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
    yes, 16 Jan 2007 @ 3:08pm

    Re: Movies doomed to disappear?

    > The production costs of something like Titanic or Lord of the Rings can probably never be brought low enough to make them profitable on the crumbs of revenue that would still remain then.

    > So in five or ten years, movies will just stop being made.

    I doubt that.
    But I believe that mediocre actors will stop being paid $20 million for 6 weeks of work.

    Either they work for less, or they will be replaced by ones that are willing to work for electrons.

    I believe that in five to ten years time, there will no be large difference in the movie experience for films like Titanic or Lord of the ring if they are entirely computer generated.

    There will still be an audience willing to pay enough to finance a Woody-Allen-type film with real actors, but these are not costing 100 million today.

    And there will be an enormous competition that will bring prices down.

    For the last 100 years, a really large group of people would have liked to be a director - probably at least as many as would have liked to be an author of books.

    But there are probably three orders of magnitude more different books printed each year than different movies shown in cinemas.

    With books, it is hard or even impossible to tell if they were written on a small or large budget.

    How much better is the last "Harry Potter", where the author could have afforded to buy an island to be undisturbed, than the first "Harry Potter", where the author lived in a small flat with noise coming up from the street ?

    The same will be true of computer generated movies, and then everybody that today loads his holiday video up on YouTube, will be able to generate something with a higher technical quality than "Nemo" or "Shrek" on his home PC and perhaps a couple of friends PC's spare capacity.

    Also, Films with real actors will be cheaper.

    Amateur digitial video cameras today are probably much better than professional studio equipment 10 years ago, and who needs a dollys and cranes if there is electronic image stabilisation and 10 million + pixel resolution to electronically zoom and pan in postproduction on your home PC?

    Exotic locations?

    Buy "views" from any place on earth at ebay, or download them from a "movie-sourceforge" and mount your actors into them.

    Of course, there are probably not a million Spielbergs out there, but i would expect a couple of dozen.

    While I do not shed a lot of tears for the likes of Tom Cruise or the Disney execs, I am afraid this will be very tough on people in the movie industry like set decoraters, caterers, lighting technicians, etc.

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