Our friend Jeffrey Tucker says it’s “mystifying” that media companies continue to hunt down internet distributors of content. But there’s another angle to consider. Even if the executives at the major media companies wanted to abandon copyright enforcement altogether, the state-backed unions that control various segments of the entertainment industry would take over the fight. And then things would get really ugly.
The Writers Guild of America (WGA) would likely resort to vigilantism if the studios abandoned copyright. The keys to the monopoly union’s power are so-called “residual” payments that allow a credited writer — whether or not he was the actual author — to claim a fee for every rebroadcast or reuse of a program. The WGA’s 2007-2008 strike was largely driven by fears of new media. As Guild member Howard Gould put it: “Soon, when computers and your TV are connected, that’s how we’re all going to watch. Okay? Those residuals are going to go from what they are towards zero if we don’t make a stand now.”
As much as the WGA’s fight was portrayed as labor fighting the big conglomerates, in reality the WGA needs “Big Media” to protect the residual system from market competition. That’s not to say residuals can’t — or would not — exist in a free market, but the system as presently constituted would surely fall without the twin pillars of monopoly unions and state-run copyright.
(Of course, the WGA’s tactics have already started to backfire, as I explain in this article.)
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How about the “other other side” of copyright? I would be a little worried if the viability of my position depended on a group of people behaving irrationally (in this particular case either customers spending money for something they can get for free, or producers making an investment in creation of something which will almost instantly be driven down to zero price -and thus will never recoup the cost of the investment-) in order to be a guaranteed benefit.
Now I’m not a sky-is-falling type of person, but it seems to me that the net effect of abolishing all intellectual property would be that those products would either become protected by contract (ie. signing the equivalent of a non-disclosure form before going to a concert or buying software), or, when transaction costs are too onerous to take that route, abandonment of the product. In the end, this leads to 2 classes of software, 1 -the very expensive, $X and up, group- which is ‘proprietary’ and comes with a contract restricting your right to distribute (essentially copyright agreed to explicitly by the buyer), and the other – $0 to $X – where the costs of writing and enforcing those contracts is too high, and the only groups competing are those who are already distributing under permissive terms now (Open source software in this case).
So we end up with a mixture of restricted software and open source software and the only real differences are
1: there is competition between the different ‘copyrights’ used. (good but software licenses already achieve this)
2: you can’t be restricted in your rights without your consent. (good)
3: Some ‘proprietary’ software never sees the light of day, because of the increased cost of doing business. (bad)
Now, I don’t really know whether this sums up to be bad or good overall, I guess it depends on what exactly you value. But there is definitely a loss for some consumers, who would, under the current system, be willing and able to pay a certain price to buy software, but, under the freer system, either cannot find it at all, or its price has increased to cover for the cost of ‘copyright’ enforcement, pricing the consumer out of the market.
And what, really, is the final result? Some software still is restricted, and the issues are the same as with copyright, some software is free, but if it’s profitable to produce it in that environment, it’s also profitable to produce in the current one, under permissive licenses. I don’t see what would be really gained, expect for making agreement to ‘copyright’ explicit upon purchase, as opposed to an implicit part of acquiring some copyrighted work.
Please do contradict me and explain the benefits, I’d love to be proven wrong (it would remove a perceived conflict between freedom and efficiency and makes the decision way easier).
Suppose you got rid of residuals and then Atlas shrugs—the writers don’t bother writing.
When I saw “The Other Side of Copyright” I was expecting to read a spirited defense of copyright.
Jeff: What if consumers get sick of being called criminals and/or being prosecuted for using copyrighted stuff. Mind those who doesen’t have a lot of money. My impression is that there are a lot of Americans working VERY hard for VERY low wages. And many people who actually have a lot of money, work VERY much as well and don’t have time or interest in consuming copyrighted stuff. I find this very difficult…
Jeffrey G –
“Suppose you got rid of residuals and then Atlas shrugs—the writers don’t bother writing.”
Well, there are many movie and television professionals who work despite not receiving residual payments, including most “below the line” production staffers. Some writers might leave the industry, of course, but new writers will enter the market, especially ones who weren’t wedded to the previous system.
And just as with the current system, the top writers would continue to negotiate contracts that pay them higher upfront fees for their work. The writers who will “shrug,” I’m guessing, will be those who weren’t terribly productive or successful to begin with.
The continual question “What if writers wrote less?” is similar in structure and answer to “What if we had fewer roads?” from the government no longer building them.
Attacking this question not only requires a step by step explanation of natural, but a more pragmatic attack that says “Maybe writers write too much” just as when we say the government builds too many roads, and squanders otherwise useful resources for inefficient and polluting modes of transportation. Maybe we spend too many resources on innovations. It’s a tough case to put forth, and most empirical evidence suggest that we actually innovate more in the long run under a system without patents. Is it worth it to impoverish people simply to slightly increase short term innovation and favor inefficient business models that rely on these regulations?
I don’t see any sarcastic references to me in this discussion. The reason for that is ______ ?
Bob:
There is another very significant difference between proprietary software and open-source software: with the former, you only receive a “right-to-use”, with the latter, you actually own the software. In other words, at least in the case of Microsoft, they retain the ownership. So it is a property rights issue; If I purchase MS software, I am only “renting”.
@Bob:
In your analysis you missed several other options about how to produce software, for example:
- custom built software (contract work)
- software as a service
I am sure there are many other business models. But that is not important. What is important is that a lot of people incorrectly assume that selling licenses is the only way for a someone producing software to earn money. That is not only not true, but in my opinion this model is becoming increasingly irrelevant, regardless of the legal framework of copyright. My opinion may be skewed of course by my own experience (being a software engineer my whole career and never earning money through licenses), but I think that the dominant business model will be to sell services (or anything that is not software) and give away software for free (with or without source).
“Well, there are many movie and television professionals who work despite not receiving residual payments, including most “below the line” production staffers. Some writers might leave the industry, of course, but new writers will enter the market, especially ones who weren’t wedded to the previous system.
And just as with the current system, the top writers would continue to negotiate contracts that pay them higher upfront fees for their work. The writers who will “shrug,” I’m guessing, will be those who weren’t terribly productive or successful to begin with.”
The current reality actually contradicts your claims.
Try again.
“The continual question “What if writers wrote less?” is similar in structure and answer to “What if we had fewer roads?” from the government no longer building them.”
This is called “false analogy”.
jeffrey katzenberg has tacitly acknowledged the failure of the present film-making paradigm by pointing out 3D as the way of the future (getting people to pay for the non-replicable special effects, rather than just punishing the odd downloader). the future film festival of bologna, the highlight of which was the j.k. presentation, dedicated an entire day to 3D.
monsters vs. aliens is, apparently, that much better for the 3D viewing.
oliva makes what seems a valid point that the guild depends very much on the large-studio predominance, and that a fluid and fractured distribution industry would drain its power.
i don’t get the gloomy conclusion, then. unions, thugs though they are under the prevailing laws, are slow, and clumsy thugs. presented with many small, dynamic targets i think the guild may wither.
“This is called “false analogy”.”
You’re not being very instructive by stating such a thing. It makes you seem like Zach Galifianakis’ pretentious illiterate. Or maybe that was a false analogy too.
It seems to me that the original analogy was claiming that government intervention was wasting resources in two different cases. It is not obvious to me that this is a false analogy, please state what you think the properties compared are, and why they are irrelevant if you’re going to claim such a thing.
All those unhappy buggy-whip makers, put out of work by changing technology.
This is no different. New technology, new ways of doing things. The old ways are no longer profitable.
It’s a knee-jerk Luddite reaction that “what now is must always be”. So, as has been mentioned, writers will be found to write without residuals. Musicians will find that they make their money from performance rather than continued sales of pre-recorded materials.
There will always be a demand for performance. TV, video tape and DVDs have not killed the movie theater. Recordings have not killed the live theater, music, ballet or plays.
Yes, there may be fewer big-budget Hollywood blockbuster movies paying their leading actors $20M plus. Is this a loss, or a return to movies with actual storylines instead of endless expensive chase scenes, stunts and special effects?
Heck, people are making pretty good Star Trek movies for nearly NOTHING right now! Google “Of Gods And Men” and “Starship Farragut”.
All those unhappy buggy-whip makers, put out of work by changing technology.
This is no different. New technology, new ways of doing things. The old ways are no longer profitable.
It’s a knee-jerk Luddite reaction that “what now is must always be”. So, as has been mentioned, writers will be found to write without residuals. Musicians will find that they make their money from performance rather than continued sales of pre-recorded materials.
There will always be a demand for performance. TV, video tape and DVDs have not killed the movie theater. Recordings have not killed the live theater, music, ballet or plays.
Yes, there may be fewer big-budget Hollywood blockbuster movies paying their leading actors $20M plus. Is this a loss, or a return to movies with actual storylines instead of endless expensive chase scenes, stunts and special effects?
Heck, people are making pretty good Star Trek movies for nearly NOTHING right now! Google “Of Gods And Men” and “Starship Farragut”.
Bob.
As a very active person in the IT world I can say this in comparison of the two.
Open source allows the creation of new software/ideas/technology’s to be built on old technologies in a modular way. This allows the introduction of new technologies in the market at an accelarted rate. The technology, from a performance/feature, standpoint is un-surpassable in comparison to closed source. If you remove Microsoft windows from the equation then you also have a much more diverse selection of platform independent products.
Open source development can create software packages faster, cheaper, and with more features.
Its ironic how many technology standards have been set from the introduction of an open source technology.
Thanks to the introduction of Vista and the terrible product known as sharepoint we are witnessing a huge backlash in demand for open-source applications. An example of how inefficient huge monopolistic company’s tend to be. Their product quality suffers along with extra high cost per unit to cover the expense of a bloated organization.
The Open-Source business model allows company’s to be far more efficient. Even Microsoft has had to partake in the open source realm.
It’s hard for people to understand the open source concept. Let me put it to you this way. In this scenario tou may do one of two things. Build a hammer or buy one. You don’t need to rent it or lease it. Since you chose not to build or do not know how you you purchase it, its yours. You own it. Your hammer. You don’t have to pay for maintenance on it, you don’t have to renew your license. It’s your hammer. Whatever problems come with that hammer are also yours. You may purchase support from the hammer store if you need it if you have troubles. Also, as an inventor and entrepreneur your encouraged to elaborate on the idea of the hammer offering new technological standards to the construction industry. How about the introduction of a nail remover on the flip side?
Had microsoft been the creator of the hammer who knows at what expense it would be. We would never own it, nor would we be allowed to expand on it’s idea. We may not even have nail removers on the flip side!
Now doesn’t it seem obsured that we would stifle creativity in physical objects like the hammer. However we cannot wrap our heads around this concept in the software world. We need to check our underlying moral premise, if we have one. Is it consistent? It seems in this case it is not. We fear that it would be worse when actually, I argue, in the absence of IP not only would we have better software, our products from Microsoft would be infinitely better. So much better I could not even imagine.
Like I said, we may not even have nail removers on our hammers…. It makes you wonder what we are still missing in the software arena.
Are there really utilitarians here who want to defense intellectual monopolies just because they think (!) that these would increase the societal welfare?
Really?
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