…from the desk of Paul Resnikoff, publisher, Digital Music News.
Dear House Judiciary Committee Chairman Bob Goodlatte, Members of the Subcommittee on Intellectual Property, Competition, and the Internet; and Other Concerned Members of Congress,
I write to you as someone in the trenches of a media industry in disruption, and a firsthand witness of the problems created by our outdated, pre-Millennial body of copyright law. As you know, last March, Register of Copyright Maria Pallante called for a serious overhaul in copyright law, while speaking of the opportunity to create the ‘next great copyright act‘. I applaud the decisions by members of Congress to move forward and closely consider such an overhaul, and I hope you’ll consider these important issues as you shape your thinking on the matter.
(1) The Digital Millennium Copyright Act (DMCA) makes limited sense in 2013, and it has largely become a loophole with destructive consequences for artists and copyright owners.
The DMCA, as you are aware, was crafted in a very formative period of the internet, one that didn’t feature P2P networks, BitTorrent sharing, on-demand streaming, complete content portability and smartphone mobility, widespread broadband or anything close to the computing power and connectivity enjoyed by millions today.
Technological innovation, already at hyper-speed, has progressed more than fifteen years since the statute first appeared, rendering large portions of the DMCA antiquated, moot, or loopholed. This is especially true for aspects related to infringement liability for online sites and networks.
Instead of protecting online services from liability from unknown users and uploaders, the DMCA has now devolved into a weapon for legally devaluing music.
Massive companies like Google can safely insulate themselves from liability by complying with DMCA-mandated takedown notices; they have billions at their disposal to handle these requests. But even the largest media companies cannot effectively police Google (and certainly not the broader internet) for every violation, even if they too have billions at their disposal.
In today’s internet, that means that copyrighted and unauthorized content reappears almost instantly after being removed. The DMCA, and its compliance thereof, has now become a cynical loophole instead of an effective policy.
It has also created opportunities at the great expense of copyright owners. Companies like Grooveshark, for example, are actively building business models around DMCA loopholes (and enraging copyright owners in the process). On many levels, it is unfair to blame the companies themselves for using the law to their advantage – laws are laws – but the end result feels extremely unfair to copyright owners (who themselves, also must follow the laws as written).
There must be a better, more reasonable middle ground that responds to the current internet and technological realities.
Google is currently getting flooded with unprecedented levels of DMCA takedown notices, with great resources being wasted on both sides. This is a distraction to both technological progress and creativity, because the more time spent waging DMCA wars, the less time spent focusing on building, creating, and supporting innovators across technology and art.
(2) The DMCA itself is a confusing law.
Even the law itself, as written, is extremely confusing. This became painfully clear in a recent decision by the Supreme Court for the State of New York (Appellate Division), who ruled in April that pre-1972 recordings were not covered by DMCA protections. That opens the possibility, at a state level or otherwise, of internet companies facing extreme liability on older recordings. The opining judges were reading the law as written; they called for Congress to clarify the statute.
In the absence of such an overhaul, companies will continue to litigate, investment across both art and technology will be cooled, and companies will continue to burn inordinate resources on both legal and compliance concerns.
(3) Someone is always making money off of ‘free’ file-sharing. So let’s determine who that should be.
Over the past decade, the content industry has been forced to adapt to an environment predicated on ubiquity, not scarcity. A large percentage of content created these days can be duplicated an infinite number of times and shared with an unlimited amount of people.
That shift comes with extreme benefits, and extreme risks. The distance between the artist and fan is now effectively zero, and on many levels, music and content distribution has been liberated. And companies need to adapt: it is difficult to expect a company, like a record label, to still survive by selling $16.98 CDs in the current environment, nor should we expect Congress to insulate such antiquated models.
But the notion that other actors, including sites that illegally aggregate audiences around unauthorized content, should profit as a result seems ludicrous.
At first blush, these seem like matters that can be resolved by law enforcement and our courts, except that the DMCA has helped to fertilize these problems. Google, for example, routinely serves networked ads on these sites, and many times, offers search results (often auto-search recommended) to illegal storehouses of content.
Google often makes money off the resulting traffic, along with the illegal site itself. Yet the content owner is forced to issue takedowns to deal with the problem, if the content owner has the resources to deal with it. Which means that even the content owners that genuinely want to adapt are instead getting dragged into policing roles.
Let the companies that can’t adapt die; while creating an environment that rewards innovation and risk-taking. But the marketplace we’ve created isn’t fair at all; it’s not a friendly environment for real, adaptive innovation.
(4) Pandora doesn’t need your help.
As mentioned earlier, technology has progressed considerably over the past decade. This has also transformed business-to-business (B2B) relationships, and transactions thereof. A company like Pandora can now negotiate its own licenses, and even choose among several companies specialized in managing the details of these royalty arrangements and payouts.
In this direct licensing system, content owners – like recording companies – can name and negotiate their own prices. Pandora can accept or reject those prices, just like any other free market exchange. Pandora has a limited catalog and a manual entry and evaluation process, which mitigates the challenges of implementing a direct licensing schema.
This is also happening on other levels: labels like Big Machine Records (whose stars include Taylor Swift and Tim McGraw, among others) are negotiating direct licenses with radio conglomerates like Clear Channel Entertainment and Entercom Communications. They don’t need Congress to tell them the rates.
In this environment, companies shouldn’t need Congress to referee their negotiations for raw materials (ie, content), especially if the mechanisms exist for a free market exchange.
Of course, internet radio is a young and struggling industry, but not every young industry deserves to grow old. Every business needs to construct a viable business model, and thrive or fail on those models and the execution thereof. This is how fledging sectors truly grow into new industries.
(5) Longer copyright protections are not protecting artists or motivating creativity. They are only benefiting large content owners and heirs.
As a society, we should make the decision that artists should be compensated for their works, and laws should protect that right. But our current protection levels are abnormally long, often resulting in royalty payments to second, third, or even fourth-generation offspring and bickering within artist estates. Or, more likely, payments are collected by the media corporation that owns the copyrights themselves, with the artist or heirs not receiving a proper share.
In many cases, these authors or heirs wouldn’t bother to renew their copyrights, anyway.
These long-term protections seem to have little motivating impact on creativity itself. Just stroll the streets of Austin, Texas during SXSW, or walk into any club on any night in Williamsburg, Brooklyn, or San Francisco, or Athens, Georgia. Or, stroll the streets of the internet, where literally millions of bands are waiting to play.
A vast majority of these groups are getting nothing for their creativity, and are certainly not motivated by long, stringent copyright protections. Which means our culture (musical or otherwise) wouldn’t be damaged by shorter copyright terms; in fact, more limited terms could serve to promote greater reinterpretations, remixing, and content discovery.
Maria Pallante has also called for shorter copyright terms, specifically something along the lines of life plus fifty years if the rights owner fails to reinstate the copyright. That still sounds long, but represents a step towards more sane copyright thinking.
Your steps towards overhauling copyright are to be applauded. Thanks again for considering these important points as we move towards building a copyright law that fits these times, and the decades ahead.
Let’s truly create the ‘Next Great Copyright Act’.
Paul Resnikoff, publisher.
Digital Music News