SOPA and PIPA are just one part of a decades old trend of copy protection legislation
Of all the SOPA and PIPA explanations I've heard, probably one of the most concise and well delivered was given by Clay Shirky as posted on TED (It's worth a watch and just under 14 minutes). In addition to being a lot more informative then some of the knee jerk commentary on the issue, he gets around to the bigger issue at hand. That these two bills are merely just one more step in a process that has been going on for decades, and that will continue to go on for years still as companies keep trying to pass this sort of legislation. Even with those two bills currently shelved, we now have ACTA being designed behind closed doors over in Europe. There are also fears that in the future, parts of these policies will be pushed through attached to other bills or enacted through foreign policy, where public awareness and legislative accountability will be side stepped completely.
Preventing Innovation and Competition
There are legitimate concerns for piracy from a cooperation's perspective. Any number of overseas sites offer users the chance to stream subtitled movies for free, to buy copies of bootlegged television series, or even to buy counterfeit physical goods ranging from designer fashion to knock off electronics. Software especially has all kinds of issues with being copied, emulated, and pirated; though there is a much larger debate to be had about who really owns the software you use and the cost that should be associated with it.
The problem is that despite the stated intentions of many of these copy protection legislation, this is not how the laws end up being used. Instead copy protection acts are used to hold back new technologies, squash out market competitors, or make the barrier of entry for new start ups prohibitive. The result of this is a worse experience for consumers in both price and service.
For a long time cloud based music sales or being able to buy songs individually was a service directly attacked by the music industry. Being able to buy your music 'a la carte' or to create your own mix tapes went against their business model of selling CD's full price regardless of how many of the songs you actually wanted from the set. The industry at the time might have argued that it was an unethical move that violated the control of their intellectual property; and that it would prevent them from acting in the best interest of the consumer if it was no longer profitable for them to do business or publish new content due to people stealing their work. Of course not long after the music company ended up settling in a case in which they were accused of price fixing, and had to pay a huge settlement available to anyone who had purchased a CD during that period.
Ten years later, being able to buy individual songs attached to an account through services like ITunes and Amazon is accepted. But the actions of companies fighting this trend prevented us from getting this service until years after it had become possible to do so. Now that they have reluctantly switched over to this new model of business, it just so happens there is yet another law suit going forward which claims that now the download prices are being fixed as well.
Piracy is a service problem
Valve's boss Gabe Newell, who's company created the Steam platform for digital video game distribution has argued that piracy is a service problem. He claims that a better way to fight piracy is to focus on simply providing a better service that customers will want to use.The Steam service deals with this by providing a 24/7 available shop where you can purchase and download games instantly. It is also enhanced by adding social networking functions through friends list and chat; and offering consistent and substantial sales that makes it's service both affordable and convenient.
As it happens, there is a large subset of piracy that exist simply because a specific service does not exist or is prohibitively inconvenient. Many forms of media are pirated because no effort was ever made to translate it into their regions language. In response, there are lots of people who are genuine fans of the product that will go out of their way to do the work to translate it themselves. There exist a whole untapped market of people who would gladly pay for a service that is never offered to them.
Other times the digital rights management protection put onto software punishes legitimate users of the software by limiting their access or the way they can use the product they paid for (limited number of installs, unable to use service when the internet connection/authentication is down); where as people who crack or jail break their product can have a much better service whether they are legitimate users or not.
But rather then put money into researching better customer service or adjusting to new technologies, companies will instead pour their money into measures that are used to restrict and control the market in the name of fighting piracy. These attempt to stop piracy are just plain ineffective and only seem to be a means to protect draconian business models for as long as possible.
Despite the fact that the Steam digital distribution model cuts down on cost through packaging, shipping, and publishing; game companies still have to price their games there the same as in retail stores, lest the retail stores pull their product from the shelves. While digital distribution is offering a cheaper and more convenient service, retail stores still account for a significant amount of the sales as not everyone has adapted to the digital front. The results is that consumers are still paying an inflated price even though we have the technology to offer it at a much cheaper cost.
There are similar type of conflicts going on when Netflix started it's successful streaming service; and how the major studios have jacked up their fee's for Netflix to license their movies ever since streaming ended up replacing the mail service as the most used part of the Netflix service. They would rather delay the emergence of streaming video content and keep people buying blue ray's and DVDs for as long as possible; at least until they could establish their own content exclusive streaming services a few years from now. The end result being an extremely popular innovative service being weakened and delayed while cable/internet companies, studios, and retailers try to retain control of their business model as long as possible.
This is why we can't have nice things
Rather then being used to stop piracy, these type of protection measures end up being used as a bludgeon instead. Even with the existing copy protection legislation we have now, it has already created a system where we treat people as guilty until proven innocent. DMCA style take down notices are now being used on YouTube by the same style of people associated with patent trolls, frivolous lawsuits, and profiteers; claiming intellectual privacy violations in order to cash in. Or forcing people to contest frivolous court charges which they may not be able to afford to deal with, and still stay in business.
Repeatedly, business have indicated they are perfectly willing to use 'piracy/copy protection' legislation as a means to control their respective markets and abuse it for their own self interest. Even without passing more legislation, companies already have many means of battling piracy. On the other side though, consumers and artist have had very little power to deal with unfair practices used within the industry such as artificial price inflation or unfair contracts.
Creation is harder then destruction
Despite all of this, new emergence in digital distribution have created a platform where people can produce and sell content outside of the control of any major studio or publisher. Platforms like Steam, Kickstarter, or Bandcamp allow independent producers a chance to sell their goods without being forced into unfair terms with a major distributor. These sites are creating a new way to market between consumers and producers, and often allowing the consumers themselves to become producers with a much lower barrier to entry.
The result is that we have seen a lot of smaller artist get recognition for the work while still retaining control over it. Products which never would have been green lighted because they were deemed to niche or to unprofitable have been able to generate enough capital to be developed. A lot of small scale projects have had success and even on occasion gone on to multi-million dollar returns; proving that big budget blockbuster content is not the only way to create quality work.
In the face of piracy, schemes like 'name your own price', digital distribution, and cloud availability have been succeeding. Piracy will never be removed entirely, but the creation of a better service and more control for consumers and artists alike have created successful business models that are challenging the industry norm. Rather then trying to artificially restrict participation or innovation in the name of fighting piracy, we should focus on creating a better service so that more people will want to buy our products in the first place.