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Sunday, May 20, 2007


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Ahoy there! You've shanghaied my noun!

First of all, I'm going to make an issue of semantics. In a brilliant PR move, the opponents of this behavior have managed to assign the general label of "piracy". In fact, they've done so well that dictionary.reference.com starts their position as the 2nd definition.

Let's look at the two spaces covered by "piracy": In one corner, we have a violent attack on a large, multiperson conveyance with the main goal of profit and subgoals (or incidentals) of rape and murder. In the other corner, we have someone copying information in a way that the "victims" can't even tell unless they find the "criminal" with the information!

And people wonder why the "anti-piracy" campaign isn't taking hold well.

Is it theft?

I'm going to skip the whole "is it good for the industry" argument and ask a question: Is "music piracy" the same as "theft of goods".

Theft of goods leaves whomever originally had the goods without goods -- they are materially damaged. ("Materially" is not a pun here. Well, it is, but it also isn't.)

"Theft of music" does not deprive the "original" owner of use of the good.

So, I have to conclude that it's not the same. Now, that doesn't mean it's OK to do. It may be *also* wrong, or it may be *morally equivalent* and we should have that discussion, but let's start by figuring it out rather than assuming it to be the same.

Gold! Gold! More Gold! (but in small pieces)

Micropayments are very interesting. However, there's a problem that most people miss.

It's not that users *don't want* to pay for content, it's that the cost is too high. But wait, that's what a micropayment is all about, right?

Unfortunately not. You see, there are *2* costs associated with a purchase. One of those costs is the value you exchange. That's the cost that micropayments are attacking. The other cost is the time you take deciding about the first cost. Micropayments don't do a whole lot for that one. Sure, you're not going to have to spend a lot of time making a $.05 decision, but you can't reduce it much smaller.

Anything that's non-free you have to decide whether or not to do it, even when it's really cheap, and situations where you don't have to decide will always have a lower cost than something that costs anything. The exception to this is when something is *so* cheap that you think of it as "free" -- e.g. municipal water.

For a longer (and slightly different) take on the micropayment thing, check out http://www.nothings.org/writing/upay.html


Micropayments are a beautiful idea (your decision-time investment issue aside), but that's not the crux of this comix-treatment of the New Economy idea.

In essence, we're talking about jettisoning the traditional idea of the middleman as it relates to "information" (the information, in this case, being music... but it could be video, or novels, etc.).

And this guy is on to the really functional issues, I think. The fun part for me is that economics -- despite all the big systems ideas that get applied to it -- is really a study of human behaviors. The "Piracy" canard rings so hollow because it's an oversimplification of a complex set of values calculations.

I still think the key isn't so much the system for handling the transactions but the means for linking audiences to content. We go see the things we've heard about, and it is essentially middlemen and mediators who determine what gets our attention. You could have a great micropayment system in place and if you couldn't find new material by unknown creators, very little would change.

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