.net: Just what is the pirate’s dilemma?
Matt Mason: It’s a problem we have with all kinds of information. When we have a new idea, there are two opposing forces at work. At the same time as we are thinking “how can I get this out there?” we’re also asking ourselves “how can I benefit from and monetise this idea?” We want to spread ideas as information, but capitalise on them as intellectual property. But the dilemma also relates to how others use our information, not just how we use it. It’s a framework to think about what you should do when someone ‘pirates’ your intellectual property. When pirates start competing with us, do we throw lawsuits at them, or do we try to match them play for play? To compete or not to compete - that is the question. I make the case that - although fighting pirates can be valuable and advisable in many situations - in others it’s better to compete by legitimising what it is the pirates are doing.
.net: How can a company compete with pirates?
MM: Pirates are only worth competing with in the marketplace if they are adding value to society in some way. The way to compete with pirates is to legitimise what they are doing, and find a way to monetise that value. Steve Jobs did it with iTunes. Radiohead did it with In Rainbows. Nike also gets it – it allowed Japanese fashion brand A Bathing Ape to come out with a very similar looking sneaker to their Air Force One, because the company realised that particular shoe, which was more of a remix than a trademark infringement, was adding value to their original.
.net: Why should the record industry turn to the youth culture for help?
MM: The record industry has always made money by co-opting scenes, sounds and ideas that bubble up from youth culture. But what they’ve failed to understand about piracy and P2P is this has become a cultural movement too. People are passionate about piracy now and the music industry is partly to blame. Suing music pirates has turned a generation of fans into an angry mob. It’s an unfortunate situation, but the majors can still turn it round. They need to co-opt file sharing the way they co-opted rock or hip hop. They need to look at sites like Oink as market signals rather than threats. Oink users devoted so much time and energy to creating an amazing library of music. People will devote attention and money to music, but it has to be given to them in a way that is better than the pirate alternatives, not worse. The crazy thing is, if the majors sold more music to more people for less money, or sold voluntary collective licenses for say, $5 a month, that allowed people to download unlimited amounts of music, they would probably end up making more money than they do now.
.net: How can we solve the current copyright problem? How do the laws have to be changed?
MM: The problem with copyright laws is they don’t reflect how we really use content. Our intellectual property laws are intellectually dishonest. The Creative Commons movement is the closest thing we have to a solution, but we also need to stop expanding extending the periods copyrights are enforced, and expand our definitions of fair use. The thing about good remixes is they add value to the original material, and if we make it easier for people to make derivative works, we add value to everyone’s work.
The other big problem with copyright at the moment is people and companies using it to stifle free speech, issuing takedown notices claiming copyright infringement when really what they are trying to is stifle free speech. There needs to be a clearer understanding of this distinction in the legal community.
.net: How will the pirate’s dilemma develop in the future? What’s the long term solution?
MM: Long term piracy isn’t a solution. Pirates are symptoms of market failure, they create periods of chaos, and it’s up to us to fix the system and recognise the innovations and opportunities highlighted by the pirates. A lot of things will become either incredibly cheap, or even free at the point of consumption I think, like music and movies. Whenever society has developed amazing new free things, like the open-source code the internet is built on, we find new ways to build new profit generating ventures on top of those free resources.
Pirates have always been at the birth of new business models, distribution systems and disruptive technologies, and I think they always will. When Thomas Edison invented the phonographic record player, musicians branded him a pirate out to steal their work and destroy the live music business, until a system was established so everyone could be paid royalties, which we today call the record industry. Edison, in turn, went on to invent filmmaking, and demanded a licensing fee from those making movies with his technology. This caused a band of filmmaking pirates, including a man named William, to flee New York for the then still wild West, where they thrived, unlicensed, until Edison’s patents expired. These pirates continue to operate there, albeit legally now, in the town they founded: Hollywood. William’s last name was Fox.
.net: What kind of feedback are you getting on your book? For example, how do the established entertainment companies react that are still clinging to their old business model?
MM: I was really worried about getting a very negative reaction from these companies, but it hasn’t happened. The truth is a lot of these companies do all want to change, but change isn’t that simple when you’re a multinational corporation. The only time I seem to get any kind of negative reaction is when people think I’m arguing all forms of intellectual property law are bad, or that all forms of stealing are good, which I’m not. One guy at a conference asked me if I was a Communist, which I thought was pretty funny after I’d just been talking about extreme decentralisation for an hour. The negative reactions always tend to be knee-jerk reactions, once people get that I’m trying to create dialog around how to fix a system that everyone recognises is broken, people come around. So far everyone I’ve met understands I’m trying to push real solutions to all this, rather than exacerbating existing problems.
.net: How did you come up with the idea for the book?
MM: I grew up in London obsessed with youth culture, and was a DJ on a few of the pirate radio stations that created and nurtured so much great music in the city. For me it was always fascinating how this system worked so well. Consistently, support from pirate DJs would send unknown artists to the top of the pop charts and pave the way for new music scenes to evolve into sustainable industries. We were creating new markets, new cultural spaces.
Over the years I worked at some of the world’s best-known ad agencies, media companies and major record labels and saw many good ideas work their way up from the street into the boardroom. As the founding editor-in-chief of RWD, I used my experience in both worlds to grow the magazine into the UK’s largest urban music title, and one of the country’s coolest youth brands. In 2004 Gordon Brown asked me to work with him on a campaign to help inspire entrepreneurship amongst other young people in the UK, and Prince Charles presented us with the London Business of the Year award. That made me realise quite how seriously the link between youth culture and innovation was being taken. After moving to New York City in 2005, I realised somebody needed to write a book about all this.
.net: What do you think about the impending Pirate Bay court case? If they do go down, what will it mean for filesharers?
MM: It’s so crazy. Look how important this is for the entertainment industry – it’s ridiculous. When lawsuits become such a huge part of your business model, the truth is, you no longer have an efficient business model. I think this whole thing is a big game of cat and mouse that can’t be won in the courts. It simply isn’t possible to take out all the pirates without treating every computer user as a criminal and invading their privacy. If this fight does escalate to that level, it will just create more support for pirates.
If the content industries put their efforts into creating real alternatives to sites like The Pirate Bay, and embraced the way millions of people have been consuming their products for the last decade, there will be no longer be a reason for consumers to defend piracy. When the entertainment industry decides to grow up about file sharing, the rest of us will have no choice but to do the same.
.net: How realistic is an internet ban for UK downloaders as proposed by a draft consultation paper received by the government?
MM: I don’t think it’s in any way realistic at all. This proposal is totally and completely unworkable in the real world. ISPs will not accept liability for the contents of packets (nor should they), and it would be impossible for them to open and check if every single download and upload was legal or not without the entire internet grinding to halt. This isn’t in the best interests of the government, the ISPs or the voters. Banning customers and exposing yourself to billions in liability isn’t a good business strategy. Criminalising six million citizens and inconveniencing the rest is not a vote winner. What’s frightening about such ideas is that they are still taken seriously all over the world by powerful decision makers in government and industry who have absolutely no clue about how the internet actually works, or the damage such laws could do to democracy.
Before there is any more discussion about this, the music and film companies need to definitively prove illegal downloads cost them millions of dollars in lost revenues. CD sales are falling because nobody uses them anymore, and Hollywood is in rude health despite the pirates. There should be no more talk about changing laws and spending tax payer’s money on this ‘problem’ until someone proves there really is one. All I see is ignored opportunities.
.net: Rapper Saul Williams' fans were recently given the option to download his album for free or pay $5 for a higher quality version. Nine Inch Nails' Trent Reznor who produced the album was disappointed to learn that only one in five people was willing to pay. Is this a sign that the Radiohead model doesn’t really work?
MM: I didn’t understand why he was disappointed about this – Williams made more money on this release than he did on his last album released through a major, because he didn’t have to give a major the lion’s share of the royalties.
I don’t know if this is the right model for everyone, but I think in this case, in Radiohead’s case and many others it’s worked well so far. Long term I think the solution is not donations, or a music tax, it’s very cheap licenses that would allow fans to download music and ensure artists got paid. I honestly believe when we figure this out, the music industry is going to be more prosperous than ever before. Every other part of the industry, aside from the selling little plastic discs part, is doing better and growing. Music is becoming more important to people as it becomes more abundant, the problem is the refusal to look at real solutions.
.net: How happy would you be about people pirating your book?
MM: If you’re reading this and you have the time and skills to rip the e-version of my book and put it on The Pirate Bay, please do. I’m begging you. I’d be over the moon. You’ll be adding value to the hard copies. The problem for books isn’t piracy – the problem is obscurity. There are two million books on Amazon. 200,000 come out every year in the US and the average book sells 500 copies. For most people, an electronic copy of a book isn’t a substitute for the real thing. If 100,000 people read it online and create a buzz about it, more people will go and buy it. I’m working with my publishers to make the online version freely available in some shape or form, and they want to do it, so hopefully by the time you read this, there will be a free e-book somewhere online, legitimate or otherwise.