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Digital Communism
National Review ^ | 5/6/2003 | James D. Miller

Posted on 05/06/2003 12:28:28 PM PDT by traditionalist

Internet file-trading tools, a California court handed a major victory to communism. The Internet allows the well-wired to take copyrighted material freely. Left unchecked, rampant copyright theft may soon destroy the for-profit production of movies, music and books and may usher in an age of digital communism.

Technology will soon increase the ease of copyright theft because as broadband access proliferates, more people will be able to download pirated movies and music quickly. Currently, authors are safe from Internet piracy because most book readers still prefer printed words to electronic text. We may soon, however, see electronic paper that is as easy to read as printed pulp. How much money would Tom Clancy be able to make when readers can download all his books freely in under a second? Can you imagine college students paying $75 for a textbook they could download for free?

The best hope to stop copyright piracy lies in stopping the distribution of peer-to-peer networks that facilitate such theft. By holding that these networks have no liability for inappropriate use of their tools the California court has reduced the value of digital property rights.

Some have claimed that Internet piracy simply represents another form of competition and all copyright holders need do to compete successfully is to lower prices. But a central tenant of economics holds that if multiple firms sell identical products, consumers will patronize the lowest price provider. If pirates give away their product for free, content providers can compete only by also charging nothing.

The ability to exclude is the essence of property rights. If I "own" land but anyone can trespass I don't really have any property rights. Similarly, if I own a movie, but anyone can freely watch it, my rights have disappeared.

Is it necessarily bad if piracy destroys intellectual property rights? After all, when everything is free we can live out Karl Marx's dream and have everyone take according to his needs.

The twentieth century witnessed a brutal competition between communism and capitalism. Communists believe that people can be motivated to work for the common good, while capitalists believe that profit provides the best catalyst for economic production. Capitalism, of course, triumphed mainly because of its superior economic performance. By decimating profits for content producers, peer-to-peer piracy may give us a communist system of intellectual-property production.

I imagine that few would invest in a factory in the Congo. Because of political strife, property rights in the Congo aren't respected, so it would be nearly impossible to profit from building a factory in the Congo since once it was built, armed men would come and steal the equipment. Businesspeople only make investments they can profit from.

Copyright holders were able to sue Napster into submission, but Napster had a centralized database that was easy to locate and destroy. New forms of Internet piracy, however, rely upon peer-to-peer networks where users download material directly from each other's hard drives. Since it would be impractical for content providers to sue millions of Internet users, to protect digital-capitalism copyright holders must be able to stop the proliferation of piracy tools.

Some might argue that copyright holders should fend for themselves in the marketplace. Imagine, however, the fate of stores if there were no effective laws against shoplifting: Theft would drive them to bankruptcy. True, copyright holders can somewhat protect themselves by imbedding copy protection technology in their products. A movie, for example, could contain a code allowing it to be played only on your hardware. Imbedded copy-protection technology is foiled, however, if even one user creates and disseminates a clean and playable copy. Furthermore, imbedded copy protection can never protect e-books since you can create a copyable e-book merely by scanning the text of a physical book.

Of course, copyright holders could still find a few ways to profit in a world of rampant piracy. Movies could be financed by the sale of action figures and musicians could profit from concerts. It's difficult to see how authors could profit, however, except, perhaps, by begging for tips.


TOPICS: Constitution/Conservatism; Culture/Society; Philosophy
KEYWORDS: copyrights; piracy
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To: Protagoras
Name a great work of literature that was written specifically to make the author a load of cash.

Great books are written by people who are trying to express a vision and who generally have to fight to have them published by anybody.

Literary genius and marketing genius are two different beasts.

21 posted on 05/06/2003 1:09:19 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: traditionalist
Remove the profitablity of mass culture, and the production of books, music, and movies will again be dominated by those motivated by their love of the art, not profit.

Remove profit from anything and you remove the ability of its producers to do it for a living. While I sympathize with the "data are free" point of view, a book or a play is more than data, it is information, that is, data created by someone to convey a message and organized to that effect. The labor inherent in that effort is work just as much as laying bricks or scrubbing floors, and those doing so are entitled to compensation at a rate the market will bear. The difficulty with eliminating "mass market" as a source of cultural devolution is that you throw the baby out with the bathwater - for every Danielle Steele who can't make a living selling bodice-rippers you have quality writers whose work will be denied you. Insisting that in the interest of quality, a person who has spent years of practice perfecting his or her craft must now entertain you for the sheer love of doing it and find another way to feed him- or herself is, IMHO, a bit unrealistic.

That said, I do think that some of the hysteria is unjustified. I'd much rather own and read a book than kill my eyes reading it on a computer, and I've tried both.

22 posted on 05/06/2003 1:11:03 PM PDT by Billthedrill
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To: wideawake
Name a great work of literature that was written specifically to make the author a load of cash.

All of Shakespeare's plays. Everything Samuel Johnson wrote, including his aphorism "no one but a blockhead writes save for money." The issue is an old one.

23 posted on 05/06/2003 1:12:47 PM PDT by Billthedrill
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To: traditionalist
The threat to "corporate" outlets for art, music, video, and other media is what is at stake here, not the rights of copyright holders.

For decades in the music world the recording industry has controlled the pipeline of what gets on TV, radio, and distributed into the stores. There are thousands of talented indie artists who are every bit as good as anything you'd hear on a major label, but for whatever reason, they remain unsigned. The internet brought a new, uncontrolled means of distribution to independent musicians. You see, for most solo acts and bands, selling a few thousand CDs a year is enough to make a tidy profit without giving up the control of your music, your name, and your life.

You see, without the millions of promotional dollars spent to create the buzz on the street about a new album or group, the playing field is pretty leveled out by talent. Michael Jackson only sold about 50,000 copies of one album because Sony didn't promote it. His name and his talent only placed his sales where a good indie band could reach. The record companies operate a sordid consignment business. Here's how it works.

1. Artist gets signed receives and advance (if they're lucky.) The deal gives the record company complete rights to all the songs, the album and the name of the artist or band in most cases. (Remember Prince, he became "The Artist" because the record company he was having a legal battle with owned his name.) Let's say the band gets $200.000. Sounds like a lot, but split 5 ways, each band member gets $50,000. A lot of professional people make that much in a year.

2. Record company releases the artist's album after nearly a year after it was recorded. The band wants to go on tour to promote the album. They receive a recoupable advance on royalties for the video, tour support, promotions, etc.

3. Albums get into the stores to coincide with tour schedule. Each step of the distribution chain receives stock free for 90 days consignment. This means that from the distributor to the rack jobber to the retailer, that's 9 months to pay the record company-who holds it for another 6 months or so before having to pay out.

4. Nearly two years elapse before the artist sees any royalties (so that $50,000 per guy advance had to come down to about $25,000 a year). Once the record company deducts tour support, the video, promotion, etc. from the million-seller album (if they're lucky), the band ends up OWING the record company about $2 million!

When it comes time for the second album, the record company tells you what to wear, what to say, how to say it, they control the songs, the tour, and everything because you are now an indentured servant of the record company. You might be able to sue them and win, but you were dumb and hopeful and trusting and their lawyers were smart and slick.

The problem is, the large record labels want to control the pipeline, not just preserve their copyrights. MP3.com is a perfect example of that. When I discovered MP3.com a few years back, I signed up, and instantly gained a means to feature my music to hundreds of listeners each day. I could control if they could download or only stream the audio. I could use MP3's features to create professional-quality CDs without having to make them by the thousands and sell them at the price of my choosing.

MP3.com actually paid the artists for the amount of airplay they generated. For certain genres of music, that's fantastic, because most traditional folk, jazz, New Age, and other niche genres of music are usually featured on public radio stations. ASCAP and BMI don't typically include airplay on public radio in their surveys, so artists don't make much in the way of performance royalties unless they're in mainstream genres of music.

When I first started out, I made a few hundred bucks a month featuring my music. MP3.com was not like Napster. They didn't do file sharing. They did allow folks to upload copyrighted music for their own use. That meant that I could take my favorite CDs, upload them, and through my own account, listen to them at work or anywhere I'd happen to have an internet connection. There were no copyrights violated in this, in my opinion. The best part was the huge opportunity it provided indie artists.

Unfortunately, the $$$ signs drew attention from the corporate music world and their lawyers caught the scent and they sued MP3.com. MP3.com lost a $55 million settlement, which included turning over a controlling interest to their company to several mainstream record companies. Since that time, MP3.com has eliminated paying indie artists for airplay, started charging artists for services that were previously free (because the CONTENT we provide brings THEM income). My airplay numbers are higher than ever, but the money disappears into their pockets, not mine.

The whole "copyright infringement" business is an attempt to take a now archaic law, written back in Thomas Edison's day, and use it to manipulate emergent technology and control the MEANS OF DISTRIBUTION. Instead of creating competitive products that customers would WANT to pay for, they took the socialist route and tried to legislate competition out of business. It's working.

The libertarian approach to the problem would be for producers to create a quality product at a reasonable price that people would not object to buying. Remember video movies when they first came out? It cost nearly a hundred bucks to buy one. Piracy was out of control. Then the prices dropped, and people didn't buy pirate copies, because they wanted the real thing.

The going $17.00 for a CD is piracy. It is a totally unreal markup. If people really knew what it costs to manufacture CDs, they'd have a cow over the price. The old myth was that you were paying for increased quality over LPs and cassettes. The real truth is that CDs cost considerably less to manufacture than LPs or cassettes. If the recording industry wants to stop piracy, they need to drop the prices and compete honestly in an open market.

Sorry this was long, but this is a real hot button for me. I'm a guitar teacher and indie musician, but I always kept my day job. I've always been able to make money with music, but the enemy is the industry itself. The corrupt RIAA lobby corrupt Congressmen and get copyright law written to their benefit. They are not about protecting artists--it's about protecting their profits at the expense of the artists.

Greg West
www.mp3.com/gregwest
24 posted on 05/06/2003 1:12:54 PM PDT by gregwest
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To: traditionalist
While I agree with the tone of this article. I do, however watch with glee as the uber leftists in the recording/film industry lose their means of supporting the socialist movement in this country.

Stealing is wrong and file swapping copyrighted material is stealing, but...

To kill off the leftist movement in this country ( or severely degrade its ability to cause any further damage) it is necessary to cut off their means of finance. Sometimes one must do (or get others to do)things that are morally abhorrent to defeat a greater evil. Take war for example, most people don’t really get their kicks out of killing other people but sometimes it is necessary to defeat a greater evil. Just as when the war is over the soldiers don’t come home and start killing everyone they see. When the war with the socialists is over we can stop using the tactics that made it possible to defeat them.

Just understand that if we don’t defeat them, we will be forced into lives of slavery to the state. I think I can handle getting dirty if it means freedom for my children and grandchildren. Think about it. You don’t have to do it yourself, just turn the socialists "morally relative" monster against them. We didn’t create the mass of indoctrinated brain dead people, but we can use their creation against them.
25 posted on 05/06/2003 1:15:43 PM PDT by myself6
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To: wideawake
who generally have to fight to have them published by anybody.

If they don't want to sell them, why are they fighting to have them published?

I have to go now, but if you can't think of many many great books that were written for money by tomorrow, look me up and I list a ton of them for you. I don't even know where to start there are so many.

Your "ton of cash" thing won't work either, they are written for profit.

26 posted on 05/06/2003 1:15:55 PM PDT by Protagoras (Putting government in charge of morality is like putting pedophiles in charge of children)
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To: gregwest
The other alternative, if the free-market is not used, would be to legislate a requirement for every person to have a digital signature that they would have to supply in order to post anything on the internet. If you wanted to post pictures of the family reunion on a personal web page, you'd have to purchase the digital signature to do so and thus register your content legally to "prevent piracy."

That's a solution that doesn't quite leave me feeling "warm and fuzzy."

GW
27 posted on 05/06/2003 1:23:55 PM PDT by gregwest
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To: Protagoras
If they don't want to sell them, why are they fighting to have them published?

Because they wanted people to read them and were not able to make thousands of copies by hand.

I have to go now, but if you can't think of many many great books that were written for money by tomorrow, look me up and I list a ton of them for you. I don't even know where to start there are so many.

So, in other words, you can't name any. Until tomorrow, of course.

Your "ton of cash" thing won't work either, they are written for profit.

What is profit? Profit is the money left over from your sales after you subtract the cost of your product.

For example, James Joyce spent 17 years of his life writing and rewriting Finnegans Wake for ten or twelve hours a day and received maybe $2,000-$3,000 for it.

That's money - but that ain't profit.

Samuel Beckett wrote En attendant Godot for a small local production, just to try his hand at playwriting. He had no thought of ever making money from it - never even intended to publish it in the first place.

Kierkegaard begged and borrowed money from relatives and friends to publish Either/Or and Fear and Trembling.

The writers who write in order to make a living as novelists are the Danielle Steels, Sidney Sheldons, and John Grishams of the world. Their work may be entertaining and useful for making an airline trip go faster, but it has no enduring value.

Name a great work of literature and I'll show you a book that made the author far less money than if the author had just spent the time waiting tables instead of writing it.

28 posted on 05/06/2003 1:33:12 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: Billthedrill
Shakespeare never made a farthing from publishing his plays. He made his money by putting together performances of them for a paying audience.

If you read Boswell's Life of Johnson you'll see that Johnson himself barely scraped by. Johnson saw writing as a way of feeding himself, not of making a fortune.

And Johnson wrote many things, poems and sermons specifically, which he never made any money from but which were intended solely for the enjoyment of his circle.

I say again, no great work of literature was ever made in contemplation of profit - just in contemplation of generating enough income to write another day.

29 posted on 05/06/2003 1:39:04 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: babyface00
Copyrights were never intended to be perpetual, or to give the discoverer/creator sole ownership.

Indeed, Article I, Section 8 of the U.S. Constitution states: "The Congress shall have power ... To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries ...."

30 posted on 05/06/2003 1:41:47 PM PDT by Gee Wally
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To: traditionalist
Imagine, however, the fate of stores if there were no effective laws against shoplifting

Yes, that would be a problem. Unfortunately for this inane analogy, there *are* laws against copyright infringement. The author is essentially demanding that backpacks be banned because they can be used by shoplifters.

Apple's music store has generated 1 million legal song purchases in 1 week, despite being available to only a small minority of computer users. It's a complete fabrication that computing freedom can't coexist with artists getting paid.

31 posted on 05/06/2003 1:49:05 PM PDT by ThinkDifferent
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To: Protagoras; Billthedrill
Thank you for your comments. If it wasn't for your posts, I'd have thought I'd accidentally strayed into D.U. I have never seen such a grotesquely overwrought and self-serving series of justifications for theft outside of a Democratic tax proposal or a public defender's office.

Hey, do you think I can just go down to the corner liquor store and steal every bottle I can carry? 'Cause I mean like all the really good booze is made by monks who just do it for the love of God and grape vines.

32 posted on 05/06/2003 1:54:23 PM PDT by brbethke
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To: wideawake
You're splitting hairs. If Shakespeare didn't write 'em for the money then what did he write 'em for? The practice of digital copying for free is similar to making old Will write the plays and put them on for free. And the upshot will be the same. No plays. And no Will.

I have, of course, read Boswell. And what I read in Boswell described a professional writer constantly struggling to get paid for his labors, often unsuccessfully. His contemporary Gibbon was stuck with producing one of the great works of the English language at the behest of a patron who, thank heaven, stayed with Gibbon despite his teasing "another damned thick, square, book - always scribble, scribble, scribble, eh, Mr. Gibbon?" Would you go back to that system? We don't have many patrons these days...

33 posted on 05/06/2003 1:56:58 PM PDT by Billthedrill
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To: Billthedrill
Patrons have been replaced by the tenure system. Destroy the writer's ability to support his family by writing and you'll end up with nothing but novels about the angst-filled lives of middle-aged creative writing professors at small liberal arts colleges who are wallowing in their own existential meaninglessness and contemplating an affair with a hot 19-year-old in their sophomore lit class.
34 posted on 05/06/2003 2:12:14 PM PDT by brbethke
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To: Billthedrill
If Shakespeare didn't write 'em for the money then what did he write 'em for?

The best insight we have into Shakespeare's personality is his works. I think he genuinely enjoyed the stage and show business - "All the world's a stage" is not just a remarkably apt metaphor for the human consition, but for Shakespeare's mental world as well.

He wrote for the joy of making his words come to life on that stage. If he'd made a million gold guineas for the Comedy of Errors he'd still have written The Tempest just to see it played.

And what I read in Boswell described a professional writer constantly struggling to get paid for his labors, often unsuccessfully.

I agree - but I do not see a man who writes merely for remuneration.

Would you go back to that system? We don't have many patrons these days...

The current system has produced a ton of embarrassingly unreadable garbage - a guaranteed press run of 1 million copies for Hillary Clinton's memoirs?

Patronage by publishing house isn't any nobler than patronage by noble.

I'll say it again:

35 posted on 05/06/2003 2:19:28 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: Billthedrill
Great art is not created for money.
36 posted on 05/06/2003 2:20:14 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: wideawake
With respect, I think you're overly idealizing the nature of being an author, about which I know marginally more than being a songwriter or a painter or whatnot, so that's the target of my comments. It may be that nobody follows his Muse merely for money, but we don't live in the times of royalty, and nobody follows merely it for the love of the art either unless he or she has another meal ticket. And Johnson certainly did mean it when he said "no one but a blockhead writes save for money," it fed him.

At least you don't deny the sheer sweat that does go into the production of a creative effort. Why anyone should feel that they are entitled to that effort without paying for the sweat is quite beyond me - you wouldn't expect that of a doctor, for example, who follows medicine as a calling but still has the rent to pay. You wouldn't expect it from a carpenter or a chef or a landscaper, all of whom pursue their art out of love but also have a landlord to satisfy. Why ask it of a writer?

37 posted on 05/06/2003 2:31:11 PM PDT by Billthedrill
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To: Billthedrill
Your points are well taken. But the best doctors are people who really take pride in their abilities of diagnosis and therapy.

The best carpenters are the ones who take great pride in their work and often do little "extras" that may be more costly or time-consuming.

The same goes for writers - the best writers are the ones who put in the kind of time and effort that no one in particular asks of them - they enjoy the work for its own sake.

I'm not saying they shouldn't get paid - I'm saying that no one whose primary motivation is to get paid has ever been a great writer.

38 posted on 05/06/2003 2:39:07 PM PDT by wideawake (Support our troops and their Commander-in-Chief)
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To: traditionalist
That sounds a bit elitist !
I don't know what you do for a living, but I imagine you prefer to be paid for it.
39 posted on 05/06/2003 3:59:18 PM PDT by genefromjersey (Gettin' too old to "play nice" !)
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To: traditionalist
I'm going to add this to my previous response: Theft is theft , and theft is wrong - something that should be apparent to anyone who claims to be religious or ethical.

When you STEAL somebody's hard work ,just because :

1. You want to.
2. It's technologically feasible.
3. "Everybody else is doing it. "

You are morally no different from ...let's say : the Internet thief, who steals people's credit card data, and passes it on for exactly the same reasons .

40 posted on 05/06/2003 4:12:17 PM PDT by genefromjersey (Gettin' too old to "play nice" !)
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