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Cause Cheating Gets it Faster

May 17, 2010

According to a really hard-hitting piece of totally legitimate and non-fluff journalism, Time Magazine postulates that using the Internet may make us happier.  I cannot believe that other major news outlets are not covering this story!  Who would have thought that instant access to all of humanity’s creation would allow someone to make themselves happier?

‘The results … are very plausible,’ says Carol Graham, chair in foreign policy studies at the Brookings Institution in Washington, D.C., and author of Happiness Around the World. ‘If you introduce a technology [in the developing world], whether it is the Internet or the cell phone, that allows people to reduce their very high [constraints] of getting through daily life, it has a tremendous well-being affect.’

Now, to be fair, humanity has not really had enough time and historical perspective to really reflect on the changed dynamics resulting from near-instantaneous availability of every non-physical good that anyone could ever offer.  Of course, depending on how you phrase that inquiry, the result seems fairly obvious that both human welfare and freedom would be bolstered by such information accessibility.

Big Content and other vested interests that relied on the supra-competitive pricing of such information lose out on the consumer surplus they had previously been happily extracting, most often under the ostensible justification that artists and entertainment as an industry need those margins to support the next generation of creative works.  However, the latent fallacy in that argument is that it totally ignores the distribution problem that the Internet solves with sheer efficiency.  People are quite often willing to pay for their online content (see iTunes) or view ads (see Hulu) if the content can be provided consistently, at high quality, and near-instantaneously.  All of those competitive advantages have to do with the distribution of the content, not the pricing or the policing.  There are even plenty of creators who profess stealing content–even the content they themselves produced.

[I]f a show is available on iTunes—as South Park is to me now I’ve set up a US iTunes account (yet another tech hassle I had to overcome…)—I’ll click and buy. It’s simple, quick, better quality, not to mention legal. It’s also cheap. Graham Linehan (creator of The IT Crowd) described this situation to me as ‘better than free’. Matt Stone and Trey Parker of South Park have always tolerated torrent sites hosting pirate versions of their show, as I imagine they see it as constant promotion. Also, they’ve realised there’s nothing they can do about it.

The promotion argument makes sense. South Park for example makes money from from syndication, advertising, merchandising and DVD sales (although the latter market is dwindling) so perhaps the extra visibility helps.

Because creators and marketing teams often trip over themselves trying to build up the buzz for content by pushing it into peoples’ hands, content industry just needs to figure out how to capitalize on the vastly increased market size by playing with larger numbers, rather than limiting distribution and extracting more consumer surplus from the artificially limited audience.  People are willing to pay more if prices were lower and simpler, and that includes the current generation of pirates.  But of course, there are always those whorish creators who thrive on extraction and will decry copyright infringers, no matter what reality has in store.

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