Tuesday, October 25, 2005
Avoiding Armageddon – Why content companies will turn against Intellectual Property
While the two sides in the intellectual property rights debate often argue at cross purposes, or fulminate about secondary issues , they are divided on a fundamental issue: whether scarcity of knowledge goods is desirable or not. The “oligarchs”  believe that without scarcity they cannot make money, and that without money there is no incentive to create new knowledge. The “anarchists” believe that culture can only flourish if knowledge is abundant and freely available; innovation doesn’t need incentives, just the oxygen of other ideas.
The oligarchs are winning against the anarchists, and they’re set on the path of “propertization” of all useful knowledge. Rather than being good for their businesses, I believe it will prove catastrophic.
Both sides believe that the growth of knowledge is essential to human well-being. However, the oligarchs rank economics ahead of culture, and the anarchists do the reverse. Their fortified debating positions remind me of nothing as much as Industrialists vs. Environmentalists. The argument about knowledge can be turned on its head, just as Hawken/Lovins  and McDonough/Braungart  did for the environment by arguing that sustainability was good business.
The oligarchs (or King Content, if you like) seem to believe that information is property which needs to be locked down with DRM in order to have a sustainable economy. They are willing to pay the price of buying all their knowledge inputs in order to achieve this . I don’t believe this makes sense for knowledge goods; unlike physical property, knowledge doesn’t (always) degrade over time, and its price does not decline. Since knowledge is so hard to measure, and since the physical attributes of goods have to date been a viable proxy for their knowledge content, economists have been able to ignore the overwhelming scale of knowledge content in our economy. If it is all turn into traditional property, businesses will find themselves hamstrung beyond imagination.
A substantial knowledge commons may be useful to the anarchists/copyfighters; however, it will be essential to the oligarchs . Once this is realized, content companies will be bigger champions of Fair Use than copyfighters. I'm not arguing that they will swear off the concept of intellectual property, but that they will not follow the logic of "all property is the same" to its ultimate point. (Yes, I know, the title of this post was misleading - but it got you to read this far, didn't it? Sorry.)
Conversely, content anarchists will find themselves demanding protection of their cultural production, and working hard to prevent its incorporation into commercial products. It’s a replay of the “Keep My Software” philosophy that led to the GPL, and one can see it at work in the Share Alike condition in the Creative Commons license. Who knows, some may even learn to Stop Worrying and Love DRM.
After all the dust has settled, we’ll find the players at the opposite sides of the argument from where they began – or, perhaps more hopefully, peacefully coexisting in the middle ground.
 Side issues include content companies insisting on total control over all content and all decoding tools at all times, and activists insisting (in an amusingly conservative way) that new content should play anywhere on any of their devices in any way they like, just like the old stuff did. I believe this is secondary because it is an argument over product features, which will evolve as the market matures.
 Siva Vaidhyanathan introduced the oligarch/anarchist antithesis in his book The Anarchist in the Library: How the Clash Between Freedom and Control is Hacking the Real World and Crashing the System (2004). His definitions: “Anarchy is a governing system that eschews authority. Oligarchy governs form, through and for authorities.” Most of the players in the debate are neither anarchists nor oligarchs in the strict sense, but they do shade towards the two ends of the spectrum. I believe the distinction is useful starting point, but there are never really only two sides in an argument. Vaidhyanathan argues, rightly I believe, that “[the] question for us in the twenty-first century should not be choosing anarchy or oligarchy but constructing and maintaining systems that discourage both”.
 Natural Capitalism: Creating the Next Industrial Revolution (2000) by Paul Hawken, Amory Lovins, L. Hunter Lovins
 Cradle to Cradle: Remaking the Way We Make Things (2002) by William McDonough, Michael Braungart
 Even a staunch copyfighter like Yochai Benkler has argued that increased property rights will advantage content owners over non-market actors; see his paper The Commons as A Neglected Factor of Information Policy at the 26th Annual Telecommunications Research Conference, Oct. 3-5, 1998. I’m claiming (but have not demonstrated) that his conclusion is based on an under-estimate of the cost of purchasing information inputs. A related threat to content companies is the “patent blackmailer” – small companies that exist merely to develop and patent inventions which they then sell to larger players at a suitably (in)opportune moment.
 I will argue in another post that a mix of public and private property increases the value of both.