Is free equal to zero worth?
Dragon asks an important question, and I'll try to respond here with some of the thoughts I've been wrestling with in the past few weeks.
If someone can explain to me how I am supposed to make a living if the worth of my work is 0 (as apparently many people believe since they keep downloading stuff I’ve made even though it is available to them in a shop around the corner) then I might be more inclined to defend these boys.
Well, radio is free, but that does not mean that it's worth zero. And the people who work for it are getting paid.
Skype is free, yet the people working for it are getting paid.
Lots of open source is free, yet people are getting paid (though most of them aren't, but some of them are).
What I'm trying to get at is that free does not equal that it would be worthless. If it's worthless, it's (usually) free, yes, but the equation does not apply the other way.
The key difference is that most of the copyright industry is concerned about selling "units of consumption" to users at a price per unit (CD, theatre ticket, DVD). Therefore, they perceive that free is value zero. However, when you start to think that the entertainment industry is more like a service than furniture industry and start comparing it with other services like radio, TV, cell phone, electricity, gas, and water, you realize three things:
- Everything tends to go towards flat rate (unless it's a consumable, which digital goods ain't)
- Everything that is flat rate will become cheaper over time due to competition
- P2P is a free service. Because it has almost no overhead or distribution costs, there are no employee costs, and it's not paying the originators (making it an illegal, but still free), it can afford to be free. Which makes it very, very difficult to compete with, since bringing anything else to the market is like saying that "we have this better radio, but you have to pay to use it". Now, this works with pay TV, so maybe it'll work with music and movies, too.
What's the tiny bit of difference then between copyright industry and the rest of the service industry? That's right - copyright itself. Because copyright is a government-granted monopoly, and the current business model is such that distributors own the copyrights, not the artists themselves, there cannot be proper competition. And that's because unlike gas, it does matter who makes the music. No matter how many Britney-clones there are out there, they're still not Britney. And because the industry is really mostly concerned with hits, they're what matters, and the system is built so that the profits from the hits can be maximized - even though a more liberal system would probably work better for the mid- and low tiers.
Some time ago, I speculated that in twenty years, assuming that current trends continue, we'll have an $500 iPod that can fit all the music ever created. I asked John Buckman, CEO of Magnatune about this, and he mentioned that we can assume that that is actually available in ten years, thanks to streaming, at least in home environments.
OK. So, if all the music ever made will be available at the touch of a button, won't that make it just like a service? And, if there were a multitude of service providers to choose from, wouldn't that then encourage competition? And wouldn't that eventually drive the price down to zero, just like radio?
And wouldn't DRM then become totally irrelevant, because you can have all the music from any provider anyway, so there is no need to make copies?
(I know this wasn't exactly an answer, but it sort of juggled my thoughts. I've been talking about music, but it seems to me that that the computer game industry is moving towards service model as well with things like XBox live. So maybe the service model is applicable to other things as well. It's left as an exercise to the reader to figure out how the service model gets funded. If you can't figure it out in 30 minutes watching TV, you're not gonna get it :-)
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