This perhaps requires some introduction.
Whenever I’ve argued with a Libertarian about the problems with capitalist systems, they’re always quick to point out that it’s not capitalism that’s the problem, it’s corporatism. If only we totally deregulated everything and allowed businesses to simply compete with each other, we wouldn’t have all these problems, because the market would self-regulate and weed all these things out of itself.
But the reality is that without regulation, corporatism is a natural component of a capitalist system — it’s part of the competition. If lobbying politicians for special favors isn’t outlawed, then that’s a venue that a business can pursue in order to try to facilitate its success (and a fruitful one at that). You can’t have an unregulated capitalist system that does not have corporatism. In order to get rid of corporatism, you have to regulate capitalism and declare such things off-limits.
Lobbying for favors and laws that benefit you is a way to influence the market in your favor without actually having to compete with your product. Disney doesn’t have to compete as much because they can extend copyright indefinitely, preventing the same ability to make derivative works that gave them their success. Part of any successful business model has to include not simply competing but preventing competition. That’s why there’s a bitter knot of lawsuits between Apple and Samsung — instead of that money being poured into R&D so that they can keep trying to outdo each other in the marketplace with products that, while similar, are constantly one-upped over the other guy’s alternative, they’re trying to prevent each other from even competing in that arena.
This is all a much larger conversation for another time, but the reason I bring it up is because lobbying is one way for entities that compete in a loosely-regulated capitalist system like in the United States to do so without actually competing in the marketplace itself. You compete by manipulating, not by actually playing the game. It’s like a cheat code, or like bringing a stun gun to a race.
Piracy operates in a similar way. The crucial difference is that it’s illegal, but I’m going to set that aside for right now, because the law belongs to those who can afford to buy it. The law will always be skewed in favor of the wealthy. If nothing else, contrast the impact of piracy (illegal) and the impact of lobbying (legal) on society and humanity, and figure out which one has more terrible an impact.
But there are benefits to piracy.
For starters, there’s the fact that piracy drives down prices for legitimate consumers by decreasing demand. If not everybody is buying everything they want to have, that decreases demand, which in turn drives down prices. But beyond all that is this, and this is far more important than any of that:
Before you could buy MP3s from digital distributors like Apple and Amazon, they were the primary format for pirating copies of physical media. People were ripping CDs and sending them to each other long before the iPod.
See, here’s the thing: In addition to cost, one must also look at effort as a motivating factor for purchasing. As soon as MP3s became a viable and popular method for distributing content, suddenly going to the store or waiting for a mail order for a physical copy of an album or a movie seemed like a chore. Going to a store might give you something closer to the immediacy of just downloading an MP3, but it still involved getting up and getting in your car and driving to a store and seeing if it was in stock and etc, whereas piracy involved a few clicks of a mouse and maybe half an hour or an hour of waiting, depending on your internet connection. Online ordering was as convenient, with just a few clicks of a mouse, but the wait time was much, much longer. In the end, you could still rip and encode the content and get the MP3s and do what you wanted with them, but it was a lot more work than just pirating it. (This is the same reason I would often download torrents of DVDs I owned for more convenient playback, instead of ripping and encoding them myself.)
And nobody was selling MP3s yet, so there was actually no legal alternative that offered the same benefits of convenience. That’s the one element that seems to be often ignored in all of this: Shows on NBC, CBS, ABC, FOX, and a few others are all free if you have an antenna (and as for the “ad model”, we’ve been able to fast forward through commercials since the 1980s), but people will pirate them to watch on their own time because of the convenience. (That’s not to say that cost doesn’t also play a role — it is, after all, preferable to get something for free than to have to pay for it. But there’s more to it than just “free” versus “pay”, which is how the discussion is often characterized. You’re not just buying a product, you’re participating in an entire experience involved with obtaining that product. There are non-monetary costs, and there are benefits that are worth certain risks or feelings of guilt. The equation is more complicated.)
Eventually, MP3s — initially demonized by the RIAA, who tried repeatedly to outlaw them — became available for purchase (along with movies and their respective digital formats), giving rise to the digital distribution models we see today. Along with the iPod, iPhone, smartphones in general, and even the Zune.
By extension, you have Netflix, Hulu, Amazon Prime, and other “rental”-type services, all of which provide even greater convenience than piracy, and now the studios are actually making money. Perhaps not as much as they would if everyone bought every movie they saw or every song they listened to, but it’s better than the zero dollars they were making from all the customers who turned to piracy as an alternative. Even Apple’s new “Match” service, while implicitly endorsing piracy, at least provides some amount of profit to the record industry. So now, everybody is benefiting, all thanks to the fact that pirates created digital formats and high-quality encoding methods and refused to stop illegally distributing those resulting digital copies of music and videos. Piracy spurred progress. (Not to mention things like how torrenting as a method of distribution is an ingenious technology in itself.)
Ultimately, a large part of Apple’s and Amazon’s respective successes over the last decade can be largely attributed to the effects of piracy on the marketplace. It’s hard to say whether digital distribution would have come about without piracy, but given that it’s far more profitable to lock people into being forced to purchase irreproducible physical pieces of media, there was little impetus for studios to invent it on their own. Ideally, for them, people would still be buying CDs and DVDs that they were unable to rip or copy. (Actually, the ideal situation for that business model is a world in which information cannot ever be copied in any form.)
Perhaps Apple might have invented it in order to sell the iPod. Again, this is all speculation, and it’s hard to say whether the iPod would have been thought up even without the earlier existence of digitized songs as data files. But when you look at the way the RIAA and MPAA have behaved in the face of all of this, it’s easy to conclude that if Apple invented the ability to rip CDs and attempted to sell it as a product, they’d have been sued out of business.
We owe a lot to piracy, and the innovations that have resulted from the myriad attempts to stifle it. Which is why I’m not really worried about all the ever-threatening laws and regulations and things that try to stop it. Instead, I’m excited by what amazing advancements to digital media and the internet will come as a result of this ongoing information arms race.