Free Ride

At this year’s Edinburgh International Book Festival, Scottish writer Ewan Morrison delivered a paper for the Guardian debate on The End of Books. During the Q&A session he was introduced to Robert Levine, former feature editor at Billboard and New York. Levine’s book is called FREE RIDE How the internet is Destroying the Culture Business and How the Culture Business can Fight Back. Morrison thought FREE RIDE had a lot of important things to say on the illusions surrounding the internet and their socio-economic consequences so decided to pitch some questions Levine’s way…

Bella: Free Ride is an insightful and, at times, revelatory text that turns the tables on received wisdom about the internet and its ‘liberation’ ethos. What your book makes clear and what I’ve begun to notice in the world since reading it, is how the word FREE has been hi-jacked by advocates of the digital industries: People are somehow seen as ‘free’ when they are online; in turn oppressive regimes are seen as restricting the populaces right to digital ‘freedom’ when they clamp down on certain sites. Culture in the future according to digital gurus like Chris Anderson, will be ‘free’. 

This ‘Free’ digital movement has picked up (or perhaps preyed upon) all of the trappings of ‘liberation’ language. But really ‘free’ in the digital world means you don’t pay for it; it means ripped videos on Youtube, it means piracy. Can you explain the history of how ‘free’ has been hi-jacked by the digital lobbyists? How pirates like Napster ended up pleading the first amendment to depict piracy as an act of ‘free speech’, and just how deep this definition of ‘FREEDOM’ has become embedded within internet culture.

RL: “Free” has two meanings in English – free of restrictions and free of cost, or as the techies put it, free as in trade or free as in beer. They don’t have much to do with each other, which is why most languages have two separate words for them. Chris Anderson recognized this and did an excellent job describing it; I don’t agree with his conclusions, but his book “Free” is refreshingly, um, free of the fuzzy logic that you often see online.

But then you have to decide what freedom is (other than just another word for nothing left to lose). Progressives see freedom as part of their agenda, but they generally favor more government regulation. Libertarians on the right want more freedom – they’re not misusing the word. But they want freedom from taxes and regulations, in a way that might have a negative impact on society – looser financial rules certainly played a role in the economic crisis we’re now in. They can enjoy complete freedom from government in Somalia, of course, but they never seem to go there.

One reason the current debates about regulating the Internet are so weird is that the technology business has always embraced this particularly Californian style of libertarianism, where people want to be left alone to enjoy both marijuana and lower tax rates and these things are somehow thought to go together. If you look at the Electronic Frontier Foundation a lot of the thinking there comes from John Perry Barlow, who wrote this mid-90s manifesto about how the government had no authority to regulate the Internet. On a number of levels, this is just plain silly. First of all, it’s like saying the government has no right to apply the law in a university dormitory – it’s just plain not true. Second, I think a lot of people want regulations on the Internet – to safeguard consumers, to protect privacy, and so on. Third, John Perry Barlow doesn’t represent anyone – he’s self-appointed, self-centered, and self-important.

But the EFF has been so influential that it led to this notion of “digital rights,” this weird idea that your rights online are somehow different from your rights offline. Legally, this is just nonsense. Now, don’t get me wrong: I think free speech online is important, I just don’t think it’s all that different from free speech offline. In both cases, I have the same rights, depending on where I am, because I’m subject to the same laws. Generally speaking, this is a good thing, because people can vote for these laws.

Gradually, the movement for ‘free content’ started to get tangled with this notion of digital rights. To some extent, this was because copyright started to be seen as a barrier to the free flow of information – laws allow artists to issue takedown notices when their work is used wrongly. But the flow of information is very different from free speech! In some cases, copyright can represent a barrier to free speech, but the US Supreme Court has also ruled that “Copyright is the engine of free expression,” because it provides an incentive to create. None of this has anything to do with anyone’s right to consume that information; just because I have the right to write a book doesn’t mean you have the right to read it. You may have the right to buy it or to quote from it – and these can be very important – but they’re completely different.

What’s really sad is that the whole debate over Internet regulation has taken on this tone very common in U.S. politics that’s reflexively anti-government for no real good reason. I don’t think anyone wants excessive regulation – it’s impractical and ineffective. At the same time, you can’t have a market without some kind of property rights, and those rights are meaningless if they can’t be enforced somehow. And the government has an important role to play in balancing the rights of various parties. As the old saying goes – ‘your right to swing your fist ends where my nose begins’. I’m not sure who can set those boundaries if the government doesn’t.

Bella: Who are the digital lobbyists? Is there a conspiracy at work? Can you explain why Google has been pumping money into think tanks and governments? Does Google (and other digital providers) ultimately want culture to be free? And why? How do they profit from this? How do Amazon profit from cheaper books – from books that retail at one pence, of which there are now hundreds of thousands on their site?

RL:  There’s definitely no conspiracy! Google has a lot of influence and it tends to exert it in indirect ways. There’s nothing unique about this – every company lobbies and many do it in ways that aren’t forthright. At the same time, people should know what’s going on – that’s one reason I wrote the book.

To me, the most important three words in journalism are, “Follow the Money.” That’s how you understand the world. And if you look at how Google spends its money, you get a pretty good idea of what it wants. For one thing, there’s a kind of value trade-off between hardware and software – the more your computer and Internet connection can get you in terms of free media, the more you’ll be willing to pay for it. For another, Google makes money on content without investing in it – partly on Google News but mostly on YouTube. Google doesn’t sell any ads directly against content it doesn’t have rights to. But serving as the definitive source of all video has helped build that business – if you find something YouTube shows without owning rights to, you might stay to see something it does have rights to – and that it has sold an ad against. Lastly, Google also has a gigantic stake in the Internet in general. It’s basically in the business of selling advertising – for all the talk about changing the world, that’s what it really does – and it dominates the market online. 

What I think is deceptive is the way it funds so-called public advocacy groups that have turned free media into a cause. In the US, Public Knowledgegets some funding from Google, and they have been very aggressive about opening up the cable television system to make programs available online. I’m not sure that inexpensive television programming is much of a public cause. I mean, I hate paying so much for cable – everyone does – so it’s in my own interest if prices fall. But I don’t think this is a societal good on the level of, say, inexpensive medical care. People without cable television can lead meaningful lives. And the government has better things to do – especially these days.

Bella:  The negative flip-side of ‘free digital content’ online is that artistes and workers in different fields who were formerly paid for their work (musicians selling CDs, journalists in newspapers, filmmakers releasing DVDS etc) are seeing drastic cuts in their income.

RL: I don’t think it’s a question of cuts in revenue so much as a dismantling of the system that paid them. If you think of the book business for example, advances are often more important than royalties, and advances are way down – almost certainly more than sales. I guess you could call that a derivative of revenue, but it’s probably more important because that’s how writers decide how to write books (Ed – Book advances down 80% in 2010 – The Bookseller). A few people I know have asked me why I didn’t self-publish my book so I could keep more of the sale price. And my two main reasons say a lot about how these businesses work. First, once you realize that most books fail to find an audience, you’re talking about taking a big risk – writing Free Ride took a year and a half of full-time work, and going without a salary for that time would have been a risk I wouldn’t have been able to take. One thing publishers do – as well as studios and labels – is aggregate that risk. So I’m essentially giving up a lot of my upside to ensure I get at least some money for my work. Is this a good decision? I’m not sure it matters all that much because of the second reason – for many creators, some money now is more important than more money later. Even if the book had done very well, how would I have supported myself during that year and a half? I can’t imagine walking into a bank and asking for a loan – with no collateral! – and telling them I’m borrowing money for a business that succeeds maybe one out of 7 or 8 times. They’d laugh at me!

What we’re seeing isn’t so much a drop in revenue but problems with the structure of that system. And that has effects that aren’t always easy to see. For example, a lot of indie movies were financed by selling rights before production even started to cable channels or different European countries. That’s much harder to do now for a few reasons, only some of which have much to do with predatory technology companies. But, OK, how do you then go about financing a movie? There are some technology companies with interesting ideas, like Kickstarter, which lets artists raise money for specific projects. But I think that has a tendency to reward the charisma of artists, rather than the promise of a project. And I tend to be nervous about anything that involves this kind of patronage, since it gives people the idea that artists exist on this rarified plane, above the common concerns of commerce, and should be supported by charitable donations. I think some art could thrive like that – museums raise money that way already – but I don’t think it could support anything like the kind of robust popular culture we have now. And popular culture can be meaningful, as well as stupid. It’s become a cliché to say this, but it’s true: The Sopranos and Breaking Bad have the complexity and moral dimensions of great novels, and I think they have a lot more vitality than much of the art that’s supported by foundations.

Bella: Is this trend towards ‘zero price’ for online ‘content’( or what was formerly known as ‘culture’) unstoppable. What would it take to stop it?

RL: As far as the trend toward zero, there are a few parts to it. Right now, buying content is essentially optional, and I think that’s unsustainable over the long term. But there’s another side to that, which is that media companies tend to cut prices in order to compete with piracy. To some extent, that’s effective. But there’s also this race to the bottom, where, once some people decide that a dollar is too much to pay for a song, labels will face pressure to cut prices to 50 cents. I’m not sure that works. If you look at what happened when Apple raised the price of the most popular songs on iTunes, total revenue increased substantially. So companies may be better off sticking to a reasonable price and just deciding that hardcore pirates – which estimates peg at about 15% of the market – aren’t coming back.

In the long term, we need systems that encourage commerce, not chaos. Apple’s iTunes/iPad ecosystem is a great example of this: You can see anything online but the app store makes it easier to use if you buy. The Internet is much easier to use if you don’t buy. People forget that the Internet was designed by academics as a way to share their research. It’s just not designed for commerce. And that’s a problem, since it is becoming the infrastructure for commerce.

Bella: I think we have to challenge the theft of the word ‘Free’ and I was trying to think of a metaphor. I thought of a farmer who works on rented land and has worked all year to raise his crops, and then a new landlord comes along, and proceeds to give everything the farmer grew, away to everyone for free. Ultimately the farmer goes bankrupt, and other local farmers can’t compete with the free produce, so they like him, up and leave and abandon farming. And with no farmers, there will be no crops next year. As a metaphor, it seems to portend something terrible – that is, that we might be going through the early stages of the free giveaway – but we’re not planting seeds for next year (we’re not paying artists to produce the culture of the future). Do you think we’re heading towards a zero point where cultural production will grind to a halt because artists lose their livelihood?

RL: I don’t think cultural production will stop – the urge to create is natural and amateurs make some great content. (Most professionals start out as amateurs, after all!) But I think we could stop seeing great work in more expensive media, like television shows or books. In journalism, we could see more commentary and less reporting from the field. You know, it’s not that hard to find someone to review restaurants as a volunteer. But it would be pretty tough to find a volunteer to cover the war in Libya. As newspapers struggle, they cut expensive journalism – foreign reporting, investigative stories, that kind of stuff. Newspapers that can’t deliver that aren’t as valuable as the ones we had.

One metaphor I’ve been toying with is tap water. For practical purposes, it’s an almost infinite good: There’s plenty of it, and it replaces itself, to some extent. But the taps water comes out of are connected to a whole system – pipes, filters, reservoirs, you name it. In economic terms you could say that these are fixed costs – just like creating music or writing. Digital albums and books, like tap water, seem overpriced – how much should you have to pay for a bunch of bits, or a glass of liquid. At the same time, you can only get these things because a massive investment was made up front. I think it captures the way this is a systemic issue. You can have a system with problems – some piracy here, some skewed incentives there – and still have a very healthy culture business. At some point, though, you put enough strain on the system that it stops functioning.

Freedom, is a tough word to parse, since it can mean almost anything. So I just tell people that we’re not just talking about freedom for us – we’re talking about freedom for Google and Facebook. It’s a very pro-business, libertarian notion of freedom. I’d suggest that this is the correct use of the term – that what people on the left see as freedom might be more accurately described as human rights.

Bella: You were lecturing this year on ‘the end of culture’ – as regards a developments in culture – is there a reason why in music – with phenomenon like the X- factor – were seeing cultural recycling of Baby Boomer culture taken to extremes bordering on cultural amnesia? I have felt for a decade now that every year is the same – that time has stopped and become a kind of perpetual now in which the past is recycled for profit. Why are we seeing so many re-makes in films, and so many franchise serial-movies – every superhero comic ever drawn being turned into a film. Have we already run out of culture? Are the struggling mainstream giants just going to keep reprocessing and re-packaging till culture runs out?

RL: I don’t want to dodge the question, but I think Simon Reynolds has very smart things to say about this in Retromania, a immensely intelligent book I’d recommend to anyone. He deals with the effect of the Internet, albeit in a very different way. I do think that a lot of creative decisions have their roots in business realities but some of them aren’t the subjects I’m dealing with. For example, the diversity of the Internet is eating away at our common culture. Look at some of the music reissues this year: Nevermind and Achtung Baby were both culturally ubiquitous. I’m not sure anything can be culturally ubiquitous in the same way anymore – pop culture has fractured into a series of different subcultures. There are good and bad things about this, but I think it’s inevitable to a certain extent.

As far as movies, that has a bit more to do with my subject, in that the decline in DVD sales has made Hollywood much more conservative in deciding what movies to spend money on. It’s really hard to make a movie like Inception, a big-budget film that had to be marketed from scratch because the audience didn’t know anything about it. Compare that to Green Lantern – you already know what it is, so half the marketing has been done already. That goes for remakes and movies made from TV shows as well. But some of this also has to do with the increasing importance of international markets. A movie like Inception has a lot of dialogue that might not translate so well into, say, Chinese or Russian. Compare that to Green Lantern, where the dialogue is practically beside the point – anyone can grasp it immediately

Bella: What is the connection between the baby-boomers and the ‘free digital revolution’. I think of people like Cory Doctorow – who write Free digital manifestos . Do these people really believe they are involved in something revolutionary? Or is it just another case of the baby boomers grabbing all they can for their big blow-it-all-end-of-the-world party? Personally, I think that digital-hippies might once have had truly radical ideas about changing society (and ‘freeing’ the individual) but that as the possibilities for real change shrank around them, through the reactionary 80s and 90s, they took refuge in the fantasy land of cyberspace. They also perhaps think that they are being counter-cultural, by taking down the big media corporations. Do they really believe that there will be some kind of future when everyone will consume culture for free and that this will be some kind of egalitarian society in which even money itself no longer changes hands? Or are these people in the pay of the new digital corporations?

RL: I don’t think there’s as much of a generation gap as some people suggest. Obviously, more young people download illegally but plenty of adults share their values. I think it depends more on someone’s mindset.

Also, I don’t see an echo of hippie hubris here so much as Marxist mumbo-jumbo. I don’t mean socialism, I mean this weird kind of historical determinism – digital is the future, content will inevitably be free, all that stuff. People like Kevin Kelly  seem to almost see technology as the engine of history, and I think it’s a little more complicated than that. Any time someone says something is inevitable, they usually end up with egg on their face. In the meantime, though, this kind of certainty that the world is moving in a particular direction is almost an intoxicant. Hence these overblown manifestos. If nothing else, digital revolutionaries certainly share the Marxist tendency toward rhetorical excess.

On another level, I think there’s this Californian utopianism on the Internet that it needs to grow out of. There’s this idea that we don’t need laws, only peer-reinforced codes of behavior. You know, who needs politicians – we can govern ourselves! This is one reason California is a mess, by the way.

As far as people being paid by technology companies, I don’t think any of the free culture activists changed their minds for money – I think it’s more insidious than that. Take Lawrence Lessig – he was a champion of free culture way before Google donated money to any of the projects he was involved in. It’s not as though he changed his mind. On the other hand, Google has donated an awful lot of money to organizations he’s involved in. Does that have any influence at all? It’s hard to say. But as a journalist, I’d say that the appearance of conflict of interest presents its own problem, since people would be less likely to take what he says at face value. If I were being paid by record companies to give lectures about my book – I’m not, of course – wouldn’t people take my book less seriously? I would think, and hope, they would. That same logic should apply to Lessig.

Bella: Do you think that part of the fault with ‘the trend towards Free’ is not corporations like Google, Youtube and Yahoo! but the greed of the modern consumer, who has come to expect, through decades of indoctrination, that they can expect to get products for next to nothing, without their being any consequences. I think here of an argument I had with a republican who was cursing China’s control of the world economy. I asked him where his shirt, pants, shoes, socks and hat were manufactured. He said China. I asked him how much he paid for everything he was wearing and he said – about $200 in total. I asked him how much all of those clothes would have cost if they had been manufactured in the US and he conceded that it would have been about ten times that figure, had US manufacturers not been put out of business by cheap imports. This discussion was only about clothes, I didn’t even touch on the technology he used. The guy, was basically representative of the ‘everything for next to nothing’ ethos of the modern consumer. A Wallmart shopper, a sweatshop shopper. He was part of the ‘race to the bottom’ in corporate outsourcing and discount pricing that Naomi Klein talks about.  Do you think that this idea of free digital culture is connected to this ‘race to the bottom?’

RL: This gets to some really big questions that are a bit beyond the scope of my book, and my expertise as well. Yes, I think there’s a connection there, but it’s so hard to analyze what’s going on in the overall economy. You know, people are so interested in saving money because (in the US) wages aren’t rising relative to inflation.

The problem, I think, is that you then have a disconnect between price and cost. For example, Wal-Mart prices don’t factor in the various kinds of environmental pollution caused by Chinese manufacturing of its products. But that still has a cost. Same with the Internet. The free content we enjoy, legally or not, has a cost in that it can negatively affect what kind of content we can get in the future.

The big mystery here is why the kind of people who wouldn’t be caught dead shopping at Wal-Mart – whether out of political conviction, snobbishness, or some mix of the two – are the most ardent champions of companies like Google. When it comes to Wal-Mart, Republicans tend to see it as a well-run business that improves the living standard of poor people by making goods cheaper and Democrats tend to see it as a company that moves jobs offshore and provides relatively bad jobs. And I’d argue that in some sense they’re both right. But now here comes the Internet, which also hurts small businesses, concentrates wealth, and eliminates jobs. And the Democrats can’t say enough good things about it! There’s Arianna Huffington, flying the flag for left-leaning politics and chipping away at the minimum wage by championing this idea that people should write for free. At best, that’s inconsistent; at worst, it’s downright hypocritical.

Bella: Could you explain what you believe the solutions could be for cultural makers (filmmakers, musicians, writers, journalists) who’re seeing their wages evaporate? It seems to me that the most progressive of your recommendations in FREE RIDE is a flat rate subscription model – Say, in book publishing, Faber and Faber ask readers to pay a monthly subscription to have access to all Faber books. A problem with this is that for this to work you’d have to have agreement between all other competing publishers to push it through with net providers otherwise Faber would be isolated. Is subscription the way forward? Or would you recommend a culture tax to raise revenue for culture makers – such a thing is, according to FREE RIDE, being considered in Germany, by Greens and Social Democrats, and in France with the re-distribution of tax money to filmmakers, musicians, cinemas and other venues that produce French language content through the Exception Culturelle Francais which ‘protects culture from the hegemony of the markets’.

RL: There are a few parts to any solution. First is making illegal commerce – ie, piracy – difficult. No one expects to make illegal commerce impossible, but it has to be difficult, much as it is in the real world.

The second part is making legitimate commerce easier, and this is part of what I mean by blanket licensing. Just to be clear, I do NOT call it a culture tax, since that implies the government is mandating a payment for something whether you use it or not. This would be more like a levy – a payment for something you ARE using, such as insurance, even though you don’t know when you’ll need it or how. The classic example in the UK is PRS for Music – they control the rights to public performances, so if you’re a restaurant or pub that wants to play music in public, you pay them and they divide the money among composers.

This seems complicated, and it is, but it makes things very easy for pub owners. Imagine if you had to contact, negotiate with and pay the composer of every song you wanted to play – it would be impossible! This makes it much easier – you pay one organization and they take care of everything else. Pay television is a much less complicated version of the same idea: You pay for a series of channels and the pay-television company divides up the money among them, according to a pre-set formula. In this case, they divide the money based on a negotiation, not an estimate of popularity, but the advantages of this are the same – consumers pay one fee.

This is important for a few reasons. First, people tend to spend more money when transactions are convenient and not very obvious. For example, I used to pay $60 a month for cable TV in the US. I barely watched it, but I never questioned the charge because it was convenient (deducted from my credit card) and hard to see (it was automatic). Now I spend much less money to watch shows on iTunes, but I question each $2 purchase: Do I really want to buy this, and is it worth it? This is silly! Yet the fact that I have to click several times gives me an opportunity to question that behavior. And while cable television is very expensive, I argue in the book that the rise of this model allowed the emergence of great shows like Mad Men and Breaking Bad.

This is already done with music – it’s called Spotify. People pay a certain amount of money per month and Spotify divides it up. That’s not a perfect system – Spotify is not transparent enough, it looks as though composers are suffering at the expense of performers and labels, and it may not be enough money to support the music we’ve become accustomed to.

The chapter of my book where I deal with blanket licenses has been criticized because some people think I’m advocating a government solution. Part of this is because the way we talk about these deals is very confusing: There’s a blanket license (like that of PRS), a statutory license according to the law (like that for covering songs by other writers) and all kinds of arrangements in between (PRS has a government granted monopoly, so the government has some involvement). To be clear, I do not want the government involved in the culture business any more than it absolutely has to be – period. However, I do think there’s a role for it to play in creating the conditions for negotiations to take place. Think of PRS. If it did not have a legal monopoly, it would have a hard time functioning. By giving it a monopoly, the government created good conditions for negotiation, then stepped back and left it to the market.

Could this work for music? I don’t think this is anyone’s first choice. On the other hand, it’s a decent outcome. PRS has been fairly successful in paying musicians. So I think this could work for labels if it were done right. That said, doing it right would be hard – you can’t create a situation like YouTube, where a technology company ends up with the power to set prices. Could it work for other businesses? It’s hard to say. I think it would be worth trying for journalism. I know it would not work for film and some kinds of television, since the most expensive productions cost more than most of them. That just wouldn’t work. Could it work for books? I think some version of it might. If people paid a certain library fee, they could access e-books for a certain amount of time. If some people still bought physical books, it could be the best of both worlds – you’d pay $10 or $20 for some rights to books but you would have to spend more to own them. And then you’d have to divide up that money. Obviously, most of it would have to go to the most popular books, which tend not to be the best. But we already have that problem, so it wouldn’t change anything. The other issue, which is harder to solve, is what counts as a book. You would have people submitting diaries, blogs, anything they could think of, just to get some slice of cash. There would have to be a way to prevent that. And that would probably have to involve some kind of gatekeeper.

And then you are back to where you are with music: These solutions are not ideal, and a lot of things could go wrong with them. On the other hand, what’s the alternative? We cannot turn back the clock, and I wouldn’t want to. The current situation is unsustainable – we need professional creators. So what do we do? I think we’d be foolish to embrace a solution like this without looking at it carefully, experimenting with limited versions, and seeing how it goes. But I think we’d be equally foolish to dismiss it without trying.

See also Pat Kane’s review of Free Ride.

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