Person to person market freedom

Economists, capitalists, republicans - they all espouse the efficiency of unfettered free market trading. Efficiency is their nirvana, minimum waste means more money to make progress. However in real life the free market is anything but free. Never mind the myriad of laws that control it, the reality is there is no one market, but a vast array of interconnected markets, all with trading laws in between them.

Probably the closest approximation to a free market we have now is the Internet itself. Accessible in almost every country, hundreds of millions are able to come together and exchange content for clicks, other content, and occasionally actual money. The fact that "trading" on the Internet can be done with little intervention and across international borders (especially if the commodity is digital) makes it an ideal location for real person to person trading. That trading is typically done with very little overhead (if any), usually just enough to keep people honest. Such systems have sprung up with great abandon - Craigs List, EBay, the old peer to peer "file trading" networks, and now Peerflix.

Now Peerflix being an obvious play on Netflix and Peer to Peer is an interesting beast. It allows people with DVD content they no longer use to exchange the physical DVD with another person for a small fee ($0.99 plus postage). The key word is "exchange" because Peerflix is a barter market so in return they get another DVD, or depending on the desirability of their DVD, more than one (all movies are not created equally).

I like the concept of Peerflix, the creators will probably go far with it and find their model copied many times. They could even launch their own open source peer to peer goods trading platform. The key point being it is a barter market for physical goods and not just digital files, all you get in return for trading a DVD is another DVD so it dramatically reduces the opportunity for fraud. For instance trading a big pile of stolen DVDs will get you... another pile of DVDs, not a big pile of cash. Yes, barter enables laundering of illicitly gained goods for legitimate goods but so long as the transaction isn't completely anonymous there should still be some recourse or at least paper trail to follow in the event of problems.

The spanner (wrench to you Americans) in the works will of course be the content copyright holders. They will kick, they will scream, they will investigate, harass and eventually they will claim Peerflix is just a huge mechanism for assisting DMCA infringements. Why? Well because they will claim it encourages people to use software that will copy their DVDs for "archival purposes" (several home media systems have this built in now) and then trade them on Peerflix for something else while retaining the ability to watch the original DVD from its digital copy. Thus they will use Peerflix as yet another reason to tighten up the screws copyright protection for everything, be it movies, music CDs, and software. They will go to the Federal government and have them move to make systems like Peerflix illegal, just like they tried (and sometimes succeeded) with VCRs, photocopiers, MP3.com, Napster and the like.

The upshot is yet another person to person market will probably get shut down because, you know, people just can't be trusted to do business with themselves without the Federal government in the way. People can't just trade among themselves without paying their dues, and without the watchful eye of regulators, copyright monitors and the like. My beef is, sure copyright holders have a right to protect their copyright, but if they weren't so bone headed about their content distribution systems in the first place then there never would be movies sitting on a shelf that have only been watched once or twice. More to the point, if you want to give me a perpetual license to watch some content then you should jolly well find a way to allow me to securely transfer that right.

Fairly priced and accessible video on demand over the Internet is coming - real soon - but the reality is it is just not "real soon" enough to stamp out consumer desire for services like Peerflix. In the mean time Peerflix will probably flourish until it is crushed by the industry. If it look at it long enough you'll see its not really that much different from consumers selling their surplus books online via services like Amazons Z-Market and Barnes and Nobles used books system. The only significant difference is that people usually don't make a photocopy of their books before selling them, its just too impractical. However I think its actually only a matter of time before automated book copiers (I have an idea how to do copy a book extremely quickly) turn up in the hands of consumers, and that that point the book publishing industry had better watch out.