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Putting money where our mouths are

The business that can't deliver the goods doesn't deserve to survive.

As Tim O’Reilly has pointed out, one of the major problems with SOPA and PIPA is that they regulate in favor of an “old economy,” and against the new. It’s sort of like the stage coach companies lobbying for regulations against the upstart railroads, and the railroads lobbying for regulation against the roads and airlines.

The problem isn’t “piracy” or “theft.” In fact, one of the big problems I have is the way the old media companies have been able to drive the language here. As Tim points out, piracy is “primarily the result of market failure” and ceases to be an issue when it’s possible for customers to get what they want on terms that they can accept. It’s about access, it’s about people being able to get the media they want and do what they want with it. In “ Scarcity is a Shitty Business Model,” Fred Wilson tells about being unable to find a good movie to watch at home on a weekend night: nothing good on Netflix, Amazon Instant Video, or the cable company. The end result is predictable: if the established means of distribution make it difficult for customers to get what they want, you can’t blame the customers. If we’ve learned anything from the Internet, it’s the business that can’t deliver the goods doesn’t deserve to survive.

Which begs a big question: If the Motion Picture Association of America (MPAA) and their bedfellows are 20th century dinosaurs, when will we see the 21st century mammals that will replace them? We’re starting to see them now, particularly in music. Musicians have already been screwed badly by the music industry, and there are no small number of reasonably successful small musicians working on a “pay what you like” DRM-free basis. Businesses like Bandcamp allow artists to sell directly to their audiences, on a “name your price” basis. Bandcamp isn’t Sony Music, but it’s one of the new breed, one of the small mammals that will survive when the dinosaurs go extinct.

When will we see the same for the movie industry? Granted, making a movie requires a much bigger upfront investment. But it’s Hollywood’s lie that a move needs a multi-million-dollar budget. “The Blair Witch Project” was produced for around $60,000 but grossed $249 million. Wikipedia lists successful films with production budgets down to $7,000. But what we don’t have for low-budget films are studios willing to take the risk of dealing directly with customers, or companies like Bandcamp that aggregate independents’ offerings and distribute them directly to customers, cutting the obsolete 20th century distribution channels out of the loop.

In short, SOPA and PIPA are attempts by the MPAA to preserve an industry that has been fundamentally unchanged since the 1950s, if not the 40s. Who’s going to re-think video, in short (YouTube), medium (TV) and long (film) form, and other forms that we haven’t even conceived? The Internet has created more new industries than I can count. It’s time for the Internet to create the new industry that puts the old-time studios out of business. Who’s going to do that? It’s a huge opportunity.

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  • Jim Bower

    The problem is that the entertainment industries are not producing what they did before (analog, hard to distribute goods). They have chosen to distribute using new media that cannot effectively be controlled. They want the best of both worlds, when THEY have made the choice to join the new one.

    The answer is very simple. Distribute hard goods if you want the hard goods rights. If you want the ease of use, reduction of expense, and reach to new markets that digital distribution provides, then accept the knock-on effects.

  • http://watershedchronicle.wordpress.com Dan Meadows

    I’ve made the argument many times before that what’s being called “piracy” today is really no different than what’s been going on for decades, its only easier to see and, to some extent, track. Media companies had no way of knowing how many people were ripping copies of dvds or cds, or were recording movies and tv shows on their vcr, or were recording songs from the radio, but it was undoubtedly going on in a massive scale. This behavior never significantly harmed them before, I and many others believe it to be beneficial, even. The problems they have today stem from the fact that the individual consumer’s technological capabilities have expanded dramatically, and our desire to have our entertainment play to that newfound capacity. The media companies refuse to adapt to that new reality because it means they have to change, so instead they back things like SOPA that effectively curtail consumer’s technological capacity to suit their ends only. It won’t work, we’ve already had a taste of what’s possible and our needs and desires have already shifted as a result. The backlash against those who stifle that progress and who refuse to acknowledge cunsumer desires will be severe. They may eventually get SOPA or something like it passed, but in doing so, they’ll be cutting their own throats. Business is about servicing people’s needs, not about them servicing yours. Those who forget that will be relegated to the scrap heap of history.

  • Brent Clay

    I agree, and I like your metaphors – particularly that Bandcamp …is one of the small mammals that will survive when the dinosaurs go extinct. The problem is that the MPAA doesn’t believe it is a dinosaur. No creature or organization ever accepts that label – it will fight for survival in the face of anything it perceives as a threat. The difference between extinction and evolution boils down to the ability to either prevail against a threat or embrace it as an opportunity. But, some can’t do it, and it’s not always a matter of choice, which may be the case with the MPAA. I don’t want to pretend to know more about the MPAA or its practices than I do, but it has become dependent on – is in fact, a product of – distribution and copyright models whose times have passed. I don’t think it will be able to adapt any more than a blue whale could adapt to fresh water. This leaves them, as far as I can tell, with only one option, which is to fight. I think SOPA is a horrible idea, but I’m not surprised by it. I truly hope and expect it to fail, but I don’t think we can look forward to anything different from the benefactors of the “old ways.” There are also some double-standards at work here, but in the interest of brevity….

  • http://www.y42k.com Ray Charbonneau

    See Louis CK’s latest convert movie for a major artist doing just what you’re referring to:
    https://buy.louisck.net/news

    • http://radar.oreilly.com/mikel Mike Loukides

      This is an omnibus reply to all the commenters. I got behind–and, franky, I don’t tend to reply to comments much; I’ve already had my say.

      Anyway–thanks for the excellent comments across the board. Some scattered replies: I wasn’t aware of LouisCK, but that’s exactly what we need. I agree about the MPAA: it doesn’t realize that it’s a dinosaur, and it won’t go down without a long, protracted fight, and that’s going to be really messy. Finally: back in the heyday of Napster, it was said that the problem with digital reproduction is that copies don’t degrade. Analog copies were OK. Yeah, that’s true as far as it goes (digital copies are better than analog ones), but let’s not forget that the same forces that oppose the Internet argued that VCRs should be illegal.

  • Monica Smith

    The fact that these measures are already in play, and have been in play for several years, shows that neither freedom or speech nor the Internet have suffered any harm. People are still quite able to deploy nonsense arguments across a multitude of Websites and no US government entities are trying to block them or stop their free speech. The ignorance backing the anti-SOPA movement is far more terrifying than anything in the PIPA or SOPA bills because, frankly, this ridiculous protest has demonstrated just how easy it is for a company like Google to deceive several million people and organize them into a political weapon that can shape law according to Google’s whims.
    Monica from http://paydayloansat.com/