Archive of UserLand's first discussion group, started October 5, 1998.

The Lie of "IP"

Author:Dennis Grant
Posted:8/31/2000; 9:18:54 AM
Topic:The Lie of "IP"
Msg #:20577
Prev/Next:20576 / 20578

I'm posting this here because the signal-to-noise ratio here seems abnormally high, it's on-topic, and the host has a position on this topic that is contrary to mine - all which tends to make for good discussion. :)

The year 2000 seems to have become a year of convergence; not of technology, but of technology-related problems. Three groups - the music recording industry (represented by the RIAA), the motion picture industry (the MPAA), and the for-sale software industry (not represented by anybody, thankfully) - have run headlong into the issue that selling bits, in a world where everyone is networked and can share those bits more easily than they can do anything else, is a losing proposition.

The convenient thing is to vilify those doing the sharing as "pirates" and "thieves" and whatnot. But the true problem here is not that people are by nature, criminal. The true problem here is that the entire notion of selling information for money is at its very root, a fundamentally broken concept.

In the standard sales model, there exists a "product", a physical thing composed of atoms that changes hands at the conclusion of a sale. By its physical nature, there exists a finite number of these products, and there is an implied cost of duplication if one wishes to add to their number. And in almost every single example of a sold physical product, the cost of tooling is by far the most expensive part of the product - the manufacturer amortizes the cost of tooling by virtue of being one of the relatively few suppliers who can produce the product in question. As of yet, there is no such thing as a "general purpose" manufacturing machine, a "Santa Claus machine" which can duplicate any physical thing that will fit inside its physical boundries.

It is these three principles: physicality, scarcity, and cost of duplication, that makes captialism work. It is also these same three principles that make unauthorized removal of a given property a crime. If I steal your Turnip Twaddler, then, by virtue of it being a physical object (and thus unable to be in two places at once) then you are unable to twaddle turnips - you are hurt. By virtue of the difficulty in tooling to produce Turnip Twaddlers, you are unlikely to be able to produce a copy on your own - hurt again. And by virtue of being scarce, you are forced to go forth and purchase a replacement if you wish to be able to twaddle turnips - hurt yet again.

The concept of cash-for-atoms makes perfect, logical sense. So does the concept of "ownership" of those atoms - once paid for, those atoms are yours to do with as you please. Once sold, the manufacturer, retailer, designer - anyone involved with the creation and selling of those atoms - loses any control over what you may choose to do with those atoms. That Turnip Twaddler is now your property, exclusively your property, and anyone who seeks to remove that property from your presence is committing an obvious crime against you.

Common sense.

The case of bits, however, is a totally different story. Aside from any incidental costs for transport media, once the bits exist (be they a song, a movie, or a computer program) the cost of duplication is essentially nil. Indeed, one of the primary purposes of every computer ever made is bit-duplication. And in a fully networked world, the cost of distribution is nil as well. Once the bitstream that represents a given package of information is produced, the replication and duplication of that bitstream is a zero-cost affair. Moreover, unlike something composed of atoms, a bitstream can be in many places at once, so that a bitstream can be shared (widely!) without denying the bitstream to anybody in the distribution path.

Clearly, the business of shuffling bits around is not subject to the principles of physicality, scarcity, or cost of duplication. This, in of itself, means that attempting to force the business model of sales (which does rely upon these three priciples) is a losing proposition. It cannot be enforced.

Furthermore, the concept of forbidding someone who has purchased your bits to do certain things with them runs completely counter to what the common-sense laws of property allow. I bought them; they're mine to do with as I please. How dare one tell me what I can or cannot do with bits I paid for? The only "crime" committed by duplicating bits is the possible loss of sales for the producer.

Unlike bit duplication, the business of bit _creation_ does indeed have an associated cost. The number of people who are capable of assembling a bitstream (be it a movie, song, or program) is relatively small. There is a scarcity here - a scarcity of service. It takes a finite amount of time, and a finite number of people, to assemble a bitstream. Once assembled, that bitstream takes on a life of its own and is essentially "released" out of the bounds of control of its producers - no scarcity can be enforced once the cat is out of the bag. But the service of creating the cat is indeed deserving of compensation.

That's a magic word: "service". The underlying truth of the bit-production industry is that it is a SERVICE industry, not a manufacturing industry. There is nothing there to manufacture; "intellectual property" be dammed, the Emperor has no clothes.

"So then" is the most common retort "how are movie makers/recording artists/software developers supposed to make a living?"

The answer is simple: get compensated for your TIME. It is the scarcity of you and your time that makes you valuable, so get paid for it up front. In the case of the recording artist, you get paid per performance - if that performance happens to be in a recording studio, where the resulting bitstream will be the definitive version of that performance and distributed all over the world, then you had better demand more for it than an impromtu concert on a street corner.

The case of the software writer is a little more complex. Firstly, because the vast majority of your peers are already doing the "service" thing and have done so since the dawn of computing. Most programmers do NOT sell their code - they work at banks, or insurence companies, or manufacturing companies, and so on, writing code to solve problems. For these people (who share code as a matter of course) the concept of selling code is completely alien, and the industry practice of selling licences or "seats" is viewed as intrinsically evil and a transient abarration.

Furthermore, the network effects of near-universal connectivity are allowing these people, plus students and interested amateurs, to take code sharing and group development to places previously unthought of. This is the Open Source or Free Software movement, and make no doubt about it, they are coming to eat your lunch. With alarming speed, whenever the Free Software people encounter a closed-source, proprietary program that does something useful and interesting, it is duplicated and released - and in many cases, development on it will far outstrip the development of even the richest and most talented closed-source company. What took Microsoft 10 years to develop, Linux accomplished in two!

And as time goes on, even the producers of the most unusual and bizzare niche products are going to find themselves increasingly squeezed by the near-universality of free software. Imagine owning a restaurant, and charging customers for the air they consume while in your establishment - that's what charging for software is going to seem like for your customers in the near (5 years out) future.

The business model for the would-be independant software developer of 2005 is going to be the Mozart Model - patronage. Either you work for a larger company that sees your work as somehow complimenting itself (see Linus Torevalds at Transmeta, Alan Cox at RedHat) or you place out a virtual tip jar, with the understanding that unless enough tips come in, your work on the software will be abandoned.

But either way, the old world of selling licenced bits is ultimately doomed. Those who currently make their living from that doomed business model can either adapt, or perish. Frankly, there's no middle ground. You're making buggy whips, and the Model Ts are turning up in greater and greater numbers.

Thank you

DG

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