“Just 30 minutes after Whitney Houston died, Sony Music raised the price of Houston’s greatest hits album, ‘Ultimate Collection,’ on iTunes and Amazon. Many technologists, including chairman of the NY Tech Meetup Andrew Rasiej, suggests that Sony should be boycotted for the move. In a tweet, Rasiej wrote, ‘Geez Sony raised price on Whitney Houston’s music 30 min after death was announced. #FAIL…We should boycott Sony.’”
via Sony Raises Price of Whitney Houston’s Music 30 Minutes After Death – Slashdot.
We’ve pointed it out numerous times in the past. Despite the rampant piracy, Hollywood and other entertainment industries continue to break revenue and sales records year after year.
In an excellent report commissioned by the CCIA, Techdirt’s Mike Masnick has has made an excellent overview of how well things go in the various entertainment industry sectors.
The report titled “The Sky is Rising” was presented at the MIDEM music business conference earlier today.
A summary of some of the key findings:
* According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.
* Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.
* From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion
* Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.
* BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.
In addition to statistics, the report also lists many of the case studies that we’ve covered here at TorrentFreak, from Paulo Coelho to Louis CK.
In large part, the report is meant to counter the entertainment industry claims that their businesses have been ruined by piracy, and that the Internet has to be monitored and censored.
via What Piracy? The Entertainment Industry is BOOMING! | TorrentFreak.
Signing a deal that makes anyone a net profit participant in a Hollywood movie deal has always been a sucker’s bet. In an era where studios have all but eliminated first dollar gross and invited talent to share the risk and potential rewards, guess what? Net profit deals are still a sucker’s bet. I was slipped a net profit statement below for Harry Potter and The Order of the Phoenix, the 2007 Warner Bros sequel. Though the film grossed $938.2 million worldwide, the accounting statement below conveys that the film is still over $167 million in the red. Text continues below…harry potter net profits
via STUDIO SHAME! Even Harry Potter Pic Loses Money Because Of Warner Bros’ Phony Baloney Net Profit Accounting – Deadline.com.
Q&A: Why money doesn’t motivate file-sharers | Interviews | News | PC Pro
Q&A: Why money doesn’t motivate file-sharers
By Nicole Kobie
Posted on 8 Dec 2010 at 14:11
Piracy is so difficult to battle because file-sharers are motivated by altruism and not financial gain, according to one academic.
Joe Cox, an economist at the Portsmouth Business School, believes file-sharers who post content online see themselves as the “Robin Hoods of the digital age,” according to a study he’s published in the journal Information Economics and Policy.
Such insight could help drive policy and find ways to prevent illegal downloads, he claims. We spoke to him to find out more.
Q. Why did you decide to look at file-sharing?
A. A lot of the academic effort which has focused on file-sharing has been on lost revenues, to say how much the record industry and the film industry has lost as a result of people illegally downloading content.
I was more interested in the behavioural motivations. To me it seems pretty obvious why you might want to illegally download a music track or a film or a video game, but what I was really interested in is the people who make the content available in the first place, because there doesn’t seem to be much to be gained for them, at least not materially. They presumably already bought the material to make it available in the first place.
I called them seeders – it’s a pretty standard term for people who make the material available – distinguishing them from leechers, who just take material from others but don’t give any back. I’ve never seen anything published which looks at those two groups to look at their different motivations.
Q. What was the motivation for seeders?
A. For the leechers, pretty obviously, the major motivation was financial. They wanted to acquire music or films without paying for it because it was cheaper than going out to buy it.
What was interesting was the difference with the seeders, and it was quite apparent that financial motivations were nowhere near as prevelant; it was a kind of altruism.
Their main motivation was that they were seeking notoriety, peer recognition, peer esteem, some sort of feeling of getting one over on the system. It was a much richer tapestry of different things contributing to the decision to go ahead and make the content available.
Q. With that in mind, how should illegal sharing be prevented?
A. The survey data suggested there was a deep-seated belief that this type of activity shouldn’t be illegal, that there was no criminal act involved.
That makes it very hard to deter with advertising to suggest that you’re funding piracy, that you’re a cheap knock-off merchant, because they believe what they’re doing is morally right. And it’s these guys that record labels and movie studios are most interested in getting to. They’re the source.
Q. You’ve said the Digital Economy Act won’t work, so what do you suggest?
A. Technology has developed to such a point now that you can’t turn back the clock and you can’t change the digital revolution – it’s a bit like King Canute trying to halt the advance of the tides.
I think there needs to be a more radical rethink in how the arts and the creative industries are funded.
The phenomena of the record label and the movie studio pretty much come into their own in the 20th century and I think they are a 20th century phenomena. Before that opera, ballet, and music were funded on a system of patronage.
I think we need to consider potential funding from the public sector. Coming at this from an economics perspective – I’m an economist – we have a particular type of common good that we look at, called a public good.
I would argue that these days music and movies are public goods: you can’t really exclude people from using them
The characteristics of this are you can’t exclude people from enjoying the benefits of it if they don’t pay for it, and if any one person consumes the good it doesn’t affect anyone else’s ability to consume it too. Classic examples are things like street lighting or national defence.
I would argue that these days music and movies are public goods. You can’t really exclude people from using them. The internet is giving them the availability to share this material at will and it’s virtually impossible to stop that. And with the digital nature of material, you can make perfect reproductions and share it to others.
What economists say will happen if you have a public good and look to the free market, the market won’t provide any output because everyone will just look to free-ride, and not pay themselves. But if no-one pays the good doesn’t get produced.
Q. And public funding is the way to get around that?
A. With street lighting or national defence, these are things that government funds through taxation. It would probably be a bit radical to say the government should fund the creative industries through taxation, but there are creative ways knocking around at the moment.
For example, you could try introducing non-commercial use levies on iPods or DVD players. It’s a lump sum you would pay over and above the purchase price when you buy the device, with the understand that you’re going to use it to access digital content.
If that money was collected into a pot, it could be distributed to record labels and movie studios to give proper compensation to rights owners. And then there could be a relaxation on how people access the material. You could keep track of downloads to make sure the most popular artists get the most money.
Internet piracy taking big toll on jobs | Reuters
A study into Internet piracy by a Paris-based consultancy published on Wednesday showed that 1.2 million jobs in the European Union could be lost over the next five years if more is not done to clamp down on illegal downloading.
The study by TERA Consultants for the International Chamber of Commerce focused on piracy in Europe’s music, film, television and software industries.
Those industries generated 860 billion euros ($1.186 trillion) and employed 14.4 million people in 2008. But in the same year, 10 billion euros and 186,000 jobs were lost to piracy, the study found.
If that trend continues — and the rapid increase in illegal downloads and advancing piracy techniques suggest it will — then up to 1.2 million jobs and 240 billion euros worth of European commerce could be wiped out by 2015.
“In the near future and even today in 2010, we observe increasing bandwidth, increasing penetration rate in terms of the Internet,” said TERA Consultant’s Patrice Geoffron, explaining that piracy was only likely to escalate.
“If we combine all those elements, obviously the impact in a few years won’t remain stable compared to what it was in 2008.”
ARTISTS SUFFER
The bulk of illegal downloading targets music, television and video sites, with consumers using “peer-to-peer” formats to download songs and video clips onto their laptops and home computers from websites without paying a fee.
In that respect it has a disproportionate impact on the creative industries, with musicians, actors and artists standing to lose the most from unfettered downloading, experts say.
Agnete Haaland, the president of the International Actors’ Federation, believes consumers need to be made more aware of the damaging economic and social impact of their illegal activity.
“We should change the word piracy,” she told reporters at the unveiling of the report on Wednesday.
“To me, piracy is something adventurous, it makes you think about Johnny Depp. We all want to be a bit like Johnny Depp. But we’re talking about a criminal act. We’re talking about making it impossible to make a living from what you do,” she said.
Haaland, whose group supported the study, said one of the best ways to reverse the situation would be stricter EU legislation to enforce existing laws against piracy.
Broadband consumers to foot £500m bill to tackle online piracy – Times Online
Proposals to suspend the internet connections of those who repeatedly share music and films online will leave consumers with a bill for £500 million, ministers have admitted.
The Digital Economy Bill would force internet service providers (ISPs) to send warning letters to anyone caught swapping copyright material illegally, and to suspend or slow the connections of those who refused to stop. ISPs say that such interference with their customers’ connections would add £25 a year to a broadband subscription.
Ministers have not estimated the cost of the measures but say that the cost of the initial letter-writing campaign, estimated at an extra £1.40 per subscription, will lead to 40,000 households giving up their internet connections. Impact assessments published alongside the Bill predict that the measures will generate £1.7 billion in extra sales for the film and music industries over the next ten years, as well as £350 million for the Government in extra VAT.
ISPs have called on the content industries to lessen the burden on broadband consumers by contributing to the costs. Charles Dunstone, chief executive of Carphone Warehouse, whose subsidiary TalkTalk is the biggest consumer provider of broadband, said: “Broadband consumers shouldn’t have to bail out the music industry. If they really think it’s worth spending vast sums of money on these measures then they should be footing the bill; not the consumer.”
Related Links
* Internet pirates will be cut off from 2011
* Piracy means less money to make films
* Mandelson targets web piracy after meal with mogul
BT also stepped up its attack on the plans, which it said represented “collective punishment that goes against natural justice”. John Petter, managing director of BT Retail’s consumer division, said: “Put yourself in the shoes of a small businessman who has a rogue member of staff. Your internet access could get cut off because of the actions of one individual. It really feels like the UK is out on a limb with these proposals compared to the rest of the world.”
Mr Petter said that the Bill, which is being rushed through Parliament before the general election next year, had been poorly thought out. He said: “The whole tenor of the way this is being introduced makes us really worried that this is all a false game. It’s like the dangerous dogs legislation, which was introduced quickly and was not effective.”
The Conservatives, who are broadly supportive of the plans, also called on the Government to spare consumers the bulk of the costs. Jeremy Hunt, the Shadow Culture Secretary, said: “It is grossly unfair that Labour expects millions of innocent customers to pay extra each month because of the actions of a minority. By their own admission this will make broadband unaffordable for tens of thousands of people, which flies in the face of government policy to increase take-up in disadvantaged communities.”
A spokesman for the Department for Business, Innovation and Skills said: “Many of the figures in the impact assessment for the Digital Economy Bill are expressed in ranges and some of the costs will be borne by the rightholders and some by the ISPs. The overall benefits to the country far outweigh the costs.”
A spokesman for the BPI, which represents the record industry, said: “It is in everyone’s interest that ISPs’ statutory obligations can be discharged as cost efficiently as possible — particularly those law-abiding broadband customers who currently carry the burden of infringers.
“We are confident that those costs will be a mere fraction of the stratospheric sums suggested by some ISPs, and negligibly small when set against their vast annual revenues.” The latest Star Trek movie was dowloaded illegally almost 11 million times this year, according to Torrentfreak, a download-monitoring weblog.
This year the FBI started an investigation after an unfinished version of X-Men Origins: Wolverine, was posted online and watched by thousands of people a month before its release.
p2pnet news » Blog Archive » RIAA v Tenenbaum: what might have been
Quoted in the Harvard Law Review, he was referring to the Joel Tenenbaum vs the RIAA farce, going on the final judgment was “both disappointing and absurdly excessive”.
Beyond Binary – CNET News
Of all the losses suffered by the music industry, one of the biggest may be the fact that nearly all of the investors that once were building digital music services have moved on.
“There are not a lot of entrepreneurs involved in this space,” said David Pakman, a music industry veteran and now venture capitalist at Venrock Associates.
By Pakman’s count, there have been 109 venture-backed digital music start-ups. Fewer than five, though, produced a substantial return, he said.
“Investors lost a lot of money in this space,” he said, speaking on a breakfast panel at the Fortune Brainstorm: Tech conference here. The loss for the industry, he said is that entrepreneurs have moved on to areas like Twitter and Facebook.
The Becker-Posner Blog
Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.
I wonder if Judge Posner will stop writing his blog because I linked to his post.
BBC NEWS | Technology
YouTube will not reverse its decision to block music videos to UK users despite a plea from the Performing Rights Society to change its mind.
It is removing all premium music videos to UK users after failing to reach a new licensing agreement with the PRS.
Patrick Walker, YouTube’s director of video partnerships said it remained committed to agreeing terms.
But such agreement needed to be done “at a rate which is sustainable to all”, he told the BBC.
Thousands of videos were made unavailable to YouTube users from late on 9 March.
Patrick Walker, YouTube’s director of video partnerships, told BBC News that the move was “regrettable” but that it continued to talk to the PRS.
“The more music videos YouTube streams, and the more popular those music videos are, the more money YouTube will generate to share with the PRS and its song writers. It’s a win-win arrangement.
YouTube, however, cannot be expected to engage in a business in which it loses money every time a music video is played – that is simply not a sustainable business model.” he said.
Steve Porter, head of the PRS, said he was “outraged… shocked and disappointed” by YouTube’s decision.
In a statement, Mr Porter said the move “punishes British consumers and the songwriters whose interests we protect and represent”.
The PRS has asked YouTube to reconsider its decision as a “matter of urgency”.
This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties
PRS statement
The body, which represents music publishers, added: “Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing.
“This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties.”
The Music Publishers Association (MPA) joined with the PRS is urging Google to rethink.
“Music publishers are in the business of getting their music heard by as wide an audience as possible, and websites such as YouTube rely on this music to attract traffic. It is difficult to see how anyone’s interests are served by denying the YouTube community the content they most enjoy,” said MPA chief executive Stephen Navin.
Lord Carter, the UK’s Minister for Communications, Technology and Broadcasting, has also waded into the debate.
Giving evidence before the Business Select Committee the minister said he suspected a degree of “commercial posturing on the part of both parties” but said the row was indicative of a wider issue.
“It is an example of the question of how do you price and fund content in the digital world?” he said.
“We have had decades of content being funded in one way – via the license fee and advertising – and that model is changing at a rapid speed,” he told MPs.
Mr Walker told BBC News the PRS was seeking a rise in fees “many, many factors” higher than the previous agreement.
He said: “We feel we are so far apart that we have to remove content while we continue to negotiate with the PRS.”
“We are making the message public because it will be noticeable to users on the site.”
Consumers must be scratching their heads in amazement at such obstacles to delivering legal content in a timely and straightforward fashion.
Darren Waters, Technology editor, BBC News website
Read more on the Dot.Life blog
The majority of videos will be made inaccessible over the next two days.
YouTube pays a licence to the PRS which covers the streaming of music videos from three of the four major music labels and many independent labels.
Stream online
While deals with individual record labels cover the use of the visual element and sound recording in a music video, firms that want to stream online also have to have a separate deal with music publishers which covers the music and lyrics.
In the UK, the PRS acts as a collecting society on behalf of member publishers for licensing fees relating to use of music.
YouTube stressed that it continued to have “strong partnerships” with three of the four largest record labels in the world.
Mr Walker said the PRS was asking for a “prohibitive” rise in the cost of a new licence.
While not specifying the rate the PRS was seeking, he said: “It has to be a rate that can drive a business model. We are in the business for the long run and we want to drive the use of online video.
“The rate they are applying would mean we would lose significant amounts of money on every stream of a music video. It is not a reasonable rate to ask.”
New deal
YouTube has also complained of a lack of transparency by the PRS, saying the organisation would not specify exactly which artists would be covered by any new deal.
“That’s like asking a consumer to buy a blank CD without knowing what musicians are on it,” a statement from YouTube UK says on its official blog.
YouTube is the world’s most popular online video site but has been under increased pressure to generate more revenue since its purchase by Google for $1.65bn in 2006.
“We are not willing to do this [new licensing deal] at any cost,” said Mr Walker.
He said the issue was an industry-wide one and not just related to YouTube.
“By setting rates that don’t allow new business models to flourish, nobody wins.”
Services such as Pandora.com, MySpace UK and Imeem have also had issues securing licence deals in the UK in the past 12 months.
Newswise Business News
Abolishing patent and copyright law sounds radical, but two economists at Washington University in St. Louis say it’s an idea whose time has come. Michele Boldrin and David K. Levine see innovation as a key to reviving the economy. They believe the current patent/copyright system discourages and prevents inventions from entering the marketplace. The two professors have published their views in a new book, Against Intellectual Monopoly, from Cambridge University Press.
“From a public policy view, we’d ideally like to eliminate patent and copyright laws altogether,” says Levine, John H. Biggs Distinguished Professor of Economics. “There’s plenty of protection for inventors and plenty of protection and opportunities to make money for creators. It’s not that we see this as some sort of charitable act that people are going to invent and create things without earning money. Evidence shows very strongly there are lots of ways to make money without patents and copyright.”
Levine and Boldrin point to students being sued for ‘pirating’ music on the internet and AIDS patients in Africa dying because they cannot afford expensive drugs produced by patent holders as examples of the failure of the current system. Boldrin, the Joseph Gibson Hoyt Distinguished Professor in Arts & Sciences and Chair of the economics department says, “Intellectual property is in fact an intellectual monopoly that hinders rather than helps the competitive free market regime that has delivered wealth and innovation to our doorsteps.”
The authors argue that license fees, regulations and patents are now so misused that they drive up the cost of creation and slow down the rate of diffusion of new ideas. Levine explains, “Most patents are not acquired by innovators hoping to protect their innovations from competitors in order to get a short term edge over the rest of the market. Most patents are obtained by large corporations who have built portfolios of patents for defense purposes, to prevent other people from suing them over patent violations.”
Boldrin and Levine promote a drastic reform of the patent system in their book. They propose the law should be restored to match the intent of the U.S. Constitution which states: Congress may “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writing and discoveries.”
They call on Congress to reverse the burden of the proof on patent seekers by granting patents only to those capable of proving that:
• their invention has social value
• a patent is not likely to block even more valuable innovations
• the innovation would not be cost-effective absent a patent
The authors acknowledge that such drastic reform is unlikely and outline an incremental approach for Congress to gradually reduce the scope of patents, regulation and licensing.
Nevertheless, their call for changing the system is urgent. The economists compare intellectual monopoly (patents) to medieval trade monopolies which were proven to be economically detrimental. They write, “For centuries, the cause of economic progress has identified with that of free trade. In the decades to come, sustaining economic progress will depend, more and more, on our ability to progressively reduce and eventually eliminate intellectual monopoly.”
Professors Boldrin and Levine maintain a blog on this topic: www.Againstmonopoly.org.
22 December 2008 – New Scientist
Will Page and Gary Eggleton at the MCPS-PRS Alliance – a UK body that collects royalties for musicians when their songs are played on air or downloaded – and Andrew Bud from the cellphone software company mBlox have analysed a year’s worth of downloads from a well-known internet music store. They found that of the 13 million tracks available, 52,000 – just 0.4 per cent – accounted for 80 per cent of downloads.
Slyck News
If you could total the quantity of unlicensed tracks within the vastness of the P2P community, then apply a reasonable fee to those tracks, you would end up with a very large monetary number. $10 billion? $50 billion? Just how much untapped money, relevant to the music industry, is circulating in the P2P community? MultiMedia Intelligence, who recently stated P2P growth will top 400% in 5 years, has pegged a monetary number to unlicensed music. The number: $69 billion.
Ars Technica
If you pay any attention to the endless debates over intellectual property policy in the United States, you’ll hear two numbers invoked over and over again, like the stuttering chorus of some Philip Glass opera: 750,000 and $200 to $250 billion. The first is the number of U.S. jobs supposedly lost to intellectual property theft; the second is the annual dollar cost of IP infringement to the U.S. economy. These statistics are brandished like a talisman each time Congress is asked to step up enforcement to protect the ever-beleaguered U.S. content industry. And both, as far as an extended investigation by Ars Technica has been able to determine, are utterly bogus.
Wired 13.01:
Anathema is a so-called topsite, one of 30 or so underground, highly secretive servers where nearly all of the unlicensed music, movies, and videogames available on the Internet originate. Outside of a pirate elite and the Feds who track them, few know that topsites exist. Even fewer can log in.
HEXUS.gaming
On receiving an honorary doctorate from Queen’s University Belfast last week for his services to computer gaming, the Northern Irish video game developer, David Perry, whose creations include Earthworm Jim, MDK, Messiah , Wild 9 and Enter the Matrix, believes that the Western games industry will eventually combat piracy problem by offering games for free.
Perry believes that the western world will soon follow the same business model that has worked well in Asia, where software is offered as a free download and revenue is made from micro-payments for extras such as new characters and weapons.
Speaking in Belfast after his award, Perry said:
“They had so much piracy that they decided to stop charging for the games. Instead, there’ll be a charge for things you might want to use in the game.”
“Your character might have a plain white T-shirt. If you wanted a nicer one you could have it for a dollar. Or perhaps you could buy a magic sword for a knight for a dollar.”
Though the idea may sound far-fetched, EA has already paved the way for the invasion of free games into the Western world by launching its ‘Play 4 Free’ business model and its first free game, Battlefield Heroes, due for release this summer.
It remains to be seen whether others will follow, but with an estimated £2bn lost every year due to piracy, developers may not have much of an option.
IBNLive
Mumbai: TV actor Rajeev Khandelwal, who’s basking under the success of his debut in recently released film Aamir, is now on a mission to stop piracy. The actor recently released the DVD and VCD of his power-packed film.
“You can easily get pirated DVDs in the market, which is really unfortunate. So I feel it makes sense to release the original DVD of the film even while it’s still in theatres,” Rajeev said.
“The film is still hot and there will be many people who would like to keep this as a collectors item. I think it is a wise decision because the market is probably already flooded with the pirated DVDs,” the actor added.
TorrentFreak
Jesse Alexander has co-produced and written for both ‘Heroes’ and ‘Lost’, two of the most successful TV-series today. In addition to millions of viewers on TV, both shows are are also extremely popular on BitTorrent. In fact, millions of people share a single episode and this can go on to 10 million downloads per episode.
One could argue that their availability on BitTorrent actually helped ‘Lost’ and ‘Heroes’ to build a stronger fanbase. With torrents, no-one has to miss an episode anymore which keeps the fans more engaged. So called “pirates” advertise the shows to their friends, or write about it on their blogs. Accordingly, when we asked Jesse Alexander whether he thinks that BitTorrent might have helped to reach a broader audience, he answered with a clear cut “Yes”.
Not that Jesse wants everybody to get the shows off BitTorrent, but he said that it certainly signals that there is a market for on-demand and interactive TV. “People watching shows such as Lost and Heroes on BitTorrent is the present world reality,” Jesse told TorrentFreak. TV networks have to recognize this, give their viewers more ways to interact with the shows, and find ways to generate revenue from every member of the global audience.”
“It’s the same for music artists. The reality is, people share music. Artist now make money by driving people to concerts, through community websites, and by offering exclusive events. TV networks are focusing too much on one exclusive product, instead of building a community. This is a mistake I think.”
The success of Heroes on BitTorrent didn’t pass by the cast of the show unnoticed either. “The cast and the people behind the scenes have all been talking about it,” Jesse said. As an example he mentioned last year’s promotional tour in France, where the actors were recognized by hundreds of fans, even though the show had not even premiered on TV yet.
Alexander has hit the nail on the head. This is in fact one of the main reasons why shows like ‘Heroes’ are so popular on filesharing networks. It can take up to six months after the US premiere before these shows are aired in Europe, Australia and other parts of the world. Jesse agreed that this is indeed one of the major causes of piracy. “This gap is something that is certainly going to change in the future,” he added.
Jesse went on to say that in the near future, thanks to the Internet, the viewers of TV-shows will see more interactive components and alternate realities they can participate in. The future of TV will be more international, with real interaction, and shows will be more and more integrated into the core part of an online community.
When we asked Jesse if he has ever downloaded TV-shows off BitTorrent, he told us: “I can’t confirm or deny, but I’m familiar with all kind of new technologies.” I guess we all know what he’s trying to say.
It is no surprise that Jesse is more positive towards new technologies than some others in the entertainment industry. Last week we reported on the upcoming “Pirate TV” show that he is working on, together with Matt Mason, the author of ‘The Pirate’s Dilemma’.
“Matt’s book needs to get a broader audience,” said Jesse. “We want to discuss the negative and the positive side of piracy, and place things in a broader historical context. We want to start a real conversation about the future of intellectual property.”
We’re happy to join the debate, what about you?
Science Journal – WSJ.com
We all bristle at people who put themselves ahead of the common good, whether it is by evading taxes, shirking military service, cheating on bus fares or littering. Many of us will go out of our way to shame, shun or otherwise punish them, researchers have shown. That’s how we foster a community that benefits everyone, even at some cost to ourselves.
Economists analyzing ingredients of the social glue that holds us all together wonder whether that public spirit of rebuke and reward is an innate human value or a byproduct of the particular society in which we live. Until recently, however, they rarely have reached across cultural boundaries to compare how people in disparate communities actually weigh private gain against public good.
In the most sweeping global study yet of cooperation, a team of experimental economists tested university students in 15 countries to see how people contribute to joint ventures and what happens to them when they don’t. The European research team discovered startling differences in how groups around the world react when punishment is handed out for antisocial behavior.
WSJ’s Robert Lee Hotz speaks to Kelsey Hubbard about an important study that looked at how people responded to peer pressure in cooperative ventures across many societies.
In some countries, researchers found, almost no good turn went unpunished. “What kept popping up is this element of retaliation,” said economist Benedikt Herrmann at the U.K.’s University of Nottingham, who reported the experiment this past March in Science. “It took us by surprise.”
Among students in the U.S., Switzerland, China and the U.K., those identified as freeloaders most often took their punishment as a spur to contribute more generously. But in Oman, Saudi Arabia, Turkey, Greece and Russia, the freeloaders more often struck back, retaliating against those who punished them, even against those who had given most to everyone’s benefit. It was akin to rapping the knuckles of the helping hand.
To explore cooperation across cultures, Dr. Herrmann and his colleagues recruited 1,120 college students in 16 cities around the globe for a public-good game. The exercise is one of several devised by economists in recent years to distill the complex variables of human behavior into transactions simple enough to be studied under controlled laboratory conditions.
The volunteers played in anonymous groups of four. Each player started with 20 tokens that could be redeemed for cash after 10 rounds. Players could contribute tokens to a common account or keep them all to themselves.
After each round, the pooled funds paid a dividend shared equally by all, even those who didn’t contribute. Previous research shows that a single selfish individual riding on the generosity of others can so irritate other players that contributions soon drop to nothing.
That changes when players can identify and punish those who don’t contribute (in this case, by deducting points that can quickly add up to serious money). Once such peer pressure comes into play, everyone — including the shamed freeloader — starts to chip in.
“Freeloaders are disliked everywhere,” said study co-author Simon Gachter, who studies economic decision-making at Nottingham. “Cooperation always breaks down if people can’t punish.”
The students behaved the same way in all 16 cities until given the chance to punish those taking a free ride on the shared investment. Punishment was done anonymously, and it cost one token to discipline another player.
Among those punished, differences emerged immediately. Students in Seoul, Istanbul, Minsk in Belarus, Samara in Russia, Riyadh in Saudi Arabia, Athens, and Muscat in Oman were most likely to take revenge by deducting points from other players — and to give up a token themselves to do it.
“They didn’t believe they did anything wrong,” said economist Herbert Gintis at New Mexico’s Santa Fe Institute. And because the spiteful freeloaders had no way of knowing who had punished them, they often took out their ire on those who helped others most, suspecting they must be to blame.
Such a readiness to retaliate, researchers said, reflected relatively lower levels of trust, civic cooperation and the rule of law as measured by social scientists in the World Values Survey, which periodically assesses basic values and beliefs in more than 80 societies. In countries with democratic market economies, peer pressure goaded people to cooperate. Among authoritarian societies or those dominated more by ties of kinship, freeloaders instead lashed out at those who censured them, the researchers found.
“The question is why?” said Harvard political economist Richard Zeckhauser.
No one is sure. The freeloaders might be angry at being trumped by strangers, or be unwilling to share with people they don’t know. They also might believe they are being treated unfairly.
But social appearances and the good opinion of others do regulate our behavior. In the only other major cross-cultural study of this sort, Dr. Gintis and his colleagues several years ago examined 15 primitive societies of farmers, foragers, hunters and nomads in 12 countries, not unlike those in which humanity might have first evolved. The researchers found that these people all cared as much about fairness as the economic outcome of a trade. “They care about the ethical value of what they do,” said Dr. Gintis.
Independent brain-imaging teams in Japan and the U.S. have shown just how valuable approval can be, as they reported in April in Neuron. Researchers at Japan’s National Institute for Psychological Sciences found that when they watched the brain respond to reputation and social status, the excited synapses looked awfully familiar: They were the same ones activated by money.
The researchers also ranked the national responses against the World Values Survey4, which periodically assesses values and cultural changes in societies all over the world. Searching for the
origins of economic behavior, an international research team studied 15
primitive cultures in 12 countries and reported their findings in
Techdirt:
I’ve been noticing an interesting trend lately. While more folks aren’t totally averse to the idea that they need to somehow embrace “free,” they’re mishandling what they do with “free” and then going on to complain how “free” doesn’t work. The basic problem is this: they hear about the importance of “free” and so they give something away for free. But they don’t have a business model around the free content. They don’t understand the economic forces at work. They just give stuff away and pray… and then whine when nothing happens. As we’ve pointed out before, no one says that “free” by itself pays the bills. You need to have a more complete strategy than that — and it involves a lot more than “give it away and pray.” It’s good that they’re at least trying, but if they don’t understand the real issues and fail at the experiments, they suddenly come back and claim that “free” isn’t the answer, and suddenly rule out all business models involving free. And that is a real recipe for failure.
|
