NOTE: The following was published in this week's edition of my free e-mail newsletter, A-Clue.Com. You can get on the list here.
The Great Race has always been between tyranny and freedom, with order as tyranny's worthy handmaiden, and crime as freedom's ugly stepsister.
The triumph of liberty in the 20th century was basically a technological triumph. It was Moore's Law that did it. Moore's Law, and all its antecedents, changed the rules of the economic game, of the power game, and the balance between rulers and the ruled.
Moore's Law, the idea that things get better-and-better faster-and-faster, means that trained minds are the key to economic growth. Willing hands, the key to economic growth in the industrial age, matter far less than they did. Chains may keep trained hands working. They don't do so well with trained minds.
In America the result, as Dr. Richard Florida (left) wrote, was the rise of a new "Creative Class" that could dominate societies and drive economic growth. These were people, accused of wealth and guilty of education, whose values were intellectual and meritocratic, and (perhaps most important) were capable of economic satiation. Creative people have, on the whole, risen through Maslow's "hierarchy of needs," and are in search of self-actualization, not food or even luxury.
Creative people like cities, vibrant and tolerant cities where we can explore ourselves and others freely, in relative comfort. The Internet is the ultimate "Blue City," where people from Pakistan or India, South Africa, Germany or Italy or America can meet as peers, become friends, and work together to create a better future.
In Florida's book he observed America's internal migration patterns to identify where growth would come later - Austin, Raleigh, Boston, Berkeley, Portland, Seattle, Santa Fe.
But America is not the only country, and the creative class is far more mobile than Florida imagined. Europe is just waking up to the possibilities of the creative class, developing new centers of economic growth around centers of learning, and remaining globally competitive by reaping the benefits of that. East Asia is now building such cities, and when this trend moves to Africa watch out.
Mobility is enhanced by the Internet, where the creative process has gotten a full dose of steroids. The big story of the last decade has been the advance of liberty, knowledge and economic freedom through this medium.
It's against this backdrop that I return to the subject of the Copyright Wars, a subject I first broached here in 1997.
The conflict has gone pretty much as expected. Big businesses have become the stalking horse for Big Government, going after people on a worldwide basis, in ways even governments are reluctant to undertake. The U.S. Justice Department can't go after someone in Australia, not without going through extradition. The copyright industries can. The U.S. government can't threaten China over software issues. The copyright industries can.
And the copyright industries have, by and large, had the imprisonment of the creative class as their main goal. One-sided contracts, with all rights assigned to the copyright owners, have been the rule for nearly a century. And in extensions of copyright, or the rights of copyright, nearly all the cash goes, not to the people creating the work, but to the industry. Time-Warner, Fox, GE, Disney - these are the Fords, Pullmans, and Rockefellers of our time.
In this work they have been more succesful than their enemies admit, more successful than I expected. They have succeeded in shutting off several server-less peer-to-peer networks, and ruining users' lives on several continents in the process. Yet freedom persists.
And so we have the BitTorrent controversy. BitTorrent may be the most powerful network yet, and the one that skirts the law most completely. You plant a "seed," an initial copy of a file, and it spreads to wherever there's empty space and bandwidth, so the cost disappears from the person posting the file, both bandwidth and storage. (Actually it's just shifted - it's still there.)
The benefits are enormous to legal files. Companies can distribute Linux at a cost near-zero. Those battling government censorship can get millions of copies of forbidden thought into users' heads and hearts within days.
But this same enormous power can be used to pirate movies, or it could be used by terrorists. Big governments and big business are united against it. The Achilles Heel or point of weakness is a "tracker" site, like Suprnova.org, which hosts nothing but merely points to file names that can then be located by client software. There's no direct copyright violation, and there's powerful non-infringing use, but lawyers are tenacious, and such sites are being shut down.
So we have the next evolution, the so-called "Darknet." By the time a file shows up on BitTorrent, it has been all over the Darknet, and there's no way to trace the infringement back to its origin. In this case the hub itself is hidden. You don't get there by a link. It's like a speakeasy to which only the elect (selected by their expertise and knowledge of other "conspirators") have access. Just getting access is an achievement. Being able to feed the Darknet makes you a Hacker Supreme.
How you feel about this depends entirely on which side of the divide you're on, and where you stand can change with circumstances. Are you spreading the word for a free Burma, or a free Tibet, or the female victims of mutilation in the Islamic world? You're a good guy (or girl). Are you spreading an unreleased video game, Hitler's collected works, or Osama's terrorism cookbook? You're a bad guy (or girl). The point is, the technology doesn't care. The same technology that makes freedom possible (and tyranny impossible) can also destroy the world.
Get used to it. And get over your efforts to kill it. Because if you do kill it, if you really succeed in making file sharing impossible, you will have ushered in a Permanent Tyranny over all mankind.
In this, as in all cases, Ich Bin Ein Berliner, as in Isaiah Berlin, the British philosopher of the 20th century. Perfection is impossible. Muddle through.
And if you doubt the sense in that, I think it's what Jesus would do as well.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Brad Hutchings on January 10, 2005 01:06 PM writes...
So best to steal from the "copyright cartel", huh? There is a phenomenon that Arnold Kling has been bringing attention of late called "the long tail". Chris Anderson wrote about in Wired recently. It's a phenomenon where (to paraphrase Anderson), the market for books that are not in B&M stores is larger than the market for those 130,000-ish that are. While you rail against the top performers for being monopolistic, unfair, crap, whatever, the long tail depends on copyright for its well being too. You offer false choice of "Big Content vs. Free Content" when in the fact the market is already making a lot of room for Little (non-free) Content.
I make my living on the tail of the software industry. I enjoy what I do and get tremendous non-monetary pleasure from one of my customers telling me I've really helped them out. But that doesn't mean I'm not in this for the money. The money lets me do what I do instead of a lame day job. The concept of copyright and a wide general respect for it (as well as some DRM) are what let me turn my creations into money. When faced with who to line up with: jack-booted big content or the fools who think I should give away my work for free... sorry pal, the jack-booted thugs are more aligned with my interests, as they are with most who make money on the tail. We may need to take time out from fighting over the commercial product curve and clobber the content communists, then we can go back to fighting for space :-).
Permalink to Comment2. Jesse Kopelman on January 11, 2005 06:12 PM writes...
I think there is a misunderstanding here. The big issue is payment for distribution, not creation. Nobody really wants to eliminate payment for the creation of something useful, but what many do want is to eliminate overpayment for the distribution of these creations. The issue is not author rights, but distributer rights. Current models say that the distributer (the jack-booted thugs) gets the lion's share of the money. In an all digital world, there is no reason for this to be so. If what people want is digital music files and not physical CDs, why should BMG and Sony still get 80% of the money when they are non-essential to the process of making the music. I think if you could buy media files (music/video/software) directly from the creator for 20% of what one pays in the current multitiered retail model, there would be a lot less piracy and the creators would not be getting any less money than they are now. The idea I think Dana is after is that merely owning distribution rights does not justify the kind of markup the Sony's of the world are getting. Let's see them provide an actual service to justify it in a world where physical distribution is becoming obsolete.
Permalink to Comment3. Brad Hutchings on January 13, 2005 01:29 PM writes...
Strawman argument Jesse. A thought experiment for you. In 2005, why would any up and coming band sign with a label if they can get distribution through Kazaa or a website or BitTorrent or whatever? The business of being a band requires capital, most bands (like most entrepreneurial efforts) have a much better chance of success with adequate up-front investment and advice from veterans of the industry than by bootstrapping from scratch. Rare is the artist with good enough business sense to survive and thrive.
One service the music industry does for the bands it signs and even for creative people as a whole is helping to keep copyright-based businesses viable: sustaining an environment where people understand that they are supposed to pay for copyrighted works where the copyright owner has requested payment for use. There aren't even many large bands that could investigate, shut down, and sue a pernicious unlicensed uploader or broadcaster on a P2P network. The software industry with 4x the annual revenues of the music industry doesn't do a fraction on the enforcement side, perhaps because most publishers/distributors are too small and too scared of incremental damage from enforcement, but also because a service component can be incorporated into most software, while music is a more pure artistic endeavor that doesn't lend itself as readily to service tie-ins.
Jesse, I would certainly urge you to pursue the business opportunity that must necessarily result from the inefficiency you perceive. But do so in a way that respects the legal rights of all involved, and with an understanding that your perception of inefficiency may be a very valid necessity to someone else's livelihood.
Permalink to Comment4. Jesse Kopelman on January 13, 2005 05:49 PM writes...
Brad, I think your argument is a bit off. Look to the sports world. Many atheletes have moved away from dedicated agents to law firms that have a sports contract specialist. The reason is because even at $500 or more an hour, the law firms end up charging 2-3% of the contract value, vs. 5%+ for dedicated agents. When your contract is in the 10s or Millions, a few percent is a lot of money. I think the same situation exists in the music world. The giant record cos and publishing houses are charging way too high a "comission." Anyway, the backing given to bands is actually a loan and even if they hit it big, it is often years before they see any profit thanks having to repay the record companies and only making a samll portion of the revenue from the sales of their music. For all the benefit they get going the established route, they might as well max out their credit cards to set up a tour and give away their music free online as a sort of advertising.
I do have some ideas I'm working on about a next generation fo music publishing. Contrary to popular opinion, I think there is a great oportunity for service tie-ins with music. If any VC is reading this, feel free to contact me. As for your final statement about people's livelyhood depending on the structure of the current system, Brad, I would say that is like the Walmart arguement. Some say Walmart is good becuase it is a large employer. The other side of the coin, however, is how many jobs would be created to fill the vacuum of having no Walmart and would they be better than Walmart jobs?
Permalink to Comment5. Brad Hutchings on January 13, 2005 08:53 PM writes...
Jesse, WalMart is good. It employs over a million people in the US, 74% of which are full time employees with benefits, average wage is 2x minimum wage. They make really cool things affordably and plentifully available to average people. Even/especially families of union workers shop at WalMart for convenience and value.
Now answer my question... Why, in 2005, when a band could supposedly do everything themselves would they sign themselves into slavery with a label? If your answer is that they are a stupid as everyone who works for or shops at WalMart, you really need to check your premises because you're kinda outa touch with the real world ;-).
Permalink to Comment6. Jesse Kopelman on January 14, 2005 03:57 PM writes...
Not stupid, but maybe uninformed. It's not like there is a high school course that teaches you how to be a professional artist (musical or otherwise). Indeed, a serious artist does not have the time to research the business side of things. Because of this, they often get taken advantage of by management. In some ways I think this is a holdover from the patronage system of olden days where an artist basically worked at the behest of some rich patron. Back then the idea that one could become rich or even independant as an artist was unthinkable, but so was the idea of free trade. I do not argue that bands need the services performed by record companys (it is really music publishers like Sony and BMG I want to cut out the equation anyway), I just question whether they might do better getting those same services from someone else with the band as the client instead of the other way around. Note the way most bands change record labels as soon as they gain the leverage to do so, in hopes of getting a better cut of the action. As for Walmart, it is certianly not stupid to shop (I do every once in a while) or work there (I've worked in similar places), but that doesn't mean its not bad for all of us in the long run. By the way, 2x the minimum wage is still less than subsistance, which tells you a lot about both our government and Walmart.
Permalink to Comment7. Brad Hutchings on January 14, 2005 05:57 PM writes...
VH1 needs to bring back "Behind the Music" (and Jesse needs to watch). There are lots of serious artists with great business instincts who develop great business acumen. The music companies fit into the equation. Even Woodstock had a business plan!
WalMart is not bad. Go pick 1000 unemployed, underskilled people living in Inglewood and ask them whether they are happy the do-gooders "saved" them from getting jobs at a store WalMart wanted to open there. Their blood is on your hands.
Permalink to Comment8. Jesse Kopelman on January 17, 2005 05:48 PM writes...
Actually, I was a big fan of Behind the Music. Did you ever watch it Brad? Because if you did, you would notice that almost every story involved the artist/band fighting to get out of their original contract. The only way the industry fit into the equation in those stories was to add drama. As for Woodstock, it had a business plan and that plan failed. Since then, people have been able to make plenty of money off of that failure -- I think I see a parallel here. Finally, go back and read my posts. Never once did I say Walmart was bad. I did however say that it might not be good (things don't have to be either bad or good) and that having no Walmart might be better than having one. There are many things we might be better off without, but that does not somehow make them evil. At the same time, just because something is not evil does not make its alternative evil.
Permalink to Comment9. Brad Hutchings on January 17, 2005 10:05 PM writes...
Funny Jesse... Next time I see on of the four behind the Woodstock concert (his family are among my best friends), I'll ask him about the plenty of money he made on the failure. Pardon the sarcasm, but he definitely did not. But my point is that Woodstock, the cultural exemplar of "free whatever" didn't happen without four people wanting to make some green, and three of them coming from the record industry.
And no, we would not be better off without WalMart. I know it's trendy to hate them, but hey, MLK Jr. Day should remind us that it's been trendy to hate lots of others too. Get past the hate, embrace the riches that companies like WalMart bring us from around the world at affordable prices. They are the ultimate good guys.
Permalink to Comment10. Jesse Kopelman on January 18, 2005 04:59 PM writes...
Brad, do you even read my posts? I said "Since then, people have been able to make plenty of money off of that failure . . ." Where did I say it was the original people? Indeed, the implication was that it was not. That you fail to see the parallel between Woodstock and the current state of the record industry boggles my mind. Also, how is not finding someone the ultimate good guy the same as hating them (or do you mean playa hating)? If you did mean playa hating, just remember that MLK Jr. was named after one of history's greatest hataz.
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