Wednesday, March 30, 2005

"Lets test the RIAA logic…" - Mark Cuban

Never let it be said that Mark Cuban didn't love a soapbox. If it's not TV shows it's his weblog.

You can't fault the guy though. He is, after all, the man footing the bill for P2P software maker Grokster in their fight against the 2003 appeal by media giant MGM. In a blog entry from a few days ago, Cuban marked out his reasons for his position against MGM (don't mind the first half of the link. It's basically Cuban running through his content assets. Just take his point as given; he's not into technology, he's into content).

It will be a sad day when American corporations start to hold their US digital innovations and inventions overseas to protect them from the RIAA, moving important jobs overseas with them.

Thats what is ahead of us if Grokster loses. Thats what happens if the RIAA is able to convince the Supreme Court of the USA that rather than the truth, which is , Software doesnt steal content, people steal content, they convince them that if it can impact the music business, it should be outlawed because somehow it will. It doesnt matter that the RIAA has been wrong about innovations and the perceived threat to their industry, EVERY SINGLE TIME.

In a more recent entry Cuban runs through what he considers to be the main case of the Recording Institute Association of America, the people constantly pushing for this outcome.

At a CEA event I attended a couple weeks ago, I listened to a panel where Mitch Bainwol, the head of the RIAA basically put out the argument that it was obvious that illegal downloads were hurting music sales. It was obvious because the advent of file sharing coincided with a decrease in music sales. Therefore A lead to B...

So Im putting together a list of digital media content types that are sold, and looking and asking if they have seen an increase or otherwise in sales since the introduction of Napster. I was hoping blog readers could contribute their thoughts to the list as well.

Here is my list

DVDs - Huge Increase in Sale
Digital Photographs - Huge Increase in Sales (see corbis and other outlets)
Video Games - Huge Increase in sales
Software - Not huge increase percentage wise, but increases in actual dollars… I couldnt find a specific reference. Anyone have one ?
Ringtongs - Huge increases in Sales

So, using Mitch Bainwol/RIAA logic. If 5 digital based products sold since filesharing came on the scene are showing flat at worst, up huge at best sales, doesnt it hold true that filesharing cant hurt and must BENEFIT digital product sales ?

Barring the attrocious spelling, I get the point, Mr Cuban, but I'm not sure the logic entirely holds in this case. It may, but I'm not entirely convinced.

The panel discussion he refers to is available as a PDF file here. The panel included Markham Erickson, Executive Director of NetCoalition (a trade association for a number of Internet companies such as Yahoo and Google), Dan Glickman, President and CEO of the Motion Picture Association of America and, obviously, Mitch Bainwol, Chairman and CEO of the RIAA.

I haven't had a chance to read the whole thing, but it gets off to an interesting run of spurious logic.

Bainwol: ...What is the basic economic theory? There is this notion of perfect substitution. You have two products, one costs money, one is free, the marketplace goes to free...

Shapiro: ...You know what we're paying for this water? I don't get it, but the point is, water is the kind of thing where it's available for free, but yet we're always paying for it... So you can compete with free, and people do it all the time in all kinds of industries...

Bainwol: You said a bunch of thngs there that I felt compelled to talk about. One of which is the water metaphor. One, water is not free (ed: added emphasis). And, two, to compare water to the genius of creativity or to the genius of any innovation, I think, is just a real stretch. A song that comes from the brilliance of the human mind is nothing like rain coming from the skies. And to make a parallel there I think is silly.

Well, Mr Bainwol, water is free. You may not always be in a position to easily get to it, so that's why you pay for it through water and council rates. Some people may wish to create a more pure form in an easily transportable plastic container which increases its value. Point being, if you have content that's different than what you can get for free, or has some added attraction, it gives it market value (I know nothing about economics and even I know this).

Second thing on this point. I don't know what things are like in the RIAA offices, but P2P isn't free. I pay for my internet access and I can't think of many people that get it for nothing (that includes University students). Yes, it may be included in some kind of association or student fee, but what's the difference between that and the council rates to get your water?

On Mr Bainwol's second point, well obviously the man has no poetry in his soul. He can scratch out pretty words about rain drops and inspiration and say they're nothing alike, but if he's never taken the time to stand and listen to the rain, to marvel at the power and intensity of a tropical thunderstorm, or feel the tiny droplets of a light sunshower falling onto his face, then he may as well stick to his books and figures. And if you don't know what I mean either, then Mark and I will see you in court.

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