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

from the indeed dept

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.

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?

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.)

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.

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.

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