Tag Archives: file sharing

Big bogus ratio

Anti-piracy people are fond of citing the big ratio. They’re talking about the ratio of paid-for music downloads to non-paid-for (i.e. stolen) music downloads. They like the big ratio because it makes things look really bad for the content industry – it dramatises the narrative. Here it is again, in the FT, quoted by Salamander Davoudi and Tim Bradshaw:

For every track bought online, 20 were downloaded illegally last year, according to IFPI, the international music industry lobby group

But the big ratio is, at best, unhelpful and, at worst, utterly misleading.

When they say: “look. N times as many tracks were downloaded illegally as legally. It’s a tsunami, a cataclysm, an [insert apocalyptic noun here].” they’re making a category error. They’re comparing different categories of behaviour: different because each is conditioned by a different price.

There’s no meaningful comparison. Tracks downloaded for nothing are not the same as tracks downloaded at a price. Stuff that can be acquired for nothing is wholly different from stuff that has to be paid for.

Here the wheelbarrow principle applies: if you hear that Tesco’s are selling tins of beans for nothing you’re going to leave the string bag at home and show up with a wheelbarrow. If the works of James Brown are available for nothing you’re not going to download the Best of… You’re going to download all of it. Discrimination, in zero price-world, is redundant. And, of course, that’s not to say that discrimination doesn’t happen any more or even that downloaders don’t practice it. It does and they do. Just not at the point of sale.

And meanwhile, the record labels continue to lean on the big ratio, a bogus comparator that doesn’t help us understand the behaviour of music downloaders and can’t help us measure the crisis for the content industry.

A parable of sorts (about the music business, I feel obliged to point out)

Dolly the cloned Sheep

The year is 1823. Nathaniel Burrell, sheep farmer, has stumbled upon a method for duplicating sheep. To cut a long story short, after years of essentially random cross-breeding he now can produce new sheep on demand at no cost. A quick twist of the tail of one of his miraculous cross-bred sheep and you’ve got a brand new one, just the like the old one, just standing there, blinking.

Burrell keeps the news to himself and makes a handsome turn selling the newly-minted sheep at the local livestock market but pretty soon people notice the smart new horse and cart in the drive and start to wonder where all the extra sheep in his fields are coming from and then a lad spies the whole process from behind a hedge and soon enough everyone knows you can get free sheep up at Nathaniel’s place.

To begin with it’s just the local miscreants but fairly soon everyone’s up there, day and night, picking up free sheep and herding them back to their own fields or back yards or box rooms. Of course, it’s not long before people figure out that the duplicate sheep have the same ability: quick twist, new sheep. Blimey.

So now everyone’s got their own and they’re busy making more for their friends. Nathaniel is pissed off. As far as he can tell, these people are stealing his stuff. “These sheep are mine!” he yells as the vicar and his wife lead four fluffy new sheep down the lane. “What do you mean, they’re yours? They’re free aren’t they?” “Yes, but they’re mine! They’re my invention, my thing!” “Does it cost you anything when I make a new one?” asks the vicar. “Well, no, but they’re still mine. And besides, I make my living from selling these bloody sheep. Nobody’s buying them now are they? Not now they can just twist-and-go!”

“I see your point, friend, but I think you’re barking up the wrong tree. Sheep are free now. I think you’re just going to have to get used to it.”

There follows a period of disquiet, during which Nathaniel makes a spirited effort to persuade the world that these free sheep are all really his. There are ups and downs. He wins a few small victories – various slow-witted judges are persuaded that the duplicate sheep actually belong to farmer Burrell, some people are even punished, although transportation seems a bit rich for the theft of a sheep that even its legal owner doesn’t actually need and even wise judges sometimes changed their minds.

Farmer Burrell even invests a few hundred guineas in an elaborate and annoying system of padlocks and sticks, which he calls SRM (Sheep Rights Management) which is meant to protect his rights by stopping people from making copies of his sheep. But the system is awkward and some people can’t get it to work at all (and it hurts the sheep) so it’s soon abandoned. Nathaniel’s not really winning the argument and the whole time people are just making more and more copies of his precious sheep.

An economist friend comes round one afternoon: “the problem with your sheep is that they’re not rivalrous any more and they have precious little excludability. They’re basically a public good now.” His friend encourages him to give up on the law suits and the nasty letters and the increasingly desperate efforts to stop people from copying his sheep. He’s just banging his head against a wall. The world has changed.

In the meantime, of course, the price of an ordinary sheep, bought in a market or at the farm gate, has fallen to a fraction of its pre-Nathaniel value and a lot of people have decided there’s no point trying to sell them at all. They’re opening innovative lamb restaurants and sheep-based circuses and generally adding value to their essentially worthless livestock. Some are given away free with another recent invention: the newspaper, some are fluffed up and sold as ‘premium sheep’ for ‘sheep collectors’. Nathaniel is resigned.

After a few years, Nathaniel has given up on making money from selling his sheep and now specialises in a range of sheep-themed experiences: a theme park, a line of clothing, club nights. It’s a blast – and he’s even making some money. And since farmer Jackson came up with a way of copying cows and farmer Finch pigs, the whole space has got a lot more competitive and everyone’s more-or-less forgotten the days when you used to have to pay for your sheep. Pay for your sheep!

Pic by Notcub.