The Freeloading Digital Economy

Posted by tuxchick on Mar 25, 2011 1:00 PM EDT
LXer Linux News; By Carla Schroder
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LXer Feature: 25-Mar-2011

This is the terrible bargain of free content: in exchange for content we don't have to pay for, everyone pays in crappy content, ads masquerading as news and reviews, and wholesale invasion and exploitation of our privacy and personal business. We already have crappy advertiser-controlled TV and radio, why would anyone want to extend that to movies, books, and music?

Jose_X wrote an interesting comment on the hurdles to making money in a digital economy. This shiny new digital marketplace is completely nuts, and I think it's going to settle into a tip jar economy, which Jose_X talked about, whether we want it that way or not. It's already most of the way there because despite the best efforts of the brainiacs at Sony, RIAA, MPAA, and our other beloved titans of the entertainment and publishing industries, treating copyright infringement like shoplifting doesn't work.

Digital copying and distribution are so easy, and making people pay for it is so hard, it seems obvious that trying to keep the old retail model going is not going to work. Market value is irrational in so many ways. I think digital media should be worth more-- you can copy it to multiple devices and modify it in all kinds of ways to suit your own needs, for example run an ebook through a reader so you can listen to it, get glorious color copies without the high cost of color printing, print out just the pages you want, copy and paste and assemble selected passages onto one page. With movies and music you can erase the dirty words if that is your desire, do-it-yourself karaoke, put yourself in the movie, convert them to lower-fi formats, store thousands of them on a single small computer, copy to multiple devices. It's the ultimate in convenience and flexibility.

But it doesn't work that way because the cost and ease of copying and distribution are so low. So the market value has no relation to the quality, depth, originality, or creativity of the content, or how much it cost to produce, or how much talent and hard work went into it. It has no relation to its convenience, which is a new and backwards factor because people happily pay a premium for convenience in other goods and services.

People who love getting stuff for free hand-wave away any notion that they should pay for digital content with silliness like "Musicians should give away recordings to promote concerts." That's just plain stupid, and they either have no idea how difficult and expensive a concert tour is, with no guarantee of making any money, or they're rotten humans who don't care as long they get their freebies. A music CD is the ultimate value for both musicians and fans: for a few bucks you get a portable, high-fidelity rugged medium that will last decades without degrading like a tape or vinyl LP.

You can play it anytime you want, and listen to any part of it you want without ever leaving your cozy chair. You don't have to buy an expensive concert ticket which is only good for one show, hassle with getting to the venue, and being there at a specific time and date. It's a boon for musicians who invest weeks or months in a studio making the best recording they can. They can stay home with their families, and when it's finished there is a possibility of generating some income for many years. It is a sweet deal for everyone, especially now when musicians have access to all the tools they need to be independent of record label and to connect directly with their fans.

Writers and moviemakers can't give away their creations to promote concert tours. What are moviemakers going to do, put on plays? Authors should give readings? Mmkay. Commercial sponsorships and ad revenues are possibilities, but dodge the core problem: the actual customers, readers, listeners, and movie-watchers are who should be paying.

I know, there are all these studies that prove illegal file sharing actually boosts sales and revenues. Maybe, maybe not; I'm sure that a lot of the people reading this have been motivated to buy something after first being exposed to an "illegal" version, and the industry's definition of illegal is considerably more stringent than what most of us rational people think.

It's always been difficult to make a living in the creative arts. Creative artists only make money on that first new sale. A CD, DVD, or book might be re-sold dozens of times in the second-hand market but none of that goes to the original creator. The art market is notorious for paintings and sculptures selling at auction for many times what the original artist received. The second-hand market is a good thing, a great boon for buyers, and it boosts the overall market.

It should be easier now since the Internet and digital distribution eliminate the middlepeople and revenues go directly to the artists, so they have a better chance of actually getting something for that first sale. But this breaks down if the expectation is that an artist should invest money, time, and talent in giving away their creative works in the hopes of shaking some income loose indirectly. I can't speak for other people, but if I wanted to sell T-shirts I'd already be in the T-shirt business.

Who Pays?

Two popular suggestions to keep the freebies coming is some kind of sponsor or benevolent patron, and advertiser support. This does not answer the question "Why should someone else pay for your stuff?" It also does not answer the question why people getting stuff for free complain so much about the ads, or whatever strings are attached. Isn't that part of the deal?

Look at all the people who say they come to LXer to get away from the obnoxious ads on Linux Today-- Good, fine, LXer is awesome and I am happy to hang out here. But who is going to pay the LXer bills? LXer runs some timid banner ads, and will never be allowed to do more than that because a deafening chorus of whinges will arise. A number of LXerers support the site by contributing stories and original features, and keeping it interesting with good commentary. That is good and has value. But paying the bills takes cash money, and I think it's a rather undeserved sense of entitlement that expects Bob, Dave, and Scott to keep it going just for our benefit.

Linux Today is a great example of the downsides of advertiser support. For all the double-talk we get from marketers about targeted advertising, those Microsoft ads sure have been persistent and intrusive. Intellitext, popups, animations-- it's amazing they still have readers.

The news publishing industry has gone through a huge upheaval and destructive changes. It's a shadow of what it once was, and now the Golden Rule is taking over: the one with the gold makes the rules. The game has changed. There has always been an uneasy truce between advertisers and editorial; now the walls are crumbling and advertisers are taking control of editorial.

Banner ads don't make much money; the real gold is in lead generation, and harvesting and trading user data. This is the terrible bargain of free content: in exchange for content we don't have to pay for everyone pays in crappy content, ads masquerading as news and reviews and the wholesale invasion and exploitation of our privacy and personal business. We already have crappy advertiser-controlled TV and radio, why would anyone want to extend that to movies, books, and music?

The only way out is for customers to pay directly for what we use. Maybe this is the beginning of an evolution to an economy that recognizes more than money as a medium of exchange. But we're not there yet. Remember the Golden Rule, and remember that nothing says "I love your work and want you to create more" like cash money.

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Subject Topic Starter Replies Views Last Post
Since words are cheap, mine particularly so, ... Jose_X 6 1,157 Apr 10, 2011 3:18 PM
Overwhelming sense of entitlement kingttx 39 1,541 Mar 30, 2011 10:52 AM
I agree in part skelband 8 1,143 Mar 29, 2011 10:53 AM
Just make it something other than PayPal. cr 6 981 Mar 25, 2011 11:37 PM
Pay the Bills klhrevolution 0 814 Mar 25, 2011 2:15 PM

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