Do We Really Want Congress Choosing Which Business Models Are Best?
from the lobbyists-aren't-pushing-for-the-public-good dept
One of the most disappointing things in watching how Congressional Reps respond to entertainment industry lobbyists is that they seem to accept that the RIAA and MPAA's interests really are about helping "content creators" rather than simply putting in place laws that prop up an increasingly obsolete business model. Braden Cox recently came out with an interesting paper that highlights the fact that lobbyists are almost always either trying to protect their own business model, or make it difficult for other companies' business models to succeed. Yes, this is incredibly obvious, but it's an important reminder of something that is often missed by our politicians.More specifically, it also explodes the myth that "the tech industry" has a single opinion on most policy issues. The report notes, basically, that different companies support different policies entirely based on their business models. It also notes that any effort by Congress to protect one particular business model is equally likely to harm another business model. In effect, any effort by politicians to prop up one is making an explicit choice over which business models are "best." And, for obvious reasons, we should all be pretty worried when Congress critters put themselves in the position of deciding which business model is best.
Tim Lee then does a nice job following up to show how things like the DMCA are an explicit choice by Congress to say that proprietary software business models are better than open software business models -- even though most in Congress don't recognize this fact. Isn't it time that we let the market decide what the best business models are instead of Congress?
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Filed Under: business models, congress, lobbyists, regulation
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Actually, I would say the congress critters are trying to prop up the business model that puts the most contributions into their parties campaign piggy banks. They are no more concerned with helping content creators than the **AA is.
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Your right but...
It's sad to see the officials that I vote for and who are supposed to represent me only care about money. A very small proportion of the United States cares about the RIAA and the MPAA, but sadly, Congress, our elected officials, follow them - because they the money.
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Food for thought
Hence a possible reason for lobbyist involvement-- consider legislating before it becomes a problem...?
What changed?
Over 50% of Board of Directors are using legal resources more frequently than 4 years ago. Most significantly, about 30% of businesses have become more risk averse and less likely to invest in new business opportunities as a result of concerns about litigation. Dealing with potential litigation and business-model risk consumes a level of company resources which many business leaders now find problematic.
Boards already admit they spend too much time on liability and litigation issues, but this could be spent more wisely and even reduced if they switched their focus to emerging risks rather than concentrating on issues which are already subject to legal and regulatory activity. Additionally, many executives admit that there has not been board-level discussion on a range of emerging model issues, (even though they recognize the need to understand the threat and opportunity.)
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How about we, you know, let the people with the business decide their business model? If a given artist wants to give away their music, so be it! But if a different artist says, "Please don't give copies of my music to friends," shouldn't that be respected, too? Even if you think it's outmoded or unsuccessful, so what? Some will succeed, some will fail - let reality decide.
There's too much Father Knows Best attitude from both politicians and the geeks.
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Re:
What kind of question is that? FUCK YES, that is EXACTLY who should be choosing the best business models.
Legislative power (no small concern) aside, why is it not okay for Congress to support a business model, and okay for Slashdot (or Techdirt, or whomever) to support a different business model?
Because they are deciding how OUR money should be spent. Consumers of all flavors get to vote with their dollars to decide "the best" business model. And that's how it's supposed to work. So when this 'no small concern' weilds its legislative power to pervert the process of consumer choice, we have a tendency to get upset.
How about we, you know, let the people with the business decide their business model?
Yes, they do indeed get to decide which business model to go by. But they do NOT get to decide which model succeeds in the marketplace. As it stands, however, they are using deception, fear, abuse of legal process, and bribery in order to subvert the consumers and get the legislative body to pass laws that demand their business model succeeds in the marketplace.
There's too much Father Knows Best attitude from both politicians and the geeks.
You're not paranoid when they really are out to get you.
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Oh, and THIS!
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Um, are you seriously asking that? It might have something to do with the fact that we don't have the power to change laws.
It's not about "supporting" a business model in saying which is right, it's about setting the laws up so that they favor a single business model. We don't have the power to do that, Congress does.
And we don't "support" any particular business model at all. All we're asking is that the market get to decide which business model makes the most sense, rather than Congress. History has shown that the market eventually chooses the most efficient business model. When we talk about business models here it's not about "supporting" one or the other, but highlighting what the most efficient one is.
How about we, you know, let the people with the business decide their business model? If a given artist wants to give away their music, so be it! But if a different artist says, "Please don't give copies of my music to friends," shouldn't that be respected, too? Even if you think it's outmoded or unsuccessful, so what? Some will succeed, some will fail - let reality decide.
Because it's the MARKET -- the intersection between buyers and sellers -- that decides the business model. That's exactly what we want.
That means Congress shouldn't be making laws that give an unfair advantage to one business model.
We're not saying that any seller *can't* choose their business model (as you imply), but that they shouldn't get an unfair boost or a special monopoly right from Congress to do so.
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This is the most harmful thing a society can do and the Federal government does it constantly. It ensures lawlessness and garners nothing but contempt for authority, a contempt that is wholly earned.
The entire model of Intellectual Property is based on a foundation of completely artificial scarcity. It is a false model that does not match reality. People rail when the rules conflict with reality, regardless of the moral or economic implications... it's only common sense.
Slashdot is free to support whatever business model it wants. That's called Free Speech. Congress on the other hand makes laws. They generally do a really awful job of it, and are beholden to monied interests and their own careers. The welfare of the country is at best a minor consideration, and then only in terms of appearances. Any positive consequences of anything they do are wholly through dumb luck.
Current business models are not working. The laws as written are wholly inconsistent with the the original (and clear) intent of the Constitution (copyright law in particular has been completely perverted).
Reality has already decided and the business model that assumes a 19th-century mode of distribution is completely obsolete, and allows corporations to be artificial monopolies and to act in arbirarily and capricious ways while avoiding true competition.
Businesses bought Congress support for their obsolete business model, and we consumers continue to suffer from it every day. The politicians need to actually do their jobs and stop being such blatant whores.
The real problem is that Rule of Law has been eroded to near meaninglessness because so many laws are completely unenforceable, and that is the real reality that is being ignored here. The only real options are a 1984-style police state or something completely new, and the invertebrates in Congress want to continue pretending this isn't so.
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Yes, and the reality is that controlling the spread of information is a futile endeavour.
So, legalities aside, it will not work, period. People will always share information, as is their natural inclination. Trying to make that illegal is like trying to outlaw breathing.
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It amazes me...
Grow some morals and quit complaining because you can have music for free.
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Re: It amazes me...
Yep. But copyright infringement is not.
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Re: It amazes me...
Hmm. I think you're reading things wrong.
First copyright infringement =/= theft. Second, we're not saying that theft is a business model. Third, we're not saying that copyright infringement is a business model.
All we're saying is that there are ways to build business models that get rid of the problems of copyright infringement by turning them not into infringement, but an advantage as a promotional good.
Theft is theft is theft.
And, as someone else noted, copyright infringement is not theft.
Why should someone be forced to change a business model to accommodate thieves?
It's not to accommodate thieves. It's to create a larger market and make more money.
Your question, by the way, is really the same thing as "why should someone be forced to change a business model to accommodate competition?"
They're not forced to do so, but if they don't, they'll find it very difficult to compete.
If someone writes a song, what right is it of yours to have that song?
And we've never said otherwise. We're not defending infringement. We're just pointing out that there are business models that change it from being a detriment to a positive.
Why would you be against that?
Grow some morals and quit complaining because you can have music for free.
It's got nothing to do with getting music for free (I do buy my music). It's about creating better business models for the creators of that music.
Is this really that complicated?
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Re: It amazes me...
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Re: It amazes me...
I don't "steal" music either. I buy it. A lot of it.
However, this conversation has much more to do with the philosophical and intellectual bankruptcy of our government creating laws it cannot (and often does not want to) enforce, and their utter willingness, even enthusiasm to subvert the intention of the Constitution to the whims of anyone with deep enough pockets.
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This is kind of off topic but an example of who gets preferential treatment by the government. We're getting a Copyright Czar but not an Identity Theft Czar. As a whole what do you think cause more damage to the average citizen? A drop in CD sales or having their bank account emptied and credit ruined?
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I'll spell it out for you
Senate = pompous, greedy & corrupt blow dried dumbasses
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Right, but I'm pointing out that, with the current set of laws, the "market" here is partially a bunch of folks looting stores during a riot. It's what the consumers want. Free stuff, yay! The problem is that it isn't legal, and the mob of folks decided they wanted it anyway. The "market" consists of infringing on copyright laws. It's a GREAT deal for consumers. It's awesome for pirates.
While I loathe Congress and its continual generation of useless laws, I don't see how breaking copyright laws (and that's what is happening) is a market so much as it is yanking stuff out of the creator's hands and saying, "YOINK! Mine now!"
Just because it is a futile endeavor does not make something right. Wildly hypothetical and overblown - take Harlan Ellison's "Button Button" box, spread it around. You can tracelessly kill random individuals, nobody can stop you. Is that now ... right?
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Re:
Or you want the government confiscating your property for the "benefit" of the public. That's what the government is doing to consumers. They're upsurping consumers' private property right in favor of granting monopolies to authors all for the "benefit" of the public.
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vote
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Re: vote
Far better than these bullies telling us how to live our lives.
Or do you want me to tell you how to live your lives by voting?
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Re: Re: Re: Re: Re: vote
This is not certainly a war of defense, because we invaded a country we have no reason to fear even if they have nukes.
Even so, I never implied that society itself, compromise, police, or law need to be dismantled. I just said that the state need to be dismantled because they are bullies.
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You know . . .
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Private Property Rights Usurped in the name of Copyright
Well it can be argued that the right to do as you please with a book/cd/dvd/software you legally purchase has been/could be usurped in the name of copyright protection.
The DMCA says that it is illegal for me to remove the CD check from a PC Game I purchased. Why??? The game already fully loads on to my hard drive, why should I have to stop and swap out one CD for another, risking damage to both?
Many in the recording industry feel that if I by a CD, I should need to also purchase an MP3, for my IPod, and another for my computer, etc... Why???? I purchased the song. I can only listen to one copy at a time. How I choose to listen to it, where I choose, and when, is my business.
These are just two examples (one real,and one simply desired) of copyright protections, stepping on my rights as a consumer, to do as I please with items I purchased in good faith.
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Let us elect smart politicians..
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Impact on Business Models...
Mike, thanks for discussing my paper. I'd like to respond to some of the posts about the rights and wrongs of intellectual property law. For purposes of the paper the merits of copyright and patent law are irrelevant. I meant to explain business motivation for (instead of the merits of) different public policy choices.
In the paper I identify 4 main business models in the IT industry:
These are many permutations, but these are the basic business models. A public policy's effect on these business models - not specific software technologies, not particular businesses - forms the basis of the paper. It's a nuanced distinction I know, but very important because companies with different business models do compete against each other. And indeed it's up to the marketplace to decide those models that win out and those that wither and fail.
The paper should not lead one to necessarily advocate for eliminating any particular policy toward intellectual property. Only if one can identify a business model that is foreclosed by regulation, or if one can identify regulatory policies that seemed specifically targeted to disadvantage one model over another. In the paper I point to the FCC's 700MHz C Block "open applications and open devices" rule as an example that precludes a free/subsidized phone + minimum term contract model (e.g. no AT&T and iPhone model) and helps ad-supported models (e.g. Google).
Getting back to IP, take software patents. A public policy allowing software patents won't per se preclude a business model. It may make certain licensing models (GPL v.3) or even hobbyist models (due to licensing fees) less viable but strictly defined these aren't business models. There's nothing to prevent companies that give away software from patenting an innovative feature, and -- patent in-hand -- still give the software away to help drive even more hardware sales. Or from employing defensive measure like the Open Invention Network.
This is not to say that software patents -- or the patent system overall -- isn't in need of reform. We're all familiar with how software and other new technologies have exposed problems at the PTO and with patent law. But if patents introduce a deadweight loss in the IT industry due to legal uncertainty and overreach, all business models feel this pain.
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Peer-to-Government and academic peer review system
http://courseblog.cs.princeton.edu/spring08/wws586f/
From the link:
Imagine a government, where people would be allowed to propose legislative bills, comment and vote in every law that may affect them. This would be a real democratic system the way my ancestors envisioned it, a democracy that holds true to its meaning: the rule (‘kratos’) of the people (‘demos’).
Sounds interesting.
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Re: Peer-to-Government and academic peer review system
Basically, make Congress use a suped-up version phpBB or something. (One would hope for better than phpBB, but that's the most of the feature set you need)
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Re: Re: Peer-to-Government and academic peer review system
Besides, have you ever seen anything actually get resolved in a web forum? I mean, we make even Congress look good sometimes :P
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Enough
Same goes for those who feel that sharing information is a natural inclination for people in general, and should therefore be acceptable. Does that then mean cheating on a test should no longer be punishable? It's just sharing information. How about your health and financial information? Every argument I've heard in defense of what is currently considered copyright infringement would apply equally well to someone distributing that sort of information.
As somone said previously, if the content creator doesn't want you sharing their content, you don't have the right to. Period. There is no room for argument there. If you don't like it, find another artist with a different business model that's more to your liking. That's the only way it's going to change anyway. Then one dl really will = one lost sale, except it'll be a dl of somebody else's music. And it will drive copyright enforcers into not only the poorhouse, but obscurity as well.
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Re: Enough
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Re: Enough
Theft is illegal because it's wrong. Copyright infringement is "wrong" because it's illegal. That's the crux of the difference.
Does that then mean cheating on a test should no longer be punishable? It's just sharing information. How about your health and financial information?
No one has promoted infringing on anyone's privacy, and no one has promoted plagiarism, the act of passing of another's work as one's own.
As somone said previously, if the content creator doesn't want you sharing their content, you don't have the right to. Period. There is no room for argument there. If you don't like it, find another artist with a different business model that's more to your liking. That's the only way it's going to change anyway.
You're saying that to change the nature of artists' business, you have to change the natural inclination of the mass market. That's false. You can't force the mass market to conform to something and then pray for business models to change. The nature of artists' business will need to change to conform to the natural inclination of the mass market, or the artists' business will fail.
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Re: Re: Enough
That's a distinction without a difference. Theft, like copyright infringement, is only wrong because we, as a populace, say so. It's a policy determination that renders each activity against the law. Neither was illegal before it was determined to be wrong.
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Re: Re: Re: Enough
Theft is wrong because someone is *deprived* of something.
Copyright is considered wrong because some folks don't understand economics.
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Re: Re: Re: Re: Enough
If you didn't create the content, it isn't yours. Whoever created it can put whatever restrictions on its use they want to, or as is more often the case, give that right to whomever they choose (i.e. the recording industry). If you don't like it, find other content. As has been pointed out, plenty of artists out there are coming up with new business models.
Copyright protection isn't going anywhere so long as there is money to be made by its existence. That people think differently tells me they're the ones who don't understand economics. You want it gone? Support the artists with newer business models. I have yet to figure out how a business model can be considered obsolete when it continues to make people millions upon millions of dollars. Isn't that the purpose of a business model?
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Big difference.
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And if no one knows about it, that also deprives the artist of lost sales.
Thing is, your artist is trying to get their target audience to "buy" something that doesn't cost anything to produce (a copy of a digital item). That's a completely wrong-headed business model.
Instead, the artist could see that EVERYONE downloading their work as an opportunity to sell items that people would appreciate paying for.
There are even people who would pay(dontate) for something they already have for free simply because they appreciate it and are wanting to receive more "free" stuff.
On top of that, the artist has this idea that they do WORK FOR FREE and then hope to get payment for it afterwards. I don't that in itself is a good business model either. This model (somewhat) worked in the past when there was a cost to reproduction of the work and there was movement of scarce physical resources.
But the digital world, one that the artists have adopted(!!) essentially makes their business model similar to a gardener that cuts your lawn and then afterwards knocks on the door and asks for money. Not a sound business move for either professional. In the gardener's case it was never would work, but in the artist's case their business model has become antiquated by the advancements they have chosen to leverage. They need to adjust their business practice just as they have their art.
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Re: Re: Re: Re: Re: Re: Enough
OK, I follow this and agree it's true: it costs (next to) nothing to make a copy of a digital work. But it costs a great deal (in time and money) to produce the original from which the copy is made. That original is a gamble, always, granted. But people (and other industries) invest in that production and take that gamble because of the potential to make a profit from that investment.
I still don't understand how the "free" business model can make that possible.
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The problem right now is that everyone is stuck with a business model that was created back when there was a scarce resource to be sold (physical media). When the scarcity was taken out of the equation, rather than adjusting the business model the industry fights against the new technology's promise, and the will of their customers.
Change the business model, work with your customers, and you'll make far more money. Keep the old, sue your customers...doesn't look very promising.
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Re: Enough
But if it's true, why shouldn't we point it out?
They are both crimes
Indeed. We agree on that. But the impact of the two very different types of crime is quite different -- and it's important to recognize those distinctions.
Claiming they're the same hides those distinctions.
whereby you get something for free that you are legally required to pay for (assuming the "owner" doesn't choose to give it away for free).
Yes, but the major difference is that in one something is *missing* and in the other it is *not*. In one, there is a scarce product that cannot easily be shared. In the other, there is.
So please give it a rest.
I don't see why one should give a rest to pointing out something that is true when many folks are mistaken about it.
You're as bad as they are with the continued assertion that one download = one lost sale.
No, there's a big difference. Claiming that one download = one lost sale is a false statement. Claiming that copyright infringement is different from theft is a true statement.
Same goes for those who feel that sharing information is a natural inclination for people in general, and should therefore be acceptable.
Ah, please shut up because your opinion doesn't match with mine? Very convincing.
Does that then mean cheating on a test should no longer be punishable? It's just sharing information.
Indeed. We've actually made that point before. The problem there is that teachers are relying on a bad system of tests.
How about your health and financial information? Every argument I've heard in defense of what is currently considered copyright infringement would apply equally well to someone distributing that sort of information.
Really? Can you apply our basic economic example to that situation?
As somone said previously, if the content creator doesn't want you sharing their content, you don't have the right to. Period.
Yes, that's why once you buy a chair you're not allowed to resell it without the creator's approval... Oh wait, that's NOT true.
So why is it okay with content?
There is no room for argument there
Clearly, there is.
If you don't like it, find another artist with a different business model that's more to your liking. That's the only way it's going to change anyway.
Wait, you mean we can't explain to the artists who have chosen a bad business model why it's a bad business model?
Yikes. You have some strange ideas.
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Re: Re: Enough
Wait, you mean we can't explain to the artists who have chosen a bad business model why it's a bad business model?
Explaining it's a bad business model is far removed from advocating the abolition of copyright and blacklisting those who want to protect those rights.
And don't play innocent on that because it won't fly ... I've been reading too long.
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re: Re: Re: Enough
With theft I get something, you lose it.
With copyright infringement, you only fail to get profit. You do not lose anything real, only the potential profit, you most likely would not have received anyway.
It is a subtle difference, but yet significant.
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Re: re: Re: Re: Enough
"Only" fail to get profit? So, that's not a loss, huh?
And the profit isn't real? That's an absurd justification. If I'm asking $10 for X, and 20 people take X without paying for it, the loss is real, specific, and NOT potential but actual. $200 worth of loss, to be exact.
And what justification can you offer to support your wild claim that I "would likely not have received" that profit? I would if laws ensured that I would ... which is why they exist.
Don't think my X is worth $10? Don't buy, or go get someone else's. But to take it without paying is to implicitly agree that X has value, we're just arguing over price. And my efforts to create X give me the right to set the price, and perhaps lose in the marketplace. But none of that justifies you taking X without paying the asking price.
The irony in this post is that Mike, et al. want the same thing: for Congress to protect their business model of "free." But that's absurd because it doesn't need protection. Everyone can already give away whatever they want ... the laws are there to ensure that. No changes are necessary to make that work.
The laws are protecting those who choose not to give things away for free. To not enact those laws would be PRECISELY to favor one business model (free) over another (pay), because one would have an advantage over the other.
That the hypocrisy in this position isn't clear belies how shallow the thinking is around this blog.
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Re: Re: re: Re: Re: Enough
It's failing to get a *potential* profit.
Failing to get a potential profit is a marketing problem, not a legal one.
And what justification can you offer to support your wild claim that I "would likely not have received" that profit? I would if laws ensured that I would ... which is why they exist.
There is no law that ensures a profit.
The irony in this post is that Mike, et al. want the same thing: for Congress to protect their business model of "free."
No, not at all. I don't want Congress to protect anything. I just think they should get out of the way of protecting business models altogether.
The laws are protecting those who choose not to give things away for free. To not enact those laws would be PRECISELY to favor one business model (free) over another (pay), because one would have an advantage over the other.
Again, that's not at all true, and belies your narrowness in thinking about this subject. I do not think that "free" should be protected in any way. I just think that Congress should get out of the way and let the best business models win.
Why do you feel otherwise?
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"And the profit isn't real? That's an absurd justification. If I'm asking $10 for X, and 20 people take X without paying for it, the loss is real, specific, and NOT potential but actual. $200 worth of loss, to be exact."
I say potential because your calculation assumes that those 20 people would have purchased x for $10, if they could not copy it for free. I say most would not. I agree this is wrong, but true. I have seen people copy first, and ask what they copied afterward.
As I said before, I prefer to reward people for their creativity. And yes, I have created, and put things out there. Nothing great, just a little shareware. But instead of whining about people not paying me, I was greatful to those who valued it enough to reward me.
And when others ported my work, I admired there versions, in fact I still play one of those freeware ports. I take pride in the fact that many others saw enough merit is what I did to port it.
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