Category: Copyright

There’s no such thing as used digital media.

It’s science.  Deal with it.

We hear an awful lot about how copyrights on creative works “stifle innovation,” preventing new business opportunities from launching or thriving. And the self-serving advocates of these “new” ideas love to describe those of us who question their proposals as anti-technology, anti-progress, stuck in old models, and so on.  But the idea that a digital file of a song, a movie, a book, etc. can ever be called “used” is nothing more than an attempt to transplant a very old model into the soil of a new, technological market.  So, who’s being anachronistic here?

On purely technical grounds, there is literally no such thing as used digital media because “use” does not in anyway degrade a file.  A digital file of a song or a movie plays as pristinely the millionth time it’s played as it does the first time it’s played.  If you worked in video post-production in the days of early digital tape media, you would have seen a new term affixed on the spines of those tapes — clone.  Because that’s what a digital “copy” actually is; it is an exact replica with no generation loss from the original source.

So, if you transfer a file of a song or a movie to someone else, it will not in any sense be “used” simply because you experienced it before someone else did.  The new “owner” of that file will have a brand new experience, the value of which is identical to the original “owner’s” purchase price of the file from the original distributor.  If we’re talking about a movie, for instance, the only thing that differentiates Viewer A from Viewer B is that the former has seen the film and the latter has not.  Yet, the logical argument being made by certain “new model” entrepreneurs is that Viewer B should be entitled to pay less for the identical experience simply because Viewer A has already paid the original price one time.  This is patently absurd. By the same logic, the ticket price for a movie in a theater ought to decrease incrementally after each screening because the film has been “used” by other viewers. (Yeah, somebody in the copyleft crowd just thought, “Hey, that’s a good idea!”)

This notion of “used” digital media is just one way in which technological opportunists can be disingenuous when it comes offering up what sound like market-based theories.  They want the luxury of cherry picking from both the past and the present as suits their purposes.  In reality, though, these ideas don’t come from particularly innovative technologists, but rather from standard-issue middlemen looking to exploit a consumer-serving limitation on copyrights to siphon value from creators and line their own pockets.  In the long run, though, transporting this doctrine into the digital market, which makes no rational sense, would likely drive prices up in what I’ll call first-user experiences in order to offset lost revenue.

Naturally, when a work is distributed on physical media, the notion of “used” remains intact.  First sale doctrine in copyright law says that I can buy a novel and then sell the book as used at my next yard sale, regardless of whether or not I read it to a dogeared pulp or kept it in pristine condition and never cracked it open.  The condition of the book may affect the second-market value in my yard sale, but it has no bearing on my right to sell or otherwise distribute the used copy one time.  Because this transaction involves a physical object, replicating the process even in tens of thousands of yard sales all over the country would never produce a secondary market for novels that clones the primary market and inherently reduces the value of all novels everywhere.

But this is exactly what would happen in an all-digital “used” market in which a middle-man like Amazon, Apple, or Redigi removes a previously purchased file from Consumer A’s computer, sells it to Consumer B for a lower price than the original, and profits from the transaction while kicking a little something back to Consumer A.  Never mind how easy it would be for the selling consumer to cheat that system by storing files any number of ways, the so-called “secondary” market would very rapidly become the primary (i.e. only) market, and therefore just another means by which tech-happy leaches artificially drive the value of creative works below sustainable levels while pocketing millions before the producing entities collapse.  (Anyone who just thought “Good, I can’t wait until the movie studios, record labels, and publishers collapse,” should understand that it will be the independent, small and mid-sized producers who will fail first.)

I find it hard to believe that any legislator or court would be bamboozled by the parlor trick in which a file is moved from one consumer to another through the resale transaction without making a “new copy.” This is an analysis of the state of the technology and its role in the market viewed through a pre-digital lens, semantically bogged down in irrelevant terms like “copy” while ignoring how the technology actually works and what its potential market impact can be for good or bad.  So, if we’re really talking about developing new business models that correspond with new technology, then the language we employ might have to be new as well.  And in the digital world, the word used has outlived its usefulness.

Lighten up, Derek Khanna

A legal cub named Derek Khanna, rather than finishing his law degree and taking the bar exam, has been steadily transforming himself into something of an anti-copyright celebrity purporting to represent a conservative perspective.  And yesterday,  he offered this inscrutable editorial, which appeared on Business Insider* among other places.  Ostensibly, the article is a criticism of copyright terms (i.e. the length of copyright), and there is certainly nothing wrong with having that discussion.  In fact, in the two plus years since I’ve personally been involved with these issues, I’ve met several strong proponents of copyrights who would be open to discussing the pros and cons of shorter terms; but it must be something about their 20-30 years worth of professional IP experience that makes them sound just a little less, I don’t know, hysterical than Derek Khanna.

Titled “The Conservative Case for Taking on the Copyright Lobby,”  one might think that the word case coming from a Fellow at Yale would involve some sort of logical construct written with the kind of dispassion legal scholars often exhibit, given their experience balancing complex and competing interests. Not so much.  Instead, Mr. Khanna offers a sort of screamo variation on the anachronistic theme that Hollywood lobbyists are robbing the future economic and creative capacity out from under the next generation while simultaneously committing treason against the orthodoxy of America’s Framers.  All of this is achieved, of course, by the “content lobby” sequestering creative works in the grip of terminal copyrights.

While Disney’s extended hold on its seminal cartoon Steamboat Willie certainly makes an interesting case for discussion, to read Khanna’s article, one might get the idea that creative work has receded thanks to Mickey and the 1976 Copyright Act rather than expanded. All the novels and plays and screenplays unwritten!  All those songs unperformed!  The films we’ve never seen!  And the computer games not produced!  All because of that damn mouse!   Seriously?  Even with terms as long as they are, I have yet to meet a single artist, great or small, who gives existing, protected works anything more than a passing thought when he or she begins to create something new. So, Derek should lighten up because he’s not only not a lawyer yet, he’s really very much not an artist.  I quote:

The costs of one of the greatest thefts in American history by these special interests hinders learning, destroys our cultural legacy, hurts innovation and the public, but, most important, it impedes filmmakers, artists, deejays, and other content creators who need to be able to build upon the work of others to create new content — as we have done for centuries. 

What do you mean we, kid?  And where have you been for the last 20 years?  Oh, right, growing up.

Certainly, Khanna is correct that the social purpose of copyright is to promote new works in the arts and sciences; and if the application of the law exceeds or betrays this purpose by preventing people from building upon the works of others, then reform is in order. Yet, despite whatever research opportunities his fellowship at Yale affords, Kahnna insists on trotting out some of the most overused, amateur complaints about copyrights — Steamboat Willie, corporate ownership of the song “Happy Birthday,” and some ill-advised things former MPAA head Jack Valenti said 32 years ago — rather than demonstrate how current copyright terms are having any tangible, negative effect on the creation of new works. This is because there are no solid data to support this accusation on any scale that can be considered problematic.  To the contrary, copyright continues to serve as a basis for fair trade among authors of works that enables multiple parties to benefit creatively and financially; and it also codifies the principle of fair use in the U.S., which happens to have the most liberal interpretation of that concept among countries that maintain copyright laws.

It is interesting, though, that Derek claims to be making a “conservative case” with this article.  In fact, the absence of a case by any definition of traditional argument reveals the piece for the emotional, buzzword vehicle that it is.  And to this end, the only apparently conservative position taken by Khanna (and it’s not his idea, by the way) in this editorial is a lightly veiled nod to “strict constitutionalism” with quotes like this one:

The steep costs to perpetual extension of copyright have been long known and are well documented. This is why the British copyright statute, the Statute of Anne, limited copyright duration to 14 years; why 12 of the original 13 colonies had similar copyright durations in their own statutes; why the Constitution includes the phrase “limited times”; and why the founders limited copyright to 14 years.

Of course, it’s rational to assume that the Framers anticipated the downsides of perpetual copyright, but the term of 14 years is as arbitrary and irrelevant to contemporary America as whatever it is Sarah Palin keeps babbling about muskets and militias.  When the U.S. extended terms in 1998, it was playing catch-up as one of the last countries to adopt the same terms other copyright-supporting countries already had in place.  What that means is that the U.S., as one of the largest exporters of entertainment and information media in the world, was literally leaving money on the table relative to its trade partners; and it’s difficult to imagine a conservative advocating a position that would support losing revenue in that manner.   One does not make a sound case for thoughtful reform simply by repeating incendiary and obsolete complaints or by bowling a googly like this one:

To their credit, in moments of candor, content-industry lobbyists at least admit their goal is to repeal the copyright clause from the Constitution. 

I got nothin’. I’ve read it several times and cannot figure out why Khanna claims content owners would want to repeal the copyright clause unless he means they would seek to repeal only the phrase “for a limited time.”  Either way, it’s pure, careless invention to suggest this notion lurks anywhere in the minds of serious copyright professionals. The clause itself is older than the Bill of Rights. And no matter what the subject, every time someone with a political axe to grind claims to know the intent of the Framers, it’s hard not to see how such “wisdom” in the wrong hands results in events like the armed standoff now taking place in Nevada.  To quote Terry Hart, who writes the blog Copyhype:

The fact is, the Founders spent remarkably little time on copyright. Joel Barlow told the Continental Congress we should have a copyright act and, by the way, you should just copy England’s law. The copyright clause was proposed just a few days before the Constitution was finalized, and adopted without debate. Compare that to the process going into the 1976 Act, which actually comprises 20 years worth of study by the Copyright Office, roundtables, discussion drafts, public comment, and congressional hearings.

And in case Derek Khanna and the editors who think he’s worth listening to hadn’t noticed, a new copyright review has been underway for several months now, complete with hearings in the House Judiciary Committee. It’s a complex matter being discussed by serious people with many points of view and by a variety of stakeholders. And I am told by lawyers I know who have been the room with studio execs and the MPAA, that nobody is talking about extending terms. Meanwhile, the narrative that Hollywood alone holds Washington in the grip of its lobbyists has been outdated for quite some time, with those resources dwarfed by the expenditures of Google alone in its efforts to weaken copyright.

I get why Khanna’s charm and good looks make him an attractive poster boy to watch poke a hornet nest with a stick. But despite all the aggrandized prattle about the digital age elevating discourse in the world, this is all too often what it really looks like:  a kid with exactly zero professional experience spouting a bunch of popular-sounding and oversimplified bullet points, all because it’s good click-bait. But that’s not where the real discussion is taking place, and neither should it be. This kind of reminds me of a moment in the year 2000 when CNN was reporting the unfolding disaster of the Russian sub Kursk, trapped deep in the Barents Sea and about to lose all hands. And CNN brings on action/thriller novelist Tom Clancy because of course he wrote The Hunt for Red October.   Fourteen years later, this circus gets more absurd by the hour.

*This was mistakenly attributed to another article and link in The Washington Post.  Thanks to Mr. Khanna for the correction.

Why is Singapore a Hub of Online Piracy?

Historically, one thinks of piracy and Singapore in the context of the high seas — both in legend and in reality.  Geography shapes history, and the the Malacca Strait has always been a valuable sea line of communication, thus good hunting ground for centuries of armed robbers right up to the present.  And although the various regimes in Singapore have a long history of dealing with piracy in the traditional sense, the current government appears to have a new problem on its hands with piracy in the online media sense.  The small, relatively affluent city-state of 5.5 million people ranks the worst out of 15 Asia-Pacific countries in per capita infringement according to research by MarkMonitor, a division of Thompson-Reuters.  Additionally, a handful of articles appeared recently citing research done by Asia-Pacific firms Sycamore and InsightAsia indicating that 70% of 16-24 year-olds are chronic users of pirate sites. This is consistent with the study released last September by London-based NetNames, demonstrating that Asia leads Europe and the U.S. for explicit use of pirate sites, with those three regions accounting for over 90% of of pirate traffic worldwide.  In my podcast interview with the author of that study, Dr. David Price did affirm that wider availability of legal, broadband-based services likely accounts for the U.S. being in third place, but his study also shows that pirate traffic continued to increase in all three regions concurrent with the expansion of legal alternatives.

The Sycamore/InsightAsia study also provides some interesting data regarding Singaporean attitudes toward piracy, revealing a willingness among those polled to examine their own behaviors — an awareness we don’t always see in the American market — that reminds one to try to understand each culture and market on its own terms rather than view data through our provincial lenses.  66% of those polled believe that their own use of pirate sites is form of theft, and 85% responded that the reason they access media through pirate sites is “Because it’s free.”  Other responses suggest an interesting contrast to many Americans’ more militant attitudes that media piracy represents some sort of civil right, despite the fact that Americans have affordable access to everything.  Singaporeans, who have have far less ready access to media, seemed to respond to the hypothetical loss of pirate sites with something of a shrug.  Those polled tended to say that if XYZ site were gone or blocked, that they’d probably move to the next, cheapest alternative.  The fact that Singaporeans didn’t raise ideological objections might partly be explained by the fact that civil rights in Singapore are not what they are in the United States, but I think there are more shades of gray here that actually make Singapore an interesting case study to watch.

I did some work-for-hire filming in Singapore in 2007, and I chatted with my friend over there who works in filmed entertainment production about some of these issues.  Granted, it’s one woman’s view from the ground, but I found her comments insightful.  For one thing, it seems we can understand the Singapore market in three broad demographics that each consume media very differently, keeping in mind that nearly 75% of the population is ethnic Chinese, descendant of immigrants who came to work for the colonial British.  The official language of Singapore is English, and school is modeled on a British system, although native English speaking is a post-independence (1963) phenomenon, which is why many people over 60, like my friend’s father, speak only Chinese and generally watch Chinese television programs.

At the other end of the market are those teens to early twenties, who are voracious users of pirate sites and are presently most interested in music and filmed entertainment coming out of Japan and Korea.  This demographic represents the hungriest consumers of media in Singapore for the same reason it does everywhere else — the young have more free time.  While iTunes is available in Singapore, broadband services akin to Netflix for filmed entertainment are not legally available, making DVD purchase the primary legal means to watch films and programs on demand.  Youth being youth, they want to consume high volumes at a high rate and feel they can’t afford enough DVD consumption.

In the middle demographic (late 20s to about 60), we find people with jobs and responsibilities and who have a broad range of media tastes, including US and UK productions.  This group buys CDs and DVDs, but they will also use pirate sites to sample programming before purchase. From this anecdotal evidence, we can predict the technorati to assert that Singapore’s piracy problem is one Neflix-type enterprise away from a solution, and while this would probably have a mitigating effect, it’s not necessarily as simple as that.

For one thing, delivering a rich library of on-demand, digital video into a particular country is complicated by trade arrangements between the producing and consuming nations, licensing agreements written into contracts before films and TV shows are even produced, and the socio-political nature of the consuming nation. With Singapore’s present piracy numbers, investors would likely write off the market as a legitimate importer/exporter of entertainment media.  This is one of the obstacles tech-utopians tend to overlook in every market when they write oversimple editorials about “switching models” to technological solutions, as though installing an app is all that’s required.  In order for their to be actual trade involved, someone has to invest considerable resources to navigate the financial, legal, and cultural seas, as it were; but if the piracy numbers are too high, that’s what will prevent a quality, Netflix-like model from manifesting in a market like Singapore.

Moreover, Singapore’s piracy trend risks cannibalizing their own burgeoning filmed-entertainment industry.  For a small nation, they produce an impressive amount of cinema and television programming out of a couple of fairly big studios and several modest production houses. It has also recently become home to satellite facilities for some major animation and effects studios like Lucasfilm and Double Negative. With the growth of this industry, it is not unreasonable to think that some of today’s teenage K-Pop fans are going to want to be tomorrow’s film and TV producers; and a message that says “Don’t pirate away your own future” may actually resonate with young Singaporeans.

It would be a shame if investors did abandon the region as a legitimate market, particularly because Singapore could become a pivotal location for media production and commerce in Asia-Pacific, just as it is a financial services hub and presides over one of the busiest shipping ports in the world.  Additionally, I think it might be interesting to watch how those 16-24 year-olds emerge as a creative class, considering they’re still part of the first generation of natives born to an independent Singapore.  Thus, they are at the early stages of defining what it means to be Singaporean, which might explain why my friend describes a love/hate relationship with China.  As that culture evolves, it will be reflected in the films and TV Singaporeans will produce, thus opening the proverbial sea lines of communication for fair trade in media will be essential to foster that expression in a manner that’s sustainable.