The debate over "illegal file sharing" doesn't seem to be going away. A group of ISPs have published an open letter in the Times in response to Peter Mandelson's earlier comment in which he set out the government's intent to punish illegal downloaders.
The government appears to be using a similar strategy to that which it employs against the illegal drugs trade, and there are more than a few similarities. Punishing the end users of any kind of product or service for which there is huge demand is, on the whole, an expensive, ineffective and counter-productive policy. Whatever your stance on economics, it’s hard to argue against the fundamental importance that supply and demand play in our society. Where there is demand the market will almost always gravitate to finding ways to satisfy it.
File sharing is no exception here. People download music, films and games illegally for two reasons: 1) because they want to; and 2) because they can. Everybody wants to get something for nothing, especially when they perceive it to have real value to them. The fact that people want as much material as is being downloaded at least suggests that it’s worth having. The huge market in downloads is, in its most basic sense, a good indicator that there is a lot of content being produced that people want.
The second point above is to do with convenience. It’s very easy to download free files, or copy them off someone else. But then it’s always been possible, one way or another. In the 1980’s people were copying tapes or taping records. In the 90’s they were taping CD’s and then they were able to copy them to Minidisc. Later, their computers could burn entirely new CDs that were as good quality as the originals. Technology has made the whole process easier and more rewarding but it’s not a new phenomenon.
While none of this is new, the rate at which it’s happening is much greater. After all, people are spending more and more time with the tools at their fingertips. And the volume of content is much greater. It’s so much easier to produce material now. If music labels are losing market share it’s just as likely to be the huge competition they’re facing as the amount of material people are taking for free. And that’s why Lord Mandelson’s latest declaration seems like a last cry of an old business model. The market is huge. The growth and evolution of the digital market is so great that it will revolutionise business models. Trying to protect the old ways of doing things is just going against the grain. Record labels and their counterparts in other media have made huge profits off the channels between producer and consumer and now those channels don’t need the same sorts of intermediaries any more. It is their misery and inevitable decline that is prompting the government to attempt such punitive and outdated tactics.
The ISPs are right to be involved in this. They are, after all, a part of the new distribution network for digital files. But so are many other companies. There is a reason Apple has been dragged through the courts by the Beatles’ old record label. Companies like Apple are part of the new distribution network. They are replacing the record labels in the same way that Amazon wants to replace the publishers (books are becoming digital files too, now. And to think how long you used to have to spend at the photocopier to steal books). What Apple understands, however, is a fundamental lesson of marketing - convenience. Apple makes its money by providing a much simpler way to download and listen to digital files, all wrapped up in a lifestyle brand. People will pay for that. And they do.
So, what else will they pay for? They’ll pay for exclusives. They’ll pay for live performances. They’ll pay for extras. With the lower distribution overheads and demise of the record labels there will be a rationalisation of costs so that even things like advertising might be able to fund the creation of new material. In the UK new release CD’s are being given away with newspapers because they sell newspapers and the artist actually makes more money by going direct to market this way. In essence, the free market will find a way. There will be an adjustment and then the old model of distributing music, videos and games will seem awfully antiquated. Except for the fact that the government will still be trying to get its head around how to punish people rather than supporting the industry to exploit the new models. Somethings never change.
