Why Are Hackers Becoming So Angry?

You may have noticed a bit of a trend recently. Groups of hackers are getting hold of stuff that has hitherto been kept locked up, and making it freely available online, much to the annoyance and embarrassment of those involved.

Well-known examples include Wikileaks, Anonymous and LulzSec, but we now have a new name to add to the list. Step forward (the possibly pseudonymous) Greg Maxwell, who has been provoked by the Aaron Swartz saga, which I wrote about earlier this week, to release some files of his own:

On Open Enterprise blog.

Ethics of Intellectual Monopolies: the Video

I was pleased to discover last night that the video of my talk at FSCONS last November is now available:

Glyn Moody - Keynote: Ethics of Intellectual Monopolies from FSCONS on Vimeo.

Real masochists may wish to sing along using my presentation slides:

Glyn moody: ethics of intellectual monopolies - fscons 2010

View more presentations from glynmoody

Which just goes to show that you can have too much of a good thing...

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An (Analogue) Artist's Reply to Just Criticism

There's a new meme in town these days: “rights of the artists”. The copyright industries have worked out that cries for more copyright and more money don't go down too well when they come from fat-cat monopolists sitting in their plush offices, and so have now redefined their fight in terms of struggling artists (who rarely get to see much benefit from constantly extended copyright).

Here's a nice example courtesy of the Copyright Alliance – an organisation that very much pushes that line:

Songwriter, Jason Robert Brown, recently posted on his blog a story about his experience dealing with copyright infringement. Knowing for a long time that many websites exist for the sole purpose of “trading” sheet music, Jason decided to log on himself and politely ask many of the users to stop “trading” his work. While many quickly wrote back apologizing and then removing his work, one girl in particular gave Jason a hard time.

First of all, I must commend Mr Brown for the way he has gone about addressing this issue. As he explains on his blog, this is the message he sent to those who were offering sheet music of his compositions on a site:

Hey there! Can I get you to stop trading my stuff? It's totally not cool with me. Write me if you have any questions, I'm happy to talk to you about this. jason@jasonrobertbrown.com

Thanks,
J.

Now, that seems to me an eminently calm and polite request. Given that he obviously feels strongly about this matter, Mr Brown deserves kudos for that. As he explains:

The broad majority of people I wrote to actually wrote back fairly quickly, apologized sincerely, and then marked their music "Not for trade."

However, he adds:

there were some people who fought back. And I'm now going to reproduce, entirely unexpurgated, the exchange I had with one of them.

Her email comes in to my computer as "Brenna," though as you'll see, she hates being called Brenna; her name is Eleanor. I don't know anything about her other than that, and the fact that she had an account on this website and was using it to trade my music. And I know she is a teenager somewhere in the United States, but I figured that out from context, not from anything she wrote.

After some initial distrust, the conversation starts to get interesting, and it turns out that Eleonor, although just a teenager, has a pretty good grasp of how digital abundance can help artists make money:

Let's say Person A has never heard of "The Great Jason Robert Brown." Let's name Person A "Bill." Let's say I find the sheet music to "Stars and the Moon" online and, since I was able to find that music, I was able to perform that song for a talent show. I slate saying "Hi, I'm Eleanor and I will be performing 'Stars and the Moon' from Songs for a New World by Jason Robert Brown." Bill, having never heard of this composer, doesn't know the song or the show. He listens and decides that he really likes the song. Bill goes home that night and downloads the entire Songs for a New World album off iTunes. He also tells his friend Sally about it and they decide to go and see the show together the next time it comes around. Now, if I hadn't been able to get the sheet music for free, I would have probably done a different song. But, since I was able to get it, how much more money was made? This isn't just a fluke thing. It happens. I've heard songs at talent shows or in theatre final exams and decided to see the show because of the one song. And who knows how they got the music? It may have been the same for them and if they hadn't been able to get it free, they would have done something else.

Which is, or course, absolutely spot on.

Mr Brown tries to explain why he disagrees using three stories. The first is about lending a screwdriver to a friend, who then refuses to give it back:

He insists that he has the right to take my screwdriver, build his house, then keep that screwdriver forever so he can build other people's houses with it. This seems unfair to me.

And he's right of course: it *is* unfair, because he has lost his screwdriver, which is an analogue, and therefore rivalrous, object. His sheet music, by contrast, in its digital form, is non-rivalrous: I can have a copy without taking his copy. Yes, there's the issue of whether he loses out, but as Eleonor pointed out, sharing sheet music is a good way to drive sales – it's marketing.

The second story concerns lending another friend a first edition copy of a book by Thornton Wilder; once again, the friend refuses to give it back:

Two months go by; there's a big hole on my bookshelf where "The Bridge of San Luis Rey" is supposed to go. I call my friend, ask him for my book back. He comes over and says, "I love this book, yo. Make me a copy!"

Again, we have the analogue element: this is a rivalrous object, and when the friend has it, poor Mr Brown doesn't have it. But there's another idea here: making copies:

the publishing company won't be able to survive if people just make copies of the book, I say, and the Thornton Wilder estate certainly deserves its share of the income it earns when people buy the book.

Here, the important thing to note is that people *can't* “just make copies of the book”. Yes, they can photocopy it, but that's certainly not the same as a first edition, which is not only rare, but comes with a very particular history. Even if you photocopied the text in order to get to know it, it wouldn't detract from the value of the first edition, which is a rare, rivalrous analogue object. And the Thornton Wilder estate has *already* been paid for the first edition, so there's no reason why they should expect to be paid again if a photocopy is made. And once more, sharing photocopies is likely to drive *more* sales of new editions – which will produce income for the estate.

The third story is even more revealing:

I bought a fantastic new CD by my friend Michael Lowenstern. I then ripped that CD on to my hard drive so I can listen to it on my iPod in my car. Well, that's not FAIR, right? I should have to buy two copies?

No. There is in fact a part of the copyright law that allows exactly this; it's called the doctrine of fair use. If you've purchased or otherwise legally obtained a piece of copyrighted material and you want to make a copy of it for your own use, that's perfectly legal and allowed.

And Mr Brown is absolutely correct – in the *US*. But here in the UK, I have no such right. So what seems self-evidently right to Mr Brown in the US, is in fact wrong in the UK. The reason for that is absolutely central to the whole argument here: the balance between the rights of the creators and the rights of the users is actually arbitrary: different jurisdictions place it at different points, as Mr Brown's example shows.

In fact, Eleonor touched on this in another amazingly perceptive comment:

I assume that because something that good comes from something so insignificantly negative, it's therefore mitigated.

The “something good” that she's talking about includes things like this:

Would it be wrong for me to make a copy of some sheet music and give it to a close friend of mine for an audition? Of course not.

What she is saying is that in weighing up the creator's rights and the user's rights, things have changed in the transition from analogue to digital. Making a copy of a digital object is a minimal infraction of the creator's rights – because nothing is stolen, just created – but brings huge collective benefits for users. And so we need to recalibrate the balance that lies at the heart of copyright to reflect that fact.

As Mr Brown's examples consistently show, he is still thinking along the old, analogue lines with rivalrous goods that can't be shared. We are entering an exciting new digital world where objects are non-rivalrous, and can be copied infinitely. Not surprisingly, the benefits to society that accrue as a result easily outweigh any nominal loss on the creator's part. That's why we need to ignore these calls to our conscience to think about the poor creator – even one as pleasant and sympathetic as Mr Brown – because they omit the other side of the equation: the other six billion people who form the rest of the world.

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Are Trade Secrets and Trademarks the Future?

Last week I wrote a piece about analogue copying. Specifically, it centred on the 3D scanning and copying of an Aston Martin – because that was how somebody framed the question to me. This provoked plenty of thoughtful comment, which I encouraged people to post over on my other blog, since a slightly longer format was needed than this blog could accommodate. However, because the original piece was posted here, I've decided to reply to them here (sorry if this bloggy to-ing and fro-ing causes digital travel sickness.)

On Open Enterprise blog.

Spot(ify) the Trend

One of the reasons that digital music will be free - whether the recording companies want it or not - is basic economics: the marginal cost is practically zero, which means that the price will tend to that point, too. And now we have this:

Spotify is slashing the cost of its advert-free music streaming in the UK and Europe, in a bid to win more paying customers besides just mobile users. It comes in two new tariffs Spotify’s introducing…

—Spotify Unlimited: £4.99pm/ for no-ads music, but no mobile access, no offline or MP3 play and no higher-bitrate quality.

—Spotify Open: Free, with ads, no invite required, but no mobile, no offline or MP3 play, no higher-quality and limited to 20 hours a month.

What's interesting here is that Spotify has already been accused of not paying artists much for each play: this new pricing scheme is likely to mean their fees won't be going up anytime soon. The sooner artists use free digital music to enable them to make money from analogue scarcity, the better.

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Diaspora: The Future of Free Software Funding?

A couple of weeks ago I wrote about Diaspora, a free software project to create a distributed version of Facebook that gives control back to users. Since then, of course, Facebook-bashing and Diaspora-boosting have become somewhat trendy. Indeed, Diaspora has now soared past its initial $10,000 fund-raising target: at the time of writing, it has raised over $170,000, with 15 days to go. That's amazing, but what's more interesting is the way in which Diaspora has done it.

On Open Enterprise blog.

Should We Allow Copies of Analogue Objects?

I write a lot about copyright, and the right to share stuff. In particular, I think that for digital artefacts – text, music, video etc. - free software has shown us that there is no contradiction between allowing these to be copied freely and creating profitable businesses that are powered by that abundance. What has to change, though, is the nature of the business models that underlie them.

The parallel between digital content and software is obvious enough, which makes it relatively easy to see how media companies might function against a background of unrestricted sharing. But we are fast approaching the point where it is possible to make copies of *analogue* objects, using 3D printers like the open source RepRap system. This raises some interesting questions about what might be permitted in that situation if businesses are still to thrive.

On Open Enterprise blog.

When We Can Copy *Analogue* Artefacts...

The recent battle over the Digital Economy Bill has focussed renewed attention on the area of copying digital artefacts – music and films, for example. It's a subject I've started writing and speaking about more and more; for example, here are some thoughts on why free software's success is crucially important in this area.

But I have confession to make: that article is a bit of a cop-out. I didn't address the even bigger issue of what happens when we can copy *analogue* artefacts. Yup, you read that aright: the time is fast approaching when we will be able to download a chair or a bicycle and just print it out. Clearly, this will make the idea of *analogue* scarcity rather more complex (although energy concerns will always place a lower bound on the cost of making such copies).

People have only just begun thinking about the implications of this shift – not least because it's so mind-boggling, and will make the current brouhaha over digital copying look like the proverbial vicar's tea party. But the first works grappling with this have started emerging; here's one of them:

Throughout recorded history most people who have wanted a household article have bought or bartered it from someone else – in past times an artisan or trader, more recently a seller of mass-produced products. With few exceptions (such as some clothing) it is rare that any of us make such articles for ourselves these days. That may soon change. Thirty years ago only dedicated enthusiasts would print their own photographs or edit and reproduce their own newsletters. The advent of the home computer, and in particular of low-cost high-quality printers, has now made such things simple and commonplace. Recent developments in producing affordable and hobbyist-friendly printers that can reproduce three-dimensional rather than just flat objects may mean that printing a toast-rack or a comb becomes as easy as printing a birthday card.

Any lawyer familiar with copyright and trade mark law can see, however, that printing one’s own birthday cards could, depending on the source and nature of the images used, infringe a number of intellectual property (IP) rights. Tempting as it may be to copy and use a picture of a well-known cartoon character, the resulting cards would very likely be an infringement of the copyright and perhaps trade marks owned by the relevant rights holder. But what if someone uses a printer capable of producing a mobile phone cover bearing such an image? Or reproducing a distinctively-styled piece of kitchenware? What about printing out a spare wing-mirror mount for your car? Do these uses infringe IP rights?

In the first part of this paper, we review the history of 3D printing and describe recent developments, including a project initiated by one of the authors to bring such printers into the home. We then examine the IP implications of personal 3D printing with particular reference to the bundle of rights that would typically be associated with a product that might be copied.

It finishes with the following interesting observations:

rights holders are likely to be concerned if personal 3D printers become widespread and effective enough to impinge on commercial exploitation of their IP rights. Indications as to how they might react can be seen from the recent history of music copyright infringement via the Internet. Both technical and legal responses have been tried, including the use of Digital Rights Management (DRM) technology and proposals to strengthen legislative measures. Will these be applied to restrict low-cost 3D printing?

Technical measures would quickly founder on the problem that, unlike music file-sharing, personal 3D printing does not produce an exact copy that can be digitally signed or protected with DRM. It is the sharing of (as seen, legitimately) reverse-engineered designs that is the issue, not original design documents. Although scanners and printers have incorporated anti-forgery measures to detect attempts to duplicate banknotes, such techniques are very specifically targeted at one well-defined item.1 Whist commercially-produced low-cost 3D printers might be configured to only use authorised DRM-protected 3DPDFs digitally signed by the rights holder, such measures would seriously constrain their usefulness and make them unattractive compared to open-source 3D printers.

It is worth noting, however, that this same point indicates that it may be some time before the level of detail and accuracy attainable by personal 3D printers becomes sufficient to seriously impinge upon the market for quality products, as distinct from utilitarian goods or spare parts (the reproduction of which, as has been noted, is in any case less likely to infringe IP rights.) Unlike digital audio and video copying, which produces perfect copies, copying of articles via 3D printing will be readily distinguishable from the original.

It concludes:

The most optimistic evangelist of low-cost 3D printing would probably admit that the household domestic 3D printer is years, if not decades, from widespread use. Its impact will be gradual, as unlike file-shared MP3s it will not immediately provide for the reproduction of faithful copies. Rather, as its ease-of-use, fidelity and range of materials increases, so will its attractiveness and range of applications. This should, at least, allow for a more measured consideration of the legal issues that will arise from such use. In the longer term, personal 3D printers may conceivably lead to radical changes in the nature of the manufacturing economy; the IP implications of such further developments have so far been imagined only in science fiction.

But make no mistake: it's coming....

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Why Making Money from Free Software Matters

Free software began as a political movement: its central aim was – and remains – the propagation of freedom. Later, it became a development methodology too, largely at the hands of Linus, whose geographical isolation in Finland forced him to develop ways of using the Internet to coordinate a new kind of massive, but decentralised, global collaboration. Later still, free software also became a way of making serious money – something that Stallman has repeatedly said he is quite happy with, contrary to much FUD claiming otherwise.

On The H Open.

ACTA's Acts of Stupidity

Alongside the UK's Tom Watson, New Zealand's Clare Curran is shaping up as one of the leading net-savvy politicians in the world. Here's a typically clueful post about ACTA and her country's role in the negotiations, concluding:

Why are law-makers heading down this route? It flies in the face of reality. What lies behind the Digital Economy Bill and ACTA?

The best thing the NZ Govt could do is to release its negotiating position to its citizens. Let’s all be in this discussion. Transparency is by far the best policy.

Indeed. But also worth noting is this wonderful point made by Colin Jackson in the comments to that post (pointed out by Curran herself):

What a pity international governments don’t seem to be able to make an agreement to ration finite resources like tuna, atmospheric carbon or fossil fuels, but instead devote their time to making an international agreement enforcing controls over something that costs no resources to copy.

Beautifully put.

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Writing (Yet Again) to my MP

I must be a glutton for punishment: I've written yet another letter to my MP about the Digital Economy Bill (not that he bothered replying to the last one...):

I wrote to you a little while back in connection with the Digital Economy Bill. I don't intend to rehearse all the arguments I made there; I'd just like to point out that this is an incredibly important bill that will affect the future of this country greatly. As such, surely it is important to get it right?

If, as may be the case, time is simply too short to debate it properly, then it should be dropped now and picked up after the General Election. If the bill is not scrutinised fully, there is a strong possibility of a seriously-flawed piece of legislation reaching the statute books with all kinds of unforeseen and highly detrimental effects for the country, both in economic and social terms.

I would therefore urge you to press ministers for a full debate on the Bill, perhaps by signing this Early Day Motion (EDM 1223):

“That this House believes that the Digital Economy Bill [Lords] is too important to be taken further in the last days of a dying Parliament; and considers that a bill with so many repercussions for consumers, civil liberties, freedom of information and access to the internet should be debated and properly scrutinised at length and in detail, with a full opportunity for public discussion and representation in a new Parliament after the general election and not rushed through in the few days that remain in this Parliament.”

At a time when the public's confidence in politicians is at an all-time low, surely the worst thing that could be done is rushing through legislation that has been criticised by every kind of expert, including those in the realms of technology, law, consumer affairs and human rights to name but a few.

File-sharing and the War on the Internet

Yesterday I attended the Counter Conference:

The COUNTER Project (www.counter2010.org), funded under Framework 7 of the EU SSHRC Programme, is a two year multidisciplinary project exploring the economic, legal, consumer and cultural dynamics of counterfeiting, piracy and filesharing. It aims to generate new knowledge which will contribute towards the development of evidence-based policy making at the European, national and international level. The project emphasises that effectively addressing this complex area requires a variety of strategic multistakeholder actions which recognise the importance of understanding and engaging with the psychological, social and cultural dynamics of consumer behaviour.

On Open Enterprise blog.

Spotify: Make Money with Analogue Scarcity

This isn't another post about Spotify: it's a perceptive comment made by the company's CEO during an interview:

Q: We’ve heard services like Spotify people say “oh no we’re not going to buy music any more”. The idea of geting people to play a monthly fee, that seems promising. Why would someone buy something?

A: I think we’re going that route. But we find that music I really love, I tend to want to buy it. Not necessarily a plastic disk, but a special edition for an artist I really like, I’m more than happy to pay $100 for a box set with a t-shirt in it, liner notes. Another person may be willing to pay for a live edition with extended tracks. Or pay for a live concert experience. The reality of the music industry today is that there isn’t one biz model. It’s about figuring out how to use downloads, streaming, promotion, ticketing, all these things. I don’t think streaming music is stream.. with Spotify people label us ‘free’ music. But people pay, either with time (adverts, which are targeting), or actually paying for the service.

Of course, this is exactly what many of us have been saying for a while, and it's good that someone behind one of the more interesting new offerings seems to get this.

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Hollywood's Post-theatrical Problem, Isn't

There's a great piece in the Washington Post with the headline "The MPAA says the movie business is great. Unless it's lousy." This rightly points out that there is something funny going on in the film industry's view of itself.

On the one hand:

global box office receipts reached an all time high of $29.9 billion, an increase of 7.6% over 2008 and almost 30% from 2005. The U.S./Canada market reached $10.6 billion, an increase of more than 10%, and International receipts increased 6.3% to $19.3 billion in 2009 .... Ticket sales in the U.S. and Canada rose more than 5.5% from 2008, the first admissions increase in two years. Per capita ticket purchases in the U.S. and Canada also increased 4.6% to 4.3 tickets per person, the first significant increase since 2002.

On the other:

you wouldn't know that the movie business was doing so well from other MPAA announcements. Take, for instance, the December press release (PDF) in which MPAA chairman Dan Glickman suggested that unauthorized copies of movies were running the industry into the ground:

"Yet our industry faces the relentless challenge of the theft of its creative content, a challenge extracting an increasingly unbearable cost."

The writer then has the following key explanation:

Asked to clarify, MPAA spokesman Howard Gantman said the industry suffers the greatest damage from fraudulent copies (he said "piracy," but I disagree with that usage) in the post-theatrical markets -- video-on-demand, downloads, DVD and Blu-ray.

I love that "post-theatrical markets" phrase, but what I like even more is this amazingly clear illustration of what is happening in the film industry.

That is, the analogue side - ticket sales in the cinemas - is soaring, while the digital part - those "post-theatrical markets" - are on the way down. And that's absolutely inevitable, of course, because the scarcity is all on the analogue side, while the digital artefacts - downloads, DVDs and Blu-ray - have close to zero marginal cost (not so true for DVDs and Blu-ray, but close enough), so you'd expect their prices and profits to diminish.

In other words, the industry's own figures are a perfect confirmation that it needs to concentrate on the analogue side, and to regard the digital side as an incredibly efficient way to boost it. But somehow I don't think that's the message it's going to be taking home in the near future, more's the pity. (Via @rlancefield.)

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Making Money by Giving Stuff Away

Open source software is obviously extremely interesting to companies from a utilitarian viewpoint: it means they can reduce costs and – more significantly – decrease their dependence on single suppliers. But there's another reason why businesses should be following the evolution of this field: it offers important lessons about how the economics of a certain class of products is changing.

On Open Enterprise blog.

The Internet's Infinite Subversion

Another nicely clueful piece in the Guardian:

The emancipatory potential of the free dissemination of intellectual property through infinite replication is overwhelming. Unlike private property that is subject to scarcity, supply and demand laws and other rigid determinations, immaterial property poses an explosive threat to our deeply rooted notions of proprietorship.

It is not only because there can be potentially infinite owners of property that the internet redefines our notion of it. It is also that people who participate in the exchange of immaterial works do not treat them as property. When they exchange music, books or movies, they are not merely transferring ownership from themselves to others; they simply do not recognise themselves as owners in the first place.

Dangerous place, this Internet...no wonder they are trying to lock it down.

Why the “Copycats?” Report has a Copycat Problem

Along with death and taxes, one of the other certainties in life is the constant flow of reports from the media industries claiming that copyright infringement is causing them to lose billions of pounds of revenue each year, and that they will inevitably go to the wall if even harsher legal sanctions against infringement are not brought in (although, strangely, they have been saying this for about 10 years now, and they seem not to have gone bust yet....)

Of course, you might expect industries to paint the situation as bleak as possible – that's why they spend large chunks of their considerable revenues on expensive PR companies and lobbyists to “sex” things up a bit. But there are other kinds of reports, typically sponsored by national government departments, that claim to provide more objective information about what is happening in this field.

Sadly, those expectations of objectivity are not always fulfilled. The most blatant example occurred just this week, when some fine digging by Michael Geist showed that a report from The Conference Board of Canada, which purports to be an independent research institute, not only copied text verbatim from the International Intellectual Property Alliance (the primary film, music, and software lobby in the U.S.), but also used figures from an old Canadian Recording Industry Association press release to justify dramatic statements like the following:

As a result of lax regulation and enforcement, internet piracy appears to be on the increase in Canada. The estimated number of illicit downloads (1.3 billion) is 65 times higher than the number legal downloads (20 million), mirroring the Organisation for Economic Cooperation and Development’s conclusion that Canada has the highest per capita incidence of unauthorized file-swapping in the world.

As Geist points out:

While the release succeeded in generating attention, the report does not come close to supporting these claims. The headline-grabbing claim of 1.3 billion unauthorized downloads relies on a January 2008 Canadian Recording Industry Association press release. That release cites a 2006 Pollara survey as the basis for the statement. In other words, the Conference Board relies on a survey of 1200 people conducted more than three years ago to extrapolate to a claim of 1.3 billion unauthorized downloads (the survey itself actually ran counter to many of CRIA's claims).

After stupidly trying to defend this indefensible position, The Conference Board of Canada has now backed down, admitted that the report plagiarised material, and withdrawn it, along with two others.

Against that background, the appearance of the report “Copycats? Digital consumers in the online age”, produced by University College London's CIBER for the UK governmnent's Strategic Advisory Board for Intellectual Property Policy (what a name) takes on an added significance. Among other questions, one issue is to what extent the report manages to look objectively at the facts, rather than blithely accepting the highly-partial views of the media industry itself.

The 85-page report is detailed, and as you might expect from an academic outfit, is fully referenced, which is excellent. I strongly recommend that anyone interested in this important field read the whole thing. But for those of you slightly more pressed for time, the executive summary gives a good flavour of its approach:

The backdrop to our research on online consumer behaviour – and the impacts and implications this has on legal practice, the content industries, and governmental policy – is one of vast economic losses brought about by widespread unauthorised downloading and a huge confusion about (or denial of) the definition of what is and is not legal and copyright protected. Industry reports suggest that at least seven million British citizens have downloaded unauthorised content, many on a regular basis, and many also without ethical consideration. Estimates as to the overall lost revenues if we include all creative industries whose products can be copied digitally, or counterfeited, reach £10 billion (IP Rights, 2004), conservatively, as our figure is from 2004, and a loss of 4,000 jobs. This is in the context of the “Creative Industries” providing around 8% of British GDP. And the situation is not solely a British problem, but a global one. Downloading culture (Altschuller, 2009: unpaginated) “has forced society into a muddle of uncertainty with how to incorporate it into existing social and legal structures.” Altschuller adds that: “...music downloading has become part and parcel of the social fabric of our society despite its illegal status,” (emphasis added).

Just to make it clear - this is not simply an issue of music and film downloads alone. Software losses due to what is often described as “piracy” were, for example, $48 billion worldwide in 2007 (BSA, 2007); and in the UK the figure was $1,837,000 or approximately £1.25 billion. An exploratory CIBER investigation found vast quantities of films, music, software, e-books, games and television content available to download and share without cost. On one peer-to-peer network we found that at midday on a weekday there were 1.3 million users, sharing content. If each “peer” from this network (not the largest) downloaded one file per day the resulting number of downloads (music, film, television, e-books, software and games were all available) would be 473 million items per year. If the figure for each individual is closer to five or more items per day, the lowest estimate of downloaded material (remembering that the entire season of the Fox television series “24”, or the “complete” works of the rock group Led Zeppelin can be one file) is just under 2.4 billion files. And if the average value of each file is £5 – that is a rough low average of the price of a DVD or CD, rather than the higher prices of software or E-books – we have the online members of one file sharing network consuming approximately £12 billion in content annually – for free. These figures are staggering.

Staggering indeed – and complete piffle.

Sadly, the basic problem with the whole report is made clear in the first line of the above extract: “The backdrop to our research on online consumer behaviour – and the impacts and implications this has on legal practice, the content industries, and governmental policy – is one of vast economic losses brought about by widespread unauthorised downloading”. That is, it starts from an *assumption* that unauthorised downloading is causing economic damage, rather than examining whether that is the case: clearly, this is going to skew all the results of the research, because it is seen through a particular optic – that of the media industries.

But wait, you may say: maybe that is simply a statement of what the report found out during its objective research, which is a fair point. So let's just look at the figures cited above, and their source.

Estimates as to the overall lost revenues if we include all creative industries whose products can be copied digitally, or counterfeited, reach £10 billion (IP Rights, 2004), conservatively, as our figure is from 2004, and a loss of 4,000 jobs.

A quick check in the references gives the following:

IP Rights (2004) UK Tackles counterfeiting and piracy – launch of national IP Crime Strategy, Alert, Press Release, August 2004, issue 156. Available online at: www.iprights.com/publications/Alert_156.pdf (accessed 02.03.09)

So that £10 billion figure actually comes from a press release from the UK government itself – looking good so far. But why don't we check up on what exactly that reference says? Here's the relevant paragraph:

there has been a growing recognition of the economic impact of IP crime. Rights owners have estimated that last year alone counterfeiting and piracy cost the UK economy £10 billion and 4,000 jobs.

There we have it: that cast-iron, irreproachable, UK government-guaranteed £10 billion figure is merely – you guessed it – an estimate from the media industries themselves. In other words, there is no fundamental difference here from the situation with the Canadian report, except – importantly – there is no attempt to hide the connection (provided you are prepared to follow the links). But the figure is essentially worthless: it was produced by the media industries to justify their perennial wails of anguish.

That's one pretty obvious way in which the whole context for the report is biased by the media industries' agenda. But the problems go deeper, and operate in a more subtle way. Consider, for example, this passage from the paragraphs above:

On one peer-to-peer network we found that at midday on a weekday there were 1.3 million users, sharing content. If each “peer” from this network (not the largest) downloaded one file per day the resulting number of downloads (music, film, television, e-books, software and games were all available) would be 473 million items per year. If the figure for each individual is closer to five or more items per day, the lowest estimate of downloaded material (remembering that the entire season of the Fox television series “24”, or the “complete” works of the rock group Led Zeppelin can be one file) is just under 2.4 billion files. And if the average value of each file is £5 – that is a rough low average of the price of a DVD or CD, rather than the higher prices of software or E-books – we have the online members of one file sharing network consuming approximately £12 billion in content annually – for free.

Again, this is riddled with unexamined assumptions that are taken straight from the media industries framing of the situation. For example:

“if the average value of each file is £5 – that is a rough low average of the price of a DVD or CD, rather than the higher prices of software or E-books”

This assumes many things. For example, that all these downloaded files represent real losses for the media industries – that people would have bought this stuff had it not been available online. This is a huge jump to make: it's just as likely that people are trying out stuff they would never have looked at if they needed to pay for it. In this case, it's closer to marketing materials, providing powerful free advertising. As other research indicates, people who download unauthorised material from the Internet are *more* likely to buy stuff afterwards.

Then there is the pricing - “average value of each file is £5”. This simply accepts that the pricing the media industries are trying to impose on online customers is reasonable. And yet economics teaches us that the price of goods tends to fall to their marginal cost – zero in this case. The media industries are basically trying to defy the laws of economic gravity: that prices of digital goods will inevitably fall to earth (reference is made to this later in the report, but the authors don't seem to have understood the implications).

It's the same with software: what illegal downloading has shown is that the prices Microsoft and other proprietary companies have tried to obtain for software are, in fact, unjustifiable, and essentially unenforceable in an online world. Paying several hundred pounds for something that costs effectively zero to manufacture and distributed is rightly perceived as unfair by consumers – which is why they feel little compunction in downloading it. Costs of development need to be recouped, but that doesn't justify the kind of price-gouging that has been going on in the software industry for the last few decades (just think of the profit margins that companies like Microsoft have achieved historically).

The difference is, people now have a way of manifesting their discontent by using open source, or through unauthorised downloads (which Bill Gates has admitted he prefers to the former option). And, of course, free software, as produced by open source companies, shows that there are other ways of developing code – be it drawing upon a wider community of volunteer programmers, or selling support etc. - without charging high prices for goods with zero marginal cost.

In fact, there is a larger point here, completely missed in the report, as far as I can see. One reason why people have few qualms about downloading copyrighted material – that lack of “ethical consideration” the report refers to above - is that there is growing realisation that copyright law as currently construed is totally tilted in favour of businesses. Copyright term – originally *fourteen* years – is now effectively forever, thanks to constant extensions. The basic social compact that a creative work was granted a short-term, government-backed monopoly in return for placing that work in the public domain soon afterwards has been betrayed: people effectively give lots and get nothing. Illegal downloads are a way of striving for a fairer balance in a world where the laws are completely skewed against ordinary citizens, who have no other way of obtaining a more equitable approach.

Again, the report does not reflect this, but silently assumes that copyright is good in itself, and is working as it should. In fact, the massive flouting of the law is proof that this is not the case: when “[i]ndustry reports suggest that at least seven million British citizens have downloaded unauthorised content, many on a regular basis, and many also without ethical consideration”, then clearly today's copyright system is badly – perhaps irremediably - broken.

So while “Copycats” is to be welcomed as an honest effort to report on the true situation of unauthorised downloads in the UK, it fails at a profound level by overlooking its own deep, ingrained biases, fruits of years of relentless propaganda campaigns waged by the media industries and their lobbyists. Ironically, then, it would seem that the authors of the “Copycats” report, which delineates a wired-up Britain permeated by the “copycat” tendency in the realm of digital artefacts, are themselves unconscious copycats, albeit of a different, more rarefied kind, in the realm of ideas.

Follow me @glynmoody on Twitter or identi.ca.

Flatworld: Open Textbooks

Flatworld, a open textbook publishing company, has finally come out of private beta. Here's what makes it different:

We preserve the best of the old - books by leading experts, rigorously reviewed and developed to the highest standards. Then we flip it all on its head.

Our books are free online. We offer convenient, low-cost choices for students – softcovers for under $30, audio books and chapters, self-print options, and more. Our books are open for instructors to modify and make their own (for their own course - not for anybody else's). Our books are the hub of a social learning network where students learn from the book and each other.

Flat World Knowledge. Because great minds are evenly distributed. Great textbooks are not. Until Now.

This isn't entirely new - for example, Rice University is doing something similar with its opencourseware - but it's probably the first time it's been made the basis of a startup.

Of course, the approach is eminently sensible: you give away what's abundant, and sell what's scarce. You create communities around learning, including teachers and students. And, crucially, you let people build on the work of others to improve existing texts - all of which are/seem to be under a Creative Commons licence:

Is the book close to what you need, but not perfect? Now you can make it perfect for you. You can customize your book before you adopt it, or anytime afterward. Think of it as your book – you’re in control and you can modify what you want, when you want.

You will find “Customize This Book” links on the catalog page and on every book page. Click and we load the book you are looking at into our “Build-a-Book” platform (you’ll need to register to do this – we need to save your work somewhere). You can click and drag chapters and sections into a better order that's right for you. Change the order of chapters or sections - or delete them altogether. Beginning Summer 09, you can add large chunks of information like a case study or an exercise set. You can search our database for material and add that. You can click the pencil icon and load that section of the book into our online editor, and actually make changes at the sentence level. Do you now have the perfect text? Great. Click “Save” and we’ll give you a unique URL, and put it in your “My(flat)World” page.

It's too early to tell how this particular implementation will do, but I am absolutely convinced this open textbook approach will do to academic publishing what open source has done to software.

Of Digital Abundance and Analogue Scarcity

Recently, I’ve started buying records. I’ve decided that CDs just aren’t enough of a collector’s item. Since I can own all the music I could ever want digitally, I want to buy something that looks nice, special, and something that’s going to be fun to browse through in a couple of years. Records are beautiful collector’s items, CDs don’t even come close; especially because records are almost always available in special limited editions with coloured vinyl, posters, extra sleeves and whatnot. I also prefer the warm, soothing sound of records compared to the sound you get from CDs and especially MP3s, which - contrary to what some may believe - do not have nearly the same sound quality as CDs or records.

This is one way for the music industry to make money: sell *records* again....