It seems common sense that people are more likely to obey rules or laws if they understand and agree with the reasons behind them. Perhaps this explains why many, otherwise law abiding citizens, appear to have no qualms about downloading copyrighted material. The recent amendment to New Zealand’s copyright law is problematic at best, and at worst a perversion of natural justice. When considering a legal framework, the rights of artists and producers need to be balanced against the enjoyment consumers lose when copyrighted material is priced prohibitively.
No modern economy could function without a proper legal framework. Consider what happens when you sell your car. There is an old saying that possession is nine tenths of the law. But just because someone is standing by the car, with keys in hand, it doesn’t give them the right to drive it away. Rather the buyer of the car trades property rights with the seller. Within certain guidelines, the law gives owners of property the right to use, dispose of, transform and otherwise exclude people from any property they own. Although property rights can sometimes be difficult to enforce, the basic principles work as well today as they have for centuries. But copyright law, a subset of property law, has struggled to keep up with rapid advances in technology.
In economics, prices exist because of scarcity. Resources are limited, and so markets exist to allow people to choose what they consume. If apples have a bad season and supply is limited, the price rises and people buy fewer apples. But once a song is recorded, a book written, or a computer software package developed, the supply is effectively unlimited. This is because modern technology allows us to reproduce such works effectively for free.
Intellectual property law grants creators and inventors a temporary monopoly on their ideas, as an incentive to create and invent. But if the terms of the monopoly are too strict, or it lasts for too long, the benefit to society is diminished. The consequences of not getting this balance right can be a big backlash from consumers, as has happened with illegal downloading.
It is becoming harder to charge end-users for computer software and music. But why would anyone produce material if they couldn’t make money off it? The music industry appears to favour the old model of directly charging users, who are traditionally given little choice about how they access the material. To preserve this model, the industry has been putting pressure on governments around the world to pass laws like we have recently seen in New Zealand. But although it may catch a few people out, the experienced downloaders will get around it easily.
Perhaps a solution to this mess is closer than we think. We already live in an age where those with a little know-how can legally run a computer without paying for any software. Having trouble with Microsoft? Then try Open Office on a Linux operating system and it won’t cost you a thing. Or if open office doesn’t impress you, go for a web-based platform. Google Docs has more or less the same functionality as Microsoft office, but files are stored in your Google account and can be accessed from any computer, anywhere in the world.
The reasons for content being free vary, much is still under copyright and supported by online advertising. Material is also produced through communities of developers and contributors, such as Wikipedia, YouTube, and the Linux operating system. Relatively high priced material risks rapidly losing market share as free or low-cost material improves in quality. Such a threat to the bottom line of traditional software and music companies is likely to be a powerful driver of change.
Monty Python famously responded to their videos being illegally downloaded by launching a YouTube channel where users could watch them for free. Because YouTube is supported by advertising, they asked users to click on the links and generate them lots of revenue in return. The move is reported to have been very successful for the franchise in terms of extra earnings.
Copyright law will always have a place, protecting the interests of those who have invested time and energy in creating material. But there is much to be gained by fully embracing the direction modern technology is taking the music, entertainment and software industries. Parts of the music industry seem to be stuck in the Stone Age, charging end users high prices for material when it costs them almost nothing to make an extra copy. If we strive to get the right balance between incentives to create and delivering benefits to users, consumers have the most to gain.