Senator Al Franken (D)

He started this petition in favor of net neutrality, saying:

Net Neutrality is THE First Amendment issue of our time. If you want to protect the free flow of information in the country and all that depends on it, you have to help me fight this.

He also spoke at a recent public hearing with the FCC on the topic of net neutrality:

The friend in question was apparently an accomplished musician, but he had hung up his guitar for good, never to release an album again. Why? It’s those darn kids and their piracy. “The second you release an album,” he lamented, “it’s up there for everyone to steal. You just can’t make money in the music business anymore.”

Obviously this isn’t true — while the industry itself may be in the beginnings of a death spiral, it’s hardly true that no one can make money-making music — but there’s something more interesting about the observation than just the fact that it’s wrong. The Internet and peer-to-peer technology has made pirating music easier, certainly, but people copied CDs and tapes long before Napster existed. For decades there have been easily accessible ways to copy music. So, even 30 years ago, when you put up an album it was “there for everyone to steal.”

On top of that, most artists actually benefit from music piracy.

Several studies have shown that most artists actually profit from unauthorized sharing of files. They sell more albums because people have the opportunity to download songs and entire albums for free. A study by Blackburn (2004), a PhD student from Harvard, found that the 75% of the artist actually profit from piracy. Blackburn reports that the most popular artist (top 25%) sell less records. However, the remaining 75% of all artists actually profit from filesharing. The same pattern was found by Pedersen (2006, see graph), who analyzed the change in royalties paid by the Nordisk Copyright Bureau between 2001 and 2005.

Linked on the above page is an overview of the studies on this topic:

The basic result is that online illegal file-sharing probably has some negative impact on traditional sales but the effect is appears to be quite small. The size of this effect is debated, and ranges from 0 to 100% of the sales decline in recent years, but a figure of between 0 and 30% would be a reasonable consensus value (i.e. that file-sharing accounted for 0-30% of the decline in sales not a 0-30% decline in sales). At the same time there is still substantial disagreement in the literature with the most impressive paper to date (Oberholzer and Strumpf 2005) estimating no impact from file-sharing.

So, basically, having your music shared online isn’t the end of the world. It’s actually probably good for you.

Additionally, and this is more of a technicality: I don’t like using the word “steal” to describe piracy, for reasons I’ve explained before. He (the above friend of a friend) isn’t losing anything when someone pirates his music. If you “steal” from a record store, you’re preventing the store from selling that record to anyone else, whereas when you download a song you’re not preventing the artist from selling it again, and there’s no evidence that you would have paid money for it if piracy wasn’t an option. That’s not to excuse it entirely, but I think it’s an important enough distinction to warrant avoiding the word “stea

It will be only a matter of time – months rather than years – before the music business establishment completely folds… [It will be] no great loss to the world.

He also urges upstart artists to avoid climbing on the “sinking ship” by signing traditional record deals.

As I’m sure you all remember, Radiohead made quite a splash in 2007 when they split with their label, EMI, and released the fantastic In Rainbows album on their own. Consumers were asked only to pay what they thought the album was worth, anywhere from zero dollars to the reported $5000 Nine Inch Nails frontman Trent Reznor paid.

As much as I’d like to agree with Thom Yorke here, I think “months” is far too ambitious. As I’ve explained before, there’s no doubt that the music industry’s business model is fundamentally broken, but in today’s economy that hardly means they’re in any real danger. Rather than getting with the times, they’ve lobbied governments and gotten rules changed in their favor — and, unfortunately, their strategy seems to be half-working. Big labels are still around, despite being at best unneeded and at worst harmful to artists and listeners alike.

So, alas, while I wish this were true, I very much doubt it is.

Deadline London reports that Ari Emanuel (brother of White House chief of staff Rahm Emanuel) has been lobbying Obama to adopt France’s three-strikes-and-you’re-out rule in relation to illegal file sharing.

[Ari] Emanuel said he’s been speaking to President Obama about the U.S. adopting France’s 3-strikes-and-you’re-out stance. (Last year, France introduced a rule allowing legal action once Internet users had been caught illegally downloading 3 times.)

The three strikes rule, if you haven’t heard of it, gives file sharers “two chances” before taking legal action to deny them access to the Internet. It was passed in France in late 2008:

[The] French senate voted 297 to 15 in favour of a law that penalises illegal filesharers by cutting off their internet access. Under the legislation, internet providers would be forced to act as watchdogs, monitoring their customers’ internet traffic for signs of copyright infringement. Anyone caught illegally sharing music, movies or games would receive two warnings before having their account terminated.

This is a ridiculous law, of course. There’s no reason anyone should be barred from Internet access. It’s like denying someone access to the post office — it’s basically a free speech issue. Besides, it’s a bad solution as far as fighting piracy goes. Trying to stop piracy by laying down hugely disproportionate punishments on a very small minority to “make an example of them” simply doesn’t work. It ends up being more of a ritual sacrifice. From the perspective of the teenage/young adult pirate, it appears as if every few months a random person is dragged off and punished for something that everyone is guilty of (“everyone” is a slight exaggeration, but you’d be hard pressed to find anyone under 24 who hasn’t committed copyright infringement, unless they’ve been living in a cave).

Of course there are better solutions that will actually work to end piracy, improve profits of record/movie companies, and avoid ruining the lives of young pirates — in fact, some such solutions have been discussed here on this blog and will be discussed in much more detail in the future — but such solutions mean these media companies must take risks and expand their business model. It’s much easier for them to just lobby the government to get the rules changed in their favor, and that’s what they’re doing.

If you haven’t read it yet, I highly recommend you check out his book Free Culture, which was released under a Creative Commons license and is therefore free to download.

A free culture has been our past, but it will only be our future if we change the path we are on right now. Like Stallman’s arguments for free software, an argument for free culture stumbles on a confusion that is hard to avoid, and even harder to understand. A free culture is not a culture without property; it is not a culture in which artists don’t get paid. A culture without property, or in which creators can’t get paid, is anarchy, not freedom. Anarchy is not what I advance here. Instead, the free culture that I defend in this book is a balance between anarchy and control. A free culture, like a free market, is filled with property. It is filled with rules of property and contract that get enforced by the state. But just as a free market is perverted if its property becomes feudal, so too can a free culture be queered by extremism in the property rights that define it. That is what I fear about our culture today. It is against that extremism that this book is written.

To get a brief summary of some of his ideas, watch this TED talk he gave a few years back (below the fold).

And for a more in-depth discussion, watch this Authors@Google lecture:

This won’t be the last time you see Mr. Lessig mentioned on this blog. He’s a very important figure in this debate, and many of his arguments are very persuasive and insightful.

Anyway, this record store was once featured in a documentary called “Scratch”. All about the history of… scratching, and hip-hop. Then-Davis-resident DJ Shadow showed the camera crew around the basement of this place (though they’ve since moved FYI) which was filled with records stacked to the ceiling. They practically had to walk on records just to get around. DJ shadow  then gives a short speech to fellow aspiring artists in the industry:

You’re looking through all these records and it’s sort of like a big pile of broken dreams in a way. Almost none of these artists still have a career really — so you kind of have to respect that in a way. I mean if you’re making records and if you’re a DJ putting out mixtapes or whatever. You’re sort of adding to this pile whether you want to admit it or not. Ten years down the line you’ll be in here, so, keep that in mind when you start thinking like “oh yea, I’m invincible,” or “I’m the worlds best” or whatever, because that’s what all these cats thought.

With the help of the Internet the music industry has even more contenders than it would in physical form. Anyone can now distribute their music to thousands of people without even costing them a dime. Good or bad music, licensed or not, it’s all available at our fingers and perhaps we have all forgotten that was our main intent.

Why is this important? Well, while the music industry was dragging its feet, technology was rapidly improving. File sharing was inevitable. It’s now so ingrained in our culture that it’s impossible to stop. Yes, it facilitates copyright infringement. But so do VCRs and tape decks. If you ever recorded a television program on your VCR and watched it more than once, you were breaking the same law. File sharing just does this on a massive scale. It didn’t require a change in our morality or cultural values — it was actually a logical result of them. Humans drive technology, not the other way around, and the Internet didn’t force your kids to copy music. They’d be doing it even without peer to peer file sharing software, by sharing CDs or copying tapes or any number of methods. This doesn’t make it right, but it’s important to accept the reality of things: music piracy is here to stay.

This rapid change in the technological landscape also changed the market. As mentioned above, CDs became pointless, and music was (and still is) overpriced. The music industry failed to adapt to a changing market. Faced with financial losses, the industry blamed piracy for its problems (as the movie industry did in the early days of the VCR). Certainly piracy shares some of the blame, but the music studio has largely brought this on itself by trying to force consumers to pay the same high prices for a product that is worth much less than it used to be, as well as for going too far in the fight against casual piracy (it is my suspicion that DRM created more pirates than it thwarted).

We’re left with a situation painted in shades of gray. Extremism on one side begets extremism on the other side, but the truth lies somewhere in the middle; a synthesis of both sides. It’ll take cooperation and compromise to fix this situation, but I believe it can be fixed. I’ve proposed a few solutions on this blog, but my favorite is a service where a flat monthly fee gets me unlimited access to music published by the labels associated with the service. Certainly they would worry that I would turn around and give this music to people who don’t pay for the service. Some no doubt would do just that. But I can already access all of that music illegally — I’m not paying for the music itself, but the convenience in downloading it. And they will also protest that a monthly fee is far too little for the hours of music I would download. A practical rebuttal to this would be: I can already download all that music for free, so is it not better to get at least something for it?

This is not the only solution, though I suspect it is the one we will end up with.

The Amsterdam court today ruled that The Pirate Bay must remove a list of copyrighted torrents from their website within three months. In addition they have to block Dutch users’ access to parts of the site where copyrighted torrent can be downloaded. If not, the three ‘operators’ will have to pay penalties of 5,000 euros ($7,500) per person, per day.

TorrentFreak has the whole story.

Jammie Thomas-Rasset and Joel Tenenbaum captured the nation’s attention when they were defendants in the RIAA’s first two trials against accused online infringers. But here’s the mind-warping reality: both defendants would have been far better off monetarily if they had simply ignored the complaint altogether and failed to show up in court.

(…)

Thomas-Rasset’s retrial ended up with a $1.92 million award, while Tenenbaum faces $675,000 in damages. Those who didn’t show up owe around $7,500.

A later edit to the article states:

Update: I was interested more in what happens within the federal court system for this article, but several commenters rightly point out that “not showing up” isn’t the cheapest way out of such situations. Settling with the RIAA usually leads to payments of between $3,000 and $5,000, lower than the default judgments issued here by Judge Gertner. Convincing a jury that you’re innocent could be cheaper still (if you find a pro bono lawyer), though it comes with certain obvious risks.

I’m not quite sure what I’d do if I were in this situation. Settling seems like the easiest way out, but it’s basically paying protection money to what I feel is a criminal organization that bullies people by exploiting the legal system.

And, of course, shoplifting the CDs rather than downloading the MP3s would have ended up landing them even lesser punishment than the above scenarios.

This goes along with a general point I try to make with this blog:  we can sit around calling an entire generation “pirates,” or we can try to understand why these so-called pirates do what they do.

In this article I am going to explore two different examples: one that demonstrates how a company can drive consumers to piracy, and another that demonstrates how a company can convert pirates into customers.

First, most readers here no doubt know of the harm DRM can do. DRM (or Digital Rights Management) software attempts to control what you can do with media that you have legally purchased. While it is often claimed to be necessary to fight piracy, it is not really piracy that it combats; at least not in the way that we think (and write) about piracy on this blog. DRM is meant to control and limit the actions of the average consumer, not of the tech-savvy pirate. I’m sure that the topic of DRM will come up more and more on this blog as time goes on, but for this article I will simply state that efforts like DRM that restrict what we can do with media that we have paid for only encourages people to not pay for such media.

Amazon’s Kindle ebook reader (and, more specifically, the ebook sales that go with it) is are a great example of a system that can understandably drive consumers to piracy. The very restrictive policy Amazon takes toward the ebooks it sells will upset average customers. These upset customers will look around and see that their options in the legal market for ebooks is very limited, and some of them will predictably resort to pirated ebooks.

Of course, this by itself is no excuse for illegal behavior. We are not entitled to these books, any more than authors or companies like Amazon are entitled to profits. Rather, I present this information to show that the situation is more complex than it is made out to be. It is not lawless anarchists pirating ebooks to read on their Kindles; I wouldn’t be surprised to find many of them have bought ebooks in the past, and perhaps are even pirating books they have previously purchased but are no longer able to access. This is not nearly as far fetched as it may sound, given that Amazon’s DRM has done just this (deny access to legally purchased books) to many, many people.

It’s not all doom and gloom in the online media market, though. There are plenty of businesses out there I could point to that are the opposite of the above (in fact, Amazon’s MP3 service is DRM-free), but the one that I’ve personally experienced is Netflix — a service that allows you to rent DVD movies via mail, and keep the movies as long as you want with no late fees. For a while, I found that it was easier and more convenient for me to throw a movie into the Neflix queue rather than it was for me to pirate it. The DVDs were high quality, legal, and no one was telling me how and when I could watch them.

I’m not trying to judge these two companies or their services — I’m actually a big fan of Amazon. Rather, I want to illustrate how the actions a company takes can influence piracy, often by encouraging it. Some people are just dead-set pirates who will download media regardless, but we should not ignore the fact that a company can actively encourage the creation of this new generation of pirates.

The lesson to take away from this isn’t that DRM makes piracy justified (it doesn’t, and that’s an oversimplification of the issue), but rather that companies can discourage piracy and bring in new customers by treating the consumer well and making sure that buying (or legally obtaining) high quality media through their service is easier and more convenient than pirating the same media would be.

Again, people are still willing to pay for quality and convenience. This article deals largely with DRM, but that is simply one example of how a company can put obstacles in the way that prevent their customer from using the media they purchase. It is by no means they only way a retailer or publisher can do this. The important thing is not the restrictions, but the benefits that come along with removing these restrictions. I imagine many movie pirates have “converted” to Netflix. Companies like Amazon will get nowhere complaining about piracy, while companies like Neflix will continue to grow by giving us what we want. Whining about one’s situation rather than changing it should lead to eventual failure in the free market, and companies that do not adapt to the reality of piracy as it is now will be at an increasingly large disadvantage when competing with other companies that have made an attempt to adapt.