Google makes money on more than their search engine. They sell web space and outsourced e-mail services to companies, for example. And there's Android.
True. You can't even use ten seconds of a copyrighted song on a TV turned on in the background in a scene in a film. Low-budget independent films have been sued for that.
A tiny fraction of all music lasts that long. Elvis Presley's music is owned by a German record company today, and it was largely to protect that record company's business and employees that copyright was extended the last time, a year or two ago. And as a result, the remaining 99,9% of music becomes locked in by copyright and rots away in libraries and private collections for yet another few decades.
Real economists, on the other hand, realise that private use is also economic activity.If x people listen to a song, it produces the same amount of good regardless of whether they do it for free or have to pay for the pleasure. If all other things are equal, listening for free is preferable, since it cuts out the middle mean and reduces economic waste.
This is where I believe the pragmatic politician and the economist start to differ. The pragmatic politician says, "What about all those people who are employed in the recording industry? Won't they be out of a job?" The economist answers, "Yes, but that's actually a good thing. That means labour is freed up to do something more useful. Selling and distributing music is not needed any more." And the politician answers, "Sorry, but I have to think of people's jobs. I won't get re-elected if I make a few thousand people unemployed - especially not if they're people with strong lobbying groups and good connections to journalists and intellectuals."
The only time copyright is good for the economy, is when it provides a strong incentive to produce more artistic and literary works. Providing employment for artists and all the middle-men is not an end in itself.
For one thing, using a disk image (e.g a TrueCrypt volume) prevents individual files from being synced. If you make changes on one computer, then changes on another computer before the modified disk image has been downloaded to it, you get conflicting copies of the disk image, and have to sort out manually which individual files you modified.
There's also a third explanation to the RIAA lawsuits: that they're a lucrative business in themselves, regardless of any lost sales, and regardless of the deterring effect.
If the RIAA comes to you and says, "We can sue people who download your songs for you, and you'll get a cut of the damages. You don't have to do anything but sign these papers", it must be hard for a record company executive to turn down.
I pirate most of my media, but I still buy them from time to time if the price is low and it's convenient. For example, I buy a lot of digital comic books directly on my iPhone due to the low price, speed and convenience, even though it's trivial to download them off DC and BitTorrent. I also buy physical copies of titles which are especially good and worth re-reading.
True. Fortunately, the damages for copyright infringement are still relatively sane here in Sweden (even if the measures to track pirates are not). We traditionally have low statutory damages, and almost no punitive ones.
It's also safe, so far, to use BitTorrent, since the courts are strict in interpreting the evidence and require proof that someone has actually completed a download. The pirate hunters usually only have time and resources to go after large Direct Connect hubs and FTP sites.
And then there are the encrypted networks which the pirate hunters haven't even started to penetrate.
True if the products are identical, but the developer can charge a premium by offering a product which is better than the pirate copy: easy updates, guaranteed virus free, listening to bug reports and features suggestions from registered users, etc.
The music industry did it he other way around, and offered a product which was inferior to the pirated version: DRM:ed music which was cumbersome to use, couldn't be converted or transferred to all music players, became unusable the day they decided to shut down their stores, and often had lower audio quality than pirated MP3s ripped directly from the CDs.
I wish you success with your app, but you don't know
1) how many of the downloaders would have bought the app if there was no pirate copy available 2) how many of the people who actually bought the app heard about it from friends who pirated it, or tried out the pirate copy first.
It's not impossible that you lose a lot from pirating, but the figure is likely much lower than the raw number of illegal downloads suggest.
You're totally missing the point. This isn't about fairness or natural rights, it's about economic efficiency.
Since the production cost for copyrighted goods is close to zero, it could be provided to second- and third-world countries at a very low cost, and still make a profit for the producer. However, the current system doesn't allow for that - producers are unwilling to sell cheaply in second- and third-world countries, since the goods could be imported back into Europe and North America and undercut the prices there.
There are two (obvious) solutions to this problem:
1. Segment the market by letting the producer control all import and export of their product, even after they have sold it on. This has the risk of promoting smuggling and black markets. -or- 2. Abolish copyright. This will allow cheap copies to be sold anywhere in the world, but could significantly reduce the profit on some goods, and cause those goods to stop being produced.
It's a failure if you consider the goal to have the media available to everyone who wants it.
ex:
(A) A DVD at $20 will be purchased by 1 million users, with the publisher taking $10 in profit per sale ($10 million profit), with 4 million pirates. (B) Now, lets say at $5 it would be purchased by 4 million users, with the publisher taking $1 in profit per sale ($4 million profit), with 1 million pirates.
Each case is a success and a failure. From a pure capitalistic perspective, (A) is a success, maximizing the profit, but a failure at getting the media into the hands of all that want it.
Actually, (A) is a failure too from a capitalistic perspective. If the market allowed for segmentation, the producer could sell the DVD for $20 to the 1 million users who could afford it, AND for $5 to the other 4 million, creating an even higher total profit.
This is not a capitalist vs. consumer thing. The market failure hurts both consumers and producers in this case.
Actually, it's much, much better for the artist if you download their music illegally and then make a cash donation to them. Artists usually receive less than ten percent of the sales price of music downloaded from sites like iTunes, a little more than ten percent for CD sales. Only the superstars get close to 20 percent.
Even if you pirate and then only donate half of what you would have paid for the music, the artist is far better off than if you buy the music legally.
Let me see if I understand...they are claiming that a strategy which maximizes profit globally is a failure? Are these people serious?
It's not the strategy which has failed, it's the market. The strategy is optimal given the market conditions the companies have to operate on. But they could make a higher profit if the market allowed for segmentation, i.e if they could sell the same goods at a high price to rich westerners and at a lower price to second- and third-world countries. The market fails since it's providing them a disincentive to do that.
There seems to be some confusion over what is meant by "market failure" in this context.
An economist takes a bird's-eye view of the economy, and looks at what is good or bad for society as a whole. From this perspective, a market serves a purpose both for the seller (who receives payment for their goods) and for the buyer (who receives goods at an affordable price).
If prices rise far above production costs, and become so high most people can't afford them, the market has failed to provide the goods. This can happen, for example, if there is a monopoly, or if the state regulates the price or quality of goods very strictly. Likewise, if prices are reduced to become very close to or below production costs, it is no longer profitable to produce them, and once again the market has failed to provide the goods.
In the case of copyrighted goods, the production cost can be made close to zero. The producer could, in theory, sell the same music CD to middle-aged middle-class for $20.00, and to teenage school kids for $5.00, and make a profit on both markets. In practice, this is not possible, since the middle-aged and the school kids have access to the same stores and everybody would buy at the lower price. So the producer compromises and sets the price somewhere in between, where he/she believes it will maximise profits.
This leads to 1) reduced profits for the producer, since he/she charges a lower price, and 2) not everyone will get access to the goods, since the price is too high for some. I.e, a market failure.
The problem is much worse in the case of pharmaceutics. The pharmaceutical companies sell drugs at a high price in Europe and North America to recover their development costs. They could sell the same drugs to third-world countries at a very low price and still make a profit, but they're afraid the cheap drugs would be imported back to Europe and North America and cut into their profits there. It's a gigantic market failure which leads to millions of people not getting the drugs they need, despite the very low manufacturing costs.
Incidentally, both of the above market failures are due to government regulation. Copyright prevents the sale of cheap copies to school kids, and patents prevent the sale of cheap generic drugs to third-world countries. Both copyrights and patents are time-limited monopolies granted by the government to the creator of a work/invention, in the hopes of stimulating the production of new works/inventions. You can argue that the government regulation is necessary, at least in the case of patents, but it's impossible to deny that there are detrimental side effects.
If it was that easy, Microsoft could just sue the Chinese companies for using unlicensed software directly. The difficulty of pursuing lawsuits in China is the reason Microsoft came up with this law.
If you have, say, Microsoft Windows installed on your computers, it's easy to install it on one computer too many, or letting it be used by one user too many, or having an employee use it at two home computers when they're only allowed to use it on one, etc. The license rules are so complicated, not even Microsoft themselves can say for sure what they allow in a particular case.
If you use free software, it's much easier. If one of your employees installs Windows among all the Linux desktops, you can spot and remove it immediately.
Slashdot Mirror
Google makes money on more than their search engine. They sell web space and outsourced e-mail services to companies, for example. And there's Android.
Or maybe it's because Google still, despite their faults, make good products.
The proper use of wine beer and wine is to get your date to drink it. Doh.
Pfft, real programming languages have static polymorphism.
True. You can't even use ten seconds of a copyrighted song on a TV turned on in the background in a scene in a film. Low-budget independent films have been sued for that.
A tiny fraction of all music lasts that long. Elvis Presley's music is owned by a German record company today, and it was largely to protect that record company's business and employees that copyright was extended the last time, a year or two ago. And as a result, the remaining 99,9% of music becomes locked in by copyright and rots away in libraries and private collections for yet another few decades.
Real economists, on the other hand, realise that private use is also economic activity.If x people listen to a song, it produces the same amount of good regardless of whether they do it for free or have to pay for the pleasure. If all other things are equal, listening for free is preferable, since it cuts out the middle mean and reduces economic waste.
This is where I believe the pragmatic politician and the economist start to differ. The pragmatic politician says, "What about all those people who are employed in the recording industry? Won't they be out of a job?"
The economist answers, "Yes, but that's actually a good thing. That means labour is freed up to do something more useful. Selling and distributing music is not needed any more."
And the politician answers, "Sorry, but I have to think of people's jobs. I won't get re-elected if I make a few thousand people unemployed - especially not if they're people with strong lobbying groups and good connections to journalists and intellectuals."
The only time copyright is good for the economy, is when it provides a strong incentive to produce more artistic and literary works. Providing employment for artists and all the middle-men is not an end in itself.
For one thing, using a disk image (e.g a TrueCrypt volume) prevents individual files from being synced. If you make changes on one computer, then changes on another computer before the modified disk image has been downloaded to it, you get conflicting copies of the disk image, and have to sort out manually which individual files you modified.
I've done it too, you insensitive clod!
So it's right to steal a Ferrari?
No, but I would download one if I could.
There's also a third explanation to the RIAA lawsuits: that they're a lucrative business in themselves, regardless of any lost sales, and regardless of the deterring effect.
If the RIAA comes to you and says, "We can sue people who download your songs for you, and you'll get a cut of the damages. You don't have to do anything but sign these papers", it must be hard for a record company executive to turn down.
I pirate most of my media, but I still buy them from time to time if the price is low and it's convenient. For example, I buy a lot of digital comic books directly on my iPhone due to the low price, speed and convenience, even though it's trivial to download them off DC and BitTorrent. I also buy physical copies of titles which are especially good and worth re-reading.
The original study is about piracy in emerging economies. I suspect the article on thestar.com is drawing its own conclusions.
True. Fortunately, the damages for copyright infringement are still relatively sane here in Sweden (even if the measures to track pirates are not). We traditionally have low statutory damages, and almost no punitive ones.
It's also safe, so far, to use BitTorrent, since the courts are strict in interpreting the evidence and require proof that someone has actually completed a download. The pirate hunters usually only have time and resources to go after large Direct Connect hubs and FTP sites.
And then there are the encrypted networks which the pirate hunters haven't even started to penetrate.
True if the products are identical, but the developer can charge a premium by offering a product which is better than the pirate copy: easy updates, guaranteed virus free, listening to bug reports and features suggestions from registered users, etc.
The music industry did it he other way around, and offered a product which was inferior to the pirated version: DRM:ed music which was cumbersome to use, couldn't be converted or transferred to all music players, became unusable the day they decided to shut down their stores, and often had lower audio quality than pirated MP3s ripped directly from the CDs.
I wish you success with your app, but you don't know
1) how many of the downloaders would have bought the app if there was no pirate copy available
2) how many of the people who actually bought the app heard about it from friends who pirated it, or tried out the pirate copy first.
It's not impossible that you lose a lot from pirating, but the figure is likely much lower than the raw number of illegal downloads suggest.
You're totally missing the point. This isn't about fairness or natural rights, it's about economic efficiency.
Since the production cost for copyrighted goods is close to zero, it could be provided to second- and third-world countries at a very low cost, and still make a profit for the producer. However, the current system doesn't allow for that - producers are unwilling to sell cheaply in second- and third-world countries, since the goods could be imported back into Europe and North America and undercut the prices there.
There are two (obvious) solutions to this problem:
1. Segment the market by letting the producer control all import and export of their product, even after they have sold it on. This has the risk of promoting smuggling and black markets.
-or-
2. Abolish copyright. This will allow cheap copies to be sold anywhere in the world, but could significantly reduce the profit on some goods, and cause those goods to stop being produced.
It's a failure if you consider the goal to have the media available to everyone who wants it.
ex:
(A) A DVD at $20 will be purchased by 1 million users, with the publisher taking $10 in profit per sale ($10 million profit), with 4 million pirates.
(B) Now, lets say at $5 it would be purchased by 4 million users, with the publisher taking $1 in profit per sale ($4 million profit), with 1 million pirates.
Each case is a success and a failure. From a pure capitalistic perspective, (A) is a success, maximizing the profit, but a failure at getting the media into the hands of all that want it.
Actually, (A) is a failure too from a capitalistic perspective. If the market allowed for segmentation, the producer could sell the DVD for $20 to the 1 million users who could afford it, AND for $5 to the other 4 million, creating an even higher total profit.
This is not a capitalist vs. consumer thing. The market failure hurts both consumers and producers in this case.
I suspect a large part of the 25% price difference is because you don't pay the sales tax in your own country. Am I right? :)
Actually, it's much, much better for the artist if you download their music illegally and then make a cash donation to them. Artists usually receive less than ten percent of the sales price of music downloaded from sites like iTunes, a little more than ten percent for CD sales. Only the superstars get close to 20 percent.
Even if you pirate and then only donate half of what you would have paid for the music, the artist is far better off than if you buy the music legally.
Let me see if I understand...they are claiming that a strategy which maximizes profit globally is a failure? Are these people serious?
It's not the strategy which has failed, it's the market. The strategy is optimal given the market conditions the companies have to operate on. But they could make a higher profit if the market allowed for segmentation, i.e if they could sell the same goods at a high price to rich westerners and at a lower price to second- and third-world countries. The market fails since it's providing them a disincentive to do that.
You need to understand the terms involved.
There seems to be some confusion over what is meant by "market failure" in this context.
An economist takes a bird's-eye view of the economy, and looks at what is good or bad for society as a whole. From this perspective, a market serves a purpose both for the seller (who receives payment for their goods) and for the buyer (who receives goods at an affordable price).
If prices rise far above production costs, and become so high most people can't afford them, the market has failed to provide the goods. This can happen, for example, if there is a monopoly, or if the state regulates the price or quality of goods very strictly.
Likewise, if prices are reduced to become very close to or below production costs, it is no longer profitable to produce them, and once again the market has failed to provide the goods.
In the case of copyrighted goods, the production cost can be made close to zero. The producer could, in theory, sell the same music CD to middle-aged middle-class for $20.00, and to teenage school kids for $5.00, and make a profit on both markets. In practice, this is not possible, since the middle-aged and the school kids have access to the same stores and everybody would buy at the lower price. So the producer compromises and sets the price somewhere in between, where he/she believes it will maximise profits.
This leads to 1) reduced profits for the producer, since he/she charges a lower price, and 2) not everyone will get access to the goods, since the price is too high for some. I.e, a market failure.
The problem is much worse in the case of pharmaceutics. The pharmaceutical companies sell drugs at a high price in Europe and North America to recover their development costs. They could sell the same drugs to third-world countries at a very low price and still make a profit, but they're afraid the cheap drugs would be imported back to Europe and North America and cut into their profits there. It's a gigantic market failure which leads to millions of people not getting the drugs they need, despite the very low manufacturing costs.
Incidentally, both of the above market failures are due to government regulation. Copyright prevents the sale of cheap copies to school kids, and patents prevent the sale of cheap generic drugs to third-world countries. Both copyrights and patents are time-limited monopolies granted by the government to the creator of a work/invention, in the hopes of stimulating the production of new works/inventions. You can argue that the government regulation is necessary, at least in the case of patents, but it's impossible to deny that there are detrimental side effects.
So maybe we should thank the MAFIAA for preparing us for when the state tries to suppress free speech?
If it was that easy, Microsoft could just sue the Chinese companies for using unlicensed software directly. The difficulty of pursuing lawsuits in China is the reason Microsoft came up with this law.
If you have, say, Microsoft Windows installed on your computers, it's easy to install it on one computer too many, or letting it be used by one user too many, or having an employee use it at two home computers when they're only allowed to use it on one, etc. The license rules are so complicated, not even Microsoft themselves can say for sure what they allow in a particular case.
If you use free software, it's much easier. If one of your employees installs Windows among all the Linux desktops, you can spot and remove it immediately.