Could You Replace Copyrights And Patents With A Fairness-Based Legal Liability?

An Amusing Historical Look At Moral Panics And The Content Industry

from the it's-happening-again-and-again-and-again dept

Mon, May 24th 2010 5:52am — Mike Masnick

PopeHilarius was the first of a few of you to send over the amusing Cracked story on "5 Insane File Sharing Panics from Before the Internet." If you're a regular reader of this site, none of these will be all that surprising to you. But, it does show that time and time again, the content industry, throughout history, has always claimed that new technologies will kill them off. And every time they've been totally and completely wrong. In fact, pretty much every time the opposite happened, and the new technology created massive new opportunities for growth. This particular list (and it's easy to add more to it) includes:

VCR's Will Kill Television!
Phonographs and Player Pianos Will Kill Music!
Pirated BASIC Will Kill Software Development!
The Cassette Will Kill Music! Again!
The Printing Press Will Kill Literature!

What's amazing isn't just that the industry seems to freak out in this same way every single time, but that politicians still fall for it.

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Filed Under: content, copyright, history, moral panic

28 Comments

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Chuck Norris' Enemy (deceased) (profile), 24 May 2010 @ 6:32am

A good politician
Grease my palms and I will believe any story you tell me!
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Hephaestus (profile), 24 May 2010 @ 7:08am

perhaps this time they are correct ...
I am going to make an assumption, that you are talking about the big media distribution companies and not the artists themselves ...

"But, it does show that time and time again, the content industry, throughout history, has always claimed that new technologies will kill them off. And every time they've been totally and completely wrong."

In this case there is one major difference. The fact that they are no longer a distribution monopoly. The internet has removed that from them.

Infinite supply, no product manufacturing cost, almost no distribution cost, and decreased studio cost via technological advances. This is basic economics, it makes it clear that they are charging way to much for the product they are selling. It has also opened up a major amount of external competition for all of the above economic reasons.

"In fact, pretty much every time the opposite happened, and the new technology created massive new opportunities for growth."

This is only true if you are talking about the industry as a whole and not the entrenced players.
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Skout, 24 May 2010 @ 7:13am

Re: perhaps this time they are correct ...
Of course we're talking about the industry as a whole, not the entrenched players. The RIAA and MPAA has been milking the industry for decades while providing little value in return, and really, it's been pointed out time and again how they're actually HARMING the little guys.

Though to argue the last comment - I don't think the politicians "fall for it" - they're just eager to accept the money. Desperation to save a dying business model comes with a price tag.
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ColonelPanik (profile), 24 May 2010 @ 7:14am

Walking backwards into the future?
Oh noes, the future will kill the past!
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Hephaestus (profile), 24 May 2010 @ 7:52am

Re: Re: perhaps this time they are correct ...
It seems that Mike was talking about the entrenced players, because they are the ones yelling how the sky is falling and this "new technology" is going to destroy them and how they need protection.

This is the line that confused me.

"In fact, pretty much every time the opposite happened, and the new technology created massive new opportunities for growth."

This time around it is the entrenched players that are under the threat of major disruption based on the new technology. It isnt an opportunity for them but for all the little fish. The distributors and big content holders seem doomed.

"Though to argue the last comment - I don't think the politicians "fall for it" - they're just eager to accept the money. Desperation to save a dying business model comes with a price tag."

Yeah I agree the politicians take the money to get re-elected, it has nothing to do with them falling for anything.
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Anonymous Coward, 24 May 2010 @ 8:00am

kill is not really the right word. the right term is "wound". it is true in pretty much every case. to use a masnick way of looking at things, before the player piano, recorded music, and the like, the only music was live musicians. now, live music occurs in a small percentage of night clubs and bars, replaced by anything from mixtapes to djs to coin operated jukeboxes. while the vcr itself didnt kill television, it wounded it. the current situation for viewership is an indication that it may have been more than a flesh wound.
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PassinThru, 24 May 2010 @ 8:11am

You forgot one
6. The written word will kill the memorization of epic poems!

This is an old one - ancient Greece? - and actually, it was true. Hard to see how this was a bad thing though.
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Modplan (profile), 24 May 2010 @ 8:11am

Re:
The art of revisionist history in action. Truly wonderful in a trollish sort of way.
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Josef, 24 May 2010 @ 8:25am

Politics?
I can't understand why people are so shy about using the word bribe. Politicians are regularly bribed.

It's funny that the content industry tries to stave off piracy with bribery. Every person that has been sued for using file sharing software should be allowed to countersue the RIAA or MPAA for lobbying (legally bribing) in Washington.
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Anonymous Coward, 24 May 2010 @ 8:37am

Re: Re: Re: perhaps this time they are correct ...
"In fact, pretty much every time the opposite happened, and the new technology created massive new opportunities for growth." - in this case, there is little in the way of new opportunities, and the net effect is null, even mike will admit that. the total dollars in every study put up about music is null overall, no further ahead than 8 or 10 years ago, net on the overall music industry. more live, less recorded, more licensing. net null. we add some live venues, and we lay off marketing staff, close record stores, and so on. net null. this is a revolution that at best allows everyone a sip of water, but may in fact not give anyone enough water to live.
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Anonymous Coward, 24 May 2010 @ 8:58am

Re: perhaps this time they are correct ...
This is only true if you are talking about the industry as a whole and not the entrenced players.

No, it applies to the entrenched players as well, IF they're willing to change and adapt. A good example of an entrenched player that did so is Fisher Coachworks. They were a manufacturer of horse-drawn coaches before the introduction of the automobile. When the automobile began to displace horse-drawn coaches in the market, they switched to manufacturing automobile bodies instead and became even bigger and more successful than before. On the other hand, the coach makers that refused to change and adapt first tried to get the automobile outlawed, and then eventually died out.

Which path does it seem that the **AA's are following?
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Valkor, 24 May 2010 @ 9:08am

Re: Re: Re: Re: perhaps this time they are correct ...
(Citation Needed)

When you say "net null" you have to produce more than opposing positive and negative forces. When the average cable subscriber spends $75 per month on TV (citation: something I heard on the radio) and Hollywood continues to have box office sales climb year-over-year (citation: various Techdirt articles), you have metric asstons of money being injected into your content economy. You need to show a lot of freeloading to "counteract" that.
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Bengie, 24 May 2010 @ 9:09am

Your forgot
Ford sells their cars too cheap!
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Hephaestus (profile), 24 May 2010 @ 9:18am

Re: Re: Re: Re: perhaps this time they are correct ...
"the total dollars in every study put up about music is null overall, no further ahead than 8 or 10 years ago, net on the overall music industry. more live, less recorded, more licensing. net null."

The music industry is growing year by year, not by much but it is growing. The labels on the other hand have lost or are loosing their revenue streams and are seeking new ones, mainly collection societies. Sometime in the next two or three years the collection societies are going to peak and the trend is going to turn downward. The labels will also struggle with back catalogs that become less relevent and less profitable over time. Artists will be leaving the labels or just not signing on in the first place.
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Anonymous Coward, 24 May 2010 @ 9:55am

Re: Re: Re: Re: Re: perhaps this time they are correct ...
hep, you need to check out both the swedish and uk numbers that mike has bandied about here. net over the time frame, the total "music" dollars remains the same. music is going up compared to last year, but overall, the total dollars in the system hasn't changed. yes, more live, less recorded, but the biggest increase in percentage in the uk was in licensing, that horrible thing that mike hates so much. drop the licensing out, and music is sliding in income, not growing.

again, in typical masnick fashion, mike will go on about how live music is growing. that is true but overall, the increase in live music isnt enough to offset the losses in recorded music sales, and that amount is only made up by the evil licensing. it has to suck when the only thing holding up the fort is the very thing you hate the most, groups like the PRS.
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Gordon, 24 May 2010 @ 10:04am

It's funny how.....
Apple can make tons of money with iTunes (selling music over the internet at low prices) but the major lables can't seem to figure out how to do the same.

They'd be able to get rid of HUGE overheads with the "stamping" of discs and just sell digitally. Sure discs are used for some reasons (dj's, mixes and the like) and they could still be made on a smaller scale. But overall the labels could put the music out there for less money to a larger buyer base directly.

The problem seems to be that they are used to the massive mark up they get away with on selling discs. The fact they can't seem to get used to the idea that we as a whole don't need them anymore probably hurts the psyche a little bit.

More middle to larger acts need to go the route of independent recorder/self distribution to force the issue down the necks of big labels.

My 2 pennies.
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Anonymous Coward, 24 May 2010 @ 10:21am

Re:
Yeah, let's ignore the fact that:

- There are more musicians than ever before.
- There is more music than ever before.
- There are more musicians making a living off of music than ever before.
- There is more money in music than ever before.

If that's a "wound" to you, then call be a damn masochist and start hacking away.
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Hephaestus (profile), 24 May 2010 @ 10:25am

Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
I have to admit that you are right I was thinking about several reports like this techdirt article and this pdf from the techdirt article. They show that the industry is actually growing but that is the UK.
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Hephaestus (profile), 24 May 2010 @ 10:34am

Re: Re: perhaps this time they are correct ...
"Fisher Coachworks" did they do cadillac years back?

"No, it applies to the entrenched players as well"

"On the other hand, the coach makers that refused to change and adapt first tried to get the automobile outlawed, and then eventually died out."

"Which path does it seem that the **AA's are following?"

Dont even get me started on the **AA's with how often they have made the wrong choice and shot themselves in their collective feet. Its amazing they are not now lobbying for greater handicapped access for themselves as well.
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Mike Masnick (profile), 24 May 2010 @ 10:38am

Re: Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
I have to admit that you are right I was thinking about several reports like this techdirt article and this pdf from the techdirt article. They show that the industry is actually growing but that is the UK

If you look at the Oberholzer-Gee and Strumpf report, they point out that the actual industry has grown over 5% and that if you actually include all consumer dollars spent on music, which would include devices, you see that it's grown *66%*. I don't see that as treading water at all. I see that as growing quite a bit.

http://www.techdirt.com/articles/20090617/1138185267.shtml
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Anonymous Coward, 24 May 2010 @ 11:03am

Well, the car did kill off the horse drawn buggy. Buggy whip manufacturers did go out of business, their product was obsolete.

Tapes killed off vinyl. CDs killed off tape. MP3 nd other digital forms are slowly killing CDs.

But when record players became obsolete, Walkmen were invented and sold billions of units. When CDs killed tapes, Discmen were invented, moved billions of units. When CDs started in decline, MP3 players came about and have moved and continue to movie billions of units.

Each new player technology costs more than the technology before (why else did tapes cost more than records, and cds more than tapes?) And now the mp3 allows limitless copies for no production cost.

I grew up in the era when 8 Tracks were going to take over from records. then cassette tapes came along. In my lifetime I've gone from record players to a tiny portable device. From a collection of 50 records to over 16,000 songs. And those songs are stored in an area a fraction of the space 50 records took.

As a consumer, I want convenience, portability and ease of use. Give me that and I'll keep buying. Take away my choices and I take away my money.
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Anonymous Coward, 24 May 2010 @ 11:06am

Re:
Technologies kill industries in the same sense natural selection kills the weak and the inept.

If industries do not adapt to the continuous changes in the ecosystem, they simply die. And that's a good thing. It means only the strong industries survive.

It's been this way since the dawn of time...I very much doubt it will change anytime soon.
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Hephaestus (profile), 24 May 2010 @ 11:46am

Re: Re: Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
Clicked submit instead of preview ... done that twice in two days.

"I was thinking about several reports"

I only mentioned the one. I was going to follow up with the report you mentioned, the number of bands on face book, the direct to fan digital music sales, and digital music as a loss leader for scarce goods. All in all it ends up being better than 5% growth year over year.

The industry reports show what they have since they started producing them, label centric reporting, and a down trend in profits for the "Industry as they understand it". The industry is alot larger than the narrow comfort zone they live in and report on.
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Hephaestus (profile), 24 May 2010 @ 11:59am

Re: Re: Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
So you are right, the recording industry is barely treading water, based on the reports the record labels produce. But it seems that everyone outside the record labels thinks the industry is growing.
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chris (profile), 24 May 2010 @ 2:19pm

Re: perhaps this time they are correct ...
This is basic economics, it makes it clear that they are charging way to much for the product they are selling.

it sounds like you are viewing the entrenched players position as a market problem: they are charging a price that the market is unable to bear.

i think it should be viewed as a product problem: the product they are selling costs too much to make in its current form to be distributed in a manner that the market will accept.

the market has shifted to digital distribution and word of mouth promotion. promotion and distribution are offered by labels at a significant markup in order to subsidize the cost of production.

on the internet, distribution and promotion are cheap and (worst of all) transparent. everyone knows it's dirt cheap, so you can't mark it up very much before you get called out for being a glutton.

since distribution and promotion are no longer able to subsidize production, production has to become more efficient, and this is why everyone in the entrenched industry is pissed off about digital distribution.

big media conglomerates simply cannot exist in their current forms with revenues from advertising and merchandising because their products (the content) costs too much to produce in its current form. sure, technology can help a little, but there are old obligations that predate the internet that have to be accounted for and these obligations are killing big media companies.

when you combine high sunk costs, legacy problems like contracts and licensing agreements that were negotiated before digital distribution, and other legacy issues like debts, the result is a product that is massively over priced before a single word is written, a single note is recorded, or a single frame is shot.

the only way out of this conundrum is for these established players to go under so the industry can start fresh and unencumbered.
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Tom Landry (profile), 24 May 2010 @ 3:33pm

Re:

Well, the car did kill off the horse drawn buggy. Buggy whip manufacturers did go out of business, their product was obsolete.

did it actually "kill" those markets or just change them? I would still consider carriages and buggy whips as part of transportation, no? *shrugs*
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Anonymous Coward, 24 May 2010 @ 7:22pm

Re: Re: Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
if you include devices, you would also have to go back in the past and include all sales of stereos, record players, and the like. not exactly a fair comparison, is it? when you get back to the music side of the busines, recorded music, live music, and licensing, things are generally flat back to about 2003 or 2004. live is up, recorded is down, and licensing is making some of the biggest percentage gains of all. most importantly, consumer spend (live and recorded) hasnt moved much either, just shifted. there was a small up tick year to year, but when you look back over a longer period, it is clear that the uptick is only a slightly recovery back to previous levels.

heck, the 5% growth you talk about (live and recorded) is over a period from 1997 to 2007. that is less than half a percent a year, or significantly less than the rate of inflation even. In 1997 dollars, the industry is way down. oh wait, did you miss that class in school?
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Hephaestus (profile), 25 May 2010 @ 7:39am

Re: Re: Re: Re: Re: Re: Re: Re: Re: perhaps this time they are correct ...
"heck, the 5% growth you talk about (live and recorded) is over a period from 1997 to 2007. "

Depending on which reports or combinations of reports you work with, the music industry is either declining at a rate of ~10% a year or increasing ~8% a year. Numbers can be made to say what you want.

The record labels for the most part follow, digital downloads, cd sales, collection services, and liscencing the things that make them profit. For independant artists the reports misses a huge chunk of the industry which is direct downloads, direct cd sales, merchandising, etc.
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