The Internet has connected the world as never before. But it’s also given rise to a pernicious entitlement mentality. A whole generation has been conditioned to expect everything for free (and quickly). Websites have long accommodated them by giving everything away. Coupled with the practice of file-sharing, this entitlement mentality is destroying two industries—print media and the recording industry.
The champions of peer-to-peer (P2P) networks and the “commons” movement may purport to stand on principle. But their intent is clear. In his manifesto, “Digital Barbarism,” Mark Helprin adroitly summarizes the file-sharer’s mentality: “Many have now decided that it is impossible not to be entitled to something that is easily and commonly stolen.” What’s yours is naturally mine. How else to explain the mass proliferation of “torrents” and in particular MP3s which, according to one estimate, cost the US economy $12.5 billion annually?
A litany of excuses is offered, typically ensconced in righteous populist anger. The recording industry rips people off. They charge too much for CD’s. They make billions in profits. After all, don’t they deserve what they get? But stealing is stealing, whether from a pauper or a faceless multinational corporation.
For over three centuries, we’ve been accustomed to paying for content indirectly through print, radio, and TV advertising (1704, 1922, and 1941, respectively). The newest medium, the internet, makes the sum of humanity’s knowledge accessible in a keystroke. In turn, this has produced a generation that expects everything quick, easy, and free.
Meanwhile, print media is in a tailspin. For too long, news outlets have given everything away on the web. Yet ad revenue alone won’t sustain this virgin medium, particularly with print on the decline. As Rupert Murdoch stated recently, “The old business model based on advertising-only is dead…though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising.”
An epic clash is unfurling. The “texting generation” feels entitled to everything within their purview for free. They pirate movies and music, and balk at paying for content. But the indirect method of generating revenue won’t last forever. While print media usually combines subscription fees with ad revenue, the web often relies solely on ads. This is a dead end: the old way of doing business online won’t sustain the mass influx of new migrants. In 2009, 367 periodicals closed shop, and 64 went online-only. Without print as its backbone, news organizations will need new methods of generating revenue. The answer is simple: direct revenue generation (i.e. fee-based systems).
It’s coming sooner than you think. The New York Times is about to announce a “metered” pay system. Online readers will be able to sample content before being asked to subscribe. With a giant like the NY Times leading the way, others are sure to follow. True, past attempts to initiate fee-based systems have failed miserably. But advertising alone won’t keep news outlets alive. And for all the merits of the “Pajamas Media”, they can’t survive without a core of professional journalists.
But how should we deal with media piracy? There’s the passive response—offer a more enticing alternative. The best example is the iTunes store, featuring over 200,000 songs, movies, podcasts, audiobooks, and more. Another is amazon.com’s MP3 section. If you make the content easy to find, and price it competitively, people will choose that over piracy (or so the companies hope).
Then there’s the active response—prosecuting violators to the fullest extent of the law. In August ‘09, a federal judge ordered one Joel Tenenbaum, a Boston University grad student, to pay $675,000 to four record labels (30 songs at $22,500 a piece). They were clearly making an example of Tenenbaum, who was described as a "hardcore, habitual" copyright infringer. But movie studios and record labels routinely send threatening letters (example here) to copyright infringers, and in some cases, demand a settlement (usually around $3,000). This is nothing new.
Some governments are taking a heavy-handed approach. On May 13, 2009, France passed the HADOPI law (i.e. the Creation and Internet Law), which sets up a “three strikes” system for copyright infringers. Repeat offenders face loss of internet privileges. The UK is enacting similar legislation in April 2010.
Which response is better? Active or passive? Criminal prosecution will fight the most egregious offenders, but it won’t stem the tide. Pirates (or potential pirates) must see viable alternatives. Offering viable alternatives to stealing should eliminate (or seriously dent) the internet entitlement mentality.
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