Economics of Napster

The Napster problem–a now seemingly ages-old dilemma involving the unpleasant-for-the-industry use of peer to peer networks for illegal uses–is a beautiful example of how the digital world should force us to rethink some antiquated ideas (fresh as they may appear on a timeline). Specifically, simple supply and demand economics–in a world of free downloading–can no longer suffice to give an accurate picture of the way things work. In a massive irony, the Real World-based system of Smith becomes merely theoretical when faced with the realities of the virtual sphere. However, what’s really fascinating about network file sharing is that that practice, perhaps more than any other computer-based practice, brings to the forefront a pre-existing issue and forces its criminalization simply due to its ubiquity. The practice in question here is just a matter of sharing music: my CD collection is full of mix tapes and borrowed discs, and it seems every time I check, there’s a new album I’ve never seen before. The issue of sharing music–either with friends, family, random acquaintances, or some guy you met on a bus–has never been something worthy of “societal problem” status. And yet, thanks to improved technology, a phenomenon that has always and surely will always exist has been deemed criminal thanks to a backwards way of thinking.

But I don’t want to harp too much on the flawed logic of a governmental model that criminalizes a socially acceptable act. Ham and Atkinson’s article is fraught with deeper problems, specifically because their business model is clearly not based in the real world. The “What’s at Stake?” section of this article is a beautiful insight into the mind of a thinker rooted in the past. The innovations that should drive a change in the industry are present in Napster, yet a refusal to understand this fact can only lead to a flawed conclusion. It may be illegitimate to steal intellectual property, but to say that that theft is capable of forever stymieing the flow of intellectual material is ludicrous and borderline insulting. The simplistic S & D curves can not account for the fact that music is an art form, and an art form that people will and should want to produce regardless of the compensation they receive for it.

With programs like Napster and Kazaa, music has finally begun moving back to its roots as a populist art form. Multimillion dollar industries are all well and good, but the loss of a few of these conglomerates has no ability to worsen the quality of the music itself. In fact, the digital age, rather than making the music label obsolete, has increased the ability of small companies to put out their own products. Technology has thankfully also improved digital editing techniques to the point where large, high-tech studios are no longer necessary to record albums. Napster has, thankfully, changed music for the better. Now we just have to wait for everyone to figure that fact out.

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