- Overview
- Copyright Concepts
- The RIAA’s approach and its Critics
- iTunes Changes Music Downloading
- Steve Jobs’ Open Letter Calling for DRM Free Music
- Music Tax… now that’s ridiclious
- YouTube and Copyright
- The SONY BetaMax Ruling and with Online Music Sales
- History Repeats Itself
Earlier this week Apple announced in conjunction with EMI (one of the biggest music labels) that they would soon be selling music without DRM (digital rights). Before I get into why this is so important, let’s first see how we got to here today.
Copyright is a fundamental in the US for business innovation. The concept of protecting technologies or ownership of works is instilled within our society. It is what allows our capitalistic business model to succeed. Say a business in the US developed a drug to cure AIDS. After investing millions, perhaps, billions of dollars in research and development the company would sell that drug on the market to make a profit. But what if their results could easily be copied by another company who could also sell that drug? The original company would no longer receive the compensation for all of the work they put in. Another company would profit off of the original company’s idea without having to invest the time or money. Thus there would be no desire for the original company to develop such a solution if there were no guarantees of protection. Such protection of innovation and technology is integrated into US law starting with the US constitution which grants these protections and rights of use “to promote the progress of science and useful arts” (NY TIMES)
It’s really about time that music executives started realization that overprotection in the end actually hurts the business model. Just look at Napster as the prime example. The RIAA in its fury to stem the piracy of music shut it down. In response many more alternatives stepped up to fill the void. These alternatives were harder to shutdown and caused free music downloading to skyrocket.
There is a common misconception that upon purchasing a cd the purchaser not only physically owns the cd but also owns the contents of the cd and thus can do with it as they please. The reality though is that upon purchasing a cd while the owner may physically own the cd, the content on the cd itself is classified as intellectual property. The intellectual property on the cd is not owned by the purchaser, but in many case, by the RIAA (Torr). The RIAA clearly establishes these different types of property and its ownership of the intellectual property on the cds is the basis for its actions against piracy. When people share and download this intellectual property they are stealing from the RIAA.
The RIAA’s approach and its Critics
To address this issue the RIAA, as many people know, began suing music downloaders. They have stated that they “take great care to ensure that a user is illegally distributing or copying copyrighted recordings before it files a request for a subpoena”(Torr). All methods used in obtaining information were argued by the RIAA to be completely within its legal authority. Since it began suing, despite arguing that its tactics were legit, the RIAA has encountered a number of setbacks. While Verizon lost a lawsuit citing customer privacy violations, SBC in 2003 countersued arguing that the methodology used to gain information by the RIAA was unconstitutional. A court later ruled in favor of SBC declaring that the RIAA’s method of using subpoena to gain information was unconstitutional (Borland). Universities such as MIT and Boston College have refused to release information citing the Family Education Rights and Privacy Act and improper legal procedures by the RIAA (Sales). Despite claims of taking great care to verify individuals through the information obtained on sharing networks the RIAA has issued subpoenas for those who have been deceased and even people who do not even own a computer.
Critics do not only include business that deal with the RIAA but include musicians themselves. Earlier in 2006 over a dozen high profile Canadian artist including the Barenaked Ladies, Avil Lavinge, Sarah McLachalan, Raine Maida of Our Lady Peace, and Billy Talent formed the Canadian Music Coalition (Dixon). Many of these artists are winners of prestigious Juno and Grammy awards and have sold millions of albums. The group explicitly stated that record labels are lobbying for changes in copyright laws which would allow them to increase lawsuits and gain greater control over the distribution of music. The majority of these artists were being represented by the music industry which had been advocating for copyright and legal changes on their behalf (Canadian Music Creators Coalition). These artists however did not believe that the recording industry was accurately representing their interests.
The Canadian Music Creators Coalition has explicitly expressed that they believe suing their own fans is not only “destructive and hypocritical” but that those that sharing music “are not thieves or pirates”. The group also advocates against digital rights and locks on music. They argue that control distribution is not fair to the consumer, because it limits choice, is counterproductive, and causes backlash, which in turn misrepresents the artist (Canadian Music Creators Coalition).
iTunes Changes Music Downloading
There were many skeptics when iTunes first came to the market. After all it offered a different solution and so music selling services so far only had limited success. But after all it’s Apple were talking about and Apple pays attention to the fine details and every aspect of the user experience to just make it work and be as intuitive as possible. The music industry reluctantly signed on learning that the service would only initially be available to those on the Mac platform. Well the initial numbers were staggering. When iTunes finally came over to Windows the numbers took Apple to 1st place in online Music Sales. Today the iTunes store is the 4th or 5th (I do forget) largest music seller only behind brick and mortar stores such as WalMart and Target. I think they’ve even surpassed Amazon.com or are close to it. This showed that the majority of consumers will pay for music! It just has to be offered on terms that seem fair.
One of the best ways to generate buzz or publicity is to offer a great product not only for free but a product that just works. That’s what iTunes did. The technicalities of the DRM from the iTunes store are essentialy hidden from the average user and Music is of the same nature and while artists and the recording industry should indeed be compensated they should serve as a catalyst for new technologies and forms of entertainment, not as a barrier due to legal and over protectionist methodologies.
Steve Jobs’ Open Letter Calling for DRM Free Music
Earlier this year Steve Jobs released an open letter calling for the music industry to release DRM free music. In it he citied the harm it causes consumers and how it stifles choice. Before digital music if you bought at cd you knew it would play in your cd player. One could go to any music store and purchase any cd and there was never a doubt that you would not have trouble playing it. With the digital rights that the industry mandates on all legal songs sold just because you buy a song from one store does not guarantee that it will play on your current music player. For example, music purchased from the MSN store or Rhapsody, will not play on the iPod and music purchased from the iTunes music store will not play on players that work with MSN or Rhapsody compatible players due to the digital locks on the songs.
There were a number of responses to letter from various industry exectivies representing various companies and sure enough members of the music industry responded. Warner Music CEO Edgar Bronfman described the letter as one “without logic and merit” (Reuters). Marketing director for Zune at Mirosoft called the letter “irresponsible, or at the very least naïve” (NY Times), and yet now Microsoft is pondering the addition of EMI’s catalog DRM Free.
Music Tax… now that’s ridiclious
Both of these responses are from companies who have argued in favor of taxing music itself. Let’s analayize the concept of a music tax for a second. Bronfman in late 2005 proposed an iPod or music tax. His argument is that “We’re selling our songs through iPods, but we don’t have a share of iPods’ revenue” (TheStreet.com). First off this is anonsense claim. Apple pays music companies roughly 70 cents out of the $1.00 of every song sold for rights to sell that music. It also covers marketing, infastructural costs, and credit card processing fees for the store. All the music companies do is sign an agreement saying that Apple can legally distribute their music and they watch the cash flow in.
Secondly, why a tax now? Before the iPod it was the SONY walkman, which was then followed through with the portable CD player. These devices where phenomeoas which also changed the way people listend to music. Yet none of these devices had specific music taxes on them? I don’t see Warner coming out with any revolutoinary devices to change the way we listen to music, so why should they directly profit off of Apple’s research and sucess? They sure didn’t do it with SONY which held a dominant hold on the music device industry for decades. SONY never paid music lables a percentage of their sales based upon the number of units sold, so really why now? Today still TV makers don’t pay tv content providers just as radio makers such as JVC don’t pay radio stations, and Satellite radio such as Sirrus and XM don’t pay royalities for each product sold.
Microsoft tried to woo the music industry by paying a “tax” for each zune sold. They agreed to pay Universal Music Group $1 for every Zune sold (NY Times). What’s a Zone? Yea, not many people know, because its so confulsted with technicalities and digital rights integration. Plus it looks like a brick or just a general pos. Yet this is the first time in history that a company has compensated content providers.
Music for the longest time has been in the spotlight in regards to copyright, coming into the spotlight now is video, esepcailly with the enormous popularity of YouTube. Almost every internet user has heard of YouTube and millions have used it, often daily. YouTube was acquired by Google in the latter half of 2006 for about 1.6 billion dollars and allows users to easily upload and share videos. It’s another example of a product that just works. There is no nonsense with video formats or crazy plugins or anything of that nature. It’s just easy and I works. YouTube features content from a-z. Music videos, commercials, tv clips, movie clips, if you’re thinking of something that has to do with video and its been broadcasted or in the main stream media chances are that its on YouTube. Essentially YouTube has made sharing video as easy as sharing photos capitalization on sites such as flicker, and photobucket, except now its with.
I grew up in Buffalo and love my sports teams. God knows that all of us Buffalonians do. When the brawl between the Buffalo Sabres and Ottawa senators broke out, one of the first things I did, not having TiVo, was look up the clip on YouTube and there it was.
Some companies have used youtube to their advantage. An example was NBC when Justin Timberlake hosted SNL. Timberlake and Andy Samberg did a skit which had to be edited for broadcast television. NBC released the clip on YouTube as “A Special Christmas Box” uncensored and within a week there were over 9 million views. As of the writing of this entry it has more than doubled to 19,383,303 views. I personally had not seen the broadcast version but people were talking about it and showed it to me and all I could do was laugh. I in turn showed my friends and everyone was talking about the skit. That’s what companies want people to watch and enjoy their content and that’s what YouTube allows.
However abuses over copyright protection again come up time and time again. When Google acquired YouTube many analysts wondered whether Google would be hit with multiple lawsuits for copyright violation now that YouTube had money. Analysits were right on. YouTube suddenly infushed with cash could dish it back out if found guilty of copyright violation.
Content owners cite the DMCA or the Digital Millennium Copyright Act. The act, which was passed in 1998, makes the penalties for copyright infringement over the internet steeper and makes it a crime to circumvent copyright protection mechanisms. There are exceptions to the law, that are under the term “fair use” and content owners often seem to abuse the power that they are given by this act.
In a nutshell the act says that:
“- Web sites that make pirated material available generally are protected from liability as long as they remove the material at the copyright holder’s request.
– In their defense, Web sites must show that they were unaware of the pirated material until they were asked to remove it.
– Recent case law and legal theories hold that Web sites still can be held liable if:
1. The copyright infringement is so pervasive that the Web site should have been aware of it.
2. The Web site induces users to post pirated material.
3. The Web site profits from the violations. “(SFGate.com)
Today one of the major things that YouTube faces is entertainment giant Viacom. Viacom is a huge media company who owns Comedy Central, Nickelodeon, MTV and movie giant Paramount and DreamWorks. Their shows that they own include the popular Daily Show with Jon Stewart, South Park, the Colbert Report, SponeBob Square Pants,the list goes on and on. Clips from all of these shows can be found on YouTube and Viacom is claiming that Google’s ““YouTube deliberately built up a library of infringing works to draw traffic to the YouTube site, enabling it to gain a commanding market share, earn significant revenues and increase its enterprise value.”(NY Times). While there are a massaive number of copyrighted clips owned by the major media studios those aren’t the only things that YouTube has on its site. Some of the top hits are of clips done by amatuer film makers with a simple video camera wanting to share their work with the world.
Viacom is suing for $1,000,000,000. Yes that is correct number of zeros, one billion saying that their clips have been viewed over 1.5 billion times. Google has been very prompt in taking down clips when issued with a DMCA requests and argues that is has one of the fastest response times in the industry when issued with such a request. This is probabably true but Viacom then argues that in waiting to be notified it forces content owners to keep a watch out for copyright infringement themselves.
Google responded that “Viacom is attempting to rewrite established copyright law through a baseless lawsuit. In February, after negotiations broke down, Viacom requested that YouTube take down more than 100,000 videos. We did so immediately, working through a weekend. Viacom later withdrew some of those requests, apparently realizing that those videos were not infringing, after all. Though Viacom seems unable to determine what constitutes infringing content, its lawyers believe that we should have the responsibility and ability to do it for them.”(Washingtonpost.com)
Viacom also last month found itself in some hot water after sued moveon.org after the group posted a Colbert Show paradoy. The EFF got invovled and I would clearly agree that the ” video is an act of free speech and a fair use of ‘Colbert Report’ clips,” said EFF Staff Attorney Corynne McSherry. “Viacom knows this — it’s the same kind of fair use that ‘The Colbert Report’ and ‘The Daily Show’ rely upon every night as they parody other channels’ news coverage.”(EFF). Talk about irony. The question is where will the line be drawn? The 1st amendment of the constitution gives us the right to criticize without fear of retaliation and that is exactly what a parody is.
Another example of this is the fiasco that the NFL now finds itself in with Wendy Seltzer. Millions of Americans watched the SuperBowl and in every football game that is broadcast there is a blurb that says
“This telecast is copyrighted by the NFL for the private use of our audience, and any other use of this telecast or of any pictures, descriptions or accounts of the game without the NFL’s consent is prohibited”
Seltzer posted a YouTube version of this clip on her blog in Feburary. She “took exception to this claim—as it clearly makes no concession for fair use—and wanted to show her students how content owners are beginning to exaggerate their rights”.
Less than a week later the clip was taken down by YouTube, which had received a request from the NFl asking the clip to be removed due to copyright infriginement. Now the average person would no doubt just say ok my clip was taken down, bummer.
But Seltzer’s job title is not only law professor. She is also an attorney at the Electronic Frontier Foundation (EFF), and founder of Chilling Effects. Both of these organizations concern themselves with education and protection of online rights. The EFF itself has been involved in a number of high profile cases including the SONY Rootkit debacle and the Supreme Court ruling of MGM vs Grokster regarding file sharing applications where innovation trumped corporate interests.
Seltzer knowing full well about the DMCA issued a counter claim arguing full faith belief that the clip was not a copyright violation and the YouTube clip came back online. According to the law the only recourse that the NFL could take is to then ask for the content to be taken down through the courts. However the NFL instead asked for the same clip to be taken down ignoring the counter claim again citing DMCA violations.
What the DMCA does say that the NFL did not take into account apparently, is that you can’t issue a take down notice for the same content twice if a counter notice is filed. If this happens, the law states that the NFL is now liable for all damages and legal fees of the infringer because the NFL “knowing[ly] misrepresentat[ed] that the clip is infringing”
“Essentially, the NFL is now in violation of the same law that it is using to try to protect its own content. And, instead of following the proper procedures outlined in the DMCA, the NFL appears to be choosing to beat her over the head with takedown requests.”(ArsTechnica.com). These media conglomerates are often blindly using their power to maintain control over their content, in a 20th century fashion, regardless as to whether or not its within their limits, in a 21st digital lifestyle.
Yes companies deserve compensation for their products, after all again that is what makes the business model of America work. However many business themselves are over protective of their content and are truly causing themselves more harm than good by focusing on their short term ramifications rather than the long term. NBC has said that viewership of David Letterman has increased due to the clips being posted online and their sucess with the posting of the SNL clip has lead to increased viewing of the show. Do you see NBC suing YouTube? No, in many instances their sharing their content and posting legit high quality copies instead of rippied mediocore versions posted by john and jane doe.
The SONY BetaMax Ruling and with Online Music Sales
In Jobs’ open letter he cited the only reason that there is DRM on the music store is because the music industry players wouldn’t of otherwise licensed the music. With this agreement consumers are given the freedom they deserve. After all consumers are the ones that dictate the market not the companies.
The online music revolutoin is not the first time that the entertainment industry has been threanted by new technology. The introduction of radio caused record sales to plummet from 100 million to 6 million during the 1920s. That is a huge change in percentage versues the drop in music sales the RIAA argues is lost to online piracy. Over time though the music industry used radio to its advantage and to this day radio is now a promotional tool dominated by the music industry (Greenblatt). When the movie industry was first threatened by SONY’s betamax, an early verison of the VHS, which allowed people to record tv shows they tried to stop its sale through the courts, by suing SONY, much in the same way that the RIAA stopped Napster. The courts however sided with SONY, saying that SONY “was not liable for creating a technology that some customers may use for copyright infringing purposes, so long as the technology is capable of substantial non-infringing uses. In other words, where a technology has many uses, the public cannot be denied the lawful uses just because some (or many or most) may use the product to infringe copyrights” (EFF).
VHS soon replaced betamax (Jost) and were then sold for over twenty years becoming the movie industries most valuable source of income. VHS tapes themsleves brought in more than the box office itself before being replaced by DVDs. When MGM sued Grokster, just as they tried to do with VHS technology, the Supreme Court again upheld the rulling that innovation trumps piracy.
Between 1999 and 2002, every month, over 2.6 billion songs were downloaded. CD shipments themselves fell from 1.16 billion to 860 million in the US and sales themselves dropped from $15 to $11 billion, which is a whopping 27%, over the same time period (Bainwol). The valuation of the music industry itself according to the CEO of the RIAA has fallen from $40 billion to $32 billion(Bainwol). In 2000 the top 10 cds sold totaled 60 million copies, in 2001 the top 10 discs totaled only 40 million and then in 2002 only 34 million which comes out to a 43% loss in sales over a 3 year period (Greenblatt). If history is of any indication, in the end technology will win over corporate interests and become a fundamental revenue source for the industry.
So really props to Steve Jobs and props to EMI Group CEO Eric Nicoli. “Nicoli said the move did not diminish EMI’s fight against piracy. We have to trust our consumers,’ he said. ‘We have always argued that the best way to combat illegal traffic is to make legal content available at decent value and convenient.’(BBC)
The people who cause mass piracy and have enough time to circumvent copyright protection schemes only make up a small fraction of the consumer population and there are always going to be people who fall into this category. The majority of consumers, don’t want to waste time dealing with technicalicty, and truly are good people who will do the right thing if offered the chance. It is good to see that there are some in the corporate world who can see this. They are the ones unaffected by greed and not only have the consumer’s best interest at heart but that are the ones who act on their intuitionsinstead of just sitting idly by.
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Some parts of this entry were taken from an English paper that I wrote. The sources listed below were used for that paper.
Bainwol, Mitch. “The Music Industry’s Lawsuits Against Online Music Sharers Are Justified” Internet Piracy. James D. Torr, Ed. At Issue Series. Greenhaven Press, 2005. Mitch Bainwol, testimony before the Senate Committee on Governmental Affairs, Washington, DC, September 30, 2003. Opposing Viewpoints Resource Center. Thomson Gale. 08 October 2006
<http://galenet.galegroup.com.gate.lib.buffalo.edu/>
Greenblatt, Alan. “Future of the Music Industry.” CQ Researcher 13.41 (2003): 989-1012. CQ Researcher Online. CQ Press. 8 Oct. 2006 <http://library.cqpress.com.gate.lib.buffalo.edu/cqresearcher/document.php?id=cqresrre2003112100>.
B.B.C. News. “BBC News | Entertainment | Apple head attacks record firms.” Apple head attacks record firms. 20 Sept. 2005. BBC. 19 Oct 2006 <http://news.bbc.co.uk/2/hi/entertainment/4265434.stm>
Borland, John. “Court: RIAA lawsuit strategy illegal | Cnet News.com.” Court: RIAA lawsuit strategy illegal. 19 Dec 2003. Cnet. 20 Oct 2006 <http://news.com.com/Court+RIAA+lawsuit+strategy+illegal/2100-1027_3-5129687.html>.
Canadian Music Creators Coalition , “A New Voice.” A New Voice: Policy Positions of the Canadian Music Creators Coalition. 26 Apr 2006. Canadian Music Creators Coalition. 19 Oct 2006 <http://www.musiccreators.ca/docs/A_New_Voice-Policy_Paper.pdf>.
Dixon, Guy, Guy. “Opposing Viewpoints Resource Center - Magazine and Newspaper Display.” Canuck musicians say lay off illegal downloaders. 27 April 2006. Globe & Mail. 19 Oct 2006 <http://galenet.galegroup.com.gate.lib.buffalo.edu/ >.
Jost, K. (2000, September 29). Copyright and the Internet. CQ Researcher, 10, 769-792. Retrieved October 8, 2006, from CQ Public Affairs Collection, <http://library.cqpress.com.gate.lib.buffalo.edu/cqpac/document.php?id=cqresrre2000092900>
Markoff, John. “Opossing Viewpoints Resource Center — Magazine and Newspaper Display.” Apple Sells 70 Million Songs In First Year of ITunes Service.. 29 Apr 2004. New York Times. 19 Oct 2006 <http://galenet.galegroup.com.gate.lib.buffalo.edu/ >.
Marks, Steve. “Internet Piracy Is a Serious Problem” The Internet. James D. Torr, Ed. Opposing Viewpoints® Series. Greenhaven Press, 2005. Steve Marks, “Remarks at General Counsel, Recording Industry Association of America, Florida Atlantic University,” www.riaa.com, April 15, 2004. Copyright © 2004 by the Recording Industry Association of America. Opposing Viewpoints Resource Center. Thomson Gale. 08 October 2006
Sales, Robert. “MIT responds to RIAA subpoena - MIT News Office.” MIT responds to RIAA subpoena. 22 July 2003. MIT. 19 Oct 2006 <http://web.mit.edu/newsoffice/2003/riaa.html>.
Schwartz, John. “Opposing Viewpoints Resource Center - Magazine and Newspaper Display.” A Heretical View of File Sharing. . 05 April 2004. New York Times. 19 Oct 2006 <http://galenet.galegroup.com.gate.lib.buffalo.edu/ >.
Torr, James D. “Introduction to Internet Piracy: At Issue.” Internet Piracy. At Issue Series. Greenhaven Press, 2005.
Opposing Viewpoints Resource Center. Thomson Gale. 08 October 2006
<http://galenet.galegroup.com.gate.lib.buffalo.edu/ >
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