Does Free Stuff Sell Stuff?
A while ago, I wrote an essay about an editorial on copyright. I thought the author of that editorial was hopelessly naive and so misguided as to be proposing suicide as medicine for what ills us.
This evening, I read an article that’s quite the opposite. Copyright Jungle, written by Siva Vaidhyanathan for the Columbia Journalism Review, takes a far more rational and realistic approach to the state of copyright law.
First, Mr. Vaidhyanathan talks about how various media pundits and futurists are fond of imagining brave new Google-dominated worlds:
“So what happens when all the books in the world become a single liquid fabric of interconnected words and ideas?” [Wired editor Kevin Kelly] wrote. “First, works on the margins of popularity will find a small audience larger than the near-zero audience they usually have now… . Second, the universal library will deepen our grasp of history, as every original document in the course of civilization is scanned and cross-linked. Third, the universal library of all books will cultivate a new sense of authority … .”
Riiiiight. Just one problem with Mr. Kelly’s utopian vision of the free all-books-now library.
Copyright.
Google has steamrolled the internet, and yet it’s copyright law that has frustrated Google more than any competitor ever could. Google can’t follow its plan to create the universal library because publishing is a right, and that right is retained by the copyright owner.
Yet, as Vaidhyanathan notes, you won’t hear much from the media about this, because the media barely seems to understand copyright itself. The fact that an industry creating the intellectual property known as “journalism” doesn’t quite get the rules that govern its own product is…well…disturbing.
The most recent headline-grabbing copyright battle involved The Da Vinci Code. Did Dan Brown recycle elements of a 1982 nonfiction book for his bestselling novel? The authors of the earlier book sued Brown’s publisher, Random House U.K., in a London court in the spring of 2006 in an effort to prove that Brown lifted protected elements of their book, what they called “the architecture” of a speculative conspiracy theory about the life of Jesus. In the coverage of the trial, some reporters — even in publications like The New York Times, The Washington Post, and The San Diego Union-Tribune — used the word “plagiarism” as if it were a legal concept or cause of action. It isn’t. Copyright infringement and plagiarism are different acts with some potential overlap. One may infringe upon a copyright without plagiarizing and one may plagiarize — use ideas without attribution — without breaking the law. Plagiarism is an ethical concept. Copyright is a legal one.
Perhaps most troubling, though, was the way in which the Da Vinci Code story was so often covered without a clear statement of the operative principle of copyright: one cannot protect facts and ideas, only specific expressions of ideas. Dan Brown and Random House U.K. prevailed in the London court because the judge clearly saw that the earlier authors were trying to protect ideas. Most people don’t understand that important distinction. So it’s no surprise that most reporters don’t either.
Most reporters…most screenwriters…
It’s quite sad, really. It may also explain why those who do understand copyright and copyright law—like the corporations who own and exploit intellectual property—continue to wield tremendous influence over the evolution of those laws.
Still, Vaidhyanathan sees a silver lining in the battle between those who wish to protect their property rights and those who wish to liberate information and expression such as the films we writers help create.
Yet copyright, like culture itself, is not zero-sum. In its first weekend of theatrical release, Star Wars Episode III: Revenge of the Sith made a record $158.5 million at the box office. At the same time, thousands of people downloaded high-quality pirated digital copies from the Internet. Just days after the blockbuster release of the movie, attorneys for 20th Century Fox sent thousands of “cease-and-desist” letters to those sharing copies of the film over the Internet. The practice continued unabated.
How could a film make so much money when it was competing against its free version?
The key to understanding that seeming paradox — less control, more revenue — is to realize that every download does not equal a lost sale. As the Stanford law professor Lawrence Lessig has argued, during the time when music downloads were 2.6 times those of legitimate music sales, revenues dropped less than 7 percent. If every download replaced a sale, there would be no commercial music industry left. The relationship between the free version and the legitimate version is rather complex, like the relationship between a public library and a book publisher. Sometimes free stuff sells stuff.
Sometimes free stuff sells stuff.
This concept isn’t new. It’s just new to the intellectual property industry. In fact, anyone familiar with “loss leaders” knows that sometimes stuff that costs the owner money sells stuff. My father-in-law was a Burger King franchisee. He rarely made any money on hamburgers. Usually he lost money on hamburgers. Lots of money if there was some kind of special offer.
But the fries? The drinks? Enormous profit margins.
However, Vaidhyanathan never quite explains why free downloads might help spur purchased downloads. I know why burgers sell fries. But why will someone watching a pirated but pristine HD download of a film ever bother to spend money on a file that is the exact same aggregate of zeros and ones?
Right now, it appears that digital piracy is something enjoyed largely by the impoverished who probably wouldn’t pay to see the movie otherwise, or the inveterate naughty, i.e. those who love getting something for free so much, they’ll put up with the crappy quality and long download times.
Those days will change.
In the coming year, downloading DVD quality movies will accelerate. Shortly thereafter, we’ll be routinely downloading HD quality movies.
The industry for which we work will face a choice. Does it continue to build the walls higher and higher, or does it hope and pray that freebies will simply serve to entice people to do the right thing and buy the official version?
I remain cautiously optimistic. Anyone can jump online right now and download any song they so desire for free…and in less than a minute. And yet, iTunes continues to move files at a ferocious pace. Last February, it sold its billionth song.
That’s a billion reasons to be hopeful.
Just as copyright law was the only thing that could trump the ambitions of Google, an inherent human decency may be the only thing that can defeat piracy.
The big problem is that most people don’t seem to believe that copyright violation is illegal. I was talking an art history PhD student at Oxford last year who thought that if he had bought a CD, then he could make as many copies of it as he wanted for his friends. I’m sure he would have had an ethical qualm with plagiarism, but file sharing was a-ok.
I assume most people come to this conclusion because media copying isn’t zero-sum, unlike theft of tangible goods. They don’t realize that copying represents opportunity cost and that, regardless of loss-leading principles, prevents the artist from collecting royalties.
Certainly video-on-demand in the same manner of iTunes will be helpful. Low-cost HD whenever we want it should help the studios. The question is then, how quickly can we get this technology in the consumers’ hands?
I can easily see a system where studios offer current-run or recent features for free or nominal cost as an enticement to subscribe to their back catalog, including stuff too old or obscure to be found on p2p services, with DVD-style special features.
That said, as a member of the first generation to grow up with the Internet, it’s really impossible to take seriously any hope of “ending piracy”. It’s too fundamental a cultural norm at this point. The internet is the land of Free Infinite Stuff. That’s pretty much its charm. And no matter how good an argument you make, at the end of the day you’re asking everyone please not to take things from the Free Infinite Stuff pile. And that’s never going to fly.
Inherent human decency? How quaint.
I’ve always prefered the idea of giving people good incentives to make purchases. DVD extra’s and special features are a good example of this, but all too often they barely an after thought tacked on, like onlu including the trailers for the movie. I have no regrets about purchasing my LOTR dvd’s which come on 4 dvd’s chocked full of extra’s and features.
A minor nitpick, but nobody is downloading “pirated but pristine HD” films. The movies you can get over bit-torrent are 99% DVD rips that are recompressed, resized, and are hardly pristine to the discerning eye.
Television HD rips are becoming very common and are captured from non-consumer satellites that are broadcasting in the clear, and are never spread in actual HD; they too are resized and recompressed, to between 350mB and 400.
While you can go out and get actual raw DVD rips that are essentially images you can reburn yourself that weigh in around 4.5gB, that’s it.
There are no 30-50gB raw HD-DVD or BluRay rips of any kind because AACS hasn’t been cracked yet (it will be), and it would be wasteful anyway. Nobody is going to download 50gB to get a single movie, if they even existed at all (they do not.)
Even when the pseudo-HD downloads start coming in DivX and WMV9, they’ll be running at very reduced bit rates to attain smaller file sizes, and also will hardly be a real HD experience with real HD attributes.
“Nobody is going to download 50gB to get a single movie, if they even existed at all (they do not.)”
…but give it a few years… (hell it’s going to take a few years for HD to properly take off anyway… and internet download speeds are not getting slower.)
I think that the main thing the industry has to do is make downloading movies easy. The other day, there was a song my wife wanted to download, but she couldn’t figure out how to use limewire to get the song she wanted. So, she just went on iTunes and downloaded it for 99 cents. She’s willing to pay a small some of money for convenience, even when there’s a free option available.
Someone on NPR (I can’t remember who) pointed out that most people’s first experience with downloading music was with Napster or Kazaa or what have you. The public got used to downloading music for free. I think the TV networks have gotten it right by putting their shows on iTunes for a couple bucks, or even for free on their own websites.
Plus, Paul is right, in that downloads will never look as good as purchased DVDs. I’ll admit that I’ve downloaded my share of bootlegs in my college days, but if I found a movie that I really liked, I’d go out and buy it so I could watch a quality version.
Matt makes a very good point. The majority of people are lazy when it comes to entertainment. The one-stop shop of iTunes (or hitting the pay-per-view button on your remote) is more attractive than the three or four programs you need to search, download, decompress and view a bootleg file. I think price points for films will be driven down further until the balance of ease vs. cost is reached. For music, it looks like .99 a song is a good balance.
Netflix has made a good buck on the subscription model. Blending the two I’m picturing an on-demand HD quality catalogue of 40,000 movies available for download or TV viewing with $30 a month unlimited viewing subscription.
Think it would fly?
-Wil
“There are no 30-50gB raw HD-DVD or BluRay rips of any kind because AACS hasn’t been cracked yet”
Wow. What happened to the good old days of “dude, just put a piece of tape over where the tab has been removed”…
Speaking of VHS, I still prefer it cause you can fast forward past all the warnings :)
Nice post, but things won’t change. Some things we buy, whether for convienence or the fact that people like “the real product”, other times (usually during our salad days) we try and get stuff for free. During the course of history we have come up with ways to try and protect “our properties”, but we have not been able to change our nature. Hollywood itself is full of famous stories of theft within its own ranks - and they’re the ones complaining about being stole from. Anyone outside of this town believes that everyone that’s ever had a job in the industry has got it made, and until the “lifestyles of the rich and famous” stops being the number one news story, few will believe that their “illegal copy” of anything is really hurting anyone.
But, like I said, nice post :)
Without a doubt. But it’s going to happen. Ultimately, download speeds are going to increase, and once they hit a certain critical rate, it’s actually inevitable that downloaded files will be indistiguishable from the files contained on the hard media.
C.
But why will someone watching a pirated but pristine HD download of a film ever bother to spend money on a file that is the exact same aggregate of zeros and ones?
They wouldn’t Craig. But that’s not always the situation.
Firstly, if you’re downloading a movie that’s in theaters you’re getting a cam (unless you were doing it during the time that Oscar voter was putting stuff online). That’s much lower quality. I have a CD with King Kong on it and about 30 seconds into it I realized I don’t want to see it like this.
Secondly, even if the file was made from an actual DVD some quality has probably been lost to compression. It’s much easier to find a compressed version of a movie online, and much easier to download. Even if you are burning DVDs off netflix you’re probably doing it to a single layer disk and having to cut the quality in half.
Thirdly, my friends and I who download what we want do it in large part for the convience, not the price. We’ve always said that if there was a service where you pay $20-$30 a month and could download whatever you want we’d sign up in a heartbeat. That’s basically what I’m doing with Netflix only it’s less convienient.
Honestly Craig, I think this will be a moot argument very soon. I really do.
The first thing to realize is this: there’s no such thing as a “free” copy of any film or song. You have to go find any so called “free” copy before you can download it, and that can entail quite a bit of time and effort on your part.
Second thing to realize is that you never have any idea of whether or not the quality of a bootleg is going to make downloading it worth the effort.
Third, with bootlegs, you’ve got no way of knowing whether or not it’s infested with a virus, spyware, or even completely innocent, but none the less just plane flat out bad code, that’s going to lock up you computer when you try to run it.
So the REAL question, the question that WILL keep people honest is this one: why should I bother with a bootleg, when for a small fee, I can buy a perfectly legal copy, of top notch quality, that’s free of malicious or fouled up code, and works every time, from a site I’ve got bookmarked so I don’t have to screw around searching for what I want?
And it’s the answers to that question that’s going to determine who stays alive and who goes belly up in the content distribution business.
Answers like:
Because a legal copy costs SO much it’s worth the effort of putting up with the problems of downloading bootlegs.
Because somebody is double dipping by charging me for a copy while charging an advertiser to include advertisements embedded in the copy I just paid for.
Because the titles I want aren’t available.
Because the server never seems to work under the load of yet another rush on one of the titles it’s offering.
Because the distributor is more interested in selling me what they want to sell this week than they are in selling me what I want to buy. I.e. it’s easy to buy that crappy film that was just released that nobody wants to see, ‘cause it’s crap, but almost impossible to find the title I’m looking for buried under all the ads and “valuable offers” that are being shoved up my nose while I’m looking for what I want to buy.
iTunes has sold a billion songs, and will sell millions of films and TV eps, ‘cause it’s cheap, it works, and it’s SO easy to use that it’s just not worth the effort to go looking for problematic bootlegs.
And as far as DVD’s or any other form of hard copies go, I don’t think they’re long for this world as a major market. Hard copies are going to wind up like leather bound books. They’re going to be the things people buy more as a statement than anything else.
Trekkies will have their hard copies of all things Trek on a shelf. Film buffs will have copies of the classics up there. You’ll probably have a copy of Scary Movie 3,4,& 5 up there along with Superhero!, Senseless, Rocketman, and a bunch of films you really admire or were influenced by.
But will they ever get played? Maybe. Once. But in a very short time it’s probably going to entail less effort to download and play a film than it is to get up off your butt and put one in a player.
Which (BTW, hint hint ;-) is why I’d be a lot more concerned with writers gettin’ paid for online delivery in future contracts, than trying to get a bigger cut on DVD sales. It’d stink to FINALLY get movement on DVD sales in exchange for a little less from internet d.l.’s, and find that in the end we’re gettin’ a bigger % of the sales of horse blankets in exchange for a smaller % on the sale of automobile tires. ;-)
Of course the real copyright question is:
Does your limited commentary about Mr. Vaidhyanathan’s article, when contrasted with the extensive excerpting of same, qualify as ‘fair use?’
heeheeheehee.
Joe U.
Time for me to change my search engine defaults from “Google” to “Ask.com”.
Believe it or not, I actually think about stuff like that. And yes. Yes it does. :)
A lot of piracy has to do with the inertia of the pirate and how difficult it is to get the pirated material. Right now it’s relatively easy to find and download pirated videos and music.
But digital rights management is getting more and more sophisticated. There will always be hackers who make it their mission to crack copyright protection software because there will always be something geek-worthy to download such as Battlestar Galactica. But it’s becoming more and more inconvenient for the average joe to rip stuff as the content providers deploy more and more protections on their entertainment softwares.
I think, eventually, it’ll be easier to pay and download than to deal with finding cracked copies to programs over the internet.
Believe it or not, I actually think about stuff like that. And yes. Yes it does. :)
Craig—
Without seeing the original article’s length, I suspect you’re right. I just thought it was a fun/funny point to bring up.
I don’t know. Even solving the bandwidth issues, downloading movies still seems like a PITA. We also need hardware to bridge the gap between the computer and the television (most of us don’t want to huddle around the PC to watch a movie, and Media Center PCs haven’t really taken off in huge numbers yet).
I’m sure we’ll see such things in the near future (I assume that Apple ITV will do it), but that still seems like an investment and complication well above the $25 I can pay to get a DVD player.
The way we consume music and movies is so different, I don’t know that the lessons of one apply to the other.
But I’m pretty small minded when it comes to this sort of thing.
Hey, thanks for the nice words and analysis.
This is a great site!
Siva
Siva:
Glad you enjoy it! I’ve been writing about copyright issues for some time now as they pertain to professional screenwriters, and I (obviously) thought your piece was one of the clearest and most even-handed I had come across.
Naturally, anyone subject to the vagaries of work-fore-hire is going to sympathize with the position that corporate IP owners have gained too much leverage. On the other hand, I don’t see work-for-hire disappearing any time soon, and we screenwriters must rely on the companies for our residuals (our version of royalties). As such, I’m very anti-P2P, because I simply don’t like the notion of mass theft. Still, the laws definitely need review an balance.
Pleasure having you here. And thank God I can just type “Siva” now. :)
Interestingly, Craig, the rise of P2P just reinforces your argument that writers need to evolve into becoming producers.
But let’s not quite panic. internet clearance in the US is just 68%, and only about 10% of that is broadband. P2P theft is still way, way below the theft rate in big box stores like Wal Mart, and they limp along. Add to that the recent studies showing that music downloaders buy just as much legally as non-downloaders, Cory Doctorow’s experiences with the sales of the books he also makes available in creative commons being HIGHER, AND the success of iTunes, and I think you have your practical examples of how free doesn’t kill pay. As you mention, work-for-hire isn’t going anywhere soon. Well, neither is the fat pipe of DVD, or the inherent advantage of cheap, legal systems.
The point is, we used to, in the old days, monetize something, and then figure out how to kep people from stealing it. This new format seems to have driven everyone mad.
People don’t buy movies. People rent movies or watch movies in the theatre. You go to many of my friend’s homes, they own 5-10 movies, several of them still on tape, and many of them straight to video flicks for their kids. Most of their movies they own they saw in the theatre first, and then bought on impulse in Wal-Mart.
Selling DVDs for a $1.50 in China doesn’t lose anyone money - it gains a market of nearly a billion people who otherwise we’re never gonna buy from you in the first place. Selling high speed film downloads at three dollars a pop doesn’t loose you a twenty dollar DVD sale, it converts a renter into a buyer, at potentially much the same profit margin.
Thing is, there is already a perfectly legal system of getting movies via the internet, that kicks the shit out of downloading via bittorrent.
It’s called Netflix.
I’m not being glib here - if you do the math, Netflix is more cost effective than downloading movies via the internet. The selection is larger, the hassle is smaller, and where it takes a day to two days to download one film, I can wait two days for a stack of movies to arrive in my mailbox, without any serious intervention by me. It’s faster and more convinient.
Serious hardcore downloaders are spending as much money on access to newsgroup servers and high bandwidth internet connections as they would on a cheap Netflix account, and it doesn’t win them much. I know serious ePirates - and they don’t pirate movies. They pirate software and music.
It’s going to be 10 years before consumer bandwidth reaches a level where you can download a pristine HD film with all the extras in less time than it takes to mail it to you. And in that time, I expect distribution to have ensure that it’s easier and better to continue to get content from the legal sources. In the meantime, we as primary content creators (as opposed to content funders and distributors) should take this changing of the paradigm as an opportunity to make the paying of things like residuals more fair.
Craig, I agree with most of what you say except how do you reconcile your desire for strong copyright with your career as of late which has been based mainly around derivitive works? Although parody film may be protected by the first amendment; I don’t know.
If copyright holders get everything they want they may stop derivitive works as well.
Jon:
Let’s hope and pray you’re right!
David:
Parody is, in fact, protected speech. Specifically, it falls under the doctrine of “free use”. That’s not to say that I don’t deal with a far larger share of copyright issues than the average screenwriter.
I do.
Still, we’re protected. For instance, Apple was very very very annoyed with us for portraying the alien tripods as ipods. But they didn’t sue us.
Nor did Michael Jackson.
Parody. Among others to think, one must never forget Larry Flynt and his landmark Supreme Court case vs. Jerry Falwell.
“Parody is, in fact, protected speech”
isn’t it a little worrying though, that this is even in question here…?
I mean, you don’t expect it to be talked about daily on the headlines of Fox News, but on a site about empowering writers, you’d think among it’s readers that at least this much would be clear enough.
Oh well.
Ruari:
If I thought writers were supposed to know this stuff, I wouldn’t have started this site.
I think writers need to know this stuff, but I’m not judgmental about whether they do or don’t before they meet my proselytizing ass.
After all, it was only three years ago that I knew none of it myself.
As an indie writer-filmmaker myself, I have no idea whehter paid downloads will ever become a viable business.
So as an experiment—and because my distributor is taking so damn long to put out the DVD—I’ve put my feature-length movie online for free.
Don’t know if this is smart or stupid, but at least people can see it. You’re all welcome to take a look.
Great site, Craig.
—Greg
Fair enough Craig… maybe then its time for a FAQ…?
Eh…if I’m REALLY bored. :)
Too many comments for me to read them all.
I’m tight with some bootleggers.
There will always be bootleggers.
There will always be a reason to steal.
Right now, in music, the new thing isn’t pirating a song or an album, it’s handing your I-Pod to a bootlegger and they program your whole shit. The put on every song by a requested artist. They put on B’cuts by the artist that you never heard of. Shit, some of the bootleggers actually consider themselves artists. They “interpret” what their clients want and load similar artists on people’s ipods.
Don’t know if this relates to anything, but there will ALWAYS be a reason and a way to steal.
Right now, in music, the new thing isn’t pirating a song or an album, it’s handing your I-Pod to a bootlegger and they program your whole shit. The put on every song by a requested artist. They put on B’cuts by the artist that you never heard of. Shit, some of the bootleggers actually consider themselves artists. They “interpret” what their clients want and load similar artists on people’s ipods.
Holy shit I would never do that. I’d really have to know and trust a guy to hand over something that expensive, and I’d sure as hell never pay for that. I’m not even very into the warez scene and I can find anything and everything by a given artists with almost no problem unless they’re really obscure. That just seems…wow.
I hate to clog up the comments or otherwise hijack the conversation, but as this is at least tengentally connected, I thought I’d offer up a recording artist’s view on file-sharing, Janis Ian’s site: here. Oh, and make sure you click on the additional link for the followup to her article.
For those too young to remember, Ms Ian experienced most of her fame in the 70s, her main claim to fame being the song ‘At Seventeen’.
Her thoughts address the music biz, but I think there are some intriguing contrasts and parallels to the film industry and figured the article might open up even more discussion.
Wasting time candy so much fun :) http://www.bildschirmarbeiter.com/output_8981.html
The more complicated and / or annoying the DRM for movie- / TV-download gets, the more people will look for another way to get what they want (or think they want, for that matter). But let’s assume there is a convenient way (as seen from the potential customers), there is still the problem of the territories. Who watched the season-premier of Lost? Right, the people in the US. Everybody else faces two choices:
1) take a look at any Lost-related site on the Internet and get your experience ruined for good, because there was no way of keeping up with the US-viewers and wait for the (shitty dubbed) release in a couple of months, if your lucky, that is. 2) try to get it the day after it aired in the US.
Now try to talk to an avid Lost-fan (not living in the US) about the aforementioned choices, or, to put it bluntly, to a customer. Said customer will be told, that nobody cares about his/her ruined experience. The solution to segment the Internet according to the wishes of some media-companies does not cut it by a long shot.
What if we had a more interesting topic instead of Master Mazin’s diversionary fishing trip topic?
Would that be a good thing?
am I tripping or is this site short a post?
Whoops!
Fixed.
Blu-ray? HD DVD? If you think that 30GB is alot for these ‘upcoming’ formats, soon HVD hits the market at 200GB for a DVD sized media. Then we’ll have serial movies available with all the extras on a single media platter. You won’t be able to stop pirating, but you could probably limit it. Using the hammer technique is not effective, especially once it gets shared by a country that doesn’t care (except officially), that someone is pirating your movie.