IMAGE: EXPAnsión (spain)

My weekly column in Spanish financial daily Expansión this week is called “Unmet demand” (pdf, in Spanish) and was prompted by Neelie Kroes’ comments during an event held this week at the offices of Spanish social networking site Tuenti in Madrid, as well as after having carefully read a recent report by the London School of Economics called “Copyright & creation: a case for promoting inclusive online sharing”, which makes it clear that downloading copyrighted content without permission is not harming the entertainment industries, and that the legislation by the powerful lobbies associated with film and music, among other others, has been completely unjustified and has proved worthless.

The restrictive laws that governments all over the world have rolled out to supposedly protect the arts and creators and to stop theft are simply the ways that an industry protects itself and artificially prolongs a situation whereby it is able to make money without really offering anything of any tangible value. In the same way that it handled the transition from vinyl to CD, the entertainment industry is trying to create a situation whereby artists’ earnings and production, distribution and promotion costs are reduced in an order of magnitude, but the intermediary’s cut is maintained. The entertainment industry has done this by drastically reducing supply, creating unmet demand in the process, and which is why people download material without permission. Fighting against practices that the entertainment industry itself is responsible for makes no sense at all.

Does this mean that nothing can be done? Obviously not. Downloading will die out when consumers have a reasonable range of options to meet demand, and when they have access to a full catalogue at prices they deem acceptable. In other words, what we have called for time and time again: the client should be able to access a work quickly within a competitive market, either by a free download subsidized by advertising, pay-per-view, streaming, subscription, or any other options the market considers viable. As far as the supplier is concerned, this new revenue stream will mean that the creator of the work in question will see some real benefit, and that downloading sites are not forced to establish prices that make them unviable in the long run.

The situation can be summed up thus: by protecting the intermediaries, governments are making themselves part of the problem.

Below is my weekly column, published in Expansión on Friday, October 11.