Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

The Illusion of Free Stuff

Yesterday’s New York Times offers a very well-articulated editorial by media writer David Carr on the larger economic cost of free media.  Using an example of buying fresh fruit at a neighborhood stand, Carr questions his own instinct to undervalue the price of a bunch of grapes in context to the way in which so much access to “free stuff” has skewed his own perceived value of goods and services in general. In a market like ours, value is reflected as price and always traces back to labor, someone’s labor somewhere.  So, I think Carr is right to ask whether or not the steady stream of free stuff in digital space corrupts our perception of value in other sectors of the economy, which can only have a cannibalizing effect on the value of our own labors whatever they may be.

We are taught in basic economics that goods have intrinsic value (i.e. cost of production + some margin of profit), and that they have perceived value (i.e. what the market will bear), with perceived value determining how wide that margin of profit can be.  I never formally studied economics, but it seems to me that when perceived value drops below intrinsic value, prices become “artificially” low in the sense that what the market will bear can no longer sustain production of the goods in question.  This, of course, depends partly on one’s definition of “sustainability.”  If, for instance, the price of socks at Walmart is “artificially” low because it can only be sustained by outsourcing sock production to a country with poverty-level wages and few workers rights, then this is certainly one kind of sustainability, but it is one that includes hidden costs we privileged consumers tend to ignore until it affects us directly.  The closer it gets to home (e.g. when we read about Walmart’s own employees working below the poverty line), we pay a little more attention.  A little.  And of course, prices can also be made artificially high based on perceived value. As anyone who’s ever marketed luxury goods can tell you, a wealthy buyer’s ego is worth several percentage points of mark-up.

One can extol the virtues of technology, invoke examples of historic transformations like the printing press, and cry Progress! from the rooftops in stream-of-consciousness editorials like this one by Bob Leftsetz, whose criticism of Carr reminds me of a slightly demented Kerouac, if Kerouac had hated music.   But if we clear away the smoke and dust from all that bluster, we might address the central point which is that the perceived value of a song (and we’ll let song stand for all media) has unquestionably reduced prices (or rates) to unsustainable levels for supporting the production of music itself.  So, the consequential question is whether or not we actually care.   Quite simply, the perceived value of recorded music was first reduced to zero by piracy (which is neither economic nor technological progress), then it was briefly and only partly resuscitated by digital downloads, and then it was dropped back to effectively zero by streaming services.  And one reason we know the perceived price is zero or near zero is that so many tech-utopians keep saying it is while they offer numbskull suggestions like more merchandise, more touring, and “adding value” to replace the inescapable loss of revenue from disappearing  sales.

When it comes to products like albums or motion pictures, prices are almost always flat so that the financial success of a given product is based entirely on volume of sales (i.e. popularity) and not on perceived or even intrinsic value (i.e. pricing) of each unique product.  But in a technological paradigm that has driven prices in the entire category to zero or near zero, champions of the “new models” are quick to say that producers of media will share smaller bits of a much bigger pie because the Internet makes the whole world a potential customer for no more than it costs to reach a local market.  Sounds good except for the fact that ten million times almost zero is still…y’know.  This argument always reminds me of the old joke about the guy selling cordwood for less than he buys it wholesale and figures the reason he’s losing money is that he needs a bigger truck.

But of course it’s all just progress, right?  Technological innovations that improve efficiency and availability of goods always lower prices for consumers, and there is usually a period of revenue shift from one class of workers to another.  It’s an unfortunate byproduct of change, but change is inevitable, so why shouldn’t we just embrace it and quit whining as Lefsetz and others insist we should?  Because the transformation is not holistic and because the initial and persistent, catalytic force of piracy normalized a black market, with which no legitimate industry in any sector can ever compete.

Both legal and illegal disruptions to media sales occur solely at the distribution end of the supply chain.  If the Lefsetz-like utopians were to say that the folks who used to package and ship physical CDs are just victims of natural progress, I’d have to agree; but further upstream in the supply chain that ends with a song in your ear or a movie in front of your eyes is a production process where all the costly labor, expertise, and capital are invested.  And when we devalue or become disconnected from the labor, expertise, and capital behind any product in any sector, this has that ripple effect to which I think Carr alludes in describing his gut reaction to the price of a pack of grapes.

Last week, songwriter/composer Van Dyke Parks wrote this editorial about the value of a song in the age of streaming, and I figured a guy like Lefsetz would go for the too-obvious criticism of this quote:   “Forty years ago, co-writing a song with Ringo Starr would have provided me a house and a pool. Now, estimating 100,000 plays on Spotify, we guessed we’d split about $80.”  The myopic reaction to a quote is to think either that a song should not be worth a house and a pool or that Parks and Starr have enough money; but both reactions entirely miss the economic implications of Parks’s point. If technological change drops the trade value of a popular good from a house and a pool to, say, a really nice car, then we might be looking at a modified but still sustainable market.  But if the trade value of a popular good drops from house and pool to less than a basket of groceries, sustainability has been eradicated, and I personally think anyone who views this as virtuous is the same kind of fool as the guy in the joke hauling cordwood.

Utopians like Lefsetz will say that the popular music and popular artists will still make plenty of money, and guys like Mike Masnick at Techdirt will preach the need for creators to embrace new lines of revenue.  And indeed, both are right in a way I personally wish they were not.  According to this brief post on Gawker, Grammy-winning pop star Pharrell not only performed at a recent Walmart shareholders meeting but apparently asked the crowd to “put your hands together for Walmart, guys, for making the world a happier place.”  In light of Walmart’s track record for its labor practices, my friends and I twenty years ago would certainly have called Pharrell a sell-out.  But today, anyone who loves free or almost free music and would still call him a sell-out is not only a tad hypocritical, but isn’t paying attention to what the market looks like when we break the transactional relationship between consumer and producer that ties price back to labor.

Pharrell is just one example.  We’re seeing a trend of popular artists take gigs to perform for sponsorships, corporate events, or private parties for wealthy individuals; and this move toward patronage by the elite is a direct response to the fact that we the people are no longer a source of revenue.  This will probably have the unfortunate effect of turning executives at Walmart or Pfizer or Shell Oil into the new tastemakers, which just personally makes me miss even the sleaziest producer who ever worked for a record label.  I don’t know whether or not a PR or communications person from Walmart fed that line about making the world happy to Pharrell, but my experience in corporate communications tells me it could have happened that way.  What’s for sure is that such  exchanges between execs and pop stars will happen soon, and  the pop stars will no longer dictate terms to these big patrons, who are their only paying customers.  I find it interesting that as angry as we seem to be over ceding political power to corporate interests because they can buy influence, that we are unwittingly going to cede cultural power as well, simply by abdicating our ability to vote with our pocketbooks.

We Are All Copyright Owners

NOTE:  Apologies in advance for the American-centric post, but what follows can only universally apply in the context of U.S. copyright law.

Certain prominent figures making proposals for more limited copyright protections like to repeat the slogan, “We are all authors/creators now,” meaning now that we have the Internet and social applications designed to facilitate easy sharing of all sorts of content. What these folks neglect to mention is that we were all creators long before the Internet, which also means that we were all also copyright owners — and still are.  And just because most of us will never need or want to enforce copyrights, that doesn’t mean we should be fooled into passively abdicating the right just to make life easier for Internet companies.  One of the ironies I find intriguing about this subject is that so-called copyright reformers will argue that in the digital age, the general public needs to worry less about copyright, while I say the Internet is the reason everyday citizens ought to worry more about copyrights than they ever have. It doesn’t seem rational that in a time when our personal photographs, for instance, migrate from shoeboxes to global, shared networks that this the moment to suddenly care less about what might happen to these assets.

In the kerfuffle over the role of copyrights in the relationship between creators of works and consumers of works, the right itself is too often portrayed as a privilege enjoyed solely by creators. Somewhere in the conversation, we forget that nearly all citizens of the U.S. are copyright owners because the right applies universally and automatically to everyone who owns personal writings, photographs, videos, etc., regardless of the amateur status of these works.  But, if the corporate-interest “reformers” can count on Americans to forget or not care that they are copyright owners, then perhaps Americans won’t notice what would be lost by acting on a proposal to make copyright registration mandatory.  It might seem wise or efficient to suggest that those who consider their works commercially or socially valuable (we’ll call them artists) should be required to declare a desire not to have their works used without permission via a registration and fee process with the Copyright Office.  But if this reform were to become law, it would instantly strip copyright from every citizen who will certainly never bother to register his/her personal, amateur works, and it would strip the right at exactly the time in history when it might actually matter to the average citizen.

Ten years ago, we weren’t uploading images of ourselves, our kids, etc. into a computer network where anyone can duplicate, manipulate, and redistribute them at will.  Granted, if some unknown troll takes one of my personal photos off Facebook, monkeys with it, and redistributes it, copyright doesn’t afford me much protection because the troll is anonymous. But suppose my friends, a Jewish white couple who’ve adopted two children from Africa, post a casual, family snapshot for us to enjoy, and the Society for the Preservation of American Christianity and Whiteness uses their portrait to produce an advertisement calling biracial, Jewish families an “abomination?”  Or maybe Sarah Palin’s political operatives decide my daughter’s picture suits one of their core messages; and instead of civilly suing her organization for copyright infringement, I have to find said political operative and beat the snot out of him.  Personally, I think it’s better to leave intact the civil remedies available, imperfect as they may be.

Remedies aside, though, the most significant loss that might be felt in years to come is the social norm of respect as something of a byproduct of universal copyright, even if that had nothing to do with the intent of the constitutional clause.  On the broadest level, we simply do not erase the rights we have on the grounds that we rarely need to enforce them.  It is narrow-minded (and usually profit-motivated) for someone to suggest that we ever should view any right this way.  For instance, the right not to be discriminated against for race, religion, sexual orientation is codified into law and applies universally, regardless of how frequently or not this right needs to be enforced.  Would we create a system in which, for instance, a gay person should officially register his desire not to be discriminated against, thereby implying that discrimination is okay absent said registration?  Or is it more civilized to say that discrimination is socially intolerable and therefore illegal?

Perhaps most importantly, it is essential that people realize that the American public gains nothing by giving up automatic and universally applied copyright while the rationale for mandatory registration best serves the interests of a handful of Internet companies.  These businesses want to digitize, organize, synthesize, and monetize every bit of data they can without the expense and hassle of dealing with pesky things like the rights of users who share data and content in exchange for the “free” applications being used.  As such, many reforms proposed by academics and Internet activists are insidiously designed to get the public to slowly and voluntarily give up rights (e.g. privacy) that impede what they often call the “free flow of information.”  This is jargon, that translates to mean “what’s yours is ours.”  Mandatory registration of copyrights would instantly disenfranchise nearly all Americans from a right they’ve enjoyed since 1978. Personally, I don’t think we should cede that ground too casually.

Information Narcosis

The pen may well be mightier than the sword, but pens have been known to unsheathe a sword now and then.  So what about video blogs and guns?

In the wake of travesties like this latest shooting at UCSB, I’m sure the question raised at my dinner table last weekend was echoed in conversations around the country.  Why are we seeing an increase in these types of killings in the U.S. and what, if anything, might reverse the trend?  The gut responses are usually the same — gun control, less violence in media, better treatment for mental health disorders — and they always feel incomplete.  Yes, I’m personally in favor of smart gun control and loathe the NRA, but I’m more than a little skeptical that we can enact effective regulation or that doing so addresses the disease manifesting as an increase in random, multiple murders like the ones committed by Elliot Rodger.  More to the point, this latest killing by yet another disordered individual prompts me to expand on a thesis I’ve considered for some time — whether  the frequency of these acts of apolitical terrorism are in some way a byproduct of mass information diffusion.  (No, I’m not bluntly blaming the internet for school shootings.)

These recent murders by Rodger have become a flashpoint for many to raise the issues of gun control and misogyny; and while there’s never a bad time to keep either subject in the foreground, both are likely diversions from an understanding of this killing in particular and to fathoming the chronic nature of these acts in general.  As I have referenced before, terrorism expert Christopher Dickey explained to me once that all acts of terrorist-type violence contain three ingredients that can be reduced to the acronym TNT.  This stands for Testosterone, because it’s almost always young men; Narrative, a belief by the individual(s) that some wrong is being righted or avenged; and Theater, a need to perform a big act on a big stage.

The concept is neatly personified in the figure of John Wilkes Booth, whose motivation for killing Lincoln was at least tinged with the hue of envy that he was the lesser actor compared to his prodigal brother, Edwin.  And although Edwin continued to be a great, classical performer even after his brother scandalized the family name, many more of us are familiar John Wilkes’s last moment on stage shouting sic semper tyrannis! than we are with Edwin playing Shakespeare.  This desire for legend through infamy is described smartly in this article by Mark Manson, who argues that various well-meaning agendas co-opting the Rodger killings are missing the point, and I agree with him.

With regard to Dickey’s acronym, Testosterone and Narrative appear to have been closely interrelated for Rodger, and synthesized through the fog of a dissociative disorder that simultaneously excluded him from society and confused him about the reason for his exile.  It would be wrong to see Rodger as merely spoiled by privilege or as a garden-variety misogynist or chauvinist.  If you’ve ever met a child who is “on the spectrum” of autism, it isn’t a hard leap to follow the arc to the young adult, who would wonder, “But I have Armani sunglasses, why don’t girls like me?”  If it didn’t turn violent, it would be cringingly sad and deserving of empathy.  It may still be deserving of empathy (the word Manson also uses) if for no other reason than to wrestle more honestly with the complexities of a case like this.

So in regard to our underlying frustration with the volume and frequency of these crimes, we can’t dismiss the fact that the other Rodgers and Lanzas and Harrises out there have too-easy access to firearms; but I don’t think it’s irrelevant to consider the fact that they also have easy access to Theater, thanks to the expansion of both professional and user-generated platforms. Moreover, the Theater of digital diffusion is interactive, not only providing a free stage for every psychosis but also enabling every psychosis to find some resonant Narrative that concludes with the rationale of violence.  In Manson’s article, he addresses the fact that it is in our nature to avoid acknowledging the “weird guy,” who says or does uncomfortable things, the irony being that people like Rodger not only show signs that forecast their violence, they compose whole preludes to it that we ignore.  Manson writes:

 “…we fail to spot shooter after shooter because they are so close to us and so much like us.  We miss them because they are our neighbors, or classmates, our friends or even our family members.  They are right in front of our noses and we ignore them for a whole host of trivial reasons.”

Of course, there’s a lot of crazy talk on YouTube videos out there.  If we wanted criminologists and psychologists to sift through it all to try to identify the guys most likely to translate their ravings into action, we’d need many more experts than we have.  Nevertheless, there’s no denying the fact that somebody out there identifies with Rodger’s video manifestos; and there’s no denying the fact that rapid diffusion combined with the economics of web traffic ensures that this Theater of the insane welcomes all performers and will turn the most dangerous ones into shooting stars.

No, this essay is not meant to promote abolition or restriction on the use of YouTube or other social media.  These are observations that may or may not be worth exploring, and I share the thoughts humbly in that regard without pretense to knowing any answers.  Twenty years ago, the video manifesto of a future, crazed gunman was not so easily distributed; and there was no Daily Mail website enticing monetized clicks with every irrelevant, salacious detail it can turn into a headline.  To what extent all this breeds some generalized narcosis is hard to say.  But we do call it “viral.”