MattMaroon.com

Some sort of semantic argument sprung up around my last post, centered on whether or not downloading a song illegally is stealing. I’m not sure what the point is, as it’s a mostly irrelevant distinction, at least in the context of my article. There’s not one conclusion that would be different if it were, instead of theft, some other crime. I should have deleted it from the comments here (or at least stopped it by pointing that out) for that reason, but I didn’t.

I do know that most people who illegally download music call it stealing or pirating (because pirates steal) so it isn’t just RIAA spin that has most people considering it theft, even if it is not. It was called that long before the recording industry even knew it was occurring. I’m sure they’ve done what they could to further that view, but most people hate the record labels so much that they actually like the idea of stealing from them, so in the end it doesn’t really help their case.

Music piracy and theft both deprive the owner of something of monetary value. Piracy is clearly not a 1:1 ratio like stealing a watch is, since much of the pirated music would not have been purchased anyway, and the copyright owner still has possession. But it seems pretty obvious that piracy does reduce the profits of some people who have a right to them. So if it’s not theft, I think the distinction is mostly legal, rather than moral, and the fact that most people call it that makes me think that the general population agrees.

Also, there’s been a little back and forth about micropayments. I’ll show you right now why I don’t believe in them as a replacement revenue source for certain types of content (though I do think they have solid potential as a new revenue source for other types):

 

That blurry cell phone picture (shot from a moving car) is of a Papa John’s pizza shop near my house here in BFE. The reason for the line? They were giving away pizzas worth about $5. It was 45 degrees and rainy that day. What you’re seeing is the rear of the store and the back part of the side. The line wrapped out the door, around the building, through the area in this picture, and continued on at least that far again into another business’s parking lot.

I should note, that I live in an area where most people have at least an acre of land, and lots of people have cattle, so this is a huge portion of the surrounding population. I also happened to drive by one in Cleveland on the same day, and the line was much longer. And less blurry.

These people and some unfathomable amount of others like them were willing to go through hours of waiting in the near-freezing rain to get a pizza they could have purchased elsewhere for less than what the average American makes in 15 minutes. Why? Because it’s free.

Evolutionary psychologists have studied the effect of free, and it’s enormous. But you don’t need to read a book on the topic to believe. Just open your mailbox. Almost every advertisement that comes in promises you something for free, and the rest promise you something at a steep discount. Infomercials all follow the same ridiculous pricing format because people are much more likely to pay $19.99 for something if they’re told it was originally $60 than if the same item were listed at $19.99. Free is our favorite word, and our second favorite is discount.

People will clearly pay for things that they don’t have to in some situations, especially if it’s a societal norm. Tipping comes to mind. But even then, it’s been shown that people generally engage in that sort of behavior only when watched. We usually tip the waiter, who we can see, because the ability to put a face to them causes us to empathize and we know that that is how they make their living. We can almost feel the impact on them of receiving no money for the half hour of work they put into us. But far less frequently will we tip a hotel maid because we don’t have that sense.

(Evolutionary psychologists might argue that reciprocal altruism is our primary motivator, and that we can feel that when we see the waitress. She brings us food, we help her pay her bills.)

I would love to believe that people, in significant numbers, would pay significant amounts for things that they could simply not pay for when nobody is watching them, just to support our creative economy. But I know too many people and have read too much about our psyche. We as a species clearly evolved to jump on anything free we happen to come across.

Micropayments fly in the face of our genetics. They ask us to pay for something that we don’t have to, whose owner can’t see us, and whose face we can’t see, and without any form of pressure from society. And I’m sure that some people will do so. But enough to replace the multibillion dollar recorded music industry?

I think micropayments could work very well for blogs though. Blogs are a numbers game. Gizmodo gets about 2 million visitors a day (plus god knows what else from RSS feeds) all on a yearly budget probably less than what it takes to produce one Britney Spears album. If 1% of visitors give 10 cents, that’s almost $750k in revenue per year. If a Britney Spears CD is a smash hit and sells 5 million copies, and you use the same percentages, you get $5,000. Even if you figure the CD to be significantly more valuable, and 10% of people give, it’s still trivial relative to production costs.

Web comics, video creators, etc., could use tipping to augment or maybe even replace advertising. I sure hope we see that day. And I’m definitely not trying to slam TipJoy (or anyone else in the micropayment market for that matter, if there is anyone else) because I think they’ve got the best shot of bringing it about. There are other reasons why people don’t give (mainly effort) and they’re b a system that reduces friction to a theoretical minimum. PayPal has more or less blown a golden opportunity to do this, and I’m glad to see someone else try.

I’d love nothing more than web-based content creation to be a viable job for 10x as many people, because we’d probably end up with 100x as much content. But I think that throwing out copyright laws will have the opposite effect on the media industry that we now have. Record labels may be taking their sweet time in evolving to a digital distribution model, but they’re doing it. They’re even removing DRM now. Slowly but surely, they’re getting it. Without IP protection, there’s little chance for them, and the movie studios would be dead in the water.

This entry was posted on June 3, 2008 at 3:56 pm and is filed under tech . You can follow any responses to this entry through the RSS 2.0 feed Both comments and pings are currently closed.