This is an essay I've been thinking about for a while: I am not altogether happy with it as it stands, but I want to stop thinking about it for a bit. See the notes for some of the things it gets wrong.


On value

In 1988 I heard some songs by a band called The House of Love who I'd never heard of before but who sounded pretty good. What did I do? Well, some of my friends had their record, and I could have taped it, but cassettes had, at best, marginal sound quality, and I was quite interested in this band. So it was easy: I bought their record.

In 2008, I heard a really fantastic song by some guy called B. Dolan who I'd also never heard of before. What did I do? Well, I didn't know anyone who had his CD, but I did know how to drive a BitTorrent client, so a couple of hours later I had a copy of of pretty much everything he'd ever recorded.

What changed? Well, lots of things, of course, but let's just look at two of them. Firstly, in 1988 recorded music was something you might expect to spend a significant amount of money on if you were interested in it, while by 2008 it was essentially free for anyone willing to avoid thinking very hard about whether what they were doing was theft. Secondly, in 1988 The House of Love got paid when I bought their record (we all know about rapacious record companies and so on who probably made sure that they didn't get paid as much as perhaps they should have done, but they got paid something), while in 2008, B. Dolan got nothing at all when I downloaded his.

For anyone happy with just using BitTorrent, the cost of recorded music has dropped to very close to zero, and at the same time the amount musicians get paid for their recordings has dropped, unsurprisingly, to very close to zero. It's an awkward truth that if people do not pay for music, musicians do not get paid: however much we like to pretend it is just hurting the record companies that is not true. Even if I'm not altogether happy with just stealing music and use something like Spotify, the cost of music to me is now extremely low: perhaps I listen to 20 hours worth of music on Spotify a month, so with the most expensive subscription I'm paying 50 pence for each CD's worth of music. I don't know how much of that goes to the musician but I don't expect it is very much. And it will go down the more music I listen to on Spotify since what I pay is a subscription, not a cost per record.

Now, you may be thinking that this is going to turn into some kind of rant about why stealing music is bad and how everything was better in 1988, but it's not: stealing music is wrong but I'm not naïve enough to think that anything I can say will stop it. And it's certainly a lot easier to find interesting music now, even legally, than it was in 1988.

The important question to ask is: why has recorded music got so much cheaper? And there is a simple answer to this: it has got cheaper because copying it has got cheaper. In 1988, if I wanted a good-quality copy of a record, I probably had two options: if I had a reel-to-reel tape recorder, a really good turntable, access to a new copy of the record and enough time I could probably make a copy which was almost as good as the record; alternatively I could just buy the record (record companies being able to make copies much more cheaply than a person can because they made so many). For almost everyone the second option was the only one available. In 2008 I just need to get hold of the bits which make up the record and I have a perfect copy, and can give anyone else as many perfect copies as I want. The costs associated with that (bandwidth, storage and so on) are low and falling rapidly: to a good approximation the marginal cost of making a copy is already zero. And now the record companies are in trouble because they can't get their costs lower than zero.

So, here's the first important point: the amount I'm willing to pay for something is not less than the amount it would cost me to make a copy of the thing myself. It might be more, but it won't be less. In 1988 it was pretty expensive for an individual to copy music, so people were happy to buy records: record companies could make much cheaper copies, and sell them at a profit. In 2008 it is pretty much free for an individual to make copies of music, and the record companies' business model has collapsed as a result, taking with it the musicians' business model.

(Compare this with, say, cars: an individual can certainly make a car, and with some effort they can probably make one that would be legal to drive on public roads. But it would be very expensive to do this: the car companies can exploit economies of scale to make cars much more cheaply. And so we buy cars from car companies. Making a copy of a car made by a car company would be even more expensive for an individual than making a one-off car, of course.)

I have been talking about "making a copy" slightly casually. What I mean by "making a copy" is "making a copy which is indistinguishable from the original". In the days of cassettes it was quite easy to make a bad copy of a record, but if you wanted a good copy – something that sounded as good as the record – it was almost impossible. Now it is very easy for an individual to make such a copy of music, but it is still very hard to make one of a car. Whenever I talk about "copying" below, I mean "copying perfectly".

So, the amount I am willing to pay for something will not be less than the cost of making a copy: why might I be willing to pay more than that? The simplest answer is "so the people who made the thing in the first place can make a living": even if it is very cheap to make copies of something, the very first copy may be expensive to make, and the person who makes that first copy needs to eat.

Well, we can see how well that worked out for music: the safe assumption is that people won't pay more than the copying cost, or not for long. So if you want to make a living by selling things, you probably need to be worried if the copying cost is very low or zero: no one will care how hard you had to work to make the first copy. For musicians this means that they need to try to make a living not by selling records but by performing live.

The situation with music has reached its end-game now: it's more interesting to look at some other areas where the same process is underway.

Books

The first and simplest case is books. Books, and publishing in general, is a very close match for the situation in recorded music but about twenty years behind. I'll restrict myself to books here, but the same thing is happening for all forms of publishing.

Until quite recently if you wanted to read something then there was only one realistic way to do it: you bought or borrowed a book, and read the book. And books have exactly the characteristics of records: they can be mass-produced by a publisher fairly cheaply, but they are somewhere between hard and impossible for an individual to copy well – you can photocopy a book but you probably would not want to read the resulting sheaf of paper.

But this is now changing: there already exist devices which are acceptable, though not yet really pleasant, to read from, and we can expect these devices to get much better over time. And these devices can hold an enormous number of "books" in the form of digital information. It's not hard to predict that within a fairly short time the large majority of reading will be done from descendants of these devices.

What is quite surprising is that the implications of this for authors don't seem to be really well-known. It's quite obvious that the various copy-protection mechanisms (known as "Digital Rights Management" or "DRM") will not last: it is already easy to find copies of almost any electronically-published book which have been stripped of their DRM if you know where to look. And at least some authors are in fact encouraging their publishers not to use DRM, based on arguments about monopolies which I won't go into here.

In a few years DRM will be gone, and the copying cost for books will have fallen to zero. At that point no money is coming into the system and authors will need to find some equivalent to musicians playing live. Perhaps book tours will become an enormous business with seas of readers in a field watching some balding author on stage through the rain, waving their hands and singing along as he recites highlights from his classic novel. This doesn't seem likely to me, somehow: if I was an author I would be hoping to find some other way of earning a living pretty soon.

Photography

Photography is the second case, and in particular fine-art photography. The way the fine-art photographer makes their living is traditionally by making and selling prints. So, what should a potential buyer of such prints be willing to pay? Not less than the price of making a copy: so what is a copy of a photograph and how hard is it to make one?

For film-based ("analogue") photography, prints are made by one of several processes – the most common for black and white being gelatine-silver – and are generally made in a darkroom, mostly by hand. Making a print requires the negative, and making a good print requires a lot of skill, and takes a significant amount of time. It's possible to make reproductions of gelatine-silver (or other) prints, and such reproductions can be pretty good, as you can see from looking at well-made books of photographs.

But comparing even very good reproductions of original prints with the prints themselves leads to an immediate conclusion: the reproductions are not the same as the print. They are, at least in some cases, not worse than the print, but they are different. Making copies of prints which are indistinguishable from the original is extremely hard. This is even more strongly the case for some processes – if you have only seen pictures of daguerrotypes in books then you haven't seen anything which looks very like a daguerrotype at all, for instance.

A traditional photographic print is essentially impossible to copy without the original negative. In fact, it is often pretty hard to make really repeatable copies of a print even using the same negative and process: you can get close, but it tends to depend on a lot of factors which are hard to control for. And it's much harder for someone else to make a really good copy because so much of the process of making a print depends on very fine details of what the individual who made it does.

So a traditional photographic print is at least hard to copy, and may well be effectively unique.

Now consider a digital print. The process here is quite different. The original digital image is worked on in digital form, resulting in a final, printable digital image. This printable image really consists of a set of instructions to the printer which will produce the final print: it will depend on the printer being used. But once this final printable image exists it can be printed many times on the same model of printer, and the results will be very good copies.

So, given possession of the same model of printer, a copy of the printable image (which, since it is digital, can be copied with no loss of fidelity), and the same software, it's possible to make an endless number of copies of the print: the cost of making copies will be dominated by the cost of ink, paper and wear on the printer. Recently, "The Online Photographer" blog had a print offer for a digital print of very high technical quality for $20 including shipping: assuming the printer was at least breaking even on this print this tells you something about what the cost of making a digital print is: less than $20 per print.

Digital prints are mass-produced goods: there is a lot of work up-front, but once that work is done copies can be made essentially endlessly for the cost of the materials.

Based on the argument above how much should I be willing to pay for a traditional print? Well, "at least as much as it costs to make a copy" would seem to imply a very high value. In fact the argument does not really apply for things which are unique: instead the amount I'm willing to pay depends on factors like how much I like the print, and perhaps how much the market decides such prints are worth. Traditional prints can have very high values.

How much should I be willing to pay for a digital print? Well, in fact the same mostly applies: since I don't have the original image I can't easily make a copy. But I feel pretty uneasy about paying a very large amount for the photographer to press a button and run off another copy. Perhaps digital prints will become valued like the mass-produced goods they are: it seems unlikely that collectors will be willing to pay very high prices for something which can be produced in large numbers. Photographers who produce digital prints will therefore need to be able to sell them in large numbers: they won't be able to rely on small numbers of high-value sales.

But digital prints are not the end. Already the vast majority of photographs are viewed on screens, and screens are rapidly getting better: I don't see a reason why, in a few years, screens should not be of equal or higher quality to paper-based media for photographs. At that point digital prints will be as "obsolete" as traditional prints are now. And trying to sell photographs to be viewed on a screen has exactly the same problems as trying to sell music does now: it's unlikely that people will be willing to pay anything at all for something that they can copy themselves for no cost.

This does not look good for a fine-art photographer trying to make a living. But it does not look altogether bad: if what you want to do is to sell prints in small numbers at high value, then you can do that, so long as you sell traditional prints which are effectively unique and stay away either from either digital prints which can be mass-produced for a fairly low copying cost, or purely digital media where copying costs are zero. In fact, you should probably be doing things to make your prints more unique: use processes which produce results which are somewhat unpredictable, and which are otherwise hard to copy – daguerrotypes would be a very good choice, though it might not be necessary to go to such extremes.


Notes

This essay is not really satisfactory in its current form. One important thing that it misses is that there are two transitions:

In the "craft reproduction" stage copies are either very hard or impossible to make, so the value of them can be very high. In the "mass reproduction" stage copies can be made for a well-understood cost in arbitrarily large numbers, and I suggest that the value of them is defined by this copying cost. In the "digital reproduction" phase anyone can make a copy for no cost.

For music the transition that has recently happened is that from mass reproduction to digital reproduction. This is the transition that is happening now for books.

For fine art photography the transition that is happening now is from craft reproduction to a form amenable to mass reproduction, and I speculate that there may be a further transition from mass reproduction to digital reproduction.

As a final note: this is not about "analogue being higher quality than digital" or "craft reproduction being higher quality than mass reproduction". I don't think that LPs sounded better than CDs, that digital prints are somehow worse than traditional ones, or that words on an electronic device are somehow not as good as those on paper. I do believe that all of these things are much easier to copy, and that's all I am talking about here.


June 2012
[TFEB]