Against SOPA and PIPA

UPDATED BELOW.

If I knew how to block out this site on Jan. 18 in protest against SOPA and PIPA, two bills currently in the U.S. Congress that claim to be against internet piracy, I would do it. I am not in favour of piracy, though I have major issues with what media conglomerates have done to distort copyright laws world wide.

The problem I have with these bills is that they are too vague and too broad. While they may become a U.S. law, it will affect internet users and site owners beyond U.S. borders. As a commenter on Boing Boing (dark for the day) said, in order to stop piracy, we're going to outlaw the sea.

There is a lot of rhetoric on both sides of the issue, but I recommend this article in The Globe and Mail for a clear-eyed look at what the internet community is upset about. There is also this comment to the article, which talks about the lack of due process:

"A website (of a corporation, individual, what-have-you) is considered guilty as soon as they are accused. Only once the site is shut down or made inaccessible can they try to defend themselves.

"Given that the whole concept of "fair use" is still, after 300 years, being refined, someone could use something fairly and still be shut down (see lack of due process above)."

If you are in the U.S, I urge you to contact your Congressman and Senators and register your opposition. You can do this easily by going to AmericanCensorship.org or the Electronic Frontier Foundation.

UPDATE: Clay Shirky is one of the smartest people in the room when it comes to talking about media. I've read his books and been lucky to hear him speak in Toronto. Watch the video below to get a "big picture" explanation of what SOPA and PIPA are actually about.

Complexity and Collapse

Clay Shirky is one of the most perceptive people I'm aware of when it comes to analyzing the changing media landscape. He doesn't blog often, but when he does, it's something that is widely linked to and discussed.

His latest entry is about how complex systems are unable to react to changing environments in any way except to collapse. Basing his piece on The Collapse of Complex Societies by Joseph Tainter, Shirky says:

"Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.

"The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

"In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.

"When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification."

Tying this into media and journalism, Shirky says:

"...last year Barry Diller of IAC said, of content available on the web, “It is not free, and is not going to be,” Steve Brill of Journalism Online said that users “just need to get back into the habit of doing so [paying for content] online”, and Rupert Murdoch of News Corp said “Web users will have to pay for what they watch and use.”

"Diller, Brill, and Murdoch seem be stating a simple fact—we will have to pay them—but this fact is not in fact a fact. Instead, it is a choice, one its proponents often decline to spell out in full, because, spelled out in full, it would read something like this:

"“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”"

They don't know how to do that because there are too many vested interests in their management and financial structures as they currently exist. This corroborates the point of the book The Hollywood Economist that I recently reviewed. Hollywood's economic structure is built on multiple revenue streams as well as finding investors, merchandising partners and tax incentives. Where once 90% of a film's revenue came from the theatrical box office, now it's only 20%. Hollywood is now more about the deal more than it is about the film.

Shirky's point also ties into Malcolm Gladwell's idea about a tipping point. In Gladwell's view, small changes in a system build up without apparent effect, but then one more small change causes the system to tip. In other words, the system's lack of flexibility doesn't appear to be a problem until it is a big problem and everything is forced to change.

Shirky concludes with this:

"When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future."

Simple in this case means cheaply. Shirky refers to Charley Bit My Finger, a YouTube video that has been watched 175 million times and was made for nothing. That video's success was an accident, but it's only a matter of time before a team of animation people, using cheap tools and web platforms, is able to create an ongoing success with drastically lower costs than established media.

Should complex systems collapse, there will inevitably be new complexity in the future, but it's in the spot between complexities where opportunity lies, because that's where established media can't compete as they can't cut their costs fast enough.

This 2008 article talks about live action web series that are earning their creators a living. Who in animation will be the first to succeed at this?

More Peering Through the Fog

I previously wrote about my curiosity over the changing media landscape here. I've already mentioned Clay Shirky for his article on how journalism is changing, and his book Here Comes Everybody. Now, here's a very recent talk from him that does a beautiful job of nailing down exactly how media have changed since the advent of the printing press.

While I'm not into video games, it occurs to me that the only area of the animation industry that's taking advantage of changes, where users can respond to content and can organize themselves around content, is gaming. TV and feature films are still operating with the 20th century broadcast model, while something like World of Warcraft is allowing users to form their own societies and teams within an animated world. While I don't think that a classical approach to storytelling, where stories are created by one set of people and delivered to another, is going to disappear, I wonder if the TV and feature model is sustainable in its current form. As the world becomes more social, what are TV and feature animation doing to keep up?

Peering Through the Fog

(Updated with new links at the bottom.)

I've been reading a lot of interesting books in the last year, all of them about the economic shift that's resulting from the web. This shift started before the economic downturn, but the downturn is accelerating it in various ways.

For the record, the books include Crowdsourcing by Jeff Howe, Here Comes Everybody by Clay Shirky, The Wisdom of Crowds by James Surowiecki, Remix by Lawrence Lessig and What Would Google Do by Jeff Jarvis. All of these books are about aspects of the web that have fundamentally changed how the economy functions. The first three talk about how improved communication allow for people to organize themselves or find information in ways that were not efficient in the past. Remix is about how digital tools allow us to use existing media as raw material for new expressions. What Would Google Do examines Google's business model and seeks to apply it to other industries. Jeff Jarvis feels that we're not in a recession or depression so much as a fundamental restructuring.

The problem with this kind of shift is that nobody knows where it's headed. Here's Clay Shirky from a fantastic essay on the what's happening in the newspaper business.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen. Agreements on all sides that core institutions must be protected are rendered meaningless by the very people doing the agreeing. (Luther and the Church both insisted, for years, that whatever else happened, no one was talking about a schism.) Ancient social bargains, once disrupted, can neither be mended nor quickly replaced, since any such bargain takes decades to solidify.

And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. They are demanding to be told that old systems won’t break before new systems are in place. They are demanding to be told that ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to.

There are fewer and fewer people who can convincingly tell such a lie.

According to Jeff Jarvis, one of the fundamental changes is that the old economy was about managing scarcity where the new economy is about managing abundance. Here's an example from before the web. Initially, there were three U.S. TV networks. If your company wanted to advertise a mass market product, you literally only had three places to go to reach large numbers of people. The networks could charge a premium because what they offered was scarce and the demand was high. While a network ad could reach 30 million viewers, it was highly inefficient in that there was no way to know how many of those viewers were actually in the market for the product. You could pay to reach 30 million, but maybe only one or two million would be interested.

Once cable TV fragmented the audience into specialized niches, advertising migrated to cable because while the audience was smaller, it was more targeted. In order to reach the two million interested viewers, you might only have to pay to reach 5 million. What you get here is a lower cost and higher efficiency. The cost is lower because the resource is no longer as scarce.

The web takes things even further. You can advertise on Google and tie your ad to a keyword search. Therefore, everyone who sees your ad is interested in your product because they're actively searching for information about your product category. And you can count click-throughs precisely.

This has had a devastating effect on any media based on advertising. Newspapers and magazines are suffering because their revenues are dropping faster than their costs. They're trying to preserve inefficient models while customers and advertisers are voting with their browsers for something that works better for them.

Efficiencies cut costs. They also eliminate jobs. When photocopying was used to transfer animators' drawings onto cels, inkers were eliminated. When scan and paint software became available, fewer painters were needed. When Flash or ToonBoom allowed for a library of assets that only needed to be coloured at the time of their creation, more painters lost their jobs as did inbetweeners and assistant animators. When this happens on a massive scale, as is happening now, it takes time for all these people to figure out how to earn a living.

One of the aspects of the Google economy, according to Jeff Jarvis, is that in an abundance economy, you want to keep your profit margin as low as possible. Otherwise, you're inviting someone to undercut you. It also means that any efficiency you can imagine will eventually be put in place, by some other company if not by your own. Therefore, the companies that most rigorously pursue efficiencies are the ones that have a chance to survive.

I think that this means flatter management structures and fewer middle men. In entertainment, this is a good thing as those in the middle add cost to a project and often slow down its production.

It also might imply more outsourcing. I'm on record as being against this, but I'm not sure if outsourcing doesn't work because of the difference between entertainment and machine parts, or if it doesn't work due to the managerial structures of the old economy. There are unlimited opportunities for improved communication via the web. Would outsourcing work if was artist-to-artist as opposed to management-to-management? I don't know the answer to this.

Those companies on the high end of animation are still in the business of managing scarcity. Whether it's feature films or big budget video games, they're protected temporarily by the difficulty in assembling the money, talent and technology to enter the field. I don't believe that we'll see new companies that are capable of competing against Pixar, DreamWorks, Electronic Arts, etc. However, the danger for these companies is not direct competition, it's the erosion of their audience. TV once again provides an example.

Broadcast television used to be filled with ensemble dramas at 10 p.m. Shows like ER, Law and Order, St. Elsewhere, NYPD Blue, etc. were the standard and they took money and talent to produce. They were not destroyed by direct competition, but by the audience moving to cable. When the audience got smaller, the economics of those shows were no longer viable. What the broadcasters did was to clone the remaining successes, which is why there are so many versions of CSI right now. What the broadcasters were also forced to do was go to less expensive programming. That's why there are so many reality shows and Jay Leno is now at 10 p.m.

I'm guessing that cloning is the final stage before collapse and movies and videogames are taking the same path right now. Everybody, including Pixar, is now producing sequels. That's certainly true of the videogame business. What's going to hurt these companies is the abundance of choice for the audience. It's going to steadily erode their bottom line until, like 10 p.m. dramas, the product will no longer be profitable.

These companies may act like newspapers, trying to preserve the structure of their businesses more than understanding what their product really is. Jeff Jarvis and Clay Shirky have both pointed out that newspapers are in the news business, not the paper business. Printing and distribution are costs that the newspaper business can no longer afford and Jarvis and Shirky argue that newspapers should abandon paper altogether and put their remaining resources into re-inventing themselves online. I don't know what feature and gaming studios should be doing to reinvent themselves, but I worry that the economics of the blockbuster won't remain viable.

Another thing that Jeff Jarvis points out is that the more control you can give to your customers, the happier they will be. Right now, Hulu is a website that makes TV shows available on demand. Another site called Boxee allowed Hulu's material to actually play on a TV. Hulu is now working to encrypt their videos so that Boxee can't use them, because Hulu's owners (Fox and NBC) are afraid of killing their broadcast earnings. This is what Jarvis refers to as the "cash cow in the coalmine." Hulu can't see that a screen is a screen is a screen. Trying to maintain a barrier between a TV screen and a computer screen is useless as the computer screen places more control in the customers' hands, which is why viewers are abandoning TV in the first place. Spending time and money to prevent people from watching your product on the screen of their choice is doomed to failure and a waste of resources.

Similarly, restricting your online content based on geography in order to preserve existing distribution agreements is also problematic. Besides alienating the people who want to consume your content, you're creating a niche that pirates are happy to fill.

This essay probably rambles more than my writing typically does (at least I hope my writing doesn't usually ramble), but it's a reflection of the chaos we're experiencing now. Nobody knows what's coming except for broad outlines: abundance instead of scarcity, greater user control, and closer relationships between companies and their customers.

There is now literally more animation being produced than any person can consume. Between features, DVDs, TV, and videogames, you could literally spend all your waking hours consuming animation. With TVs, desktops, laptops, netbooks, and cellphones, there's no shortage of screens. Ultimately, animation is going to have to be produced as efficiently as possible and is going to have to find an audience that can be monetized somehow. Just like TV and newspapers are undergoing massive transitions, I think the same thing is going to happen in animation. We're not going to recognize the industry in five years. It hasn't been conceived yet and it won't be conceived by those people with a vested interest in the status quo. Something different is coming, but who knows what it will be?

(For those interested in reading more, see Jeff Jarvis's series in progress, "The Great Restructuring." Here's part 1, part 2 and part 3.)

The Cognitive Surplus

We know that the media ground is shifting, but nobody knows where it's headed. I think that the talk below by Clay Shirky gets to some underlying truths. Until now, media has assumed that we are only consumers. They put stuff out, we watch/read/listen and pay for the privilege. Shirky believes that we're coming to the end of the period where we'll spend our surplus time purely as consumers of media and that with the web, we're moving into a period where, in addition to consuming, we're also producing and sharing. We can already see this with YouTube, FaceBook, MySpace, Wikipedia, etc. and Shirky thinks that these things are not fads but signposts as to where we're headed. Clearly, anyone thinking of creating intellectual property needs to consider what this means.

One of the things that Shirky talks about is the astronomical number of hours spent consuming media. This is something that I've thought about on a smaller scale. If you make a half hour TV show and a million people watch it, you've used up 500,000 hours of human life. If you make a feature and a million people watch it, you've used up two million hours of human life. There are only 8,760 hours in a year, which means that your TV show burns up more than 57 years of human life and your feature burns up more than 228 years of human life for every million viewers. These amounts are not trivial. We should all ask ourselves if we are providing value for the amount of the audience's life we are using up. And looking at it this way, how can we be surprised if the audience would rather spend that piece of their lives doing something other than consuming media?

(Link via ¡Journalista!)