In light of the recent Supreme Court decision on file-sharing, political blogger Kevin Drum asks:
"The year is 2015 and Columbia has just released Spiderman 7. The next day, 10 million people with no technical savvy at all go to their computers, stick a Blu-ray disc into their DVD drive, log on to Movies4Free... Three minutes later they have a 100% perfect DVD...As bandwidth increases, DVD technology improves, and software becomes as easy to use as a toaster, every piece of digital content on the planet will be available within minutes...Is this OK? Or do you have a different vision for the future? If profit-based movie/music distribution becomes essentially impossible, do you think the content industry will somehow adapt and get its revenue elsewhere? Or will content creators continue creating but just make a lot less money at it?"
1) Right now, radio broadcasters make more money from music than music labels do. U.S. CD sales are $17 billion, radio advertising is $20 billion. Broadcasters' ability to take the labels to the cleaners for the past, oh, ninety years is due to a court decision in the early days of the 20th century that set the recompense rate exceedingly low. The NAB has had enough political clout to keep it there ever since. Cool, huh? Note that they make all this moolah by... giving songs away for free.
2) Before Caruso (correct me if I'm wrong on this) there were no recorded-media stars, and instead there were many more local peformers of moderate skill who played directly to the people (y'know, live) and made a decent living doing so. If the hyper-promotion of mediocrity machine that is the labels goes away, perhaps we can move somewhat back in the direction of this former model. Quality will still rise to the top; with free distribution of songs, it would do so as a matter of course. But if the primary payment mechanism for musicians was for *playing music* instead of recorded album sales, then, it would be terrible! No one would get more rich than Jerry Garcia. Have you ever seen Jerry Garcia's house? That sounds OK to me.
3) Movies are a very social medium with extremely high costs of production. Right now, they emphasize cost-of-production over, say, quality. I get better acting at my local theatre than I do in watching a Jerry Bruckheimer $200m extravaganza -- but the "production values" of the local theatre are a bit lower. If production technologies get cheaper (and they will!) then the local theatre can start to compete -- meaning that we'll get a much wider base of content producers, similar to today's documentary situation. Unlike music, it's not unreasonable to hyper-encrypt movies during their initial "theatrical" phase and only show them there -- people seem to like watching movies together, and after you've made back your (much smaller) costs of production plus some profit, you throw the thing into the maw of the collective and start working on your next piece. Again, surprisingingly similar to the local-theater model, which seems to work just fine.