Over this past semester, our class has been discussing an area of law (and culture) that is in flux, with many new developments actually taking place during the semester, and many more yet to come. We were left with unanswered questions and no foreseeable solutions. With all these unanswered questions, I decided I would do a little question and answer session with myself ... interview style. So here it goes:
1) Will Congress intervene with new legislation aimed at thwarting p2p networks? Probably not in the immediate future. The failure of the INDUCE Act made it apparent that it will be difficult for the content industry and the electronics industry to reach a compromise. It is possible that Congress may try to pass a bill designed to eliminate "illegal" p2p networks if the Supreme Court does not rule in the content industry's favor in the Grokster decision. However, any potential legislation is not likely to be successful because it will fail to effectively stop p2p file sharing, but will probably have a chilling effect on innovation. I feel that we must find potential solutions that do not obstruct innovation or creativity.
2) Are intellectual property rights really necessary in order to provide incentives? Yes, they are. And I posted about that here. Many scholars have argued for less copyright protection. The content industry has, of course, argued for more. I feel that we do not need to further extend the protection already conferred to copyright owners; instead we should focus on just how much protection is necessary without losing any of the incentives to create. I certainly feel that the Sonny Bono Act has extended copyright terms well beyond the length of time necessary for the requisite incentives. Many copyrighted works are abandoned or unused after only a few years and not allowing them to enter the public domain means these works essentially go to waste.
3) So just how long should copyright terms be? I don't know if there is an ideal answer for that yet, but I do like the Posner/Landes idea of a copyright registry with renewable terms. However, I do not think that the original author, or his/her heirs, should be able to renew the work indefinitely. I think an initial term of 20 years, plus one renewable term of another 20 years is sufficient. Thus, the work enters the public domain after either 20 or 40 years. I recognize that congestion effects are a potential problem with works that become available to the public. But seriously, after 40 years? I can't think of any work from 40 years ago that, if it entered the public domain, would suffer from congestion problems. There is just too much other content out there for people to focus that much attention on one work. Further, I don't think that placing the rights to the work in the hands of the author's heirs (or assignees) will necessarily bring about the most efficient use of the work.
4) So what does the future hold? The use of file sharing networks is going to continue to increase, especially as newer generations get introduced to the instant gratification of downloading free music. Some studies have reported that the introduction of p2p networks has increased music consumption, and contrary to what the content industry would like you to believe, has not hurt music sales. While music consumption may be up, there is no question that there are people out there who just aren’t buying CDs, but are downloading a significant amount of "pirated" music. This is hurting the content industry and its only going to get worse. Inevitably, the content industry at some point will have to absorb the blow and will be forced to scale back somewhere, and my guess is that it will not be in executive compensation. Instead, it will hurt content, as less money will be invested in new artists, and much of the money going to new artist development will be poured into those artists that are more “main stream,” and more likely to have higher record sales.
5) Is there a solution in sight? As our class has seen this semester, there is no quick and simple solution to the fine mess we’re in. It's not going to happen. You know it is bad when even Orrin Hatch cannot solve the problem. The Grokster decision could be, at the very least, a moral victory for the content industry if decided in their favor; but how much of an impact will it really have? In reality, p2p networks can still exist without any actual organization running it. With p2p protocols, the networks can still exist in a virtual sense. These type of networks are difficult to police or regulate, and once one shuts down another can go up immediately, and we’re back to square one.
6) What about vertical integration? In class we discussed the possiblity of the the ISPs becoming immensely powerful corporations, while the content industry dwindles to such a degree that eventually the ISPs buy them out. With the ISPs in control of the internet service and the content, they can effectively shut down file sharing networks and bring back the content. However, I don't foresee this as a possibility. With the content industry having the resources and capital that it currently has, I think it is much more likely that the content industry, if desperate, will band together and pay the ISPs to eliminate the p2p networks before such a "buy-out" can occur.
7) What about criminal sanctions? Criminal sanctions are one solution that has a real possibility of stopping illegal file sharing. Then again, we could also effectively deter most people from speeding with criminal sanctions. Is this something we want? I don't think society is ready to label file sharers as "criminals" (an important point to consider before instituting criminal sanctions). Additionally, I don't think that locking up kids for sharing their music is going to have any beneficial result. There is also the difficulty of actually policing this sort of thing: will there be enough enforcement to effectively deter? And do we want to spend up law enforcement resources in this area? Some like to compare it to stealing a CD out of a music store, but I still feel a significant distinction can be made based on the fact that, with file sharing, no one is actually being deprived of personal property.
8) So what should the content industry do now? Lower their prices. Don’t fight the new technology, work with it. The content industry should try to take advantage of the immense popularity of mp3 players, along with the capability of storing digital music on hard drives. And they can do this by lowering their prices. Not very many people (especially college-aged people or younger) are willing to pay 99 cents for a song from a “legal” network like ITunes when they can get the same song for free from Kazaa. However, I think many of those same people would be willing to pay say 25 cents for a song if they’re able to get the added benefits of quality, convenience, and legality. Likewise, consumers may be more willing to buy CDs if they are sold at a reduced price, i.e. $5.00. If prices were to be lowered, the industry of course loses the profit that could have been made from those consumers who are willing to pay the current prices. However, the consumers willing to pay those amounts will continue to decrease, and it could cause the industry to collapse. So why not take the hit now, but potentially save the industry’s future? Granted, with price reductions, the industry will have change some of its practices. They will have to cut back in certain areas, perhaps promotions, and possibly even salaries (although they may be able to save some money by distributing the majority of their music digitally). But is anyone -- other than the industry itself -- opposed to this? Seriously, not every rapper should be able to afford their own record label. I -- for one -- don’t think the industry making less profit will be such a bad thing. The demand for content will always be there, and the industry will find a way to meet that demand, even if it means slightly less money for those involved. Or at least that is how it should be.
In the end, we have learned that their is no simple solution. No one really knows where this area of law is headed. However, reaching this anti-climatic result has been a thoroughly enjoyable journey for me.