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.

The Amazon Effect

More than a decade ago, a book editor managing her own imprint at one of the big publishing houses gave me some insight into her world that I’ll never forget.  “I have to publish about five diet books,” she told me, “in order to invest in one new novelist.”  It’s important to understand that this is not a comment on the publishing industry but rather a comment on the book-buying market.  Like it or not, the number of people who want to purchase serious literature and non-fiction is considerably smaller than the number of people who want to buy self-help books, diet books, and pulp fiction.  And there’s nothing inherently wrong with suppliers delivering the products people want, but when it comes to products like books (as it is with music and filmed works), the healthiest market overall is one that sustains the greatest diversity of material, which is not necessarily the same thing as the greatest number of works.  This is a distinction I suspect the algorithmically-minded folks at Amazon may not understand, or care to understand; and this leads to the question of what effect the distribution leviathan will continue to have on publishing and literature going forward as well as what the company represents to the overall economy.

This past February, George Packer published a detailed examination of Amazon in The New Yorker under the subtitle Amazon is good for customers.  But is it good for books?  Packer covers so much ground, some of it rather startling, that the article is hard to summarize, and I strongly suggest reading it if you haven’t.  Probably the most striking revelation in the piece is the manner in which Amazon pushed the concept of “co-op marketing” fees, money a publisher would spend at a brick an mortar store like Barnes & Noble for a prominent display of a new book, to something reminiscent of an old-fashioned shakedown with a digital spin.  According to accounts cited in Packer’s article, it was pay the fees to Amazon or watch the “Buy” buttons disappear from your products, meaning browsers literally could not purchase the books on the site.  You can almost imagine the heavy saying something like,  “Youze got a nice collection of novels here. I wouldn’t want to see anything happen to ‘em.”

To my mind, the techo-utopianism exemplified by Amazon — and uniquely by Amazon because of the way the business is both web-based and operates in physical space — is based on two illusions, one that is probably hazardous economically, and another that is probably hazardous culturally.  The economic implications are relatively easy to recognize in that we’re seeing the Wal-Martization of every line of business represented by the things Amazon delivers — and Amazon delivers everything.  The illusion for the consumer is that we get low prices and convenience; but the hidden, long-term cost may well be the jobs that enable us to buy stuff in the first place.  This vicious, downward cycle is very neatly summed up in this 2005 JibJab spoof. It depicts a man enjoying low prices at “BigBox Mart,” losing his job at a supplier due to pricing pressures by “BigBox Mart,” then having no recourse other than to work for “BigBox Mart” well below his qualifications and at some fraction of his previous earnings.

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An economy is an ecosystem, and just as the principle of biodiversity teaches us that a whole species cannot be eradicated without threatening other species, I suspect the same can be said for certain organisms within a free-market economy.  Sure, those who stand to gain will talk about creative destruction and technological progress, but when the products or labors being artificially devalued still have real value (i.e. market demand), that’s not creative destruction; it’s just destruction without creating anything new to replace what’s been lost. Like Wal-Mart, the Amazon model doesn’t create anything; it is merely a distribution system, a contemporary railroad that can dictate the prices charged in every diner along its route.  Except this railroad has thousands of lines spanning in all directions, doling out cheap candy to the passengers and simultaneously reducing the value of labor in so many little towns along the way until eventually nobody can ride the train.  From the Packer article:

According to a recent study of U.S. Census data by the Institute for Local Self-Reliance, in Washington, brick-and-mortar retailers employ forty-seven people for every ten million dollars in revenue earned; Amazon employs fourteen.

Like his Silicon Valley brethren, Amazon CEO Jeff Bezos speaks with the confidence and arrogance of determinism, as though these dominant, even monopolistic, technology companies are manifestations of the only history that could have unfolded in the digital age.  “Amazon is not happening to bookselling. The future is happening to bookselling,” Bezos is quoted as saying in the Packer article.  And while it may be true that the publishing industry does cling to some antiquated practices, it’s a subtle but important sleight of semantics happening there when a wealthy corporation owner tells us that the manner in which his business operates was inevitable, ordained as it were by the natural order of our times.  Does this apply to the entire enterprise?  Are the transitory, non-union “pickers” hired to work in Amazon fulfillment centers in questionable conditions and for low wages an inevitability in this “future?” Because on the subject of antiquated practices, the notion that warehouse workers have to be treated like machines so that I can get a dollar off a luxury item like a book or a CD takes us back at least a century.  Does the future belong to people who make conscious choices, or is it already encoded by seven wizards who dwell in the sacred valley?

While the consumer is distracted by cheap commerce, the producers (authors) gaze at a different illusion — one that preaches self-reliance, a chance to connect directly with customers, and bypass the traditional, elitist “gatekeepers.”  This is music to the aspiring writer’s ears, particularly if he’s been turned down for publication by one of those gatekeepers in the publishing world; but more total manuscripts uploaded by more writers does not mean that more great works must inevitably be discovered or that more writers will make a living through digital sales.  “The digital market is awash with millions of barely edited titles, most of it dreck, while readers are being conditioned to think that books are worth as little as a sandwich,” writes Packer.

There’s a reason my editor friend referred to “investing” in an author, and it’s because the best stuff almost always comes from the healthy center of an industry, where experienced professionals have the resources to cultivate something the market doesn’t know it wants yet. The best stuff comes from high-risk bets.  It’s not too hard to sell a slightly scandalous S&M trilogy or mass-market paperbacks or diet books. But stewardship of the next Toni Morrison is hard and takes experience and real risk because that kind of literature just isn’t going to be as popular as 50 Shades of Grey.  And unfortunately, what is threatened by the devaluation of all works by a model like Amazon are the resources available to make those riskier investments.  Some people may call the curators of those bets elitist, but which is the preferable tastemaker — the agent or editor steeped in literature his whole life, or Amazon’s pay-to-play model for promoting a book?  Or worse, how about a bot swarm telling us how great or awful some new ebook is?  I say, bring on the elitists.

The promise says “your work will retail for less, but you have the potential to sell more and pocket a larger percentage of the sales than you would with a traditional publisher.”  This illusion is how the internet industry convinces people that these models are examples of creative destruction — that these new opportunities for authors are what’s being created to replace those jobs in publishing and book retail that are being wiped out. Interestingly enough, though, Packer’s article mentions that even Bezos’s own wife, an author, published her last novel with Knopf and not through Amazon Publishing.  Since it’s a safe bet MacKenzie Bezos knows where her next meal is coming from, why not give Amazon Publishing or even direct sales on its platform a go?  Maybe because book publishing is more complicated than the Amazon model says it is.  From the Packer article:

“Writing is being outsourced, because the only people who can afford to write books make money elsewhere—academics, rich people, celebrities,” Colin Robinson, a veteran publisher, said. “The real talent, the people who are writers because they happen to be really good at writing—they aren’t going to be able to afford to do it.”

It was inevitable that these companies, once they controlled the lines of distribution, would get into the business of production; and while it’s reasonable to expect that Amazon as publisher might partner with some great authors and strike good deals with them, what would Amazon be at that point other than another so-called gatekeeper?  More importantly, everything about the company’s business practices suggests they expect to be the only gatekeeper, which is why all this democratization talk is bullshit; it’s a hypnotic used to blind people to the fact that these companies are designed to devour whole industries and emerge as the only game in town.  That doesn’t sound like the promise of the information age to me.

What does sound like the promise of the information age to me is something akin to my long-time friend and colleague’s venture Bittersweet Editions. Marco North spent over two years developing an artist-centric, all-digital publishing entity. Modeled after a classic small press, Bittersweet and ventures like it are seeking a balance, looking to provide authors a choice between big, corporate publishing and getting lost in a sea of “content” on the Web.  The roles of editing, marketing, and connecting with the right audience are still relevant, still take labor and expertise, and still have value.  Just like any editor/publisher, the small press or small label or small film distributor makes an investment in works and cannot help but impose his own tastes in making selections.  Call this “gatekeeping” if you will, but it seems to me that the better vision for the future is one that fosters more independent gatekeepers rather than one big company with a master key.

Airbnb v NYS: Can innovation coexist with regulation?

Rules are meant to be broken.  It’s not a bad aphorism inasmuch as it contains the spirit of innovation that leads to things like democratic republics in favor of monarchies, cures for horrendous diseases, brilliant works of art, and…yes…iPods.  Of course, as the better English teachers used to say about grammar, it’s okay and even necessary to the task of creative writing to break the rules as long as you know you’re breaking them.  In another context, regarding the rules pertaining to many of the social systems we erect, I would argue that it’s okay to break certain rules as long as we don’t forget why we wrote them in the first place.  There’s no question that government regulation, for instance, can be inefficient, unreasonable, costly, and even corrupt; and for a state government that has exhibited all of these vices many times since the nation was new, one need look no further than Albany, NY.  Nevertheless, as state Attorney General Eric Shneiderman squares off this week with chief executive Brian Chesky of Airbnb, the question of whether or not regulation plays a role in the so-called “sharing economy” is as much a cultural matter as it is a practical one.

Airbnb is the biggest online facilitator of short-term rentals.  Through services like these,  home-owners with anything from a room to a whole house available can connect with renters looking for short-term alternatives to hotels and traditional B&Bs. Airbnb collects modest service fees for hosting the connections and facilitating transactions, and today the company is worth an estimated $10 billion.  Of course, in New York State, as you might expect, a very large portion of rental properties are offered and sought in New York City, and there happens to be a law in the city against renting a whole apartment for less than one month.  This is to prevent landlords from operating unlicensed hotels.  According to this story by David Streitfeld in The New York Times, AG Schneiderman is claiming that 60 percent of Airbnb rentals in the state are illegal due to the large number of city offerings that are breaking the law.  Chesky is fighting back with a familiar refrain we hear in so many contexts these days — that current regulation doesn’t apply to his company’s stable of hosts he calls “micro-entrepreneurs.”  And, indeed, Airbnb can be a very lucrative, even home-saving opportunity for people seeking new ways to survive the pressures of the current economy.

I personally think Airbnb and businesses like it are pretty cool, and we should proceed with caution when it comes to regulating new sources of income for individuals in an economy that continues to pummel the middle class from all sides.  I stayed in a woman’s home on Long Island a couple years ago; and it was clear that the income she earned by renting out her kid’s room from time to time factored considerably into making ends meet for her family. On the other hand, if an unregulated, data-driven system enables the multi-property, commercial owner in a place like New York City to circumvent laws originally designed to protect consumers, that doesn’t ultimately help Mrs. Room-to-Rent or anyone else in the long run. It seems to me that if a system like Airbnb exacerbates the already lopsided real-estate market in that city, the family with one room to rent is only going to bear more financial pressure over time in macro-economic terms until their micro-entrepreneurism won’t help.

And according to the Times article, the AG’s office claims that nearly one third of the city rental offerings at the time it began its investigation were owned by just 12 percent of the hosts on Airbnb.  Even as the fight was brewing in Albany, Airbnb was scrubbing certain landlords from its site who were controlling an estimated 2,000 rooms in the city.

David Streitfeld rightly invokes the Silicon Valley ethos ingrained in its VC-fueled, fail-fast, start-up culture that “It’s better to ask forgiveness than permission.” This mantra is often repeated with regard to copyright infringements, privacy invasions, and violations of any number of statutes; and what it really translates to mean is get rich faster than you can be sued or indicted, and then you can negotiate or even pay a settlement after the fact.   In fact, the Times article quotes a Mr. Kevin Laws of AngelList thus:  “the approach almost all start-ups take is to see if they can be successful fast enough to they can have enough money to work with regulators.”   It’s an effective strategy, and there is something undeniably American spirit about it, too; but it seems to me we should adapt regulations to accommodate the changing market without necessarily abandoning their initial intent.  The current cultural trend that seems to want to tear down all systems originally designed to serve the public has a tendency to result  in the kind of market that existed at the turn of the last century when people were  literally ground under the wheels of innovation.

I think this tension between New York State and Airbnb makes an interesting test case — one that ought to be a relatively solvable — exemplary of the larger challenge as to how and when to regulate in the digital age.  Can we balance legitimate innovation that really does meet a viable market demand and creates opportunities for people while also maintain rational grounds for public oversight where necessary?  While temptations abound to forego the very notion of traditional regulation in favor of some sort of algorithmically optimized democracy, I suspect this isn’t a choice we’d make were we able consciously to consider it.  As such, cases like this one are intriguing in that they force us to ask some of the right questions.