It seems as if no one in our class likes the current copyright regime. What I find most interesting, however, is what we identify as its problem. Some think the problem is that the regime is too restrictive, and concentrates too much power to a few large corporations. Others think the problem is that the current regime is so easily, and repeatedly infringed upon, with little consequence that it's viability is in question. I tend to agree more with the latter than the former. I will focus exclusively on the relationship between digital media copyrights (specifically music and movies) and P2P, the area we spent the most time on and also the most interesting. I may post more, but this post will serve as my "final post" wherein I identify the problems I see with the current regime (including their tactics), and offer a practical solution on how to remedy them.
The biggest problem I see with the current copyright regime is that it is so easily and repeatedly violated that I fear the content providers will seek to regulate emerging technologies in some way. And succeed. We may feel smug in our "knowledge" that the "horse is out of the barn," but content providers don't appear to uniformly hold this view. Also, history shows the content industry isn't shy when it comes to prosecuting and regulating enabling technologies (Betamax, Napster, Grokster, INDUCE, etc.).
My solution for content providers is three-pronged:
- Selectively sue infringers
- Tell your story more effectively
- Cut prices
I. Selectively Sue Infringers
Even at this late date, many people do not think of downloading content for personal use as "stealing." This doesn't much matter so long as they know it's illegal and will be punished for it. A recent Harris Poll of 2,306 adults revealed some disturbing results:
Fully three in four adult Americans (75%) agree that "downloading and then selling the music is piracy and should be prohibited, downloading for personal use is an innocent act and should not be prohibited."
This is consistent with a Harris Interactive survey of teens released in October 2003 which showed that roughly three in four teens feel that downloading music files without paying (74%) and letting others download files from them (78%) should be legal.
Nearly two of three adult Americans (64%) agree that musicians and recording companies should get the full financial benefit of their work. (all emph. added)
Certainly I can't be the only one who finds it strange that 75% of respondents would simultaneously believe that "downloading for
personal use is an innocent act and should not be prohibited" and, that "musicians and recording companies should
get the full financial benefit of their work." If we're to assume - correctly, I might add - that the extent of the financial benefit musicians and record companies receive is almost exclusively a function of the legal rights afforded them, then this these two beliefs are contradictory. Musicians and record labels I suspect that most people don't view copyright law this way.
The majority also agreed w/ the first part of the statement that, "downloading and then selling the music is piracy and should be prohibited." I think most people feel that if someone were to do this, they would receive the financial benefits that rightfully belong to the musician and record labels, thus depriving the rightful parties of that financial benefit. I think those same people feel that when they are "downloading for personal use[,]" they are committing an innocent act because they are not receiving any financial benefit.
Content providers should file lawsuits against the largest individual infringers on the sharing (supply) side. Fellow classmate, Tommy O'Reardon, has a similar proposal. He seems to have been met with more skepticism, resulting in a post titled, "Why won't anybody listen to me?" (I'm listening Tommy!). Lawsuits would serve two purposes: (1) Reduce the number of large file-sharers, thus, reducing the number of copyrighted files on the network and (2) Educate the public that downloading or uploading copyrighted content, even for personal use, is a crime.
In, "Reducing Digital Copyright Infringement Without Restricting Innovation," author Mark Lemley states:
While the number of users of p2p networks such as Morpheus and (before the injunction) Napster is massive, the overwhelming majority of those users engage only in downloading. Indeed, by one estimate, 3% of the users of a p2p network upload 97% of the files on that network. These high-volume uploaders also seem to be the users most likely engaged in uploading illegal content, rather than providing access to legal files. They are easy to identify, both because they will repeatedly appear in content searches and because many run so-called "supernodes" that facilitate fast downloads. (emph. added)
While the exact effect is unknown, a likely drop in file sharing would occur. The only question is how substantial that drop would be. The content providers need not sue every infringer - a "solution" that many have rightfully criticized as impractical - to substantially reduce infringement. The secondary effect would be to scare current uploaders to stop, as individuals benefit little from uploading.
George Mason University Economist, Tyler Cowens, argues that, the lawsuits aren't done to scare off downloaders (a point I disagree with, if not in intent, at least in effect), but rather they are:
about spreading the idea that downloading is wrong and illegal... think of the lawsuits as one way to buy space in the newspaper, but without paying advertising rates.
I see the music companies as trying to hold back a new commercial norm. Specifically, the music companies are trying to maintain the old norm that you should always pay for music.
Two years ago most [American] downloaders did not know that their activities were illegal. Few uploaders felt guilty about making large numbers of songs available for free on the Internet. It was viewed as akin to lending your CDs out to your friends, except that the "friends" here were both anonymous and large in number. "Art should be free," right?
The music industry knows that the long run will bring a network of free music. It knows that free music may have illegal status, a "grey" status, white status (recorded from the radio), or perhaps be pirate (from abroad) but not illegal in the actionable sense. But there will be two networks, a pay network and a free network.
The music companies - present and future suppliers of the pay network - do not wish to face a ten year period where everyone is used to getting music for free. They do not want an entire generation to grow up thinking of music as a free commodity. They do not want hackers and illegal downloaders to become established as folk heroes.
Once commercial norms become established, they are difficult to dislodge. We are all used to breathing air for free. Imagine the response if suddenly we had to pay for air as we now pay for ice cream cones. Maybe the air would have a better quality and the price would be very low. Still I predict there would be a public outcry.... They cannot live with a norm that music should be free. (emph. added)
This ties back in to that other horse, still in the barn. This is the single most important tactic that content providers must implement. The MPAA is has announced that it plans to sue infringers, a decision partly based on what they saw the music industry go through. The MPAA believes that the RIAA acted too slowly in filing civil actions against infringers, resulting in unnecessary losses. They also believe that the the music industry's recent uptick is in some part due to the RIAA's renewed vigor in pressing ahead with lawsuits.
Almost every foreseeable consequence from filing suits favors the content providers. There is very little downside to this tactic because in reality, consumers have little else to choose from.
II. Tell Your Story More Effectively
America's media companies are the richest, most influential, and most effective in the world. To gaze across the global expanse is to witness American cultural hegemony, in large part shaped by these media companies. Which is why I am always surprised at how inept and ineffective their anti-piracy advertising campaigns always turn out. Content providers should leverage their natural institutional skillset, emphasizing storytelling.
Show real individuals - no millionaire rap stars, please - that were really harmed in some way and tie that back to downloaders. At the same time, dramatize a real life lawsuit that will be prosecuted without mercy to show what can happen to violators. Make an example out of a particularly egregious violator and explain that anyone could be next. And then prove it by dramatizing a real court case against an "average Joe" or "average Jane."
III. Cut Your Prices
Content providers will have to accept the fact that they can not completely stop P2P infringement. In turn, they can no longer depend on their traditional distribution channels to provide the revenue streams they once did. This does not mean, however, that content industries are headed towards inevitable decline, but it does mean that they will have to compete with P2P in the short term until they can innovate new channels and/or mediums. The DVD is a great example of this innovation. The new format / medium enabled content providers to generate nearly pure profit via the reissuing of hit films from their catalog; films that were producing little or no revenue prior. The same Harris Poll cited above also shows:
[A]lmost... 70% say, "If the price of CDs was a lot lower, there would be a lot less downloading of music off the Internet."
The hope is that lawsuits, coupled with a "good cop / bad cop" media blitz should make illegal file sharing much less attractive. However, most of the hesitation towards file sharing should be as a result of fear of punishment rather than some moral epiphany from the ad blitz. I have no delusions that the 75% of the population who think that "downloading for personal use is an innocent act and should not be prohibited" will now view their actions as culpable of deserving of prohibition. When consumers have only two choices, as they do here, the attractiveness of either option is a function of the other. If content provider, for example, were to implement a five fold increase in prices (e.g. $55 movie, $90 CD) at the same time, file downloading would appear much more attractive, especially to the large segment of the population that was effectively shut out from the legal market.
For the short-term (1-4 years), content providers should cut their prices 15-30% across the board. This will have several effects:
- Welcome Back! Lower prices would soften the financial blow to those consumers that are being (re)-incorporated back into the legal market - helping to ease them (back) into the habit of paying for content.
- It makes P2P less appealing, legal content more appealing: See above
- It serves as a gesture of goodwill. We punish those who cross us, reward those that are loyal.
- Keeps "grudge factor" down. There is a small segment of the population that possesses the technical skill and resources necessary to create very good P2P software. Let's say one of these people were to develop an alternate program that closed all the loopholes that content providers had been currently using to identify infringers. This would be an expensive setback until alternate means could be found. In the meantime, content providers would have to fight the spread of this technology, losing money all the while. The hope is to reduce the number of people who would do this - out of spite, or a sense of being wronged - from the subset of people that are capable of doing this. Equally important, it serves as a hedge against wide adoption from the consumer base, so that even if a new P2P technology were to come out, the hope is that they will be used to paying what they believe is a fair price for their content.
After that, well, there should be some other innovation that makes these technology specific problems moot.