A Psychological Explanation For RIAA Short-Sightedness
from the would-rather-lose-money-than-let-someone-else-make-it dept
In all of the discussions we've had over various business models that could help make the entertainment industry even bigger than it is today, while embracing things like file sharing, we're always shocked to have entertainment industry execs and lobbyists come back with some sort of version "but that's not fair." We saw it when we tried to explain why questions about the economics of file sharing really shouldn't be seen as a moral issue, because if the economics works out with everyone being better off, the moral question should fall by the wayside. Yet, we were still told that it was a moral issue and a question of "fairness." This is true even if what we describe would make the industry more money. On an absolute basis, they would be better off. If you can make twice as much money, even if some people are "freeloading" and not paying anything, wouldn't that be a good thing? Yet, time and time again, we're told that "no" it would not be a good thing, because of those freeloaders. Universal Music CEO Doug Morris even admitted flat out that giving up 10 cents today to make a dollar later means that he's being taken advantage of for that 10 cents. These reactions are not rational.At times it's been frustrating trying to understand why this is. We've often just assumed that it's caused by a general inertia: that is, it's not easy for someone who's had a successful existing business model to accept the idea that the market has changed and the business model needs to change. That requires effort and effort is not as much fun as coasting on inertia. However, reader Bill Corry writes in with another intriguing possibility. He points to a story in the LA Times discussing some recent behavioral economic studies on how people deal with fairness vs. rationality, suggesting that it explains the RIAA's actions. I'd actually seen all of the studies mentioned in the past, but hadn't associated them with the entertainment industry's struggles. The key part:
Consider one more experimental example to prove the point: the ultimatum game. You are given $100 to split between yourself and your game partner. Whatever division of the money you propose, if your partner accepts it, you each get to keep your share. If, however, your partner rejects it, neither of you gets any money.So, perhaps the industry is to be forgiven. It's not that they're completely blind to the fact that they're giving up potentially millions of dollars in forgone profits from not embracing new models that also benefit "freeloaders." It's just that we're all hardwired to make bad economic decisions when that happens.
How much should you offer? Why not suggest a $90-$10 split? If your game partner is a rational, self-interested money-maximizer -- the very embodiment of Homo economicus -- he isn't going to turn down a free 10 bucks, is he? He is. Research shows that proposals that offer much less than a $70-$30 split are usually rejected.
Why? Because they aren't fair. Says who? Says the moral emotion of "reciprocal altruism," which evolved over the Paleolithic eons to demand fairness on the part of our potential exchange partners. "I'll scratch your back if you'll scratch mine" only works if I know you will respond with something approaching parity. The moral sense of fairness is hard-wired into our brains and is an emotion shared by most people and primates tested for it, including people from non-Western cultures and those living close to how our Paleolithic ancestors lived.
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Filed Under: behavioral economics, business models, economics, riaa
Companies: riaa
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Laziness?
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Re: Laziness?
Says the guy commenting from a well known music industry company....
Though, it is a reasonable question. The answer is that there are bigger fish to fry, and it certainly seems like enough musicians are figuring this out on their own.
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Re: Re: Laziness?
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Re: Re: Re: Re: Laziness?
And to you AC (assuming your the same AC that responded to Jan)
"So they are trying to save money by downloading music? Also I didn't realize that the RIAA is responsible for global warming."
First, yes they are trying to save money by downloading music. If you would provide that music in a reasonable way at a reasonable price people would buy it. People have already done this (and were successful) but the recording industry keeps shutting them down.
Second, with digital downloads you don't have all that useless plastic cases that most people just throw away, no shrink wrap, no little paper books that most don't read. They can still be offered to those people that do use them, for a price, but not for as much as they sell for now.
Let Napster offer MP3s (without watermarks) and I'll subscribe (no joke). I am not spending $0.99 per song that only works on "Napster approved" devices. I won't pay that much for just one MP3 (I like the subscription they have).
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Re: Re: Laziness?
Mike can head off to Scotland and bask in the glow of a warm reception. That is his prerogative. Thanks to technology he doesn't have to wait until he gets back to respond if he wishes to do so at all. And thanks to technology, he can just delete this post and leave no trace of it behind. Hmmm. Maybe not. It will be stored somewhere for later retrieval. Who knows if the retriever will be friendly or hostile?
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Re: Re: Re: Laziness?
"The reasoning by technocrats seems to be that if enough people want to break the law and do so with technological means, then the laws should be changed and the law breakers rewarded."
You have a habit of taking wild leaps in your reasoning, and coming up with some outlandish conclusions. Your entire post reeks of conspiracy theorism, with little to no basis in fact. I don't recall any rational defense of piracy or copyright infringement. There has been questioning of the methods used to prosecute those crimes, and the rationale behind attacking a symptom and not the cause of the problem.
"The discussions about 'new business models' is just so much subterfuge."
Mike has presented an economic theory with relevant research to support his view. Your only response has been to label it "mumbo jumbo" with no real explanation as to why. I'm not saying I agree 100% with his conclusions, but they make more sense than this wonderful 'theory' of yours.
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Re: Laziness?
Dan, you probably will not believe me, but for each of the 17 different excuses that people have come up with for the illegal downloading of music files that I have heard or read, many, if not most, of them have been posted here on this blog. I have yet to see Mike (or you, actually) call them down about it. As long as a poster lamblasts the RIAA as if it were some kind of big flesh-eating ogre, they can make any kind of assertion to justify the illegal downloading of music files from the Internet and nothing will be said about it. I have read many posts here and elsewhere where the poster complains about having to buy 20 songs on a CD when all that was wanted was 1 or that the cost of a CD is too great, so on that basis and since they cannot buy the one song they want for, say, 99 cents, it is deemed to be OK to download it for free. But I cannot recall any direct rebuke of those posts by Mike. He tries to brush aside the criticism by repeatedly claiming that he thinks unauthorized downloading of music is illegal, but he does so in an oblique fashion. Since this is his blog, he can do as he wishes, but he could denounce illegal downloading in the most direct of terms, but he doesn't do that. He quibbles incesantly over whether or not "making available" a copyrighted work for unauthorized copying in a shared folder in a computer is infringement and thus illegal. It's like saying "no" softly while shaking your head vigorously up and down.
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Re: Re: Laziness?
For the record, you will notice, if you examine my post history here, that I do purchase CDs. I like the artwork, etc. etc. However, I am not happy about the prices charged for them in major music stores. I buy directly from the artist whenever possible, and used otherwise.
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Re: Re: Laziness?
Well then, maybe you're just blind to anything that you don't want to see. Mike has repeatedly said that he doesn't support illegal copyright infringement. If you're claiming that he hasn't, then you're lying.
Now, I've also seen comments on Techdirt claiming that copyright infringement is the same as murder, and I haven't seen you directly "rebuke" any of those. So by your reasoning we should take it that you agree. That makes you quite an extremist. Either that or quite a hypocrite.
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Re: Re: Re: Laziness?
It's got nothing to do with "desire." It is merely explaining the forces that are actually at work. And it's got nothing to do with a "technocracy." It's actually very much about democracy at work, where the free market actually gets to deliver on its promise to expand a market.
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Re: Re: Re: Laziness?
yeah right. we want technology to rule everything. that's why we fawn over technological monopolies like telecoms and microsoft and why we want video cameras and finger print scanners everywhere. have you ever read a post or a comment on techdirt before?
the truth is that we, the technical elite, want technology to benefit the people. p2p distribution means lower prices for everyone. internet access that is free from monitors, caps, and filters means the people can communicate, work, create, and conduct commerce without fear of the government.
The overriding rule above all others in this technocracy would be, "Whatever can be done with technology should be done with technology." Such a society brings to mind those negative utopias portrayed in Huxley's Brave New World and Orwell's 1984. Technology has to be controlled lest we become controlled by technology.
yeah, again, that's like saying we love wiretapping, we love nanny state regulations, and we love systems like carnivore and AT&T selling us out to the NSA. you couldn't be more wrong.
technology in the hands of the people benefits the people. technology in the hands of the corporations benefits the corporations. technology in the hands of the government benefits the government. since there are way more people than there are governments or corporations, technology will benefit the people most of all.
p2p, open source, open standards, truth in advertising, competition, network neutrality, privacy, free speech, fair use, innovation... this is all to benefit the people. it's to protect us and our ways of life from the government and the corporations. technology is the only weapon we have to defend ourselves.
being anti-technology is being pro-servitude. that's something that luddites like yourself never seem to realize.
This debate over copyrights and what constitutes fair use is just a minor skirmish in the broader battle to control all of us... What the rest of us might want to do would be ignored. If there were a court system, it would be constructed to carry out the wishes of the ruling technocrats. That would square with the wishes of a lot of people here who think the justice system is antiquated and "not viable" in this technological age.
again, none of that is possible in an environment of competition, fair use, privacy, innovation, and free speech. copyright originated as a tool of government censorship and has been used as a club by corporations ever since. copyright is anti-competitive and anti-consumer. it is artificial scarcity that withholds benefit from the public good.
innovation benefits us all, not just the government or the corporations. inexpensive technology means lower prices on consumer goods since corporations need to invest less in productivity technology, and lower taxes since the government will need less money for it's materials for public works and defense.
The thinking seems to be that if an act is illegal when carried out by non-technical means, it is still illegal, but if it is carried out by technical means, it can be justified as perfectly legal. What do judges in 2008 know anyway? Their children and grandchildren know more about computers than they do, right? And who really cares about the law? The reasoning by technocrats seems to be that if enough people want to break the law and do so with technological means, then the laws should be changed and the law breakers rewarded.
yeah right, laws have never changed to keep up with the times. that's why women still can't vote, why children are forced into labor, we all have to work a mandatory 80 hour work week without pay, and that's why we still have slavery.
also, enough people breaking the law has never justified breaking the law, that's why we still have prohibition and enforcement of the sabbath. get a clue.
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Re: Laziness?
That pretty much sums up the rationale for my argument.
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Re: Re: Laziness?
That pretty much sums up the rationale for my argument.
excellent, that's a classic non-response. well done.
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Re: Re: Re: Laziness?
Oh brother. So now Techdirt is trying to replace the government, huh? What a loon.
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Re: Re: Re: Laziness?
If enough people believe that a law (or anything else for that matter) is unfair then the it is unfair. That is basis of democracy.
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Re: Laziness?
"Well let's see you do better" is an argument that nobody over 5 years old should use. Constructive criticism is your friend.
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Re: Re: Laziness?
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Re: Re: Re: Laziness?
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Re: Laziness?
and if you're making such attempts at logic by poorly referencing an informal fallacy, let's look at your argument
mike: the music industry would make more money if it embraced new business models and ceased to attack their customers.
ac: if you know everything why don't you do it?
for me, it's really getting hard to have any sympathy for the record labels. If they aren't going to adapt, they will no longer be able to do business and will likely be replaced by services that cater to the specific areas of the process, such as promotion, distribution, and production/recording.
btw, i haven't bought or listened to music from a major record label in years. i can't even remember the last time i did either.
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Destroy music that comes from the internet.
That's the bottom line people.
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...perhaps because the music industry keeps extorting money out of their own customers who are just trying to save time, money and our planet's resources?
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Re:
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ultimatum game
The point of the ultimatum game is about fair distribution of resources.
"People want a reasonable relationship between accomplishment and reward" - JS
Neither party - consumers vs. the RIAA - sees the current music industry model as a just exchange.
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My Two Cents
Everyone knows that the record companies are crooks. So are the oil companies, banks, etc..
What are we to do? I say just a straight out boycott of all of them. Now, I know, that sounds great when said, but will it ever happen? No! Why? Because we have been trained, by the government, by the big-businesses to become nothing more than puppets for their pleasure.
Everyone needs to stand up and say Screw Them! For one week, switch to Creative Common music. Agreed that it isn’t the best, but there are some great artist out there, and the good thing is, I can download it all day free and the Record Execs can’t do Jack about it!
Come on America, Wake up and see what is happening to our country!
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Re: My Two Cents
Absolutely, people should always post with their real name!
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You may say you don't believe in Jesus, but that won't keep you from going to hell.
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Re:
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Moral sense of fairness is hardwired ...
- Think on how humans lived in Paleolithic times. Humans were hunter/gatherers, mostly living hand to mouth. How would several individuals share a windfall? Similarly, how would a group of hunters share a kill. Even in a single tribe, there was both cooperation and competition among individuals. Any significant disparity in the distribution of a benefit had the potential for adverse consequences for the receiver of the lesser; also, the receiver of the greater had an advantage. Such, differences could have large consequences in survival and reproduction.
- From that perspective, one can argue that it is better for a single individual to ensure than none profit rather than allow a competitor to receive too great an advantage. Thus, people don't take the "rational" course, and object to a distribution disparity that they feel is too large.
- This may be a human survival trait from primitive times, but, it in no way applies to modern corporations. There is no such thing as a Paleolithic corporation. Were I a shareholder or mutual fund manager, I would expect individuals who claim the talent, skill and intelligence to lead a modern corporation to be able to recognize such primitive personal behaviors, compensate and not allow the behaviors to effect how the corporation is run.
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Re: Laziness - I could not disagree more. It is far easier to see a mistake, and propose a solution, than it is to start from scratch. How many times have you taken something for repair, and had the repair person say "This happens all the time, they should have done it this way". Why not ask him to start his own company? You can have ONE answer, without have ALL the answers.
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Chilling of Speech
Several random thoughts:
1. In both cases is was people who "opposed" his thinking. In fairness I don't read every post so he may have outed others not opposed.
2. If that information is available and an poster were praising his 20,000 song downloaded collection and Mike was sued to give up the IP address by the RIAA would he not have to comply?
3. I personally am afraid to post my name here because of the rabid "kill the RIAA and all its minions" type of comments that pop up. To be clear these scary comments are clearly not Mike and his close allies but on the other hand those comments are not strongly condemned either.
4. If only the opposition is outed then that seems directly opposed to Mike's stated goal of getting at the wisdom of the crowd here.
For the record, I am an independent musician and find some of what Mike says to be helpful and makes me more money and some of what he says causes me to loose money when I try it.
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Re: Chilling of Speech
Says the guy commenting from a well known music industry company....
Calling that being outed is a bit of a stretch. He didn't name the person or the company, just the kind of company. I'd hardly say that was "chilling".
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RE: My Two Cents
> I agree that the music industry is doing a horrible job providing its products to us. That's why the free market is responding with declining sales to traditional music mediums and finding new ways to get music from artists.
Come on America, Wake up and see what is happening to our country!
>> I'm not sure what a crappy recording industry has to do with the state of our country. It's like buggy whip manufacturing at the dawn of the 20th century--the free market will correct this of its own accord. It's a demonstration of the principles of our country in action when artists and music fans find new and creative ways to interact, without giving outdated record companies a share of the profits.
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I wonder who this quote is from?
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Techdirt has noticed that the recording industry is in trouble. No one denies this. Articles such as this provide analysis of the issue anyone may read and follow or not follow. The point is, whether current activities in which the public engages are fair or not, it would be easier to embrace them than to attempt to stop them. And if this is done, both consumers and industry will be more satisfied. Clearly you do not believe this is the case.
No drastic change of society is required. But laws such as the DCMA should be dropped, not so we can all STEAL MUSIC, but because they hurt everybody in the long run, and benefit a few in the short run, to an extent which is less than the extent of possible benefit to those few outside of such laws.
Since you disagree with these articles so much, can you show how such policies and efforts on the part of the **AA are good for them? Is it your opinion that the effort expended on taking every immediate dime possible is worthwhile? Would you demand $50 and refuse $10, to receive nothing? What if $10 could be received from ten people, instead of $50 from one?
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And the NSA looking at calling patterns while not listening in to the call isn't a privacy issue either, is it? That shouldn't be chilling, should it?
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Re:
A web site owner pointing out an anonymous poster's conflict of interest is a far stretch from a government agency's activities. Is the NSA looking at calling patterns while not listening in the call "chilling"? Perhaps, but unless they're actually listening to the call, I'm more concerned/entertained by the shenanigans of the music industry.
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Re:
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Disclosed Biase =/=
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Mike, how the HELL do you know who Anon is?
Are you seeing IP addresses we're not?
Outing your enemies is rather obnoxious, especially in such a vague way.
But Anon, if he's seeing your IP address, use Tor or something. Just don't whine. Jesus.
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Re:
How can you "out" someone in a vague way? To qualify as outting an anonymous poster, you'd have to give his or her name, something that I think most people wouldn't call vague.
But Anon, if he's seeing your IP address, use Tor or something. Just don't whine. Jesus.
The ironic thing is the kind of person that would make an anonymous post when they have an obvious conflict of interest because they work for a company that demonstrates a fundamental lack of understanding of the impact of technology on their business is the same kind of person who wouldn't know how to mask their IP address or probably what an IP address even is.
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That was posted by an AC, which in fact was me. I don't work for the music industry (or any other content industry for that matter) and in fact don't even own an iPod or MP3 player (well, my phone could play music, but I have none on it) and made my comment as a casual observation.
I think its pretty funny that if someone disagrees with your point of view, you assume they are an industry shill. Think that says more about you than me.
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I have no problem with that thought.
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Re:
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Technocratic Totalitarianism?
Well, I guess that depends on your definition of "us". First of all, I don't want our current crop of busy-bodies replaced by panopticon robots. I like to keep my enemies human, thank you. Also, you mention that the current election seems to favor religious zealots, or at least people who have a problem separating religion from state. I agree that this is a problem, but I would hope that the majority of folks here on TechDirt think that this is not an ideal situation. Again, though, I would prefer to be ruled by a human, rather than an inhuman computer (shades of Paranoia the RPG).
Of course, I'd prefer that there be "no rulers" and that is what seems to be going on in the world, at this moment. More and more people are waking up to the fact that the "emperor has no clothes". Yes, the military, police, and secret agents of the world can shove us around with direct and indirect force, but the people are waking up to the fact that these forms of carrot-and-stick behavioral controls are no longer legitimate. It's we the people. We make the rules. You can incarcerate us all, I guess, or invade countries that do not share your antiquated notion of copyright, but that will cause your governments and corporations to go bankrupt. How are you going to enforce copyright in a country without a functional court system? Mercenaries? They're expensive.
Anyway, I wasn't all fired up to write about that. I'm more interested in why RIAA/MPAA keep doing what they do. I think I stumbled upon this a while ago, but couldn't incorporate it into my thinking about the MAFIAA. Essence of Decision was written by people who sought to explain the causes of and actions taken during the Cuban Missile Crisis. Like many individuals, we are assuming that the MAFFIA is a rational actor, and are baffled by their behavior when they fail to act rationally. Actually, they follow the Organizational Process model. All of the fallacies that they have fallen into can be explained by their inability to accept new data. They do what they have always been doing, and react to "threats" with short-term thinking.
I would posit that until the heads of the MAFIAA-aligned companies are replaced by people who are capable of learning (accepting new information as "true" and using it to make decisions), we are only going to get more of the same from these folks.
In short: the world has moved on. We don't need you anymore. Get over it. The reason Mike does not start a record company is that the entire model that assumes that you need a corporation specifically designed to promote, distribute, and sell music is obsolete. He could be a record company, if he really wanted to be. So could I; so could you. I choose to comment on this blog.
Now, I have wasted all of your time and mine, when I could have been busy making my first billion dollars. Thanks techno-priests. I'm going back to my cave, now.
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Crazy and Felonious Things the RIAA Has Done.
Under pressure, the RIAA/MPAA revert to gangster tactics, perhaps as a result of spending too much time with people like Snoop Doggy Dog or O. J. Simpson. Once you start talking about "serious crimes against the person" (murder, rape, kidnapping, armed robbery, "grievous bodily harm," etc.), alleged music piracy doesn't amount to a hill of beans. Any number of "debt collectors" have gone to prison for a long time, regardless of whether or not the money was justly owed.
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Re: Crazy and Felonious Things the RIAA Has Done.
Copyright infringement kills corporations by destroying business models. Corporations are legally people so it is the same as murder.
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Re: Re: Crazy and Felonious Things the RIAA Has Done.
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Why Morals Aren't Bad After All
The only catch is the point in time when one choses to define everyone.
Assume for a moment that food becomes scarce. To solve the problem, the Leader of your country determines that a India and China are just too much of a drain on the Economics of Food available in the world today. Therefore, said Leader drops a number of nuclear bombs on them, in order to help even things out.
Or assume for a moment that your belief system is paramount. Your problem is that those who don't believe as you do are just plain wrong, and should therefore die. No problem (you determine), you'll just fly some jets into some tall buildings and make your statement loud and clear.
Less people, less food consumption, everyone benefits.
Less heretics, less corruption, everyone benefits.
Except of course those who are now dead, but wait: they're not in a position to care anymore, so what's the difference?
There is none, because according to Mike, morals should move aside when everyone benefits.
Morality is not found in a vacuum. It is not something to use when convenient and then discard when inconvenient. Nor does it extrude itself out of years of cross-breeding. Unfortunately, many will learn this lesson too late.
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Re: Why Morals Aren't Bad After All
Strange, I don't remember him writing anything about suicide. Why don't you cite where he did?
Assume for a moment that food becomes scarce.
You obviously haven't read and understood about what are and aren't scarce goods. Food happens to be a scarce good already. And there's a market to deal with it.
To solve the problem, the Leader of your country determines that a India and China are just too much of a drain on the Economics of Food available in the world today. Therefore, said Leader drops a number of nuclear bombs on them, in order to help even things out.
That's more like what the RIAA would do: Use government force rather than the market.
Nor does it extrude itself out of years of cross-breeding.
Now you've really lost me. Is that supposed to be some kind of racist remark?
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Re: Why Morals Aren't Bad After All
Uh, that's clearly not a situation where everyone is better off, because you've just wiped out everyone in India and China. Those people are now decidedly worse off.
Your problem is that those who don't believe as you do are just plain wrong, and should therefore die. No problem (you determine), you'll just fly some jets into some tall buildings and make your statement loud and clear.
Again, you seem to have trouble understanding "everyone."
Less people, less food consumption, everyone benefits.
Uh, except for the people who are now "less".
Less heretics, less corruption, everyone benefits.
Uh, except for the "heretics."
You seem to not understand what we're talking about. We're not saying that we judge some people as being more important than others. We're saying if EVERYONE is better off. And your response is to pretend that everyone is defined as not everyone.
It is not something to use when convenient and then discard when inconvenient.
I am not saying you discard morals. I'm saying that morals are meaningless in a situation where everyone is better off. You only need moral determination when there's a question where some are better off and some are worse off.
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Re: Re: Why Morals Aren't Bad After All
So yes, you're exactly right: everyone was not defined in its literal sense my examples. And why is that? Because its much easier to redefine the term when you're the one in charge (or at least when you think you're right) and when the desires and wishes of someone else do not meet with your expectations or desires.
Stealing music, whether it be via the internet or a coat pocket at Wal-Mart is still stealing. Will the music industry have to change? Yep, they will. Do I agree with the tactics of RIAA? Hardly. Do they appear to be abusing ignorance of the Law in their favor? Absolutely.
But to suggest that morals should be discarded simply because the alternative appears to be better for everyone else (who themselves have discarded morals), is simply wrong and misguided.
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Re: Re: Re: Why Morals Aren't Bad After All
And lying is lying. Do you really think people can't see how full of crap you are? Man, the more I see of people like you the less I think of the record industry. You're your own worst enemies.
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Re: Re: Re: Why Morals Aren't Bad After All
I didn't say morals should be *abandoned*. I said they don't come into play. Moral issues are only raised when you need to determine what's fair and what is not when someone could be worse off. The point is not that you ABANDON morals but you never even need to get to the point where there are moral questions.
Stealing music, whether it be via the internet or a coat pocket at Wal-Mart is still stealing
No. It's infringing, which is different. Nothing is lost, so no stealing has occurred.
But to suggest that morals should be discarded simply because the alternative appears to be better for everyone else (who themselves have discarded morals), is simply wrong and misguided.
Again, I did not say that morals should be discarded. All I said was that if you do the calculus and realize that everyone is better off, there is no moral question to be answered. It answers itself.
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Assessment
By reading this blog, these posts, you have two options: respond with relevant topical information, or catalog the information and move on. I really don't understand how a discussion about the recording industry breaks down to a personalized attack at Mike with phrases like "assisted suicide" and "since corporations are people, it's the same as murder".
Frankly, it is a law put on the books to afford certain rights to corporations. "Killing" a corporation does not exact murder charges. First of all, no corporation is going to go down that easily, thus "Murder" should be replaced with a slower form of death, say "Asphyxiation". Second, you cannot ask a corporation to baby sit, or catch a movie with you. Corporations are COMPRISED of people. Even the opinion of a corporation comes not from one single person. So the idea of "killing" a corporation cannot logically be equated to killing people.
As for this blog, I think its a good source of opinion. I don't see any reason to not afford someone their right to voice their opinion, as it's my choice whether or not I accept their stance. This argument has many stances, all which have their ups and downs. To each their own. Providing reasonable evidence only strengthens that stance.
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