Lobbynomics v. empirical data

Ars Technica points to a UK report asserting that “lobbynomics” rather than empirical data drives much of the intellectual property policy debate:

There are three main practical obstacles to using evidence on the economic impacts of IP…[3] Much of the data needed to develop empirical evidence on copyright and designs is privately held. It enters the public domain chiefly in the form of “evidence” supporting the arguments of lobbyists (“lobbynomics”) rather than as independently verified research conclusions.

My own experience in dissecting IP developments supports this view.  It is surprisingly difficult to find “hard data” about copyright piracy, leaving any “debate” to a shouting match between proponents of bald assertions.

We need better data, and we all need to be more circumspect (and humble) before drawing sweeping conclusions from the little that is available.

A call for a sociological study of (digital) piracy

John C. Dvorak suggests that we need more (sociological) research on the causes of digital piracy:

Understanding why piracy exists as a phenomenon needs to be better understood, but it should be up to academics, not me and other pundits, to determine the causes. Where is the great sociological study of piracy and the mentality behind it?

Dvorak briefly discusses what he thinks are the three roots of piracy: price, distribution, and marketing. At the end of the piece, he again calls for more research:

The real problem with piracy, again, is sociological. If an entire generation becomes acculturated to the free exchange of content and code, then the industry is doomed or it will have to cut back on its First Class Travel and rethink its models. Moaning and groaning about piracy will not stop it…

I’m not sure what can be done about all this, but it does need careful study, not more columns.

Sounds like it could be an interesting project. One angle would be to see how piracy has developed as a deviant (or not-so-deviant) behavior.

Some thoughts by Joel: Actually, there have been some really good academic studies of digital piracy published recently.  I wrote up some thoughts about the SSRC‘s 400+ page report titled Media Piracy in Emerging Economies in early March, and a few weeks later there was the (much shorter at 18 pages) London School of Economics paper entitled Creative Destruction and Copyright Protection:  Regulatory Responses to File-sharing.  Both are well worth reading (for sociologists, especially the former).

Status update: P2P still in litigation

Nate Anderson at Wired reminds us that “the first file-sharing case in the US to go all the way to trial is still going”:

Filed on April 19, 2006 and progressing through a remarkable three trials, the recording industry case against Minnesota resident Jammie Thomas-Rasset continues to burn through cash and judicial attention.

Thomas-Rasset was at first hit with a $222,000 fine in 2007, which was set aside in 2008. Another jury trial in 2009 ended with a $1.92 million judgment, which was set aside in 2010. In November 2010, a third trial ended with a $1.5 million verdict, which the judge is unlikely to allow (his previous orders suggested that a few thousand dollars per song would be the maximum permissible damages). At the moment, both sides are still arguing over the appropriateness of that $1.5 million damages award.

Almost five years.  Three trials (so far).  What a colossal waste of economic, judicial, and personal resources.

LA piracy debate

The LATimes just posted the second round of its “piracy Dust-Up” (you can read the first round here), and I thought I’d pull two quotes.

The first is from Harold Feld, the “legal director of Public Knowledge, a Washington-based digital rights advocacy group”, who points to the hidden costs of copyright enforcement:

It’s easy to understand 9 million illegal downloads of “The Social Network,” and hard to understand how the new regulations Sony wants will raise the price of your broadband subscription and your iPod while keeping you from doing cool things on your iPhone.  As the crowning insult, there is no evidence that these new rules would actually make a dent in the illegal downloading problem, or that marginally reducing illegal downloads would translate into an increase in legal sales.

The second is from Andrew Keen, “the author of the upcoming Digital Vertigo: An Anti-Social Manifesto...[and] an advisor to Arts and Labs, a coalition of entertainment and technology companies”:

Rather than worrying about doing “cool things on our iPod,” shouldn’t we instead be trying to craft legislation guaranteeing that 21st century artists have the opportunity to make a living selling their books, their recorded music and their movies?

Here’s the thing that I don’t understand:  in 2006, Keen accused Larry Lessig of being “an intellectual property communist”.  Yet if I understand this debate correctly, it is Keen who wants to focus on ways of “guaranteeing that 21st century artists have the opportunity to make a living” and who is unconcerned whether or not people can do “cool things on [their] iPod[s]”.

Last time I checked, “guaranteeing” certain people paychecks is strongly associated with communism.  It is innovation of the sort that allows people to “do cool things on [their] iPod[s]” that smacks of the capitalism Keen so implicitly embraces.

Keen will no doubt object that I mis-characterize his view insofar as he “only” seeks opportunity, not outcome.  This objection is fair enough — so far as it goes.  But it’s a tricky objection to maintain credibly when it is your opponent (here, Feld) who is calling for balance and proportionality in infringement penalties and you (Keen) who is engaging in the take-no-prisoners logic that “we surrender to the online thieves by treating piracy as a ‘cost of doing business'”.

Mr. Keen, accepting business loses due to shoplifting (in the physical realm) or piracy (in the digital realm) is not “surrender”; it is a fundamental recognition of reality.  Failure to recognize this reality seriously undermines your argument — as does your claim that you only seek “opportunity” when you so clearly will be satisfied only by enactment of one particular outcome.

Licensing theater

Stanford’s Center for Internet and Society pointed me to a comprehensive study by the Social Science Research Council (SSRC) (Wikipedia backgrounder) on the effects of media piracy in emerging markets:

Based on three years of work by some thirty-five researchers, Media Piracy in Emerging Economies tells two overarching stories: one tracing the explosive growth of piracy as digital technologies became cheap and ubiquitous around the world, and another following the growth of industry lobbies that have reshaped laws and law enforcement around copyright protection. The report argues that these efforts have largely failed, and that the problem of piracy is better conceived as a failure of affordable access to media in legal markets.

“The choice,” said Joe Karaganis, director of the project, “isn’t between high piracy and low piracy in most media markets. The choice, rather, is between high-piracy, high-price markets and high-piracy, low price markets. Our work shows that media businesses can survive in both environments, and that developing countries have a strong interest in promoting the latter. This problem has little to do with enforcement and a lot to do with fostering competition.”

I’m looking forward to perusing the report, but there’s a threshold issue that I want to address:  SSRC has released the report itself subject to a “Consumer’s Dilemma” license:

[T]he CD license creates different paths to acquiring the report: first, we have an IP address geolocator that sends visitors from high income countries toward an $8 paywall when they download the report;  all other resolvable IP addresses get free access.  Second, and separately available, a ‘commercial reader’ license that costs $2000.

Why did SSRC set things up this way?  Licensing theater:

Maybe some clarification is in order here. If you are residing in one of the listed high-income countries, want to read the report, but think that $8 is an unreasonable price, you can acquire it for free through other means.  In fact, we have made it exceedingly easy to do so. If you fall under the terms of the commercial reader license but think that $2000 is unreasonable, you have the same options (plus the $8 option).  In both cases, the reader is faced with a dilemma: pay the legal price (roughly mapping ability to pay to a determination about whether the price is fair), acquire it through pirate channels, or don’t bother with it.  In most of the countries we’ve studied in this report, the results of this calculation with respect to DVDs, music, and software are strikingly consistent.  Media goods are highly desired, exorbitantly priced with respect to local incomes, and freely available through pirate channels.   High rates of piracy and tiny legal markets are the result. We’ve written 400+ pages about this dysfunctional form of globalization and its causes.

The resulting consumer dilemma is a ubiquitous experience in medium and low-income countries but one that confronts the American or European reader (or the media company employee conjured up by the commercial reader license) much less frequently and with much less intensity.  The global market is made for those consumers.  It is priced and distributed for them.  They are rarely faced with what they experience as ridiculous pricing for a DVD or book–or seriously disadvantaged by differential pricing.  The Consumer’s Dilemma license is a way of reversing that equation and, in the most minor ways,  requiring an explicit engagement with it.  Among the surreal aspects, that simple choice can subject you to crushing civil and criminal penalties, but you can rest easy knowing that only very rare, arbitrary examples will be made (and none in our case).  Now that’s theater.  Our license has a theatrical side, to be sure, but it also stays true to the experiences  documented in the report.

Well done, SSRC.  Now I’m really curious to read the report…

Update: TechDirt has posted an initial analysis of the report here.

The spin-to-truth ratio is rising

Mike Masnick over at TechDirt pointed me over to a “study” put out by Rick Falkvinge, a member of the Pirate Party, who claims that

for every job lost (or killed) in the copyright industry due to nonenforcement of copyright, 11.8 jobs are created in electronics wholesale, electronics manufacturing, IT, or telecom industries — or even the copyright-inhibited part of the creative industries.

Masnick has at least as many problems with Falkvinge’s methodology as I do, but the content industry plays this game too.  See this example of similarly muddled reasoning over at The Copyright Alliance Blog, which attempts to connect almost 14 million illegal downloads with the 2,000 production jobs in L.A.  Are readers really supposed to think that Hollywood blockbusters are imperiled?  If so, the Alliance Blog probably shouldn’t have picked as its example a movie that’s made over $800 million worldwide.  (At the box office alone.)

I think Masnick’s analysis is spot-on:

I don’t think anyone actually believes [Falkvinge’s] numbers are accurate. But it’s using the same basic methodology, assumptions and thought processes behind the studies in the other direction. You can also, obviously, claim that Falkvinge is biased. He is. But is he more biased than the entertainment industry legacy players who do the other studies? It seems clear that the industries are likely to be more biased, since they have billions of dollars bet on keeping the old structures in place. I think both studies are probably far from accurate in all sorts of ways, but if you’re going to cite the entertainment industry’s claims based on this kind of methodology, it seems you should also have to accept these claims. [emphasis added]

Numbers can be powerful weapons.  But it helps if they actually mean something and aren’t simply empty rhetorical flourishes.