The Shame Factor August 30, 2012Posted by Bill Rosenblatt in Economics, Music.
Larry Lessig’s first book, Code and Other Rules of Cyberspace, is a landmark work in many respects. One of the less-mentioned ones is his description, starting on p. 88, of the four forces that govern cyberspace (or any other environment that humans inhabit or interact with): the market (economics), architecture (technology), people’s behaviors (norms), and laws (self-explanatory). This insight is an infinitely powerful tool for evaluating the digital world and attempts to influence the way it works.
In the world of content, we can view attempts to enforce copyright and uphold the value of creative works through the framework of Lessig’s four forces. At one time or another, pro-copyright interests fight the battle on all four fronts: they support new business models that “compete with free” (the market), they try to implement technologies that limit what users can do with content or monitor cyberspace for copyright abuses (architecture), they try to educate consumers on behavior regarding copyrighted material (norms), and they litigate or lobby for stronger copyright protections (laws).
Most of what we talk about here is some combination of market, architecture, and legal factors. The norms front has been both uninteresting and ineffective: it consists mainly of copyright holders’ desires to “make it easy to do the right thing” (through arms-length licensing deals with third parties that have other agendas, e.g. profit) and preachy educational campaigns (through trade associations that no one trusts).
Now David Lowery, of “Open Letter to Emily White” fame, has come up with what might just be the first interesting twist on norms: shaming big businesses. In his blog The Trichordist, he has written a series of posts that all follow the same template: “[Musician with Artistic Cred] Exploited by [Name-Brand Companies]!!” The musical artists with critical/indie cred have included Peter Gabriel, Neko Case, Aimee Mann, Neil Young, Jared Leto, Talib Kweli, and Tom Waits; the name-brand companies have included Volkswagen, LG, Ford, Target, Macy’s, Levi’s, Wells Fargo, BMW, Toyota, American Express, AT&T, Wendy’s, and many others.
Here’s what Lowery is trying to accomplish. Torrent and file-sharing sites make money by selling ads that they show to people who come to those sites to download infringing music. The artists and songwriters make no money from these ads (unlike, say, on YouTube, which shares ad revenue in many cases). The companies that advertise don’t buy the ads themselves, of course; instead they are placed by online ad networks like ValueClick, Turn Media, 24/7 Real Media, AdBrite, Collective Network, Specific Media, and those run by Google, Yahoo, AOL, and Microsoft. Some ad networks buy ad inventory wholesale from other ad networks. In other words, the name-brand companies may not even know where their ads are being placed.
Many companies have policies with ad networks that their ads should not be placed on certain types of sites, including sites that offer infringing content (as well as porn, political extremism, etc.). This is analogous to traditional advertising, where companies tell media buyers where and where not to place ads in publications, on TV shows, and so on. The problem is that such policies often aren’t enforced — especially when multiple layers of ad networks sit between the advertiser and the site with the inventory.
Lowery’s objective is to generate negative publicity that will shame these companies into actually enforcing these policies, through audits and other measures, thereby starving the infringing sites of ad revenue. He constructs his posts in such a way as to appeal to journalists looking for sensationalist angles like “Hip/Not-Rich Artist Exploited!” (He isn’t complaining about exploitation of Lady Gaga or Jay-Z.)
I admire Lowery and his tactics. He’s trying to do what he can with the tools he has (e.g. no multi-million-dollar budget for lawyers or lobbyists) and to build on the momentum he generated in the firestorm following his Open Letter to Emily. Yet I had not been impressed with his emphasis on norms, or as his blog slogan has it, Artists for an Ethical Internet.
In general, people behave economically rationally. If there’s a way to get something for free instead of paying for it, and the likelihood of getting caught is virtually zero, people will choose free. If your boyfriend offers to fill your iPod with several gigabytes of his favorite music, you’ll take it and dive right in. Trying to change this behavior through appeals to “ethics” is tantamount to fund drives on public broadcasting: it might work for a small, affluent minority but is hardly enough to sustain creativity in general.
Yet ethics do have economic value to corporations with consumer brands. Bad PR can cost real money. No company brand manager wants another Apple/Foxconn type situation on his or her hands. Lowery has written to advertising departments of consumer product companies and gotten a couple of positive responses: thanks for bringing this to our attention, we will certainly clamp down on this in the future. To add oomph to his message, Lowery often points out that the sites that feature infringing material usually also have ads from companies that offer Ukrainian mail-order brides, porn, and other things with which mainstream consumer product companies probably don’t want to be associated.
It’s an interesting and innovative gambit. However, I have to wonder how effective it will be. So far, no journalists appear to have picked up on any of Lowery’s posts, even though he has been at this for a few weeks. Maybe he’ll have better luck after everyone returns from summer vacations, but he could use some help in getting the message out. (Hello, Future of Music Coalition??)
The economics behind Lowery’s approach are in line with those of the failed SOPA and PIPA legislation: focus on squelching the supply of infringing content by cutting off economic benefits to the suppliers. This is considered to be “low hanging fruit” because it does not directly affect consumer behavior. But it has a major limitation: squelching supply of infringing content is highly unlikely to affect demand for it. If people can’t get their free content from KickassTorrents or FilesTube, they’ll get it from places that don’t make ad revenue, of which there are plenty. The most serious long-term issue is the dwindling perceived value of content. Getting AT&T and Ford to pull their ads from TorrentReactor and IsoHunt won’t help solve this problem.
ADDENDUM: One of Lowery’s posts did get noticed on adland.tv, a site featuring insider-y discussion of advertising industry topics that appears to be frequented primarily by art directors, i.e. the creative types who make the ads, not the media buyers. The upshot of the discussion there is “how difficult it is to find a network where the buyer has control” over where ads are placed.