Economics of Digital Media
1
Brief preface: I love digital media. I love what FAKKU is doing, I love reading manga and watching video on my computer or tablet. I'm not going to stop anytime soon. But this thought is irritating me. I've been thinking about this for a while and I can't resolve this by myself. I think about piracy quite a lot and that might be what brought this on. But I'm definitely not an expert in this area. Some of you guys are pretty smart so maybe you can help me.
I've been considering the idea that something isn't quite right when it comes to digital media. Suppose there's a miner. Through physical effort he extracts precious metals from rocks. Those metals have intrinsic value. They're rare, they have a lot of practical applications, and they're in demand. Now consider a digital artist. Perhaps he gets commissions for digital artwork. The art he produces does not have intrinsic value. That artwork's value changes as different people examine it. It is typically unique, but the demand is difficult to quantify. From a practical standpoint, the miner has added a unit of value to the economy while the artist more or less has not. Regardless, we exchange money for both of these things.
Now, of course I understand that there is value beyond intrinsic qualities. There is value in aesthetics, value in emotions, in ideas. I strongly believe that we actually need arts to foster a stable society. But I still can't shake this feeling that something is off. Let's look at one other angle.
The precious metals sold by the miner are finite. He can't sell what he doesn't have. He only profits when there are physical things for him to sell. But the artist can potentially sell his work to everyone, even though realistically only a limited number of people will actually buy. This appears to be anomalous. The item with no intrinsic value is sold at an arbitrary rate to an indefinite number of people. But the physically limited item can only be exploited once at a time. However it can be resold later, unlike the artwork. I'm calling this a "money sinkhole". Money can potentially, though unlikely, flow into the artist's hand without limit but not for the miner. This seems to be really, really strange from such a perspective. It almost seems backwards.
How would you resolve this? Is it really an issue? Is our economic system just robust enough that money can flow into creatives' hands without much of a problem? How do I justify such a thing under this highly practical lens?
For one thing, Patreon is rapidly growing. Creatives are getting paid big time on that platform and it's really amazing. It's hard evidence that people really do value these somewhat intangible things. But how do I bridge the gap between these ways of thinking?
I've been considering the idea that something isn't quite right when it comes to digital media. Suppose there's a miner. Through physical effort he extracts precious metals from rocks. Those metals have intrinsic value. They're rare, they have a lot of practical applications, and they're in demand. Now consider a digital artist. Perhaps he gets commissions for digital artwork. The art he produces does not have intrinsic value. That artwork's value changes as different people examine it. It is typically unique, but the demand is difficult to quantify. From a practical standpoint, the miner has added a unit of value to the economy while the artist more or less has not. Regardless, we exchange money for both of these things.
Now, of course I understand that there is value beyond intrinsic qualities. There is value in aesthetics, value in emotions, in ideas. I strongly believe that we actually need arts to foster a stable society. But I still can't shake this feeling that something is off. Let's look at one other angle.
The precious metals sold by the miner are finite. He can't sell what he doesn't have. He only profits when there are physical things for him to sell. But the artist can potentially sell his work to everyone, even though realistically only a limited number of people will actually buy. This appears to be anomalous. The item with no intrinsic value is sold at an arbitrary rate to an indefinite number of people. But the physically limited item can only be exploited once at a time. However it can be resold later, unlike the artwork. I'm calling this a "money sinkhole". Money can potentially, though unlikely, flow into the artist's hand without limit but not for the miner. This seems to be really, really strange from such a perspective. It almost seems backwards.
How would you resolve this? Is it really an issue? Is our economic system just robust enough that money can flow into creatives' hands without much of a problem? How do I justify such a thing under this highly practical lens?
For one thing, Patreon is rapidly growing. Creatives are getting paid big time on that platform and it's really amazing. It's hard evidence that people really do value these somewhat intangible things. But how do I bridge the gap between these ways of thinking?