In the second part of this series I’ll be looking at how the internet has put a new pressure on ideas of ownership and value.
The internet has a fundamental affinity with the idea of “free”. It was not created for profit, but by the US military and the academic world to enable collaboration, and knowledge sharing.
It’s interesting that the most important and disruptive economic force of our age was not the child of capitalism, and in many areas the world of business is still trying to understand what this means for how you get paid. This incomprehension may threaten the conditions that made the internet so successful in the first place. As I write a dispute is playing out between Netflix and Comcast, which could prove a test case for the future of “net neutrality” (the principle that all traffic should be treated equally – in practice keeping the playing field level like this has ensured a progressive uplift in quality to the benefit of all, as well as the proliferation of innovative services).
In truth the dispute threatens the reality of net neutrality but is not an argument over the fundamental principle. It’s more about simple greed, reflecting a phenomenon apparent elsewhere in the corporate reaction to the digital revolution, an unprecedented rapaciousness. Comcast has an ISP business. It sells access to the internet to consumers, who pay a monthly fee for a certain amount of bandwidth. Comcast has turned around to Netflix and demanded an extra fee because Netflix’ product (TV and film streaming) uses a lot of bandwidth. It has argued that Netflix is not paying the true cost of its business, and so is making profits at Comcast’s expense.
This seems a dubious argument. Comcast is already being paid by its end customers to supply a certain amount of bandwidth. If Comcast cannot maintain quality of service without further network investment, then that’s an issue for its pricing to those consumers. If anything, because nobody needs or buys bandwidth for its own sake, you could say that ISPs should be paying content providers for creating something that makes their bandwidth desirable. It’s as though Comcast has looked at the profits being made by Netflix, and because the latter’s business depends in parts of America on Comcast’s transmission networks, decided that it deserves a share of those profits, even though its own business depends just as much on the content providers using its networks.
This wilful blurring of established boundaries isn’t unprecedented. The head of EA Games notoriously lambasted high street outlets selling secondhand games as if they were stealing from his company, highlighting the thorny question of what is actually happening when you buy a game (a question which applies as much to software, or indeed music and books). In the past there was never any question about this: if you bought a book you had no claim on the intellectual property it represented (you weren’t allowed to extract the text and reuse it elsewhere), but you certainly owned the physical object, and could resell it at your leisure. There was an established principle of first sale, and publishers accepted that they had no claim on the secondhand market. The same applied to music (and video/film) recordings.
Computers enabled a new world of digital copying, which raised understandable concerns about loss of legitimate income, but in unilaterally redefining the customer transaction as a licence rather than a sale (ostensibly to protect themselves from copy violations) software and creative content publishers have practised their own piracy, imposing draconian restrictions on previously well-established consumer rights (the right of resale is now a seriously grey area).
We’re entering a new phase, with large software publishers unilaterally reclassifying what were once clearly products as “services”, requiring a rental fee than a purchase payment. There’s some sleight of hand here. It’s become normal for bug fixes to be issued during the lifetime of a software product, but this is not a service: it’s only putting right what should not have been wrong in the first place (I appreciate that software is often complex, but in the past publishers have rightly included the provision of such fixes in the purchase price). The publishers will also throw in new features over time as part of the “service”, but this is ironic indeed: the reason they have resorted to this new pricing model is because people no longer needed or wanted the new features they were being asked to pay for. It’s true that most of these software products include an element of “cloud” integration and synchronisation, so files and configuration are replicated across multiple devices, which is certainly nice to have, but then it can be largely achieved using existing (and often free) services. If the cloud element was offered as paid-for add on I doubt it would find much take up (at least outside the enterprise, and enterprises manage their software and costs in very different ways).
For most users outside the enterprise this shift to software as a service effectively is a demand that the publisher be paid for existing. Rather surprisingly it’s proving successful, though it would be interesting to see how well the sales are going outside enterprises.
In a rational world this shift would be kicking the door wide open for alternative software providers, not least because the most convincing alternative to Microsoft Office, LibreOffice, is available completely free. In fact as a professional writer I prefer LibreOffice Writer to Microsoft Word; it takes a bit of configuration, but that’s partly the point – unlike Word you can set it up to work pretty much the way you want it. LibreOffice is widely used, and these days its compatibility with Microsoft formats is reasonably good, but Microsoft’s increasingly restrictive practices have not caused a wholesale switch to the open source world. Perhaps people just don’t know about it.
LibreOffice is maintained and developed by The Document Foundation, a not-for-profit organisation co-ordinating the voluntary work of programmers and other professionals across the world. Some of these programmers are technically employed by sponsoring enterprises, which then donate their employees’ time to the project. Others do it for love.
And that’s interesting.
There’s a small section of society motivated entirely by money, and perhaps the sense of self-importance that easily goes with large amounts of money. If you work in the City of London there’s not much else to keep you going. But most people are not like this. It’s true that the widening gap between the wealthy and everyone else is likely to be fuelling resentment and frustration at work (I heard it said recently that in the US some 70 per cent of the workforce would happily leave their current jobs), but it’s also apparent that most people want more than money from their work, and are prepared to do a great deal for no financial reward at all.
In a way this has always been so. For plutocrats like Britain’s prime minister it seemed to offer a handy way to redescribe a full frontal assault on the public sector (which he called The Big Society). In my next entry I want to think some more about how the ideas of “free” inherent in the way the internet has evolved mesh with this evident but little-considered element of our culture. And I want to look at some of the bigger questions about ownership, capitalism, and productive assets that have emerged in parallel with the new freedoms offered by the internet.