Mother of Invention

I met an old colleague, Malcolm Dick, for a cup of tea this morning, and he pointed me towards a story that’s been going around for about five years or so.

It’s about Frank Zappa, and about an article he is apparently credited with writing in 1983, headlined A Proposal For a System to Replace Ordinary Record Merchandising. You can see a copy of the article here.

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Did he write it? I don’t know. I’ve ordered a copy of the book it is meant to be included in, so that I can tell for sure. In the meantime, whether he wrote it or not, it’s worth reading just for the sentiments in the article.

It matters to me because I’m intrigued by all manner of things to do with piracy: the arguments, the characters, the rumours, the downright lies, the posturing and gaming.

Take Rolex watches for example. Not the ones you buy from Rolex, but the ones available in China and Hong Kong and Singapore. The ones that cost you maybe $20.

Let’s figure this out. First, let’s take the person that pays $20 for a “Rolex”. Does he think he’s really buying a Rolex? Come on. So now think about Rolex the company. Does Rolex think that a buyer of a $20 “Rolex” is really in the market for a Rolex? I hope they’re smarter than that. So a person buys a product which he knows is not a Rolex, at a price which he knows is not a Rolex price, from someone who is not Rolex, and all the time Rolex knows that the buyer is not ever ever ever likely to become a customer for a real Rolex.

There’s even a replica Rolex market, selling stuff like this, for pretty stiff prices:

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The kind of fakes sold by Fancy Fakes retail at around 3-4 iPhones; that’s real money in any language. But it’s not Rolex money.

Sometimes I’ve thought that people like Rolex should take a leaf out of Paolo Coelho’s book (pun intended):

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Paolo is a great guy. Not just a great read, a great guy. The first time I met him, he told me all about Pirate Coelho, the “pirate” site for his blog. How he got into trouble for helping people run the site, and for recommending the site to people. In fact, he goes so far as to link to pirate download sites from his official site.

Somehow, I don’t think that Rolex will try and quantify each fake Rolex sold as Rolex revenue lost. I think the same is true for a lot of “pirate” films. People pay for quality. Does someone who pays $5 for a pirate DVD really count as being in the market for a $40 version. Perhaps, but I’m not that sure. I’ve never bought a pirate DVD. Nor do I intend to. I can afford to pay the going rate, and if I don’t like the rate I won’t buy it. Full stop.

When film piracy takes place in the Far East and in India, at least part of the reason for the piracy may be the economic one; a false market created by a false price. But I tend to think there’s a deeper reason, one of “artificial abundance”. I have maintained for some time that every artificial scarcity will be met by an equal and opposite artificial abundance. I have, similarly, maintained that the most retrograde and fundamentally stupid invention I have seen in recent years is the region code on a DVD. Which customer was that for? Which customer finds that useful? Puh-leese. Nothing more than a futile attempt to extend the life of a yesterday geographical business model at the expense of the customer.

Which brings me to the kernel for this post. A few days ago, I read an unusual article on BBC. Headlined Top 40 faces new digital shake-up, it contained the following chart:

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30.89m singles sold in 2003. 115.14m singles sold in 2008. This, despite recession and despite alleged piracy on gargantuan levels. Such levels that people are prepared to criminalise large swathes of humanity to stop the “crimes”. Intriguing, no?
I’ve seen some interesting stats for book publishing as well, stats that suggest that we would all do well to absorb Kevin Kelly’s majestic Better Than Free article.
There’s a lot of hype out there about “piracy”. There are a lot of people out there who are not pirates. There are a lot of people who spend a lot of money buying legitimate goods; there are some people who don’t. There are also a lot of broken business models out there, and the dialogue needs to change. People like Terry Fisher have been trying to change that dialogue for a while now, and need to be read and understood.

11 thoughts on “Mother of Invention”

  1. Great Article, JP.
    I don’t agree on one thing: a 40$ DVD is not much better than a 5$ DVD.
    I completely agree on everything else.
    The point is, how can consumers kill old business models? The conversation, of course, but the conversation is slow, and companies adapt and evolve. Old business models are hard to kill :)

  2. Hey! I bought a knock-off Rolex many years ago in Malaysia for a trivial price because I really liked the look of the “Sub Date”.

    When my “pockets were deeper” I bought the real thing from a Jewellers in Vienna on a whim for about £2k.

    I really doubt I’d have bought the real Rolex had I not seen, and worn, a fake previously.

  3. @simone, thanks for stopping by. I guess I have this perception that pirated DVDs are poorer quality than the real ones, maybe that’s the power of the anti-piracy advertising in the cinemas.

  4. @Julian, thanks for the comment. I had seen the article, it’s definitely worth sharing. There is a growing body of evidence that economics-of-abundance pays off in the music and publishing businesses. Hollywood has yet to be convinced.

  5. @opensourcerer that’s a logical conclusion and a worthwhile twist. Someone who buys a ripoff item, at a time when the real thing is unaffordable, may well become a customer for the more expensive item at a later more affordable stage. That’s an even better reason for Rolex to manage their fakes. There has to be a market for official Rolex fakes.

  6. @JP when I was younger I often wondered if some of the big vendors weren’t ‘managing the market’ in official fakes of their development tools.
    In the early 90s, it was very expensive to start doing development, yet we saw an explosion of VisualBasic applications, most of which were written by the young and not particularly wealthy. Some of those have gone on to be the most powerful of evangelists for the platform…

    Today, of course, open source has changed all that – you download Eclipse or NetBeans; you install linux. Eventually you might pay for IntelliJ or TextMate.

  7. I share your fascination and this was very well written ?

    Beside the topic though I sometimes wonder if the good Coelho knows about the background of The Pirate Bay men. I suppose he does since he seems a sincere person and even wanted to come and witness in their benefit.

    Two of them Neij and Svartholm Warg used to run a webb-hostel called PRQ that hosted a site where paedophiles could share information: http://www.pedofil.se. PRQ also hosted another site who sold illegal drugs such as GBL to minors. The police eventually was able to shut it down. In 2008 they got rid of PRQ but a journalist friend tells me they still run it via others. To me this somehow makes their talk about free culture hypocritical.

    One other of the men charged, the capitalist Carl Lundström who provided the money for the original set up for TPB is a rightwing extremist bound to The National Democrats who is working for keeping Sweden to the Swedes.

    This seems far away from Coelho’s values but perhaps he considers it as different things?

  8. Niklas, I don’t know much about the background of the TPB men, but I think you run the risk of being somewhat unfair.

    PRQ distinguished itself from its competition by being willing to host “anyone”, as a formal expression of the right to freedom of speech. They indicated that they were willing to host anyone and anything as long as it was within Swedish law, at least that’s the way I have usually interpreted their stance.

    There are always risks to such a position, and you list some of them. I don’t believe there is any evidence that any of the Pirate Bay people have any real and direct links to the sites you mention.

    As far as Lundstrom is concerned, I think people are aware of his right wing links in the past; he has apparently kept away from such activities since 1992. But anyway is that material to what is happening with TPB now?

    I think we need to concentrate on the *principles* behind TPB rather than the *personalities*. Otherwise we will find it harder to make progress.

    Thank you for taking the time to comment, I hope my response is of value.

  9. You have been misinformed. There is no doubt that they set up and owned PRQ, it is known and they have never denied it. The number listed for PRQ in the catalogue still goes to Svartholms old number. Here the largest swedish paper writes about it: http://www.dn.se/kultur-noje/pedofilsajt-tar-skydd-av-lagen-1.598221

    There has been rage among parents whose children have bought drugs through “Rena Hjul” it was very cleverly disguised as something else and it took some time for the police to shut it down. One mother was invited to my teenage daughters school to tell about her 15-year-old daughter who was hospitalized and damaged since using GBL she had bought at “Rena hjul”. The site that was hosted by PRQ who was owned by Svartholm Varg and Neij until 2008.

    And of course you know that the two of them was charged for possession of drugs and theft from a school at the same time they were charged in TPB – case.

    Lundström still holds these political views and he is perfectly entitled to them, we are all democrats I hope. This is still what he thinks and says. He is not a racist but as many in Europe he does not want immigration. The assault case he was convicted in is since the 90s though.

    I don’t understand in who’s interest one ought to withhold this information? I think it is very naive to see these people as moral highstanders, they are quite ordinary capitalists only prepared to go a bit further.

    I understand what you are saying but to me ethics are always of importance and when it comes to freedom, including freedom of speech I can no longer call it that when this kind of hurt for others might be the result.

    But as I understand you see it as their personalities and not of interest in the important work to break up copyright laws, Coelho perhaps thinks the same.

    Have a splendid day ?

  10. I am sorry I wrote a smiley who turned a ?.

    I do wish you the very best day and I always read your blog.

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