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Impact?

Slapnose notes that the RIAA and MPAA claim P2P networks, "facilitate and promote theft and are a threat to their business, despite the fact that their sales of CDs and other music products rose 2 percent last year." This is, of course, faster than the rate at which the population is growing. But even making arguments of this sort concedes too much to the content industry (and, to be fair, this growth came after several bad years). As I've been urging, protecting the profits of the record industry is not the appropriate aim of intellectual property policy. Rather, the point of intellectual property law is to ensure that adequate incentives continue to exist for the production of new works.

Perhaps readers will write in to correct me, but I don't believe I've even heard anybody try to argue that fewer new songs are being written or recorded or that people are listening to less music than they used to. It's the availability of new music for consumption that we're supposed to be protecting here. P2P, through both authorized and unauthorized uses, obviously leads to an uptick in the number of people who listen to any given song. You would need a pretty huge decrease in the quantity of new music being recorded (and, as I say, no sign there is such a decrease at all) in order to make the case that the progress of musical arts was being seriously impeded here. P2P probably is a problem for the major record companies, both because infringement will reduce their sales potential, and also because it will make it easier for public domain and independent works to be distributed and publicized. This, however, simply isn't something IP law is supposed to prevent. The health of music-production as an endeavor is not at all the same thing as the financial status of the RIAA's membership. As I say, if there's evidence that thanks to copyright infringement kids aren't forming bands anymore, artists are quitting the business in droves to go to law school, or clubs are finding that nobody wants to go on tour anymore then that would be interesting and relevant, but I'm not familiar with any such evidence. "Rock star" isn't exactly a really crappy profession that people would be unwilling to take on if you couldn't get rich doing it.

UPDATE: See also Mark Cuban thinking along the same lines. To re-iterate my extremist line against even Cuban, however, aggregate sales aren't really all that relevant. If the music is getting made, and the music is getting listened to, well then, that's a healthy IP environment. The creation and consumption of new works is the end, sales are merely a means to that end.

March 30, 2005 | Permalink

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» More on Grokster from Slapnose
Matthew cites my post yesterday noting that record sales have actually risen in the past year, and then goes on to explain that, in his view, even this argument concedes too much to the content industry. I'm inclined to agree,... [Read More]

Tracked on Mar 31, 2005 2:42:53 AM

» Song number one is not a f--- you song. from Obsidian Wings
Matt Yglesias, explaining why record companies need to relax on this whole P2P thingy, states:As I've been urging, protecting the profits of the record industry is not the appropriate aim of intellectual property policy. Rather, the point of intellectu... [Read More]

Tracked on Mar 31, 2005 8:40:45 AM

» Song number one is not a f--- you song. from Obsidian Wings
Matt Yglesias, explaining why record companies need to relax on this whole P2P thingy, states:As I've been urging, protecting the profits of the record industry is not the appropriate aim of intellectual property policy. Rather, the point of intellectu... [Read More]

Tracked on Mar 31, 2005 9:11:59 AM

» More on Grokster from Slapnose
Matthew cites my post yesterday noting that record sales have actually risen in the past year, and then goes on to explain that, in his view, even this argument concedes too much to the content industry. I'm inclined to agree,... [Read More]

Tracked on Mar 31, 2005 1:55:30 PM

Comments

Mark Cuban has some relevent info here. He doubts the RIAA really knows what's going on.

Posted by: Anthony | Mar 30, 2005 4:13:32 PM

I think this exactly parallels the instumentalist vs. desert arguments with regards to 'earning' as well.
The concept is clear, relatively easy to understand given an intellectual environment, and on reflection quite obviously right, yet the idea is extreme, as you say, deeply unintuitive and therefore not a factor in driving good policy.
I think getting this concept to be the conventional wisdom is a key part of advancing liberalism.

Posted by: theCoach | Mar 30, 2005 4:38:27 PM

I'd agree with you that the goal of protecting overall scientific and musical innovation should be the goal of IP law. But both Article 1's grant of power and copyright law itself seem focused on exclusive copyrights for limited periods of time as the main way Congress can go about promoting such innovation. One could argue about whether the copyright power has been abused in favor of the copyright holders and has thus subverted its original purpose, but that would be a major overhaul for the Court to attempt. As such, I think the idea of the overall level of musical innovation staying steady isn't going to hold any weight in court if it means reducing the rights of exclusive copyright holders in favor some some aggregate theory.

The only way the Court's going to end up succesfully dealing with this without massive change is balancing the rights of scientific innovators with the rights of current and future copyright holders that could be infringed, same as they tried to do in Betamax. Since that seems to be what they're going for, hopefully things will turn out well enough. An adaptation of the 'substantial noninfringing uses' doctrine which is more leinient towards scientific development would work fine with me.

Posted by: Justin | Mar 30, 2005 4:39:31 PM

I've found it instructive to note just how many artists have leapt to the defense of their record labels in the face of adversity.

Posted by: Oh Snap! | Mar 30, 2005 4:41:03 PM

Remember when artists used to tour for other reasons than promoting a new album? Remember when you could buy an LP or 45 with spare lunch money? Remember when there was diversity on the radio? (And my last of questions I probably can't answer): Why doesn't the industry suck it up and adapt to the inevitable future of online music sharing. Peace.

Posted by: Ian | Mar 30, 2005 5:24:21 PM

Right on, Matt. BTW, have you had a chance to check out my book, The Anarchist in the Library? I think you would dig its arguments. They are pretty close to yours.

Posted by: Siva Vaidhyanathan | Mar 30, 2005 5:25:57 PM

To put what Matt says in VERY simple terms..

The long-term wellbeing of the culture at large trumps ALL other interests.

Posted by: Karmakin | Mar 30, 2005 5:33:15 PM

I'm not sure if I agree completely with your characterization of the goal of IP law. I'd say that the original intent was to avoid exploitation. That is, if someone is making money off of something that you did, you deserve a piece of that pie. I think this matches up fairly well with the commonsense idea of proper/improper IP uses: copying a CD for a friend-fine; copying 10,000 CDs and selling them-not fine. There are all sorts of problems in defining the terms, of course, but the basic idea I think is similar to yours--just because you deserve a piece of the pie doesn't mean that you get to decide how big the whole pie is.

Posted by: mc | Mar 30, 2005 5:34:33 PM

"The creation and consumption of new works is the end, sales are merely a means to that end."

This is absolutely right, and absolutely crucial. And this is the point on which Grokster's lawyers ought to be focusing (but aren't) and on which the Court should base its decision.

Posted by: Donald A. Coffin | Mar 30, 2005 5:36:52 PM

Granting an instrumentalist view of IP law, I'm not sure that seeing no decrease in production of music in the last few years really proves the point either way. Fact is, this is a long-term concern. Right now an artist can hope to make money in the lottery that is making money off of culture production, and because it is a lottery, reducing the number of payoffs by a few percent won't make much of difference in the short-run, we know that people screw up when calculating on small odds. But in the long-run, as the number of possible winning tickets (major record label contracts) reduces further, that may reduce cultural production.

This might be total bull, but it is important to keep the temporal considerations straight...

Posted by: Isaac | Mar 30, 2005 5:44:46 PM

Totally OT but, Matt, if you're reading, how do you decide what to post here versus on tapped. In partiuclar, I'm wondering if it's based on the topic, or on how controverisal your take is, just based on which one you've posted to more recently, or none of the above?

Posted by: washerdreyer | Mar 30, 2005 5:54:17 PM

Ian writes: "Remember when you could buy an LP or 45 with spare lunch money?"

On the pricing of recorded music:

In the summer of 1964, LPs sold at my local discount store (Shopper's fair) for $2.69. Adjusting that simply for the increase in the CPI since the summer of 1964 would suggest that an LP-equivalent (a CD?) would sell for $16.57 today. I routinely buy new releases--and older CDs for much less than that ($12.99, $13.99, or even less), so it's not clear to me that the recording industry has pumped up its prices in a way that rips off consumers.

Posted by: Donald A. Coffin | Mar 30, 2005 6:06:57 PM

Here's a devil's-advocacy argument: Because everyone who's seriously into good, non-teenpop music has embraced filesharing, there's no market for that music, and the industry has been forced to bring us Britney clones ad nauseam, apparently on the Summersesque theory that hormonally distraught teen girls are statistically less likely to figure out that filesharing nerdy stuff.

At least, that's ONE explanation for the crap I hear on the radio.

Posted by: Anderson | Mar 30, 2005 6:08:25 PM

Donald Coffin - assuming that your numbers are correct, you're still ignoring the fact that producing a CD costs a fraction of what it costs to make an LP. I think there was a class action case a couple years ago that uncovered various shenanigans whereby the music industry colluded to keep CD prices high even though production costs were lower, thus (in theory at least), boosting profits at the expense of the consumer. Does anyone know anything else about this?

Posted by: b | Mar 30, 2005 6:20:00 PM

Right on Matt. Stay strong on this one.

Every month or two, I had down to Great Lakes in my neighborhood to hear Prince Lefty and His Rambling Kings play country standards for a couple hours. They didn't write the songs, in many cases the people who made them famous didn't write them either. No money changes hands for IP -- or in fact for the music at all: there's no cover and they don't even pass a hat.

And you know what? It's a more satisfying musical experience than listening to just about anything on CD. Live music is just like that.

Would Merle Hagagrd prefer to get a royalty every time Prince Lefty sings, "I take a lot of pride in who I am"? Maybe, maybe not, I honestly don't care. I don't think "creators" have any nmoral right to exclude others from enjoying their work. I do think if whoever owns the copyright started trying to collect, a fine thing would be wrecked.

On the other hand it's a good thing that Lefty and the guys have decent day jobs that leave them with the money and spare time to produce music for free. Securing that for everybody is the whole story as far as creation of art, music, writing is concerned (movies would be a little trickier), because everybody is (or could be) a creator.

It's hardly original, but no less true, to point out that technology has practically eliminated barriers between music producers and consumers. Why should the goal of the law be to build them up again?

Posted by: lemuel pitkin | Mar 30, 2005 6:23:28 PM

Matt,

The problem with your argument--that the government should restrict individuals property rights in this particuar case in favor of abstract notions like benefit to society--is that it is really easy to take it too far. You are leaving the definition of "good for society" up to the government and we all know how much thoughful and careful the government is. They could decide that giving your house to a developer and thus improving their tax base is good for society. There are cases about this in the system right now. Strong rights adhearing to property and person are the basic foundation of our constitution. The desire for this in the founders was the result of centuries of bad experiences. I don't think the desire for a lot of college kids to download free music trumps the foundation of our society.

Maybe becasue you are young and don't own much, the value of strong property rights is not that clear to you yet, but I promise as you get older it will become more important (unless you go commie, but even then it's all about the dacha).

So my idea is that maintaining strong property rights is actually just as, if not more, important as the disemmination of music, books, and technology (This includes the property rights of big corporations. You don't want to start carving out exceptions, becasue you might be the next). Especially in this case.

This suggest to me some sort of balance between strong property rights and the public good such as we have currently have.

Posted by: cw | Mar 30, 2005 6:25:24 PM

You are leaving the definition of "good for society" up to the government

Whereas, as we all know, IP law was dictated directly by God.

Posted by: lemuel pitkin | Mar 30, 2005 6:29:40 PM

Anybody who reads this comment owes me 5 cents, I call.

Posted by: yesh | Mar 30, 2005 6:47:05 PM

mc:

I'm not sure if I agree completely with your characterization of the goal of IP law. I'd say that the original intent was to avoid exploitation

We don't need to guess the intent of the copyright laws, it states it in the Constitution:

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;

And Jefferson said of it:

He who receives an idea from me receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

Of course he was a Commie as citizen k points out as he also said:

It is agreed by those who have seriously considered the subject, that no individual has, of natural right, a separate property in an acre of land, for instance. By an universal law, indeed, whatever, whether fixed or movable, belongs to all men equally and in common, is the property for the moment of him who occupies it; but when he relinquishes the occupation, the property goes with it. Stable ownership is the gift of social law, and is given late in the progress of society

Posted by: epistemology | Mar 30, 2005 7:29:49 PM

It appears from the comments that there are alot of folks reading this that have legal backgrounds and I'm hoping you can explain this to me. I am a writer and a songwriter. When I write a song and it is placed on an album, I am compensated for that use by payment of mechanical royalty every time it is sold. Not much and I'm not wealthy by any stretch. Though I'd like to I can't survive only on this work but I'd sure like to. Maybe I'll prove good enough, maybe not. But if I write something that is placed and the album is intended to be a commercial product, when it is distributed for free via P2P I get nothing. That song is my intellectual property. Surely, some subset of the people who now enjoy the song, that they got for free, would have bought it if it had not been available for free. In that sense, aren't I being denied income that I otherwise would have gained through the commercial use of the song? I can, and have, licensed songs and waived my royalty for various charitable causes. It was my choice, as the owner of the property to do so. I guess what I'm asking, and it's not rhetorical, if intellectual property law is not the avenue through which I am compensated for the creation of that song, what is? Or, are we saying that for some reason an artistic endeavor should not be commercially exploited and it should be available for free to all? Again, I'm not trying to pick a fight, but every time I read opinions like these, where the prevailing attitude strikes me as "it should be free 'cause I want it to be" I wonder what it is I am supposed to do, or if there's a different business model out there that would work better or what? But, if anyone can answer for me what area of law exists, if not intellectual property law, to protect my right (I think it's a right) to commercially exploit my work if I so choose, I'd really appreciate it.

Posted by: rik | Mar 30, 2005 7:47:40 PM

I've been trying to follow this discussion all day, and feel like I have crossed over into some generational twilight zone. It's depressing to learn how out of touch I am with contemporary cultural norms and mores. I'm hoping that there are still a few others like me out there who are just afraid to speak up because they appear to be so outnumbered here in the twenty-something dominated blogosphere.

Apart from the legalities of the case before the Supreme Court, aren't there some among you who shares with me the moral intuition that making an unauthorized copy of some artist's work is stealing? Or have you all convinced youselves you have the God-given right to suck for free off the Great Anonymous Artistic Teat, and that you know better than the artists, their producers and their distributers what is best for them? I don't buy all this bratty, pseudo-anarchic raging against the evil "content industries". These are just opportunistic, pick-and-choose poses of radicalism pulled in to defend a selfish practice.

From where I sit, Matt speaks for a generation of consumerist parasites who have acquired the nasty habit of routine, unchecked, petty thievery, and have devised all sorts of fabulous and creative intellectual justifications - even reaching to the lofty heights of the intentions of the Framers of the Constitution - to explain why they shouldn't feel bad about the rampant stealing. But it is stealing, and you should feel bad.

The fact is that many of these artists, and the folks who help produce and distribute their works, don't want you to make unauthorized copies of their work. And it should be their call. If you do make these unauthorized copies anyway, you're a scumbag. Ok, maybe its just a tiny bit of negligible scumbaggery if you do it a few times; but you're a great big parasitical scumbag if you do it all the time.

This has less to do with the Good of Humanity and the Benefits to the Republic than it does with ordinary decency and respect for the creative efforts of artists and intellectuals. If you had a friend who took a pleasing photograph and said "please don't copy this photograph and give it away", and then you did copy it, and did give it away, wouldn't you feel just a little bit bad about it? Is it only because you don't know personally the people you're ripping off that you don't feel so bad?

I know some of you are already thinking: "Yes, but a lot of artists don't mind if I copy their stuff; some actually want me to copy it." Yes, there are various reasons why that may be true in the case of some artists and some producers.

If I create some work of art, I may decide that I want people to copy and distribute it, because I'm not seeking profit or even compensation, and all I care about is getting my ideas out there. Or I may decide that I want people to copy and distribute it, because I believe the exposure this time will help me make some real money the next time I create something. And if I do make this decision, I can post my work to a site that offers free file-sharing.

But I may not make those decisions. I may decide that I want only those people to make a copy who pay for the authorization to do so. I may have calculated that in this way I can make a certain amount of money. And it may be that that calculation is what motivated me in the first place to invest the time and sweat and grief I put into making the work to begin with. And my calculation may be correct. It may also be that to get my work out there, I made a business deal with someone to produce and distribute the work it for me. So they also get a justified say in how it is to be disseminated.

Many of you seem convinced that these artists and producers and distributers are all ignorant, that you yourselve know what's best for them, and that all this illegal activity is actually helping them. Matt says:

Perhaps readers will write in to correct me, but I don't believe I've even heard anybody try to argue that fewer new songs are being written or recorded or that people are listening to less music than they used to.

Well, I suppose it is possible that these content companies are so stupid that they have all decided to invest millions in pursuing this matter legally, when in fact they are making money from the black free trade. Yet they have whole financial departments that do analyses on just such questions and make recommendations to their legal people. So my bet is on the companies and not the blogosphere. (By the way, the fact that sales grow by 2% is no argument that an industry is not losing money from illegal file sharing. Matt is too smart to rely on such a flimsy argument.) It is a highly reasonable conjecture that if content producers are not making as much money as they otherwise would, then they are not producing as much content as they otherwise would. The budget for every department is affected by profitability.

The biggest legal question before the court, as I understand it, is whether a company is liable for illegal activity conducted with its product when it produces a product that has a legitimate use, but markets and optimizes that product to capitalize on rampant illegal use, even to the extent that it its business plan was to make the bulk of its money off the illegal uses. I don't know what the law is. I think it's an incredibly slimy practice; but perhaps it is a legally protected form of sliminess.

Finally, I have trouble believing that a decision against the defendants would somehow endanger the technology itself. C'mon. If, as you all agree, the ability to copy and carry MP3 files has value, then people will pay for it. They may not like the fact that its not as great a deal as it was when it was free, but they will pay something. Sites can charge metered, monthly or other innovative types of downloading fees, and pay the content producers for making the content available on the sight. The producers will surely make the deal in most cases, because they don't want to be on the sidelines in MP3 market, and most less well-established artists will not be able to drive a hard bargain. So you MP3 junkies will all get your music fixes at a good price - it just won't be free.

Again, whatever the law actually is, and whatever the intent of the Framers of the Constitutution, doesn't that just strike most people as the fair thing to do - pay people for what you derive from their labor?

Posted by: Dan Kervick | Mar 30, 2005 8:28:43 PM

I think the idea that I should be able to download whatever I want for free is an evoloution of consumerism. The driving force behind consumerism is the infantile desire to have what I want, now. The infant doesn't care what work goes into the creation of what the want, or what work goes into the delivery of what they want, or who has to deal with the consequences of them getting what they want. The just want what they want and they want it now. They are programed by evolution to believe that it is their birthright.

I believe that's where the whine and indignation of some of the anti-IP posts come from.



Posted by: cw | Mar 30, 2005 8:36:26 PM

Yes, it's stealing, but the RIAA is a cartel which price-fixes, which is why CD prices are artifically high. And unlike most consumers, the RIAA had the financial resources to lobby the government to just give it a slap on the wrist.

Personally, I do pay for the vast bulk of my music, using P2P mostly to find rarities and to get individual songs from otherwise sucky albums. In other words, material I wouldn't pay money for, either because it's not commercially available or because it's priced higher than I value it. How is this theft if nobody was harmed by it?

I'm pretty sure a lot of kids who don't have the cash to pay for CDs (because of the price-fixing) go through this line of thinking, which is basically a simplification of Matthew's argument that "the socially optimal amount of infringing is non-zero" for intellectual property.

Posted by: fling93 | Mar 30, 2005 8:45:21 PM

CW,

You seem to be lumping a lot of things into the term "property." It's true that real property (i.e. land) has a privileged place in our society, and is subject to all sorts of additional protections (e.g. against government taking, etc).

But intellectual property is quite a different thing, designed for a very different social problem. Our existing laws expressly recognize these differences -- after all, there's no time limit on ownership of real property, I have no "fair use" right to use your house, etc. Congress is constantly adjusting the scope of this "property" right.

This isn't to say that intellectual property doesn't deserve protection - just that, as Matt points out, we need to look carefully at the *reasons* for protecting it, rather than just relying on instincts about "property".

Posted by: Joe | Mar 30, 2005 8:48:02 PM

cw,

Intellectual property is not actual property. There is no "tragedy of the commons" for intellectual property. Everybody could share it.

rik,

You are definatly better off as a songwriter with intellectual property protection for music. There is no other business model. You would have to write songs for free or stop writing songs. MY's argument is that society as a whole would be better off without intellectual property protection for music.


Posted by: joe o | Mar 30, 2005 8:59:46 PM

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