When is an MP3 file like a lighthouse?

From: Alex F. Bokov (alexboko@umich.edu)
Date: Tue Oct 23 2001 - 17:08:21 MDT


This is the most concise, non-technical, non-legalese summation of the
information-wants-to-be-free side of the great debate that I've found
so far. As far as getting the point across simply and concisely, this
guy is right up there with Eric S. Raymond.

This essay was stolen from:

- ---------------------------------------------------

Steal This Essay 1: Content Is a Pure Public Good
by Dan Kohn

Steal this essay, or, why these sorts of essays represent the future
of all publishing. Hint: I'm not getting paid for them.

"Freedom of the press belongs to those who own one." - A.J. Liebling
If you or anyone you know has ever or will ever produce content
(writing, music, video, etc.) and hopes to get paid for it, you should
be afraid.

To see why, start by downloading (for free, of course) one of the
numerous peer-to-peer file sharing systems such as Aimster, LimeWire,
and eDonkey2000 that have emerged hydra-like to take the place of
Napster, whose head was cut off this spring by the Recording Industry
Association of America (RIAA). You will find that much the same
selection of MP3 music that was on Napster is still available for
free, as well as being accompanied by more and more movies ("ripped"
directly from DVDs), and nearly all other forms of content, from
Shakespeare's works to hard core adult materials.


What you will not find - even if you are the RIAA - is anyone to
sue. Because unlike Napster, there are no companies underlying the
software infrastructure, no servers to confiscate, no officers on whom
to serve papers. The next generation of peer-to-peer clients relies on
no central infrastructure whatsoever, and is being developed by a
loose knit group of developers spread around the world, all donating
their significant efforts without any real hope of getting paid for
their work. All of the developers are men - or teenage boys - and
though not following the typical societal track toward prestige, they
are just as competitive as any rival athletes or entrepreneurs. Many
are distributing their software as open source, so anyone else can fix
bugs and make improvements. What this means is not just that the RIAA
is applying makeup to the corpse of the music industry as we've known
it. In fact, it heralds an even larger change about how all content is
created and distributed, and raises serious questions as to whether
content creators (such as the author of this essay) will ever be
compensated for our work.

Read a few dozen articles by top technology analysts, and it is often
difficult to find one that doesn't breathlessly declare how this or
that new technology represents a sea change, an inflection point, or
the end of history. In fact, while the Internet's growth rates have
been quite high, other technologies such as radio and gas cooking have
actually been adopted faster. It may be, though, that all of the hype
surrounding the digital duplication and peer-to-peer distribution of
content actually underestimates the impact on the authors and
publishers of music, movies, and written works.

Put simply, in a world where there are essentially no costs to
replicate content and it is effectively impossible to stop anyone from
doing so at will, the current economic model underpinning content
creation will be dead. Despite the protestations of lawyers, (certain)
rock bands, and legislatures (all on the same losing side, oddly
enough), we are entering that brave new world.

If, as this hard technology determinist viewpoint suggests, content is
destined to be free - i.e., the content creators and publishers will
not be directly compensated the way they are today when you make a
purchase from your local CD store - then the real question is what
system could replace the content compensation system that has worked
quite well for the last 300 years. However, implementing revenue
models for infinitely redistributable goods is not an entirely novel
question, and there are several economic models that can support the
creation of content. What there may not be is enough revenue to
support the publishers of that content in addition to the authors,
which helps explain why the RIAA is so eager to thwart digital
distribution. When an ecosystem undergoes severe environmental
changes, certain organisms that were previously essential - like the
cyanobacteria that originally converted carbon dioxide to oxygen, or
the record companies' A&R men - may recede to minor ecological niches.

Economists have a term for what digital goods have become. Items are
"nonrival" when we can all make use of them without anyone having to
give them up. If I copy your CD, you're none the worse for it
(nonrival), but if I steal your car, you will probably be upset
(rival). Goods are "nonexcludable" when it becomes impractical to stop
everyone from making use of the item, once one person can. It is
infeasible, for instance, to stop additional viewers of broadcast
television (nonexcludable), while it is very feasible to stop
additional moviegoers from entering a theater (excludable). Economists
call nonrival, nonexcludable items "pure public goods," although the
name does not imply that public goods can be provided only by the

Lighthouses are a classic pure public good. They are nonrival because
each additional ship does not reduce the light available to the
others. They are nonexcludable because any ship sailing by can see
them. There are cases in New England two centuries ago of shipping
guilds building privately managed lighthouses, even though the
services couldn't be withheld from non-members. Most medical research
and nearly all basic scientific research today is a pure public good,
although for exactly this reason it is often financed (at least
indirectly) by the government. Other textbook public goods are
national defense, mosquito control, and public radio. In each case,
the cost of providing the item to one consumer is the same as
providing it to any number of consumers (nonrival), and it is
impractical to stop anyone from making use of the good
(nonexcludable). The table below provides some examples.

 RIVAL | car, Walkman | unmanaged fishing rights
 NONRIVAL | movie in a movie | lighthouses, national defense,
            | theater, concert | mosquito control
            | in a large hall |

If content is becoming a pure public good, it will necessitate a
radical rethinking of the recording industry's claim that copying
content is stealing. We as a society react very differently toward the
unpaid use of rival versus nonrival goods. Think of the punishment
inflicted, for example, on those who steal cars versus those who
listen to public radio without contributing to the fund drives. Of
course, whether a good is rival or not is beside the point if you can
successfully exclude people who don't pay. (Ask Microsoft, whose cost
for selling one copy of Office is approximately the same as selling
100 million copies (nonrival), but which has used informant tactics
and large legal penalties to make their software very excludable, at
least for businesses.)

The lawyers representing the recording and movie industry are well
aware of the threat to their business models of digital content, and
they believe they have already developed the answer:
encryption. Encryption represents the music industry's last, best hope
of maintaining their product as excludable. Why they are wrong, and
content protection is doomed to failure, will have to wait for the
next essay.

[Dan Kohn is a General Partner with Skymoon Ventures. His writings are
announced through <dankohn-subscribe@yahoogroups.com> and can be
discussed through <dankohn-discuss-subscribe@yahoogroups.com>.]


- --
* I believe that the majority of the world's Muslims are good, *
* honorable people. If you are a Muslim and want to reassure me and *
* others that you are part of this good, honorable majority, all *
* you need to say are nine simple words: "I OPPOSE the Wahhabi cult *
* and its Jihad." *

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