We need to talk about the future of the creative industries.

This week’s report on Britain’s digital future has once again raised the question of online file sharing. The carter report sets out an aim to reduce illegal file sharing by 70% over two years, yet the music industry has been fairly unanimous in its opinion that proposed measures – primarily written warnings to repeat offenders – will be too soft to be of any use.

I believe that in two years time the problem of illegal file sharing will still be with us. And unlike many others I do believe it is problem – not just for artists or record companies but for society as a whole. Taking a birds eye view, the past decade has seen an ongoing game of cat and mouse between file sharers and entertainment companies, and there is no reason to believe it will end any time soon. The point is that at a basic technical level, the conditions under which music is consumed, produced and sold, have changed. Legal and judicial efforts can only do so much to reverse this tide.

This in turn calls for some quite serious, and quite imaginative thinking about how our creative industries might be sustained in the future. It is time to stop regurgitating tired cliches about the record companies being to slow to adapt. How far can a business adapt to its products being given away en masse for free? And in reality they have adapted. Go on itunes and you will find single tracks downloadable to the price of a diet coke.

The point is that technical developments appear to have effectively turned recorded music into what economists call a ‘public good’. A public good – in the economists vernacular – refers to something quite precise. It is defined by two criteria:

- It is non-excludable. It is impossible to provide it to one person without making it available to everybody.
- it is non-rival – if one person uses it, there isnt any less left for others to use.

The typical example of such a good would be a lampost. The problem with public goods is that no one person will put their hands their pockets to pay for them – since they expect a ‘free ride’ on somebody else paying for them. Were it left to the market, then, no resources would be allocated towards building lamposts.

In the case of lamp posts the solution is obvious. Since individual consumers wont pay for lamposts, local government will take it upon itself to provide them. But herein lies the problem. When it comes to choosing lamposts there isn’t much of a muchness. It doesnt matter what kind of lamp posts the council pays for. We can be fairly sure they will meet the needs and wants of those for whom they are bought.

The music industry is of course a completely different kettle of fish. If the market fails to allocate adequate resources towards the production of music – because people don’t bother paying for it – do we really want this role to be taken on by the government? In such a situation it would fall to public bodies to determine what gets produced and by whom. To put it bluntly, the whole world would sound like radio 1, mixed in with a bit of WOMAD.

Given the amount of rubbish that gets talked about the music industry I feel that I should – at this point -assert that if we want good music to listen to we really do need to find some way of allocating resources towards its production. Music might ‘come from the heart’ but it also come from hard work. Good songs take months and months to write. As with poets and painters, if people have a talent for writing songs that other people want to listen to, it is in all our interests that they should be able to dedicate their lives to such an endeavour. Equally, good songs do not magically turn into graeat tracks. This process requires expert engineers and very sophisticated equipment.

The point, then, is that the production of music as we know it requires the deployment of very substantial resources. This, in turn, necessitates choices. Needless to say we, as a society, cannot pay every prospective songwriter a full time salary, and cannot fund the production of every piece of music. Up until now we have relied on the market to make these decisions for us. In the future this may not be possible. And however much we may critique the way in which fashions and tastes are manufactured, the obvious alternative, in which Arts Council type bodies pick winners and determine what will be produced, is equally unpalatable.

Romantic fantasies of a future in which amateur musicians somehow render great works of art in return for nothing but spiritual satisfaction are not an answer. Yet it is perhaps equally naive to imagine that the technical transformations which have made file sharing endemic can simply be nullified by legal or judicial intervention. And this is why we need to bewgin thinking long and hard about how exactly we are going to pay for culture.