Tuesday, April 15, 2008

Copyright Pirates: Friend or Foe?

In the category of turning lemons into lemonade, Fast Company has an interesting article about "how the pirating of intellectual property can be a good thing." At first I expected the usual libertarian rant about how "information wants to be free," but Matt Mason shares some fascinating concepts. He asks, "Are pirates a threat to be battled or innovators to be emulated?"

He suggests that piracy is a market signal that consumers want something or that something isn't working. For example, "It concerns people within Microsoft that people weren't pirating Vista; they're continuing to pirate XP." Another example of brands using piracy is the way Nike, rather than suing a guy who was ripping off their shoe designs, instead watched the way the market reacted to the garish textures and colors he used (and later became an investor).

Still, despite Mason's best effort to frame piracy as some sort of free market force, to me there's no escaping that theft has ALWAYS been a market force; we've just never tried to excuse crime as an acceptable consumer response to individual wants and needs.

For example, Mason notes that "digital distribution is a much more efficient way to deliver music than CDs and that's why people switched to it." His contention was that the market was speaking and music labels weren't listening. He may be right about the labels, but he's wrong about the market.

People began downloading music not because it was more efficient but because it was free. In fact, people first started downloading ripped CDs back when dial-up modems required hours to obtain an entire CD--hardly a more "efficient" way of getting music. And interpreting P2P distribution of stolen music as a sign consumers want a different distribution model makes about as much sense as thirty years ago saying that people stealing LPs from record stores was a sign the market was demanding a different distribution mechanism. For some portion of the market, theft will always be in demand, but it doesn't make it an appropriate market force.

I believe there has to be a place for copyright protection. Even in the day and age of digital distribution, open source, and social networks, there are things that need to be owned in order to provide return to the originator who appropriately deserves and needs the reward of creating an in-demand product. Pharmaceuticals are one such example--take away copyright protection, and the firm cannot earn back the costs to develop, test, and market the product. (Don't get me wrong, I'm upset that the investment in marketing is outstripping R&D in the pharma industry, but that's an unrelated matter.)

I also think it's fine for Nike to be open minded about a pirate stealing their designs, but stealing a design is a different thing from stealing the actual product. A person who steals the design of a physical thing must have the means of production to produce it, providing a significant (but not insurmountable) hurdle. Moreover, the author of a shoe design can still compete on the quality of the physical product. But what's left for those who make movies and audio when the free download of a stolen version is identical to the paid and legal download? If musicians, movie makers, and authors cannot earn money through the sale of their product, what's left?

Any way you slice it, piracy is still theft. You can label it a "market signal" till the cows come home, but the pirates are taking someone else's ideas, investments, and content and selling it as if they're their own. You'll note pirates don't steal the mere idea of the things they pirate--it's not as though they like Arctic Monkey's melodies but believe they can produce better songs or believe Star Wars can be shot better in 2008 than in 1977. No, they simple steal the whole thing because they can't be bothered to come up with their own original ideas, investment, or content.

Some people think piracy may be a legitimate market force or that in a new "world is flat" era we need to get used to piracy, but I think there is reason to be concerned. Even more imporant than the rights of authors and owners, I grow concerned about what piracy (and our growing acceptance of piracy) might do to our economic model. There already has been an economic paradigm that removed rewards for concept authorship and ownership. It was called communism, and it didn't work.

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