Why Would Companies Ignore Empirical Evidence Of An Opportunity?
from the change-is-hard dept
That, by itself, is quite interesting, but it's worth reading further into Boyle's article, because that's where he explains the most fascinating part: the EC tried to "balance" out these results with another "study" that was simply them asking the EU database companies what they thought of the law. Those firms, not surprisingly, said they loved the law and that it needed to be kept for their own protection. This, of course, is not very different from the big record labels repeatedly ignoring detailed research suggesting that there are opportunities to make more money by embracing file sharing of free music. In both cases, it may seem odd to see companies effectively saying that evidence showing they can make more money should be ignored in favor of overly protective rules or actions that they simply "believe" are needed to protect their business. However, the real issue is that these laws protect an existing business model -- and changing business models can be quite difficult. So, while there may very well be a much bigger opportunity with less restrictive intellectual property laws, it would open the door for competitors or more innovative firms to come into the market and capture that opportunity. It's not about protecting the overall market, but protecting some risk-averse incumbents. Of course, that can be bad public policy. Generally, you would think, politicians should be facilitating policies that generate the largest overall benefit -- which is why these incumbents have to spin the story to suggest that their way of doing business is the only way of doing business. One of these days, perhaps politicians will learn that protecting big incumbents isn't the same as helping the economy -- in fact, it can often make things worse.