David Canton is a business lawyer and trade-mark agent with a practice focusing on technology issues and technology companies.
I’ve written before about how the three strikes law that is in force in France, and is being contemplated in other countries, is fundamentally wrong.
Take a look at this short video interview from author Cory Doctorow that puts it in perspective.
Mike Masnick of Techdirt has published a post that is a chapter he wrote for a book being presented at a conference for the International Association of Entertainment Lawyers (IAEL).
Its worth a read, not only for Mike’s thoughts on new ways for the music industry to make money, but also to consider how that business model might work for other industries.
Here are some snippets to get a flavour:
It’s no secret that there’s a lot of concern these days about what the music industry will look like going forward — especially from those who work on the label side of the business and have been around for a bit. A variety of things have caused rapid change in the market. Competition from other forms of entertainment, such as the internet, movies and video games, have put more pressure on the industry, as consumers have been presented with significantly more options for their entertainment attention and dollars. And, of course, there’s the ever-present specter of unauthorized file sharing — or, as the industry prefers to call it (accurately or not), “piracy.”
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However, there is another solution: stop worrying and learn to embrace the business models that are already helping musicians make plenty of money and use file sharing to their advantage, even in the absence of licensing or copyright enforcement.
In simplest terms, the model can be defined as:
Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model
Sound simple? It is, if you understand the basics — and it can be incredibly lucrative. The problem, of course, is that very few seem to fully understand how this model works. However, let’s go through some examples.
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This is a business model that’s working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what’s working and encouraging more of that is the way to go. It’s a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it’s producing.
For the London Free Press – November 23. 2009
INFRINGEMENT: It addresses concerns of creators and publishers of movies and music
The “three-strikes law” is a controversial proposal to address download infringement concerns of creators and publishers of movies and music.
The concept is that if someone alleges an Internet user is downloading copyrighted material, they can advise their Internet Service Provider (ISP). The ISP then tells the customer to cease this illegal activity. If this happens three times, the ISP must turn off the customer’s Internet access.
France recently approved such a plan, but not without a struggle. An initial version was ruled unconstitutional by the French courts. An amended version was approved this fall which calls on a judge, not a government actor, to sign off on account suspensions.
France is now viewed by supporters as a pioneer against piracy, leading the way by implementing this legislation.
The same proposal in Britain met with public backlash. Public consensus is these measures are too drastic and draconian. The measures will generate a bureaucratic nightmare while having little impact on the overall prevalence of file-sharing.
Other critics argue the increasing prominence of the Internet in everyday life makes suspending that privilege a limit on individual freedom of expression.
Even holders of copyrighted material are split on the subject. Artists, such as the music group Radiohead, argue that any effort to criminalize file-sharing is in vain. They believe artists would be better to embrace the potential of file sharing to share their work with a larger audience. This will allow them the opportunity to generate revenues through concerts and merchandising, and even the sale of their music.
Other artists are of an opposite view, believing that file-sharing restricts the ability of young artists to make a living, lessening the likelihood of success for emerging artists.
The three-strikes law is misguided, even if you believe such activity should be controlled.
Whether someone has violated copyright is often not a black-or-white issue. Copyright law is complex, and knowing in any given instance whether an infringement happened isn’t easy.
To implement these policies on a mass basis, in a similar manner to handing out parking tickets, ignores this complexity. And the penalty is more than paying a few dollars in parking fines.
The proposal is also open to abuse as sanctions imposed at the request of an alleged victim can be taken advantage of.
There are numerous examples of questionable takedown notices under the existing U.S. DMCA rules. In fact, the Electronic Frontier Foundation has created a Takedown Hall of Shame, which lists “bogus copyright and trademark complaints” which “have threatened all kinds of creative expression on the Internet.”
This points up another problem with the concept: violations need only be alleged, not proven. An individual may be accused and given a strike by their ISP with no proof of misconduct. Guilty till proven innocent is not something we should condone.
The issue of digital piracy will continue to be a contentious topic. The three strikes proposal is not a palatable solution.
Digital Video Recorders have been attacked by many in the entertainment industry as being harmful to TV ratings and advertisers. Just like VCR’s were supposed to ruin the video industry. In general, the entertainment industry historically has tended to fear and fight every new technological development.
Turns out that the reality is that DVRs actually add significantly to live ratings, and have helped some otherwise marginal shows become hits.
From the New York Times:
…television network executives have fallen in love with a former tormentor: the digital video recorder.
The reason is not simply that more households own DVRs — 33 percent compared with 28 percent at this point in 2008 — helping some marginal shows become hits. It is also that more people seem content to sit through the commercials than networks once thought.
These factors combined mean DVR ratings now add significantly to live ratings and thus to ad revenue.
Also see commentary by the EFF, and Cory Doctorow of Boing Boing.
Michael Geist and Boing Boing both point to a Norwegian study that shows that people who tend to download more music also tend to buy more. They point out that this is consistent with a previous Canadian study.
Techdirt comments on a New York Times article that talks about the hardship caused to the industry by the downloading of movies and TV shows. Techdirt’s position (and i tend to be more on the Techdirt side on this one) is that the arguments and stats used by the industry just don’t add up. For example, Techdirt says: But, the NY Times reports, without a hint of skepticism, about the fact that The Dark Knight was so widely available online, representing a huge failure for the industry. You know which important part the reporters left out? That it was also the highest earning movie of the year. In other words, piracy is not the problem. People are plenty willing to pay to go to the movie theater if you give them a good reason to do so.
And concludes by saying: It’s really sad that the entertainment industry keeps trusting execs who view such opportunities as threats, and that the media takes their word for it.
The bottom line in my view is that in general we spend too much time trying to stop new things from happening, and not enough time figuring out how to use new things to our advantage.
That’s the title of my weekly Slaw post today.
It says:
There have been a few articles recently talking about a new proposed method of digital rights management called Digital Entertainment Content Ecosystem. The idea is to control what we do with video purchased online, and allow us to use it on multiple devices. See this LATimes article, and this TechCrunch article.
One problem with DRM is that it never really works. Someone always finds a way around it, so it does nothing to stop pirating on a commercial scale. And it usually causes problems for the average consumer, and puts undue limitations on what we can do with it. So the entertainment industry then tries to get laws passed to make it illegal to circumvent digital locks. (That’s one of the objections to bill C-61 – but I digress.)
This new system is being touted to overcome the problem where people buy, for example, a song to play on their MP3 player, but DRM prevents them from playing it on their computer or in their car.
Apparently the proposed system would allowed one to play it on any device you have that you register with “them”. This raises huge privacy flags for me. It would require us to register with “them” and list every device we want to play this content on. Perhaps the privacy issues could be addressed – but regardless of the privacy promises we receive – how many consumers would want to give this kind of information to an industry that has a tendency to sue its customers?
That’s the title of a Techdirt post that points out that as technology and markets change, sellers of affected products need to take a close look at their business model. Figure out what your market really is. And if the product you have been selling is no longer scarce, then figure out what new scarcities the change has created, and sell that. Examples are buggy manufacturers at the dawn of the auto, and the music business.
That has been true ever since the dawn of technology and markets. Often easier said than done though. One hint – if you start thinking that you need to have legislators change laws to protect your market, or feel the need to launch lawsuits against massive numbers of people – it may be time to reflect on this.
The more I read about this, and the ramifications sink in, the less I like it. The combination of the expected copyright reform bill and this proposed treaty leads us down the wrong path. Its a backwards step and out of touch with the reality of today’s technology, marketplace, and consumer rights and expectations.
As Michael puts it:
This suggests that the two-part Prentice plan is rapidly coming together – a Canadian DMCA could be introduced next week, while by the end of the year Canada may have agreed to an international treaty that mandates new levels of surveillance for ISPs and border guards. The effect of these reforms will dramatically reshape Canadian law with Prentice and Prime Minister Stephen Harper rolling out the red carpet for President George Bush’s demands and leaving Canadians wondering how their consumer, property, and privacy rights suddenly disappeared.
Several blogs and newspaper articles have mentioned a leaked document that describes the ACTA negoitiations. It is a proposed treaty among a few countries to help stem the flow of counterfeit goods at borders. The proposed treaty and the way it is being discussed raise all sorts of problems.
For example, it supports the US entertainment industry agenda that is being pushed by the US government – the same agenda that has huge opposition on the copyright reform front. And if that’s not bad enough in substance, its being negotiated out of the public eye.
It also has the potential to make crminals of all of us at border points, as it would give customs officers the ability to look for “illegal” copies on any device we have. Having customs officers deciding what are legal vs illegal copies of things is a scary proposition as that determination is not always easy even for the courts. And content that may be perfectly legal to have in one country, may not be in another.
In the grand scheme of things, stopping a truckload of counterfeit CD’s would be a good thing – but stopping individuals from crossing a border with their ipods is just silly.
This strikes me as one of those creeping out of control concepts where legitimate border controls are being used for improper purposes.
For more information on this topic take a look at:
Unless otherwise stated, all original material created by David Canton included in this blog is licensed under a Creative Commons License.
