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Wednesday, October 26, 2011

How Baseball Made Me a Pirate

Major League Baseball has made me a pirate, with no regrets.

Nick Ross, on Australia's ABC, makes "The Case for Piracy." His article argues that piracy often results, essentially, from market failure: customers are willing to pay content owners for access to material, and the content owners refuse - because they can't be bothered to serve that market or geography, because they are trying to force consumers onto another platform, or because they are trying to leverage interest in, say, Premier League matches as a means of getting cable customers to buy the Golf Network. The music industry made exactly these mistakes before the combination of Napster and iTunes forced them into better behavior: MusicNow and Pressplay were expensive disasters, loaded with DRM restrictions and focused on preventing any possible re-use of content rather than delivering actual value. TV content owners are now making the same mistake.

Take, for example, MLB. I tried to purchase a plan to watch the baseball playoffs on mlb.com - I don't own a TV, and it's a bit awkward to hang out at the local pub for 3 hours. MLB didn't make it obvious how to do this. Eventually, I clicked a plan that indicated it would allow me to watch the entire postseason for $19.99, and gladly put in my credit card number.

My mistake. It turns out that option is apparently for non-U.S. customers. I learned this the hard way when I tried to watch an ALDS game, only to get... nothing. No content, except an ad that tried to get me to buy an additional plan. That's right, for my $19.99, I receive literally nothing of value. When I e-mailed MLB Customer Service to try to get a refund, here's the answer I received: "Dear Valued Subscriber: Your request for a refund in connection with your 2011 MLB.TV Postseason Package subscription has been denied in accordance with the terms of your purchase." Apparently the terms allow fraud.

Naturally, I'm going to dispute the charge with my credit card company. But here's the thing: I love baseball. I would gladly pay MLB to watch the postseason on-line. And yet there's no way to do so, legally. In fact, apparently the only people who can are folks outside the U.S. And if you try to give them your money anyway, they'll take it, and then tell you how valued you are. But you're not.

So, I'm finding ways to watch MLB anyway. If you have suggestions or tips, offer 'em in the comments - there must be a Rojadirecta for baseball. And next season, when I want to watch the Red Sox, that's the medium I'll use - not MLB's Extra Innings. MLB has turned me into a pirate, with no regrets.

Cross-posted at Info/Law.

Posted by Derek Bambauer on October 26, 2011 at 07:48 PM in Criminal Law, Culture, Information and Technology, Intellectual Property, International Law, Music, Odd World, Sports, Television, Web/Tech | Permalink

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Comments

Just to be clear, the deprivation that has forced you to piracy is MLB's refusal to provide you with baseball over the internet, because you choose not to own a TV or go to someplace that has one.

I trust you will support someone ripping off your written work because they don't like the look of bookshelves or hate spending the time going to a library.

Posted by: Ani | Oct 26, 2011 8:43:44 PM

Actually, I make all of my work available on the Internet for free, even when there is a paid version of it (e.g., law reviews). In fact, you're reading it now, for free. The practice you recommend is the same one that makes people pay PACER by the page for court records: it keeps information locked away, and privileges those who can afford it over those who cannot.

Even if you don't like my normative claim, the descriptive one is exactly accurate: some piracy occurs because people want things for free, but a significant portion occurs because consumers are frustrated by content owners' unwillingness to let them pay for it. I used to condemn this, but I increasingly sympathize.

Also, note that I'm willing to stand behind my perspective under my real name, unlike you.

Posted by: Derek Bambauer | Oct 26, 2011 8:51:40 PM

Related: http://virtualshacklesimagestest.appspot.com/serve/game_of_thrones.jpg

Posted by: Guest of a Guest | Oct 26, 2011 9:15:36 PM

Real name, no gimmick.

The last paragraph is ridiculous. Because you're frustrated at your own inability to read fine print, you refuse to pay for MLB.tv next year despite MLB very much not "forcing" you to piracy in the regular season? (I don't see how you're going to get Extra Innings without a TV.)

Posted by: Jason Wojciechowski | Oct 26, 2011 10:16:00 PM

What I was driving at it is not your interest in protecting work you have no interest in protecting (like a blog post, perhaps), or even your work in particular. Whatever the accuracy of my assumption that there's *some* work you might want to protect, your reasoning would relinquish your ability -- or that of someone else having a very different sensibility -- to decide, on what I think is a fairly thin claim of inconvenience merged with understandable irritation at a bad business practice.

Obviously, I don't see the weight of an unfulfilled interest in paying for entertainment in a preferred format (and I think my view would be shared by many artists who generate a limited number of reproductions, for example). I also doubt you can satisfactorily distinguish those with a willingness to pay from those with a willingness to pay but at a very different (lower) price. But putting that aside, I think your personal example is a salutary one: let those who don't care make their content freely available, so that MLB loses to other sports or means of entertainment with more open channels.

I'm not sure how my anonymity is relevant to the point under discussion, but duly noted. If you don't want to continue the discussion, that's your prerogative, just as if you had refused to engage the comments at all. Entirely up to you, and you should feel free to delete this comment if you feel it has crossed a line. I haven't meant to be abusive.

Posted by: Ani | Oct 26, 2011 10:23:52 PM

@Jason: "Inability to read fine print"? Right. Do you read the fine print on the privacy policy or ToS for every Web site you sign up for? Do you scroll through every page of a software EULA? There are good arguments against my position; this isn't one of them. And MLB has an in-season, on-line package for games, which is exactly what I thought I was buying. I'd be much more sympathetic to MLB if their on-line position was "No access - watch TV" rather than deceiving consumers. The "duty to read" perspective on contracts flies in the face of a decade of behavioral economics research - you should read some of it.

Posted by: Derek Bambauer | Oct 26, 2011 11:03:04 PM

I just went to MLB.tv (which redirects to the landing page for Postseason.tv), and it says in very large print right at the top of the page: "International Customers WATCH GAMES LIVE or On Demand. U.S. AND CANADA CUSTOMERS WATCH GAMES On Demand ONLY." It says the same thing in the MLB.tv house ad on the front of MLB.com. You certainly don't need to read any fine print for it.

Perhaps I'm less sympathetic to your plight than others because of my background, but I don't see how your own actions turned you into a pirate. It's true that you should be able to secure a refund here, but you chose not to go to a sports bar -- something thousands of people across the country do during the World Series -- you chose not to have a TV, you chose not to get an over-the-air antenna that can pull in Fox's signal. It would be great to be able to pay a nice price for entertainment delivered as we preferred, but content owners aren't there yet. MLB gave you plenty of other options, and if your response is to pirate, that's a personal choice. MLB did not push you there.

Posted by: Benjamin Kabak | Oct 26, 2011 11:11:37 PM

So, there's two aspects to the post that I want to distinguish. One is the understandably frustrating problem of a product or service that's not labeled clearly or accurately, leading to a mistaken purchase, followed by a somewhat maddening refusal to refund the money (I assume close in time). Hopefully the charge-back will serve as a sufficient remedy in this case for that problem though.

But you seem to be arguing that even if you had never been misled about the extraterritorial nature of the plan you purchased, you've still been done some wrong that offsets the wrong of getting free access to content through unauthorized channels that you know they are charging for. (I take it you agree in the abstract the unauthorized access would be wrong, or else it's unclear to me what the point of the rest of the story is.) I'm intrigued by this notion that failing to provide access to content in a particular form (and a particular price?) violates some sort of obligation a content owner has, which is something I've explored before: http://www.concurringopinions.com/archives/2008/01/is_there_a_mora.html . One thing I'm curious about is how general you perceive this obligation to be -- do all content creators/owners have it? Only large, profit-making enterprises (and if so, why only them)?

Let's take an example. Suppose I've written the next great American novel. I've shown a manuscript to a few people, but I haven't sent it out to publishers. You ask to see it. I say no. (Or, to make it more like the baseball situation, I say I'm only showing it to people in Australia.) You see that I've printed out several copies and left them sitting on a library table while I've gone to get a drink of water. You know that the cost of 200 pages of paper means little to me, and that I can easily print out another copy. Is it OK for you to take a copy against my express wishes? If not, what distinguishes that situation from MLB? Does it change the result if, instead of a flat-out refusal, I offer to give you a copy in return for a seemingly exorbitant amount, say, $100? Does it change the result if, instead of the author, the person that refuses to give you a copy and has several sitting on his or her desk is an editor at a large publishing firm?

Posted by: Bruce Boyden | Oct 26, 2011 11:24:16 PM

As Ben points out, "fine print" turns out to be wrong. I was remembering when I signed up for regular-season MLB.tv, where the blackout rules are only spelled out fully in fine print at the bottom of the sign-up page. No, I don't read fine print when there's 30 pages of it in a EULA, but I most certainly do read it when I'm directed to it by a banner that mentions blackouts or something else that's highly relevant to my day-to-day usage of the service I'm considering purchasing.

Posted by: Jason Wojciechowski | Oct 26, 2011 11:24:27 PM

Bruce: An unpublished novel is different from a broadcast presentation of a live event. The unpublished novel is not offered for sale anywhere (yet). The sporting event is available for purchase in a variety of forms (live in person, broadcast for free over the air, broadcast for a fee over terrestrial cable and satellite, online for people not in the US, etc.). None of your hypotheticals are remotely relevant.

It would be relevant if you offered your book for sale in Canada and the Bahamas, but not the US. It would be relevant if you serialized it in a magazine, and carpet bombed whole cities with leafletted versions. It would be relevant if I offered to pay you directly for the book you were otherwise selling, but you decided you didn't want my money.

Are you really telling me that you'd be upset if you were doing those things and I decided to torrent a copy of your book instead?

Posted by: billb | Oct 26, 2011 11:34:26 PM

Jason: If MLB.com could detect that Derek was in the US when he tried to watch his purchase, aren't they in the best position to throw up some giant blinking letters at the time he signed up saying: "You appear to be trying to purchase content that's not going to be available in your current country. Are you planning to watch it from somewhere else?" or something similar?

It seems to me that even if he misread the contract and is ineligible to watch, they ought to at least let him have his money back. There's no cost to them to do so.

Since the internet is so fond of car analogies: it's like prepaying for a rental car with Avis at the Denver airport only to be "reminded" that you can't drive it anywhere in Colorado. I think you'd ask for, and expect to receive, your money back. Society works better when contracts have reasonable terms, people clearly agree to weird terms, and refunds are quickly forthcoming when expectations get wonky, especially when the refund comes at no cost!

Posted by: billb | Oct 26, 2011 11:45:06 PM

To be less bombastic but to make (I think) essentially the same point as Ani, you have not identified a "market failure" in the classic economic sense. A content owner being unwilling to let consumers "pay for" content in the manner of the consumer's own choosing is not a market failure.

A store refusing to serve a market or a geography is not a market failure: I would love it if In-N-Out Hamburger served the East Coast, but they don't. So what?

A store trying to force consumers onto a particular platform is not a market failure: I would really like to be able to pay by credit card at that "cash only" store. Doesn't mean that I get to take their stuff for free when they don't accept credit cards.

And trying to leverage interest in a new product is not--at least not by itself--market failure: What do you think those "Buy X, Get Y free" deals are?

Of course there is no excuse for them to take your $19.99 and not perform their side of the contract; and if they really are in breach of contract you can maybe sue for expectation damages (not merely a refund, but the positive value of your enjoyment of MLB for the postseason). But this particular wrong does not support your more general point. Even if MLB refuses to serve you in exactly the way you like, this does not give you some "right" to take their stuff.

Posted by: TJ | Oct 26, 2011 11:47:18 PM

TJ: You might love an In-and-Out in DC, but at least you can buy a hamburger there! When we're talking about monopoly goods with no reasonable substitutes (there must be at least one reasonable burger joint on the East Coast, yes?), the failure of a company to market their product to willing buyers is a true failure. This is especially true of digital goods that have miniscule marginal costs of production!

Not allowing folks in the US to watch online is an artificial limitation. We know that MLB.com is capable of selling streaming to folks here; they do it throughout the regular season. I'd guess that their TV contract specifies that they won't compete directly with Fox or that Fox has exclusive US distribution rights to the content. So they artificially restrict the product from willing buyers.

Since there's no substitute product for The World Series, eager fans don't have much choice but to try to find a place to download it.

Posted by: billb | Oct 26, 2011 11:59:42 PM

billb: the content is available in the U.S., just not live, so there are good reasons to purchase the service within the U.S. Some giant "DO YOU KNOW YOU CAN'T WATCH THIS LIVE" popup would be a huge annoyance given the redundance: as Ben pointed out, the text at the top of the MLB Postseason subscription page that says that differentiates international from U.S./Canada is enormous. That is, I think, the blinking text.

Anyway, I do agree with you on the refund. Assuming the time from signup to request for refund was quite short, at worst giving the money back less some convenience fee would be reasonable.

Posted by: Jason Wojciechowski | Oct 27, 2011 12:00:37 AM

billb,

The fact that a seller can, but chooses not to, sell to some people in the format they would prefer is not a market failure. Again, I would like stores to accept credit cards, but not all do. There is no market failure in that.

Of course, there is a "market failure" in all IP in the sense that content owners are selling above marginal cost. But that is built into the IP system. It is clearly not what Derek is complaining about.

Posted by: TJ | Oct 27, 2011 12:20:56 AM

billb, yes, an unpublished manuscript is different from a television broadcast in several ways. For example, one involves paper, and the other involves television. But I think we're looking for a difference that actually matters for the question I am raising, i.e., whether it is OK to obtain an unauthorized copy in one instance but not the other. You correctly note that the television broadcast is more widely distributed, but it's not at all clear why that difference matters. In both cases, the work in question is distributed to some people, but not to the person considering the hypothetical, on the terms that person would like. Are you saying that large numbers trigger some sort of obligation? Above distribution to, say, 1,000 people, an obligation kicks in to not withhold it from Person No. 1,001? That's not totally implausible (or, perhaps in your terms, that's "not remotely relevant"). The idea I take it would be that mass publishers have an obligation not to make distinctions between faceless consumers that individuals dealing one-on-one do not. But I don't get why not -- why can't a large publisher say that people in Australia can purchase this program (or book or newspaper or what have you) but we won't be selling it in New York? And if anything, I'd think the moral valences worked the opposite way: the face-to-face rejection seems a little harsher to me.

Posted by: Bruce Boyden | Oct 27, 2011 1:38:42 AM

Count me in with those that don't see the fraud here. MLB is going to great lengths to make it clear that you cannot watch games live over the Internet in the U.S.:

http://mlb.mlb.com/mlb/subscriptions/postseason/index.jsp?affiliateId=MLBTVREDIRECT

Posted by: Buddy | Oct 27, 2011 7:36:25 AM

You could set up gotomypc or similar on a computer outside the US and then watch the game via that pc. There are several IP masking services that let you pretend to see the internet from another location. Marketa Trimble has a whole paper about this on SSRN, "The Future of Cybertravel" http://ssrn.com/abstract=1752591. Cheers, Matthew.

Posted by: Matthew Sag | Oct 27, 2011 8:47:57 AM

It occurs to me that, as people who teach or write about copyright for a living, we're missing the salience of the fact that Derek paid for access (and, by refusing to return his money, MLB has been paid for that access). We may know that the copyright statute doesn't include an express distinction between people who buy a copy or a ticket and then seek to enjoy the work in an unlicensed way, and people who want to enjoy the work without paying for it, but I think the distinction is nonetheless important. It underlies our sense that, say, backing up one's hard disk, ripping CDs one has purchased, or copying one's music collection to the cloud so that one can listen to it on multiple devices is not actionable. We have a sense that people who have paid the copyright owner's price for a work should be entitled to some freedom in how they choose to enjoy the work; people who haven't paid don't deserve the same solicitude. Randy Cohen's 4/2/10 Ethicist column made this point in connection with buying a hardcover book and then downloading an unlicensed ebook for travel. Cohen thought that was ok. See http://www.nytimes.com/2010/04/04/magazine/04FOB-ethicist-t.html. I think that courts often interpret the copyright law through this lens.

Posted by: Jessica Litman | Oct 27, 2011 9:16:45 AM

I'm not sure this falls into the category Professor Litman identifies -- instances in which someone has paid for a work and seeks then to enjoy it in an additional, unlicensed way. This is an instance in which Professor Bambauer gave money and bought a right which is useless and irrelevant to him (the right to enjoy MLB from overseas, in essence). I take it whether that's his fault or the vendors is in dispute, as is the question of a refund. But this is much closer to a case in which the vendor didn't want to do business with him at all, which makes it harder to piggyback this right into one to pirate.

As to the broader ethics, I think this is one of many instances in which Cohen demonstrates his incompetence. His position may be defensible. But to say simply that "Author and publisher are entitled to be paid for their work, and by purchasing the hardcover, you did so" without exploring whether a consumer is entitled to both name her own price and name her own rights, and to make every producer market like Radiohead or an alternative lunch counter . . . I think at best he manages to report ethical problems, rather than serving as an ethicist.

Posted by: Ani | Oct 27, 2011 10:04:03 AM

Jessica, I agree entirely that Derek's payment for access he didn't get is a complicating factor here. The problem, as I see it, is that Derek indicates he is going to initiate a charge-back through his credit card company, which if successful should undo that harm and I think forecloses the ethical permissibility of any further self-help remedy in order to compensate for the lost $20. Whatever the ethical limits on self-help, surely he can't do both. That is why I read the rest of Derek's post to be asserting that even if he had been aware of the terms up front, he would still be (and is) within ethical bounds to get unauthorized access solely because of MLB's failure to make that access available over the Internet in the U.S.

Posted by: Bruce Boyden | Oct 27, 2011 10:19:21 AM

Another aspect of this that is being glossed over in that MLB DOES offer a service to U.S. subscribers: you can listen to radio broadcasts live, and rewatch archived video of games later. So it's not as if a U.S. subscriber loses out entirely if they subscriber to the post-season service, they simply must wait a couple hours to view the games.

Posted by: Anonity | Oct 27, 2011 12:51:52 PM

Jessica, I think that, as Ani and Bruce have also indicated, we fully appreciate that Derek himself may have a reasonable moral and perhaps even legal claim here, because he paid $19.99 and MLB is keeping the money. So we are not missing the salience of the fact that he has paid for access, and that MLB has accepted that payment.

What we are challenging is his supposed broader principle, which seems to be that being willing to pay for one particular kind of access of the consumer's own choosing will somehow confer a moral right to take the content for free if the content owner is not willing to provide access in the form. To generalize this principle, that would mean I should be able to take stuff for free in any store that is not willing to take credit cards. That is a clearly wrong principle.

Posted by: TJ | Oct 27, 2011 3:06:20 PM

TJ: Physical goods are different from intellectual ones, especially in the digital age. Bits are trivially easy to copy. This triviality makes it extremely frustrating for consumers when a publisher artificially restricts supply. If a publisher only sold to people who swore to wear a green hat while reading their book, we wouldn't accuse the reader who surreptitiously took off the hat while enjoying the book of stealing the book or infringing copyright.

The fact that MLB won't sell a live stream to people in the US but will to people in other countries is an extremely arbitrary constraint. Ignoring whether Derek got duped into buying a package he couldn't consume, it's still extremely annoying that this case exists. Annoyance leads to defiance.

Dealers in monopoly goods, especially trivially reproducible monopoly goods, have to do their utmost to provide acceptable opportunities to customers to get at their products. Intransigent publishers may find their monopoly rights reduced if they continue to artificially restrict the market in their product (think compulsory licensing).

Posted by: billb | Oct 27, 2011 3:49:53 PM

@Matt: excellent idea. I've read and enjoyed Marketa's paper, but wasn't bright enough to make the connection.

Let's put aside MLB hosing me on the $19.99. Billb has it right: annoyance leads to defiance. Think about the music industry: they refused to offer a lawful means for consumers to purchase / access music on the Internet. The result was Napster, Grokster, and massive piracy. I have no sympathy: market demands get met. When a copyright owner operates out of pique, or intransigence, or simple stupidity, infringement is civil disobedience. Put another way: when enough of us Torrent or stream MLB games instead of buying a TV or going to a bar, MLB will offer us Internet access. The music industry did.

I love In N Out Burger - though less than Islands - but folks, let's be smart: physical good analogies are utterly irrelevant. Digital bits are costless. Infringers are not "stealing," they're infringing. Reasoning by analogy is a form of bad logic endemic to lawyers.

Posted by: Derek Bambauer | Oct 27, 2011 4:58:07 PM

Let me sharpen the moral point: MLB has the capability to offer digital streaming of the playoffs. They offer it outside the US, and they offer regular-season streaming in the US. So, it's not a capability or cost option. I argue that US consumers have a moral claim on Internet streaming of playoff games, particularly if they have become accustomed to accessing baseball games via the Net (a type of reliance claim). If MLB decides not to let us pay for streaming, we can reasonably access games without their permission on-line.

Before you jump on this, remember that ripping your CDs to MP3 infringes, according to the RIAA. It's only with their permission that you can do so. How many of you plan to stop if the RIAA says to do so?

Posted by: Derek Bambauer | Oct 27, 2011 5:07:56 PM

The moral claim, as I understand it, is that if a provider could offer a service for a price, but does not make it available for any price, the service may be appropriated without permission. An additional factor is reliance.

1. I assume reliance is not a necessary condition, or that if it is, the degree of reliance need not be great at all. Is that correct?

2. Am I correct in assuming that no compensation need be paid either?
(Before you say that it is costless, note that circumvention probably diminishes the amount of revenue MLB can charge for televised rights, which is why I assume they cut out the US market in the first place.) How is that governed?

3. Is making the service available, but at a very high cost, the equivalent of not making it available at all? If so, does this amount to a moral claim to name-your-own-price or infringe?

4. What is the core of the moral claim? I take the point that frustration results in defiance, but that is not a moral argument by my reckoning. Is it the right to pay a fair price, or at least some price, for any digital service? So far as I can tell, this is essentially a claim to compulsory and potentially free licensing of all digitized works, regardless of whether it is a matter of minimal trouble (accessing a telecast) or minimal social value (and I say this as a baseball fan).

P.S. As to the CD hypo, I would stop, I think. But I see a difference, perhaps wrongly, between the fair use claim that can be made in the context of such a purchase and the rights of consumers who would in effect force a business relationship on the vendor.

Posted by: Ani | Oct 27, 2011 5:55:33 PM

"MLB has the capability to offer digital streaming of the playoffs."

In some sense yes, in some sense no. MLB is in the middle of a 2007-2013 deal with FOX that promises exclusivity. Maybe they made a bad deal by not trading some money for some (limited?) right to sell streaming, but it's a decision they're making year-by-year given the state of technology and their other business dealings.

Another way of putting this is that the premise of "[w]hen a copyright owner operates out of pique, or intransigence, or simple stupidity, infringement is civil disobedience" is flat wrong. There's no pique here, no intransigence. Whether it's stupidity is a factual question that comes down to how much money FOX left on the table by not reserving themselves streaming rights. If anyone here has any insight on that point, I'm glad to hear it.

Posted by: Jason Wojciechowski | Oct 27, 2011 5:56:43 PM

"Let me sharpen the moral point: MLB has the capability to offer digital streaming of the playoffs. They offer it outside the US, and they offer regular-season streaming in the US."

Just so you know, MLB.TV does not stream regular-season games that are being carried on national networks like ESPN. They also don't stream games that involve your "local" teams - regardless of whether the game at issue is actually being broadcast to your region.

But none of this is all that hard to figure out ahead of time. They make it pretty easy to find on the website, before you sign up. It is unfortunate that you didn't realize this when you bought the internet package, but somehow I figured it out (and refrained from buying as a result), and others have as well.

It seems to me that MLB has a legitimate reason why they would not want to stream games being carried live on network TV - to benefit the TV networks that fund the sport. So while I can see why you would pirate the games this year, I don't see any legitimate justification for punishing MLB by pirating their games next year instead of ponying up for the internet package.

Posted by: Steve H | Oct 27, 2011 6:06:21 PM

Derek, there are some points where we are just not going to agree. Start where we do agree: it is annoying that sellers won't sell to me on the exact terms that I want. And when I can get away with not complying with their terms, I do. Annoyance leads to defiance, at least where defiance is not punished by the legal system.

But even where there is massive defiance doesn't mean it is thereby morally justified. There is massive defiance of speed limits because (1) compliance is annoying, and (2) there is severe under-enforcement. But I don't think anyone will make the case that one is thereby morally entitled to drive at whatever speed one likes. At most it means that there is relatively little moral sanction for driving a slightly over the speed limit.

Finally, "physical good analogies are utterly irrelevant"? "Reasoning by analogy is a form of bad logic"? For a start, you make the analogy yourself to Napster, which is a form of reasoning by analogy, so clearly reasoning by analogy is not per se bad logic but depends on the analogy. The question then is whether physical good analogies are "utterly irrelevant" as you say. Again, you invoke the concept of "market failure," which is an economic concept developed primarily in the context of talking about markets is physical goods. If physical good analogies are "utterly irrelevant" to talking about IP, then IP becomes this little intellectual island that is divorced from every intellectual tradition.

Of course there are differences between IP and physical goods. But that is only a point to require caution in the analysis. To dismiss all physical good markets because of the zero marginal cost point is absurd. For a start, many physical goods (e.g. airline seats) also have zero marginal cost.

Posted by: TJ | Oct 27, 2011 8:23:11 PM

Jessica is right; this is a conversation in which (sometimes unstated) ethical norms are doing a lot of work. Both Derek and MLB have moral claims here that appeal to a widely-shared intuition: creators and audiences ought to engage in respectful, voluntary transactions. The relationship broke down here, and one can actually tell conflicting stories about why.

From Derek's perspective, he tried to be a morally upstanding fan, who finds and pays for the broadcasts he wants to watch. MLB, however, treated him with less than the respect due to honest fans when it took his money and gave him nothing in return. With the moral covenant broken, he doesn't feel the affective attachment that makes him care about paying, so he's going go stream the games instead.

From MLB's perspective, it offers a whole range of options for fans in the U.S. and abroad. It's honest up front about the terms, and Derek was fine with them when he clicked "OK." But then Derek decided to hell with the moral covenant, and decided to pirate instead. That's a selfish, un-fan-like attitude.

These stories conflict in the sense that they differ on who's morally at fault for walking away from the table. But they actually agree on the underlying premise that the moral ideal is voluntary exchange in which each side respects the other as more than just a means to an end. I say much more along these lines in a paper from a couple of years back: http://works.bepress.com/cgi/viewcontent.cgi?article=1023&context=james_grimmelmann

Posted by: James Grimmelmann | Oct 27, 2011 11:42:59 PM

@TJ: No. Airline seats have zero marginal cost *until you have to add another airliner*. This is why physical analogies are a bad idea: when poorly thought through, they lead you astray.

Posted by: Derek Bambauer | Oct 30, 2011 9:39:00 AM

James: is that Derek's story? I don't think so. I was trying to clarify this above; whether in the hypothetical where there never was a transaction that went awry, Derek would still argue that he is justified in streaming the games without paying. My impression is that he would. E.g., "I argue that US consumers have a moral claim on Internet streaming of playoff games, particularly if they have become accustomed to accessing baseball games via the Net (a type of reliance claim). If MLB decides not to let us pay for streaming, we can reasonably access games without their permission on-line." That seems to refer not just to consumers who have experienced an annoying mis-fired transaction, but *all* US consumers, just because of the differing mediums in which the games are made available live. That seems to be a peculiarly narrow moral claim to me. But perhaps Derek can clarify this.

Derek: Can't we say about ALL analogies that when they are poorly thought through, they lead you astray? That's not really a distinguishing feature of intangible-objects-to-physical-objects analogies. I suppose the argument is that they are more likely to go astray, but TJ explicitly noted the need for caution. I think we can also say that a poorly thought out kneejerk opposition to physical analogies can lead you astray as well.

Posted by: Bruce Boyden | Oct 30, 2011 3:16:46 PM

Derek, that is like saying that transmitting major league baseball has zero marginal cost, *until* you have to add new fibre cables, play additional games, etc. etc. At any rate, we have clearly reached our point of diminished marginal returns.

Posted by: TJ | Oct 30, 2011 8:29:38 PM

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