Exclusive interview with "Deathly Hallows" e-book pirates

[BenG]

I'm surprised that the US can't come up with a system of handling sales tax at source. If the EU can do it in a community of 25 nations, each of which has its own completely separate legal system, tax system, language, etc, one wouldn't have thought it would be beyond the limits of human ingenuity to come up with a way of uniformly collecting sales taxes within a single country, would you?

The U.S. sales taxes are a state and local tax. So there are 50 different tax systems, plus some counties that add a penny or two to the state tax. And each state may have their various exemptions and exceptions.

[Steven Lyle Jordan]

Bottom line is, it could be done... it would just be pretty involved, and no one in the U.S. wants to go through the trouble. If they decide that they're losing too much money, though, wait and see the fireworks!

[BCCISProf]

The US Federal Government is prohibited from regulating interstate commerce (Constitution of the US). Thus the Federal government may not impose a local tax system on the individual states/local governments. Each local jurisdiction would have to enforce its local regulations and not all states would want to do so in concert. Thus unless a company is doing business in a particular state, they do not charge the "state" tax of the purchaser. The purchaser is technically supposed to pay the tax -- but obviously few do.

All this because of the original Federal vs. State argument when the country was formed in 1776!

Copyright Laws are the only "commerce" statutes that the Federal Government is allowed to enact (again in the original Constitution). It is interesting to note, that Copyright Laws were not originally enacted to protect the authors. Rather they were enacted to provide for the "Public Good." That is, if some type of copyright/patent protection is not given, then innovation would be stifled - leaving the public at a disadvantage. Today, Congress seems to be leaning more toward the author/inventor than to what is best for society at large. And of course technology has exacerbated the tension between the author and the public.

[HarryT]

As a "non-American" it seems exceedingly odd to me that the government of the country is not allowed, by its own constitution, to control taxation - raising taxes is one of the primary duties of the government in most countries .

I suppose, though, that we all think that the way that we do things is "right and proper" and that other systems are "odd", don't we?

[BenG]

US Federal Government is prohibited from regulating interstate commerce

I thought that commerce between states was the only commerce it could regulate.

[Nate the great]

Originally Posted by BCCISProf

The US Federal Government is prohibited from regulating interstate commerce (Constitution of the US).

You mean intrastate commerce, commerce within a state. The federal gov't. can regulate commerce between the states.

[Steven Lyle Jordan]

Originally Posted by HarryT

As a "non-American" it seems exceedingly odd to me that the government of the country is not allowed, by its own constitution, to control taxation - raising taxes is one of the primary duties of the government in most countries .

The Federal government does tax people... through income and property taxes. But it allows the states to control their internal taxes (my state also taxes my income, as well as my purchases... other states do differently), the idea being to give the states some autonomy and to avoid the Federal govt having too much control over the states.

The idea was to create a government as egalitarian and decentralized as possible, the image of the ultimate Democracy, and all of these steps were designed with this in mind. That's why some of the Constitution gets intricate, to say the least, and getting decisions from Congress can be like pulling teeth, but is all designed to prevent the rise of absolute central control.

Uh...

Weren't we talking about e-book piracy? How did we start examining government taxation?

[Liviu_5]

Originally Posted by Steve Jordan

T
Weren't we talking about e-book piracy? How did we start examining government taxation?

I introduced the example just to show how the Internet is changing the playing field in very disparate domains, makes things murky and so on.

Calling the tens of millions (possible hundreds of millions if you take into account Russia, China, India and other rising countries) of people that download music, books, music, software and what not, thieves is to me as ridiculous as the state governments calling all of the people that bought anything online and did not pay their state sales tax tax cheats.

It just inflames spirits, does not stop anyone doing it again, and it just gives ammunition to extremists on the other side that use the slogan "information wants to be free" to call for de facto abolition of copyright, patents and pretty much all intellectual property, without understanding that a balance needs to be struck between the rights of the creators and the rights of the public for interesting things to continue being created at the amazing rate of today.

So coming back to the original subject of HP7, and with the disclaimer that I never read any HP book in any form, my opinion is that while legally the posters were wrong, practically they did a service to society and even to Ms. Rowling and her publishers since I strongly believe that all the ensuing publicity sold more books than the minuscule sales lost due to potential piracy.

A new copyright balance is going to be struck whether people want it or not, the question is how it will get done to maximize societal benefit, and keeping to extremists views on whatever sides is not going to help.

[HarryT]

Originally Posted by Liviu_5

Calling the tens of millions (possible hundreds of millions if you take into account Russia, China, India and other rising countries) of people that download music, books, music, software and what not, thieves is to me as ridiculous as the state governments calling all of the people that bought anything online and did not pay their state sales tax tax cheats.

I'm afraid I honestly don't see anything ridiculous about either situation. Someone who illegally downloads copyrighted material is infringing copyright law ("thief" is the wrong word to use); someone who doesn't pay their use tax is a tax cheat. Neither should be condoned, IMHO.

What would you suggest as a solution to the problem (of illegal downloads, that is - we'll leave sorting out the tax problem for another day!)?

[Liviu_5]

Originally Posted by HarryT

I'm afraid I honestly don't see anything ridiculous about either situation. Someone who illegally downloads copyrighted material is infringing copyright law ("thief" is the wrong word to use); someone who doesn't pay their use tax is a tax cheat. Neither should be condoned, IMHO.

What would you suggest as a solution to the problem (of illegal downloads, that is - we'll leave sorting out the tax problem for another day!)?

Cheap or free with print book purchase e-books in open format; national digital libraries; licensing of content; coop projects that allow e-authors to sell directly or at least through retailers that do not take 50% of the cover price so allow lower prices, ad campaigns and so on (taking 50% of cover price for selling e-books is way out of bounds)
Similar stuff for music, movies...

There is a popular author/blogger who just recently described his experience of buying a WB dvd and getting a free portable version of the movie included for which he commended WB, though noting that anyway he needed the portable version so he would have headed for Pirate Bay if WB would not give him the portable version, being too busy to do the format shifting on his own...

Once you have affordable and easily accesible content many people at least here in the western world will limit their unauthorized downloads. Sure there will be downloaders, but most I believe would be people who would otherwise could not afford to buy the product.

For many years before I even knew what an e-book is and today for that matter, I still read tons of books for free by the simple expedient of getting them from the library, the difference being that for many years I could not afford to buy books so almost all my reading was done that way, today I can afford so I buy lots and lots of books, print, e, whatever, but I still use the library massively too...Once you have a similar system going for e-books I strongly believe that people will limit their unauthorized downloads a lot...

[nekokami]

One difference between reading a book at a library and downloading it from the darknet is that the library sales are tracked by publishers and impact future contracts with that author. If a book is popular, it is purchased by many libraries, sometimes even in a special, more expensive (and presumably more durable) "library binding." In the case of very popular books, multiple copies are purchased per library. This gets noticed by publishers and authors alike. Authors (e.g. Robert Heinlein) have commented that staying in the good graces of librarians is very good strategy for authors, because it affects how well their books are known-- people who borrow their books from libraries may buy other books by the same authors later. Publishers may therefore offer the authors a larger advance for their next book if a previous book is purchased by many libraries. (And this is not even taking into account systems like the one in the UK, that track how many times a book is borrowed from a library.)

The problem this presents, by contrast, with the darknet is that unauthorized downloads are not tracked and have no effect on publisher valuation of the book. The "buzz" generated through downloads may lead to more purchases of legal copies of the book (and I think in many or even most cases it probably does), but the downloads themselves are intentionally invisible to publishers.

There's no easy solution to this -- not simple, but easy. Yes, I think publishers should put their entire inventories up for sale in digital format, sans DRM, as Baen does. I think it would generate a huge amount of revenue for publishers and authors, undermine the darknet, and lead to an explosion in the popularity of ebook reading software on common portable devices such as PDAs, iPod-like devices, and handheld game units, as well as the development of new devices optimized for ebook reading. But this action would, in fact, have a cost to publishers. Though it is relatively easy to convert digital files between formats so that a publisher's inventory could be converted, for example, to HTML or RTF fairly simply, there is still the task of setting up and monitoring the conversion, listing the books in online vendors such as Amazon, Powell's, Mobipocket, Fictionwise, etc., and monitoring sales by those vendors. There would probably be associated advertising costs and overhead in management costs as well. A large project like this would not be "free" for publishers, however much revenue it might generate for them. That means there's risk involved in taking this course, and publishers are generally risk-averse. That's why it isn't an "easy" solution, however simple it may sound.

I still wish they'd do it, though.

[BCCISProf]

Originally Posted by Nate the great

You mean intrastate commerce, commerce within a state. The federal gov't. can regulate commerce between the states.

You are of course correct. Oh the joys of spell check......