Content vs. Property

Technology, Economics, Politics by Adam on 2005-07-02 04:39

The following entry is a letter sent to Richard Epstein in response to his article “The Creators Own Ideas”.

Dear Dr. Epstein,

I greatly enjoyed your piece “The Creators Own Their Ideas” in the June 2005 issue of MIT Technology Review. I wish to offer a response and rebuttal from my own, somewhat unusual, perspective: that of a libertarian, businessman, and free market capitalist who is also a staunch supporter of free software, creative remixing, and the weakening of “intellectual property” laws.

Lessig’s article has the right idea, but takes the wrong approach (appeals to emotion, anecdotal evidence, etc). Your article was flawlessly argued but where it fell short was understanding of the unique nature of content, and why traditional property laws are poorly suited for protecting the rights of authors, consumers, and culture as a whole.

As mentioned, my perspective is an unusual one. On the one hand, my “day job” is as an entrepreneur. Currently I am the CEO of one corporation, and sit on the board of two others. Earlier in my career, I was a computer programmer whose income was directly dependent upon proprietary software, so I have a direct understanding of the harm caused by software piracy. Overall, you will be hard-pressed to find a more unrepentant advocate of free market capitalism than myself.

On the other hand, my hobbies - or perhaps “night careers,” if you will - are of an artistic bent. I am a musician (having produced a number of works both for sale and for free distribution), a creator of free software (in both the “freedom” sense and in the “no cost” sense), and to a lesser degree an author who has achieved some minimal publication. In all cases, I am creating content which is easy to redistribute - the very issue which IP law attempts to address.

Typically you will find artistic types on one side of the fence, because they see only the perspective of content creators and consumers; and practical, business types on the other side, because they see the perspective of property law and market economics that are vital to the health of a free society. I have the benefit of seeing the issue from both perspectives, which I believe produces some useful insights.

Lessig’s explanation of the free content culture reflects the people in that culture: artists, authors, and musicians feel more than they think. His use of anecdotes is an attempt to convey the gut feeling that (most) artists understand intuitively but can’t explain. They bandy about emotional phrases like “information wants to be free” which carry the feeling but not the understanding. So let me try to repackage this feeling as an argument, in concrete and practical terms, suitable for debate.

Content vs. Property

IP law is an attempt to classify content as a subset of the term “property.” Is this justified? Let’s compare content (music, writing, software, movies) to what we normally call property (physical property such as land, resources, or manufactured goods).

Examining this list, one wonders why physical property and content are lumped together at all. They are almost nothing alike. Their only similarity - and this is certainly a key one for economic purposes - is that their owners may wish to use their property or content to make money or achieve other benefit through the usual mechanisms of the free market. Although this similarity should not be ignored, neither do I believe it is strong enough on its own to justify grouping these disparate concepts together.

Perhaps the most dramatic difference between property and content is the last point on the list above. It is intuitive that property - be it a resource like land or oil, or a product like a car or an ice-cream cone - reduces in value the more it is used. Content, on the other hand, is worth nothing until it is used, and next to nothing until it is used widely.

Consider a popular musical artist such as Metallica. Imagine that Metallica had produced all of the same songs that it has up to the present day, but there was only a single copy of these songs, owned by a single person (perhaps one of the band members). How much value would this music have? By the rules of property, its value would be enormous: it is rare, even unique, and completely unused. A rare, unused car, an unspoiled piece of land, or an untapped mine which produces a rare mineral would all be of exceedingly high value. But this is not property, it is content. The music described would be of no (monetary) value whatsoever, because Metallica would be a completely unknown band. They would be just another garage band, one of millions that exist across the nation.

The bane of a property owner is theft; the bane of a content author is obscurity. Wal-Mart’s asset value decreases every time someone shoplifts an item from their shelves. Metallica’s value as an artist increases every time someone downloads one of their songs (legally or not), because it increases their notoriety and the value of their current and future content, while not decreasing the value of any assets. The downloader is one more potential fan who may attend concerts, buy t-shirts, or even buy future albums. (The benefit of this is more obvious for the vast majority of artists who are not household names and have not achieved market saturation.)

A Century of Transition

The legal (and largely, political) conflict we face today under the heading of “intellectual property” law is a temporary aberration which stems from the growing pains of content distribution technology. Consider the long history of content creation, stretching back to the beginning of history and earlier, and extending up until the turn of the last century. Storytellers, musicians, and playwrights did not make their living by selling copies of their material. To take the most notable of these, making copies of musical performance was essentially impossible. The economic value of a song was in its performance, not its content.

Recording technology changed all this - briefly, in a historical timeframe. For about one century, society found itself in an awkward transitionary place straddling historical distribution methods (performance, with free borrowing and remixing between artists), and the world of today and beyond (nearly unlimited capability to transmit perfect digital copies of content). This transition was facilitated by the rise of content distributors: record labels, publishers, television networks. These distributors performed the important task of disseminating copies of content. Given the technology of the time period in question, this was a challenging and resource-intensive task, one that required the business muscle and vast resources of large, centralized distributors.

Indeed, through most of this time and certainly today, distributors take the vast bulk of the profits gleaned from artists’ works. It is a straw man to present proponents of free remix culture, like Lessig, as seeking to deny income to artists. Very few artists today make the bulk of their income from selling copies of their content. Even when they do, swapping of pirate copies usually only increases any revenue gained (as it is basically free advertising). The vast quantities of money people spend on content are going to the distributors: television networks, record labels, and publishers.

But as the cost of creation and distribution has dropped, what value do content distributors offer? Little, and in the coming decades, it will shrink to nearly none. Weakening of intellectual property law only hastens the inevitable demise of centralized content distribution business. Sooner or later, they will be replaced by decentralized, Internet-based distribution systems which offer a direct conduit between content creators and content consumers.

Great Art Does Not Require IP Law

When we think of the greatest artists of all time, who comes to mind? Mozart, Shakespeare, Da Vinci - these men lived before modern content distribution technology, and were unable to benefit in the slightest from selling copies of their work’s performances. Yet they created mankind’s greatest works of art. Has common, restriction-free usage of the Mona Lisa’s face, modern remakes of Romeo and Juliet, or recordings of Piano Concerto No. 24 reduced the value of these works? No, quite the opposite: it has catapulted their worth, and the fame of the creators, to stratospheric levels well beyond that achieved in their own lifetimes.

Prior to recording technology, artists’ source of income was in performance. Today, the vast majority of money made by artists big and small (but especially small) comes from performance. (Ask any band what their revenues are on concerts, compared against the size of the checks they receive from their record label.) In the future, with centralized content networks gone, artists will make money from… yes, still performance. For artists, little has changed. It is the business of distribution which is in jeopardy. And, like the horse and buggy, this outdated business model must be left to die, not propped up by Congress by attempting to shoehorn content into the legal realm of property.

Content’s value is increased when it is shared. Therefore, it is in both society’s and the individual’s best interest to share it as freely as possible. Sharing content creates wealth. In its most basic form, “sharing” is simply being able to experience the content: listening to a downloaded song, or reading an article on a website. But it goes much further than that, into the realm of unlimited creative remixing. Whether it be a musician changing a few words or notes of a folk song, a pianist performing a Beethoven piece with their own unique style, a parody work poking fun at a popular story, a modern remake of a classic Shakespeare work, a DJ mixing together tracks from different artists, or even a child creating a collage of clippings from a magazine - free and creative remixing increases the value of content and increases wealth in society as a whole.

As for DRM, I will say only this: I believe that the free market will eventually decide against it. The IBM PC gained maximal market share over other, technically superior technology platforms because its use of open technologies which were easy to modify and copy. The Internet’s success over proprietary networks controlled by single companies was due to its decentralized nature, giving creators and consumers maximal freedom to use it in any way they can imagine. DRM technology will turn out the same way. Content which is tightly controlled through DRM will be of less value in the long run than content which offers more freedom to its users. It goes without saying that government should neither support nor inhibit DRM technologies. It is up to consumers, artists, and businesses to make choices individually, and in the long run a general trend will emerge: the market’s decision.

Summary

“Intellectual property” is a term which places debate into the terms of one side: that of content distributors, not artists or consumers. Content is not property. In fact, it bears hardly any resemblance to property whatsoever. Property rights protection is without a doubt the proper role of government. But this has little to do with content, and trying to combine the two only clouds the issue. The result is - and will continue to be - excessively complex and vague laws which will be difficult or impossible to follow or enforce, and which will thereby be increasingly ignored by society at large.

Content its own complete subject. Traditionally, the rules were simple: to experience it, you had to attend a performance. Today’s technologies are allowing content to expand in wonderful and vastly diverse new directions. The question of how to best create, distribute, experience, share, and store content is one that deserves the attention of our society’s best minds, legal and otherwise. But forget about property. Content in modern times is a whole new world.

Sincerely,
Adam Wiggins

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