<nettime> Resistance is futile (peer-to-peer)

[Steve Cisler <cisler@pobox.com>]

Resistance is Futile
How Peer-to-Peer File Sharing Is Likely to Change Big Media

By Robert X. Cringely
<http://www.pbs.org/cringely/pulpit/pulpit20021128.html>

Maybe you saw the story this week about a paper from Microsoft
Research analyzing peer-to-peer file sharing networks with the
conclusion that they can't be stopped -- not by the law, not by the
movie studios and record companies, not even by mighty Microsoft and
its Palladium initiative for trusted computing. Swapping songs and
maybe movies is about to reach some critical mass beyond which it
simply can't be stopped, or so the kids in Redmond think. The story
is interesting, that it came from Microsoft is even more interesting,
though the authors carefully disassociated themselves from their
employer in the paper.

But this all pales in comparison to the implications of their
conclusions. These are smart folks, taking a stand that is surely not
popular with their company, so I think there is a pretty strong
reason to believe they are correct. If so, then what does it mean?
Are record companies and movie studios doomed? Am I doomed, as a guy
whose work is regularly ripped-off, too? And will the print
publishers go away, leaving us with only weblogs to keep us warm? I
don't think so, but the world is likely to change some as a result.

Maybe it would help to deconstruct what publishers and broadcasters
and movie moguls do that makes them significant contributors to our
culture. They take financial risks by backing talented people in the
hope of making money. Publishers and broadcasters and film makers and
record executives have taken the time and spent the money to build
both a commercial infrastructure and a brand identity. The most
extreme version of such financial risk-taking is spending tens of
millions -- sometimes hundreds of millions -- to make a movie.

Forgetting for the moment that some of these media people are greedy
pond dwellers, let's ask the important question -- how are
peer-to-peer file sharing systems going to replace $100 million
movies? Peer-to-peer systems can share such movies, but since there
is no real peer-to-peer business model that can generate enough
zeroes, such systems are unlikely to finance any epic films.

Well, right there we have a problem. People LIKE epic films, but even
with the best editing and animation software, there is no way some
kid with a hopped-up Mac or PC is going to make "Terminator 4." One
can only guess, then, that people will continue to go to movies and
eat popcorn and watch on the big screen despite how many copies of
Divx there are in the world.

Peer-to-peer movie piracy is practical only in the manner that any
organized crime is practical: it works only as long as the host
remains strong enough to support the parasite. Tony Soprano can't run
New Jersey because then everyone would be a crook and there would be
nobody to steal from except other crooks. No more innocent victims.
Same with movie piracy, which needs a strong movie industry from
which to steal. If the industry is weakened too much by piracy, the
pirates begin to hurt themselves by drying-up their source of
material. It is very doubtful that this will happen simply because
the pirates, too, want to go to movies.

But the same is not true for records. This is simply because
technology has reached the point where amateurs can make as good a
recording as the professionals. The next Christina Aguilera CD could
be as easily recorded at her house (or mine) as at some big recording
complex out on Abbey Road.

And text, well, text is even worse because it is easiest of all to
steal. My columns are published in newspapers and websites and
handed-in as college essays all over the world and there is almost
nothing I can do about it because tracking down the perps costs me
more than does their crime. From the perspective of the established
publishers, there is also the horrible possibility that people might
actually come to prefer material they find for free on the Internet
-- not just pirated material but even original material. This column,
after all, is free, and my Mother claims to find some value in it
from time to time.

So movies, while they may be hurt by peer-to-peer, won't be killed by
it. But print publishing and music recording could be seriously hurt.
Maybe this is good, maybe it is bad, but probably, it is inevitable.

Of course, the recording and publishing executives, who often work
for the same parent company, aren't going to go without a fight. We
are approaching the end of the first stage of that fight, the stage
where they try to have their enemy made illegal. But the folks at
Microsoft Research now say quite definitively that legal action
probably won't be enough. That's when we enter stage two, which
begins with guerrilla tactics in which copyright owners use the very
hacking techniques they rail against to hurt the peer-to-peer
systems. This too shall pass when bad PR gets to the guerrillas. The
trick to guerrilla or terrorist campaigns is to not care what people
think, but in the end, Sony (just one example) cares what people
think.

That's when the record companies and publishers will appear to
actually embrace peer-to-peer and try to make it their own.

This will be a ruse, of course, the next step in the death of a
corrupt and abusive cultural monopoly. They'll say they will do it
for us. They'll say they are building the best peer-to-peer system of
all, only this one will cost money and it won't even work that well.
There is plenty of precedent for this behavior in other industries.

My favorite historical example of this phenomenon comes from the oil
business. In the 1920s, the Anglo-Persian Oil Company had a monopoly
on oil production in the Middle East, which they generally protected
through the use of diplomatic -- and occasionally military -- force
against the local monarchies. Then the Gulf Oil Company of
Pittsburgh, Pennsylvania, literally sneaked into Kuwait and obtained
from the Al-Sabah family (who still run the place) a license to
search for oil.

The Anglo-Persian Oil Company did not like Gulf's actions, but they
were even more dismayed to learn that Gulf couldn't be told to just
go to hell. Andrew Mellon, of the Pittsburgh Mellons, was the U.S.
Secretary of the Treasury, and he wasn't about to let his oil company
be pushed around by the British Foreign Office. So Anglo-Persian and
the Foreign Office did their best to delay Gulf, which worked for
several years. They lied a little, lost a few maps, failed to read a
telegram or two, and when Gulf still didn't go away, they turned to
acting stupid. As the absolute regional experts on oil exploration,
they offered to do Gulf's job, to save the Americans the bother if
searching for oil in Kuwait by searching for them.

The Anglo-Persian Oil Company searched for oil in Kuwait for 22 years
without finding a single drop.

Remember that Kuwait is smaller than Rhode Island, and not only is it
sitting atop more than 60 billion barrels of oil, it has places where
oil has been known for more than 3,000 years to seep all the way to
the surface. Yet Anglo-Persian was able to fulfill its contract with
Gulf and keep two oil rigs continually drilling in Kuwait for 22
years without finding oil. To drill this many dry wells required
intense concentration on the part of the British drillers. They had
to not only be NOT looking for oil, they had to very actively be NOT
LOOKING for oil, which is even harder.

Back to music and text publishing. Expect both industries to offer
peer-to-peer systems that won't work very well, and will cost us
something instead of nothing. In the long run, though, these systems
will probably die, too, at which point, the music and the print folks
will have to find another way to make their livings. This will not be
because of piracy, but because of the origination of material within
the peer-to-peer culture, itself. We're not that far from a time when
artists and writers can distribute their own work and make a living
doing so, which makes the current literary and music establishments a
lot less necessary.

But they won't die altogether because of the record company back
lists of music, because peer-to-peer doesn't do a very good job of
self-organizing, and indicating what is important, and because people
won't take tablet computers with them to the bathroom.

So we will have little movies and little records and little magazines
on the Internet because the Internet is made up of so many different
interest groups. For the larger population, there will still be
Brittany Spears and Stephen King singing and writing for big labels.
And that will only start to change when the first really big artists
jumps from old media to new, trading 15 percent of $30 times 100,000
copies for 100 percent of $0.50 times 1 million copies.

The Grateful Dead showed that it is possible to make a great living
even in competition with some of their audience. This is a lesson all
old media must learn in time.

Either that, or die.
  
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