The End of Music Piracy? O RLY?

The End of Music Piracy? O RLY?

A provocative headline can generate a lot of readers and a lively debate, but it can also do a poor job of indicating what an article is actually about. A recent example is Paul Boutin’s quite inflammatory article in the December edition of Wired, now available online, entitled rather ambitiously, “The Age of Music Piracy Is Officially Over.” Based on the headline alone, a reader could assume that Boutin was making an interesting but factually incorrect observation about the state of file-trading online today. A quick glance at the comment section on the Wired site would indicate many people took exactly that viewpoint to blast Boutin.

However, that is not at all what the article actually argues. According to Boutin, we all need to “Mark down the date: The age of stealing music via the Internet is officially over. It’s time for everybody to go legit. The reason: We won.” In other words, Boutin contends that if one looks back at what music file-sharers have said publicly to justify their actions, going all the way back to the Napster days of 1999/2000, such as high prices, DRM, poor audio quality, record label exploitation, lack of deep catalogues, etc., that those rationales no longer exist. iTunes and Amazon sell high-bitrate DRM-free tracks at relatively low cost, have massive catalogues, and even allow more of the purchase price to go to the artists themselves. Ultimately, Boutin wants file-sharers to just admit that they have gotten everything they claimed to have wanted, and that the only reason left for pirating music is an indefensible one, that “You’re cheap.”

While the article did generate a lot of angry comments and some more thoughtful responses, I think both Boutin and his vocal readers have missed some larger issues that go much deeper into the on-going dynamic of online music sharing, and explain why any declarations of its eminent demise are wishful thinking at best.

To start, I don’t think anyone should pay attention to what was said by Napster users, or by file-sharers in general about why they download music. Tens (maybe hundreds) of millions of people have downloaded an .mp3 at some point over the last decade, from every country on Earth with a connection to the internet. Why do they do it?  Ultimately, unless one insists on seeing the phenomenon in purely moral terms, I don’t think it really matters what people say publicly about why they refuse to purchase digital music. The fact is, millions of music fans choose to use Bittorrent, digital lockers, Usenet, etc. to get their music. And by their actions, they have created an economic dynamic that is much more important, and has far more long term implications, than endless debates about 128 kbps .mp3’s versus FLAC’s or how exploitative the recording industry is.

In the course of the post-Napster decade, we have come to recognize the profound economic implications of digital media interacting with the internet, and not just in simple notions of “digitial distribution” or the “long tail.” Instead, we now understand that because every single DRM scheme is inherently doomed to failure, and that the marginal cost of copying a digital media file is and will always be essentially zero, then we can only speak of digital media in a context of infinite supply.  I am not a trained economist, but it is patently clear that an infinite good, available to anybody with a modem, will trend very quickly to a price of zero, no matter what the proponents of strict intellectual property regimes would prefer. While there is clearly a large number of people that purchase .mp3’s (or AAC’s) from iTunes and Amazon, they remain a distinct minority in a global online world that simply does not accept the notion of exchanging money for digital music.  I would even say that iTunes customers most likely value the convenience and technical simplicity the shopping experience provided by Apple far more than any true sense of the specific “value” of the files they purchase.

In fact, it is precisely this dynamic of infinite versus scarce goods that points to the future of digital media online. As Mike Masnick of Techdirt has so powerfully demonstrated, once content creators understand the problematics of trying to charge for infinite goods, they can truly embrace the countless possibilities of creating tangible goods, that cannot be copied and can be sold for real money. It is almost a cliche now to speak of how musicians can rely on live performances to substitute for sales of recordings, but that is merely the tip of the iceberg of what content creators can do, by creating non-replicable experiences that allow their fans to connect with the art and artists in ways that are truly worth treasuring.

Streaming services like Spotify also indicate how music can remain a revenue generator in a world of infinite goods, by providing a service and convenience that is of true value even to customers not used to paying for the music they download. Just as Netflix does not have a single film or TV show that is not available online for download for free, but can still build a massive customer base by recommending and presenting video content in a manner that their users love and happily pay for.

So, music pirates are in fact “cheap” according to Boutin’s perspective, which judges music downloading as immoral because it ignores the desires of content creators to charge for digital copies of their work. But outside of this moral framework, examined from a purely economic viewpoint, music file sharers are rational actors that pay for the things they consider of tangible value (iPods, laptops, Internet access, concert tickets, band t-shirts, streaming subscriptions, etc., etc.) and do not pay for the infinitely copyable. And unless the content industries and their government representatives somehow do the impossible, and turn the Internet into something it currently is not, then the future will continue overwhelmingly in that direction.