BUSINESS

SOPA or The Myth of Lost Business

TAGs: MPAA, RIAA, Stop Online Piracy Act, US congress

court-gavel-iconThe US Congress is about to pass on the Stop Online Piracy Act, as series of regulations that would mean the end of the Internet, as we know it. The Act, also known as “America’s Firewall” would allow for American companies to blacklist and block websites just under the allegation of copyright infringement.

Not so oddly, the main proponents of these measures are the two industries whose business models have had the hardest time adapting to the new economics of the Internet. The MPAA, read the Hollywood establishment, and the RIAA, or the record companies. The reason: They allegedly lost between 14 billion (or even “hundreds of billions” of) dollars in revenue to Internet Pirates. They also claim that all of America’s creativity and innovation, represented by intellectual property, is being stolen

But who is the one that is stealing? Most copyrights are owned not by the creative or innovative people that actually write, shoot, play or sing in them, but by corporations to whom they are contractually bound. More over, unless the creative guy is really a heavy weight, he will not even get fair royalties for the work, as most corporations require them to sign weavers in order to employ them. So yes, someone is in fact stealing, or at least short changing the creative, but it is not the Pirates. This model is the one in place in most creative industries, from graphic design to movies, musicians, writers, and software developers.

Now lets say that Film Studios and Record Companies came to their senses and actually shared all that profit. Then they would have a case for wanting to get back the 16 billion they loose every year in revenue so they can pass on the wealth to their creative, wouldn’t they? Well, the fact is that such profit does not exist. The projections are based on the volume of sales a product would have in a market if all copies were “legal”. What really happens is that most, not all but most of those sales would have not been able to take place at the “legal” price point. If pirate copies were not available people would just not buy the product. I base this assumption in pure logic. People in poor countries would never buy say a Justin Bieber CD at $10.  Mainly because that could mean half a month’s salary in a lot places. What would happen though is that Justin would be far less popular, and far less of a Star…

In my opinion what the US Congress should look into is on how to dismantle monolithic, obsolete business models and maybe even force them into being Creative and Innovative and find a fair way to do business in the Internet instead of trying to protect them.

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