Tuesday, August 31, 2010

Don't let your VCR strangle you

Stanford Law prof Mark Lemley has written a brief and entertaining paper about the content industry's ongoing "Chicken Little Syndrome".  One particularly purple passage is good for a chuckle.
The content industry warned us that the VCR must be stopped.  Here was Jack Valenti of the MPAA, speaking to Congress: 
"the VCR is stripping those things clean, those markets clean of our profit potential, you are going to have devastation in this marketplace.  We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine"
If that were not enough, he went on to say, "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."

It's also remarkable to read how many times music, television, and film producers have been saved from themselves by the slimmest of Supreme Court margins, and how badly it has gone for them in the few cases they have "won" -- remember DAT tapes?

We did, however, successfully shackle next-generation audio technology in the early 1990's with the digital audio tape.  Here the perceived threat was the same as audio cassettes but worse.  Audio cassettes turned out not to have shut down the industry, true. But if you gave customers digital audio cassettes, content owners warned, if you allowed them to make a digital-quality copy, then they had no reason to buy our better quality copy, and we will be shut down.  That argument carried the day in Congress.  Digital audio tapes were then subject to a compulsory licensing scheme and were never heard from again by mass-market consumers. The technology flopped once it was put under the control of the content industry. 

No, I didn't think you did.

As I think about these problems of property, which range from patents to copyright to net neutrality to agricultural production, the basic pattern becomes more and more clear to me.  Create just enough private property to encourage people to engage in non-zero sum games.  Maybe 500 years ago, when the king owned everything, we erred on the side of too little, but we are rapidly getting bogged down in having too much.  The default presumption is not that property should be collective until otherwise stated -- I'm not arguing that all private property is theft from the common hoard.  The default presumption is that there is no such thing as property until its absence stymies activity or we get into enough of a row over it that makes both sides worse off at the same time.  Plenty of cases fall under that heading.  Just not many from the media world.

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