Economist: Copyright is dead

[RayBonga]

No wonder they call Economics the Dismal Science. At the Internet Video Policy Symposium in Washington yesterday (co-sponsored by Content Agenda), a chorus line of academic economists postulated that content owners face a far more difficult challenge than they know in monetizing their content on the Internet, and that the odds that we can build our way out of the current debate over how to manage scarce online capacity are virtually nil.

The most enthusiastically glum was Gerry Faulhaber, a professor at the Wharton School of Business at the University of Pennsylvania and the former chief economist for the FCC. According to Faulhaber, copyright is a dead letter.

"Copyright is a very big issue in the legal world today, but in the business world, when you talk to consumers about protecting copyrights, it's a dead issue," he said. "It's gone. If you have a business model based on copyright, forget it."

According to Faulhaber, the "world of open piracy," created by digital technology will always thwart content owners seeking to leverage the monopoly granted to them by copyright law.

"The music industry is yet to figure this out," he said. "The current iTunes model is probably the best they can do. In both movies and music this is likely to result in substantially lower revenue for content owners." The movie studios will have an even tougher time than the music companies, according to Faulhaber, because some of the monetization models that can work for music--such as advertising--probably won't work for full-length movies.

The likely result? "Content providers will have to hook up with the conduit guys," Faulhaber said. "They're the only ones in a position to monetize content online because they can control its distribution."

Faulhaber was also gloomy about resolving the current stand-off over the allocation of bandwidth.

"Video takes lots and lots of bandwidth, and bandwidth is not cheap," he said. "If bandwidth were cheap, the business would be attracting new entrants, which clearly it isn't."

As a result, some degree of "traffic shaping," or "network management" is both essential and inevitable, as it has been for telephone networks for decades. Regulating or prohibiting traffic shaping, Faulhaber claimed, would only make the problem worse.

"Regulating traffic shaping will reduce available capacity," he said. "If demand exceeds supply, total throughput on a network declines, sometimes to zero. The best illustration of this is highway traffic. When the volume of traffic exceeds that capacity of the highway, everyone has to slow down."

According to Scott Wallsten, senior fellow at the Georgetown University Center for Business and Public Policy, simply building more capacity won't solve the problem.

"Japan has 100 MBs networks and they still have congestion, and ISPs still have to shape traffic," Wallsten said. "If you price something at zero, people will use too much of it. Creating more capacity alone is not the answer to congestion."

What is? Recognizing the value of network management, according to Wallsten. "The data say that a small number of users are creating an externality," he said, using the economists' term for an action that imposes a cost on parties not directly involved in a transaction. "You need to make those heavy users internalize those costs," through something like congestion pricing," he said.

The focus of policy makers, therefore, according to Wallsten, should be on making sure that the unavoidable tools of traffic shaping are not used anti-competitively.

"There's a huge role for anti-trust here, but those laws are already on the books," he said. "We don't need new regulation to prohibit anti-competitive behavior."

http://www.contentagenda.com/blog/15...630023663.html

[IllTestYourGirls]

There is a way to fight it on porn; no right click save as. but from what I have heard that loses money? It may be harder for the music industry to make it so you can not burn a cd or share a mp3/4.

[Paul Markham]

Amazed that this is not getting more views and posts. Some are too busy bumping the promo threads in the hope of winning $50 or an ipod.

Is copyright dead or do we need to change the way we do business?

Stopping people from downloading simply does not work, going after the big Torrent sites is an uphill struggle. Maybe going after the uploaders and monetising them will work, too early to tell.

Paysites have to respond to the customers who will pay and give them the product at the price they are willing to pay. It's clear the days of forcing them are gone.

There is one glimmer of hope. We are largely controlled by billing, some think it's the most important thing. So if the major billing companies see a drop in profits, by people getting for free what they used to pay for, will they pull the accounts of those who support the people giving it away for free?

Nothing is free, even free porn on the Internet. The structure has to be paid for somehow. Pirate Bay is not a free site, it's paid for by advertisers. If those advertisers can't bill people because they can't get cleared they pull the ads, Pirate Bay collapses.

Sad days ahead I think.

[Johny Traffic]

Originally Posted by Paul Markham

If those advertisers can't bill people because they can't get cleared they pull the ads, Pirate Bay collapses.

One biller pulled the billing, 10 billers step in their place.


But forget file sharing and torrents, its for nerds and eastern europeans, file sharing has always been around, they are annoying to use, full of crap. The people who use torrents are the exact same people who take their own drinks in to a pub. If they are willing to fuck around with torrents they were never going to pay for porn.

Tubes are different, they are easy to use and what you see is what you get. But they are effecting sales not because they are giving away more, not even because its all stolen. The vids are not even that good and all generic and all stuff thats been knocking around for free for years. They in no way compete with "good" paysites. Especially more niche ones and ones where the site owner gets the content right.

The only reason tube sites are effecting sales is because they are taking the traffic from the sources that most webmasters use to get traffic.

If you have a good pay site and offer exactly what the surfer wants, how he wants it and how he wants to pay for it. You will easily survive these shitty sites.

Those of you spending your time thinking of new and interesting ways of getting rid of tube sites from suing the uploaders (as if there is anyone uploading apart from the site owners) or to suing the advertisers. Well enjoy your last few months in adult. Because tube sites are going no where. There will be more tube sites comming, they will be bigger, they will offer more, they will offer better quality videos and the videos will be longer.

[axelez]

Originally Posted by Paul Markham

Sad days ahead I think.

[Rorschach]

There was a good article linked on slashdot the other day, with some dude from a gaming company basically saying, "don't worry about piracy." The gist was that a certain percentage of people are always going to buy your stuff, and a certain percentage will always pirate it, no matter what you do to try and stop it. His idea was to build your product around niches / markets where you were going to have a large number of buyers, regardless of the percentage of pirates; so no matter how much got stolen, you'd still be making good money from the people that stumped up the cash. The "cost" of piracy is just another operating expense.

[JFK]

I likethis, "The most enthusiastically glum was Gerry Faulhaber"

[Naughty]

It's been dead since late 90s

[testpie]

Why not just upload dodgy versions (i.e. with lots of random frames missing, audio out of sync, blockiness, unusual cuts at the height of the action - use your imagination here) - but which are the full length - of your content to tube sites, thereby swamping them with your shitty quality stuff, displacing the good quality videos (because they are still full length), and for good measure, smack in some subliminal advertising along the way - after all, if the tube business truly is as unregulated as you all proclaim it to be, why follow the rules?

[Slappin Fish]

Originally Posted by IllTestYourGirls

There is a way to fight it on porn; no right click save as. but from what I have heard that loses money? It may be harder for the music industry to make it so you can not burn a cd or share a mp3/4.

Err... you are joking right?

You must be, nobody is that dumb to believe disabling right click changes anything.

[Mutt]

i'm waiting for the employee from DollarMachine to come in and tell us we should be selling advertisements for Ford cars and MillerLite the way CBS is on its free streaming of the NCAA March Madness coverage.

or for the usual tards to pop in and tell us all to adapt.

without a source of revenue other than the customers paying for content there is no adaption - only extinction.

are there are other ways to make money from adult content - sure, but nothing like the revenues this industry has made from the paysite model - whatever the solution is a good % of the people in this industry won't survive.

[Violetta]

who is that girl in your avatar again ray?

[Barefootsies]

Originally Posted by Johny Traffic

If you have a good pay site and offer exactly what the surfer wants, how he wants it and how he wants to pay for it. You will easily survive these shitty sites.

Mother fucking exactly.