David Lowery: We Have the Services, But the Markets Are Sickly...

Monday, July 09, 2012
by paul

You could never call iTunes or Spotify failures, but why aren't multiples more paying for such services? According to David Lowery, the deeper reason is not a failure of the services themselves, but a failure to adequately protect private property on the internet.

Or, perhaps more like a refusal. "The debate's very old now - twelve years since Napster was at its peak," Lowery told the Register over the weekend. "And if you asked me ten or twelve years ago that we'd be where we are now, I'd have said you're crazy."

"We have services but the markets are sickly. Investment is disappearing and musicians are getting poorer."

Actually, the debate over 'free versus paid' is now quite complicated and gray. Spotify constantly talks about providing an alternative to piracy, and many musicians have built models around near-total recording devaluation. But why is there still such a massive black market in 2012? "You have legitimate businesses trying to compete with illegitimate businesses and it's made the market unhealthy," Lowery continued. "Really only the biggest players benefit - the richest, most powerful players benefit. Small stakeholders can't really compete when the market's like that."

"You need a rule of law, or otherwise you have a failed state. And in a lot of ways, the market place for songs and music and films does kinda resemble a failed state."

Which brings us to the ISPs, a group Lowery feels is piling up some serious infringement liabilities. "Ultimately the ISPs are liable. The way they have interpreted the DMCA leaves them with a huge liability," Lowery noted. "It's not as hard to get them to go along with a plan as people think. I have requested take-down notices through ISPs: Not individual downloaders but people who are seeding. Almost invariably the ISPs will tell you they don't have to do anything because the repeat infringer is somebody who has not been convicted of copyright of infringement in a court of law. So they say they don't have to forward the notice of infringement. These are from six of the bigger ISPs in the United States, and the seeders have contributed tens of thousands of downloads of one of my songs. That is their legal response."

"Now, I don't believe the DMCA was ever, ever written to say that (laughs). I think the ISPs are just piling up the liabilities. The more their shareholders figure this out, the more they're going to get worried about it."

Comments Closed

Comments (10)

wallow-T Monday, July 09, 2012

On ISPs accepting copyright complaints: Mr. Lowery seems to have overlooked the "Memorandum of Understanding" between major ISPs and major copyright interests, in which the ISPs have agreed to accept copyright infringement accusations without challenge; to map them to a ISP customer account; to pass on notification; and to keep score and have a vaguely-defined set of penalties.   This is the plan popularly known as "Six Strikes" being run by the Center for Copyright Information.

Of course it is possible that this plan is vaporware and it will founder on the daunting challenge for the ISPs of matching IP address info to customer accounts accurately and in high volume.   A recent Time story places the start of the program as "fall"; the much-publicized July 1 start date did not happen.

(I also expect this plan to create significant political resistance once the inevitable errors happen, but that's another topic.)

@mattadownes Monday, July 09, 2012

Whining is for losers. Start coming up with constructive ways to fix the problem.

Visitor Monday, July 09, 2012

Whining is for losers... Start paying for content or accept the consequences...

But Monday, July 09, 2012

It appears that the majority of the buying public is perfectly ok with "the consequences" thus far...

People like Prince threatening to not make new music until things are sorted out has not seemed to stop anything. People like Lowery comparing things to the past and fear mongering about the future does little more.

Regardless of what happens over the next 10 to 20 years, music will survive, so will musicians as will "good" music.

Whether it's a move towards monetizing different ways, with or without things like labels, or just an overarching Darwinism that brings about opportunity to incentivize more hard work, people will do it.

As far as consumer's expectations, they'll have that much more to choose from, that much more often.

Visitor Monday, July 09, 2012

there are few consequences, but when there are, people do nothing but whine about it... jaime thomas, joel tennenbaum, the pirate bay... all whiners...

Casey Monday, July 09, 2012

In what ways are the ISPs liable? Saying "The way they have interpreted the DMCA leaves them with a huge liability" is meaningless if he cannot provide examples.

wallow-T Monday, July 09, 2012

Disclaimer: I am not a lawyer, I just have Wikipedia. :-)

Mr. Lowery's suggestion about ISP liabililty would seem to be contradicted by Wikipedia's summary of section 512(a), "Transitory Network Communications Safe Harbor," which "protects service providers who are passive conduits from liability for copyright infringement, even if infringing traffic passes through their networks."

The Notice and Take Down provisions were designed before P2P file sharing was widely known. Notice and Take Down presumes that the infringing content is available on servers under the control of the Online Service Provider (think web pages): the scenario where the infringing material was being offered from the customer's home was not considered back in the dial-up era, 1998.

I suspect that the big ISPs have big lawyers. I suspect that when the big ISPs tell Mr. Lowery they are not going to act on his copyright complaints without a subpoena, that the big ISPs are on solid ground.

Central Scrutinizer Tuesday, July 10, 2012

Lowery knows this. Everyone knows this i.e. look it up on wikipedia.

He has explained how it doesn't work. I think he is suggesting that the law be changed.

He suggests that the law won't change because the major labels and other major copyright holders (movies, software etc) have made agreements with ISPs to not push for new laws because they are making money still. This squeezes out all independents, DIY or other small copyright holders.

Paul B Tuesday, July 10, 2012

The other factor here, that we rarely hear about in these discussions, is that the ISPs are the ones profiting the most from the current situation. They make lots of money from all the traffic generated by illegal downloading.

wallow-T Wednesday, July 11, 2012

Central Scrutinizer, above, has mis-stated Mr. Lowery's position. Mr. Lowery is not stating a hypothetical, or a "it would be nice to change..." position: Mr. Lowery states flatly that the ISPs have an enormous copyright liability.   And Paul chimes in that the ISPs have profited from piracy.

After my admittedly-minimal research, I have come firmly to the opposite position. In the Safe Harbor sections of the DMCA/OCILLA/Section 512, the ISPs who merely transport bits have been given NEARLY ABSOLUTE immunity from copyright liability for transporting those bits. All of the notice-and-take-down stuff applies to companies providing STORAGE services (hard drives; think web pages or "cyberlockers"); TRANSPORT services have complete immunity from liability and they need do nothing except comply with court orders (such as subpoena for customer info, or order to disconnect.)

I believe that the reason the transport safe-harbor was granted is that (1) Congress considered that it was in the national interest that a lot of internet infrastructure ("tubes") be built by private industry; (2) These "tubes" were going to carry infringing copyrighted content, and there was little the "tube-industry" could do about it without mass infringement of commonly-understood customer rights.

Anyway, that's what the law regarding ISPs is today, as this non-lawyer understands it after more thought and research than 99% of citizens have put into the matter.

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