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« Almost two years ago... | Main | Opt In Matters (sigh) »

My note to Senator Hollings and his colleagues

Lately, the entertainment mega-companies appear to be having great success lobbying Congress in an effort to preserve their monopolies and their perceived right to continue minting money.

As a creator of intellectual property who has also self-published, I come at this issue from both sides, but I have been thinking and writing about this issue for years (see the reprint of my Inside article from two years ago, which follows).

The argument of the big media companies, as I understand it, goes like this:
“Copyright protection gives us the right to keep anyone, at any time, from making any copies of what we make. That means that if Apple Computer makes a device (the Ipod) that can play music ripped from CDs, Apple is responsible for building unbeatable copy protection into the device to prevent consumers from stealing our music. It means that no device that copies DVDs should be permitted to be manufactured in or imported to the United States, and going one step further, it should be a violation of federal law to post a page of instructions that can teach a hacker to program his Linux box to enable him to watch a DVD he already owns.”

!gasp!

The logic presented to Congress by their lobbyists seems to take two tacks.

First, “this is our property and copying it is stealing.”

Second, “intellectual property (movies, music, books, etc.) is a precious resource of our country, a profitable export and a way that the United States continues to influence the world. If widespread copying continues, we won’t be able to make movies, we can’t afford to make CDs, the already precarious publishing industry will die.”

I have to say upfront that I believe that both arguments are utter nonsense.

First, copyright was never intended to protect the creator or distributor of intellectual property. Instead, it was designed to help CONSUMERS. Congress correctly saw that if there was very limited (in time) protection for literary works, people would be encouraged to create it. It worked. It seems as though everyone wants to be a screenwriter or a singer or an author. By limiting the time, they gave creators a small incentive, but still protected consumers from copyright monopolies. Over the last few years, those periods (thanks to lobbying by the movie industry) have gotten longer and longer. They don’t think they can live without them, and they feel quite threatened by wholesale digital copying.

We can all agree that in the short run, consumers benefit from widespread access to a huge library of work. But what happens in the long run? Will the supply dry up as the media monopolies predict?

Even with widespread and instant copying, there are countless ways for the creators of intellectual property to profit. Perhaps Universal won’t be able to make money making $100 million movies—so what? You can’t make money being a poet either.

Hollywood’s objections all center around a fundamental error. They believe that they have right to business as usual. They believe that if the ground rules of the marketplace change, it’s not fair. They somehow deserve the private planes and the wild parties and the significant profits. And they also seem to believe that if the money wasn’t as good, the supply of ideas would dry up.

Actually, what will dry up are the profits of the big entertainment companies. The supply is well assured. It’s now easier (and far cheaper) to invent/create/produce a movie or a CD or a book than it ever was before. You can record a 24 track CD in your basement. You can make the Blair Witch Project for a few hundred thousand dollars. You can write, typeset and distribute a book for free using a PDF file.

But how can you make any money?

Well, first off, I’m not sure that’s a good question. Do you really believe that if every CD in the world was instantly put into a cosmic jukebox and the artist received no money at all that there would be any shortage of music? Sure, Mick and the Stones might not be motivated to make another album, but the large number of unsigned, unpaid artists makes it pretty clear that the supply is not threatened.

In fact, though, you CAN make money. I gave Unleashing the Ideavirus away for free on the net (more than a million people have downloaded it so far) and this approach actually made me MORE money. You can visit my ideavirus site for more details, but the short version is that I make money with souvenirs—with speeches, hardcover editions, foreign translations, etc. No, there’s probably no money here for a traditional publisher to make a huge profit, but so what? If the purpose of copyright is to encourage creativity, who cares about big publishers?

Radio, after all, did not hurt the record business, even though they hated it at first. The record companies also tried to shut down MTV by charging for videos, then they discovered what a powerful tool widespread distribution was.

Let’s take it a step farther. What if every DVD on the market was instantly copied? Well, movie producers would have several alternatives:

They could, for example, make movies that work beautifully in theatres and never release them on DVD. They could make theatres more fun and more attractive to a larger audience.

They could make movies that cost far less to produce, making enough profit on the people who want to buy the beautiful DVD packaging, with extras, etc.

They could start producing interactive entertainment, which would only work when the user was online and paying the studio directly.

They could put commercials in movies, but allow people to pay a fee to go online and see the commercial-free versions while connected to a server.

They could sell subscriptions, offering, say, an audience of a million people the very freshest movies—before their neighbors—for a fee.

They could make all the profit from souvenirs (live events, clothing, etc.) instead of the performance itself. Think Grateful Dead.

Regardless of which path they follow, one thing is certain—the massive marketing and distribution network they’ve built would become far less useful. What’s wrong with that?

I agree with Steve Jobs that there’s a huge, huge opportunity here. If you know WHO is listening/watching/reading and you have permission to market to them, there are countless ways to profit from that. Perhaps you don’t make as much from a given hit, but that doesn’t mean it should be forbidden by the government.

At the heart of this issue is not fairness, nor is it economics. It’s a simple plea by the entertainment giants to keep everything JUST THE WAY IT IS. Federal Express couldn’t stop email, and Fox shouldn’t be permitted to cripple several industries just to support multi-million dollar salaries.

Ideas that spread are worth more than those that don’t. Devices that spread ideas are both an important economic engine AND a huge opportunity for both cultural and economic growth.

But the most important message here is simple. Congress rarely succeeds when they use legislation to “help” an industry by forbidding changes. Let the market work.


if you know someone in Congress or the music/movie business, please go ahead and forward this blog. I hope that people will start to see the huge opportunity this technology represents…at the very least, I hope they can hear the other side of the argument.

note: When you’re working on an idea, sometimes it seems like everyone else is, too. After I wrote the first draft of this note, there were three (at least) great articles over the last week on this issue. (Kelly in the New York Times Magazine and Mossberg and Weber in the Wall Street Journal.) I don’t think any of them went far enough though… we’re still stuck in the status quo, worrying about publishers and their business model, and not dialing back to the actual creators.

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