About Piracy and the Free Market
A well-written argument about why piracy is abundant. The dude is right - the record companies should learn to adapt to the New World and leave their old school business model. In other words: they should stop being greedy.
Taken from Slashdot. (exact post link here.)
His point is simple: if you have a previously profitable business model, and it suddenly becomes unprofitable, you are shit out of luck. For example: at one point, much of the economy of Hawaii was dependent on cane sugar. This sugar was being sold on the mainland, primarily, because let's face it, there aren't a lot of people in Hawaii, relatively speaking. It wasn't long before some enterprising farmers realised that sugar cane grows remarkably well in California, and that by producing it in California, they saved big bucks on transportation and labour costs. The result? Cheaper sugar, and they undercut the Hawaiians.
Now, this sucks big time for Hawaii: nowadays, cane sugar plantations are rare, and the industry that once held up the entire Hawaiian economy disappeared essentially overnight. Sucks to be them.
What did not happen in this scenario is, the Hawaiian sugar plantation owners didn't lobby congress to pass laws making the cultivation of sugar cane illegal in California. But if you extend this analogy to the RIAA, that's exactly what they'd like to do.
Here's the situation: DRM is unworkable, for technical reasons, for the same reason that software copy-protection has been unworkable and will continue to be so. The people have already woken up to the convenience of digital media, however, and are not going to roll back the clocks and carry around a bulky discman when an iPod or similar can hold so much more music and play for so much longer. This is simple common sense. Further, we're purchasing everything else on the internet these days, and the average consumer wants to purchase music this way too.
But because DRM is unworkable, the record companies feel that distributing music on-line is inviting copyright infringement. So they resist the migration. The result? A great demand for on-line music, already encoded in MP3 format for ease of use on the iPod and similar, and a very limited RIAA-sanctioned supply.
Well, the way the free market normally works is, I see that consumers want the media, and so I start my own business to take advantage of the high demand and low supply, and make money hand over fist. That's how business works. There's nothing stopping me from starting a CD business, for example: I can purchase a bunch of CDs in bulk and resell them. But because we're dealing with digital media, this avenue isn't open to me, at least not legally. I can't sell a bunch of Britney Spears on-line in MP3 format, because those tracks don't "belong" to me in the sense that I don't have copyright.
So the result is, illegal or questionably legal sites like allofmp3.com do it anyway, and make money hand over fist. People are willing to pay for music if the price is right; 99 cents for an AAC track with Fairplay that will only play on one particular kind of portable music player and will suddenly cease to be functional after your operating system is upgraded or re-installed 5 times, on the other hand, is unsurprisingly much less popular.
The sick thing is, the RIAA could absolutely afford to match allofmp3.com's services and prices and be just as profitable as they are -- more so, in fact, because the fact that they are legally sanctioned and don't require transactions in rubles would make the vast majority of consumers far more willing to buy, and they have the infrastructure required do the sales on a much larger, international scale.
But they won't, because they're married to their extremely high margins. It's amazing, really. They make a ton and a half of money, and the prospect they face is making less money, not no money, and so their response is luddite lobbying of legislatures around the world to somehow make their outdated business model sustainable. But this is a stopgap measure: there are songs and albums that people want to buy in CD form, and there are catchy singles and tunes that people would rather get as an MP3. Saying "no you can't" to the iPod generation isn't going to work.
All that legislation does is makes most people criminals. Any kind of legislation that makes a substantial percentage of the population into criminals is a losing proposition in a democracy.
They don't have a right to make money. If they can't figure out how to make money in an environment where people can and do make unlimited copies of digital media and share them with their friends, they're going to go under: that's how the free market works. That's why it's so flexible: it adopts to changing times dynamically, even if individual people would rather not have to adapt.
The writing is on the wall. No amount of whining about how copyright infringment or theft or whatever you want to call it is wrong is going to stop people from doing it. That's a fact. So it's either figure out how to make money in the new world, or don't make money. It's up to them. I personally couldn't care less either way.
Taken from Slashdot. (exact post link here.)
His point is simple: if you have a previously profitable business model, and it suddenly becomes unprofitable, you are shit out of luck. For example: at one point, much of the economy of Hawaii was dependent on cane sugar. This sugar was being sold on the mainland, primarily, because let's face it, there aren't a lot of people in Hawaii, relatively speaking. It wasn't long before some enterprising farmers realised that sugar cane grows remarkably well in California, and that by producing it in California, they saved big bucks on transportation and labour costs. The result? Cheaper sugar, and they undercut the Hawaiians.
Now, this sucks big time for Hawaii: nowadays, cane sugar plantations are rare, and the industry that once held up the entire Hawaiian economy disappeared essentially overnight. Sucks to be them.
What did not happen in this scenario is, the Hawaiian sugar plantation owners didn't lobby congress to pass laws making the cultivation of sugar cane illegal in California. But if you extend this analogy to the RIAA, that's exactly what they'd like to do.
Here's the situation: DRM is unworkable, for technical reasons, for the same reason that software copy-protection has been unworkable and will continue to be so. The people have already woken up to the convenience of digital media, however, and are not going to roll back the clocks and carry around a bulky discman when an iPod or similar can hold so much more music and play for so much longer. This is simple common sense. Further, we're purchasing everything else on the internet these days, and the average consumer wants to purchase music this way too.
But because DRM is unworkable, the record companies feel that distributing music on-line is inviting copyright infringement. So they resist the migration. The result? A great demand for on-line music, already encoded in MP3 format for ease of use on the iPod and similar, and a very limited RIAA-sanctioned supply.
Well, the way the free market normally works is, I see that consumers want the media, and so I start my own business to take advantage of the high demand and low supply, and make money hand over fist. That's how business works. There's nothing stopping me from starting a CD business, for example: I can purchase a bunch of CDs in bulk and resell them. But because we're dealing with digital media, this avenue isn't open to me, at least not legally. I can't sell a bunch of Britney Spears on-line in MP3 format, because those tracks don't "belong" to me in the sense that I don't have copyright.
So the result is, illegal or questionably legal sites like allofmp3.com do it anyway, and make money hand over fist. People are willing to pay for music if the price is right; 99 cents for an AAC track with Fairplay that will only play on one particular kind of portable music player and will suddenly cease to be functional after your operating system is upgraded or re-installed 5 times, on the other hand, is unsurprisingly much less popular.
The sick thing is, the RIAA could absolutely afford to match allofmp3.com's services and prices and be just as profitable as they are -- more so, in fact, because the fact that they are legally sanctioned and don't require transactions in rubles would make the vast majority of consumers far more willing to buy, and they have the infrastructure required do the sales on a much larger, international scale.
But they won't, because they're married to their extremely high margins. It's amazing, really. They make a ton and a half of money, and the prospect they face is making less money, not no money, and so their response is luddite lobbying of legislatures around the world to somehow make their outdated business model sustainable. But this is a stopgap measure: there are songs and albums that people want to buy in CD form, and there are catchy singles and tunes that people would rather get as an MP3. Saying "no you can't" to the iPod generation isn't going to work.
All that legislation does is makes most people criminals. Any kind of legislation that makes a substantial percentage of the population into criminals is a losing proposition in a democracy.
They don't have a right to make money. If they can't figure out how to make money in an environment where people can and do make unlimited copies of digital media and share them with their friends, they're going to go under: that's how the free market works. That's why it's so flexible: it adopts to changing times dynamically, even if individual people would rather not have to adapt.
The writing is on the wall. No amount of whining about how copyright infringment or theft or whatever you want to call it is wrong is going to stop people from doing it. That's a fact. So it's either figure out how to make money in the new world, or don't make money. It's up to them. I personally couldn't care less either way.