It’s Not Easy Being Free

For a number of observers, one of the most confounding things about Radiohead’s In Rainbows experiment last year was that even after the band allowed fans to download the album from their website, a huge number of people decided to download it via bit torrent instead.

Forbes noted, “But for hard-core music pirates, even free hasn’t been enough of a draw. According to music industry analysts, hundreds of thousands of Web users who frequent copyright-infringing file-sharing sites, including The Pirate Bay and TorrentSpy, have chosen to download In Rainbows illegally, distributing their contraband around the Internet just as they might with any other pirated album.”

Now comes the news that even though the season premier of Prison Break was available for free on Hulu.com and Fox.com, more than a million people decided to torrent it instead. Cue hysteria. Betty Shiffman over at Wired quotes Robert Rosenberg, president of Insight Research:

“This is a group of people who define themselves in part by the technology they use and the application of that technology. Chances are that this is only happening in a defined age group. You’d be hard-pressed to find 60 year-old guys passing this stuff off to their buddies.”

This is just plain wrong. Downloading a movie via bit torrent instead of watching it on Hulu has nothing to do with a technology identity or a pirate mindset. First of all, I’d be willing to bet that a lot of those downloads came from outside the US, where content on Hulu and Fox is blocked. If you’re in Canada or overseas and people are talking about the new episode of your favourite show, then of course you’re going to bit torrent it, you’ve given these people no choice. It’s not that they identify as techno-pirates, they identify as fans of the show.

Next, what this whole issue really comes down to is two competing products. One is available in the same place as all the other products someone downloads (a bit torrent search engine) and one you have to go out of your way to get. Given two identical products, people will choose the one that’s more convenient for them. It’s the difference between going to a butcher shop to get your meat or a grocery store. A lot of people don’t mind going out of their way to go to a butcher, and even paying more, but in return they have to get a better product.

It’s not enough to take your product, make it free, and throw it up on the Internet. If you want to complete with piracy, you have to offer a better product than the pirates offer. One way to do this, for example, would be to build a robust community around the website for fans of the show. That way, fans who missed an episode could watch the show at the same place they get their fix of spoilers or speculation and chat with other people who love the show. So far, the networks have done a terrible job of creating online communities, getting their asses handed to them by sites like Television Without Pity.

The Wired article also quotes Eric Garland, the CEO of Big Champagne.

The networks haven’t necessarily improved upon the experience on pirated sites, so users don’t have much incentive to leave those sites.

This is dead on. Media companies have to figure out ways of improving the product they offer on-line. If they do that, people might even be willing to pay for access, the same way people long ago chose to pay for cable instead of relying on over-the-air broadcasting. Give us better choices and a better product and we don’t even mind if the butcher puts his thumb on the scale every now and then.

Free-conomics & copyright law

Over at The Long Tail, Chris Anderson has a great post outlining the various models a business can employ to make money even when they find that their main product is being distributed for free.

The list comes from a 2004 paper by Hal Varian, Google’s chief economist. The paper starts with a great overview of the history of copyright, which is well worth the read.

One of the arguments advanced by the paper is that in the 18th and 19th centuries, while the US was still a “developing nation”, the American courts refused to recognize international copyrights. When, and only when, the US economy advanced to the point where it was in their best interests to see their copyrights respected overseas did they start to respect the copyrights of others.

The U.S. Copyright Act of 1790 was modeled on the Statute of Queen Anne, and offered a 14-year monopoly to American authors, along with a 14-year renewal. Note carefully the emphasis on “American.” Foreign authors’ works were not protected by the American law. In contrast, many other advanced countries such as Denmark, Prussia, England, France, and Belgium had laws respecting the rights of foreign authors. By 1850, only the US, Russia and the Ottoman Empire refused to recognize international copyright.
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The US was a developing country in the nineteenth century, and it was hardly surprising that it found it attractive to free ride on the intellectual products of other, more developed countries, such as Britain.

Considered in this light, copyright and patent infringement in China and the developing nations of the world today is a lot harder to condemn. 

Some Links:

Kevin Kelly gives a great rundown of ways to compete with free business models.

Here’s Anderson’s seminal piece in Wired, on why “free” is the way of the future.

And here’s a piece I wrote (for the now sadly defunct TQ Magazine) on why content providers stand as much to gain from piracy as they stand to lose.