This article is aimed at people who sell bits and bytes and wonder why people don’t always pay for them. 

Napster Was Just The Beginning…

At risk of pointing out the obvious; digital information does wonderful things for art and culture because it is both abundant and egalitarian. Once something goes digital; it can be copied indefinitely and shared freely with anybody who has access. It allows the unlimited distribution of old songs, books, films and things previously no longer available to the world.

It is also insurance for our older treasured cultural works threatened by physical degeneration. Consider Google’s ‘liberation’ of books to the public domain through its meticulous program of scanning and uploading lots of very old texts. It is nice to think that they are now available to everybody without charge, and easily accessible. As they should be. You could think of it ‘doing backups on historical data’.

An old hacker maxim says Information wants to be free. In the physical, and on a large commercial scale (think Google’s servers), the cost of information storage is now so low as to be worth (in economic terms) almost zero. Its price continues falling, as technology improves and hosting moves to the cloud.

The buyer now has the choice to pay for something digital – so can we really expect everybody to willingly give their hand earned money away for our bits and bytes?

Point I am making: In this instance we must not mistake pay for with value. If I love your music, adore you as an artist but don’t pay for it, I maybe incongruent in how I value you (maybe I’m ripping you off?). However, I clearly value your work in some way, perhaps not monetarily.

Do you love your girlfriend less if you can’t afford to buy her a meal? What if you are too cheap? What if you steal the meal for her?

Speaking Of Piracy:

And just because I download your album, doesn’t mean I don’t value your music. The loss of a physical sale is not so much a loss as a lesser gain; as not everyone who downloads something illegally would have purchased it with no other option. The free download option has given rise to a semi (emphasis on semi) honorary system dubbed ‘try before buy’. It has been around in one form or another for many years now with the idea of ‘shareware’.

It appears that information starts to centralise as the efficiency of communication increases. A better network facilitates a faster diffusion of information. Think of examples from film or fiction where someone leaks a story to the press – information is very adept at duplicating itself. It starts off leaked from one source, and eventually winds it’s way back to the major (central) information outlets, CNN, BBC, Google News, so on.

The accidental citizen journalist scoops the major news network, just because he/she was THERE.

Music Is A Good Example…

We can extend this metaphor of ‘diffusion’ to the distribution of music. New tracks, especially ones by artists who are well-known and highly commercial will be let released quickly as the insatiable demands for them can be fulfilled. This includes new channels such as peer-to-peer file sharing and digital distribution.

Why wait for your CD to arrive if someone has already leaked the album onto a torrent, which will take you a few minutes to download for free? It’s probably unfair but humans often value utility over the ‘relatively small ethical snags’ or guilt. This is especially when the implications of illegal downloading aren’t clear.

What is the Internet, asides from a conduit? It is a repository and a medium in which the majority of human information is being indexed. I think of it akin to a big hard drive with an ever-expending storage size that we haven’t properly mapped yet. You can find almost anything there, if you know what sectors to look in.

Collectively, the internet doesn’t really follow an ethical code. Just because sharing pre releases of albums for free is illegal, doesn’t mean our giant hard drive (the net) won’t make that available to you. If you know the right search terms or places to go, it is all there waiting.

Rihanna

If I download Rihanna’s new album, to me, that doesn’t seem to take anything away from her considerable wealth. But if I leak a pre-release of her album, I don’t necessarily see the damage that I’ve done to her sales. She looks rich and successful to me regardless, even if I do take a cut out of her figures. And if I am harming her business, can we quantify the damage I’ve done? It’s all a bit thorny and therefore easy for me as ‘Mr. Digital Native With BitTorrent’ to really not care that much.

What am I getting at in all this? It’s that people, in their practical way, don’t see the consequences of these abstract laws they break. They don’t want shackles and limitations if they honestly believe that they are committing little or no wrong. And if they believe themselves to be anonymous (which is easier to be online), they are less afraid of legal ramifications.

We have an environment where everyone has the ability to share files at great speed, with negligible cost to both sender and receiver AND both are completely unconstrained by geography. It’s easy to see that your CD is going to get out there, whether you like it or not. There are people who ‘crack’ software that they don’t use and share music that they don’t listen to. They do it just because they can, and they enjoy the challenge.

Don’t Fight The System, Change The System

Impose artificial scarcity on an essentially unlimited environment and the system will correct itself whether your ethical stance likes it or not.

Digital natives cannot be told how to value things. Don’t stake your money on convincing them to. A couple of years of torrenting and 4chan and people get a sort of blasé approach to the whole thing.

As an artist you may do a limited press run of 100 CDs, but once someone has encoded that to an MP3 all the scarcity is gone, at least as far as the music is concerned. Perhaps the intrinsic scarcity (and value?) now shifts to the physical product…

You know as well as I do that people still like to appreciate and feel beautiful, tangible things. Give them a CD or DVD product with inherent physical value in related to your music and those buggers who pirate your sounds will have a hard time cracking and sharing that experience!

There are tangible and intangible things that are beyond piracy. Your brand and beautiful physical goods are amongst them.

Yet Another Thought Experiment – A World With No Scarcity

Here is a thought experiment for you to ponder… (because I spend too much time in my own mind and so do you).

If physical resources become susceptible to the same kind of abundance as digital information has, what happens to value? What happens to scarcity?

Theoretically: matter equals frozen energy and almost all resources can be described as matter. Maybe at some point in the future, if humanity will acquire the ability to harness immense amounts of energy (zero point, fusion? etc.) and the mechanism to ‘freeze’ this energy into things. Maybe we’ll be able to create abundant matter of any variety we like, and it therefore all experience no physical scarcity.

At this point is what sort of economic system and would we be operating under?

New Economies Of Lossless Replication:

So, perhaps these digital shenanigans are a preview of the coming new economics (given a few hundred years of technological advancement). Economics driven by a value system that does not incorporate scarcity any more. Maybe this marketplace’s values will be driven instead not by financial gain but by something higher, such as the need for self-actualisation, e.g. the need to express our creative selves and the altruistic urge to see people around us happier?

Maybe.

I and many others believe that the need to acquire is a phantom happiness that passes onto the next new, desirable thing that comes along. Perhaps when the need to desire material things is removed, the pursuit of happiness will be redirected toward immaterial things. Spiritual things.

Maybe towards a more authentic pursuit of happiness, which comes from things we cannot sell each other, but give only freely. I say this with the caveat: we often tend not to value things we don’t work for.

How does this relate to the new digital economy? Perhaps it is a prototype of a system to come as our resources increase and marketplaces start to see less and less scarcity. A testing ground for us to see how we can make money out of things that are essentially free.

Maybe a little paradoxical; what do we do with all the money then?

No Replicators Allowed? 

Think about it, if someone invented a replicator that was commercially viable for the general public, the damage that it would do to the marketplace would be almost unlimited. I wouldn’t be surprised if there where lawsuits to try and limit the distribution and usage of this hypothetical replicator.

We’re already seeing the first steps in this with 3D printers and the ban on certain blueprints (namely weapons…)

And, we already have replicators that work losslessly with digital information. We call them computers! And they’re doing plenty of damage.

It makes me think; money is an incentive and a way to systematize and control the exchange of goods and services. But if these goods and services arrive instantly and without effort, you don’t need to incentivize anybody. Money becomes redundant. The inequalities in power caused by an uneven distribution of resources go away. What then? Green uptopia? I wonder.

Pay What You Want – You Might Have To Eventually

Asking for people to ‘pay what they want’ for something could be the preview to a new economy.

If you think of it as a continuum between price fixing on one end and haggling everything on the other, then this form of everyone individually valuing things is the ultimate form of liquidity.

Radiohead offered pay what you want on their album “…”. This went very well. They later sold the album at full retail price, which also did well.

Such a society could be full of deeply spiritual and contented people. Alternatively it may come to grow lazy now that the impetus and motivation to ‘do’ anything was removed.

If you had every material thing you ever wanted, what would you do?

You’d probably be forced to chase the intangible.