A new bill is moving through Congress titled S. 978. It would make the recording and sharing copyrighted materials illegal and punishable as a felony.
“Makes unauthorized web streaming of copyrighted content a felony with a possible penalty of up to 5 years in prison. Illegal streaming of copyrighted content is defined in the bill as an offense that “consists of 10 or more public performances by electronic means, during any 180-day period, of 1 or more copyrighted works” and has a total economic value, either to the copyright holder or the infringer, of at least $2,500.”
A new website has recently launched called http://www.freebieber.org which rightly points out that, should this bill have been enacted 5 years ago, people like Justin Bieber would never have become stars and would instead be just getting out of juvenile detention.
But that’s not the reason I find the bill such a misstep by the recording industry’s lobby.
You see we have a new type of economy on our hands. Usually what happens is that I make something and then I sell it to you. If someone else wants it then they have to pay me to make another or pay you for yours. In either case the price of that good can be different (usually higher) than the original selling price. This is based on the idea of scarcity, the greater the scarcity + demand the greater the price of the good. These are called rivalrous goods and most of the products in our economy are of this type.
But from the day that music started being recorded another kind of good was created. These are called non-rivalrous goods. Instead of traditional supply and demand, now a recording can be given to another person without the original creator having any part of the process.
The record industry exists for two roles, one, the increase the distribution of non-rivalrous material and two, to control the supply of that material to ensure prices don’t become free. Since the first role, distribution, has been reduced to public relations the industry has focused on the second perceived role.
Here’s the issue. Non-rivalrous goods are increasing in number. Anything that can be digital will be. Even production, with products like Makerbot, will lead to traditionally rivalrous goods suddenly being freely available. This is an inevitability because the new role of invention is to speed the diffusion of knowledge.
But this isn’t why the bill is backward thinking. The interesting part is what happens when you really look at the value non-rivalrous good have. And here, ironically, Justin Bieber is a great example of non-rivalrous good creating value.
You see, as you increase the number of people who have a non-rivalrous good, the more value that good creates (ironically this transforms non-rival to anti-rival). The value may not be pay-per-song but value is generated. I argue, as do people like Stanford professor Larry Downes, that the potential value generated from a non-rivalrous business model far exceeds what the record industry makes per song.
For Justin the value was and is immense.
He chose the songs he sang as a kid on YouTube because he loved them.
By singing them, more people heard those songs under different context. People who may not ever have heard those songs before or even cared to listen to them.
By singing those copyrighted songs he created a career for himself.
And by singing those copyrighted songs, one could argue, the career of Usher was saved.
You could also say that American Idol became much more popular simple because it showed that regular people could become famous, just like Justin.
So how much value is that? Is it worth removing the ability to generate that value? If we live in an economy where entertainment is one of our largest exports, do we want to constraint the ability to innovate that export?
I think not. http://www.freebieber.org