Sunday, 29 July 2012

Copyright: The Good, The Bad, And the Truth

Ever since the SOPA/PIPA battle in January, the industries collectively known as Big Content have been lobbying for mass surveillance of the population to protect their failing business models. When you consider how easily they're getting politicians on side with them (till we kick off!), you've got to wonder who the bad guys really are.

When we defeated SOPA/PIPA in January, they went on the offensive and the raid on Kim Dotcom was the result. Briton Richard O'Dwyer's arrest was less dramatic but he too faces extradition to the USA. Many news blogs are talking about this but I want to look at the motivation behind the heavy-handedness. These are the questions we need to address if we're going to discuss this properly:

  • Why are the US content industries pushing for people to be jailed for copyright infringement?

  • Why are they having people extradited for copyright infringement?

  • Why are they pushing for mass surveillance of the populations of the Western nations?

  • Why are our governments colluding with them?

  • And why don't they just change their business models to fit the Internet Age?

IPR and the property paradigm

It actually starts with the Emperor's New Clothes assertion that you can own an idea. Once they have established that they start to use emotive and politically laden words to shape the discussion. This enables them to funnel us into thinking that they're right. It limits any discussion of reform, and puts them firmly in the driving seat. Words like "Theft," "Property," and "Consume," get people's attention and get them on side even if they disagree about the details. I've been in flat out arguments about the use of these words because of the effect they have but God forbid that you should challenge the nomenclature. It's a conceptual thing; you wouldn't understand it, apparently.

And that's the problem. If they decide what you call the experience you have when you read, watch, or listen to their content, and you accept this without question, you end up coming to the same conclusions they do and validating their approach, at least on a subliminal level. If you use those words and rebel, it's because you find the situation personally inconvenient. Deep down, you actually agree, you just wish they'd make it easier for you. Go on, admit it.

Well the result of that is that the Big Content companies and their representatives also believe it. When they've got enough people to believe it, they can cry, "We wuz robbed!" to our governments, who will instantly rush to their rescue and punish those thieving infringers.

The value of exclusivity

I wrote some time ago about how HBO's Eric Kessler discussed his reasons for not providing an internet-only service for HBO programme fans. One of the most important things to note about the way the IPR industry operates is the fact that they're trading in intangibles. Like The Emperor's New Clothes you must accept that these invisible items are real and are worth having. Well what Kessler sells is not only the programmes themselves, he bundles them with conceptual items that only intelligent, cultured, and well-educated discerning people can see. This includes the brand, the experience, the association with other popular content providers, and the exclusivity; you can only watch it via approved distribution channels. Okay, there are some real added extras, but they should be optional. He's not addressing the market, he's controlling it. And he's not the only one.

Lockdown and the free market

The market for content controlled by the major producers is not in the least bit free. The distribution monopolies are carefully guarded and the lobbyists of the MPAA and RIAA are intent on keeping them in place. They're entrenched partly due to the proprietary notions they've invested in their products and they've got influence over our representatives, who are drawn to them for the glamour — and the campaign funds — they provide.

In an exclusive interview with Fox News, Dodd fired off a warning to Obama -- his former Senate Democratic colleague in this election year -- "don't take us for granted."

"Candidly, those who count on quote 'Hollywood' for support need to understand that this industry is watching very carefully who's going to stand up for them when their job is at stake," Dodd told Fox News. "Don't ask me to write a check for you when you think your job is at risk and then don't pay any attention to me when my job is at stake."

Dodd, who became CEO of the Motion Picture Association of America after leaving the Senate in 2011, noted the movie "Avatar" was stolen by online pirates 21 million times. Such acts, he said, threaten to decimate his industry.

But his industry is emphatically not being decimated. In fact, it's doing better than ever, and infringement may well be a part of that. In a Techdirt report called The Sky Is Rising, Mike Masnick noted,

Indeed, you wouldn’t know it, just listening to the entertainment industry talk about how much the entertainment industry is "dying," but data from PricewaterhouseCoopers (PwC) and iDATE show that from 1998 to 2010 the value of the worldwide entertainment industry grew from $449 billion... to $745 billion. That’s quite a leap for a market supposedly being decimated by technological change.

So where is Dodd getting his figures from? Well, there's the Intellectual Property and the U.S. Economy: Industries in Focus paper of March 2012. Highlights include:

The granting and protection of intellectual property rights is vital to promoting innovation and creativity and is an essential element of our free-enterprise, market-based system.

...without IP protection, the inventor who had invested time and money in developing the new product or service (sunk costs) would always be at a disadvantage to the new firm that could just copy and market the product without having to recoup any sunk costs or pay the higher salaries required by those with the creative talents and skills.

Short version: "If we can't lock away our ideas to stop other people copying them, we'll be undercut by competitors who haven't had to put the work in to making the product in the first place."

What about open source? Besides, the insistence on building businesses on IPR is actually driving the US deficit, which currently exceeds their GDP. Why? Look at what they're importing:

Instead, a spike in overseas purchases of capital goods, such as computers and telecommunications equipment, and consumer products (including television sets and cell phones) accounted for the bulk of the fatter trade imbalance.

Rising imports aren’t all bad as they reflect growing domestic demand; American consumers have been spending – and borrowing -- more recently. And some of the imports are high-tech goods that were designed in the U.S. and assembled overseas with domestically produced parts.

Okay, so domestically produced parts are exported for assembly, then reimported as part of the finished product in some cases, but not all of them. I stand by my assertion that IPR is mostly to blame for the deficit with China. While it's reasonable to want to have the time to develop a new product without fear of someone legging it off with your R&D and making cheap versions of your idea, it's unreasonable to make IPR into a product in and of itself, or to force people to accept your Emperor's New Clothes version of your product's story or go to jail. The point is, markets aren't free if the population they're supposed to be serving is under surveillance to enforce compliance with the demands of the monopolists. And enterprise isn't free if it messes with the distribution monopolies, as Richard O'Dwyer and Kim Dotcom have discovered to their costs.

Business models

The idea that IPR is necessary to make money from the things you do is ridiculous. Imagine an Italian entrepreneur arriving in a London that had never heard of Fish 'n' Chips. The first thing he does is leg it to the IPO to register his secret recipe in every way possible, then opens the first ever chip shop. The only chip shop on the planet would be Macari! The fact is, chip shops do very well indeed without IPR, and in an age when copying and sharing has never been easier, it's more cost-effective to just change the way you do things than to lock down and control the market for whatever you're selling.

So why not change their business models? The content creators aren't paying for enforcement, we are. And our ISPs, who will ultimately pass the costs on to us. Basically, they've convinced our representatives that they're being robbed, that this harms the economy, that they can't afford to contribute to the campaign funds of assorted politicians and that they can give or withhold influence by encouraging celebrities to associate with politicians — or not. That's a lot of lobbying power. And what have we got? A rag-tag bunch of digital rights activists who can be conveniently be dismissed as a bunch of freetards whining like little babies to get their own way. The content creators are accustomed to getting what they want and being deferred to all the time. There's no reason to change.

What can we do?

First of all we must accept that no matter how many setbacks they endure, Big Content is not going to back down from their attempts to gain control of the internet. Therefore, we need to stay vigilant and fight tooth and nail for our right to privacy, for net neutrality, and for IPR law reform. If you want to do something, follow, friend, or circle the Internet Freedom Movement and take part in our campaigns when they come up. We have thousands of followers and by working with other digital rights groups we get results.

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