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
    jackscrow, 16 Mar 2007 @ 7:21am

    Re: Compensation for services.

    You must be a sessions musician (if one at all). You are totally ignoring the existence of "intellectual property".

    The artist has a right to control distribution of the art.

    The fact that stealing is becoming easier does not make it right...

    You are rationalizing STEALING. And it's not just information, it is the artist’s work, and in some cases, their livelihood.

    If you are a "musician", as you claim, you know that the "information" on that file you download and copy cost someone thousands of dollars to produce and, more often than not, thousands more to market.

    The artist is the supplier and the art is the product, and the artist has the right to control and make money off his/her creation. The idea that you create something, get paid once and move on is idiotic. Even painters have numbered prints.

    Increasingly the artist and the distributor are the same, so if you up-load or down-load music files, you are not stealing from some faceless corporation, you are stealing from a musician who very likely maxed out his or her credit trying to maintain control of their product.

    The artist or the company that contracts them pays to put the original creation into a format that can be distributed (think about that numbered print). If part of that contract includes royalties, then the distributor has every right to go after thieves.

    If you are a musician you would know what a good producer is worth and how much they charge. How much mastering costs, along with Website SEO and Marketing costs.

    It's my property, I set the asking price, I decide how to access it, and if you access it without paying, it is thievery and I have the right to sue you.

    Even when you buy a CD and burn 10 copies for your friends, you are stealing.

    I don't blame the record companies for suing on behalf of the artists. In fact, I wouldn't blame the artist for hunting the offenders down and beating them senseless.

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