THE ECONOMICS OF THEFT: THE SON OF WHACK THE GOPHER

In the first part of this series of posts I excoriated the Science Fiction and Fantasy Writers of America for acting like a junior-jackboot version of the RIAA in issuing a bunch of DMCA takedown orders against documents on a site called Scriptd. The most obvious problem was that many of the works SFWA claimed were written by Isaac Asimov and Robert Silverberg were in fact written by others - unless Asimov and Silverberg had flourishing careers writing gay porn their fans never knew about.

The point man on this buffalo stampede over the cliff was Andrew Burt, a SFWA vice-president and computer science professor at the University of Denver, who has been waging a long campaign to take harsher measures against people who post copyrighted works on free sites.

(And don't read too much into Burt's position. One of the effects of the problems with SFWA I outlined in the first post is that the organization is vulnerable to electing whack jobs as officers.)

In spite of the idiotic manner SFWA handled the Scriptd case, Andrew Burt is not an idiot. What he is, in my opinion, is fixated.

Burt has been gulping down the copyright Kool-Aid by the glass and he's drunk so much of it he's lost all sense of proportion on the issue.

Burt and the Spider Lady

He reminds me so much of nothing as the Spider Lady - a severely arachnophobic old lady who lives in my neighborhood. The Spider Lady wants the City of Phoenix to eradicate every spider in the city and she's constantly trying to get her neighbors to sign petitions urging the city to spray wholesale with various nasty insecticides. Since most of us value our pets, children and health she had been notably unsuccessful.

Actually the comparison is unfair to the Spider Lady. A large proportion of the spiders in Phoenix are poisonous black widows and homeowners who don't take precautions will soon find their webs everywhere. The Spider Lady may be nuts, but she's focused on a real problem.

Where Burt and the Spider Lady converge is their utter inability to see beyond their stated problems to the utter folly of their "solutions". Even if you drenched every square foot of Phoenix with DDT you wouldn't eradicate the spiders, no matter how many you killed. And even if SFWA bankrupted itself in the effort, it will never shut down all the sites posting copyrighted works for free.

Burt has a FAQ (which is not, please note, an official SFWA publication) that does about the best possible job for laying out the argument against 'piracy'. It extensively discusses the legal and moral issues involved in copyright violation on the web and disposes of some of the more jejune arguments in favor of it.

And, typically of his approach, he utterly ignores the economic and practical aspects of the situation.

I'll cover practicality in the next post. For now let's look at the economics because the rational part of this flap is about money.

The Guiding Principle of Security
Burt may be a computer scientist but he's pretty clearly not an expert on computer security. Well, neither am I, but I write about it extensively which gives me some little exposure to the field. On the evidence a good deal more than Burt has.

The key principle in any computer security system is proportionality. The proposed security solution shouldn't cost more than the possible loss caused by a breach of security.

So the first question is, how much is piracy costing SF authors?

The answer, apparently, is 'not very much.'

Science fiction and fantasy authors are notoriously paid a pittance for their work. For each copy of a paperback book the author usually receives less than 50 cents. Hardbacks with higher royalty rates and much smaller sales usually pay the author about a dollar a copy. Advances are just that; advances against royalties which must be repaid before the author sees any additional money.

While it's true that a very few authors sell enough copies to turn those pittances into substantial sums, only a tiny minority of authors can eke out even a poverty-level income from writing fiction.

The next question is 'how much does this kind of copyright violation cost authors?'

The short answer is 'apparently virtually nothing.' The longer answer starts with the nature of sales of fiction books.

Book sales notoriously follow the Long Tailed Power Law. That is, most of the sales are made in the first couple of royalty periods a book is on the market. After that sales drop off sharply - how sharply depends on the work and the author, but typically they have dropped to almost nothing three or four years out.

So even if you take a popular author like the late Isaac Asimov or Robert Silverberg, who hasn't written much recently, the current expected sales figures on any of these books would be low. It's worth noting that all of Silverberg's works on named in SFWA's DMCA demand were several years old. Which means that since the total sales are small the economic impact would be small as well.

There is some evidence to suggest this is the way it works. I just went back through my old royalty statements to confirm the lack of effect of freely available copies online. A couple of my Wiz books are up in the Baen Free Library, a pioneering effort by the late and much-lamented Jim Baen to use the web intelligently by offering copies of selected Baen books free online. (Not copyright violation, please note. Those of us who participate freely agreed to make out books available for free. I did it because I believed it would increase the sales and longetivity of my books overall. On the whole I've been borne out.)

I'm a particularly useful canary in this particular coal mine because I haven't published a new book in nearly 10 years or a short story in six or seven - not since heart surgery and attendant problems put a serious pause in my writing career. So we've got a series of books that's several years old with no additions in about a decade and two of them made available free online several years ago.

If there was significant economic harm to authors from freely available copies of their works, you'd expect to see an inflection in my royalties about the time my books went on the Baen Free Library. In fact there isn't. The curve diminishes, of course, but it stays smooth.

But the argument of harm to authors faces even bigger hurdles than that. In order to accurately calculate the harm from free downloads you have to account for any increased sales resulting from the author's inadvertent free samples.

I'd argue that my long-term sales have improved because the free advertising has extended the sales at low levels. There's no obvious inflection point in the royalty curve, but I'm still collecting a couple of hundred in royalties every year. This is unusual for books that have been out that long.

I know that freely available copies of books online do boost at least some authors' sales because I've become regular readers of series and authors I first encountered in the Baen Free Library. For example I've probably spent more than $100 on copies of Eric Flint's books since reading "1632" http://www.baen.com/library/ and "1633" online at the Baen Free Library. Now granted, perhaps $10 of that has actually gone to Eric and his co-authors, but those are sales that never would have been made if I hadn't read "1632" online.

By the way, the argument equating the number of free downloads with the number of lost sales is utterly specious. Most of the studies, and common sense, show very few of the people who have stolen something in violation of copyright would have ever bought the item. Thing of the computer types with hard drives packed full of pirated software, most of which they never access and don't even know how to use. The argument has been thoroughly discredited in the case of software and similar numbers turn up with music and books.

Now you would think that if there were major economic losses here the people pursuing the people posting this stuff would be the ones losing the most money - the publishers. In fact book publishers have shown remarkably little interest in going after online copyright violators. Except for situations like trying to keep the latest Harry Potter from reaching the net before it reaches the stores, there's almost no enforcement action from publishers.

The reason is that modern publishers have an almost reptilian focus on economics. If it costs more to go after the pirates than it does to suffer the piracy they won't bother.

And yes, I've had my works posted online without permission. A few years ago Ernest Hogan and I co-authored an "Aztec dinosaur detective story, noir" titled "Obsidian Harvest". It appeared originally in Analog and was reprinted in Gardner Dozois' "18th Annual Year's Best Science Fiction" anthology.

Since then the story has appeared in an unauthorized Russian translation. Am I happy about it? Not especially. Am I losing sleep over it? No. Am I going to call out the copyright dogs? Not hardly. The losses are just too small.

In short, whatever the moral argument against illegal posting, the economic argument simply doesn't hold water. The losses to science fiction and fantasy authors are simply too small to worry about. (Games and game-related material? I don't know. That's not something I follow.)

And it is simply totally impractical to make a serious effort to shut down sites that post copyrighted works on line for free. That's an issue we'll discuss in the next installment.

Coming soon to a screen near you:

Whack The Gopher III :The Mutant Grandson