Paying for ‘product’
p2pnet news view Freedom | P2P:- Corporate music industry lawyer Ben Sheffner has a certain amount in common with NPD spokesman Russ Crupnick.
Around five years ago, Crupnick appeared out of nowhere to start commenting on developments in and and about corporate entertainment industry, with special reference to Apple.
Sheffner, who in a long and windy not-so-mini-bio says he’s a “copyright/First Amendment/media/entertainment attorney and former journalist,” is a much more recent arrival.
He used to boast on his blog that in the early 2000s, he worked on the infamous Grokster case on the Big Music side, and that Warner Bros Records was also one of his company`s clients.
Now he, too, is being oft-quoted as a very-pro corporate entertainment cartel expert, this time with special reference to the Joel Tenenbaum and Jammie Thomas-Rasset filesharing lawsuits.
He’s also been debating matters of copyright concern with Bill Patry, the clear-thinking senior copyright counsel at Google and author of the famous Moral Panics and the Cpyright Wars blog.
The debate caught the eye of Mike Masnick at TechDirt who says Sheffner, “has an interesting piece where he argues (delicately) that sometimes the customer isn’t right.
“He admits upfront that this is a tricky position to defend, and he starts out with a more nuanced view as to why that is, but then he gets to this:
” ‘So everyone wants the product — but too many don’t want to pay for it. Hell, I don’t want to pay for it. I would love it if I could get all the movies and music I want for free. And I would love it if I could get all the BMWs, houses in the hills, and meals at Urasawa I want for free as well. But of course I realize I can’t. Just about everyone is with me on the BMWs and houses part. But too many think that movies and music should be free, and don’t see anything wrong with taking them. I’m willing to say they’re wrong.
Everyone understands why they can’t have all the physical goods they want for free. But they have a much harder time understanding that with intangible goods like movies and music. IP is just harder to understand, and to explain, than physical property. We need theories to undergird it, special laws to define it, and special classes at law school to learn how to fight over it — not to mention eight-volume treatises to tell us what the law actually is. So when people commit copyright infringement, they may think they’re causing no harm — but they are. They’re undermining a system that enables those big, bad companies that everyone loves to hate, to finance the movies and albums that we all love’.”
But, “This is a myth,” says Masnick, continuing »»»
It’s a popular myth, and I’m quite sure that Sheffner and lots of folks on both sides of the debate think its entirely accurate. But it’s a myth. The nature of a good economic transaction is one in which both parties are better off after the exchange. That means the people “paying” don’t mind paying. They’re happy to pay because they believe that what they have received is better than the cost it took to acquire it. But basic economics plays into the situation here: if the same thing can be made available by others in a better way, it’s only natural for people to ask why they should have to pay.
But if you want real proof that there’s a lot more at work than the idea that consumers just want everything for free and think that if it’s not free they should just take it, look no further than the countless examples we’ve shown of people paying lots of money to support those providers who don’t treat their fans as criminals, who don’t try to prevent what the technology allows and who actually work to connect with those fans and give them a true reason to buy.
Everyone wants a good deal, and a fair deal, but people are more than willing to pay if it makes economic sense. Whether consciously or not, there are an awful lot of people who inherently recognize that the economics don’t make sense when a good is infinitely available. As much as people have trouble understanding explicit economic concepts like supply and demand, instinctively many do, in fact, understand the very nature of abundance and what it means for pricing. It’s not some nefarious story of a bunch of immoral “thieves” wanting stuff for free. It’s an inherent understanding of competitive markets.
On top of that, Sheffner takes the position that paying for these things is necessary, because not paying for them “undermines the system,” he is once again being misleading. It may undermine one particular way that the system works, but the false statement is implicit in his argument: that this is the only way of funding such creation. That is demonstrably false, as we’ve shown time and time again. I have no doubt that Sheffner is sincere in his argument, but it’s based on a false premise that because the system used to work one way, back before technology changed the basic economics it relied on, that somehow we should all suffer by limiting what the technology allows and by ignoring basic economics.
It would be nice if it were possible, but I cannot find a single example of a modern society being able to successfully hold back or ignore what technology allows when it comes to economics.
Finally, way back when I was in high school, I worked at a bagel shop, which also sold other baked goods. The boss’s position was that “the customer is always right” except for one particular issue: the customer could only get the next piece of coffee cake in order. We had this giant sheet cake coffee cake, and many customers didn’t want “end pieces,” and would ask for middle pieces instead. On more than one occasion, this resulted in angry customers stomping out — and even once resulted in a fist fight between a customer and the owner’s son. Over time, as more competition entered the neighborhood (a Dunkin’ Donuts across the street, another bagel shop a block away), we lost a lot of business for our baked goods.
The point, which should be clear, is that you can say the customer is wrong all you want. But, in the end, the market will decide that the customer is right. Always. If you don’t provide what the customer wants (a fair transaction) and others are able to do so, you will suffer.
The movie industry and the music industry both have had numerous opportunities to embrace what the technology allows — and to craft new business models that would be massive money makers in doing so. They have chosen not to do so. They have said that the customer is wrong, and, as Sheffner notes, they have no problem saying so. The problem is that, whether legal or not, the competition is springing up left and right. Sheffner and his former colleagues can stand on whatever principles they want. The market doesn’t care. The market only cares for those who serve the customers’ needs. Plenty of others are doing so (both legally and illegally). Those who want to survive in business would be smart to take lessons from those who are succeeding and looking to implement smart business models around them. Those who want to insist that “the customer can be wrong” may feel good when they look in the mirror, but they’re going to have to contend with a rapidly diminishing customer base.
“The customer can be wrong, but focusing on that doesn’t get them to pay you,” Masnick adds.
First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi
special reference to Apple – NPD `Apple 91%` claim, July 23, 2009
used to boast – RIAA vs Jammie Thomas, from both sides, June 15, 2009
TechDirt - Myth Debunking: Fans Just Want Everything For Free, August 18, 2009
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September 1st, 2009 at 12:02 pm
I’m not sure where this notion of ‘free’ came from. It costs me ~$100/month in LEGiT costs for my ‘activites’, I call it internet wholesale. If the MAFFiA wants to make money in the 21st century all they have to do is have iSP’s impose a small extra IP tax on internet connections. It wouls save them money on laywer fees thatts for sure…ok almost time for vape
September 1st, 2009 at 1:40 pm
@EPiPHON3…
I wish people would get a clue on the whole “levy” idea.
1) Not everyone engages in file sharing, therefore an “internet tax” would be discriminatory. And selective taxing would be pretty much impossible for the providers, unless you’re willing to let DPI become a permanent component of your internet experience.
2) How many OTHER business models would you like to support this way?
If you give the Recording Industry a levy, then every other group that feels “the Internet is devastating our business!” will want their own “compensation”. The MPAA would most likely be the first, followed by the application developers, the gaming industry, book publishers, e-Book publishers, television networks…. the list may not have a end! The average internet bill would be totally unaffordable for the average user under such thinking.
3) Experience has always taught us that such “levies” (read “TAX”!) may start as a low amount, but soon become another way to exploit everyone. All taxes GO UP!
4) Giving any outside interests a piece of the “internet pie” means giving them more legal stake in the whole thing. (Geez! We’re already fighting to keep all the bastards from ruining for us now!)
September 1st, 2009 at 3:29 pm
@ DA
I have more clues then you could shake a hash pipe at…..More taxes are coming whether you like it or not…..Believe it or not but taxes are one of the MAiN reasons that governments and their handlers haven’t just decided to round everyone up and put them in camps to have them ‘work’ their debts off. I hate taxes as much as the next guy, my local sales tax just went up 1%, but I truely believe that if it didn’t our local services would get drastically reduced and their would be even more social unrest/crime and I wouldn;t be able to sleep at night which I can barely do already. I would much rather pay a few extra pennies on my internet bill than have some kind of data cap that’s for sure. I would also just like both sides to be appeased and get along. And people reading this site are file sharing or they are LEO.
September 1st, 2009 at 3:44 pm
@EPiPHON3
I don’t want to pay more money on my internet bill so people can download RIAA or MPAA crap. Why should I, somebody who doesn’t even wanna touch that rubbish, subsidise the people who do?! If you want it then go out and pay for it, steal it, pirate it, I don’t care. But don’t ever, EVER demand that other people should pay for it for you.
September 1st, 2009 at 8:10 pm
@EPiPHON3
If ISPs were taxed, where would the money go? The only organizations with the resources to negotiate a tax would be the RIAA affiliated labels – the big 4 more or less. Indie labels and artists who release their own material would not receive any of the tax. Not to mention, people who didn’t download any music would still have to pay the tax.
In Canada, if I recall correctly, blank cd’s are taxed (technically, levied) to solve piracy. For every cd-r sold, the buyer pays an extra fee which would be given to record companies to “support artists”. But in reality, only big labels that have made negotiations with the government receive any money. Small labels are screwed. Not to mention, you still have to pay the tax, even if you’re using the cd to back up family photots, burn a linux distro, or for some other legitimate non-audio use.
About canadas cd-r levy:
http://neil.eton.ca/copylevy.shtml
The other things that bothers me about an ISP tax: I am appalled by the behavior of the RIAA and the big 4, and how they have abused the legal system to get what they want. I’ve been boycotting RIAA music for a while. I don’t want any of my paycheck going to those slimeballs. But if ISPs were taxed, I’d be forced to support those scum in order to use the internet.
September 1st, 2009 at 8:52 pm
@EPiPHON3â¦
“I would much rather pay a few extra pennies on my internet bill…”
What makes you think it would only come out to “a few extra pennies”??
And, do you think the ARTISTS would actually get their cut?
Once you “appease” the RIAA with their levy, the MPAA with theirs, the Adobes with theirs, the gaming people with theirs… (on and on ad infinitum), how much do you think that would be? (Don’t forget, the recording industry already stated that a minimum of $5 would be what was needed for them to start talking about it.)
And, what about all the other “levy” schemes being pushed for?
An internet tax is not the only levy being demanded. There’s also talks of adding DEVICE taxes to the purchases of iPods, MP3 players, computers, Blackberries, cell phones, etc., and all sorts of other hardware. Obviously, in order to appease all the industries involved, this one-time levy would need to be significant as well.
Let’s expand the idea, shall we? (After all, once you introduce an additional tax scheme, and it becomes “accepted”, it will automatically be expanded at every opportunity to cover additional revenue sources.)…
What about a “site levy” on P2P access sites? It wouldn’t be any stretch of the imagination this would be proposed as well. Suppose, in order to participate in file sharing, you would need to pay a tax whenever you access a file sharing network. Suppose, down the road from then, more sites were included in the scheme. Would this not lead us closer to creating that “2-tiered” Internet we often discuss we’re afraid of seeing develop?
Why did I just take it in that direction, you ask?
To illustrate how levies:
1) never do anything they’re supposed to do, with the exception of putting extra money in the wrong hands.
2) always get raised and expanded, resulting in another perpetual cash cow for those that are already screwing us.