Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution

Lesson 1: Obscurity is a far greater threat to authors and creative artists than piracy.

Authors who are fortunate enough to get the rights to their book back from the publisher often put them up freely online, in hopes of finding readers...The deep backlist of [book] publishers is lost to consumers because the music just isn't available in stores.

Lesson 2: Piracy is progressive taxation

For all of these creative artists, most laboring in obscurity, being well-enough known to be pirated would be a crowning achievement. Piracy is a kind of progressive taxation, which may shave a few percentage points off the sales of well-known artists (and I say "may" because even that point is not proven), in exchange for massive benefits to the far greater number for whom exposure may lead to increased revenues.

Lesson 3: Customers want to do the right thing, if they can.

Online file sharing is the work of enthusiasts who are trading their music because there is no legitimate alternative. Piracy is an illegal commercial activity that is typically a substantial problem only in countries without strong enforcement of existing copyright law.

Lesson 4: Shoplifting is a bigger threat than piracy.

Because an online copy is never out of stock, we at least have a chance at a sale, rather than being subject to the enormous inefficiencies and arbitrary choke points in the distribution system.

Lesson 5: File sharing networks don't threaten book, music, or film publishing. They threaten existing publishers.

There is nothing in technology that changes the fundamental dynamic by which millions of potentially fungible products reach millions of potential consumers. The means by which aggregation and selection are made may change with technology, but the need for aggregation and selection will not.

Lesson 6: "Free" is eventually replaced by a higher-quality paid service

Why would you pay for a song that you could get for free? For the same reason that you will buy a book that you could borrow from the public library or buy a DVD of a movie that you could watch on television or rent for the weekend. Convenience, ease-of-use, selection, ability to find what you want, and for enthusiasts, the sheer pleasure of owning something you treasure.

Lesson 7: There's more than one way to do it.

[T]hat's the ultimate lesson. "Give the wookie what he wants!" as Han Solo said so memorably in the first Star Wars movie. Give it to him in as many ways as you can find, at a fair price, and let him choose which works best for him.