History Repeats Itself: How The RIAA Is Like 17th Century French Button-Makers

from the no,-seriously... dept

As regular readers know, I've been working through a series of posts on how economics works when scarcity is removed from some areas. I took a bit of a break over the holidays to catch up on some reading, and to do some further thinking on the subject (along with some interesting discussions with people about the topic). One of the books I picked up was one that I haven't read in well over a decade, but often recommend to others to read if they're interested in learning more about economics, but have no training at all in the subject. It's Robert L. Heilbroner's The Worldly Philosophers. Beyond giving readers a general overview of a variety of different economic theories, the book actually makes them all sound really interesting. It's a good book not necessarily because of the nitty gritty of economics (which it doesn't cover), but because it makes economics interesting, and gives people a good basis to then dig into actual economic theory and not find it boring and meaningless, but see it as a way to better understand what these "philosophers" were discussing.

Reading through an early chapter, though, it struck me how eerily a specific story Heilbroner told about France in 1666 matches up with what's happening today with the way the recording industry has reacted to innovations that have challenged their business models. Just two paragraphs highlight a couple of situations with striking similarities to the world today:
"The question has come up whether a guild master of the weaving industry should be allowed to try an innovation in his product. The verdict: 'If a cloth weaver intends to process a piece according to his own invention, he must not set it on the loom, but should obtain permission from the judges of the town to employ the number and length of threads that he desires, after the question has been considered by four of the oldest merchants and four of the oldest weavers of the guild.' One can imagine how many suggestions for change were tolerated.

Shortly after the matter of cloth weaving has been disposed of, the button makers guild raises a cry of outrage; the tailors are beginning to make buttons out of cloth, an unheard-of thing. The government, indignant that an innovation should threaten a settled industry, imposes a fine on the cloth-button makers. But the wardens of the button guild are not yet satisfied. They demand the right to search people's homes and wardrobes and fine and even arrest them on the streets if they are seen wearing these subversive goods."
Requiring permission to innovate? Feeling entitled to search others' property? Getting the power to act like law enforcement in order to fine or arrest those who are taking part in activities that challenge your business model? Don't these all sound quite familiar? Centuries from now (hopefully much, much sooner), the actions of the RIAA, MPAA and others that match those of the weavers and button-makers of 17th century France will seem just as ridiculous.

If you're looking to catch up on the posts in the series, I've listed them out below:

Economics Of Abundance Getting Some Well Deserved Attention
The Importance Of Zero In Destroying The Scarcity Myth Of Economics
The Economics Of Abundance Is Not A Moral Issue
A Lack Of Scarcity Has (Almost) Nothing To Do With Piracy
A Lack Of Scarcity Feeds The Long Tail By Increasing The Pie
Why The Lack Of Scarcity In Economics Is Getting More Important Now

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  1. identicon
    Yemi, 15 Mar 2007 @ 3:39pm

    Re: Movies [not] doomed to disappear?

    I think that you can make money on movies in a new business model. I know that there have been many advances in technology and they become cheaper every year. I also know that the software side does not get as cheap, but does allow you to do more for a similar price year after year. Now if we do not have to pay actors/actresses, directors, a few others millions of dollars to do a single movie, I think that you can cut down on the budget. I do respect talent, but it is a bleeding shame that we pay millions for it.

    Once that price cut happens, then we move on to the actual effectiveness of the acting, editing, and other post-production work. Have you seen DVD's that have director commentary, blooper-reels, alternative endings? That takes money to make, add, or be lossed against (blooper). If you cut some of that out, you can save some more money.

    Now you also have a larger market to work in over the internet. So if you charge a moderate fee and include some carefully placed advertisement in the movie (not scene spliced, literally a part of a scene), you can feed some your earnings potential. The movie does not have to be free, if it is cheap enough, many would not care to buy it once. If you really drop the bottom line price (except long-term profits) you can get people to buy it multiple times (tv, ipod, phone, etc.) and not think much of it.

    There are a number of models that could work, and you have to think hard to make the most of them. I also invision a subscriber fee for a VHS quality streamed viewing of any movie from a library and a one time per movie fee for a DVD quality stream from the library.

    It could change Sony, Warner, or who ever into a media storage facility. They may not make millions, but they can still keep a roof over there heads. It may also just have some indies to house/host there movies, get subscribers, and look to move to a Sony only when their movie needs to survive slashdotting or the like.

    These are ways in which some people in the industry can make money with new models in film entertainment. Good day.

    Yemi Bedu

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