Saturday, May 19, 2012

Thoughts on piracy

According to Forbes, Game of Thrones will likely be the most pirated show of all time. There are many reasons for this, one being HBO's business model, as summed up nicely in this comic by The Oatmeal.

I myself am watching Game of Thrones legally, yet not paying for it. My sister records the episodes and I watch them at her place. In effect, I'm piggybacking on her account and we're getting two views for the price of one subscription, since I don't have cable at all.

Personally, I've had mixed feelings about piracy for a long time, and I'm still not sure what my position will eventually evolve into. I've got friends in two camps on this. My artistic friends (game designers, people involved with film and music, and those who can draw well) generally think that piracy is one of the greatest sins of the modern world. Meanwhile, my techie friends seem to have not even the slightest trace of guilt about it.

A great case in point: I watched Breaking Bad for the first time last year, on the advice of a coworker. First he said "You should check it out." I said I'd see if it was on Netflix, it was, so I got hooked. I feel good about watching things on Netflix, because in effect I've already paid for it, and the money that I pay indirectly gets back to the studio via whatever contract they've negotiated.

When I'd finished the third season, I realized that the fourth and final season (so far) was not available yet. So I told my coworker, "Well, I'm gonna wait a while until Netflix uploads the next season." I got funny looks. He said "Why don't you just torrent it?" -- as if there is no reason in the world not to do that, and I must be some kind of Amish hippy or something to not have thought of it.

I'm not saying I took the moral high ground here. I held out for a few more days before I talked myself into torrenting it. But at least I'm aware that there is a moral issue. I discussed it a few times with said coworkers over lunch, and they at least acknowledge that it might be a problem for the studios. I have a strong suspicion that most people under the age of 20 would not even go as far as recognizing that it's illegal.

To be clear: Most of the movies I watch are either in theaters, purchased or rented DVDs, or legally endorsed streaming sources. Most of my music is from CDs I own or MP3s I purchased online. Most games I've played and enjoyed are either free or paid for. Most, but definitely not all.

Let me play "angel's advocate" and try to fairly represent the side of my art friends.
  • Being an artist, of one sort or another, is hard work, usually for low pay.
  • Making money as an artist depends on some sort of reliable revenue.
  • Without a business model that produces reliable revenue, big budget art will not be viable. Movies like The Avengers have to show in theaters and sell DVDs, or there's no economic incentive (hence no ability) to make them. Games like Diablo III and Skyrim need to pay their designers, actors, modelers, and developers, and that means they can't afford to give it away. Musicians need to make enough money to live on. And so on.
  • When you consume art for free that you have been asked to pay for -- watch a movie, play a game, put music in your collection -- you are stealing it. The artist deserves to make money for producing things that you enjoy, and you are taking advantage of them by not paying for it. (This is one of the points I am a little ambivalent about. Just bear in mind that I'm trying to accurately represent the artist side of the equation in making these points.)
  • The more art people steal, the more difficult it becomes to make money as an artist. It's a tragedy of the commons situation. Eventually we may get to the point where the quality of art declines dramatically, because the really talented people will not be able to produce art full time, nor will the budgets be there for big projects.
  • Therefore, by pirating, you're hurting everyone in the long run.
I don't really want to post the pirate's justification for pirating in much detail. I've heard them presented in many conversations; I've even tried using a few myself. But even to me, they ring a little bit hollow. They strike me as the rationalizations of someone who knows they're doing something wrong but wants to keep doing it.

For the sake of putting them out there, here are some briefer hits on the pro-piracy arguments:
  • It's not really stealing if you copy something without destroying the original.
  • Information should be free anyway.
  • I wouldn't pay for it even if I couldn't pirate it, I'm too poor or it's not that good.
  • I tried to give HBO my money but they made it too hard. (See the cartoon above.)
Many of the arguments come up in this Reddit conversation about "Thrones," which the Forbes article also links.

I don't want to pretend that these are really strong arguments from an ethical point of view, but I do want to point out a few things about managing incentives properly.

There is a saying among economists, that you put a lock on your bike to keep honest people from stealing it. In other words, leaving your bicycle unlocked is just too tempting, and some people who wouldn't normally steal a bicycle may succumb if it's just sitting there unlocked. Meanwhile, a really determined criminal will still steal your bike with or without the lock. It's just that if you have the lock, the probability that your bike will be stolen on any given day goes way down.

In other other words, we all have a certain moral threshold, some lower than others. I'm pretty sure I wouldn't steal a bike, with or without a lock; and yet I stole season 4 of Breaking Bad. Where does the moral calculus lie?

It seems to me that people decide on a course of action based on a variety of factors, of which the primary motivators are
  1. How great the benefit is for doing something unethical (If there's no benefit, the choice would be easy) versus how great is the fear of being punished for your actions (taking into account both the likelihood of being caught and severity of punishment).
  2. How difficult the action is to perform. (In the bike lock example, moral objections plus the difficulty of breaking a lock will be enough to deter some people from stealing a bike, whereas without the difficulty factor, they succumb.)
  3. What magnitude of harm they think their actions might cause. (Robin Hood is a prime example. In this case, the principle that "Stealing is wrong" butts up against the observation that it will do more good than harm. Most people would place "Stealing $1,000 from a billionaire" as a lesser evil than "Stealing $1,000 from a person who needs that money to eat.")
There may be more factors there, but let's just take these three to start with. On these axes, media piracy falls in an area for most people that makes it really easy to rationalize.

How great is the benefit of piracy? Well, not really that great. You can watch a movie that you would otherwise miss. It might not even be a very good movie, or else you'd be more likely to pay for it. There is benefit, though, as The Oatmeal points out. Sometimes you're saving the cost of a ticket or DVD, and sometimes you're seeing something now that won't even be available for a year or more.

But what about punishment? Despite a few well publicized cases in the last decade that turned out to be a PR disaster for the RIAA, generally people know that the chances of being caught and making charges stick for something that millions of people do, is minuscule at best.

How difficult is it? The first time you try it, it takes a little research. On subsequent tries, it's trivially easy, requiring only some nearly free bandwidth, and a few hours of slightly slower internet access.

What magnitude of harm? This is the major point of dispute. Even if we completely grant that it's wrong to pirate, and even if we accept the fact that artists need that money, the individual harm that I cause by pirating a movie is still very small. Depending on when they say it, the MPAA claims that piracy costs their industry $250 billion, $58 billion, or $6 billion per year. A piece in Ars Technica suggests that it's not nearly as bad as any of those.

Certainly, if someone pirates a movie that they would have otherwise have paid $20 for, then the studio loses $20. But part of the effect of piracy is that people wind up seeing a lot more movies than they would actually buy, and most people see their "theft" of any individual movie as being worth a buck or two at most... and one TV episode being worth far less. Again: I'm not saying any of this to argue that it's actually okay to do this, just pointing out how the calculation shakes out for people who pirate regularly. When a pirate steals an episode of a show, they probably think of that individual action as costing a few cents.

In HBO's case, on one hand I think they're being a little bit foolish by making customers jump through so many hoops to get a copy of the episodes. Yes, if they force somebody to subscribe to their full service then they wind up with a lot of money. But if somebody doesn't subscribed even though they would have been willing to buy some episodes on Netflix or Hulu for, say, $20, then that's $20 that HBO simply doesn't get which they could have. I'm not the CEO of HBO, of course, and they might have calculated the difference. But my feeling is that if their business model is to force customers to stay subscribed to traditional cable service forever, I don't think that model will last very far into the future. I know I'm not the only one who's just abandoned cable entirely in favor of paid online entertainment, and I imagine this will become more common going forward.

On the other hand... the fact that HBO doesn't charge a reasonable price for their services doesn't automatically entitle people to steal them. As with all of capitalistic offers, your options within the law are to either accept the services, find a legitimate bargain, or just don't use them.

But despite all that rationalizing, we still have those issues in the background that make piracy an easy thing to do. The act of pirating is ridiculously easy, and will only get easier. There are steps that many game companies are taking to prohibit piracy, such as the growing trend to do what Blizzard has just done with Diablo III, which is to require that even mostly single player games connect to a server at all times. However, in the case of music, media and text... I'm fairly well convinced that it will never get more difficult to pirate them from a technical perspective.

The reason is simple. No matter how many safeguards they put on DVDs and ebooks, eventually you have to let paying customers see and hear it. That means that you have to allow every customer to decode it and play it back visually and audibly, and that means that you can capture the output to a file as well as the screen. Look at it this way: in the worst case scenario for pirates, even if the software was completely flawless, it wouldn't be able to prevent external recording devices from just taking a video of the video.

When you look at it that way, legal wrangling like SOPA and PIPA are all that media companies really have to turn back this tide, and they're not good tools. They'll never make media harder to copy, and they won't convince people that the pirated video is costing them more than a couple of bucks per "theft". So the cost/benefit calculation of pirating is their only weapon -- trying to impose draconian punishments on people who get caught, so that they won't do it.

Yet SOPA and PIPA had all kinds of problems because they overreached, causing companies which do not encourage piracy to protest that this would hurt their business model. In effect, the cost to the society for implementing those measures was worse than the cost to the media companies. In my example above, I said you could copy movies with a video camera. Suppose the MPAA decided to push Congress for a law that made owning a video camera a federal violation subject to a hefty fine. That might solve some of their problems, but it wouldn't be a solution that citizens would stand for, for many legitimate reasons.

So as I've felt for years, I don't know what the solution to piracy is. Since it is a tragedy of the commons problem, everyone who pirates contributes a small amount to the problem, but the overall consequences are large. And I don't want HBO to go away. From what I've read about them, it seems to me like it would be extremely difficult for any other company to undertake such large scale projects with such a generous lack of censorship. As popular as it is to talk about "crowdsourcing" these days, I think people underestimate the magnitude of shared resources that has to go into a huge entertainment project.

There is, of course, a lot of fat that can be trimmed out of the publishing industry in general. Greta Christina recently proved that you don't have to go through a giant publishing corporation to make money on book sales, and Joss Whedon showed that you can make money on a silly one-off independent film project. But that's probably not a fair standard, since he's Joss Whedon. Already an established Hollywood presence (more so now that he's directed one of the biggest box office hits of all time) and with fairly big name actors willing to work with him pro bono.

It could be that some art forms will simply be unavailable, or will decline sharply in quality, because it's no longer feasible to produce expensive things and make money with them. That'll be sad. But with all that said... I may be a hypocrite, but torrenting is still fun.