The behavior’s not so much surprising as it’s disappointing. Companies that succeed within an economic framework want to maintain the structures — legal, cultural, physical and otherwise — that allowed for success in the first place.

Look no further than the record industry and its decade-long confusion over how to interact with, treat and sell to those of us who prefer mp3′s over CD’s (the physical), those of us who share and sample mp3′s before purchase (the legal) and those of us who think sharing and sampling is right and proper behavior (the cultural).

Instead of adapting and innovating to take advantage of these new-ish realities, the industry walks around with a big stick and sues the likes of Joel Tenenbaum and Jammie Thomas-Rasset. Tenenbaum downloaded 30 songs and was fined $675,000. He got off easy. Thomas-Rasset downloaded 24 songs and now owes $1.92 million.

One wonders about the viability of an industry that sues those that transgress the old order in order to scare others from entering the new. Perhaps it’s a delay tactic until they figure out how to operate in a new paradigm. Perhaps they simply don’t have answers.

Meanwhile, despite the industry’s handwringing over petty pirates and the culture that breads them, total music revenue has actually increased. Just not for the major labels.

A report from the UK tells us that while people buy less recorded music than before (thus less money in the labels’ coffers), they spend more on music as a whole (ie, on recorded music plus concerts plus swag, etc.). The net effect of all this file sharing appears to be increased consumer involvement, albeit involvement the record industry — to its litigious chagrin — no longer controls.

About a year ago I asked whether big companies can innovate. The question then, and now, is what companies do once they’ve cornered a market. Do they defend their turf at all costs, rhyme and reason be damned? Or do they continue to innovate, come up with new models, take risks and branch out into the perpetual unknown?

This is especially true as our technical landscape changes economic boundaries and workflows, and cultural practices accelerate those changes. It’s also true when it’s not just a company or companies that are disrupted but an entire industry instead.

Newspapers, unfortunately, are becoming increasingly adept at demonstrating to the rest of us what not to do. As that ship sinks one head scratching proposal after another bubbles to the surface.

Creating pay walls is a fabulous solution until we realize that walls box in just as much as they box out. People will just go elsewhere for the same ubiquitous information as publications get trapped in prisons of their own making and lose any link economy benefits.

The thought then is that partial pay walls might work in order to “protect” premium content.

The immediate question that arises: protect from what? The readers one thinks we’d actually like to attract?

Or, the fear in every Associated Press nightmare: bloggers and aggregators quoting content as they converse about and disseminate the news and issues of the day.

As News Futurist writes:

This is not to say some news providers couldn’t get away with charging online; but to do so they would have to have content so valuable and unique that they don’t face the competitive forces that pull prices down to the marginal cost of ~zero. And even if you find a specific niche and premium content you can charge for, you’re likely to face free competition once the word gets out.

The news industry struggles though, and as it looks for a way out its economic misery a non-exhaustive list of recent headscratchers includes:

• the European Court of Justice rules that reproducing 11 words from a news article can constitute copyright infringement.
• Not to be outdone, the Associated Press will sell you five words and even license content it didn’t produce.
• One newspaper sends another a a cease and desist notice for reporting… the news.
• At a Newspaper Association of America event, a publisher says pay walls are advantageous because they keep offline, print circulation up.

The point here is that as information industries struggle, they grasp at anything to protect their turf. What we see are more and more cases of mental squatting, a tactic I’ve described before as the deliberate attempt to expand one’s hold on content and ideas outwards into the public sphere through copyright, patents, and redefining what the boundaries of content are to begin with.

Amazon’s snafu with the Kindle edition of Nineteen Eighty-Four is an exceptional example. Forget legal posturing. The company reached out and deleted books people had purchased. These were “their” books on “their” Kindles. No matter. As we enter a permission culture, one were we ask for the privilege to read, listen to, build upon or otherwise consume content, even paying for it is not enough.

Slate’s Farhad Manjoo paints a dark picture on what’s at stake when a company’s empowered to reach out and delete content, writing that corporate and governmental censorship is literally a click of a button away.

There are some positives. First, some major media companies do get it. The New York Times’ top lawyer pushed back at the AP’s content grab, stating that he doesn’t believe aggregation is a copyright issue. Then, Chris Ahearn, President, Media at Thomson Reuters, basically told the AP to stop whining and evolve with the link economy. In a blog post, Ahearn wrote:

Blaming the new leaders or aggregators for disrupting the business of the old leaders, or saber-rattling and threatening to sue are not business strategies – they are personal therapy sessions. Go ask a music executive how well it works.

At the Harvard Business School, two economists, Felix Oberholzer-Gee and Koleman Strumpf, recently released a working paper on the societal benefits of less stringent copyright protections. Part of their findings (download) demonstrate that overall cultural productivity increases in countries and regions where piracy is greatest. Michael Geist provides an overview here, noting in particular that:

The paper takes on several longstanding myths about the economic effects of file sharing, noting that many downloaded songs do not represent a lost sale, some mashups may increase the market for the original work, and the entertainment industry can still steer consumer attention to particular artists (which results in more sales and downloads).

This shouldn’t surprise. The Dutch government recently released a similar report about the overall societal gains attributable to file sharing. Before that Canada released a study concluding that file sharing has a “a positive effect on music purchases among Canadian downloaders.”

Few companies within industries holding the short end of a rapidly evolving technology stick will survive and the convulsions from their demise will be felt through and through.

An AP has clout, power, and an army of lawyers it can and will employ to protect its inalienable turf. It’s already spent $55 million on what from the outside appears to be a bunky software to prevent people from “stealing” its content and in general has a confrontational stance about what others consider fair use.

How much it — along with others dependent on information control — will spend on litigation and attempts to expand copyright and limit fair use is anyone’s guess. But as the ship goes down, do not underestimate the desperation of the drowning. If we don’t look after and care for society’s interest, these organizations will make them their own.

This article originally appeared on ScribeMedia.org
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