The (Dis)Economies of Content Creation

Next to join the Mourning of Impoverished Content Creators (following Music and Photography) is the Society of Authors - from todays Times Online:

Book piracy on the internet will ultimately drive authors to stop writing unless radical methods are devised to compensate them for lost sales.....

.....For a while it will be great for readers because they will pay less and less but in the long run it’s going to ruin the information. People will stop writing. There’s a lot of ‘wait and see what the technology brings’ but the trouble is if you wait and see too long then it’s gone. That’s what happened to the music industry

The assertion that content creation will stop because the current crop of professionals are getting less money just doesn't hold up. Look at the chart below, which shows the game theory:



In essence there are two different creative industries here - the "Long Tail", for whom content creation is essentially subeconomic, so they are offsetting it by one or more of:

- deriving value from the content creation in another way
- subsidising it via work done elsewhere (aka a Real Job)
- subsidising it by reducing income potential (aka Starving in a Garret)

For these people the Internet is a great opportunity as it gives them low cost exposure, which promises future benefits, and monetisation problems are long term - so they'll worry about it if they ever get into that wonderful position

The other group are the "Hit Head" - they get a great benefit from the "'Net echo" effect - ie because they are known, the internet tends to amplify this fame even more, driving demand up. However, they are also hit by a bigger disbenefit, ie they attract greater levels of piracy of their content.

This is why they wail the most and tend to attract not that much sympathy...people instinctively reallse that they are getting a Net benefit as well as a problem.

What is most interesting is the behaviour of those people who are in the Breakeven Band - that fuzzy area between making money and losing money. Clearly those on the way down are extremely keen on raising drawbridges, those on the way up don't care about anything except getting over that drawbridge - apres moi les deluge or whatever. And that is because, on the way up, they start to see a whole lot of benefits - publicity, recognition, status etc that starts to generate a whole lot of non cash and longer term benefits - as Daniel Defoe realised;

In 1701 The True-Born Englishman, a satirical poem by Daniel Defoe became a bestseller after an estimated 80,000 unauthorised copies were distributed. It did not make him rich but it did make him famous. In the preface to a later edition he wrote of his gratitude to the “pirates” who had sold it, the first known reference to intellectual property theft as piracy

Those on the up are not going to stop creating content to help those already more fortunate in a million years (or 300, at least)!

(Note - this is not an argument for "Everything is Free, Forever" thinking - its an explanation of why some creators will offset the costs of creation and do it for free)