Combating The Cost Of The Free Economy

Last month, we published a piece called The Case Against Free. It ignited conversation, and raised many questions. Here's a companion piece, which attempts to answer some of them.

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Last month, we published a peice by Elmo Keep called The Case Against Free. The article ignited conversation, and was read many, many times around the world. Jared Leto tweeted it. So did Cake. But for all the positive feedback, we also got a lot of questions. Here is a companion piece, which intends to answer some of them.

The answer isn’t to take what we want; it’s to recognise that culture is worth a lot more than what little we’ve been conditioned to pay for it.

The customer is always right! Technology wants what it wants! Trust in the wisdom of the crowd! These are some of the things people have said to me after I wrote about the Free Economy and how it is monumentally shit.

Really? Is capitalism at such a point of hyper-acceleration that we unquestioningly trust in these hollow maxims of the technology industry? They might not bear much ethical scrutiny, but they work a treat in helping us rationalise our self-serving behaviours.

In reality, the customer is often an entitled brat, technology is controlled by real-life human beings, and the crowd, a lot of the time, is an unruly mob.

Game Of Thrones: The Piracy Phenomenon

Case in point: Game of Thrones! What I wouldn’t give to never hear about Game of Fucking Thrones ever again. (I kid. Enjoy your dragons.) No one can shut up about Game of Runes, I mean Thrones, because it has offered up a so-far failed test case for combating piracy. After being fast-tracked to pay TV and iTunes, the show is still hugely pirated: one million illegal downloads, with Australia’s share of those coming in third behind the UK and the US. The test case is flawed because Game of Thrones is the U2 of television shows: nothing can financially impair something so huge. But still, this whole fast-tracking experiment did expose a particularly nasty streak of entitlement as regards what people think they should and shouldn’t be able to access for free.

Game of Thrones is on premium cable subscription network HBO. None of its programming has ever been free, to anyone, by any definition of that word. When shows like this come to free-to-air after some time, then they are free to watch! Amazing, just like it says on the box. Otherwise, if you want premium content, you pay for premium television. You can do this through Foxtel on Xbox for $12.50 a week. Or, you can buy a season pass on iTunes, and get the episode the next day for about $3.50 a pop. This sounds like a good deal, yes? Evidently, no! Why not? Because if you do have Foxtel, waiting two whole hours for the show to be uploaded to a server, encoded and distributed across the Foxtel network, is apparently too long to wait. Waiting until that evening to see it at 8:35pm was also too long to wait. It’s also too long to wait to get it on iTunes the next day, because presumably one cannot stay off the Internet long enough to avoid spoilers while it broadcasts in the States (here, set up a Twitter filter).

Premium Television Is Not A Human Right

Is anyone arguing against these points actually listening to themselves? Or can’t you hear yourself over the sound of the world’s tiniest violin?

The most often-levelled criticism of networks in this debate is that they have been too slow in working out how to preserve their business model, while also meeting the immediate demands of consumers (“consumers” here, is loose: if you are pirating these shows you aren’t a consumer. You’re a thief.) Networks are now expected to also function as content delivery tech companies. So far there is only one company experimenting with creation and distribution: Netflix.

It’s interesting that no one is arguing for the opposite scenario. No one is pushing for Apple to invest in feature film production, or for Google to open an investigative journalism fund with their billions in revenue, because that is not within the purview of either company. Instead, those two companies are in the parasitic business of reaping huge financial reward for merely storing other people’s work, while paying the least royalties possible. It seems insane in hindsight that producers were lining up to build the brands and bottom lines of these enormous middleman entities, while sacrificing their ability to control the output of their own work. But remember, they were in the business of producing specialised content — culture — not the business of algorithms and encoding data.

It’s only hindsight that lets us decree that producers should also be in a totally separate business to the one they have always been in.

“Download” Really Means “Copy”

Otherwise extraordinarily intelligent people can make some maddeningly incoherent arguments when it comes to piracy, and who it is and isn’t hurting. To download a file is to make a copy of the one that is sitting on the server you are copying it from, and to save it onto your own computer. There is not one incredible file that flies around the world as millions of people download it simultaneously. In this way, “download” is a weasel word; what is actually happening is copying, and that is in breach of copyright. It is illegal to copy someone’s work without their permission. Copyright likely means nothing to you unless it protects what you personally do for a living, so in your eyes it’s a victimless crime. It isn’t, not when you make your living from your intellectual property but people don’t want to pay you for it.

There is a tendency to resort to clumsy analogy in times like this, but let’s give it a whirl for old times’ sake: let’s say you’re a plumber, and you come and do work on someone’s house. But when afterwards you ask them to pay you, they say they won’t, because they just thought you wouldn’t mind not being paid for your work. This is of course, deeply, deeply stupid. But it is the same fundamental, moral principle: people need to be paid for their work, whatever their work is. It doesn’t matter if in your esteemed view they are overpaid, or you think their show costs too much to make. You are not the mighty arbiter of other people’s careers.

In short, it’s not our place to tell people what their work is worth — they tell us. If we think it’s worth it, we pay. If we don’t think it’s worth it, we don’t pay and we don’t engage their services. We certainly don’t engage their services and then not pay them, because that is unethical.

So, Great. WTF Do We Do?

1. Pay More Money

There’s one further corollary to all of this that the Games of Runes cryfest exposed, which is that many people still do not see the value in digital goods. In a way, this is understandable, as they have been conditioned over years to think like that. Digital goods — be they newspaper websites, MP3s, streaming services, digital magazines, movie files or eBooks — were initially pitched to consumers as secondary to physical goods, and so were seen to be inferior goods worth little or, in a climate competing with free, nothing. Of all the fatal lack of foresight, this was probably the most damaging. eBooks are outselling print books, digital music is outselling physical units, no one buys newspapers, and these trends will only continue to grow and spread across all media.

Image via Digital Music News

You can see where this is going: paying little for digital goods, which make up the majority of all goods sold, means that profit margins drop dramatically. So even when we are using these legal alternatives like Spotify, iTunes and Amazon, the goods they are selling are vastly undervalued – are ebooks really worth only $0.99? We need to get used to paying more for digital goods than we have been, because they are worth a lot more than what we have been paying. They aren’t just files and bytes of information — they are the goods now. For the incredible convenience alone, what we pay should be a lot more than we do.

We also need to stop thinking in terms of physical objects, and thinking in terms of the man hours that went into creating what we are consuming — ultimately, the medium through which we consume it does not dull our engagement with or enjoyment of those works.

2. Give Power Back To Producers

Producers — of all stripes: labels, publishers, networks, as well as the content creators — need to take back control of their output and invest in their own storefronts, therefore cutting companies like Amazon, Spotify, Google and Apple out of the bargain altogether. There are significant start-up costs in establishing that infrastructure, but in the long-term, making up for the huge chunk of money that these companies continually take would certainly be worth it. Not to mention escaping the punitive terms they set on sale costs, which are to keep them in strict competition with each other, and which increasingly push the value of digital content further down in the eyes of consumers (where people think $3.50 per episode is too much for Game of Thrones, for example.)

If producers were to all adopt a direct-to-audience model, where they sold straight from their own sites and then en masse took their content out of these third party vendor storefronts, it would put the power squarely back where it belongs: with creators. Going straight to the source rather than through a third party would mean we as consumers might lose certain elements of the algorithm economy we’ve all become so lazily dependent on — why seek things out when you can have them come straight to you, in social-graphed recommendations? – but, we would be happy to know that our money is going straight to the producers who make the art we love so much, and enjoy on such a voluminous level that any person who were to travel here from the past would think that we were each individually a member of a royal family.

Acknowledging A Global Audience

But the other side to this equation in Australia, regarding television especially, is that rearranging content delivery to meet demand for fast-tracking would decimate our TV industry if the transition weren’t handled slowly, and in a profit-preserving way. The way that television networks fund themselves currently is largely dependent on securing the rights to overseas shows, against which they serve ads and bring in their revenue. If we were all able to buy those shows directly from their overseas networks online — which is what most people are looking for, to be able to buy Game of Thrones direct from HBO’s website as soon as it airs — then why would those viewers tune in to Australian television at all?

Conceivably this will mean a generational shift; a younger audience will become the dominant audience that networks will struggle to capitalise on — their core business will take place online, not on screens, and networks need to be there to capture that. Even so, perhaps there is a real silver lining to this: if the local audience for overseas programming will never be recaptured, then what is stopping Australian networks from investing all their capital in producing only high-quality local programming? Imagine how many more series on par with The Slap we might see in a model like that.

(This is all only speculation, obviously. If I knew any of these answers I’d be on my yacht in the Bahamas, watching reruns of Law & Order because I wouldn’t let money change me.)

Things To Remember

In the end, we want what we want, and we want it now. But we have to understand that technology is swift and beholden to no one, and corporations are lumbering and slow. Someone can write some code in a single afternoon that will bring an entire industry to its knees within the following decade. Networks, labels and publishers, conversely, are huge entities with many stakeholders, investors and boards to whom they are fiscally responsible. Shifting the business model of whole industries that previously functioned in completely different ways before they were “disrupted” cannot happen instantaneously to meet our needs, because they will be destroyed in the process.

We need to be cognisant of the effect that our sense of entitlement has and will continue to have on the financial ability of the creators of work that we love to consume to continue to make that work. We need to remember also that executives make up a very small number of people working in the entertainment industry, and that piracy isn’t punishing fat cats, who are almost always immune from mismanagement and downsizing — it’s punishing the many more numerous regular people who make their income in those fields, and who are getting laid off by the hundreds at a time.

You aren’t sticking anything to The Man when you take stuff for free; you’re just showing no respect for the hard work of others.

Elmo Keep is a writer. She also works as a digital media producer, for clients including Channels Seven, Nine, Ten, the ABC, Foxtel and many other producers. 

Illustration by Matt Roden.