Eric Pfanner devotes a column to the war between downloaders and the music companies link here. He has apparently reported frequently on the subject and here reviews the field after calling our attention to the Isle of Man which proposes on grounds of "tax efficiency" to put a small tax on the fee its citizens pay their internet service providers. The pot would be divided up according to the number of downloads and given to the copyright holder. Similar ideas have been proposed before. The companies are opposed so far.

Short of getting rid of copyright on music, this compromise might not be bad, if the fee charged remains low. In fact the island's government could push the issue by imposing it and not preventing non-islanders from down-loading, creating a sort of national Pirate Bay. How long could the companies hold out?

HBO got the exclusive right to broadcast Sunday's inaugural concert link here. They are now firing off take-down notices against YouTube posts of clips of the concert, even privately filmed ones--and making them stick. No question of fair use or who made the video.

Where is the outrage?

Interest post on Squawking Tech--proposes that because of natural (price) deflation,

"With the exception of land and human time, in all areas of society we have been conditioned to expect more for less over time. Yet until just a few years ago, the music industry was increasingly charging more, for the same product. And they were able to do this because copyright law gives them the ability to set prices like a legal monopoly. ... When people in aggregate are asked to pay far more than what they think something should cost, they start looking for alternatives. In this case, the alternative comes in the form of P2P technology."

Intriguing argument: that the failure of music to fall in price along with other technology-related goods is evidence of the pernicious effect of copyright.

Michael Perelman reported before on Google's deal with authors and publishers link here. MOTOKO RICH gives some more detail on the deal link here which still has to be approved by the court. Here are some of the major points from the article.

"It will make it possible for users to read a far greater collection of books, including many still under copyright protection."

"According to Dan Clancy, the engineering director for Google book search, every month users view at least 10 pages of more than half of the one million out-of-copyright books that Google has scanned into its servers."

"For readers who might want to buy digital access to an individual scanned book, Mr. Clancy said, Google was likely to sell at least half of the books for $5.99 or less. Students and faculty at universities who subscribe to the database will be able to get the full contents of all the books free."

"The settlement may give new life to copyrighted out-of-print books in a digital form and allow writers to make money from titles that had been out of commercial circulation for years. Of the seven million books Google has scanned so far, about five million are in this category."

"Revenue will be generated through advertising sales on pages where previews of scanned books appear, through subscriptions by libraries and others to a database of all the scanned books in Google's collection, and through sales to consumers of digital access to copyrighted books. Google will take 37 percent of this revenue, leaving 63 percent for publishers and authors."

"Just what kind of commercial opportunity the settlement represents is unknown, but few expect it to generate significant profits for any individual author. Even Google does not necessarily expect the book program to contribute significantly to its bottom line."

Rich reports some criticisms of the settlement, but they seem small beer. That readers might decide to pass up a book based on a few pages of its text might just as likely be encouraged to read the whole thing. More telling was the concern of some libraries that the charges would price them out of the market for the service.

To me, the settlement seems like a good deal for most people, short of the abolition of copyright. Publishers are likely to suffer in the long run as the market for printed books continues to shrink.

Also note the same old error creeping in of thinking that creation is an independent source of property rights (for more, see Libertarian Creationism, Inventors ... are like unto ... GODS...., Rethinking IP Completely, and Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors).

Notes Johnson, "the creator of a piece of intellectual property owns the product of his work." His argument? "If a baker bakes a loaf of bread, he therefore owns it." And likewise, for "music, movies, software." But note the mistake here Johson makes: "If a baker bakes a loaf of bread, he therefore owns it." The "therefore" is the giveaway: he says this because he thinks of the creation of the loaf as the act that gives rise to ownership. Then this leads to the analogy with other created things, like music. But creation of the loaf is not the reason why the baker owns it. He owns the loaf because he owned the dough that he baked. He already owned the dough, before any act of "creation"--before he transformed it with his labor. If he owned the dough, then he owns whatever he transforms his property into; the act of creation is an act of transformation that does not generate any new property rights. So creation is not necessary for him to own the resulting baked bread. Likewise, if he used someone else's dough--say, his employer's--then he does not own the loaf, but the owner of the dough does. So creation is not sufficient for ownership.

The rest of the argument is confused as well. Johnson argues that there are property rights in creations, and glorifies the (utilitarian) Constitution that enshrines them--why, then, ought they last only for a finite time, instead of forever, like other types of property rights do? And take this argument:

The pirate deprives the creator not only of the relatively small amount of money to be paid for the product. He deprives the creator of his very means of living, his ability to control, trade and profit from the work of his mind. That is a crime legally, morally, and on the deepest philosophical level, metaphysically. It is a matter of the creator's ability to maintain his own existence.

But this implies that property owners have a right not only in the physical integrity of their property but in the value of their property; they do not: value lies in the way others esteem your property. (See Rethinking IP Completely, and Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors for further comment on this.)

Finally, when he notes, "The PRO-IP Act ... is a welcome law and a welcome message," he accepts the idea that law can be or ought to be made by legislation. Of course, this is wrong, for several reasons--see my post Regret: The Glory of State Law for elaboration.

Update: see the vigorous debate in the comments section of the parallel post at Mises.org.

Here's the disturbing story.

On the Sept. 3, 2008 show of Free Talk Live, the excellent libertarian radio program, there was an interesting discussion with a caller who is an author and has changed his mind about IP--he realized that by giving online versions of his book away on Amazon, he can sell more copies of it.

The recorded show is here; the IP discussion starts at the beginning, with the first caller, and lasts for a few minutes.

In other news, Google's new Chrome browser "is based on the open-source WebKit architecture, and Google claims that its code will be open source, so it's unlikely that the company is trying to corner the market on browser functionality, since innovations are eminently copyable." I.e., Google's not trying to lock Chrome's code down with copyright. It's not afraid of competition.

I reported previously on attempts to break the copyright over Oregon laws. It looks like the same thing is happening in California. And the person leading the charge is no other than Carl Malamud, who forced the SEC to put all filings online. Check out his public.resource.org site.

Today's Wall Street Journal has a front page article, "Glut of Flilms Hits Hollywood", about why so many money losing movies have been made lately. Donald Starr, chairman of Grosvenor Park, a film financing company, says: "The amount of sales that these films generate is just too small to be worth it. In any other business, if something doesn't make back its price, you stop making it. But for some reason in the film industry we keep making more of these movies."

The reason Mr. Starr is searching for was identified by the economist Arnold Plant in a classic 1934 article on "The Economic Aspects of Copyright in Books." He pointed out that the copyright regime has the perverse consequence of over stimulating the production of books people don't want to read. Publishers use the monopoly profits earned from successful books to fund the production of their duds. The same thing is true for any other part of the copyright industry, including films. An excess of small indie films get made, which don't earn their opportunity cost of capital. The other side of the ledger is that a small number of films (e.g., Titanic) and film stars (hello Leonardo Di Caprio), and books (e.g., the Harry Potter series) and authors (hello J.K. Rowling) earn far more than they would in a free market.

Julio Cole wrote an article on copyright discussing Plant's work "Controversy: Would the Absence of Copyright Laws Significantly Affect the Quality and Quantity of Literary Output?"

The solution is to abolish the copyright raj. Hey, maybe that would play in Bollywood.