Tim O'Reilly Explains Where The Federal Gov't Has Gone Wrong On SOPA/PIPA: Solving The Wrong Problem

Say That Again

from the indeed dept

Tue, Jan 17th 2012 8:38am — Mike Masnick

A few months back, in going into great detail on everything wrong with PIPA & SOPA, I started it off by explaining that the whole effort was attacking the wrong problem. Here's what I wrote at the time:

That main issue, we're told over and over again, is "piracy" and specifically "rogue" websites. And, let's be clear: infringement is a problem. But the question is what kind of problem is it? Much of the evidence suggests that it's not an enforcement problem and it's not a legal problem. Decades of evidence from around the globe all show the same thing: making copyright law or enforcement stricter does not work. It does not decrease infringement at all -- and, quite frequently, leads to more infringement. That's because the reason that there's infringement in the first place is that consumers are being under-served. Historically, infringement has never been about "free," but about indicating where the business models have not kept up with the technology.

Thus, the real issue is that this is a business model problem. As we've seen over and over and over again, those who embrace what the internet enables, have found themselves to be much better off than they were before. They're able to build up larger fanbases, and to rely on various new platforms and services to make more money.

And, as we've seen with near perfect consistency, the best way, by far, to decrease infringement is to offer awesome new services that are convenient and useful. This doesn't mean just offering any old service -- and it certainly doesn't mean trying to limit what users can do with those services. And, most importantly, it doesn't mean treating consumers like they were criminals and "pirates." It means constantly improving the consumer experience. When that consumer experience is great, then people switch in droves. You can, absolutely, compete with free, and many do so. If more were able to without restriction, infringement would decrease. If you look at the two largest contributors to holding back "piracy" lately, it's been Netflix and Spotify. Those two services alone have been orders of magnitude more successful in decreasing infringement than any new copyright law. Because they compete by being more convenient and a better experience than infringement.

Tim O'Reilly (who you should know already), who makes his living in the content business, but has always been against these kinds of ridiculous laws, has come out with a great, detailed discussion of the same issue, concerning how the federal government still has mis-defined the problem. He's doing this in response to the White House's statement on Saturday, and makes some important points:

I found myself profoundly disturbed by something that seems to me to go to the root of the problem in Washington: the failure to correctly diagnose the problem we are trying to solve, but instead to accept, seemingly uncritically, the claims of various interest groups. The offending paragraph is as follows:
"Let us be clear—online piracy is a real problem that harms the American economy, and threatens jobs for significant numbers of middle class workers and hurts some of our nation's most creative and innovative companies and entrepreneurs. It harms everyone from struggling artists to production crews, and from startup social media companies to large movie studios. While we are strongly committed to the vigorous enforcement of intellectual property rights, existing tools are not strong enough to root out the worst online pirates beyond our borders."
In the entire discussion, I've seen no discussion of credible evidence of this economic harm. There's no question in my mind that piracy exists, that people around the world are enjoying creative content without paying for it, and even that some criminals are profiting by redistributing it. But is there actual economic harm?

From there, he talks about his own experience running a content business, and how he's learned that any actual infringement tends to benefit him in the long run. That's because, like I explained above, if you put in place a smart business model (something Tim is good at) piracy is no problem at all. O'Reilly is fond of the phrase that "obscurity is a bigger problem than piracy" and he's completely right:

In my experience at O'Reilly, the losses due to piracy are far outweighed by the benefits of the free flow of information, which makes the world richer, and develops new markets for legitimate content. Most of the people who are downloading unauthorized copies of O'Reilly books would never have paid us for them anyway; meanwhile, hundreds of thousands of others are buying content from us, many of them in countries that we were never able to do business with when our products were not available in digital form.

History shows us, again and again, that frontiers are lawless places, but that as they get richer and more settled, they join in the rule of law. American publishing, now the largest publishing industry in the world, began with piracy. (I have a post coming on that subject on Monday.)

From there, he starts talking about what the White House should be doing, and it's simple: look for ways to allow innovation to flourish -- not create protectionist plans for industries who aren't keeping up with the times:

Congress (and the White House) need to spend time thinking hard about how best to grow our economy - and that means being careful not to close off the frontier, or to harm those trying to settle it, in order to protect those who want to remain safe at home. British publishers could have come to America in the 19th century; they chose not to, and as a result, we grew our own indigenous publishing industry, which relied at first, in no small part, on pirating British and European works.

If the goal is really to support jobs and the American economy, internet "protectionism" is not the way to do it.

It is said (though I've not found the source) that Einstein once remarked that if given 60 minutes to save the world, he would spend 55 of them defining the problem. And defining the problem means collecting and studying real evidence, not the overblown claims of an industry that has fought the introduction of every new technology that has turned out, in the end, to grow their business rather than threaten it.

He also has a final suggestion that may seem unrelated, but is actually directly at issue:

If Congress and the White House really want to fight pirates who are hurting the economy, they should be working to rein in patent trolls. There, the evidence of economic harm is clear, in multi-billion dollar transfers of wealth from companies building real products to those who have learned how to work the patent system while producing no value for consumers.

But, of course, that will never happen. That's because a totally useless "patent reform bill" passed a few months ago, and Congress and the President now consider that problem "done." And that's even though nothing in the bill actually addressed the issue of patent trolls, which has been a huge problem, and has hit many of the new businesses that are needed to build the innovations that will help the old guard in the content industry adapt. Hell, just look at Spotify. Days after being introduced in the US... it was sued for infringement.

So, the real response to the White House should be that it's time to stop making this a faith-based debate. Let's focus on the actual evidence, and define what the actual problem is. Because if it's (as all the evidence shows) a business model problem, not a legal or enforcement problem, pushing forth new regulation is not going to be the answer.

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Filed Under: business models, copyright, economics, internet, laws, legislation, pipa, protect ip, protectionism, regulation, sopa, tim o'reilly, white house

37 Comments

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Anonymous Coward, 17 Jan 2012 @ 9:01am

But what about the lawyers what will they do if there are less laws :(

Make Law firms sad T_T
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anonymous, 17 Jan 2012 @ 9:10am

but it's so much easier to just ramp up existing laws than actually sit down, think things through and come to sensible conclusions from which you can draw sensible solutions. i think you are trying to give those in congress more intelligence than they have (unless it's their ability to count, of course!) and the entertainment industries more common sense than they have a hope of ever getting!
you know the rules, when you have money, it's easier to force someone out of business than compete with it. just keep suing them out of existence! once the competition has gone, you can keep to the old ways. the fact that it cost more to expel the competition than it would have to update and compete, is irrelevant!
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Anonymous Coward, 17 Jan 2012 @ 9:15am

Tim is the one who is thinking about the wrong problem.

This is not about 'piracy' or 'infringement' or 'business models' or 'jobs' or 'USA' or anything related to that.

The problem is that members of congress need money. This is the one and only concern they have. Thinking that they are interested in solving other problems (like 'infringement' or 'business models') ignores reality. They don't care about that stuff.
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Anonymous Anonymous Coward, 17 Jan 2012 @ 9:18am

Say yes, not no!
This makes me think about a management maxim I learned a long time ago. Find a way to say YES, instead of finding ways to say NO.
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Keroberos (profile), 17 Jan 2012 @ 9:18am

You just have to understand what the "problem" is through the eyes of the media conglomerates
Piracy and so called rouge websites are just a red herring for the media conglomerates to get what they really want, to turn the Internet into a broadcast medium where they are the sole gatekeepers and can control all of the content available there (and giving them the ability to charge what the want for it). Viewed that way SOPA/PIPA are almost the perfect laws for solving the "problem" as they see it.
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weneedhelp (profile), 17 Jan 2012 @ 9:18am

Let's focus on the actual evidence, and define what the actual problem is.
Facts? The facts are irrelevant. Must be a freetard.
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Ima Fish (profile), 17 Jan 2012 @ 9:24am

Trying to rationally explain to the copyright industry how it is wrong is about as asinine as trying to explain to the mafia why they're wrong.

"Look, I've been paying you guys protection money for years, and I don't see any benefit. Honestly, I'm starting to get the impression that I'm paying you this money every month to protect myself from you. How does that make any sense as a business model?"
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Anonymous Coward, 17 Jan 2012 @ 9:26am

Re: Let's focus on the actual evidence, and define what the actual problem is.
Reading your comment reminded me of a rather famous line, which I've changed a bit to suit the mood.

"Facts? We don't need no stinkin' facts!" - MPAA/RIAA

For those wondering, it's a reinterpretation of "Badges? We don't need no stinkin' badges!" (Or you can substitute "badgers" for "badges" as well.)
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Ninja (profile), 17 Jan 2012 @ 9:28am

Trololol
Masnick and his piracy apology. The numbers are crystal clear: non-commercial, non-profit file sharing is costs trillions to the American economy daily. And don't come at me with the pirates also buy bs, it is obvious that if they couldn't pirate they'd buy two copies and if the pirate mistakenly downloaded twice he's twice the loss because he'd obviously buy /two/ copies. Only an intellectually dishonest person will not agree that one download equals a lost sale.

You certainly need a dose of reality, chubby.

/hardtroll
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Anonymous Coward, 17 Jan 2012 @ 9:30am

Re:
"Four laws good, two laws bad!"
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Loki, 17 Jan 2012 @ 9:31am

Let's focus on the actual evidence, and define what the actual problem is.

The problem is the industry refuses to address the actual evidence. They refuse to have any open or honest discussion. The refuse to accept any sort of compromise or negotiation. They deliberately and purposefully twist facts and statements to say what they want them to say (the MPAA response to the White House directive is a perfect example).

It is simply not possible to be reasonable with totally unreasonable people. And as someone who used to be a loyal supporter to their cause, I have no interest of even trying anymore.
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MrWilson, 17 Jan 2012 @ 9:33am

Re: Re:
Some laws are more equal than others, specifically the ones lobbied for and funded by corporate interests.
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Robert Doyle (profile), 17 Jan 2012 @ 9:36am

I still wonder
I still wonder why a people-minded group of philanthropists hasn't gotten together to fund congress so that they no longer need industry money? Imagine if the Bill & Melinda Gates foundation or Warren Buffett turned a small portion of their immense wealth and just gave it to the greedy politicians in exchange for one simple thing - that they no longer accept any form of donation or compensation now or in the future from any industry group. Period.
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Anonymous Coward, 17 Jan 2012 @ 9:36am

Re:
Members of congress do not need money. The problem is that members of congress want money (and are willing to sell our country to the highest bidder).
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DavisPrime (profile), 17 Jan 2012 @ 9:39am

Re: Trololol
This comment made my brain explode. Apparently it could not digest the absurdity in this comment.

I am hoping it is sarcasm.
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Overcast (profile), 17 Jan 2012 @ 9:40am

Piracy and so called rouge websites are just a red herring for the media conglomerates to get what they really want, to turn the Internet into a broadcast medium where they are the sole gatekeepers and can control all of the content available there (and giving them the ability to charge what the want for it).

I think you are right - it's the best innovation that media of any type has ever encountered and they are mad they don't own the rights to all of it.

The day the media industries control the web so happens to be the same day I'm not interested in using the web anymore.
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Anonymous Coward, 17 Jan 2012 @ 9:42am

Re: Re: Trololol
It is indeed sarcasm. If the /hardtroll didn't alert you to that, look at the username, Ninja. He's most definitely not one to say such a thing, at least not in a serious and non-sarcastic manner(unlike some of the ACs who frequent the site).

Gotta give him credit, that was on par with the usual comments by some of the more ridiculous trolls.

Ninja, I give you a 10 out of 10!
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MrWilson, 17 Jan 2012 @ 9:43am

Re: Trololol
What's worse is that these dirty pirate are making trillions of dollars based on their piracy also, so not only are they stealing, but they're wrongly profiting off of the hard work we put into contractually stealing artist's hard work! I'm pretty sure the GDP of any third world nation could be shown to be entirely derived from pirated American intellectual property!

/s
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Ninja (profile), 17 Jan 2012 @ 9:46am

Re: Re: Re: Trololol
Aww, I'm flattered, thanks!

I got the /two/ wrong, it's /three/ =(((

And I thought that closing the command line with a /hardtroll would show the sarcasm (as you said some of the trolls here are reaching that level of ridiculousness).
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Ninja (profile), 17 Jan 2012 @ 9:50am

Re: Re: Trololol
You, sir, are trolling it right. That makes the pirates some sort of "ARRRR!"-Robin-Hood-scallywag type.
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DavisPrime (profile), 17 Jan 2012 @ 9:51am

Re: Re: Re: Trololol
I should have noticed. I quickly read the comment without noting the username or /hardtroll. Something about the comment sent my brain into a tailspin, where reason and logic did not prevail. I will do better in the future. :)
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Ninja (profile), 17 Jan 2012 @ 9:52am

Re:
Actually I'd go further than that. Money has its part on it of course but censorship and control is the real goal here, considered the Police State apparatus that's being built in the US.
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Anonymous Coward, 17 Jan 2012 @ 9:55am

Re: Re:
Heroin addicts just don't want heroin, they NEED heroin.
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Ninja (profile), 17 Jan 2012 @ 9:58am

Re: Re: Re: Re: Trololol
No worries, it's kind of worrying when you can squeeze such amount of non-sense and bs like that from your brain. Maybe I know the enemy too much like Saruman did. *evil laugh*

But, pardon me... GOTCHA!

On a side note I should get my lazy arse moving and actually login to my TD profile. I wish Mike would allow something like using your twitter acc to post, I'm almost always logged into twitter via my phone =/
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Anonymous Coward, 17 Jan 2012 @ 9:59am

Re: I still wonder
There will never be enough. Even if Buffett or maybe some NGO were to donate trillions to this cause, congress would always be able to solicit a few extra dollars from other sources. If they can, they will.
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gorehound (profile), 17 Jan 2012 @ 10:25am

Re: Trololol
You are the one who needs a dose of reality.
SOPA/PIPA = WAR
We do not want nor need your stinking Censorship.
Public Government Information proves that you are wrong and the MPAA & RIAA are not losing money nor employees and are in a great position compared to other genres of employment.
By looking at the Public Government Info we all can easily see thru those lies and so do the supporters of these Bills in our Government.
These Arses want to take away our Freedom.They want to control what they should never have control of.
And I feel deep down inside that the day is coming when they will get what is coming to them.
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btrussell (profile), 17 Jan 2012 @ 10:28am

Re:
Who cares?

It is the government that needs to define the problem and take appropriate steps. Like putting copyright back to ten years.

If the **AAs' don't like it, they can move to another Country. Oh! That's right! Half of them are from other Countries. GO HOME!

As my favorite t-shirt says under a decal of our flag:

"Love this Country or get the Fuck out"
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lwclark (profile), 17 Jan 2012 @ 10:38am

Spreading and Sustaining the Message
If this is the root of the problem, will this message be a part of the various blackout pages going up soon? This is such a great chance to get people talking about a core issue and start changing the nature of the discussion entirely. Once the undesirable legislation has been stopped, it seems as if we'd like to carry that momentum into creating good legislation, on both the intellectual property and internet freedom fronts.

Internet activism has proven to be very powerful on this issue, but if it peaks and dies off it won't have made a lasting impact. How can we sustain it, even when we no longer feel threatened, to become a force to make positive changes in this area and beyond?
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artp (profile), 17 Jan 2012 @ 10:42am

Consumers ARE being underserved
That comment is right on the money for me. Have you ever trolled through Amazon looking for one of your favorite old TV series?

I keep looking to see if I can get complete season series of the original Maverick TV series with James Garner. There is one DVD available that features three (3) episodes. That is it, complete and total. there used to be a season DVD, but it mysteriously disappeared.

Now if I was a "My Favorite Martian" fan, I could get everything. Now, I am a MFM fan, but it doesn't rank up there with James Garner in Maverick!

"My Mother the Car" also isn't available, and although I am a huge fan of that series (one year) and not ashamed of it, it is not nearly as heart-breaking as missing out on Maverick.

The question arises, of course, "Why?" Why aren't the studios cashing in on one of the most popular Westerns ever filmed? Could it be that Garner sued them for back royalties and won? That he exposed their greed and fraud and their lack of concern for the artist?

I wonder. Not!
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pixelpusher220 (profile), 17 Jan 2012 @ 10:45am

Re: I still wonder
The problem is the vast bulk of people opposed to SOPA/PIPA and even more the vast masses who are oblivious...still contribute to the MPAA/RIAA by purchasing and consuming their products.

It sucks, but as long as we keep buying from them, they will always have the money to throw around at Congress.
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pixelpusher220 (profile), 17 Jan 2012 @ 10:47am

Re: Consumers ARE being underserved
"WKRP in Cincinatti" is the poster child for this.

A TV show about a radio station playing many of the hits of the day. It simply can't be reissued due to massive licensing issues.
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The eejit (profile), 17 Jan 2012 @ 11:01am

Re: Re: Trololol
Ah, yes. "MAFIAA". We have dismissed those3 claims.
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The eejit (profile), 17 Jan 2012 @ 11:08am

Re: Re: Trololol
You got Ninja Trolololed, man.
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Anonymous Coward, 17 Jan 2012 @ 11:52am

Re:
"Piracy is a service problem." That's why, thanks to iTunes, Amazon and Spotify, music piracy has completely disappeared in the US.

oh wait...
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btrussell (profile), 17 Jan 2012 @ 1:01pm

Re: Re:
If we were always buying bottled water, and then all of a sudden we had free water being piped into our homes, it will require some effort to get back paying customers. Some would never come back regardless of what you do. Especially if you were suing people for having the water piped in.
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Anonymous Coward, 17 Jan 2012 @ 1:21pm

Re: Re:
"Piracy is a service problem."

Funny, I searched the article for that quote, and it doesn't appear to exist. This wouldn't be the start of a straw-man would it?

That's why, thanks to iTunes, Amazon and Spotify, music piracy has completely disappeared in the US.
Exactly - and that's why Tim says that infringement of his stuff has stopped completely, oh wait...

What he actually said was "at O'Reilly, the losses due to piracy are far outweighed by the benefits of the free flow of information, which makes the world richer, and develops new markets for legitimate content."

But I guess that doesn't really allow you to dump your steaming-pile of "comment" here.
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MahaliaShere (profile), 17 Jan 2012 @ 1:57pm

Re: Consumers ARE being underserved
They'd rather sell to no one at all, rather than to just a few.

"Just a few" meaning "less than the majority of all consumers".
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