Piracy Is Not Competition
Responding to Salam and Ruffini’s criticisms of the entertainment industry.


In the February 27 issue of National Review, Reihan Salam and Patrick Ruffini argue that Hollywood lobbyists have been more successful than they deserve to be, especially by nearly passing the Stop Online Piracy Act (SOPA). Most of their article’s main points are unobjectionable: SOPA was problematic; the Internet is a wondrous development that should not be overregulated; Hollywood has received unseemly financial favors from various levels of government; and copyright law has been needlessly expanded at the hands of the entertainment industry.

Salam and Ruffini are also correct that the Web has thrown numerous established businesses, from brick-and-mortar retailers to newspapers to the U.S. Postal Service, into turmoil, forcing them to confront highly efficient online competition. They are right, too, that the government should let the market work its magic in these cases. But they are wrong to include the threat Hollywood faces from Internet piracy in this trend.

When brick-and-mortar bookstores complain about the threat they face from, they are complaining that customers will leave them for a superior alternative; when Hollywood complains about piracy, they are complaining that customers have left them for an illegal alternative. They have stopped paying for Hollywood products yet are still consuming them. These are not even remotely similar situations — morally, legally, or economically.

With this distinction in mind, one might find it rather odd for Salam and Ruffini to insist that the solution to piracy is “innovation” rather than law enforcement. By “innovation,” they mean primarily that Hollywood should make it easier and cheaper for customers to buy their content digitally, citing studies indicating that when digital content becomes readily available through legal channels, piracy goes down. But even assuming Hollywood can discourage piracy by cutting prices and offering its content in different ways, since when do we tell crime victims to appease their tormenters?

Moreover, in no other industry do we allow consumers to force prices down by taking products for free whenever they, personally, think the legal versions are too expensive or inconvenient. Any customer may refuse to buy a product that’s undesirable, or even organize a boycott — but then that customer needs to go without the product. Salam and Ruffini provide no justification for singling out industries that sell intellectual property — and little evidence that these industries’ disproportionately young, bratty, and entitled consumers are better equipped than the free market to decide what a “fair” price is for an album or movie that cost thousands or even millions of dollars to create and market. Essentially, they are calling for price controls calibrated to the liking of the Occupy Wall Street crowd.

Salam and Ruffini also note that despite the cratering of sales for easily pirated media — recorded music and home movies, in particular — the entertainment industry as a whole is doing all right by some metrics. But once again, even if this is true, it applies a standard to the entertainment industry that no other sector must suffer under — namely, that it must tolerate violations of its legal rights so long as it remains profitable.

Of course, one may claim that the legal rights themselves are the problem, and should be eliminated or substantially weakened — but Salam and Ruffini take no such position in their piece, at least not explicitly. There are also the matters of how government should prioritize copyright enforcement, and what tradeoff we should strike between enforcing copyright laws and keeping legitimate Internet activity unrestricted. But Congress has for centuries recognized some form of copyright, the Constitution explicitly authorizes the legislature to do so, and even Salam and Ruffini concede that piracy is common and increasing. Thus it would seem that the industry has a strong moral and legal justification to ask the government to enforce copyright law more effectively.