Is It Worth Keeping The Pirates At Bay?

May 23, 2012The Internet and Social Mediaby David Smith

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Is It Worth Keeping The Pirates At Bay?

With the advent of the Internet, major movie and record studios have been demanding extensions to copyright laws in order to preserve outdated business models. But copyright law can do little to protect them and they need to move with the times and embrace the new technologies.

In 1995, John Perry Barlow, a poet and the former lyricist of The Grateful Dead, memorably summed up the changing media landscape by describing big media firms and music publishers as “merely rearranging deck chairs on the Titanic”. In Barlow’s scenario, the Internet – with its 500 million channels – was the “iceberg” that could eventually sink the stranglehold of the media giants and lead to a radical transformation of the media.

“The Titanic analogy is accurate,” says Andrew Murray, Professor of Law at the London School of Economics and author of The Regulation of Cyberspace.

“Barlow said the media and music industries were standing on the deck and shouting to the passengers that they would face harsh criminal penalties if the ship went down.

“What he describes as their ‘serene, glassy-eyed denial’ reflects the refusal of the music industry to accept that the business has changed forever. The most successful companies today are not based on the old models, like EMI and Sony, but are innovative technology companies, like Apple with iTunes, and Amazon with Kindle Store.”

Yet, some major Hollywood studios, as well as the music publishing industry, remain desperate to put the genie of technology back into its bottle. According to studio representatives, intellectual property infringement committed via the Internet, costs the U.S. economy nearly US$250 billion, and 750,000 jobs, every year.

Related: Infographic: The Internet - Then vs. Now

Related: Infographic: Millions Left Behind By The Internet Revolution

A closer look at these figures though reveals their murky origins. It turns out that the US$250 billion number is a 1990s’ estimate of the size of the global market in counterfeit goods – a different thing altogether. As for the 750,000 jobs figure, this appears to have originated from a 1986 speech by the US Secretary of Commerce, who ‘guesstimated’ that counterfeiting could cost the US “anywhere from 130,000 to 750,000” jobs.  

According to Dr Joss Wright, a researcher at the Oxford Internet Faculty, the media industry’s scaremongering tactics were intended to protect a massive money-spinning operation, which was “crumbling under them as the fundamental technologies have changed”.

Dr Wright added that the movie and music studios should accept the fact that we are now living in a “post-scarcity period”.  

“The thing that assigns value is scarcity. That’s why we willingly paid £15 for a CD 20 years ago. But we no longer need these objects and we are seeing an extremely tortuous extension and twisting of copyright as the industry tries to maintain the old business model.

“It’s difficult to justify £8 for an album on a legal download from Amazon when all I get is bits and bites on my computer I could have got free elsewhere. The industry is fighting tooth and nail to preserve the idea of scarcity, but the data costs a fraction of a penny.”

“Copyright law is failing to control it because of the transmittable, duplicable nature of the Internet. Copyright laws are being used to patch up holes, but the holes are appearing as quickly as they can be patched.”

Professor Murray also noted that the pace of technology was making it harder for the media industry to regulate copyright on the web.

“Once the technology exists, it’s hard to control through legal means,” he said.

“Copyright law will always be behind the curve. We saw a few weeks ago when The Pirate Bay (a popular file-sharing website) was blocked that traffic immediately soared by 50 percent. No matter how much the law tells the ISPs to block access, people with technology skills will find ways around it.”

As such, Dr Wright believes that the media industry should find new ways to make money, rather than maintaining their “glassy-eyed denial” of the changing landscape.

“New business models have already been successful. One idea is to say ‘here’s our album, it’s free, you can download it, but pay us what you think it’s worth’. This model does surprisingly well as some people pay a fair price, and some pay nothing, whereas others pay a ridiculous price.”

 Another model, which was tried by the English rock group Radiohead, is to release the album for free once a fixed sum has been donated. In Radiohead’s case, this was millions of pounds.

“This gets around the idea of scarcity as once the money has been paid, the album is released and that’s an end to copyright restrictions,” said Dr Wright. “Once the data is released, you lose control forever.”

To the objection that Radiohead can make millions with this approach, but a first-time artist might find it hard, Wright responds: “One idea is to upload an album for free once they get a donation of, say, £1,000. They then develop a large fan base whilst working in Tesco’s, but once the album is a success, they ask for £15,000 next time.”

Wright points to the U.S. Kickstarter website, an online domain for people who require investment to fund business ideas, as a reference.

“It’s a phenomenally successful model which relies on financial sponsors. For instance, if someone has a new idea for a board game, an early donor might get their name mentioned for US$100, or their name in the instruction booklet for US$250, or have a character named after them for US$1,000.

“The model (also) works well for films. Let’s say you donate US$1,500 dollars, they name a character after you. Lots of amateur filmmakers are doing this. People might say it’s creatively compromised but it’s much less so than the Hollywood studios which pay over-inflated fees to actors like George Clooney and make safe, formulaic romantic comedies, or action films, every year.

Dr Wright also challenges the assumption that a successful artist deserves to be mega-rich.

“We have this profound cultural belief that, by right, an artist should live the rock and roll lifestyle. But the fundamental idea of copyright is to promote creativity. For too long, artists, studios and music publishers have made massive profits for not doing much. The decentralisation and personalisation of copyright will make it easier for people to do quirky little albums that would never get sold by record companies.

The cultural assumption that a recording artist should be paid royalties for a song released decades ago should also be re-examined, says Dr Wright.

“I agree that an artist should be paid for his work. But the argument breaks down when you say that every time a copy of that work is used, he deserves extra payment. I pay my plumber for two hours worth of work, not every time I flush the toilet.”

 This ethical debate came into focus last year when English singer Sir Cliff Richard campaigned to extend copyright for his recordings. Brussels agreed to ratify the so-called “Cliff Richard law”, which extended copyright for singers of other people’s songs from 50 to 70 years.

But Dr Wright said: “He recorded Schoolboy Crush in 1958. If I buy a copy today why should I pay for two hours work he did decades ago? He should have to go on working to make more money. The belief that because 1,000 people download an album, the artist deserves more money is now being challenged.”

Professor Murray, an expert on copyright law, agreed that the Cliff Richard Law was retrograde.

“The reason for copyright is to provide an incentive for creativity and the Cliff Richard Law does not do that. He’s not creating any more 1960s records now.”

Click on the next page to continue reading: “Piracy & Censorship: An Ethical Debate?”

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