The Trichordist

Musicians POV: Spotify Isn’t Good for You (Part 3 of 5) –

This is Part 3 of a 5 part post–read Part 1 here and Part 2 here

How to Enforce Windowing

Spotify is actually very similar to the old record club model—the labels owned the company and they made significant revenues on hit product sold through the record club at a reduced royalty rate for both artist royalties and a ¾ of ¾ royalty rate for mechanical royalties.

It was common for record companies to agree to give a 90 day hold back on record club sales, meaning 90 days from the U.S. release, and in some cases that date could be pushed out as far as 12 months, or in some cases a “reasonable time”.

There really is very little difference between the functional issue that gave rise to the record club holdback. The record company wanted to sell the artist’s recordings in a way that profited the record company more but paid the artist less, and the way the artist protected themselves from this arbitrage was to create a window where the record company could not cannibalize front line sales.

An artist could also ask for downside protection on streaming services that would require a minimum payment of a penny rate to the artist. This is in part because it is very difficult to get record companies to give the artist the digital service accountings on audit, so at least if there were a per-play minimum, the artist could essentially handle the streaming service in a simple desktop audit of penny rate multiplied by number of reported streams (assuming the artist can even extract that information).

This is, to be clear, an issue for artists negotiating with a label or a distributor, less so for an artist with a digital aggregator.

For example, an artist could ask for a ad-supported service holdback of 12 months from the U.S. release date, and a per play royalty of a minimum of 1¢, going to 2¢ or more if the holdback was violated. This would mean that if the label violated the holdback and allowed the ad-supported service to stream the title during the 12 month holdback, then it would cost the label a penalty.

This of course is something that will only be discovered on audit, so be sure to draft your contracts so that your business manager or accountant can call up the label after receiving an incorrect statement and ask for an adjustment based on unequivocal contract language. (And good luck with that.)

____________________________

Next: Part 4

See: Part 1, Part 2,

April 25, 2012April 26, 2012 by thetrichordist

Musicians POV: Spotify Isn’t Good for You (Part 2 of 5)

This is Part 2 of a 5 part post on Spotify–read Part 1 here

A Billion is Cool

To be clear—no one artist would own any of the shares, but by signing up for Spotify they would have a right to the proceeds from the sale of these shares based on being a participating artist. This is because each artist—particularly new artists—on an ownership basis is as important as any other artist. The artist stockholders would then have a say about royalty rates based on their board seat, a minority voice to be sure, but a voice nonetheless. A seat, by the way, that should be held by an artist, not a manager or lawyer as the “artist representative” but a bona fide artist.

Here’s an example:

Daniel Ek transfers a number of shares equal to 18% of the outstanding shares of the company into an escrow account. The sole purpose of the escrow account is to sell the shares on a liquidity event. When the liquidity even occurs, the proceeds of the sale are received by the escrow agent (such as an unrelated bank) and are distributed to each artist whose tracks were continuously available on Spotify after the date the escrow was created through the date of sale. If artists removed their tracks during the period, they’d lose their right to the escrow funds. All these payments would be made to the artists directly but the artists could not force a sale prior to the liquidity event. (That would likely be too complex from a securities law point of view.)

So if 18% is worth $720,000,000 and the sale occurred today, and assuming there are 200,000 qualifying artists on Spotify, then each artist would be entitled to $3,600 (less some administration fee for the true transaction costs). Even though this money would be paid off contract (a meaningful concept to unrecouped major label artists), it still does not amount to much.

Now—this is not a particularly exciting number. Even if you allocated these funds based on aggregate streams by artist, you would essentially be letting the major labels off the hook with their own artists to share any of these proceeds with them, and even then it is unlikely that this calculation would result in a life-changing amount of money comparable to the return to the venture investors.

So another way that Spotify could do this is to agree to pay out a certain amount of money to each participating artist that would be something in the range of $25,000 to $50,000 each.

Because you know what’s cool? A billion is cool.

_________________________

Next: Part 3

Streaming Price Index : Pay Rates as of 12/31/11

Streaming Price Index : Current Streaming Pay Rates as of 12/31/11

Payable to Artist/Label via digital distributor for sales from Jul to Dec 2011 *

Zune
15,159 = $437.58 = .028 = 25:1 Itunes Song Download

Napster
30,238 = $479.07 = .016 = 43:1 Itunes Song Download

Rhapsody
50,822 = $668.57 = .013 = 53:1 Itunes Song Download

Spotify
798,783 = $4,277.39 = .005 = 140:1 Itunes Song Download

* these figures are from an independent catalog of 87 albums / 1,280 Songs – BEFORE the distributor’s cut/fee.

[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

April 23, 2012June 4, 2012 by trichordist

Musicians POV: Give it to Mikey, he’ll eat anything! Spotify is (NOT) Good for You, Yum Yum! (Part 1 of 5)

Mikey’s Not Here

If you remember the old “Life” cereal ads, they featured kids who didn’t want to eat Life cereal because it was “good for you” so who would like that? Test it out on “Mikey”, the hyper critical eater—”Give it to Mikey, he hates everyhing!” And surprise, surprise, Mikey likes it.

So it is with Spotify. Mikey may eat it, Mikey may even proselytize about its wonders of valuation, but Spotify is not only not good for you, it’s actually bad for you. The good news is (maybe) there’s something every artist can do about it. Unless, of course, they listen to “Mikey”.

Here’s the proposition: From a financial point of view, Spotify’s payable royalties are neglibible–marginally better than a pirate site. (See “Streaming Price Index“) Spotify is, of course, a licensed service and it is encouraging to see investment pouring in to its coffers. Make no mistake–we’re happy it exists. The unfortunate thing is that Spotify is another example of reacting to massive piracy with a business model that in the long-term is nearly–although not quite–as unsupportable as the piracy it promised to help fix.

Spotify”s model is essentially a variation on Web 2.0, or as we say around the Trichordist, The Man 2.0. With the usual Web 2.0 company the users provide all the content and the tech oligarchs (or wanna be oligarchs) get all the money. (Like with Facebook, Flickr, YouTube, Google, Wikipedia, Instagram in no particular order.)

Except with Spotify it is the artists (and not the users) who create all the value and get none of the profits. Like other Web 2.0 darlings, the tech oligarchs build the platform, create none of the content and will get the lion’s share of the profits on Liquidity Day. Spotify is just a couple compass points away from oligarch status—call them mini oligarchs. In the meantime, Spotify profits from the artists and pay a laughable royalty in return.

So in the words of a famous revolutionary, what is to be done?

First, consider whether there is any benefit from being a Spotify stockholder. We think we will see that there is not much financial benefit. Then we consider how you can keep your music off of Spotify, even if you are a major label artist. Then we consider how you can force the company to pay a fair rate.

What if Artists Were Stockholders?

So who makes money? First and foremost—Spotify employees starting with Daniel Ek. These guys get a steady paycheck and have equity in a dark future for artists.

Next, venture capitalists who are the 1% of the 1% don’t forget. These VCs, especially Silicon Valley VCs, are some of the richest people in America who nearly single handedly brought you the stock market crash of 2000 when the last tech bubble popped in a frenzy of irrational exuberance.

It is pretty common stuff for these people to personify the long simmering rivalry (largely one-way) between Northern and Southern California. The Internet was a force multiplier that weaponized that hatred. This, of course, results in screwing artists. (See the embarrassing post “Kill Hollywood” by elite VC Paul Graham of Y Combinator, the home of digital chickenfeed: “How do you kill the movie and TV industries? Or more precisely (since at this level, technological progress is probably predetermined) what is going to kill them?” Search for the word “artist”—no matches found.)

And of course, another group of Spotify stockholders are the major labels who extracted equity ownership in the company in return for licensing catalog at ridiculously low royalty rates. The fairly consistent rumor is that the labels own 18% of Spotify, which at its most recent valuation of $4 billion is worth $720,000,000.

Here’s the twist—because the deal with Spotify is for the entire catalog of each label and not of any particular artist, it is doubtful that any artist will ever participate in that 18% equity. If you think of that 18% as being subject to the 50/50 net receipts allocation (the issue in the Eminem case), there’s a very easy fix to this.

Spotify can allocate another 18% of its equity to an artist stock pool. Artists would not need to own that pool, but it could be held in trust for all artists who ever have participated in Spotify and all artists who will participate in Spotify before the “liquidity event” that would turn that stock into cash—an IPO or acquisition, typically. All other terms of stock ownership could be on the same terms as the labels. And, of course—an artist would be appointed to the Spotify board with full voting rights to vote the full 18% block of shares.

These don’t have to be new shares—Daniel Ek and Spotify can hand them over from previously issued stock to give to Spotify’s artist “partners” an incentive to stay with the company.

___________________________________

Next: Part 2 Could Artists be Stockholders?

April 23, 2012April 23, 2012 by thetrichordist

The Trichordist Random Reader News and Links Sun Apr 22

Grab the Coffee!

Here’s some interesting stories and links we discovered or were sent during the week. These may not be stories OF the week, as we share them as we find them.

German Court Rules Against YouTube in Copyright Case:
http://news.yahoo.com/german-court-rules-against-youtube-copyright-suit-115708414–sector.html

Supporting Copyright Is Not The Same as Opposing Free Speech:
http://www.guardian.co.uk/music/musicblog/2012/apr/19/copyright-freedom-speech

Rapidshare Writes Four Page Anti-Piracy Manifesto:
http://www.theregister.co.uk/2012/04/20/rapidshare_stop_piracy/

Interesting interview Between Ben Watt of Everything But The Girl and Journalist/Author Robert Levine:
http://www.buzzinfly.com/index-robert-levine-interviewed-by-ben-watt.html

Musician / Composer Mark Isham Launches ibuymymusic.org
http://ibuymymusic.org/I_Buy_My_Music_Dot_Org/Home.html

TechDirt Goes on the Defensive after Gearslutz thread asks, “Why does TechDirt hate musicians”:
http://www.techdirt.com/articles/20120415/02354118491/difference-between-nuanced-discussion-evil-underbelly-internet-is-apparently-fine-line-indeed.shtml
http://www.gearslutz.com/board/music-business/719114-why-does-techdirt-hate-musicians.html

The Chicago Reader Picked up On David Lowery’s “New Boss, Worse Than Old Boss” as posted at TheTrichordist.
http://www.chicagoreader.com/Bleader/archives/2012/04/17/the-good-old-bad-old-days

Another shout out to TheTrichordist, this time from The Cynical Musician:
http://thecynicalmusician.com/2012/04/recommended-reading-the-trichordist/

April 22, 2012April 27, 2012 by trichordist

Andrew Keen on the false idealism of the internet [video]

In this interview with the BBC for the show “The Digital Revolution,” Andrew Keen describes how artists have been exploited by the tech and internet industries.

“What would I say to the people that are sitting in front of their computers–believing in revolution–I would tell them that they are subjects or victims of false consciousness, that they’re wrong— that they’re believing in something that doesn’t really exist–that they’re dupes–they’re exploited, particularly those that give away their labor for free so that young men in Silicone Valley can become infinitely rich.” – Andrew Keen

If you enjoyed this video, you may also like to read:
Loser Generated Content : From Participation to Exploitation by Mork Petersen

###

April 19, 2012May 28, 2012 by trichordist

Grooveshark On The Hook : Notice and Shakedown

We salute Tunecore CEO Jeff Price who recently called for a boycott of Grooveshark on his company Blog. This after a series of articles from varied and respected media outlets such as Digital Music News, Hypebot, Billboard, and others who have been reporting on Grooveshark’s unethical practices against artists and the resulting lawsuit by the major labels.

But this isn’t just about major labels, it’s also about indie artists and labels who have been victim to Grooveshark’s practices for years. Just one example is from Helienne Lindvall who detailed her attempts to have her music removed from the site in painstaking detail, to no avail. Later we’ll show how other artists and labels experience is exactly the same as hers.

Grooveshark illustrates the failing of the DMCA by creating an incentive to build a business on infringement. Previously YouTube did it and that practice is now at the center of the recently appealed, billion dollar lawsuit with Viacom. At the heart of the matter is ethics.

The DMCA was designed to protect Internet Service Providers (ISPs) from liability if they had no knowledge of infringing material. The DMCA was also designed to provide protection for artists to have their work removed from an ISP (website, etc) if it was discovered to be there. In other words, the DMCA was drafted to give a little latitude to reasonable people acting reasonably and to empower artists to protect their rights without having to file a federal copyright lawsuit.

Grooveshark, like YouTube before it, has exploited this loophole in an attempt to build a business on infringement. The attraction of this business model is substantial as there are no licenses, fees or negotiations and no artist royalty payments, ever. All they have to do is plead ignorance, and wait for the DMCA notices to come in. And, once the notices come in, just wait for another user to upload the same material again. And so it goes on and on; the DMCA dance of death until artists are too exhausted or broke to continue.

The really insidious part of the Grooveshark model is representative of the old saying, “It’s better to ask for forgiveness later, than to ask for permission.” This is also known as “negotiation via lawsuit.” Grooveshark’s strategy appears to be: lure in artists as they seek to have their illegally exploited work removed, and then try to get the artist to sign a license agreement. This heavy handed approach has been aptly titled, “Notice and Shakedown.” Thankfully, a lot of artists are smart enough to question such shady practices.

We know of at least one indie label who when they contacted Grooveshark to take down offending material were met with the smarmy onslaught and the hard sell. You can see the pitch here in the first sentence of a DMCA query on the site.

http://help.grooveshark.com/customer/portal/articles/302472-your-music-on-grooveshark

“If your music was posted up without your permission and you’d like to have it removed, please click here to access our DMCA takedown form — we highly recommend, however, that you contact us first to talk about ways that Grooveshark can fairly compensate you for your music!”

Ah, yeah right. Exploit my work, then try to negotiate with me (using fuzzy math based on Spotify model) about how much you are not going to pay! At least Spotify is legal, and I can actually remove my titles. But it doesn’t end there.

“You have full control over all songs in music catalogue. This includes the option of removing them all together. It only takes a minute just follow these steps:”

Uh, yeah, ok, but keep in mind at this point, Grooveshark is only helping me to “manage my catalog” which just happens to be on the site illegally. Also removing the songs via their “rights management” system avoids a DMCA takedown. The entire set up of Grooveshark is to engage artists and content owners in a conversation to negotiate with Grooveshark, on Grooveshark’s terms because guess what, they already have your music illegally, and they’re not paying you. But wait there’s more…

“Currently, songs can only be removed one at a time – we’re sorry if this is an inconvenience. Please let us know if you need any help along the way”

Yes, you can help me. You can remove my catalog from your site that I didn’t give you permission to profit from by monetizing it against advertising. And the way to do that is to click on the DMCA form for a proper take down. Of course, you’d hope this would be the case, but unfortunately not so as witnessed by this report on Digital Music News from famed guitar legend Robert Fripp which is nearly identical to that of Helienne Lindvall. Even classical indie artist Zoe Keating could not get her music removed from the site after issuing at least six DMCA notices to Grooveshark.

As if all this we’re not bad enough CNET reported on internal emails that show how Grooveshark was intentionally using the illegal exploitation of artists work as the basis for it’s business model. Unfortunately, not everyone sees this practice as deceitful and unethical; TechDirt has rallied to support Grooveshark despite serious complaints dating back to 2009 by indie label DashGo.

Ultimately we’re encouraged that one of the things the internet is really good at is sharing information. As more artists become educated about their rights, and how they are being exploited, we can see that they are speaking out against these unethical attacks to their livelihood.

###

April 19, 2012May 28, 2012 by trichordist

The Beatles – Why Music Matters [video]

Why Music Matters is a fantastic organization creating awareness about Artists Rights.

Website : http://www.whymusicmatters.org/
YouTube : http://www.youtube.com/user/whymusicmatters

###

April 18, 2012May 28, 2012 by trichordist

The Real Issue Of Online Piracy and Illegal File-Sharing: Assholes (guest post)

By Zach Hemsey
(Copyright in the author, used by permission)

Debates about illegal file-sharing have been going on for quite some time now, and while there are many interesting perspectives on the issue, the one thing that continues to surprise me is that very few people seem to actually understand what the central matter being debated is. Time and again, arguments are made that miss the point, facts or statistics are presented that have no relevance, and ultimately discussions digress into personal opinions about artists, major labels, the industry, etc. I’d like to clear up much of this foolishness, so that moving forward we can all focus on the relevant issue at hand. Note that for the sake of simplicity, the following will focus on music piracy and artists, but obviously the points raised are equally applicable to movies, authors, etc.

Lets begin with the myth that piracy was born of a noble idea that everything should be free and accessible to everyone…this notion is not what drives piracy. On the contrary, piracy is primarily motivated by greed – it’s a business, and apparently a very good one. Without getting into the specifics of how money is earned through advertising, subscription fees, encouraging additional piracy through revenue kickbacks, etc, the short of it all is that pirates are making money. There’s nothing wrong with someone making money, but if they are making money by commandeering and exploiting my work, and not even sharing any of those earnings with me to boot, then it shouldn’t be controversial to suggest their actions are less than admirable.

There also needs to be a distinction between those who facilitate piracy, and the general users that benefit from it. The latter is not the issue. There are individuals who illegally download music in virtue of simply having access to it, without any concrete conceptualization or clear understanding of the practice they are undertaking. There are also people with low incomes that sincerely cannot afford to purchase or acquire content in other manners, for whom file-sharing is a blessing. There are even those who utilize piracy as a means to preview a large breadth of content before subsequently legally purchasing the content they like. But all of those who benefit from piracy in these ways are irrelevant to the “piracy industry” itself, which only exists because assholes are making a living from it.

Just to clarify, for the purposes of this article, “asshole” refers to persons that distribute content that they do not own, for the express purpose of profiting from that distribution. If you buy a book and share or give that book to a friend, you are not an asshole. Same with a physical CD or digital download. To be clear, a violation of intellectual property rights is still occurring in such cases, however, it’s an extremely weak violation (much like J-walking), and does not have a significant impact on anything. Sharing on a person-to-person level is more or less inconsequential to the livelihood of content owners. In contrast, it’s the massive enterprise of sharing through file-sharing networks on a national and global scale that is at issue, and which does affect the livelihood of content owners.

Now, lets address 8 common arguments in favor of piracy that succeed in skirting the real issue:

1) “Piracy only effects millionaires and billionaires who are already filthy rich, and there is nothing morally objectionable about preventing these overly wealthy individuals and companies from continuing to profit from my hard-earned money.” This is fascinating logic, but not very compelling. For one, I’m a little uncomfortable with the populace collectively deciding that Katy Perry has made enough money – at the end of the day, she made a product – if you want that product, buy it; if not, don’t. If her content is so appealing that it turns her into a billionaire, good for Katy. Is this really so objectionable? Moreover, it’s not just the content of established and successful artists that are being pirated – it’s also up-and-coming artists and independent artists. Yes, the content of established artists is pirated the most from a quantitative standpoint, but this has no bearing on the fact that independent artists who don’t have large streams of income are substantially affected by the pirating of their content.

2) “Artists are getting screwed by their labels anyway, so what does it matter if their music is pirated?” Well that’s very nice that you have decided to stand up for artist exploitation at the hands of their respective labels by choosing to steal their content. I’d like to point out that this has no relevance to artists that are not affiliated with labels, nor does it have any bearing on the many major / indie label artists with very good deal structures in place. But even in cases where labels are screwing over their artists, if an artist chose to enter into a bad deal, that’s their prerogative – why are you so concerned with their business decisions? And furthermore, do you realize that even if we suppose 100% of all major label artists have “bad deals”, you’re enabling of the piracy industry isn’t combatting that – it’s simply changing which group of assholes are making money (and at least in the former case, artists are making something from their work, even if scant).

3) “Piracy is the best thing that could ever happen to independent or up-and-coming artists….now their work is being exposed to way more people than it would otherwise have been.” Maybe yes, maybe no. But shouldn’t that decision rest with the artists and rights owners of the music? If they see the merit in your perspective, and choose to distribute their catalogue for free, so be it. However, if they disagree with your position, why should they be unable to manage their catalogue as they see fit? Moreover, plenty of artists’ music is readily available through online streaming sites – my entire discography for example can be listened to in it’s entirety through my website and YouTube channel – so the issue is not about having free access to music, it’s about having music illegally distributed in an exploitative capacity without artists’ consent.

4) “Music and movies are grossly overpriced, and pirating such content amounts to an objection of those inflated prices.” There are certainly cases where content is overpriced, and such cases are definitely irritating to all consumers. However, it is unfair to characterize the entire entertainment industry, or even a significant part of it, as being “grossly overpriced.” $10 for a music album is not overpriced. Those who suggest otherwise either don’t have an understanding of what goes into the making of this content, or simply don’t appreciate what they’re getting for their money. Either way, such ignorance is beyond my ability to remedy, but while such a deluded perspective can understandably lead to person-to-person file-sharing, it does not legitimize the global money-making business of the piracy industry. I hope we can agree on at least that much.

5) “Artists have an easy life – you can barely call what they do work. They are living the dream, and they shouldn’t be entitled to such obscene income and a life of luxury. So who cares if their content is being pirated.” I’ll be sure to ask for your permission the next time I have to take a shit. But let me just point out to you that while there do exist individuals in every industry who have had some remarkable opportunities just fall into their lap, the majority of successful professionals, including artists and entertainers, have all worked extremely hard to get to where they are. It seems to me that the real source of your ire is the cultural / political / societal system that we are all born into…I sympathize with you…but don’t take it out on artists, especially when it’s art that stands the best chance of taking the edge off the absurdity of all that angers you, and the best chance of inspiring the change that your miserable soul yearns for.

6) “Piracy is not actually theft – it’s an infringement of copyright, which is not the same thing.” Yes, technically speaking, you are correct. But regardless of the legal nuance involved, I think we can all agree some form of theft is at work. Should the illegal file-sharing of music be treated equivalent to the stealing of a car? No. But that doesn’t mean it’s somehow acceptable to steal intellectual content. In the same way that we treat the physical theft of objects differently based on the value of the object in question – a DVD vs a Mercedes – so should we treat the theft of objects differently according to the nature of the object – physical vs digital vs intellectual property. But make no mistake…all occurrences of theft should be addressed in some manner.

7) “We’re in a new modern age where unrestricted access to digital content is now a basic reality that the entertainment industry needs to accept and find a way to adapt to.” Interesting…so taken to it’s logical conclusion, I suppose the “theft” of all the digital money in your bank account is something you’ll just have to get over and accept as a reality of modernity, right? After all, it’s not physical money – just a bunch of zeros and ones on a computer screen, so perhaps we shouldn’t even consider it “theft” in the first place. Right, I hear you – the theft of “digital” money is different from digital music, because digital money isn’t copied…it’s stolen, in the real and legal sense of that term. Uh huh – well when 50 thousand people “copy” Lady Gaga’s record, who otherwise would have bought it, is that not an actual measurable and legitimate loss of income? Does that not qualify as theft in your expert opinion? We can debate how many individuals that illegally download music would otherwise buy it if left no other choice – but while it’s impossible to know the answer, I think we can agree that some amount of individuals would legally purchase music if a free alternative did not exist…and when you consider the millions of people throughout the world downloading thousands of music and movie files, even if that number were as low as 10% it would amount to a significant loss of income to content owners.

8) “Copyright law is ridiculous in and of itself with terms lasting author’s life + 70 years…there’s no reason for ownership to last that long, and it’s only purpose is to ensure labels keep profiting for years and years. It should last somewhere between 5 and 20 years max. So as far as I’m concerned, piracy is rectifying this obscenity.” Ugh…where to begin. Start by reading points 1 and 2 above. Then explain to me why it is you feel I should be forced to relinquish ownership of something that I created with my own two hands. Then let me know what time you’ll be home so I can stop by to take that Mercedes from you – I think you’ve owned it for long enough, don’t you?

With all of that out of the way, what we are left with is that assholes are exploiting other people’s work without their consent, and profiting from that exploitation.

Now, I cannot prevent you from being an asshole. Only you can do that. So if you choose to be an asshole, it is what it is. We can get into why one would make such a choice, and speculate as to the psychological and emotional underpinnings that lead to such a choice, and even look to other industries where assholes have succeeded in astounding the world with their assholiness (white collar criminals and those Wall Street fuckers come to mind)…in the end though, it doesn’t matter. Just accept that there are assholes in the world.

So, given pirates’ decisions to be assholes, what can I do? I can perhaps try to persuade them that their decision has consequences that effect other human beings, and hope that they’re able to see beyond their own selfish perspective. But I’m not going to waste my time trying to converse with assholes, as it doesn’t make for very enlightening conversation.

It seems to me the logical thing to do is to remove the ability of assholes to steal without impunity in the first place – not to remove their desire to do so – just the ability. Consider this: if one person comes into a bank and steals handfuls of cash, it is easy to stop that individual. But if hordes of assholes are storming banks across the country, stealing everyone’s money, then it’s not practical to stop them all, nor efficient to discuss their actions on an intellectual and philosophical level…but it is practical and efficient for banks to start securing their money within vaults, and in so doing, remove the ability of said assholes to steal it. It’s not rocket science…we just need to apply the same principle to piracy.

Obviously, the literal concept of a bank vault is not applicable to illegal file-sharing. However, just like in the bank analogy, we can diagnose what allows pirates to do what they do, and then seek to undermine that. In the case of banks, allowing piles of cash to be publicly accessible leads to massive theft of that cash. In the case of piracy, the enterprise functions as a result of a simple distortion: the notion that file-sharing websites facilitate the transfer of digital content between other people, without directly participating in the content being transferred, and that as such, they have no control over if their users choose to upload and share content illegally, and are thus not responsible for any copyright infringement that occurs – all they can do is have such content removed once uploaded, provided the content owners inform them of such violations. This laughable perspective is what has allowed the piracy industry to flourish, for it is not feasible for content owners to scour through thousands of file-sharing websites to discover if their content is being illegally distributed, only to then have to submit claims to each website for each specific instance of copyright infringement…only to then have to repeat the process again and again week after week.

This is where new legislation comes into play. We need properly written legislation that enforces intellectual property rights without curtailing 1st amendment freedoms, and which holds piracy facilitators accountable instead of users. This should not be that difficult to put together folks…people simply have to agree on it’s necessity. Of course, if you happen to be an asshole, then you will want to oppose such measures.

I leave a detailed exploration of solutions for another time, but suffice it to say that if file-sharing companies / websites were simply responsible for policing the content whose distribution they facilitate (instead of the burden falling on the content owners – an impossible task), and there were effective consequences in place for the failure of such companies / websites to perform said responsibilities, then the entire piracy industry would go away pretty fucking quick. This is not to say that file-sharing would stop in total – just that the national and global business of file-sharing would.

Or maybe I don’t know what I’m talking about. Feel free to enlighten me with your comments.

Check Out Zack Hemsey’s work at:
http://www.youtube.com/ZackHemsey

###

April 17, 2012May 28, 2012 by trichordist

None Dare Call it Theft

Is copyright infringement theft?

It’s a good question to ask on the internet if you want to spark another round of an endless discussion.

Opponents of the “infringement = theft” argument will marshal an impressive array of arguments.

There are the semantic arguments: theft has a settled meaning that doesn’t apply to infringement (ignoring centuries of usage to the contrary).

Then there are the legal arguments: you can’t sue someone for copyright infringement under theft laws. Leaving aside the fact that there is no single “theft” law — statutes different from state to state and country to country — this distinction only matters if you’re a prosecutor; doesn’t dictate how words can be used in common parlance. And I don’t believe anyone is seriously making the argument that the goal of calling infringement theft is to eventually bring infringement actions under theft laws.

In a recent New York Times article, author Stuart P. Green adds his own arguments to the debate. While generally more eloquent than what you normally find online, they are still not so convincing.

Green begins with his explanation of how we got here:

From its earliest days, the crime of theft has been understood to involve the misappropriation of things real and tangible. For Caveman Bob to “steal” from Caveman Joe meant that Bob had taken something of value from Joe — say, his favorite club — and that Joe, crucially, no longer had it. Everyone recognized, at least intuitively, that theft constituted what can loosely be defined as a zero-sum game: what Bob gained, Joe lost.

When Industrial Age Bob and Joe started inventing less tangible things, like electricity, stocks, bonds and licenses, however, things got more complicated. What Bob took, Joe, in some sense, still had. So the law adjusted in ad hoc and at times inconsistent ways. Specialized doctrines were developed to cover the misappropriation of services (like a ride on a train), semi-tangibles (like the gas for streetlights) and true intangibles (like business goodwill).

Green goes on to lay the blame on the current debate on, of all things, the 1962 Model Penal Code (?!?).

While superficially appealing, this story is an over-simplification (as any two paragraph summary of thousands of years of history can be). One could just as easily fashion a Green-esque history of property law to make the claim that taking someone’s pet is not theft.

After all, for thousands of years pets weren’t treated as property — it wasn’t until the early 20th century (much later than the appearance of copyright law) that the common law recognized taking cats and dogs as larceny. And today, you can find those who will argue that pets should not be considered property. It shouldn’t be hard to find scholars who will claim that pets should be “free as the air to common use” — and it’s not hard to imagine a site like “PetDirt.com” pointing to stories about Michael Vick to prove that it’s harmful to allow people to claim ownership over animals.

But it’s not as simple as that. You can easily find exceptions to this narrative throughout history, and property law is always evolving.

Next, Green makes it sound like the description of copyright infringement as theft is a recent phenomenon:

With intangible assets like information, patents and copyrighted material playing an increasingly important role in the economy, lawyers and lobbyists for the movie and music industries, and their allies in Congress and at the Justice Department, sought to push the concept of theft beyond the basic principle of zero sum-ness.

This claim has a certain appeal to the conspiratorially-minded. But it’s simply wrong.

People have used theft language to describe copyright infringement long before now. In fact, referring to unauthorized copying as theft has occurred before the term “copyright” appeared in the English language. Centuries before, even.

For example, Martin Luther placed a “Warning to Printers” on the inside of his 1541 German translation of the Bible. The warning read:

SO feret der Geitz zu / vnd thut vnsern Buchdrückern diese schalckheit vnd büberey / Das andere flugs balde hernach drücken / Vnd also der unsern Erbeit vnd Vnkost berauben zu jrem Gewin / Welchs eine rechte grosse öffentliche Reuberey ist / die Gott auch wol straffen wird

Avarice now strikes / and plays this knavish trick on our printers whereby others are instantly reprinting [our translation] / and are thus depriving us of our work and expenses to their profit, / which is a downright public robbery / and will surely be punished by God

Later writers would use the term “piracy” to describe unauthorized reprinting and plagiarism, such as Elizabethan pamphleteer Thomas Dekker, who encouraged his readers in 1603 to “Banish these Word-pirates, (you sacred mistresses of learning) into the gulfe of Barbarisme.”

It would not be until 1710 that the first copyright law would be passed — England’s Statute of Anne (though interestingly, the term “copyright” does not appear in the law and would not enter the language until the 1730s.) Since then, it’s not hard to find a wide variety of sources describing infringement as theft.

Some examples: An 1858 article in the Journal of the Society of Arts says, “All the legislation which has taken place upon the subject of Copyright in England has proceeded upon the just theory that an author or artist has a property in his work. Where, therefore, a Copyright work is literally copied, or copied with merely colourable alterations, it seems difficult to distinguish the moral guilt of such a theft from that of picking a pocket, and consequently that such an act of piracy ought to be punishable as a criminal offence.”

This dictionary from 1861 defines “piracy” as “infringement of the law of copyright; literary theft.”

The editors of the Round Table, a weekly U.S. journal, petitioned Congress in 1866 for an international copyright law, saying “this license for literary theft (for it is nothing less than theft) is beginning to affect our own writers and publishers. American works are daily reprinted in England, and at a less cost than the original publications.”

Legal treatises routinely made use of theft language, such as this 1886 treatise from R.R. Bowker: “After the invention of printing, it became evident that new methods of procedure must be devised to enforce common law rights. Copyright became therefore the subject of statute law, by the passage of laws imposing penalties for a theft which, without such laws, could not be punished.”

A letter printed in an issue of the Literary World from 1899 made the case that “An author’s brain work is as exclusively his own stock in trade as is any other work of any other artisan of any kind. Stealing brain work is as much a theft as stealing handiwork. Any person of ordinary intelligence can understand this fact. The copyright of all such work is the author’s own. If he chooses to delegate rights to reporters, well and good. He may do this as he does to his publishers, by royalty or by sale, according to mutually approved terms. But any right assumed otherwise than by permission of the author is downright robbery, according to all high standards of morality.”

These are only a few examples. Since the early days of copyright, infringement was, “frequently equated with theft.”

Indeed, not only has infringement routinely been described as theft, some have argued that it is worse than stealing tangible property.

German philosopher Johann Gottlieb Fichte wrote in 1793:

[I]n consideration of the fact that anyone is a thief who usurps the use of others’ property for his own profit, then the reprinter is without doubt a thief. If, furthermore, a theft is the more heinous when it involves things which by their very nature cannot be kept under lock and key, then the reprinter’s theft is one of the most heinous, since it involves something which necessarily lies open to the public, like air and ether. And if, finally, a theft is all the more heinous the nobler the objects it is perpetrated on, then it is the most heinous of all when it involves things that are creations of the mind.

And an 1840 book, An Historical Sketch of the Law of Copyright, noted:

For the printing a work, the sole right to which belonged to another, was looked on as little better than theft, and punished accordingly. Indeed, it was said, that such conduct was worse than to enter a neighbour’s house and steal his goods: for negligence might be imputed to him for permitting the thief to enter: but in the case of piracy of Copyright, it was stealing a thing confided to the public honour.

+++++++

The ancient Romans defined larceny as “Contrectatio rei alienae, invito domino cujus illa fuit” — “a diversion of the thing of another, contrary to the will of him, to whom it belongs.” Copyright gives creators an exclusive right to copy, perform or display, and make derivative works of their works, and copyright infringement is an appropriation of these things against the will of the copyright holder. For as long as copyright has been recognized by law, authors, philosophers, legal theorists and judges, and the general public have described infringement using theft language. The arguments that it is wrong to do so ignore logic and history.

What’s more, these arguments ignore the harm copyright theft causes the general public. Just last month, a Phoenix Center for Advanced Legal and Economic Public Policy Studies report demonstrated how “The existence of IP theft—even when assuming theft is costless to affect, produces consumption goods of quality fully equal to those consumers pay for, and does not suppress labor supplied—results in a reduction in social welfare” and “reduction in the rates of theft of intellectual property would benefit society (producers and consumers).”

So why do these arguments continue? At a basic level, they generally stem from this idea: it is wrong to call infringement theft because the word “theft” has moral overtones. But this begs the question that infringement is never an immoral act. Clearly that’s not the case.

Of course, saying that it’s sometimes appropriate to call copyright infringement theft does not mean we’re required to describe every act of infringement as theft. Someone who writes a fan-fic of a popular book, posted online for free, may end up with a work that a jury might find infringes the original, but I doubt few people would consider this theft — some authors even encourage such acts. There are plenty of other examples of online behavior involving non-commercial copying or transformative uses that, if put in front of a court, would be considered infringement but nevertheless would find few willing to describe as theft. So it’s worth being careful when using theft language.

However, that doesn’t mean it’s never correct to call infringement theft. When a service like Grooveshark, for example, doesn’t “pay the artists, the labels and/or the songwriters for the use of the music that’s making them tons of money”, it’s fitting to say they “knowingly and willingly use a legal loophole to steal from artists and songwriters.” For services like these, which seek to profit off creators’ labor without permission, it is very helpful to create clever semantic arguments that make their behavior seem not as bad as it is.

###

April 16, 2012May 28, 2012 by Trichordist