The debate at the Wheeler Centre on copyright, which our team lost, is up now available to watch. If you’d prefer not to watch — that’s my preference! — my part of it, my talk is reproduced here.
I think that we do come off a little serious and lecture-y, but in our minds it was a serious topic less befitting of making light of than it was something we wanted to get our point across on.
I’d love to know what you think and where you stand on the issue.
For my part today I will be attempting to answer the “million dollar” question as billed on the Wheeler Centre website – and I will be accepting my cheque later – how can we ensure creativity continues to pay? Quickly, I am an author with a publishing house, I am a writer who works in print and online, who has produced television, written television, who has overseen the digital distribution models for that television, and I am the digital director of a non-profit literary magazine which has just transitioned to subcompact digital format, the Lifted Brow.
I want to start by zooming out a little and imaging the world where copyright doesn’t exist. All things are free. Royalties aren’t paid. Permissions aren’t paid. Advances aren’t paid to authors because no one buys books anymore as they are now free. No one pays for television shows so advertisers don’t take ads out in the middle of them. No money, no new shows. No one buys music so records labels – not that they exist in this future – don’t invest in artists and so no new music is created. Movies are free, somehow, despite how vastly expensive they are to make. You can see where the flaw in this vision is: if there is no revenue generated in these fields because their goods are free, how will these goods – cultural artefacts – be created in the first place?
They won’t be. Because culture is not free. To even say that it is possible to create something with nothing is a proposition so ludicrous it actually defies physics. It costs money to make money. To create anything takes time. If you don’t value your time in labour costs you deserve to be paid, then you are either an amateur, an anarchist or a fool. “Information wants to be free,” we so often hear without hearing the second part of that famous quote which is, “information also wants to be expensive. That tension will not go away.”
How can creativity continue to pay?
First let’s look at who did benefit from the first wave of piracy, when Napster emerged in the late 1990s from the bedroom of an American teenager. In the fifteen years since the emergence of Napster the global record industry’s profits have halved. Piracy meant that music was suddenly worthless. It was worth in consumer’s eyes no financial transaction whatsoever. The baseline was lowered to free. When Apple decided to open the iTunes music store in order to boost the sales of its iPod hardware, Steve Jobs set the price of a single song at $0.99. $0.99 was attractive, it’s a small price to pay, compared to zero it’s not a huge leap. What this did, once Apple asserted market dominance over digital music, was to drastically devalue all digital goods. Apple can afford to do this, because mp3 sales are a loss-leading product for them. Apple is not in the business of selling mp3s, it is in the business of selling the vastly more expensive hardware upon which those mp3s are played.
Apple set very punitive sales terms with labels and networks that sell through its store. It sets the price your content will be available for sale at, and there is no negotiating that price. You either agree to their terms or don’t sell through them. Apple then takes its 30%. It has provided nothing more than a server for people to sell their wares through, yet it has profited enormously from making those wares so cheap that no competitor can viably emerge. Digital goods stay cheap. Apple’s market cap is hovering around $US500 billion. The money it has reinvested in creative industries is zero.
Similarly, Amazon sells a loss-leading product in ebooks. eBooks are vastly undervalued, as anyone who gets an email alert to an entire back catalogue series at $2.99 per ebook can attest. Amazon is not in the business of selling ebooks, it is in the business of crushing its competition through rock bottom prices and free shipping, that being brick and mortar stores and other online retailers who cannot compete. Amazon’s sale conditions are as punitive as Apple’s and as mercurial. Recently Amazon’s CEO Jeff Bezos bought the Washington Post newspaper for a cool $US250 million. In cash.
Neither of these monolithic multibillion dollar companies could exist at their dominance today without the devalued digital goods, made of other people’s intellectually property, on top of which they stand.
How can creativity continue to pay in the age of piracy and free culture? It is a two-step process that begins with changing consumer perceptions. As consumers we have to accept that this is wrong. We have to accept that $2.99 for a book or $3.99 for an episode of scripted television is too cheap. That $0.99 is not enough for a song. That digital goods may be in some ways more ephemeral than physical objects, but that the cost in time and labour – in serving them, in hosting them, in promoting them – to the human beings who created them – who wrote them, who composed them, who filmed them, who edited them, who acted in them – is the same. And to think just a little into the future and to do some basic maths. Digital goods have already eclipsed the sale of physical ones. As they are soon to be the dominant vessel of all cultural goods, the corrosive cumulative effects of their devaluation are obvious even to someone with such a tenuous grasp on maths as a writer such as myself. These things are really, really cheap. They are soon to be all that there is. They generate far less revenue. It’s simple.
Yet through the architecture of the Internet our behaviours have been primed to the point where we want what we want and we want it immediately and if it’s too expensive or not available right now, then we’re just going to just take it. This is an immoral stance. Piracy is theft. Downloading a file is making a copy of it, this is copyright infringement. There are many cognitive tricks you can play to convince yourself that what you’re doing is fine, that it’s justified. It’s a victimless crime, everyone does it. As you see, that is the thinking which enables the cycle to continue, which enables the devaluation of digital goods to continue unchallenged because still in people’s mind they equate digital with cheap, with ephemeral, with worthless. With free. The first step is to realise this assumption is false, and to make the ethically sound decision in your own life to pay for whatever you consume through whichever legal means are available. The problem of those legal means being currently too cheap is what I will come to next.
For the creative industries to recover from the “disruptive” chaos wrought upon them by free culture evangelists and the companies which profited from their mindset, creators need to take their content back from these third party tech giants and sell it straight to their audiences themselves. There is so far one light on the hill and that is Netflix, a web based television production company which creates its own content and sells it straight to its subscribers, there is no middle man. For smaller players to be able to do this, to recreate those structures, guess what they will need? An injection of capital. We are going to have to pay more because most creators are not giants like Apple and Amazon who can operate at a loss on goods and reap giant profit elsewhere. Small players intellectual property is no loss leader, it is the entirety of their business.
Copyright does not stifle creativity. Copyright and creativity have fruitfully coexisted for over 300 years, and I would defy anyone who argued that creativity has somehow suffered in that time, or been prevented from flourishing – the proof that is hasn’t is everywhere in our world. What does stifle creativity is an inability to make a living from it. Increasingly this is the most difficult time to be an artist precisely because revenues in the digital age are shrinking to miniscule, and we have the free culture movement to thank for that.
The free ride is over. If we don’t come to accept that and make personal decisions to consume ethically, then someone is always going to be getting rich somewhere. Make sure you aren’t a sucker lining the pockets of billionaires with your lazy habits of consumption. Think of where your money is going and what kind of world you want to live in: where profits and power are in the hands of the very few for the sake of our convenience, or where we pay more for what art is actually worth, so that art can continue to be made. I want to be in a world where artists’ rights are respected and continue to be enshrined by copyright law. That is how we fuel innovation, by protecting the ability for artists to make their living. In the end I think you’ll find that we’re the ones who need to “think different.”
— The Wheeler Centre, September 2013.