Piracy, Public Goods and Possible Government Solutions

[Chestaan]

Many of you may be already aware of the economic concept of public goods. Two main characteristics define public goods:

1) Non-Exclusivity: Once these goods are produced for one person, everyone else cannot be excluded from consuming the good.

2) Once the initial good is produced, it costs nothing for an additional consumer to consume the good.

Some examples of public goods would be street lighting and clean air.

Having thought about this concept and piracy, it seems that in this modern age that music, tv shows, video games and all other media that can be distributed online have become public goods. Take music as an example. It is impossible to prevent a person from downloading any music track for free once it has been uploaded and as all you need to do is copy a file from the internet, there is zero cost in producing this extra copy. Hence, digital media is a public good as it meets both requirements.

Trying to restrict access to digital goods online is the same as trying to restrict access to street lighting and it is impossible to enforce. But this raises an important question; if we can't charge for music these days, then how can we make sure that the good is produced in the first place?

Of course, if I've thought about this issue and made the connections, then the chances are that somebody smarter has already done so

http://www.hypebot.com/hypebot/2010/12/ ... hting.html

An economist in the University of Portsmouth believes that digital goods should be provided by the government. This makes sense as most other public goods must be provided by the government as private individuals are not willing to do so due to the non-exclusivity of the goods. The form that this could take could be any of a number of things, perhaps consider a government funded netflix/spotify. Users could download the music/films/games etc free at the point of access. Then this service would be paid for by taxes, as street lighting is. The artist would receive money based on how many people downloaded their file and this would largely remove the desire to pirate as you are already being given the file for free from a safe and legal source.

The obvious problems with such a system are that it could cost a massive amount, but really I can't see any other way of getting over the problem of goods not getting produced because artists can't receive money for a product if they do produce it.

What say you NSG? A good idea? Or is this just more unnecessary meddling in the free market?

[Dalcaria]

What do I think? Honestly, I'd like to stand in front of the Hollywood lobbyists in the US, with a megaphone, and scream until their ears bleed that if they want our money, LOWER THE PRICES!

Why are less people going to movie theaters? Because tickets are $10-$16, popcorn is $5 or $6, a drink is at least $3-$5, and then there are snacks! By the end of the movie, you've spent at LEAST $20 (PLUS TAX!) for a hour to two hours or so of your time. THAT'S IT! With video games, you can get anywhere in the range of 10 hours (for just ONE play through) to 1000 hours (also for just ONE playthrough) or more at the cost of $60-$80, sometimes a little more depending on DLC. That's also ignoring the replay value games have, which could double, triple, or quadruple the amount of time you spend on it! But for a single movie, it costs you between a third to a half the cost of a video game with 10-100 times as much content, or more? That's a ripoff! So lower costs at theaters and lower DVD costs and THEN maybe more people will start spending money again! Also, Netflix exists now! So if they want to avoid piracy even more, they should put their movies there since so many people use it anyways! With a combination of those three things, the movie industry can have a lot less piracy.

For music, the simple solution is make better music, produce better music, and sell more stuff you can't pirate. Artists need to make more songs people are willing to spend money on (the music industry had a record low sale of records last year I believe, Taylor Swift was the only artist to break a million if I remember correctly), music producers need to find new and better bands and artists to promote (I think people are getting sick of hearing the same 20 songs on the radio all the time, or at least I hope so), and bands need to have more concert tours, merchandise, and other things that aren't available digitally. Great ways of making money!

As for video games... Steam. Steam. And Steam. Problem solved. I never was much of a PC gamer before, but then I got my laptop, steam, and a few games from a friend and discovered that honestly? I'm better off buying steam cards and just getting all my games on here (sometimes on sale!) than wasting my time on consoles I'd have to pay monthly fees to enjoy the "privilege" of online service for. I think I pirated all of 5 games or something in my whole life? One was Minecraft, and the other was Civ 3, which is OLD now (so who really would have cared?), and I bought the legitimate copies of both because it was honestly just easier to work with. As for any other pirated games, I probably haven't played them in years, and they weren't exactly games that had "triple A" budgets. That said, the gaming industry is doing just fine I think. Hollywood could learn a lot.

[Chestaan]

What do I think? Honestly, I'd like to stand in front of the Hollywood lobbyists in the US, with a megaphone, and scream until their ears bleed that if they want our money, LOWER THE PRICES!

Why are less people going to movie theaters? Because tickets are $10-$16, popcorn is $5 or $6, a drink is at least $3-$5, and then there are snacks! By the end of the movie, you've spent at LEAST $20 (PLUS TAX!) for a hour to two hours or so of your time. THAT'S IT! With video games, you can get anywhere in the range of 10 hours (for just ONE play through) to 1000 hours (also for just ONE playthrough) or more at the cost of $60-$80, sometimes a little more depending on DLC. That's also ignoring the replay value games have, which could double, triple, or quadruple the amount of time you spend on it! But for a single movie, it costs you between a third to a half the cost of a video game with 10-100 times as much content, or more? That's a ripoff! So lower costs at theaters and lower DVD costs and THEN maybe more people will start spending money again! Also, Netflix exists now! So if they want to avoid piracy even more, they should put their movies there since so many people use it anyways! With a combination of those three things, the movie industry can have a lot less piracy.

I think you're missing the point. Unless sellers of music, movies etc lower the price to zero, there will always be a massive amount of people who will pirate the good rather than pay for it.
For music, the simple solution is make better music, produce better music, and sell more stuff you can't pirate. Artists need to make more songs people are willing to spend money on (the music industry had a record low sale of records last year I believe, Taylor Swift was the only artist to break a million if I remember correctly), music producers need to find new and better bands and artists to promote (I think people are getting sick of hearing the same 20 songs on the radio all the time, or at least I hope so), and bands need to have more concert tours, merchandise, and other things that aren't available digitally. Great ways of making money!

As for video games... Steam. Steam. And Steam. Problem solved. I never was much of a PC gamer before, but then I got my laptop, steam, and a few games from a friend and discovered that honestly? I'm better off buying steam cards and just getting all my games on here (sometimes on sale!) than wasting my time on consoles I'd have to pay monthly fees to enjoy the "privilege" of online service for. I think I pirated all of 5 games or something in my whole life? One was Minecraft, and the other was Civ 3, which is OLD now (so who really would have cared?), and I bought the legitimate copies of both because it was honestly just easier to work with. As for any other pirated games, I probably haven't played them in years, and they weren't exactly games that had "triple A" budgets. That said, the gaming industry is doing just fine I think. Hollywood could learn a lot.

[Imperializt Russia]

What do I think? Honestly, I'd like to stand in front of the Hollywood lobbyists in the US, with a megaphone, and scream until their ears bleed that if they want our money, LOWER THE PRICES!

Why are less people going to movie theaters? Because tickets are $10-$16, popcorn is $5 or $6, a drink is at least $3-$5, and then there are snacks! By the end of the movie, you've spent at LEAST $20 (PLUS TAX!) for a hour to two hours or so of your time. THAT'S IT! With video games, you can get anywhere in the range of 10 hours (for just ONE play through) to 1000 hours (also for just ONE playthrough) or more at the cost of $60-$80, sometimes a little more depending on DLC. That's also ignoring the replay value games have, which could double, triple, or quadruple the amount of time you spend on it! But for a single movie, it costs you between a third to a half the cost of a video game with 10-100 times as much content, or more? That's a ripoff! So lower costs at theaters and lower DVD costs and THEN maybe more people will start spending money again! Also, Netflix exists now! So if they want to avoid piracy even more, they should put their movies there since so many people use it anyways! With a combination of those three things, the movie industry can have a lot less piracy.

For music, the simple solution is make better music, produce better music, and sell more stuff you can't pirate. Artists need to make more songs people are willing to spend money on (the music industry had a record low sale of records last year I believe, Taylor Swift was the only artist to break a million if I remember correctly), music producers need to find new and better bands and artists to promote (I think people are getting sick of hearing the same 20 songs on the radio all the time, or at least I hope so), and bands need to have more concert tours, merchandise, and other things that aren't available digitally. Great ways of making money!

As for video games... Steam. Steam. And Steam. Problem solved. I never was much of a PC gamer before, but then I got my laptop, steam, and a few games from a friend and discovered that honestly? I'm better off buying steam cards and just getting all my games on here (sometimes on sale!) than wasting my time on consoles I'd have to pay monthly fees to enjoy the "privilege" of online service for. I think I pirated all of 5 games or something in my whole life? One was Minecraft, and the other was Civ 3, which is OLD now (so who really would have cared?), and I bought the legitimate copies of both because it was honestly just easier to work with. As for any other pirated games, I probably haven't played them in years, and they weren't exactly games that had "triple A" budgets. That said, the gaming industry is doing just fine I think. Hollywood could learn a lot.

First poster syndrome strikes again.

[The Two Jerseys]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

[Chestaan]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

Don't you think they would do that if they could? Not exactly as easy as you make it sound.

[Imperializt Russia]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

Alternatively they could realise that digital media doesn't really conform to how copyright is considered.
Copyright laws need a ground-up revamp if they're to still function properly with the ease of access to digital media.

Just look at music on Youtube. Until like last year, accounts were taken down for copyright breaches on music.
Since Billboard started including Youtube plays as airtime for its rankings, they've been leaving the music up there, even on unofficial channels. Because it's now beneficial for them to do this.

[Russels Orbiting Teapot]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

When everyone commits a crime, enforcement becomes impossible.

[Shilya]

Such a model, a "culture flatrate", has been proposed here as well, a few years ago. I could see two basic models.

The first one would be a consumption-based. Consumption is recorded from everyone, the government looks at the price it should pay per good, and then pays accordingly from tax money. The second would be income-based, i.e. the nation assigns itself a media budget. Afterwards, the budget gets paid out per share of downloads - the more total downloads, the lower the payout per download.

Both are possible and would likely gravitate to roughly the same price, with the income-based one being more stable and opening less room for complains why game x deserves more money than movie z, but giving comparatively little incentive to excel, instead going towards the maximum amount of downloads/downloaded size. A mixed weighted model would also be possible, what remains is the consideration on how to weigh material against each other.

Either way, we can be quite sure consumption of digital goods would increase and the price per good would have to fall. A side effect would be that marketing would be even more dominant than it is now: If the main barrier to getting your good consumed as much as possible (and hence maximizing the payout) is getting people to be aware and interested in your product, then the more media presence you have, the better. Upstarts/indies can't compete on a price basis against the model.
It would also mean that no matter how much you consume, you pay the same - hence potentially screwing over people who consume very little. Not exactly an ideal system, seeing how this would cut in the existing entertainment of those people. If your idea of watching movies is to go to the cinema instead of downloading them and watching them at home, you now have to pay for both, because you can't pirate a cinema.

[Quintium]

It's too difficult, and it gives the government too much power over producers and consumers. It's also a drain on money that governments don't actually have at the moment. I know of a better solution. I don't know who said it, but the best way to make sure that people buy your stuff is to make sure that it's worth buying. Make a very good product, and consumers will come to purchase it.

[Dalcaria]

First poster syndrome strikes again.

Was that a slight against me of some kind, or just pointing out I posted first?

[Dalcaria]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

They've been doing that for more than 10 years now, still haven't succeeded. "If at first you don't succeed, try a different method." The flaw is with the industry itself. By no addressing that flaw, all they're doing is attracting people more and more to pirated stuff. They dug their own grave, and now they're crying out to Uncle Sam for help. They made their bed, they should lie in it, or remake their bed.

[The Two Jerseys]

Or the government could just enforce copyright laws and prosecute people who illegally distribute digital media.

When everyone commits a crime, enforcement becomes impossible.

Yet the police still hand out speeding tickets.

[Dalcaria]

When everyone commits a crime, enforcement becomes impossible.

Yet the police still hand out speeding tickets.

And yet people still speed.

[The Two Jerseys]

Yet the police still hand out speeding tickets.

And yet people still speed.

So the police should just stop enforcing the speed limit then?

[Dalcaria]

And yet people still speed.

So the police should just stop enforcing the speed limit then?

No, because you see speeding endangers lives and probably has a relatively decent success rate in terms of catching offenders. Piracy on the other hand doesn't endanger lives, and it's "success" has been tenuous at best in terms of enforcement. As I said in my first post, it would be infinitely smarter for the industry to adapt. Trying to fight something you haven't beaten for 10 years is silly at best. They'd make more money by lowering prices to attract people back to them. After all, at the end of the day business is pretty much about two things, when it comes to consumers; convenience, and who can go the lowest in price. As it so happens, pirates have both those bases covered. What they don't have, however, is consistently good quality (like at a theater, on DVD, or on Netflix), and they don't provide the same experience as a theater. But people aren't going to waste $20 and up for 2 hours tops of their time. That's a waste of money, and if Hollywood bothered to learn that and change, more people might be spending their money at theaters again, or buying DVD's for better quality, or subscribing to Netflix for the ease of access.

[The Two Jerseys]

So the police should just stop enforcing the speed limit then?

No, because you see speeding endangers lives and probably has a relatively decent success rate in terms of catching offenders. Piracy on the other hand doesn't endanger lives, and it's "success" has been tenuous at best in terms of enforcement. As I said in my first post, it would be infinitely smarter for the industry to adapt. Trying to fight something you haven't beaten for 10 years is silly at best. They'd make more money by lowering prices to attract people back to them. After all, at the end of the day business is pretty much about two things, when it comes to consumers; convenience, and who can go the lowest in price. As it so happens, pirates have both those bases covered. What they don't have, however, is consistently good quality (like at a theater, on DVD, or on Netflix), and they don't provide the same experience as a theater. But people aren't going to waste $20 and up for 2 hours tops of their time. That's a waste of money, and if Hollywood bothered to learn that and change, more people might be spending their money at theaters again, or buying DVD's for better quality, or subscribing to Netflix for the ease of access.

Exactly. Let the industry deal with it. The government has no business running a music download site.

[Pope Joan]

I no longer consume popular music.

I consider it to be a "public bad".

I do not want someone spending my tax money to produce and distribute this pollution.

[Imperializt Russia]

First poster syndrome strikes again.

Was that a slight against me of some kind, or just pointing out I posted first?

OPs I wander into in NSG these days tend to be pretty beautifully answered by first post.
I now realise that terming this a "syndrome" can be horribly misinterpreted

[Keyboard Warriors]

What do I think? Honestly, I'd like to stand in front of the Hollywood lobbyists in the US, with a megaphone, and scream until their ears bleed that if they want our money, LOWER THE PRICES!

Why are less people going to movie theaters? Because tickets are $10-$16, popcorn is $5 or $6, a drink is at least $3-$5, and then there are snacks! By the end of the movie, you've spent at LEAST $20 (PLUS TAX!) for a hour to two hours or so of your time. THAT'S IT! With video games, you can get anywhere in the range of 10 hours (for just ONE play through) to 1000 hours (also for just ONE playthrough) or more at the cost of $60-$80, sometimes a little more depending on DLC. That's also ignoring the replay value games have, which could double, triple, or quadruple the amount of time you spend on it! But for a single movie, it costs you between a third to a half the cost of a video game with 10-100 times as much content, or more? That's a ripoff! So lower costs at theaters and lower DVD costs and THEN maybe more people will start spending money again! Also, Netflix exists now! So if they want to avoid piracy even more, they should put their movies there since so many people use it anyways! With a combination of those three things, the movie industry can have a lot less piracy.

For music, the simple solution is make better music, produce better music, and sell more stuff you can't pirate. Artists need to make more songs people are willing to spend money on (the music industry had a record low sale of records last year I believe, Taylor Swift was the only artist to break a million if I remember correctly), music producers need to find new and better bands and artists to promote (I think people are getting sick of hearing the same 20 songs on the radio all the time, or at least I hope so), and bands need to have more concert tours, merchandise, and other things that aren't available digitally. Great ways of making money!

As for video games... Steam. Steam. And Steam. Problem solved. I never was much of a PC gamer before, but then I got my laptop, steam, and a few games from a friend and discovered that honestly? I'm better off buying steam cards and just getting all my games on here (sometimes on sale!) than wasting my time on consoles I'd have to pay monthly fees to enjoy the "privilege" of online service for. I think I pirated all of 5 games or something in my whole life? One was Minecraft, and the other was Civ 3, which is OLD now (so who really would have cared?), and I bought the legitimate copies of both because it was honestly just easier to work with. As for any other pirated games, I probably haven't played them in years, and they weren't exactly games that had "triple A" budgets. That said, the gaming industry is doing just fine I think. Hollywood could learn a lot.

Movie theaters have overhead expenses to pay and usually a loan. Pirates have no expenses. How are movie theaters supposed to lower their prices enough to stay competitive with free downloads exactly? Are they supposed to cut staff wages? Or the quality of their service? And that's only one example.

[Chestaan]

It's too difficult, and it gives the government too much power over producers and consumers. It's also a drain on money that governments don't actually have at the moment. I know of a better solution. I don't know who said it, but the best way to make sure that people buy your stuff is to make sure that it's worth buying. Make a very good product, and consumers will come to purchase it.

It doesn't matter how good your product is, if it is offered on a torrent site for free there are a massive group of people who would rather illegally download it than purchase it by legal methods.

[Chestaan]

I no longer consume popular music.

I consider it to be a "public bad".

I do not want someone spending my tax money to produce and distribute this pollution.

Its almost impossible that we will agree with 100% of the ways our tax money is spent. In any case, it wouldn't just be popular music, it would be all music.

[The Nihilistic view]

Can people be excluded from digital media? Yes. So is it a public good? No. Simple.

[Chestaan]

Can people be excluded from digital media? Yes. So is it a public good? No. Simple.

I take issue with the underlined. Anybody with a computer can download torrents of pretty much every song, tv show or movie.

[Keyboard Warriors]

Can people be excluded from digital media? Yes. So is it a public good? No. Simple.

I take issue with the underlined. Anybody with a computer can download torrents of pretty much every song, tv show or movie.

So people without a computer, or more importantly an internet connection, are excluded from digital media.