Shallow thinking about filesharing

Tyler Cowen “cannot accept the radical anti-copyright position” and so proffers apologia for the radical intellectual protectionist position. (NB no anti-copyright position is being argued in MGM v. Grokster.) Regarding Cowen’s three arguments:

1. In ten year’s time, what will happen to the DVD and pay-for-view trades? BitTorrent allows people to download movies very quickly.

BitTorrent downloads tend to be faster than those on typical file sharing networks but still very slow. Netflix is a far superior option unless you place a very low value on your time (in addition to waiting many hours in the case of BitTorrent to weeks in the case of eDonkey for a download to complete you also need to spend time finding active torrents or hash links and dealing with low quality, mislabled and overdubbed copies, which often means starting over, even after you’ve learned how to deal with all of these. I pity the computer semi-literate who just wants to snag some “free” movies) .

Note that DVDs already account for more than half of Hollywood domestic revenue. Furthermore the process will be eased when TVs and computers can “talk” to each other more readily. Yes, I am familiar with Koleman Strumpf’s excellent work showing that illegal file-sharing has not hurt music sales. But a song download can be a loss leader for an entire CD or a concert tour. Downloading an entire movie does not prompt a person to spend money in comparable fashion.

Radical protectionists said made similar arguments about the VCR, as have those in countless businesses faced with new technology. In the case of the VCR, entrepreneurs figured out how to use the new technology to make billions. Similarly, it should be up to entrepreneurs to figure out how to thrive in the environment of ubiquitous networking, rather than up to lawmakers to ensure existing businesses survive technological change.

2. Perhaps we can make file-sharing services identify (and block) illegally traded files. After all, the listeners can find the illegal files and verify they have what they wanted. Grokster, sooner or later, will be able to do the same. Yes, fully decentralized and “foreign rogue” systems may proliferate, and any identification system will be imperfect. But this is one way to heed legitimate copyright suits without passing the notorious “Induce Act.”

Fully decentralized filesharing systems have proliferated. LimeWire is #2 at download.com and several other decentralized filesharing clients make the top 50 downloads list.

The imperfections of an identification and blocking system will include invasion of privacy and censorship.

3. I question the almost universal disdain for the “Micky Mouse” copyright extension act. OK, lengthening the copyright extension does not provide much in the way of favorable incentives. Who innovates with the expectation of reaping copyright revenues seventy-five years from now? But this is a corporate rather than an individual issue. Furthermore economic research indicates that current cash flow is a very good predictor of investment. So the revenue in fact stimulates additional investment in creative outputs. If I had my finger on the button, I still would have pushed “no” on the Mickey Mouse extension, if only because of the rule of law. Privileges of this kind should not be extended repeatedly due to special interest pressures. But we are fooling ourselves if we deny that the extension will benefit artistic output, at least in the United States.

The paper Cowen links to above (Cash Flow and Outcomes: How the Availability of Cash Impacts the Likelihood of Investing Wisely) is hardly encouraging regarding the efficacy of additional investments correlated with increased cash flow.

Eric Rescorla points out that subsidizing organizations that happen to hold copyright to work created 70 years ago is hardly the best way to subsidize new content creation, should one wish to do that.

3 Responses

  1. Technologists Ignoring the Future

    Mike Linksvayer Shallow thinking about filesharing — BitTorrent downloads tend to be faster than those on typical file sharing networks but still very slow. Netflix is a far superior option unless you place a very low value on your…

  2. […] Well over a year ago Sameer Parekh called out an obvious flaw in my argument: I find it funny when I read technologists arguing that downloads of movies aren’t a problem because they’re slow. When do technologists talk about how technology sucks and isn’t going to improve? When the improvement of that technology hurts their public relations effort! […]

  3. […] Shallow thinking about filesharing. As Creative Destruction wrote: “I find it funny when I read technologists arguing that downloads of movies aren’t a problem because they’re slow. When do technologists talk about how technology sucks and isn’t going to improve? When the improvement of that technology hurts their public relations effort!” […]

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