Dispatches From the Moderate Left

Wednesday, November 09, 2005

Book Review: Promises to Keep

A little while ago I posted on an idea I had while I was researching an essay on copyright. My basic feeling was that copyright laws were going to become increasingly impossible to enforce as internet technologies become more mature and social norms supporting the laws erode. In the absence of excludability, entertainment products become pure public goods which can only be effectively provided by the government. I proposed to compensate artists out of general tax revenue based on the popularity of their downloaded songs. I also thought this might be a semi-original idea which I could use to conclude my essay, after examining alternative proposals. But, of course, after a little more research I've found out that people much smarter than me had done much more research into the subject and come up with very serious proposals for replacing copyright with government funding and one of those people was William Fisher who wrote this book to argue his case.

His idea is more refined than mine (it also borrows very heavily from a guy Netanel who wrote a paper on this at the time Fisher was writing his book). To try and minimise political interference and equity issues, he proposed that payment to copyright holders come from a levy, not general tax revenue. This levy would be imposed on goods which benefit from digital media - mp3 players, digital set top boxes, computers, broadband internet - and people wouldn't mind this levy too much because purchasing these goods give them access to unlimited and free online music, TV shows and movies (copyright holders who agree to the levy system would not be able to enforce copyright online). He estimated that if 20% of revenue was lost to online file sharing then the levy would need to be about 10%, while Netanel estimated it at an average of 4% (Netanel had a varying formula for products and a wider base which included things like computers and all internet access which Fisher didn't). Obviously this figure would rise as more and more people switched to P2P to get their entertainment.

The unlimited and free part is really attractive, but in the end I decided to oppose Fisher's proposal in my essay, for two reasons:
  • I mentioned my initial idea to my lecturer and she then said she had this really good book on that - this one. To make it look a little less like I plagairised Fisher and copied the book I had to try and take an opposing position. I wasn't going to get many marks without some evidence of original thought.
  • On further reflection, this proposal really, really radically changes a lot of things and I'm not entirely convinced that copyright either must or should be ditched in response to the challenge of the Internet.

To explain why this might not be such a good idea, I'll explain Fisher's proposal in more deatil. Both he and Netanel acknowledge that a simple download count is a poor measure of popularity. Being free, this system is rampantly open to 'gaming' - copyright holders programming bots to download unlimited tracks and NGOs and political parties putting up fake tracks and getting their supporters to download them as a fundraising mechanism. That undermines the whole point of the levy system which is meant to provide funding for the creation of entertainment.

Also, a simple count of downloads doesn't really track people's tastes when you're talking about something that's free. When you have to pay for music you engage in some searching before buying, whether it be radio, listening at a friends place/store, reading reviews or trusting a band's reputation. But when the music is free the "purchase" is the search. Thus people end up downloading a buch of random songs they never listen too (50% of all tracks downloaded from Napster were never listened to in full and 10% were never listened to at all). So a download count is a really poor valuation mechanism. Thus, both Netanel and Fisher propose to track popularity by measuring how often a song is played. To make the whole thing managable they propose to do this via a sampling system which is large enough to be statistically significant. It seems a little artifical, but it's probably workable.

The problem comes when you think how fundamentally this alters the entire funding basis for entertainment. Currently if you buy an album or DVD it's a once off payment to the copyright holder and they get no revenue from repeated listens. But now, funding isn't based on what people are currently buying it's what they're currently watching or listening too. The entire back catalogue of creative works suddenly gets an enormous funding boost and the percentage of revenue flowing to new works plummets. That's a big enough problem if the entire point of this sort of system is to encourage the creation of new works, but it gets even worse when you think about what a levy system does. The levy system is not a market by which the total payment pool is determined by how many popular new works are released and sold in a year (the vast majority of payments currently go to new works, so that's a good rule of thumb). The size of levy payments is determined by a government body based on an assessment of how much revenue companies are losing to free online media and how much money is needed to sustain a viable creative industry. But the revenue doesn't change if companies don't release any new songs. So there's almost no incentive to release new songs or movies.

The obvious "solution" is to link the size of the payment to the number of new works. But then companies just release thousands of crappy products. And so then the department decides that it will only pay more for X amount of new works, and so the companies release X dodgy cheap products. And so the department says "works have to be this good before we'll pay you money" and then the whole system breaks down becuase you no longer have an independent creative content industry you have the government directly funding all artistic products which are made in the community. And then what do you get? Say it with me people... censorship. Political influence. Stifling of minority views. G rated product. Military friendly movies. Easy listening pap. And yes, of course, we get all this now, but at least there's the opportunity, which is fairly regularly taken, for media independent of the big companies to break the mould. That sector would die.

So wither the future of copyright then? I dunno, but I think it's going to be messy and I don't think it's going to be the potential utopia that Fisher describes in this book. I think we're going to see a proliferation of DRM (digital rights management) controls which may be broken by 1% of users but will effectively control the casual user. I think we'll see ever stronger DMCA-type protection which criminalises breaking these protection systems. I think we'll see more suing of individual P2P users because, despite what people like the EFF say this actually works (Pew is the source for this - P2P use went from 33% of internet users in 2002 to 14% after the first big round in 2003-2004 and even though things have been quiet since then it's only back up to 18-22%). I think anyone who tries to make money off P2P software will be sued and shut down like the parasies they are. I think P2P software like Bittorrent will be found non-infringing and so companies will complain to governments and make it illegal. And goodness knows what will happen if Google merges its normal and desktop search engines (letting individuals flag files on the hard drive as internet searchable), or Microsoft removes the dividing line between Internet Explorer and normal Explorer (letting people share files over the net directly). If something as mainstream as this happens, technological and legal controls will likely get even more draconian.

Believe it or not I'm not convinced that that would be a bad thing. I wrote in my essay that fair use (personal hard copy copying, format shifting etc.) should be mandated by law and that DRM technologies shouldn't control this. Unfortunately I know that isn't going to happen, though I really think it should. The real choice is going to be this - do we pay for media and put up with some DRM controls or do we not pay for media and have a crippled creative content industry reliant on government handouts, wealthy patronage and which only the very most successful can make a viable living from (this latter will become the only viable option as more and more of the current generation grows up and the mainstream simply stops paying for media. The half way house where young, internet-connected people pay for a little bit and the oldies/non-internet savvy pay the lion share won't continue). I think the former is probably preferable.


  • Sorry for the brief comment on such a substantial post (which I really enjoyed, incidentally!), but I think there's a flaw in the early stages of your logic.

    You claim that copyright is becoming impossible to police in a digital age. On the contrary, in a world where everything is shared, it is increasingly easy for a studio to tell who is plagiarising or illegally distributing its content.

    Furthermore, even if people are getting songs/movies/etc illegally, there is little evidence that their conduct is hurting the industry. Additionally, studios have opened up new revenue streams and been exposed to new competition by the technology that MP3s and the like have unleashed. The whole society seems to have been quite benefited by the past few years' little foray into petty piracy.

    By Blogger Splat Guy, at 11:14 PM  

  • Thanks for the comment, I'll post a fuller reply on this in a little bit because it's obviously a subject that's been taking up a lot of my thinking recently. It's intresting that you naturally fall, roughly, into the "digital lockup" camp which is where academic libertarians are at.

    By Blogger Jeremy, at 10:28 AM  

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