The Dutch government commissions a report on the social and economic effects of file sharing and discovers that it’s all good.
A lot can be said for shifting our gaze from our navel and focusing instead on the entire belly. In this case, the social and economic effects of file sharing.
By file sharing I mean the good, the bad and the ugly in the debate. This includes those in the record industry whose blood reaches a fevered boil at the mere mention of the phrase to their ideological opposites who insist that all content everywhere must, should, will and at all times be free.
As a US citizen, I generally follow only what’s happening here in terms of copyright, file sharing and what in the past I’ve called mental squatting. That, for worse and worse, is how we do things here in America. (Although, in moderate defense, I have been following New Zealand’s recent copyright battles.)
But with a desire to be a bit more worldly in my understanding, I started reading a report commissioned by the Dutch government on the social and economic effects of file sharing on the music, film and gaming industries.
Color me amazed.
US debates circle endlessly around producers and consumers with each reduced to a function of the dollar amount added or subtracted to the entire industry. That is, the argument is generally won or lost on proof that behavior (i.e., file sharing or its prevention) benefits a producing agency such as a record label.
For example, if you can’t demonstrate that file sharing benefits or injures the recording industry, you’ve lost the argument. The goalposts in our US debate are strictly aligned to what positively or negatively affects an industry.
The Dutch go about this differently. They bring in another potential beneficiary. Cleverly enough, they’re called citizens. And what amazes me in this report is the very simple move of bringing in the collective commons as an equally worthy participant in any analyses of whether file sharing harms or benefits society.
The research shows that the economic implications of file sharing for welfare in the Netherlands are strongly positive in the short and long terms. File sharing provides consumers with access to a broad range of cultural products, which typically raises welfare. Conversely, the practice is believed to result in a decline in sales of CDs, DVDs and games.
That the report talks about overall societal welfare is eye opening to begin with. That it recommends that the benefit of such welfare is equal to that of the producing agents is something unheard of in our Stateside debates.
Determining the impact of unlicensed downloading on the purchase of paid content is a tricky exercise. In the music industry, one track downloaded does not imply one less track sold. Many music sharers would not buy as many CDs at today’s prices if downloading were no longer possible, either because they cannot afford it or because they have other budgetary priorities: they lack purchasing power. At the same time, we see that many people download tracks to get to know new music (sampling) and eventually buy the CD if they like it. To the extent that file sharing does result in a decline in sales (substitution), it usually entails a transfer of welfare from producers to consumers. With estimated welfare gains accruing to consumers totalling around €200 million a year in the Netherlands, music producers and publishers suffer turnover losses of at most €100 million a year.
You see what they did there? The emphasis is mine but there’s a “transfer of welfare from producers to consumers.” This is not a dollar amount, although the report’s authors quantify it. Instead, it’s a social good. It’s a cultural product that citizens otherwise would not have access to but can benefit from and are available through file sharing.
The Dutch view this as valuable. Instead of a US debate where dollars lost is a net loss in the zero sum game of US citizens defined as consumers, the authors of the Dutch report suggest that the transfer of — and access to — cultural assets is a societal good.
This is not to say that the report dwells solely on this idea or issue. Instead, it looks at new business models for the music, film and gaming industries where citizens are equal partners in the equation rather than blameworthy pirates to be sued by a nation’s recording industry.
What strikes me though is the Dutch reintroduction of the consumer-as-citizen, and the elevation of that citizenship to equal status with our corporations. It’s an argument lost in US debates on the issue. And one that should be found as we consider content in an age of digital reproduction.
The report can be found here.