Raiding the future of the Internet

February 17, 2012

Think right now about your home bookshelf. If yours looks like mine, it contains odds and ends, comic books you’ve saved for years, books mailed to you or bought on a street corner, your own collection of dog-eared titles, some old yearbooks. Now think about the privacy of your own home and the few legal ways in which that privacy can be violated: an emergency response, a crime, a public health crisis. Imagine if once a year you had to open your door to a copyright agent who could scan your library for content that you have not paid for, add up your violations, and send you a bill. Imagine if the agent came by once a week, or even once a day. Imagine that the agent found a picture of the nerdy kid from high school in your yearbook and explained that that kid copyrighted his likeness, so you’ll have to either pay up or destroy his high school photo.

This is the world that content companies want to create. Legislation they have proposed in the U.S. and around the world — SOPA, PIPA and ACTA — would open the Internet’s house to any agent.

Artists and big companies often warn us of the opposite of this problem — the idea that the Internet is a lawless space where content is pirated, stolen and shared recklessly, costing them billions of dollars in lost revenue and shrinking the incentives for artists to produce new works. After all, if they can’t be paid fairly for them, why bother?

But not being able to monetize media doesn’t mean you have to obsessively limit it. As the content companies see it, the bookshelf described above is the data stream heading into your house, and they, specifically those who create music and video, are demanding that governments consent, more or less, to let them tap the wires. SOPA and PIPA are currently on hold, but ACTA, whose provisions are almost as enveloping, is taking root all over Europe, though not without protests.

Amazingly, governments around the world, including the Obama administration, resisted making ACTA’s text public. American politicians said the provisions the U.S. was agreeing to enforce were “national security secrets.” Ironic, then, that the Internet should be open for inspection, but the inspectors’ marching orders shouldn’t.

When the text was eventually leaked, reportedly by EU officials, the measures didn’t quite allow copyright agents to search your house, but they weren’t too far off. One particularly draconian provision allows for border searches of iPods and other electronic devices — not for terrorism prevention, but for theft of intellectual property. I suppose this means that if you were planning on partying to Danger Mouse’s The Grey Album or Girl Talk’s All Day on your Cancun vacation, you had better burn it to a CD and stuff it into your underwear, lest the Border Patrol decide to take your Genius Mode for a whirl.

According to a recent study on SOPA, 52 percent of Americans support penalties of some sort for illegal downloading, but only 36 percent support the provisions for enforcing copyright protection that SOPA allowed. If there were clearer proof that Americans, and indeed people around the world, could be convinced to pay for content if the system were fair, friendly and flexible, Apple or Amazon would have already created it. Which, actually, maybe they have.

Among the serious issues lawmakers and content providers should tackle is fair use. The copyright enforcement systems proposed in recent laws nearly make it a crime even to listen to music that hasn’t been paid for. One thing the music business must do is stop squeezing startups that become successful. As Spotify has accelerated its growth, its royalty payments to the recording industry have, by one measure, eclipsed those of terrestrial radio. If Neil Young is right and piracy is the new radio, music labels should be hoisting the Jolly Roger, not tearing it down.

If the music industry would focus its attention on creating a clearinghouse that allowed for affordable music sharing and discovery through digital tools, it could still save itself. The book publishing industry, which had to wait for the invention of e-ink to get serious about digital, is arguably further along. It at least has begun supporting limited “lending” of books and has even enabled social bookmarking and other similar features. At the same time, the book industry has won some battles against Amazon, regaining its right to set the price of its content in Amazon’s Kindle store.

During a recent panel discussion on copyright, Reddit founder Alexis Ohanian talked about the need for the content industry’s scarcity-based pricing model to be superseded by something more attuned to our digital times — something that makes sense not just for businesses but for artists and consumers too. The problem is, the models the industry has proposed far too often resemble the type of intrusive interrogations by state agents one would expect to find in a totalitarian state rather than an open society.

Content creators and artists openly worry about the power of the Internet to rob them of compensation — which, for many, is their incentive to keep creating. What they ought to worry about are the incentives their proposed laws are creating — incentives not only for artists but also for consumers and distribution networks — to abandon altogether their high-walled, authoritarian compensation and copyright enforcement models. Where one castle crumbles, a thousand wildflowers may bloom.

PHOTO: Protesters opposed to anti-piracy legislation gather to demonstrate against the Stop Online Piracy Act (SOPA) being considered by Congress, at City Hall in San Francisco, January 18, 2012. REUTERS/Robert Galbraith

11 comments

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[...] Raiding the future of the Internet As the content companies see it, the bookshelf described above is the data stream heading into your house, and they, specifically those who create music and video, are demanding that governments consent, more or less, to let them tap the wires. Read more on Reuters Blogs (blog) [...]

The core fallacy the anti-piracy lobby is built upon is the impossible assertion that every illegal download is full-prices sale that is lost. That’s how they assemble the ficticious “We lose X dollars a year to piracy” claims. They should be forced to prove what percentage of pirated content represents a lost sale; as it is they are just making up numbers to suit their cause. They might as well just say they are losing trillions a year… if you’re just making things up, you might as well go big.

The reality is that only a small portion of illegal downloads are actually a lost sale; that’s why they movie and music sales did pretty well in 2011 and look fine for 2012. Most people downloading content don’t have the means and/or the inclination to purchase the content they download, so they aren’t costing anyone anything.

The movie industry has been screaming bloody murder since betamax made pirating home movies possible. The music industry has been whining about the end since people starting dubbing via casette tape. Both are doing well. The only reason the music industry got beat to a pulp a few years ago is that they were too stupid to jump on the digital bandwagon and tried to fight it instead.

It’s the future train. Hop on or get run over.

Posted by spall78 | Report as abusive

[...] Raiding the future of the Internet | Paul Smalera. Share this:TwitterFacebookLike this:LikeBe the first to like this post. [...]

[...] su Internet ho trovato un interessante post di Reuters che spiega, spero, una volta per tutte, come funziona il copyright sul web e tutte le recenti leggi [...]

@Spall78:
Entirely agree. Add to this the Megauploads.com/Dotcom fiasco. I would like to see some honest accounting on how the industry measures the so called millions in lost revenue. Oh, and the latest on the Dotcom case is that they are now saying that Megauploads even illegally downloaded and distributed copyrighted material from Youtube! (No doubt using a certain Firefox plugin).

As if redistributing what can be watched for free on Youtube (most of which is uploaded illegally anyway) constitutes a lost sale! I say that we vote with our wallets and boycott the music/movie industry. It’d being the moguls to their knees in a very short time. Meanwhile. artists would soon find they are better off without those douche bags. Enough is enough.

Posted by tora201 | Report as abusive

Excellent essay.

Capitalism is a very powerful force of nature. Capitalism is as old as mankind. The accumulation of surplus human production into stores of surplus grain, or silver, or cattle, and the lending of that capital to a relative or other person, at interest, is a calculated human behavior older than the pyramids of Egypt. For good or bad, capitalism is a productive force, characterized by efficiency.

Copyrights and patents are not part of natural capitalism, but are rather antithetical to capitalism. Copyrights and patents are monopolies granted by governments to favored parties. This is the opposite of capitalism.

The popular misconception is that a people will not be productive without patents and copyright monopolies. The truth is that humans are by nature very industrious naturally.

Look at China, which has become so productive without patent and copyright monopolies. Look at all the workers in your life that are getting up early, to work hard at building houses, or running railroads, or growing crops, or cooking meals. They are all working extremely hard without any enticement of copyrights or patent rights.

Even artists such as musicians or painters or sculptors are driven by their own internal creative forces. Most of them would continue to work hard no matter what.

Large media corporations often produce lousy art, whereas a lone artist may create good things. Where the large media corporations excel, like the patent troll companies, is in the arcane arts of greed and lobbying.

Posted by AdamSmith | Report as abusive

How about this suggestion : If you’re going to spend intellectual effort on justifying theft of digital assets, why not spend equal time on justifying theft of food as well — wouldn’t physical nourishment for poor people rate morally higher than adolescents and immature adults ranting about their right to steal (sorry … ‘share’) entertainment ?
Maybe I’m wrong.

Posted by tangogo68 | Report as abusive

@tangogo
Theft of digital assets. Hmm..

What about where someone acquires the rights to water, or the air we breathe, and then extracts from us, through the police powers of the judicial system, a daily toll on drinking water or breathing air?

There is a theory or philosophy that says that we humans gain all our ideas not from within ourselves, but rather from the world we see. Like the Beatles learning from Little Richard, who learned from other musicians.

This intellectual property boom, is not unlike the Alaska Gold Rush, where anybody with larceny in their heart just walks in an claims something as their own, even though they did not make it.

Our legal system is allowing anybody that can afford a high-powered law firm to stake a claim to anything, even staking a claim to DNA, or the cells of a natural organism.

“Intellectual property” is a gigantic scam. The wealthy benefit, the courts benefit, the law firms benefit, the politicians in their employ benefit. But the ordinary citizen is harmed immensely by the tolls extracted from them on a daily basis, all in the name of “intellectual property”.

Posted by AdamSmith | Report as abusive

Yet another form of crony capitalism, not capitalism at all. Most of the laws on the books are gaming the system. If only the author and like kinds would fully open their eyes to all the other similar laws.

Posted by JP007 | Report as abusive

The important thing to remember is that the copyright owners in this industry are the distributors of content and not the creators of content. Typically, creative artists are horribly used by publishers, record companies, and movie distributors. Typically, creative artists receive only a small share of the proceeds of their work. The Internet is a “disruptive innovation” which potentially offers a distribution system that requires a much smaller middle-man infrastructure between the creative artist and the publisher, record company, or movie distributor. (Did you know that independently produced movies are distributed by the big studios, because that is the only way to get movies into theaters?)

Posted by Bob9999 | Report as abusive

Correcting the comment above:

The important thing to remember is that the copyright owners in this industry are the distributors of content and not the creators of content. Typically, creative artists are horribly used by publishers, record companies, and movie distributors. Typically, creative artists receive only a small share of the proceeds of their work. The Internet is a “disruptive innovation” which potentially offers a distribution system that requires a much smaller middle-man infrastructure between the creative artist and the audience than what is currently provided by a publisher, record company, or movie distributor. (Did you know that independently produced movies are distributed by the big studios, because that is the only way to get movies into theaters?)

Posted by Bob9999 | Report as abusive

The legislative initiatives in the USA should be a clear bright red flag that the US Government cannot be trusted with technology. They do not understand it. They only understand the bribes they are paid, and little people do not pay bribes. Big ones do. Little people pay taxes. Remember, “taxes are for little people”.

It is time to create a direct encrypted pipeline from major American cities to a locale with uncorrupted Government. From there, connections to the rest of the world could take place. Permitting any processing in the USA means accepting Government takeover. Centralization is the enemy of freedom and creativity.

This is a technical issue that arises above the political (“legal”) ones. The key is to dump everything that is related to “cloud” computing or storage. Once you permit centralization within an unfree State, you permanently lose your technological freedom. Buy and maintain linux systems with strong encryption and subscribe to overseas secure services in a political entity that allows freedom from Government surveillance of your computing.

Posted by txgadfly | Report as abusive

Watching the music industry fight this is highly amusing. They can’t win. I will never pay $20 for a CD. Never. Their business model requires that I do that. The whole industry is on the verge of irrelevance. Artists don’t need them, customers don’t need them. They are easily circumvented middle men (read “leaches”). All you need to create, sell or buy music are a computer and itunes (talent and instruments have been omitted from this list on purpose). Even if you want to have something “professionally recorded”, it’s fairly cheap compared to music label cuts. The only service they provide is that they “know people”. And that will change in time. The future music industry is a very decentralized one.

Notice how music has been the most vocal about piracy. That’s because other industries sill provide services they can charge for without tipping the scales in their favor. You can’t film a movie for as little as you can make a CD. People pay good money for the movie theater “experience”. Downloaded movies don’t look like blu-rays. Studios solve these problems and I am perfectly willing to pay for their services.

So a note to music labels — You, like so many things, have been replaced by the internet. Your services are no longer needed. Good day.

Posted by CapitalismSays | Report as abusive

AdamSmith,you said:
Look at China, which has become so productive without patent and copyright monopolies.

I don’t disagree with your post, but keep in mind that China also moved quickly into the 21st Century by the theft of the West’s patents and copyright monopolies. It stole microelectronics, aeronautics, communications, and missile technology while it hide behind its state run economy.

Posted by Andvari | Report as abusive