Paul Krugman, the Grateful Dead and copyright: “Just tape it!”

It’s a strange and brave new world when you can read the noted economist and NY Times op-ed contributor Paul Krugman quoting tech guru Esther Dyson, who proclaims that the Grateful Dead are the creative harbingers of the age of digital media. In a recent column, he explains how she predicted, before the widespread adoption of the web, the end of the intellectual property model that the world had lived with for two centuries:

In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.” For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because “enough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.”

He goes on to describe his recent conversion to Amazon’s Kindle, which he believes has advanced e-book technology to the point where digital readers will become common, perhaps even the usual way we read books. And Krugman, like many others, predicts that this technology will alter the publishing industry forever:

Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won’t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices. Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.

He’s certainly not the first one to suggest that using books as promotional collateral for alternative revenue streams is the way of the future, but it seems to me that the only people suggesting this solution are writers who already earn a substantial portion of their income from non-authoring activities. (Krugman is best known as as Professor of Economics and International Affairs at Princeton University, as well as the author of over 20 books. One of these, International Economics: Theory and Policy , is a staple of many college level International Economics courses. The 7th edition lists on Amazon for $122.50, (including 1 semester access to the e-book version), so if Professor Krugman’s publishing prognosis comes to fruition he may find himself passing the hat during his lectures to maintain his lifestyle. For the rest of the piece, (“Bits, Bands and Books”) click here

For a well-reasoned rebuttal to Krugman’s hypothesis, it’s worth reading writer Steven Poole’s Blog posting, “Free Your Mind”, which neatly summarizes the challenge facing writers and artists who depend on their creative output for their living:

But if the day comes when most reading is done on electronic devices, the equation will alter drastically. Giving away your work in the same format in which you hope to sell it is a dangerous game, if that’s how you hope to make a living. And if books in the future are distributed mainly in DRM-free electronic editions, then writers won’t even have a choice. The version of digital rights management on Amazon’s Kindle, where your “books” are forever locked to that device and its successors, and you can’t even lend a book to a friend, is stupidly restrictive. But is a free-for-all the best alternative? A lot of people paid for the Radiohead and Nine Inch Nails albums even though it was also rapidly possible to download pirated versions for free. But perhaps that was because they were already Radiohead and NIN fans. Will as many people choose to pay for something they don’t have to pay for, when it’s a question of taking a punt on a new artist? A reasonable outcome, perhaps, would be something like an iTunes for books, where people choose to buy (DRM-free or at least DRM-lite) copies because it’s still easier for most folk than hunting down a torrent. That way writers would still see some kind of modest revenue from their efforts. Otherwise, if people can’t earn money from writing books, then books will only be written by the rich, and by people in their spare time.

As the creative universe grapples with the challenges posed by new technology, new concepts and ideas will need to be experimented with. One start-up which may be onto something, is wowio, a company that offers its registered users free e-book downloads that are ad-supported. (For an earlier post on this site, click here)

Can you really see the latest John Grisham or Stephen King thriller sporting an ad for Nike or Coke after the title page? Who knows? But I believe that a lot of Deadheads love Stephen King’s novels, so maybe it’s possible.

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