This is an ancient post, published more than 4 years ago.
As such, it might not anymore reflect the views of the author or the state of the world. It is provided as historical record.
(and why this is not necessarily a bad
thing)
UPDATE: heartfelt thanks to Carlos Solís for the Spanish translation. ¡Gracias!
Abstract
With each day we seem to acquire new – faster, better, more
convenient – ways of sharing information; and today almost anything can
be information: from software operating the fastest supercomputers,
through terabyte-sized datasets craved by science, to digitised works of
art. All available in byte-form, ready for copying and sharing.
This digital revolution is not compatible with business models of
old, and their benefactors fight back vehemently.
Is this the best strategy? New, emerging business models that
take these vast sharing opportunities into account seem to suggest
otherwise.
Historical outline
When the Licensing
of the Press Act of 1662 expired in 1695, the Worshipful
Company of Stationers and Newspaper Makers – remembered in history
in short as the Stationers’ Company – found itself without the
state-guaranteed monopoly on printing that fueled their flourishing
during previous decades. Knowing full well that authors themselves would
not be able to publish their works on their own, as that would require
significant investment into printing infrastructure, Stationers’ Company
invented (then quite a revolutionary) notion that is ringing in every
copyright debate to this day: authors’ inherent right to their
works.
This argument was so potent that it led directly to enacting in 1710
of the Statute of
Anne and creation of the copyright law in form we are familiar with
today.
Just as at that time, today this argument is still used as an
instrument of protecting the livelihood not of the authors, but of
publishers. The middlemen.
Cornerstones of Human
Knowledge
Arguably the ability that had the biggest influence on human history
is the ability to communicate. During millenia human race perfected it,
with few inventions bringing real, qualitative change in its speed and
accuracy. Each such invention was followed by great intellectual,
cultural and social leaps – and political backlash.
Inventing speech allowed our ancestors to transfer knowledge
directly, co-operate better in a group, exchange ideas – from very
rudimentary at the dawn of men, to great intellectual constructs that
were all but lost in time. It also sparked our ability to think in
abstracto and operate with logic.
Next great leap was the invention of writing. Immensely important, it
catered to the need of preserving the intellectual constructs made
possible by speech. This led to the golden age of philosophy, first
historical records, literature and poetry. In a way, it enabled
communicating through time – great thoughts could be sent across years,
decades and further, simply by conserving them in writing.
Printing press brought the written word to the masses, and in effect
uprooted the social and economic structure of feudal Europe, leading
finally to modern-day democracies. By lowering the costs of creating
multiple copies and decimating the time needed for creation of a single
copy, ideas could be spread faster and more accurately than ever before
– more people could afford to have their thoughts written down and
disseminated, more people could afford to own a book. Written word
ceased to be the domain of the ruling elite.
Today, the Internet and digital technology lowered those costs even
further, dramatically; it enabled almost cost-less transfer of
information around the world and instant creation of perfect copies.
What was a hard, complicated, arduous and prone to errors process just a
couple of decades ago is now a click of a button away.
Disruptive technology
We do not know about speech, but all the remaining inventions were
seen as disruptive and met with resistance at the time of
introduction.
Socrates refused to write down his concepts claiming
that writing is harmful to author’s memory, and to the concepts
themselves. Printing press was opposed and curtailed by Church and the
crowned heads, for it was seen (quite aptly, as Luther’s example shows)
as a tool of great revolutionary potential.
Today, no one disputes the importance and value of those inventions,
and how instrumental they were to scientific, social and economic
development of humanity. Early attempts to curb their use, to exert
control over whom can use them and to what ends – like the infamous Index
Librorum Prohibitorum – are rightly called censorship and seen
as detrimental.
Nevertheless, even with such historical lessons, we find ourselves
engulfed in debates on how dangerous Internet is and about ways of
curtailing it by the gatekeepers of old.
Devil in the Net
Arguments brought about against uncensored Internet are many and can be roughly categorized into:
- moral objections to some content (e.g. pornography; anti-religion
content),
- alleged dangers to society stemming from certain kinds of content
(e.g. critiques of the ruling; dissent groups; nazizm;
hate-speech),
- perceived infringement upon rights of those hitherto privileged
(this argument, for obvious reasons, is not usually publicly
stated).
Notably, all those categories were present in the European
anti-printing-press narrative centuries ago. The Index was
created as a measure to enforce official moral and social norms of the
times, its creation argued necessary to prevent break-up of societies
exposed to “subversive” writings, while at the same time acting as a
tool of continually exerting control by the Church – control that was to
date exercised through a de facto monopoly on truth, impossible to
maintain in the era of print.
In this paper I would like to focus on the last category of arguments
against a censorship-free Internet.
Technology versus law
Current copyright law descends directly from the Statute of Anne;
this is apparent even in its very name: it lays down the rules under
which copies of works can be made and who has the
right to make them. Created in times when printing was
a difficult process, requiring resources and manpower, aimed (as it
still is today) to protect publishers’ – and other middlemen –
investment.
Publishers’, not authors’: copyright law was created only when the
business of publishing emerged; before the advent of printing press and
the need for printing workshops there was no need for copyright law, and
thus none existed. Without any fast and exact method of copying a work
of art (including a book), there was no need to protect the rights to it
– books and other artforms were treated just like regular objects: sold,
traded, etc., without any discussion of “authors’ rights”.
Complicated printing process also meant that it was in fact possible
to efficiently exert control over printing workshops – printing presses
had to be purchased, skilled personnel was needed, all this could be
controlled to great extent.
Today copyright law is still being used to defend business of
middlemen. However, what centuries ago was envisioned as protection of
an emerging and useful industry, today is stifling innovation by
needlessly defending outdated business models. This stems from a few
crucial changes digital technology brought about:
- copying is nigh effortless and cost-less, requires almost no
technical prowess, and produces exact, perfect copies, indistinguishable
from the “original”;
- distribution across the globe, once the work is in digital form, is
also almost effortless and cost-less;
- tools needed to be able to copy and distribute are in abundance and
easy to use.
Copyright law is based on assumptions (copying being
resource-intensive; distribution being troublesome; censorship being
workable) that no longer hold. Traditional business models based on it
are, thus, also outdated and ever harder to maintain. Middlemen are
gradually becoming obsolete, as each and every author is able to
self-publish and reach their fans directly.
However, instead of looking for new models that do work within this
new technological framework, the middlemen of old – conventional print,
media and entertainment companies – are pushing for ever sterner
copyright, ever more enforcement.
This goes against both technology and society, already treating the
culture of sharing as the norm, at the same time jeopardising emerging
models of financing production of cultural works and endangering works
already published.
Of “pirates” and fans
Please note: the term “pirate” in this particular context is an
act of language abuse; downloading content from the Internet, even
without copyright holders’ permission, is legal in some jurisdictions
(e.g. Poland), even if publishing it might not be.
As studies around the world have shown, the greatest fans also tend
to download the most content from the Internet. A correlation between
rising amounts of so-called “illegal content” downloaded via
new electronic distribution channels (like peer-to-peer networks) and
purported dwindling profits of media companies has not been, however,
proven.
On the contrary: yearly revenue reports from biggest entertainment
companies seem to suggest otherwise – their
revenues evidently rise along with the amount of downloaded
“illegal content” worldwide.
There is even a visible correlation
between the amount of downloaded illegal content of a particular artist
and the artist’s revenue from sales – although it is unclear whether
there is any causation present, and in which direction. This might,
however, mean that peer to peer networks, besides being allegedly
detrimental to sales figures, might be actually a good marketing
venue.
This is already being used as a foundation of emerging business
models. Notorious torrenting website The Pirate Bay has decided to work
with artists willing to take part in an experiment – and launched The Promo Bay: instead of site’s
logo, visible to millions of visitors each day, a new artist and album
is being promoted.
It is a new venture and it is hard to assess its long-term viability,
but already many participating artists report
a surge in interest – and revenue.
The “marketing through sharing” strategy is itself verified, though –
the Brazilian Tecno
Brega music genre strives on treating CDs recorded in local studios
as advertising material, sold for symbolic price or simply given away
for free. Sharing on the Internet is not being discouraged as money is
being made on live sound system parties with thousands in attendance, by
charging entrance fees and selling recordings of the live performance
after the party.
Instead of fighting against technology and social norms, Tecno Brega
industry takes advantage of technical possibilities of easy copying and
distribution to sell something that cannot be readily copied: thrill of
live concert, and memories from it.
Sell what cannot be copied
While not musically related to Tecno Brega, Polish Przystanek Woodstock festival
organizers follow a similar path. This biggest in Europe open-air music
and culture festival (catering to over 400 000 music fans each year)
does not collect admission fees at all – however, one can buy
professionally made recordings and merchendise each year.
Merchendise and concert admission fees are great examples of a
business model compatible with culture of digital sharing, but there is
even more to make money on than that. Turns out, fans will pay good
money for the sheer thrill of knowing they helped make their favourite
show or album possible.
This is the idea behind crowdfunding –
asking regular people, not big media, for cash up front, so that
production could commence. That’s how Pioneer One got founded. That’s
where open-source social network software Diaspora got a kick-start. Fans and
people that simply liked the idea gladly chipped-in a few dollars to
make those – and many more – projects possible. Both were released under
open licenses (Creative Commons-based, and AGPL license,
respectively).
In fact, this method of receiving pay for work supports many libre/open-source software
and libre culture projects. The key here is to make donations as easy,
and the resulting product as useful and pleasant to experience or use,
as possible – this, in fact, encourages such projects to use libre
licensing terms. Terms that are entirely compatible with culture of
sharing.
An interesting twist on that particular idea is the Humble Indie Bundle. Mixing the
trait of easy donations and maximum freedom of use after purchase with
funding drives known from political rallies, NGOs or lately Wikipedia
(an interesting example by itself), and with an honourable cause, HIB
operators gather independent games in a “bundle” and do a two-week
funding drive.
Each client can set their own amount to pay for it, and can set how
the money is shared between game developers, HIB operators and two
notable NGOs. In return, each client receives games that work on all
major operating systems (including the open-source Linux-based ones),
not boggled-down with unweildy DRM used by big game publishers to
“protect” their games from illegal sharing.
This model is already being copied, for example by Polish start-up Music Rage, doing similar promotional
drives for independent music bands.
More inclusive models
Also worth noting, and not usually noticed by pundits, is the fact
that with many of the above models (specifically: those in which the
buyer/founder sets their own price/amount), artists and authors are able
to receive payments from income groups that would be excluded in
traditional models.
With a CD costing a fixed amount many will not decide to buy: the
potential client will not receive the work, nor author the money, even
if the client would, in fact, be willing to pay just a little less.
And conversely – should the client decide they would like to reward
the author more than the fixed price, this too is impossible (short of
buying a second album).
This is not the case with those flexible models. Because copying and
distribution is pretty much cost-less, authors can let clients set their
prices, and hence cater to both of the above groups.
They can, in fact, incentivise the wealthier clients to make more
generous payments by additional services, like inclusion of the name in
ending credits in case of a film (again, Pioneer
One is an example here).
Middlemen stifle business
innovation
Traditional middlemen – publishers, big media conglomerates,
collection agencies – are trying to roll back technological progress to
save old, failing and unsustainable business models, built upon
assumptions that no longer hold. By doing so they are actively hurting
emerging business models that are both compatible with the technology
and social norms aready in place.
A century ago it was not deemed proper to enact laws that would
defend horse buggy makers from competition from car makers. Technology
moved forward, and so did the affected industry – it was seen as a
natural process.
In this paper I hope I have demonstrated the viability of a few
examples of emerging business models that take advantage of available
technology. I do not believe these are the only models possible, nor
that these are the best models conceivable.
I do, indeed, hold that there probably are other and better models
for the future. However, unless we stop hampering and hindering
technological and business progress in the name of outdated assumptions,
we might never be able to find them.
This article has appeared in a peer-reviewed publication
“Innovating innovation. Essays on the intersection of information
science and innovation” (Warsaw 2013, ISBN:978-83-925759-8-6) edited by
dr Bruno Jacobfeuerborn and published by the MOST Foundation.