A Lack Of Scarcity Has (Almost) Nothing To Do With Piracy

from the misunderstanding-the-premise dept

Took a week off from my series concerning the economics of abundance, but wanted to jump right back into it this week. I started out with a discussion on how the number zero seems to screw up otherwise sensible people when it comes to economics, and followed that up with a post on the economics of abundance is not a moral issue. I had planned to move on to more about the actual economics, but the responses have delayed that for at least a little while.

Some of the complaints about the last piece highlighted one aspect that perhaps I had not made clear: unauthorized downloads, "piracy" or "stealing content" (if you want to use those phrases) have almost nothing to do with this discussion. People criticizing the posts on this topic keep going back to the idea that this is all some big defense of such practices when nothing is further from the truth. This series is very much written from the perspective of the producer of content, not the consumer. That is, we're trying to make clear the basic economics so that the producer of the content can use that to his or her advantage. So, the lack of scarcity we're talking about is based on the fundamental nature of the content: that it has zero marginal cost to make a new copy once the original is made. That's a simple fact that has nothing to do with whether or not people are making unauthorized copies. That nature of the content is fundamental. So everything that we're saying here applies just as much to content if there were no "piracy" at all. If there were an industry where there was a lack of scarcity, but no piracy, the information here would apply just the same.

Now, I do say "almost" nothing to do with piracy. The way that unauthorized copies play into this discussion is in the realization that they're a fact of the marketplace. That is, they're helping to accelerate the impact of that lack of scarcity, and only helps to highlight why the producers of content need to pay attention and make changes sooner, rather than later. Many of the recent actions taken by organizations like the RIAA, the MPAA and the BSA represent a fundamental misunderstanding of this fact. They believe two things that are absolutely wrong. First, that the lack of scarcity is only due to piracy and, second, that there's some way to really stop piracy. Both of these things are wrong. The lack of scarcity is due to the fact that the content has zero marginal cost -- which is true no matter what, and unauthorized copies are always going to be an issue. So, based on that, why not try to understand what happens when you have a lack of scarcity and how to profit from it, rather than fighting the obvious trend?

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  1. identicon
    M1$t1f, 18 Jan 2007 @ 3:54pm

    I am a Pirate?

    I have an old Computer Game. It came on five CDs and I recently dug it out and dusted it off thinking that it might be fun to finally finish it. The license agreement prohibits duplicating the disks. At the time I bought it I didn't even own a CD writer.

    Disk one is bad.

    If I am caught downloading an image of disk one I would be considered a pirate. The company that "hosted" the game (put their name on the label) almost acts like it never existed. The people who actually made it are virtually non-existent, and no-one has sold copies of it in years (except maybe on e-bay).

    Preventing someone from protecting an investment is insane - whether it is through stern language, laws, or engineering/innovation.

    (Warning non apples to apples comparison ahead!!!!!!)

    If I want to protect my scratched or dented car I can paint it, I can also replace parts on it and if I really wanted to, and knew how, I could even make the parts myself.

    But I am not legally allowed to protect the CDs and DVDs I buy in the manner that protects them best - only using a copy of the original, so if it is damaged I can make a second copy to replace the first, and still protect the original.

    The industry wants disks to be impossible to duplicate and easy to damage so they can sell replacements. And when profits are down and they don't sell that title anymore YOU are out of luck, not them - they made their money, they are happy.

    Anyone remember when CDs first appeared? You could buy a drive that used a disk caddy which protected the disk when it was out of the machine because the disk could just stay in the caddy until you wanted to take it out. No dust, no scratches and disks lasted a good long time. Have you seen what rental disks look like these days? I've seen scratches, fingerprints, food and even teeth marks. I look at the disks before I leave the store these days.

    The rental industry has the money to keep replacing these things, I do not.

    And about DRM - HD DVDs were just cracked and the movie industry has a plan. If the keys needed to copy an HD DVD get released they will just disable the keys, then no-one can play the disk (that won't stop it from being illegally copied). They will change the keys, re-press the disks and if you want to watch the movie you will need to purchase a new disk - too bad, sucks to be you. Hell will freeze three times over before I will take one of these disks as a gift!

    So anyway, about that game. I had disk one in a drive that began to spin too fast and seemed to have some way of putting on the breaks to stop the disk from shattering. Whatever it was grabbed the disk at the outer edges, but the disk was full to the edge. I have tried every repair trick/device I have come across, but to no avail.

    Anyone know where I could find an image of "Armed and Delirious" disk one (I only need disk one)? And if that question makes me a pirate then I wear the badge proudly!

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