Games * Design * Art * Culture
Information for Development Partners
Electronic Press Kit
My Other Websites
Manhattan Address Locator
NYC Game Companies
Heroes of the Revolution
Big Time Games
Guardians of Kelthas
Health Media Lab
The Llama Pad
Pocket Watch Games
Science of Tomorrow
Spider Web Software
A Tale in the Desert
Third Wave Games
Game Design Stuff
"Mahk" LeBlanc's rants
P & TNH
Kipper's Mighty Pen
Zen of Design
Games Are Art
Jeux Sans Frontieres
Only a Game
Game Studies Blogs
Avant Game Grand Text Auto
King Lud IC
Water Cooler Games
Other Interesting Game Blogs
Jason Della Rocca
Videogame Media Watch
Game Girl Advance
Play No Evil
VCs Worth Reading
Preserving Game History
Lowood @ Stanford
Classic Software Preservation Proj.
Digital Game Archive
Musee Suisse de Jeu
The Liman Collection
Friday, March 16, 2007Information Wants to Cost a Buck
The argument over copyright seems to devolve to this:
Side A: Creators deserve to be compensated, you evil pirate swine!
Side B: Information wants to be free! Copying is now trivial! The old notion of 'copyright' is clearly defunct in the digital age! Fuck the man!
The problem, really, is that both sides are right.
On the one hand, creators do deserve to be compensated. On the other, copying things historically has been expensive and required you to own (or contract with people who owned) printing presses or vinyl record presses or other expensive pieces of equipment, and a whole business ecosystem of manufacturers, publishers, distributors, and retailers was built on the basic expensiveness of copying things. Today, copying is trivial, and "copyright" no longer seems a particularly relevant idea--or business model.
Lost in the argument is the fundamental fact that, by and large, creators were pretty much screwed under the old business model. As an example, the RIAA is furiously attempting to suppress unpaid copying of music--but at the same time, no business has developed such expertise in screwing creators as the music industry. When the RIAA whines that "creators are being screwed," what the really mean is "WE [that is the record labels] are being screwed"--but they've already done their level best to screw the actual recording artists.
Feel free to go do your own independent research into typical business practices in the recording industry, but here are some highlights:
1. Everything they can think of is recoupable against your royalties. Not just the cost of renting a recording studio and producing the album, but the cost of your bus, your hotel room, your meals on tour. A typical recording act never actually sees a dime beyond the initial advance, except in the form of mechanicals (about which more later).
2. Royalties are on sales, right? Not necessarily; back in the day, the recording industry took a fixed percentage of sales off the top before paying royalties, for "breakage," because 78s were fragile and a fair number broke before they actually reached the retailer. This is not a problem with CDs, but standard record industry boilerplate still takes a percentage off the top before paying royalties on this basis--something that's negotiable out of the boilerplate, if you have a decent agent, but if you're a naive teen rock band signing your first deal, well, heh, welcome to the machine, pally.
3. A typical big-label deal is a multi-album deal, and all royalties are cross-collateralized. That means that if album 1 sells poorly, but album 2 hits, well, you still have to pay off the advance for album 1, and you've probably signed up for six. So basically you may never see any actual money beyond the advance (which winds up going to pay recording studio expenses, tour expenses, etc.). In other words, you're an indentured servant to the recording industry unless you hit big.
Now, the recording industry is notoriously the most artist-unfriendly of any creative field, but others are not all that much better. Let's take film. Stars and directors and others who have clout and savvy know to get their money up front, and they do; at the top level, artists can make huge amounts of money. But let's look at the typical deal for a novelist who is selling the movie rights to his work. He gets (typically) a $50k advance, which is nice, but in exchange signs away all subsidiary rights, so that if, say, toys based on the movie become a billion dollar market, he or she gets zilch. And typically he may have some percentage of the "net" (meaning net profits), but in Mamet's words, "there is no net." That is, all movies lose money--at least according to Hollywood accounting. #1 hits typically "lose" money. That is, they actually make huge profits for the investors and the studios that release them, but after the accountants have finished massaging the books (strictly and legally adhering to the definition of 'net' provided in the contracts the studio offers), the 'net' is negative. Everyone in Hollywood knows to take the money up front, and assume you will never see another dime.
The game industry is marginally better, I guess; typically, the developer gets a 15% royalty (recoupable against development costs)--not of the consumer dollar, but of net revenue received, less market development funds, which ultimately means more like 8% of the consumer dollar. But of course, with development costs as high as they are today, this means developers are highly unlikely to see anything beyond development costs--you'd need to sell multiple millions of units.
Book publishing--probably the least corrupt and most creator-friendly industry in entertainment--at least offers an upside to authors. But when you come down to it, an author's typical share of the consumer dollar is 15% on hardcovers--and more like 8-10% on paperbacks.
In other words, when you copy a song, a movie, a game, or a story, the compensation you are denying the creator is actually small--pennies on the dollar. The people you are screwing are mostly those who have already screwed the creator. If downloading an Arcade Fire song makes you feel guilty, find a way to send them a buck. Or even a quarter. They'll probably wind out ahead.
So the claims of the film or music industries that "piracy" is "stealing" from "creators" is basically bogus--you could make an argument that you're maybe 6-15% "stealing" from creators, but the rest of the money you're denying other people is money they got under old market conditions only because they were gatekeepers, because copying stuff was hard. And they should be denied their share, now that copying stuff is easy. Now that copying is trivial, a progressive, capitalist society should find better ways of connecting people with stuff they like, and adequately compensating the creators thereof. And both creators and fans should benefit by disintermediating all those gatekeepers.
Lovely idea, of course, but how the hell do we make that work?
It's also a simplistic idea, in at least one regard: Marketing stuff is hard. The traditional gatekeepers serve three roles--funding, marketing, distribution. Distribution, in an era in which stuff can be copied, is (notionally, at least) trivial. Funding is something that should be, and can be, divorced from the other three functions. But how do you get the word out about a product, how do you get press coverage, how do you pay for advertising, and all the crap? Marketing is a discipline and a practice with its own long history, and geniuses (and idiots), and it takes money in its own right. Whoever does the marketing deserves a slice, too.
Again.... How do we make that work?
I can't say I know, entirely... But one of the things I look at with interest is recording industry mechanicals.
Well, once upon a time, before Tom Edison, song writers made their money by contracting with sheet music publishers. Someone like John Philip Sousa could actually become rich by writing songs that people liked and wanted to play on their pianos and sing for their friends (or perform at the local village bandstand), and so went out and purchased the sheet music. Once the recording industry appeared on the scene, there was a big industry brouhaha... Edison could record a song on his wax cylinders, paying some piano player and singer on a work-for-hire basis, and sell thousands, or maybe even tens of thousands, of copies, and, well, the creator wasn't compensated.
A problem, obviously.
So Congress passed a law requiring record publishers to pay a fixed per-song price--half to the sheet music publisher, and half to the actual lyricist and song-writer--per song included on their record. The law has been modified over time, but it remains in effect today: when you go and buy a CD, the publisher of that CD is going to pay a few cents, per song, to the "publisher."
Of course, sheet music is now an after thought, so most recording artists incorporate their own "publishers", so they get 100% of the mechanicals--and since this payment is not recoupable against advance or expenses, it's often the only real money they actually ever see out of an album.
Back when Napster was the bete noire of the recording industry, I used to think that the best thing they could do, the thing that would change the whole terms of debate, would be to say "Well, fuck the labels--but we'll pay mechanicals to the actual artists." But as far as I know, it never occured to them.
Now, mechanicals are in some ways an unfortunate precedent--they're established and fixed by the state, not by negotiation on a free market. But they're the single example we have of a way to compensate actual creators, and not intermediaries who use some chokehold on the market to extract an unreasonable portion of the consumer dollar from sales, at the creators' expense.
So my basic question: Is there a way to build on that model? Suppose we had a world in which creators could say "I just want a dime/a buck/ten bucks/whatever", and anyone can sell and market. Copy for your friend, or put up on your portal and charge 2x or 1.5x or 1.1x the price the creator has established, and market to reach whatever audience you can find. Include it on a compilation disk, do whatever the hell you want with the IP--so long as any time anyone makes a copy, some bucks flow to the creator. (Of course, the creator could set an unreasonably high price--but hey, it's a free market. That means they won't find their maximal audience.)
In other words, 'mechanicals' aren't just due on songs--they're due on everything (except for those things creators choose to release as freeware, of course).
That makes sense to me. But there are some implications that EFF fundamentalists won't like, too. For one thing, it means that DRM isn't inherently evil; instead, it's pretty much essential. Creators still deserve to be compensated, and there needs to be a way to reliably extract revenue from people when they decide they want to get the full version of something. I imagine that creators will typically release something for free in order to spur a market--but that might be the first minute of a song, or a song at a lower than CD-quality, or a movie in a tiny YouTube format with the full version costing money, or the first ten levels of a game. They'll still want to be compensated for the "full" version.
And they should be; creators (not necessarily intermediaries) deserve compensation.
In this regard, I wonder whether indie games are also a model: Few people seem to bitch that the 'free to copy and use' version of indie games have some limitations. Sometimes that's number of levels, sometimes it's minutes of play, sometime it's access to some game features (like saving your game)--but in general, while music fans may whine that a DRMed version of a song won't play on a device they've owned even after they've paid for it, most gamers are okay with the notion that to get the full version, they do have to pay.
In general, I think that makes sense--you don't want to make life difficult for paying customers, but if they want the full dealie, they should pay something.
To the creator, at least primarily.
1. My business, Manifesto Games, typically passes on 60% of the consumer dollar to creators; I actually think that's too low a percentage. We won't be increasing it anytime soon, however, both because it's a better deal to developers than most operators offer and because we're still operating in the red, and we're not interested in shooting ourselves in the foot. I wouldn't, personally, mind a world in which we're forced to cut our margins for competitive reasons, however. And, yeah, we do try to justify that margin by doing some marketing for the games we carry, which has a price tag attached; at least some of our developers think that marketing has benefited them.
2. Most (not all) of the games we offer have some kind of DRM attached. I don't want to make our customer's lives difficult, nor do I want to offer them more onerous terms than they get when buying conventional software--but I also believe in locking my front door. It won't stop a professional thief, but I don't want people walking in on me unexpectedly--we offer reasonable trials to people, and think beyond a certain point, they ought to pay something, because software takes time and effort and energy to create. Creators deserve to be compensated, we pay them promptly, and arguably we're a 'gatekeeper' of the kind I've just suggested should be disintermediated, but hopefully we provide some value to the creators we work with (who, by the way, work with us entirely voluntarily, and from whom we do not require exclusivity).
I think the reason for copyright to be valid, despite copying itself being trivial, is not that "creators need to be compensated", but that the community still profits from copyright, because it enables bigger investments in creation by making a return of investment possible.
By 5:21 AM, at
Hmm. Very interesting stuff.
The way I see it, aside from really nasty freeloading leeches, piracy stems from publishers failing in their distribution responsibility.
I think the decentralized distribution idea is very interesting. It's like Youtube in reverse. For Youtube, lots of people make videos that are all distributed by one centralized website. For this, few studios make games that are then distributed by large amounts of people.
I think your regarding Manifesto as a gatekeeper in the last sentence is wrong. Manifesto is a store; you would be a gatekeeper only if you somehow prevented companies from selling games through any other means. And there's nothin' wrong with stores. (until they get super-huge and turn into gatekeepers)
Anyone who believes "Information wants to be free" is a moral argument has completely missed the point. It's a statement of fact about reality, a warning if you will. You might as well use "Water seeks its own level" as your anti-dam motto.
So rather than drm as we know it, what about a watermark or something embedded unique to each buyer. So it doesn't interfere with usage, but if it's warezed, well then you trace it to the original purchaser and then they're liable. Would probably be the best license agreement evar... "THIS IS YOUR, DON'T SHARE IT OR WE'LL GET YOU. THE END".
taking alan's point...
By 5:00 PM, at
Greg, you need to think about this some more.
By 7:45 PM, at
Watermarks may be as crackable as DRM, but I think that people would expend much less effort to defeat watermarks.
Sure, the actual roots of the laws and precedents of the contracts are born out of transferring content to a tangible media and baring out manufacturing, distribution and marketing costs, but the practical reality of copyright is this: it is a transfer of ownership. The RIAA becomes the defacto "creator" of the album with the band becoming the "work-for-hire" contractor, there's just an infinitely more complex legal structure around it.
Let me add my voice, too: DRM is not a necessary component of a distribution system such as the one you describe. DRM is, as others have pointed out, fundamentally broken, and interferes with what users can legitimately do with their products into the bargain.
I don't see how watermarking is enforceable. If someone buys your product, moves to [insert country of choice], and then tries to undercut you by reselling that copy to people at half price, what can you do about it? It could just as easily be uploaded to a server for free download.
Your analysis is quite correct.
By 8:17 AM, at
By 4:25 PM, at
Do you know who downloads and shares the most music among my friends? The guy who owns the local independent record store, people who play in original indie bands (as in not cover bands), my friends who run record labels, and the people I'm always running into at shows and at the record store. Historically, before p2p, who was the best person to get a mix CD from? A record store owner. Who bothers to download enormous game files? The only people who can name a good game store.
I guess that whole rant was to say: maybe that way that bloggers make a living is a better model than old publishing industries. It's all about indirect benefits.
hi my name is muhtfe very nice informations and very nice blog thank you very much...
very very nice informations thank you very much... mr sima
itīs a really great blog, thx
By 2:39 AM, at
By 4:22 AM, at
By 9:19 AM, at
By 4:38 AM, at
By 4:07 AM, at
By 1:49 AM, at
wow power leveling
By 11:07 PM, at
Traffic Sex carries sex toy like giant dildos and rabbit vibrators and even vibrating bullets for women and for the man we have sex toys cock rings and realitic vaginas online.
By 5:21 AM, at
By 12:35 AM, at
runescape money runescape gold runescape money runescape gold wow power leveling wow powerleveling Warcraft Power Leveling Warcraft PowerLeveling buy runescape gold buy runescape money runescape items runescape gold runescape accounts runescape gp dofus kamas buy dofus kamas Guild Wars Gold buy Guild Wars Gold runescape accounts buy runescape accounts runescape lotro gold buy lotro gold lotro gold buy lotro gold lotro gold buy lotro gold lotro gold buy lotro gold runescape money runescape power leveling runescape money runescape gold dofus kamas cheap runescape money cheap runescape gold Hellgate Palladium Hellgate London Palladium Hellgate money Tabula Rasa gold tabula rasa money ??? ???? ????? ???? ??? ??? ???? ?????? ??? ???? ??????? ??? ?????? ?????? ???????? ????? ???
By 1:12 AM, at
wow gold cheap wow gold buy wow gold world of warcraft gold wow world of warcraft wow gold WoW Warrior WoW Hunter WoW Rogue WoW Paladin WoW Shaman WoW Priest WoW Mage WoW Druid WoW Warlock power leveling powerleveling wow power leveling wow powerleveling wow guides wow tips google?? google???? google???? ???? ???? ???? ??? ?? LED? ?? ?? ??? ?? ?? ?? ???? ???? ???? ???? ???? ???? ???? ???? ???? powerlin518 logo design website design web design ????