Monday, October 13, 2003

Apple farmers in upstate New York

Clay Shirky has a new essay outlining how the RIAA's law suits are driving users to paying services or ever-more-resistant-to-lawsuits filesharing networks. Previously the domain of corporations, encrypted, private networked storage is now being used by consumers to swap mp3s.

An interesting side effect of this is that obscure music gets dropped first, while popular tunes remain as available as ever -- a loss for labels, listeners, and artists alike.

Richard Thaler, behavioral economist at Chicago, has a note in this book (The Winner's Curse) about apple farmers in upstate New York (Dick used to teach at Cornell). According to Dick, New York apple farmers would leave baskets of apples by the roadside with a cash box secured to table the fruit was on. Passers-by were expected to buy apples and, on the honor system, pay for them by putting money in the cash box. But honor has its limits and the cash box was screwed tight to the table, so people could not walk away with it.

This system used to work pretty well, although economists would say it would fail because people would simply walk away with the apples without paying. To me it represents a very efficient sort of practicality -- I'm sure some people do walk away without paying for the apples, but not so many that it's worth having someone standing guard. Or trying to apply DRM technology to fruit. Or suing 13 year olds. The best digital music service will take the same common sense approach as New York apple farmers -- there will be some theft, some precautions, but people will overall have a good experience and pay for it.

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