The Price of Everything - Eduardo Porter [65]
But the analogy also highlights creators’ existential problem: somebody has to pay for the lighthouse’s light. The light and the movie won’t happen unless shipowners and Batman fans can be made to pay for them. Lighthouses—like clean air and national defense—are known because of their peculiar nature as “public goods.” The fact that consumers can use them without paying has a name too: the “free rider problem.” It is a problem because private companies cannot earn enough money from selling public goods to give them a reason to produce them. So left to the private sector, they won’t be produced. Transported to the Internet era, the argument suggests that if information becomes truly free, we will stop producing any.
NAPSTERING THE WORLD
Technology brought us to the edge of free. The price of computers fell 99 percent between 1980 and 2009, after accounting for inflation. A computer in 1980 cost seventy-nine times what it does today. As the price of storing, copying, and transmitting information in digital form fell, the producers of songs, movies, and other digital media lost their ability to stop consumers from copying their products endlessly and distributing them as widely as they wanted. In June of 1999, Shawn Fanning, a teenager from Brockton, Massachusetts, known to his friends as the Napster, launched a system that allowed people to share over the Internet the music files stored on their hard drives. By July of the following year, one in four adults who used the Internet said they had downloaded music for free.
Stewart Brand, a countercultural prankster of the acid-laced sixties who evolved into a revolutionary futurist, told the nation’s first hackers’ conference near San Francisco a quarter of a century ago that “information wants to be free.” In the 1990s, Apple advertised its new iMacs equipped with a writable CD drive as the tool to “Rip. Mix. Burn.” Today, creators have lost control of their creations. The minute they become a digital file they “belong” to everybody, so nobody owns them.
In Free: The Future of a Radical Price, Chris Anderson, the editor of Wired, argued that people can no longer own things made out of ideas because anybody can get them for nothing. Since most of what advanced economies produce is made of information, this could mean that much of the product of modern economic activity would inevitably become gratis.
The dictum seems to be true. Retail sales of music in the United States—from CDs to ring tones—declined by about a fifth in 2008 to $8.5 billion, as consumers stopped buying music and turned to peer-to-peer networks, where it is available for free. Globally, wholesale shipments of recorded music fell by nearly a tenth, to $18.4 billion. This changed the very meaning of success. The biggest album of 2008, Lil Wayne’s Tha Carter III, sold 2.87 million copies in the United States, according to Nielsen SoundScan. Nine years earlier the top album was Millennium by the Backstreet Boys. It sold 9.45 million copies.
IT IS HARDLY surprising that whoever owned the rights to these songs and movies would resist their liberation. Record labels and Hollywood studios deployed battalions of lawyers to turn back the tide of free. They devised so-called Digital Rights Management technologies—known as DRM—to bar users from copying their products.
In 2000, A&M Records and other labels sued Napster, forcing it to shut down the following year. In April 2009, a Swedish court convicted the three founders and the financial backer of The Pirate Bay, one of the largest file-sharing services in the world, for breach of copyright