Don Boudreaux of Cafe Hayek (a member of our Academic Advisory Council) posts on his blog copies of his Letters to the Editor which failed to find favor.

A good custom; so here is my unappreciated missive to the WSJ taking issue with its column on the Viacom/YouTube suit:

To: 'wsj.ltrs@wsj.com'

From: Jim DeLong

Subject: Comment on Kedrosky on Viacom v. YouTube

Sent: Thursday, March 15, 2007 8:44 AM

In his column on Viacom v. YouTube, Paul Kedrosky notes that "YouTube doesn't matter" because even if it is busted consumers will still want "unbundled media, sold everywhere and in myriad assortments" and that Viacom and other media companies are dolts for not understanding this.

Well, Duh! The media companies understand these consumer desires perfectly well. They are working frantically to develop business models that will meet them.

The precise problem is that YouTube and its ilk, by appropriating other people's creations so as to attach their own advertising to them, pre-empt the development of more creative business models that are based on not just advertising but on purchase, pay-per-view, subscriptions, patronage, and combinations thereof, and that slice and dice long works into separate chunks. Look how rapidly the music industry responded to the demand for ringtones.

In the not-so-long run, the result of YouTube's hijacking would be a substantial curtailment of consumer choice. The only creations that would survive are those that garner millions of mass market eyeballs. One of the ironies of this whole debate is that, contrary to most press accounts, it is really Viacom, not YouTube, that is defending consumers' true interests.

Hopefully, the mass of consumers, as opposed to the noisy juveniles of academia, understand that the world runs on reciprocity -- artists create and consumers pay, in this case -- rather than on free-riding.

posted by James DeLong @ 4:34 PM | Media: Video, Music...

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