Category: Art

NFT – The Hottest Trend in Ripping Off Artists

By now, even people who don’t follow copyright and crypto stories may have read somewhere that a crypto group called Spice DAO purchased a rare copy of Frank Herbert’s Dune for €2.66 million and then announced its intent to make the work publicly available, produce an animated series, and promote derivative works. The group also floated the notion of minting each page into an NFT, burning the book while video-capturing themselves doing so, and then minting the book-burning video into an NFT. (Nice to have so much time on one’s hands.)

https://twitter.com/TheSpiceDAO/status/1482404318347153413

Since the initial tweet on January 15, Spice DAO has been smacked around the internet by even legal laymen reminding the group that the purchase of a copy of a work, even a rare and old copy, does not transfer any rights to do anything whatsoever with the underlying material. If these guys really spent that much money on the book expecting an ROI based on any their stated plans, they should quit while they’re behind. The lawsuits they have already implied would cost a more than they’ve spent so far.

Meanwhile, Spice DAO’s stated intent to mint NFTs out of material they do not have the right to reproduce brings me to the reason I am finally saying anything at all about this crypto trend that’s been making noise for almost two years. Although I have often been asked about NFT art and copyright, I have been reluctant to write a post about the topic, mostly because I wanted to avoid writing that obligatory paragraph describing what an NFT is while pretending that any explanation makes sense. Like the rest of you, I have read definitions of NFTs in various places—critical, analytical, and promotional—but find it impossible to believe that the virtual trading floors exchanging NFTs do not represent an irrational market, buying and selling smoke.

It’s a digital record of a transaction that lives on the blockchain …

… when someone buys an NFT, they’re not buying the actual digital artwork; they’re buying a link to it.

It’s a digital certificate for intellectual property and is stored on the blockchain.

And so on.

Seriously? Are we all pretending that any of that means anything? A parable about the Brooklyn Bridge comes to mind, but in that scenario, at least there’s an actual bridge the huckster does not own. But okay. Even if the NFT market is not just another free-for-all invented by tech bros to sell to the Court of the Naked Emperor, it is clearly the coolest new way to rip off artists. As Kevin Collier wrote on January 10 for NBC …

Last week, an unidentified user on OpenSea, the dominant marketplace for the burgeoning NFT art market, started putting tens of thousands of listings of [Aja Trier’s] work, often duplicates, up for sale. Thirty-seven of them sold before she was able to convince the platform to take them down.

Tell me how this was not inevitable. If literally anyone can mint and upload an NFT to a trading platform like OpenSea, of course thieves are going to grab artworks they “find” online and do exactly what Collier’s article describes. After more than twenty years of creative works being used without permission online and enriching the platforms on which they are being used, this black-market trade in NFT art finally sheds all pretension of respect for the artist’s right to control and monetize her own work as she sees fit. Collier adds …

Trier’s story has already become common in the burgeoning world of NFT art sales. RJ Palmer, a San Francisco artist who designs creatures and monsters both as commissioned digital works and for movies and video game companies, said issuing takedown requests to NFT platforms for his work became a daily routine before he eventually gave up.

Whack-a-mole 3.0? If making artists give up on their rights was not the intent of network effects, it sure as hell is a byproduct. Creators find it both daunting and depressing to discover dozens, or hundreds, of unlicensed uses of their works online, but to now find the works explicitly being sold without permission is a whole new level of predation. Collier’s story reports that OpenSea is valued at over $13 billion, which is its own kind of crazy, but it is astounding that these platforms are not responsible for validating the provenance of the NFTs being offered.

I say astounding but, of course, it’s not surprising. In fact, the most obvious absurdity that leaps out at the moment is this:  the NFT enthusiasts have been brosplaining to artists that this is a crypto-currency solution to their woes—a new method of validating ownership in their work, and one that might even replace copyright. But aside from the fact that copyright does a lot more than validate ownership, how can the NFT serve as a means of validating ownership if the market allows any jamoke with a computer to mint and trade NFTs made from art they don’t have rights to use in the first place?

Presumably, the Spice DAO group with the rare Dune copy is exactly as naïve as their public statements imply. If so, that story is mostly a laugh. The Herbert estate can adequately address infringements of the work, if they arise. But for the artists mentioned in the NBC story, and creators even less well-known, having their art appropriated and sold as NFTs without their permission isn’t the least bit funny. In fact, one might even call it a crime.

Photo by: justlight

Amazon Fades from the ebook Legislation Narrative

Before I let the topic of these state ebook lending bills go for a bit, there is one aspect of this story that should not be overlooked. I was thinking about it when I saw a tweet criticizing Governor Hochul’s December 30th veto of the New York version of the bill. Media professional and professor Dan Gillmor, who has over 46,000 followers, summed up the sentiments of many when he wrote…

Mr. Gillmor’s hyperbole is an example of that blinkered view which finds it sensible to vilify publishers while ignoring authors, as if the interests of two were not intertwined. But the comment also reminded me that the force still driving this willful blindness is a belief that internet platforms can and should obviate the need for intermediaries like publishers. What’s especially funny about that idea in context to this story is that it was the monopolistic conduct of one internet platform—Amazon—which served as a major predicate for advocating the ebook bills in the first place. For instance, in Maryland, which passed its bill into law and now faces litigation by the publishers, all the supporting letters in the record contain the following:

For example, Amazon and Audible currently have between them over 20,000 “exclusive” titles. They will license these titles – which include high demand content by J.K. Rowling, Margaret Atwood, Alice Walker, Dean Kootz, Neil Gaiman, and others – to consumers, but not to libraries.

The headline of a Washington Post article from March 2021 (when the eBook bills were still percolating in state legislatures) identified Amazon as the publisher refusing to license titles to libraries. And as the AAP complaint against the State of Maryland notes, “The Maryland act’s legislative history and public statements by state legislators and public officials reveal some very specific concerns about this company.” The complaint adds that legislative sponsors specifically and repeatedly cited Amazon, but then avers, “… there is no contention that publishers more broadly are failing libraries. Nor is there any question that the marketplace for library ebooks and audiobooks is flourishing.”

After passage of the Maryland law, Amazon Publishing signed a deal with Digital Public Libraries of America (DPLA) to make their ebooks available to U.S. libraries, and it is reportedly negotiating terms to make its Audible audiobooks available as well. That’s a good thing, but we should not lose sight of the distinction between Amazon and the major publishers, who were not withholding their ebooks from libraries. Because whatever drove Amazon’s decision at the time (strategy for global domination?), it must be viewed as an outlier unique to that leviathan of a company and not aligned with the rest of the industry whose core business is still book publishing.

The library associations highlighted the conduct of one tech industry publisher as a reason to promote legislation that would divest individual authors of their copyright rights. Thus, despite the claims that these bills are not anti-author, a major prong of the argument for them boiled down to this:  Amazon behaved like a monopoly, so authors should pay the price. And this aspect of the story is transformed from the absurd to the grotesque when we remember that Amazon was among the platforms once touted by copyright critics as an antidote to the “gatekeeping” engaged in by publishers.

As the ebook bills gained momentum in four states—NY, MD, MA, RI—the Amazon predicate faded into the background to the extent that now, according to observers like Gillmour, the story is all about the publishing “cartel” quashing “reasonable” legislation solely directed at the price of ebook licenses for libraries. A couple of problems with this narrative, though.

The first is that, even if the libraries have a sound complaint about the cost of ebook licenses, that’s a subject for negotiation and not grounds for a futile attempt to legislate away the rights of authors. Second, if the libraries want to make a case for calling the current terms of ebook licensing unreasonable, they need to at least do some math. It is not enough to just compare the ebook purchase price to the library ebook license price and declare the difference extortionate on its face.

Because whatever the ideal cost of ebook licenses should be for libraries, the current rate of approximately three times the consumer price for ebook purchases is not as unreasonable as the library associations make it seem. The simple fact is that lending an ebook to multiple readers is a different market from selling an ebook to one reader. Let’s do a quick, back-of-the-envelope review for context.

A two-year license fee of $65 provides free access to an ebook to roughly 52 readers at a cost to the library system of $1.25 per reader. But based on the rhetoric employed by the library associations, they seem to want the same 52 readers to be provided access at a cost of about $ 0.29 per reader, but even then, not really. Because digital materials never wear out, what the libraries actually want (i.e. unlimited licenses at consumer purchase rates) is for the authors and publishers to make titles available until that per reader cost approaches zero. Clearly, there is a threshold when too low a fee would cannibalize the market for ebook sales, which would end the market for ebooks, period.

For further context, keep in mind that one reason the libraries claim a right to buy, rather than license, ebooks is that they are used to buying hardbound copies and loaning them to their communities. But here, the library associations are comparing apples and oranges and not taking an honest account of cost to the library system for providing its services. Because a physical book requires infrastructure and labor to maintain, a $30 clothbound copy, for instance, may cost the library around $1.44 per reader to serve the same 52 patrons.[1] The broader point is that the two-column argument the ALA et al presented to state legislators is not a full picture.

Finally, I would add that libraries will not stay relevant in a world where they put too many eggs in the digital lending basket. At the point at which one’s “library” experience is little more than tapping a button to access a book through an electron reader, the relationship with the individual library evaporates rather quickly. If the library associations were to take a serious read of the landscape, they might consider whether Amazon’s original refusal to license its titles has something to do with that company’s strategy to replace publishers, libraries, and any other distribution channel it doesn’t control. Because that’s the real battle of the digital age, and to that end, the libraries and publishers should be allies.

[1] Based on a staffer making $10/hr and spending three minutes managing a book for a single patron. The actual per read cost is likely higher.

Why is the press so bumfuzzled about copyright issues?

During a recent scan of the Authors Guild discussion boards, where I look for copyright related comments, I noticed a couple of authors mentioning how dismayed they were to hear the NPR show 1A host a one-sided conversation about the Internet Archive being sued by several major publishers. The program, which aired on December 7, hosted Internet Archive founder Brewster Kahle, along with Melanie Huggins of the American Library Association and John Bracken of the Digital Public Library of America.

The segments of the show extolling the virtues of libraries and discussing their digital futures were valid conversations worth having, but my friends at AG were right to take issue with the producers at 1A in regard to the conflict between Internet Archive and the publishers over copyright infringement. WAMU had provided a forum for advocates of policy positions directly opposed to authors’ interests and did so without inviting any authors to participate. Instead, as the press often does it seems, 1A amplified the too-simple narrative about King John publishers and Robin Hood librarians, as if the writers of the books necessary to both institutions do not have anything to say on the matter.

If 1A and others don’t want to host a serious conversation about the legal doctrines implied by the theory called “Controlled Digital Lending,” or they don’t want to discuss the library associations’ hopes to amend §109 of the Copyright Act, fine. If they don’t want to invite counsel for the Association of American Publishers to debate these nuanced legal matters, so be it. But before providing yet another platform for those who promote the “evil publisher” narrative, perhaps some consideration for the relationship between publishers and writers is warranted.

I don’t know. Maybe Macy’s will never talk to Gimbels. Because it seems to me that public radio shows feature in-depth interviews with authors all the time. Clearly, somebody in the ambit of NPR understands that before publishers or libraries can make books available, writers have to write them. And writing books is what we call work. And using anyone’s work without license is what we call exploitation, which is precisely what writers feel when Brewster Kahle (who is a multi-millionaire, by the way) and the executives at library associations presume to make books available in ways that contravene licensing regimes governed by copyright law.

It is very disappointing when journalists in a position to shape public perception on background issues like copyright law are apparently so star struck by Kahle’s utopian shtick that they ignore the individuals whose lives would be affected by the ideas he and his friends are promoting. I wonder if the producers were even aware that Kahle lied at the top of the program about the publishers’ lawsuit, when he flatly stated, “They’re accusing the Internet Archive of lending books,” and then further insinuated that the lawsuit came out of the blue at the start of the pandemic.

Commenting as a lifelong liberal, I can say that was Kahle throwing red meat to a presumably liberal audience, no less bloviating bullshit than anything that ever flowed from the maw of Jim Jordan. Because in this case, Kahle omitted the crucial detail that what triggered the lawsuit was his decision to release 1.4 million books without license or restriction, describe the move as a “National Emergency Library” (NEL), and claim that it was Internet Archive’s response to an urgent need during the early days of the COVID shutdown. (See post here for discussion.)

But Kahle is not so naïve and innocent as he presented himself on the broadcast. The NEL was a stunt—one worthy of Barnum—that seized upon the emergency atmosphere of the first wave in the pandemic to advance a broader anti-copyright agenda. And he had to know it would force the publishers to sue. Like any activist, Kahle wants to control the narrative, which is an understandable tactic but should be seen as a tactic, and one that had nothing to do with responding to a public need, let alone showing any respect for authors.

Unfortunately, the producers at 1A, like much of the press, seem to remain blissfully unaware that the copyright agenda promoted by Kahle and the library associations is not narrow but would, if achieved, affect professionals across most if not all areas of copyrighted works. So, in this regard, perhaps they might take a glance at their own web page, read ©WAMU at the bottom, and ask themselves what that means in the broader conversation they are not quite having.