2006-06-19

Society benefits from file sharing

The music and movie industry mixes up what is economics and what is business economics, claims debater and scientist Jan Kallberg. Mr Kallberg runs the blog Raka Puckar. This article was first published in Computer Sweden and is translated with Kallbergs permission - all eventual errors in the text are due to my translation.

I do not deny them their right to get paid for their word during a reasonable time, but I do question that there are equal signs being made between self-interest and public interest.

Let's take an example. The friends Magnus, Mikael and Motek downloads one movie a night for 365 days. According to the copyright lobby this means a hundered SEK per download with taxes excluded.

That means 36 500 SEK in lost income for the industry and 20 000 for society in lost VAT and taxes.

This is based on the assumption that there is a measurable correlation between download and purchase. The three friends would then spend around 154 SEK a day on buying movies and music.

Each of these youths would shun night clubs, liqour, cigarettes, travels, papers, candy, coffee and public transportation fees to be able to put all their money on copyrighted matieral sold by large international companies lacking the ablity to adapt to new technology. This chain of thought does not exist outside the music and movie industries. It is a chimaera.

There is no such thing as a binary choice situation where one have to consume copyrighted material or die.

Young people can do completely other things: vandalize subway trains, do drugs, roam the city at night and pick fights in pub lines.

Let's go back to economics. Society does not loose 20 000 SEK in taxes if these three younglings are downloading movies every day.

They would buy a fifth if they were forced to buy at all. So the theoretical loss of society is about 100 SEK a month per individual

The three of them means a public cost of about 4 000 SEK a year.

So is this a loss for society? No. It's gain. The cost is marginal compared to what is gained by calmer youths that watch movies at home instead of running around vandalizing, youths that gets their hands on computer programs they could never afford to buy and a transformation of kids from ignorant brats to technically knowledgeble adults.

They will be able to get into the labour market faster, since they know the tech. They are motivated since they haven't roamed around the city all the time growing up.

That's why the propaganda about how society loses from illegal downloading of copyrighted material doesn't add up. Society would lose large incomes, but the cost reduction is much larger.

Downloading pays off for society, with gain.

The complexity inherited in the software downloaded is marginal, so the real influence on research and development is limited.

Consumption is not about to disappear. It changes appearance and people go to concerts or see the movie instead of buying the album and the movie in competition with other purchases.

It is not certain that the youths would have had this focus on movies and music without downloading working as an initiator. If they would not have this focus, other choices would take a greater position, and that would influence the possibilities of the copyright holders' possibilities to make money in general and on the authortised market.

From an economical perspective - where only the costs and incomes of society and the way society is affected by downloads is weighed in - this is more of a gain than a loss to society!

The tale the copyright industry is telling about what Sweden looses from downloading lacks support from real facts.

Society doesn't lose billions in lost incomes and kept costs.

It is more likely that the long-term benifits from file sharing is much higher than the loss incomes. This is something that also the industry usually regards as profits.

Jan Kallberg, debater and scientist

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