

Debunk The Myth That Copyright Is Needed To Make Money - edwincheese
http://torrentfreak.com/its-time-to-debunk-the-myth-that-copyright-is-needed-to-make-money-or-that-it-even-makes-money-121007/

======
vibrunazo
Imagine if, before intellectual property, you put 20 smart people in a room,
and tell them to come up with solutions to add incentives for creative works.
None of them would have come up with "Hey! Why don't we grant inventors
monopolies over inventions! We could increase the ammount and quality of
inventions by limiting what others can invent!". No one would ever think
that's a good idea. It's completely backwards and counter intuitive. They
would come up with things like y-combinator, angel funds, startup incubators.
Or straight up government money investments. These are the obvious ideas that
come up when you're trying to figure how to incentive ideas. You incentive
ideas by investing in them, not by limiting them.

And of course, as most people here probably already know, that's not how IP
was invented. It was not a conclusion from trying to come up to a solution for
investing in ideas. No sane human being would have thought that was a
solution. IP was invented as a monarchy monopoly to give power to the king.
The "but it's good for innovation" meme was an excuse invented later when they
figured they could actually make a lot of money from it, so those who were
profiting off monopolies had to find an excuse to keep it.

It's so mind boggling to watch so many discussions where people ask "the
ultimate hard question" of "but how else could be possibly incentive ideas
without copyright???". C'mon, it's so straight-forward and we've been doing it
for centuries. YC alone has done much more for promoting innovative creative
works than copyright has done since it's invention. Do you really care about
investing in ideas? Then put your money where your mouth is, become an angel
investor, and stop pretending it's a hard problem to solve.

~~~
rayiner
Copyright isn't about incentivizing innovation. It's about preventing free-
riding. You think any sensible VC would have invested in Microsoft if there
was nothing preventing Tandy, etc, from buying a single IBM machine, copying
the OS off the disks, and selling as many machines with Windows loaded as they
wanted without paying any licensing fees to Microsoft?

As for YC, etc... What a ridiculous bit of self-important exaggeration.
Scribd, AirBnB, Discus... Oh my god all the innovation! More innovation than
has ever been made possible by the patent laws or the copyright laws over the
course of history! Seriously, I think YC, etc, is great, but let's not forget
that there is a whole world of technology out there, and internet startups are
one small niche. In most technology fields, all the money YC has ever handed
out would barely make a dent in the capital requirements of bringing a product
even to the prototype stage.

Also, let's not rewrite history here. Intellectual proponents of copyright and
patent law include people like Thomas Jefferson, who none would accuse of
being a monarchist.

~~~
AnthonyMouse
>Copyright isn't about incentivizing innovation. It's about preventing free-
riding.

Why is free-riding bad unless it reduces the incentive for innovation? If half
the world can free-ride on something with no marginal cost that will be
produced regardless of the free-riding, the result is greater economic
efficiency.

>You think any sensible VC would have invested in Microsoft if there was
nothing preventing Tandy, etc, from buying a single IBM machine, copying the
OS off the disks, and selling as many machines with Windows loaded as they
wanted without paying any licensing fees to Microsoft?

I don't think anyone is suggesting that Microsoft would be able to survive
with the same business model in the absence of copyright. But the real
question is, would there still be operating systems? And obviously there would
be -- at the very least BSD and GNU/Linux and the like.

>Also, let's not rewrite history here. Intellectual proponents of copyright
and patent law include people like Thomas Jefferson, who none would accuse of
being a monarchist.

The text below was written by Thomas Jefferson -- it isn't exactly a ringing
endorsement:

If nature has made any one thing less susceptible than all others of exclusive
property, it is the action of the thinking power called an idea, which an
individual may exclusively possess as long as he keeps it to himself; but the
moment it is divulged, it forces itself into the possession of every one, and
the receiver cannot dispossess himself of it. Its peculiar character, too, is
that no one possesses the less, because every other possesses the whole of it.
He who receives an idea from me, receives instruction himself without
lessening mine; as he who lights his taper at mine, receives light without
darkening me. That ideas should freely spread from one to another over the
globe, for the moral and mutual instruction of man, and improvement of his
condition, seems to have been peculiarly and benevolently designed by nature,
when she made them, like fire, expansible over all space, without lessening
their density in any point, and like the air in which we breathe, move, and
have our physical being, incapable of confinement or exclusive appropriation.
Inventions then cannot, in nature, be a subject of property. Society may give
an exclusive right to the profits arising from them, as an encouragement to
men to pursue ideas which may produce utility, but this may or may not be
done, according to the will and convenience of the society, without claim or
complaint from anybody. Accordingly, it is a fact, as far as I am informed,
that England was, until we copied her, the only country on earth which ever,
by a general law, gave a legal right to the exclusive use of an idea. In some
other countries it is sometimes done, in a great case, and by a special and
personal act, but, generally speaking, other nations have thought that these
monopolies produce more embarrassment than advantage to society; and it may be
observed that the nations which refuse monopolies of invention, are as
fruitful as England in new and useful devices.

~~~
rayiner
> Why is free-riding bad unless it reduces the incentive for innovation?

Free-riding is a narrower concept than simply reduced incentives. There are
lots of different incentives and lots of different ways to increase or reduce
incentives, but free-riding addresses the specific case of where the ability
to copy a design cheaply and easily and thus undercut the inventor reduces or
eliminates the incentive to invest in new designs.

> I don't think anyone is suggesting that Microsoft would be able to survive
> with the same business model in the absence of copyright. But the real
> question is, would there still be operating systems? And obviously there
> would be -- at the very least BSD and GNU/Linux and the like.

That's not really the full extent of the question. It's not just whether there
would be operating systems, but would the market be served as well by those
operating systems?

BSD was a university research project that arose in the context of a major
DARPA project. That's a viable and popular model, but do we want to rely on
the Department of Defense for an even larger fraction of our technology? I
used to work for a DARPA contractor. They're not the world's most efficient
way to develop technology. We use DARPA for blue-sky things the market doesn't
invest in naturally, not because it's a great way to develop new technology.

Linux started as a personal hobby, and the incentive structure has always
relied heavily on people scratching their own itches. Would either have served
the home computer user market like Windows did? An incentive scheme that
relies on government funding or personal hobbies results in very different
software than one where a customer can pay a vendor for a piece of software.
And I think there is much to be said about how the latter incentive model
incentivizes the creation of software that the public wants rather than say
what is most useful to the military.

It's interesting to see how recent developments built on Linux have been
monetized. Nobody can make money selling Linux directly to cell phone vendors,
like Microsoft did selling Windows to PC vendors, so what you have instead is
a platform, Android, based entirely on the perpetuation of Google's
search/advertising empire. Instead of paying cash for an OS, people pay in the
form of their privacy, because that's something that can be monetized in a
world where software cannot be monetized. Is that better?

~~~
icebraining
I disagree with your Android example:

\- It's not technically true that you can't make money selling Linux, but even
if it wasn't, it's a red herring; Google could certainly sell _Android_. The
reason they don't has to do with their business model, nothing else.

\- It's not true that you can't make money selling it to cell phone
developers. What you do is not charge for _current_ software, but for future
development. As an employee of a company which sells GPL licensed software, I
can tell you it's a very viable business model.

\- Google could also charge for access to their services, including App Store.

Secondly, the idea that you are spied upon because it's free is very naive;
how do you think Apple's Ad network (iAd) can target Demographics, Application
preferences, Music passions, Movie, TV and audiobook genre interests and even
_Location_? Guess what: the consumer is paying with cash _and_ their privacy.

~~~
rayiner
> What you do is not charge for current software, but for future development.
> As an employee of a company which sells GPL licensed software, I can tell
> you it's a very viable business model.

It's a viable business model in the small, not when you're developing software
for a huge market where a handful of customers can't bankroll future versions
of the software.

> Secondly, the idea that you are spied upon because it's free is very naive;
> how do you think Apple's Ad network (iAd) can target Demographics,
> Application preferences, Music passions, Movie, TV and audiobook genre
> interests and even Location? Guess what: the consumer is paying with cash
> and their privacy.

The point is that when companies cannot sell the software directly, they need
to rely on alternative monetization models. A lot of those monetization models
involve privacy-invasion through advertising, etc. Paying for software doesn't
eliminate that obviously, but rather when software can't be sold as a product
the equilibrium moves to a very different place.

~~~
apotheon
> It's a viable business model in the small, not when you're developing
> software for a huge market where a handful of customers can't bankroll
> future versions of the software.

That depends entirely on your apparent assumption that only high-overhead
organizations can produce software for broad use. This is clearly not the
case.

> The point is that when companies cannot sell the software directly, they
> need to rely on alternative monetization models.

It's lucky, then, that nobody has credibly established that copyright is
necessary to be able to sell software directly -- or that things that are bad
for the nominal customers are the only options for alternate revenue models.

------
linuxhansl
Personally I am torn on this topic.

We now have this thing "information" (software, music, books, whatever) that
can be useful for us, and which has the property that it can be copied
infinitely without cost; but then we turn around turn it back into something
that behaves like a "physical thing" by means of copyright.

On the other hand, and contrary to the article, I think the current problem
with the music industry is not due to copyright but due to financial
monopolies (the labels) that are outmoded but hang on for dear live.

Copyright is interesting even if artists were to sell their own music
independently of the labels. Indeed here copyright is what would protect the
artist from a label to just copy the music and selling it for profit.

Also, interestingly, Open Source would not work without copyright. That's
right. The GPL, (to some extend) the Apache License, and many other licenses
only work _because_ of copyright, which grants the owner the right to license
software to you under a license.

(Note these comments are true to copyright, but not for patents, which is a
completely different story)

~~~
jkn
_Also, interestingly, Open Source would not work without copyright. That's
right. The GPL, (to some extend) the Apache License, and many other licenses
only work because of copyright, which grants the owner the right to license
software to you under a license._

Open Source is bigger than copyleft software. Without copyright, BSD/MIT/etc.
licensed software would thrive.

Also without copyright, closed source software would not generate the kind of
money it does now, so there would be less incentive to invest in it vs.
investing in open source software. One could say that Open Source gets a
competitive advantage when all software can legally be copied for free.

------
whiddershins
Please ... this article is trolling copyright holders. Each point is weak,
easy to dismantle, and unsubstantiated. I started to write a long response and
decided perhaps this isn't the forum, but I am surprised to see this on the
front of hacker news.

------
njs12345
That 2% figure is quite interesting (and the study beautifully typeset), but I
can't read Swedish. Can anyone find a translation anywhere?

------
Silhouette
How about a little full disclosure? The author of the cited article is Rick
Falkvinge, founder of the Swedish Pirate Party, so not exactly an unbiased
source.

Aside from that, this whole article is one strawman after another. I don't
know anyone who supports copyright and believes it to be the _only_ way for
creative folks to make money.

The creative argument in favour of copyright is simply that more useful works
get generated and distributed with it than without it.

The economic argument is also very simple: the people making those works need
to put food on the table. Despite all the rhetoric, nothing is stopping them
from doing that in other ways right now, yet relatively few people actually
are.

Really, all the anti-copyright people have to do to make a rock solid argument
for their case is show that industrial-scale creative work is more effective
using alternative business models rather than relying on copyright. There's an
entire world of creative industries and bazillions in cash going into those
industries, so finding more than an occasional study and isolated success
story shouldn't be that hard... _if_ their position is actually correct.

~~~
AnthonyMouse
>The author of the cited article is Rick Falkvinge, founder of the Swedish
Pirate Party, so not exactly an unbiased source.

Source bias is a concern when the source is supplying unverifiable facts. When
a source is supplying reasoning, it can be evaluated for consistency and
validity independent of the source and attacking the source is just the ad
hominem fallacy.

Incidentally, who do you think would be making anti-copyright arguments,
Christopher Dodd?

>Aside from that, this whole article is one strawman after another.

A strawman is when you take a weak argument that opponents never made and
proceed to knock it down, then use the failure of the weak argument to argue
that a stronger argument is also wrong. In this case, the positions being
attacked are ones that have actually been taken by industry supporters at
various points during lobbying efforts to pass copyright legislation. Perhaps
there are stronger arguments in favor of copyright than the ones the industry
has been putting forward, but then let's hear those in the halls of Congress
and stop hearing the ones that are so ridiculous that you think they're
strawman arguments.

>Really, all the anti-copyright people have to do to make a rock solid
argument for their case is show that industrial-scale creative work is more
effective using alternative business models rather than relying on copyright.

The only real way to actually test the hypothesis that creativity would thrive
in today's economy in the absence of copyright is to have the absence of
copyright for a while and see what happens. For example, how else can you tell
what derivative works would be created if permission was not required to
produce them for commercial gain? (And hey, if we try not having copyright for
a decade or two and it turns out badly, we can always put it back.)

~~~
Silhouette
_A strawman is when you take a weak argument that opponents never made and
proceed to knock it down, then use the failure of the weak argument to argue
that a stronger argument is also wrong. In this case, the positions being
attacked are ones that have actually been taken by industry supporters at
various points during lobbying efforts to pass copyright legislation._

Really? You can cite a lobbyist who actually claimed that without copyright,
there was no way for any artist to make money? Or that with free sharing, no-
one at all would spend money on entertainment? Or that no-one at all creates
new art without the financial incentive?

Lobbyists say some pretty silly things, and distort reality to absurd degrees,
but even then I've never heard anyone making such a black-and-white argument
before a legislative assembly.

 _The only real way to actually test the hypothesis that creativity would
thrive in today's economy in the absence of copyright is to have the absence
of copyright for a while and see what happens. For example, how else can you
tell what derivative works would be created if permission was not required to
produce them for commercial gain?_

That's a fair point, but it's not a counter to my argument. There is nothing
whatsoever about today's copyright law that stops someone from funding
completely new works using alternative business models and giving those works
away such that they can be freely distributed. If there are alternative
business models that really are as effective as copyright or more so in
incentivising the creation and distribution of useful works, why aren't we
seeing vast amounts of such work, funded by such alternative models, in the
age of the Internet?

It seems plenty of people are willing to try disrupting Big Media, given the
number of people who are self-publishing books instead of relying on
traditional publishers, putting their band's music on-line via their own web
sites, and so on. But why does almost every success story seem to stop there?
One possible explanation is that the only legal barrier between those self-
publishers and an Amazon-scale operation redistributing anything good via a
much better known web site and taking most of the profits is copyright...

[Edit: Clarified the wording in the last paragraph.]

~~~
njs12345
_That's a fair point, but it's not a counter to my argument. There is nothing
whatsoever about today's copyright law that stops someone from funding
completely new works using alternative business models and giving those works
away such that they can be freely distributed. If there are alternative
business models that really are as effective as copyright or more so in
incentivising the creation and distribution of useful works, why aren't we
seeing vast amounts of such work, funded by such alternative models, in the
age of the Internet?_

That's pretty easy - the return for the creator is higher with copyright than
without. Hence, in the current system, there is no incentive for alternative
models to really develop (outside of some niches --- software is maybe a
limited counterexample, with licences like the GPL demonstrating what might
happen if copyright did not exist). Also, your argument does not take into
account the fact that without copyright derivative works would be utilized to
a much fuller extent.

~~~
Silhouette
_Hence, in the current system, there is no incentive for alternative models to
really develop_

I don't think that's necessarily true. For example, if, as self-confessed
pirates have frequently argued on sites like Slashdot, the advertising side-
effect of sharing works freely ultimately generates more revenue for the
creator than copyright-controlled distribution, then the logical move even
with copyright is to put those works into the public domain and invite
donations to support the creator. However, that risks the alternative
possibility that the "advertising benefit" agument really is just another
pyramid scheme, and without enough law-abiding (with copyright)/donation-
giving (without copyright) people at the end of it to support everyone else,
it's just rationalising freeloading.

 _Also, your argument does not take into account the fact that without
copyright derivative works would be utilized to a much fuller extent._

There are definitely valid arguments against copyright based on greater use of
derivative works. The problem is that it is also possible that derivative
works would become dominant if it were easy to make them and much harder to
create something original, with little incentive to do the latter.

~~~
njs12345
_I don't think that's necessarily true. For example, if, as self-confessed
pirates have frequently argued on sites like Slashdot, the advertising side-
effect of sharing works freely ultimately generates more revenue for the
creator than copyright-controlled distribution, then the logical move even
with copyright is to put those works into the public domain and invite
donations to support the creator. However, that risks the alternative
possibility that the "advertising benefit" agument really is just another
pyramid scheme, and without enough law-abiding (with copyright)/donation-
giving (without copyright) people at the end of it to support everyone else,
it's just rationalising freeloading._

Indeed, and plenty of artists nowadays (both big and small) have experimented
to a certain degree with this model. It has its benefits and downsides but
largely your argument is not particularly relevant to the topic of the
article: the question is not 'Would content creators be better off without
copyright?', it is 'Would society be better off without copyright?' The
economic optimum is for creators to make the fixed costs of producing the work
and nothing else; there is little incentive for them to support changing the
current system which gives them an essentially unlimited monopoly on their
work. The article is merely meant to outline some ways in which creators could
get their fixed costs covered without copyright.

 _There are definitely valid arguments against copyright based on greater use
of derivative works. The problem is that it is also possible that derivative
works would become dominant if it were easy to make them and much harder to
create something original, with little incentive to do the latter._

Why is this a problem? Modern popular culture demonstrates pretty conclusively
that most people have no problem with works that are essentially derivative..

~~~
Silhouette
_The economic optimum is for creators to make the fixed costs of producing the
work and nothing else_

I don't think economics works the way you think it does. You just removed not
only the incentive to make a better (but more expensive to produce) work but
also the financial incentive to create any work at all.

 _Why is this a problem?_

Why is it a problem to replace a system that supports the creation of
original, innovative works with a system that pushes heavily toward creating
endless derivative works and minor variations of the same tired ideas? Are you
really asking that question seriously?

I think, contrary to your suggestion, that plenty of people are already fed up
with the same old movie sequels and annual releases by the same computer game
franchises and so on. But that's what happens when the system doesn't
effectively support those who would create more interesting alternatives,
which typically aren't as profitable on a first outing but cost more to
produce. Coming soon: Cloned Sports Franchise 2013 edition, with ads shown
every five minutes during your favourite fly-on-the-wall reality TV show.

~~~
njs12345
From the Mark Lemley paper quoted elsewhere on this page:

 _Economic theory offers no justification for awarding creators anything
beyond what is necessary to recover their average fixed costs._

I think I'm fairly happy putting my faith in him knowing how economics works.

 _I think, contrary to your suggestion, that plenty of people are already fed
up with the same old movie sequels and annual releases by the same computer
game franchises and so on. But that's what happens when the system doesn't
effectively support those who would create more interesting alternatives,
which typically aren't as profitable on a first outing but cost more to
produce. Coming soon: Cloned Sports Franchise 2013 edition, with ads shown
every five minutes during your favourite fly-on-the-wall reality TV show._

Do you think Notch would have problems raising funding on Kickstarter? How
about Quentin Tarantino? How about Amanda Palmer, of the Dresden Dolls? How
about the XX? Stuff which has a cult following seems to fare well under the
patronage model.

Most of the really high budget stuff turns out to be fairly derivative. There
are exceptions, but they're rare.

------
tzs
So articles about creationists chairing major science committees in the US get
killed for being politics, but an article FROM A POLITICIAN pushing his
political agenda is fine???

~~~
apotheon
Maybe it has something to do with the fact that this is very relevant to
matters such as business models and software development.

