The New Face of Demagogy

Posted on February 11, 2012

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Evidently, the Recording Industry Association of American (RIAA) will not take the derailment of SOPA or PIPA lying down. Cary Sherman, CEO of RIAA, rants against this derailment in an op-ed piece in the New York Times. Essentially, Sherman is incensed that Google and Wikipedia brainwashed hundreds of thousands of people, inciting them to rise up against his baby — SOPA/PIPA. I guess he really doesn’t want to listen to anyone else except for the members of his association. And those members only want to listen to their shareholders.

Since he’s a lawyer, I assume that Sherman is fairly well educated. But he seems to have little comprehension as to what “net neutrality” means. (I get more than peeved when professionals — such as lawyers, lawmakers and judges — feel that they understand technology but in reality have no conception of technology.) But I do feel he is being true to his profession: he uses misinformation and partial truths to argue his very partisan approach. For starters, there was no real legislative process and many of those who testified in support of the bills also noted they had no real technological knowledge to assess its effects. And there’s no mention of the $90 million spent by the RIAA lobbying Congress from 2000-2010. I guess it’s OK for corporations to spend tons of money lobbying, but not OK for hundreds of thousands (and more) citizens to express their opinions. By the logic set forth in SOPA/PIPA, all traffic on every road in the country should pass through roadblocks since thieves also use roads for getaways. And if the thieves manage to get to a hideout, then the government has the right to “disappear” that area and address from maps and GPS’s. (I know this sounds wacko, but sometimes you need to test your thinking by reframing it — something the RIAA people I’m sure never do.)

As I mentioned my objections to SOPA/PIPA in a previous post, the intellectual property industry prefers to think of its customers as potential thieves. People resort to thievery when either they cannot afford something they need to have, or if they feel that the owner of the property they steal has ripped them off. (And, yes, there is a small minority of people who steal for the thrill of it, and those from a pathological need to pilfer.) Give customers a fair shake, and respect, and you’ve got their business. In effect, people are telling the industry that they are not getting a fair shake. And respect? Gimme a break.

An Aside: Just one thing to consider: going digital gets us out of the problems (and laws) governing physical manufacturing and distribution. When you need to make something physically, it tends to obey the law of supply and demand when it’s sold in the marketplace. For digital “manufacturing,” supply is only limited by digital storage and bandwidth. And, for most of everything done digitally, sufficient storage and bandwidth exists. (OK, my argument does break down if, say, 10,000,000 people download the same song from the same place at the same time.) Therefore, digital supply will theoretically always meet digital demand. There will be no scarcity, no point(s) where demand will outstrip supply. And no overproduction where there’s too much product and too little demand.

Continued Aside: So, for books, digital “manufacture” obviates the need for old-time manufacturing costs, as well as distribution costs, and, most importantly, the cost of returns. Depending on the book (and press run), those savings could constitute anywhere from 20 to 35% of the list price. Most publishers initially listed ebooks at just below, equal or even higher than list, and when Amazon tried selling ebooks at a “truer” price, publishers revolted and came up with the agency model.

Ending the Aside: What can help shape a new concept of a digital law of supply and demand borrows from an old practice MacDonald’s mastered to their advantage: volume pricing. For example, I can gear my business to selling 100 $10 burgers a day, or I can gear it to sell 500 burgers at $2 apiece. (Yes, I know this is simplified: one would also need to factor in quality of ingredients, level of service and ambiance.) Either way, I make the same amount of money. Digital “manufacturing” along with volume pricing means a way to expand book sales. If you could net the same amount of money, what would you rather do — sell 10,000 books at a high price, or 100,000 at a much lower price?

Back to the Programme: If the intent of the RIAA, and their allies, is to shut down foreign websites that distribute, and sell, works illegally, then work on dealing with foreign governments to directly deal with this problem. The solution is not to punish consumers (citizens) here and not to hold companies here responsible for the actions of companies on foreign soil. If some inventive bloke in Uzbekistan is illegally streaming The Descendants, figure out a way to work with Uzbeki authorities to shut him down.

In the meantime, our lawmakers and judges really should get refresher courses as to the nature of copyright. As stated in the Constitution, copyrights and patents are meant “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” What we have now in the protection of intellectual property is that the copyright holder has right to their property for a period that exceeds its ability to promote the progress of science and arts when that period expires. I’d say at least 99% of what is being currently copyrighted will hold no value to either the progress of science and useful arts, or its copyright holder, by the end of its copyright period. I’d venture to say that runs counter to the intent of the Constitution — something this Supreme Court turned a blind eye to when it signed off on the Mickey Mouse Copyright Protection Act of 1998 by saying as long as there’s a limit to the copyright duration, then it’s constitutional. In that case, why not make it for a 1,000 years, or until the end of time + 1 year?

Ultimately, the future success — nay, survival — of publishing resides in how well publishers listen to their readers, and not to themselves or their shareholders or booksellers or distributors or anyone with vested interests in intellectual property — of any sort — and how publishers listen to what might be left of their consciences.

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