-- CharlesColman - 19 Nov 2008

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Charles Colman Paper #1

Professor Moglen has argued that the transformation of media into a zero-marginal-cost good eliminates the need for proprietary copyright. I disagree. The current system, in which copyright owners can choose to enforce their rights or give away their works for free, is ideal for ensuring that both small- and large-scale works are created and made available to the public.

Professor Moglen begins by observing that in a zero-marginal-cost world, an artist is not harmed when someone consumes a digital copy of his work for free. Despite inevitable free-riders, some will choose to pay the artist for his work, even without a legal obligation to do so. It is supposed that people will open up their wallets because of social pressures, enthusiasm, gratitude, or a desire to fund more work by the artist. Even if only 10% of a work’s audience chooses to donate, the argument goes, the creator will still be better off than he was under the old system, where major labels, book publishers, and movie studios took nearly everything and gave the artist the remaining crumbs.

Those who would rely on social pressures as a guarantee of generosity overlook the fact that Net usage is a solitary activity for a substantial portion of media consumers. But even those who are active in online communities do not experience social pressures equivalent to those exerted in real life. When a donation hat is passed at a concert, people surely wish to avoid being seen passing the hat without adding to the pot. No good analogue is possible on the Net without an extreme reduction in privacy. One can imagine some future facebook that posts a user’s every economic transaction for all his friends to see (it does this already for Fandango tickets), but many would surely object to this. Without a repellent level of transparency, social pressures can only be brought to bear on the Net through intrusive questioning (“how much have you donated?”), or unprompted broadcasting of personal contributions. Neither practice is likely to gain traction in a culture that considers money to be a private matter.

Nevertheless, enthusiasm, gratitude, and a desire for more works by an artist will result in some voluntary contributions. The pay-what-you-wish model is best suited to singer/songwriters, book authors, and perhaps small-scale documentary filmmakers. Their projects require little expertise beyond that of the creator, and thus avoid a major production cost: coordination among multiple parties. These works are also particularly likely to elicit the generosity of the public because they have a face—that is, they are headed by a single creator with whom consumers have direct contact and can thus imagine a personal relationship. But these advantages have their limits. Because small-scale works have become so easy to produce and distribute, many more of them exist than at any other time in history—a “profusion of the small,” as Professor Moglen calls it. Even assuming that people continue to spend the same proportion of their income on media as before—a doubtful assumption, when payment is optional—each artist will now receive a smaller share of the pie. In the end, fewer people will be able to survive as professional artists. Still, this may not be cause for concern. Because small-scale works require the time and creative force of just one individual, they can be produced on nights and weekends with one’s discretionary income. Even if these moonlighters never see a dime in return for their efforts, many will continue to make art for the sake of reputation and because, as Professor Moglen writes, it is “an emergent property of human minds to create.”

However, along with a “profusion of the small,” we can also expect a significant “reduction of the large.” Works that require substantial investment, expensive technology or large teams of people face major barriers to creation in a voluntary contribution regime. Such works (television shows with large casts, movies with action scenes or elaborate special effects, orchestral recordings) cannot be easily created outside one’s day job with a small amount of disposable income. Few investors will pour large amounts of money into such projects in the hope that consumers will be generous enough to return the favor—particularly in hard economic times, when people naturally eliminate optional expenses first. (Corporations and private patrons will no doubt continue to sponsor creative works when they consider it beneficial to do so, but as professor Neil Netanel argues in Copyright and a Democratic Civil Society, 106 Yale L.J. 283, 358 (1996), such sponsorship undermines central goals of copyright law. I may address this in a subsequent paper.) Because expensive works often draw a large audience, they will suffer more acutely from the free-rider problem: it is difficult to reassure oneself that “everyone else” will donate to an obscure singer/songwriter, but easy to assume (reasonably, if mistakenly) that a donation to a major film would merely be a drop in the bucket. Furthermore, a consumer cannot easily imagine a personal relationship with a less visible creative figure—the director of a major film, a team of writers on a television show—in the way that he can with a singer/songwriter or author, who seems to speak directly to him. In the end, lack of funding will cause entire categories of complex and expensive works to disappear along with the corporations that financed those works in the past. It may be tempting to bid these companies “good riddance,” and accept the disappearance of large-scale works as collateral damage, but this would be a mistake. Important policy decisions should not be guided by schadenfreude, but rather by what is best for culture.

In an ideal world, we would have both large- and small-scale works—in other words, exactly what we have now. Under the current copyright system, people who wish to distribute their work for free have extremely efficient avenues to do so (YouTube? , MySpace? , BitTorrent? .) At the same time, people (or more commonly, companies) who wish to distribute their goods in a less efficient manner in order to take advantage of copyright’s traditional business model can proceed that way (iTunes, DVDs.) True, it will require substantial resources to enforce intellectual property rights in the digital age. But the alternative—a drastic reduction in large-scale works—entails substantial losses. Technological advancements often have negative repercussions that must be weighed against increased efficiency; factory farming, for example, is marvelously efficient but also breathtakingly cruel to animals. In the agricultural context, there is no way to achieve one good (improved animal welfare) without reducing efficiency to some degree. The conflict in media in much less stark, because creators can opt out of copyright—and into more efficient distribution—by giving away their property for free. The legal safe harbor of “substantial noninfringing uses” is designed to ensure that maximally efficient distribution channels like YouTube? , MySpace? , and BitTorrent? remain available even as we seek to minimize copyright infringement facilitated by those channels. As filtering technology becomes more sophisticated, it will no doubt become easy and inexpensive to pull unauthorized copies out of distributions streams. The resources we expend on filtering, criminal investigations, and civil infringement suits are not wasted. These efforts force consumers to use pay-up-front distribution channels for large-scale works that would not exist at all if not for those channels—inefficient though they may be. All other things being equal, efficiency is of course preferable to inefficiency. But all other things are not equal, and the cost of maximum efficiency may be higher than most people are willing to pay—even if they don’t realize it yet.