Ars Technica’s Nate Anderson has written an excellent history of how the content industry has fought against pretty much every technological advancement over the past 100 years for fear it would end creative expression forever. As we know this isn’t true. Rather, technology helps increase the market for these creative works (and other industries) by decreasing costs and increasing efficiency. It is much cheaper and easier to create and distribute music than it was 10 years ago, let alone 100 years ago.

Anderson profiles the content industry’s fight against the gramophone and player piano. John Philip Sousa campaigned to Congress to ban these evil machines for replacing live performances, not recognizing that home recordings might increase the demand for those live performances. This gave birth to the compulsory license system, where the government set rates sheet music must pay to songwriters, we have still to this day, though it has been vastly expanded.

Photocopiers spelled doom for the print industry, with UCLA law professor Melville Nimmer saying “the day may not be far off when no one need purchase books.” While the U.S. and its courts upheld a fair use right to copying, Canada and other countries must pay royalties to collection agencies for every copy. Canada pays the same tax on rewritable CDs and iPods because they might be used for pirated content.

Movie companies famously referred to the VCR as the “Boston strangler” as it killed the movie industry. Universal sued Sony over Betamax all the way to the Supreme Court to ban the use of home recording. Once found legal, movie companies decided to sell copies of their own movies to home viewers, a revolutionary practice that led to the multi-billion dollar home video and rental market.

Pretty much every expansion into digital media has been fought tooth-and-nail by the content industry, from Napster to DVR to the iPod.

Anderson also left out some other highlights. Cable TV, when originally introduced, featured almost exclusively pirated content from network television. This allowed cable television to expand far enough that it could afford its own programming. Even the movie industry began by fleeing New York to Hollywood to escape enforcement of Thomas Edison’s patents and the high prices he charged to anyone wanting to make movies.

Presently, the DMCA makes sure technological innovations are few and far between to help the content industry.  While CDs were released without DRM and thus able to be ripped onto computers and people’s iPods, DVDs are copy-protected and thus illegal to copy in anyway. Even though it is easy to do so, no software or hardware can be released that can take advantage of people’s massive DVD collections.  Even though the content industry claims it would never sue to ban innovation, the industry has done so several times, and won these cases, holding back technology and innovation that consumers want and could do more to help expand the content market.

Hank Williams, author of the blog Why Does Everything Suck, has a cynical view of the recent economic crash claiming that it has more to do with technology making people and their jobs obsolete. But the numbers, and some history, show this to be completely untrue.

Williams writes:

The problem is that we are in this awful in-between phase of our planets productivity curve. Technology has vastly reduced the number of workers and resources that are required to make what the planet needs. This means that a small number of people, the people in control of the creation of goods, get the benefit of the increased productivity. When we get to the end of this curve and everyone can, in essence, be their own manufacturer, things will be good again. But until we can ride this curve to its natural stopping point, there will be much suffering, as the jobs that technology kills are not replaced.

The fact is technology, throughout history, has increased the number of jobs, not diminished them. Further, the new jobs created are often higher paying jobs.  ATMs, for instance, do away with bank tellers, but then we need people to make and maintain the ATMs.

I wrote about this trade off several months ago. I linked to a Slate article listing the dozens of industries put out of business by new technology over the last century. Yet instead of declining jobs and growth, the  last century has been one of prosperity.

Technology helps make us a more efficient society, allowing fewer people to do one task and devote time to another. The U.S. used to employ the vast majority of its citizens in food production, but now less than one percent of our GDP comes from agriculture yet we produce more food than before. All those people once focused on growing and harvesting food went on to build new industries like movies, air transportation, computers, and the internet.

Speaking of the internet, how did that Dot Com Boom go? A massive increase in job creation in an all new industry not seen before. Yes there was a crash, millions of jobs lost. And you know what? We recovered and built sustainable jobs in that same all new industry.

Of course, it would help if Williams looked at where the jobs are actually being lost.  The financial industry hasn’t lost more than 300,000 jobs because of better technology, but rather unregulated greed, corruption, and bad investments. The mortgage and construction industries have lots hundreds and thousands of jobs because of more than a decade of over investment and now a large drop in people not wanted to buy new houses.

The jobs lost are not just low-skilled or low-income jobs. This economic crash is the result of many, many issues including many industries not adapting to new technology rather than simply being made obsolete (see the auto and newspaper industries). After the end of this recession, the U.S. and most other countries will have reprioritized their resources, both in terms of dollars and labor. Maybe more people will be available to research and build a massive green technology industry. How about turning stem-cells into a viable business? What haven’t I thought of? Who would have thought 10 years ago that writing 140 characters would be a billion dollar business? By removing some jobs, we free up resources, both people and dollars, to do more in other places.

Media and software companies release reports that piracy costs them billions of dollars, destroying their business, funding terrorism, or hurting poor farmers. These companies lobby governments to pass laws, sue fans in court, or ask people to spy on others in order to prop up business models that are becoming obsolete. Companies should stop fighting piracy and treat it like any competitor - by competing and out innovating file-sharing services to provide a better value allowing everyone to make more money.

Matt Mason promotes this in his book, The Pirate’s Dilemma, calling piracy a sign of innovation as pirates experiment to make processes more efficient.

Some of America’s greatest innovators were thought of as pirates. When Thomas Edison invented the phonographic record player, musicians branded him a pirate out to steal their work and destroy the live music business, until a system was established so everyone could be paid royalties. Edison, in turn, went on to invent filmmaking, and demanded a licensing fee from those making movies with his technology. This caused a band of filmmaking pirates, including a man named William, to flee New York for the then still wild West, where they thrived, unlicensed, until Edison’s patents expired. These pirates continue to operate there, albeit legally now, in the town they founded: Hollywood. William’s last name? Fox.

New technology has repeatedly challenged media companies, from Edison’s phonograph to television to cassette tapes. After lawsuits attempted to quash the innovation, media companies embraced the new technology and found new revenue streams, making more money as a result. The home video market Hollywood so desperately defends now would never have existed had Universal and Disney’s lawsuit against Betamax succeeded. Instead of suing file-sharing networks, media companies need to embrace the new technology as a new way to make money.

The current state of media and software is quite good. Media companies are making more money every year. Even the music industry is making more music while more people are listening to music. The recording industry is plummeting at a rate so fast piracy cannot be the sole factor, as studies have shown.

But piracy has become an obsession for media and software companies, hurting themselves and their paying customers with DRM and restrictive policies that limit the value of their products. Microsoft, Google, and Major League Baseball have all discontinued DRM serviced, meaning people who legally paid for goods no longer get to use them while pirates continue to download DRM-free goods for nothing.

Piracy offers a compelling alternative. Piracy offers unlimited free downloads of an almost complete collection of every movie, song, TV show, book, or game ever made using a variety of easy to use programs. Pirated content has no DRM, meaning you can put your music and movies on every computer and portable device you own. On the down side, pirated content is has unreliable quality and inconsistent download speeds, but since its free, these are minor negatives.

Why should someone pay for a service with less services?

Media and software companies need to recognize piracy is not going away - it’s a competitor. No matter how many lawsuits the RIAA, MPAA, and BSA file, piracy grows. These lawsuits increase publicity for many sites and services, working against the lawsuit’s purpose - Pirate Bay, the leading BitTorrent tracker, is now one of the 100 most trafficked websites thanks to publicity from these lawsuits. And for every file-sharing service closed down, dozens more pop up. File-sharing is too useful and thus valuable.

To compete, media and software companies will need radical changes to their business models. Techdirt’s Mike Masnick constantly refers to leveraging infinite goods to sell scarce goods.

In a competitive market, the price of a good is always going to get pushed towards its marginal cost. That actually makes a lot of sense. As competition continues, it puts pressure on profits, but producers aren’t willing (or can’t for very long) keep selling goods at a direct loss. Sunk (or fixed) costs don’t matter, because they’ve already been paid — so everything gets pushed to marginal cost.

Movies, music, and software have high upfront costs but negligible reproduction costs - it’s as simple as copy and pasting a file.

This means leveraging infinite goods to sell scarce goods, like concert tickets, collectable merchandise, or advertising (people’s time and attention is very limited). $20 for DVDs and CDs worked under the old, obsolete business model. The new media economy requires new business models that offer more value to consumers. Plastic discs don’t offer $20 of value anymore, meaning new price models and revenue expectations need to be developed. Just because the recording industry used to be making $10 billion a year doesn’t mean is deserves to always $10 billion. As Masnick points out, should the automobile industry be blamed for putting horse-drawn carriages out of business? The industry has to innovate and adapt to market forces to continue making that money. That’s how capitalism works.

Several progressive artists and developers are experimenting with new business models. Radiohead’s pay-your-own price for their new album was a good start. Trent Reznor of Nine Inch Nails earned $1.6 million in one week selling special editions of his new CD, a CD that you could also download for free. Indie record label Fueled by Ramen used viral marketing to build valuable brands around its bands rather than relying on disc sales. The potential for rewarding business models exists, but will require risk and experimentation and an understanding of the evolving marketplace. Media and software companies need to recognize what their customers want and give it to them. Suing isn’t the answer. Embracing is. And that’s how both piracy and business can win.

Scientific development constantly moves, introducing new gadgets and gizmos at a shocking pace.  But some things just don’t happen fast enough.  Science fiction predicted hundreds of amazing things we’d be doing now from traveling space to flying with jet packs.  Sadly, all we got was the internet and iPods.  These seven dream technologies should be the focus of every scientist or inventor because, well, I said so.

7. Commercial space travel

Science fiction from the past century has promised human settlements of the Moon, Mars, and more beginning ten years ago.  They failed to uphold this promise.  I want to be able to go for a moon walk for about as much as the red-eye to DC.  And if I want to vacation on the barren lands of Mars, I should be able to.  Earth has gotten too boring, we’ve seen it all.  Time for something new.

6. Cheap, reliable energy

Between global warming and gas prices, non-polluting energy would be a welcomed solution.  Whether it’s large scale hydrogen, solar, wind, or nuclear power, we need to band together to save the world and shut up those damn pundits and their gas price graphs.  Super-efficient batteries for our laptops and gaming handhelds would be awesome too.

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If war or famine doesn’t kill us, technology sure will.  As we become more and more advanced, the technology we create poses more and more of a challenge that could lead to catastrophic consequences like affecting the Earth’s environment or creating something that takes on a mind of its own.  Science-fiction has proved to us we have more to fear from technology than the perceived benefits.  Here are the most likely ways technology will strike.

7. Wi-fi/cellular radiation

Your cell phone is going to give you a brain tumor, make you infertile, or both at the same time.  All the waves and what-not flying around our heads is also killing us slowly with a relentlessly malicious intent.  As we start packing in internet and phone and video into more and more gadgets, our pockets will fill to much we won’t even be able to walk, leaving us at the mercy of the wi-fi waves and cellular radiation.

6. Hackers and computer viruses

Already many live in fear their computers, cell phones, or even video game consoles will be infected by a vicious computer virus or hacked by a vicious hacker who will steal all their money.  These fears are both logical and rational and will only get worse.  Hackers will get better with stronger more intelligent viruses while security software slows to a crawl thanks to patent lawsuits and tons and tons of money made off of our fears.  Eventually, some virus will go all Y2K on us an send our nuclear missiles flying or send airplanes crashing or turn off our refrigerators, spoiling our milk, and starving us all.

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Video game fans know it sucks to invest hundreds of dollars in consoles, accessories, and games only to do the whole thing over again in five years. We do it, but we hate it. Sony’s PS2 is showing the console lifecycle might be lengthening, with awesome games still being releases for the seven year old system. The PS2 even outsells the state-of-the-art PS3 meaning people seem willing to invest a couple years in the aged platform.

But Sony’s PSP handheld is a different beast. John Koller, senior marketing manager for Sony’s PSP told IGN he believes the handheld has a 10-year lifecycle similar to the PS2 and PS3. Using firmware updated and some hardware revisions, they can milk the life out of the PSP. But this is a bad idea and an example when starting fresh is better in a few years.

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There are lots of sexy political issues, usually following whatever George Clooney is promoting that week, and sadly patent law is not one of them. Intellectual property issues and patent law is too complex to be highlighted on billboards, and from the public’s perspective, doesn’t affect our lives too much. But the more I learn about these issues, the more I realize how much America’s patent system is hurting us economically and intellectually.

But in my research and discussions with people, I found myself challenged as to describe my position. I am not specifically anti-copyright or anti-patents and wish there was a term to describe my political position so I knew what to call the Facebook group.

I would like to recommend Pro-Innovation as the term.

Pro-Innovation has that positive marketing spin, being for something rather than against something else. And innovation is good, and in truth, the intended purpose of a patent system. Unfortunately, for all the conventional wisdom, there is no evidence that more patents helps innovation, rather it hampers innovation more than helps.

The Pro-Innovation position looks to bring back American intellectual property laws to their minimalist state as dictated by the Constitution “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Meaning any patent or copyright is granted only to promote the development or more and better stuff and only granted for a limited time (70 years after the creator dies seems a little long).

This is an extremely complex issue that I will be tackling more on Prodigeek, but I wanted to throw my suggestion in the ring. I have already trademarked Pro-Innovation and expect a quarter every time somebody says it.

The popular audio format of the 1960s, 8-tracks were one of the major alternatives to large records, giving music fans some portability.  Ford Motor Company was the first to include an 8-track player in its cars, freeing people from the confines of radio and commercials.  But as one of the earliest format wars, 8-tracks were quickly usurped by the smaller and cheaper compact cassettes, leaving thousands of music fans with obsolete technology.  But for all the wasted money, 8-tracks have developed an avid collectors market, with many present day audiophiles or, ironically, collectors, still pursuing 8-tracks.  A few independent artists even release 8-track tapes.  I’m seeing resurgence…

Most geeks might not have cared about ABBA’s The Visitors, but this album marked the first audio CD, a media that might be on the way out now, but has given us more than 25 years of optical-disc based joy.  No more 20 floppy discs just to install a word processor.  A CD could hold almost 500 floppy discs word of content, making for higher quality music, better graphics for video games, and simpler installations for…installing stuff.  The CD not only revolutionized the recording industry, but likely encouraged the development of piracy since CDs became a standard for computers as well as portable music players. 

And don’t forget video games.  To compete with the Nintendo juggernaut, Sony released its Playstation system using CDs as the medium rather than the standard cartridge.  Other systems used optical media, but the cinematics seen in Final Fantasy VII proved how superior CDs were to cartridges, if you don’t care about loading times, of course.

The highlight of any museum trip, IMAX movies prove bigger is better.  These screens are more than five stories high, dwarfing the size of traditional movie screens and providing greater picture quality and sound.  Introduced in 1971, IMAX movies required special filming for the larger screens resulting in a more expensive production process.  IMAX films were limited to museums and educational purposes better suited for shorter films with breathtaking visuals.  As of 2002, traditional movie releases could be upcoverted to IMAX screens allowing for more commercial releases.  But IMAX still devotes more than half its screens to educational films, which is how most geeks remember these giant screens.