Sunday, February 11, 2007

Not selling what they’re buying

At the root of the argument between content owners and copyright activists lies fundamentally different mental models. (Earlier posts on this topic: Media business beyond DRM, From copyfight to copytruce, King Content vs. the Copyfighters.)

To the activists, music (or other digital content) is a substance. When they hand over money, they feel they have bought this substance. This “stuff” is turned into entertainment through rendering, and they thus feel they have the right to render it anywhere, and anyhow.

Rights holders think they’ve sold a permission: the right for a customer to enjoy specific content in a particular way. The physical item, if there is one, is mostly a token that the customer has the right to play that music in a particular way. Customers, at least if they’re activists, aren’t buying what the rights holders are selling.

Nobody had to think about this much until now, because the music “substance” and the performance “permission” were inextricably tied to a physical medium. With intangible media, though, the consequences of the models diverge:
  • To the activists, DRM is a hindrance to their right to enjoy the music-stuff they bought in any way they choose.
  • To rights holders, Fair Use is a diminution of the permissions they own.
The activists’ model is grounded in the habits and customs associated with tangible media. You can take your CD to a friend’s house, and hear it on player, not to mention in the car: music is stuff you can take with you anywhere. You own the CD, and thus you own the music. The same can be said for sheet music. The rights holder view is more esoteric, and depends on abstractions far removed from everyday experience, like rights in non-rival goods. Their model has some similarities with live concerts. (This is ironic, since activists argue that bands should make money from live music, not media sales.) Buying a ticket to a show doesn’t entitle you to walk into a record store and just take the CD; you’ve only bought the right to enjoy that show, at that time, in that place. It’s widely understood that making fan recordings usually isn’t legal – viz. “bootleg tapes.”

Given these dissonant views among the experts, how do “ordinary consumers” think about the entertainment they buy? Do they see purchased music as a substance, as a set of permissions, some paradoxical mixture, or something else altogether? I doubt anyone has bothered to ask. The partisans don’t want facts to cloud the issue, and, as Peter Cowhey has explained to me, scholarship on public opinion and policy doesn’t care about the “what do they know” questions. Scholars are more interested in the heuristics that people use to decide complex issues – whose opinion can you trust on an issue you don’t know much about? – and in how the framing of an issue can determine outcomes. I think rights holders over-estimate the power of the permissions frame, which doesn’t resonate with the public’s assumptions about media; and activists over-estimate the degree to which the public experiences the DRM frame as a hindrance. I look forward to seeing the scholarship on this question. My hunch is that consumer thinking is closer to the activists’ view. (Aside: I’d be fascinated to see how many people who have an opinion about the term “DMCA” can explain why it’s a good or bad thing. I suspect even the experts will struggle.)

The dirt/digital differences may exacerbate the problem because digital media are so unlike the physical stuff humans have evolved to cope with. Perfectly copyable, persistent media are counter-intuitive, which accounts for rights holders’ terror of the “release once, gone forever” consequences of non-DRM content. (Not that DRM helps, since it will always be broken...) Opacity also plays a role: Digital media are hard to understand because they’re non-rival and non-excludable. DRM is deeply inscrutable, and even though the license terms sound simple, it’s often hard to understand why, or predict whether, media plays in some places and not in others. DRM tries to convert a non-rival, non-excludable information good into an excludable one. I’ve always found it hard to think about non-rival, non-excludable goods; perhaps I’m not alone.

The problem for rights holders is that there are few things in our everyday experience that fit their model of music as a rights-controlled good. It’s not that people can’t deal with the restrictions that come from “technological boundaries.” Brad Gillespie has pointed out to me that most people didn’t have problem moving from LPs to 8-track to cassettes to CDs. He observes that they can deal with restrictions based on physics – playing a CD on two different players at once, or making an LP play in a CD player – but they don’t accept “virtual restrictions.” The problem is that rights holders have over-estimated the persuasiveness of the permissions frame. They’ve also under-played analogies that might help them, like “buying digital music is like buying a book of concert tickets.”

Of course, as Brad Gillespie notes, legal restrictions like “don’t steal” are not imposed by physics. One thus has to confront the question of why humans obey laws. Rights holders have tried to appeal to consumer self-interest in ads where studio crafts people say that they wouldn’t have a job making movies if the pirates won. The problem is that there’s an over-supply of creators. That’s always been true (Q: "What does an English major say after graduation?" A: "You want fries with that?"), but finding an audience used to be hard. The distribution problem is now being solved by YouTube et al. The catch is that the Fat Rump still makes most of the money for Hollywood, and that the oversupply is in the Long Tail. Consumers like some Rump as part of a fully balanced media diet, but rights owners have trouble distinguishing between rump and tail.

1 comment:

Peter Haynes said...

I think the heart of the problem is less the physical/virtual divide (as Brad Gillespie notes, people obey laws without a physical imperative), and more the way that the rights/ownership divide is orthogonal to that. The content owners are pulling a bait and switch. Before online (i.e., easily ripped) digital media came along, you never, ever heard content owners talk about CDs “conferring the right to listen to music in a particular way;” they simply “sold you a CD.” It was then yours, and you could do whatever you wanted with it. Copying was never really an issue for content owners because it was too cumbersome. But even if you did tape a CD, it clearly wasn’t something the content industry cared about—aside from basic copyright, there were never explicit warnings on the jewel case not to use the CD “inappropropriately” or excessively or whatever. Then online music came along, and suddenly “sold” turned into “leased”…

The experience, however, didn't change. If you’re a consumer, the “right to listen” and “ownership” look, feel and sound exactly the same. Which is why, when content owners try to tell consumers it isn’t the same, those consumers smell a rat.

What the content industry doesn’t seem to understand is that it will never make money along the entire length of the tail. Until it groks this, its slice of the tail will get smaller and smaller, as it alienates more and more customers with (a) the bait and switch and (b) its, uh, interesting interpretation of entertainment economics (where lower demand = higher prices = still lower demand = still higher prices = … you get the idea).

Also, frankly, I don’t think anyone of my generation has ever forgiven the music industry for tripling the price of an album when the switch from LP to CD was made. My $6 LP became an $18 CD, complete with the bonus track I never wanted in the first place.