The replicator analogy: why infinite ebooks make more jobs

The common wisdom of record labels and publishing houses alike is that the redistribution of infinite goods – digital music files, say, or ebooks – will be the doom of the industry: if no one needs to pay for the end product, the end product will eventually disappear, as will the jobs that currently create said product.

Now, that seems logical enough, doesn’t it? But that’s because we’re used to thinking in terms of artificial scarcity. Jon Renaut has sat down and written out an analogy to explain why he thinks the conventional wisdom about infinite goods is wrong… and it’s based on the replicators from Star Trek.

A better analogy [for the music or publishing industry] would be if the replicator only made tomatoes. You could have as many tomatoes as you wanted, they’d always be perfect and delicious, and they’d always be free. This would put tomato farmers out of business. But these tomato farmers could likely start growing something else instead. And what happens to the rest of the economy? Pizza and pasta restaurants suddenly find that a major ingredient in many of their dishes just became free. Now, for the same dish, they can charge less, or buy higher quality ingredients, or make more profit. And if you’re a really talented cook specializing in tomatoes? Your skills are now in very high demand.

And there is still a demand for the people who bring the tomatoes from the replicator to your table. There is still a demand for the person who stews and cans the tomatoes, or dices and seasons them. And all the other food items, the ones that aren’t in infitnite supply, still need people to produce, process, and distribute them.

This is what’s happening in the music industry, and starting to happen in the publishing industry. Some parts of the industries are finding their functions obsolete. Instead of looking at the money they could save with electronic distribution, and what good use they could put that money to, the industry is seeking new laws and regulations to limit the infinite supply so business can continue as usual.

Even if every single song, book, and movie was distributed digitally for free, there would still be a need for the music, publishing, and movie industries. There would still be demand for editors, producers, marketers, and all sorts of other services that these industries have always provided.

As is discussed in the comments, the analogy doesn’t hold for other non-infinite goods – medicines, for example. But for goods that can be duplicated endlessly without degrading, there’s plenty of opportunity to build value-adding business models around the free stuff. [via TechDirt]

Your thoughts?

6 thoughts on “The replicator analogy: why infinite ebooks make more jobs”

  1. “Even if every single song, book, and movie was distributed digitally for free, there would still be a need for the music, publishing, and movie industries. There would still be demand for editors, producers, marketers, and all sorts of other services that these industries have always provided.”

    There might be a need for the music, publishing, and movie industries, but I fail to see how they would support themselves. By the way, I get the replicator analogy, I just think it fails when it comes to this statement.

  2. Vested interests will always defend their grip on an income. It’s only natural -for them- and we should never respect the painful transitions of those poor people who are let bereft of a decent income by technological changes, as we can be sure to have many. The poor executives and (and actual talents) of the record industries should feel somewhat safe in society offering them collectivist means for retraining and unemployment benefits, and if neither is feasible, a basic income. They can even make claim to a fair transition period where they should be capable to wean of come habits, gradually decouple from goldplayed yakuzis and stretch-limo’s and what not. A year should be a fair period where society protects the interests of these individuals and honors existing contractual obligations either way.

    But never, under no circumstances, should whale oil salesman become whine oil salesmen. When either demand of people (and I am not saying consumers here) for a product category evaporates, because manna falls from the sky and the previous manna magnates are now left bereft, the manna kartels are not in any way ligitimized, or in any way able to shoehorn the existing system into accepting a continued economical right. When a monopoly (or even a state of scarcity) ends, the former kartelates have no right on their income, even if they use mafia tactics to brutalize society into submission, or even if they are able buy the existing legal system into a mercenary-dom.

    Musical artists, and the surrounding parasitical conglomerates, could at one time extract a certain income from the audiences. At some time this was a fair tribute, based on supply and demand. Due to better distribution methods, supply and demand ratios have shifted. It is not acceptable to rivet up contrivances such as copyright laws and use these as would the english, as artillery against the unwashed natives, because the natives have developed new ideas about the opium?

    In a decent world the WHO would step in, and simply declare this a historical artefact, declare something like a phased transition lasting 5 years, and phased out the grotesque artefact called “music business”. The WHO would laugh out of court draconian persecution of those few anti-lottery “music pirate” winners who are crucified in what is not much worse than spectacles of intimidation. It is not free markets. It is not even nearly protecting the interests of musicians.

    If I have one new years wish for 2010 for the managerial side of the current music industries, it would be to give them a humane welfare cheque until that time they find other meaningful employment. As for the artists, they actually make something people want, I am sure they can find another channel to make money from it. Maybe they can get fans to register and bid on them making new records? Or concerts? Or sell T shirts?

  3. I expect to be paid for my writing. End of story. At least as far as it comes to get it published. I put work into it and when I am allowing others to see it and take what they will from it, I expect compensation. Maybe that is a ridiculous idea in this equally absurd world of the net where everyone expects to get everything for free, but tough crap. Writers deserve to be paid for their work. Period. There’s no argument for me on that front. If it’s quality work and deserves being published, then it should be paid for. The same is true of everything else.

    I think Chad is right: how would all this be supported? If you can get everything for free, how exactly do you expect people who create these products to see the value in continuing to do so? A lot of great artists would simply cease to be, precisely because they would have to have two or three jobs just to be able to afford to create whatever it is they are creating. And if the counter argument to this is the “well, you’d just ask for donations” thing, then I would say that someone is overly optimistic about donations from people who receive things for free. Cause if donations were so prevalent you’d think that all these online magazines wouldn’t have to ever hold fundraisers…

  4. @SMD: Good writers will still earn money, but it will be less for the sales of books and more from the distribution channels, fan support, and other scarce items (lectures, book signings, etc…).

    Your argument that “If artists (writers, bands) aren’t paid, then we won’t have any more art (books, songs)” is not true. Lots of great art is created by people very day. Many starving artists, local bands/singers, and bloggers create their works because it is what they do.

    Megadeals like pop singers (Lady GaGa) and blockbuster movies (G.I. Joe) will see their incentive reduced and their profits cut, which is precisely why the trade groups work so hard against piracy. But indie bands/moves/writers are still going to crank out good stuff. The model is switching from this:

    “I bought this CD because I like this one song on it”


    “I pre-ordered this CD because I support the band and I want them to keep making CDs”

    The Internet and digital distribution enables fans to directly support artists rather than having support filtered through many layers of marketing/distribution/contracts/executives/etc…

  5. @SMD No-one’s saying you should work for free; what’s being said is that trying to charge money for small files of digital information just isn’t going to work any more. pandora won’t go back in the box. However, given our human propensity to not just survive but thrive on techno-economic upheaval, I’m pretty confident that the desire for good writing – writing good enough that only someone making some sort of living from doing it could dedicate themselves to produce – will weather the storm. That’s the whole point above, really: he’s saying that the publishers will still pay you to write, but they’ll make the money to do that by some method other than selling digital content as a scarce good. If you can work out a way to link to your audience before they suss it out, however, you’re laughing.

    Related and pertinent: Cory Doctorow’s latest column for Locus, “Special Pleading”.

  6. I actually believe good writers will get paid. I just don’t believe it will be through publishers once e-books are extremely common. Why would I let a publisher take a large chunk of my profit? Basically, all they really do is put the book on Borders, and Barnes and Nobles shelves. Of course, you won’t need your book put on a shelf when most books are e-books, thus you won’t need a publisher. I can hire an editor for a flat fee. I could e-market it myself or hire a specialist to do it. I can hire a local artist to do a cover for me for fairly cheap (based on the vast majority of book covers this would probably be better anyway). I can distribute it electronically myself or hire a tech guy for hours to set it up (this will be very easy at some point).

    On top of that if your book only sells a few thousand copies most publishers aren’t overly interested in you anyway. This makes it difficult to get future works published and you don’t make much at all. If you are self-publishing e-books and you charge $5 per book and get a few thousand copies sold, you actually did ok. (Obviously, you would have to factor in costs, but they would be manageable)

    If you are Dan Brown, Stephen King, etc.…why wouldn’t you self-publish an e-book if they make up 80-90% of book sales? Your profit margin would be huge, as the costs would be very very low compared to the overall revenue.

    The one hurdle is controlling the e-book once it’s released. I’m not sure anyone has figured this out yet, as the music industry is still struggling with it.

    90% of traditional publishing will be gone in 10 years.

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