Upcoming Copyright Battles

The Next Generation of Copyright Battles

There’s an old saying that the only constant is change. We naturally remember this whenever we look back over a decade or two and see just how much the landscape has been altered. But it may be even more more valuable to look ahead and remember that whenever the world changes – it changes again.

In 1994, digital music sales were under $200 million. As we hurtle closer to 2014, that number should soon surpass $4 billion at the current rate of growth. New markets tend to grow like snowballs under the right conditions, just as the old ones melt away underneath us.

Looking at the next 2 years – not to mention the next 10 – we’re sure to see a much different music industry than the one we’re familiar with today.

Nearly all the signs point to greater regulation and enforcement concerning piracy and the theft of intellectual property in the future, and this could have a significant impact on the lives of hundreds of thousands of professionals, and millions of fans.

Rebuilding After the “Great Leveling”

Image Courtesy of Flickr user MikeBlogs

Image Courtesy of Flickr user MikeBlogs

The internet was supposed to be the great leveler and in some ways, that proved to be true. At the risk of sounding cynical, the data suggests that the web helped to “level” much of musicians’ ability to make money, and not just at the top. Overall, it’s been established that music sales declined by as much as 64% at the same time that illegal file-sharing rose exponentially.

Of course, there are some artists and labels who are doing better today than they were 10 years ago. I love interviewing these outliers to figure out what we can learn from them, but the truth is that their increases in income are often thanks to plain old career growth that they would have been likely to experience in any environment. Although it would only be speculation, it’s tempting to argue that their successes could often have been even greater in a different IP or economic climate.

When we zoom out from these anecdotes, it seems clear that musicians have suffered on the whole. According to the Federal Bureau of Labor Statistics, the number of musicians working in the US decreased by at least 10% between 2000 and 2008, and then by another 10% between 2008 and 2010.

There are a few ways to look at the data, and some analysts peg these drop-offs at a rate closer to 20% each, or even as much as 45% altogether. But no matter which way you slice it, the decrease in the number of working musicians appears to closely parallel both the rise in illegal file-sharing and the decline of overall music sales.

On the other side of the debate, it’s easy to find tech advocates who argue that musicians and other creatives have largely benefited from an unfettered web. While we’ve heard plenty of great anecdotes and compelling rhetoric, as of press time we still could not find any hard data that would back this up as a verifiable trend.

If you have any data that would help to make this case on a larger scale, please don’t hesitate to share it with us. If such evidence does exist, we’d gladly publish it in a future issue.

But whatever side of the debate you prefer, it seems that the lawmakers are looking at the numbers and the trend in the near future will continue to be toward greater enforcement of IP rights.

Even popular websites that have been criticized as hostile to intellectual property have begun to change their tune when infringement affects them directly. In recent months, both YouTube and TheOatmeal have essentially written cease and desist letters to websites that leech their material – an ironic reversal for either outlet.

New Trends

We’ve all heard about the defeat of SOPA and PIPA, and so far no new legislation has risen up to firmly take their place.

You may have also heard of a controversial new bill called CISPA, but contrary to blogger-rhetoric, it has absolutely nothing to do with SOPA or PIPA.

The CISPA bill does not address copyright, file-sharing or intellectual property. If you’re interested in online security or privacy, it’s worth reading up on. But for the purposes of this conversation, it’s irrelevant.

What is interesting is that in the past two months, other nations have begun adopting the very strategies that were outlined by SOPA and PIPA and have demonstrated where America’s hands are tied without them.

This May, both the United Kingdom and the Netherlands required that all internet service providers block access to the notorious file-sharing site The Pirate Bay, which earns its revenue by selling advertisements on the traffic generated by users who seek illegal downloads.

The site’s founders have cast this action as “censorship”, but since all the material that is shared illegally on the Pirate Bay is still available through legal channels, it’s unclear why they decided that this term would be a meaningful description for what’s happening.

In any event, the Pirate Bay website is still operational despite a major 2009 conviction in the Swedish courts. But unlike the UK and the Netherlands, the US does not have the power to require that ISPs block it.

Ironically, the US government does have the power to take down domestically registered “.com” and “.org” sites (just like it did with Megaupload), but to block a foreign offender, we’d need a bill similar to the recently “postponed” SOPA or PIPA acts.

Many nations have begun to step up their enforcement on the end-user side as well. Britain has just joined New Zealand and France in adopting a “3 strikes” policy that requires ISPs to warn, and then slow down or terminate their users’ internet access if they are found to be infringing copyrights.

Meanwhile, the US quietly instituted an even more lenient “6 strikes” policy which technically doesn’t even go as far as including account suspension as a deterrent.

Other countries have adopted significantly more aggressive policies.

In 2009, the Swedes began levying small fines against individual file-sharers. In 2010 the Japanese government began to take penalties like these even further. Now as of this June, it was decided that illegal downloading in Japan will be punishable by up to two years in prison or fines of up to $25,000.

The penalties that were already in place for illegal uploads are even more harsh. They can include up to 10 years in prison or $150,000 in fines.

Despite how radical this may seem next to the lax regulatory environment in the states, the bill enjoyed wide support and passed through the Upper House of the Japanese legislature in a landslide vote of 221 to 12.

The Upcoming Battles

It’s likely that the SOPA/PIPA debate from early this year was just a dress rehearsal for a new round of discussion, legislation, and even litigation surrounding copyright and intellectual property.

There’s a good chance that we’ll see something like a revised version of SOPA soon. Chris Dodd of the MPAA has even gone on record recently talking of reviving that legislation or something like it.

In addition to all of this, there was a ticking time bomb planted in the Copyright Act of 1976, and it’s about to go off. In just 6 months, prepare for a wave of new litigation as the copyrights to albums recorded in 1978 become the first to revert back to their original authors thanks to the Act’s 35-year “termination clause.”

One of the reasons we can expect litigation is that the original wording of the law does not define exactly who gets to be classified as an “author.”

It goes without saying that the featured artists and producers who were responsible for creating the music will be able to reclaim or renegotiate their copyright claims. But others — including labels, ancillary performers, and in some cases, engineers, may want a piece of the pie as well. Even if their chances of being considered “authors” are slim, it’s almost certain that some of them will test the waters.

It’s also reasonable to say that all this talk about IP law may set the stage for new sweeping legislation in coming years. Aside from some minor tweaks in 1998, we have not had a comprehensive overhaul of the system since 1976.

Many of the provisions in the Act of 1976 are outdated or address the concerns of another era. Public opinion has changed as well, and even if some IP rights are extended even further, it’s almost certain that there will be a push for expansion of public domain and greater turnover of “orphaned works.”

Our best guess is that the legislation will be re-tooled by 2019 at the very latest, when the copyright extensions granted in 1998 begin to expire. But it’s also possible that this could happen sooner as other debates gain steam.

Earlier this month, we live-tweeted the congressional “Future of Audio” panel and one of hottest topics was the fact that traditional radio broadcasters and digital streaming services pay different royalty rates.

While it’s unlikely that the rates for digital streaming will come down, it’s quite possible that the rate for radio royalties may go up, and even include compulsory performance royalties for the first time.

As much as I love independent radio, this is probably a good idea, and a fair one too. Comments during the panel suggest that in order to concede this increase without a fight, traditional broadcasters will insist that working AM/FM chips be included in all mobile phones going forward.

While this can seem like a frivolous and self-serving addition at first glance, on closer inspection, it turns out to be a damn good idea from a consumer standpoint. Even the mere activation of the FM chips that already lie dormant in many of our phones would dramatically increase the availability of free and legal music without biting into our data usage, as well as provide reliable emergency communication. As soon as I realized that my iPhone didn’t have an active FM chip and understood just what I was missing, I began looking at it like it was broken.

But no matter what’s decided, the laws and norms in this arena will begin to change – just as they are beginning to change throughout the entire music and audio industry.

We may be allowing more control and enforcement into the wild west of the world wide web, but if the IP advocates are right, we’ll be inviting more new and meaningful jobs as well.

This entry was posted in Featured Stories, Industry Trends, July 2012. Bookmark the permalink. Both comments and trackbacks are currently closed.
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