Money for Nothing Becomes Nothing for Money

Regular readers may have noticed that whilst I am very conservative about many things, I am somewhat progressive on the issue of digital intellectual property rights. And I practice what I preach.

For example, there are television programmes that have been scattered electromagnetically into the atmosphere for everyone with a television to enjoy for free. While the technology is there for those waves of son et lumière to go anywhere in the world, they have been limited to certain geographical regions, so they can be sold and resold and resold in different markets to make already obscenely rich people even more obscenely rich. I only use the word “obscenely” twice in the same sentence because my megre vocabulary is insufficient to appropriately modify the word rich.

The Internet has created a giant ocean of ones and zeros drifting in and out of the millions of connections within it. It has eliminated the borders and the broadcast restrictions, even if there are companies out there trying as hard as they can to claim part of these high seas as their own. Or you might say they are trying to dam the ones and zeros within their territorial waters. You might say they are trying to limit fishing in their territorial waters by trying to keep hold of the fish. But that’s the problem: you can keep boats out, but you can’t keep fish in.

The fact of the Internet Ocean is that 90% of the music fish are swimming freely. In other words, even given all of the “legal” download sites and services, 90% of music is downloaded without the express written consent of the music industry.

The British Phonographic Industry (BPI) is the face of the record industry cartel in the UK, the British equivalent of the RIAA.  They claim that file sharing has cost the industry £1.1 billion a year. What they mean is that they have identified £1.1 billion that they could have accrued and didn’t. It didn’t actually cost them anything. It didn’t cost anyone another yacht in the Med or a twelfth sprawling estate in another exotic and exclusive location. It didn’t take any money out of a tax-protected off-shore account.

The BPI have bullied the British Government and the major ISPs in this country into forcing the ISPs into sending letters to customers based on the BPIs spying. If the BPI thinks a particular IP address is uploading an illegal file, they contact the ISP, which is then obliged to send a letter to the account belonging to the IP address giving details of the alleged file-sharing incident. I got such a letter the other day.

Was it about television programmes or films or even various albums (most of which don’t even get copied to CD and end up in the recycle bin)? No, it was about a single Britney Spears track that no one in our household has ever uploaded, downloaded, or otherwise loaded. You would think with all of the billions of pounds the BPI’s member labels have made, they could afford to get the information even somewhere near correct.

Legal threats aside, in reality what has happened is that the revenue stream is concentrating more and more on live music. That is the one thing that is not copyable. But this means that musicians have to work harder and maybe make less money. Perhaps some of you will pity them for this. I don’t.

It used to be that musical acts had to invest huge sums of money in studios and technology to produce records. Now top selling CDs have been produce in bedrooms with digital recording equipment. Making records has become easier and cheaper, thus increasing the profit margins. Now these recordings are going to have to be adverts for concerts where real music will have to be played in real time for real people.

I have been saying for a long time that the developments in technology mean concepts about intellectual property law will have to be dramatically reformulated. Those who are profiting the most, those piggybacking on the actual creators of ideas, are trying to formulate new revenue streams so they can continue to make money for nothing (sound anything like the bankers who have precipitated the world economic collapse?) but music cartels will eventualy have to realise that music is only worth what people are willing to pay for it and increasingly (if you can keep increasing from 90%) they aren’t.

Sharing Another Difference Between the US and UK

Another contrast between the US and UK has become apparent today when the FCC ruled against Comcast hampering file sharing. In the UK, people have been getting warning letters from their ISPs if they have been suspected of file sharing.

The British Government want to cut file sharing by 80% by 2011. British Phonographic Industry – the trade cartel for the UK record industry – has cut a deal with six of the UK’s biggest ISPs. The ISPs have agreed a three-strikes policy against customers who are suspected by the BPI of file sharing.

And just because the ISPs are agreeing to boot offenders, this doesn’t mean the cartel won’t take people to court for damages. They have and they will again. That’s not to say the equivalent US cartel, the Record Industry Association of America won’t sue people. They also have and will again.

The difference is the approach by Government. The BPI have Whitehall in their pocket. You’re thinking those must be very big pockets to fit Whitehall in them, but trust me, the BPI and its members have big pockets. Much bigger pockets than the private individuals they like to pick off and litigate into financial oblivion.

I’m not suggesting the record industry isn’t hurting from the downturn in CD sales. But they’re not losing money. Let’s be straight about this. You can’t lose someting you don’t have. Unless you have either pocketed someone’s money and it gets taken out of your pocket or you have invested money and end up with less than you’ve invested, you haven’t lost money. But they are hurting because it must be emotionally painful to be used to wallowing in billions and billions of pounds and to now have fewer billions in which to wallow. Think of what it must be like to be filthy rich and after a huge slump in sales to be, well, filthy rich.

Let me say this again: when you are making huge profits and then you are making less huge profits, you are not losing money.

In the US, the RIAA has had to face accusations of the obvious – they are an antitrust violating monopoly. It appears from my brief look at existing litigation that the RIAA are in retreat. Most recently it seems they have tried to drop cases in such a way as to punish the defendants by forcing them to pay their own legal fees, which, when fighting giant corporations and their lawyers, can be enormous. They have now been losing at that tactic.

In the UK, the courts have not been so enlightened. it is strange to think that in a very capitalist country like the US, the courts and even Congress can see through attempts at creating illegal monopolies and bullying the consumer, while in the socialist UK, big business wins.

So once again in the UK we have to deal with a heavy-handed totalitarian-aspiring Government and their collusion with industry cartels that are determined to maintain their profit levels. I haven’t even touched on the Government supporting the energy utilities putting up their prices by 35% in a single hike to maintain or even increase their profit levels in the face of rising energy costs.

Games

I saw the boardgame Stratego at Woolworths the other day and it brought back a few memories. And I do mean few.

I used to love board games. Growing up, I had at least half the length of the shelf that ran the length of my bedroom closest stacked with them. That would have been at least two games wide and several high. But the thing about games is that you need someone with whom to play them. I never had a lot of friends growing up. I had a chemistry set. And the board games.

So I didn’t get to play Stratego very often. As I moved into my teenage years, I had a few friends from church who were older than me, but we never played Stratego. We played guitars. I got pretty good at it and eventually the Stratego game must have been thrown out. (This must have happened after I moved away to college, as I never threw away anything.) It had probably lost pieces appropriated by my little brother for no known reason, but he always seemed to have bits and bobs of my stuff in his room.

If anyone ever played Stratego with me it was probably my cousin Kyle. He was (and still is, by last count) five years older than me. However, most of the time we played Monopoly. Not out of the box, because Kyle designed his own Monopoly boards. My uncle was a building sub-contractor and Kyle had access to big off-cuts of Formica. He would cut these in rectangles of what must have been about 2 feet by 3 feet. The perimeter of the board would be partitioned into the various properties using masking tape. Names would be created for them and deeds created from the names. The prices of the properties reflected the currency being used, which was always the large denomination money from the Game of Life, rather than the lower value Monopoly cash. I ended up with one of Kyle’s boards as a hand-me-down. I had it for ages.

When I got into college, I had the chance to play another one of the games that during my childhood spent most of the time in the top of my closet. During a brief window of time, my housemates and I played Risk. It is probably the greatest of all male bonding games. Often we would play at the home of another man in the church. His son was just a baby – now that son is serving with the Army in Iraq.

I still look back on this time of my life as one of the happiest. These days it is those college friendships that spend too much time on the shelf. I stay in contact with some – one or two occasionally read this blog – others haven’t been dusted off in ages. Some are undoubtedly missing enough pieces that the only thing left is to look at the box.

It’s when I think of college – that emergence into adulthood – that nostalgia hits the hardest. That’s when I have to go look in the mirror at the lines around my eyes and the reflection of the light off the top of my head to remind me that I’m not 20 anymore. I could also look down at my pot belly or look in on the sleeping faces of my own children upstairs – there’s plenty to remind me if I’m not absorbed in my own thoughts.

When I see the kids I teach just about to make that jump to college and university, I feel both jealous and sad.  They have the opportunity for so many great times ahead. Most of them may not remember much, because their social life is entirely fuelled by alcohol. Lots of alcohol. They don’t know to be jealous of the values with which I was raised and which were reinforced at my college. I am so glad that I never spent one college night drunk and obnoxious. None of the games we played were drinking games.

My children enjoy playing games. I hope they have more friends to play with than I did early on. I hope my son will find someone with whom to play Stratego, Monopoly, and Risk. I’ll try not to be too jealous.