Piracy Bill Misses the Point

Congress is pushing through a bill that would require domain hosting companies (people who register web addresses) to block US users from pirating sites. If the sites are located overseas then the bill would force ISPs to block access to the sites.

I don't necessarily advocate piracy outright, but when government reps are making statements like this:

“But it’s also become a tool for online thieves to sell counterfeit and pirated goods, making hundreds of millions of dollars off of stolen American intellectual property." - Sen. Orin Hatch (R-Utah) (Taken from the Wired article above)

... you know progress is about to get stifled. Piracy just isn't a black and white issue, and the numbers they quote are often ridiculous. I thought Republicans supported the free market? No pun intended.

Is piracy stealing... kind of. If you steal a tangible object the seller literally has less, but this isn't true of a digital copy. The price for one is the same as the price for infinity. You only deprive the creator of income if you would have paid for the content otherwise. How many times have you downloaded a piece of software or music because it was free that you otherwise would not have? In these cases where you have stumbled upon something you never knew you liked you have opened up a discourse with the producer of the content under which they could potentially profit from you in the future. Think of how broad most younger peoples taste in music is compared to their parents.

My broad taste in music means that I go to a lot of concerts, but I don't buy records. What does this mean for the band? They make more money and have broader appeal. Their pirated online albums serve as event flyers. Another example is the plethora of super out of reach expensive software for architecture school that I need to study and learn but can't afford. I learn these programs and when it's time for me to go to a firm they have to buy it. A copy of just plain AutoCAD costs $4,000 and every firm in the world has that. Why? It's not really the best drafting software necessarily but Autodesk does allow free downloads to students... is it any wonder that Google's Sketchup - a clearly inferior program - is now gaining traction because it's free?

There is a cost to users for pirating - that is - buggy software, older versions, no updates, and the time and knowledge to crack and obtain such things. Basically, people at the lower end of the economic spectrum engage in it - people that wouldn't have access to it otherwise. It's simple opportunity cost for the pirater. The real problem is with the pricing and distribution of media and software. I could bore you with this but I won't. Distribution must become intangible and prices must be cut drastically. A dollar a song and $600 for Photoshop CS5 is ridiculous. Content providers need to seriously consider ways of extracting higher amounts of consumer surplus (the amount that a buyer is willing to pay in addition to the asked for price) after dropping prices. Take for example ipods. Apple charges a base price for the unit with say 4 gigs, then so much more for 8 gigs, and so on. More people buy the product this way while at the same time Apple is able to get people who are willing to pay more to spend more. Look at what Microsoft is doing with Windows 7: Home, Home Premium, etc.

Of course there are problems with pirating but I think that often the benefits outweigh the costs. Pirating has changed the way we consume media and information. Bittorrents, a byproduct of pirating, is almost unarguably the best way to download anything. In some odd way it's almost tragic that a different generation (see, old white affluent men) feels the need to deprive us of something they do not and possibly cannot understand. There always seems to be debate in Washington about topics that my generation considers a moot point, but I suppose it's always this way. One day my generation will mold the world in the defunct image of their youth to the detriment of that times generation.