Liberty, technology and the corporation
Published by Yazad Jal November 8th, 2004 in Economics, TechnologyGuest post by Arun “Quizman” Simha
Tyler Cowen of Marginal Revolution (and George Mason University) argues that the music industry often sues its own customers to create commercial norms in which consumers are not trained to think of music as a free commodity. The lawsuits, are meant to serve as deterring signals to young consumers who would otherwise grow up thinking of music in much the same way as other subsidized commodities.
However, he states that:
Note that the music companies are demanding far smaller penalties than they might hope to win in a formal lawsuit.
In actual fact, music companies have made punitive lawsuits demanding very high penalties from consumers.
Very good arguments against anti-competitive practices by music companies and the Recording Industry Association of America (RIAA) are made by Lawrence Lessig of Stanford and Siva Vaidyanathan of New York University.
Lessig argues that the rights of recording companies are not the same as those of recording artists. The recording company industry tries to use the state to restrict creative freedom.
The industry inhibits creativity and innovation. Ask yourself:
- Why did CDs take such a long time in being made available to consumers even though the technology was available in the 1970’s?
- Why don’t they have DVD recorders in the market though the technology was available for a long time?
- Why you pay 2% royalty for every blank CD-R you buy even if you use it to save your child’s birthday pics?
- Why did Tivo have to fight a legal battle?
Read an excerpt from Lessig’s book “Free culture”, and see / hear his presentation on that topic. Read an article by the former CEO of the RIAA on Lessig’s Creative Commons.
Yazad: On a sporadic basis, AnarCapLib has guest posts (largely by frequent commenters). I do not necessarily agree with whatever’s written on a guest post. My main objective is to highlight interesting points of view and stimulate debate.
Another reason to post on this topic is that it ties in very well on the issues that were discussed at the Liberty, Art and Culture seminar that I attended last week where Tyler Cowen was the keynote speaker.
If anyone else would like to guest post, please write to me at mail [at] yazadjal [dot] com.
7 Responses to “Liberty, technology and the corporation”
- 1 Trackback on Apr 13th, 2005 at 2:30 am
The recording companies are woried because they are slowly but surely being relegated to the role of a middleman. In the old days it was nearly impossible for an artist to distribute his/her music without the distribution power of a recording company. Today that artist can easliy strike a deal with anyone of the online retailers and get a commission for each song downloaded. Its also more profitable for the artist as there is little or no cost involved in distribution (advertizing yes) as they don’t have to invest in the media (CDs, DVDs) and it costs the same to sell 1 million copies as it does one copy.
THe RIAA never objected to people recording music from radios (it was all the rage when FM first came out in India remember). The same can now be done online. There are thousands of shoutcast servers broadcasting music on the net. Wiht Streamripper you can download these songs as they are being streamed? Is that illegal? I can do it on the radio and thats not illegal so is it illegal to do it on a computer? The material and the model hasn’t changed - only the technology as. I guess the RIAA’s major concern is that the copy I make is exactly the same as the original i.e. there is no deterioration of the quality.
Good Article in the Economist on the issue
Why don’t they have DVD recorders in the market though the technology was available for a long time?
They do. It costs about 6500 bucks for a Sony model.
Madman,
I should’ve used “didn’t” instead of “don’t”. My error. Imho, DVD recording technology has been available since the 1980s. Incidentally, here’s another interesting article on this topic.
Actually Hollywood had thought it had got piracy cornered after the advent of DVDs. Having learnt lessons from teh proliferation of VHS tapes, Holly wood was determined not to repeat the fiasco of giving the consumer content on easily duplicable media. So all DVD’s were encrypted to prevent them from being copies. However and enterprising HAcker cracked the encruption and made it available on the Net. The other tactic that they used was to regioanlly encode DVDs so that for e.g a DVD from the US will not play on players on China. DVD player makers had to promide to regionally restrict their player. However economics took over and rather than design a different decryption circuit for each of the players being sold in diferent countries, DVD makers gave the player teh ability to play all DVDs and then locked out regions depending on the market in which they are being sold. But if you know how, its very easy to unlock the player to make them play all DVDs - so yet again Holly wood was frustrated. What they are worried about is Internet2 which recently broke a speed record. They estimate that you coudl download a full length movie DVD in about 4-5 seconds using Internet2 - now taht has tehm really worried.
Another fact to ponder: CDs are cheaper and faster to manufacture than Audio CDs. Why the hefty price then?
Quizman, it will be good to see the days of the “Record Label” are coming to an end. It is the artist that sells, not the record label.