Most physical object businesses has a multi-tier process that, greatly simplified, can be described as:
(1) design -> (2) produce -> (3) distribute
This simplified traditional model can be directly applied to movies, games, books, etc.
For example:
(1) guy writes book -> (2) publisher runs the printing press -> (3) dude runs book store
Each of these steps can be greatly sub-divided. For example, someone needs to drive the truck full of books to the book store!
Furthermore, the line between each of these steps can be very blurry. An author could, for example, print his own book at home, if he were so inclined.
The big monkey wrench comes into things when you consider the most important missing element: MONEY! Where does it come from?
In the days of yore, if you wanted to produce a film, you'd have to go find backers, like you would for a startup business. Those backers could be friends, family, fools, professional investors, pre-order sales, etc.
More interestingly, one type of backer could be the production/distribution suppliers. They often have greater diversification, so they are more stable in the long term. As they grow more and more stable, they grow more and more rich. With their riches, they can go re-invest more and more of the supply and distribution chain. Once they own more and more of the supply and distribution chain, they can invest more and more in the design end of the process.
Now here's where things get rotton:
It is extremely difficult to profit from a movie these days which are not funded by the major studios. They simply won't run it in the theaters that they have exclusivity deals with! ie. most of them!
You're fucked.
This is true of a scary number of media empires! In addition to movies, think about TV, music, Broadway, books (especially text books). I'm sure I'm missing many.
It even is true of software! It may no longer true for boxed software at your local Compu R' Us store, but it still is for video games. You're simply not gonna make as much money if your game doesn't show up on the shelves at Walmart.
So while capitalism works pretty well in general, it's got a fatal flaw: it tends to generate monopolies. And monopolies are dangerous. If not presently malevolent, monopolies are like time bombs waiting to go off when new leadership steps in. I doubt the movie studios set out with the goal of controlling all media and public opinion. It just so happens that being good at making money makes you good at accumulating power. And power corrupts.
So now back to the question you asked: What is The Pirate Bay's stance?
Well.... I'd imagine that they view themselves as liberators from the tyranny of the production companies. If those companies went poof and disappeared tomorrow, films wouldn't disappear. I mean, just look at youtube.com/freddiew -- there are talented people out there who are figuring out how to fund things like they're doing with their VGHS film.
Surely, destroying the production companies would cause people to loose jobs and lots of great films to die on the planning desk. But people will overcome. The industry will find new ways of funding itself and the middleman will become less powerful. Sure, YouTube is huge, but that won't stop you from clicking a Vimeo link. The internet simply makes it too hard to get disgustingly rich from being a publishing or distribution platform. And if you do get disgustingly rich, you simply can't lock every movie theater into an exclusivity deal: anyone could run his own movie theater! And many other movie theaters are just a few keystrokes away! There are new ones every day.
Capitalism doesn't create permanent monopolies, government does. Capitalism tends to destroy monopolies. Just ask Kodak or AT&T or any other monopoly disrupted by innovative technology.
Anyway, Notch is making tens of millions of dollars on Minecraft, a video game sold directly to consumers.
Yeah, that's a great point about Notch. I think it goes along well with my point that theater-type production and distribution systems are reserved for the big guys. The smaller guys like Notch have their own channels and it has worked out very well for the most successful of them.
It is great that Mincraft is as successful as it is. But trying to say that gaming would exist as is without the backing of big companies as is is a joke. Minecraft caters to a niche market.
I'm pretty sure Notch couldn't have cranked out Skyrim on his own, and WoW wouldn't have been developed by a small group of people as a hobby project on their own time. Large and complex games and systems and the like take lots of money to produce a product people will want to play, and without big backing these type of games wouldn't exist.
Thanks so much for the lengthy response - really cleared a lot of things up, but I had a few things to ask about:
1) So the main issue that we all have with these big production companies is that they make it difficult for small guys to get in on the movie game? But isn't that what things like Youtube and Vimeo are for? Distribution systems for the little guy?
I don't really think it's practical to want to put a significant amount independent developers into theaters. The reason the production companies are really oligopolists (few in number, but relatively great in power) in the industry is that is the best way to actually make the industry work. For example, it's not a very good idea to have 100 different power companies where you live because it is much more efficient and therefore better for society to have only one company. Similarly, it really isn't a great idea to have hundreds if not thousands of movies playing across the country at the same time - it brings up huge issues with coordination, advertising, movie quality, etc. These big production firms don't have the problems that you would have with having hundreds of smaller independent firms.
The smaller guys should be going for the distribution channels made for the smaller guys because that's how those channels were designed. The whole construction of the network of theaters around the world wasn't designed to have thousands of movies playing at the same time - it was designed to have a few big movies playing at the same time. And the only way you're going to get a few big movies is if you have only a few firms that are able to make these big movies.
2) Just as a quick point on economics, capitalism doesn't create monopolies. It's the part of our economy that isn't capitalistic that creates monopolies. We obviously don't live in a purely capitalistic society as a whole - it's more monopolistically competitive and in some parts, oligopolistic. It is oligopolistic in those parts where it is most efficient to do so (like in the big name movie production and distribution industry).
> The whole construction of the network of theaters around the world wasn't designed to have thousands of movies playing at the same time
You're presupposing that the traditional movie theater is an enterprise that has an inalienable right to exist.
It doesn't :-)
Disruptive technology is called "disruptive" for this very reason.
Thanks to cheap big screen TVs and digital distribution, the movie business is being disrupted.
Near me, lots of theaters have gone out of business recently. Other new ones have popped up that are now selling beer and food during the film. Still others are showing fewer blockbusters, but more classics and inviting directors, actors, and other crew to hold QnA sessions after the screenings.
In the short term, damage is done, jobs are lost, businesses fail. In the long term, scar tissue forms and society rebuilds, better than it was before. It's all a bunch of grand experiments. Who knows what will stick?
> capitalism doesn't create monopolies
It most certainly does create monopolies AND oligarchies. Just look at history. Some other reply to me suggested it was government's fault. Yeah that too. Also see history :-)
> For example, it's not a very good idea to have 100 different power companies where you live because it is much more efficient and therefore better for society to have only one company
This is a pretty different discussion.
In terms of ideology, I'd consider myself a social libertarian. I believe that the government should do only really two categories of things:
1) Act as a check/balance on businesses (ie. make sure my food is safe to eat & that no one organization goes around destroying the greater good for personal gains)
2) Provide municipal services where there is either (A) conflict of interest (eg. health insurance) or (B) unsatisfiable constraints to sustain business (eg. no one will deliver mail to a 10 person town; or road construction)
However, the problem is that when technology changes, government needs to be able to rapidly evolve it's involvement in both areas. Sadly, it seems incapable of rethinking any idea without a full reboot (cough bloody revolution) or a fist full of lobbying dollars.
For example: Today, I support the government's control of road construction. If teleporters are invented tomorrow, I would demand that the government immediately develop a plan for reducing and ultimately eliminating their involvement in transportation.
If it's more efficient, how come they are complaining so much about how they're struggling to make money? P2p is way more efficient than what they want (build+power+staff theatres, rental stores, retail stores, manage supply chains, etc.)
It isn't about efficiency. It's about giving stuff away for free versus charging for it.
As one guy above put it, if you lay out a bunch of hotdogs on a table and let people take them for free, you'll give out a whole lot more than the guy next to you who is charging for them and handing them out one by one.
Youtube and vimeo probably weren't originally designed as "distribution systems for the little guy", so much as "I want to share this cat video/student film". The point being that they weren't meant to be a distribution system any more than a DVD in and of itself is a distribution system. They're a type of media which makes the work of distribution systems easier. Blogs were, at the time, the distribution system, and youtube/vimeo were a new, easy to use media that made distributing to a wide audience easier (no more 'codec' issues, etc.)
The fact that they have become distribution systems in their own right is a testament to the fact that content creators will always create, and will try to distribute their creations in any way that they can. People will often use something counter to it's original design, and it's smart companies that can recognise that use and restructure their operation around it.
The problem isn't that only the big guys get into the cinemas - in a free market, that might still be the case. The problem is that the little guys can't get into the cinemas, no matter how high the quality of their product. The only way that they can is by bowing down and paying fealty to the big studios who didn't actually contribute anything to the production.
The problem that the big companies are encountering now is that new media has been showing up which works without their tightly controlled distribution methods. Want to make a TV series? You no longer have to sell it to a studio or be stuck on some form of local station. You can distribute it yourself, to more people than the traditional methods would ever allow, and you can do it easier. The problem that the studios have is that you no longer need to be on a TV show or in a cinema to get seen. They're not entirely irrelevant yet, but they're no longer the only way to view content.
The problem with piracy is that people are taking the job of distribution out of the hands of the people who either created or paid for the rights to distribute it. It's a big blow for companies that add no real value other than distribution, which is why they're claiming massive losses and jobs lost. They can't reconcile the idea that you can make as much money (if not more) by selling the same product at a lower cost to a wider audience. The pirates saw an opportunity and stepped in. Once the big companies can figure out how to adapt their business models to meet what consumers actually want, they'll start to make a profit, and everyone will be all the better for it.
The last thing that this opening of the market (and that's what this internet revolution is) means is that quality will increase. Once distribution isn't a case of "You get what you're given, and you'll thank us for it", then the producers of content will have to start competing not in price but in quality for the consumer's dollar. People can pick what they want to watch when, now. They don't have to catch it at the cinema or have to go without until it makes it to DVD. To make them want to watch something at the cinema, then the product actually has to be worth watching at a cinema. If you want someone to pay money for your DVD box set, you have to make it worth spending money on. If there's something getting produced which you can get for cheaper, in a way that's more convenient to you, then the content would have to be amazing to get you to pay for the more expensive option.
Anyway, this has been a long, rambly rant. I'm hoping that I didn't cloud issues too much, or tangent too often, or outright contradict myself. Every word I wrote, I meant at the time I was writing it.
(1) design -> (2) produce -> (3) distribute
This simplified traditional model can be directly applied to movies, games, books, etc.
For example:
(1) guy writes book -> (2) publisher runs the printing press -> (3) dude runs book store
Each of these steps can be greatly sub-divided. For example, someone needs to drive the truck full of books to the book store!
Furthermore, the line between each of these steps can be very blurry. An author could, for example, print his own book at home, if he were so inclined.
The big monkey wrench comes into things when you consider the most important missing element: MONEY! Where does it come from?
In the days of yore, if you wanted to produce a film, you'd have to go find backers, like you would for a startup business. Those backers could be friends, family, fools, professional investors, pre-order sales, etc.
More interestingly, one type of backer could be the production/distribution suppliers. They often have greater diversification, so they are more stable in the long term. As they grow more and more stable, they grow more and more rich. With their riches, they can go re-invest more and more of the supply and distribution chain. Once they own more and more of the supply and distribution chain, they can invest more and more in the design end of the process.
Now here's where things get rotton:
It is extremely difficult to profit from a movie these days which are not funded by the major studios. They simply won't run it in the theaters that they have exclusivity deals with! ie. most of them!
You're fucked.
This is true of a scary number of media empires! In addition to movies, think about TV, music, Broadway, books (especially text books). I'm sure I'm missing many.
It even is true of software! It may no longer true for boxed software at your local Compu R' Us store, but it still is for video games. You're simply not gonna make as much money if your game doesn't show up on the shelves at Walmart.
So while capitalism works pretty well in general, it's got a fatal flaw: it tends to generate monopolies. And monopolies are dangerous. If not presently malevolent, monopolies are like time bombs waiting to go off when new leadership steps in. I doubt the movie studios set out with the goal of controlling all media and public opinion. It just so happens that being good at making money makes you good at accumulating power. And power corrupts.
So now back to the question you asked: What is The Pirate Bay's stance?
Well.... I'd imagine that they view themselves as liberators from the tyranny of the production companies. If those companies went poof and disappeared tomorrow, films wouldn't disappear. I mean, just look at youtube.com/freddiew -- there are talented people out there who are figuring out how to fund things like they're doing with their VGHS film.
Surely, destroying the production companies would cause people to loose jobs and lots of great films to die on the planning desk. But people will overcome. The industry will find new ways of funding itself and the middleman will become less powerful. Sure, YouTube is huge, but that won't stop you from clicking a Vimeo link. The internet simply makes it too hard to get disgustingly rich from being a publishing or distribution platform. And if you do get disgustingly rich, you simply can't lock every movie theater into an exclusivity deal: anyone could run his own movie theater! And many other movie theaters are just a few keystrokes away! There are new ones every day.