Intellectual Property -- Copyright War

By Michael Condon

The creative industries get ready for an offensive to take back what was historically theirs.

Never in the history of media have so many vested interests, so much money, so many people and such complicated issues converged in one. The music industry, the movie industry and the media—particularly newspapers—are cutting off dead wood and preparing for the last stand. But are things really that dire? Some would argue that these industries are healthier now than they ever have been. With the spread of information at a never before seen level, pieces of journalism are being read more now than ever, music artists are able to reach a broader audience than ever (some by bypassing the record labels all-together), and movies are being watched by more people in more countries.

New copyright laws may ban illegal downloads for personal use but will this stop profit declines within the creative industries?

The issue is control, and the embodiment of that control is copyright. The music industry is perhaps most illustrative of the issue. While historically artists have arguably lost a large amount of control from the moment they signed their record deals—at least as far as the use of their music, post recording—the record labels kept that control and made their money from the copyright.

Now with the distribution channels disrupted via the spread of the Internet, and with the increased popularity of peer-to-peer file sharing sites such as Bittorrent, industry representatives are struggling in attempts to take back that control.

Currently in Japan, new copyright laws are being debated which could make average users subject to civil law suits from record labels or movie distribution companies. Within the walls of mega-forum 2-Channel and the Japanese blogosphere, debate has been raging over the laws and what they will mean exactly for the average user.

Specifically the outright banning of illegal downloads—music, movies and games being the main points of interest—is currently being investigated by a sub-committee appointed by the central government. Presently, Japan’s copyright law makes an exception in the case of downloads for personal use. But with sales dwindling, particularly in the case of CDs, and peer-to-peer sites firing an unimaginable amount of terabytes across cyberspace, industry representatives are drawing the line in the sand in the battle against the file-sharing onslaught.

Policing the highway
The answer is simple according to some. John Kennedy, chairman and CEO of the International Federation of Phonographic Industries (IFPI), says it is a matter of simply getting tough on infringers. “It’s a very simple proposal—you have a law and you enforce it,” he says.

Kennedy, a former President and COO of Universal Music International, who received an OBE for his work on Live Aid, has spent 30 years in the music industry and has seen it evolve during that time. Kennedy represented a swathe of successful artists during the ’80s, including Wet, Wet, Wet and the Stone Roses. He also represented Capitol Records, best known as the home of Oasis.

The industry veteran says he believes a large increase in resources will not be needed to govern the Internet—warnings and enforcements will just need to be carried out in a similar way to any other law. “People call the Internet an ‘Information Super Highway.’ Well like any normal highway, it can be governed. If someone is speeding you give them a ticket and in extreme cases you take away their license.” But how about finding them? “People sit in their rooms and think they are anonymous but they are not—their IP address says exactly who they are,” says Kennedy.

Back inside 2-Channel, Daisuke Tsuda, IT journalist and member of the sub-committee, answered questions by concerned users. Tsuda said that while there was no criminal penalty and users could not be arrested, they could face a civil suit. While the revenue from digital downloads continues to grow, the amount is unlikely to make up for the drop in CD sales. Meanwhile, Japanese music industry representatives have moved to protect the lucrative chaku uta (ringtone) trade. With middle and high school students continuing to download illegal chaku uta like crazy onto portable USB drives and SD cards, profits are massively under threat.

So far, the review sub-committee has agreed that downloading for personal use should be made illegal while watching streamed content via sites like YouTube and Japan’s hugely popular Nico Nico Douga video site, would remain legal.

Rethinking copyright
But the debate raises the larger question of what a copy actually should be defined as and whether the concept of copyright as it exists today is outdated. The very core of the Internet is essentially a copy machine, with information being duplicated for different users to view or use.

Media futurist Gerd Leonhard says that in a globally networked world, with an expected 3.5 billion mobile users and Internet speeds increasing exponentially within the next two to four years, the traditional Western concept of exclusive copyright must be reviewed. “It is the purpose of copyright to generate sustainable and growing revenues for the creators, not to prevent new uses of their works that may eventually result in those new incomes. He believes that in the future, “many of these models will be more like flat-rated or bundled access models, rather than unit-sales based models.”

Solana Larsen, the managing editor of worldwide blogosphere monitor Global Voices Online, which exists largely through the use of Creative Commons’ licenses, says it is time for a rethink. “Technological advances have always challenged people’s interpretation of copyright law. I mean, it was the printing press that made copyright necessary in the first place. Pretty much every time there has been innovation in communication or distribution technology, there has been some need for reinterpretation and adaptation.”

“With the Internet there is a new degree of transparency and openness, which first of all makes it difficult to hide when you reuse people’s work, but it also enables new methods of accreditation and profit sharing that content providers are beginning to capitalize on. There are other ways you can profit from content being shared and reused that are not always immediately monetary.”

A recent case involving Google may help provide a blueprint for content creators. In October, Google settled a dispute with authors and publishers over its scanning of 7 million books for digital versions of printed material. The company paid $125 million to publishers and authors and will, from now on, provide a percentage share of the profits from ads and downloading fees. Under the agreement, Google would receive 37 percent of revenue while publishers and authors would get the rest. The settlement could pave the way for similar agreements within other industries.

At the moment, the debate within industry— both from content creators and intermediary companies alike—is split into two groups: those who wish to enforce existing laws or create new ones to enforce stringently, and those who wish to remold the laws and at another level, the concept of copyright itself.

Creative Commons CEO Joi Ito, who also founded PSINet Japan, Digital Garage and Infoseek Japan, advocates an adjustment of copyright to match the new technology:

“In the analog world, copyright was primarily a method of preventing commercial exploitation of one’s creative works, since the average person did not have the means to “copy” things and copies were typically made by pirate publishers. Copyright prevented people from building businesses to commercially exploit creative works in a way that would reduce the incentive for an artist to create,” Ito says.

“The problem with the digital world is that all of the things that were never in the domain of copyright, such as selling a book, sharing a book, reading a book, etc. were things that you could do without restriction. Now with computers and the Internet, nearly every kind of use of content comes under the regulation of copyright,” he says.

Ito continues, “While it is important to protect copyright and the incentives that copyright (and intellectual property) provide, it is important that we do not prevent many of the basic things that people want to do with content or prevent some of the potential new ways that people will be expressing themselves and sharing this expression.”

Ito says that revenue within the music industry will increasingly come from other avenues rather than the unitary selling of music recorded by the artist. The Web entrepreneur pointed to the Nine Inch Nails’ latest release Ghost I IV, a 36-track instrumental album, part of which was released for free from the band’s Website.

Fans could also download a 40-page PDF of photography which formed a visual accompaniment to the music. The album was also released in various forms, from a $10, 2-CD set to a $300, limited edition set. Consequently, they made $1.6 million in one week from album and merchandising sales via the Website and Amazon.com. The band’s singer, Trent Reznor, said he was able to bypass record companies, paying only $38 to sell his album via Amazon.

The album was released under a Creative Commons (CC) “Attribution Non-Commercial Share Alike” license which effectively allowed anyone to use or rework any material from the album for non-commercial purposes, as long as they gave proper accreditation to the artists and as long as the work was released under an identical license.

A new model
The Creative Commons project was created as an alternative licensing system to address the issue of total control verses exploitation of material. While CC has been met well by artists and other content creators, its enforceability has often been queried.

A decision in August this year, however, went some way to validating the licensing system. The Court of Appeals for the Federal Circuit (essentially the Internet Protocol, or IP, court in the US) upheld an open source copyright license, explicitly pointing to Creative Commons.

The court determined that CC licenses are copyright licenses despite the fact they may not be contracts. If users fail to honor the license agreement they become copyright infringers. Global Voices’ Larsen, meanwhile, says she believes Creative Commons is a valid alternative for copyright law. “Most people on the Internet who copy and paste text or images, or make copies of music and send them to their friends, only do it out of excitement for the content. It’s actually a positive thing. Why would you try to shut down your biggest potential distribution channel?” she says.

“Creative Commons [addresses] the politics of copyright, which is that some very powerful corporations and government bodies have huge financial interests in deciding over laws that were initially developed to protect individual content creators. They simply don’t have the best interests of creativity, science or humanity at heart,” she says.

“a continued loss of control over IP and copyright and most other measures of restrictions is absolutely inevitable; and in fact, the less control we will have the more new revenues will surface.”
Media futurist Gerd Leonhard

Futurist Leonhard says the key to making money in a post super-connected world is to embrace the concept of losing control. He believes that “a continued loss of control over IP and copyright and most other measures of restrictions is absolutely inevitable; and in fact, the less control we will have the more new revenues will surface.”

Leonhard believes that “The future of creativity, content and media is bright, as it is the human creativity and its embodiments that will be even more valuable in a world of ubiquitous access and huge growth of output. It is the value and dollar system and logic that we need to rebuild and adapt—and the law is, of course, there to support this, and will therefore be adapted. This process is not new, just more drastic since the Web is often removing many old ways to get money out of scarcity while not yet offering the same profit in a plausible new way yet. This new logic needs more than 3 percent of the global population on broadband, and always-on, to generate increasing revenues from those new ideas. Another 24 months and we should have a much better take on this.”

Before this happens, new laws will likely be in place in Japan. But whether a new adaption of the existing laws will be required, or whether a whole overhaul of the concept of copyright will move with the proliferation of the technology, is a topic which will continue to be debated across the forums of 2-Channel for some time.