watch it on my IPod, or PSP, or save it to my hard drive so I can watch it when ever I want. The movie industry are try to charge me every time, I already paid them for the privilege of watching the movie. Why should I have to keep paying just to watch it in a different format.
Re: Re: Re: Double Speak?
I tend to agree that an author must have some way to gain from his writing, but to double charge as in pay for the book, then the ebook?
True that an ebook may be passed around indiscriminately, but I think that is a price to pay, and many who get ebooks, wouldn’t have bought the actual books anyway, I know I do. And if I read an ebook and I like it, I like to buy the actual book for my collection.
I tend to favor limited copyright. I would understand that the author must have monopoly of his book for a time, but life plus 70 years? come on. Try 5 years since first publication. If the book sells, it was good, please write another. If it doesn’t sell, please write a better one. No need for your children to earn from it when you’re dead.
Peace!
Re: Re: Re: Double Speak?
I’m not sure how it’s infringment if you give credit to the original source, which generally means we’re talking about fair use.
Oh really? So if I put up an MP3 by Metallica on this website and say “hey, everyone, here’s Metallica’s MP3” that’s not infringement? I think Lars would disagree.
Giving credit alone is not fair use.
Again, how else would copyright provide incentive except through the fact that it gives authors a way to profit from their works
Yes, it gives *a* way for authors to profit from their works. In the same way that *giving* some farmer a monopoly on sugar gives that farmer a way to profit from his farming. It’s just not a very efficient way or the best way.
It’s all well and good to talk about new business models using the economics of the free, but until we see a successful one actually demonstrated, it’s all just theoretical.
By this point, I’ve pointed to at least 50 different *actual examples*. Must I repeat them all?
In a world devoid of copyright, how would authors make money? In your arguments for the music industry, you tout touring and merchandising, which certainly is an effective strategy, but this doesn’t really apply to authors.
Er. Selling books doesn’t hurt, you know. Books being tangible things (remember, the model is selling scarce stuff). As we’ve pointed out repeatedly, giving away free elctronic versions tends to help with sales of the physical book.
Other authors have found that it helps generate other ways of making money as well: authors become sought after speakers and columnists thanks to their written works and their influence. Writers get commissioned to work on other projects.
These aren’t theoretical, either. We’ve pointed to examples of all of them.
Sure, distributing copies of the work for free online drives up book sales, but without copyright publishers would not have to pay the original author royalties on those book sales.
There is tremendous demand for *authorized* copies, as published by the actual author. Being first to market makes a serious difference. Even if a publisher doesn’t pay royalties (and US history shows that they often will even if not required to in order to keep the author happy for future deals — see what US publisher paid Charles Dickens, despite not being required to do so), a publishing house that expects to be able to sell lots of books by an author would pay that author an upfront payment, knowing that having the “approved” version that would be first to market is a lot more valuable than being a copycat.
For proof of this, look at the sales of the 9/11 commission report (which was a huge best seller). It, being a gov’t document, was not under copyright. However, the gov’t gave it to one publisher first. That publisher got the book version out first, and even though others caught up withn a day or two, the original publisher DOMINATED sales throughout the lifecycle of the book.
Even though it was a public domain document, being the first with it, and being seen as the authorized publisher was worth a TON of money.
But this would clearly drive down the amount of published work dramatically.
You say this as if it’s true, yet in every historical look at this subject, removing the monopoly *increases* the amount of work produced, because authors can no longer rest on their laurels and need to keep writing new stuff to continue generating revenue.
Re: Re: Re:2 Double Speak?
“You say this as if it’s true, yet in every historical look at this subject, removing the monopoly *increases* the amount of work produced, because authors can no longer rest on their laurels and need to keep writing new stuff to continue generating revenue.”
Mike, you keep saying this as if repeating it is going to make it true. What % of authors with today’s copyright system get to sit back and “rest on their laurels”. Honestly, do you have any idea what most successful authors make. You obviously think authors make more then they do for you to keep repeating this statement.
I’d argue that getting rid of copyright would decrease the amount of work produced not only by driving some authors out of the business because of loss of profits, but in another way you haven’t thought of. You do realize that if copyright didn’t exist, there would be publishers exist only to reprint works of other publishers. Instead of these publishers being encouraged to go out and invest in new products, they’ll just reprint what’s already out there.
Anyway you cut it, you lose the number of new books being written.
Re: Re: Re:3 Double Speak?
Mike, you keep saying this as if repeating it is going to make it true. What % of authors with today’s copyright system get to sit back and “rest on their laurels”. Honestly, do you have any idea what most successful authors make. You obviously think authors make more then they do for you to keep repeating this statement.
No. I’m quite aware of the fact that most authors make very little. Publishing is a tough, tough business. It’s tough to get published and it’s much more difficult to actually make any money at it. I know an awful lot of starving writers.
That’s why I find it rather amazing that you are so against a system that allows writers to *better* promote themselves and *better* make money.
I find it hilarious that you would imply I think authors make a lot of money today. If that were the case, why would I be advocating a different system?
I’d argue that getting rid of copyright would decrease the amount of work produced not only by driving some authors out of the business because of loss of profits
And yet you were just claiming how few authors make profit. Which is it Corey?
You do realize that if copyright didn’t exist, there would be publishers exist only to reprint works of other publishers. Instead of these publishers being encouraged to go out and invest in new products, they’ll just reprint what’s already out there.
Yes, and again, if you look at the historical record, that tends to help the market, not hurt it. It makes the market more competitive, which leads to more innovative offerings. And, as I pointed out, the original “official” version sells much better anyway.
Authors would work with the publishers who respected their works. Those who merely reprinted other works would have weak reputations. Publishers that represented authors well, and offered upfront payments or even work for hire deals would find it worthwhile and would find authors willing to work for them.
Anyway you cut it, you lose the number of new books being written.
Again, you keep saying that and every time you do, it’s done while ignoring the historical evidence that says that’s not true.
The problem is that you seem to think we’re talking about a zero sum game here. History has shown (again and again and again and again) that this is not the case. If you can better promote the book, you can sell more of the book and you can sell more ancillary products. We’re talking about expanding the market so that there are more ways to make money, and you’re insisting that the old way (which even you ADMIT sucks for most authors) is better.
Re: Re: Re:4 Double Speak?
I’m not insisiting on anyway – but if most working authors don’t make that much – I find it absurd to argue that them having to compete with their own works will help them.
And the other point that you keep ignoring is that most authors don’t have “ancillary products” to sell.
“I’d argue that getting rid of copyright would decrease the amount of work produced not only by driving some authors out of the business because of loss of profits
And yet you were just claiming how few authors make profit. Which is it Corey?”
Seriously, read my posts, I’ve been aying they don’t make MUCH of a profit.
“I find it hilarious that you would imply I think authors make a lot of money today. If that were the case, why would I be advocating a different system?”
Because this is what you do. No matter how much or how little an industry makes, you have your black and white view of the world where free is always better. And don’t just say its a business model – if it was just that then you’d freely acknowledge a companies right to try or not try the model, but no, you want to get rid of copyright and force the model on everyone because you have a handful of examples. You know – if half the major publishing houses gave their works away for free, you’d have a big enough sample to prove or disporve your theory, until then, its still a theory.
Re: Re: Re:5 Double Speak?
And the other point that you keep ignoring is that most authors don’t have “ancillary products” to sell.
There are ALWAYS ancillary products to sell. You can ignore them, but it doesn’t change the fact that they exist.
No matter how much or how little an industry makes, you have your black and white view of the world where free is always better. And don’t just say its a business model – if it was just that then you’d freely acknowledge a companies right to try or not try the model, but no, you want to get rid of copyright and force the model on everyone because you have a handful of examples.
Huh? I’m not sure how you can be this confused. I apologize if I haven’t made myself clear, but I’m pretty sure I’ve pointed this out repeatedly: I am not forcing anyone to do anything. The basic ECONOMICS at play are what’s forcing the changes in the market.
You know – if half the major publishing houses gave their works away for free, you’d have a big enough sample to prove or disporve your theory, until then, its still a theory.
Uh. This is the same ridiculous point you keep claiming. And I’ll say it again: if the buggy whip makers said that autos didn’t matter unless 50% of households had them, what would you think? You’d think they were sticking their heads in the sand.
It’s really rather amazing that you are utterly unable to recognize the economic forces at work here — especially when combined with example after example after example showing that it’s not just a “theory” but that it works. The fact that not everyone has adopted it yet doesn’t change the basic forces.
Re: Re: Re:6 Double Speak?
Fine, believe what you want, but it seems to me you are the one with their head in the sand. There are no “ALWAYS ancillary products to sell.” You can keep saying it, but a Sci-Fi writer who maybe sells 20,000 books doesn’t have many other products besides the book/ebook. The content therein IS the product.
You buggy whip analogy is no good here. The buggy and the car are 2 different products. In this case, to prove an economic theory, you would have to have a good % of the market adopting the theory in order to test it. For example, was it Radiohead who gave away their CD on their website? Well, this got them press and promotion because it was unique, but its not a true test of the market because being unique is part of the reason for its success.
You put some other post up about someone giving an ebook away (for a limited time I believe) and was promoting this fact on Oprah. Let’s see now, maybe the promotion on Oprah has something to do with its sales increase. Its not a proven theory untill it works across the board. Sorry Mike.
Re: Re: Re:7 Double Speak?
You can keep saying it, but a Sci-Fi writer who maybe sells 20,000 books doesn’t have many other products besides the book/ebook. The content therein IS the product.
The BOOK is an ancillary product. Corey, we’ve told you that about 1000 times by this point.
Other ancillary products:
* speaking engagements
* opportunities to write columns
* new books
* writing for tv or movies
* writing for magazines
* readers’ attention
* readers’ time
Some may be more valuable than others. Some may work for some and some may work for others. And that’s off the top of my head — there are a ton of others as well. Again, your own inability to think of ancillary goods doesn’t mean there aren’t any. ANY infinite good impacts scarce goods in some manner or another. You just need to figure out what those scarce goods are. There are always some.
You buggy whip analogy is no good here.
It’s not an analogy of products, Corey. It’s an analogy of the idiocy of saying that this theory is meaningless unless 50% of publishers adopt it.
The buggy and the car are 2 different products. In this case, to prove an economic theory, you would have to have a good % of the market adopting the theory in order to test it.
Ah, the old “let’s wait until it’s too late to change our model before we believe the new model works.”
I’ve explained WHY the new model works. I’ve given proof of it working IN PRACTICE. I’ve shown economic peer-reviewed studies showing that it WORKS in practice on both a small scale and a large scale. To continue to insist it doesn’t work is ridiculous.
Do you not believe maps until you’ve actually mapped the terrain out yourself too? A theory is a map. It provides a guide — it explains why stuff works. And then when you use the map and it works a few times, you tend to recognize that the guide is reasonable and it works. You, on the other hand, apparently do not trust maps.
You put some other post up about someone giving an ebook away (for a limited time I believe) and was promoting this fact on Oprah. Let’s see now, maybe the promotion on Oprah has something to do with its sales increase. Its not a proven theory untill it works across the board.
Corey. That was one example. Among many.
Re: Re: Re:8 Double Spe
I don’t have the time to respond to all of this – I’ve been here to long already, but I wanted to respond to:
“The BOOK is an ancillary product. Corey, we’ve told you that about 1000 times by this point.
Other ancillary products:
* speaking engagements
* opportunities to write columns
* new books
* writing for tv or movies
* writing for magazines
* readers’ attention
* readers’ time”
Fisrt of all, the book as the product works for now, but what if ebook readers become so good that in 10-20 years most people use those. Then we’ve got to take the book out of the equation. I’m not saying that will happen, but you have to look at future possibilities when arguing things like this, because things change.
speaking engagements: most authors DO NOT get paid. These are used to promote the book/ebook.
opportunities to write columns/magazines: I’ve done both. The pay is very small, the real incentive again is to promote the book.
writing for tv or movies: most authors will not get this chance.
So my point is the book is the main product/money maker. If ebooks ever take over, I’m sorry Mike, but your other products don’t make up for the loss of book profits. Either authors SELL the ebooks, or you lose all but the very successful few.
Re: Re: Re:9 Double
So my point is the book is the main product/money maker.
Corey, the book is the main product money maker RIGHT NOW. But as you yourself admit, it may not always be. And the point is that if you can give away the book as THE PROMOTION, then suddenly those other things can PAY much more.
You have an incredibly static view of the world. Your just like the RIAA who is so blinded to the fact that what USED to be promotional is now the main product. So, yes, some of those things are now promotional, but they won’t be in the future. And EVEN BETTER, because the new promotional stuff (the content) will be FREE, it means that it can generate a much larger audience, making the other things pay much better.
It’s happened over and over again. Why you think it won’t happen this time I can only chalk up to a lack of historical knowledge (funny for a historian) or lack of imagination. If you look at the basic economics, you’d realize that the market ALWAYS expands when this happens. There’s not a single example to the contrary, and that’s because once you recognize that the infinite goods aren’t goods at all, but resources, you’ll quickly realize that the market HAS to expand because you’ve expanded the resource base on which the market expands.
Do your research. You’re a historian. The data is all out there. I’ve pointed it out to you in the past, repeatedly. Ignoring it is a choice you have chosen to make, but that doesn’t mean it’s smart.
Re: Re: Re:10 Do
Its not a “static view of the world.” What your model seems to ignore is that some products have a very finite market. If you write an academic book on Hitler, there is only so many potential readers out there. The odds would be very small of the free ebook spreading to so many more people that it gives any of those other products value.
You theory is sound for things that haven’t reached their potential market, but it ignores that some products have, and that the free content won’t expand the market much.
Re: Re: Re:11 Re
You theory is sound for things that haven’t reached their potential market, but it ignores that some products have, and that the free content won’t expand the market much.
Yikes, Corey. So you’re saying that we need copyright for the 0.00001% of books that don’t need any more promotion?
Back here in the real world almost any author will admit that obscurity is a much bigger threat to their livelihood than piracy.
Besides, I’d argue that even products that you think have reached their entire potential market, have not. You just need to have someone involved who knows marketing a little bit and you can find new markets.
Re: Re: Re:12 Re
Mike, again you miss the point, as you seem to do when anyone from any field you talk about comes in to dispute your policy.
The point is readership growth is not infinite. Only so many people are going to read books. Just because a book is free, even if it is good, doesn’t mean readers with increase x10 or x100. But for the other goods you propose authors sell, you would NEED that type of increase in market size to make them even slightly viable. You seem to lack a complete understanding of what authors make from these other sources. Doubling readership with free ebooks won’t make it so those income sources would make up for selling books. How much money does the average person spend on book? How much money does the average person spend on going tosee authors speak? You have a complete misunderstanding of what authors make on good outside of their books.
Re: Re: Re:13 Re
“Only so many people are going to read books.”
I…uh…I…
Corey, as an author, you must suck. Seriously.
You’ve already determined that your potential audience is incredibly small. Is your writing so dry that you couldn’t open up the subject to more people?
There are 6 BILLION people on this planet. What percentage of the planet do you need to make a reasonable profit?
Your low expectations for your work come not from a small potential audience, but from the lack of ability to reach the wider audience that DOES exist…that tiny percentage of the 6B people.
So you sit back and say “I get $1 for every book sold, I need to sell 20,000 copies to squeak out a living on this one”.
Mike is saying, make $.10 off something related to your writing. Use the writing to find 200,000 (or more) to be interested in that related thing.
Personally I haven’t seen anyone (in this thread) point out that another approach is for the author to drop the whole idea of getting a share of the book’s revenue. Take a pay completely up front, let the publisher (or whoever) concern themselves with the whole “economics” thing.
Heck, isn’t that sorta what goes on here at TechDirt?
Re: Re: Re:14 Re
OK, I don’t have time to respond to all of the posts to me from over the night, so I picked this one, because it can best illustrate my point.
I’m not saying my book sucks, what I am saying is this. Just because something is free, doesn’t mean it will spread exponentially. For example, in my case I write history books, which gives me the opportunity to write article about my subject. Some of them are freely available online, so I see how fast these kinds of things spread. Now, I would think the article would spread much quicker then a book, because its much quicker to read.
In a post below, you gave a few examples of successful companies that have spread using free, but look at all of the good books that are on the market. Do you really believe that if they were all free, that many more people would hear about each individual title. You’re example of a book that sold 20,000 getting 200,000 readers is a perfect example. You’re telling me another 180,000 people will hear about ther book because its free? This won’t happen for most books. So, if you believe everything should be free, that’s your choice, but accept that the number of books produced will decrease.
Re: Re: Re:15 @Corey
“but accept that the number of books produced will decrease.”
OR, and this is just a thought, the quality of books will increase. A LOT of the books out there right now are crud. And yeah, some people like crud, and I guess that’s OK, but frankly I’d prefer it if there were a small number of really quality authors out there. I’d buy MORE books: I’d know the quality of what I was purchacing.
Now, yes, this possibly means a lot of current authors wouldn’t be able to make it in the market. But, I mean, in any market, if you can’t make it… You can’t make it. I don’t feel bad for all the kids who wanted to be pro-baseball players but can’t make the cut. Well, I DO feel bad for them, but not to the point that I think we should set up some kind of fund so they can artificially compete with REAL athletes. Maybe that’s heartless, but…
Re: Re: Re:13 Re
The point is readership growth is not infinite.
I didn’t claim it was. None of this is based on the idea that readership growth is infinite, so I’m not sure what kind of point you’re making.
Just because a book is free, even if it is good, doesn’t mean readers with increase x10 or x100. But for the other goods you propose authors sell, you would NEED that type of increase in market size to make them even slightly viable.
Historically, that’s not true at all. Again, the combination of business models we’ve discussed don’t require a huge increase in readership. Some might, some don’t. To assume that it must would be wrong.
Corey, clearly, we’re going around in circles here. You don’t see the economic forces that are coming. Fair enough. That is your choice. It doesn’t mean they don’t exist. It doesn’t mean other authors won’t embrace them and do very well.
Re: Re: Re:7 Double Speak?
You probably only need a few example to prove Mike wrong.
Why don’t you do that?
Find examples where people actually test out Mike’s business model and failed in the process.
Mike already use this strategy to build his business. Why not try it yourself?
You proposed hypothetical scenario where it doesn’t work, but I would like to test assumption about that hypothetical scenario.
If you never try it before or never see anyone who try it, how do you know that it doesn’t work in your situation?
Re: Re: Re:8 Double Spe
AC, there are plenty of examples of people who give away ebooks for free and make nothing. The reason I don’t list a bunch of them is because most are unknowns trying to make a name for themselves, and may be doing just as poorly if they were not giving away their product for free. To prove or dispove Mike’s theory, you would need a good sample of diffenret types of author’s all doing it. It working or not working for a few doesn’t mean it will work or not work for the many.
Why don’t I try it? Let’s see. I’m a history author – I’ve got plenty of other articles and other things out there that are free, so people interested in the subjects I’ve written about have probably already heard of the book, so in my case the free ebook would be more of a risk to cut into my sales then generate new sales. And my publisher, who has more publishing expeience then me, you, or Mike, would agree with this.
Sorry, I’ll trust the people who have the most to gain more then Mike and his one size fits all theory.
Re: Re: Re:9 Double
You DIDN’T ACTUALLY TRY giving away your ebook.
I just want you to try it to see if it work.
That’s the whole point. I don’t care about whether you think the risk is very high.
If you can’t do that. I guess you don’t have enough balls to try them like you don’t have enough balls to find viable example of people who did that and failed.
Mike already done his homework. Let see if you do your.
If you don’t have enough time to do the research. Well, tough luck.
And oh, you’re a historian for god sake! Act like one!
Re: Re: Re:10 Do
AC, find you’re own examples. The internet is full of people trying to give products away who are going nowhere.
Let’s see, why shouldn’t I try Mike’s theory? Maybe because if if it doens’t work (like my gut and my publisher say), then what do I use to support my family.
Sorry, I’m not going to try a theory that I think will fail to prove a point to you.
Re: Re: Re:11 Re
“The internet is full of people trying to give products away who are going nowhere.”
You mean, like Mike? You can see how his giving away free articles on TechDirt is completely keeping him on the streets?
Like Apache/Mozilla/RedHat?
Like Oracle/Microsoft/IBM all give away TONS of software for free. Netscape PROVED that giving away your MAIN PRODUCT for free will generate revenue (and were so successful at it that their competitor had to beat them giving away pre-installed free stuff).
Like CNN/Yahoo/Google?
Like Prince/Radio Head?
Tim Horton’s (coffee chain in Canada) gets the most money out of me during their Roll-Up-The-Rim-To-Win campaign…that is they get money from me when they give stuff away for free.
Yep, can’t work. Back to bartering and living off the land.
Re: Re: Re:5 Double Speak?
Because this is what you do. No matter how much or how little an industry makes, you have your black and white view of the world where free is always better.
Corey that is a very false statement. Nowhere does Mike advocate that Ford should give cars away for free as a business model. But he would probably point out the ‘free’ cars being given away as promotions as yet another example of a company being able to leverage ‘free’ in the market place.
Re: Re: Re:6 Double Speak?
But Mike does say that everything digital should be free. That was what we were talking about and that is not a false statement.
Re: Re: Re:7 Double Speak?
He never said that. He said that the forces of economic will make digital goods free.
Re: Re: Re:7 Double Speak?
But Mike does say that everything digital should be free. That was what we were talking about and that is not a false statement.
No Corey. I said that the economics means that digital goods *will* become free, thanks to the economic pressures. Not that they should be free, but that economic pressures will force them to be. However, once that’s the case, there are ways to leverage that to make much more money.
Re: Re: Re:2 Double Speak?
Quote:
“Oh really? So if I put up an MP3 by Metallica on this website and say “hey, everyone, here’s Metallica’s MP3″ that’s not infringement? I think Lars would disagree.”
Sorry, I should have made clear I was thinking specifically of written works, where “giving credit” is referring to quoting with citation, which is fair use.
Quote:
“By this point, I’ve pointed to at least 50 different *actual examples*. Must I repeat them all?”
Fair enough. I’ve only been reading this blog for a few months. I don’t remember examples relating specifically to written works, besides the free online promotion concept, but I’ll take your word.
Quote:
“Er. Selling books doesn’t hurt, you know. Books being tangible things (remember, the model is selling scarce stuff). As we’ve pointed out repeatedly, giving away free elctronic versions tends to help with sales of the physical book.”
Here’s my issue with this example, and where I think that written materials differ fundamentally from the music industry, where I wholeheartedly agree with your arguments. When a band gives away their music for free and makes money off their scarce commodity, i.e. touring, they are in 100% control of that scarce commodity. But when it comes to authors and the scarce commodity is books, the authors are not in control of the publication of those books. They are at the mercy of the publishers, who are not obligated to pay them royalties in the absence of copyright, as I said before.
Quote:
“…Charles Dickens…9/11 commission report…”
Good examples I was not aware of. However, there is at least the possibility that they are unique and not representative of the market at large. A publisher might give a well-known author like Charles Dickens preferential treatment, but would they do the same for new authors trying to break into the market? And with the 9/11 report, because we are still at the beginning of a new era of thinking, perhaps it has just not entered people’s consciousness that for a work not protected by copyright, one publisher’s copy is just as good as another, the only differentiator being price.
Quote:
“…authors become sought after speakers and columnists…”
No question, and these are in fact scarce commodities the authors are in control of. But there are I-don’t-know-how-many thousands of published authors in the US, and I don’t think there are enough speaking engagements and columns to go around to all of them that they could make the equivalent living they do today.
And keep in mind that the prime scarce good we are discussing – books – are in all likelihood in the sunset of their existence. At some point someone will create a DRM-free ebook reader that is just as convenient and easy to read as a normal print book, with all the desired features like wireless connectivity, etc. At that point, print books become obsolete. Yes, giving away the book for free online may promote sales of the physical book, but that is analogous to the fact that giving away music for free online promotes sales of cds – it doesn’t change the fact that cds are a dying technology and that this phenomenon is only temporary. Just as a ubiquitous DRM-free music player will be the final nail in the coffin of cds, a quality ebook reader will be the death of print books.
Are there potentially other scarce commodities authors could make money from? Yes, but the key word is *potentially*. Part of the problem I have with your arguments is that you assume that when the infinite goods are liberated, the scarce goods will definitely be sufficient for creators to make as much as they did under the old scheme. In fact, you seem to think that authors will in fact make more money, referring to the explosion of creation/innovation that takes place when monopolies are removed. But I don’t think that there is anything in economic theory that says that is always necessarily true. Yes, in general monopolies hold back the growth of a market. But isn’t it the case that some monopolies instead prop up an artificial market that shouldn’t exist in the first place? For example, you truly shocked me when you wrote against a la carte pricing in the cable industry. You basically admitted that the prices we currently pay for cable subsidize lesser channels that would not be able to survive for themselves in a market purely driven by competition. Take away those artificial subsidies and several channels would go out of existence. I realize it is not a precisely analogous situation, but could not the same principle apply here? Take away the artificial subsidies copyright provides, and instead of an explosion of new creation, a significant percentage of authors would be forced out of work? I’m not saying it *would* happen, I’m only saying it *could* happen.
As a final note, I’m not passing judgment on whether if this happened it would be a good or bad thing. I’d hate to see thousands of authors forced out of work, but I also admit that sometimes I walk through Barnes & Noble and think that a little winnowing of the chaff might be a good thing. I’m not an author myself and have no vested interest in the outcome of this debate.
Re: Re: Re:3 Double Speak?
Hi Alan,
Sorry, I should have made clear I was thinking specifically of written works, where “giving credit” is referring to quoting with citation, which is fair use.
Even that’s not accurate. You can only copy a small portion to have it be considered fair use. If you copy all or substantially all of the piece, then it’s still infringement, even if you give credit. Hell, the AP is suing Moreover for merely reposting headlines and the first sentence of an article…
Here’s my issue with this example, and where I think that written materials differ fundamentally from the music industry, where I wholeheartedly agree with your arguments. When a band gives away their music for free and makes money off their scarce commodity, i.e. touring, they are in 100% control of that scarce commodity. But when it comes to authors and the scarce commodity is books, the authors are not in control of the publication of those books. They are at the mercy of the publishers, who are not obligated to pay them royalties in the absence of copyright, as I said before.
As I noted with Corey, books are a scarce product, but not necessarily the only one. And, don’t get caught up in thinking that you need the publisher as the middleman any more…
Good examples I was not aware of. However, there is at least the possibility that they are unique and not representative of the market at large. A publisher might give a well-known author like Charles Dickens preferential treatment, but would they do the same for new authors trying to break into the market?
A new author tends to be more worried about obscurity than piracy… and if pirating the book makes that author famous, then the next go around they have the leverage.
And with the 9/11 report, because we are still at the beginning of a new era of thinking, perhaps it has just not entered people’s consciousness that for a work not protected by copyright, one publisher’s copy is just as good as another, the only differentiator being price.
There’s little evidence to support there and plenty of evidence that suggests it’s not the case at all. A recent look at generic drugs is a perfect example. Despite the fact that generic drugs are chemically equivalent, and most people know that, many people will stay pay much, much more for the brand name drug. There is a value placed on the “official” version of something or the brand associated with something, and people pay it.
No question, and these are in fact scarce commodities the authors are in control of. But there are I-don’t-know-how-many thousands of published authors in the US, and I don’t think there are enough speaking engagements and columns to go around to all of them that they could make the equivalent living they do today.
Indeed. I should be clear here. I am not saying that all authors will suddenly get speaking engagements and columns. I am saying that there are a host of different business models that will show up — and some authors will accept some, and others will pick up others. There isn’t one business model any more.
Are there potentially other scarce commodities authors could make money from? Yes, but the key word is *potentially*. Part of the problem I have with your arguments is that you assume that when the infinite goods are liberated, the scarce goods will definitely be sufficient for creators to make as much as they did under the old scheme.
Fair enough. I’ll just say that I’ve yet to come across a market where the infinite good hasn’t created more scarce goods from which to make more money — and I’ve been looking. Everywhere you look, it only creates additional opportunity. It makes sense, too, when you think about it — because the infinite good is, by its nature, increasing the resource pool from which to make scarce goods more valuable. Any time you increase the resource pool, there should be greater opportunities to profit.
For example, you truly shocked me when you wrote against a la carte pricing in the cable industry. You basically admitted that the prices we currently pay for cable subsidize lesser channels that would not be able to survive for themselves in a market purely driven by competition. Take away those artificial subsidies and several channels would go out of existence.
That’s mostly due to the regulatory nature which enforces a near monopoly on cable tv providers. And, I wasn’t necessarily saying it’s good or bad. I was just noting the idea that people have that a la carte would decrease costs is unlikely to occur. I’m not against a la carte pricing — it’s just that people who think a la carte pricing means that they’ll just pay $4 for a couple channels are going to find the reality much different.
Re: Re: Re:3 @Alan
Hey Alan, just wanted to chime in here.
(1) Some of MY desired attributes in a replacement to books would include binding, covers, and turnable pages. Generally, “being a book.” I may be old fashioned, but I don’t see books going away anytime in the next long while.
(2) Wirelessly-connected eReaders FRIGHTEN me. The ‘promise’ of being able to add ‘errata’ or make ‘corrections’ to books is far more 1984 than anything I’ve heard other people crying about. Give me immutable media any day.
(3) I think authors should be concerned less with the success of any one book and more with the success of themselves as an author. As Mike notes, it’s worse to be unknown. And one and author is know, he has power — like the power to tell his readers which publishers are paying him and which are ripping him off. Fans will respond accordingly.
(4) No one is guaranteed to be successful, period, full stop. This goes for techies like me as well as artists. if an artist can’t compete with other artists, perhaps they ought not be an artist. While it’s unfortunate for those who fail, it can only lead to better quality art.
Regarding trademarks
Hi, i will add something about trademarks, mainly from what happens here in Argentina, but i believe it will probably apply also in the US and many other countries, because there are many international agreements (notice: i’m a programmer that worked on a trademark app, not a lawyer).
The matter with trademarks is that they must be renewed every number of years (here is 5), because (as said in the post) lack of PROVED commercial use may allow another (unrelated) interested party to GET the trademark.
Most interesting (as said in the post), trademarks are to protect customers in a SPECIFIC MARKET. This means that i can have a “José Luis” branded product in Buenos Aires, and someone else may have a “José Luis” branded product in Mendoza (another city of Argentina) and there would be no infringement (at least, that was a 100 years ago, where markets used to be very-very local). Today is not that easy as markets have expanded, but this may take the form of businesses in different countries in different continents using the same trading mark. This has happened to many (now-global) brand names. They usually end up buying the trademark from the local holder.
Another thing specific to trademarks is that they apply only to a certain type of product (there are “classes” to this purpose). For example, i can have some food under “José Luis” and someone else can have some services under the same mark. It is atmost allways the case with big brands (like Coca-cola, nike, ibm, etc) that they register their trademarks in all the classes in all the countries, so that no one can use it.
Other extras:
1) slogans are also subject of trademark law (think nike “just do it!”). Scents and sounds are also subject of trademarks (chanel has a trademark on the scent of it’s perfumes).
2) very important: a trademark not only recognizes the name, but also the logo (think of nike’s check mark, that is also a trademark).
3) trademarks are PUBLISHED to public scrutiny before they are granted (at least, here in Argentina). The public can then oppose to the request (as in “this trademark is similar to this other”). Patent requests are published too (here), but i’m not sure if one can oppose.
The following is DUBIOUS (at best) but: someone once told me that the whole trademark law spawned from the use of “uncle sam” by some people (other than the original manufacturer). If this is true, then go figure!
Your privilege is ineffective and unethical
Corey, all authors and inventors have a right to sell their intellectual property in a free market, and until they choose to sell it (if they choose to), they have a right not to have it stolen from them.
This is precisely the same set of rights that any craftsman or artist enjoys whether they weave a basket or record a song.
The problem is that the illiberal anachronisms of awarding patents on designs or copyrights on writings and other artistic expressions were unethical in the first place – despite being quite effective. There have been good reasons to abolish copyright and patents for a long time. What has added grist to the mill is that such monopolies are no longer effective.
So, there’s no amount of persuasion that can undo the invention of the Internet and digital diffusion technology. What could be achieved by persuasion would be to argue that prosecuting random families doesn’t remedy the monopolies’ lack of effectiveness either.
Meanwhile authors such as you are well advised to seek ways of selling your intellectual property without a monopoly, just as craftsmen of material property do.
No-one is arguing that the monopoly should be taken from you – you’ve already lost it. The argument is that people should no longer be prosecuted for infringing it.
a Patent
Some time ago the IEEE Spectrum published this on patents:
“A patent, any good patent attorney will tell you, isn’t a right to do something, it’s a right to keep others from doing it. If your invention is a good one, they’ll pay you for the privilege of using it for the patent’s 20-year life. If they don’t license your patent voluntarily but apply its innovation anyway, you have two choices: back off, or sue for infringement. Which way you go depends largely on how much money you’ve got. If you decide to go the legalistic route, you’d better have a couple of million dollars to start you on your way.”
example of incentives working
I think the case they allways post as an example is the fashion industry. They don’t have copyright but every year new content is created.
For patents, as said in the IEEE fragment, you can license or you can invent yet another completely new thing to the same end (that’s the incentive to progress).
The system is kind of twisted in many ways. It’s common for patent holders to register for extensions (usually on variations of the original patent to cheat the time limit). To limit this missuse, i believe the Argentine patent and copyrigth office has issued a policy saying something on the line that some extensions have the lifetime of the original patent.
Imaginary property
Mike, I’m sure you have seen people using the term “imaginary property” as a substitute for the traditional meaning of IP. I encourage you to give some careful consideration to adopting the practice yourself. A successful campaign to make the term IP or “intellectual property” be a joke will, I think, force people to abandon the lazy shortcut of lumping the two or three types together, and may even get them to consider the correctness of the arguments in favor of patents and copyrights.
Transfer of trademarks
I agree with the notion that the value of trademarks is that customers can use them to know that a product is produced by the entity they know. This is to the advantage of both the producer and the customer.
So why is it acceptable for a trademark to be sold to some other entity, for example, when a company goes out of business? To me, for a completely unrelated entity to produce goods under a trademark they have purchased is fraudulent — that product is not being produced by the company I have come to know and trust. Why should that be allowed?
Yes, there is the complication that a portion of a company that makes a product might be sold to another company. One might argue that the trademark should go along with the entity that has earned it, though often in such cases, the entity is so changed by its new owner that it does not deserve to be able to use the established trademark.
Re:....
Corey,
i’m not an expert on any of this, but i find it curious that you mention your publisher on all this. I wonder if Bouie, Yagger and others have relied on music executives to support taking down napster and the likes… And yet, here we are….
I don’t know much about economics, but i’ll tell you that these guys sound solid in what they say. Also, i’ll expand this idea on what i know from programming.
For decades, it’s been an dark science (i.e: to users), to the point of jokes that you probably heard many times. Now, technology is starting to enable users to start programming more complicated things (think excel macros but on the internet and way more sophisticated).
It seems that i should be frightened by this, but the fact is that it will create more need for my professional work.
For starters, i do not work for small businesses because of the “nephew” effect (yes, every other person has a nephew that is a genius with computers… the kid games all day long). Having users trying to actually do something will be good for me, as i’ll be able to charge reasonable for my services to more people (without having to explain why is reasonable).
Second, when things get more complex, data integrity starts being a problem (among many others). So, my work will shift from basic programming to more challenging tasks. That is good to keep my interest in my profession.
With so many (amateur) people creating content today, don’t you think that being a professional writer opens some opportunities to you? Take your publisher out of the equation and rethink the whole thing, maybe you’ll find something interesting to do that doesn’t take your current way of living, but is also a cheap experiment.
You are assuming that all this means:
EXTINCTION & I’M A DINOSAUR!!!!
Well, consider that not long ago, when you needed furniture, you payed to a carpenter. Then all kind of tools started to appear and “Do it yourself” became the “my god, we will loose our jobs” motto of carpenters. Do you make your own furniture? Did the government created the “fund to support out-of-job carpenters”?
Yes, you will talk about copyright, but being a programmer, many of the things i do could be subject to copyright (and man, i have made things that where years ahead of common technology). The truth is that when you have a business based on policing (from police, not policy), your start spending a lot on policing.
Re: Re:....
The problem with your post is this. You seem to be missing the point. I’m not saying I won find other work. What I’m saying is books don’t open as many revenue streams as Mike would like to think. If I find, as you put it, “something else to do”, that’s fine, but if the something else becomes my main source of income, the books come out much less, or not at all (it costs a lot of money for research and travel to write a book – so its got to make that back). The result would be losing many authors because they are forced to make a living doing something else. Which again comes back to the reason for the copyright – by enabling authors to make a living writing book, you are encouraging this, and therefore getting more books.
Re: Re: Re:....
Corey,
You are living inside of a system that is 200 years old and expecting it to continue to support you even in light of obvious pressures causing it to shrink (if not soon collapse).
Instead of using this as a forum to brainstorm ideas such that you can thrive, at least partially, outside of this collapsing system, you insist that the system *must* survive.
In my opinion, all evidence shows that the entire media industry is on the verge of a major change. The old way of relying on the scarcity of distribution and police/court enforced business models is going to die simply because society is moving on, evolving.
I wish you would look to at least some of the ideas put forth, or at least watch to see what others are doing. They will lead the way and for you to write off the stated successes as flukes or irrelevant (without showing, in economic terms, why they are) is disconcerting.
I wish you luck.
Material....
Mike,
i’m not very seasoned on economy in general, but you sound solid and usually mention many terms and/or explain things (like: “Value is *one* component in demand. But price is set at the interaction of supply and demand. This is an economic fact.”).
I wonder if you can recommend some entry level books to read on this subject.
You know, i would like to understand at least enough as to not consider bullshit everything economists say…
Hey, did you notice that i’m asking for books?
Man, i hate reading long texts on the computer screen. I would check an free e-book to figure out if it’s good to me (writing, examples, etc), but printing is more expensive than buying (even with international shipping).
I would also say that this free sampling is just a bit more than today’s back cover, and anyway, you can go to many book stores and read the book right there, isn’t it?
Re: Material....
Hi José,
I wonder if you can recommend some entry level books to read on this subject.
Last year, I put together a “reading list” that might be helpful:
http://techdirt.com/articles/20070516/195222.shtml
I usually recommend that first book, “The Worldly Philosophers” to people who have no background at all in economics. It’s an enjoyable read (not like a textbook at all). It actually makes some basic economic ideas very fun to read and hopefully will start you down the path towards a further exploration of the subject.
Re: Re: Material....
Mike,
thanks a lot for this. That is the kind of post that i usually would “star” in my reader, but i’ve joined this blog in Aug 2007, so i’ve missed it.
Thanks again!
i hope
At this point I’m actually hoping Corey is a shadow writer for Mike to bring up new points and to further explain the thesis. Frankly, I got bored of the back and forth because it’s clear that Corey will never see Mikes point, and Mike will never convince Corey his frame of reference is skewed. Mike, please stop responding to Corey. He is frustrating and cannot be moved. Ignore him and respond to those who might actually listen.
Re: i hope
Sorry Hope, I didn’t realize that if someone doesn’t agree with your point of view, its because their reference must be skewed.
I love how on this site whenever someone comes in from an industry being discussd and points out areas where the “free” business model doesn’t work, they get attacked from people like you who obviously are not in these industries and have no clue how they work or how money is made in them.
Gee, maybe its your reference that is skewed. Maybe you don’t know everything about book publishing. Just maybe.
Re: Re: i hope
Corey,
The problem is that you say the “free” model doesn’t work UNDER THE SYSTEM YOU ARE USED TO. But that system is no longer a viable reality.
It has been said above, and I’ll restate. To call the economic theories discussed here “free” business models is to miss the point of price vs. value. The price of one thing is set to free in order to leverage the value of the real product.
The value of your book is not simply the cost (and profit margin) of a 1/2 pound of dead wood. Adding in the cost of your time to fill that dead wood with ink also does not cover the value of the INFORMATION within that book.
You should find ways to get a better price for the value of that INFORMATION in this, the information age. We are not in the dead tree age, not in the plastic disc age, not in the download-from-pirate-websites age…
People want abundant, convenient, fast and ready access to reliable and/or rare tidbits of information. You are hoping that the value of ready-access never gets outweight by abundant, convenient or fast. Technology trends of the past 30 years have been focused on improving all facets, bringing them all inline.
Spelling.
discussd.
Re: Spelling.
Really, yuor correcting me for missing an “e” at 12:30 at night.
Dude, get a life.
Lay off the booze, take II.
won != won’t.
Do not end a sentence with a preposition.
yuor != you are
“Yuor” assumption of my time zone is ‘fnuny’.
I liked the article
This was a good reminder of the 3 subjects. Thanks.
Corey
Corey, I understand the position you are in and why you are not a fan of giving away your book content for free, but I need to clarify a few false assumptions you make about customers.
First off, you seem to assume that everyone is extremely cheap and MUST be coerced into purchasing something the only legal way. I can tell by your defensive stance on copyright that if the government doesn’t come make your business model work for you, absolutely no one would buy your book. This makes you seem very insecure and that you really do not have much to offer in your books. You would be surprised what people would pay for quality. When I read a book online, the first place I turn is to the original vendor. I want the official book with the official cover. They usually last longer, and they are far more trustworthy. Along these same lines, do you realize how much hassle it takes to print and bound a book unofficially? Trust me; there is PLENTY of value in the book format.
Second, you assume that all freeloading is bad. Part of offering something for free is accepting that some people will come along, mooch the free stuff, and leave. “OMG I lost money!” Wrong! If the only option were to buy the book, do you think such a freeloader would have purchased it in the first place? Freeloaders are actually a big part of the model. They freely spread the information and make recommendations to friends who DO turn into paying customers. I freeload a ton. I have so much professionally produced open source software, and I never send any money to the creators. Am I stealing? Certainly not, but I recommend the software to everyone, and some of my friends HAVE turned into paying customers. Apparently, freeloaders aren’t so worthless.
Third, you continually admit that business is not good as an author but resume defending your business model on grounds that we “are all ignorant Mike-followers who pretend to be experts” in your field of writing. Obviously, you are not as wise as you proclaim if you are not rolling in hundreds of thousands of dollars per year. Why not experiment with a new business model? Why shoot down Mike’s proposals in favor of your mediocre existence? How about you perform an experiment and give a book away for free? Do you HONESTLY believe your profits would drop close to zero as a result?
Don't worry about books becoming free, because nov
Corey, don’t worry about books becoming free, because novels will remain valuable. (Let us pretend you write novels)
If there’s one thing yesterday can reassure you about concerning tomorrow, it is that your readers won’t decide that your novels are suddenly less valuable to them just because the books that contain them suddenly become freely copyable.
Similarly, a musician’s audience don’t decide that the music they love suddenly no longer has as much value to them simply because they can download it for free. The same goes for movies.
This should reassure you that in the long run authors and other digital artists will make just as much money. It will often be more, given far more efficient mechanisms to enable prospective readers to discover novels that interest them. Sometimes it’ll be less, because of greater competition from other authors who under the previous system may have found the entry costs too high.
Remember, the value isn’t in the copy, but in the art.
So don’t sell copies of your work, sell your work.
Of course, if you had an unethical monopoly in the manufacture of copies you could sell copies, but such monopolies are no longer viable even if the privileges remain on the statute books.
All you need to do is to realise where your market is. Do you sell your work to a publisher and receive an ever shrinking pittance, even as it becomes augmented by revenue from litigation against those of your readers who file share ebooks? Or, do you sell your work to your readers, and encourage them to copy it far and wide?
Let’s say you had built up a readership of 10,000. How about selling your next ebook to them for a dollar a piece. That’s $10,000, and you can put the ebook on BitTorrent so it costs you next to nothing to do what your publisher used to do for you. Plus, because you don’t need a monopoly, your readers promote you and your work to a far larger audience who’ll purchase your next work.
Just remember, the deal is very simple:
Art for money, money for art.
There is no copy.
Society will find a way to support what it values
Corey,
Do you have confidence that basic economics is understood? If so, then take a moment to consider this thought.
(I think I’m right in what follows, but I’m not certain of that. It is my attempt to explain the situation from fundamental economic principles, but given that I have very little actual training in economics, I’m not the best person to attempt this. If I’m not right, I hope Mike or one of the others will jump in to correct me.)
Suppose, just for the moment, that copyrights vanish. Whether they are legally repealed or everyone just stops paying attention to them doesn’t matter — just assume that, for practical purposes, they don’t exist any more. So what happens?
Assuming there are enough people who want to read the kind of history books (or e-books or whatever form the writing takes) that you write, and those people want to read them more than they want to do other things that compete for their interests, the economic system will find a way to support the production of such items. It might turn out to be quite different from the way production of such items is supported today or it might be just a little different, but if enough demand is there, the production will occur, and the people who produce will be rewarded, perhaps not the same way as today, but they will be rewarded.
I have no idea whether the current demand for history books will be “enough demand” in the new economic environment. If it is not, it might be that the amount of history books produced in the future will be smaller than it is today, and the field won’t support as many writers, or the genre might disappear altogether. In that case, I imagine the frustrated demand for history books will get diverted to some other kind of item and will end up supporting production of that item. You might have to write some other kind of book, or do something else productive.
But I doubt things would go in that direction because increasing economic efficiency (removing an artificial restriction on the market ought to improve efficiency) generally expands opportunities rather than shrinking them. So you might find yourself in a history book boom.
I can’t argue the details of how a world without copyrights will support the authors. I don’t know enough about it. But Mike apparently has found considerable support in legitimate economic research and in practical examples that he has been referring to for the notion that it does work. The main point I want to make is that, as I understand it, generally accepted economics holds that a free market does the best job possible of allocating society’s resources. So if you trust that basic economics is understood, then you can be sure that if enough people in the society want history books, people who write history books will be able to make a living.
Doing things differently is scary and the transition can be difficult, but often that is what progress requires.
84 comments on an article that only describes the topic. How lame. Hell, it could have been a copy and paste from Wiki.
Crosbie, you are just wacked if you think that without copyright protection, an author can make more money than with.
Re: Re:
“you are just wacked if you think that without copyright protection, an author can make more money than with.”
Nice to see you haven’t bothered reading the posts…Mike’s shown several scenarios where this assumption is false.
“84 comments on an article that only describes the topic. How lame.”
Why exactly is staying on topic lame?
Re: Re: Re:
I believe the AC meant that the article only describes the topic, rather than presenting anything to discuss. So it’s ‘lame’ that there are 84 comments. Nevermind the content of those contents or the discussion we’re engaged in.
Is money an (artificially) scarce good?
As said before, i’m not seasoned in economy, but i started to think about the fact that money is being replaced (faster every day) with it’s electronic version.
I would say that the product itself (the paper bill or coin) has some production cost (the security stripes, the special paper, the ink, etc). These costs no longer exist on the electronic version and i might seem reasonable (or incredibly stupid???) to believe that once the good becomes completely digital the same forces Mike talks about will apply to money.
Is it so? I can imagine that governments will try to “put a serial number” on bits just to keep the “world from falling”. Is it that at some point, money will be so readily available that we will stop worrying about it? Will we start using other thing (such as “entertainment” to define value?).
Maybe this has always been the case (you know: money doesn’t buy happiness) and this will only make it more obvious…
Re: Is money an (artificially) scarce good?
Digital money is not the same thing as digital music. Money is currency developed as a way of expanding the influence and usefulness of a barter system. If you have a chicken and I have a pig we might agree to trade them, or I might give you a piglet for a half-dozen eggs (depending on the size of the piglet. If I’m a computer prgrammer, though, and your chicken farm doesn’t require Server Software, I’m out of luck for that omlette. But if there were a chain of exchanges that got me the eggs and you the piglet, it works out the same. Money abstracts that chain.
Abstracting money doesn’t change too much about it; it’s still effectively an exchange of favors. This exchage needs to be moderated, and digitally it’s moderated by banks and credit companies. These companies have a vested interest in tracking what “favors” everyone is owed, and they put in place their own security mechanisms — not security strips and watermarks, but mechanisms which ense your money doesn’t copy itself infinitely.
So the short answer is no, digitizing money changes nothing. It still needs to be exchanged and moderated, and in the end that requires us to perform work and drive the economy the way it always has.
Re: Re: Is money an (artificially) scarce good?
Yes, i agree with what you say, but i was pondering the fact that in the origins of the “money” concept, it was precious metals (gold, silver) and the value of that was driven by it being scarce.
We then changed to coins (made of less valuable metal) and paper. In all these, the security measures where placed there to maintain scarcity.
But today, it seems to me that somehow, money appears to be infinite. When you see valuations of companies and the way economists talk about billions and trillions (and these numbers get bigger everyday). At the same time, it is all becoming digital also.
Economy seems to be growing exponentially (despite one or other recession announcement). At least, countries (USA specially) seem to expand their money base at will (is it so?).
I wonder if more (abundant) money will trigger the eradication of poverty and a more even distribution of power (the “power” usually attached to having a lot of money).
Re: Re: Re: Is money an (artificially) scarce good
I doubt it. I mean it’s, what, 5million yen is the same as 1thousand USD? Something like that. The point is, you can fiddle with the numbers all you want, if it costs 8 billion dollars for a cheeseburger then being a millionaire doesn’t mean much any more. There will still be poverty in the sense of people who can’t meet their basic needs. Even if they have “tons” of money in the bank, that’s the real test.
Re: Re: Re:2 Is money an (artificially) scarce
My brain seems not to follow the whole idea (maybe it’s that i don’t understand economy, or i’m stupid or the whole economy/money is self sustained autodefinition…).
If money is really (and not artificially) scarce, then the amount available for distribution is relatively constant, right?
But everybody considers economy growth somehow endless and the size of the economy is tied to the total amount of available money.
We then have an endless amount of money (that is a contradiction with it being scarce). Also, who get’s to decide that now or tomorrow is a proper (and realistic) moment to increase the total amount of available money?
And how this relates to “opportunity”? It seems obvious that money distribution is somehow affected by opportunity (not alone, but to some extent). Opportunity is not a scarce resource, i think…
Re: Re: Re:3 Is money an (artificially) sca
I think we’re talking past each other somewhere, because I’m not understanding you, either. :p
If the Treasure prints off more bills, then yes there’s “more” money. But it’s all worth less because what backs it hasn’t increased. Unfortunately I don’t understand this aspect any further than that simple description. But if you can argue that there’s infinite supply of money, then you can argue that there’s also infinite demand for money.
Regardless, somehow it works out.
If by an expanding economy you hope to remove poverty by ensuring everyone has a job which provides them enough to meet a certain quality of life… I think you need to talk to someone with a better understanding of the whole picture than I have.
Re: Is money an (artificially) scarce good?
Jose, the question about the scarcity of money is a good one. It used to be tied to the gold standard, which enforced scarcity. In moving off the gold standard, we went to a Federal Reserve system, who is in charge of regulating the monetary supply in order to enforce the scarcity.
There are plenty of people who have problems with this, because they recognize that it could cause a lot of problems if mismanaged. However, for the most part, the Fed is trying to enforce scarcity on the monetary supply.
Growth does occur outside of that, and there are alternative currencies that cannot be regulated — but in the end, the idea is not that money is infinite — but that it’s scarce in the fact that it’s really tied to the value of goods and services available. i.e., Even if you increased the monetary supply greatly, you’d get the market to correct for you via inflation (making everything more expensive) and you’d go back to a system that has some equilibrium.
So, no money isn’t really infinite, since it’s tied to the value of goods and services, which is scarce. Hope that makes sense…
@Corey
So, I just had a thought, and I wanted to bounce it off you. I don’t mean to be snarky, ironic, sarcastic, whatever; I’m not attacking you.
But you say you write history books, right? And you say you’ve written several already. Presumably, you’ve sold books and recovered your costs and made money from them: or, as you said, you wouldn’t keep writing.
The point is, you have content which has been paid for. Even if it’s exhausted the current market, it hasn’t *saturated* the market: as proof, I’m a fan of history books but can almost garontee I haven’t read anything by you (not a remark against you; as I noted earlier this year, there’s SO MANY authors of such unknown quality that I’m usually very hesitant to buy books sight-unseen). I imagine I’m not the only one who hasn’t seen these books you have and who would be interested in reading them.
What I propose is that you digitize the content you already have and distribute it for free online, less as a direct attempt to make money and more as a way of promoting yourself. Since it’s content which isn’t necessarily “raking in the dough” any more, and the audience it would be distributed to probably doesn’t know you from Adam anyways, you wouldn’t be losing potential sales. And you may be building something of a fan base.
From there, whatever. I’m really just curious to see what happens. Maybe nothing. You can go on selling your books the way you do now, but if your experiment in promoting yourself with older material works out, you may sell more of your new stuff.
That’s just an idea: I’d be interested if you have comments.
I think that’s a good idea from out of print titles. I haven’t been in the business all that long, and the books I have out are still selling decent enough where I wouldn’t consider it with those titles.
The only problem with in regards to newer titles is this. I have been reviewed in magazines, newspapers, etc, have written articles, done book signings, my publisher had advertised the book. My point is this, why would people hear about the free ebook who wouldn’t hear of the book anyway. Sure, a small number of people will share it, but this can already be done with articles and other free content I have created.
In my experience, reviews and articles is how most people hear about books I have written. Then they find the book. Some people purchase ebooks. If we give the ebook away for free, then we lose the sales to people who would buy them. That’s fine if the exposure brings in a larger audience (big enough to make up for the lost sales). I don’t think how much of an audience this free exposure would bring in is a black-and-white issue, and is different for every book and every type of book. I just don’t think its a guarantee that it will increase the audience enough to bring in revenues for lost sales – it will vary greatly from case to case and book to book.
Re: Re:
So, see, that’s kind of my point. How do I explain myself?
*I* haven’t read your books. And, depending on what magazines and reviews you’re talking about, they aren’t free. I tend not to subscribe to magazines, for a load of reasons that mainly boil down to, “they don’t engage me consistently enough.” So if nothing else, I am part of the market you’re missing, Corey. I’m sure there are others.
Now, if you’re missing us, giving us free copies doesn’t lose you any sales. We aren’t buying as it is, and just saying, “I have a book on Foo you can buy for $XX.XX” is unlikely to reel us in. If you were to show us proof of your writing talent and quality research, though… Even if we don’t buy copies of the free stuff you gave us (though my experience is we probably would), we’d be interested in what else you come out with later. If we respect you as an author and researcher, we’ll value your input.
And I guess that’s really my point. You aren’t promoting books. Not really, anyways. The idea is to promote yourself, Corey. Even if there are only 150 History authors in the world, that’s quite a crowd to get lost in. If you can make yourself stand out — and no, not with the ‘novelty’ of free, but with the displayed quality of your work — then you get an edge. For you, arguably, reaching a wider audience is more a side effect.
And just because you give away the content doesn’t mean you can’t still sell books. Books are tangible and ACTUALLY scarce, even if the content isn’t. Books are valuable and desirable in themselves. And you can add to that in a number of different ways.
Ok, I’m rambling, but one last point: you’re concerned that other publishers are going to rip you off. They might try. But if we respect you as an author and a researcher — if we are your fans — then simply saying something like “publisher Foo has ripped me off, and Iam not recieving compensation from their sales” and YOUR FANS will not buy from them. It will hurt their sales. You can approve and shun publishers as you wish, as the author, and that holds weight.
Frankly, I think you’re under-valuing yourself.
What about bookstores?
Consider places like Barnes & Nobles! I love going in there, grabbing various books, sitting down, and reading them. You know what? THAT IS THE BEST MARKETING SYSTEM EVER. Some books I manage to read all the way through. Do I put the book back and think, “Well, I’ve read it, so I’m done”? OF COURSE NOT! Unless it is a 50-page joke book, large books naturally require several readings. Even then, it’s just NICE to have the book at home readily accessible. I never wonder if there is a massive PDF available online. Reading most of a book I do not own drives me to buy the book. I am so broke right now because (literally) I just purchased several books from B&N that I probably should not have (financially speaking). I would have NEVER purchased any of them had I not been able to read through them first.
“I believe the AC meant that the article only describes the topic, rather than presenting anything to discuss. So it’s ‘lame’ that there are 84 comments. Nevermind the content of those contents or the discussion we’re engaged in.”
Exactly, you are shooting your wad before Mike even starts to actually get into the topic.
Re: Re:
Well, except for the fact that Mike’s kind of been talking about this for, what, the last five years? Certainly for the last year or so. I think we have at least enough of the idea to have a lively discussion about it and, what do you know, we are.
Corey –
Here’s an article about this subject written by a man who has a lot of experience with the matter, including hard figures as to how it works for him.
http://www.baens-universe.com/articles/The_Economics_of_Writing
Check it out and see what you think.
Re: Re:
Good for him. I never said it couldn’t work on an individual level – but the results might be vastly different if EVERY book was given away for free because the competition would be that much greater. Also, he’s still talking about the present, and selling his actual book for profit, not related services. Part of my point was, what happens to authors in 10-20 years if ebooks are the standard. Mike claims there’s other products authors can sell, but I don’t think he realizes how little money authors make in those other avenues. It may work for some, but is every author going to increase his readership x100 to make those other avenues viable? Probably not.
Re: Re: Re:
Mike claims there’s other products authors can sell, but I don’t think he realizes how little money authors make in those other avenues
As I’ve said, quite clearly, I do understand that they make very little money from this TODAY. However, as you shift around the business models, things will change.
Re: Re: Re:
Corey,
what follows is a long shot (at best), probably ridiculous and likely, a bogus business idea… I assume that you are a reasonably good writer, because if not, you are really screwed, as a “fact book” on history is probably redundant, given that internet is right here and information is everywhere.
So, you are good, you love being an historian and you love writing books. Lets say you decide to start writing a blog about your activities in the process of your writing (posting articles about parts of what will be in your books and all kind of notes of when you are traveling). Given your online presence, you do your job in SEO (search engine optimization) and web site design, web site analitics, etc.
In this hypotethic future, one friend of yours decides that (s)he is going to travel to the place you usually go to do research and (s)he wants some advice on this, advice that you give for free.
Then, you start thinking that a lot of people travels and much of this people goes to historic places when traveling, and you have some expertise/advice on both (and as you are a **KNOWN** book writer, your advice deserves some respect).
You make some changes to your web site to rank well for history AND travel, you give your book for free and you make some arrangements with a travel agent to get paid for customer referrals from your site. You also recommend places to visit.
Heck! You even create a special version of your free e-book to be used on the very smart browser’s that phones will have, and you give this for free.
So, here you are. You will not be selling books. You have lost your (small) readership, but you tapped into the much bigger business/market that is travel. Also, having a biz relation with a travel agent, your research expenses go down as a side-effect.
That, plus you are still doing what you love (history and writing) and maybe you are making a lot more money.
In this future, one day a writer friend of yours that is struggling because cook books don’t sell, comes complaining and you start telling that THE problem is the business model. You then recomend this friend to make arrangements with restaurants for her/his book’s recipes tasting…
This maybe a very stupid idea (or not), but please think of other options. In all your messages, you are tying readership with technology will free and complain about there not being a 100X increase when you might very well have it, if you just dare imagine other alternatives…
Terrible Debate Quality.
We will and did have the same god damn discussion with detractors of Techdirt, again, again, and again. The detractors’ point are old and weak. Essentially, the debate is “frozen” because the detractors doesn’t bring anything new to the table. They can’t argue well and misunderstand every 2nd paragraph that Mike wrote.
Will the real challengers to Techdirt’s economists please stand up?
I agree with Mike’s economic, but I am hungry for some real critics who can debate Mike at his level. So we can learn something new from the debate.
Mike,
i was aware of the change from the gold standard in the USA (i think it happen during nixon’s presidency?). Here in Argentina the same change was made 10 years ago (i believe), but we (as many 3rd world countries with weak economies, specially in Latin America) still do need some backup and we use (guess…) USD in our central banks.
That presents a whole lot of problems per se (not just for us, but for the USA also as your Fed decisions now affect other countries that you want to be “friendly”). This is not helping USA’s image in the world, as dependency on USD tends to result in abuse (you have reported it many times, the last about Antigüa and gambling).
Anyway, i don’t completely understand the mechanics of all these (remember, i’ve asked about reading materials because to me, what economists say sounds mostly like bullshit :-). However, i will start to read about this and (maybe) i’ll become very convinced that what economists say is BS 😉
The part of goods/services being scarce i do understand, but then i start to think that as long as this scarcity remains, poverty (and bad distribution of power, illiteracy, no health, etc) will exist?
This would mean that, opposed to common thinking, poverty is not intrinsically related to bad distribution of money?
Re: Re:
The part of goods/services being scarce i do understand, but then i start to think that as long as this scarcity remains, poverty (and bad distribution of power, illiteracy, no health, etc) will exist?
Not necessarily… and here we start to go down a path that my research has been taking me. I think we can do quite a bit to alleviate many of those problems if the economics is well understood.
Poverty is a bit tricky, as some of it is a relative question. That is, people who are poor in the US today probably wouldn’t have been considered poor a few decades ago — but thanks to the relative differences they are.
Yet, you’re right in the core of your thinking, that a well understood economic system that realizes how infinite goods expands the resource base at no marginal cost could go a VERY long way towards reducing the problems of poverty and most certainly the problems related to healthcare. I’m not quite ready to discuss more specifics on exactly how that would work, but I will be soon… The bad news is that my research keeps taking me down interesting new avenues that delays me writing it up. The good news is that the news is all good. 🙂 There’s a lot of evidence that we really can alleviate many of the world’s problems. But it’s going to take a lot of work.
mike, your research sounds like very interesting reading, i look forward to read it once is public and (hopefully) i’ll know more to fully grasp it.
Thanks for taking the time to answer!