I recently finished a book entitled, “Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back.” It’s a fascinating insight into how the digital revolution, which was meant to spawn a resurgent era of artistic and creative productivity, has instead turned into an exploitative decade with technology companies and “free content” advocates undercutting the very foundations of what the author, Robert Levine, calls “the culture business.” The result? Droves of dispirited, underfunded, and beleaguered artists, authors, editors, reporters, critics, performers, musicians, and creative businesses in their wake.
The story begins with the Internet, of course — a US government-funded invention that, with the introduction of the graphical browser, was imagined in the 1990s to be capable of paying back its investment with a more vibrant creative economy, one that would generate jobs by the thousands as consumption and creation reinforced each other in new and bigger ways, and as American culture was exported around the world. The Digital Millennium Copyright Act (DMCA) was created to construct a legal environment that would balance the needs of creators and consumers in the Internet Age.
An interview with Bruce Lehman, the Commission of the Patent and Trademark Office under President Clinton, starts to show how forced compromises like the “safe harbor” provisions, compromises driven through by high-stakes lobbying from technology companies and technology trade groups, had unintended consequences for culture businesses:
Our intention was not that the music business would be flat on its back and many other industries we wanted to promote would be in trouble. . . . Unfortunately, at least in some areas, our policies haven’t worked out too well.
A key compromise that gave pirates and technology companies a relatively open field was the safe habor provision, which allows technology companies to exploit copyrighted materials in a manner that put the onus on media, music, and publishing companies to track down infringers, and then makes it difficult to enforce copyright beyond intervening on one site before trying to track them down again on another.
But this gaping hole wasn’t enough, and technology companies have worked hard to erode the rights environment that allowed artists, editors, agents, and others to thrive to mutual benefit. In fact, the fundamentals of the tale emerge as technology companies undermine intellectual property laws by funding and supporting the rhetoric of “free” and “open” — all of which benefits their business model. This required painting music companies, publishers, and copyright itself as anti-freedom, anti-innovation, and anti-openness. The result has been:
. . . a race to the bottom, and the inevitable response of media companies has been cuts — first in staff, then in ambition, and finally in quality.
Sound familiar? It should. The same rhetoric has been used within scholarly publishing for over a decade, while new, technology-dependent companies like BioMed Central, PLoS, and PeerJ have emerged in our space, racing to the bottom themselves in various ways while eroding copyright protections. Most significantly,
none of these three entities currently cycle s little or no financial benefits back into the academic or research community. And the ultimate version of “open” in our domain — “green OA” — exploits the infrastructure of traditional scholarly publishers — after all, the vast majority of manuscripts are written to be submitted to traditional paid journals — while creating a price point that can only lead to market failure.
Perhaps the most salient line of Levine’s book is:
The product isn’t the problem.
This simple sentence kept echoing through the reporting, a backdrop to the facts Levine lays out. People like and want the music, movies, news reporting, scholarly articles, and photographs created by popular musicians, movie studios, newspapers, scholarly publishers, and professional photographers. Usage is higher than ever, but not as high as it could be. Nor is it making the people responsible for it more secure and more ambitious. The power envisioned for the Web to stimulate the creative culture is there — consumption grew, as did the rate of creation. The problem is that customers have been taught by technology companies not to pay for content. To increase their profit margins, technology companies have been methodically weakening copyright laws and enforcement mechanisms and propagating the “free” meme. After all, it drives down their costs to do so — and that increases their profits.
Levine’s book follows the money, and there is plenty of it flowing to undermine copyright laws, their enforcement, and public attitudes about traditional media and publishing companies. There are eye-opening sections about Lawrence Lessig, whose work has been funded directly and indirectly by Google for years; about Stanford and how Google influences it; about Creative Commons, which both depends on copyright and weakens it, much to the delight of its funders — Google, Microsoft, eBay, Best Buy, and the Consumer Electronics Association, all of whom have a vested interest in reducing prices for content so they can sell more technology and technology services.
Looking at Creative Commons’ finances via 990 forms, it’s clear that the organization has no real revenue model, but is funded by organizations interested in modifying the rights environment, and for obvious reasons. Of course, Lessig serves on the board, as do the business development manager at YouTube, and major investors in Flickr and other open Web businesses. As Levine writes:
Google has as much interest in free online media as General Motors does in cheap gasoline. That’s why the company spends millions of dollars lobbying to weaken copyright.
Levine uses the term “parasite” to describe the companies that exploit creative companies without compensation, and he uses it in an informed fashion, harkening back to its original meaning in Greek:
The term “parasite” comes from the Greek word parasitos, used to refer to someone who at at someone else’s table without providing anything in return.
This “providing something in return” aspect is particularly important to track. Even attempts by Apple to return money to artists have fallen generally short, as per-song purchases don’t compare to full album purchases, and the share of revenues are generally smaller and don’t fund the value chain of artist development and risk. In addition, technology companies are notoriously stingy with customer data, which is vital to knowing your audience and charting a course forward.
We are seeing a similar set of tensions in scholarly publishing. For instance, even the oft-maligned Elsevier provides something in return to the 500 or so professional and scientific societies contracting for Elsevier services. But the “providing something in return” goes much further once you get beyond the commercial publishers — most scholarly publishers are part of professional societies or universities, many organizations depend on revenues from these publishing activities, and scientific communication itself is strong and vibrant because these publishers and organizations are well-funded through self-reinforcing systems. But the new breed of technology-driven and copyright-disdaining publishers — BioMed Central, PLoS, F1000, Bentham, and dozens of others — return little or no revenues to the scholarly table; in fact, they have reached more deeply into the larder by going directly after research funds. They are not only at the table, they are raiding the pantry. And research funding is the core creative funding in science.
A number of these publishers also come from the Silicon Valley technology-first world. There is a reason PLoS is headquartered in Palo Alto and had major involvement from Stanford people at the beginning. There is a reason why PeerJ also has started there, and has venture capital funding from other technology advocates. The lineage is quite discernible, and technophilia is, as well. As BioMed Central writes on its “What is BioMed Central?” page:
. . . restriction of access to published research prevents full use being made of digital technologies.
Yet, as Levine points out, digital technologies do not predetermine “free” or “open,” and advocates of such positions have a definite reason for their advocacy, one driven by financial interests in most cases. Clearly, BMC, PLoS, and the like are in favor of OA because they have found not only a way to make it profitable, but also because they don’t have to return
anything much to the community they’ve drawn the money from. Ain’t technology great?
Levine’s book is worth reading for many reasons — it makes sense of why the music industry is suffering, why movies aren’t suffering as badly yet, and why publishers of all types are now struggling. Controversies like the Google Books non-settlement, the Napster case and its spawn (with a particularly funny note about how Kazaa invoked copyright to stop another company from making a derivative copyright-violation system), the role of Amazon, and the real reason newspapers have suffered so much — all are covered clearly and framed well.
The fundamental lesson is that we have a battle between the “open” Web and the “closed” Web — between Google and Apple, between technology and creativity. Both sides have financial interests at stake. The difference is that the technology companies don’t support artists and the creative communities they utilize, while the media companies create incentives for the content creators, rewarding them with more splash, more cash, more exposure, and more prominence. The culture companies help to perpetuate whatever culture is theirs, and they do so in tangible financial ways. The technology companies exploit cultures and return little or nothing.
Perhaps the most insidious consequence is how expectations have shifted. Levine notes that while Lessig damns Walt Disney for being “derivative,” he fails to note that Disney paid to license all the ideas he borrowed for some of his movies — he was willing to pay to play, and treated the creators of the ideas fairly, abiding by copyright willingly. Everyone benefited. Now, copyright is viewed as anti-freedom, and increasingly disdained as outmoded, superfluous, even stifling.
This mindset is distinctly counterproductive when it comes to the creative work of editors and publishers, to take one example. I’ve seen the effects of this first-hand. Not too long ago, I was involved in the development of a new product idea. We held a focus group. The participants in the focus group really loved the product. It was just what they wanted because there was a need for a high-end information source of the type we’d created — a smarter, more thorough, more polished product than anything on the market. The excitement was palpable. But then we asked about paying for it. The youngest participant went off on a short rant about how he shouldn’t have to pay for any content any more, and so he wouldn’t pay for this. Others were less absolute, but admitted they don’t pay for many content sources anymore, and kind of feel that access to content has become assumed. It was clear that higher quality — despite the fact that it meets a customer need — isn’t a viable business proposition. This is a real problem. Creatives can’t even provide the audience with new and better experiences because the technology companies have eroded the ethos and incentives at the heart of content and creative businesses.
This imbalance between content consumption and supporting content creators and their sponsors was beautifully/sickeningly captured in a recent discussion about an NPR intern who claimed she had 11,000 songs in her music library but had only purchased 15 CDs in her life. As the respondent to her observations about how “inconvenient” it was to buy music put it:
The existential questions that your generation gets to answer are these:
Why do we value the network and hardware that delivers music but not the music itself?
Why are we willing to pay for computers, iPods, smartphones, data plans, and high speed internet access but not the music itself?
Why do we gladly give our money to some of the largest richest corporations in the world but not the companies and individuals who create and sell music?
This is a bit of hyperbole to emphasize the point. But it’s as if:
Networks: Giant mega corporations. Cool! have some money!
Hardware: Giant mega corporations. Cool! have some money!
Artists: 99.9 % lower middle class. Screw you, you greedy bastards!
Congratulations, your generation is the first generation in history to rebel by unsticking it to the man and instead sticking it to the weirdo freak musicians!
I am genuinely stunned by this.
You see how this phrase I quoted earlier — “The product isn’t the problem” — comes up again and again. People love the products of our culture businesses. They are just confused about where they comes from, who makes them, what it takes to make them, and how incentives work in both the short- and long-terms. And technology companies have created the illusion that culture and information should be free, or so cheap that it might as well be. This isn’t sustainable. Already, some creative industries are teetering on the edge of oblivion.
As Levine writes, a market failure is something that rewards behavior that will eventually be bad for the endeavor in general. File-sharing is a market failure. Free online news is a market failure. In all cases, the initiatives deplete, take, and exploit a creative world they do not share in. Sadly, they are probably crippling the exact thing they believe they are making stronger — by draining away financial incentives and advocating a race to the bottom. Levine ends his book with an observation that has a touch of plea to it:
The current situation is slowly robbing the Internet of its potential. Rather than encourage innovation and excellence, it rewards cost-cutting and crowdsourcing. . . . In a functioning market, online media would get better, not just cheaper. And this, in turn, would fuel growth of more technology companies. This wouldn’t break the Internet; it would help it live up to its potential.
Of course, Levine offers some solutions — some of which seem pretty familiar and have been known to work. But to read about those, I suggest you buy the book. After all, that’s part of the solution.
[Corrections: BioMed Central does have society publishing partners of various kinds -- some that endorse journals published there, some that are of the more traditional type. My estimate is that approximately 16% of BMC journals have a society affiliation. I apologize for getting that wrong by speaking in absolute terms. Also, PLoS has started a couple of journals with society affiliations, as well. Again, I apologize for not knowing about these and for speaking in absolute terms. The text has been amended to reflect the spirit of these corrections. However, the overriding points remain regarding Creative Commons' erosion of copyright in practice, the diminution of the value of scholarly publishing at the hands of technology companies, and models that reach directly into research funds for their sustenance.]