tag:blogger.com,1999:blog-6598831864333990375.post904125595229571462..comments2023-05-08T04:01:34.561-08:00Comments on Students Who Enjoy Economic Thinking: Professor Roberts' Bizarro WorldAdam Levyhttp://www.blogger.com/profile/15257124483756325652noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-6598831864333990375.post-81747438748177460912009-11-04T01:58:17.499-09:002009-11-04T01:58:17.499-09:00UDO,
I like where you were headed with this post. ...UDO,<br />I like where you were headed with this post. Mr. Roberts seems to be making a lot of leaps in his article, most of which don't really make sense. It is difficult to see how car owners (as opposed to stereo manufactures) were benefited by thieves freely stealing stereos. Sure car stereos were redesigned to be harder to steal, or useless once stolen, but where is the benefit for the car owner in that situation? While he could have a point, claiming that the cost of the law enforcement necessary to prevent stereo theft would have exceed the cost of redesigned stereos, he fails to provide any evidence that was actually the case. I tend to find evidence more convincing than unsubstantiated claims.<br />To back up Mr. Roberts for a minute. On the idea that music piracy sites could actually help record sales, the BBC posted an article on the second of this month ( http://news.bbc.co.uk/2/hi/technology/8337887.stm ) that claims that those individuals--in the UK at least--who steal music also purchase around twice as much music as those who don't. That fact actually has less to do with the innovation Mr. Roberts believed would have come from unhampered file sharing than it does with the fact that people who love music will purchase it as well as steal it--because they love music. We cannot draw the conclusion that music piracy actually promoted record sales from the BBC article. In fact it could very well be that the pirates would have purchased more music had they been unable to steal the music that they had. Instead, we can only draw the conclusion that people who love music will obtain more music than those who don’t—not exactly a revelation I know. We should be careful about committing post hoc proctor hoc fallacies, even when they may support an idea we like.GI Bloggerhttps://www.blogger.com/profile/17236596672678332781noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-4816907111139135642009-11-04T00:13:11.764-09:002009-11-04T00:13:11.764-09:00"The markets definitely tried to respond (iTu..."The markets definitely tried to respond (iTunes) with some measure of success. You mentioned that iTunes has sold over 6 billion songs. Was this profit included in the $9 Billion profits of the Record Industries in 2008? Curious how that pans into it."<br /><br />I tried to find out, but if the detailed numbers are out there I'm having trouble finding them.UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-46537223682392271552009-11-03T21:16:18.287-09:002009-11-03T21:16:18.287-09:00First off, Josh:
"If you want to argue that ...First off, Josh:<br /><br />"If you want to argue that the music industry 'could have, but didn't' then you will be pulling me into a hypothetical world that doesn't exist in reality."<br /><br />Like "imaginary wealth" and the world as a "single self-contained trading system" because of the lack of interplanetary commerce? Ha ha. We've already delved deep into the realm of hypotheses my friend.<br /><br />But I take your point that we have to deal with what actually happened, not what might have happened. And I agree with you that the market hasn't responded quite the way Professor Roberts predicted. The courts tried to shut online music piracy down but failed, because as Richard pointed out the pirates have stayed ahead of the system.<br /><br />The markets definitely tried to respond (iTunes) with some measure of success. You mentioned that iTunes has sold over 6 billion songs. Was this profit included in the $9 Billion profits of the Record Industries in 2008? Curious how that pans into it.<br /><br />Perhaps the reason the music industry is losing money is that it is not correctly responding to supply and demand. Albums are getting more and more expensive while free music is getting easier and easier, whether you download it online or you just copy the contents of someone's iPod onto your computer.<br /><br />Perhaps the music industry needs to lower the costs of cds. And I know that theoretically the only way to counter the cost of free music (nothing) is to produce music for free (impossible), but I think the music industry would sell more albums and actually make more money if they lowered the costs of cds down. <br /><br />The problem with this is that because the profit margin will be narrower and so Record companies are less likely to take risks on new artists and so the variety might decrease. But I think technology counters this by allowing people the ability to market themselves easily online by cheaply recording demos and posting them to community review sites.<br /><br />It's hard to predict the future of the music industry, after all, the industry might take a surprise corner and go in a direction completely unexpected. It doesn't seem likely that the music industry can exist as it has been in the past, though. Something's going to have to change or it will keep losing income year by year.SamuelVanderwaalhttps://www.blogger.com/profile/12906638268162700375noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-30542866850278232422009-11-03T21:10:46.539-09:002009-11-03T21:10:46.539-09:00If you bought and sold used albums at your shop an...If you bought and sold used albums at your shop and didn't give the RIAA a slice of your earnings in their eyes you're no better than a pirate, car thief, commie, terrorist etc.<br /><br />http://www.nytimes.com/2007/04/05/opinion/05sachsnunziato.html?ex=1333425600&en=4e2f925d623fbe36&ei=5088&partner=rssnyt&emc=rssRichard Raineshttps://www.blogger.com/profile/00804936689427520573noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-37978001890463896012009-11-03T20:42:40.633-09:002009-11-03T20:42:40.633-09:00LOL, If only that what Professor had predicted! I...LOL, If only that what Professor had predicted! I might be agreeing with him. I owned a record store for around three years in the early 2000's, And I actually think that music piracy probably helped me out. (Hard to tell for sure though.)UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-79642398263351579312009-11-03T20:35:55.060-09:002009-11-03T20:35:55.060-09:00You're right that the music industry failed to...You're right that the music industry failed to devise a means to successfully restrict access to copyrighted music over the internet and they are worse of because of it. However I would argue that net social welfare may actually have increased as a result of piracy despite the losses of music labels, musicians, and traditional record stores.Richard Raineshttps://www.blogger.com/profile/00804936689427520573noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-72093467282121957422009-11-03T19:36:25.014-09:002009-11-03T19:36:25.014-09:00I like Josh disagree with Robert’s main point. I t...I like Josh disagree with Robert’s main point. I think that in the case of Napster that systems for protecting music from theft actually increased because Napster was shut down by the legal system. This is because of the publicity that was created by the ordeal. Music recording companies saw how their profits would dissipate and many never would be music pirates became so because they learned of such sites through the shut down of Napster . Other file sharing sites took Napsters place. Most people that I’ve talked to about stealing music have done so through other sites, infact I don’t think that I know anyone who originally used Napster during it’s hay day.Camilla Kennedyhttps://www.blogger.com/profile/02449045341190889112noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-6879591603569872812009-11-03T19:14:47.882-09:002009-11-03T19:14:47.882-09:00Roberts said "I will argue that allowing the ...Roberts said "I will argue that allowing the theft of music via Napster could have actually increased revenue for the music industry benefiting music lovers and the creators of music.”<br /><br />In my experience, that's about as close to a testable prediction as economists ever get. He gives him self some wiggle room by saying "could have". Fine, I won't hold him to a high standard. Even if they only increased revenue by a single penny, I'll concede the victory to Roberts. <br /><br />Music industry revenue is down 4 BILLION as of 2008.<br /><br />I argue that while the "capital N Napster" was shut down, the technology it represented was not.<br /><br />I say that the industry did allow theft of music via Napster (actually Napster substitutes.) If you want to use his "NYC Stolen Stereo analogy", what happened is that the recording industry never came out with a product that stopped functioning when it was stolen. The car stereo industry did.<br /><br />If you want to argue that the music industry 'could have, but didn't' then you will be pulling me into a hypothetical world that doesn't exist in reality.<br /><br />Professor Roberts argued in his piece that when you give the actual property rights for your stuff to thieves, the market will respond in a way that benefits both the Producers and the Consumers.<br /><br />Through technological innovation and ineffective law enforcement, the actual property rights for music was given to thieves. The market did respond, consider what happened to Napster after it was shut down as a p2p file sharing system, or consider iTunes. ITunes just sold its six billionth song in January of 2009. I don't know what it's up to 11 months later...<br /><br />Professor told us that in this specific instance, if you let the thieves have your junk, the market will respond, and we will all be better off.<br /><br />The market responded: we aren't better off.UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-40314465521522677372009-11-03T12:40:32.865-09:002009-11-03T12:40:32.865-09:00I fail to see how Roberts' central thesis is f...I fail to see how Roberts' central thesis is false. Granted he failed to anticipate the explosion of alternative P2P file-sharing options after Napster's demise but his prediction that the existence of illegal downloads on the web would provide copyright holders with an incentive to look for ways to protect their intellectual property from unlicensed distribution was spot on. What Roberts didn't realize was the futility of the copyright holders' experiments with methods of discouraging copyright infringement. He assumed that some sort of innovative new technology would be invented that would allow copyright holders to discourage illegal downloading in the same way that the invention of removable radios discouraged stereo theft. DRM is just that sort of innovation. In that sense his NYC analogy was accurate. The only difference is that the market in NYC was self correcting whereas in the digital music market the pirates have consistently outsmarted the copyright owners. That's because Roberts, and essentially everyone else at the time, underestimated was the ingenuity of digital pirates and their skills at subverting any DRM technology copyright holders could come up with. As a result P2P sharing is at an all time high while record profits drop to an all time low.<br /><br />Now that they've failed to discourage P2P transfers on their own via DRM they've resorted to seeking legal intervention and government protection. You say that "there never was a real concerted effort to end file sharing", but I'd point you towards the scores of lawsuits the RIAA has filed since MP3 and P2P technology came into the mainstream. It's been indiscriminately suing individual file-sharers, torrent trackers, website owners, software engineers et al. for at least the past decade in an unsuccessful effort to deter piracy.Richard Raineshttps://www.blogger.com/profile/00804936689427520573noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-23061460149843453402009-11-02T14:38:54.846-09:002009-11-02T14:38:54.846-09:00Oops. I made a huge mistake.
Should read 1999 - 1...Oops. I made a huge mistake.<br /><br />Should read 1999 - 13billion<br />2008 - 9billion<br /><br /><br />Yikes I need to hire an editor.UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-62456532719713805192009-11-02T11:51:09.317-09:002009-11-02T11:51:09.317-09:00Deep sixed*Deep sixed*UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-21566239307938587032009-11-02T11:49:53.893-09:002009-11-02T11:49:53.893-09:00Thank you for the correction! I was under the imp...Thank you for the correction! I was under the impression legal downloads started before napster got deep sixes. Check out that on the media link. I found the riaa insider interview to be eye opening.UDOhttps://www.blogger.com/profile/16797455822014965844noreply@blogger.comtag:blogger.com,1999:blog-6598831864333990375.post-11987723589411994282009-11-02T00:07:01.976-09:002009-11-02T00:07:01.976-09:00Just want to point out that at the time Russel wro...Just want to point out that at the time Russel wrote this article itunes was in fact readily available. However the introduction of Apple's itune's store, the actual client through which people could download music legally, wasn't introduced until April 2003 - long after Napster shut down and Russel published the article you criticize. Also early in the itunes store's history Apple experimented with several digital rights management (DMR) schemes which in effect meant those who decided to get their music through legal channels didn't technically "own" their music. They were merely "borrowing" it temporarily from Apple and their RIAA backed record labels, who could at any time revoke their permissions to listen to the music they purchased.Richard Raineshttps://www.blogger.com/profile/00804936689427520573noreply@blogger.com