So Victor, we’ve talked a lot about intellectual property over the years. And one argument, which I always find fascinating, is that you put forward an argument that in some cases, piracy can actually be good. So the first thing is that it doesn’t matter whether it is good or not. What matters is that it is a cultural phenomenon. So it is happening. The question is why it is happening. So don’t tell me about what you do, but you certainly heard of people who are watching videos from some dodgy sites and downloading music from all sorts of places.
You probably know that the guys who developed the Skype software, their previous product was a Kazaa, which is– they called it a music-sharing software. And those who were in the music business called it piracy. You know people doing that. Why they are doing that?
Effectively, because they want to access people’s creative talent, but they perhaps don’t want to pay, say, a premium fee for that creative talent. See, I don’t think that this is the case. OK. So I think that– many people anyways– so probably that exists, as well. And I don’t say that piracy sometimes doesn’t lead to breaking the law. It can be illegal. What I’m talking about is that we’ve managed to develop this kind of incredible, impenetrable layer between the creators and the users. So very often, the user does not mind paying the creator. They do mind this hustle between.
So if you want to listen to some music, do you really need to buy the whole CD, selected by someone else, because there is one track that you really, really like? Or do you want to buy a DVD that you will watch once? So you see that the music industry already changed. I would not say that they adopted, because most of those that are making these kind of middle-layer working, they just disappeared, and they were replaced by someone else. But do you think that a music artist makes less money now that this middle layer model has disappeared, or they are making the same sort of money as before? There could be an argument for both.
I agree, absolutely agree what you’re talking about in terms of the culture changing and how we consume these creative products like music and movies. But the thing is that, as well, there’s still a fine line between watching one movie on say one of the online sharing platforms like Netflix or watching a movie that’s still in the cinema a week after it’s in the cinema. You know that’s actually cutting into the cost of the– or the profits of the creators of the music, and whilst Netflix, on the other hand, is not. So I can say there’s an argument for both. For and against. Yes, but I am not talking up against Netflix. That’s the point.
My argument is that piracy led to the development of Netflix, which is now a legal way, which does not make the creator not owning– getting the money. However, all those in the middle, they have kind of shrank and disappeared. So music labels are kind of out of business. But I think it goes on to a really interesting point if you go to look at, say, the history certainly over the last 10, 15 years of the music industry. So for example, when Steve Jobs effectively came up with iTunes.
His main point there was because he wanted to compete with the pirates, so he developed iTunes that you could access that single piece of music for a relatively short, or for a small amount of money. Likewise, 10 years on from that, you’ve then got Spotify. So I agree with you to a point, Victor yes, there is that kind of shrinkage of the middleman in the creative process. And if there was no piracy, then we would not have iTunes, and Netflix, and that kind of stuff. So that’s my main point, OK? So that’s why I think that in a sense, this is positive. So by the way, the musicians never made the big money from the records that they were selling.
OK. Those who were winning those diamond records and so on– yes. But most of the money is made from the gigs from the concerts. It is much less what was made by the records. And if you look at the publishing houses today, so they seem to be a little bit smarter, isn’t it? So they are adapting to this open-access policy and so on, and they start to release, because they see what happened to the music labels. And but let me give you a different example. When for example I had this caricature that combines Batman with Marilyn Monroe. And it is for me, the absolutely most brilliant way of explaining the essence of the mash-up content.
As the musicians say, you take something old, something new, and put in a twist. Now that’s this picture. And with that picture, I can explain to anyone the concept of the mash-up in about 30 seconds. Without that, it’ll probably take me about five minutes. So it is a good way to do that. So I wanted to use this picture, and they said I cannot because of copyright issues. So I said OK. I sent an email to the artist who created it, and I asked him, OK, so would it be OK with you if I use it in my MOOC– Understanding Modern Business And Organisations. Oh, yeah. OK, of course, feel free to use it.
I said, of course I will put in the link to your website and everything. And he was perfectly happy with that. And then I faced the lawyers. And they say no, you cannot do that. Then I need to ask the artist to get the form and fill I don’t know how many pages of what sort of forms and that kind of stuff. So this inconvenience of the access. This is the big problem. And I think that as much as there are bad effects of the piracy, which means illegal stuff and taking away other people’s intellectual property, it is also getting us forward. So this is leading to these better solutions as iTunes and Netflix and so on.
And you see that people who are stealing music, or stealing videos, are much fewer today since we have these better-working solutions. Thinking about this, what seems to have happened is that the culture of how we consume music, or how we consume anything, has basically– works best when you create an environment where you do not need piracy, rather than blocking people out. It’s like you’re creating an environment where people don’t need to steal. And I think that’s the essence of what… Exactly. Policing did not prevent piracy. What helped with the piracy is Netflix and iTunes, so the right solution is then compete with piracy.