In this season of giving, here are two counter-intuitive truths about how Internet music piracy and product knock-offs benefit the original creators.
#1: In November, TechNewsDaily published a story about two studies showing that those who practice Internet piracy, “stealing” all that music, are actually the ones spending more on downloading music. Concerns can still be made as perhaps these pro-piracy people would have bought more had they not taken what they did for free. But I think a wiser take is that the act of listening for free allows a freer flow of new music that wouldn’t have been listened to prior. Once exposed, the listener has the chance to financially compensate the creator–and apparently they do.
More exposure equals more money, and stopping this file-sharing could very well hurt the music (and film, presumably) industry. This leads to this second counter-intuitive truth about piracy.
#2: All those knock-off products–watches, handbags, cell phones–which are also targeted by law enforcement and the makers of the original products for stealing ideas/styles/technology. But according to the book, The Knock-Off Economy, featured here on the Freakonomics Blog shows that these knock-offs actually lead to increased sales of the real items being knocked-off. (In America, it’s harder to imagine this phenomena because we just don’t see that many knock-off products.) But when living in China, I saw stores with nothing but imitation goods. It’s in places like this that the theory holds that the advertising from the knock-off products make the real ones that much more desirable.
I can also imagine that owning that fake, cheap Louis Vuitton hand bag also increases the desire to own the real thing. Or maybe it’s the idea that if something is worth imitating then the real thing must be awesome, and seeing all the fake ones around makes people want the real thing to stand out among all the posers. For whatever reason, it’s true that fighting the knock-offs could mean hurting the makers of the real thing.
In all, we’re realizing a new plateau of the definition of stealing–insomuch as differentiating physical from intellectual property. The grey area that is intellectual property (how can you own an idea, anyway?) results in the grey that is the mixed results of stealing ideas. Sometimes using someone else’s ideas is harmful to the person who came up with them. This I won’t argue. If I write a book and someone else takes it and sells it as their own, I’m the loser. But at the same time, if, say, Time Magazine reprinted an article of mine without permission and sold a ton of magazines, this “theft” would probably help me.
The idea of the intellectual property holder being helped by stealing is in stark contrast to the zero-sum theft that we all imagine: taking your car means one more car for me and one less for you. Ideas are not zero-sum, though. Just because I use your idea doesn’t mean you can’t. In fact, if it’s not used by others, your ideas won’t make you a dime. The fear of letting others use your idea without compensation, whether it’s listening to music for free or making a like product, is understandable. But by getting their ideas out there–even for free, as the two above examples show–it increases the demand for the product at the same time.
This is the model for writers. I write these articles, offer them at no charge to get my name out there, and then use the leverage of any recognition I can manage to find a paying job(s), sell books, or maybe get paid to speak one day.
Technology and a growing, global market is changing our ideas of how non-physical property is compensated. We’re seeing some odd effects of “theft”. As is shown from tech companies like Google, from writers and musicians, and from consultants, one must be a great giver first in order to make money. Google gives away its email, maps service, and tons of other software. Many Internet consultants blog for free, giving away their best tips to gain an audience (and the chance to get exclusive contracts for paid consulting gigs.)
The result is an ever-freeing flow of ideas–whether software, art, or tips to grow your business–available to an ever-growing, worldwide audience. This should lead to great innovation and wealth in the years to come.
to new plateaus,