Tag Archives: infinite goods

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The ethics of content theft in a digital world

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Here’s a simultaneously wry and astute post from novelist Philip Palmer about the publishing industry’s new here-to-stay bugbear, digital piracy. What I like most about it is the blend of idealism and honesty; rather than simply stating that Piracy Is Wrong And Evil And Makes Jeebus Cry, he’s willing to objectively assess his own moral code as applied to evading cost on the media he wishes to consume.

Before we get to the meat, though, I’m going to call out one item for criticism, because it’s such a well-used semantic straw man that by this point that it gets repeated as a matter of fact:

… there are many thoughtful individuals out there, possessed of shitstorm-generating superpowers,  who do believe that EVERYTHING SHOULD BE FREE ON THE WEB.

I tend to think of this as The Doctorow Rejoinder, because it’s usually Cory that’s the target (implied or otherwise) of that complaint. But here’s the thing: it’s bollocks.

Sure, there are people out there who believe everything should be free on the web… and sure, those people are pretty stupid (or extremely idealistic and ignorant of the most basic tenets of economics). However, the “shitstorm-generators” that Palmer refers to – the ones with any real influence at all, rather than the lip-flapping skriptkiddiez who requote them out of context on their warez blogs – do not believe (or at least do not publicly claim) that “everything should be free on the web”.

People are always reminding me about how Cory Doctorow believes and preaches that; however, not one of them has yet been able to show me a citation where he does so. Doctorow happily and truthfully claims that free content has worked for him, and explained the potential benefits of such a business model to people in similar positions, but he’s never (to my knowledge) claimed free content as a) a panacea to the struggles of the obscure artist/creator or b) the road to an inevitable digital syndicalist utopia where everything necessarily costs nothing. (I’m quite willing to be proved wrong on this point, but I want citations from original source material, not flimsy op-eds from folk with axes to grind or political capital to reap.)

So, let’s be clear: no one worth arguing with has ever claimed that “everything should be free on the web”; until we get past this particularly tenacious straw man, we’re going to struggle to deal with the real issues. And so, it’s back to Philip Palmer’s otherwise sound essay. A few quotey bits:

I think it’s worth pointing out that there’s nothing new under the sun.  The digital age didn’t invent plagiarism; nor did it invent piracy.  The web changes many things; but not basic questions about right or wrong; it merely AMPLIFIES the problems that always existed

Book piracy, for instance,  was pioneered by the public library service.  For many years, until the advent of PLR, it was considered moral and normal to give away books for zero money on a rental basis to members of the public.  This is a great way to impoverish authors.  Because a book that’s been borrowed a hundred times has only been bought once!

Second hand bookshops!  They are the buccaneers of the book trade. A second hand book may be sold a dozen different times but again,  the author only gets paid once.  We authors notice these things.

So illegally downloading books is no different, in principle, than going to Hay-on-Wye.  Fact!

Yes, that’s a sophistic argument; that’s Palmer’s point, I think. Now, here’s where it gets interesting:

When I started getting published I stopped buying second hand science fiction novels from authors still alive or not-rich.  So I’ll buy second-hand Stephen King, though only occasionally,  but I’d never buy Al Reynolds’  latest in a second hand bookshop, because  he’s a real writer earning a living. I do though buy all my Edgar Rice Burroughs’ Barsoom novels (my current passion)  second hand via Amazon, mainly because the old Del Rey editions are so stunning, and I’m pretty sure they’re out of print.

So that’s my moral code, based on the opinion that borrowing books from a pal and illegally downloading books are pretty much the same thing, ethically speaking. In other words, it’s okay to get stuff free sometimes, as long as you OFTEN pay.

Palmer’s point is that (with very few exceptions) we don’t have unlimited funds for buying entertainment, but we have a close-to-unlimited hunger for the stuff, and so we all come to our own ethical compromise with the world; Palmer puts money in the pockets of living authors who he feels deserve it, but he doesn’t want to contribute to Stephen King’s retirement nest-egg, nor send money to middle-men reprinting the works of the long-dead if he has a cheaper option available to him. He’s obeying the spirit of the piracy laws, though not necessarily the letter of them.

I take a similar approach to music, as do many people I know; I’m – by my own admission – a somewhat skewed data-point (because as a reviewer I get sent a lot of legitimate freebies) but I download hard-to-find and/or costly albums without too many qualms because I attend dozens of live shows every year, buy merchandise, patronise live music venues, buy music equipment and use rehearsal spaces. I’m paying my way within that economic sphere, and doing so with a fairly significant portion of my disposable income.

There are those who don’t pay their way, certainly, but I suspect they’re a minority; digital music recordings are valueless unless you want to listen to them. I can’t imagine many folk bother downloading albums just to consume hard drive space and have a longer list in their media player library; you collect music because you’re passionate about it, and if you’re passionate about music you probably go and see it played live if you have the opportunity to do so.

Digital media is a non-rival good; to take it for free is not theft but evasion of cost, and evasion of cost is a fundamental tenet of economic behaviour (with the possible exception of those with more money than sense); economic behaviour is not rational but emotional, and basing your response to a change in the underpinnings of an industry’s economy on the hope that you can stop human beings behaving in the ways they always have done is to doom yourself to failure. Successful businesses work out ways to monetise desire, but business models do not last forever; if they did, there wouldn’t be an internet (or cars, or electricity, or, or, or). QED.

This is a point borne out in the music industry, where – in spite of the withering of the recording companies – overall profits are actually growing consistently: live show tickets, merchandise, new instruments and recording technology, all selling better than they ever have before. There are studies based on the industry’s own figures that show heavy downloaders of music torrents spend more on legitimate content purchases than those who buy a few albums every year. Illegal downloading is not “killing music” (just as home-taping didn’t “kill music”); it’s killing a business model, and the record labels really don’t have anyone other than themselves for failing to adapt to a changing landscape.

As I’ve mentioned before, the publishing industry appears to have wised up faster than the record labels did, but it’s interesting to note that – as with the music industry – the smaller more artist-centric outfits are the ones who seem to be most willing to try new options. The more profitable the old model was, the greater the inertia of those who profited from it. Evolve or die.

This is the point where I usually get accused of celebrating the fact that it’s getting harder and harder for artists of all stripes to make money from their work. To which I respond: pointing out the realities of the situation, and the fact that all the idealistic thinking in the world won’t stop consumers behaving as they do (namely getting something they want as cheaply and conveniently as possible), is not celebratory; it is a matter of pragmatism.

The genie will not go back in the bottle; it is more productive to work out ways to cope with the genie’s freedom than it is to build elaborate doomed-to-fail genie entrapment devices, or to repeat idealistic platitudes about how the bottle shouldn’t have been opened in the first place and look for someone to blame for it. Yes, it sucks that the business models of many creators whose work I adore and wish to support are under economic pressure; however, no amount of me (or anyone else) saying how much it sucks will make a damned bit of difference. Play the hand you’re dealt, or fold and get out of the game.

A harsh thing to say, perhaps, given I’m a friend of (and contractor to) a number of authors… but would you want your doctor to lie about a life-threatening illness? If you want to survive, you have to accept the reality of the situation, take the pills, endure the surgery; I can’t help but think that content creators as a demographic are moving slowly through the five stages of grief psychology with respect to the economics of infinite goods. It’s a painful and necessary process, but acceptance is the only end-point from which you can move on.

In an ideal world, we’d all be paid enough in return for doing something we loved to have everything we wanted. If anyone has directions on how to get to that ideal world, by all means please let me and everyone else know how to join you there; in the meantime, I think we’re best off concentrating on finding a way to make a living here in reality.

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Ebooks cost a lot of money to make; will no one explain why that has to be so?

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Andrew Wheeler wants people to stop saying that ebooks don’t cost publishers lots of money to make:

Creating an individual ebook format — one of the current suite of them — costs roughly as much as creating a print-on-paper edition; the costs of the actual paper and ink are vanishingly small in this equation. Some ebook formats, such as the currently fashionable one, have a baroque process of creation that involves multiple transformations and iterations of quality control, which drives up costs further. And the cost per unit is massively higher for ebooks than for printed books — infinitely so in some cases, since there are plenty of ebook editions that have never sold a single copy.

Now, I feel the need to respond to this post, because I’ve chimed in on ebook economics before and it’s a topic I care a lot about. However, I’m going to first point out that I have a great deal of respect for Andrew Wheeler, both as a blogger and an editor, and I’m fully aware that he knows a lot more about the inner workings of the publishing industry than I do; I’m not going to tell him he’s wrong, because he isn’t. I’m not going to refute the claim that ebooks currently cost a lot of money to make. I am, however, going to say that they shouldn’t cost a lot of money to make, that they don’t have to, and that the longer they do, the smaller the chances of them ever becoming a viable industry in their own right.

Part of this isn’t the fault of the publishers; as Wheeler points out, there are a dozen competing ebook formats with arcane creation processes; there are DRM frameworks; there are ebook vendor requirements that predicatably take advantage of the over-the-barrel status of the publisher and milk them for as much as they think they can get away with. This is pretty much how new technologies always work; I can see parallels with the digital music business as it meared the Napster era. The publishers dragged their feet then, as well, and in the process allowed an openly accessible file format (the mp3) to gain ascendancy in a series of distribution networks that they had no investment in or control over. I expect book publishers are well aware of this parallel; what surprises me is that they’re not talking to the consumers about it more actively.

I do need to quibble on one of Wheeler’s points:

… the cost per unit is massively higher for ebooks than for printed books — infinitely so in some cases, since there are plenty of ebook editions that have never sold a single copy.

Now, again, I’m not saying he’s wrong here – he’s seen figures and spreadsheets that I’ll never be shown, of that I’m certain. But if you’re running a set-up where the per-unit cost of an infinite good is higher than that of the physical finite version, either there’s something massively wrong somewhere in the production chain, or my understanding of the publishing process has a huge flaw which I would sorely appreciate being corrected on.

Allow me to explain: some of you may be aware that I work for UK small press PS Publishing. Now, we don’t sell ebooks (yet), but we make PDF versions of our books available to reviewers. Those PDFs are almost identical to the file we send to the printers, except for being saved at a lower resolution to save on disk space and download times. In other words, the work to produce a template for the reproduction of a physical book or an electronic one can be exactly the same; the same editing, proofing and typesetting/layout process, all the way up to the stage where the book is released to duplication.

The obvious answer to that statement is “well, you’re using PDFs and no other formats, so of course it’s easy”. Well, yes; and that’s kinda my point – if the publishing industry continues to allow intermediary vendors to shaft them with ludicrous hoop-jump requirments and costs for multiple proprietary formats, then they’re never going to make a dime out of selling ebooks. There needs to be a concerted push by the industry for a single, simple and secure digital format that everyone uses; then leverage can be applied to the makers of reader hardware to support that format, plus the formats used by public domain material (e.g. the humble and ubiquitous PDF, which is either unsupported or charged for on most current readers of which I am aware).

Part of the establishment of that file format should include software for easy conversion of proofed electronic galley files directly into it, so that once a book is ready for printing, it’s also ready for ebooking in one click. At this point, there’s no way the per-unit cost for ebooks can be higher than print, because that ebook is ready to ship, and any intermediary vendors should be willing to eat the storage and distribution costs out of their final to-consumer price. If they’re not, you go with the one who will; the rest will soon follow. Now, sure, you’ve still got your marketing and promotion budget to consider in to that per-unit cost, but that’s the same outlay for both editions up to this point in the process, and with a digital format that cost is spread over a theoretically infinite number of units at no extra cost.

By comparison, after that final file is deemed ready for production, printed books must be printed, warehoused, shipped, lifted onto shelves in brick-and-mortar stores and run past the till scanners there, too… and all that money has to be coming from the profit margins. By any rational analysis from outside (with the caveat that I’m not an economist or an accountant), that must cost more than making digital books available; I’m prepared to believe that there may be reasons that it doesn’t, but I’d suggest that those mysterious reasons point to a heroic flaw in the economics of book publishing as it stands.

To reiterate: I’m not saying Andrew Wheeler is wrong to say that ebooks cost more to make than dead-tree books; I’m saying that disparity in cost is impossible to understand for anyone not privy to the way the system works – people like me, and people like the ones who want to buy ebooks but find them either unavailable due to antiquated regional licencsing, hobbled or useless thanks to proprietary and restrictive file formats, or just simply too damned expensive by comparison to the dead-tree version.

Wheeler’s final point s that many ebooks never sell a single copy, which surely only underlines my point that making every effort to reduce that inexplicably high per-unit cost is the only way to make them a viable business. As Blue Tyson says in the comments below the post, “[p]ricing them double is a pretty good strategy to sell zero, certainly.” If your current system means you have no choice but to charge an arm and a leg for an infinte good, your system is surely broken. I think part of the problem is considering the physical and electronic versions as two separate products; that proofed and typeset file is the product, and the ebook or bound paper are just the delivery systems for it.

Now, I’m fully prepared to admit that there are things I don’t know about how the system works, as mentioned above. The point I’m trying to make here is that until the consumer has been shown why that price must be so high, they will never stop complaining about it. I’d genuinely like to know the truth of the matter, and as such I’d like to invite Andrew Wheeler (and anyone else with the pertinent experience and knowledge) to set us straight; I’ll happily publish a response here, or link to it if published elsewhere. Sunlight is the best disinfectant, so they say. 🙂

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The replicator analogy: why infinite ebooks make more jobs

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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?