It’s probably old hat to most people who spend any amount of time online at this point, but in case you weren’t aware, Congress is in the process of considering the PROTECT IP Act / Stop Online Piracy Act (SOPA). Like most bills in Congress, the name of the bill makes it sound like the sort of thing anyone would support, but the underlying purpose of the bill is something quite different (*cough* PATRIOT Act *cough).
So What Would SOPA Do?
All in all, it’s a ridiculous and overreaching bill.
So Why Push SOPA Through Congress?
The American Entertainment Complex—Hollywood, the networks, the stations, cable, the record labels—has placed before Congress a simple request: Give us a law to punish Google, PayPal, the Web ad industry, and anybody else doing business on the Internet who may play some intermediary role in connecting foreign “pirates” to consumers seeking illegal access to copyrighted content.
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The only way to stop piracy, the entertainment complex would have you believe, is to give its and the government’s warships the power to stop, inspect, and track any packet sent on the great sea of the Internet, and impound the ones it doesn’t like.
The American Entertainment Complex are behind the push for SOPA. The music industry got blasted out of the water by Napster and the like and the other industry groups have been scrambling ever since. Flailing about in reaction to the deaths of their business models – they have reacted in suing people and attempting to pass more and more draconian legislation. It’s taken companies like Apple to drag them kicking and screaming into the future with iTunes, simple pricing and easy-to-use interfaces.
The thing is, the American Entertainment Complex didn’t like it then, and they still don’t like it now. They yearn lustily for the days of $19.99 CDs. $19.99! And this was in the 1990s! It’s the same thing with TV and movies, they want to continue to maintain their inflated prices. Now, why are they inflated? Let’s digress to some basic economics.
Take The Red Pill
The economic problem, sometimes called the basic, central or fundamental economic problem, is one of the fundamental economic theories in the operation of any economy. It asserts that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs. The problem then becomes how to determine what is to be produced and how the factors of production (such as capital and labor) are to be allocated. Economics revolves around methods and possibilities of solving the economic problem.
Put simply: “How do we satisfy unlimited wants with limited resources?“
In the days of physical goods, this was easy. Captial was diverted to proudce the goods the market demanded. As demand and supply waxed and waned, so did prices. Music, TV, movies, books were all physical, tangible goods – IE finite. They were limited. If there became too many of any one item, then supply was shortened or stopped in order to maintain prices.
Then along came computers and the Internet.
What had once been tape or disc or paper or film was now merely 1s and 0s. Anything that could be stored digitally – essentially any information could be instantly and identically re-produced. Any bit of digital information has essentially n+1 copies of itself available. There is no scarcity. Outside of basic storage capacity on the total sum of all computers that currently exist on the planet, there is no theoretical limit as to the number of copies of a piece of digital information. So what is something that is nearly infinite worth? How much would you pay for a grain of sand? Beyond that, to buy that grain of sand what if you had to jump through a bunch of hoops, were limited to purchase it in only certain stores, and could only buy it after it had been available for sale in the US for 3 months – while there were also piles of sand right next to you available for free.
But sand is worth something. It can be molded and shaped into glass. It can put into a sandbox. Used to make concrete. People buy sand all the time because when they are buying sand what they are actually buying is the service that brought them that sand. Or the skill that was used to craft the sand and make it unique. This is where the value is added.
Instead, the American Entertainment Complex is obsessed limiting access to the sand – attempting to create artificial scarcity. But it isn’t working out. From AACS to DeCSS – almost every attempt to create artificial scarcity hasn’t worked out. Since these efforts keep failing, the label holders have decided to try and make everything even vaguely related to sharing information online illegal. Hence, SOPA and its ilk. But they’re going about it all wrong. The solution isn’t to create artificial scarcity, obtuse usage restrictions, time-delayed releases, and draconian digital rights management.
The solution? Stay tuned for the next post and find out who said the following:
In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty.
Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.
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That quote belongs to Gabe Newell, am I right!?
As someone who lives in Australia, I’ve often had to deal with these bizarre concepts of regions and protracted release delays. The truly annoying thing is that it continues to exist even on the internet. Amazon.com for instance won’t sell mp3s to people outside of America. Apple’s iTunes store won’t allow you to pay for American television shows. You must set up a bogus account with an american address and then use itunes cards paid for in America in order to watch it. How much easier is it to find the show on a bit torrent client?
I’m no economist but as large as America is, the world is even larger. Why restrict your market to one country when the product can be sent to every computer on the planet with no more difficulty?
The reason Gabe Newell and Steam have been so successful is all present in the quote above – they regard regions as a thing of the past and have removed that barrier to purchase IP holders inexplicably cling to.
I have pirated gigs and gigs of copyright material over the years and I’ve also bought things through sanctioned channels. Given the choice, I prefer to reward the people who have crafted that “grain of sand” you talked about. But when preventing customers from doing so, the IP holder has only themselves to blame.
Isn’t it strange that consumers understand this so clearly when the IP holders just cannot seem to grasp it?
Interesting and funny anti-SOPA/PIPA song made out here in Seattle by attorneys and web enthusiasts: http://www.youtube.com/watch?v=1p-TV4jaCMk Political protest and classic rock . . . Just thought it would be worth sharing