You, too, can live without Madonna!
Posted by Andrew | Filed under Commentary
Imagine a world where, instead of going to a library or a DVD shop, you could just download what you wanted online. You have a legal arrangement with a company which supplies films or TV programmes, according to which they deduct a fixed fee from your bank account for each item you download and save. This would be good for the consumer because all of the silliness of buying the thing and then possibly waiting for who-knows-how-long for it to physically arrive would evaporate. For the distributors it would be good too, because instead of having to package the thing in a CD-ROM or DVD, they just have to keep one copy available for their customers to download from. No need for a credit card because the distributor has your permission to take payments from your bank account as and when. The only other decision which has to be made is whether the customer wants to burn it onto disc for future use. :cheers:
You would think that an arrangement like this would be perfect for all parties concerned. When I download music, I do not then make it available to be shared with others – after all, I just PAID for it – but the entertainment industry takes a dim view of file-sharing, largely (one suspects) because they see it as a golden opportunity which they missed, and now, utterly obsessed with what they see as the infringement of their "intellectual copyright", they have proceeded to criminalise their own customers. Haven't they stopped for a moment to ask themselves what the ultimate outcome of this might be?
I read recently at the BBC's web site that new research had shown that the customers who bought the most music online were also the ones who did the most file-sharing – not (one presumes) sharing the ones that they had downloaded but finding others online and downloading them too. Now today I came across an interesting discussion (http://longtail.typepad.com/the_long_tail/2005/08/just_enough_pir.html) of whether "piracy" is actually good for sales and whether there is actually an "optimal" level of piracy for any industry.
As an example, Chris Anderson mentions the experience of Microsoft in China and India. The various versions of Windoze have always been overpriced and as time has gone by, they have become more restrictive too; whereas once upon a time you could get a copy of (say) 98SE and put it onto as many hard drives as you wanted, now M$ restricts it to a single copy per hard drive. But the experience of M$ in China and India was that most users could not afford it (does that sound familiar?) at the beginning and therefore resorted to "piracy" to get what they wanted, especially the OS itself and Office. For M$, the benefit of this was that customers became dependent upon the software and this led to M$ getting a foothold in government offices and large corporations. This, of course, is precisely what one would predict. :rolleyes:
But what is this actually teaching us? It means that even in the presence or availability of "pirated" (and therefore effectively "free") copies of particular items, people will take the legal route when it is offered to them. It doesn't take a Rocket Scientist to realise that in a situation where free software enables the copying of large music or even larger video files around the world, a company which makes its catalogue available to consumers for a reasonable price (and remember that many people buy CD albums possibly for only one track thereon, they may consider the rest to be superfluous) would be laughing all the way to the bank. There are many free software clients which allow complete copies of even the largest DVDs to be passed around, so the entertainment industry does not have to bother itself with anything except getting its dues from the customers. And the answer to this problem is simply a legal agreement by the customer not to pass on copies to others. How is this really any different from any other online sale? :confused:
Let's forget films and audio for a moment and shift to software. On my PC I run XP Pro and Mandrake 10.1. I purchased a legitimate copy of XP at a local electrical outlet (unfortunately in Korean, but you can't win 'em all!), and used a "certain" file-sharing client to download complete copies of Mandrake 10.0 and 10.1 – a process which is legal because, under the terms of the GNU Public Licence, no charges can be levied for the software other than perhaps the costs of packaging. Download the software over the Internet and they don't get even that. In the RIAA's terms I would be a "pirate" for downloading and sharing the software but in this case, it is not actually illegal; instead, having satisfied myself that I could be happy with the software, I "went legal" and purchased a Silver Club subscription at the Mandriva web site, which is equivalent to about US$10.00 a month to the vendor in France. Updates, bugfixes and patches are entirely free. Instead of criminalising its own clientele, Mandriva has done the logical thing and let its wares out for free, instead charging for membership of its Club, and in the process, it makes much more money in the long term and has a guaranteed cash flow. Imagine M$ giving away free Windoze to customers! :p
How is it that Mandriva (and others such as SuSE and Red Hat) feels that it can can do this and M$ feels that it can't? The answer is that M$ has proprietary software over which it has full copyright. However, with Linux, the man who pulls the strings is Linus Torvalds and people are free to hack away at his creation to their hearts' content, hopefully improving it along the way. And they put out a "basic" collection of the OS bundled with useful software as a "community distro" each time a new version comes out. 😀
Now imagine that you live in a developing country where money is tight. There is a legendary OS that everyone in the developed world uses and you, too, would like to use it. But alas, the cost is sky-high and the more copies you want to use in your company, the more the cost will skyrocket. Call me a Damn Foolee if you like, but this seems hardly the way to boost customer loyalty – quite the opposite, in fact. My own interest in Mandrake started wayyyy back in 1999 when Version 7.0 was still new, and despite the fact that I could never get the damned thing to work properly, I liked what I saw and the result, six years later, is increased revenue for the vendor. It does everything that M$ does and more, as the latter has a nasty habit of removing useful software with each new version. And it's free! :cheers:
The real problem here is that Microsoft has effectively had the software market to itself for much of its existence. Apple went into near-terminal decline but was saved by taking its creator, Steve Jobs, back on board; IBM had a great OS in the form of OS/2 but despite having a 32-bit platform before Microsoft made the jump (and cheaper, too), it never took off. And in the absence of competition, the result is stagnation. And when things like software become necessary rather than optional, illegal copying and distribution is the result. Microsoft had the market to itself and has become both universal and despised at the same time – but it was they themselves who created that situation with their aggressive competitiveness. If any institution is severely in need of competition, it's Microsoft. :zzz:
So now we return to the question of "pirate" file-sharing. What the likes of Mandriva have understood, and the likes of Sony and Time Warner have not, is that the file-sharers themselves are effectively acting as salesmen for the media companies. These latter have taken the now-illogical view that each copy of an electronic file has an intrinsic worth, despite the fact that what they have really created is essentially "vapourware". A file like this is not only easily copied, but also easily lost from any hard drive. Would you want to pay anything for something that could be removed just by an accidental slip of the mouse? I wouldn't. I would expect that part of the "rights" I have as a customer are the rendering of the downloaded file into more permanent form, on a CD-ROM or DVD. And because I am the one who has paid for it, I might lend that CD-ROM or DVD to a friend but I would not want to "share" it in the sense of making it available electronically over any file network. :eyes:
What emerges is the scant regard which the media multiples have for their own customers. Imagine that you have just paid for a new film, which you have downloaded over the Net. Then, poof! Blackout? Virus? Too clumsy with the mouse? There are a thousand and one things, and probably more, that can go wrong in this process. But if you lose your copy, you would not be able to replace it without paying a second time. Yet, as I suggested above, we are not talking about "hardware" here – you should not have to go crawling back to Sony when something like this happens, you pay for the right to enjoy that product and if that is taken away, they have no right to charge for it. It's not like buying a physical DVD. The whole point of digital technology – its supposed major benefit – is the infinite, perfect reproduction of copies with high fidelity to the original. But you cannot maintain high prices for something like this, because as technology improves, the cost of reproduction declines. And software is a ghostly thing – pull the power plug and it's gone. :faint:
In the final analysis, there is no real difference between any of these examples and (say) drug addiction. If you push drugs, you want your clients to want your product. This is just the same for software or digital media as it is for cocaine or heroin. And you make money off the back of peoples' addictions. Imagine what it would be like if the drug pushers were entitled, at a legal level, to force you to stay in a permanently addled state while they made ridiculous profits from your pocket. But that is what the media companies seem to want. No competition for the money in peoples' pockets. 😥
Entertainment companies will rise or fall on their relationships with their own customers, and the rise of file-sharing and the negative response to it by media companies is symptomatic of any company which feels that it has somehow lost control. But how much of that is the fault of the companies themselves? It was they who stoked peoples' appetites and made their products desirable in the minds of the customers. And they still have a strange business model according to which people should pay for each and every viewing of their product, as if they were at some local fleapit watching a film. Digital technology has long since made this an antiquated model and it's about time the media companies grew up a bit.:smurf:
And if they cannot make this transition, people will simply turn off. I mean, I can live without the likes of Madonna. Can't you, too? :up:
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