TidBITS#602/22-Oct-01
=====================


Steal This Essay 1: Content Is a Pure Public Good
-------------------------------------------------
  by Dan Kohn

  Steal this essay, or, why these sorts of essays represent the
  future of all publishing. Hint: I'm not getting paid for them.

   "Freedom of the press belongs to those who own one."
     - A.J. Liebling

  If you or anyone you know has ever or will ever produce content
  (writing, music, video, etc.) and hopes to get paid for it, you
  should be afraid.

  To see why, start by downloading (for free, of course) one of the
  numerous peer-to-peer file sharing systems such as Aimster,
  LimeWire, and eDonkey2000 that have emerged hydra-like to take the
  place of Napster, whose head was cut off this spring by the
  Recording Industry Association of America (RIAA). You will find
  that much the same selection of MP3 music that was on Napster is
  still available for free, as well as being accompanied by more and
  more movies ("ripped" directly from DVDs), and nearly all other
  forms of content, from Shakespeare's works to hard core adult
  materials.

<http://www.aimster.com/>
<http://www.limewire.com/>
<http://www.edonkey2000.com/>
<http://www.napster.com/>
<http://db.tidbits.com/getbits.acgi?tbser=1206>

  What you will not find - even if you are the RIAA - is anyone to
  sue. Because unlike Napster, there are no companies underlying the
  software infrastructure, no servers to confiscate, no officers on
  whom to serve papers. The next generation of peer-to-peer clients
  relies on no central infrastructure whatsoever, and is being
  developed by a loose knit group of developers spread around the
  world, all donating their significant efforts without any real
  hope of getting paid for their work. All of the developers are men
  - or teenage boys - and though not following the typical societal
  track toward prestige, they are just as competitive as any rival
  athletes or entrepreneurs. Many are distributing their software as
  open source, so anyone else can fix bugs and make improvements.
  What this means is not just that the RIAA is applying makeup to
  the corpse of the music industry as we've known it. In fact, it
  heralds an even larger change about how all content is created and
  distributed, and raises serious questions as to whether content
  creators (such as the author of this essay) will ever be
  compensated for our work.

  Read a few dozen articles by top technology analysts, and it is
  often difficult to find one that doesn't breathlessly declare how
  this or that new technology represents a sea change, an inflection
  point, or the end of history. In fact, while the Internet's growth
  rates have been quite high, other technologies such as radio and
  gas cooking have actually been adopted faster. It may be, though,
  that all of the hype surrounding the digital duplication and
  peer-to-peer distribution of content actually underestimates the
  impact on the authors and publishers of music, movies, and written
  works.

  Put simply, in a world where there are essentially no costs to
  replicate content and it is effectively impossible to stop anyone
  from doing so at will, the current economic model underpinning
  content creation will be dead. Despite the protestations of
  lawyers, (certain) rock bands, and legislatures (all on the same
  losing side, oddly enough), we are entering that brave new world.

  If, as this hard technology determinist viewpoint suggests,
  content is destined to be free - i.e., the content creators and
  publishers will not be directly compensated the way they are today
  when you make a purchase from your local CD store - then the real
  question is what system could replace the content compensation
  system that has worked quite well for the last 300 years. However,
  implementing revenue models for infinitely redistributable goods
  is not an entirely novel question, and there are several economic
  models that can support the creation of content. What there may
  not be is _enough_ revenue to support the publishers of that
  content in addition to the authors, which helps explain why the
  RIAA is so eager to thwart digital distribution. When an ecosystem
  undergoes severe environmental changes, certain organisms that
  were previously essential - like the cyanobacteria that originally
  converted carbon dioxide to oxygen, or the record companies'
  A&R men - may recede to minor ecological niches.

  Economists have a term for what digital goods have become. Items
  are "nonrival" when we can all make use of them without anyone
  having to give them up. If I copy your CD, you're none the worse
  for it (nonrival), but if I steal your car, you will probably be
  upset (rival). Goods are "nonexcludable" when it becomes
  impractical to stop everyone from making use of the item, once one
  person can. It is infeasible, for instance, to stop additional
  viewers of broadcast television (nonexcludable), while it is very
  feasible to stop additional moviegoers from entering a theater
  (excludable). Economists call nonrival, nonexcludable items "pure
  public goods," although the name does not imply that public goods
  can be provided only by the government.

  Lighthouses are a classic pure public good. They are nonrival
  because each additional ship does not reduce the light available
  to the others. They are nonexcludable because any ship sailing by
  can see them. There are cases in New England two centuries ago of
  shipping guilds building privately managed lighthouses, even
  though the services couldn't be withheld from non-members. Most
  medical research and nearly all basic scientific research today is
  a pure public good, although for exactly this reason it is often
  financed (at least indirectly) by the government. Other textbook
  public goods are national defense, mosquito control, and public
  radio. In each case, the cost of providing the item to one
  consumer is the same as providing it to any number of consumers
  (nonrival), and it is impractical to stop anyone from making use
  of the good (nonexcludable). The table below provides some
  examples.

            |  EXCLUDABLE        |  NONEXCLUDABLE
 -----------+--------------------+--------------------------------
 RIVAL      |  car, Walkman      |  unmanaged fishing rights
 -----------+--------------------+--------------------------------
 NONRIVAL   |  movie in a movie  |  lighthouses, national defense,
            |  theater, concert  |  mosquito control
            |  in a large hall   |

  If content is becoming a pure public good, it will necessitate a
  radical rethinking of the recording industry's claim that copying
  content is stealing. We as a society react very differently toward
  the unpaid use of rival versus nonrival goods. Think of the
  punishment inflicted, for example, on those who steal cars versus
  those who listen to public radio without contributing to the fund
  drives. Of course, whether a good is rival or not is beside the
  point if you can successfully exclude people who don't pay. (Ask
  Microsoft, whose cost for selling one copy of Office is
  approximately the same as selling 100 million copies (nonrival),
  but which has used informant tactics and large legal penalties to
  make their software very excludable, at least for businesses.)

  The lawyers representing the recording and movie industry are well
  aware of the threat to their business models of digital content,
  and they believe they have already developed the answer:
  encryption. Encryption represents the music industry's last, best
  hope of maintaining their product as excludable. Why they are
  wrong, and content protection is doomed to failure, will have to
  wait for the next essay.

  [Dan Kohn is a General Partner with Skymoon Ventures. His writings
  are announced through <dankohn-subscribe@yahoogroups.com> and can
  be discussed through <dankohn-discuss-subscribe@yahoogroups.com>.]

<http://www.dankohn.com/>
<http://www.skymoonventures.com/>








TidBITS#603/29-Oct-01
=====================

Steal This Essay 2: Why Encryption Doesn't Help
-----------------------------------------------
  by Dan Kohn

   "Doveriai no proveriai." (Trust but verify.)
     - Russian proverb, as quoted by Ronald Reagan

  Even as content becomes a public good, content creators (or at
  least the publishing and recording industries that claim to
  represent them) have been led to believe that encryption can
  protect their revenue streams. As I noted in the first of these
  essays, they are lambs being led to the slaughter.

<http://db.tidbits.com/getbits.acgi?tbart=06604>

  Why is all content becoming a public good? It has realistically
  been nonrival for some time now, meaning that I can copy your CD
  of music or software for a few pennies or less, and you are in no
  way disadvantaged. (Of course, the author of that content may feel
  quite disadvantaged by this "theft," but as long as I don't
  scratch your CDs, there's no reason for you to care that I
  borrowed them for a few minutes.) In fact, the central concept
  of digitization - converting all content to streams of zeros and
  ones - entails making it infinitely copyable without any loss of
  quality, the very essence of nonrival goods.

  What has only become clear in the last couple years (although
  the Recording Industry Association of America - the RIAA - 
  still has its head in the sand) is that digital content is also
  nonexcludable. Of course, tens of millions of dollars have been
  spent on a variety of means to make digital content uncopyable.
  Supposedly unremovable watermarks are embedded in images to detect
  copies (e.g., SDMI and Macrovision), content is encrypted so that
  it can only be viewed through an authorized player (e.g., DVD CSS
  and Microsoft's and Real Network's digital rights management
  systems being used in the music industry's Napster competitors,
  PressPlay and MusicNet), or some form of registration is required
  for activation (e.g., Office and Windows XP).

<http://www.riaa.org/>
<http://www.sdmi.org/>
<http://www.macrovision.com/>
<http://www.dvdcca.org/>
<http://www.pressplay.com/>
<http://www.musicnet.com/>


**Encryption Is Ultimately Futile** -- The problem with the
  security of these approaches is that, as cryptographer Bruce
  Schneier points out, there are basically only two types of users:
  regular ones against whom _any_ form of copy protection will work,
  and experienced hackers, whom _no_ form of technology can stop.
  Your technophobe mother represents the first category, and your
  geeky nephew exemplifies the members of the second category. Why
  can't the hackers be stopped by encryption? If the challenge were
  just to transfer a file from one point to another without letting
  someone get to see its contents, encryption is up to the job. But,
  consumers don't listen to or watch encrypted versions of content.
  (I have, and it looks like static). They watch the regular,
  unencrypted version. So, somewhere close to the user, the content
  must be decrypted. And that decryption process typically runs on a
  PC, where experienced hackers can watch it work one instruction at
  a time, and change those instructions to enable the unencrypted
  content to be copied.

  Phrased differently, as long as the intention is ultimately to
  deliver the content to the customer (and hopefully even the RIAA
  is still trying to do that), then it's impossible to stop wily
  hackers from getting at the content in its unencrypted form and
  having their way with it. "Trying to secure [digital goods] is
  like trying to make water not wet," Schneier said recently. "Bits
  are copyable by definition."

  In early 2000, a 16-year-old in Norway named Jon Johansen was
  upset because he wanted to be able to play DVD movies in his Linux
  box's DVD drive, but the movie industry had not authorized any
  players for Linux. So, working with several anonymous contacts on
  the Internet, he cracked the copy protection scheme used by all
  DVDs, enabling them to be played on his machine and, incidentally,
  to be copied endlessly and perfectly. (The Norwegian police
  actually confiscated his computer at the request of the Motion
  Picture Association of America several days after he distributed
  the code on the Internet, providing a classic example of tardy
  barn door closing.) More to the point, one could ask what chance
  any copy protection scheme has, when random 16-year-olds with an
  Internet connection can succeed in breaking it in their spare
  time.

  But the news for authors such as myself, who might want to get
  paid for our work, gets worse. There are many in the music
  industry who believe that a 98 percent copy protection rate would
  be just fine, the same way that department stores calculate a
  presumed level of spoilage (i.e., stolen goods) in their
  inventories. That works for department stores because their goods
  are rival, so that even if a few shoplifters get their items for
  free, everyone else still has to pay. The problem for the RIAA is
  that nonrival content means crack once, run everywhere. That is,
  all it takes is one smart hacker to defeat the copy protection
  schemes for everyone. Then, your nephew can either distribute his
  hacks in an easy to use format that even your mother can install,
  or, more directly, he can just distribute the unencrypted content.


**Advertising Support?** If content can't be made excludable (and
  thus easily charged for) via encryption, perhaps there are other
  ways to build business models around content. What about
  advertising? After all, broadcast television is essentially
  nonrival and nonexcludable, and it's financed by advertising.
  Unfortunately, no. First, as they have become ubiquitous, banner
  ads have dropped dramatically in effectiveness, as measured by
  click-through rates, which have fallen from 4 percent to 0.1
  percent. This is not too surprising, given that most people hate
  banner ads and do everything to try to ignore them. Ad rates for
  some large sites have fallen correspondingly from 40 cents per
  impression to less than 0.1 cents, one of the primary causes of
  the many new applications of former dot-com employees for
  Starbucks barista positions.

  And for content providers, the news grows still worse. The
  downturn in the economy has made it harder, particularly for
  publications without loyal readers, to attract advertisers, even
  at the lower ad rates. Then there's software such as WebWasher
  that automatically detects the banner ads on any given Web page
  and strips them out, which incidentally causes the page to load
  faster (just as a 30 minute television sitcom can be viewed in 22
  minutes without the ads). Ad blocking software replaces the ads
  that are supposed to be funding the content with blank space,
  which is what content providers' revenue models are starting to
  look like. The software is not perfect, but it's getting better
  and is already effective enough to strike fear into the hearts of
  content publishers and advertisers.

<http://www.webwasher.com/en/products/wwash/functions.htm>

  Even the soap companies that have funded so many years of daytime
  drama may start reconsidering their advertising budgets over the
  next decade, as digital video recorders such as TiVo become
  increasingly common. These enable viewers to have their favorite
  shows easily stored to a hard drive, where they can be
  conveniently replayed at the time of the viewer's (rather than the
  programmer's) convenience. Imagine setting your own viewing
  schedule rather than having it dictated by snotty network
  executives in LA and New York. Plus, these devices let you skip
  right past the commercials with a few clicks of the remote,
  thereby crumbling the foundations of 50 years of a profitable
  broadcast industry. New PC-based recorders such as SnapStream even
  support sharing recorded shows across the Internet, enabling video
  to take its place next to MP3s on the new peer-to-peer networks
  that are quickly replacing Napster. Why schedule your evening
  around a broadcast schedule and sit through brain-numbing
  commercials, when the show is available whenever you want it with
  the commercials already edited out? A world full of digital video
  recorders is one in which the couch potato is liberated from the
  slings and arrows of network programming (how dare they put that
  promising new show against Survivor!), and once again is empowered
  to make real choices about how, when, and what to watch. [For more
  on TiVo, see Andrew Laurence's two-part article series "TiVo:
  Freedom Through Time Shifting" and be sure to read the in-depth
  TidBITS Talk discussion on how personal video recorders are
  changing advertising. -Adam]

<http://www.snapstream.com/>
<http://db.tidbits.com/getbits.acgi?tbser=1204>
<http://db.tidbits.com/getbits.acgi?tlkthrd=1461>

  Are there any categories of content from which individuals can be
  excluded? Only two that I can see. The first is showing movies at
  movie theaters. With a significant investment in digital
  distribution, and an even bigger investment into physical security
  at the theater, studios should be able to distribute movies
  without them immediately being copied onto the Internet (but watch
  out for those 16-year-old projectionist/hackers). The other
  category would appear to be Web services, where software is split
  into components that are loosely coupled and distributed across
  the Internet. Since you're interacting with numerous other
  computers, your identity can be continually reaffirmed (what
  Microsoft is planning with Hailstorm), making it nearly impossible
  to avoid paying. But any software that supports a disconnected
  mode (such as an operating system), can be easily (by hacker
  standards) modified so that it no longer "calls home" to ensure
  authenticity. The registration system for Windows XP was cracked
  so that running a simple program will remove the requirement for
  online activation, six months before the software was even
  released.

  Content won't truly be a pure public good for another ten years or
  so until broadband home Internet connections are ubiquitous,
  making it trivial to transfer large files around. But, since the
  process is already accelerating (Napster began with college
  students who already have broadband connectivity, and some new
  peer-to-peer file sharing services are designed explicitly for
  downloading very large files in the background), it's worth asking
  why anyone will create content when the old models for getting
  paid don't work. The answer will have to wait for another essay.

  [Dan Kohn is a General Partner with Skymoon Ventures. His writings
  are announced through <dankohn-subscribe@yahoogroups.com> and can
  be discussed through <dankohn-discuss-subscribe@yahoogroups.com>.]

<http://www.dankohn.com/>
<http://www.skymoonventures.com/>








Steal This Essay 3: How to Finance Content Creation
---------------------------------------------------
  by Dan Kohn

  "If consultants had been hired to evaluate the market for printing
  a decade or two after its invention, they would have concluded
  that the new technology was vastly overrated. Scribes were already
  producing the important books efficiently, and the new printers
  produced mainly the same old texts, such as the Bible, which were
  readily available to the tiny minority who were literate."
     - Ithiel de Sola Pool

  Who will pay for something "free?" It seems obvious that content
  creation has to be funded somehow, since the next Jurassic Park
  won't be developed during some teenager's free afternoons.
  Economist Arnold Kling says that "The central paradox of our times
  is that information wants to be free but people need to get paid."

  Pure public goods have been funded by various means for the last
  several hundred years, so there should hopefully be some insights
  by now into how the makers of pure public goods can be compensated
  for creating their works. For if these options aren't realistic,
  it is unclear why authors such as this one will continue as ink-
  stained wretches (well yes, this essay was typed directly into the
  computer, but you get the idea).

  There are four basic ways to fund a public good: the government,
  micropatronage, funding from non-profit organizations or corporate
  philanthropy, and the sale of atoms associated with the bits.
  These are in no way exclusive - it's entirely likely that any
  given public good may receive funding from more than one of these
  sources.


**Government Support** -- Although few people like the idea of the
  government getting to decide which artists and writers "deserve"
  to be funded, government support has been the traditional manner
  to fund public goods. Given the political histrionics surrounding
  the U.S.'s National Endowment of the Arts, it seems unlikely that
  this model will scale to fund a much larger supply of content.
  Neither the public at large nor Jesse Helms himself want to live
  in a world where the Senator decides which situation comedy or
  hip-hop band is most deserving of funding.

  However, there are alternatives that could enable much larger
  government funding of content creation without involving the
  government in picking winners and losers. These measures would be
  based directly on popularity, so that creators of popular content
  would be compensated for doing so. For instance, a commercial
  service called MediaMetrix currently calculates the most popular
  Web sites, just as Nielsen's delivers ratings on the most popular
  TV shows. A new government program could offer grants to the
  authors of the top 1,000 most popular Web sites, MP3s, movies, and
  so on, encouraging innovation not just in the creation of new
  content but also in its successful promotion.

<http://www.mediametrix.com/>


**Micropatronage** -- Don't confuse micropatronage with
  micropayments, which make no sense for pure public goods.
  Specifically, if anyone who pays $1 for a New York Times article
  can redistribute that article endlessly, why would anyone else pay
  the dollar? Plus, people are mistrustful of the ways micropayment
  systems have been proposed thus far, due to the fear of fainting
  spells when reviewing the bill at the end of the month.

  Micropatronage entails a return to the content creation system of
  the 15th century, namely art patronage. The downsides are that
  artists are open to influence from their patrons (though arguably
  less than they are by their publishers today) and that content
  creators need to be matched up with patrons. The advantage is that
  with the near-zero cost of information distribution, finding
  patrons becomes simpler, as does having one artist supported by
  numerous patrons. Thus, rather than the Medicis funding
  Michelangelo's works, an artist such as Aimee Mann with a small,
  passionate following could probably find 1,000 individuals willing
  to donate $100 a year or more. (The main difference between modern
  micropatrons and the Medicis is the dramatically smaller
  likelihood of going from being a patron of the arts to becoming
  the Pope.)

<http://www.aimeemann.com/>

  Is there any model of micropatronage in action today? Yes, public
  broadcasting. Fund drives for PBS and NPR run into a basic
  difficulty that they are trying to raise money for a pure public
  good that is available to everyone. But large numbers of
  individuals still seem to find the money to donate, even though
  they could not be excluded from future content for not doing so.
  (Or phrased differently, their guilt from enjoying PBS or NPR
  outweighs the economic certainty that no single person's
  contributions will have any effect on whether they get to continue
  enjoying this nonexcludable good.)

  Mickey Kaus's personal news Web site recently declared
  profitability (although this is misleading given that he is not
  charging for his own time), where he is relying on an Amazon-based
  system to enable readers to become micropatrons. Even TidBITS uses
  micropatronage, with over 700 contributors to date.

<http://www.kausfiles.com/>
<http://www.tidbits.com/about/support/contributors.html>

  More generally, almost all charitable giving today falls under
  this model, in which the charitable services (e.g., the Salvation
  Army or your school's alumni association) are equally available to
  you whether you contribute or not, but you still choose to do so.
  In situations in which there is no downside for any given
  individual to be a freeloader, it is amazing that so many
  charitable services continue to survive on donations alone.


**Non-profit Foundations and Corporate Philanthropy** -- Another
  way that pure public goods such as medical research are funded
  today is through non-profit organizations such as the American
  Cancer Society. These raise money for a single larger goal and
  then distribute it to the uses they believe are worthiest.

<http://www.cancer.org/>

  This approach could easily apply to content as well: imagine a
  National Country & Western Foundation, or an American Society for
  Horror Flicks. That is, some potential micropatrons (especially
  companies) may wish to fund a genre as a whole, and have the
  experts employed by non-profits decide which established and
  up-and-coming artists are most deserving of their funds.

  The Web magazine Slate's current financing seems to fall into a
  similar category, whereby a (very) for-profit corporation,
  Microsoft, apparently feels that the respect and gratitude it
  garners by funding a high-quality magazine is worth the $20+
  million a year that it spends to operate Slate.

<http://slate.msn.com/>

  In fact, nearly all influential news and opinion magazines are
  financed by individuals and/or companies that appreciate the
  respect that seems to rub-off from financing top rate content.
  Examples include The New Yorker (Si Newhouse's Advance
  Publications), The Weekly Standard (Rupert Murdoch's News Corp.),
  and The New Republic (Marty Peretz). They certainly are not run on
  any generally understood financial principles, since they all lose
  money.

<http://www.newyorker.com/>
<http://www.weeklystandard.com/>
<http://www.thenewrepublic.com/>

  As content becomes less excludable (meaning mainly that people are
  reading or listening via digital devices rather than through paper
  and CDs), many new such foundations will likely be needed.


**Sell Atoms Associated with Certain Bits** -- Finally, one system
  that is beginning to work for funding a public good is to charge
  for physical items associated with given content. That is, even
  though bits are becoming impossible to charge for, many people
  will be willing to pay for the atoms associated with those bits.
  The most obvious are concert t-shirts, or micropatron plaques with
  a signed thank you from the content creator. Since (all but open-
  air) concerts are by definition excludable, fans will continue to
  pay real money to attend them. In the case of concerts, the atoms
  that fans are paying to be in proximity to are those of the artist
  herself.

  Are there really enough funds available from these four methods -
  even combined - to pay for the next Madonna CD or an episode of
  The West Wing? Only time will tell. But, just as technology is
  nearly eliminating the cost of distributing information, so too is
  it drastically reducing the cost of creating content. The
  dinosaurs that took 50 people and dozens of supercomputers to
  create in the original Jurassic Park may soon be reproduced by a
  16-year-old working after school on her home PC. The symphony that
  Mozart had to assemble an orchestra to hear can now be authored
  (and iterated, and iterated again) with a free music program in an
  afternoon (presuming the talent), with no musicians to train or
  pay. Of course, even these teenagers will need to pursue some
  combination of these funding mechanisms if they want to have their
  art be more than a hobby.

  And those four options are it. Although I (and numerous hungry
  artists) will continue looking for new funding innovations, I
  can't currently envision many other ways that pure public good
  content could be funded. Which leads to the question addressed in
  the next essay, of whether all of this is fair.

  [Dan Kohn is a General Partner with Skymoon Ventures. His writings
  are announced through <dankohn-subscribe@yahoogroups.com> and can
  be discussed through <dankohn-discuss-subscribe@yahoogroups.com>.]

<http://www.dankohn.com/>
<http://www.skymoonventures.com/>








TidBITS#610/17-Dec-01
=====================

Steal This Essay 4: Are We Just Rationalizing Theft?
----------------------------------------------------
  by Dan Kohn

   "Information is the currency of democracy."
     - Thomas Jefferson

  At least since the U.S. Constitution explicitly granted Congress
  the power to protect copyright, an intellectual foundation has
  been built up regarding intellectual property. My previous essays
  argued that foundation is now crumbling, and will be gone within
  10 years as broadband connections (to enable easy transfer of
  large files) become ubiquitous and people become more comfortable
  viewing material on computer screens (where it becomes impossible
  to stop copying) versus on paper (where content is still somewhat
  excludable). In other words, if you make money from selling
  content, the news is worse than you think.

<http://db.tidbits.com/getbits.acgi?tbser=1209>
<http://db.tidbits.com/getbits.acgi?tlkthrd=1503>

  But whether or not this trend is inevitable, one could stop and
  ask whether it's a good thing, and whether the death of excludable
  content should be grieved or cheered. Property is generally
  defined by economists as goods that are rival (e.g., if I take
  your car, you don't have one) and excludable (e.g., you can lock
  your door to keep me out of your home). As information has become
  digitized (and therefore nonrival and nonexcludable), the
  intellectual underpinning of intellectual property has eroded, so
  that today the term intellectual property is little more than an
  oxymoron. Intellectual property may, in a few years, sound as
  strange to the ears as "reasonable attorney fees", "low tar
  cigarettes", and "Zero Administration Windows" do today.

  Note, however, that while this erosion applies to all forms of
  copyright, 99 percent of patents remain valid and enforceable.
  That's because the majority of patents entail securing property
  rights regarding the manipulation of atoms, not bits. If someone
  steals your patented concept of how to build a better mousetrap,
  you can still sue that company, shut down their mousetrap factory,
  and get a large cash settlement. Even patents regarding the way
  information is stored on physical media, such as the MPEG patents
  that apply to DVDs, remain enforceable because you can sue to shut
  down DVD factories that violate them. The patents that will become
  increasingly unenforceable are those regarding the transfer of
  digital information over networks, such as the patents that
  Fraunhofer holds over software that creates MP3 music. Yes,
  Fraunhofer can sue large companies that might infringe, such as
  Microsoft or Real, but they are unlikely to succeed in stopping
  individuals that create MP3 software as a hobby and release it for
  free. Bits are virtual; atoms are real. The rule of thumb is that
  if you can't kick it, you can't sue it.

  Won't people's conscience stop them from "stealing" other's
  "property?" Ask the millions of college students who popularized
  Napster. The reality is that new technology almost always changes
  the views of its users as to what is permissible and even what is
  moral. For example, the Pill radically changed society's view of
  the permissibility (and feasibility) of sex outside of marriage,
  and had even larger effects on the role of women in all walks of
  life. Going back further, it is hard to see how Martin Luther's
  Protestant Revolution could have taken hold without the broad
  availability and consequential wide literacy enabled by the
  Gutenberg Bible. In fact, the drastically reduced cost of
  information distribution that Gutenberg's printing press entailed
  can be seen to underpin the entire Enlightenment, as well as its
  intellectual offspring, liberal democracy and market capitalism.
  (Not to mention the similarity that the printing press was quickly
  applied to the production of erotic texts and imagery, just as
  VCRs caught on as a way to watch adult movies in the comfort of
  one's home, and the sons-of-Napster are exchanging an increasing
  quantity of adult materials in addition to MP3 music.)

  As the marginal cost of distributing information goes from a few
  pennies per megabyte (the approximate cost of most media today) to
  zero, it is likely that the impact on larger society will
  accelerate. Most people will probably come to see the terms
  property and stealing as simply unrelated to how information is
  distributed and how its creation is funded.

> Price per megabyte of different media today
> ------------------------------------------------------------
> book             $20/50 MB      $0.40 per MB per copy
> newspaper        $0.50/10 MB    $0.05 per MB per copy
> 30 second TV ad  $500,000/5 MB  $0.03 per MB per person
>                                 (assuming 3 million viewers)
> CD-ROM           $15/650 MB     $0.02 per MB per copy
> DVD              $50/7000 MB    $0.007 per MB per copy

  A.J. Liebling said that "Freedom of the press belongs to those who
  own one." The reality is that throughout history, the distribution
  of information has been monopolized by a tiny, yet extraordinarily
  powerful, elite. In ancient Egypt, priests would jealously guard
  their astronomical knowledge so as to ensure their place at the
  top of society by being able to predict the annual flooding of the
  Nile. The Roman Catholic Church used the literacy of its clergy
  and monks to develop a parallel government that was more powerful
  than the theoretically sovereign kings during the 1,000 years of
  the Middle Ages. Although freedom of the press is enshrined in the
  First Amendment to the U.S. Constitution, the reality today is
  that the majority of information distribution channels are still
  controlled by a small elite of publishers and broadcasters. An
  oligopoly of five powerful companies has nearly exclusive control
  in deciding what music will be heard. (This is certainly one of
  the fundamental reasons that Britney Spears is so popular.)

  The influential media theorist Ithiel de Sola Pool described the
  concept of a technology of freedom, which he said, "aims at
  pluralism of expression rather than a dissemination of preferred
  ideas." Pool analyzed the radical differences in how
  communications technologies were regulated by the government,
  based on the perceived scarcity of how many publishers could be
  supported. The press was the gold standard by which others were
  measured, which because of its wide availability, is given the
  broadest First Amendment protection. But radio and television
  broadcasters, by convincing the government that there is a
  scarcity of available radio spectrum, have successfully argued the
  need for heavy regulation. Thus, the government not only regulates
  the kinds of content that can be broadcast (allowing almost any
  level of violence as long as no nudity is shown) but also makes it
  far more difficult for new entrants to compete with the
  established players.

  If he were alive today, Pool would surely believe that the
  Internet is the ultimate technology of freedom. Or, as Judge
  Dalzell said in his historic ruling in ACLU v. Reno that
  pronounced the Communications Decency Act unconstitutional, "It is
  no exaggeration to conclude that the Internet has achieved, and
  continues to achieve, the most participatory marketplace of mass
  speech that this country - and indeed the world - has yet seen."
  Intriguingly, he implied that the Internet may therefore deserve
  even greater free speech protection than what is currently
  available for print. That's because anyone with basic literacy
  skills can use the Internet to reach an enormous and growing
  audience for almost no cost. If Liebling was right and the
  limiting factor is the availability of the printing press, than
  that price has been reduced to the $1 an hour or so charged by
  Internet cafes, or the free Internet access made available in many
  U.S. libraries.

<http://www.aclu.org/court/cdadec.html>

  The world we seem to be entering, then, is one in which the
  distribution of content is essentially free, even while its
  creation must still be funded. However, the group most responsible
  for promoting the concept of intellectual property is the
  recording industry, which generally gets the ownership rights to
  artists' music in exchange for agreeing to distribute it. Is it
  any wonder then that the recording industry routinely makes absurd
  comparisons such as that there is no difference between stealing
  music and stealing a car? (The recording industry also routinely
  refers to copying music as piracy, trivializing a real crime in
  which hundreds of people are killed every year on the high seas.
  Piracy on the seas is violent as a direct result of the fact that
  physical goods are rival.)

  A world in which distribution is free is one where many more
  voices can be heard (and also hopefully in which the corresponding
  mouths can be fed). It is unlikely, though, that there will be
  enough money left over to support the recording industry. On the
  night when the RIAA's last lawyers are laid off - they will go out
  toasting, "Well, at least we brought Napster down with us" - few
  tears will be shed for the demise of the music oligopoly.

  Of course, the music industry as it currently exists is not giving
  up without a fight, and a future essay will examine how their
  announced digital offerings compare with the many services that
  have risen up in place of Napster.



$$

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