The Knockoff Economy (29 page)

Music, too, is moving in this direction. The music industry is exploring ways to emulate the dynamic of external and expressive consumption that the fashion industry exploits so well. The current leader in this, as in so much else in the music industry, is Apple. Apple’s iTunes gives users the option of sharing the content of their music collection with other iTunes users connected on the same network. In 2010, Apple took another step in this direction when it began not-so-gently nudging its users into its new music-centered social network, Ping. Ping shows people what their friends and favorite artists are listening to, and gives them a very easy way to sample and buy into the trends that Ping highlights.

With these moves, Apple hopes to make music consumption choices external and expressive in the way that fashion trends are, in the hope that consumers will be induced to buy more music to keep up with the trends in which their friends are participating. Like clothing, music is a powerful form of personal expression that can convey identity and establish status. But because music is often so private (especially in today’s world of ubiquitious earbuds)
^*
its signaling power is limited. iTunes library sharing and Ping change this by harnessing new technologies to make song choices not just private preference, but public information.

And these features don’t just provide information about the music a user buys—pirated music in a user’s iTunes library is also grist for the trend mill. If lots of people are pirating the new Bon Iver album, then Apple hopes that by communicating the album’s hotness, iTunes library sharing and Ping will lead more of the many law-abiding people to buy it from the iTunes Store. Piracy provides valuable information about tastes and trends. People copy things they desire and share things they respect.

We suspect other creative industries can find similarly powerful ways to leverage the power of external and expressive consumption to make copying work for them. As Apple’s moves suggest, the degree to which a product or industry taps into trend-driven innovation is not fixed: it can be altered by the technologies of consumption.

Social norms can play a significant role in shaping and constraining the effects of copying, whether that copying is legal or not. We found this to be true in the worlds of comedy, cuisine, and magic. Of course, social norms do not prevent all copying, though neither do legal rules about copying. And as the relevant social group grows and disperses, norms—which depend fundamentally on relationships and work best in communities—probably lose their power. But social norms nonetheless can be an important constraint on copying and can help divert copying away from its more harmful forms.

The norms systems we’ve described share two important features. First, norms deter theft by
rival creators.
They do not map directly onto situations where copying is done on a mass scale
by consumers.
Nonetheless, as we will explain, there is reason to believe that at least some of the lessons of social norms can be adapted to discourage consumer piracy as well. Second, norms probably work best for
individuals rather than firms.
In innovative fields dominated by individuals, which characterizes many of the creative communities we have explored in this book, we see norms working, sometimes very well. In fields where large firms dominate, norms may be much less effective.

Still, several of our case studies show that social norms can be very significant when a creative community seeks to regulate copying among insiders. The check on copying that social norms can provide often makes imitation less harmful to innovators. And norms can also provide an extra-legal means of redress to those whose work has been copied. Norms have one other noteworthy feature: because they are constructed within the relevant industry, they are more likely to reflect the particular nature of that industry and its competition-copying trade-offs.

Comedians offer the most dramatic example of the power of social norms to constrain copying. Among comedians, the norms system operates effectively despite the fact that jokes and routines are formally covered by copyright. Comics prefer the system of norms because it is more tailored to their needs and much more useful to them. For example, copyright law only protects the precise version of a joke or routine; the comedy norms system protects the underlying funny idea or premise as well. So the “rules” in the norms system are quite different from those in IP law. This may be even more true for magicians, where, for example, the rules governing the disclosure of tricks deviate markedly from what the law requires.

In comedy, and in magic, there is also enough of a critical mass of norms-followers to keep the system working well. Comedians and magicians have a high level of agreement about what the norms are and when they are transgressed. Enforcement is social and extra-legal—and sometimes even illegal and violent. But the key is that the norms system is widely agreed upon by insiders, and the public nature of performance helps to deter a lot of copying that would contravene the unwritten rules.

Chefs exhibit some similar traits, though the norms in question appear to be less embedded and well established. Eric von Hippel and Emanuelle Fauchart’s study of Michelin-starred French chefs showed that norms about copying and attribution may be significant in the Gallic culinary world.
¹⁶
We are less certain about the significance of social norms among American chefs,
^*
who in our interviews demonstrated much more ambivalence about the need for norms against copying—and less clarity on what the norms, if any, are or ought to be. This may reflect the large and dispersed nature of the high-end restaurant world in the United States, a vast country with dozens of truly great restaurants and thousands of merely excellent ones. Or it may simply reflect differing social conceptions of what it means to be a professional chef. Either way, we think the evidence for the role of norms is weaker in cuisine than in comedy. Put differently, there must be other factors in the culinary world that explain why chefs remain innovative in the face of extensive imitation by others.

Still, it is clear to us that many chefs, wherever they may be based, share a broad ethos about appropriate behavior with regard to ownership and attribution. This ethos does not track the rules of copyright and patent, and, as in comedy and magic, in some cases it focuses on different issues. For example, a theme that pervades our study of food is the central role of attribution. Many of the chefs we and others interviewed were not especially concerned about copying per se. They saw execution as central and, in some cases, viewed copying as the price of success—or even a desirable
indicator
of success.

Still, many chefs felt that attribution was essential; they wanted to receive, or give, credit for creation where credit was due. (And to the degree copying
is thought of as an indicator of success, attribution becomes even more important.) We will return to this theme of attribution and indication in the context of brands. But as this suggests, copying has a complex relationship to credit-claiming—and can serve as a valuable form of advertising for those who are truly innovative.

Again, norms work best among individual producers who see themselves as part of, and seek the respect of, a professional community. Yet norms can play a role even among consumers. Consider the situation in comedy. The norms in the comedy world are developed and largely enforced by comedians themselves. More recently, however, fans have been posting videos of questionable performances and taking sides in disputes over copying. In this way fans shape the ensuing debate over copying—as Dane Cook’s complaint to Louis C.K., recounted in the Introduction, made clear.

The ability of fans to play this role is of course driven by technology: it is much less effective to tell a friend that Comedian X copied a bit from Comedian Y than it is to post a cellphone video of the performance online (or to compare two such videos for similarities). The result in comedy, as in food—where fans often blog about and post photos of dishes, sometimes noting copies—is a form of consumer-based policing of the norms governing copying. And the same is even true in some niche forms of music, as we will describe in the epilogue to this book.

In short, norms play an important role in enabling some creative arenas to reduce the harm from copying, just as a wealth of studies have shown that they play an important role in regulating social life, policing specialized markets, and generally providing “order without law.”
¹⁷
Norms are not a panacea for copying, nor do they work in all areas. Yet a robust norms system can mitigate the downsides of copying, helping to transform copying from a threat to nuisance—and maybe even into a benefit.

If an item can be copied perfectly and sold cheaply, or made available free, convincing customers to pay for the original can be difficult. (Just ask the music industry.) But some products simply cannot be copied perfectly. Often that’s because the product itself is really analog rather than digital—that is to say, not reducible to a perfectly replicable set of 1s and 0s, or the real-world equivalent. A terrific and innovative dessert is
usually a handmade item that is likely to be a little bit different every night it’s made. Another chef may copy it, but the copy will rarely be identical to the original, and given that skill is often an important variable, it may well be decidedly inferior. The same can be said of a terrific joke or comedy routine.

There is a second reason, however, that some products cannot easily be copied. It is because they are fundamentally about experiences, and experiences are even harder to reproduce. What we buy in these instances is less a product than a performance. Cuisine is again a perfect example. If a precisely rendered version of David Chang’s signature pork belly bun was available at street corner bodegas in Chinatown (and it may well be), what would be the effect on sales at his flagship restaurant, Momofuku?

At some point, if Chang-style pork buns became ubiquitous, like any fad they would peak and then fade away, and perhaps harm Momofuku’s reputation and profits in the process.
^*
But outside of that somewhat extreme scenario, the bodega pork buns do not really compete with the Momofuku buns, because dining at Momofuku is about more than just eating great pork buns—which, David Chang is the first to admit, is not really a very innovative dish anyway. It is about the clamor and energy of the crowd, the range of dishes available, the entire aesthetic of no reservations, no substitutions, spare décor, loud music, and colliding Asian cuisines that Momofuku represents. A Momofuku pork bun eaten at Momofuku, in short, is a particular experience that customers are willing to pay for (and wait for). A copy is just a really good pork bun.

Even the Supreme Court has noted the centrality of experience in the dining world. In
Chapter 2
we described the Taco Cabana-Two Pesos dispute over restaurant trade dress. The issue was whether one somewhat generic Mexican restaurant had copied the décor, and therefore the “trade dress,” of another. In the oral argument in that case, Justice Scalia suggested that the underlying issue was not trivial: the atmosphere of a restaurant was a central part of the restaurant experience as a whole. “I don’t think it is packaging. I think you’re talking about the
substance of what’s being sold,”
said Scalia. “You’re selling atmosphere and food, the two of them. You can have wonderful food in a lousy atmosphere. I’m not going to pay as much money.”
¹⁸
Neither restaurant in the dispute had wonderful food. But the
atmospheres were equally nice (or lousy) and Justice Scalia’s point was simply that atmosphere was a core element of almost any restaurant’s actual product, not just a metaphorical wrapper placed around the product.

The same basic dynamic is present in other industries we have looked at. Bars and high-end cocktails epitomize this phenomenon of performance over narrowly defined product. Why else do people pay upward of $15 for a drink that may cost less than $2 to make? As a sage bartender once said, you are not really buying a drink, you are renting a bar stool. And the rent varies, as you would expect, with the quality of the experience. In short, the high-end bar is a live performance venue. The drink is the ticket to the show. Anything that is a live performance must be experienced to be appreciated, and that experience can shelter creativity from the pernicious effects of copying. Why? Because copying all the facets of the experience is very difficult and often extremely costly—and sometimes impossible, as many would-be restaurateurs and bar owners have discovered to their peril.

The centrality of experience helps explain the co-existence of some otherwise-contradictory trends outside the restaurant industry. Consider the willingness of customers to pay high prices for movie tickets in some theaters, even as streaming video in the comfort of one’s home grows ever more common. Why pay to go out to a movie theater when you can watch the exact same film on your widescreen high-definition television, thanks to one of the many torrent Web sites that feature illegal content? One answer is that the experience is different, and many smart theater owners have been rapidly moving to accentuate that difference as dramatically as they can.

The tremendous success of the Arclight theater chain in Southern California is a case in point. The Arclight allows customers to reserve seats in advance and to choose their seat as they do so. The theater seats are big, clean, comfortable, and have good sight lines. The screens and sound are top flight. Inside the complex is a restaurant, bar, and gift shop, and at some showings alcoholic drinks can be enjoyed during the show. The overall experience, in short, is at a much higher level than is available at the average mall multiplex. So are the ticket prices, which can approach $16—about twice the national average. Still, the Arclight has proven successful enough to have expanded in just a few years from its original Hollywood complex to three other locations in Southern California.