Intellectual Property and the pursuit of profit

We live in a rapidly changing world, the information era, and, most assuredly, we need to equip ourselves to handle protections for people who create easily copyable digital media. However, the maximizing of profit (aka “greed”) is promoting the very “piracy” that they purport to oppose, in much the same way that US foreign policy promotes terrorism while aggressively denouncing it.

What is going on here? Last year, I got excited about some new digital book technology which could save a lot of environmental costs (trees, transportation, etc.), only to find out that the prices for the books were equivalent to hardcover book prices – even for older books, that you could easily find on paperback or used (even though the reader itself had a reading surface about the size of a single paperback page). And let’s face it, it’ s a lot easier to read a printed book, than to read from some kind of computer monitor. And easier to transport and doesn’t require batteries and you get the picture and blurbs on the cover. Not only is the physical book superior in many ways from a consumer standpoint, but it costs a lot more to produce (cost of materials, cost of printing, cover design/printing and transportation costs), so why couldn’t they pass along some of those significant savings onto the consumers? Greed: They think the technophiles will give them an easy boost for even higher profits than for paper books.

These companies could easily push the envelope by lowering prices and encouraging individuals to go digital, thereby increasing environmental benefits, pushing further technological innovation (due to increased market) and all the while earning a much higher profit percentage than results from the much less efficient physical media production/sales.

But no, they’d rather cry about “piracy” where some individuals, rather than violently overtaking merchant ships, killing, raping and enslaving people (as done by actual “pirates”), merely make digital copies for themselves or their friends of movies, CDs or other media that they like. Of course, this has long been possible with VCRs and Tape recorders, but the difference now, with digital (as opposed to analog) media is that there is NO DEGRADATION of quality with the copies, so the copy can be just as good as the original. This is a legitimate concern, but it’s certainly not “piracy” – there’s no killing, no rape and no “theft”.

I’m not saying that illegal copying is OK, but it’s not the same as stealing. If someone broke into your house and made illegal copies of all your CDs but left all the CDs intact and in your possession, would you say you got robbed? The theoretical loss of profit is not theft either. Can a movie producer sue a film critic who gives a film a bad review and sways some potential viewers away from watching the movie, for theft of profit?

As for the theoretical loss in profit that the media industry “suffers”, there is no direct correlation to any loss in profits from illegal copying. Although individuals may get/make copies of media for “free”, there is no guarantee that they may otherwise have bought the materials. In fact, many of those who partake in this are people with very limited budgets or very expansive tastes who would not otherwise be able to view/listen to the media. In addition, the copy-consumers can try out things that they are not sure they would like and then decide whether to buy the official media or not. Similarly, some individuals will consume copies and spread the word, building hype that generates more interest in the source materials which results in some official media purchases. In these last two examples, the existence of copies actually results in additional profit. Undoubtedly, there are some individuals who would otherwise buy some media, but will get it for free, even though it’s illegal. Many people like myself, however, prefer the official media, especially when you can find it at a reasonable price.

To my way of thinking, the profit pros and cons roughly equate, so there’s really no loss. Certainly, none of the big media companies have gone out of business due to the preponderance of digital copying techniques. If there is any con-side imbalance, I place the blame squarely on the media companies who charge such unreasonably high prices. At least the movie industry has been fairly adaptive. Remember when DVDs first came out and were 50-100$ each (even though they’re much cheaper to produce and transport than VHS), but now most new ones can be found for 20-40$. The music industry, however, has been locked in some closet as most new CDs retail in the 18-20$ range (similar to getting just the audio track of a DVD for the same price), which is especially laughable when they try to claim that “piracy” hurts the “artists” (because the artists are only getting a small fraction of the LP-based list prices [around 10$], not a fraction of the actual dollar amount paid). And the iTunes and Napster(V2) extravaganza is just bulking up the producers pocketbooks even more (where you can buy an MP3 version of a CD or song for about the same price as the actual CD (or set of songs), with a fraction of the sound quality [MP3s do not posses as much sound information as a WAV file on a CD, they’re compressed for better transmission on the internet, but somewhat reduced sound quality]).

I think the media industry may need to go back to some basic economics to remember that profit = total revenue – total operational/production costs. If costs are lower for digital media and more sales can be made by lowering the price, the profit could be even better.

Anyways, for a funny take on this same idea, check out Weird Al’s “Don’t Download this Song” (off “Straight Outta Lynwood” album): WeirdAl.com
For some more serious material in the same vein, check out Negativland’s Intellectual Property essays: negativland.com/intprop.html