A Nation of Thieves?

July 3rd, 2008

“Congress shall have the power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Thus does the Constitution empower Congress to establish copyrights and patents, and thus create a means of livelihood for everyone from Thomas Edison to Jackson Pollock to Michael Jackson and Norman Mailer. (And, of course, me, if somehow the world would discover my genius.) But lately, it seems the Internet revolution has accelerated a siege on copyright by a rogue’s gallery of bad actors, attempting to convince the world that copyright is in crisis, and needs to be, depending on whose side they’re on, (a) dramatically toughened, or (b) tossed. In this tirade, I’m going to try to lay out the real story, which makes it kind of not a tirade at all. But I still think you may find it informative.

In this corner, we have the Chicken Littlers. “The sky is falling”, they say. “People are stealing our property”, they say. So far, the Chicken Littlers have been winning the war.

The problem is, of course, it’s all a pack of lies. So let’s look at them for a moment.

Lie #1: “Sales are tanking because of illegal downloads.” Sales of compact discs in the United States peaked in 2000 and have been declining ever since (see here for the bar chart). The Chicken Littlers insist that this is because people are downloading music for free instead of purchasing it. The problem is, of course, that this is hogwash. First of all, movie ticket sales in the US peaked in 2002, but it’s not like we’re all busy downloading illegal movies from the Internet. Second of all, there are plenty of other possible reasons for declines in CD sales, such as the major labels appear to be releasing dramatically fewer releases than 10 years ago (see here and here for comparisons). And then there’s the possibility that the record industry has lost its imagination and is releasing lots of crap. Nah, couldn’t be.

Lie #2: “Every illegal download is a lost sale.” The problem is, of course, that this “replacement” theory is hogwash. No matter how many illegal downloads there are, there’s no reason to conclude that every song that’s been illegally downloaded would have been purchased. In fact, it’s quite likely that the vast majority of them were not – i.e., they count as “sampling”, rather than sales replacements. There are plenty of things you’d try for free that you’d never purchase. The upshot is that if anything, illegal downloads are probably free publicity; and in fact, a couple of independent studies have concluded that there’s really no impact on CD sales. The record companies, of course, are certain that they’re being robbed, but, as you might expect, they’re not being particularly honest.

Lie #3: “My property is being stolen.” You may find it odd to learn that this, too, isn’t really a fair representation of what’s happening. The problem is that copyright, as far as the US is concerned, is not a property right, at least in any coherent sense of the term “property”. It’s limited in time (at least it should be, except that Congress continues to knuckle under to the copyright holders, and the Supreme Court thinks there’s no problem), and limited in scope, since there’s a fair use exception, among other things. Imagine if your home were no longer yours after 17 years (the lifetime of a patent) or could be occupied by someone else enjoying their fair use rights. Tom W. Bell has more, in Chapter 3 of his very readable book about copyright. Furthermore, copyright exists solely, according to the Constitution, to “promote the progress of …useful arts”. It’s not a so-called natural right, like ownership of physical property; it’s a privilege granted to content creators to foster the public’s access to creations.

But, as I said, these folks are winning the war. And in the context of winning this war, they’ve continued the awful behavior that’s led to this pack of lies and misrepresentations. So how have they managed to win? Well, lying and fear-mongering are always powerful strategies, not to mention the cozy corruptive influence of big business on government policy. But one of the most visible causes of this victory are the willing, greedy stooges on the other side. These are the “information wants to be free” morons, whose interest in getting something for nothing is exceeded only by their failure to understand strategy, politics, or economics. They’ve been the most convenient whipping boys for the scary threat of the Wild West Internet, and it’s definitely worth it, once and for all, to take their pitiful arguments and snap them, like twigs, over one knee.

Lie #1: “Information wants to be free.” Of all the idiotic, self-serving mishmash that’s come out of the digital revolution, the particular way this observation has been abused has to be the most offensive. Originally attributed to Stewart Brand, this quote began its life as an observation about how difficult it will be to maintain fees for information in a world where digital distribution has an cost approaching zero. But the anthropomorphism inherent in this statement has taken over. Of course, the problem is that information doesn’t want anything; people want things. And what some people want, apparently, is to consume other people’s creations for free, without their consent.

Lie #2: “Downloading music from shared sites isn’t illegal.” This might seem plausible, since it’s a lot like buying a Rolex from a curbside dealer in Manhattan; you know it’s not a Rolex, and he knows it’s not a Rolex, but you’re not the one breaking the law. Unfortunately, you’d be wrong. It is most definitely illegal – you’re creating a copy of a work you don’t have permission to create a copy of. True, virtually all of the high-profile prosecutions are for uploading, not downloading; but that’s simply because it’s a more efficient place to prosecute.

Lie #3: “Because policing is too hard, we should just give up.” It’s not really put this way, but this is essentially their argument. Of course, people don’t respect laws merely because they’re afraid of getting caught; they also respect them because of their moral content. There aren’t nearly enough police in the world to keep my house from getting robbed; yet robbers are few and far between in my neighborhood. Similarly, there are plenty of opportunities for petty theft in convenience stores; but most of those opportunities go unseized. Why? Because people recognize the difference between right and wrong, and not paying for something you’re supposed to be paying for is wrong. The problem, nowadays, is whether rhetoric reflects this moral judgment, which brings me to the next lie.

Lie #4: “There’s nothing wrong with sharing on-line.” Because, of course, the fair use exception clearly covers redistributing music to thousands of your closest friends. Whom you’ve never met. Seriously, this may be the most toxic of these lies, because it compromises respect for the law. Not only is it demonstrably incorrect – sharing music you don’t have the license to share is illegal – it’s also profoundly misleading, because it claims that there’s some common agreement that the right to control distribution is a right that creators shouldn’t have. We may ultimately reach a point where people reach this consensus about copyright, but we’re nowhere near it, and I doubt that anyone would want to live in a country where that’s true.

Lie #5: “Because the cost of distribution is now zero, there’s no more need for copyright.” The idea behind this one is that the Constitution enabled copyright for the sole purpose of ensuring progress in the useful arts, and the real obstacle there was owning a printing press, and since now it costs nothing to distribute things, we’re done. Poof! No more copyright. People keep creating, distribution is free and instantaneous, and everybody’s happy, right? Everybody except the people who used to have a right to control the distribution, of course.

There are lots of problems here. The first, of course, is that the per-unit cost of manufacturing and distributing copies is only part of the cost of the thing being copied; all the up-front costs still exist, and for many creators, they’re considerable, in terms of time (all those hours they could have been paid for digging ditches, slinging hash or teaching nuclear physics) and materials (e.g., film, cameras, trying out recipes before they’re published, etc.). And, of course, most artists never see per-unit profit anyway; the lucky ones get advances, and some tiny fraction of those get royalties above a certain number of copies sold. So the chilling effect on creation still exists in the free-distribution world.

“But copyright doesn’t care whether a particular artist gets paid; it only cares that enough artists create.” This is true; but it’s always been true, and copyright has been uncontroversial up until recently. The basic problem is that even if the law doesn’t care whether a particular person is encouraged to create, it’s kind of impossible to provide a financial motivation for some people to create without providing one for all of them. Copyright is, and always has been, the legal instantiation of this unfortunate turn of events.

Lie #6: “The world has changed; get used to it.” This is the latest version of wishful thinking from the folks who used to hide in their bedrooms and play Atari all day instead of interacting with other human beings. The theme of “geek revenge” has played out repeatedly during the Internet revolution – it was going to be some sort of meritocratic utopia, beyond the reach of mere states and laws, yada yada yada. Of course, what it ends up turning into is “Lord of the Flies”, because that’s what this sort of thing always turns into, and lo and behold, it ends up not being beyond the reach of the state or the law. Why these people persist in this foolishness mystifies me; I assume it’s because they were studying Pascal programming instead of American history.

Lie #7: “Free distribution increases sales, so enforcing copyright is actually counterproductive for artists.” This isn’t a lie so much as deliberately missing the point: it’s the copyright holder who gets to decide his or her marketing strategy, not the consumer. Besides, even if free distribution does increase sales of music, there’s no evidence that the same effect holds for books, poetry, or movies.

So is copyright broken? Probably, but not the way you might think. In general, the privileges of the creators are doing just fine – it’s the privileges of everyone else that’s currently taking a beating. Here’s our Hall of Shame:

Assaults on the first sale doctrine. The laws of copyright give authors control over the first sale of a copy of the work, but not over subsequent sales of that copy; this is how we have used bookstores and used CD stores – both physical and virtual, nowadays. But copyright holders are trying various end runs around this doctrine, with varying success. They recently lost a lawsuit in which they claimed that promotional CDs couldn’t be resold (and also, recently lost a patent suit which involved an analogous principle). They’ve also been trying to convert sales into licenses, but many courts have ruled that they really are sales.

Assaults on fair use. The US copyright laws explicitly give people the right to “fair use” of copyrighted works without obtaining permission for a number of reasons, such as teaching, scholarship, or research. These laws have also been used as the basis of the implicit right, in some cases, to make copies for personal use without permission (the famous Betamax case). However, in all sorts of ways, copyright holders have been trying to erode these principles; for example, we would be astonished if we couldn’t play a CD we owned in any CD player we encountered, but DVDs are region coded in such a way that DVDs sold in the US can’t be played in Europe, and the Digital Millennium Copyright Act flatly forbids circumvention of encryption technologies in almost all circumstances. The effect of this clause of the DMCA is that fair use is essentially trampled.

Assaults on the time limitation of copyright. The Constitution grants Congress the right to grant copyright for “limited times”, but influential copyright holders like Disney have repeatedly lobbied, successfully, to extend the term of copyright. The Supreme Court has ruled, in Eldred v. Ashcroft, that although it might appear that these repeated extensions have the effect of eviscerating the “limited times” clause, they do not, because the term of copyright remains limited in each of these extensions. Preposterous, but that’s where we stand.

Assaults on limitations of contributory infringement. In the Betamax case, the Supreme Court ruled that manufacturers of technologies which had “substantial non-infringing uses” could not be held liable for contributing to copyright infringement. Thus, Sony was not liable for infringement on, say, Disney’s copyrights, even though VCRs could be used to make illegal copies of Disney movies, because VCRs could also do lots of things which were legal, like make “fair use” personal copies. The Napster file-sharing system attempted to invoke the Betamax safe harbor, and failed; Grokster did the same, and also failed. In the process, the safe harbor established by the Betamax case has been nibbled away. Not only that, but more and more, non-government organizations are being dragooned into serving as surrogate copyright enforcers; the Grokster case established a new criterion of whether a technology was designed with the intent of inducing infringement, and the proposed ACTA treaty, being negotiated in secret (because heaven forbid actual citizens would have anything to say about it), would essentially eliminate the safe harbor established for ISPs established by the DMCA and require them to actively enforce copyright.

The real danger, in the end, is that the American people will lose faith in the balance of copyright. In large part, the assault on the limitations of copyright isn’t being pursued by individual creators; it’s their agents, the distributors, who are waging this war. They’re the ones that make the real money; they’re the ones who want to make even more, or are terrified that the business models they’ve relied on up to now are no longer supportable. In some cases, the asymmetry in financial interest between creators and distributors is so extreme as to be laughable; consider the case of academic journals, where authors are never paid for their work.

Except in a police state, the law is realistically enforceable only to the extent that it’s respected. When you tell people who have bought DVDs that if they move to Europe, they have to repurchase all their DVDs, and that software that would allow them to circumvent this ridiculous restriction is illegal, people lose respect not simply for the anti-circumvention law, but for the people who are championing it, and for the principles they claim to be championing. Copyright becomes an imposition rather than the balance of privileges it was intended to be. When you try to stop people from reselling CDs and software they clearly own; when you try defend the principle that 95 years of copyright privileges is a “limited term”; when you try to use secret international treaty negotiations to circumvent settled law; you’re going to make a joke of the principles you claim to espouse.

The people pursuing this outrageous expansion of copyright privileges do not speak for me as a composer, although they claim to. The American recording industry is a dinosaur; it’s going to battle for its outmoded business model until it kills itself and everything around it. And the creators are the people who will suffer. The implementation of copyright in the current array of laws and court opinions may very well be broken; but the principle of copyright is vitally important, to artists and to society in general. A strong and balanced system of copyright enables all sorts of things: residuals, royalties, the system of open source software licensing. I don’t want to lose this; and I’m guessing that there isn’t a single content creator who would. But we’re in real danger of reaching a point where the American people no longer believe the copyright deal is a fair one, and I fear that the scrum that will inevitably follow will leave us all the poorer.

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