Icky Theory: Seriously, Piracy, Again?..

Oh so much fun! … No really, I love this stuff!

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While what I really wish to examine is the new balance of power between (hitherto) producers and consumers, firstly let us (again) visit the topic of piracy. There are a great number of studies on the topic, and I only want to briefly note some (potential) positive effects of (book) piracy, or indeed, authorised, free downloads.

Dejean provides an examination of many works on music and film piracy, noting that “… if the good supports network effects, its value rises with the installed base of users. It could be profitable for the supplier to accommodate for a number of illegal copies in order to increase the willingness to pay for originals (Conner and Rumelt 1991, Takeyama 1994)” (Dejean, 2009, p 327). While there is a strong argument that this should work best for relatively unknown artists (Blackburn, 2007), there is also evidence to show that this same user base can drive demand for larger artists, too, as is the case for Paulo Coelho. “Coelho [2009] has found that he sells more books when they are also available for free, and so actively offers his books for free through BitTorrent and other services: “What Coelho quickly discovered was that the more his book was available for free, the more sales of the actual book increased. As an example, he cites the Russian translation of his book, where it went from only 1000 sales to well over 100000 in a period of two years, and has only continued to grow since then” (Masnick, 2008)” (Fingleton and Wilson, 2008).

Note, these ‘network effects’ are (in the case of Coelho) print (as with many other examples also, such as Cory Doctorow (2006), a popular science fiction author who provides his traditionally published, print books alongside wholly free downloads of the same), and this does not specifically deal with any potential tipping point where digital ‘sales’ outpace print. However, there are new empirical studies which suggest a relationship between free downloads and online sales. Hilton and Wiley (2011) measured the sales results of a publisher who placed texts by authors online for free, against print and digital texts by those same authors, and found “that there was a positive correlation (albeit weak) between book downloads and print sales. [Though] the correlation was stronger when Internet-only sales were considered. One theme uncovered throughout an analysis of the data is that free e-book distribution had a considerably stronger relationship with Internet sales than in-store sales.”

Coelho’s case, and this study are very worthwhile arguments versus the fear of piracy, because they are measuring the same text, only delivered in different ways. This is significant, because unlike Doctorow, whose texts are not measured versus each other and themselves (owing to his not selling the digital texts, nor keeping data on downloads) can only be measured against an others’, different texts—looking at Doctorow, we cannot really tell what erosive effect the downloads have had on his sales, only at just how popular he is amongst paying customers.

At one level, this should comfort those who fear book piracy, but what this particularly speaks of for the purposes of my overall argument, is of the Attention Economy; giving away both like and unlike texts to leverage sales is about capturing a broad awareness of your work. As O’Rielly says it, “obscurity is a far greater threat to authors and creative artists than piracy” (2002). The reason for the Attention Economy, then, is that this is something you can leverage for sales and for broader value, it is the scarcity of it. ‘Information’ may be infinite, but attention isn’t.

“It may be correct to say that information per se will have little value in cyberspace because it is effectively limitless. Information economy is a misnomer; we use it because it is convenient, not because of what it means! Goldhaber’s “attention economy” is closer to the mark for the simple reason that it pinpoints a resource that is, as he rightly puts it, “an intrinsically scarce resource”, limited as it is by the number of people with attention to give. Indeed, human attention, like everything else in the “future” of cyberspace has been recognised as a resource by society throughout history, from Brutus who borrowed his audience’s ears, to advertisers and publishers who buy and sell their audience’s “eyeballs”” (Ghosh, 1997).

In truth, it is the attention which both Coelho and Doctorow receive that allows them to profit in publishing their work. What was once done by purchasing ‘mindshare’ via shelf space in a bookstore, can (and must) be gained by other means. However, these examples still fit the caveat that online publishing works best when you are selling both print and static ebooks as if they are scarce products. Even Hilton and Wiley’s study presupposes a ‘walled garden’ approach to the ‘like’ books, supposing that consumers will be willing to pay for what is quite literally, economically valueless information. Not that this is necessarily unworkable—as the evidence suggests—but it supposes a comparable print/ebook experience. However, this ‘experience’ is in fact merely a delivery style of discrete content packaged conveniently for the purchaser. By doing this, we are still prioritising a digital version of the static, and ‘authoritative’ print-like format which is in fact vulnerable to an attention deficit. Instead, I want to examine the ways in which publishers and authors can work within the digital environment, and, that broader way is to embrace the unique properties of ebooks.

The Attention Economy is interesting because it appears to invert the traditional economic model of a producer selling something to an audience, and instead attention flows the opposite way. Attention is something to be captured. Of course this can then be sold on to advertisers, however, more so attention prompts further user attention, as Doctorow says “[readers] evangelize the books they love, form subcultures around them, cite them in political arguments, sometimes they even rearrange their lives and jobs around them” (2006), and O’Reilly finishes that “being well-enough known to be pirated [is] a crowning achievement” (2002). In many ways, selling copies of a text is actually merely a (valuable) byproduct of attention.

References

Blackburn, D. (2007). “The Hetrogenous Effects of Copying: The Case of Recorded Music,” Working Paper, Harvard University, Cambridge.

Coelho, Paulo. (2009). Pirate Coelho, Paulo Coelho’s Blog. http://paulocoelhoblog.com/category/pirate-coelho/

Conner, K. R. and R. P. Rumelt. (1991). “Software Piracy—An Analysis of Protection Strategies,” Management Science, 37, pp 125-39.

Dejean, S. (2009). What Can We Learn from Empirical Studies About Piracy? CESifo Economic Studies, 55(2).

Doctorow, C. (2006, 1 December). Giving it Away. Forbes. http://www. forbes. com/2006/11/30/cory-doctorow-copyright-tech-media_cz_cd_books06_1201doctorow. html

Fingleton, T. Dena, C. Wilson, J. (2008). The writer’s guide to making a digital living: choose your own adventure. Sydney, Australia: Australia Council for the Arts. http://www. australiacouncil. gov. au/writers_guide

Ghosh, Rishab Aiyer. (1997, May 5). Economics is dead. Long live economics! A Commentary on Michael Goldhaber’s “The Attention Economy.” First Monday, 2(5). http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/529/450

Hilton III, John and David Wiley. (2011). Free E-Books and Print Sales. The Journal of Electronic Publishing, 14(1). http://hdl.handle.net/2027/spo.3336451.0014.109

Masnick, M. (2008, 24 January). Best Selling Author Actively Pirating His Own Book–Finds It Helps Sales Tremendously. TechDirt. http://techdirt.com/articles/20080124/08563359.shtml

O’Reilly, Tim. (2002, December 11). Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution. OpenP2P. http://openp2p.com/pub/a/p2p/2002/12/11/piracy.html

Takeyama, L. N. (1994). “The Welfare Implications of Unauthorized Reproductions of Intellectual Property in the Presence of Network Externalities,” Journal of Industrial Economics, 42, pp 155-66.