I’ve been thinking more about SOPA/PIPA day or so, and throw in the mix the fact that megaupload.com has been shutdown and is now in the middle of a lawsuit for facilitating piracy.

Marco Arment has some good thoughts of what will likely happen over the next few years, or maybe even sooner.  One reason, probably the only reason in my mind, that these bills failed is because congress did something they don’t usually do.  They spelled out the laws in plain english.  Both SOPA and PIPA are acronyms that can be understood by anyone who uses a computer, and the bills themselves were the focus of attention.  Contrast that with the norm of bundling all of the provisions of a bill they are trying to pass with a more popular bill.  The next SOPA, as Marco describes, most likely won’t be named SOPA 2, or something similar.  It will be a wolf in sheep’s clothing, a trojan horse.

But if/when something passes, the question remains of whether or not it will be effective.

The more you tighten your grip, Tarkin, the more star systems will slip through your fingers. - Princess Leia

There will always be people who choose to pirate over pay.  I don’t think anyone really has a good idea whether or not  this behavior is truly is increasing or decreasing.  I’d like to take some time to discuss this “seedy underworld.”

A decade or so ago, long gone services like Napster, SoulSeek, Kazaa, Audiogalaxy and others provided one thing.  The ability to download any music you wanted without having to pay for it.  There is a reason that these services are no longer around, and that is because they were blatant stealing.  However,  they set a tone with their users that has remained long after their servers have gone cold.  A sense of entitlement.  Let me present to you what I am calling “The Millenial’s Law of the Internet.”

It states, that which I can download, I may download.

While the services listed above are no longer around, there is still Bit Torrent for those that choose the 100% free, 100% of the time route.  It isn’t rocket science to know  you can search google for any movie or tv show with the word torrent after it, and lots of links will appear.  And here we get to the economics of things.  The sites that you will see in your search results are, in one man’s opinion, the sewer of the internet.  The sites are designed for you to specifically click on ads, sign up for services that you think will enable your download, and in general fool the user into thinking they are getting something other than what they are getting.

Without realizing it, these users who are unwilling to pay anything to watch a movie, are providing money to the parties that leech off the companies that create the content.

There is another tier above the users described above.  There are people out there that are willing to pay SOMETHING, just not the amount asked to the general public.  Services like mega upload sold premium memberships for faster download speeds, and unlimited bandwidth.  Since the site has been shut down, I’ve been unable to find the cost of their premium service, but needless to say, it was less than the cost of going to the movies twice per month.

I know a fair amount of people that either subscribe to premium download services, or something similar like unlimited usenet news hosting services.  The arguments that most of them make two-fold: price and convenience.

On price, most of them are willing to pay for premium content, just not at the going rate.  A Blu-Ray movie costs over $20.  For less than that, they can download every movie that comes out that month.  The big flaw with this logic is that the money is received by the wrong party, and that is where I understand the complaint of the music and movie industries.  Companies, you could say entire industries, are created to facilitate this type of black/grey market for content distribution.

On convenience, it really comes down to the purely digital format.  Having a non-DRM digital copy of a movie means they can watch it on any of their computers, their TV, as well as their phones and tablets.  This doesn’t have to be unique to this distribution method, and that is why many people are not sympathetic to the music and movie industries.  I think this was best communicated by Nat Torkington in his response to the president’s challenge.  It was over ten years ago when I first read the Perl Cookbook that Nat wrote.  He still knows how to write.

All I can think is: we gave you the Internet. We gave you the Web. We gave you MP3 and MP4. We gave you e-commerce, micropayments, PayPal, Netflix, iTunes, Amazon, the iPad, the iPhone, the laptop, 3G, wifi–hell, you can even get online while you’re on an AIRPLANE. What the hell more do you want from us?

Then there is another tier of user.  This user isn’t a pirate at all.  They pay for all of their content.  Whether or not they are going to the movies, buying DVDs, or purchasing movies from from iTunes, they follow the rules to the letter of the law.  How are they rewarded?  I’ll focus on the movie theater experience.  According to the list from Roger Ebert, both ticket prices and refreshments are too expensive.  Imagine a world where customer’s could actually purchase refreshments at a discount at the theater, a benefit from paying the ticket price.  Wouldn’t that make more economic sense?  If you put a store front behind a barrier, reducing demand, the prices should be lower.  This doesn’t play out in practice because the theaters artificially reduce supply by prohibiting customers from bringing their own refreshments.

Customers would likely be a lot more willing to pay for an expensive movie ticket if it meant they were able to buy bucket of popcorn for 50 cents.  But instead having to pay $5 for a soda that would cost them $1 at any near by fast food restaurant, doesn’t leave them with the same taste in their mouth.

It will be interesting to see what happens over the next few years.  It looks like people are mobilizing.  The key to how this plays out will be what do people do now, before the next SOPA is drafted and voted on in congress.  If the answer is wait, and protest when it comes up for vote, then nothing will change.  Chris Dodd couldn’t win when he tried to run for president, so he’s trying to be one of the next most powerful people in the country.