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The case against free - 2017 update

by Elmo Keep

In 2013 I made the case for creators to be paid for their work on the internet. In web parlance, these creative labours come under the preferred tech jargon of "content." This definition encompasses a huge variety of cultural products: books, films, television shows, recorded music, written works of fiction and non-fiction, criticism and news reporting, design artefacts, photography and illustration.

What they all have in common is that they require capital to produce: the creation of cultural works requires labour invested over hundreds and sometimes thousands of hours on behalf of producers. Some illustrative examples: the cost to produce an independent broadcast documentary is at minimum $1000 per finished minute. At the other end of the industry, Game of Thrones, Australia's most pirated television show, cost $US10 million per episode as of its sixth season, employing thousands of people across several continents. None of those costs can be brought down to zero and still leave a cultural product at the end of the equation.

While it should be obvious to most people that content made for profit is not charity and requires a profit margin to continue to be made, stubborn myths about why it should be free still persist.

Though some encouraging gains have been made in the last four years in turning consumer behaviour away from piracy, there is still a battle to be fought for the basic right of cultural producers to be paid fairly for the labour. And that is what this fight is still about: it is not about lining the pockets of corporations, it is about the livelihoods of producers, and if or not you believe art and journalism, however you define them, are vital to a functioning society. In Australia that means ensuring the robust future of a sector that contributes over $4.2 billion to the economy.

The Availability Argument

A common argument against paying for content in Australia in 2013 was that of availability, or the lack thereof. There was a thin argument to be made in those nascent days of streaming services, that it was difficult and irritating to be locked into contracts to access only one or two television shows that someone wanted to watch. But the reality of territories and foreign markets meant that broadcasters who paid enormous licensing sums for exclusive rights to programming (a major source of funding for the continued production of those same shows) then had to secure revenue against that outlay of costs.

In 2017, the plethora of streaming services that can be legally accessed means there is almost no video content that can't be legally paid for.

If you can work out how to illegally download something, then you can also definitely work out how to legally pay for it. This is good news!

As consumers have come around to paying for convenient streaming services, those platforms have in turn invested vast resources into original programming. For Netflix, which now hosts over 2 million Australian users, if or not this business model will turn into overall global profit margins is yet to be seen.

Patronage, And "The 'Artists Should Work For Love' Fallacy"

One of the stranger responses to my original piece came from an artist. Their argument was that creators don't deserve to be paid, because the models that made payment possible have been irretrievably broken by a deluge of free online content. Therefore, in this conception, artists should just accept a life of penury and draw meaning from the inherent pleasure of making up stories and never expect to be compensated.

It is ironic then to find one of the people making this argument is a party to a crowd-funding project on the Kickstarter platform. The project lays out in clear detail all the costs that need to be covered in order to produce "ambitious graphic novels." Turns out trying to make something for nothing is actually bad business.

The oft trotted-out idea that artists don't have a right to be paid because what they do is somehow not really work, or is so much more "fun" than other kinds of labour, is a fallacy. This is a moral judgment that consumers are not entitled to make.

Producing cultural products requires an intensive investment of time and resources. Consumers do not get to arbitrarily decide which kinds of labour are worthy of payment and which are not. Devaluing labour in one sector devalues it in all sectors.

An attendant fallacy was the idea that giving work away for free online would somehow result in paid compensation of some other kind down the track: that if you made your book available for free on your website that people would hire you for speaking engagements, or that if you built a large enough audience this way, you would eventually be able to charge them in other ways directly.

This approach has been shown again and again to work only for exceptions, not rules. To make money from a dedicated audience in this way (Louis CK charging only five dollars per release, for example) you need an already huge established audience, which was almost always built through traditional means (Radiohead already being an enormously successful band whose profile was built by the backing of a record label.)

The "anyone can make money on the internet" myth is easily disproved: if it worked for everyone, then everyone would be doing it and making a living wage that way.

The reality is somewhat starker: the average number of books sold by a self-published author is 100. In total. What this means in practice is that only people who can already afford to make almost no money from their creative labours will be able to pursue careers as artists; a flattening, homogenising effect that marginalises voices that badly need to be heard.

Kickstarter's crowd-funding platform was the beginning of creators going straight to audiences to solicit payment for their work in a direct transaction between audience and artist. This has been further professionalised in the form of Patreon, which allows backers to fund an ongoing artist individually, free of a specific project outcome. This might mean paying on average $12 a month to an individual investigative journalist to help them cover some basic operating costs, or to a photographer or illustrator or radio producer working in a permanent capacity.

The emergence of this way of raising revenue exists only because many traditional models of payment have collapsed under a combination of dire circumstances: erosion of online advertising revenue, shrinking and atomised audiences, and a reluctance to pay for online content.

While some creators have been very successful at clawing back against these by building large and loyal audiences for their work over a number of years, this again is a gamble on investment of time versus hard financial rewards, and it won't work for everyone.

For most users of Patreon and similar platforms, the amount of money raised per month amounts to a marginally helpful, small stipend of $100 per month. It is not a living wage for the majority of its users, but for many it's better than nothing.

And Now, The YouTube Problem

Spotify, the world's largest music streaming platform now has 50 million paying subscribers, which might seem encouraging, but its overall user base is 140 million - that's 90 million people who are using the free service. The music industry was decimated by piracy long before other cultural producers had to face the same problem of the internet, that being how to get a user base primed on free content to switch to paying models? It is now facing a fresh crop of new revenue challenges.

For artists, fundamentally there is still the problem of how little streaming music services pay out to individuals. Per one thousand plays per song an artist can see on average $7 from Spotify or Apply Play, but only $1 from YouTube.

Beyond that is something even more vexing for both labels and artists. The generation of users who are classified as millennials and younger have grown up with YouTube, the world's largest ever free jukebox.

Teenagers today are not paying for music, not because they are pirates, but because they live in a world where everything they've ever wanted to listen to has been available for free (much to the fattening of Google's bottom line.)

Convincing them that paying for cultural products which are not free to produce, is not only a problem for the music industry, but will have a knock-on effect on all other content production once their generation is the dominant consumer force by numbers. And as millennials are the first post-industrial generation to be financially worse off than their parents, this could be an uphill battle.

Can We Ever Fix This?

The future sustainability of creative industries in the digital era remains in flux. What is clear is that the new economics of the internet as driven by tech conglomerates like Google and Facebook have obliterated the previous decades' of traditional funding models in almost every media industry. Returning to those days is impossible, and only a combination of simple access to paying services, consumer education and legislation can hope to secure a long term, profitable future for industries which all require large-scale investment in upfront costs. Meanwhile individual creators remain committed to finding new ways to be paid for their work, even as their returns continue to diminish.

So if you are thinking about whether or not you want to pay for someone's work, you can undertake this thought experiment: if your boss told you that you weren't going to be paid to go to work tomorrow, but you're expected to put in a full day regardless, what you would tell them?

You'd tell them to bugger off.

Elmo Keep is an Australian writer and journalist living in Mexico.

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