The economics of digital media and the inevitable future

Since the internet enables people to copy and transfer files with virtually no cost, the supply of a media file is essentially infinite and will be for the foreseeable future since the internet is not going anywhere. According the laws of supply and demand, when something has infinite supply, its price drops to zero and thus has no value. So in a sense, people are downloading music for free because, according to economics, it has no value. Some might protest and argue “Hey you’re wrong, my band XYZ produces very valuable music! Don’t say their music has no value” and you’d be partly correct. However its not the actual music itself that has economic value. Rather, it’s the artist’s raw talent and ability to write and play music that has value. The talent needed to write a new song is in limited supply, and therefore has great value, but once a song has been written, the end result has no value since it can be copied infinitely many times (for all practical purposes).

So what does this mean for the future of digital media in the long term? I think it means we will eventually move to a model where people pay to make use of the artist’s talent, rather than for the music itself. This is already the case for live performances – people pay good money to go watch musicians play in front of a live audience, even though they often already own copies of all the music that the artists play at these events. As for other forms of making money, I expect it to move to a more contract-based model, where people pay money for artists to make a particular song for them. So for example if you have a great idea for an awesome apocalyptic song in your head, you could hire a musician and pay them like 5 thousand dollars to have them make a song to your specifications. This is sort of all ready the case for music for TV shows and commercials, where companies pay musicians to make a certain piece of music for them. That said, artists will still be able to write the music they want to write, though it just might not be as lucrative as writing music for other people.

The (im?)morality of downloading/pirating music

Lets use the foundation of morality I outlined in my previous post to determine if downloading music is moral or immoral. If you purchase a song before or after downloading it for free, then clearly the artist does not lose any money from your illegal download, so it is not immoral in that case. So lets consider the other case:  Suppose you download a song without paying for it. Does the musician suffer any harm? Clearly the action does not inflict bodily harm to them. Does it inflict psychological harm? Sure, if they realize you are downloading their song without paying for it, they may be slightly depressed by the fact, though they likely feel more depressed just reading news headlines in the morning, so your action is essentially negligible with respect to psychological harm. This leaves just one category: Does the action of downloading music illegally inflict material harm?

Well, you didn’t decrease the number of material possessions they own, and you did not take any money out of their bank account, so on the surface it may seem like the answer is “No, downloading music for free does not inflict material harm.” However, if you would have bought the song had you not been able to download it, then you could argue that you robbed them of some potential money, in a sense. However even then its hard to say this action is immoral, because you simple elected to do something neutral (give them $0), rather than do something good for them (give them $x). So in this sense, downloading music for free does as much (or as little) harm to the music artist as walking does for taxi drivers. You can give a taxi driver some money to take you to your destination, or you can walk there for free. Either way – you get to your destination in the end, however in one scenario you give the taxi driver $0 (electing to walk instead), and in the other scenario you give the taxi driver $x (however much it costs to bring you to your destination). I don’t think anyone would argue that walking is an immoral action because it robs a taxi driver somewhere of a potential sale. So it looks like robbing people of potential sales is not an immoral action. Does that mean torrenting Stargate SG-1 is a good and moral thing to do? Not exactly, though to see why we’ll need to look at these actions in a larger context, which I’ll save for another blog post.

Foundations of morality

What is morality? Morality is a set of rules that define what is moral. While many people like to use some sort of religious texts to tell them what is and isn’t moral, I find it much easier to define morality based on a few common sense principles. The easiest way to define what is moral is to define what is not moral. In a nutshell, immoral actions are actions that inflict harm to other sentient beings (for the most part I’ll just talk about people, though these things can also apply to animals). Physically, people are collections of cells. Clearly any action that inflicts harm to this collection of cells is an immoral action. However some of these cells are neurons, which when networked together, constitute the brain, and the brain is the hardware platform that contains and executes the person’s mind. We could then argue that any action which harms the mind, also harms the person, and therefore is an immoral action. Finally, the mind often has a sense of ownership (people generally own a number of material possessions). So we could then argue that any action which harms something owned by the person, causes harm to the mind, and thus indirectly causes harm to the person and therefore is an immoral action. These are the three measures I used to define morality, which can be summed up as: bodily harm, psychological harm, and material harm. Any action that directly or indirectly does harm to one of these three things is immoral. For example, stealing someone’s car would take away their material possession and thus cause them material harm, and it would also give them negative emotions (anger, sadness, etc.) and thus also cause psychological harm. As another example, punching someone would cause bodily harm, and thus would be immoral.

While a complete definition of morality would have to consider cases of imperfect information (i.e. you’re not sure what the consequences of an action are), and also cases where you must choose between two possibly immoral actions (i.e. pick the lesser of two evils), this basic rule set is good enough for the purposes of this blog.

Anyway, its the weekend, so rather than write an entire essay, I’m going to go watch Spiderman 2.