Recording Industry Testing Out New Theory: It Deserves More Money Because It Lets You Transfer Music

from the the-audacity-of-greed dept

William Patry has a long, but fascinating, discussion on the latest trick being used by the recording industry to try to squeeze more money out of you: telling governments that because it's now willing to let people transfer the music they legally purchased between devices, it deserves extra money for it. To back this up, it's claiming that there's obviously value in being able to transfer music around, otherwise why would people want that ability. The audacity of such a statement from the industry shouldn't be understated. After all, this is the same industry that has, for years, ignored pleas from fans all over the world to get rid of DRM because it would make digital files increase in value. And, now, that the industry has finally been forced to recognize this, it seems to be claiming that all of the value belongs to the industry itself, and it's the government's job to hand over that "value."

The reasoning for this seems to go back to the psychological explanation for why the recording industry keeps getting itself into trouble (and it's similar to the story we had recently about bloggers worrying about a new aggregator). They assume that all of the "value" needs to be captured by them, and not anyone else. In economics, this is effectively an industry telling the government that it needs to be compensated for all of the positive externalities it created -- even if it's better off at an absolute level. Basically, the industry is so overvaluing its own content, that it assumes that any additional value that people get out of music, even if it's through no effort of the recording industry itself, should be entirely converted to more revenue for the industry. As an analogy, it's like your automobile maker demanding an ongoing cut of your salary, since without the automobile, you wouldn't be able to drive to work. Unfortunately, though, unless you're a copyright wonk, you might not even notice that the recording industry is trying to do this. Instead, it presents its case in a logical fashion, focusing on how much "value" it's suddenly creating by "allowing" people to transfer the music they already legally purchased to the device of their choosing.
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Filed Under: copyright, externalities, recording industry, taxes, value, william patry


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  1. icon
    PaulT (profile), 16 Apr 2008 @ 10:19am

    Re: Re: Re:

    Ahh... the industry shill. Never bother to give a name, do you?

    The industry created the problem because they tried to ignore what the consumer wanted. The consumers got it anyway, so now the industry's trying to make silly claims to get back some of the money they lost.

    The solution is the same as always - give the customer what they want and the consumer will buy it. Just because they're finally meeting one demand (no DRM), it doesn't mean they're doing it all right and doesn't mean they're meeting all the consumer demands. Sitting back and going "wah! people are stealing" instead of meeting demand is what got them into this position in the first place.

    As for the claims in the article:

    "To back this up, it's claiming that there's obviously value in being able to transfer music around, otherwise why would people want that ability."

    Yes, that's right. There's a definite value. I consider that value when I purchase music. I didn't buy DRM music because it didn't offer this value. I consider this ability to be already included in the price when I buy MP3s, just as I consider the resale rights of CDs to be included when I buy CDs.

    Taking these rights away from me or trying to charge me extra for them will just result in lower sales as the product becomes less valuable. I really wish it wasn't so hard for people to understand this.

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