Paul Graham has lost the plot

Spotted the massive, gaping flaw in the argument yet?

It's 2012, if you make this argument then I am done with you. Linux is how old? How much of the internet runs on it?

Done.

Edit: Wow, really? Why is this still a necessary argument?

The linux kernel is utterly free. Yet it's still developed. It's still a state of the art product. And people still make money off of linux and linux-based products.

Do I honestly have to connect the dots here?

Spoilers: if you can't or don't want to charge for the code directly then maybe you find some alternate way to charge for something else or you use another form of supporting development.

The analogy to the creation of music and movies should be so frelling obvious I shouldn't even need to make it.

This sums up why I disagree with the author. People have been playing and composing music way before "selling records" was the way to make money. Just like people don't contribute to open source "for the joy of it".

Very serious business is being done around open source, and the same could happen around the music industry. I personally wouldn't mind settling for an industry where artists get paid for their performances (getting paid for the "actual" hours put in, not just a one-off recording session decades ago that's making them fat millionaires), using their records as promotional tools. Parallel business would develop, they would charge for packaging, interviews, talks, God-knows-what. Let the next generations be creative.

The industry may not seem as lucrative as it may sound today, but frankly I could do without the MBA consultant in a suit. Cut off his salary and most of the middle men and you're good to go. Despite what the article says, the cost of producing and publishing new material isn't that high. My closest friend took a couple months off to record a home made 6 song album. With an iMac and some amateur equipment. The result is simply bluffing. Even a small team on a low budget can definitely invest this money as part of their promotion campaign.

Well, all of the music available on iTunes, Amazon, and the Pirate Bay has already been produced, it just needs to be distributed.

If I want to pay for music to be produced, I use Kickstarter. (Or go to concerts, since playing a song live could be considered a new production)

It's a historical accident that we use charging for distribution of music to pay off debts incurred while producing the music.

Of course, paying 99cents to have my phone download a song in the background so I can play it in the next five minutes is worth it to me - cheaper than a cup of coffee, and I don't have to do any work. So the old system of charging for distribution isn't totally dead.

The problem I have with this article is the association of investment with a 'right' to recoup that investment. There is no inherent right to recoup investment money of this type. NONE! It doesn't matter how hard something is to produce, there is no inherent right to make a profit based on that effort. People paint, write, sing and act all the time without compensation of any kind.

The argument that creators must be compensated to keep creating is a bit of a straw man. The idea that someone can spend some time writing or making music and then deserves compensation seems to be strongly held, but the ones who vastly profit from the copyright law are not the creators. Disney, for instance, has been dead a very long time, but his company defends copyright extension into perpetuity.

Right now, there are far more people unable to create because of copyright/patent law than there are people getting compensated for their creations.

Copyright is simply one means of accomplishing the end goal of paying creators, and certainly not the only one. I'd like to hear an argument in favor of copyright-exactly-as-it-is that doesn't involve this logical fallacy.

I think the solution is more to push for it to become registration based and offer companies a way to extend the copyright for a fee that increases exponentially with time. Lets say the first 10 years is free everything after starts to cost you more and more.

That way I feel that you let things like orphan works be preserved and used even if they are not longer worth enough money to keep under copyright and publish.

Also have the database of what is under copyright be available to everyone so that right holders can be located and licensing can be made easier. These records can be maintain with the money obtain from copyrighting fees.

And also, fix issues with fair use such as breaking DRM being made not illegal.

"Tijl was visiting the market, and noticed a food stand where a butcher was roasting chickens over a fire, spreading a delicious smell.

Tijl stood a while next to the barbecue, sniffing the exquisite smells. Then the butcher noticed him just standing there, sniffing, and not buying anything.

The butcher said: "Hey, you're enjoying the smell of my grilled chickens, not buying anything, you know what? You should pay me for the cooking smells of these chickens instead!"

Upon which Tijl produced his wallet, made tinkling noises with the coins, and replied: "I pay for the smell of these chickens with the sound of my coins!". Faced with such impertinence, the butcher got angry and chased a laughing Tijl away."

Just because there is a cost to produce something does not mean that it has market value.

pg was right in pointing out that the content industry is built on the economics of scarcity, and that this scarcity no longer exists. You could charge someone to see a movie in a theatre when doing so was the only way to see the movie. You could charge for an album when doing so was the only way to hear music on your terms.

That is no longer the case. Scarcity, as far as arrangements of bits is concerned, is over. Period. You can complain about it, you can legislate about it, you can gnash your teeth and prostrate yourself and offer blood sacrifices to your preferred god, but nothing will change this basic fact. If the content industry wishes to persist in this new reality, it will have to adapt to it. That means a business model that is not based on the economics of scarcity.

That does not mean, as the author seems to believe and the content industry threatens, that there will be no money to pay for new content. It means the economic model will have to shift away from one of necessity, to one of value-add.

There is no shortage of cleaning labour. Anyone can pick up a feather duster and go to town. Yet, we have professional cleaners. Why? Because there is an opportunity cost to cleaning. An hour you spend cleaning is an hour that you can't spend doing something else. Too, there is value-add. Perhaps the professional cleans better than you do. Perhaps they clean faster, or clean when you're not home. There is convenience and status involved in having someone clean for you.

All of this adds value to cleaning labour, making it so people can charge for it. Similarly, the content industry can focus on modes of distribution which add value to the content, which is not scarce. The content industry currently pretends it is in the mining business, with large upfront costs to extract a valuable and rare resource then bring it to market. It isn't. It's in the bottled water business. Water's everywhere, and it's free. Yet people buy it bottled. They pay for the convenience, and perhaps they pay for the perceived quality as well.

Just as the water bottlers cannot stop people from getting water for free, so too can the content industry not stop free content. They can only offer it in a better, more convenient form.

Amazon does this incredibly well. I used to download ebook torrents, and read them on my laptop. It sucked, and I stopped. Then I got my Kindle, and started again. It still sucked. The formatting was wrong, it was inconvenient, and the metadata was filled with crap from the rippers that meant it would never sort properly. So I bought an ebook from Amazon.

It was amazing. I got the book I wanted, instantly, in a fantastic format, for cheap. It was a better service than bittorrent, and I paid for it. Gladly. Now, I get all my ebooks this way and I wouldn't think of going back. Certainly, the publishers are pissed at Amazon, but that's because Amazon is rendering them obsolete. So too are studios pissed at Netflix. What they fail to grasp is that Netflix is not the problem, they're just a company that adapted where the studios have not.

There's no going back. The content industry can stamp its feet and huff and puff and sulk all they want, but the genie's out of the bottle.

Time to adapt or die.

The reason that point is important is because regardless of the value derived by the end user, it is the ability to extract value that counts for the producer. And when smell cannot be rationed, or music supply cannot be controlled, you change your model.

Land used to make no sense to sell. Shit changes it now makes sense. Copies of music doesn't really make sense anymore either.

Whether or not there is some truth in the philosophical view that "illegal copying is theft", the reality is that the characteristics that make it easy to copy digital works makes it really difficulty to maintain a business model that relies on everyone paying for the bits they copy... as difficult as charging for smells.

What he hits on is that there is no scarcity anymore. Media is reproduced and shared freely and instantly, because that is the nature of the internet. The 'pipes' (expensive, physical means of distribution) the recording industry pumped music through for decades have now dissappeared and have been replaced with an open environment. Anything that tries to close that environment is just trying to create artificial scarcity.

It's true that media costs money to produce. And the publishers can still charge for it, if they make the distribution model convenient (or not). But that is still a one time cost which promotes the artist. And let's not act like artists are going to just stop making media if they don't think publishers are going to give them a big payday. They aren't. The more likely scenario is that the distribution will shift to being handled by the artists and that money will be made through concerts and merchandise. Downloaded music will be paid for sometimes, but mostly used for advertisement.

Here's the thing: production needs to change. If production is too expensive to justify digital revenue streams, then either we need to get creative about revenue streams or we need to rethink the cost side of the business. I'm less concerned with whether we feel this is "right" or "wrong," as such concerns are largely irrelevant. Arguments about right and wrong are distractions, and they offer us little in the way of practicality.

What's relevant is that a shift has occurred in the marketplace, and now the players in the market needs to adapt to it. Adaptation isn't going to be easy, and the status quo will need to undergo a painful transition. But we need to adapt, one way or the other.

Hoping the genie gets sucked back into the bottle is not a business strategy. But rethinking the revenue and/or cost sides of the business is.

The examples that PG points to are all examples of massive societal and social change (moving to the moon, changing from hunter gathering, and in a comment he nodded to the abolition of slavery). These were situations where we did have a fundamental shift in what our society believed was property. This simply hasn't happened here. Citizens still believe that an idea is yours, that creative works have value and belong to the person who creates them. We desire to protect that.

Where it has all gone wrong is our laws and the industries. Perhaps the value of this property has decreased and the law still protects the ability of the media giants to price beyond that value. That's not working for citizens. Citizens are being held to licenses and contracts they haven't read and don't understand. They can't trade an ebook from their device to their spouse's. When I switch between android and iphone do I no longer own angry birds? The real problem is that the legislature isn't working for us to protect these property rights in a way that makes sense for us as the citizens who made the property a right in the first place. Could this be keeping the market from adjusting to valid pressures?

If I was in the music industry, my line of reasoning would be thus

1. Can I prevent people from downloading my stuff illegally? (My guess is this very unlikely regardless of lawsuits, drm, etc)

2. Given that some people WILL obtain my goods without having paid for it, how can I still make money from the cheap bastards? (My guess is this will probably involve using assets that I can exert monopoly control to access e.g. live interactions, licensing, early access to stuff, etc)

3. How can I ensure the folks who would still pay for my goods are not tempted to defect and join the pirates? Here's where you make sure your distribution strategy is much better than the pirate experience (It probably wouldn't hurt to help to make the pirate experience suck a little bit by seeding torrents with crappy versions of your goods and hampering companies who want to improve the pirate experience).

I would probably focus more on the 2nd step simply because the 1st and 3rd are just band-aids and can only take you so far. This point of view probably pisses some people off but like everything else, it's not personal, just business

Musicians can help the pledge process along by releasing low-quality or partial files, and releasing the full files once pledge targets are reached.

There's a game theory argument that this won't work, but million-dollar pledges on Kickstarter pretty much prove that it works just fine in the real world.

Similarly, the recording people have regularly paid big bux to radio station to freely distribute the music. The exposure gets a song popular, hence more sales. Yet, instead of looking at an even greater chance for big exposure, the industry is looking to clamp down on it. Granted, it involves changing the product from the recorded music to something else surrounding that. Still, this I felt was the main point of the analogy, rather than "derp music is just air", like the author suggests.

I will be glad to see the "big music" bubble burst and all these companies go out of business. I find myself hoping the execs stay jobless and penniless for long after they do. I'm not worried about the lower echelon people, skilled talent will find a way to earn their living either in a small scene, specialized way, or in a different industry.

It depends on what you mean by "being heard". Some people think the only acceptable business model for music is for musicians to perform live. If we were to follow this line of thought, what's the difference between listening to music outside the concert grounds and listening to music stored on a digital device? In neither case are you participating in the live performance. In neither case have you reduced the artist's net worth by a single penny, provided that you never intended to attend the live performance anyway.

> What would happen if creators couldn’t charge for their creations? The same as if you couldn’t charge for lines of computer code: there’d be less of it.

And maybe that would be a good thing, as some other commenters have already suggested. Maybe it's not a morally acceptable business model to charge money for making copies of existing code. More companies should be charging money for the value-added services they offer, like making it easier for us to access music and apps, and offering subscriptions. If you don't want people to copy your code without paying, don't release it publicly in the first place, and only release it to people who sign NDAs. That's how business secrets work, right?

I'm not sure if I want to agree 100% with these lines of thought, but it's an interesting thought experiment.

Edit: Added paragraph.

All the interest and investment in new distribution services is basically looking to be part of RIAA 2.0 - continuing profitable distribution channels based on consumer laziness. The goal of the record industry has never been to compensate artists, and the decreasing prevalence of big-name acts means there's even fewer lucky ones with the power to demand so. Meanwhile, the pirate side has accepted that distribution is free and is trying to usher in the future so sustainable artist-beneficial (whatever that turns out to mean) structures can be created. Oink was responsible for my going to many shows, while the risk of being hassled over torrenting (I've become more risk-adverse) has resulted in me knowing very few bands on the concert listings.

Wait. Let me guess... because they invested, so they deserve to profit right?

So somebody please explain to me why the media industries are different. If anybody thinks music is free please go price out studio time before replying.

I would never make the argument that musicians shouldn't get payed and payed well for their work, but for the copyright holders to dictate how, where, and under what circumstances I listen to music that I've payed is the problem with copyright law.

I should have to pay for music. I shouldn't have to pay for the same song four different ways so I can listen to it in my car, on my Ipod, computer, and home stereo.

The problem is the distribution companies. When artists wise up and realize they don't need record labels or movie studios anymore, we'll all be paying for DRM free content - and the artists will get rich.

This is why we have lobbyists for these big companies trying to avoid extinction.

(also the smells equivalent in music would be more like trying to charge people who happen to overhear music while going about some other activity)

1. The artist actually gets even more of a shit deal with digital distribution than they did with physical media. You are supporting the machine, not the musician.

2. The cost of developing a quality recording has plummeted dramatically, the only substantive cost remaining is the advertising. The exception might be for faux artists like Rihanna that hire top notch songwriters to pen hits, but for lesser known musicians, mp3 distribution has been shown in studies to have a positive impact.

3. mp3s can function as the advertising medium itself. The money can be made elsewhere like endorsements, or touring. Live music can never be "stolen".

This response was flimsy.

    > This is a flawed analogy. Cooking smells are a
    > positive externality – they’re generated as a
    > by-product of providing a service to paying patrons.
    > But commercially released music is produced
    > specifically for the purpose of being heard, and
    > paid for (whether by the buyer, or by a royalty
    > from a radio station). 

That's similar to the situation we have with commercial music venues. The government extends property rights to things that are both (1) not property and which (2) have a very different dynamic to property. And then dedicate operators set up to harvest that.

The people producing cooking smells wouldn't be restaurants producing food innovation. The restaurants themselves wouldn't have time to spend chasing after fiddly smell licensing arrangements, and paying up lawyers to go chasing after freeloaders. They're too busy running actual restaurants. Just as it is where the people producing music aren't themselves the music artists, and except for a tiny (although highly visible) fraction, music artists (even world class music artists) do not benefit from copyright protection.

The article goes on to claim that music costs money to produce - ludicrous. You can put a microphone under a jazz musician and then publish it on the internet and it's first class music. You can take a laptop into a symphone orchestra concert and record it. Recording and distributing things is so free of cost that the commercial music industry has to go out of its way to find mechanisms to shut down the people who do it, and to get the government to protect it.

I'm in the privacy of my room. Someone is broadcasting radio into my space. Why the hell shouldn't I flip some magnetic signals and bottle it, and give it to my friends if I want to? Or sell it? It's my damn room and media.

It significantly impedes our freedom. It makes us criminals in our own homes. And it doesn't delivery to the people whos interest it is justified by. It creates a sea of lobbyists who need to extend the policy further and further into our lives just so they can stay in the same place. It is indefensible, disgusting policy failure on a grand scale.

It's important to stress that intellectual property innovation occurs because people have a problem to solve. I wrote a franchise system for an events company because - surprise surprise - they had a franchise, and wanted software to better run it.

Mendellsohn wrote the Scottish symphony because he was inspired to do so. Orchestras perform works because people come to their concerts to experience the sound and atmosphere and variation, despite having high quality recordings at home. IBM funds linux because it wants an operating system capability for its servers.

However, the mamoth presence of things that leverage copyright in the market and in our lives distorts our perspective. Because of its legal advantages and the privilege it pushes focus away from artists, and leads to crazy circular logic of the sort shown in this article. You could simplify many of the points as, "The world is this way, therefore the world must be this way."

There was a time hundreds of years ago when the church had a monopoly on education. They would have tried to claim that without strong privilege, education would not happen. It's a lie.

IP law is holding us back, but you need to use your brain to see past the world we live in to the opportunities we're missing out of because of all these protected gangsters who dominate the channels.

Near the end I see bold text,

"What would happen if creators couldn’t charge for their creations?"

You can charge for your creation. Steam has mechanisms for getting people to buy from them, and to make it difficult for people to run steam software they haven't paid for. Good for them.

But you shouldn't have the right to get the government to annoint business models for you, or to be your enforcer. Copyright and patents are not property, and they should be described that way or treated that way in law.

Remind me again how much radio stations in the US pay in performance royalties?

Would there? Really? Like, are we absolutely sure there would be less of it? Are we also ruling out the possibility that someone would pay you to produce specific lines of code or just that once you produce code, you can't sell it?

It used to commonly be the case that you got paid to make music for someone. Now you make the music and then try to sell it to people.

It just seems like there is an implicit assumption that the marketplace model is the best way to encourage the creation of all things.

To those who make impassioned pleas that technology has made copyright obsolete, what if there were a technology that allowed the wholesale copying of your profitable Saas/PaaS from AWS? Sure, the code you wrote is still on the server, but is that something you would condone? All the months of hard work and crunch mode, being made to benefit another without your consent? Does that feel right?

Didn't think so.

Brilliant. I was expecting something controversial. But, I assume, that at least within this community what PG says here, is the opinion of the majority.

Smells are similar, but are not yet distributed as a temporal frequency.

Software is much easier to control, since after all, logic is embedded in the work of art, an OS can govern the rights and/or TCP requests can act as a conduit for authentication.

It's just silly that the industry spent a decade suing people, and probably could have made 10x their money by giving up the 'suing people for smells' and started other music/content related businesses.

so what if there's less of it?? .. necessity is the primal driver - if society as a whole really needs your shitty music (or whatever widget you want), it will get made by some avenue of support. PERIOD. we don't _need_ most of this bullshit anyhow .. so boo f'ing hoo.

if you distribute something outside of your garden, it has gone wild and you have no right to restrict how anyone can then play with it. .. imho

Yes, in your analogy

it's

air:internet smell:music

NOT

air:music smell:???

also, from above...

Water is free, but bottled water has essentially added 'smell', or, the convenience of having it in a bottle and across the street, refrigerated.

Steps to increase exposure: I read PG essays, PG has a of exposure. I don't agree & write counter arguments. Post article & submit.

It's called perfume.

PG seems to be advocating a pragmatic approach, based on the difficulty of enforcement. Goods can be excludable or non-excludable. Excludable goods are anything that can be effectively locked down (like most physical goods, or movie tickets). Non-excludable goods can't (like air, fish in the sea, and IP). You can make a non-excludable good excludable by creating laws (like Carbon Taxes or IP laws), but it's not always practical.

But he kind of misses the other half - rivalry.

Goods can also be rivalrous or non-rivalrous. Ideas are non-rivalrous as you don't lose anything (except a competitive advantage) if other people also have it. In fact, IP may be the opposite to rivalrous (which is a rare enough thing to not have a name, though I like the name "network goods"), because it's worth more if everyone has it. If more people can speak a language, it's more useful to everyone. The Lord of the Rings is more interesting if you can talk to your friends about it.

While there's a good reason to try to make common goods (rivalrous but non-excludable) goods more excludable (by introducing laws which prevent over-exploitation), it's perverse to make non-rivalrous excludable. You don't tax breathing if there's plenty of air.

The main reason you want to make a public (non-rivalrous non-excludable) good more excludable is to incentize its creation (another reason might be because it's judged to be a "de-merit" (bad) good - such as a porn or a method of manufacturing weapons). But since IP is an input to creating IP, there's very good reasons why you want to make copyright and patents expire in a short time - bringing down the cost of creating new IP may outweigh the lost incentive. Also, the anti-rivalrous nature of IP may even encourage people to make more, simply because it's so useful have more people using it - Linus got his own private kernel debugged and extended at a lower cost by sharing it.

If a good cannot be easily made excludable, then it's all very sad (assuming that the lost incentive to create more of it outweights the loss from more people having access to the existing stuff, and the stuff that's made voluntarily) but there's not much you can do without heavy regulation.

Music will still be made. Musicians will make money on gigs. Advertisers will pay musicians for annoying jingles. It's not the 1700s, there's literally millions of talented musicians who will eke out a living actually connecting with the community (concerts, teaching, playing in pubs) who should be able to produce far more (in aggregate) than Mozart, Beethoven and the like. Without copyright, many of those musicians may make a better living, as they can draw on other people's material more easily.

The fat distribution pipe (distributors, promoters, producers, broadcasters) will mostly die, but no-one really cares - they don't create much value. OK, the definition of value is rubbery, but if you make money by convincing people that they need something (i.e. tell them that folk music is daggy, and you have to buy the latest pop hit to be cool) then you're really destroying value, then offering a band-aid.

Coming from Nashville/Austin I can assure you, the reason people are interested in distribution channels is because that IS the music industry.

All this copyright hubbub is just a natural protectionist attempt to keep the high cost/barrier of entry for musicians (not just to distribution but profitability) by established entities like clearchannel, et al. You can't convince a new musician to sign a predatory contract when they have reached profitability through an easier distribution channel.

From an artists perspective: Talent isn't going away, at first the internet made the talent acquisition process easier and faster for studios, but Talent now has easier options for sustainable profitability through these new distribution channels. Studios have come to simply hate how much harder contract negotiations become when the artist they are targeting is already "making enough".

There is a lot more nonsense in this article regarding "Lines of Computer Code", "Forced Open Source" and the like, along with absurdist FUD like "What would happen if creators couldn’t charge for their creations?", give me a break.

If PG is making that point, it's stupid. How about someone stealing his ViaWeb source back in the day before the Yahoo acquisition? (Actually, it wouldn't even be stealing, because he would still have the source himself).

Would he still be using that "information wants to be free" meme?

This wouldn't actually follow PG's logic. Using code does not necessarily require the end user copying it, especially for web-based software which is mostly run remotely. Consuming media necessarily requires copying it to somewhere - to your nerve endings, at the very least.