Piracy/File sharing - Why aren't songs, movies or ebooks given for free (+ads) like TV? Update: I have spent 750 reputation points for bounties on this 6 year old question, and it looks like ONLY NOW this question might be closed. LOL. this must be such a huge guinness book of stackex records: longest duration of post or most reputations points spent for bounties (or both) on question that is supposed to be closed before question is actually closed.


Question: Why aren't songs, movies or ebooks given for free (+ads) like TV?


i. Sub-question: Every minute, people are pirating and there is no stopping that. If people see 0.99 for a song on iTunes and 0.00 for a song on a torrent site, I don't see anything stopping majority of people from going to that torrent site in the same way I don't see anything stopping them from going to a library or asking a friend to borrow a book instead of buying the book in Borders or taping a song off the radio. In particular, there's betamax. It was thought illegal until this case or something.

(Anyway that's about legality not economic benefit/loss. Also betamax is more like is or positive rather than should or normative, I guess.)

So, why don't companies, like the RIAA or MPAA, release their songs, movies or ebooks for free but put in ads kind of like how cable TV was/is done? In my opinion, companies incur a huge opportunity cost

eg 'JK Rowling has lost millions of dollars, because she refused to let Harry Potter come out in ebook form. Newsflash: you can get ebooks of all the Potter books from pirate sites. She didn't cater to her fans, so her fans catered to themselves.'.


ii. Sub-question: What I guess is that they think they can actually stop piracy with things like DRM or scaring people into believing that they will be caught even though such is unlikely so as to keep making money on iTunes, Netflix or whatever.

However, I read that in a documentary, Chairman and CEO of the Motion Picture Association of America (MPAA) Glickman 'concedes that piracy will never be stopped, but states that they will try to make it as difficult and tedious as possible.'

So he ADMITS piracy cannot be stopped, which makes my guess wrong. So what, are the RIAA and MPAA actually irrational?




Question: What are some economic concepts or theories involved in file sharing/piracy besides opportunity cost and free rider problem?


Notes:

This can also extend to games, apps, etc.

To clarify, I don't mean to ask why songs, movies and ebooks are not given ONLY for free. They should continue to be given for payment since there will still be demand. If people want to buy CDs, DVDs or ebooks, attend concerts or go to cinema before songs, movies and ebooks would be given free, they would likely not want to do less if ever songs, movies and ebooks would be given free, I think because it seems that if people like the cinema or concert experience, don't have Internet access or like smelling books, they will continue to purchase as much.

My question is not 'Why do people go to netflix instead of torrent?', a question focused on the consumers given the law and the companies' decisions. My question is instead 'Why aren't songs, movies or ebooks given for free?', a question focused on the law and the companies' decisions given, well:

Pirate Coelho's 'Sharing is part of the human condition. A person who does not share is not only selfish, but bitter and alone.'


Btw I just discovered artificial scarcity.



Edit: in re my badge, thanks for the upvotes everyone! This is so weird that this has only 3 downvotes. I could've sworn this was at 0 score sometime in the past year or so with like at least 10 downvotes. I got a lot of 'user was removed' in notifications recently, so maybe that's relevant.
It's called a Principal-Agent Conflict.
The RIAA/MPAA act as agents on behalf of the people who actually produce content (and consequently end-consumer value).
To maintain relevance to their principals', the RIAA/MPAA must signal value to them (i.e. claim loudly and repeatedly that they do something good for them [regardless of the validity of that claim]).
Firstly, this signaling is demonstrably an example of the Principal-Agent problem, in that it diverts resources away from actually advancing the principals' interests, but more so in that it creates a perverse incentive for lobbying groups to fight imaginary fires.
The impact of piracy on the broad economy is believed to be near zero, so IP laws are effectively just rent-seeking $^{[2]}$ anyway.
Whether or not that particular type of rent-seeking is always a drain on the broad economy (in that it distorts markets producing deadweight loss in excess of the externalities corrected) is up for discussion, though it is known to be possible (insofar as the existence of an optimal tax [or government induced market distortion] is necessarilyy proof of the existence of an excessive tax).