How Many Bad Assumptions Can You Make In A Single Article About Content Creation And Copyright?
from the freeload-this dept
I really like The Atlantic and think they do pretty good work. I also tend to like Megan McArdle's work, which is usually pretty thought provoking. So I was profoundly disappointed with her recent article, The Freeloaders, which makes a bunch of really bad assumptions, tied together with debunked arguments, with claims that simply go against the facts and with a heaping of "oh noes, the pirates are killing content" fear mongering, to create an article that is sort of a parody of itself. After all, the article bemoans the fact that new and high quality works may be harder to come by in the future (based on no actual evidence), but all of the arguments in it are old and derivative themselves (many of which have been debunked), leading to a piece that comes off as downright amateurish.Let's pick out some of the more egregious mistakes:
But even as I've heard over the past decade that things weren't that bad, that the music industry was moving to a new, better business model, each year's numbers have been worse. Maybe it's time to admit that we may never find a way to reconcile consumers who want free entertainment with creators who want to get paid.That's simply not true. McArdle is making the same mistake that many politicians and reporters make, despite it being pointed out as an error time and time again: she's confusing the recording industry with the music industry. The music industry is actually doing quite well when you look at the numbers. Switching back and forth between the two, as McArdle does throughout the piece, and pretending they're the same thing at some points, and different at others is really weak reporting. Yes, the numbers for the recording industry are worse, just as the numbers for the horse buggy industry got worse and worse each year as the automobile industry ramped up. Now, later in the piece, McArdle tries to switch back to including the wider music industry, but we'll get to the problems with her statements there later.
Reflecting on this problem, the computational neuroscientist Anders Sandberg recently noted that although we have strong instinctive feelings about ownership, intellectual property doesn't always fit into that framework. The harm done by individual acts of piracy is too small and too abstract. "The nature of intellectual property," he wrote, "makes it hard to maintain the social and empathic constraints that keep us from taking each other's things."Now, I know McArdle understands economics, so I'm a bit surprised that she didn't actually look into the economic arguments here, and immediately jumps to the ridiculous claim that people who intuitively recognize that abundant goods are under pressure to be priced at zero are "ethically unmoored," rather than realizing this is just the good old supply and demand curve at work. Supply goes up, price goes down. Supply goes to infinite, price gets pressured to zero. This is why many people intuitively and instinctively do not see an ethical quandary in copying a digital work: because they recognize they're not taking away anything from anyone else, they're actually adding to the overall supply.
In other words, we kept to our rules about IP as long as it was attached to a physical object: a book, a CD, a videotape. Now that it consists of endlessly replicable electrons, we are ethically unmoored.
The argument that people don't think about it because "the harm is too small" is also questionable. People don't think of it that way because they don't see it as harm. Making a copy of something is effectively obtaining the work from a competing supplier offering a better price. If there's no ethical issue in saying I'll buy lunch at this sandwich shop instead of the grocery store across the street because the sandwich shop is cheaper, then there's no ethical issue in getting content from a different supplier as well. It's a matter of competition.
They are Generation Free, and they just might kill the goose that lays the golden egg.A pithy statement based on nothing. In fact, the evidence suggests exactly the opposite. Once again, the evidence:
While album sales have generally fallen since 2000, the number of albums being created has exploded. In 2000, 35,516 albums were released. Seven years later, 79,695 albums (including 25,159 digital albums) were published (Nielsen SoundScan, 2008).... Similar trends can be seen in other creative industries. For example, the worldwide number of feature films produced each year has increased from 3,807 in 2003 to 4,989 in 2007 (Screen Digest, 2004 and 2008). Countries where film piracy is rampant have typically increased production. This is true in South Korea (80 to 124), India (877 to 1164), and China (140 to 402). During this period, U.S. feature film production has increased from 459 feature films in 2003 to 590 in 2007 (MPAA, 2007).The golden goose doesn't look like it's dying. It looks like it's going in the other direction. And even those numbers appear to undercount reality. Soundscan is notorious for undercounting many new music releases, and if you go beyond the MPAA's feature film numbers, you find that the the number of movies being made has increased a lot more than the rate of growth in just feature films.
And the same thing is true on the money front. Depending on which research you look at, the overall consumer dollars spent on music have increased between 5% and 66% in the decade from 1997 to 2007. And the movie industry, of course, keeps setting records at the box office. The golden goose is alive and well and laying bigger and bigger golden eggs.
Isn't that worth mentioning in a story about what's happening in the market?
Can the market evolve fast enough to keep up with the expectations, and predations, of Generation Free? Even if the music industry manages, what about all the other businesses that depend on intellectual property--including (gulp) my own?Considering that it already has and continues to do so, this seems like an odd question.
Yet even if die-hard music buffs spend more on albums than the guy who buys one box set a year, they're still buying less than they used to. Moreover, spending less on recorded music doesn't necessarily mean you spend more on shows; the savings could just as easily go toward beer. And even avid music lovers in urban areas can see only a few shows a week. To raise revenue, you have to get new customers in the door or raise ticket prices.Yes, but we have numbers on this, and the money isn't actually going to beer. It's still going to music or music related goods, which is why consumer spending in the market has increased. And, yes, getting new customers in the door is key. And here it would be worth pointing out (though, McArdle doesn't) that research has shown that (at least in the UK, though I would imagine the results are similar in the US), 60% of the population didn't buy music anyway. So getting any money out of them via alternative offerings is better than nothing.
Concert-promotion mogul Michael Rapino has said that just 2 percent of Americans attend more than a couple of concerts a year, which leaves plenty of room to increase attendance, but also suggests that most people don't particularly care for live music. It's far from clear that free MP3s increase the number of concertgoers, instead of just changing the mix of shows they attend.But that's a totally different argument. I never really understand this line of thinking. You have people saying "well, no money is being made." Then you point out that money is being made, so they say "well, fewer works of art will be created." So you point out that more works of art are being created. And then they say "well, very few people attend shows." So what? If more works are being created and more money is being made... then what are you complaining about?
Also, while live shows are an important and growing part of the music industry, it is still just one part of the music industry. Here it seems that while McArdle has moved away from pretending the recording industry is the music industry, she now thinks that the live industry is the only other part of it. It's not. There is a large (and growing) B2B side of the business that McArdle doesn't even acknowledge, and there is a growing direct-to-consumer part of the business as well.
This fragmentation has been good news for performers like Jonathan Coulton, who makes a decent living selling quirky songs and related merchandise on his Web site. But the broader music industry, like other entertainment fields, has always worked on a tournament model: a lot of starving artists hoping to be among the few who make it big. What happens to the supply of willing musicians when the prize is an endless slog through medium-size concerts at $25 a head?Again, we have the answer to that: it grows. Why? Because the folks like Coulton who can make a living doing medium-sized concerts at $25 a head wouldn't even be in music five or ten years ago. The Coultons and Corey Smiths and Matthew Ebels of the world who we've talked about, are all folks who likely would be working day jobs instead of making a living in music. That's because under the old system, the only way to make a living making music was to get a golden ticket: get signed by a major record label and then be one of the 5 to 10% of major label acts that the label decides to really push each year. Otherwise, you're back to your day job. But today, with the ability to take control over your own career, you can actually make a living in music (if you're good) without a record label. So the barriers have lowered, and that's why there are more people making music today than ever before, and more people making a decent living from music than ever before. Just look at some of TuneCore's numbers. These are the sorts of facts that an article like this should be highlighting. These are the sorts of numbers of what's really going on -- not just what the major labels are complaining about.
Moreover, whatever the sins of the big labels, they invest heavily in finding, promoting, and recording new music... People tend to underestimate the extent to which the old industry supports things like... concert attendance.No doubt. The big labels have always invested heavily in finding, promoting and recording new music. But no one said that's the way it always needs to be. The money is there, it's just in different places, and as long as the money is there, there are clear incentives for others to provide those services as well. In fact, they'll probably do it a lot more efficiently and economically, without having to waste millions on the sorts of things that record label execs are famous for wasting money on.
A smaller, more amateur music business is possible, if not optimal.How can anyone say this when the numbers show that the amateur music business has exploded? I mean, it's just flat out wrong.
But I doubt that YouTube can substitute for Hollywood in a world where "cheap" indie films can cost millions.Ah, the YouTube fallacy. Apparently there's nothing in-between a major motion picture and YouTube. Those are the world's only two choices. And, yes, a cheap indie film can cost millions, but we're seeing all sorts of innovations that make the cost of making movies cheaper and cheaper, and we keep hearing about indie movie makers experimenting with interesting business models. Why assume that they won't work?
Children's films might be made at a loss to sell action figures--but how do you finance The Godfather? With a co-branded line of frozen cannoli?At this point, we point out, yet again, that box office attendance has hit record highs, despite widespread unauthorized file sharing, and that the top movie downloads also seem to be the top at the box office. So, it certainly looks like you finance The Godfather the same way The Godfather was financed when it was made: by selling tickets to the theater.
We have yet to figure out how to make IP work in the new era.No, you have yet to understand new business models in the new era. That has nothing to do with "IP." If anything, "IP" is holding back many of these new business models by giving folks a crutch to rely on, rather than experimenting with smarter business models.
Even if we don't, people will still make pictures, sing songs, and write stories--just not as frequently, or as lavishlyExcept, again, all of the evidence says that they're doing so more frequently because everything about making pictures, singing songs and writing stories has become cheaper. It's cheaper to create. It's cheaper to promote. It's cheaper to distribute. And, as your basic economics will tell you, if you make all of those things cheaper, you tend to get greater output. Why McArdle would just assume lower output... well that's not explained.
But even if we do, file-sharing will probably alter the form of the works we do create. The popular arts may come to look more like the rest of the Internet...Is that a bad thing? So, rather than having mass produced pablum forced down our throats by a few gatekeepers, there will be a wider variety of content, created by people who really love to create? Doesn't that seem like a good thing?
As a postscript to all of this, Boing Boing points us to an amusing musical rebuttal. It turns out that the image used to illustrate McArdle's article used non-public domain music, which some musicians noted highlights how wrong McArdle's article is, in that she seems to draw "a clear line between right and wrong where there is, in fact, significant ambiguity." So, the musicians recorded an album based on the notes. Is this ethically unmoored? Is this the result of "freeloaders" creating less works? It doesn't seem that way.
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Filed Under: copyright, culture, freeloading, megan mcardle
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Nevermind the Pirates...
You have to worry about my ever growing stash of DVD's purchased at Walmart and Target and Media Trading Company and through Amazon. Watching the old stuff gives you a better appreciation for what dreck most of the new stuff is.
Regardless, I can keep myself entertained quite well with what I've already legally purchased.
Then there's Netflix and Pandora.
Even in the 70s there were people stuck on the idea of never going to the cinema because it would eventually be out on HBO.
Piracy is just a convenient excuse.
The fact that someone has to use The Godfather as their example kind of proves my point about quality.
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She makes many of the same points you always do but from a different perspective. She has more in common with your point of view than your article would let us believe.
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Re:
If this were the case then why would he link to the article for everyone to read? and I don't think he can "let" us believe anything, he can't control our thoughts.
Also notice how he said
"I really like The Atlantic and think they do pretty good work. I also tend to like Megan McArdle's work, which is usually pretty thought provoking."
The point of his post wasn't to highlight agreements, that would be redundant. The point was to criticize disagreements.
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It is like she went to B-school, read the Cliff notes to get the hang of econ basics and buzzwords, and is now spending her career comforting the comfortable.
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you seem capable of plenty each day. is it single article or cumulative?
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Re:
Exhibit A: the post you just made!
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you seem capable of plenty each day. is it single article or cumulative?"
Leave it to idiots like this to make a claim and fail to back it up. I enjoyed the article because each argument and refutation was well explained and thought out instead of using the same diahrrea-shotgun approach as the quoted anonymous coward.
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Never understood how blind they are
Artists like Keb Mo, the Disco Biscuits, Gov't Mule, The Derek Trucks Band, Blues Traveller etc. These bands might have gotten a record contract, but they never were the front runner artists being "pushed" by the record labels. Mostly they make a living off of touring. At one point in the beginning, Gov't Mule played 300+ dates a year. They played their asses off. They connected with fans, varied their setlists and gave them something unique at each show. Most of them encouraged live taping (which was also at one point the thing that would kill the music industry).
Bands like Phish have been doing this for decades. They learned from pioneers like the Allman Brothers and the Grateful Dead. Connect with fans by giving them mail order tickets before they go on sale thru TicketBastard. Do a newsletter to let them know what is coming. Have a hotline for tour dates. Offer new merchandise all the time. What did this type of business model get them? Devoted followings. Phish started out this way and booked sold out show after sold out show and had the small but loyal following long before any record label even looked at them.
Blues Traveler kept a map and marked off each state they played a show in. They added another mark when they could sell out a show of 500+ in that state. They charted their progress. With almost no radio play and no record company support they were grossing over a million dollars a year by when their first album was published. Long before they had their breakout hits from the fourth album they were touring all 50 states and selling out 1000+ seat venues in almost every state. By working hard and giving their fans what they wanted.
Live concert taping provided the same service free download do. I could take one of my concert tapes and make a copy for a friend and say "you gotta hear this." Did everyone I passed a tape to become a fan? Nope. It cost the artist NOTHING to do this.
The traditional music industry model (which today has devolved even more into American Idol and Justin Beiber) has never been the only way to do things, and has never been the best way for the artists.
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Pieces of the Pie...
The first is what you might call the "rock star mentality". The 'dream' of people who go into the music industry, especially those who like to refer to themselves as "national recording artists" is that they will hit it mega-big, sell a million billion records, and sit around their mansion collecting royalty checks for the rest of their lives. I have found it humorous, the number of acts who are back on the road now, after having not been seen live in years and years. I have no reasearch to back it up, but I have presumed that falling record-sale royalies have led these bands into the decision. The future of music (not recording) looks like a lot more really good acts, performing a lot more live shows, and making a lot more modest livings from it. That scares the guys in the $5000 suits at the record company, because if they don't have a stable of mega-stars to collect a percentage of, how will they continue to live the rock and roll lifestyle themselves?
The second reason they fail is the fallacy of the limited "pie". They seem to assume that there are only a fixed number of dollars to be made, or a fixed number of acts that can be successful, a limited number of movies that can make a profit. Clearly, the actual limit is not infinite, but it is so large as to be nearly so. There IS room at the top, but by the time people get there, it may not look like it does now.
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Seriously?
I find the implication underlying the presentation of the above as a bad thing to be entirely despicable. Like "oh, wasn't it great when everyone had to suffer under the same arbitrary system in order to participate at all?" Good lord. Supply of willing musicians? Willing to what, parade their desperation for your amusement, milady?
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Re: Seriously?
Somehow, driving a thousand musicians into poverty to make one rich is a good thing?
The death of that "tournament model" is something to cheer, not cry about.
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quality of music
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Re:
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What really scares recording industry executives...
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Its called a JOB. And the willingness might come from the fact that its a job they'd enjoy. Since when does the incentive for musicians have to be hitting a lottery-like payday?
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Infinite Supply fallacy
What is in demand is not an electronic file, it is the song contained within. The song is the product, and there is a limited supply of songs. Metallica has only made x number of songs. Making an infinite number of electronic copies of the songs do not increase supply at all. Not a single new song has been created through that process.
Artists are not selling the medium on which their music is delivered, they are selling the music itself. That's why it's called "intellectual property" instead of just "property".
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Re: Infinite Supply fallacy
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Re: Infinite Supply fallacy
That's exactly right. They are seeking specific music. The desired product is the music, not the file. Copying the file does not make more music, it makes more files. As you stated, it's the music that is in demand. There is not an infinite supply of the music, only an infinite supply of files.
It's called "intellectual property" for a reason. It is property of the mind, not physical property. One reason it needs protection by law is because there is no physical protection possible.
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Re: Re: Infinite Supply fallacy
An infinite amount, in fact. Which is why the infinite supply issue is not a fallacy at all, but accurate economics.
There is not an infinite supply of the music, only an infinite supply of files.
Yes. We agree.
It's called "intellectual property" for a reason
Yes, because those unfairly benefiting from the gov't granted monopoly wanted to pretend it was a property right when it was not. It was not originally called that because the people who created copyright knew better and knew that it was not property.
It is property of the mind, not physical property.
You've fallen victim to total revisionism.
One reason it needs protection by law is because there is no physical protection possible.
No, this is wrong. The purpose of copyright law is clearly stated: to promote the progress of science and the useful arts. It has nothing to do with protectionism. It's very much a utilitarian look at what will create the most SOCIAL benefit. It's not a property right at all.
The concept of property was actually developed for the exact *opposite* issue -- to help manage allocation in the presence of scarce resources. But when the resources are infinite, there's no allocation issue, and creating quasi-property rights is incredibly short sighted.
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Re: Re: Re: Infinite Supply fallacy
An infinite amount of the delivery mechanism (files) is irrelevant to the supply of the item in demand (music). If you buy a basket of strawberries, you don't care about the basket, you want the berries, but you also get the basket as a convenient delivery mechanism.
It's not revisionism. The term intellectual property has always referenced creations, labors, and discoveries of the mind. Creating quasi-property rights is a fair way to give creators control of their creations for a limited time (if there's one thing that should be done, it's to limit duration of protections).
"The purpose of copyright law is clearly stated: to promote the progress of science and the useful arts"
Next time cite the complete statement before declaring, "It has nothing to do with protectionism".
Full quote: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
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Re: Re: Re: Re: Infinite Supply fallacy
Using your analogy, if the technology existed to make an exact copy of a basket of berries, you'd be upset that farmers wouldn't get paid what they used to before the technology came along.
If we could do that with any item, whether it's berries, frog legs, or gold, (or Metallica, Jimi Hendrix, or Lady Gaga songs) once you make it infinite, the price will be effectivly zero. Doesn't matter who produced the first basket of goods, once it can be made at no cost, no one will be willing to pay what was once paid. You can argue about that fact all you want, but you'll be arguing against a basic economic principle.
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Re: Re: Re: Re: Infinite Supply fallacy
Doesn't matter. We're talking economics here. Supply is the issue. The supply of the files is what determines the price.
Or are you suggesting that basic economics does not apply?
An infinite amount of the delivery mechanism (files) is irrelevant to the supply of the item in demand (music).
Uh, supply and demand are already independent entities.
If you buy a basket of strawberries, you don't care about the basket, you want the berries, but you also get the basket as a convenient delivery mechanism.
That has nothing to do with what's being discussed.
It's not revisionism. The term intellectual property has always referenced creations, labors, and discoveries of the mind. Creating quasi-property rights is a fair way to give creators control of their creations for a limited time (if there's one thing that should be done, it's to limit duration of protections).
No, it very much is revisionist history. Copyright was not referred to as "intellectual property" until much later, and it was done so SOLELY to distort the debate into pretending that a gov't granted monopoly on an expression was some form of property right, rather than a monopoly privelege.
Next time cite the complete statement before declaring, "It has nothing to do with protectionism".
Uh, you should learn to read the constitution. The latter part is a clause that is reliant on the first part. Yes, it grants LIMITED EXCLUSIVE rights -- i.e, a gov't monopoly privilege, NOT A PROPERTY RIGHT -- only for one purpose: to promote the progress.
You are suggesting that it's done for the sake of protecting creators. It is not.
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Re: Re: Infinite Supply fallacy
Yes, supply and demand are independent. Just like files and music are independent. Music is in demand, not files. Files are in infinite supply, not music. Just because the files happen to contain music does not make the music worthless.
Because you interpret this constitutional statement differently than I, does not mean I don't know how to read it. The latter part defines the method by which to achieve the purpose stated in the first part. Yes, exclusive right to the creator, a monopolistic privilege, over things such as production and distribution.
I'll agree, it's not really for 'protecting' creators (poor word choice) it is for granting them rights to control their creation as they see fit for a limited time. As I said, I think that's the biggest problem with the system. The 'limited time' is too long. I mean, Master of Puppets is 24 years old; should be public domain by now.
Whether or not it's 'property' is not at issue. We agree it's not 'property' like land or horses, it is intellectual property (I'm sorry you don't like the word 'property' included in the term 'intellectual property', but that's what it's called, even though we understand it's not physical property).
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Re: Re: Re: Infinite Supply fallacy
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Re: Re: Re: Re: Re: Infinite Supply fallacy
Yes, supply and demand are independent. Just like files and music are independent. Music is in demand, not files. Files are in infinite supply, not music. Just because the files happen to contain music does not make the music worthless.
Because you interpret this constitutional statement differently than I, does not mean I don't know how to read it. The latter part defines the method by which to achieve the purpose stated in the first part. Yes, exclusive right to the creator, a monopolistic privilege, over things such as production and distribution.
I'll agree, it's not really for 'protecting' creators (poor word choice) it is for granting them rights to control their creation as they see fit for a limited time. As I said, I think that's the biggest problem with the system. The 'limited time' is too long. I mean, Master of Puppets is 24 years old; should be public domain by now.
Whether or not it's 'property' is not at issue. We agree it's not 'property' like land or horses, it is intellectual property (I'm sorry you don't like the word 'property' included in the term 'intellectual property', but that's what it's called, even though we understand it's not physical property).
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