a new marketplace for media

mediAgora defines a fair, workable market model that works with the new realities of digital media, instead of fighting them.

  • Creators should be credited and rewarded for their work.
  • Works can be incorporated into new creative works.
  • When they are, all source works should be credited and rewarded.
  • Customers should pay a known price.
  • Successful promotion of work should be rewarded too.
  • Individuals can play multiple roles - Creator, Promoter, Customer
  • Prices and sales figures should be open
  • Relationships are based on trust and reputation
  • Copy protection destroys value
Saturday, September 20, 2003

Volokh on Media as Property

The Volokh Conspiracy: ...say that virtually all TV viewers start using a hypothetical new technology that lets them watch all programs (cable or broadcast) for free, and lets them seamlessly skip commercials. Pro-I/P argument: This will mean much less incentive to create new works, and thus much less new TV programming. Anti-I/P argument: No problem; there's always some other business model. Shift from advertising and pay TV to, say, product placement (advertising Coke by having Coke cans appear as props in the show, or praise of Coke appear as part of the dialog) -- that will provide the revenue needed to make people invest in making more programming.
This argument does have some merit, in rebutting the extremist pro-I/P argument that "If it weren't for intellectual property, we'd have zero new works being created." Like most predictions that contain the words 'zero', 'always', or 'never', this is bunk: Some people will find some ways to make some money from the works even without intellectual property, and others will do it without a profit motive (consider blogs, for example). The extremist argument has always been hyperbole, not reality.
But this leaves the moderate pro-I/P argument that "If it weren't for intellectual property, we'd have much less investment in new works" -- and the "there's always some other business model" argument isn't really much of a response to that.

The flaw here (as Volokh acknowledges later) is that digital media re non-rivalrous and non-excludable:
Now of course one can argue that tangible property is different from intellectual property, for instance because it’s nonrivalrous; I won’t get into that debate now. But the store example shows that the argument that “there’s always some other business model” doesn’t really carry independent weight. Once you conclude that the seller has no legitimate property right in some kind of property (whether television programs or clothing), you can then pooh-pooh its claims by saying “there’s always some other business model.” But what’s doing the work in that argument is your initial rejection of the seller’s property right claim -- not your argument about other business models.

It seems that Volokh is the one doing a lot of work here to pretend these works are rivalrous and excludable. Pointing out the opposite is the boy that says 'but the Emperor has no clothes'.

Volokh has fallen into the trap of economic shallowness - that people act in accordance with the simplistic models of one-shot game theory, which says that the Prisoner's Dilemma will always end in betrayal.

In the real world, there is an iterated Prisoners Dilemma, and those who betray don't get to play for long, as their reputation precedes them.

Fans will readily pay for value perceived and received, especially when they know it will reward the creators. Creative work is not a commodity good, subject to uniform valuation and equilibrium economic assumptions, obeying Gaussian staistics, it is a fashion good, whose value varies wildly between individuals, and over time as trends ebb and flow, following Power law statistics. Pretending otherwise is the real mistake.