Here on Techdirt we often discuss economics in the absence of scarcity -- how the ability to make any number of digital copies for vanishingly small cost creates new business opportunities for creators. But could a kind of abundance exist in the physical world too? That's the question raised in a fascinating post on Salon about a vote that will take place in Switzerland:
The laws governing intellectual monopolies in the UK are in a state of flux at the moment. After the previous government in its dying hours rammed through the shoddy piece of work known as the Digital Economy Act, the present coalition government took a more rational approach by commissioning the Hargreaves Review into the impact of digital technologies on this area. One of its key proposals was that policy should be based on evidence, not "lobbynomics"; the fact that this even needs to be mentioned says much about the way laws have been framed until now.
A post on The Next Web reminds us that the CD is thirty years old this month. As the history there explains, work began back in the 1970s at both Philips and Sony on an optical recording medium for music, which culminated in a joint standard launched in 1982. The key attribute of the compact disc was not so much its small size -- although that was the most obvious difference from earlier vinyl -- but that fact that it stored music in a digital, rather than analog format.
One of the most important moments in the rise of a radical idea is when the fightback begins, because it signals an acceptance by the establishment that the challenger is a real threat. That moment has certainly arrived for open access, most obviously through moves like the Research Works Act, which would have cut off open access to research funded by the US government. That attack soon stalled, but the sniping at open access and its underlying model of free distribution has continued.
One of the common assumptions in the copyright debate is that artists are special, and that they have a right to make money from their works repeatedly, in ways not granted to "ordinary" workers like plumbers or train drivers, thanks to copyright's reach through time and space. Of course, when modern copyright was devised in the early 18th century, artists were special in the sense they were scarce; offering them special monopoly privileges "for the encouragement of learning" as the 1710 Statute of Anne puts it, therefore made sense.
A recurrent refrain from the copyright industries is that you can't make money from digital goods if they are freely available online. To which Techdirt has been pointing out for years that not only are there many ways of doing precisely that, but lots of people are already coining it as a result. One of the Guardian's columnists has noticed one of them - that in a world of digital abundance, you can make money by selling associated scarcities:
Last week I was invited to talk at the South Tyrol Free Software Conference which took place in northern Italy, in the city of Bolzano (disclosure: a paid gig.) As its title indicates, this was a more local, specialised conference than some of its more famous international siblings, but I was impressed just how much activity was going on. It was also interesting to see that open data was already a hot topic here - it's not just national holdings that are being opened up.
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On the first LP I ever owned was Tchaikovsky's Serenade, Ravel's Bolero and Smetana's "Bartered Bride" Overture. It was soon joined by many more vinyl discs, but the problem of storing these 12" leviathans soon became a limiting factor. Things grew rapidly worse when I discovered the wonderful if even bulkier Vox Boxes, with their irresistible promise of "complete X", where X might be Bach flute sonatas or Mozart piano variations.
Fortunately, as the floor of my flat was in serious danger of ceding under the weight of hundreds of boxes and LPs, the CD came along. For reasons that escape me, my first CD was Virgil Thomson's "The Plow that broke the Plains", but this was soon joined by hundreds and then thousands of others.
Once again storage - and organisation - became a crucial issue, and once again, I was saved by technology, this time in the shape of the MP3 file. I bought one of the earliest MP3 players, the Diamond RIO PMP300. This came with a massive 32Mbytes of RAM, allowing up to an hour of listening (albeit at lower quality).
It was an important moment not just for me, but also for the industry, as Wikipedia explains:On October 8, 1998, the American recording industry group, the Recording Industry Association of America, filed an application for a Temporary Restraining Order to prevent the sale of the Rio player in the Central District Court of California, claiming the player violated the 1992 Audio Home Recording Act.
Judge Andrea Collins issued the temporary order on October 16, but required the RIAA to post a $500,000 bond that would be used to compensate Diamond for damages incurred in the delay if Diamond eventually prevailed in court. Diamond then announced that it would temporarily delay shipment of the Rio.
On October 26, Judge Collins denied the RIAA's application. After the lawsuit ended, Diamond sold 200,000 players.
This was one of the earliest attempts by the RIAA to derail the future of music, and luckily on this occasion it lost.
Of course, once music became digital, Moore's Law ensured that things kept on scaling. Silicon storage capacities went up, and prices went down, until today I have dozens of Gbytes of MP3 files of music stored on various media.
And yet I rarely listen to them, because streaming in the shape of Spotify came along a couple of years ago. Although I understand the issues about not owning the music you listen to, I'm lucky enough to have vast amounts of the music that is most important to me available in multiple backup formats - LPs, CDs and MP3s. If Spotify disappears tomorrow - say, as a result of being destroyed by a patent troll - I can just go back to listening to these. In addition, I feel increasingly guilty about owning anything in a depleted world drowning in stuff, so streaming seems like a good idea anyway.
It's of course regrettable that Spotify isn't open source, but it has certainly taken my experience of listening to music to a new level. The ability to leave the complete works of Mozart, say, running in the background for days, or to hear the same movement of a Beethoven symphony played by 35 different orchestras has never been so easy; both change how you regard well-loved pieces because they provide new contexts that allow you to listen to them more deeply.
Moreover, Spotify gives me the unprecedented capability of listening to something - now matter how obscure (well, almost) - the moment I come across even the merest reference to it. It really is like having practically all music instantly on tap, anywhere there is an Internet connection.
As such, it's a foretaste of how things will soon be for all digital artefacts, when every text, image, sound and video ever created will be just as instantly and effortlessly available. The only thing standing between us and that amazing, mind-expanding world of digital abundance is an 18th-century law that replaced earlier censorship with a framework for the "encouragement of learning" in an age of analogue scarcity. Once anachronistic copyright has been abolished, my journey from LPs through CDs and MP3s will be complete, and the ultimate knowledge revolution can begin.
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As long-suffering readers will know, I've been warning about the growing problem of patent thickets in the field of software for some time now. Until relatively recently, I and a few others have been voices crying in the wilderness: the general consensus has been that patents are good, and more patents are better. But in the last few weeks, the first hopeful signs have appeared that at least some people are beginning to realise that software patents not only do not promote innovation, they actually throttle it.
On Open Enterprise blog.
You wouldn't expect much else from a meeting organised by WIPO, but this is pretty rich even for them:
Copyright is necessary to allow authors to live from their trade and to guarantee their independence, and exceptions should be decided by authors and publishers, according to panellists on a copyright dialogue held at the World Intellectual Property Organization this week.
Amusingly, this was a "copyright dialogue": but I bet there weren't many people from the *other* side of the equation - the readers. The readers, you see, don't really count in this - "exceptions should be decided by authors and publishers" as the above insists. The fact that copyright is supposed to be a balanced quid pro quo - a time-limited monopoly in return for works entering the public domain afterwards, and that such a balanced of necessity requires both parties to agree, seems not to have entered the heads of those authors and publishers.
The very idea that "exceptions should be decided by authors and publishers" betrays the deep-seated arrogance and contempt that both of these now have for their readers. And that's all part and parcel of the publishing industry's problems: it sees readers as the enemy, something that must be fought and vanquished in order for it to be forced to buy books on the terms of authors and publishers - forced, if necessary, by ever-more Draconian laws that criminalise willy-nilly.
What is so regrettable about this depressing vision is that at the very same conference where these extraordinarily insulting comments about readers were made, another publisher revealed the wonderful truth:For Richard Charkin, executive director of Bloomsbury Publishing, publishing is also investing in the future. Copyright is a flexible system, he said, giving an example of Bloomsbury Academic’s business model. The publishing company publishes social sciences and humanities research publications. They are available online under a Creative Commons non-commercial licence, and for sale as printed books. The publications are thus widely available, Charkin said, but surprisingly, he said that sales of books seem to be higher when they offer free downloads than if they do not.
Go that? "Surprisingly", when people can freely share books, they *buy more* - exactly as many of us have been saying for years, and in diametric opposition to the dogma of the same authors and publishers who insist that they know best, and that readers must be brought to heel like recalcitrant curs rather than treated as equals in a pleasant colloquy.
How to make money in the age of digital abundance is there for all that have eyes to see; sadly, even the most basic optical equipment seems lacking in this singularly benighted profession. Looks like they will have to learn the hard way....
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So the publishing dinosaurs have got together and produced an egg: The Berlin Declaration on the Future of the Digital Press.
Unfortunately, as you probably guessed, this is backward- rather than forward-looking. Try this, for example:It is recognition of copyright which fundamentally underpins investment in editorial content. It enables publishers to make quality works available, whilst providing a framework to secure remuneration for their investment and the sustainable delivery of creative content. Providing new exceptions in this field would therefore represent a direct threat to publishers’ economic sustainability and their ability to respond adequately to digital challenges. Digitization has not reduced but increased the need for the protection of copyright.
Do you detect a sense of desperation here? The idea that there might be the teensiest rolling back of the copyright ratchet through "new exceptions"? Because, of course, the current copyright framework is working so well online, as is the increasingly deranged enforcement legislation designed to "support" it, that we shouldn't dare tinker with it. The idea that it is precisely because copyright is dysfunctional online that publishers are finding themselves in trouble obviously never entered their minds.
The next bit is fun, too:The different possibilities to utilize content on the internet and via tablets make it very easy for third parties, like aggregators, search engines and pirate sites, to use publishing houses’ creative content for free, without authorization and remuneration of the publisher. It is thereby one of the most important tasks of copyright to draw the line between the widely permitted reference to content of third parties and the unauthorized re-use of such content, which is prohibited.
It's interesting to see the flip-side of publishers' ridiculous obsession with tablets. Alongside the hope that they will be the salvation of the industry (newsflash: they won't) there is also a fear that somehow they will make things worse (well, no, not really.) Again, this is indicative of the fact that the publishers don't really have a clue when it comes to the digital world, and over-emphasise surface details like the tablet while overlooking key trends like the arrival of digital abundance.
To be fair, there is one point in their declaration that is absolutely right:The future of the European press strongly depends on the ability of publishers to monetize their digital editions. Therefore the EU should allow Member States to extend their reduced - including the possibility of zero % - VAT rates to the digital press.
One of the things that I learned when I went along to a roundtable discussion of the UK Independent Review of "IP" and Growth was that ebooks are subject to VAT, whereas physical books aren't. That's partly - but only partly - why ebooks are more expensive than you would expect.
I think the publishing industry is spot on here: VAT rates should match those for physical books, and ideally be set at zero. As for the other points of the declaration, they certainly do declare the publishers' positions, but probably not in the way that was intended.
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Recently, I had the pleasure of finally meeting Cameron Neylon, probably the leading - and certainly most articulate - exponent of open science. Talking with him about the formal peer review process typically employed by academic journals helped crystallise something that I have been trying to articulate: why peer review should go.
A recent blog post has drawn some attention to the cost - to academics - of running the peer review process:So that's over £200million a year that academics are donating of their time to the peer review process. This isn't a large sum when set against things like the budget deficit, but it's not inconsiderable. And it's fine if one views it as generating public good - this is what researchers need to do in order to conduct proper research. But an alternative view is that academics (and ultimately taxpayers) are subsidising the academic publishing to the tune of £200 million a year. That's a lot of unpaid labour.
Indeed, an earlier estimate put the figure even higher:a new report has attempted to quantify in cash terms exactly what peer reviewers are missing out on. It puts the worldwide unpaid cost of peer review at £1.9 billion a year, and estimates that the UK is among the most altruistic of nations, racking up the equivalent in unpaid time of £165 million a year.
Whatever the figure, it is significant, which brings us on to the inevitable questions: why are researchers making this donation to publishers, and do they need to?
The thought I had listening to Neylon talk about peer review is that it is yet another case of a system that was originally founded to cope with scarcity - in this case of outlets for academic papers. Peer review was worth the cost of people's time because opportunities to publish were rare and valuable and needed husbanding carefully.
Today, of course, that's not the case. There is little danger that important papers won't see the light of day: the nearly costless publishing medium of the Internet has seen to that. Now the problem is dealing with the fruits of that publishing abundance - making such that people can find the really important and interesting results among the many out there.
But that doesn't require peer review of the kind currently employed: there are all kinds of systems that allow any scientist - or even the general public - to rate content and to vote it up towards a wider audience. It's not perfect, but by and large it works - and spreads the cost widely to the point of being negligible for individual contributors.
For me what's particularly interesting is the fact that peer review is unnecessary for the same reason that copyright and patents are unnecessary nowadays: because the Internet liberates creativity massively and provides a means for bringing that flood to a wider audience without the need for official gatekeepers to bless and control it.
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Last week I was talking at the Open Everything meeting in London, where I went through some (most) of my tropes about openness and the creation of a commons, about enclosure (of land, creativity and ideas), how today's open movements are based on the economics of abundance, not scarcity, and are actually a return to a pre-lapsarian state, rather than something inherently new.
What was particularly heartening about the occasion was meeting so many other people with similar viewpoints, albeit coming from slightly different starting positions. Indeed, one of the most positive signs that something is afoot is the broad-based nature of this growing unanimity around the world.
For example, I came across a reference to the paper "Undermining abundance (Counterproductive uses of technology and law in nature, agriculture, and the information sector)", which also ties together the enclosure of many different domains:Technology and law are increasingly used to undermine processes of abundance intrinsic to nature, agriculture and the information sector. A number of examples are reviewed here. Such counterproductive use of technology and law is traced to corporate profitseeking. The relationships between the phenomenon of abundance and the related concepts of scarcity and commons are explored. Finally, approaches are proposed that harness abundance for the human good.
This led me to the blog of the author, Roberto Verzola. He's based in the Philippines, which has provided me with interesting insights into what's happening in that part of the world in terms of openness.
Here's a taster of his original thinking, from a posting provocatively entitled "The piracy of intellectuals":We’ve seen people who come from or work for Western software firms. Well groomed, in business coat and tie, they look the antithesis of the pirate they hate so much. They come and visit this country of pirates, and perhaps make a little study how much they are losing from piracy in the Philippines.
Quite a number of them, however, come to the country to do some pirating themselves.
But they don’t pirate software, which is apparently beyond their dignity. They pirate people. They pirate those who write the software. They pirate our best systems analysts, our best engineers, our best programmers, and our best computer operators.
The advanced countries of the West routinely pirate from the Third World our best professionals and skilled workers, but begrudge us peoples of the Third World if we engaged in some piracy ourselves. They accuse the Third World of “piracy of intellectual property”, yet they themselves engage in the “piracy of intellectuals”.
In truth, there is quite a difference between pirating intellectual property and pirating intellectuals.
For example, it costs our country perhaps ten thousand dollars to train one doctor. Training a second doctor would cost another ten thousand dollars. Training ten doctors would cost a hundred thousand dollars. In short, given an ‘original’ doctor, it would cost us as much to make each ‘copy’ of the original. When the Americans pirate our doctors, they take away an irreplaceable resource, for it takes more than ten years to train a new doctor. The Philippines has approximately one doctor for every 6,700 citizens. When the U.S. pirates this doctor, it denies 6,700 Filipinos of the services of a doctor. And every year, the U.S. takes away hundreds of our doctors. How many Filipinos died because they could not get the services of a doctor on time?
What about a computer program? Whatever amount Lotus Corporation spent in developing their spreadsheet program, it costs practically nothing to make a second or third copy of the program. It would take a few seconds for them to make each copy. When we Filipinos pirate their program, we have not stolen any irreplaceable resource, nor will it take Lotus 10 years to replace the program, nor have we denied any American citizen the use of the spreadsheet program. It is still there, for Americans to use. We make a copy of their program, we don’t steal it, because we have not taken anything away. We have made our own copy, but they still have the original.
Pirating a computer program is quite different from pirating a doctor. When the U.S. pirates our doctors, it doesn’t take a copy and leave the original behind. Instead, it takes the original and leaves nothing behind.
Strongly recommended.
Nothing new here for readers of this blog, but good to see someone else saying it:the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?
I have an answer. The simplest way I can put it is thus:
When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.
Etc.
I've always assumed the Swedish Pirate Party were a bunch of anarchists who wanted to cock a snook at authority by disrupting one of its precious intellectual monopolies, and have some fun along the way.
I was wrong.
It turns out that there is some pretty deep thinking behind what they are doing, as evidence by this fascinating interview with Rick Falkvinge, founder and the leader of the party:What was remarkable was that this was the point where the enemy - forces that want to lock down culture and knowledge at the cost of total surveillance - realized they were under a serious attack, and mounted every piece of defense they could muster. For the first time, we saw everything they could bring to the battle.
And it was... nothing. Not even a fizzle. All they can say is "thief, we have our rights, we want our rights, nothing must change, we want more money, thief, thief, thief". And shove some poor artists in front of them to deliver the message. Whereas we are talking about scarcity vs. abundance, monopolies, the nature of property, 500-year historical perspectives on culture and knowledge, incentive structures, economic theory, disruptive technologies, etc. The difference in intellectual levels between the sides is astounding.
So now we know what the enemy has, and that they have absolutely nothing in terms of intellectual capital to bring to the battle. They do, however, have their bedside connections with the current establishment. That's the major threat to us at this point.
Intellectual capital? Hm....
And then he goes on to make this important point:The people who have been led to believe that file sharing can be stopped with minimal intrusion are basically smoking crack.
Early on in the debate, we dropped the economic arguments altogether and focused entirely on civil liberties and the right to privacy. This has proven to be a winning strategy, with my keynote "Copyright Regime vs. Civil Liberties" being praised as groundbreaking.
The economic arguments are strong, but debatable. There are as many reports as there are interests in copyright, and every report arrives at a new conclusion. If you just shout and throw reports over the volleyball net at the other team, it becomes a matter of credibility of the reports. When you switch to arguing civil liberties, you dropkick that entire discussion.
Obviously I need to pay more attention to these people.
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