Tuesday

from the thanks! dept

Nice news of the day is that Techdirt has been in the "Best Business Blogs" category. The competition is steep with the likes of excellent sites like and the NY Times' -- so we'll just trot out the cliche (but we mean it!

) and say it's just great to be included in such a group of sites. The Webbies have their own internal voting as well as a "People's Voice" vote where anyone can vote -- so feel free to . And, as always, the real thanks goes to our passionate and opinionated readers who, whether they agree with us or not, continue to make writing the Techdirt blog fun and intellectually stimulating for those of us here at Techdirt Towers.

In one of its roles as proxy for Hollywood movie studios and record labels, the US government continually complains to China that it's not doing enough to stop piracy, and threatens it with the big stick of sanctions or other actions through the World Trade Organization. While these threats are usually just hot air, the US has now , saying that Chinese laws don't live up to WTO commitments in the area of copyright protection and enforcement. But there's a second element to the complaint, which takes issue with China's heavy restrictions on the distribution of foreign content, including DVDs, CDs, books and other products.

Where things get a little bit more interesting is that the original article in the Wall Street Journal, and indeed, movie studios and record labels themselves, gloss over the second part of the complaint -- when it illustrates beautifully how backwards big content thinks. A graph in the article says that China and France are the two nations where the movie industry suffers its biggest losses due to piracy. While the dollar amounts cited are , is it any coincidence that the movie industry sees those two countries as the biggest for piracy when they both feature some of the tightest restrictions on the distribution of foreign content?

France is pretty famous for its efforts to of its media market, while the Chinese government allows just 20 foreign films to be shown in the country's cinemas each year. It would be reasonable to deduce that it's a lack of legitimately available, attractive products that's driving the demand for pirated goods in these countries, rather than weak enforcement of copyrights. This mimics what goes on in other markets: the content industry fails to provide consumers with attractive products to purchase -- though it's generally because of poor strategy rather than government interference -- so they turn to pirated goods instead.

The market for legitimate movie downloads probably provides the best illustration of this scenario. The products offered by legitimate, studio-backed sites and overpriced that nobody wants to buy them. The idea that content providers like movie studios don't understand this is reflected in the fact that they aren't pushing the government to attack China's 20-film limit, they just want to make its copyright laws more strict.

It's just another indication of how the industry , while it protests that . The failure in the market isn't a failure of the government to sufficiently protect copyright holders; it's a failure of those copyright holders to provide products and services that are attractive to consumers. Update: The WSJ updated the article, and changed the graph to show another set of questionable MPAA data.

The original graph .
Back in 2003, we mentioned an article that , noting that even though there was no intellectual property protections over clothing design and copying was rampant, the fashion industry was thriving. This shouldn't come as a surprise, really.

After all, without the artificial protectionism, the fashion designers are forced to continually compete by continually innovating and always trying to come out with the latest and greatest design. Even though others copy, there's tremendous value in being the first, or being the "big name" in the industry. The article included this fantastic quote: "Ideas arise, evolve through collaboration, gain currency through exposure, mutate in new directions, and diffuse through imitation.

The constant borrowing, repurposing, and transformation of prior work are as integral to creativity in music and film as they are to fashion." In 2005, the NY Times wrote a similar article, but warned that the fashion industry , as lazy designers who didn't want to compete and wanted to rest on their laurels had started pushing for new intellectual property over their designs. Late last year, the calls for such protectionism -- though, the reasoning doesn't make any sense.

The entire point of intellectual property protections is to create incentives for a market. If that market is already thriving, why do you need to add new incentives? The real reason is that it's not to provide incentives.

It's a way for successful players to keep making money without continuing to innovate -- which is simply bad for society. The NY Times is taking another look at this issue, this time in a piece written by well-known economist Hal Varian, who points to a recent study that doesn't just note that the fashion industry has thrived without intellectual property protection, but notes that . In other words, if those pushing for those new IP rights get them, the end result will likely be harmful to the overall fashion industry.

Again, this shouldn't be surprising, as removing protectionist policies tends to increase competition and the size of the addressable market, but it's certainly a good example to point to when people insist that things like the music industry wouldn't exist without copyright protection.