The Digital Market Failure

Free Ride: How Digital Parasites Are Destroying the Culture Business, and How the Culture Business Can Fight Back, by Robert Levine, Doubleday/Random House, $26.95.

The notion of ‘regulation’ applied to the Internet has been, for long and by many, considered a dirty word. Whether rejected as an assault on free speech, a barrier to the expansion of a powerful engine of economic growth and innovation, or simply an attack on some forms of ‘online rights’, the idea of web regulation has been framed as an ideological battle for the public interest. Robert Levine, a journalist specializing in the entertainment business in the digital era, has a contrasting opinion. For him, the Internet as it exists now stands in an age of digital feudalism, which drags a critical public good, culture, into a dangerous death spiral. Going through a beautifully clear, comprehensive and well documented history of a decade of Internet-induced change in each sector of the media and entertainment business, Levine convincingly demonstrates that the model of free and ‘neutral’ Internet as we know it today has empowered mostly ‘digital parasites’, i.e. online companies that have built businesses based on giving away content produced by others without investing in, or proposing a model to support creation. This unfair competition, Levine explains, results in a “race to the bottom,” otherwise called, in economists’ terms, a market failure. He calls for reintroducing, through lawmaking, a functioning free market for content online, which, in his view is the only way to empower and save creators, corporate and independent alike. Free Ride is a timely whistle-blower and a must-read for anyone trying to navigate the critical mutations of the cultural economy.