What They'll Never Tell You About the Music Business

by Peter M Thall

  Is this the end of copyright? No. But it certainly is the end of copyright as we know it. The battle between copyright as a property right, and society’s right to have unfettered access to its own musical heritage, is something worth contemplating as an opportunity rather than as a problem. Call it a wake-up call in this era of changing business models and perceptions. The whole world is struggling with this conflict, so let us examine it and see if we can identify its causes and perhaps offer some solutions that will help to strike a balance between the two conflicting viewpoints.

  BATTLES OR BATTLE-AXES

  First, let us consider to whom the benefit of the work of an author passes. Surely not only to the creator. The consumer and society tend to benefit as well. But, as we will see, there is an evolving view among the populace that copyright law no longer succeeds in serving the interests of both authors and consumers. In fact, it is arguable that the perfectly lawful acts of copyright owners may actually diminish the inherent value of their own copyrights. Is it possible that the copyright law itself, which has served society so well, now threatens the very rationale behind it?

  There is a war going on, and you may be surprised when the combatants are identified.

  Here are some of the important issues involved:

  • first and foremost, of course, CD burning and illegal song swapping, and the ever-increasing sophistication of the software that facilities the co-opting of music for personal use

  • the need for database protection (see chapter 23, this page)

  • piracy

  • cut-rate retail prices

  • deregulation and consolidation of radio and television ownership

  • the continuing consolidation of the major players in the entertainment industry

  • the paucity of “new music” in major media, which goes hand in hand with the record companies’ dependence on the “super artist”

  • a growing trend among hardware manufacturers to give away “content” to sell their gadgets

  • the growth of satellite radio, with its attendant opportunities and challenges

  • the incredible cost of A&R and motion picture and television production

  • the location and relocation of servers to offshore countries where no copyright laws apply

  • the continued chipping away, by the US Congress, at copyright (for example, the ill-named Fairness in Music Licensing law)

  • the claim, by Internet users, that they have First Amendment protection

  • nonexistent or insufficient harmonization of rights clearance procedures worldwide

  • insistence on most-favored-nation provisions, forcing prices to rise to the highest quoted license fee, but limiting the price paid for the most valuable songs to the price paid to the least valuable

  • the need to establish acceptable and reasonable rates for permanent download, limited download; on-demand streaming; subscription services, etc.

  • mechanical rate issues: per copy or percentage? more or fewer compulsory licenses, for an array of uses?

  • expansion of the tariff on digital audio tapes to analog tapes and blank CDs and DVDs

  • resolution of the conflict between support of intellectual property rights vs. the fear of dampening developing technology

  • the continued shrinking of music education initiatives

  • the ignorance of professionals, at every level, of the source of copyright in the United States, its progenitors, and the importance of copyright protection for our society and our economy

  • enormous disparities among nations and their courts with regard to identifying responsible parties among distributors of music and other intellectual property via the Internet

  • artists’ frustration with record companies whose greedy actions speak louder than their soothing, fraternal words

  • incompetent—or shady—accounting practices

  • the change in work-for-hire provisions that matured in 2013

  COPYLEFT (AKA COPYWRONG), BUT NOT COPYRIGHT

  Many of the issues just listed are part of the driving force behind the copyleft, or copywrong, movement.

  Lawrence Lessig, one of the most outspoken of the critics of monopolistic behavior among copyright owners (and self-appointed 2016 candidate for President of the United States), refers to the “remix” culture in the world of music, a culture in which the creativity of artists is built on the creativity of others. Appropriating others’ material is, according to Lessig, an essential ingredient of our culture, justifying borrowing (and more extensive adapting) that is so pervasive in the music field. Had Romeo and Juliet been in copyright when Leonard Bernstein and Stephen Sondheim wrote West Side Story, there would have been no such musical masterpiece. Lessig reminds us of The Grey Album, produced by the DJ Danger Mouse, which is a remix of The Beatles’ White Album using vocal tracks from Jay-Z’s Black Album; The Grey Album was a musical breakthrough in 2004 and remains an Internet download favorite, notwithstanding its questionable copyright status. Some call it the “ultimate remix.” But in our world, Mr. Mouse (actually, Brian Burton) was lucky that EMI and Sony/ATV decided not to pursue their considerable legal remedies. He would have lost.

  Mr. Lessig, who was the (losing) primary counsel on behalf of Eldred in Eric Eldred et al. v. John D. Ashcroft, the Supreme Court case that affirmed the constitutionality of the Sonny Bono Copyright Term Extension Act, sees our very culture as a “remix.” He sees oppressive copyright laws (in particular the aforementioned extension of the term of copyright to life plus seventy years) and the practice of embedding codes in musical offerings that prevent copying as clearly running counter to the intent of the framers of the Constitution, who offered protection to authors and inventors in order to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries….” How can extending the term of protection for George Gershwin (who is dead) and Mickey Mouse (who is dead in an entirely different sense) promote the progress of the arts?

  He and other copyleft proponents contend that laws in general are continually being adjusted to take into account new technologies. Why not copyright law? What has happened, they say, is that instead of the law being a facilitator, it has become a major impediment to doing business. And if anything riles a legislator in Washington, it is that! Yes, copyright is supposed to reward the creators and to encourage innovation and creation. But no one foresaw that the copyright owners (most often the music publishers and record companies, not actually the creators) would use their monopoly rights to discourage innovation and creation—yet this is, in fact, what they are doing.

  Creative Commons

  Quite a lot has been written about Lessig’s positions and his establishment of Creative Commons (www.​creativecommons.​org), a nonprofit organization that has conceived of what might be called a “middle ground” between full copyright protection and the absence of all copyright protection. Creative Commons encourages the relinquishment of an array of copyright protections via a license agreement (which they provide) that permits variable conditions on use of copyrighted materials. For example, depending on the circumstances, the license may limit a user to “noncommercial” use, while retaining the commercial rights for the author. It may permit changes in the licensed work, or not. It may require credit to the author, or not.

  Here is what a sample license from Creative Commons might look like:

  You are free to copy distribute, display, and perform the work, to make derivative works, and to make commercial use of the work under the following conditions. You must attribute work in the manner specified by the author or licensor. For any reuse or distribution, you must make clear to others the license terms of this work. Any of these conditions can be waived if you get permission from the copyright holder. Your fair use and other rights are in no way affected by the above.

  Some refer to this process as a sort of lawyer-assisted suicide
. Why? Because under the Copyright Act of the United States, and under the copyright laws of other countries, while a mere license that relinquishes certain rights under copyright does not, in and of itself, place the work in the public domain, once a right is relinquished to the public for no compensation, and pursuant to no control whatsoever, the consequences to the author can be considerable—and unpredictable. For example, an author who allows a derivative work to be made may have lost the right to make a derivative work him- or herself, or via another licensee, for all time. If I write a song (recall “Rhinestone Cowboy”), and someone wants to make a play out of it, a Creative Commons license may well authorize this. The resultant musical (or nonmusical) play (which is quite well protected by worldwide copyright) and the subsequent film and television series and attendant books, videos, etc. (which are also well protected), and all of the earnings derived from them, will be completely beyond the author’s right to participate—whether in creative decision making about how the song is used or in any of the earnings derived from the exploitation of the play or film.

  Why would any artists, then, want to give up the ownership or control of their intellectual property and relinquish the possibilities of earnings derived from it? Creative Commons explains:

  Many people have long since concluded that all-out copyright doesn’t help them gain the exposure and widespread distribution they want. Many entrepreneurs and artists have come to prefer relying on innovative business models rather than full-fledged copyright to secure a return on their creative investment. Still others get fulfillment from contributing to and participating in an intellectual commons. For whatever reasons, it is clear that many citizens of the Internet want to share their work—and the power to reuse, modify, and distribute their work—with others on generous terms.

  Many of the different forms of license agreement offered by Creative Commons require only that the originator of the intellectual property be given “credit” for being the originator. But after that, it’s a free world. Its detractors point out that intellectual property license agreements are wordy for a reason. The absence of carefully drafted language can result in ambiguity and a whole lot of disappointment and even outrage in the licensor when he or she finds out how imprecise the Creative Commons license is. For example, the Creative Commons license provision dealing with credit is silent insofar as how the credit is to be provided, in what size, where and how often it is to be given, how it is to be given in proportion to the other credits, etc., yet these are the meat of traditional industry agreements dealing with the issue. Credit provisions are often the most hotly contested parts of an agreement imparting intellectual property. You can’t imagine what someone can do with a clause as bereft of protective language as the credit provisions in the Creative Commons license.

  Creative Commons has established itself in dozens of countries, including most European countries and some South American countries—encouraging the anticopyright movement there. Creative Commons has been embraced by many musicians who are looking for ways to get their music to the public with no restrictions. Jeff Tweedy, of Wilco fame, is a huge supporter, even as he rakes in the royalties from his Nonesuch (that is, Warner Bros. Music Group) releases, all of which are quite well protected. Yet having made his music free for a time via the Internet, he attracted a sufficient enough following that his touring alone drew the attention of the majors. Sometimes free is good. He actually created stronger copyright exploitation by initially offering his music free.

  Creative Commons has interrupted, in part, the attempts by copyright owners to control the Internet, and has opened up a brand new paradigm for the distribution of intellectual property to the public at a price they can afford—zero. At its inception, in 1709, copyright protection was merely a license to publishers as an exercise of the royal prerogative to prevent unlawful copying of printed material. But over three hundred years of international lawmaking, the rigid controls enjoyed by proprietary asset holders have grown ever stronger. At its best, Creative Commons provides a means to dilute those controls, ending the virtual hegemony now enjoyed by copyright holders. At worst, it opens up many cans of worms (and litigations). One thing seems certain: if copyright reform catches on worldwide, the result will be nothing short of a revolutionary reshaping of our very social structure.

  At the end of the day, I think that the Creative Commons concept may survive in some form; perhaps a sampling license can be attached to a digital recording as a data file. Yet “shorthand” license agreements like the one quoted above are fraught with hazards—that is, unaddressed issues—and open the door to unlimited litigation down the road. For example, telling an anonymous user via the Internet that he or she can make a derivative work but cannot use a work “commercially” is clearly ambiguous, opening the door to countless lawsuits brought by parties with differing interpretations of that language. Lawyers who advise clients to sign such agreements are themselves open to claims of negligence. Why should it be otherwise for Creative Commons?

  Worse still, the carefree use of contract language encouraged by Creative Commons encourage people who think they “know better” to write their own “creative commons” contracts, which will merely produce yet more frustrated licensors, as well as dissatisfied licensees. There are good reasons for the sometimes extreme length of contracts between licensors and licensees: they must address and answer the myriad questions that may arise once the contract is signed. Shortening a five- or fifty-page license agreement to five sentences is an invitation to disaster—for both parties.

  Killing the Goose That Laid the Golden Egg

  This may all sound perfectly reasonable on some limited level: why not let people decide how much protection they want and how much they are willing to relinquish? But what many people do not know is that the seemingly rational and reasonable arguments promulgated by Lessig and “solved” by the Creative Commons licensing scheme have resulted in the proliferation of movements in many territories of the world—in particular in undeveloped countries—to extend the intent and limits of the free culture movement. Lessig himself has supported this expansion of global resistance to copyright hegemony that Creative Commons has fueled.

  The World Social Forum (WSF) is an annual meeting held by the “alternative globalization” movement to “resist neo-liberal globalization” and challenge its capitalist-model rival, the World Economic Forum, which meets—usually in Davos, Switzerland—at exactly the same time. WSF originated with the encuentro, an activist Latin American movement. Its annual meetings were originally held in cities such as Caracas, Nairobi, and Belém, Brazil, but lately the meetings have featured polycentric/decentralized venues around the world at the same time, including some in the United States. Their participants have occasionally been violent, such as when they destroyed the genetically modified crops of Monsanto in 2001. These enthusiasts objected to the global agribusiness of Monsanto which they thought was unethical for harming rural farmers. It is not a reach to carry forth this philosophy into demonizing copyright laws as smothering the downtrodden masses they claim to represent by denying them unfettered use of the world’s creative output. Talk about a counterculture! (Depending on your point of view, WSF is dangerously far to the left on the political spectrum, progressive, or simply out of touch.) (There have been fifteen meetings through 2015. The 2016 Forum will be held in Montreal.) In Porto Alegre, Brazil, at the Fifth World Social forum, in 2005, free culture advocates encouraged the idea that the establishment and maintenance of property rights in music, films, and computer software are just one more (and overwhelming) example of the rich countries’ dominance over the poor countries. Limiting access to these materials—which to a large extent form the underbelly of these countries’ own culture—by copyright laws and conventions is regarded by WSF as tantamount to occupation by a foreign power.

  The World Social Forum is still not much more than its annual meeting. And, although it hasn’t yet come close to being a movement, many feel that its te
nets are aimed at property ownership of all kinds, not just intellectual property. The attendance in Porto Alegre of more than 100,000 participants suggests that we have not heard the last of what I consider to be a particularly venal form of anticopyright enthusiasm.

  Using phrases like “proprietary culture” in an address to the WSF, Lessig (yes, him again) demonizes copyright by distinguishing “culture” from the control that copyright places over creations that are, of course, the fundamental elements of our culture. He points to what he calls an “error” in the 1909 United States Copyright Act that used the word “copy” rather than “publish” as the right that law was primarily intended to protect. “Copying” was at the time simply the act of reprinting a work. It required intentionality; guilt was easily established and punished and just as easily avoided. But with the development of digital transmissions via the Internet, copying has become not just routine, but ubiquitous. There is no way that a document can be called up onto a computer screen without it being a copy. In addition, the opt-in copyright system, where federal registration was required to claim copyright ownership, had already changed to an opt-out system: copyright is automatic unless waived. Under such circumstances, it seemed likely to many observers that seemingly innocent activities like visiting a website and even just reading a copyright-protected document was, by implication, copyright infringement. Everything created after 1978 was automatically “copyrighted,” and every click on the mouse resulted in a “copy.” Things that used to be “free”—like playing a song on the piano via sheet music—became liable to a charge of infringement if the sheet music was obtained via an illegal site on the Internet. Reading a book became an infringement if the book happened to be an e-book. Giving your sheet music or a Coldplay recording to a friend is fine; forwarding it to a friend via the Internet is not. Selling used music at a flea market has always been a convenient way to disseminate music to lovers of certain genres; selling it on the Internet is an invitation to a federal lawsuit. Why then should we be surprised that the eruption of so-called copyright violations (beginning, of course, with peer-to-peer sharing) has provoked everything from discord to near riot (at the 2005 World Social Forum) by those who claim that “their” culture has been stolen.