The Internet

Making Money from the Network, or, The Workers Control the Means of Promotion

Karl Marx 001Almost immediately after it became clear that SOPA and PIPA were going to be “shelved indefinitely” (read: put on hold until they’re brought back in another form so as not to attract so much attention), there came the news that the Department of Justice had shut down and seized assets from Megaupload.

I was thinking that the timing couldn’t have been better: here was proof that the government already had plenty of power to take down infringing sites outside of the US, and SOPA and PIPA were completely unnecessary. The reason I jumped so hard onto the anti-SOPA bandwagon was only partly being a joiner, and mostly because it’s just such a transparent abuse of power: the MPAA and RIAA had been going batshit crazy attacking individual litigants for years, and they wanted to be able to circumvent the system entirely and just go after sites themselves.

And after reading an article on Ars Technica called Why the Feds Smashed Megaupload, I thought it’d be clear to everyone that these were the “bad guys,” and here was a clear case of the system working as it should:

As for the site’s employees, they were paid lavishly and they spent lavishly. Even the graphic designer, 35-year-old Slovakian resident Julius Bencko, made more than $1 million in 2010 alone.

The indictment goes after six individuals, who between them owned 14 Mercedes-Benz automobiles with license plates such as “POLICE,” “MAFIA,” “V,” “STONED,” “CEO,” “HACKER,” GOOD,” “EVIL,” and—perhaps presciently—”GUILTY.” The group also had a 2010 Maserati, a 2008 Rolls-Royce, and a 1989 Lamborghini. They had not one but three Samsung 83″ TVs, and two Sharp 108″ TVs. Someone owned a “Predator statue.” Motor bikes, jet skis, artwork, and even 60 Dell servers could all be forfeit to the government if it can prove its case against the members of the “Mega Conspiracy.”
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But the government asserts that Megaupload merely wanted the veneer of legitimacy, while its employees knew full well that the site’s main use was to distribute infringing content. Indeed, the government points to numerous internal e-mails and chat logs from employees showing that they were aware of copyrighted material on the site and even shared it with each other.

The internet joins together to protest heavy-handed legislation, and the “industry” works within the system to take down one of the most egregious offenders. Win-win, right?

Maybe not. Ars Technica also ran “Megaupload wasn’t just for pirates: angry users out of luck for now”, part of the emerging backlash against the takedown as an abuse of power. Apparently, individual creators’ losses due to piracy are statistically insignificant, but the number of people who are for some reason keeping their sole copies of their work on file sharing sites are a legitimate concern.

On Twitter and his blog, Jonathan Coulton wrote about the takedown of Megaupload and how it’s a complicated issue. Because sure, for the people running that site to be knowingly profiting off of copyright-infringing material is “kind of a dick move,” but what about the people using the site legally? (Instead of Dropbox, Box.net, iCloud, Amazon Web Services, Google Docs, RapidShare, a private FTP site, or any of thousands of other sites and services?) And more significantly, does piracy actually hurt anyone, really?

Looking at the music business, yes profits have gone down ever since Napster, but has anyone effectively demonstrated the causal link between that and piracy? There are many alternate theories (people buying songs and not whole albums, music sucking more, niches and indie acts becoming more viable, etc.). The Swiss government did a study and determined that unauthorized downloading (which 1/3 of their citizens do) does not create any loss in revenue for the entertainment industry. I remember but am now too lazy to find links to other studies that say the same thing. I can’t think of any study I’ve seen that demonstrates the opposite. If there is one, please point me to it. So I have a lot of trouble with the idea that the federal government is directing resources toward an ultimately ineffective game of piracy whack-a-mole (with some unknown amount of collateral damage to law-abiding citizens), when we are not even sure that piracy is a problem.

Well, for starters: the Swiss government’s study, as described by completely objective research site TorrentFreak.Com, concluded that piracy doesn’t necessarily create a loss in revenue for the industry, since the people in their study who downloaded copyrighted material still spent about the same amount of money on concerts (and concert souvenirs), videogames, movies, etc.

Which, if anything, says that the industry is large enough to write off the loss. But how many of us are paid by “The Entertainment Industry?” How is that anything other than ominous to anyone who believes in the value of independent artists and objects to the idea of entertainment corporations consolidating into ever-growing monolithic entities?

I can’t speak for anyone else (seriously, I don’t speak for anyone else, including companies I used to work for), but whenever I would google for “Sam & Max” and came up with dozens of torrent listings, I never thought, “Well, that’s kind of a drag, but at least people are still buying Madden, so no harm done.” Instead, I’d usually think about what would be possible if you had enough revenue to make a game with no limitations and without being reminded about dwindling sales and niche markets.

Coulton talks about Tim O’Reilly’s Google+ post piracy’s effect on “the industry”:

Tim points out that he and a lot of other content creators have been happily coexisting with piracy all this time, and I’m certainly one of them. Make good stuff, then make it easy for people to buy it. There’s your anti-piracy plan.

Sounds simple. Make good stuff, make it easy for people to buy it. Oh yeah, and one more thing: get lots of promotion from famous people.

I’ve got no doubt that a significant part of Coulton’s audience discovered his music via YouTube videos, remixes, word of mouth, and the like. That’s not how I heard of him, though. I first heard of him through John Hodgman’s books, published by a subsidiary of Penguin publishing. And I never would’ve heard of Hodgman if not for his Mac ads (paid for by Apple, Inc) and his appearances on The Daily Show (broadcast by Viacom). I’m sure lots more people have subsequently heard of Coulton via his work on the Portal series (developed and published by Valve and distributed by Electronic Arts).

I like Coulton, but I’ve got to say that it’s disingenuous bordering on arrogant to reduce it to “make good stuff” without acknowledging how much goes into promotion. (Not just distribution, promotion). I say arrogant because it perpetuates this myth that everything’s a meritocracy — if your work were just better, you’d have a bigger audience. And it makes it sound like greed if you want to protect your IP.

So: make good stuff, make it easy for people to buy it, and spend lots and lots of money on promotion to make people aware that your good stuff even exists in the first place. And, I’m assuming, cross your fingers and hope that you’re one of the lucky ones who gets paid for his work to guarantee no net loss for the industry as a whole, not one of the ones who’s repeatedly told — by people wealthier than you’ll ever be — that piracy isn’t an issue.

For me, the topic of piracy always comes down to the same issue: it’s about fairness. It’s always made out to be some big, complicated issue with lots of gray area, and no doubt in legal terms it really is. But it ultimately comes down to individual responsibility, and as I see it, that couldn’t be more simple. We know what genuine fair use is, even if the RIAA and MPAA don’t. We can distinguish between genuinely legitimate sites and ones that profit off the work of others, even if SOPA and PIPA can’t tell the difference. We want people to be paid for their work, even if we forget about the work of PR and marketing people. We want people to be free to make cool things, instead of having creative decisions determined by accountants.

People are going to pirate stuff for as long as they can get away with it, that’s a fact. But it’s not a justification; “people are going to do it anyway” is about the weakest possible defense of anything. “Make it easy for people to buy it” means you don’t load your stuff down with egregious DRM in an attempt to grab every last sale at the expense of your loyal customers.

But the concept of “happily coexisting with piracy” is just plain bullshit. Saying “it does no harm” turns into “it’s not really theft, actually” turns into entitlement and then you can’t make a living doing what you love unless you’re employed by a huge company. I just hope nobody has the gall to act surprised when we end up in an environment where it’s impossible for indies to make a living.

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