I enjoyed watching Marvel’s Guardians of the Galaxy a lot at the theater. It’s got a lot going for it — clever writing, interesting characters, some impressive CG (that technology has come a long way!), and more.
One thing I like about this movie is that although it focuses on a lot of violence and cynical attitudes, it also showcases optimism, idealism, and a galactic society which is probably not a bad place to live, overall. In a world of increasingly negative science fiction, with at least three dystopian films in the previews, that’s a refreshing breath of air. No surprise coming from one of the authors of Lunatics!, but clearly I like the idea of imagining futures we’d want to live in.
So I think it’s safe to call it an artistic triumph.
Lately, though, I’ve seen a lot of articles like this one:
It’s easy to understand why this is exciting if you’re a Disney executive or an investor — some of that money is going to be coming to you. But I’m going to take a big leap and assume most of you reading this (like me) are NOT Hollywood insiders.
So why do we get excited reading about this?
Think about it for a minute.
We’re getting excited, because money — which you remember is hard-earned cash coming our of OUR pockets — is flowing to a production company, and ultimately to the artists who made “Guardians of the Galaxy”.
If you hang around for the credits (which we all have to do for Marvel films now — everybody sticks around for the ‘Shawarma’, right?), then you probably realize that that’s probably thousands of people (sorry, I didn’t count — but that was a LOT of names up there on the screen).
If we were short-sighted, selfish automatons (as “Economics 101” often assumes we are), then we should be seeking to minimize our costs. We should be annoyed that all of our cash is going to folks in Hollywood. But we’re not. We’re thrilled to see them making a fortune by taking money from us.
How does that square?
Well, obviously, we’re not just short-sighted, selfish automatons. We’re also not being irrational. But we do have a sense of fairness (most of us figure those people working on the movie are very talented people, working hard at what they do, and they deserve to get paid for that) and we also figure that if they don’t get paid, we’re not going to get more exciting films like this to watch. So we’re making a very rational choice to pay for that. And for most of us, it does not take force to make that happen.
New free-culture business models are looking for ways to capitalize on that desire — to make it easy for fans to support the artists they like, without relying on trying to force them:
- “1,000 True Fans”, Kevin Kelly – http://kk.org/thetechnium/2008/03/1000-true-fans/
- “The Creator-Endorsed Mark”, Karl Fogel – http://questioncopyright.org/creator_endorsed
- “The Complete Guide to Freemium Business Models”, Uzi Shmilovici, http://techcrunch.com/2011/09/04/complete-guide-freemium/
- “Techdirt’s Connect-with-Fans Plus Reason-to-Buy”, Mike Masnick – https://www.techdirt.com/articles/20090719/2246525598.shtml
- “Advertising Revenue Under a Creator Endorsement Model” http://questioncopyright.org/creator_endorsed_ads
- “The Sita Distribution Project”, Karl Fogel/Nina Paley http://questioncopyright.org/sita_distribution
The insight here is that fans want to pay artists for their work. And of course, you’ll find other examples, such as the success of Kickstarter and IndieGoGo crowd-funding. And now we have Patreon, which is oriented toward recurring, series works, rather than one-time barn-raisings.
Putting it to the Test
Will we be successful? It’s hard to be sure. Some people insist that the old studio system is still essential for marketing and start-up costs. Or that you need it for investment. They argue that the new models work for special niche cases — artists who made their names on proprietary works, but now choose to free their work (and some see this as a betrayal which steals money the promoters earned).
With the Lunatics! project, we’re all pretty much newcomers or outsiders to the media industry. We’re intimately familiar with free-culture and free-software tools to make it, but not so much with the Hollywood business environment. We’re still learning that — and in some ways that’s a good thing, because switching to a free-culture model involves a lot of filtering and reconsidering old models and techniques. It’s a whole new paradigm, and it needs to be rebuilt from the ground up.
So the fact that we’re rebuilding it from the ground up as a brand new studio anyway is actually very helpful. And that’s not that uncommon — real change to an industry usually comes from outsiders like us disrupting the status quo. People comfortable with the old way of doing business are usually the last to adopt a new approach.
On thing I have learned is that for an original work like Lunatics!, we are going to need to do some marketing. The “free stuff will market itself” idea doesn’t really work, except for an extremely narrow band of “fan works” which are tightly bound to some existing market (you could argue that the marketing for the primary work made that possible, so the fan works are free-riding on that). With this in mind, I know we’re going to have to spend a little on marketing — Sheri Candler, who’s had a fair amount of experience marketing low-budget productions suggests we should at least figure on 10%. I can live with that.
And that makes sense to me — there are cases of great original works which had little-to-no marketing, which I did discover on my own. Sometimes I discovered 10 or 15 years after they were made — and of course, at that point, my new love for the work is not going to result in any follow-ups, because the artist has moved on (either to new works, or they’ve left the industry forever because they couldn’t make any money at it). A little bit of marketing would have been to my advantage as a fan, had it been done back at the beginning.
But, but, but, but,… what about PIRACY?!
Now, of course, there’s always going to be free-riders. Do you buy all the crap that is advertised on TV to pay for the shows you watch? Probably not. That’s part of every business model, not just movies — you can’t convert everything to cash.
But Hollywood tries pretty hard to do that. They think of every time somebody sees the film without paying for it as a “loss”, rather than perceiving the gains when people do. This causes some faulty mental accounting.
For example, suppose a torrent of Guardians of the Galaxy gets leaked onto the Internet (as it inevitably will). Suppose 50 people see this particular copy. A bean-counter in Hollywood will likely account this as 50 times the cost of a movie ticket (say $10 each) being lost.
But would those 50 people have gone to the theater to see it? Probably not — not if they’re willing to settle for a download on their computer. But let’s be generous and figure, okay maybe one of them would’ve taken the trouble to go, buy a ticket, and see it, if they hadn’t been able to just download the video. So that’s a loss of 1 times the ticket price — still a $10 loss, right?
But now, what happens if the movie is good? Did you want to see the movie a second time? I did. And if all I had seen was a crappy bootleg, I damned sure would want to see it on the big screen.
Let’s imagine that just 5 of those 50 people reacted the way I did. Then they go and spend 5 times the ticket price ($50). We subtract the $10 lost, and voila: what the bean counter registered as a loss of around $500 to “piracy” was actually a gain of around $40.
That’s faulty accounting.
And this bears up to observation – the evidence is that “piracy as marketing” generally works:
- “SOPA, Internet regulation, and the economics of piracy”, Julian Sanchez – http://arstechnica.com/tech-policy/2012/01/internet-regulation-and-the-economics-of-piracy/
We also ignored what it would’ve cost to stop that torrent from being published.
Anti-piracy measures have significant costs. The most obvious is that any enforcement process is expensive. Clearly, for small studios and individuals, there’s little if anything you can do about it.
But the most powerful costs are against society as a whole — suppressing copying, fair use/fair dealing, and the transformative uses of creative output suppresses a great deal of creativity. It crushes freedom of speech directly, and through so-called “chilling effects” which is basically the degree to which creators are terrorized by the enforcement measures to the point where they self-censor.
The need to track and control media transmission and find “pirates” also gives an excuse to track any digital activities that the powers-that-be would like to track. Namely any sort of political or social dissent.
Allowing media to gain total control of the transmission of information over the Internet for capitalist goals will have the same impact that controlling real-world transactions to further communist goals did in the 20th century. It provides the apparatus and the excuse to CRUSH individual freedom.
And in my humble opinion, that would be really, really bad.
That’s why, as a creator as well as a fan, I don’t want that future, and I’m interested in finding better alternatives. Because creators are not short-sighted, selfish economic automatons, either.
In the end, we — creators and consumers of media — are in this together. This is our society, and the mechanisms that prop up intermediaries and petty tyrants are not in our best interests, even if they can offer us short term gains. So let’s have more experiments and learn how to build a future we all want to live in.