New Legal Regime for Music File Sharing
When disruptive new technologies have emerged that changed the way in which consumers have gotten access to news and entertainment (e.g., radio and cable television), the existing legal structures of the Copyright Act often could not accommodate the challenges posed by the new technology. In the early case of piano rolls and later with radio and cable television, for example, Congress adopted compulsory licensing legislation as a means of appropriately compensating content owners while simultaneously encouraging widespread use of the new technologies.
With P2P music file sharing, we have witnessed a range of dramatic responses from the content owning community: massive lawsuits against individuals, including innocent children and grandparents; invasive efforts to get customer information without the intervention of a judge through misuse of administrative subpoena provisions of title II of the DMCA; and now the Induce Act in the Senate.
Fred von Lohmann and his colleagues at EFF have suggested an innovative alternative to litigation and traditional compulsory licenses. Their approach, described as a "voluntary collective licensing" system, is aimed at compensating artists while ensuring that new technology will flourish. I would welcome your thoughts on whether this is the kind of approach we in Congress should implement or whether there are other alternative means of moving beyond the unproductive debates of today to a new legal regime for music file sharing.
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Comments (59)
There are many critiques of the idea. But it does hold out some hope for resolution. I suggest it would be quite feasible to do some pilot studies and begin to address the evident problems via empirical evidence, as well as perhaps convincing some in the content industry that there are alternatives to the present war.
I don't know if collective licensing is necessarily the right way, but it does seem like positive actions would be a nice change from the overwhelmingly negative atmosphere there is now... The RIAA, MPAA, etc, seem utterly unwilling to recognize what people want to do with their media - the public has seen the possibilities of filesharing, etc, and generally seems to think its pretty cool. People want to share, to trade, copy, etc, and the content industry, instead of finding a way for people to be able to pursue these behaviors and still get paid, is busily trying to convince people that they're wrong about thinking that sharing is good.
I think it would be great if we could have a regime under which people could do the things they want with their media and technology, without being unduly hampered by threats of lawsuits. Collective licensing is an interesting idea, but the RIAA seems absolutely opposed to it, refusing to even consider the possibility. I wish that they were willing to work towards a compromise position, where people could pursue the behavior they enjoy, but they still get paid, instead of trying to retain complete control at the expense of everything else. I think that if Congress can (is willing to?) encourage positive work like this, then that would be of great benefit to the public. The RIAA is unwilling to make any positive steps, so maybe they need to be pushed a little bit...
Thanks very much for all of your positive work, Rep. Boucher - you're a true inspiration :) I've had the opportunity to attend a few hearings this summer that you were present at, and was each time impressed with you as a voice of reason and balance :) Again, thanks for all of your efforts.
Rep. Boucher,
IMHO, such licensing schemes, whether compulsory or voluntary, are largely band-aids that do not actually solve the underlying problem. It seems to me that the root of all the problems we are all debating here (e.g. copyright, political representation, telecom policy, etc.) ultimately lies with media ownership/concentration rules. Ted Turner's recent piece in Washington Monthly (see... http://www.washingtonmonthly.com/features/2004/0407.turner.html), as well as recent statements and testimony given by Barry Diller, address this issue from such a perspective. It's instructive, and highly significant, that even such "media moguls" see a fundamental problem in the way existing laws and regulations favor the entrenched conglomerates at the expense of entrepreneurs who embrace disruptive technologies and business models.
Congressman Boucher, I believe you are familar with Neal Netanel's work on the NUL (Noncommercial Use License)
Terry Fisher's book "Promises to Keep: Technology, Law and the Future of Entertainment" finally debuted last week on August 8 and will be the defining work on establishing alternative compensation procedures (ACS). This book is a Big Tent and encompasses the work of a "who's who" of scholars in the field. It has complete details for the financial determination of "just the right price-no more, no less" to inspire authors to create (and forestall underproduction) and yet not tax the public so harshly as to creat market failure. Which is another way of saying, why should anyone bother to purchase if they can get it for free?
Now, of course, in a ACS panel at the Future of Music, an ASCAP rep said, "That's very nice that you academics did all this work, but why don't you go back to campus?"
I agree that funding the administration fees of a royalty collection agency starts with taxes, and Professor Fisher and his cohorts have exhaustively explained how to do it. (Before establishing a new field of thought regarding artists' compensation, the book firstly explains how the traditional agencies operate.)
I have no particular preference if this so-called collection agency is governmental, semi-regulatory or entirely private.
Many people say we have almost one hundred years of useful observation how the PRO's (ASCAP and BMI) collect money. But for practical purposes, my opinion is that we should avoid involvement with the traditional players in this field (ASCAP and the Copyright Office)
This book is the beginning of a new era of compensation for artists. And oh-too-easy to dismiss in this era of paranoia as "taxation." It may be difficult for Congressional staff to grasp the complexities or search for a TV sound bite, but that is the nature of Copyright Law after all. Dense and tangled! Despite all the work materials with which the MPAA and BSA are trying to innoculate children in class.
As Tim Wu has pointed out, the traditional view of copyright as "author's rights" is a romantic concept that is outdated. Otherwise, how to explain the tangled complexities and specific exemptions ennumerated in the mechanical license (§ 115), secodndary transmission cable television license (§ 111) digital audio recording devices (§1001) and internet providers immunities (§512).
We can accomodate changes in technology. Laws are for changing. The issues are not as child-simple as the MPAA, the RIAA and BSA insist on presenting.
Terry Fisher's book is bulletproof. Let's discuss this in the halls of Congress and compensate artists fairly for the first time. We can get it right.
Hmmm, the Congressional Budget Office has a new study on copyright regimes. Seems they have decided not to decide. This will take some time to plow through!
http://www.cbo.gov/showdoc.cfm?index=5738&sequence=0
"Fourth, any solution should minimize government intervention in favor of market forces."
All I can say to that is 'HECK YA!' On one hand you have an estimated 60 million file sharers; on the other you have the RIAA and MPAA. New file sharing applications are being produced regularly. Lawsuits, DMCA, and INDUCE won't stop this. They will only mire the federal governemnt (and my tax dollars) in thousands of lawsuits and criminal cases.
Think of it like a wild fire. At some point the fire is too big to control with a fire hose, so fire fighters make "back fires" to defeat the real fire. This would be the best course of action for the RIAA: beat the file sharers at their own game.
But where will their profit come from?
I'd gladly pay 5 or 10 bucks a month to have access to millions of songs that I can download and use just like a CD from Wal-Mart. Assuming 60 million file sharers, that's at least $300 million a month. No credit card to pay the subscription fee? No problem. Napster has teamed up with many retailers to sell music cards for people with no credit card, the RIAA could do the same.
How many "traditional business" would line up to put an ad on a LEGAL napster-like site run by the RIAA? How many millions do you figure advertising alone would generate?
Cost savings would be another "revenue stream". Using a distributed distribution system like BitTorrent, the RIAA doesn't have to run massive servers like Apple. Being digital, fewer products will have to be shipped to store shelves.
Being run by the RIAA, artists could be paid for the exact number of copies people have because the RIAA would know how many people had a particular song. Studios could record, produce, and release immediately meaning artists could see royalty payments trickling in the very next day.
No matter how much legislation is passed, file sharing will not go away. Murder has been a part of society since the beginning of time, and no legislative means of stopping it has ever worked. That the RIAA expects to legislate file sharing out of existance is just a sign of their fear of change.
Erm...my apologies. I guess I should have read the article further because my post is pretty much the same thing as the whole article.
"lies, damned lies and then there are statistics"-Mark Twain, I believe.
First: If I am reading this correctly it seems that compensation is based on a statistical analysis of what is popular. Statistical data can be massaged to give you whatever results you want assuming the data set isn't corrupted in the first place and I would trust no non-artist in the music industry with the data.
Second: if the best example they can give is how the labels through ascap, bmi, and sesac manipulated the radiowaves into playing worthless formulaic drivel then count me out.
Third: this idea is a dead duck in any case. The labels and the men who run them are all about control. They want to control the content, the medium, the price, everything. To think for one second that they will submit their music libraries to this kind of regime is absurd at best.
Now, of course, in a ACS panel at the Future of Music, an ASCAP rep said, "That's very nice that you academics did all this work, but why don't you go back to campus?"
This is why I think the next step has to be some *IMPLEMENTATION*. Some real-world testing, in order to determine if what sounds like a good idea is realy feasible (or if what sounds like a bad idea isn't really a problem).
Well all the money at stake, I'd expect it would be possible to run some experiments.
Charge it to marketing. After all, everything else is charged to marketing anyway ...
Mr. Boucher, and of course, Mr. Lessig, I just wanted to extend my personal thanks for your great contributions to freedom and protections for the rights of digital consumers.
Your dedication to the need for protection of the rights of the Common Man, is admirable, and I only wish others would emulate your tremendous efforts, and that there were more "reasonable men" in congress that would take up the defense of citizen and consumer rights in this digital age.
~Code
Copyrights grant the exclusive priviledge of reproduction of a creative work to the creator of said work.
Some people saw a business opportunity in purchasing these rights from the creators. Business is risky. It always has been. Unfortunately for the people who seized this business opportunity, there is little monetary value in the trade of copyrights.
In essence, technology has taken us back in time to the days when artists really did reproduce their music. Now, though, instead of using a pen and paper to manually copy the sheet music, they use a PC to copy digital files.
Therefore, I think the first new change to be made in copyright policy should be to revoke the right of non-creator copyright holders to protect the copyrights. Afterall, the copyright is an attempt to incentivise creativity. Non-creator copyright holders don't generate more creative works when the monetary value of a given copyright is increased. So why should we withhold the cultural value of a creative work from society if withholding it will not generate more creative works?
“[W]hether this is the kind of approach we in Congress should implement”
Feasability aside, it is an interesting conundrum to come up with an idea about how congress can help facilitate the implementation of “voluntary collective licensing” without passing a law to make it compulsory. Congress could provide some sort of financial incentive to influence such a policy. Perhaps, tax incentives such as a lower rate on royalties earned through collective licensing as opposed to normal distribution channels.
It may be a good idea, with any solution, to try and drive a wedge between the artists and the record companies.
For example: (1) create and adequately funded non-profit organization (or government agency); (2) create a plugin for gnutella based P2P programs that provides a mechanism for downloaders to voluntarily contribute a collective fund (5-10 cents a song via a paypal type set up); (3) take those funds and start sending checks to the artists; (4) fight a rearguard action against the RIAA (ala Napoleon’s retreat from Waterloo) long enough to demonstrate to the public that the artists are being compensated for their work.
It would be effectively a compulsory system without the compulsion. It could be described as “passive aggressive collective licensing.” Revenue would be generated from distribution that is already taking place and cannot be stopped anyway. Ideally, this would work best with a G. Soros type benefactor setting everything up offshore.
The headlines could read, “Pop Star Receives $150,000 Check from Renegade Music Licensing Clearinghouse.”
Fait accompli.
I think it's unworkable. I think it's irrational to expect high-school and college students to pay a $5/month premium for "legal-ized" file downloads when they don't have to pay anything to get them from the existing framework; legality or illegality doesn't concern them until they get the lawyergram in the mail. If I'm the parents, I don't want to pay an additional $5/month on my ISP bill for a service that I'm not going to use; and the ISPs won't make it something you can unbundle because of the administrative cost of keeping track of who's paid their music license and who hasn't. It's just not the way business works.
It's also a non-starter because from the viewpoint of the RIAA they don't have anything to gain. Why settle for half a loaf when they can get the whole one already through lawsuits and IICA Acts? Until they get decisively checked with something like the Betamax decision that forces them to adapt, there is no incentive for them to accept anything less than full control.
I am very pessimistic that anything will be done to prevent the RIAA from accomplishing their goal of criminalizing all unapproved (i.e. unpaid-for) uses of their "property". The current legislative environment is simply too pro-corporate for me to expect any other outcome. I say this with all due respect to Congressman Boucher, who speaks as a voice of reason in the wilderness of a pro-Big Business Congress.
If a collective license were brought about, do you believe the way would be paved for the easier passage of legislative efforts such as H.R. 107 to free the public of restrictive DRM?
Are there other conerns which are prompting rightsholders such as the MPAA to impose these control systems?
"I think it’s unworkable. I think it’s irrational to expect high-school and college students to pay a $5/month premium for “legal-ized” file downloads when they don’t have to pay anything to get them from the existing framework; legality or illegality doesn’t concern them until they get the lawyergram in the mail. If I’m the parents, I don’t want to pay an additional $5/month on my ISP bill for a service that I’m not going to use; "
I would like to disagree with Rob on this.
These fees are not simply "voluntary", they are backed up by the force of traditional copyright law. There would be far less public sympathy and backlash for someone greedy enough not to pay a reasonable monthly fee.
Because lawsuits against teens are generally exacted upon the parents, parents would be likely to pay for their teens if given the choice. I would think teens too would galdaly pay a small fee, and $5 a month is not a lot of money even for a 5th grader with allowance. College students, with their high ticket expenses, would view $5 as a pittance worth paying to avoid lawsuits or prosecution.
Well, that's my two cents.
That's right. And that's exactly the rule for radio stations in the ASCAP/BMI world. Yet you don't see songwriters suing radio stations one by one. Once critical mass develops and collecting societies have money in the pot, copyright owner holdouts will have a choice of cashing a check or trying to sue individuals one at a time. As the RIAA will tell you, suing one at a time is not a profit center.
Some have also suggested that a voluntary collective licensing approach will never work because the music industry will never agree. That's a general observations, however -- no legislated compulsory solution will pass either, unless the music industry agrees. I believe the industry will come around, once they realize that their other efforts have failed to make P2P disappear or shore up their revenues. I think that day is coming soon. The major labels are in serious financial trouble, and new offers like iTunes (which have attracted a tiny user base when compared to P2P and are generating insignificant revenues) are showing no sign of turning that around.
what worries me about Fred von Lohmann's comment is there are movements in the committees to felonize the activity. As long as those movements continue the RIAA will not be encouraged in that direction.
Additionally, without the DMCRA, the mandatory DRM imposed on cable/satellite by the MPAA will generate the same stubbornness from their part, as they will make open home recording a breach of federal law.
I have this neat little idea that the downloaders as a class are engaging in "adverse possession". In real estate law if you can stake a claim to some piece of land and fend off all other claimants for a period of time it becomes yours.
The downloaders of the world are staking their common claim for our musical-cultural heritage. Hang-on guys and gals, it will be yours eventually.
I am with Drew a couple of comments back.
The real problem is that corporate entities are treated as persons. They aren't; and since they aren't they can't really create anything either. Only living, breathing persons can create something.
What needs to happen is to dispense with the legal notion that corporate entities, whether public or private, are people.
Early on, the corporate form(whether public or private) was created as a form for aggregating capital. After the civil war corporations were treated legally as people. This has since morphed into a form where real people abuse the corporate form by either
a) hiding from responsibility behind the corporate veil i.e. enron, et al or
b) abusing the priviledge of the corporate veil as in the major labels.
I believe that the idea is ultimately impractical, and unfair, to smaller content owners and unnecessarily a recipe for distribution disputes among the larger ones. While the ASCAP/BMI model works well for clubs, I think it may be impractical here, where there are many more players across many disparate industries. In short, while a decent idea, I think the practical issues will preclude it from getting much traction.
However, a slight variation of the idea may well work wonders, borrowing from the model of the Copyright Clearance Center which distributes licenses to make photocopies of magazine and journal articles, however acquired and using whatever means to replicate. The mechanism was created in response to the Wilkins case, which held that it was fair use to make private research file copies of journal articles, because the transaction costs for negotiating copying licenses were impractical, and thus no market effects.
After the CCC was formed, a consortium of publishers, including American Geophysical sued Texaco, and in a landmark decision, the "fair use for private copying" defense was reversed, precisely because there existed an entity to facilitate getting copying licenses (the 4th factor). The Am Geophysical reasoning was very persuasive, and the Second Circuit affirmed a multi-million dollar judgment.
It is a sensible model. Assume that you could obtain, by electronic or network services, a cryptographic token that grants a right to make personal copies of a single song (or work) for personal use, using whatever technology to produce it and obtained from whatever source. The network service should provide transparent means to facilitate acquiring the token, transferring the token, and preserving privacy. Make it automatic and capable of supporting micropayments. Make a standard API for using the service.
What result? A thousand flowers can bloom! (1) people who make excellent distribution technologies can build their technologies without interference. The technology can be credibly and responsibly programmed to ask a person seeking a copy to demonstrate authority to receive it, or even (like iTMS), to provide the means (directly or indirectly) to obtain that right for the person seeking the content; (2) people who aggregate content, communally or for profit, can assure they are not directly liable for infringement by challenging a requesting party to authenticate using the token; (3) people who sell content need only make and distribute the content, register with the clearance center, and start clipping coupons. Those who distribute best will succeed, according to market demands, for their distribution technology. those who aggregate and reformat content the best will succeed, according to market demands and their formatting technologies. Those who obtain and market content best will succeed, according to market demands, for their content and the effectiveness of their marketing of it. Everybody does what they do best, and gets rewarded by a business model consistent with the meritocracy of the marketplaces.
Most important, this approach dovetails well with the copyright. It rewards authors for their works, but doesn't necessarily overreach to let them develop monopolies on related distribution technologies and marketplaces therefor. Of course, if they are good enough to do everything, the better for us all!
The market prices will determine what is what -- unless Congress sees fit to make the license compulsory and fix prices as they have in some other areas. If they do, the clearinghouse could be set up in this manner.
But I like the idea of obtaining a per-work token -- it leverages all of the downside of the network for content-owners, to make possible a direct and immediate means for profiting from the same technology they claim is threatening them.
Of course, there are clear hybrids between this idea and Fred's. These are, ultimately, the "other" business models that everybody has been talking about.
My apologies to everyone for deferring my participation until now. Occasionally , I am reminded that I still have a day job ( representing some very insistent constituents) , and today is one of those days.
Moreover, given the through nature of the proposal made by Fred Von Lohman, I thought it best to just let you read his suggestion and respond. Predictably , your responses are varying considerably.
Here are a few thoughts of mine:
Fred should be credited for a truly innovation suggestion, as is typical of his work. I think that in view of the certainty that P2P file sharing will continue and probably grow in spite of the law suits and other enforcement attempts of the RIAA , the music industry will eventually conclude that some form of collective liscensing approach, voluntary or compulsory, will be better than essentially giving away billions of dollars worth of music for free each year. It is probably too soon for the industry to reach that conclusion. At present the RIAA appears to have a laser-like focus on enforcement. They will probably have to experiment with it for a bit longer before they become convinced that it will not solve the problem for them.
In the meantime, the industry is beginning to experiment with an early collective liscense with a handful of major universities which have added several dollars per month to the student activity fee ,which is passed along to the legal industry music download sites ( I Tunes, ect) . Students then get all you can eat access to the legal sites from their dorm rooms. There is no limit on downloads to the hard drive, but there are some limitations on CD burning just as there are on the regular subscription services for these legal sites. All students pay the fee , and all students can access the site. Apparently the activity fee charge is less than an individual subscription to the site would be.
Of course, the inventories on the legal sites are far smaller than on P2P sites, and in all likehood, file sharing will continue at these universities, although perhaps to a lesser extent by virtue of the legal alternative. This is a kind of early and primitive demo project, Seth, although not of the exact model Fred is suggesting.
I have many questions about the acceptance of the EFF approach by file sharers. Fred points out that 60 million people in the US are doing some amount of file sharing. He multiplies that number by $5 per month and derives $ 3 billion in annual profits for the industry , as compared to an annual $11 billion in gross revenues today. If all 60 million file sharers took part in the voluntary program, the industry would probably make more profit than it does today.
The problem is getting even a large percentage of the 60 million to take part. Presumably the incentives are "being legal", which I do not discount , but which will motivate far fewer than 60 million , and immunity form suit from the rights holders who are voluntarily participating. I'm not sure that the threat of suit is particularly intimidating at present--witness Fred's statement that file sharing is still growing in spite of highly publicized suits against file sharers. Moreover, as several postings this morning pointed out, there will be no protection from suit from rights holders who opt out of the program. I have real doubts that there will be sufficient incentives to encourage even a large majority of the 60 million to take part.
As unlikely as it may sound, further analysis may presuade the industry that it is not losing so much from file sharing after all. Earlier this year, 2 notable graduate business school professors published an in depth study concluding that file sharing is not causing loss to the industry at all. Apparently, file sharers are the largest purchasers of recorded music both from stores and from download sites. They sample on P2P and then buy what they like. The quality is more assured with the purchased product ,and one gets the added virtue of being legal. (I would strongly maintain that if you have bought the music, even after the fact, your file sharing should be seen as fair use for products that you eventually buy--perhaps a creative interpretation, but certainly consistent with fair use theory). When teamed with the fact that a major reason labels are losing revenue is that they are simply putting out less product than they used to, the study has opened some eyes. Perhaps more such studies focusing on other aspects of file sharer behavior would further reveal that the industry is not as badly harmed as it claims by file sharing.
Such a realization combined with the futility of enforcement may bring the industry around to a collective liscensing arrangement. At that time, Congress would probably welcome whatever role it can play in facilitating the collective liscense. Don't look for Congress to take the lead on this--the RIAA's influence there is just too great--althought not with every member :-) Congress would probably implement an RIAA collective liscense recommendation but not force one on the industry.
Voluntary means, it has to be fun. Its easy as pie:
The collecting society operates an electronic voting machine (possibly monthly paper/email trail:) Software makers include a means in their applications for people to vote, eg. for the current song. The users monthly fee is divided by the number of votes and split to the receiving artists. No vote means, split like the sum of all the votes did. Vote only once: all the money is to this one songs creators.
Instant gratification by direct communication with the favourite artists - the internet at its best.
No gaming by greedy artists, or cunning script kiddies. Users only have to trust the sharing software; create a PGP key at home that only you know, send the public key to the collecting society, as part of becoming a member; its used to secure the votes. presto.
The fee: a reasonable part of what restaurants pay: home users dont perform in the public. There can even be a "silver", "gold" and "platinum" membership: for people that want to have bigger votes.
No patent pending, at least not by me.
PS: one way to game this: if eg. bitzi was used to determine, whom the vote was for, was to spoil the bitzi database.
Alexander Wehr said:
And you see how effective traditional copyright law has been at preventing illicit file sharing. Let's go ahead and try it, I'm not averse to making the effort if it will get the RIAA out of the business of stifling technology for profit's sake, I just don't see it being very successful. $5 may seem like a pittance to you, but back when I was going to college in the 1980's that was two pizzas and cokes; and when I'm choosing ISPs (not that I have any choice today!) I'm not going to be very happy being forced to pay $5 extra for a service I won't use.
Depends how much that allowance is, doesn't it? I got $10 a week at most, until I went out and started getting my own lawnmowing jobs. $5 a month would have been a significant chunk of change to me.
Actually, I think it more likely that parents would simply forbid their teens to use those evil illegal file-sharing services in the first place; I think we can all guess how effective that would be. And I submit again that there's no way you're going to convince very many people to pony up $5 for something they can already get for free. There has to be some sort of value-add, either a more complete selection or greater ease-of-use; the supposed lure of legality (and I do say supposed) simply isn't going to make the plan succeed on its own.
Fred von Lohmann said:
You're more optimistic than I am. The RIAA has shown no indication of wavering, continuing to insist that their downturn in revenue is mostly if not entirely attributable to P2P "piracy" and discounting all studies making findings to the contrary. Instead, I see them sticking to their guns stubbornly until the last lawyer falls. Once they secure their "rights" in the U.S., they will pursue similar injunctions throughout the rest of the world, just as DMCA-like laws and regulations have been pushed out to Europe and Australia.
What's the solution? I don't know that there is one. How can an artist extract value from their work when it is so easily recordable and distributable? I think it still domes down to value-add; if there is a product that is not simply the songs (which are available for free) but includes other items such as music videos or interviews, there will be an incentive to buy that product. I still buy CDs even though I have always been able to download music from Usenet for free, because of the ability to rip the CD to whatever format I want (and because I can't afford a new radio for my truck that would play CDs; I have a portable CD player I use to play my mixed CDs through a cassette adapter. It's a hassle to set up and I'm always afraid someone is going to break into my truck to steal the player, but I have no other choice). Funky band-aid solutions that preserve traditional copyright protections without acknowledging the new distributional reality are simply not going to be attractive enough to succeed on their own merits. That's my two cents.
Rep Boucher,
I sincerely applaud your efforts to investigate new approaches to digitized content, and your forward thinking attitude towards the disruptive technologies that threaten the existing "content" industries of music, movies, and print.
However, I think the nature of the debate is unfairly constrained by a 500 pound gorilla that is latent in many posts thus far, and it is best summarized in your call for "a new legal regime for music file sharing." The underlying assumption, of course, is that some sort of regime, structure, or schema is necessary to mitigate the conflict between file-sharers and the copyright controlling companies.
I propose an alternate idea: do nothing. More specifically, Congress should enact no law, give sanction to no entity, nor make any other intervention on either side in the conflict. In other words, refuse to take sides. Here's why:
There have been several passing references to "disruptive technology," and I think it is fair to say that the Internet is the king of all disruptive technologies, in that many of the old rules on how society and business work no longer apply. The immediate reaction of any entrenched business to a disruptive technology is to make it go away by any means necessary, which describes how the RIAA, MPAA et al have been handling file sharing on the Internet thus far. While the EFF plan is forward looking, in the end it will end up playing right into the hands of the content industries by condoning the idea that a single copyright gatekeeper is an essential part of the Internet society. To echo an earlier post, it provides a band-aid on the problem of excessive litigation, but in fact hinders any further exploration into the purpose and durability of copyright in a digital world. Moreover, it furthers the idea (I think incorrectly) that corporate entities, as opposed to individual creators, are the proper custodians of copyright. To borrow from Professor Lessig's book "Code," once the architecture is enabled and the idea is sanctioned that people need to pay copyright clearinghouses some form of compensation, then a mechanism is in place to control and manipulate that content.
Several posts have claimed that the RIAA and MPAA's business model is dead; I couldn't agree more. However, it is not up to Congress to protect a dying business model in the face of several that could (and I have no doubt will) prove just as beneficial to society. By way of example, if a corporation has erected a toll road in between two towns and charges people to pass, and frustrated commuters have hacked a path through the woods to avoid paying the toll, my view is that it is not up to the government to shut down the second road and propose a way to fairly compensate the owner of the first. Rather, by doing nothing it will force the corporation to confront the fact that it is going about business the wrong way, and if the second road exists long enough, the owner of the first will realize that it should not focus on shutting down the second road, but make its own road more attractive to travel on.
While the content industries will continue to howl bloody murder and some additional grandmothers might get sued, Congress cannot forsake the forest for the trees. The bigger, and much more valuable picture is about the role of copyright on the Internet. Content industries have already proven their ability to legislate copyright into perpetuity, but if Congress refuses to do all the work for the content industry by enacting architectures of control, then hopefully the industry will learn that copyrighting everything in sight is neither an engine of perpetual wealth nor a sound public relations strategy.
Mitch Bainwol's comment at the Senate INDUCE hearings seemed telling to me. When asked about evidence that industry revenues were not hurt by file sharing, he responded with a chart showing how sales of hits had declined.
If both facts are true, than filesharing is changing the recording industrys revenue mix away from hits toward more obscure songs that people find through file-sharing exposure.
This implies that the recording industry is not just fighting to preserve its revenue stream -- they're fighting to maintain their current product mix.
If the recording industry is currently dedicated to using the legal system to protect a changing product mix, it will take a long time to persuade them about alternative solutions that make money for them. They don't just want to keep making money -- they want to keep making money the same way they always have, even though customer preferences are changing.
"Alexander Wehr said:
These fees are not simply “voluntary”, they are backed up by the force of traditional copyright law.
And you see how effective traditional copyright law has been at preventing illicit file sharing."
There is a vast difference between using traditional copyright law to force people to abandon a rich source of art, accept restrictive DRM, and pay through the nose VS. using traditional copyright law to persuade payment of a mere $5 a month.
"Because lawsuits against teens are generally exacted upon the parents, parents would be likely to pay for their teens if given the choice.
Actually, I think it more likely that parents would simply forbid their teens to use those evil illegal file-sharing services in the first place;"
Are they effectively doing this now? they have no $5 alternative and they are not forbidding it.
I do apologize Rob, but while these arguments are somewhat relevant, they are trivial and in the case of your representation, completely overinflated.
It is an economic fact that people will very easily part with trivial sums of money. I see no reason for active resistance to a fee small enough for even a gradeschool kid to pull from his pocket.
Observations:
- The phrase "content owning community" reeks of the propaganda language used by copyright middlemen. It's not content; it's not a good. They're works. Your constitution only recognizes the value of works, not the (monetary) value of sellable 'intellectual' goods.
(I was surprised when I found out that US copyright law speaks of authors as 'owners' of a work; I would have guessed 'copyrigth holders' a more logical term.)
- Copyright middlemen have tasted blood, and now they cannot get enough. Where in the old days they had to be content with the laws as passed by congress, today they dictate those laws. I doubt they will give up that kind of power.
The keyword here is power. Larry Lessig's idea for a law that requires a copyright renewal fifty years after publication could mean a tremendous revenue stream for publishers, yet they all seem against. The reason? Power. The major publishers would rather lose money and dictate the rules forever, than give up a little power and make more money.
If you think I am exagerating, try the following thought experiment; try and think of a USA in which copyrights are non-transferrable (and where transfer of rights cannot be emulated through contract provisions). How likely would such a system seem? Yes, it would solve a tremendous amount of problems, but the middlemen would never let it happen.
- Compulsory licensing schemes have worked for ages, and work in other countries, so there is no reason why they would not work for P2P. Some might argue that downloads are too fine-grained to measure, or that you can never find out exactly who downloaded what; when has that been a problem with for instance radio, where you will never find out who listens to what?
Tip: levies on the storage media, rather than on the bits transferred. (The advantage is that it is easier to measure an amount of CD-Rs shipped than to identify a blob of bits floating through cyberspace + it puts the burden of payment with those actually downloading works.)
- The collecting societies for radio get a lot of flak, because famous artists get a disproportianally large amount of money. Still, it could be argued that the situation is not that bad; radio stations try and cater to their audiences' tastes. As a result, they generally cannot and will not play songs that are rarely appreciated.
P2P networks actually facilitate matches between obscure tastes and the songs that go with them. A lot of people use these networks to find that rare track nobody is playing or selling anymore. A voluntary licensing scheme such as outlined by the EFF should take great care to pay a lot less money to the big acts and a lot more to obscure acts. The 'dividing it up' plan proposed by the EFF seems inadequate.
Of course, this would again mean that the current major record companies get bypassed a lot, and again they won't stand for it.
- One final thought: if the US congress wants to regain its law-making power (which is something different from law-passing power), it could start by setting the record companies and Hollywood a deadline. Say: "either you come up with a proposal, or we'll do our job and this time write the law ourselves". It is your mandate, isn't it?
Hi All.
I finally read the EFF proposal and I have several problems with it. First of all, it is based on Negative incentives. In other words, DO something otherwise bad things will happen to you. Like lawsuits, running afoul of the law, etc. In general, it does not change one iota of the current sociopolitical climate regarding the relationship of authors, publishers and general public. If nothing basic has changed, then why should we believe that the current situation will improve.
Second, collection societies have their own problems. Right now in Canada they are making dentists pay for the music they play on their cubicles. The rules and reglations used by BMI and ASCAP are a real mess regarding who has to pay and when. For example, if you have a bar with at least X number of screens of Y size at least then you have to pay $Z per month or year, whatever. Anyone remember when they wanted the girlscouts to pay for singing a copyrighted song around the fire?
Third, the $5 or $10 or $20 whatever will spread thin, very thin as we keep downloading and listening to more music. Downloading the first song is worth $5. Downloading the hundred song is worth $0.05. and it keeps getting worse from the artist point of view.
How can we solve this? First, we must change the system from a Negative incentive one to a Positive incentive one. Scott Mathews's DRUMS database is a good idea for this. The voluntary compulsory association (VolComp) MUST provide some kind of service that people will be willing to pay for. Access to the DRUMS database could be one. The VolComp association can also provide indexes to Most played, most downloaded, In Most Playlist, etc, songs. Likewise, same as Amazon, they can create affinity services that allow people with similar interests to share recommendations. If you decide not to pay the $5 or $10 for this then you forfeit access to such services.
Second, instead of a statistical system to apportion the $5 or $10 subscription price, you should implement a Mecenas system. Whatever software you use to communicate with the VolComp association should allow you to divide up your contribution among the artists/acts that you want. This feature automatically creates two behaviors. First, as an artist it behooves you to belong to the VolComp. Second, Minor artists have a better chance of being paid up for their music than using the statistics popularity method. People COULD have software on their computers to help them decide on the aportioning, but there should not be a compulsory feedback from the user back to the Volcomp regarding what he/she is listening or have on his/her Hard Disk. Privacy abuses would be unavoidable if we do that.
Rep. Boucher,
Although I've made numerous criticisms of the EFF plan, I think it is a major step in the right direction and that some form of voluntary collective licensing agreement is the likely solution barring draconian new copyright and paracopyright laws.
In response to your concern, I think the incentives for people to switch to a reasonable, authorized filesharing scheme are greater than you postulate.
Those who switch to the legitimate scheme will be guaranteed quality and ease of access. Find what you want, easily and quickly. For those who value their time more than a small, reasonable fee, this will be incentive enough. You'll never be able to convince those with more time than money to switch, so you really shouldn't bother too much (although a certain amount of price discrimination might be helpful).
Institutional actors, such as businesses, schools and the government (including the military), and even parents, can do much by buying such licenses en masse. Their incentive will be relatively inexpensive social benefit, more control over filesharing programs, and etc.
With open APIs, value-added services can easily be added to the authorized filesharing channels that non-authorized services will have difficulty matching, for example, playlist sharing. Send a playlist to a friend that will automatically download what he doesn't have ... a non-authorized service can't guarantee such a system will work, given spoofing, etc.
There will be a tipping point in the process. Once sufficient numbers of people switch to the authorized service, the unauthorized service will become more and more unreliable, thus increasing the attractiveness of the authorized service. Smaller numbers of unauthorized filesharers will be easier to police and enforce against. No system will be perfect, but enforcement will be easier.
Congressman Boucher:
Despite my pessimism about the particulars of Fred's proposal, I think he has his finger on the pulse of the solution. The reason for this is that I am not at all pessimistic about compliance by file sharers, and ultimately of the effectiveness of combining a decent solution with the risk of enforcement. Its ultimately a lot like trying to regulate against speeding -- you won't really stop all speeders, but you can save lives.
Despite my reputation as a cynic, I genuinely believe that most people are basically honest -- in particular, they don't want to break the law and they won't take something for nothing, particularly if there is some risk, however slight, that they might get caught at it. For the most part, people can put out a box of fund-raising chocolates and an envelope for people to put money in -- and most of the time, nobody is going to steal the money or the chocolate. People tip for good service at restaurants. many far better examples can be proffered, but i don't have the time or imagination to explain this point now. suffice it to say, I think that given the chance to steal an album or a song, or to acquire it under responsible circumstances -- no matter how badly they want it -- folks would prefer to do so.
How to explain file sharing, then? Even accepting at once that there is an epidemic of people owning entire libraries of infringing content, how can this be reconciled with my generally flowery view of the world?
This is easy. File-sharing offers something that record companies don't provide: (i) immediate access to an enormous pallate of music; (ii) on an individual song-by-song basis; and (iii) in a form that is perfect for the new and modern way of enjoying music in electronic form. Nothing at any record store could compare. I believe this was far more compelling than issues such as (a) free; and (b) occasionally scratchy or incomplete content. And it was the roman numbered items, together with (1) ease-of-use; (2) consistent, reliable operation, that made it a lifestyle.
You can surely compete with free (bottled water), but you can't compete with good, useful and fundamentally life-changing.
I have to tell you, when I was a software publisher, we had copy protection on our games (we didn't call it DRM then), and fought the pirate/new tech battles with glee. We were geeks, and that was fun. But we had no illusions that they ever worked, just served to keep honest people honest.
Ultimately, and I think this must eventually happen here, the market rebelled. After hard disks became common-place, a competitor could seek a significant competitive edge by offering its content WITHOUT copy protection. For awhile we dabled with dongles, artifacts and code-wheels, but eventually gave all of that up because the market required it. We took out the DRM, and our sales went up. We listened to our customers, and they told us how to make more money.
I have no doubt our piracy increased too. But probably not much, and probably our sales went up more -- in those days (early 80s), it really was a no-brainer. Nowadays, more limited types of protection is tolerated by the marketplace, but nothing like the lock-in technologies being suggested now. The market will eventually rebel, and sooner or later competitive entrepreneurs will recognize they can do better by offering more for less, and all the while make far more money in the process.
My point is this: give people what they want, and they will pay for it. (iTunes Music Store, big fee per tune, GREAT product, compelling interface, superb hardware -> its like a drug). If they have to go somewhere else to get it, they will.
I am sympathetic as to the desire of content management people to control the mix of available content and manner of distribution. If I could do that, I would too. But copyright policy has nothing to do with supporting that, and barring dramatically powerful and therefore disruptive technologies under color of a trademark claim, or keeping new talent's work under cover to promote others, is problematic. That is a variartion of technical and creative luddism, and has nothing to do with the promotion of progress.
A comment to Andrew Greenberg:
you spoke of competitors eventually offering services without DRM.
In the case of digital cable this will not be the case because of manipulation of FCC mandates, so how are people's future consumer and recording rights to be protected from such restrictive regimes?
Alexander Wehr said:
That's your opinion. We have no empirical evidence before us either way, so we must conjecture based on our respective thoughts on human behavior and our own past experience. Obviously different people have a different perspective.
Or if they are, it's been ineffective. That was my point. Even if you put the alternative out there, if parents don't pay the $5 the kids just go ahead and download anyway; all you've really accomplished is to force parents to subsidize your system because they know they can't really stop their kids from downloading. Additionally, if the "legal" service doesn't happen to have the content the kids want you've accomplished exactly nothing. You've held a gun to the parents' heads and said "pay this $5 or else", and they are *still* on the hook for lawsuits. My question is, why bother? Why waste all this time, treasure and effort to prop up a distribution system that is horribly inefficient compared to P2P file sharing? Let it adapt, or perish. Isn't that the way capitalism is supposed to work?
All I can say is gradeschool children must be extraordinarily well-compensated in that part of the country, and I don't consider $5 a month a trivial sum to someone on a budget; there's lots of those "only $5" services out there, why should I be forced to take on one more?
"Additionally, if the “legal” service doesn’t happen to have the content the kids want you’ve accomplished exactly nothing."
I believe you misunderstand the structure of the collective license. It does not call for a new p2p service. It calls for payments to compensate artists for use of existing services, and any of their successive generations.
I honestly do not have to conjecture on this. I live on a campus full of people who at one time or another admitted they would pay a collective license fee rather than go through the current hassle and uncertainty.
Even high school economics notes demand increases as price drops.
I agree completely with Charles Williamson's post earlier. In fact, he's conveyed what I was actually trying to say with clarity. I couldn't have said it better myself, literally :-) Thank you.
As a postscript however, I would like to add one more observation. Everyone here continues to refer to the RIAA and MPAA. But the problem is that such "industry" orgs are no longer representative of reality. As I trust Rep. Boucher knows well, and certainly more than me, it's all about a handful of integrated conglomerates that own every critical piece of the value/distribution chain. As a result, viewing public policy, consumer advocacy, or technological advances/regulations from a narrow lens of simply copyright, or distribution, or even DOJ for that matter, is by its very act self-defeating. IOW, by doing so, the media giants have already "won the war before it's begun."
In other words, the media giants have already divided and conquered everyone here ;-)
To Charles Willamson:
I take your point that Congress should do nothing to protect the old business model of the record labels. That model is failing and is doomed .The labels still basically want to cling to the sale of an entire CD at $16 or so when the consumer really only wants 3 tracks on the CD.
The long standing reluctance of the industry to create or liscense lawful download sites with an ample selection of music to be delivered in a user friendly form ( meaning unlimited permanent and portable downloads at an attractive per track price ) stemmed in my view from an unrealistic nostalgia for that old model of "buy the whole CD ". Now with Itunes and a few other legal sites some progress is being made, but the selection is still small, there are still limits on number of downloads, portability, ect. As Fred points out, consumer uptake has been anemic.
In selecting a title of today's session "a new legal regime", I was thinking "regime " in the broadest sense of the word. legal regime could imply an act of congress, or it could mean using private contract law as Fred has suggested in his proposal. Either way a new leagl regime could arise. You have suggested doing nothing.
Why is doing nothing not the best option? The basic problem is that the 60 million file sharers are technically acting outside the law. When that many people are law violators, respect for law generally is affected. Society is not well served by this outcome. I am frankly less concerned about the financial condition of the record labels and song writters than about the condition of public respect for law.
It's not an answer to make everything lawful by simply declaring that all file sharing is legal. Rights holders would claim confiscation of property without due process , effective condemnation of their interests or somesuch and file loss claims against the government. Actually, they might have a greater chance of getting payed in this circumstance than presently.
Finding a new mechanism to enable and free file sharing while providing compensation to IP holders seems to be the obvious answer. A new legal regime , perhaps based entirely on private contracts with congress doing nothing or nearly nothing, would have to arise to support the mechanism. As I said earlier, I think that time will come, but not immediately.
Rep Boucher,
I've been following these debates from Australia, even more closely now because the AUSFTA has come into play and we look set to follow the US wherever it may go.
I was wondering if it's possible for a "catch-all" law to be enacted that specifies a voluntary collective licensing scheme, e.g. as it operates for radio, so that it becomes the default modus operandi for all future disruptive technologies and systems, that aren't adequately covered by more specific schemes? This would include all copyrighted materials, not just music, for all distribution methods, not just internet-based, though these are some of the obvious current targets. The government would probably create some common infrastructure, e.g. the Office of Voluntary Collective Licensing, that all such schemes can hook into, instead of having to create their own organisations.
I know it'll be a difficult task to get the wording just right to cope with all future possibilities, but the benefit is that there'll always be a balanced way forward that allows for both profit-making and for development of the new technologies, rather than trying to stall everything with litigation. There'll be no need to revisit this same situation again every few years, so law-makers will have more time to examine other areas.
It may put the onus on the technology developers to build the licensing scheme into the new systems they create, but it also means they are free to develop any kind of new system. Inventors would be encouraged to bring to market all the variations on a theme. Surely this burst of innovation and the job-creating activities that surround it would provide long-term benefits to the overall economy too. Heck, even the vested interests (MPAA, RIAA, etc) might get into the act by funding R&D, safe in the knowledge that the copyright holders they represent will always get a cut of the profits from the trading activity and they will get opportunities to market the technology itself.
Perhaps litigation is already the "catch-all" default, but that doesn't mean it should always be that way. Increased litigation is certainly one aspect that I don't want to see imorted to Australia.
Thanks for your time,
Keong
I think this idea is horrendous. The only group it benefits are high volume pop music acts-- it essentially kills any cashflow into the underground music "industry".
Take, for instance, a small band or artist living in a city somewhere.
With current policies, this band or artist may, being pretty obscure, sell 1,000 to 5,000 albums. This isn't much, but at ten bucks a pop, 5,000 albums generates 50,000 bucks with very little startup capitol. They probably get downloaded a bunch too, but most people tend to feel a responsibility to support their favorite artists when they know that every dollar actually counts.
With Voluntary Collective Licencing, however, fans are led to believe that downloading is 1) approved by any music act, regardless of that band's label affiliation; and 2) going to make money for everyone, even the artists who's filesharing stats are too small to be acurately represented in Nielsen type studies, or whose music is mainly traded through more secure means or networks than the ones targeted by stupid companies like BigChampagne.
The result?
Our band now lost the little paying fan-base it had, while even more money is being given to RIAA affiliates than ever before.
Disgusting.
Not just that, but by telling the world that simply paying 5$ a month makes across the board music filesharing is OK, you're pretty much stifling the one thing that makes it possible for albums to reach the networks in the manner they do-- purchases.
Since the turn of the year alone, i think i've purchased between 12 and 15 cds. Your average consumer/ pc user is going to chuck any moral obligation to purchase an album in the future, negating it with a quick click and a five dollar charge. Parents/ aunts/ uncles are going to save the trips to the "weird" part of the city to get their kids the obscure punk cd they wanted for christmas, and tell them to download it instead-- "Don't worry, son-- it's paid for!"
I realize whole heartedly that something has to change. The way things are working right now is either going to become an endless battle a'la "feds vs. drugs", or morph into something completely different.
When i read articles like this, though, that are supposed to be the "voice of the good guys", i worry that that morphing process is going to be even uglier than the most vicious lawsuit.
(i apologize about the spelling errors-- i know there are a few in there, but i wanted to post this before i decided that the argument wasn't worth it)
To Andrew Greenberg:
Your posting at 4:06 is well reasoned and supported by examples of why the public was driven to file sharing by the lack of an acceptable legal product from the industry . I have a speech on the subject that makes many of the same points. I also agree that you can compete with free with a superior product ( a Juperter Media Matrix study of 2 years ago makes this point graphically). Unfortunately, the industry for a variety of reasons , including the difficulty in clearing the publishing/songwritter interests in some music, has failed to offer a truly attractive legal alternative even today.
I also agree that most people are honest and given an attractive legal alternative will opt for it. I'm just not quite as optimistic as you are that a large percentage of the 60 million file sharers would pay the $5 per month and go legal when they can still get the same thing ( not a better product, but the same thing) or free.
Representative Boucher:
I take issue with the following comment in your answer to Charles Williamson:
There is nothing in the Constitution that says Authors should be compensated when their copyright is over. Like in the patent regime, once it is over, it is over. Enjoy it while it exists. The way you spoke perpetuates the ideas=properties falacy that the publishers like so much. If publishers can sue for confiscation, then why is the common public kept from extending a class-suit to the publishers for the same after the Sony Bono Copyright Extension? (remember Eldretch).
To Keong:
An ineresting variation on the EFF proposal. Thanks for the suggestion
To Javier:
When a copyright naturally expires, you're right, it's over. But for the government to terminate by law copyright interests during their term would without doubt spawn litigation that would probably conclude that government improperly terminated a property interest and award compensation. I would bet heavily on that outcome.
To Earnest Miller:
As I read your post and that of others , I am beginning to think I may be a bit too pestimistic that the EFF structure could entice file sharers to participate. As I said earlier, Fred deserves credit for an innovative idea. I hope it gets lots of exposure in the near future so that many other thoightful observers can comment on it. We made a good start on that process today.
It's 10:30 pm here, and I'm turning in . More tomorrow.
A data point: here in Canada we already have compulsory licensing of music for personal copies. A levy is collected at the wholesale level on writable CDs and blank tapes. The money is distributed by a government-appointed committee. You can avoid paying the levy by signing an attestation that the blank CDs or tapes will not be used for personal copying of music, so for example a manufacturer buying writeable CDs in bulk for distributing software doesn't have to pay the levy.
It seems likely that gathering data about file-sharing would be much simpler than gathering data about private copying of music onto CDs and tapes. Hence the distribution of file-sharing fees could be done on an objective and fair basis.
Another data point: in Quebec 90% of record releases come from independent publishers ("How Quebec may be the saviour of music", by Juan Rodriguez, Ottawa Citizen, 14 April 2004, page F6; reprinted from the Montreal Gazette). These Quebec labels account for 25-30% of sales in Quebec (ibid). But those independents are still worried about file-sharing (ibid). So worry about file-sharing is not simply a manifestation of over-concentration in the music publishing industry, as alleged by at least one poster above.
Congressman Boucher:
I think the huge success of iTMS is evidence of people voting for quality products with their pocketbooks. That's the carrot -- excellent product, excellent prices.
Now, the stick. Whatever may be said of the technologies in question, the end-users who are engaging in copyright infringement are engaging in copyright infringement. It is too soon to say whether the spate of "sue everybody in sight" lawsuits will be effective, but I am here to say that litigation is an essential element of any intellectual property licensing scheme, whether compulsory or otherwise.
ASCAP/BMI, the model for the EFF proposal is a case in point. Neither ASCAP nor BMI have clubs and restaurants running to them for the, not inexpensive, performance licenses. Why? Because its pretty hard to compete with free. ASCAP and BMI provided a dramatically superior form of licensing to the alternative of going to a "Harry Fox-like" agency or to individual authors for each song to be performed, but it still is pretty expensive, and its not obvious why they would want it.
Does ASCAP/BMI sue every nonconforming club? Be real. Do they sue and whine on the first indicia of some infringement. Oh, please. What they do is send a salesperson to explain to the club the error of its ways, and the benefit of compliance. Eventually, dunning letters are sent. Ultimately, for clear problems, witnesses are sent to measure infringements, and finally, for the cases where examples must be made, yes, people are sued, sued, sued.
Some clubs face ruinous damages, some actually go under. Most are settled profitably. (Litigation for ASCAP/BMI, done right, is a source of profits -- the Copyright Act is an AMAZINGLY pro-plaintiff regime, long before DMCA). And in time, a few examples are made. And then the salespersons add those examples to the list of events.
Nobody is fond of speeding laws, and yet nobody really whines about enforcement. If content owners act responsibly and give a great product at a reasonable price, convenient to use and effective -- if they permit the marketplace to make the technology to deliver it and NOT interfere with development of technologies, the P.R. downfall of suing little Suzie can be managed -- and the example of little Suzie (who at the end of the day will have been seen to have been dunned, given second, third, fourth and eighth chances, and is actually a front for her deadbeat (musicwise) lawyer dad) will be a deterrent.
Can it work? Sure. After the enforcement bans were lifted for performance licenses, the consortia turned a significant profit. The fallout of composers suing a club, albeit by proxy, is nil, and most enterprises fall in line.
Can it get everyone? Of course not. No amount of enforcement will EVER get anyone, even under INDUCE. Only the most draconian and wasteful modes of enforcement would give that result, and would ultimately destroy through imbalance any benefit for which the copyright regime was designed, and take out a few other industries with it. In the twentieth century, bootlegs could be purchased in virtually every neighborhood on city streetcorners or second-hand stores (heck, there were bootlegs routinely available in rural upstate New York). The bootlegs were every bit as good as the originals, and much, much cheaper (certainly not free). Routine enforcement held that, ACTUAL piracy, in check, and reasonable profits were made by content owners and related industries.
Like speeding enforcement, I anticipate there will always be freebie-takers, but so what? The deterrence is slight, and many people speed, but they speed way less, and lives are saved.
My point is this: whatever we do, measure twice and cut once. Why opt for draconian changes when existing structures have not been tested and no effort has been made by content owners to address the problem. Look how things worked at the common law in the American Geophysical scenario:
1) paper media didn't think they needed to facilitate copying licenses, that people should simply buy multiple copies or back-issues of their entire journals (in some cases at huge annual fees).
2) the marketplace got tired of asking, and ignored them. rampant copying occurred, both reasonable and illicit.
3) the content people (apparently without the congressional clout of other media) went to the courts and asked for relief.
4) no sir, the courts said. the use was fair BECAUSE there was no credible alternative, hence there is no use impinging upon a relevant marketplace.
5) the content people created a consortium to dramatically ease the transacitonal costs, permit people to make their own copies for their own purposes in their own way, and license on a pay as you go.
6) the comfy users said, "we won, go away"
7) paper content sued, and this time won BIG BUCKS against the most unlucky defendant of the twentieth century, Texaco. Texaco lost at trial and on appeal.
Let's show some respect for the common law. By saying, "NO!, try something else before you ask for serious change," the content people created a solution. Nobody pretends that private copying doesn't occur all the time. But NONE of it happens in Texaco labs, and many other companies have similar policies, paying an annual license fee that rewards the content publishers for their efforts.
Sometimes, actually most of the time, the right thing to do is to let the marketplace do its bidding. If the marketplace fails, trust in the wisdom of the common law. By ALL MEANS, listen deeply to the plaints of content owners, some of whom are my clients, as well as the technologists, some of whom are my clients as well. But before we make changes that can literally change the world through unmeasurable and unintended consequences, let us make sure that all existing structural remedies have actually been tried, and keep the changes to the tiniest and least invasive changes necessary to correct the problem.
No doubt, the INDUCE bill will give content owners a lot of what they want. But there are also many other forms of technology mandates that can make things better for them. That we can make things better for copyright owners isn't the only question. Whether those changes create a net plus for the American people, after we do ALL of the accounting. That is the issue.
Like I said, I'm all about the balance. We can't have enough intellectual property. But neither can we have too much. Just call me Goldilocks. Its got to be just right.
To Representative Boucher:
I would like to respond to your incisive and thought-provoking comments along two lines of logic, one relative to the music industry and its business model (although I believe the logic can be extended to other content forms), and the other relative to copyright law and Congress. By viewing these parallel lines of reasoning, I will hopefully elucidate why I think that government abstinence (pun intended) is truly the best policy. I will begin with the music industry side.
The negative excesses of the music industry are widely chronicled; I find two exceptional descriptions are Fredric Dannen's "Hit Men" and Clinton Heylin's "Bootleg: A History of the Other Music Industry." In both, the creative accounting practices of the music industry are given thorough review, with astounding figures that many artists have lost money by making gold records. This is notable insofar as it reveals that as long as the music industry has been around, portable media sales have usually been a loss leader for many acts. For every Metallica that cries out that music sharing hurts their bottom line, there are scores of well known artists (usually those whose careers are at an ebb) and hundreds of lesser known artists that have embraced the download concept as a vehicle to connect and reconnect with their fans and as a way to fuel the real profit center of the music industry: live touring.
While I take your point that file sharers are acting technically outside the law, it is clear that many artists, most notably (and exceptionally) Phish and the Greatful Dead, have long and profitable histories of relaxing, if not waiving their desire to enforce that law. Even multi-platinum acts have realized the potential of releasing special tracks as promotional vehicles for appearances and for albums themselves. At the very least, this indicates that total copyright protection is not a universal concern among creative artists, in spite of industry protestations to the contrary. At the most, it frames the copyright debate as the desire of a consolidated, entrenched corporate beauracracy to maintain its longstanding industry practice of only promoting acts with wide-ranging appeal.
This is one side of the reason why a dedicated compensation mechanism is a bad idea. It places the guilt on the file trader, demanding payment on the assumption s/he is trading in material that the holder would like to protect. Copyright and compensation for a class of media should be universally applied, it would be premature to apply a structure for mandatory compensation when many people would like to use it as a promotional tool. Since there are two diametrically opposed camps, it would not be proper for Congress to favor one camp over another, and to reward acts like Metallica and penalize independent artists. Advocating a non universal compensation mechanism would require Orwellian control mechanisms over computer networks, to which I think we are all highly opposed.
On to my second line of reasoning, I share deeply in your concern about public respect for the law. I do, however, think that there is a difference between enforcing a law and beating people over the head with it. Walk onto any college campus (at least in my experience) and you will see the ultimately futile efforts of the war on drugs (which I think is disappointing). In fact, even among campus authority figures there is more of a permissive "just don't let me see you breaking the law" attitude. In other words, the legality of certain actions stems from society's mores on the subject. While the government is the ultimate arbiter of the law, it is not the ultimate arbiter of society's mores (see: Prohibition). In the case of file sharing (and, incidentally, drugs), I believe that society's mores are in flux. In the case of file sharing, I ultimately believe that people's (both consumers and composers, not the corporate executives) opinion of file sharing is becoming more permissive because of the obvious promotional benefits. Mandating a compensation scheme for the rearguard action of corporate executives would embrace a position that might be unpopular in the future, or more to the point, irrelevant. If, as you say(and I agree), the industry and its artists are moving away from the "buy the whole album" format, then there is also the possiblity that people might move away from the "buy the album" format altogether, and it would be harmful to have a mechanism that prevents this from happening.
Rep. Boucher,
First, let me say how much I admire not only your legislative record and grasp of P2P and tech-related issues, but I also admire your willingness to dive into discussions like this and hear what people have to say (not all your fellow congressmen are so disposed, to say the least). Bravo!
I've read this entire thread now, and I find Charles Willamson's argument most persuasive: Congress should do nothing on the licensing front. It's too early in the game. Let P2P services continue. Let the music and movie industries adapt to new technologies and changing times. Let a thousand business models bloom.
You yourself say that a recent credible study suggests that file sharing is *not* hurting music sales. If that's the case -- and it may well be true -- then I don't see the point of a voluntary collective license.
I suspect P2P will ultimately undermine the record industry's hit-making machinery, but it's quite likely that a new regime of independent artists selling 10,000 to 100,000 CDs will rise to take the place of the Britneys and Eminems. That would be a healthy development -- something that collective licensing could well undermine.
Eventually, years from now, Congress may revisit the digital rights arena to modify copyright law to reflect and enshrine user behavior in the digital age. But let's not forget that every time Congress has waded into these waters over the past decade, it has mucked things up even worse: the DMCA, Sonny Bono Act, and now the proposed INDUCE Act. (Your Digital Media Consumers’ Rights Act would be a welcome exception.)
Yes, it's a noble goal to restore balance in copyright law, but I don't see that happening with this Congress (or the next), although perhaps you would be in the best position to know. But I fear the worse. How can you guarantee us that the result of Congressional action won't be a copyright regime even more onerous than the one we have today?
I say this, by the way, as a writer and author who is no foe of reasonable copyright.
More on New Media Musings.
I mentioned above the release today of the white paper: "Copyright Issues in Digital Media" from the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=5738&sequence=0
Nathan Musick of CBO’s Microeconomic and Financial Studies Division wrote this paper under the supervision of Roger Hitchner and David Moore.
This paper i