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Anis Shivani

Anis Shivani

Posted: August 10, 2009 10:47 AM

Should Internet Content Be Free? The Best Model to Save Newspapers, Books, and Music in the Digital Age


FREE: THE FUTURE OF A RADICAL PRICE
By Chris Anderson
Hyperion, 274 pages. $26.99

DIGITAL BARBARISM: A WRITER'S MANIFESTO
By Mark Helprin
Harper, 232 pages. $24.99

Does free have to mean diminished quality of content? Is the enticement of free only a marketing ploy, or does it really mean a revolution in how we think about the pricing of content? How should we understand piracy? What is the philosophical and political basis of copyright? Is there something fundamentally different about digitally distributed content that drives free? How can we retain, even enhance, creativity in the digital age, taking advantage of near-zero costs of redistribution?

These two books represent a full-throated debate between advocacy of free as the most viable price for content on the Internet, and unreconstructed support of copyright in virtual perpetuity. Chris Anderson explains how any number of profitable business models can be built on free, whereas for Mark Helprin the "creative commons" is a bad idea which makes us more barbaric by the day. Anderson is the clear winner in the argument, his ideas looking forward to the future, while recognizing the difficulties authors, musicians, and journalists will undoubtedly face in transitioning to free; Helprin comes off as driven by nothing but the profit motive as incentive for artistic creation.

Lawrence Lessig, particularly in The Future of Ideas: The Fate of the Commons in a Connected World (Random House, 2001) and Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity (Penguin, 2004), has persuasively spoken for the maximum possible enlargement of the public domain, which is violated when copyright becomes expansive and tends to perpetuity, as is the case now, after repeated extensions by Congress. Where Lessig is the intellectual standard bearer of the movement for free, Anderson is one of its most effective pitchmen, building on the earlier philosophical work to show how free can be profitable. Anderson shows examples of existing models of free for air travel, DVR's, electric cars, trading stocks, webmail, directory assistance, silverware, music CD's, textbooks, bicycles, and university education.

Various kinds of cross-subsidies have always made free viable. These include "paid products subsidizing free products," "paying later subsidizing free now," and "paying people subsidizing free people." A direct cross-subsidy is free to "everyone willing to pay eventually, one way or another." A second free model is free to everyone; this is possible because, for example, media companies "make money around free content in dozens of ways, from selling information about consumers to brand licensing, 'value-added' subscriptions, and direct e-commerce." A third free model is "freemium," which is free to basic users, though those desiring premium versions pay. A fourth free model is "nonmonetary markets," essentially the "gift economy," where "people choose to give away with no expectation of payment," and which is free to everyone. Free radio encountered much resistance in the early twentieth century. Yet today the three-party model, where "a third party (the advertiser) subsidizes content so that the second party (the listener or viewer) can get it at no charge" is "at the core of the $300 billion advertising industry."

What is new about the digital economy is that Moore's Law applies in greater force than ever: "When something halves in price each year, zero is inevitable." The price of "primary inputs to...[the] industrial economy" is falling as never before: "Each time, whether it's a new material, a new etching process, a new chip architecture, or an entirely new dimension such as parallel processing, the learning curve starts again at its most vertiginous slope." Economics, not political ideology, determines where the Web is going: "Price has fallen to the marginal cost, and the marginal cost of everything online is close enough to zero that it pays to round down." Compound learning curves interact with dramatically falling marginal costs to lend new reality to Stewart Brand's well-known dictum that "information wants to be free."

Typically, companies (and creators) respond to free by going through the familiar stages of denial, anger, bargaining, depression, and acceptance, as in Microsoft's response to Linux open source software. An entirely different approach is Google's "max strategy," which means "take whatever it is you are doing and do it at the max in terms of distribution." In other words, "since marginal cost of distribution is free, you might as well put things everywhere." Anderson explains that "today the vast majority of Google's employees are busy dreaming up new things to give away." The demonitized economy ushered in by Google can be scary to many (especially employees in danger of losing jobs), but it's important to see that "value is not so much lost as redistributed in ways that aren't always measured in dollars and cents." The newspaper industry is understandably concerned about rapid demonitization, yet "it's entirely possible that the lost $30 billion in newspaper market capitalization will eventually show up as far more than that in increased GDP, although we'll never be able to make that connection explicitly." During the transition, a few of us might end up being "superrich," rather than wealth being redistributed widely, but this is a necessary short-term cost.

Paid content is doomed. Anderson's six reasons for this are that "the supply of content has grown by factors of million, but demand has not," "we value atoms more than bits," "it's...easier to download content than...buy it in stores," "habits set on the Web carry over into the rest of life," "the computer industry wants content to be free...[because] the devices it plays on [become] more valuable," and because the broadband generation has got free "wired into their DNA." Does advertising face limits to support free content? Traditional advertising relies on scarce space. But digital space is infinite, so content providers will have to be innovative, and rethink "how to quantify nonmonetary markets such as attention and reputation," which in turn can lead to monetization, if that is what the author of the content wishes. Instead of "scarcity management," the new dynamics of waste in the digital economy compel the management of abundance. Anderson recognizes that free may be the best price, but it can't be the only one. He offers fifty different existing models based on free, fitting into the categories of direct cross-subsidies, three-party, and freemium.

Mark Helprin set off a firestorm with his May 20, 2007 New York Times op-ed, "A Great Idea Lives Forever: Shouldn't Its Copyright?". Helprin is at pains to deny in the book that he advocated perpetual copyright in the op-ed, but since the 1998 Sonny Bono Copyright Term Extension Act extended copyright to seventy years after the author's death, for Congress to take another shot at it "as far as it can throw" would mean extending virtual perpetuity. That the Constitution recognizes intellectual property as a special form of property, and affords it special protection, is grist for the mill for both sides of the debate. Helprin emphasizes the distinction between ideas (this is what he thinks Jefferson had in mind as common property) and art, while Anderson focuses on the limited duration of copyright, noting that intellectual property is not to be treated as other property, because it is the basis of common culture. Helprin also excoriates Thomas Babington Macaulay, whose famous words against perpetual copyright resound loud and clear today; for Helprin, those who deploy Macaulay to bring down the copyright edifice are insufferably self-righteous, and the idea of "convergence" is nothing more than utopian fantasy.

Helprin's view of intellectual property is static. Anderson's book isn't a polemic arguing that books be given away for free (Anderson realizes that physical books are more precious than online content), or that authors not benefit from their creativity. Anderson is simply pointing to the extreme pressure on content to become free, because of the new reality of infinite digital space. In Anderson's terms, attention and reputation are at the highest premium in an age of unlimited availability of information. A paradox can easily be seen at work here. Those who have the greatest talent may well earn even greater benefits in the free economy, but this is an outcome Helprin is completely unprepared to explore. For Anderson, "the quantification of attention and reputation is now a global endeavor...a market we all now play in, whether we know it or not."

Helprin is fixed in a mindset that sharply separates free from paid content, and has no consideration or value for the former. Can an author profit in other ways than sales of a book? To read Helprin is to think that the only benefit an author derives from his book is in direct sales, and his progeny should continue to derive the financial benefits lest the author feel less incentive to create. But is that what drives artists, or is it the widest possible dissemination of their work? Helprin doesn't seem to give any attention to the latter question. The profit motive is at best of limited value in thinking of the motives for creative work, but in Helprin's polemic it becomes the sum of the focus.

Everywhere, Helprin sets up bright-line distinctions, which in the digital economy are inoperable. For Helprin, content is either paid for or pirated. But piracy is a concept worth renewed philosophical exploration. Anderson, for example, points out that widespread piracy in China hasn't destroyed the music or video or any other market, but has "primed the market for an emerging tide of middle-class consumers." For Helprin, piracy is out-and-out theft, and his book is full of unmitigated contempt for anyone of the new generation indulging their selfish proclivities by harming authors and musicians and stealing what they should pay for. There are different kinds of piracy, ranging from the intentional causation of maximal harm (by those who resell things commercially) to person-to-person exchange, which often results in paid purchases. Helprin is immune to these kinds of philosophical gradations, because he is operating on the old principles of scarcity and abundance.

Helprin's book is a compendium of myths about the free economy which Anderson has taken pains to demolish one by one: "There ain't no such thing as a free lunch" (one must distinguish between open and closed markets), "Free always has hidden costs/Free is a trick" (the model exceeds trickery), "The Internet isn't really free because you're paying for access" (content and carriage are separate markets), "Free is just about advertising," which has its limits (these are both illusions), "Free means more ads, and that means less privacy" (interests can be balanced), "No cost = no value" (there are more ways to make money than direct revenue), "Free undermines innovation" (creativity has a long history of being driven by more than price incentives), "Depleted oceans, filthy public toilets, and global warming are the real cost of Free" (the tragedy of the commons is a fact, but the world of atoms is free), "Free encourages piracy" (it's the opposite, "piracy encourages free"), "Free is breeding a generation that doesn't value anything" (it only values things differently), "You can't compete with free" (find the scarcity proximate to the abundance), "I gave away my stuff and didn't make much money" (consider attention and reputation), "Free is only good if someone else is paying for it" (counterexamples like Facebook proliferate), and "Free drives out professionals, in favor of amateurs, at a cost to quality" (there will be a new role for professionals, as in the newspaper industry, once the shakeout is complete).

Anderson's book is empirical and pragmatic; Helprin deals in binary oppositions. Helprin begins the book by setting up two scenarios, a tranquil British parliamentarian vacationing in Italy in 1908, and a frenzied corporate figure of the future in California in 2028. Their relation to information is utterly dichotomous. In fact, tranquility goes hand in hand with frenzy in every acceleration of technology, and so the future, for an artist in 2028, will be something like the acceleration of 2028 superimposed over the tranquility of 1908, not an erasure of the earlier quality. With slowness comes quality of content; that is indisputable, yet there have been endless threats to slowness, and each time art remains unstrangled. In light of Anderson's "ten principles of abundance thinking," Helprin's book appears to be an exercise in futility: Anderson argues: 1. "If it's digital, sooner or later it's going to be free." 2. "Atoms would like to be free, too, but they're not so pushy about it." 3. "You can't stop Free." 4. "You can make money from Free." 5. "Redefine your market." 6. "Round down." 7. "Sooner or later you will compete with Free." 8. "Embrace waste." 9. "Free makes other things more valuable." 10. "Manage for abundance, not scarcity."

Other false dichotomies proliferate. Helprin insinuates that protection of (more or less) perpetual copyright is tantamount to protection of the individual voice. There is first the dimension of collaborative creation to acknowledge. Furthermore, the individual voice is not reducible to expansive copyright protection of the kind Helprin has in mind. What Helprin is really arguing for is perpetual inheritance rights, of which he has made copyright a subset. That's somewhat different turf than the individual voice. Conservatism bolsters tradition, which cannot be established without the greatest possible access to common culture; yet Helprin argues for limiting individuals' ability to derivatively build on existing culture. Collaboration is a bugbear for Helprin, because he has set up an unsustainable aura of the solitariness of the individual creator, confusing the physical and mental dimensions of it, before, during, and after creation. Wikipedia, for instance, is loathsome to Helprin, because of its collaborative nature. But Wikipedia is not a work of art; it can only be legitimately compared to traditional encyclopedias. Its democratic input may seem to have settled at a low point, but it seems a good example of the creative commons in action, and it is only at the beginning stages. Similarly, Helprin sees blogging as driving out professional writers, unable to see it as a supplemental, expansionary, reinforcing form.

It is all gloom and doom for Helprin: "Once you dispense with the author, it is easy to dispense with his rights. And what better way to accomplish all this than to rid the field of professionals; rid every author of control over his work; and, by means of an ever-fluid and changing mass of words floating aimlessly and subject to anyone's agency and intervention, eliminate the rewards and distinctions that vex the dark side of any egalitarian movement." Helprin worries that the truncation of copyright (a strawman, since the legislative movement is entirely in the other direction) would mean "the virtual disappearance of the profession of writing other than its migration into the academy, think tanks, or various other corporate bodies, where the cadre of writers would find themselves beholden to various types of department heads." In fact, this is the situation as it exists now, and one could easily argue that the free economy would make it at least theoretically possible for authorship to regain a wide audience. Macaulay didn't warn of monopoly in books without due cause.

Helprin is driven over the edge by the Espresso Book Machine), which he visualizes as replacing traditional bookstores. Yet it would still be a product in atoms, and one fails to see why one of Anderson's models of free couldn't produce profitability in this realm. Helprin worries that "nothing is entirely free, not even an electron (hardly an electron) or an atom floating in the inaccurately named vacuum of space," but this is to miss the point of the imagination of abundance, particularly with respect to creativity, that Anderson explores. Helprin states that "previous generations paid far more often for what current generations now call 'content.' Movies, vaudeville, theater, news, and music were until relatively recently not available for 'free' on radio and television." But was that good for culture? Culture is not a product that can be valued, estimated, rewarded, or disseminated like any other product; Anderson fundamentally understands the distinction.

In general, it would seem that copyright should be as limited as possible; it should be for a short fixed term (not in perpetuity, or anything close to it), so that the public domain can expand to the greatest extent possible. Writers can envision a world where their books have a bigger and better market in the gift economy, and there will always be those who value the superior experience of atoms. Anderson is on the right side of the argument. No doubt, his fearless proposition poses much challenge to traditional content providers, but it is on the side of democratic egalitarianism, not obnoxious elitism, and one can bet that it is this model that will win. Anderson addresses the idea of "progress of science and the useful arts," built into the constitutional clause, or the idea of "public good," as Macaulay phrased it, much more soundly than his antagonist, given the realities of digital distribution.