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Ask a question about: Napster
Respond to the question: Disneyland?

10/12/2000 10:01 PM by Chris Rasch; Would consumers benefit from a monopoly on the "Disneyland Experience?"
Logically, it makes sense that the ability to inexpensively make and distribute copies of books/movies/music would decrease the incentive to purchase legal copies, which would in turn decrease the incentive of the creator to make the intellectual product in the first place. However, I would point out that the empirical evidence to date is mixed on whether Napster has harmed CD sales--for example, see this overview, Does Napster Harm Music Sales by's Chris Sherman.

Some quotes of interest:

From the article, Napster boosts CD sales by Lisa M. Bowman, ZDNet News, July 21, 2000.

However, the Jupiter study refutes those charges, saying instead that
people who use services such as Napster are 45 percent more likely to
have increased their music buying than non-users.

On the other hand, from the legal brief, A&M Records v. Napster, Inc. United States District Court, Northern District of California at

However, Jay's overall conclusion was that "[ t]he more songs Napster
users have downloaded," the more likely they are to admit or imply
that such use has reduced their music purchases.
Even if it could be shown that Napster decreases CD music sales, it is not clear that the majority of citizens are better off with copyright law.

What if, once someone built Disneyland, anyone could recreate the "Disneyland experience" almost instantly, almost free, of almost equal quality as the "live" experience anywhere in the world? (I think this is a better analogy than the "perfect counterfeit ticket" scenario, since counterfeit ticket holders would impose additional operating costs (increased parking lot size, litter, lines) beyond the initial sunk costs; Napster users impose few, if any, additional costs on the record companies.)

Assuming that this were possible, would we be better off allowing anyone to recreate and distribute the "Disneyland experience", or would we be better off by granting to the Disney company a legal monopoly on the right to recreate and distribute the "Disneyland experience"?

One of the primary reasons that I think the legal recognition of property rights for physical objects is a good thing is that it helps prevent costly conflicts over inherently limited resources. I'm glad that there are generally recognized rules to distinguish between "proper" and "improper" exchanges of material goods--I would hate to have to constantly defend my car against attempts to take it. In addition, my cars loss would mean sharp curtailment in my ability to travel, and the loss of substantial fraction of my income.

However, I would be much more nonchalant, if the car cost me five cents to begin with, and if a car "thief" could "steal" my car by pushing a button, and creating an exact duplicate 2000 miles away. Likewise, intellectual objects, once created, can be duplicated and distributed at relatively small cost (bandwidth, hard drive space, and operator time), so the argument from scarcity is much less compelling.

Let's assume that unlimited copying/distribution were legally allowed. The question then becomes, why would Disneyland (or GM), invest in development to begin with?

As with costs of music production and distribution, were instant duplication of Disneyland and GM cars possible, I suspect that the cost of creation and distribution would be dramatically lower than it is now.

However, that still leaves some initial cost to be paid for. And certain kinds of intellectual products are quite costly to create--"Titanic" cost >$500 million.

My suspicion is that such products will continue to be able to derive revenue sufficient to continue to create from several different sources. For example, a budding new band gives away their first 3 albums. After a while, assuming they are good, they will have a fan base. I expect that they will then have several potential revenue streams:

  • advertising (commercial endorsements)
  • live performance (rock concerts)
  • convenience (anything that saves time, or reduces the cognitive complexity of getting the music. For example, Amazon can charge more because xthey have a reputation for having a wide selection, many people already have accounts there, and they're easy to use. Similarly with
  • "Pay now, create later" schemes--a popular band refuses to release their next album, unless 100,000 fans send in $10.
  • auxiliary products (hats, t-shirts, etc.)

My prediction:

If downstream licensing were eliminated, while you may see a dramatic change in the structure of the music industry, the quantity or quality of music (as measured by samplings of music sales/music downloads, and consumer surveys) available to the consumer would remain the same, but at much lower cost and with greater convenience.


It would be nice if it were legal to use real money to put one's money where one's mouth is, via Robin Hanson's idea futures market proposal. [Manage messages]

10/12/2000 03:02 PM by doug bennett; counterfeit Disneyland admissions
I thought the RIAA's position was that the technology of Napster makes it impossible to determine if a user actually owns the CD which he downloads from N, thus allowing theft. If I can not only re-sell my Disneyland admission [View full text and thread]

10/12/2000 02:35 PM by David K. Levine; Downstream licensing
Our argument is that downstream licensing should not be allowed. That is, AFTER you buy something, you should be free to do with as you wish. The Disneyland analogy is not that Disneyland should not be able to charge for admission, but [View full text and thread]

10/12/2000 01:49 PM by; Would Disneyland have been built?
Technology is such that there is a large fixed cost to produce a CD, then a tiny cost to make additional copies. A person paying zero for a copy does not deprive the seller of the chance to sell to another person at a positive cost, as [View full text and thread]