June 28, 2008
Alejandra's article on black market bootlegs in the mercados of Juarez raised a lot of contrary opinions. Some readers attacked the morality of pirated creative works. Others defended the expediency. The controversy highlights the dilemma.
A couple of years ago, a guy showed up at my doorstep here in Barrio Heights hawking DVD's. They were, of course, bootlegs, and cost $6 each here on my doorstep, or 3 for $15. I bought War of the Worlds (the Scientologist's version), Sin City, and some other DVD that I can't remember. War of the Worlds was titled in the Cyrillic alphabet and recorded in a theater. It wasn't worth $6 on DVD, and a fair market price for me, in a theater, with English titles and Dolby surround sound, would have cost Cinemark free cokes and popcorn and a nominal cash payout. Sin City, though, was a bargain. Subsequently, I bought the graphic novel, full pop, at Barnes and Noble.
I don't steal. The last thing I stole was a couple of highlighters from a job five years ago. Guilt still haunts me.
And I didn't steal those DVD's. I paid for them, cash.
The unacknowledged gorilla in the apartment is that the business model for creative works, as we've known it, is broken, usurped by advancing technology. Scalable works are now easily reproduced for almost nothing. What's the marginal cost of this newspaper you're reading? Approximately what you paid for it. All you people who are so indignant about Alejandra buying bootleg DVD's ought to voluntarily contribute to NewspaperTree. If you like my columns you ought to kick in a little for me, too, or at least take me out to lunch. Preferably someplace nice and expensive, but I eat Chico's. So maybe just nice.
The MPAA, of course, recognizes the inadequacy of their business model, so they try to persuade us by resorting to moralizing and proselytizing and reminding us befor the movie starts that the poor prop guy's job is on the line. The studio heads' eight or nine figure salaries make them less sympathetic.
The music industry is already adapting to the insufficiency of the system. Radiohead offered set-your-own-price downloads. U2 followed suit. Record companies are taking it in the shorts, but they've been exploiting artists for years. It's hard to justify keeping record producers and A & R guys in silk suits and Maseratis.
The money in the music industry these days lies in live performances. Maybe, when bootleg DVD's are ubiquitous, live theater will make a resurgence. Or maybe movie stars will capitalize on celebrity appearances and endorsements. Like they have already.
Celebrity has replaced talent as the chief determinant of moneymaking ability these days. There are plenty of great bands and songwriters languishing in relative obscurity. Some major talent continues to live on Ramen. Few artists are as critically acclaimed and as financially unrewarded as Alejandro Escovedo. On the other hand, Paris Hilton's singular talent lies in maintaining her celebrity.
Celebrity is fool's gold.
Economists will recognize that when you buy a bootleg you make a capitalistic decision. Based on the actual $2.50 you spend on the bootleg movie, and and the nonexistent expected penalties, you behave just like the model of the economic man. Provided she got two and a half bucks worth of utility out of the DVD.
In a perfect Pareto optimized free market system, price discrimination is a legitimate practice. People should pay what a good or service is worth to them, and not what the producer wants to charge. Every transaction should be negotiated. (Dr. Roth showed me that model 25 years ago. Bet you thought I wasn't paying attention, huh, Dr. Roth?) If the movie theaters weren't oligopolistic exploiters, they'd let everyone pay what the want. What's the marginal cost of letting one more person into the theater? They should pass the tin cup at the end of every movie, or maybe after every reel. Maybe that's what George should do with his Movie on the Mountain.
Maybe we should go to the Honor System, and only leave cigar boxes with money at the checkout stations, so people can make their own change.
Free market capitalism isn't a moral system. In fact, it's the exact opposite. The invisible hand doesn't hold a whip or a Bible. Only carrots. Guilt is the only additional cost you can extract from Alejandra. But I bet she'll get over it watching next month's movie before its theater release.