Intellectual property, network effects, and Tesla

Money, cash, LincolnI am a snob about intellectual property, because this is how I make my living. I believe in supporting writers, musicians, and artists, and that means paying for their work. Most of the pictures I use in blog posts were taken by me, because then there are no copyright issues.

I’ve heard the argument that piracy increases the market for other works, but I don’t buy it. My publisher is suing some Pirate Bay users for downloading Day Trading for Dummies, and I am okay with that. The argument is that once they make an illegal download, those readers will run out and buy copies of my other books, but I’m not seeing that in sales figures.

I know some authors who have had success giving away their ebooks. Some give their books away for a limited time in order to spur reviews; others have a series of books and give away to first in order to get people enthused for the sequels. In these situations, the giveaway is controlled by the copyright holder and has a specific purpose. It’s not a free-for-all.

I have made a few illegal music downloads over the years. In almost all cases, it was because I wanted something that was not available for purchase in the U.S. because of copyright issues or because it was out of print. Had I been able to pay, I would have. I have an emusic account and buy music from Amazon, and I often buy CDs when I see live performers, so I’m guessing I spend more on music each year than the average person. Both emusic and Amazon often offer free samplers from different record labels. When I hear something I like on the sampler, I buy the artist’s album. That’s the whole idea!

So, yes, there are benefits to a creator in giving away intellectual property. That’s why I’m so fascinated by Tesla’s announcement that its patents are now open. They aren’t telling people to spy in them or steal their intellectual property; the management has made a conscious decision to open up its technology for one specific reason: to create a critical mass of electric cars that will, in turn, create a support system for them. Electric car owners need charging stations, they need mechanics who know how to work on them, they need regulators who understand the differences between electric engines and gas ones.

And this will help.

It’s the difference between a razor company giving incoming college freshmen a free razor and stealing a razor from the drugstore.

A white woman with green glasses and gray hairAnn C. Logue

I teach and write about finance. I’m the author of four books in Wiley’s …For Dummies series, a fintech content expert, and an avid traveler. Among other things.

1 Comment

  1. Well, I think that for this instance Tesla believes that buy opening up the technology for their charging technology, it will open up more charging stations paid for by other people and push the growth of electric cars which is for all intents and purposes is almost all that they do. This will grow their business more because of other companies taking on some of these other burdens. There’s a large enough of a market that even if they can eventually take 1-2% they will be selling many many more cars than they do now.

    As a side note about photos on blogs, I typically use art from artists on my blog and give them credit and link it to their web page. I find that stock photo’s don’t really add much to my posts so I just put another one of my passions into my posts even if it’s completely unrelated. Many times the art that I put up is available for purchase from the artist and the picture is from their website so I feel like it’s sort of just free advertisement for them. Many times I also use photos that I took of art that I own. I still mention the artist and name of the painting to give them credit… I figure I’m allowed to post pictures of things I own right?

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