Parasitic Freeloaders

On Wednesday I read this article on the Guardian where the author bemoans filesharers as parasatic freeloaders.
I normally do not pay too much attention to these articles in favour of the current business model of the large media combines, but this time I stopped and thought for a moment.
There are several studies that demonstrate that filesharers actually buy more music that non filesharers, this is oft quoted and I have not read the studies to know how they have been conductuded. It would seem to me that it does apply to some small clique of filesharers, but not to the large majority, which frankly do not pay anything for content, but the issues are can they afford to pay? Or more controversially should they pay?

The media combines cite statistics that “demonstrate” the large amount of money that illegal filesharers cost them and the economy in general, but money is a finite resource and unless filesharers hide the money they don't spend on content under their mattresses, the only people suffering are the media combines, not the economy as a whole, as the money will simply be spent elsewhere, it does not disappear into a black hole as the media combines will have us believe. Furthermore, they have the rather insidious tendency of equating a download with a lost sale. This is patent nonsense. they complete fail to understand that the opportunity cost of an illegally downloaded song, movie or game is negligeable, it does, therefore not follow that they have lost a sale as the opportunity cost is significantly higher (orders of magnitude higher) for a real sale. For instance, the ten pounds used to buy a DVD could have been used to buy a few drinks, whereas the bandwidth, electricity and computer wear and tear needed to get the same dvd are either very small or zero, assuming that a flat internet tariff is used and that the computer was being used for something else. Computer wear and tear can be ignored as most computers will be upgraded before they fail. (Note that even if the sole use of the computer was to download the DVD, the cost in electricity would be around 5 pence). This is a major fault in their analysis.

Another flaw in their analysis is that they fail to take into account the attraction of “free”, as Dan Ariely so masterfully put it in his book Perfectly Irrational. Every transaction has a downside and upside, but with free, it appears that there is no downside, for instance people will overwhelmingly favour a free ten dollar voucher over paying three dollars to get a twenty dollar voucher, in essence when something is free we equate it to zero opportunity cost, so it is not surprising that somebody might illegally download U2's whole opus even when they might only be interested in a few songs, but by downloading it all they might discover a few songs that they like, does that mean that U2 have lost royalties for 12 albums, it's possible, but unlikely. It is possible that they might have lost the sale of a compilation album, so that is a lost sale for every 12 downloaded albums, now the numbers start to look less scary. One then has to ask how would that person had listened to them otherwise, so it is not far fetched to assume that with illegal downloads the combines might have lost the sale of an album, but without them that person might have never listened to those tracks, so that it never would have entered his head to buy the album. Had s/he listened to them, it probably would have been at a friends house, in which case he would have, audible gasp, borrowed it and, with an even more audible gasp, copied it, there I have said it, yet the combines understand that current laws preventing people from copying are not enforceable outside cyberspace.
On the internet is a little bit different, as there are ways to look into what people are browsing, scary I know, crime thoughts here we come. If the police asked Royal Mail to open your mail to ensure that you keep to the straight and narrows and expected Royal Mail to pay for it, both you and Royal Mail would be rightly outraged, but this is excatly what the combines want the ISPs to do. Granted, it is not as onerous a task as Royal Mail's hypothetical task, but why should ISPs oblige the combines.

But wait there is more. I personally don't have a television, but even so I can navigate to a little known website and watch content for free ... legally. How is this possible? I hear you ask, I just read that article in the Guardian and you know that Anne Wollenberg, she makes a lot of sense. This is the really really and I mean really funny bit. You don't have to pay to view any movies or TV program as long as it has been emitted on free to air channels, it's as simple as that, really. If I download a movie from a torrent site, I'm the scum of the earth, a no good freeloader whose actions will set in motion the end of the universe (I might be exaggerating here a little bit), but if I watch said movie on the iPlayer website all is fine and dandy, furthermore if I lived in, say Spain, I could watch said movie on a TV without having to pay at all, no TV Licensing company in Spain yet, and I can record them, so remind me again why it is that I should pay for content, because it really is not that clear to me.

Similarly for music and books, the former you can get on the radio and in libraries, the latter on libraries, both legally for the cost a gulp of air (You do have to pay for to rent music in libraries, but not for the radio).

The above, of course, does not apply to games, as they don't suddenly become free, but the opportunity cost analysis still applies. The smart money is on all-online games, as these would allow publishers to require authentication to play. Attempts to require this type of authentication have not met with widespread approval, but Steam seems to be doing well and World of Warcraft is a runaway success, definitely pointing the way.

A final issue is DRM, which the combines love. Now, whereas before you owned the media but not the content, which allowed you to make copies for the purpose of backup, this is not quite the case anymore, thanks to our very pervasive enemy, DRM. It is true that you can download the media again, but if a media combine decides it is not worth their while to maintain a download service, you are out of luck. You will be the proud owner of loads of zeros and ones and unless you illegally break the protection, you will not be able to play your legally bought music. DVDs and Blu-rays also carry DRM that prevent you to make a backup copy, so that if your original disc gets scratched you need to buy a new one. This does not compare favourably to illegally downloaded material, which you can copy as many times as you want or even download again.

The combines need to wake up, the only way they can fight illegal downloads is to move to a subscription service not the current pay per view/listen model. Pandora's box has been opened. It is frankly disgusting that the politicians are doing the combines fighting and passing on charges to ISPs or even creating a sort of government agency, as in France, but let us make sure that the freeloaders get what they deserve and the combines are preserved.

Celebrititis

A couple of weeks ago my mother in law came to visit us. She had just finished reading a book by a famous novelist, I forget his name and it is not important anyway, who had just written a non-fiction book. He had taken a recent interest in the travel industry, in particular he had taken an interest in baggage. He had become fascinated by baggage, by the whole hidden infrastructure of baggage handling, by its efficiency. He had been surprised by the tiny percentage of baggage that was actually lost and as every good writer with plenty of spare time and a keen interest in something does, he had decided to write a book about it. His agent was not very supportive, his agent is a risk adverse person, who prefers his writers stick to what they do well, his commission depends on it. But no matter how much he tried he could not convince our famous writer to write another novel instead. The writer had said that he needed a break from writing novels so he had started researching for this new book. He had traveled the world doing research and when he finally had finished writing it, he had taken it to his agent, who had his worst fears confirmed. The book had the writer's unmistakable style and while the research was not bad, it was amateurish, it simply showed that he should have stuck to novels. The agent had a little bit of problem, he needed to get this book published but his writer had quite clearly never heard about comparative advantage or David Ricardo for that matter. He meet his normal publisher who was keen about a new book by this writer, but somewhat surprised that it was not another novel. The publisher got together his marketing team and they concluded that they could make the book an economic success, after all the writer was well known enough and his last book had sold so well that his faithful audience would probably buy this book anyway, a snazzy cover, a catchy subtitle, a few good reviews and hey presto another sales success. To be honest, I do really know if this is what happened but it seems plausible enough.

Unfortunately, this is an all too common occurrence in the publishing industry (see all the ghost written books that do very well on the charts) but not at all limited to it. Just think of the number of singers that have tried their hand at acting (David Bowie, Madonna, Beyonce, etc..), actors/actresses that had tried singing (David Hasselhoff, Scarlett Johansson), Models that turn into actresses (Cameron Diaz, Charlize Theron), etc.. Some have been successful, but others not so much and the problem is that every example of a not so successful endeavor has taken the place of a talented, but unknown person, and we are poorer because of this. If you don't believe me, Imagine a world without Robert de Niro, who could have played Travis Bickle emptyness so well, without Humphrey Bogart or without Marcello Mastroianni, we would live in a poorer place but the fickle public would rather watch celebrities than good actors/actresses.

It is fair to say that the publishing industry is now using blogs as a gauge of success before a book is published for a number of newcomers (belle de jour, Stuff white people like, etc) which is an improvement, but it is really just a mild case of celebrititis. If your topic is not easily turned into a blog, which given today's attention span of several hundred words at most, leaves out rather a lot of content, then you are out of luck. I have to confess that I am not blameless here, I fully confess to having the attention span of a hyperactive three year old kid, well perhaps not that short. But which long post blogs do I bother reading? Why, the ones that have been recommended to me, of course. But how will it ever be recommended if nobody reads it in the first place? and with so much content online, how do you decide which five thousand word essay you should read? time is, after all, finite.

Unfortunately I must confess that I also suffer from celebrititis, two examples below:

In the mid nineties, the former Argentine football player Jorge Valdano became the manager of C.D. Tenerife and then went on to manage Real Madrid football club. He was an intelligent, articulate, calm, handsome man in his late thirties/early forties, he dressed smartly, always wearing suits, who always seemed to say the right thing, he never put his foot in it. He was a rare creature: an intellectual football manager and people where interested in his opinions, whether about football or about anything else. He was famous and he looked the part, that was all that was needed for people to be interested in him as a thinker. I honestly cannot recall whether he ever did provide opinions on abortion or unemployment, but rest assured that people would have been interested. I should perhaps clarify that the fact that he was Argentine did help.

Yesterday, I watched A Serious Man by the Cohen brothers. The cast is distinctly D-list, I did recognize three actors but that was about it. The thing is that I felt somewhat uneasy when the movie started and there wasn't a single name I recognize, quite a change from Burn After Reading which features George Clooney, Brad Pitt, Tilda Swinton, Frances McDormand and John Malkovich. The issue is that I cannot fault any of the performances on A Serious Man, in fact quite the opposite, the lead Michael Stuhlbarg, was excellent as a man taking each blow on the chin, while desperately looking for a way to dig himself out of the black hole his life has suddenly become but had it not been a movie by the Cohen brothers I probably would have never given the chance to see it and had I had that chance it is doubtful that I would have taken it without having read a wealth of favourable reviews. (I do watch Art-House movies, but I tend to watch only the recommended ones)

So there you go, I'm as guilty as you, I'm still to buy a book “written” by Katie Price though.