⇥ How to encourage piracy

The copyright industry is somewhere around these parts.

As I write this post, I am comfortably slouched on an easy chair in a Seattle area hotel, a guest at Microsoft’s Web Development Summit (about which I shall write more in a future post). Like most visits to the States, this means a stop at Fry’s—a geek’s equivalent of Willy Wonka’s chocolate factory, with wall-to-wall electronic candy, from computers to consoles, from DVDs to floppies (yes, they have some of those, too).

Slave to my own customs, therefore, I joined my friends Eli and Rafael for a trip down to the Electronic Mecca with the idea of finally purchasing an electronic book reader—I’ve wanted one for a while, and now that php|a has an all-new format, we want to focus on supporting these devices, which we think are the way to go looking forward into the future. Translation: I finally had an excuse to get the eReader past my wife (who will probably read this post and promptly strangle me).

I ended up purchasing a Sony eReader Touch Edition. As the name implies, this device combines an ePaper screen and a touch-based interface; I don’t intend to review the device here, other than to say that the screen doesn’t quite have the contrast ratio of decent paper stock (in fact, it’s probably inferior to pulp paper), and the whole user interface seems to always stop one step short of a good UX (plus, the device has no wireless connectivity, which at this point in time is simply inexcusable). Nevertheless, the device does provide a really good reading experience, particularly when you consider that it can go for two weeks between charges and the average fiction book occupies less than half a megabyte.

What I’d like to speak about is the wonderful, wonderful feelings that purchasing content for this device has left me.

The store that almost was… not

I don’t think that you’ll be surprised to hear that the first thing I wanted to do, upon unpacking my new toy, was to get some content for it.

The folks at Sony sure must be falling off their chairs, however, because I simply couldn’t get anything. I had fallen in that DRM Neverland that is purchasing a book from the Canadian store—with a Canadian credit card tied to a Canadian address—while within the United States. In fact, the store told me so—after I had dug my credit card out of my pocket and typed in all my information: “You cannot change your method of payment in a country other than your country of residence.”

There’s a finality, a sort-of “what kind of stupid shenanigans are you trying to pull” attitude to this statement that just drives me up the wall. Why shouldn’t I be able to buy a book from the online store dedicated to my country (which, in itself, is a curious idea to be found on a worldwide network), with a credit card that was issued in the same country and is registered to an address which is, itself, in the same country?

Of course, I understand why this is: rights management. Despite the fact that the US dollar is essentially at par with its Canadian counterpart, we regularly pay much higher prices for books (among other things) than our friends south of the border. Distribution of content in our country is regulated by a government that is intent on ensuring that our cultural heritage is not overrun by Americans—in itself a rather curious attitude, considering that so many Canadians are first-generation immigrants and therefore don’t have a shared heritage to start with. Furthermore, book rights (much like movie rights) are routinely handled by different entities across borders and, obviously, each wants to make sure that it can maximize its ability to take advantage of its captive market.

Of course, I hope that you won’t mind me saying that this line of reasoning has been pulled straight out of the digestive system of a cow by the copyright industry. They are the ones who insist on placing impossible constraints on the management of content rights—and they are the ones who constantly find themselves at odd with simple, plain reality. In other words, they have created a problem—their problem, not my problem—and the only solutions they come up with end up victimizing the law-abiding user—me.

The “to copy is to steal” mantra that the idiots from the copyright lobby continue chanting is so misleading you could put a tail on it and call it a weasel. Here I was, credit card in hand, ready to make a purchase—nay, credit card details already entered on site and purchase already made, as far as I was concerned—and they won’t take my money… why? Because my IP appears to be assigned to another country? It’s the equivalent of walking into a grocery store and being denied the purchase of milk because I look like I might be from out of town. Their legal choice removed, guess what honest people do—and they don’t even feel remotely guilty about it.

I’ll say this: when we removed password protection (which is not a form of DRM, as I have tried to explain multiple times) from our publications, our sales actually went up. I am glad we did. I am glad our customers pushed us to do it and didn’t let us off the hook until we would.

Cost vs. “cost”

As I have said in the past, DRM is an endless battle against an imaginary foe. The content industry is chasing after windmills—and the worst part is that they actually believe they have an enemy.

Not too long ago, I had a brief argument on Twitter with Charles Arthur, the Technology Editor at Britain’s Guardian newspaper. I enjoy reading Mr. Arthur’s work, which, of course, made me all the madder when I saw him reporting this statement:

The Entertainment and Leisure Software Publishers’ Association, ELSPA, which represents the video games industry, says that criminal games copying and other illegal activities cost the industry more than £750m annually.

I challenged this and was frankly disappointed that Mr. Arthur’s answer was that he wasn’t making the claim—rather, the ELSPA was. Technically, that’s clearly correct, but that’s a statement that just begs for some questioning that I would think a journalist should want to undertake.

If you ever happen to be overly bored and decide to look at the financial statements of any public corporation that trades primarily in intellectual property, I challenge you to find a line item that says “costs due to piracy.” Go ahead, try—you won’t find any.

Don’t worry, though; through the magic of common sense, I can tell you exactly how much money piracy costs to the entire industry: zero.

You see, in accounting—which is what companies use to track and report their financial positions—cost is essentially equivalent to expense: the money a company spends to produce or acquire something. Piracy, therefore, is not a cost—because the company cannot spend money that it doesn’t have in the first place. Their claim that piracy costs them hundreds of millions of dollars a year is a bit like me claiming that not getting run over by a truck while crossing the street earlier today cost me hundreds of thousands of dollars in insurance claims.

That’s right—the copyright industry is very cleverly using a concept that is proper in economics—where “cost” is the value of an opportunity that has been discarded in favour of a different alternative—in a context where the subject is accounting. With this clumsy sleight of hand, they have created a financial liability that cannot be reported on their books (not without some serious consequences, at least), but that looks really good in print.

The simple reality is that the industry knows exactly how much piracy costs them: nothing. What they don’t seem to know, however, is what combating it is costing them: it has created a generation of content users that are completely disillusioned with the value of intellectual property because they are constantly presented with a set of facts that have been gracelessly distorted to present a picture that doesn’t stand up to the most basic scrutiny.

Good luck staying relevant.

Photo credit: Jack and Jill Windmills in Sussex by david.nikonvscanon