The Piracy Crusade: How The Music Industry's War On Sharing Destroys Markets and Erodes Civil Liberties
The Piracy Crusade: How The Music Industry's War On Sharing Destroys Markets and Erodes Civil Liberties
Science/Technology/Culture
Edited by
Carolyn de la Pea
Siva Vaidhyanathan
The Piracy
Crusade
How the Music Industrys
War on Sharing Destroys Markets
and Erodes Civil Liberties
Aram Sinnreich
CONTENTS
Acknowledgments
xi
15
17
37
56
69
71
94
119
135
137
8
9
160
Is Democracy Piracy?
179
Notes
201
Index
235
ix
ACKNOWLEDGMENTS
LIKE ALL creative work, this book resulted from the contributions
of a great many people and institutions. Although the genesis of my research on digital music and piracy dates back to my work at Jupiter
Research at the turn of the century, my interest was rekindled when I
served as an expert witness for the defense in Arista Records v. Lime Group
in 201011. Several attorneys for the defendants, including John Oller,
Joseph Baio, Tariq Mundiya, Todd Cosenza, and Chris Miritello, served
as sounding boards for my expert report in the case, which is a distant
ancestor to the book you are now reading.
As I wrote the book manuscript itself, I received copious help from
several sources. I thank Kathleen Fitzpatrick and her colleagues at
MediaCommons Press for graciously allowing me to post my draft chapters for open review on their website. Seeing each section in print as
soon as I had completed it, and knowing it was instantly available to the
public sphere, gave me the fortitude to continue working on a project
that would have been far more difficult to finish had I been consigned to
the book authors standard vacuum. I am also thankful to my colleagues
at Rutgers Universitys School of Communication and Information, and
especially those within the Department of Journalism and Media Studies,
for consistently supporting my work and affording me the resources to
complete it.
A great many people read and commented on my draft manuscript,
via both personal interactions and the MediaCommons website. The
feedback was overwhelmingly positive and constructive, but I appreciated every comment, even those that were neither. Although some
commenters have opted to stay anonymous, I can explicitly thank Jesse
Lifshitz, Samantha Kretmar, Frank Bridges, Vicki Simon, Peter Axelrad,
Billy Pidgeon, Richard M. Stallman, Mark Mulligan, John McCartney,
Cory Doctorow, Vivien Goldman, Norman Savage, Marissa Gluck,
Nicole Lewis, Eric Steuer, Ray Beckerman, Fred von Lohmann, Lucas
Gonze, Joost Smiers, Bryce Renninger, Judah Phillips, Josh Chasin,
Evan Korth, Joly MacFie, Tom Hughes, Mark Oltarsh, David Ritz,
xi
xii
ACKNOWLEDGMENTS
Introduction
Piracy Crusades Old and New
The fight by creative industries against digital piracy is an economic necessity,
not a moral crusade.
International Federation of the Phonographic Industry (IFPI), Digital Music Report 2011
We remain the national leader in the crusade against illegal copying and
distribution of software and content online. . . . In 2010, we intend to be even
more vigilant in our pursuit of software and content piracy.
Software & Information Industry Association, Anti-Piracy Year-In-Review 2009
I NTRODUCTION
laughed, reminded the French that the Jews were more apt scapegoats,
and returned to their walled city, where they prepared for the onslaught.4
The Genoans had promised the French a swift and easy victory, but
the assault took months. During this time, not only did Europeans and
Africans alike die in various skirmishes, but the crusaders suffered and
perished from thirst, hunger, fevers, parasitic infections, and swarms of
insects. Additionally, their attempts to take the city were stymied by
the fact that they had failed to bring any battering rams, and what siege
equipment they did have was hopelessly inadequate.5 Once it became
clear that military victory was impossible, the Europeans cobbled together a face-saving diplomatic one, exacting promises of reduced piracy
(to which the Tunisians fleetingly adhered) plus a substantial monetary
tribute (which was apparently never paid).
All in all, the crusaders had lost 20 percent of their forces in the failed
assault, and more died of disease when they returned home, but these
costs were nothing next to the invasions long-term fallout. Under
political pressure to show something for their efforts and expenses,
Charles and Adorno trumpeted the crusade as an unmitigated success
for Christendom and for European commercial interests, and this, in
turn, began a cascade of defeats that would soon reduce Europe to a
shadow of its former glory.
Despite the Mahdian debacle, the enthusiasm of the returning nobles
helped recruit the major crusade directed at Nicopolis in Bulgaria six
years later, which would prove to be Europes last such adventure.6
Because the French had learned absolutely nothing from their failure, and still believed themselves supreme in war,7 their ill-conceived
assault on Nicopolis would not only cost a great many lives, it would
ultimately cost European control over the Bosporus, which was the continents primary conduit of trade and communication with the East and
the crux of its economic and political power. As a result, the Ottoman
Empire would soon rise and come to dominate large swaths of Central
Europe, North Africa, and the Middle East. Only after centuries of colonization and global naval exploration would Europe regain its wealth
and influence.
In short, we can understand the Mahdian Crusade as a vital factor
(albeit one of many) leading to Europes downfall in the late Middle
Ages, like the proverbial butterfly whose flapping wings cause a tsunami
halfway around the world. Or as Sigismund, the king of Hungary (and
future Holy Roman emperor) said when the battle of Nicopolis was over,
We lost the day by the pride and vanity of these French.8
PI RACY CRUSADES OLD AND NEW
I NTRODUCTION
so-called pirates perceived themselves as the Genoeses neighbors involved in an ongoing mutual seizure of goods, rather than as malicious
and unilateral aggressors).
There are also similarities in the circumstances of the crusade itself,
although the Genoese and the French were fighting for control over the
Mediterranean, while todays crusaders seek control over the Internet.
Like the Genoese, Hollywood and its allies have used excessive force
in place of actual strategy, and yet found their methods hopelessly inadequate as P2P networks and other digital pirates have strengthened their electronic garrisons in response to the siege. Like the French,
the US government was initially promised that its participation would
be brief and effective, only to find itself engaged in a classic quagmire.
As the major film studios pledged in a 2000 court filing, the strict new
copyright law for which they and the music industry had just fought
and won (the Digital Millennium Copyright Act of 1998) would suffice
to stop infringement, to stop digital piracy, before copying becomes
truly ubiquitous.12 Since then, dozens of newer, stricter laws and treaties
have been proposed, and many of them have been enacted, under similar
promises; yet unlicensed copying and distribution have only continued
to increase,13 as the stalemate between crusaders and pirates has expanded to encompass the globe and the collateral damages have continued to mount. Finally, like the Mahdians, the targets of todays crusade
are often surprised and dismayed to find themselves under assault, and
typically view their own activities as ethically valid, even if they do not
conform to the (ever-expanding) letter of the law.
The pride and vanity of the French has its analog in the attitudes
of todays crusaders, who invariably treat each newly enacted law and
treaty, and each newly concluded litigation, as a decisive turning point
for their cause. To cite a few such examples, the Recording Industry
Association of America (RIAA) called a 2000 settlement against MP3.
com a victory for the creative community and the legitimate marketplace,14 a 2001 court ruling against Napster a victory for copyright
holders,15 a 2005 Supreme Court decision against Grokster the dawn
of a new day,16 and a 2010 court ruling against LimeWire an extraordinary victory for the entire creative community.17 The industry also
frequently follows these legislative and litigious successes by promoting
research showing that online piracy has been diminished as a direct
result of their actions. The fact that these claims are often debunked
by independent third-party researchers,18 and that online sharing in the
PI RACY CRUSADES OLD AND NEW
I NTRODUCTION
I NTRODUCTION
Sterne, Nancy Baym, and Adrian Johns, have produced work that belongs to this field, even if they themselves do not always make the connection explicit.
This book also shares some of its DNA with research and advocacy
groups that exist primarily outside of the academy (although with many
points of scholarly contact). While there is not yet a single conceptual
tent to house these disparate interests, the free culture movement, the
free software movement, the access to knowledge movement, the transparency movement, the Internet freedom movement, and the open access movement all share an interest in reprioritizing communication
policy to privilege free speech, privacy, and innovation over the private
interests of market oligopolists.
Both as a mark of intellectual kinship with these movements and as a
practical method of honing my work by exposing it to scrutiny and critique, I opted to publish the draft of this book online as I wrote it and to
promote newly published pieces of it via Twitter, Facebook, and several
industry associations and online forums in which I regularly participate.
MediaCommons Press, an open scholarship platform, graciously offered
to host the book-in-progress,25 and in the five months from its launch to
the time of writing this final manuscript, the site has seen thousands of
page views and has garnered both public and private comments from
music industry executives, industry analysts, attorneys, and academic
researchers in addition to friends, family, and other interested parties
(the final manuscript has been considerably improved by this ongoing
feedback). Additionally, both the online book draft and this finished
version are available under the Creative Commons 3.0 AttributionNonCommercial-ShareAlike license, which grants noncommercial actors the freedom to read, reconfigure and redistribute it as long as I am
credited for the work.26
Finally, before I discuss the specific contents of this book, I believe a
word of clarification is required. I frequently use terms such as music
industry, recording industry, and music cartels to discuss the subjects of my research and analysis. Although such terms are, by virtue of
their brevity, imprecise, I do not use them interchangeably, and my aim
is to be as accurate as possible in my nomenclature. To be clear: when I
use the term music industry, I am discussing the broad constellation of
individuals and institutions that collectively exploit musical expression
for profit. At other times, I discuss a subset of this larger group, using
terms such as the broadcasting sector, the major labels, and so forth,
to pinpoint a specific group of actors whose interests are distinct from
PI RACY CRUSADES OLD AND NEW
those of the industry at large. When I speak of cartels, I refer specifically to the oligarchic corporations that exert disproportionate influence
on the economies and practices of the industry, through economic cooperation and, at times, collusion. Throughout the text, I bear in mind
John Williamson and Martin Cloonans argument that the notion of a
single music industry is an inappropriate model for understanding and
analyzing the economics and politics surrounding music. Instead it is
necessary to use the term music industries. 27 And I draw inspiration
from (and, I believe, give credence to) Patrik Wikstrms assertion that
the contemporary music industry is best understood as a copyright
industry.28
THE PIRACY CRUSADE has nine chapters in addition to this one,
which fall into three sections. The first section is about the legal and economic foundations of the music industry and about the complex relationship that the industry has historically had with innovative technologies.
Chapter 1 charts a brief social history of the music industry, from its
origins at the dawn of print publishing through the development of electronic recording and broadcasting in the twentieth century. The chapter
aims to show that our current ideas about music as a form of property,
and as a variety of entertainment, are neither natural nor inevitable, and
are instead the contingencies of specific social, economic, and technological forces and events over the past two hundred and fifty years.
Similarly, the chapter examines the origins of copyright as a regulatory
framework for the distribution of music in industrial society and as an
instrument of leverage and control for established commercial interests.
Chapter 2 examines the music industrys ambivalent relationship to
new technologies during the twentieth century. It begins by looking at
the progression of dominant recording formats, from the wax cylinder
to the MP3, and at the industrys wary reliance on the format replacement cycle as a continuing engine of new revenues and business models
on the one hand and a continuing threat to cartelized distribution on
the other. The chapter also charts the complex constellation of forces
that led to the broadcasting industrys rejection of the higher-quality FM
format for nearly half a century before it achieved market dominance
in the 1980s. Finally, it reviews the role of innovative music production
technologies in creating and maintaining an aesthetic pro/am gap to
distinguish between commercial and amateur recordings over the decades, as well as the social and economic implications of widely accessible recording and production tools in the digital age.
10
I NTRODUCTION
11
these claims are not only baseless, but are given the veneer of legitimacy
through repetition by reputable sources, and are then used as justification
for stricter anti-piracy laws and policies.
Chapter 6 investigates the role that the recording industrys own
actions have played in undermining its goodwill, and therefore its market
value and commercial earning power. The chapter begins by examining the industrys historical dealings with artists, consumers, and business partners, showing that, in each case, the major labels have relied
upon their oligopolistic market dominance to exact concessions that
have generated a simmering reservoir of bad will against the industry.
The chapter then looks at the labels more recent public education and
mass litigation campaigns, exploring the ways in which they have further
undermined public trust and respect. Finally, the chapter concludes by
reviewing some of the other major public relations fiascos the industry
has faced in recent years, from corruption scandals to massive computer
hacking charges.
The third and final section of the book focuses on the collateral
damage of the piracy crusade, measured in terms of delayed innovation,
failed enterprises, and, most important, threats to free speech and civil
liberties. The book concludes by arguing that the costs will only continue
to mount as we come to rely on networked communications increasingly
in our personal lives, public affairs and social institutions.
Chapter 7 uses interviews with music industry executives and visionary digital music entrepreneurs to present case studies for five failed
digital music initiatives over the past fifteen years. Although these initiatives are differentiated by the years and circumstances in which they
arose, each faced a similar fate: because the major record labels refused
to grant them viable licenses, they were unable to spread their innovations to musicians and audiences, impoverishing both the marketplace
and the musical public sphere. Ultimately, my industry sources explain,
these initiatives were starved to death or sued out of existence not because they lacked market viability, but precisely because they possessed
it; factions within the major labels, afraid of competition and unwilling
to take risks, opted to control a diminished marketplace rather than to
share a growing one.
Chapter 8 examines the most devastating consequences of the piracy
crusade: namely, the increasingly draconian laws and policies that have
governed the use of intellectual property since the dawn of the web.
The chapter aims to show that, far from isolated responses to discrete
legal threats, these laws and policies represent a coherent and consistent
12
I NTRODUCTION
13
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
PA R T I
16
CHAPTER 1
Both arguments appear to have merit, but they originate from such
irreconcilable vantage points that they can never generate a meaningful
dialogue, let alone come to a satisfying accord. What both viewpoints
lack is a degree of historical perspective. Where did this cat-and-mouse
game begin? How did the recording industry come to possess the powers
it wields? When did music sharers become pirates? In this chapter, I
argue that music began as a public good and trace the course of its
gradual propertization, as well as the development of the legal framework that enabled this process. I also examine the history of music
piracy and discuss some of the ways in which our uses of the term today
diverge from those of the past.
Although my own vantage point is largely critical of the music industrys most powerful organizations, I also sympathize with those who feel
threatened by the changes at hand. It is my hope that, by providing a
broader context for todays conflicts both in this chapter and throughout
the book, I can help to navigate a better path forward than the stonewalling, violence, and recrimination that have characterized industryconsumer relations thus far.
CHAPTER 1
19
CHAPTER 1
bought and sold, shared and stolen, stockpiled and monopolized? When,
and how, did music become a commodity?
Despite its historical status as a public good, music has never been
completely free. Powerful social institutions have always played a role in
regulating musical aesthetics, practices and technologies. From dynastic
Egypt and China to present-day America, musics capacity to influence
peoples behavior, opinion, and collective action has always been recognized as a vital tooland a dangerous weaponby those holding the
reins of power.11 Yet throughout most of history, this power has been
exercised politically, militarily, religiously, and ideologically; only with
the dawn of modern capitalism did music enter the marketplace and
thereby become regulated through economic measures as well.
The French economist Jacques Attali has argued persuasively that,
in the Western world, this shift began in the fourteenth century, at the
birth of the Renaissance. At this time, he writes, the age of minstrels and
jongleurs began to wane, and musicians became professionals bound
to a single master, domestics, producers of spectacles exclusively reserved
for a minority.12 This was part of a broader trend; throughout the Renaissance, all of the cultural behaviors we now consider fine arts were
professionalized and separated from more common, craft-oriented, and
unmarketable ones, and professional artists were distinguished from
mere amateurs and audiences.13 In that cultural moment, the music industry was born.
It is no coincidence that, at the very time when control over music and
the arts shifted from religious to market mechanisms, the political power
of the church was diminishing and that of the bourgeoisie was rising. Not
only did the professionalization of music turn musicians themselves into
commodities, requiring that people pay for access to something which
had hitherto been free, but the new musical modes of production actually served to validate the underlying logic of the market system itself. If
access to music could be bought and sold, then what other aspect of the
human experience could legitimately be excluded from the marketplace?
Over time, the new focus on professionalization within music crystallized into an emerging set of aesthetics that didnt just reward professional skills, but demanded them. By the turn of the nineteenth century,
the shift was complete; as the music historian Joel Sachs argues, the
modern music of the time emphasized virtuosity as a way to exclude
both amateur musicians and uneducated audiences.14 These new aesthetics, in turn, paved the way for an even greater set of social transformations, centered around industrialization and massification. As the
STACKING THE DECK
21
CHAPTER 1
23
CHAPTER 1
these new publishers had released nearly ten thousand secular titles in
a broad range of genres and themes,25 many of them tailored to suit the
needs of the countrys growing bourgeoisie, an increasing number of
whom boasted pianos and other instruments in their homes.
Although it may seem surprising, given the emphasis we place on
intellectual property as an incentive for musical creation and distribution, American law did not provide copyright for printed scores at this
time. Composers and publishers in Europe had the ability to copyright
music in the late eighteenth century, but only with the Copyright Act of
1831 were musical scores considered eligible in the United States.26 Ironically, as the music historian Richard Crawford suggests, the introduction
of copyright may have undermined the domestic market for American
composers in the nineteenth century because it created an incentive for
profit-oriented publishers to distribute European works (for which they
didnt owe a royalty) rather than domestic ones (for which they did).
As he writes, the American appetite for European music owed much
to the notion that Old World culture was superior. But the dollars-andcents advantage to publishers also promoted the circulation of foreign
music.27 This is an early, and notable, example of how the financial interests of the music industry, enforced through the mechanism of copyright, can often come into direct conflict with the cultural and economic
interests of musicians and audiences.
The American publishing industry continued to grow sharply throughout the nineteenth century, in conjunction with the rise of minstrelsy,
expanding national borders and accelerating technological change. By
the middle of the century, five thousand titles were being published each
year. By the turn of the twentieth century, this number had grown to
twenty-five thousand songs per year, and a single hit song from commercial songwriting capital Tin Pan Alley, such as After the Ball by
Charles Harris (1892), could sell millions of copies. Throughout this era
of rapid expansion, the largest music publishers worked to reinforce their
industry dominance and economic power on legal fronts, by lobbying to
expand the scope and duration of copyright, and strategically, by using
song pluggers, trade associations, and other forms of market leverage
to promote their songs among performers, music sellers, and potential
purchasers.
As the music industry expanded, so did the scope of copyright law. In
the span of a few generations, American copyright developed from zero
statutory protection for music in 1830 to the coverage of scores (1831),
public performances (1897), and mechanical reproduction (e.g., piano
STACKING THE DECK
25
rolls and phonograph records, 1909), while the term of copyright doubled
from fourteen years (renewable for another fourteen) to twenty-eight
years (renewable for another twenty-eight) and statutory penalties for
copyright violation expanded from pennies per page to imprisonment.28
These changes were brought about, at least in part, by an increasing degree of organization, collaboration, and even collusion among
the nations largest music publishers. In 1855, the first music industry
trade association, dubbed the Board of Music Trade, was founded, with
the explicit aim of stemming price-cutting. By 1880, this association had
grown to encompass every major publisher, renamed itself the Music
Publishers Association (MPA), and clarified that its purpose was the
regulation of the music trade by fixing and sustaining a uniform and
standard price for all music publishers.29 From this point to the present
day, music industry trade organizations have played an active role both
in the process of regulating industry practices and pricing (sometimes in
violation of antitrust law, as I discuss in chapter 6), and in lobbying for
continual copyright expansion. As early as 1909, for instance, the MPA
was actively lobbying for a copyright term of the composers life plus fifty
years30 (this ambition would finally be realized in 1976, and surpassed in
1998).
The same economic, legal, and technological expansion that helped
the music publishers to grow in power throughout the nineteenth century would contribute to their relative decline in the twentieth. After
World War I, the rapidly evolving capabilities of audio recording and
broadcasting technology gave rise to two new powers in the music
industrythe record labels and radio networks. These sectors exploded
in size and power, and before long, they had outstripped music publishing both economically and politically. Following in the footsteps of
music publishers, the larger labels and broadcasters consolidated their
market share, founded influential trade organizations, and played a central role in the continuing expansion of copyright, placing an ever-greater
range of musical practices and products into private (primarily corporate)
hands, and eliminating them from the freely shared cultural commons
for a functional eternity.
As the music industry and the legal apparatus that binds it both ballooned in the wake of technological advancement, its economic and
institutional foundations crystallized around the idiosyncrasies of these
particular technologies. Much as molten glass will harden in the form of
any mold into which its poured, the twentieth-century music industry
slowly ossified in the form of its own enabling technologies, such as the
26
CHAPTER 1
vinyl record and AM/FM radio. In turn, these newly fixed industrial practices were reinforced by further legal and technological development, in
a self-perpetuating cycle.
By the second half of the century, the industry had fully congealed
around the broadcasting/label dichotomy, with the former sector based
on advertising-supported, over-the-air programming, and the latter based
on consumer-supported, over-the-counter retail distribution. Although
they both solved essentially the same problemthat is, capitalizing on
consumer demand for access to recorded musicthe two sectors consisted of entirely different firms operating according to separate laws and
licenses, using totally distinct technologies, and deriving income from
two entirely separate sources. There was a great degree of symbiosis
between these sectors (radio promoted the sales of recordings, while
recordings provided programming for broadcasters), but there was also
friction; for instance, the decades-long debate over whether broadcasters
should pay labels a royalty for public performance of their recordings or
whether the promotional value of airtime obviated such a need.31
Despite such tensions, this arrangement persisted for the better part
of a century, weathering continuing technological innovation and shifting political tides. As 78 rpm records gave way to 45 rpm singles, LPs,
cassettes, 8-tracks, and CDs and as stereo FM supplanted mono AM as
the dominant broadcast format, radio conglomerates ruled their roost
and record labels ruled theirs, while the once-powerful music publishers
stood by as largely silent partners to each. As I argue throughout this
book, part of the reason that twenty-first-century digital communications technologies have proven so disruptive to the music industry is
precisely because they undermine the theoretical distinction between
broadcasting and retail, thereby upsetting the elaborate ecosystem that
has emerged around this distinction, bringing former market allies into
greater competition and conflict with one another and muddying the
legal and economic waters.
At the end of the twentieth century, on the cusp of this change, the
American music industry had reached the apex of its concentrated political and economic power. In 1999, the field was dominated by five
major record labels (soon to be three), four large publishers (all of them
affiliated with major labels), four major radio groups, and a single music
television titan (Viacom), wielding copyright powers that had been extended significantly by two radically expansive pieces of legislation in the
previous year,32 and consolidating rapidly in the wake of recent media
deregulation.33 Collectively, this handful of highly litigious corporations,
STACKING THE DECK
27
and their trade associations, controlled more than just the music marketplace; they regulated global musical culture to a degree that is arguably
unparalleled in history. In practice, this meant everything from the
broadly general (e.g., promoting and censoring different styles, genres,
and artists; shaping and constraining the development of music recording and playback technology) to the minutely specific (e.g., threatening
to sue Girl Scout camps for allowing campers to sing Woody Guthrie
songs;34 micromanaging and tracking consumers music listening habits
through the use of digital rights management technology).
In short, the music industry as it existed immediately before the introduction of the pioneering file sharing service Napster was hardly a
timeless, or even a particularly stable, institution. Its economic and legal
foundations had accreted around the idiosyncrasies of an outmoded technological system, and its unprecedented cultural power was the result
of two centuries of sustained concentration of ownership and successful
lobbying for ever-greater degrees of copyright protection over a broadening field of musical practices and products. What had once been a public good and a native form of ritual communication for our species had
been successfully commodified, and then monopolized by a multibilliondollar cartel, but the very rationale for this cartels existence was already
being called into question.
Music as Entertainment
The portrait Ive just painted is somewhat at odds with the popular narrative of the music industrys formation. Most histories, biographies,
and documentaries tend to focus on stylistic disruptions (e.g., how
rock n roll fomented youth rebellion in the 1950s and 60s), or the
larger-than-life personalities of celebrated music industry executives
(e.g., how Walter Yetnikoff of CBS Records waged war on Steve Ross
of Warner Communications, while injecting untold millions of dollars
into superstar contracts and mob-related promotion companies).35 To
the extent that corporate strategy and copyright law are invoked at all,
they tend to be treated as peripheral to the storyexecutive gambits
and the rules of the game, respectively. And though few dimensions of
the music industry typically escape the scrutiny of critics and historians,
one thing thats often taken for granted is the industrys raison detre;
namely, the premise that music is an untapped resource just waiting
to be mined by entrepreneurial spirits capitalizing on the demand for
entertainment.
28
CHAPTER 1
29
ask whether or why music should be exploited in this way, but only who
should be doing the exploiting, and under what conditions. This dynamic
occurs both within and outside the academy, and among both those
who sympathize with the commercial music industry and those who
challenge it. It is unsurprising, if rather telling, that the recording industrys own publications refer to the selling of music as creative product
exploitation,40 but a bit more problematic when a nonprofit organization offering education, research and advocacy for musicians produces
events and publications titled The Band as Business.41 There seem to
be few advocates for music or musicianship outside of a commercial
context, and little recognition of musics role outside of entertainment.
The fact that skilled and venerated musicians such as Elvis Presley and
Michael Jackson, both of whom died relatively young as a result of sustained self-abuse, have been publicly quoted claiming that our job is
to entertain,42 suggests some of the human costs of this paradigm, and
Kurt Cobains Generation X rallying cry, Here we are now, entertain
us, perfectly encapsulates the ambivalence felt by both musicians and
audiences confronted by such market reductionism.
I am not simply making an art-for-arts-sake argument here, or suggesting that creative expression is some pure and delicate substance corrupted by the nefarious influence of capitalism. Nor am I suggesting that
musicians shouldnt take advantage of the opportunities the marketplace
offers, and equip themselves with the same degree of leverage and expertise as any other labor force negotiating with an industry that exploits its
work. My aim is simply to point out that the economic privatization of
music has required us to adopt a framework of analysis whose totalizing
effect is to reduce our expectations of musics social application to the
limitations of entertainment as a field,43 thereby undermining alternative measures of value and systems of reward and incentive. And despite
the measurable success of music as a commercial product, and the thousands of willing laborers within its industrial economy, this compromise
still sits uneasily with us as a society, and weighs on none more heavily
than the musicians who succeed the most in market terms.
CHAPTER 1
and even a plush parrot doll for good measure. The child will swagger
around with plastic cutlass in hand, uttering phrases like Arrrghh and
Shiver me timbers! and generally making things difficult for younger
siblings and house pets. Adults occasionally like to play pirate as well,
and each year on September 19, hundreds of thousands around the
world celebrate International Talk Like A Pirate Day by adopting this
garb and garbled speech to one degree or another. At the time of writing, people have paid over $3.7 billion in box office ticket sales just to see
Johnny Depp swashbuckling across the screen as Captain Jack Sparrow
in the Walt Disney Companys massively successful Pirates of the Caribbean movie franchise.44 For most of us, he is the dictionary definition of
a pirate.
The International Federation of the Phonographic Industry (IFPI; the
global trade association for record labels) has a very different definition.
On their website, a page titled What is piracy?45 mentions nothing
about ships, parrots, or cutlasses. Instead, they use the term to mean the
deliberate infringement of copyright on a commercial scale, and identify
four types relevant to their industry: physical music piracy, counterfeits, bootlegs, and Internet piracy. In this fourth category, the IFPI
acknowledges that even its own definition of piracy doesnt really apply.
Internet piracy, they argue, is not necessarily due to the motivation of
the perpetrator. So much for deliberate. They also claim that the term
refers more generally to any use of creative content on the Internet that
violates copyright. So much for commercial scale. Given the fact that
since the enactment of the 1976 Copyright Act every piece of text, audio,
video, and imagery ever created is automatically subject to copyright,
anyone who e-mails, blogs, or shares any document, song, video clip, or
image he or she did not personally create from scratch is, according to
the IFPI, a pirate. So much for Johnny Depp.
How can this one word mean two such different things? Is the distinction between Blackbeard and BoingBoing merely one of scale and means,
or are they truly as different as they seem? What possible similarity can
exist between blasting a ship to smithereens and making off with its bullion, and posting a mashup to Facebook? In order to address these questions, we need to look briefly at the history of the concept of piracy itself,
and trace its evolution from antiquity to the present day. Fortunately,
other researchers have done a lot of this work already, so I will try my
best to give credit where it is due, lest I be branded a pirate myself.
As it turns out, the definition of piracy has been continually revised
and debated since its earliest appearance. Cicero, writing two thousand
STACKING THE DECK
31
years ago, was the first to outline a comprehensive definition and theory
of piracy, arguing that pirates are those who, by virtue of being the
common enemy of all, have forfeited all rights, including those to fair
dealing. For example, he wrote, if an agreement is made with pirates
in return for your life, and you do not pay the price, there is no deceit,
not even if you swore to do so and did not.
Daniel Heller-Roazen, a professor of literature who uses Ciceros
words to title his excellent social history The Enemy of All: Piracy and the
Law of Nations, argues that the exceptionalism inherent in Ciceros definition is the thread that ties together all subsequent concepts of piracy. He
identifies four distinguishing features of this paradigm: first, piracy must
take place outside of traditional legal regions (e.g., on the high seas);
second, piracy is committed by an agent of universal antagonism;
third, piracy collapses the categorical distinction between the criminal
and the political; fourth, and consequent to the first three features, piracy
requires a redefinition of war. From the beginning, then, piracy has operated as a kind of negative categorya placeholder for malicious actors
and activities that fall outside obvious social and political categorization.
What it hasnt always meant is the theft of property; this property/theft
dialectic, so central to our contemporary understanding of piracy, is a
relatively recent affair, likely dating to the dawn of modern nation-states
and international commerce. As Heller-Roazen observes, even plunder
on the high seas was considered a legitimate economic model and political tactic for most of history, until international accords in the midnineteenth century abolished privateering, and in so doing, relegated the
plunderers that remained to the negative category of pirates.46
The application of the term piracy to what we now call intellectual
property is of relatively recent vintage, as well. As the professor of history
Adrian Johns demonstrates, this use of the term can be traced directly to
the dawn of the modern publishing industry in late seventeenth-century
England, from whence it spread to other Western European nations.
Like Heller-Roazen, Johns emphasizes that the definition of piracy has
always been fluid, a matter of placeof territory and geopolitics. In
this case, the territory was the modern European nation-state, and the
geopolitics involved the international trade in mass-produced printed
goods. And although the IFPIs definition hinges on the infringement of
copyright, Johns makes it clear that the term was not only adopted prior
to the development of copyright, it was actually a constituent element
of the original argument in favor of legal protection for publishers. In
Johnss words, the invention of copyright itself was largely a response to
32
CHAPTER 1
33
Figure 1. Logo for the anti-taping campaign launched by the British Phonographic
Industry in the 1980s.
CHAPTER 1
eral appeals court decision in A&M Records v. Napster, Inc.,54 which found
that the popular file sharing service (which operated on a noncommercial
basis) did not enjoy the same fair use protections as Betamax, because
the networks centralized architecture gave its operators the power to
identify and prevent copyright infringement. A third blow was struck by
the 2005 Supreme Court decision in MGM Studios, Inc. v. Grokster, Ltd,55
which found that even technology providers who had no knowledge or
power over the use of their products for copyright infringement, and
who did not benefit financially from such infringement, could still be
found liable for inducement.
Mitch Bainwol, the head of the Recording Industry Association of
America (RIAA), celebrated the ruling against Grokster for its role in
contain[ing] piracy and for providing moral and legal clarity.56 Many
legal scholars and public advocates disagreed. As Fred von Lohmann of
the Electronic Frontier Foundation (EFF) argued at the time, the broad
and vague applicability of this new precedent gave rise to a new era
of legal uncertainty,57 in which nearly any media technology could be
construed as a vehicle for piracy.
This is, of course, exactly the outcome devoutly pursued by the music
industry (and its entertainment industry partners). As the law professor
Lawrence Lessig has astutely observed, every new medium is pioneered
by pirates, who use the contents of older media to populate their new
platforms and test their technologies. This was true of the recording
industry (once dubbed pirates by music publishers), the radio industry
(once dubbed pirates by record labels), and also the film and cable television industries.58 In other words, yesterdays pirates have become todays
establishment, and their aim is to stay put by keeping the cycle from repeating. If the price is fair use, free speech, and cultural and technological
innovation, then so be it.
BOTH MUSICAL culture and the music industry are in a state of
flux, and the rapid changes we have witnessed since the turn of the
twenty-first century clearly have something to do with the explosion
of networked digital technologies such as PCs, smartphones, portable
media devices, and the Internet, which binds the rest together. On this
much, nearly everyone can agree.
Where this book differs from the bulk of the commentary and coverage of these changes is in how these disruptions are framed. The recording
industry, which has been highly successful in setting the terms of the public debate thus far, paints a bleak portrait: a venerable industrial sector,
STACKING THE DECK
35
36
CHAPTER 1
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 2
very different. During the 1920s, the government established the Federal
Radio Commission (later to be supplanted by the Federal Communications Commission), equipment manufacturers started shipping a significant number of radio receivers (for listening only), major broadcast
networks like NBC and CBS emerged, and hundreds of stations across
the country took advantage of federally licensed clear channels, free
of amateur clutter, to broadcast news and music to millions of listeners
across the country. By 1930, the radio industry looked, and sounded,
much as it would at the end of the century, with a handful of major
networks broadcasting music, news, and entertainment to a massive but
largely passive audience.
In short, neither of the technologies that came to define and dominate
the music industry in the twentieth century was initially invented or
conceived for this purpose. Nor was the existing music industry, in the
form of the publisher titans of the nineteenth century, necessarily keen
on these technological innovations. To the contrary, as I alluded to at
the end of the previous chapter, these new distribution channels were
initially considered pirates by the industrys vested interests, for their
disruptive economic potential. Nor were recording and broadcast technologies especially well suited to music distribution, at least in their initial
forms. The high level of noise and single-channel audio provided by wax
cylinders and early AM radio offered a listening experience that todays
musicians and music fans would have little use or patience for. Yet, despite all of these challenges, records and radio grew rapidly in popularity,
performance, and power, generating billions of dollars in market value
and contributing to radical changes in our musical cultures and practices.
As I discuss in this chapter, these developments were neither necessary nor inevitable. Rather, the development of the modern music industry reflects a complex, long-standing love/hate dynamic between the industrys most powerful institutions and the technologies that enable and
constrain them. In science and technology studies (STS), this process is
called the social shaping of technology2a dialectical process of pushand-pull between social dynamics and technological innovation, in a perpetual circuit with neither beginning nor end. Such a dynamic has been
integral to music industry evolution. On the one hand, new technologies
have allowed labels, publishers, broadcasters, and musicians continually
to reinvent themselves and their products and to refine their economic
and aesthetic models. On the other hand, each new technological innovation complicates and challenges established economies and aesthetics,
putting powerful institutions at risk and providing an opportunity for
38
CHAPTER 2
39
41
CHAPTER 2
43
music. To the music industry, these behaviors are not merely threats to
their ability to sell new recordings but also criminal violations of their
copyrights. To music fans, these behaviors are what make records appealing in the first place. And the more that technologies allow us to
collect, share, curate, and reinterpret our music, the more excited we
become as consumers, and the more likely we are to embrace a new
format.
Consequently, there has been a consistent tension within the industry
between the desire to promote formats that have adequate consumer
appeal and the desire to promote formats that will limit consumers
range of freedom in the name of protecting the bottom line. In the era
of vertical integration (a term referring to a single parent company
owning many complementary business units), this tension can even result in conflict within a given corporation. For instance, Sony Electronics,
which pioneered the portable music market with its Walkman product
in the 1980s, began selling portable digital music players in 1999, two
years before Apple introduced the market-transforming iPod. With its
unrivaled branding power, engineering expertise, and knowledge of
the consumer electronics marketplace, Sony should have dominated
this emerging product category long before Apple could make its entry.
Yet, in what has now become a classic cautionary tale taught in business
schools around the world, the company shot itself in the foot. Because
Sony also owned a major record label (worth a small fraction of the
electronics business), the company chose not to allow its digital music
player to support MP3s, for fear that the open format would encourage piracy. Sadly, the device would only play songs encoded in Sonys
proprietary, copy-protected digital format, which could only be obtained
from Sonys music store or created using Sonys specialized software.7
Naturally, music fans showed little interest in the device, and the path
for Apples eventual victory with the MP3-compliant iPod was cleared.
Like the dog in the classic Aesop fable, Sony dropped its prize in its haste
to have another.
To summarize, we can understand the progression of dominant recording formats over the past century as a kind of moving scrimmage
line in a sustained contest between consumers and the record industry,
with consumer electronics manufacturers acting as (not entirely objective) referees. Some formats (such as LPs and CDs) offered higher quality
audio in exchange for limited convenience, while others (such as cassette
tapes and MP3s) sacrificed fidelity for greater portability and writability.
Many of the formats rejected by consumers, such as cassette singles,
44
CHAPTER 2
MiniDisc, and slotMusic, are those that failed to provide adequate leaps
in quality to compensate for their diminished utility or vice versa.
Today, we are still in the midst of this process. The rise of MP3 ripping and CD burning at the turn of the century disrupted the traditional
format replacement cycle, in large part because the industry hadnt
prepared adequately for digital business models (a subject I explore in
greater depth in chapter 3). Initially, the industry tried, and failed, to
introduce new formats (such as secure CDs and encrypted digital files)
that sacrificed utility without improving quality. It also attempted to sell
higher-quality audio discs, such as Super Audio CD and DVD-Audio, but
was hamstrung by the format war I mentioned earlier as well as the fact
that, given the CDs claim to perfect digital fidelity in its 1980s market
debut, most music buyers who werent audiophiles failed to recognize
any difference in sound quality.8
Very recently, the industry has put significant weight behind digital
subscription and cloud services, which offer listeners a high degree of
utility and access to an extensive library of music at relatively low cost,
while retaining far more centralized surveillance and control over music
than any previous format. Later in this book, I hazard some observations about the potential for these models to succeed in the marketplace
and about their significance for musical culture and social practices. For
now, I want simply to observe that, innovative as these platforms may
be, they are still subject to the same drivers and constraints as past music
distribution technologies and represent the continuing evolution, rather
than the demise, of the format replacement cycle.
45
developed as what media analysts call a lean back technology for passive consumption, while records were a lean forward technology for
active engagementand this arrangement was not so much an accident
of technology as the outcome of the social shaping of these platforms,
laws, and industries by the various interested parties over the decades.9
As close as they are, the two industries also differ in a few important
respects. First, while the recording industry developed with very little
government oversight, as a classic free market, the evolution of the
radio industry was guided heavily by the FCC and other federal agencies,
and radio was therefore more constrained both in its ability to innovate
and in its capacity for self-destruction.
Second, the record industry is organized around a single economic
transaction, the retail sale of a song or album. Once the music is sold,
labels have little concern with consumers use of their products (as long
as they dont pirate it!). By contrast, the radio industry earns its revenues from advertising, which are tied directly to the measurable audience
for any given station at any given time. Hence there is an immediate correlation between consumers listening habits and the economic success
or failure of the broadcasters. This difference has contributed to some
interesting divergences and tensions between the two industries. For instance, while record labels have historically limited the content of albums
to two or three radio hits, supplemented with an ample amount of
filler (like fast-food burgers), radio playlists (with the exception of specialty formats, such as Album-Oriented Rock) consist almost entirely
of hits. Similarly, while for half a century long-playing vinyl records and
their descendants have enabled popular recording artists to experiment
with more extended compositional and improvisational musical styles,
popular music broadcasters typically remain focused on songs of three
minutes or less, in order to retain audience attention and keep listeners
from turning the dial or, even worse, switching off the radio.
Just as the recording format replacement cycle on examination reveals the complex interplay of forces and stakeholders behind the market
progression from vinyl to cassette to CD and beyond, the evolution of
radio as a platform has not been quite as tidy a process as it may appear
on the surface. Although the medium has been evolving for more than a
century, perhaps the greatest development of the pre-digital age was the
shift from AM (amplitude modulation) to FM (frequency modulation)
as the dominant broadcast standard. At first glance, this change appears
to be an obvious case of the better technology winning out; after all, FM
has a clearer signal, and the ability to carry stereo (or even quadrophonic)
46
CHAPTER 2
sound. While its true that AM signals can travel farther at lower expense,
a strong enough FM transmitter can easily blanket an urban market of
millions, and has the added feature of passing through thick walls and
nasty weather. Yet, as was the case with recording format evolution,
the change from AM to FM had at least as much to do with social and
political factors as with technological ones.
It took half a century after FM was first patented by Edwin Armstrong
in 1933 for its share of the radio market finally to eclipse AMs, in the
early 1980s. What accounted for this delay, if the technological benefits
of the newer standard were so obvious? It certainly wasnt for lack of
knowledge or interest within the general public or the industry; as early
as 1944, Billboard Magazine (then titled The Billboard) dedicated significant
coverage to the emergence of FM and to the opportunity FM presents,
and anticipated a boom in what it presciently (or optimistically) referred
to as post-war FM. At the time, the new technology was viewed by
labor organizations and other marginalized voices as a valuable opportunity to provide more mass media representation for groups and interests that had been structurally excluded from AM radio. In the same
issue, however, there were signs of trouble brewing for the new format.
Specifically, the American Federation of Musicians (AFM) decided not
to allow existing radio networks to repurpose musical programming licensed to their AM stations for their new FM affiliates. According to the
article, this decision could be interpreted virtually as an FM nix, due in
part to the perception that there was no financial gain to the networks
in feeding programs to FM.10
Despite the buzz around this new technology, FM radio failed to materialize for decades after World War II. An oft-repeated version of the
story suggests that the large AM networks, content with their business
model and focused on developing television rather than improving radio,
stalled the new formats progress by manipulating the FCC into redistributing the broadcast spectrum at a crucial moment of adoption and
by undermining support among consumer electronics manufacturers.
Armstrongs suicide in 1954, after years of patent disputes and disappointments, provided poignant support for his reputation as a lone innovator
at odds with big business.
While this narrative certainly appears to have some basis in truth, the
media historian Hugh Slotten has shown that the full story of the delay in
FMs adoption involves the complex nature of regulatory decision making, the defining role of different institutions and individuals, the contingencies of historical context, and the essential role of nontechnocratic
RIDING THE TIGER
47
CHAPTER 2
development of cheap magnetic tape in the wake of World War II contributed to new multitrack studio techniques such as overdubbing and
phasing, which were first introduced to popular music by experimenters like Les Paul in the 1950s, exploited fully for psychedelic effect by
producers such as George Martin and Brian Wilson in the 1960s, and
became standard practice in many genres by the 1970s. The most significant aesthetic consequence of multitrack studio techniques was, of
course, multichannel sound (mostly stereo) and resulting innovations in
both panning (e.g., location of instruments and voices in the sound field)
and reverberation. However, the improvements in recording quality also
contributed to a renewed emphasis on musical aspects such as dynamics
(the loudness or softness of a given sound) and timbre (the unique voice
of a given instrument or part). These new aesthetic trends made FMs
ability to carry multichannel sound with less noise and richer bass stand
out in stark contrast to AMs tinny mono signal. And as a new generation
of adolescents and young adults, exposed to these innovative aesthetics
via their local FM college radio stations, reached maturity, advertisers
increasingly recognized the need to migrate with them to commercial
FM stations that could adequately accommodate their stylistic tastes.
As with recording formats, then, radio broadcast technology has been
shaped less by a teleological march toward sonic perfection than by a
complex array of competing interests, technological innovations, and
regulatory interventions. The recording industry both loves radio (for
its promotional power) and hates it (for its cannibalizing potential), and
has both impeded and assisted its technological development at different stages and in different ways over the years. And just as in the case
of recording technologies, concerns about granting too much power to
listeners (sometimes framed as piracy) have been a significant factor
throughout the development of this industry. If anything, these concerns
have only increased since the ascendancy of FM, with newer broadcast
platforms such as satellite radio, Internet radio, and digital radio offering new capacitiesand with them, new perceived threats ranging from
stream-ripping, or the unpermitted download of online broadcasts, to
the inclusion of DVR-style personal storage functionality in satellite radio
receivers. As I discuss in chapter 1, home taping of FM radio failed
to kill the music industry as promised (to the contrary, it inaugurated
the greatest rise in music retail sales in history), but that hasnt stopped
the recording industry from using both law and leverage to limit radios
functionality across both analog and digital platforms in the years since
then. More on that later in the book.
RIDING THE TIGER
49
CHAPTER 2
Over time, as the cost of recording equipment fell, an increasing number of independent and home studios appeared across the country,
undermining the exceptional role of the major record companies. While
they solidified their economic positions by cartelizing distribution channels to retail stores, they also needed to revamp their aesthetic styles in
order to emphasize the difference in quality between their own products and independently produced music. Thus, a kind of cat-and-mouse
game developed, whereby first, innovations in studio technology would
emerge, often from outside the industry; second, the industry would
adopt and refine these innovations, spending the capital to mainstream
a polished version of the sound; then the cost for independent record
producers to adopt a given innovation would drop to accessible levels,
and it would become ubiquitous; whereby the cycle would repeat itself.
There are countless examples of this process in action, and an entire
book could be written (and should be written) on this subject alone.
For now, a few paragraphs will have to suffice. An interesting case, to
which Ive already alluded, is overdubbing. Before World War II and the
introduction of magnetic tape in the United States, overdubbing was so
difficult and expensive as to be something of a novelty technique. The
multi-instrumentalist Sidney Bechet used overdubbing on a few recordings in 1941, playing six interlocking parts on songs such as The Sheik
of Araby (which took three months to record and edit). The technique
was sufficiently new that Time magazine called it a unique stunt in
its review later that year.14 It was also instantly perceived as a threat to
working musiciansafter all, Bechet hired no sidemen for the recording. Consequently, the AFM (the same group that would nix FM stereo
a few years later) called for a ban on the technique and imposed a fine
on Bechets record label for what it perceived as exploitative labor relations. As he relates in his autobiography, the newspaper men . . . raised
so much hell that the union made the company pay me for seven men,
and it was forbidden to do it again!15
By the end of the decade, the war was over and magnetic tape was
widely available. Experimentalists such as Les Paul in the United States
and Pierre Schaeffer in France began to adapt the technology specifically
for the purposes of multilayered sound composition. Although there were
some early market successes (such as Pauls Lover (When Youre Near
Me)), it wasnt until the 1960s that major labels adopted it as a standard
element in studio recordings. Throughout the next two decades, stereo
multilayered sound became the hallmark of professional recording; it
RIDING THE TIGER
51
was one of the sonic factors that would immediately distinguish an independently produced demo from commercial products. By the end of
the 1970s, producers like Donald Fagen and Walter Becker of Steely Dan
had carried the technique to its logical extreme, crafting meticulously
constructed recordings featuring opulently overdubbed instrumentation
and vocalization (such as Michael McDonalds virtuosic background vocals on Peg).
Many musicians and fans at the time balked against this newly elevated aesthetic standard, complaining that Steely Dan and similar bands
were, as many have described them, too perfect.16 Resistant aesthetic
movements such as punk music emerged at exactly this moment as well,
championing a sound that was exuberantly and adamantly imperfect. Yet
many independent musicians still aspired to commercial success, and to
the aesthetics of the major labels. It was to serve these musicians that
consumer electronics manufacturer TASCAM released the Portastudio,
the first low-cost, cassette-based 4-track recording tool, in 1979. Using a
device such as this, musicians without access to professional recording
studios could overdub, multitrack, and emulate the sound of the industry. Naturally, this democratization of the technology undermined its
value as a marker of superiority, and the industry moved quickly on to
other studio technologies to maintain its dominance in this sonic arms
race, using even newer tools such as digital fidelity, sample-based drum
machines, and music sequencers in the 1980s.
This process has repeated, and accelerated, over the years. A recent
example is pitch correction technology such as Auto-Tune, a digital software tool enabling producers to change the pitch of a recording, and
primarily used to fix out-of-tune vocal tracks. When Auto-Tune was
first released in 1997, it was essentially a trade secret, employed like airbrushing (or Photoshop) to cover the sonic blemishes of popular singers.
Soon thereafter, the technology became incorporated more directly into
popular music aesthetics, with inhuman, mechanical leaps between perfect pitches emerging in a range of popular musical styles, from Chers
1998 dance music hit Believe to T-Pains self-produced 2007 R&B hit
Im Sprung. Over the course of the 2000s, the technology appeared in
an increasing number of independently produced recordings, and then
reached ubiquity in 2009 with the debut of YouTube viral video sensation Auto-Tune the News, quickly followed by the release (and market
success) of a mobile application called I Am T-Pain, which enabled any
smartphone owner to auto-tune her own voice in real time, with a price
tag of three dollars.
52
CHAPTER 2
Predictably, with the democratization of pitch correction came its devaluation within the industry, and its waning as a mark of professional
distinction. In 2009 the simmering resistance against its cyborgian aesthetic exploded into a full-scale backlash, led by some of the music industrys leading lights. Jay-Zs single D.O.A. (Death of Auto-Tune),
released in the same year, perfectly captured this reactionary sentiment
with lyrics such as This aint for iTunes / this aint for sing-alongs / This
is Sinatra at the opera. In other words, Jay-Z laments the role of pitch
correction in the development of an aesthetic that privileges accessibility
and collaboration (e.g., sing-alongs) and aligns himself with the music of
elitism, virtuosity, and professionalism (e.g., Sinatra, opera).
Although pitch correction continues to be used on many if not most
commercial tracks (including some by Jay-Z!), the backlash continues
especially against independent musicians who employ the software. For
instance, in 2011 a thirteen-year-old girl named Rebecca Black became
the subject of worldwide ridicule and vitriol (and became measurably
the most-hated performer on YouTube) for the crime of releasing an
amateur song and music video called Friday that used pitch correction
technology in a noticeable but un-ironic fashion. One of her most voluble
critics was Miley Cyrus, the teen pop star whose music is probably indistinguishable from Blacks by the majority of Americans over the age of
thirty. Although Cyrus later retracted her critique, the sentiment remains
central to public discussions of the Friday phenomenon: amateurs who
violate the aesthetic boundaries demarcating real musicians from wannabees will be punished and held up for public scorn as examples to the
rest of us.
Paradoxically, one of the unintended consequences of the studio technology arms race has been the gradual weakening of the music industrys
claims to aesthetic exceptionalism. As the onus to produce distinguishably commercial music has shifted farther and farther from musicians to
music producers to technology manufacturers, claims the industry could
once have made no longer ring true. For recording artists, for instance,
a strong singing voice is not as important as it was in the jazz or rock
eras. While its true that Mary J. Blige and Adele have rich, well trained,
powerful voices, the same claim cannot be made for equally successful
singers like Rihanna or Jennifer Lopez, or indeed the majority of vocalists
on the pop charts. Similarly, while A&R (artists & repertoire) executives
at major labels once staked their reputations on their golden ears, or
their ability to hear a diamond in the rough, that work is increasingly
shifting onto computerized music analysis services such as Polyphonic
RIDING THE TIGER
53
HMI and Platinum Blue, which use predictive algorithms to pick hits
on behalf of the labels. Research services then cross-index those findings with analyses of online consumer sentiment, leaving little room for
surprise, intuition, or aesthetic innovation. In short, by allowing itself to
become increasingly dependent on studio technology to set itself apart,
the music industry has lost track of its primary source of legitimacy, undermining its already tenuous foundations.
CRITIQUES OF music industry anti-piracy campaigns are often
framed in terms of the industry hating technology or being resistant
to innovation. Yet history shows that technological change has always
been a central facet of the industrys evolution.
From the beginning, the music industry has viewed emerging technology as a double-edged sword, offering the promise of greater power
and the threat of obsolescence in equal measure. The industry has often
branded itself as a champion of both cultural and technological innovation, and has invested heavily in a narrative of perfectible fidelity and
sonic quality in order to migrate consumers to new platforms that either
increase industry power or boost sales and advertising revenues. Yet
there is some truth in critics accusations of music industry Luddism or
obstructionism; innovative technologies like FM stereo have taken half a
century to take root, while other promising developments have withered
on the vine, because of political and economic factors rather than quality
or potential market demand.
In addition to the record companies and broadcasters, several other
stakeholders have played a role in the development of music technology; these include other music industry sectors such as publishers and
musicians, as well as electronics and software manufacturers, government regulators, and consumers themselves. This last group has perhaps
added the greatest amount of complexity to the process; production,
distribution, and broadcast platforms can all be understood as battlefields
on which the competing interests of music buyers and sellers vie for
superiority, and this dialectical tension continues to steer technological
development in unexpected directions.
We cannot understand the industrys reaction to recent innovative
technologies such as peer-to-peer file sharing, the MP3, and the iPod
without taking these historical processes into account. Just as digital
music piracy is a concept that obfuscates the transient and ephemeral
nature of the legal codes and economic systems it ostensibly threatens,
the premise of pirate technology suggests a stable and unchanging
54
CHAPTER 2
55
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 3
this much as early as 1999, a few months after the launch of Napster
and subsequent to the record labels defeat in a suit against the MP3 device manufacturer Diamond Multimedia. In Rosens words, Its not like
MP3s caught us by surprise or anything. Weve been talking about this
for more than 10 years.6 Even in retrospect, record industry executives
have conceded that they suffered not from a lack of foresight but rather
from a lack of vision. As Doug Morris, then the CEO of Universal Music
Group, told Wired magazine in 2007, theres a misconception writers
make all the time, that the record industry missed this. They didnt. They
just didnt know what to do.7
Yet, if Morriss account is descriptively accurate, it doesnt provide
much in the way of analytical self-reflection. Why did the industry fail to
act proactively on its market intelligence? Was is simply, as Morris suggested in his Wired interview, that theres no one in the record company
thats a technologist and we didnt know who to hire?8 This seems
unlikely. First of all, as I argue in chapter 2, technological innovation was
hardly an unfamiliar force within the music industry; to the contrary, it
is a constitutive element of the business, and music distribution technology has always been in flux. Second, it is a matter of public record (and a
fact to which I can personally attest, having known them) that the major
labels employed a number of celebrated technologists and tech strategists
during this period, including inventors and innovators such as Albhy
Galuten, Ted Cohen, and Larry Kenswil.
If we rule out ignorance and inexperience, then, a far more likely explanation of the music industrys failure to meet the challenges of digital
media head on can be found in its institutional culture and practices, or
what we might metaphorically understand as the psychology of the
companies involved. The law professor Michael Carrier insightfully describes these challenges in terms of an innovators dilemma, in which
legacy industries have little short-term incentive or ability to innovate,
even if the long-term circumstances demand it.9 In public discussions
of these matters, Ive often made a similar argument using the framework of Elisabeth Kbler-Rosss famous five stages of grief,10 which
describes the process whereby grieving individuals deal with death and
other forms of radical change. This is not a flippant comparison; having
advised, researched, and reported on the music industry as an analyst,
journalist, and academic between 1997 and the present day, I believe
that it was precisely the sheer scope of potential market transformation
implied by digital and networked technologies that provoked the music
industrys strategic paralysis.11
WEVE BEEN TALKING ABOUT THIS FOR YEARS
57
Denial and Isolation: CDs Original Sin and the Rise of MP3
According to Kbler-Ross, the first stage of grief is denial, which can
be followed or accompanied by an increasing sense of isolation from
ones peers or surroundings. One could argue that the recording industry was in denial about the potentially transformative capacity of digital
technologies from the very moment it introduced the compact disc as a
new commercial music distribution format in 1982. This format, which
was thoroughly vetted by all of the major labels and successfully won
out over several competing digital prototypes,12 was endowed with a
kind of technological original sinnamely, that its digital information
was unsecured by encryption or other means and therefore available to
be copied freely by anyone using a computer equipped with an optical
media drive, then copied and redistributed ad infinitum without any loss
of quality.
Although we may think of CD ripping and burning as a uniquely
twenty-first-century development, the plans to use compact discs for data
storage and transmission were already in the works when music CDs
were first introduced into the marketplace, and the first CD-ROM drives
were available to consumers as early as 1985. Both music CDs and CDROMs reached market maturity in the 1990s, and by the time the CD had
ascended as the dominant music format, pioneering CD-ROM publishers
such as the Voyager Company were shipping millions of titles per year.
Thus, while not every record label executive in the early 1980s necessarily had the expertise and the foresight to realize that the CD format
betokened the end of their cartels control over music distribution, it was
hardly beyond consideration for their in-house technologists even in the
earliest years, and would have been increasingly obvious to all interested
parties well before the market transition from cassette to CD was complete. So why wasnt this new format aborted before it achieved ubiquity?
Because, as I discuss further in chapter 5, CDs also yielded an unprecedented amount of revenue for the music industry and inaugurated the
longest and steepest rise in total market value in the industrys centurylong history. With an upside that large, why worry about the downside?
The industry exhibited a similar degree of willful blindness when it
came to the potential market impact of digital distribution formats and
the Internet. As the music industry journalist Steve Knopper relates in
his excellent book Appetite for Self-Destruction, Fraunhofer, the developer
of MP3 technology, tried to warn the industry in the early 1990s of the
potentially volatile combination of unsecured CDs and its new encoding
58
CHAPTER 3
format, but didnt get anywhere. There was not that much interest at
the time, Knopper writes, quoting a Fraunhofer employee.13
As the 1990s wore on, CD-ROM drives became ubiquitous, and MP3
became an increasingly popular format on the Internet. Yet the industry
appeared ever more isolated from its own artists and customers, continuing to operate its still-thriving CD business as though nothing much had
changed. By the end of the decade, many industry analysts including me
were clamoring publicly for the industry to embrace new technologies
and distribution models, and proactively to release music in online digital formats before control over distribution eluded its grasp completely.
Even the popular and trade press caught on and took the record labels
to task for their inaction. As the PC Magazine columnist John C. Dvorak
lamented in 1997, While the music industry moans and groans, it obviously isnt doing the job needed. . . . This concept is not going to disappear, and the record companies should look at this as a new form of
distribution.14
To be fair, many in the music industry paid lip service to what was
then known as digital distribution in the mid-to-late 1990s. At virtually
every meeting or conference I attended in the presence of record executives from 1997 to 1999, I was assured that a decisive digital music strategy was right around the corner, and that the industry was excited about
the possibilities presented by new technologies. As Cary Sherman, then a
senior executive vice president at the RIAA, told Business Week magazine
in 1998, We think digital distribution and the Net provide great opportunities, and we love that.15 Yet very little in the way of actual digital
music distribution materialized, and for online music fans, pirate tracks
distributed on MP3-hosting websites were the only downloadable source
of commercial music during these years.
The hemming and hawing, promises and procrastinations continued
until the sudden rise of Napster in the summer of 1999, when the online
explosion of MP3 content fueled by peer-to-peer file sharing would force
the major labels to acknowledge that digital distribution had arrived
without them. Yet even this sudden confrontation with reality would
not be enough to bring the industry to its senses and encourage it to
embrace a viable digital distribution strategy.
59
directions and projected onto the environment at times almost at random.16 This has been true in the case of the music industry as well,
which responded to the popular emergence of digital music with a wide
array of threats, accusations, and lawsuits aimed at virtually everyone
involved in any way. Of course, neither threats nor lawsuits are new to
the music business; in a way, they are the industrys lingua franca and
modus operandi. But both the volume and the range of targets significantly expanded in the digital era, especially in contrast to the period of
relative peace and plenty during the previous two decades.
The first digital music lawsuits took place in June 1997, when the
RIAA and its constituents sued three noncommercial Internet music
archive sites, which allegedly hosted MP3s of music controlled by the
major labels, available for free download. Even though all three websites
were shut down by their publishers once legal action was taken, and the
degree of market harm and potential amount of damages to be recovered
were insignificant, the plaintiffs in the case acknowledged that the point
was, as RIAA chief Hilary Rosen told a reporter at the time, to obtain
a court decision affirming the rights of copyright owners.17 In other
words, the aim was to set a precedent, and to send a warning.
This was the first drop in what would soon become a deluge of litigation against any Internet sites and services hosting or facilitating access
to major label content, including high-profile lawsuits against innovators
like Napster, the music locker service MP3.com, and the Internet radio
pioneer LAUNCH Media, as well as countless other, less celebrated,
defendants. In the meantime, a 1998 revision to copyright law called
the Digital Millennium Copyright Act (DMCA) gave record labels and
music publishers the power to issue takedown notices to any site or
service they believed were violating their copyrights. As the law scholars
Jennifer Urban and Laura Quilter have demonstrated, these takedown
notices, which require no evidence or judicial oversight and entail a difficult appeals process, are routinely abused by copyright holders to create
leverage in a competitive marketplace, to protect rights not given by
copyright . . . and to stifle criticism, while failing to adequately protect
copyright in many legitimate cases.18
Wielding the DMCA in one hand and the threat of costly litigation in
the other, the music industry effectively shut down hundreds or perhaps
thousands19 of independent web publishers, software developers, and
service providers in the early years of the new century. There is little
question that many of these sites and services were providing their users
with major label music, or the means to access it, without a license. But
60
CHAPTER 3
they were also doing the socially and economically valuable work of exploring the capacities of emerging technologies, pioneering new business
models, and developing the rudiments of twenty-first-century musical
culture. A great many of them even sought licenses from the labels and
publishers but were either rebuffed or offered rates that quickly would
have put them out of business (more on this in chapter 7). To contemporary observers, the music industrys strategy was clear. As the Los Angeles
Times (normally a great sympathizer with the content industrys perspective) described the scenario in a 2001 article, the barrage of lawsuits by
record labels had hampered the Web-based companies innovation and
growth.20
The music industrys legal assault wasnt limited to online sites and services; it also attempted to shut down or intimidate consumer electronics
manufacturers and consumers themselves. As I mentioned above, the industry attempted to stem digital music usage by suing the manufacturer
of the first portable MP3 player, Diamond Multimedia. But unlike most
of the industrys claims against content and service companies, this lawsuit was unsuccessful, and the decision established a legal precedent that
copying music from a hard drive to a portable device constituted a personal use, and was not a right the music industry had the power to grant
or withhold.21 Notwithstanding this ruling (or perhaps in response to it),
the Disney Corporations CEO Michael Eisner testified before Congress
in 2002, arguing that the Rip. Mix. Burn. advertising campaign behind
Apples first-generation iPod was tantamount to telling consumers that
they can create a theft if they buy this computer.22 Eisners aim in this
case was to convince Congress to pass new legislation undermining the
Diamond precedent, requiring all consumer electronics and computer
manufacturers to integrate copy protection into their devices, thereby
preventing any unsanctioned uses of any music or video whatsoever
(including, presumably, legally established fair uses such as backing
up music collections or making mixtapes for personal consumption).
Although the industry was unsuccessful in this particular campaign, its
fantasy of total control over the distribution and use of all content has
persisted over the past decade and has led to some highly problematic
developments, as I discuss throughout this book.
Of course, the music industry hasnt limited the targets of its litigation
to other businesses. In a 1999 interview, Hilary Rosen pledged not to sue
individual music downloaders, arguing that it doesnt seem practical.
Its virtually impossible to do. . . . Besides, I have very strong views about
privacy, so Im not going to start doing it.23 Despite these very good
WEVE BEEN TALKING ABOUT THIS FOR YEARS
61
reasons, the RIAA began suing alleged music downloaders less than four
years later, shortly after Rosen stepped down and ceded the reins to the
veteran political operative Mitch Bainwol. The lawsuits, which targeted
at least thirty-five thousand Americans, including a significant number
of children, elderly, disabled, and deceased people, continued at least
until the end of 2008, when the RIAA announced it would discontinue
the strategy (although there is evidence that it continued the practice at
least through 2010).24
These lawsuits alone suggest that the music industry views its customer base with a degree of suspicion bordering on contempt. Yet when
viewed in combination with industry rhetoric claiming its own mission
as analogous to the civil rights movement25 and comparing unlicensed
digital music users to shoplifters,26 drug dealers, and terrorists27 (no mere
idle rhetoric, considering that the film industry and the FBI invoked the
Patriot Act to pursue a fan of the TV show Stargate SG-1 for allegedly
infringing copyrights on his website),28 a larger narrative emerges. The
music industry, in its anger, has apparently cast itself as the hero in a
tragedy of epic proportions. Like Michael Caine in the film Zulu, the industry believes itself to be the last bastion of civilization, outnumbered
in a wilderness redoubt by a malevolent horde and firing endless volleys
into the throng in a last-ditch effort to preserve itself. Of course, like the
actual Zulu warriors of the nineteenth century, many of us cast in the
role of savages are more likely to see ourselves as the protagonists,
defending our ancestral homeland and our culture from our would-be
colonial overlords.
CHAPTER 3
63
CHAPTER 3
65
CHAPTER 3
67
did.42 And despite their refreshing willingness to grant licenses to innovators like Spotify, the labels are still essentially requiring that licensees pay
them on a per use basis, rather than collecting a share of revenues, a
condition that structurally excludes smaller and more innovative companies from competing with the well-funded Apples and Googles of the
world, and makes it difficult for any music seller, no matter how large,
to recognize a profit.
Underpinning all of these decisions is the recording industrys continuing commitment to a narrative in which it plays the role of victim
and the Internets billions of users are painted as aggressors or, at best,
suspects. In the name of this narrative, which routinely invokes Napster
as the ground zero in this imagined assault, the industry has pushed, and
continues to push, for the enactment of laws and treaties that would
effectively subject people around the world to a degree of digital surveillance and censorship that has no precedent in free society.
68
CHAPTER 3
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
PA R T I I
blame for its own misfortunes, a fact it has tried its best to
obscure by carefully curating the narrative to emphasize
some details while obscuring others.
My aim in this section is to debunk the music industrys
version of events and offer a more thorough counternarrative that fully explores the industrys own role in the
process, while exonerating those parties who have been
wrongfully accused. I begin with the butler, examining
the pros and cons of P2P and showing that it cant reasonably be blamed for the majority of the music market
contraction. I then move on to examine the many economic factors that contributed to the boom in music sales
revenue during the 1990s and the bust in the following
decade, and describe the music industrys decisions that
contributed to both boom and bust. Finally, I review some
of the ways in which the industrys own methods of doing
business with partners, musicians, and consumers has
eroded its goodwill, further undermining its market value
and revenue potential.
70
CHAPTER 4
CHAPTER 4
music beyond their comfort zones, contributing to a more sophisticated musical culture that transcends the generic boundaries imposed
by the economics of mass production and mass media. And for a great
many musicians and composers, it has provided a powerful platform for
self-promotion and independent distribution that has allowed them to
catapult into broader awareness and to take a more active role in their
own careers than they would have had in the twentieth-century music
industry.
Given the range of factors at work, it would be impossible to judge
P2P and online music sharing as net positive or a net negative for the
music industry or musical culture overall. Any claims in either direction
are likely to be so limited in scope as to be irrelevant, or so biased as to
be disinformative. Yet it is possible to take a close look at the technologys
many pros and cons, and in so doing, to understand better its uses and
threats to specific parties under specific conditions.
73
CHAPTER 4
The same could not be said of more decentralized file sharing services such as Grokster and LimeWire.6 Because these file sharing services
lacked network oversight and therefore could not be found liable for contributory or vicarious infringement, they were ultimately found liable
for inducement of copyright infringement, a new legal standard that
emerged from the US Supreme Courts decision in the Grokster case.7
Yet despite these rulings, the networks were not as easy to shut down as
Napster was. For instance, even though LimeWire stopped publishing its
software and remotely disabled many of its users copies via a back door
in the programs code, an open-source Pirate Edition of the software
emerged two days later and remains fully functional and active at the time
of writing despite the efforts of LimeWire and the RIAA to shut it down.8
BitTorrent is the most difficult flavor of P2P to prosecute or contain
successfully. Because the BitTorrent protocol is freely available for programmers to use, there are many open-source software front-ends based
on it, each of which operates completely independently of its developer,
BitTorrent Inc. And because the sharing process is broken up into so
many moving parts and reduced to the scale of bits, issues of legal liability
become far more complex. Is hosting or contributing to an index a violation of copyright, even though the torrent file is only a text file about a
copyrighted work, rather than the work itself? Is joining or maintaining a
tracker a violation of copyright, even if the tracker is neither contributing
to nor inducing infringement, in a legal sense? Is there a de minimis, or a
minimum number of digital 1s and 0s that need to be shared by a given
peer before they constitute an infringement? Would sharing a single bit
of data, technically indistinguishable from any other bit of data on the
Internet, constitute infringement if it were related to a torrent for a song
or a film? These questions have yet to be addressed definitively by either
legislation or case law, although the music and film industries, as well as
several governments around the globe, have taken legal and quasi-legal
action against many parties including scores of trackers and hundreds of
thousands of individual BitTorrent users.
In short, P2P file sharing is not simply a piece of rogue technology
that enables pirates to infringe on copyrights. It is a diverse assortment
of technologies and platforms with a broad range of uses in a variety
of different contexts. While some specific P2P architectures are vulnerable to some varieties of legal challenges and technological restrictions,
others are technically legal or as yet untested, and many remain impervious to any kind of legal or technological regulation except perhaps total
surveillance or closure of all digital communications networks. And, as
DISSECTING THE BOGEYMAN
75
CHAPTER 4
77
In other words, we found that, among online adults who liked music,
Napster was actually helping music sales. Although some were no doubt
using the service as a replacement for traditional music retail, others
were using it as a vehicle to discover and sample new music, increasing
their enthusiasm about music products and driving them to purchase
more. In 2002, I published follow-up research, based on a newer Jupiter
survey, showing that file sharing continued to have a mixed effect on
music purchasing habits, with a net positive effect overall. This time,
we found that file sharers were 75 percent more likely than the average
online music fan to have increased their music purchasing habits since
they started visiting online music sites.16
In the decade since then, dozens of researchers worldwide have published scores of studies on this subject in both academic and commercial
venues, and the results have run the gamut from positive to neutral to
negative for the industry. A thorough review of all the relevant literature is beyond the scope of this chapter, but there are several recently
published meta-analyses that attempt to summarize and integrate this
literature. The business professors Felix Oberholzer-Gee and Koleman
Strumpf have been among the most active in this area, publishing a number of frequently cited articles on P2P and media economics since 2004.
As they argue in their most recent work on the subject, because the
theoretical results are inconclusive, the effect of file sharing on industry
profitability is largely an empirical question. Yet, reviewing the empirical literature, they find that the results are decidedly mixed. While the
majority of studies find that file sharing reduces sales, there are several
that document a positive effect, and an important group of papers
reports that file sharing does not hurt sales at all.17 In short, there is no
research consensus on the subject, either theoretically or empirically.
Similarly, the technology journalist Drew Wilson has recently published
an extensive series on the P2P news website ZeroPaid analyzing twenty
published research reports related to P2Ps economic effects. He has
found that a great deal of the research undermines the RIAAs claims,
and that some of the corroborating research uses spurious logic or questionable methodologies.18
If we can conclude anything at all from the research in this field, its
that the relationship between P2P and music economics is anything but
simple. Studies have produced variant findings in part because different
groups of people share music in different ways, at different times, under
different circumstances, for different reasons. Similarly, the music industry has undergone significant changes in recent years owing to a variety
78
CHAPTER 4
of factors, many of which are so closely related to P2P that its hard
to control for one and measure the impact of the other independently
(I discuss these other factors in chapter 5).
Even framing the question introduces difficulties. If we look only
at music sales, are we ignoring revenues that accrue from non-retail
sources such as licensing and subscriptions? If we look at industry profitability, which firms count as industry and which dont, and whose
numbers are we going to use to assess profit and loss? If we are interested in the total economic impact of P2P, do we take into account
second-order effects such as sales of concert tickets and merchandise, or
word-of-mouth marketing? To my knowledge, nobody has yet addressed
these questions definitively, and its entirely likely that a definitive answer is downright impossible. Far from being an unmitigated threat to
the bottom line for artists, composers, labels, and other stakeholders in
the music economy, P2P is more of a digital Rorschach test; any assessment of it is far more likely to reflect the viewers biases and preconceptions than to represent an objective measure of its total impact on the
marketplace.
79
retail revenues over the past decade or two. These new revenues typically arent reflected in the infamous figures depicting the music industrys precipitous decline, and are rarely mentioned in the industrys piracy
crusade rhetoric. Some of the most significant new revenue sources for
labels include:
Performance rights royalties. This category includes the licensed use
above, record labels receive synchronization or master use rights revenues whenever their songs are used in television shows, video games,
movies, or commercials. The music industry only began reporting
revenues from this source in 2012, when it claimed $342 million for the
previous year. The IFPI, which bases its estimates on revenues reported
by member labels, may be underestimating the actual figure considerably. In 2011, the music licensing attorney Steve Gordon (a former major
label executive and widely read author)21 told me that in the last 20
years, master use licensing has gone way up and become a new, important income source for the labels.22 Overall, Gordon estimates that this
market brings the labels closer to $12 billion per year.
Live events. The live music events sector has climbed steeply in value
over the past decade, as ticket prices have escalated and audiences awash
in digital recordings increasingly crave live contact with their favorite artists. Today, this sector is worth well over $20 billion annually, roughly
three times what it was a decade ago. Its difficult to say what percentage
of this accrues to labels through 360 deals, but a conservative estimate
would be over $1 billion and growing, compared with zero a decade
ago. There is little question that free online music sharing has played a
significant role in driving these gains; as Lady Gaga told the Sunday Times
in 2010, she doesnt mind about people downloading her music for free,
80
CHAPTER 4
because you know how much you can earn off touring, right? . . . Make
musicthen tour. Its just the way it is today. 23
Sponsorships and endorsements. Traditionally, many popular musicians
Thus, while the amount of money accruing to large record labels from
the direct sale of music to consumers has dropped significantly over the
past decade, these losses have been mitigated to a great degree by a variety of new and rapidly growing sources of revenue, driven in part by
the free distribution of music via online channels. Although its very difficult to establish whether this nets positively or negatively for any given
record label or even for record labels as a sector, there are a number of
recent analyses by researchers around the world that provide compelling
evidence that free music sharing has contributed to an increase in revenue for musicians themselves and for the music economy overall.26 For
instance, based on a variety of sources, the editors of techdirt, a prominent media and technology blog, have shown that the musicians share of
the overall US music economy grew 16 percent between 2002 and 2010,
to $16.7 billion, while the overall entertainment economy has grown by
50 percent in the past decade.27 Even the IFPIs own figures show that
an economic index it calls the broader music industry (an amorphous
and changing category including some forms of consumer spending that
dont directly affect the labels bottom lines) has grown from $132 billion
in 2005 to $168 billion in 2010. A great many prominent recording and
DISSECTING THE BOGEYMAN
81
CHAPTER 4
83
fans are able to develop their tastes based primarily on their social connections to other fans instead of being dependent on media gatekeepers
who have been paid to keep most artists and styles out of the public eye
(and ear). Thus, as several researchers have shown, P2P has both improved the accuracy with which consumers are able to match music to
their tastes and broadened those tastes.38 For musical culture in general,
P2P increases the prevalence of diverse and innovative music and also
allows songs, artists, and styles to remain in the public ear far beyond
their traditional market lifespan. As the music blogger Eric Lumbleau,
editor of Mutant Sounds, argued in a recent Wire magazine article, free
music sharing serves an important social function: File sharers uploading rare and out of print records challenge official histories of music.
This activity has not only helped to democratize musical culture but has
also made the marketplace more sensitive to diverse tastes and helped
it to thrive by catering to those tastes. Lumbleau boasts that numerous
reissues have come to market as a direct result of those albums having
first been discovered on Mutant Sounds and/or made viable enough to reissue because of the increased profile that a previously obscure album has
received by being posted on Mutant Sounds.39 This is not a self-serving
claim; many high-profile musicians have made similar arguments. In the
words of Pink Floyds Nick Mason, File sharing means a new generation
of fans for us. Its a great thing to have another generation discovering
your music and thinking youre rather good. File sharing plays a part in
that, because that generation dont do it any other way.40
Of course, pirates have been responsible for keeping obscure and
out-of-print music in the public sphere for generations, and perhaps since
the dawn of the recorded music industry itself. As Adrian Johns argues,
music bootleggers in the 1950s who sold jazz and opera records wanted
to make money, but they were in business for more than profit alone.
They justified their actions in terms of furnishing a public archive of
classics that the recording industry was overlooking in search of larger
markets.41 Other musical traditions benefited similarly. The ethnomusicologist Harry Smith, whose groundbreaking compilation Anthology
of American Folk Music more or less single-handedly inaugurated the 1960s
folk revivaland in so doing forever changed the tenor of American
musicincluded dozens of songs still under copyright, without permission. As he argued in his liner notes, Only through recordings is it possible to learn of those developments that have been so characteristic of
American music, and therefore the power of such recordings to make
historic changes rests in their making easily available [to a broader
84
CHAPTER 4
85
grossed over $1.6 million in sales revenues across all formats.53 Retail distribution was handled by Sony Musics RED division, as well as Amazon
MP3. The albums CD release was successful enough to win it fourteenth
place on the Billboard 200 chart, as well as the number 1 position on
the Dance/Electronic Albums chart. For his following album, The Slip,
Reznor pursued a similar strategy.54
Another excellent example is the band Radiohead. In 2007, the band,
which had recently parted with longtime label EMI over financial and
strategic disputes, self-released its album In Rainbows on its own website,
offering fans the opportunity to pay anything they liked for the songs in
DRM-free MP3 format. Despite making the music effectively free and
freely shareable, the band had a significant commercial success. Although
official sales figures for the album have never been announced, the bands
publisher, Warner Chappell, reported that sales of the new album on the
bands site during its first twelve weeks of release yielded more income
than total online and off-line sales of their prior, major-label album.55
Roughly two months after the self-release, the band shipped a retail CD
version of the album via major label distribution deals. In its first week of
official release, sales of the CD format pushed In Rainbows to first place
on the Billboard 200, as well as the UK Album Chart.56
A third example is the rock/R&B megastar Prince. More than almost any other popular recording artist, Prince has shown an enthusiasm from the Internets earliest years to experiment with new forms
of distribution, sales, and marketing. Although his stated position has
been subject to numerous shifts and reversals (not long ago, he declared
that the Internet is completely over),57 he has benefited immensely
from innovative distribution strategies based on free distribution and
redistribution. In 2007, for instance, he released his new album Planet
Earth as a CD included free in three million issues of Britains Mail on Sunday tabloid newspaper. In addition to being paid a reported half million
dollars plus royalties by the papers publisher, Prince went on to play a
twice-extended, sold-out, twenty-one-night engagement at Londons 02
arena during the subsequent two months, which grossed over twentytwo million dollars in revenues.58 A copy of Planet Earth was also given
away free to every ticket purchaser. This newspaper distribution strategy
was so successful, he repeated it three years later with his 20Ten album.59
Although Prince has been a vociferous opponent of file sharing at times
(and has sued torrent tracker The Pirate Bay), there is little question that
his financial success as a touring artist owes some of its longevity to his
efforts to make his music freely available for people to access and share.
86
CHAPTER 4
87
These cases, though celebrated, are becoming the rule rather than the
exception; collectively, over five thousand music projects raised nearly
$35 million in crowd-funding on Kickstarter alone in 2012, and that number is sure to skyrocket; the amount of money raised via the site more
than tripled from 2011 to 2012.64 Similarly, in December 2012, Bandcamp
achieved the milestone of distributing over a million dollars to its artists
in a single month.65
In addition to the many famous musicians using P2P and digital music
sharing to extend and grow their careers, there are also many recent examples of obscure or emerging musicians whose careers were propelled
into the stratosphere via free online distribution. One widely celebrated
example is teen pop sensation Justin Bieber. After his mother posted
home videos of the Stratford, Ontario, fourteen year old singing (unlicensed) pop R&B songs to YouTube, he was discovered accidentally
on the site by a former label marketing executive, who helped him sign a
recording contract with Island Records.66 By the time his first single was
released in 2009, the singer was already the twenty-third-most-popular
musician on YouTube. After his commercial release, Bieber continued
to grow in popularity, fueled by free sharing on YouTube (where, at
the time of writing, he has the second most popular video of all time,
with over 819 million views), Twitter (where he is the currently secondmost-popular account, with over thirty-two million followers), and P2P
networks (where he is consistently among the most shared musicians,
according to BigChampagne). None of this free sharing kept Biebers first
two albums from selling like gangbusters (each earned RIAA-certified
Platinum status in the United States and Canada), and its clearly only
helped fuel the Bieber fever driving millions of fans to buy his merchandise and attend his live concerts for nearly half a decade thus far.
Another example of an artist climbing from obscurity to fame on the
coattails of free Internet distribution is the Gregory Brothers, a Brooklynbased indie band best known for their YouTube video series Auto-Tune
the News (ATTN), in which they remix and harmonize television news
footage. Although ATTN has enjoyed significant traffic (millions of views
88
CHAPTER 4
per video) and press attention since its debut in spring 2009, the band was
catapulted to mainstream success with the July 2010 release of ATTN
episode 12b, BED INTRUDER SONG!!!! This video, which remixed a
Huntsville, Alabama local news story about an attempted rape and featured the colorful personality of the victims brother, Antoine Dodson,
garnered over fifty million YouTube views within its first four months
of release.67 Additionally, within a month of its first appearance, thousands of other YouTube fans had posted their own interpretations of
the song, accounting for tens of millions of additional views. This viral
success translated to a degree of market success beyond the confines of
YouTube; the song was made available for paid download on iTunes and
charted on the Billboard Hot 100, a rare accomplishment for an iTunesonly song by an unknown act. The Gregory Brothers shared 50 percent
of writing credit and revenues with Dodson,68 who has also used the
video to sell merchandise and music of his own and has reportedly used
the revenues to move his family out of the projects to a safer home.69
As these two examples make clear, P2P alone cannot take all the credit
for launching new musicians careers; social media and online video sites
such as YouTube (both of which also qualify as free online distribution and frequently lack licenses from copyright holders) have played
an increasingly important role since the mid- to late 2000s. Recently,
the Internet researcher Alex Leavitt reported on Twitter that a major
record label had seen 42 percent of its new musical acts originate as YouTube cover artists.70 This statistic, though anecdotal in nature, reflects
an evident truth: namely, that sharing unlicensed versions of commercial
music freely via the Internet has replaced the traditional demo tape as
the primary vector for amateur or independent performers to shop their
wares to the music industry and to a broader audience. While Bieber is
the best-known example of this phenomenon, my personal favorite is
Arnel Pineda.
Pineda served as the lead singer of The Zoo, a popular classic rock
cover band in his native Philippines. After the band posted several cover
versions of songs by Journey to YouTube, Journey cofounder and guitarist Neal Schon contacted him to ask whether hed be interested in
auditioning to be the bands lead singer. Pineda got the job; the resulting
album, Revelation, sold a million copies within six months of its release
in June 2008,71 and their tour that year grossed over $35 million. Fortunately, Schon and Journey saw something of value in The Zoos YouTube covers; had the copyright holders simply censored or prosecuted
the cover band for its piracy, Pineda might have been bankrupted,
DISSECTING THE BOGEYMAN
89
Journey might have missed out on an ideal lead singer (and a $35 million
paycheck), and Journey fans around the world might not have been able
to enjoy their new album and live concerts.
CHAPTER 4
Why did UMG invoke false copyright claims to prevent the video
from being seen? Was it simply a matter of using any means necessary
to combat a website it considers a dangerous pirate? Perhaps so, but
I believe the company was equally concerned with the videos actual
contents, which consisted of major label artists celebrating the site. A
foundational element of the recording industrys anti-piracy narrative
is the argument that label-backed music distribution support[s]77 artists, while its efforts to crack down on unlicensed distribution protect[s]
artists.78 So its problematic when some of the best-known and bestselling major label artists publicly extol one of the very services the industry has identified as a threat.
The truth of the matter is that, historically, the major labels have done
a fairly poor job of supporting and protecting artists, and therefore artists
today have little incentive to fight for the status quo on behalf of companies that are routinely criticized for unfair or unethical business practices. Most notably, major label record contracts typically include clauses
whose primary effect is to diminish actual royalties paid to the recording
artist. As the Future of Music Coalition, a pro-musician advocacy group,
argues in a lengthy critique of these contractual hijinks, Outside of the
major label music world many of these clauses are seen as an affront to
basic logic.79
Several economic analyses have demonstrated the effects of these
practices on actual artist revenues. The celebrated rock producer Steve
Albini (Pixies, Nirvana, PJ Harvey) wrote a widely read and reprinted
1993 article in The Baffler, demonstrating how such clauses, and other
economic factors, could conceivably lead to band members signed to a
$250,000 contract taking home roughly $4,000 apiece for their work.80
More recently, in 2010, the online magazine The Root, in conjunction with
Don Passman, author of All You Need to Know about the Music Business,81
conducted an economic analysis corroborating this point, demonstrating that for every $1,000 in music sold, the average musician makes
$23.40.82 These economic disparities pertain even in the digital music
economy; according to court documents filed in 2011 by rapper Chuck
D, artists signed to UMG get paid $80.33 for every 1,000 iTunes downloads sold.83
Even the more justifiable contractual elements can be damaging to
artists bottom lines. For instance, recoupment clauses require that
labels make back their expenditures for producing, distributing, and
marketing the music before any royalties are owed to the recording
artist. As the RIAA has admitted on its own website, fewer than one in
DISSECTING THE BOGEYMAN
91
ten of its constituents album releases ever make back the money the
label has spent;84 therefore, by this logic, more than 90 percent of major
label artists never see royalties beyond the initial advance.
Aside from these contractual considerations, the major labels have
historically fought to diminish the degree of power, ownership, and revenue recognized by recording artists, in the interest of maximizing their
own profitability. One fairly recent example is their lobbying effort to insert four words into the text of the Satellite Home Viewer Improvement
Act of 1999, thereby with one tiny stroke reclassifying all recording artists labor as work-for-hire under copyright law. The practical effect of
this maneuver was to eliminate artists rights to recapture control of their
work via term reversion after their contracts had expired. Although
President Clinton signed this bill into law, subsequent Congressional testimony by major label artists such as Sheryl Crow and Don Henley led
to its repeal by the Senate. Despite this highly visible reversal, however,
the major labels and publishers have continued to fight copyright term
reversion. Most recently, a federal judge ruled in favor of Victor Willis,
composer of the song Y.M.C.A., in a test of this principle in 2012. Yet,
this story has only begun; it seems likely that the music industry will
continue to push the matter by any means necessary to avert a ticking
time bomb of mass copyright reversion from taking effect.85
Another highly visible, high-stakes battle between the major labels and
their artists has revolved around the issue of whether digital downloads
(such as those available from iTunes) are technically retail or licensing.
According to traditional artist contracts, retail royalties are significantly
lower (by a factor of about 3-to-1) than licensing royalties, which means
that the answer to this question could be worth billions of dollars to
either labels or artists. Recently, this battle has been waged in the form of
a lawsuit between rapper Eminem and Universal Music Group86 (the US
Supreme Court has declined to revisit an Appeals Court ruling in favor
of Eminem),87 as well as an ongoing class action suit brought against
UMG by a variety of musicians including Rob Zombie and Rick James.88
In short, the relationship between the major labels and the artists they
purport to represent has historically been a fraught one, and continues
to be contentious. Although many benefits, such as fame, legitimacy,
and the chance of riches, accrue from a major label relationship, it is no
surprise that even successful artists continue to express support for P2P
and other forms of free online music sharing, as, in their eyes, the benefits
must far outweigh the risks. For the labels, this support has led to numer92
CHAPTER 4
93
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 5
Figure 3. Chart by Stanley Liebowitz depicting the purported effect of P2P on music sales.
95
CHAPTER 5
reasons including changes to their internal data, analyses, and methodologies.9 Second, inflation makes longitudinal data difficult to compare.
Some of the difficulty is due to confusion (its not always clear which
years dollars are represented in a given publications figures), and some
of it is genuinely thorny math (inflation is not consistent from region
to region, market to market, and currency to currency). A separate but
related challenge is the fact that exchange rates between currencies differ on a daily basis; therefore, globally reported market figures in US
dollars are difficult to assess for a single year and a guesstimate at best for
longitudinal data. As the Organisation for Economic Co-operation and
Development (OECD) warned in its own analysis of IFPI data, Global
sales figures in USD . . . must be used with caution due to fluctuating
US dollar exchange rate [sic] which can make year-to-year comparisons
difficult.10
In addition to these macroeconomic challenges, many of which pertain to any global marketplace, there are additional idiosyncrasies about
recording industry data that make them even knottier to unravel. For
one thing, there is a methodological inconsistency between some figures,
BUBBLES AND STORMS
97
which are based on analysis of retail sales data (e.g., SoundScan, which
the IFPI uses), and others (e.g., RIAA publications), which are based on
shipments, or the number of units record labels report sending to retailers,
which are then extrapolated to dollar figures. Each of these methods of
assessment has its strengths and weaknesses, but there is invariably a
significant quantitative gap between the two.
Another challenge is that the music industry sometimes reports sales
data in terms of trade value, or wholesale price, and at other times in
terms of retail value, or the price paid at market. Moreover, the conversion rate between retail and trade value differs from format to format, region to region, and year to year. For instance, the IFPI recently reported
figures that suggested an 83 percent retail markup for physical goods and
a 59 percent markup for digital goods in the United States in 2008, while
reporting a 107 percent markup for physical and a 73 percent markup for
digital in Austria in the same year.11 Given that the IFPIs older publications report retail value, while the newer ones tend to report trade value,
this makes longitudinal market analysis even more difficult.
Finally, there is the question of what the object of analysis is. Historically, the music industry only reported revenues accruing from the
global sale of physical goods in brick-and-mortar stores. As the industrys
revenue model has diversified, some additional income sources have
slowly been added, though others have not. For instance, global IFPI
figures have included performance royalties and digital sales (including
ringtones) for most of the past decade, and in 2012 began to include
synch license royalties. Given that these arent technically sales, and
have no retail markup, the process of comparing current to past global
market figures is a bit of an apples-to-oranges-to-watermelons process.
I discuss these challenges not to bemoan my job as a researcher or to
besmirch the integrity of the recording industry, but simply to point out
that it is theoretically impossible to describe the historical global music
marketplace with total accuracy, and that any market data that appear
in any publication must be understood as fundamentally interpretive in
nature. Nor are the resulting inconsistencies sufficiently small as to be
of academic interest only; they bear directly on the questions I address
in this chapter: namely, when and why did the music industrys fortunes
reverse? According to an IFPI publication from 2000, the global music
retail market peaked in 1996, followed by a market contraction, with
a 2 percent drop in 1999.12 By 2005, the IFPI was reporting two sets of
figures: in terms of variable dollars (at same-year exchange rates), the
market peaked in 1996, but in terms of fixed dollars (all years calculated
98
CHAPTER 5
at a 2004 exchange rate), the peak came in 1999.13 Today, all IFPI publications show a 1999 peak, and there is no discussion of fixed vs. variable
dollars. Perhaps the industry changed its analytical methods because it
believes fixed dollars are a more meaningful measure. Perhaps they just
make for a better story.
For my own version of the chart, I rely on data from two recent IFPI
publications. For 19692004, I use the variable-dollar figures reported in
the Recording Industry in Numbers 2005. I chose these figures because they
are the most recent official data going back that far, because they reflect
retail rather than wholesale, and because variable dollars more accurately reflect the role of macroeconomic factors (such as buying power)
in shaping the music economy over time. For more recent years, I use
the IFPIs numbers published in 2012 (which use fixed dollars). Because
these are reported in terms of trade revenue, I adjusted for retail based
on an average 70 percent markup across different regions and formats.
As I discussed above, the IFPI doesnt use a single conversion rate, but
this figure is both conservative relative to the range of percentages the
industry uses, and consistent in its results with many additional published
market data.14 All of my figures reflect inflation-adjusted 2011 US dollars.
99
existing collections. The CD has been the most successful physical distribution format of all time by many measures, including the speed with
which it achieved market dominance and the total number of units sold
at its peak. First introduced to the market in 1983, retailers were already
touting the CDs potential to spark a replacement cycle by 1984.15 CDs
outsold microcassettes globally for the first time in 1993, and remained
the dominant sales format, in terms of revenues, through 2010. Only in
19981999 did Billboard magazine first raise the specter of diminishing
sales due to the maturing of the CD-replacement cycle,16 suggesting
that it had played a significant role in driving revenues for the past 15
years (fig. 5).
Another important factor in the expansion of the recorded music market during the 1980s and 90s was the transformation and consolidation of
the music retail sector. Until the 1970s, most people bought their music
at independent record shops or general merchandisers. While there were
some regional music specialty chain retailers such as Sam Goody and
Camelot Records, they were still a far cry from the global superstores
and megastores typified by Tower Records, HMV, and Virgin a decade
or two later. By the early 1980s, the head of the National Association of
Figure 5. Global music sales revenue, 19692011, and CD replacement cycle, 19841999.
100
CHAPTER 5
Recording Merchandisers (NARM) was confidently predicting the imminent death of mom and pop operations in the wake of further consolidation of the large retail chains.17 His words proved prescient; coasting
on the larger wave of industrial consolidation and the general transformation of retail into a mall-based, entertainment experience, the music
sector reinvented itself under the auspices of its new corporate owners,
forcing most independent retailers out of operation and streamlining and
standardizing the music shopping environment.
In the short term, this was a boon to music sales; it increased retail
space and foot traffic overall, brought many innovations in end-cap promotion and other forms of in-store and cooperative marketing, and made
price competition less likely. It also helped fuel sales for the industrys
biggest acts; with a single deal, a record label could effectively promote
its top artists in thousands of stores across the country and around the
world. In the longer term, however, consolidation had a strategic downside; with the mom-and-pop stores out of the picture, there was little
basis for customer loyalty, not much diversity in terms of music selection, and a strict, short-term bottom line driving all strategic decisions.
Within another decade, a new breed of big-box retailers such as Best
Buy, Circuit City, and Walmart began selling a significant amount of
music. Like the Towers and HMVs of the world, they were large corporate chains with little to differentiate them. But unlike the music-only
megastores, these retailers could afford to sell music at break-even point,
or even as a loss leader, with the assumption that a portion of consumers lured to the store with the promise of $9.99 CDs would end up
splurging on $299.99 stereo systems and $499.99 televisions. The effect,
according to one music chain executive, was like a neutron bomb has
gone off, instantly undermining sales at nearby music-only stores by up
to 50 percent.18
While the lower prices offered by big-box retailers temporarily helped
boost sales volume, they also augured ill for the industry. By the mid1990s, the music specialty stores, forced into a losing price war with Best
Buy and Circuit City, began to see their retail margins erode steeply.
Together with the record labels, which had initially ignored their plight
on the grounds that greater volume meant a better bottom line, they
came up with a plan to stanch the blood flow. In exchange for the labels
financial cooperation in music advertising, retailers would adhere to a
strict minimum advertised pricing (MAP) policyessentially fixing
the price of CDs at a level high enough for the music retailers to retain
some profit.19 This policy lasted from the mid-1990s until 2000, arguably
BUBBLES AND STORMS
101
n space
Figure 6. Twentieth-century music retail transformation and global music sales revenue.
maintaining an artificially inflated value for the compact disc market beyond its expiration date (fig. 6).
The 1980s90s also saw the emergence of a blockbuster economy in
the music industry, in which an increasing portion of the record labels
fortunes rested in the market performance of a dwindling number of
megastar artists with increasingly short shelf lives. Several factors were
responsible. First, beginning in the late 1970s, major labels entered into
a bidding and poaching war over some of the industrys biggest acts,
inflating the advances paid on royalties to stratospheric heights. James
Taylor, Michael Jackson, and Bruce Springsteen were three of the initial beneficiaries of these deals, which paid them millions of dollars before they had recorded a single note.20 In order to recoup these unprecedented expenses, the labels had to sell an unprecedented number of
units, which meant spending more on marketing and promotion, which
in turn eroded their margins and required a higher volume of sales to
achieve profitability.
This dynamic was compounded by an increasingly concentrated, integrated, and expensive marketing and promotional system. Beginning
with the 1981 launch of MTV, television became a (possibly the) domi102
CHAPTER 5
nant element in bringing new songs and acts to the publics attention, and
successful artists were increasingly required to be triple threatsgood
musicians, good dancers, and good-looking to bootwhich naturally
depressed the number, range, and diversity of potential pop stars. After
Viacom bought MTV in 1985, it began to expand its music television
offerings rapidly, building or acquiring nearly every major music cable
channel, including VH1, BET, and CMT. With the deregulation of the US
radio industry in the mid-1990s, media conglomerate Clear Channel went
on a buying spree of its own, expanding from the legal maximum of 40
stations in 1996 to over 1,100 by the end of the century. Together, Clear
Channel and Viacom accounted for the majority of the music marketing opportunities on US radio, television, and outdoor media (e.g., billboards), as well as the nations largest events promotion company.
These corporations wielded their consolidated power as a form of
leverage over artists and labels, requiring all-or-nothing commitments to
national tours, marketing, and promotional campaigns (often, all three).
For labels, this dynamic further undermined the value proposition for investing in mid-level artists who may have a loyal following of a few hundred thousand, but would never be able to sell a platinum album or fill
stadiums across the country. It also meant that there was a higher-thanever risk associated with artist development; beginning in this period, if
an artist didnt have a hit with his or her first radio single, a full album
could very well never be released. Gone were the days when artists like
Bob Dylan or Simon & Garfunkel could struggle through a few albums
worth of obscurity before hitting it big.
Naturally, the rise of the blockbuster economy could be heard aesthetically in the music itself, which had to aim for larger audiences, often
sacrificing depth of resonance for breadth of appeal. One example of this
trend was the emergence of boy bands such as New Kids on the Block,
the Backstreet Boys, and N Sync. With their youthful bravado, carefully
coiffed images, and even more polished sound, these groups were ideal
vehicles to sell a few platinum albums, sell out a few tours, unload a
ton of merchandise, and then put out to pasture (or, on rare occasion,
develop into successful solo acts). If many of these groups sounded the
same, it was often because much of the music was written and produced
by the same people. Labels and artists during this time increasingly came
to rely on the pop expertise of a handful of super producers such as
Max Martin, Rami Yacoub, and Rodney Jerkins,21 who developed consistent songwriting and studio techniques that could be applied to any
popular artist of the day.
BUBBLES AND STORMS
103
Figure 7. Global music sales and US economic expansion and recession, 19692011.
104
CHAPTER 5
105
CHAPTER 5
this classic recording finally appeared on iTunes, available for legal download for the first time ever.29 Naturally, music sales lagged during this
interim. And again, despite the prevalence of the P2P killed music narrative, major labels have occasionally acknowledged the role that format
replacement plays in maintaining and growing their market size. Warner
Music Group (WMG) has been one of the most vocal labels on this subject, consistently acknowledging in its public filings between 2006 and
2010 that negative growth rates on a global basis can be attributed in
part to the fact that the period of growth in recorded music sales driven
by the introduction and penetration of the CD format has ended.30 Lyor
Cohen, then WMGs North American chief executive, acknowledged
this fact as well, calling the end of the CD replacement cycle the biggest challenge facing the company in the early years of the twenty-first
century. In a 2006 interview with the Los Angeles Times, he argued that
Warners infrastructure was way too expensive. Throughout the
1980s and early 90s, the success of the compact disc format allowed
music companies to build enormous, expensive staffs. When the
industry began to decline in the late 1990s, most companies decided
that rather than cut staff, they would take shortcuts to sell more
records. Thats why Britney Spears, the Backstreet Boys and NSync
appeared, because labels had to find huge pop hits to pay for their
staffs, no matter how short-lived those hits were.31
107
music sites and services, both licensed and unlicensed. By the mid-2000s,
there was neither the economic necessity nor the market demand for
the kinds of blockbuster acts the recording industry had emphasized in
the 1990s. Yet the labels were essentially stuck with this model, having jettisoned both the artists and the infrastructure to accommodate
smaller, more targeted markets. As a result of this mismatch between
the expectations of music buyers and the capacities of music sellers, the
market suffered.
Another major factor in the contraction of the global music market
was the unbundling of songs. As I discussed in chapter 2, the introduction of the LP vinyl music format after World War II contributed to
the ascendance of a new product categorythe albumin which songs
were bundled together and essentially sold at a discount relative to their
aggregate price. By the 1960s, the album had become more than just
an economic and technological convenience: it had become the dominant paradigm through which recording artists and their fans communicated. Programmatic recordings like the Beach Boys Pet Sounds (1966)
and the Beatles Sgt. Peppers Lonely Hearts Club Band (1967) conceived of
the album as a contiguous suite of interrelated songs, rather than a more
or less random assortment of radio hits. Increasingly elaborate and welldesigned album cover art and packaging helped to communicate this aesthetic to fans, and to establish a sense of the work as a discrete category.
Yet not every album was like Pet Sounds. A significant portion of
album releases continued to contain mostly filler material punctuated
by a handful of hits. This was an economic calculation on the music
industrys part, tailored to make consumers pay more relative to the
number of songs they genuinely wanted to hear, and it inflated the value
of the music retail industry above the level of actual demand. As iTunes,
Amazon, and other retailers began to offer digital singles in the 2000s,
and as iPods and other new digital music players offered fans the ability
to create their own playlists and to listen in shuffle mode, consumers
began to spend their money more strategically, purchasing only the individual songs they wanted to hear. Naturally, this deflated the music retail
market by cutting out the portion spent on filler. As Bob Pittman, the
cofounder of MTV, former AOL Time Warner COO, and current Clear
Channel CEO, acknowledged a few years ago, the reversion to digital
singles as the dominant sales format has had a far more ruinous effect
on record industry revenues than file sharing has. In Pittmans words,
Stealing music is not [whats] killing music. . . . When I talk to people in
the music business, most of them will admit the problem is theyre sell108
CHAPTER 5
Figure 8. Twenty-first-century music retail transformation and global music sales revenue.
ing songs and not albums. I mean, you do the math.33 After doing the
math, the Harvard Business School professor Anita Elberse concurred
with Pittman, concluding that it is indeed a significant factor in decreased
sales revenues: I find strong support for the hypothesis that revenues
for [albums] substantially decrease as music is increasingly consumed
digitally. While the demand for individual songs is growing at a faster
rate than the demand for albums is declining, the dollar amounts gained
through new song sales remain far below the level needed to offset the
revenues lost due to lower album sales.34
Sales have also declined over the past decade as a result of the continuing evolution of the music retail sector. Beginning in the mid-1990s, as
I mentioned above, MAP pricing schemes artificially sustained the sales
priceand therefore the aggregate sales valueof CDs. This practice
ended abruptly in 2000, when attorneys general from forty-three states
launched an investigation into its potential anti-competitive implications
(fig. 8). Two years later, the suit against the labels was settled for $143
million in cash and donations, with no admission of wrongdoing by the
labels. However, thenattorney general of New York Eliot Spitzer announced that the agreement was a landmark settlement to address years
BUBBLES AND STORMS
109
CHAPTER 5
111
CHAPTER 5
century has deflated the market, a factor exacerbated by increased competition for consumer discretionary spending from the growing sectors
of home video, video games, Internet access, and mobile applications.43
After a decade of unprecedented expansion, the US economy suffered
two major recessions in the course of a decade, while median household
income dropped from its historic peak (see fig. 7). Although these factors
arent typically acknowledged by piracy crusaders seeking to place most
or all of the blame for their misfortunes on P2P and online music sharing,
the major labels have occasionally acknowledged that their market, like
any, is subject to the vagaries of the global economy. Predictably, this has
happened more frequently in the discussion of good news than bad. For
instance, in a 2005 press release, the IFPI acknowledged that improvements in the music economy over the past year had been due in part to
economic strength and strong releases help[ing] CD volume growth.44
In short, we cannot blame P2Por any single factorfor the heavy
decline in global music sales over the past decade. However convenient
it may be to scapegoat online music fans for the industrys woes, the
preponderance of evidence points to a far more complex, and interesting,
picture. If piracy played a role at all, it was likely in the form of massive
commercial CD duplication (primarily in emerging markets), which according to the IFPI has grown from roughly 165 million units in 200045
to 1.1 billion units in 2008, accounting for $4.6 billion in sales that year.46
Nor are the many factors of the music industrys perfect storm discrete.
We cant confidently ascribe 10 percent of the market contraction to one
and 20 percent to another. To the contrary, they are deeply interrelated;
the bad economy helped to drive the housing bubble, which helped to
push brick-and-mortar retailers out of business, which helped drive consumers to digital goods, which accelerated the unbundling process, and
so forth. At the end of the day, all we can say is that these many factors,
taken in aggregate, represent the conclusion of an economic cycle for
the music industry, and inaugurate another, with its own threats and
opportunities.
113
CHAPTER 5
business losses associated with digital piracy, and should not be interpreted
as doing so,50 explaining that such losses would be methodologically impossible to capture. Predictably, these numbers have been consistently
misinterpreted in exactly the way the reports authors warn against.
For instance, US Senator Chuck Grassley recently gave a statement at a
Senate hearing on intellectual property claiming that the global impact
of counterfeiting and piracy is $650 billionin other words, painting
this figure as representative of costs, rather than value. Even the USCC
has misrepresented the ICCs findings, citing the report on its website to
support the disingenuous claim that counterfeit and pirated products
account for $360 billion in losses in international trade annually.51 (This
is actually the figure the ICC report describes as the maximal value of
internationally traded counterfeit and pirated products, a subcomponent
of their $650 billion estimate).
Other figures abound as well. For instance, The Institute for Policy
Innovation, an archconservative think tank founded by US Congressman Dick Armey, still prominently promotes a 2007 report it published
called The True Cost of Sound Recording Piracy to the U.S. Economy.
According to this report, the U.S. economy loses $12.5 billion in total
output annually (or nearly half of the global recorded music industrys
total sales) due to piracy of sound recordings.52 The report, which was
authored by an economist who, according to his bio, has been instrumental in furthering the global efforts of the World Intellectual Property
Organization,53 also claims that Americans lose over 71,000 jobs annually from music piracy. This number is difficult to reconcile with RIAA
chief executive Cary Shermans claim that direct employment in the
industry has fallen by only about 10,000 in the past 13 years,54 or with a
new report from the International Intellectual Property Alliance (IIPA),55
penned by the same author as the IPIs, which claims that the core copyright industries (defined as music, filmed entertainment, software and
publishing) only lost a total of 4,000 jobs between 2007 and 2011.56 Yet
the IPIs report has been widely repeated without critique in the press,
and is called a credible study on the RIAAs own website.57
Despite the consistency with which these contradictory and often illogical figures get repeated in the press and elsewhere, I am hardly the
first researcher to call the various claims of piracys economic impact into
question. Ars Technica journalist Julian Sanchez published an in-depth
investigative piece in 2008, concluding that the $250 billion and 750,000
jobs figures promoted by the USCC are at best, highly dubious. They
are phantoms. We have no good reason to think that either is remotely
BUBBLES AND STORMS
115
reliable. He also points out that, despite recent reports apparently validating these numbers, they are both seemingly decades old, gaining a
patina of currency and credibility by virtue of being laundered through
a relay race of respectable sources. Apparently, they have no foundation whatsoever in concrete economic analysis. When he contacted the
government agencies which ostensibly served as the sources of the dollar
figure, for instance, he was told that they couldnt find any record of
how that number was computed.58 Sanchez has revisited this subject
over the years; in an extensive blog post for the Cato Institute in 2012
titled How Copyright Industries Con Congress, he connects the dots
between research and policy, demonstrating that his phantom numbers were a central element in the recent efforts to legislate Internet
censorship via the Stop Online Piracy Act (SOPA).59
The US Government Accountability Office (GAO) has also taken pains
to identify the sources of many of these figures, pursuant to the Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act,
which was signed into law in 2008. Interestingly, the GAOs findings
were somewhat at odds with the rhetoric of the laws proponents. Specifically, the authors found that [t]hree widely cited U.S. government
estimates of economic losses resulting from counterfeiting [including the
$200250 billion figure cited by the USCC] cannot be substantiated due
to the absence of underlying studies. Even further, the report conceded
that any such figures cited in any context are most likely spurious, given
that it is difficult, if not impossible, to quantify the economy-wide impacts of piracy.60
Ultimately, then, the entire case for the economic impact of digital
piracy is a castle built on quicksandor perhaps a more apt metaphor
would be the mythical Ouroboros, a snake that devours its own tail. A
lobbyist (RIAA) aims to amplify its credibility by citing a study produced
by an independent consultancy (Frontier Economics) and funded by the
International Chamber of Commerce.61 Frontiers study repeatedly explains that it is building on the OECD methodology and building on
the OECDs work,62 thereby increasing its own credibility by resting
its case on the findings of a multigovernmental economic organization.
The OECD, in turn, gains credibility by basing its analysis in part on figures sourced to government agenciesspecifically, the US Federal Trade
Commission (FTC). The US governments own Accountability Office
investigates these figures and finds that FTC officials were unable to
locate any record or source of this estimate within its reports or archives,
and officials could not recall the agency ever developing or using this esti116
CHAPTER 5
117
have finally begun to license their content for use in innovative new
business models premised on abundance rather than scarcity, such as
Spotify and iTunes Match, offering the prospect of higher revenuesand
higher customer satisfactionthan the sales of a la carte digital singles
alone could accomplish. To put it another way, the industry appears to
be recognizing that its market has transformed, and is applying genuine
efforts toward meeting its consumers halfway.
We are not out of the woods yet, however. Labels are still more likely
to litigate than to license when confronted by a genuinely innovative
music distribution platform, and theres the minor matter of a decade
of lost opportunities and ill will to overcome. In my next chapter, I will
discuss the recording industrys lingering goodwill problem and continuing strategic missteps, and discuss the extent to which its piracy crusade
has exacerbated these problems.
118
CHAPTER 5
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 6
CHAPTER 6
121
why does it seem to have become the very image of its putative nemesis,
what in the counterculture era it would have called The Man? The
answer has little to do with some foundational shift in industry ethics
or practices and can be better understood as a powerful cartels longwandering chickens coming home to roost.
First of all, the music industry has a history of unfair and exploitative
labor practices. In addition to the legislative and contractual wrangling I
described earlier, the major labels have often reached beyond the liberal
scope of their allotted power, violating the terms of their own contracts
and functionally robbing their artists of their entitled dues. For instance, a
recent legal suit brought by country music legend Kenny Rogers against
Capitol Records11 offers a litany of alleged violations, including
taking two years to respond to an audit request
refusing to account for, or pay a share of, the substantial fees
collected in lawsuits against P2P companies such as Napster,
Kazaa, and Grokster
holding over $76,000 in unprocessed royalties in a suspense file
with no apparent right or cause
non-payment of royalties from sales of music via record clubs
non-payment of royalties on free goods distributed overseas, in
violation of Rogerss contract
inconsistent documentation, in that some accounts showed earnings for certain albums in certain periods, but other accounts . . .
failed to reflect those earnings
withholding foreign taxes even though they were offset by tax credits
incorrect royalty rate calculation in some foreign territories
charging over $12,000 to Rogers without any explanation of those
charges
charging Rogers 100% of video production costs, even though his
contract stipulated a 50% charge
failing to account for or pay royalties based on radio performance
royalties12
paying Rogers a far lower royalty than his contract required for nondisc records such as digital downloads and ringtones
failing to remedy any of these oversights financially once the audit
had revealed them
True, these are alleged wrongs in a legal complaint, but they are consistent with those described in other recent lawsuits and with widespread
criticisms from artist advocates over several decades. (The University of
122
CHAPTER 6
123
CHAPTER 6
technological barriers, by enabling songs to be reproduced and redistributed infinitely at no cost, by providing online retailers with limitless shelf
space, and by enabling webcasters to offer as many different programs
and playlists as there are listeners.
These changes provided greater leverage both to innovative businesses and to consumers. For instance, independent musicians and record
labels no longer had to pay a premium to share shelf space or air time
with the majors; most digital retailers and subscription providers now
boast libraries of 1520 million songs, as does Clear Channels custom
webcasting product, iHeartRadio (though many of the companys terrestrial broadcasting stations still offer playlists of 100 or fewer songs).
Nor are consumers nearly as beholden to the dictates of the marketplace;
if commercial music products and services dont offer appealing features
at reasonable prices, they will seek out their music through other means,
such as P2P.
Not only have these newfound freedoms highlighted by contrast how
unfair the twentieth-century music business was, they have allowed artists, music businesses, and consumers a measure of independence from
the major labels, publishers, retailers, and broadcasters. This independence in turn has allowed a greater degree of criticism without fear of
reprisal. In the meantime, the burgeoning blogosphere and other outlets
of social media have amplified the conversation, bringing once arcane
legal and economic arguments into the public realm. Whereas the industry once operated behind a veil of chic professionalism, today its inner
workings are subject to the judgments and voluble opinions of millions
of armchair business analysts and cultural commentators. Even this book,
which once would have been written in a solitary vacuum and read by a
select group of academic researchers, has been pre-published freely online and already read by thousands of people, many of them presumably
from outside of the academy and music industry. With this greater degree
of overall scrutiny has come a broader acknowledgment of the industrys
faults, its errors, and its foibles; even if the industry transformed itself
today into a global charity focused on curing AIDS and ending poverty,
it seems likely that its uncharitable past would continue to haunt it.
125
their allies tacked in the opposite direction. With the physical mechanism of cartelization quickly evaporating, the industry redoubled its
focus on its legal mechanismnamely, copyright. Now, instead of erecting toll booths outside of retailers and broadcasters, and excluding or
overcharging potential competitors seeking admission, the major labels
and publishers wielded the threat of crippling and sustained litigation to
prevent upstarts and innovators from gaining market share and industry
influence. The strategy appears to have worked, at least to a degree;
as an unidentified industry insider recently told Rutgers law professor
Michael Carrier, from 2000 to 2010, even to this day, there really hasnt
been new innovation in digital music other than iTunes.28
With the renewed focus on copyright as the saving grace of the legacy
music cartels came an amplification in the rhetoric and propaganda surrounding unlicensed uses of music online. Innovative sites and services
were branded as rogues, and their millions of users classified as pirates. These changes were neither coincidental nor reflexive, but rather
the result of what the IFPI called an intense global information campaign [beginning] in 2003, with the aim of explaining the illegality of unauthorised online music distribution. By the recording industrys own
account, the campaigns had an immediate and decisive impact in raising
public awareness on the issue internationally.29 Available data appear
to bear this out; a search of international news sources on the research
archive Westlaw shows the use of the term illegal downloading escalating from 80 stories in 2002 to 315 in 2003; similarly, uses of the term
music piracy grew from 363 to 908 during the same year (fig. 9). Yet
despite these apparent successes, the campaigns also brought some negative consequences, namely a groundswell of badwill (the opposite of
goodwill, in business jargon) among the industrys consumer base. While
such consequences may have been unintended, or even underevaluated
by the industry, they were hardly unforeseen; as an article in Businessweek
warned in January 2003, at the outset of the campaign, Branding too
many customers [as] criminals could incur the wrath of the larger music
community.30
Vitriolic and effective though it may have been, the piracy rhetoric
was only half of the industrys awareness effort. As the IFPI described
it, the campaign was coupled with the launch of extensively publicised lawsuits against major copyright offenders in the US, which were
conceived of not as a means to recoup lost revenues or even to punish
wrongdoers, but rather as a crucial public deterrent against copyright
infringement. In other words, these major copyright offenders, who
126
CHAPTER 6
by the IFPIs own definition were those who had shared hundreds of
song files via P2P, were targeted for litigation primarily as a media stunt.
Again, by the IFPIs own accounts, the policy was immediately effective; according to its tally, awareness of the illegality of unauthorised
file-swapping in the US rose from 37% before the lawsuits to 64% in
December 2003.31
Like those of the awareness campaign, the litigation initiatives measurable short-term successes were easily matched by long-term strategic
failures. If calling its own customers criminals had spurred some negative
backlash, suing them by the thousands, after explicitly pledging not to do
so,32 officially put the music industry at war with the population at large.
And like some actual military interventions, this quickly became a classic
quagmire; even as the evident costs to goodwill mounted, the industry
remained far too invested to cease operations and withdraw. The initiative began with a splash, with 261 lawsuits filed against alleged P2P users
in September 2003 and the promise that thousands more suits would
follow if need be.33 The RIAA lived up to its word; five years later, the
major labels had sued over 35,000 Americans.34
The badwill associated with the RIAA lawsuits wasnt simply a matter
of freeloaders grousing at the consequences of their own wrongdoing.
IS THE MUSIC INDUSTRY ITS OWN WORST ENEMY?
127
CHAPTER 6
129
Its perfectly reasonable to assume that the cases Ive outlined above
are the exceptions rather than the rule; most P2P defendants arent quite
so unfortunate, and its possible that the majority of them are, in fact,
liable (although Ray Beckerman, a defense attorney who knows more
about these suits than anyone else outside of the RIAA, holds otherwise).46 Yet, from the standpoint of goodwill and public relations, these
questions are irrelevant. The recording industry inaugurated this policy
as part of a public awareness campaign, and by the end of its five-year
run,47 the public was painfully aware that the industry seemed hell-bent
on protecting its assets at any cost. In the words of a 2009 article in the
Minnesota Journal of Law, Science & Technology, the industrys strategy to
counter digital music piracy has embittered or calloused a substantial
portion of the public. In particular, the lawsuit component of the industrys approach, besides being ineffective, has proven highly repugnant.48
Toward the end, even some record industry executives and organizations publicly acknowledged that the strategy had backfired. For instance, EMI threatened to leave the IFPI over the bad public image resulting from the suits,49 and Jennifer Pariser, an attorney for Sony Music,
admitted under oath that the lawsuits represented a money pit for the
labels.50 Yet when RIAA president Cary Shermanthe definitive industry spokesmanwas interviewed by Declan McCullagh of CNET News,
he showed neither remorse nor trepidation about the litigation tactics
or their ruinous effects on defendants. In response to the question Do
you view your lawsuits, even ones where you sued a 12-year-old girl or
a Boston grandmother, as a success overall and do you think the process
is working?, Sherman responded, Yes. Were feeling pretty good.51
CHAPTER 6
the company and asking it to stop, RIAA lawyers stormed in like the
Men in Black, the Parsoft business manager told a reporter soon afterward. They threw down a huge swatch of legal papers and said, Youre
running an illegal site. . . . It was a week of hell and $10,000 down the
toilet. After ParSoft was forced to retain both an attorney and a public
relations firm to defend the suit and the companys reputation, it turned
out that the files hadnt been posted by anyone at the company, but
rather by an employee of their Internet service provider.52
While the Parsoft incident can be written off as a regrettable but somewhat humorous case of mistaken identity, other anti-piracy fiascos have
not been quite so benign. For instance, as early as 2002, the RIAA and
its frequent partner in the piracy crusade, the MPAA,53 successfully convinced Congress to introduce a bill that would have indemnified both
groups against all state and federal laws in their attempts to stop a publicly accessible peer-to-peer file-trading networkessentially granting
them carte blanche to hack into and destroy any private or commercial
computer suspected of hosting unlicensed content. Given the obvious
risks of false accusations and the lack of legal checks and balances, there
was little doubt among its critics that such a law would have led to significant, unrecoverable damages sustained by innocent parties. Moreover,
there was legitimate concern (considering the industries histories) that
such power could have been used as an effective tool for anticompetitive
tactics. Consequently, the Berkeley law professor Mark Lemley characterized the bill as a nightmare,54 Will Rodger of the CCIA55 referred to
it as vigilante justice for the 21st century,56 and the tech policy analyst
Hal Plotkin, writing on the San Francisco Chronicle website, called it an
incredibly vivid example of how easily government officials can unintentionally screw up the economy.57
Unsurprisingly, given the backlash it generated, this particular bill died
in subcommittee. But that didnt stop the music industry from experimenting with computer hacking as a piracy deterrent. On Halloween
2005, a blogger and tech researcher named Mark Russinovich posted
a lengthy analysis58 of a new security risk he had discovered: copyprotection technology installed on a CD manufactured by Sony BMG
had, without his knowledge or consent, installed a rootkit on his computer. In Russinovichs words, rootkits are cloaking technologies that
hide files, Registry keys, and other system objects from diagnostic and
security software, and they are usually employed by malware attempting to keep their implementation hidden. In other words, even without Congressional carte blanche (or suspicion of infringement, for that
IS THE MUSIC INDUSTRY ITS OWN WORST ENEMY?
131
matter), Sony BMG had gone ahead with its hacking plan. In the weeks
that followed, it turned out that tens, if not hundreds, of millions of discs
contained the software, which not only opened a back door in users
computers, exposing them to malicious hackers, but also slowed down
and in many cases crashed their computers. Some consumer electronics,
such as car stereos, were also affected (in fact, my own Sony car stereo
became unusable after I tried to play a Sony Music CD in it). After a
tsunami of negative publicity, several class action lawsuits,59 and several
investigations by state and federal regulators, the CDs were recalled,
and Sony BMG published uninstallers for the softwarewhich, sadly,
presented new security threats when used.60
After this colossal debacle, one would think the major labels would
take greater care to ensure their customers privacy and security. Yet
security problems related to the piracy crusade have continued to crop
upfor example, in 2009 it was discovered that BayTSP, which policed
online copyright infringement on behalf of the RIAA and MPAA, was
storing all of the data about the identities of suspected infringers in an
unsecured Internet database, permitting it to be searched via Google and
allowing anyone with hackerish leanings ample opportunity to create
all kinds of mischief.61
Finally, there have been several instances of apparent piracy and
corruption by the piracy crusaders themselves. Some of this is predictable, garden-variety hypocrisy, as when sixty television shows (worth $9
million in damages, according to statutory rates) downloaded illegally
via BitTorrent were tracked to the RIAAs headquarters,62 or when executives at nearly every major entertainment industry company in the
US were caught downloading both music and movies via P2P.63 But
sometimes the stories have taken a darker turn. For example, there is
the case of Melchior Rietveldt, a freelance music producer who was
commissioned to compose a soundtrack for an anti-piracy video released
by BREIN (the Dutch entertainment industry trade association) in 2006.
The following year, Rietveldt bought a DVD of a Harry Potter movie and
was shocked to find that the video had been included on the disc, in direct
violation of his contract with BREIN, which limited its use to a local film
festival. After doing some research, the composer discovered that the
video had been included on tens of millions of Dutch DVDs without his
knowledge, consent, or remuneration. In other words, his anti-piracy
song had been pirated by the piracy crusaders.
Rietveldt soon contacted the music rights organization Buma/Stemra
in search of what he estimated were about a million euros in unpaid
132
CHAPTER 6
133
134
CHAPTER 6
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
PA R T I I I
Collateral Damage:
The Hidden Costs of
the Piracy Crusade
IN THIS FINAL section, I address the social and economic costs of the industrys piracy crusade and consider
some of the longer-term dangers we face if the crusade is
allowed to continue.
Given the pro-business veneer of the music industrys
rhetoric, its ironic that one of the principal victims of
the piracy crusade is the music business itself. The major
labels unwillingness to license their music to innovators
on viable terms, combined with their inability to innovate
on their own, paralyzed the industry at exactly the moment when new technologies offered the greatest amount
of promise and when consumers expressed the greatest
enthusiasm for new products and services. Similarly, the
anti-piracy laws and policies promoted by the industry
seem tailored to keep established oligopolists firmly in
place, while eliminating the market conditions that allowed upstarts (and the major labels and broadcasters
themselves) to reinvent the music industry in the past.
Far more troubling than the piracy crusades commercial effects, however, are its social effects. An underlying
political agenda that privileges the short-term interests of
135
136
COLLATERAL DAMAGE
CHAPTER 7
CHAPTER 7
considerable degree by the difficulties faced by innovators in their dealings with the legacy cartels. Unlike iTunes and Pandora, most new digital music services must face a choice between entering into extended,
and likely fruitless, negotiations with the major labels before launching,
or being branded as piracy enablers and litigated out of existence. Either way, only a small fraction of the good ideas ever make it to market,
and only a handful of those become stable, revenue-generating (let alone
profitable) businesses. This isnt simply an annoyance to those of us
hoping to impress our inner adolescents with the wonders of the digital
futureits a significant hindrance to the development of the industry,
and a serious drain on economic growth. As the business professors Jeff
Dyer, Hal Gregersen and Clayton M. Christensen write in the introduction to their book The Innovators DNA, innovation is the lifeblood of our
global economy and a strategic priority for virtually every CEO around
the world.5 In other words, an industry incapable of adapting toand
capitalizing ontechnological change is doomed to obsolescence.
Unfortunately, innovation has never been one of the music industrys
strong points; even in the pre-digital era, the labels attitude toward new
technology always mixed optimism and distrust in equal measure. In a
blog post, Steve Blank, a tech entrepreneur and the author of the Silicon
Valley bible The Four Steps to the Epiphany,6 explained how the music
business has often innovated in spite of itself: The music and movie
business has been consistently wrong in its claims that new platforms
and channels would be the end of its businesses. In each case, the new
technology produced a new market far larger than the [negative] impact
it had on the existing market.7
This resistance to new ideas has only increased in the digital age, as
the gap between the innovators and the industry has widened. The resulting stalemate has essentially ground the wheels of progress to a halt,
hurting businesses old and new, as well as consumers and musicians. The
Rutgers law professor Michael Carrier, who published an extensive study
on this subject, argues that the music industry is largely to blame for its
own economic collapse because of its single-minded focus on preserving
an existing business model and ignoring or quashing disruptive threats
to the model and its consequent reliance on overaggressive copyright
law and enforcement, [which] has substantially and adversely affected
innovation.8
In the remainder of this chapter, I tell the stories of five promising digital music businesses that suffered as a result of such policies.9 Although
these are only a handful among hundreds if not thousands, each is in its
THIS SOUNDS WAY TOO GOOD
139
own way emblematic of the dysfunction at the heart of the music industry in the digital age. Through their stories, I hope to provide a glimpse
of whats been lost and what the costs have been to both musical industry
and culture, as well as a sense of the human toll, measured in terms of
wasted hours and diminished dreams.
CHAPTER 7
141
In the end, the major labels never quite said no to Uplister. They simply never got around to saying yes, demanding millions of dollars apiece
in advances, and refusing to negotiate for a lower fee, even though the
sums they asked would bankrupt the fledgling enterprise. Nor did they
respond to Silvers appeals with any kind of enthusiasm or alacrity. As he
described it, the major labels attitude . . . when there was a problem was
this is too difficult, well go really slowly. And for a venture-funded
startup with a high burn rate in a rapidly evolving business and technological environment, this amounted to the kiss of death. Things were a
bit better with the indie labels, who were much more interested, much
more engaged, much more willing to experiment, and thus granted
licenses to Uplister only a year or so after the company launched.
Unfortunately, this proved too little, too late. By September 2001,
Uplister had about 750,000 users, six weeks of cash left in the bank,
and zero major label music on its site. As Silver recalls, It was like we
were in this race car, although someone had disabled the brakes, and
we were headed for a wall. It was horrible. The dot-com bust earlier
that year had made investors far more cautious, and venture capitalists
(VCs) were unwilling to pour more money into the company if it didnt
have a fully functional service. Then came the attacks of September 11,
which froze investment entirely. Silver was forced to lay off his thirtyfive employees, his wife and young children returned to their native
England, and Uplister shut its doors permanently. Although Silver soon
moved on to become the CEO of the music composition software company Sibelius, his experience at Uplister had left him with a lingering
sense of personal regret that starkly contrasts with his earlier optimism
and enthusiasm. Actually, its quite painful thinking about it, he told
me. It wasnt fun.
CHAPTER 7
edy the problem. I just became sort of obsessed with why that couldnt
happen, he told me. Why cant I just click on these songs, and hear
them right now?
Because Ouellettes primary expertise was in design and his computer
programming skills were only at the hobbyist level, and because he had
a full-time job at the video sharing site Vimeo, he initially viewed his pet
project strictly as a user interface experiment. After working nights
tinkering on his playlist software for some time, he suddenly realized that
it was two or three weeks away from being releasable. He quit his day
job and buckled down, spending most of March 2008 in full-time development. Even at this point, however, he didnt view it necessarily as a
career move. It was more of a creative challenge, a test of his minimalist
design principles. I want the whole site to be music, he told himself.
Literally, the surface area of the site should [have] very few areas you
click on without hearing something.
After three weeks of intense work on the project, which he dubbed
Muxtape (a portmanteau of MUX, an electronic device that manages
the flow of audio or video signals, and mixtape), Ouellette was ready to
share his creation with the world. Because it wasnt initially intended as a
commercial project, there was no marketing or promotion involved with
its launch, though he was certainly optimistic about its social impact. He
posted a screenshot of the Muxtape logo to his Tumblr blog, and told his
readers, Im proud to introduce Muxtape, a new way to share, discover,
and listen to hand-picked music online. . . . My goal is nothing short of
changing the way we consume, distribute, and discover music.13
The response was sudden and overwhelming, in part because some
of Justins Tumblr readers were themselves influential bloggers. Within
four and a half hours, a thousand people had signed up for the service.
Within twenty-four hours, thirty-five thousand people had visited the
site, and about a quarter of them had signed up to use it, posting nearly
twenty thousand songs. His post was the most reblogged item on
Tumblr, and his site melted under the heavy strain of its exponential
growth.
Music fans werent the only ones who responded quickly to Muxtapes
release. The day after he launched the site, Ouellette started hearing
from record labels. Universal Music Group was the first to contact him.
The labels general counsel called Ouellette directly (how they got my
contact information is still a mystery), and asked where he should send
the summons. Independent labels also e-mailed him, but unlike the majors, they were mostly inquisitive, not hostile or anything.
THIS SOUNDS WAY TOO GOOD
143
Ouellette was savvy enough to understand that this Jekyll and Hyde
routine was essentially the labels version of good cop / bad cop; the
threat of litigation, while real, wasnt immediate. Instead, the labels appeared to be using it as a form of leverage. This wasnt a problem, as far
as he was concerned; once the licensing terms were worked out, and he
paid appropriate retroactive royalties for the sites first months of operation, everybody would get along just fine. His attitude toward the labels
at the time, he told me, was you guys are snakes, but, you know, I can
respect the game.
It was clear to Ouellette that the four majors had conferred about
terms prior to their separate negotiations with Muxtape. They each offered essentially the same deal: the service would have to pay anywhere
from a half cent to two cents each time a song was played on the site, it
would have to share 50 percent of its revenues (Ouellette anticipated selling ads to music-related companies) with the majors, and it would have
to give each major an ownership stake in Muxtape ranging from one to
five percent. Against these terms, the labels collectively required cash
advances amounting to ten or fifteen million dollars. Although he considered them onerous, Ouellette was willing to accept the labels terms,
as long as theyd allow him to go about his business in peace. Im not
144
CHAPTER 7
145
become toxic for any investor because of the cloudy legal outlook.
And, most important, Ouellette told me, I felt betrayed. I was like, this
is not a negotiation in good faith. The labels had failed to live up to even
his diminished expectations of how the game was played. So he pulled
the plug on negotiations, closed down the site, and replaced it with a
brief note saying that Muxtape will be unavailable for a brief period
while we sort out a problem with the RIAA.
After spending a long weekend feeling sad, Ouellette dedicated a
few months to developing a new version of Muxtape, in which bands
and labels could voluntarily post music as a form of self-promotion; that
way, licenses wouldnt be necessary. After six months, he closed the
doors on that, as well. My heart wasnt in it the same way anymore,
he confessed. It just wasnt as interesting to me as a product. Today,
Ouellette works at Tumblr, the site where the Muxtape story began, and
says he love[s] working there. . . . If theres anywhere that the spirit of
Muxtape is alive, its in Tumblr.14 Despite his own ventures disappointing outcome, he acknowledges that thatll probably go down as the best
year of my life. . . . I dont have any real regrets. Nonetheless, he told
me, there is one thing that continues to bother him: I still wish the state
of music on the Internet was better.
CHAPTER 7
147
of promotional guarantees (youre gonna use your inventory to promote our stuff, this often and this much space). They wanted equity
in the company, they wanted the advances, and obviously a piece of
revenue as we built the service up. . . . [I]t was just all not practical.
In other words, the major labels made the same set of crippling demands on MyPlay that they would make on Muxtape a decade later.
And, like Ouellette, Pakman found the pill too bitter to swallow. In his
words, we never signed any deals because the terms were so onerous.
By the spring of 2001, the company had managed, despite spending a
year and a half in fruitless negotiations, to attract eight million users. But
the service was still inelegant (especially in comparison to the booming
unlicensed P2P services), and revenues were paltry. Then, soon after a
proposed $200 million acquisition by Yahoo imploded because of disagreements over a preexisting partnership with its rival AOL, the tech
bubble burst, and MyPlays horizons narrowed. Without major label licenses, there was little chance that newly cautious investors would continue to support MyPlays business.
So Pakman and Camplejohn sold the company (for considerably less
than $200 million) to the only buyer still on the marketBertelsmann
eCommerce Group, the sister company to major label BMG.18 Presumably, the company would now have an easier time obtaining licenses,
and the plan was to integrate its locker service with the soon-to-beobsolete CD subscription service BMG Music Club. Although Pakman
was disappointed about the earlier setbacks, he was still optimistic about
MyPlays future at Bertelsmann. He was excited to work for his new
boss, Andreas Schmidt, and thought he was going to do great things.
Unfortunately, Schmidt was fired three months later (owing largely to
his great vision of a post-retail, digital future for music), and the new
guy had no vision. So Pakman left Bertelsmann as soon as his contract
expired, a year to the day after the acquisition. Soon thereafter, the
eCommerce group itself disappeared beneath the waves, taking MyPlay
down with it.
Today, Pakman is a partner at Venrock Associates, a New York venture capital firm, and is still an influential thinker when it comes to the
music industry (Billboard magazine considers him one of the music
industry characters you need to follow19 on Twitter). Yet despite his
love of music and his history in the business, he says he wont invest
in digital music startups and has not found a single investment in the
space worthy of our capital. In fact, when he meets promising young
148
CHAPTER 7
149
CHAPTER 7
money in the capital market, and they wanted to take it all. Its that
simple. . . . They know they have big statutory damage award laws, and
they can crush people with it, and thats what they do.
In May 2000a scant four months after the service had launchedUS
District Judge Jed S. Rakoff found for the plaintiffs, deciding that, because
MP3.com had made copies of the labels music in order to stream to its
customers, and because these copies did not merit fair use protection,
it had therefore infringed their copyrights and was liable for statutory
damages, which were eventually tallied at $53.4 million.22
What happened next was both predictable and absurd. Having sued
the company to the brink of bankruptcy, Vivendi Universal (the owner
of Universal Music Group, the largest major label) purchased it. The
media conglomerate paid only $5 per share for MP3.comless than a
fifth of the IPO price of $28 and less than a twentieth of its peak price of
$105, despite the fact that the company had revenues of $80 million per
year and (unlike most Internet companies) was actually profitable.
Although Robertson ultimately was able to walk away from the
company with a considerable portion of the acquisition money and the
knowledge that his technology would live on in some form (it was used,
in part, to power PressPlay, a major label initiative to sell digital music
directly to fans), the experience left him bitter. Not only had he been
branded a pirate in the court of public opinion (as well as in a court of
law) and seen a substantial percentage of his net worth evaporate, but
he had lost control of his company before he could finish building it.
More than a decade later, he still evinces both regret and anger when he
talks about the sale to Universal. It was a sad day, really, he told me.
Because I had all these great plans, visions, and we werent really able
to achieve it.23
151
CHAPTER 7
That was a big, big, big, big, big debate, Foreman recalls, and one
thing that never got solved.
If the service was opt-in, then the universities didnt have much to
gain; the non-participating students would still be subject to litigation,
which would continue to pose legal and technological hassles for the
schools. If the service was opt-out, then the schools would have to justify
what amounted to a tuition increase even for students who had never
used P2P. Furthermore, at the public universities, their state governments would have to ratify any across-the-board rate increases, which
could take years of complex political wrangling. On top of all this, the
labels insisted on pegging pricing to this negotiation point. If the service
was opt-out, they would agree to accept $5 per month per student (which
was more or less universally agreed to be a fair and feasible sum throughout the music industry); however, if the service was only opt-in, the
labels would expect something closer to $20 per month (which is more
or less universally viewed as excessive, and anathema to consumers).
Time was of the essence. As Foreman recalls, Choruss felt like a
house of cards. If they didnt get the project moving forward quickly,
the house would collapse, and Bronfmans support would evaporate. Yet,
in addition to the seemingly intractable impasse with the schools over
opt-in vs. opt-out, the other labels appeared to be dragging their heels
on the business affairs side.
It wasnt that they werent willing to talk. We had lots of meetings
over a very long period of time, Forman told me. We had lawyers
on the phone, had contracts drawn up, all this stuff. And we were negotiating on finer points. Yet something always seemed to prevent the
contracts from getting finalized. At one point, he says, Bronfman and
Universal Music Group CEO Doug Morris failed to meet to discuss the
project because they couldnt agree on whose office they would meet in.
When they did manage to meet, each label brought its own set of concerns to the table. Universal was worried that Choruss would set a legal
precedent validating P2P, and specifically objected to partnering with
LimeWire to track music downloads while they were litigating a highprofile case against the file sharing company. Sony was worried about a
different kind of precedentspecifically, that granting immunity to P2P
users would establish a degree of legal ownership over the music theyd
downloaded tantamount to that conferred by a retail sale.
The ultimate sticking point, Foreman says, was Chorusss foundational premise. If you ask me why did we fail, he told me, it was the
covenant not to sue. Even the indie labels and the publishers balked at
THIS SOUNDS WAY TOO GOOD
153
the idea. There is no way Choruss could have worked without it; trying
to license every single track, by every single artist, composer, label, and
publisher, for all possible forms of distribution was just not logistically
possible within a reasonable time frame. Therefore, promising not to sue
for unlicensed usage was the only feasible workaround.
Yet the legal departments at the labels and publishers were loath to
give up the power to litigate. It wasnt just an essential form of business
leverage for their employers, it was also the attorneys primary function
within the organizations, and therefore their job security itself was on
the line. Foreman sees this as one of the key problems facing the music
business in the digital age. Lawyers are the hardest part of the industry,
he told me. Our impression is that they were working against [Choruss]
the whole time. Nor did the universities care for the deal as Foreman
pitched itto them, it sounded too much like extortion, a classic protection racket. At best, it sounded like vapor: everyone at the universities
kept asking, What am I getting with my $5 per month?
So it was a balancing act, and ultimately, it all came down, Forman
recalls. If we could have gotten a covenant not to sue from the majors that was signed, then we could have maneuvered our way into the
schools. Then we would have been able to set everything up. Unfortunately, it was not to be; at the eighteen-month point, it became obvious to everyone, including Bronfman, that Choruss had run its course.
Griffin and his crew approached some VCs (including the music-averse
David Pakman at Venrock) about turning it into a privately funded project, but everyone concerned realized that once it lost its affiliation with
WMG, Choruss would have an even lower chance of bringing all four
major labels on board.
The project never officially shuttered its doors, but without Bronfmans
financial and political support, Choruss more or less disintegrated. After a
year and a half of promising, cajoling, and placating, Foreman was forced
to call his would-be customers at the universities and tell them the deal
was off the table. Theyre probably not all happy with me, he acknowledges, but I did the best I could. It brings a tear to my eye.
CHAPTER 7
155
During the Internet boom years, Silver told me, this practice got so
out of hand that many of the majors introduced quotas, requiring executives in charge of licensing to reach revenue targets on an ongoing
basis. So if you didnt get two million dollars a quarter in business, on
the back of all these startups, there was something wrong with you, he
156
CHAPTER 7
recalls. And there are individuals who are now the head of digital for
large corporations who were very successful in doing that. Nor was
this money simply gravy from the labels perspectives; in at least one
financial year, Silver claims, digital music advances at EMI made the
companys budget when the retail sales would have failed . . . so the appetite was pretty keen.
Along similar lines, Kenswil confirmed what many of my other interviewees alleged regarding the motivations driving the major labels
to litigate against digital music innovators. While there are certainly instances in which the labels legitimately feel as though its the most effective method of curbing unlicensed distribution, there are other cases in
which it serves more as a form of leverage. As Ouellette recalls, It was
clear to me early on, even when I got that first call from Universal, that
its an intimidation tactic. Its all business. They want to make you feel
like you have very little control over the situation so they can work a deal
thats the most beneficial to them. Kenswil readily acknowledges this
to be the case: Yeah, thats always true in business litigation. . . . Thats
how its done. Business litigation ends up in a deal [and] the company
uses whatever leverage they have to try to make that deal as good as
possible.
As with licensing advances, Kenswil admits that the potential cash
value of a legal decision or settlement sometimes served as a financial
crutch for the major labels, undermining their interest in and ability to
seek more stable forms of long-term remuneration:
The main problem here was there had been some success on the
litigation side. To the point where, unfortunately, the money that
was coming in from some lawsuits exceeded the profits that were
being made from the actual digital businesses. And so there was
some argument to be made by those who were being paid to litigate
that litigation was a more profitable endeavor than licensing. Why
license them and make a little, when you can sue them and make
a lot?
157
CHAPTER 7
failuresemphasis on short-term gain at the cost of long-term stability, infighting and mistrust combined with entrenched cartelization, and
a steady outflux of visionary executivesmay very well continue unabated until the industrys dysfunction leads to full-scale implosion. Its
not that the destination is a mystery; by now, everyone knows theres
a celestial jukebox just waiting to be switched on once the labels can
agree to some equitable terms. Its just that there doesnt seem to be any
way to get there from here. And anybody with an idea about the route
inevitably suffers the consequences sooner or later, leaving a kind of
strategic vacuum where decisive vision is most needed. Its very hard
to understand if theres any kind of an overarching strategy going on
at these companies, Kenswil concedes. Or if there ever was, I guess.
159
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 8
chapter 6 which would grant legal immunity to record labels who are
spying on, hacking into, and destroying the computers of suspected P2P
users), made it clear that the State Department sees no contradiction
between intellectual property rights protection and enforcement and
ensuring freedom of expression on the Internet.4
If these anti-piracy laws and policies are so clearly founded on false
premises, and so evidently inimical to the values that America holds most
dear, why has the piracy crusade enjoyed such support from such a broad
swath of lawmakers and law enforcers? The answer to this question is
complex. Part of it is that, as with many other policy matters, intellectual
property is an arcane and profoundly unsexy field, and most government
officials probably dont have either the interest or the expertise to draw
such conclusions independently. Among those in the minority who do
have a working fluency in this field, there are actually significant disputes;
for instance, as I discuss below, a number of ambitious anti-piracy bills
have been successfully blocked by legislators concerned about their civil
liberties implications. These disagreements echo the arguments within
the record labels themselves that I documented in the previous chapter.
Among those who support anti-piracy measures, there are no doubt
some who believe that their solutions are the most reasonable balance
between competing values (e.g., liberty vs. security) in the face of an
intractable and potentially devastating problem. And there are certainly
others who support such legislation for politically instrumental purposes
that cant be stated explicitly (e.g., gaining leverage in trade relations
with other economic powers such as China and Russia). But there can
be little question that a substantial portion of anti-piracy legislation and
policy is driven by lobbying, campaign finance support, and other forms
of direct influence from the music industry and its allies.
According to the RIAAs website, the organization takes an uncompromising stand against censorship and for the First Amendment rights
of all artists to create freely. From the nations capital to state capitals
across the country, RIAA works to stop unconstitutional action against
the people who make the music of our timesand those who enjoy
it.5 Public records show that the RIAA contributed over $4 million to
political campaigns between 1989 and 2011, with anti-piracy legislation
sponsors such as Congressman Howard Berman and Senators Dianne
Feinstein and Orrin Hatch among the top recipients.6 The organization
also spent over $52 million in lobbying during the same time period,
the majority of it in the past six years. Collectively, the recording industry (including labels, publishers, and trade associations) has given
GUILTY UNTIL PROVEN INNOCENT
161
Figure 10. Campaign finance and lobbyist expenditure by copyright industries, 19892011.
almost $36 million to campaigns and over $120 million to lobbyists, with
copyright, patent & trademark listed as the most frequently disclosed
lobbying issue. The broader copyright industries, which include film,
television, computer software, and publishing, have donated over $836
million to campaigns and spent nearly $1.5 billion on lobbyists (fig. 10).
For each of these industries, intellectual property is one of the top three
issues targeted by their efforts. Nor are they alone in these initiatives;
across all industries, lobbying related to intellectual property topped
$2.5 billion just during the period from 2009 to 2011, with the greatest
single contributions coming from the US Chamber of Commerce. As
media watchdog MediaMatters argues, due to the opaque nature of
lobbying disclosure forms, its impossible to nail down the total amount
of money7 spent on promoting any given law; yet, collectively, these
contributions speak volumes about the financial commitment that piracy
crusaders have made to influence policy.
While it is true that public interest groups such as the Electronic Frontier Foundation, Free Press, and Public Knowledge have devoted considerable effort to influencing both policymakers and public opinion against
such policies, their resources are minuscule compared with those of the
162
CHAPTER 8
163
Recent Freedom of Information Act (FOIA) requests have also revealed the degree to which the US copyright czar Victoria Espinel
(former Assistant United States Trade Representative for Intellectual Property and Innovation, where she was the lead architect of
Americas IP trade policy and principally involved in WTO [World
Trade Organization] litigation against the EC and China)13 was actively
involved in secret negotiations between entertainment and communications industry organizations (including major record labels), as well
as lobbyists, to implement an unmandated, self-imposed graduated response14 Internet censorship policy at the nations largest ISPs. This six
strikes policy, dubbed the Copyright Alert System (CAS) and slated to
take effect in early 2013, slows down and potentially cuts off Internet
access for paying Internet subscribers suspected of violating copyright on
multiple occasions, without either legislative representation or judicial
oversight. Throughout the negotiations, which indicated a friendly twoway relationship between the industry and the administration, and for
which Espinel at times used her personal e-mail account, there was virtually no participation from public interest groups, let alone the public itself
or its legislative representatives.15
These are just a few examples of a much broader trend, with troubling
implications for civil liberties and democratic society in the networked
age: Again and again, a handful of major record labels, film studios and
other legacy content cartels have leveraged their strong ties with elements of the US government, as well as foreign sovereignties and treaty
organizations, to promote policies that undermine fundamental human
rights such as free speech, privacy and access to information in the name
of combating digital piracy. In the remainder of this chapter, I will review
some of the specific elements of these laws and policies, and discuss in
greater detail some of their implications for culture, society and the political process.
CHAPTER 8
ACTA in Europe, an activist subset of the general public becomes sufficiently engaged to fight the bill or treaty in question, making it too
politically toxic for public officials to continue to support. But even in
these cases, the initiatives are typically seen as discrete threats, Goliaths
overcome by the collective slings of a thousand Davids.
In actuality, these initiatives are part of a continuuman everevolving set of agenda items that reappear from bill to bill and treaty
to treaty until they are legally enshrined on a global scale. Typically,
the process begins with a trade agreement, establishing minimum standards for copyright protection across the many signatories. This is often
justified in the name of harmonizing policy across regions16a necessary precaution in an era of global digital information and capital flows.
Once the agreement is in place, each signatory develops laws adhering
to the requirement of the trade pact. To the greatest extent possible, the
piracy crusaders will push legislators in the United States to outstrip the
agreements minimum requirements. Once enacted, these laws up the
ante for the piracy crusade, establishing a new set of powers and negotiating parameters, and possibly leading to new judicial rulings applying the
laws to emerging technologies and cultural practices. The content cartels
also use the threat of further legislation as form of tactical leverage to
exercise supralegal powers and privileges in their dealings with third parties (as in the six-strikes CAS agreement with American ISPs described
above). Once these new laws and business accords have been established,
the piracy crusaders return to the international table to establish updated
trade agreements with an aim to harmonize copyright protection and
enforcement at these higher standards, and the cycle repeats itself.
As this process unfolds, technological innovators, public advocates,
and political activists work to develop alternative policy and communications platforms, typically with an aim to promote a more open public
sphere in which free speech, privacy, and transparency are privileged
over the protection of vested business interests. In many ways, this dialectic resembles a game of football, with each party working to advance
the ball incrementally, play by play, over the long haul. Though, to be
fair, the process cant be reduced to a simple binary with two teams, or
even two goals; no two organizations, artists, policymakers, technologists, or public advocates share exactly the same set of interests or the
same vision of an ideal compromise. Moreover, theres no discernable
end zone in sight: although people may work toward a more open or
more secure society, most of us would consider total transparency and
total informatic lockdown to be equally dystopian prospects.17
GUILTY UNTIL PROVEN INNOCENT
165
CHAPTER 8
case of infringement, rather than once for each song. Although this provision was dropped before the act passed into law, the question of how
to treat compilations in a digital context is an ongoing conundrum
that remains on the anti-piracy agenda.26 Most recently, the National
Defense Authorization Act of 2012 (NDAA), signed into law by President
Obama, increased penalties for selling or giving infringing goods to the
military, law enforcement, national security, or critical infrastructure.
One potential target of these higher penalties is Hyman Strachman, a
ninety-two-year-old World War II veteran profiled by the New York Times
for sending hundreds of thousands of bootleg DVDs, free of charge, to
soldiers in Iraq and Afghanistan.27
In addition to punishing businesses and individuals who have directly
infringed on intellectual property, recent efforts have focused on expanding the scope of what is known as secondary liability28in lay
terms, helping third parties to copy or redistribute content illegally. In
the United States, the DMCA staked out an initial compromise: While the
anti-circumvention measures stipulated by WIPO made it illegal to publish a webpage linking to a site hosting a piece of software that might be
used by someone to bypass DRM on a copyrighted file, thereby expanding potential liability far beyond direct infringement, it also stipulated
some safe harbors limiting the secondary liability of online service
providers such as ISPs.29 All it asked of these service providers in return
was that they adhere to a notice-and-takedown protocol, whereby if
a rights holder claims its work has been infringed, the service provider
must respond expeditiously to remove, or disable access to, the material
that is claimed to be infringing or to be the subject of infringing activity.
This uneasy peace didnt last long. When the US Supreme Court decided the MGM v. Grokster P2P suit in 2005, the existing concept of secondary liability didnt apply to the facts of the case, so the justices created
a new standard in its decision against the defendant, suggesting that by
inducing people to infringe copyrights, it had broken the law and was
liable for damages (an attempt to legislate this standard, in the form of
a bill called the Inducing Infringement of Copyrights Act, had failed to
pass the Senate in the previous year). Since then, there have been numerous attempts to further extend secondary liability by ratcheting down or
eliminating ISP immunity. For instance, such provisions have been included in drafts of both ACTA and TPP, and a clause originally appended
to the Senates 2010 Combating Online Infringement and Counterfeits
Act (COICA) would have granted ISPs immunity in exchange for censoring websites suspected of infringement by the Justice Department
GUILTY UNTIL PROVEN INNOCENT
167
suggesting that they risked secondary liability had they not taken such
voluntary measures.30
Several laws have sought to broaden the roles that government bodies
play in policing and punishing IP infringers, essentially diverting tax dollars toward providing the major labels and other content industries with
a free, international enforcement agency. The PRO-IP act first established a US copyright czar (technically, an Intellectual Property Enforcement Coordinator, or IPEC), a position appointed by the president and
confirmed by the Senate. Since then, government seizures of pirated
and counterfeited goods, and cases brought against IP infringers, have
climbed sharply. The Department of Homeland Securitys Immigration
and Customs Enforcement agency more than doubled its arrests for IP
violations between 2009 and 2011, and, in conjunction with the Department of Justice, seized 270 domain names from infringing websites in
2011 alone.31 The PRO-IP act also included a provision that would have
empowered the Justice Department to litigate civil infringement suits on
behalf of the content industries. This provision, which was eliminated at
the last minute because of veto threats by President Bush, has been on
the anti-piracy agenda for years, first appearing in the Protecting Intellectual Rights Against Theft and Expropriation (PIRATE) Act of 2004, which
passed the Senate but died in the House. Nor is governmental participation in policing infringement confined solely to US law; for instance, the
French Creation and Internet Law (HADOPI), adopted in 2009, created a
new government agency tasked with policing Internet service providers
and users for online copyright infringement,32 and treaties such as ACTA
and CETA expand the power of customs control in signatory nations to
search and detain goods and travelers suspected of IP infringement.
Some bills and treaties have also sought to give both government
bodies and private industry greater powers to search and surveil people
suspected of violating copyright. The Cyber Intelligence Sharing and
Protection Act (CISPA), a bill passed by the House in 2012, encourages
government agencies and private companies to share cyber threat information about Internet users activities. Given that the scope of allowable information is vague at best, and that intellectual property infringement is defined as a cyber threat, this law opens the door for millions of
Internet users to be surveilled if they are suspected of violating copyright.
It also empowers private companies to prevent users from sharing information with one another, as long as these measures are undertaken
in the name of identifying cybersecurity threats. A Senate bill called the
Strengthening and Enhancing Cybersecurity by Using Research, Educa168
CHAPTER 8
169
wish list that have yet to pass into law. For instance, a joint strategic
plan submitted by the RIAA, MPAA, and others to the IPEC in 2010
included several additional policy requests, including encouraging ISPs
and network administrators to filter out copyrighted material before it
could reach their users (presumably leaving only public domain information behind); empowering customs authorities to educate travelers
about the economic costs of piracy and requiring travelers to claim pirated goods at the border; restricting trade with countries that refuse to
adopt and administer stricter anti-piracy laws; and deputizing the Justice
Department and Department of Homeland Security to develop preventative and responsive strategy around blockbuster releases by the
entertainment industry.36 Public Knowledge cofounder Gigi Sohn has
also compiled a list of bad ideas perennially supported by the piracy
crusaders.37 This list includes exempting copyright enforcement from
net neutrality policies mandating that ISPs provide equal passage for
all content regardless of its source; making it legal for content companies
to disable users computers (e.g., the Berman bill); mandating the use of
DRM by all content providers and device manufacturers (essentially outlawing the traditionally open personal computer); inserting a broadcast flag into all publicly available content, restricting the uses to which
viewers or listeners can put that content, and effectively forestalling fair
use; and remotely disabling the output ports on peoples televisions and
other media devices via selectable output control.
Finally, there is the piracy crusaders coup de grce, an Internet kill
switch enabling a government agency or official to shut down all online
communications in one fell swoop. This was first proposed in a 2010
Senate bill called the Protecting Cyberspace as a National Asset Act.
More recently, it reappeared in the Cybersecurity Act of 2012, another
potential Senate companion to CISPA that specifically identified IP infringement as a cybersecurity concern and cause for action. Fortunately,
this agenda item has not yet become law in the United States; considering
the uses to which similar powers have been put in China, Iran, Egypt,
Uganda, Thailand, and Tunisia, let us hope it never does.
To summarize, the piracy crusade supports a broad and ever-expanding
agenda, the contours of which can be seen in the dozens of individual
laws and policies. Although the implications of an Internet kill switch
for free speech and civil liberties may be abundantly clear, the social
and political implications of these other policies may still be somewhat
obscure. In the next section, I discuss some of the ways in which these
existing and proposed policies pose a threat to human rights and demo170
CHAPTER 8
cratic values, and may complicate international relations for the United
States and its allies.
171
CHAPTER 8
Further complicating these issues is the fact that the piracy crusades
effects dont stop at Americas borders. I have already discussed the role
that international trade agreements like ACTA, TPP and CETA play in
setting, and raising, the bar for domestic copyright law. But there is another side to harmonization. Such pacts also serve the equally important role of exporting American IP policiesand therefore the interests
of American content cartels and their regulatory alliesto the rest of the
world, industrialized and developing nations alike.
These agreements are usually heralded as partnerships (e.g., the
second P in TPP), or as a chance for the United States to work cooperatively with other governments to advance the fight against counterfeiting and piracy.46 Strong anti-piracy laws that surpass those in the
United States, such as Spains Sinde Law47 and Swedens Intellectual
Property Rights Enforcement Directive (IPRED)48 have been called out
for praise in IFPI publications, as evidence of this global spirit of collaborative enforcement. Yet leaked intergovernmental communications
tell a very different story: both Sindes Law and IPRED were enacted
at diplomatic gunpoint, under pressure from the US government and
the content cartels. Diplomatic cables published in 2010 by Wikileaks
showed that the United States had threatened Spain to force them to
pass stronger copyright enforcement laws in the past.49 Then, in 2012,
the Spanish newspaper El Pas published a letter from the US ambassador
Alan D. Solomont to the Spanish prime ministers office, threatening
that if Sindes Law (which was then stalled in legislative limbo) were
not passed, the country would be placed on the USTRs priority watch
list (essentially the most wanted list for countries in breach of trade
agreements) and subject to retaliatory actions with severe economic
consequences. As a result, the incoming Spanish government fully implemented the legislation within ten days.50 Similarly, Wikileaks cables reveal that, in Sweden, IPRED was one of several laws enacted there over
a series of years, under similar threats that the country would be placed
on the USTRs watch list if it didnt comply.51
Again, these specific examples point to a larger trend: the US government, at the behest of the piracy crusaders, routinely bullies other countries into adopting anti-piracy legislation that outstrips domestic law in
its threats to free speech, privacy, and other liberties, then aims to use
these examples to push for higher levels of protection and enforcement
at home and around the world. But, in many of these nations, the costs
of adopting such policies are even greater than those faced within the
United States. For one thing, there is the matter of simple economics:
GUILTY UNTIL PROVEN INNOCENT
173
CHAPTER 8
fects, then sends their owners messages claiming that the cause of the
action was online copyright infringement. Infected computers can only
be recovered if the owners pay the purported IP police: To unlock your
computer and to avoid other legal consequences, you are obligated to
pay a release fee of 50.58 Yet to the malwares hapless victims, this form
of extortion may seem benign compared with the thousands of dollars
demanded by actual rights holders alleging infringement.
I myself was targeted by a similar scam in 2011, in which phishers
(a term for e-mailbased con artists) sent me a message claiming to be
the proprietors of all copyrighted material that is being fringed upon on
your companies webste [sic], and demanded that they recover damages
from you for the loss we have suffered as a result of your infringing conduct, to the tune of $160,000. I posted the message on my blog (both as
an example of the point I am trying to illustrate here, and as a warning to
other potential recipients of the e-mail). Judging by the responses to my
post,59 this was a widely distributed message, and theres no telling how
many of its recipients clicked the link it provided, exposing themselves
to financial losses or further malware attacks.
A marginally more legitimate, but far more deadly, variety of IP law
exploitation comes in the form of copyright trolls, who use the letter
of the law to achieve ends at odds with its statutory purposenamely, as
stated in the US Constitution, 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. Instead of
promoting innovation and developing new ideas, trolls typically acquire
legal control over an existing piece of intellectual property, and use it to
extort money from people who have violated their exclusive rights. This
is hardly a rare problem; for instance, in mid-2011, the tech news site
TorrentFreak broke the story that over two hundred thousand BitTorrent
users had been targeted in mass infringement suits by copyright trolls
within the past year and a half. None of these suits had actually made it
to court; instead, the trolls used their legal leverage to identify the alleged
infringers, then offered settlements of a few thousand dollars to each
(typically cheaper than the cost of a defense lawyer). This tactic likely
yielded hundreds of millions of dollars for the trolls, while overloading
the federal judicial system and preventing real justice from being done.60
Likewise, patent trolls61 and trademark trolls62 pursue similar tactics
using those respective forms of intellectual property law, empowered
by the stricter laws, higher penalties, and amplified rhetoric of the piracy
GUILTY UNTIL PROVEN INNOCENT
175
CHAPTER 8
177
178
CHAPTER 8
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
CHAPTER 9
Is Democracy Piracy?
IN APRIL 2012, a young couple got married in Belgrade, Serbia.
The wedding video1 shows the bride and groom smiling nervously as
they stand on a dais in fancy clothes, while the crowd around them titters
and cheers and the romantic strains of an aria waft through the air. After
the groom lifts the brides veil, they exchange heartfelt vows and then
kiss. The room erupts with applause.
Despite these traditional elements, this was no ordinary wedding. For
one thing, the young couple were dressed in a postmodern mlange of
styles: the groom offset his brocaded coat, leggings, and neck ruff by
dying his short hair maraschino cherry red, while the bride wore a floorlength dress that was white on the left and black on the right with black
breast cones and a single elbow-length black silk glove on her right arm.
Far more striking was the officiant to their right: in addition to his conservative black cassock, augmented by a gray and gold stole, he wore a Guy
Fawkes mask and sported a laptop emblazoned with stickers (fig. 11).
The laptop was evidently the source of the officiants voice, which in
its computer-generated cadences asked each party to take the other as
a noble peer and to share your love, your knowledge, and your feelings . . . as long as the information exists.
These vows had never been spoken before, because this was the first
marriage ever conducted in the Church of Kopimism, a new religion
founded in 2010 by a nineteen-year-old philosophy student named Isak
Gerson. The religion is based on the principles that copying, disseminating, and reconfiguring information not only are ethically right but are
in themselves sacred acts of devotion. Kopimist philosophy also holds
that the internet is holy and that code is law2 (a phrase copied from
the legal scholar Lawrence Lessig).3
When Kopimists first filed to be recognized as an official religion in
Gersons native country of Sweden, some grumbled that they were
179
Figure 11. The worlds first Kopimist wedding, in Belgrade, Serbia, April 2012.
CHAPTER 9
181
CHAPTER 9
rare instances in which the public good fully coincides . . . with the
claims of individuals.15 By tapping into the power of the marketplace,
the legal scholar Neil Netanel argues, the founders believed that they
could create a sphere of self-reliant authorship, free from state or private patronage . . . help[ing] to ensure the diversity and autonomy of the
voices that make up our social, political and aesthetic discourse.16
Yet, even at the dawn of the new republic, the founders recognized
that there must be some limitations on the scope of what we now call intellectual property. Thomas Jefferson wrote of the issue in an oft-quoted
letter to a Boston mill owner named Isaac McPherson: It would be
curious then, if an idea, the fugitive fermentation of an individual brain,
could, of natural right, be claimed in exclusive and stable property. . . .
Society may give an exclusive right to the profits arising from them, as
an encouragement to men to pursue ideas which may produce utility,
but this may or may not be done, according to the will and convenience
of the society, without claim or complaint from anybody.17
Thus, Jefferson (who was initially opposed to copyright laws altogether) viewed intellectual property as an artificea necessary fiction,
mutually agreed upon by the state, the citizenry, and the marketplace,
whose value was limited to its role as an encouragement for the sharing of ideas. To put it another way, the marketplace was, by virtue of
its plurality, understood to be a lesser of evils, a check on the governments potential for tyranny, and thus another instrument of leverage
for the citizenry to protect individual liberty and the integrity of the
public sphere. It was precisely this vision that has been enshrined in
the US Constitution, which paves the way for copyright by establishing
Congresss power 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.18
In the centuries since then, copyright law, media technology, and private industry have coevolved, to the point where none remotely resembles the world knownor even anticipatedby Jefferson and Madison.
Yet we have never moved beyond the original challenge at the heart of
copyright lawnamely, the task of striking the perfect balance between
government regulation and commercial privatization, ensuring the maximal freedom of speech for the public whom both sectors ostensibly
serve. Unfortunately, we now live in an age in which this dtente has
been compromised. Private industry has consolidated to a near singularity, with a handful of global corporations controlling the vast majority
of the revenue-generating music, as well as books, movies, games, and
IS DEMOCRACY PIRACY?
183
CHAPTER 9
Litman,27 and Tim Wu28 published influential books and articles reframing intellectual property law as a regulatory mechanism for public and
commercial speech. Pundits like Tim OReilly29 and Cory Doctorow30
began to critique the language of the piracy crusade, celebrating the
social and economic benefits of peer-to-peer culture. Filmmakers such
as Brett Gaylor,31 Benjamin Franzen and Kembrew McLeod,32 and Andreas Johnsen, Ralf Christensen, and Henrik Moltke33 created compelling visual and narrative arguments to communicate these concepts to a
broader public. And advocacy groups like Creative Commons, Electronic
Frontier Foundation, Public Knowledge, and Students for Free Culture
began to develop cohesive educational and lobbying agendas in contrast
to those of the piracy crusaders.
Most important, and no doubt in part as a result of these efforts, the
general public have become demonstrably more aware ofand more
actively engaged withthese issues in recent years. My own research has
borne this out. With my coauthors Mark Latonero and Marissa Gluck,
I fielded a survey of American adults in 2006 related to what we call
configurable cultural practicesnamely, mashups, remixes, and other
emerging digital forms of expression that blur the boundary between traditional production and consumption. This survey included an optional
write-in response, inviting respondents to share their general thoughts
about remixes and mashups. Analyzing the hundreds of voluntary written responses, we discovered that respondents had adopted several new
ethical frameworks to evaluate the validity of these new cultural practices (e.g., good copying vs. bad copying), and that most of these
frameworks had nothing whatsoever to do with the law.34 When we
fielded a nearly identical survey to adults around the globe four and a
half years later, in late 2010, we found that most of these ethical frameworks were still in place, but many respondents also explicitly critiqued
copyright law as either inadequate to the task of regulating digital culture
or as antagonistic to it.35 In other words, in a half decade, public opinion
regarding copyright (at least in a digital context) had progressed from
largely irrelevant to broken and possibly harmful. Quantitative research has produced similar results, as well. For instance, Joe Karaganis,
a researcher at Columbia University, recently found that solid majorities of American internet users oppose copyright enforcement when it is
perceived to intrude on personal rights and freedoms.36
The copyfight has already yielded some interesting political effects.
This is an issue that collapses the traditional left/right binary within both
American and international political arenas. Successful bills such as The
IS DEMOCRACY PIRACY?
185
Cyber Intelligence Sharing and Protection Act (CISPA) and the Prioritizing Resources and Organization for Intellectual Property (PRO-IP)
Act of 2008 were passed with bipartisan support. Yet CISPAs sister bill,
the Cybersecurity Act, was blocked by a Republican filibuster, and both
COICA and PIPA were effectively blocked by Democratic senator Ron
Wyden. Similarly, European ACTA signatories included both leftists and
conservatives, but a similarly diverse mix of politicians ultimately refused
to ratify it.
This stubborn refusal to conform to traditionally polarized party
dynamics has already become one of the hallmarks of the copyfight,
making it an unusually chaotic and unpredictable element of the political landscape. There are at least three reasons why this has happened.
First, the rapidity with which technology, culture, and industry now
coevolve has made it difficult for any legacy party to effectively integrate
a consistent IP position into its platform. For instance, should a smallgovernment, pro-business, unilateralist Republican support or reject a
copyright bill that increases federal regulation, funding, and power in the
name of protecting private enterprise at home and abroad? How would
this same hypothetical politician feel about an international trade agreement that harmonizes IP law and coordinates international policing
efforts under the auspices of a multi-governmental treaty organization?
There is no easy answer to these questions, thus the opportunity
perhaps even the necessityfor new organizations like the Pirate Party
to enter into the mix.
The second reason why the copyfight upends traditional party dynamics is its emphasis on personal liberty in contrast to institutional power.
Although copyfighters dont necessarily claim affiliation with or draw
inspiration from other political movements organized around this dynamic, they occupy a point on the political compass where [left and
right] curve around to meet in a common war cry: Get the bureaucrats,
the plutocrats and the party hacks off our backs, 37 in much the same
way that historical movements like anarchism and libertarianism and
contemporary ones like the Tea Party and Occupy do.
The third, closely related, reason for the copyfights lack of traditional
political valence is the fact that most of the anti-piracy agendas legislative and executive sponsors appear to be driven more by economic
self-interest (in the form of the lobbyist carrot and the trade sanction
stick) than by strict political ideology. These policies may be justified in
the name of partisan party platforms, but ultimately they are promoted
and enacted by bipartisan alliances cemented with common patronage
186
CHAPTER 9
187
Figure 12. Polish legislators wearing Guy Fawkes masks in Parliament. AP Images,
reproduced with permission.
CHAPTER 9
ends in sight can we evaluate the different means that have been proposed to achieve them.
As I discussed earlier, one of the primary functions of copyright, patents, and other species of IP is to incentivize creators to share their ideas
with the world. A second, related function is to provide such creators
with a means to capitalize on their innovations. In addition to providing
creative incentives, this also speaks to a basic expectation of fairness
that is commonly invoked in capitalist societiescreative work, like all
other forms of labor, should be remunerated.49 A third function has to
do with the reputational economy, rather than financial remuneration:
copyright allows creators to take credit for their work, which has social and
psychological benefits in addition to financial ones. A fourth function of
copyright is to grant creators some degree of control over how their work
is used by third parties. For instance, by a provision in his will, the late
Adam Yauch (a.k.a. MCA) of the Beastie Boys has used his copyrights in
the bands repertoire to prevent posthumously the songs being used for
advertising purposes,50 a stipulation in keeping with his lyrical pledge
(in Putting Shame in Your Game) not to sell my songs for no TV
ad. A fifth function, mentioned earlier in this chapter, is to provide the
citizenry with a mechanism for checks and balances against both governmental and commercial encroachment on free speech. A sixth function
of copyright is to incentivize industrial organizations to exploit creative
work, thereby both spreading new ideas and generating new wealth for
the economy. This is a hefty load for one law, or more precisely, one set
of laws and policies, to carry. Inevitably, in the shaping and execution
of these policies, one function must be weighed against, and privileged
over, another. As I hope I have demonstrated in this book, the problem
with the piracy crusade isnt copyright per se, but rather the fact that it
overwhelmingly privileges the sixth function, often to the detriment of
the first five.
One of the earliest modern efforts to reprioritize the functions of copyright came in the form of free software licenses (sometimes used interchangeably with the term open source).51 In what has now become the
stuff of geek legend, the computer hacker Richard Stallman pioneered
this new breed of legal instrument in the 1980s with the development of
the GNU General Public License (GPL).52 Stallman had been frustrated
when the de facto public domain that had characterized the software
coding community from its earliest days began to be privatized; not
only was code being copyrighted, but commercial interests were shipping software without granting purchasers access to the source code,
IS DEMOCRACY PIRACY?
189
which would allow them to make their own edits and amendments. As
a result, much of the code that Stallman and his peers had written, with
the expectation that it would remain publicly available to the hacker
community, was being integrated into commercial projects and essentially locked behind digital bars. Stallmans solution to this problem was
a stroke of genius: he would turn copyright inside out (or backward;
this solution is often referred to as copyleft), using a license of his own
devising to force anyone who used his code to make it available to third
parties on the same terms.53 The GPL has become a canonical text within
the hacker community, and today it and dozens of similar licenses have
been used to establish openness for millions of works, including some
of the worlds most popular software programs and web destinations.
More than a decade after Stallmans revelation, the law professor Lawrence Lessig recognized that culture at large faced challenges similar to
those Stallman had identified in the field of computer code. Between
copyright term extension, the DMCA, and other elements of the budding piracy crusade, Lessig worried that the cultural commons, or the
shared knowledge and experience of our society, was being increasingly
encroached upon by private interestseven as new digital communication networks were providing us with the power to share ideas on a scale
hitherto unimaginable. Lessig foresaw that the combination of stronger
copyright and more powerful networks would soon turn virtually everyone into pirates by default, so he set out to create a legal inoculation in
the form of an open license for creative expression.54 The resulting legal
instrument, which is called a Creative Commons (CC) license,55 is similar
to the GPL in that it gives musicians, authors, artists, and other creators
the opportunity to use their copyrights as a means to encourage, rather
than discourage, the reuse and redistribution of their work. One of its
most important innovations is that it gives the author herself the ability
to prioritize between copyrights various functions; for instance, while
one breed of CC license allows any kind of use as long as attribution is
granted to the original creator, another allows only noncommercial uses,
and yet another prohibits derivative works. In the decade since the CC
license was developed, hundreds of millions of works have been released
under its terms, including the White House website, Wikipedia, music
by popular artists including Nine Inch Nails, Beastie Boys, and Snoop
Dogg, and this book.56
Where open licenses such as the GPL and CC attempt to address the
shortcomings of copyright by augmenting it contractually, others have
proposed that intellectual property law simply be abolished altogether
190
CHAPTER 9
and replaced with a new regulatory system. For instance, the Dutch researchers Marieke van Schijndel and Joost Smiers have proposed that all
creative works be immediately absorbed into the public domain (a legal
concept that describes information that cannot legally be propertized,
although the authors explicitly synonymize it with the commons).57
Van Schijndel and Smiers envision three possibilities for creators
under this solution. For those in relatively low-investment, low-risk fields
(such as musical performers), the authors suggest that a first-mover advantage will allow innovators to benefit, simply by virtue of being reputationally and economically associated with the new ideas they promote.
True, performers cant expect royalties from recordings, they argue, but
the loss of these typically meager sources of revenue will be offset by
increased income from other sources, such as live performances. For
creators in higher-investment or higher-risk fields (such as cinema, book
authorship, and music composition), the authors suggest a usufruct, a
legal instrument that predates copyright by centuries. In the present context this term means that although the creator doesnt technically own
a work, she retains the exclusive right to exploit it commercially for a
limited period of time (the authors suggest a year). This is a less radical proposal than it may seem; in its emphasis on temporary rights of
exploitation rather than permanent rights of property, the Jeffersonian
and constitutional approach to copyright more closely resembles such a
usufruct than it does modern copyright law. Finally, van Schijndel and
Smiers suggest that works that may be difficult to exploit commercially
can be subsidized by the government, further justifying their public domain status. Again, this proposal is hardly radical; even in America, the
land of free enterprise and low taxes, we currently spend over $150 million annually on the National Endowment of the Arts, one of many public sources of funding for creative works.
While ideas such as open licenses and the usufruct system have
emerged from outside traditional government and policy circles, alternatives to the piracy crusade have been proposed by lobbyists, legislators,
and regulators as well. In the United States, the Pirate Party advocates
reducing copyright terms from their present length (an authors life plus
seventy years, or ninety-five years for a commercially funded work-forhire) to the original fourteen-year term that existed when copyright
was first introduced in this country.58 The party has also advocated for
the abolishment of the DMCA (hence the title of its recent publication,
No Safe Harbor), and for the expiration of unproductive patents after four
years.59
IS DEMOCRACY PIRACY?
191
CHAPTER 9
193
CHAPTER 9
195
CHAPTER 9
197
CHAPTER 9
region of our personal and public lives will not therefore be subject to
copyright, or to some similar legal constraint, and to all the opportunity
for exploitation that comes with such constraints? It sounds like the plot
of a dystopian science fiction film, but its clearly the direction in which
were headed.
Futurists like Ray Kurzweil83 have charted the course to the singularity of man and machine in excruciating detail, and they look forward
devoutly, with a messianic fervor, to the day when we can transcend
biology. I have spoken on several occasions to one of the Singularity
movements chief proselytizers, and he has described for me his vision
of the not-so-distant future in which the human spirit, liberated from the
bonds of mortality and corporeality, is free to explore the limitless possibilities of the known and unknown universe for all eternity.
To me, this future sounds at best lonely and at worst totalitarian. If
all of life is code, and code is law, and life, code, and law are undying,
how can we avoid reaching one of two chilling ends? Either the power to
shape our destiny rests in our own (virtual) hands, and we each become
singular gods in our own monotheistic universes, or there is some system
of centralized authority that doles out such power, and we must spend
eternity subject to its unfathomable whims and biasesin other words,
with a machine as our god (and devil).
If there is a third way, I believe it looks a lot like Kopimism. Far better
to function as a noble peer, sharing information in the form of love,
knowledge, and feelings with the other peers in the universe-network,
than to go it alone or to toil eternally under the yoke of some heartless
algorithm.
In the meantime, there are more pressing concerns, and much work to
be done. Long before we achieve anything close to singularity, the piracy
crusade threatens to undermine our societies, to crash our markets, and
to privatize completely the most personal form of public expression
our music. In the interest of both present and future, we need to rethink
some of our basic assumptions about business, law, and culture. How
much of a threat is piracy in the form of online sharing, compared
with the costs weve already seen to innovation, civil liberties, and public
discourse in our failed efforts to stop it? Will stricter copyright, stronger
enforcement, and harsher penalties really aid creative expression and the
industries that exploit it, or will it simply open the door to more abuse
and plunge us deeper into cultural paralysis?
As I have argued throughout this book, the answers to these questions
are clear if were willing to see them. The entire rationale for the piracy
IS DEMOCRACY PIRACY?
199
200
CHAPTER 9
Paperback
Amazon Kindle
Kobo
Apple iBooks
B&N Nook
Amazon
Indiebound
UMass Press
Barnes & Noble
www. piracycrusade.com
N OT E S
5. Daniel Levitin, This Is Your Brain on Music: The Science of a Human Obsession
(New York: Dutton Adult, 2006).
6. Colin M. Turnbull, The Forest People (New York: Simon & Schuster, 1961).
7. John Blacking, How Musical Is Man? (Seattle: University of Washington
Press, 1973).
8. Edward Schieffelin, The Sorrow of the Lonely and the Burning of the Dancers
(New York: Palgrave Macmillan, 2005).
9. Lawrence Lessig, Free Culture: The Nature and Future of Creativity (New York:
Penguin Books, 2004); Lewis Hyde, Common as Air: Revolution, Art, and Ownership (New York: Farrar, Straus and Giroux, 2010); James Boyle, The Second
Enclosure Movement and the Construction of the Public Domain, Law and
Contemporary Problems 66 (2003): 33.
10. James Carey, Communication as Culture (London: Routledge, 2009), 18.
11. Sinnreich, Mashed Up.
12. Jacques Attali, Noise: The Political Economy of Music, trans. Brian Massumi
(Minneapolis: University of Minnesota Press, 1985), 15.
13. Bram Kempers, Painting, Power, and Patronage: The Rise of the Professional
Artist in the Italian Renaissance, trans. Beverley Jackson (London: Penguin, 1995);
Larry Gross, Art and Artists on the Margins, in On the Margins of Art Worlds,
ed. Larry Gross (Boulder, CO: Westview Press, 1995).
14. Joel Sachs, London: The Professionalization of Music, in The Early
Romantic Era: Between Revolutions, 1789 and 1848, ed. Alexander Ringer, 20135
(Englewood Cliffs, NJ: Prentice Hall, 1991).
15. Christopher Small, Music of the Common Tongue: Survival and Celebration
in African American Music (Lebanon, NH: University Press of New England,
1987), 62, 346.
16. Lyman Ray Patterson, Copyright in Historical Perspective (Nashville:
Vanderbilt University Press, 1968), 5.
17. Ibid., 6.
18. For a thorough examination of the Jefferson-Madison correspondence
and a comprehensive history of American copyright, see Hyde, Common as Air.
19. See, for instance, the US Copyright Offices claim that copyright law
encourages cultural innovation by securing exclusive rights to . . . authors in
Celebrating World Intellectual Property Day 2011, www.copyright.gov/docs
/wipo2011.html.
20. Neil Weinstock Netanel, Copyright and a Democratic Civil Society,
Yale Law Journal 106, no. 2 (1996): 283387.
21. Tim Wu, Copyrights Communications Policy, Michigan Law Review
103 (November 2004): 349.
22. Patricia Aufderheide and Peter Jaszi, Reclaiming Fair Use: How to Put Balance
Back in Copyright (Chicago: University of Chicago Press, 2011).
23. Although copyright has been advanced as an instrument of several
non-economic ends, such as quality control, a lengthy analysis by the then law
professor and future Supreme Court justice Stephen Breyer concluded that
none of these ends were adequate to justify the means. In his words, if we
are to justify copyright protection, we must turn to its economic objectives.
Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in
NOTES TO PAGES 1924
203
Books, Photocopies and Computer Programs, Harvard Law Review 84, no. 2
(December 1970): 291.
24. John Ogasapian, Music of the Colonial and Revolutionary Era (Westport, CT:
Greenwood Press, 2004).
25. Lorenzo Candelaria and Daniel Kingman, American Music: A Panorama
(Boston: Schirmer, 1979).
26. There were copyrighted musical works in the United States prior to this
act; some legal scholarship suggests that the language of the law was expanded
to include music as a statutory clarification of existing norms. See, for instance,
Oren Bracha, Commentary on the U.S. Copyright Act 1831, in Primary Sources
on Copyright (14501900), ed. Lionel Bently and Martin Kretschmer (Cambridge,
UK: Faculty of Law, 2008), www.copyrighthistory.org.
27. Richard Crawford, Americas Musical Life: A History (New York: Norton,
2005), 232.
28. For a more thorough account and analysis of this expansion, see Lessig,
Free Culture; Siva Vaidhyanathan, Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity (New York: New York University
Press, 2001); and William F. Patry, Moral Panics and the Copyright Wars (New
York: Oxford University Press, 2009).
29. Dena Epstein, Music Publishing in the Age of Piracy: The Board of Music
Trade and Its Catalogue, Notes, 2nd ser., 31, no. 1 (September 1974): 7.
30. Deven R. Desai, The Life and Death of Copyright, Wisconsin Law Review
2011, no. 2 (March 2010): 219.
31. This debate has found new life in the digital era, as evidenced by the
introduction of the Internet Radio Fairness Act into Congress in 2012.
32. The Digital Millennium Copyright Act (DMCA) and the Copyright Term
Extension Act (CTEA; also known as the Sonny Bono Act).
33. The 1996 Telecom Deregulation Act.
34. David Bollier, Brand Name Bullies: The Quest to Own and Control Culture
(Hoboken, NJ: Wiley, 2005).
35. Fredric Dannen, Hit Men: Power Brokers and Fast Money Inside the Music
Business (New York: Random House, 1990); Walter Yetnikoff and David Ritz,
Howling at the Moon: The Odyssey of a Monstrous Music Mogul in an Age of Excess
(New York: Broadway Books, 2004).
36. Theodor Adorno, On Popular Music, in Essays on Music, ed. Richard
Leppert, 43769 (Berkeley: University of California Press, 2002).
37. Richard Wightman Fox and T. J. Lears Jackson, The Culture of Consumption:
Critical Essays in American History, 18601960 (New York: Pantheon Books, 1983).
38. Bernard W. Carlson, Artifacts and Frames of Meaning: Thomas A.
Edison, His Managers, and the Cultural Construction of Motion Pictures, in
Shaping Technology/Building Society: Studies in Sociotechnical Change, ed. Wiebe E.
Bijker and John Law, 175200 (Cambridge: MIT Press, 1992).
39. Stuart Ewen, All Consuming Images: The Politics of Style in Contemporary
Culture (New York: Basic Books, 1988); Daniel T. Cook, Consumer Culture,
in The Blackwell Companion to the Sociology of Culture, ed. Mark D. Jacobs and
Nancy Weiss Hanrahan (Malden, MA: Blackwell, 2005), 16075.
40. IFPI, Recording Industry in Numbers 2010, www.ifpi.org.
204
41. Marcy Rauer Wagman and Paul Rapp, The Band as a Business,
October 4, 2011, Future of Music Coalition, http://futureofmusic.org/article
/article/band-business.
42. Jerry Osborne, ElvisWord for Word: What He Said, Exactly as He Said
It (New York: Random House, 2006); Adrian Grant, Michael Jackson: The Visual
Documentary, new updated millennium ed. (London: Omnibus, 2001).
43. There are exceptions, such as the commercial distribution of religious
music, but these account for a small minority of both music market value and
musical cultural practice.
44. Franchises: Pirates of the Caribbean, Box Office Mojo, http://
boxofficemojo.com/franchises/chart/?id=piratesofthecaribbean.htm.
45. What Is Piracy?, IFPI.com, Views, http://ifpi.org/content/section
_views/what_is_piracy.html.
46. Daniel Heller-Roazen, The Enemy of All: Piracy and the Law of Nations
(New York: Zone Books, 2009).
47. Adrian Johns, Piracy: The Intellectual Property Wars from Gutenberg to Gates
(Chicago: University of Chicago Press, 2009), 1213.
48. Ibid., 32931.
49. Ibid., 44748.
50. Stephen Traiman, Pro & Semi-Pro: All Systems Go, Billboard, May 12,
1979, TAV-3.
51. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
52. Mike Hennessey, U.K. Piracy Rate Worlds Lowest, Billboard, June 19,
1982, 9.
53. For an exhaustive examination of the relationship between copyright
and fair use in the context of digital media, see Patricia Aufderheide and
Peter Jaszi, Reclaiming Fair Use: How to Put Balance Back in Copyright (Chicago:
University of Chicago Press, 2011).
54. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001).
55. MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005); full disclosure:
I was an expert witness for the defense.
56. Mitch Bainwol, Building a Brighter Future: Making AND Selling Great
Music, address delivered at the National Association of Recording Merchandisers Convention, San Diego, August 12, 2005, available at http://
dreadedmonkeygod.net/home/attachments/Bainwol.pdf; emphasis in
original.
57. Electronic Frontier Foundation, Supreme Court Ruling Will Chill
Technology Innovation, EFF.org, Press Room, June 27, 2005, www.eff.org
/press/archives/2005/06/27-0.
58. Lessig, Free Culture.
2. Riding the Tiger
1. Michael Chanan, Repeated Takes: A Short History of Recording and Its Effects
on Music (London: Verso, 1995).
2. Wiebe E. Bijker and John Law, Shaping Technology/Building Society: Studies
in Sociotechnical Change (Cambridge: MIT Press, 1992).
NOTES TO PAGES 3038
205
3. Media scholars such as Mark Katz and Jonathan Sterne have written
excellent books detailing the social histories of music recording technologies,
and each has not only informed my thinking on these subjects but also helped
to shape the larger scholarly approach to the topic. It is not my aim here to
reproduce or extend their work, but I feel it is important briefly to revisit some
of the same ground they have covered in the interest of my broader argument.
4. Jonathan Coopersmith, Old Technologies Never Die, They Just Dont
Get Updated, International Journal for the History of Engineering & Technology 80,
no. 2 (July 2010): 16682.
5. IFPI, Recording Industry in Numbers 2012, www.ifpi.org.
6. Kara Rose, Cassette Tapes See New Life after MP3s, USA Today.com,
October 3, 2011, www.usatoday.com/life/music/news/story/2011-10-02/mp3s
-cassette-tapes-vinyl-albums/50639144/1.
7. Also, because Sony owned its own digital storage format (the Memory
Stick), it chose not to support less expensive and more widely used nonproprietary flash memory cards.
8. Many audiophiles have rejected the claims of CDs perfect quality since
the formats debut, and there are continuing efforts to develop a digital music
ecosystem that allows music to be distributed via the Internet in higher-quality
(24 bit, 96kHz) audio formats.
9. For more in-depth analysis of the social shaping of radio, see Christopher
Sterling and Michael Keith, Sounds of Change: A History of FM Broadcasting in
America (Chapel Hill: University of North Carolina Press, 2008); H. R. Slotten,
Radio Engineers, the Federal Radio Commission, and the Social Shaping of
Broadcast Technology: Creating Radio Paradise, Technology and Culture 36,
no. 4 (1995): 950; Christina Dunbar-Hester, Geeks, Meta-Geeks, and Gender
Trouble: Activism, Identity, and Low-power FM Radio, Social Studies of
Science 38, no. 2 (2008): 20132; Gary Lewis Frost, Early FM Radio: Incremental
Technology in Twentieth-Century America (Baltimore: Johns Hopkins University
Press, 2010).
10. Officially Its No Decision; Unofficially AFM Turns Thumbs Down on
FM Feed, Billboard, February 19, 1944, 12.
11. Hugh Richard Slotten, Radio and Television Regulation: Broadcast Technology
in the United States, 19201960 (Baltimore: Johns Hopkins University Press, 2000),
144.
12. B. Eric Rhoads, Blast from the Past: A Pictorial History of Radios First 75 Years
(West Palm Beach, FL: Streamline Publishing, 1996), 32829.
13. Mark Katz, Capturing Sound: How Technology Has Changed Music (Berkeley:
University of California Press, 2004).
14. July Records, Time, July 14, 1941, 42.
15. Sidney Bechet and Rudi Blesh, Treat It Gentle: An Autobiography (Cambridge, MA: Da Capo Press, 2002).
16. Wayne Wadhams, Inside the Hits, ed. David Nathan and Susan Gedutis
Lindsay (Boston: Berklee Press, 2001); James Hunter, Recordings, Rolling
Stone, April 3, 1997, 64; Soundcheck Smackdown: Aja, WNYC.org, April 19,
2011, www.wnyc.org/shows/soundcheck/2011/apr/19/soundcheck
-smackdown-aja/.
206
207
17. Don Jeffrey, Downloading Songs Subject of RIAA Suit, Billboard, June
21, 1997, 3.
18. Jennifer Urban and Laura Quilter, Efficient Process or Chilling Effects?
Takedown Notices under Section 512 of the Digital Millennium Copyright Act,
Santa Clara Computer & High Technology Law Journal 22, no. 4 (March 2006): 687.
19. Its difficult to establish the exact number, as DMCA takedown notices
are not typically made public.
20. Jon Healy, Online Music Services Besieged, Los Angeles Times, May 28,
2001.
21. 180 F.3d 1072 (9th Cir., 1999).
22. Brooks Boliek, Eisner: Piracy Killer App for Computer Profiteers,
Hollywood Reporter, March 1, 2002.
23. MP3s Biggest Threat, Maximum PC, September 1999, 46.
24. See, for instance, Arista Records, LLC v. Doe 3, 604 F.3d 110 (2010).
25. Prepared Remarks of Hilary Rosen, Chairman and CEO, Hilary Rosen,
Recording Industry Association of America (RIAA), National Association of
Recording Merchandisers, Annual Convention and Trade Show, Orlando,
Florida, March 17, 2003, www.riaa.com/newsitem.php?news_year_filter
=&resultpage=54&id=870A2E2F-1415-5740-F001-252D26B52493.
26. Philip E. Meza, Coming Attractions? Hollywood, High Tech, and the Future of
Entertainment (Stanford: Stanford University Press, 2007), 130.
27. Eliot Van Buskirk, RIAA Training Video Leaked onto Torrent Sites,
Wired.com, Listening Post, February 19, 2008, www.wired.com/listening
_post/2008/02/riaa-training-v/.
28. Cory Doctorow, Stargate Fan-site Operator Busted under Antiterrorism Law, Boingboing, July 26, 2004, http://boingboing.net/2004/07/26
/stargate-fansite-ope.html.
29. Kbler-Ross, On Death and Dying, 95.
30. Sinnreich, Copyright and Intellectual Property.
31. Aram Sinnreich, Digital Music Subscriptions: Post-Napster Product
Formats, Jupiter Research (2000).
32. Charlie Sorrell, So Long, and Thanks for All the Cash: Yahoo Shuts
Down Music Store and DRM Servers, Wired.com, Gadget Lab, July 25, 2008,
www.wired.com/gadgetlab/2008/07/so-long-and-tha/.
33. Matt Asay, Warner Music: It was wrong to go to war with our customers
[Gasp!], CNET.com, News, November 15, 2007, http://news.cnet.com
/8301-13505_3-9817893-16.html.
34. In inflation-adjusted 2011 dollars.
35. Nine Inch Nails frontman Trent Reznor released an EP with Columbia
Records in 2012, a few years after NIN parted ways with Interscope, but thus
far, NIN itself has yet to release any additional recordings via a major label. It is
my (unsubstantiated) opinion that Reznors deal with Columbia was a gesture
of goodwill, to ameliorate his relations with the majors as he negotiated licensing deals for his yet-to-launch digital music subscription service, tentatively
named Daisy.
36. Although Madonnas 2012 album, MDNA, was distributed and marketed
by Interscope, her recording contract is part of a 360 deal with the live events
208
company Live Nation, which she signed after leaving a decades-long relationship with Warner Music Group.
37. As I told the Seattle Times when SpiralFrog was announced, I felt it was
really promising that the labels are going to finally stop kvetching and start
thinking intelligently about where their moneys going to come from in the
21st century. Quoted in Charles Duhigg and Dawn C. Chmielwski, All Music
Downloads from Largest Record Seller Will Be Free, Seattle Times, August 30,
2006, http://seattletimes.nwsource.com/html/nationworld/2003234969
_music30.html.
38. Declan McCullagh, Warner Music Readies CD-free e-label, CNET
.com, News, August 22, 2005, http://news.cnet.com/Warner-Music-readies
-CD-free-e-label/2100-1027_3-5841355.html.
39. Geoff Taylor, Napster10 Years of Turmoil, BBC.co.uk, News,
June 26, 2009, http://news.bbc.co.uk/2/hi/technology/8120320.stm.
40. Erik Pedersen, Has the Music Business Turned a Corner? RIAA Reports
First Revenue Increase in 7 Years, Hollywood Reporter, March 28, 2012. Later
reports showed that this upward trend continued throughout 2012.
41. Eliot Van Buskirk, Copyright Time Bomb Set to Disrupt Music,
Publishing Industries, Wired.com, Business, November 13, 2009, www
.wired.com/epicenter/2009/11/copyright-time-bomb-set-to-disrupt-music
-publishing-industries/.
42. Michael Arrington, 360 Music Deals Become Mandatory as Labels
Prepare for Free Music, TechCrunch, November 8, 2008, http://techcrunch
.com/2008/11/08/360-music-deals-become-mandatory-as-labels-prepare-for
-free-music/.
4. Dissecting the Bogeyman
1. A principle coined by Intel founder Gordon Moore, which holds that the
amount of computer processing power available at a given price will double
every eighteen months.
2. Quoted in Kevin D. Mitnick and William L. Simon, The Art of Intrusion:
The Real Stories behind the Exploits of Hackers, Intruders, and Deceivers (Indianapolis:
Wiley, 2005): 35.
3. Cary H. Sherman, What Wikipedia Wont Tell You, New York Times,
February 8, 2012.
4. For a more in-depth overview of the range of P2P protocols and architectures, see Anura P. Jayasumana, File Sharing to Resource SharingEvolution
of P2P Networking, IEEE Consumer Communications and Networking
Conference (CCNC), Las Vegas, January 2012, available at http://host.comsoc
.org/market/ccnctutorials/T2_Jayasumana_P2P_CCNC2012_2.pdf.
5. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001)
6. MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005); Arista Records LLC
v. Lime Group LLC, 715 F. Supp. 2d 481 (2010). I served as an expert witness for
the defense in both of these cases.
7. This ruling has been criticized for being overly vague and broad in its
applicability, a subject I explore in greater depth in chapter 8.
NOTES TO PAGES 6775
209
/vaneijk/Ups_And_Downs_authorised_translation.pdf; Bericht des Bundesrates zur unerlaubten Werknutzung ber das Internet, EJPD, November 30,
2011, www.ejpd.admin.ch/content/dam/data/pressemitteilung/2011
/2011-11-30/ber-br-d.pdf; Richard Bjerke, and Anders Srbo, The Norwegian
Music Industry in the Age of Digitalization, masters thesis, BI Norwegian
School of Management (Oslo), 2010; Do Music Artists Fare Better in a World
with Illegal File-Sharing?, Times Online Labs Blog, accessed November 12, 2009,
http://web.archive.org/web/20091214051313/http://labs.timesonline.co.uk
/blog/2009/11/12/do-music-artists-do-better-in-a-world-with-illegal-file
-sharing/; Guatham Nagesh, Report Minimizes Online Piracy Impact, The
Hill, January 30, 2012, http://thehill.com/blogs/hillicon-valley/technology
/207361-report-downplays-impact-of-online-piracy.
27. Michael Masnick and Michael Ho, The Sky Is Rising!, Techdirt, January
2012, www.techdirt.com/skyisrising/.
28. 50 Cent: File-Sharing Doesnt Hurt Artists, Industry Should
Adapt, TorrentFreak, December 8, 2007, http://torrentfreak.
com/50cent-file-sharing-doesnt-hurt-the-artists-071208/.
29. Quoted in Steve McCaskill, Swiss Government Rules Downloading to
Stay Legal, TechWeek Europe, December 5, 2011, www.techweekeurope.co.uk
/news/swiss-government-rules-downloading-to-remain-legal-48351.
30. Terra Firma, Annual Review (2007), 88, www.terrafirma.com/
annual-reviews.html.
31. Shakira Hits Back at Lily Allen in Illegal Downloading Row as She
Claims File-Sharing Brings Me Closer to Fans, Mail Online, October 20, 2009,
www.dailymail.co.uk/tvshowbiz/article-1221639/Shakira-hits-Lily-Allen
-illegal-downloading-row-claims-file-sharing-brings-closer-fans.html.
32. Aram Sinnreich, Copyright and Intellectual Property: Creating New
Business Models with Digital Rights Management, Jupiter Research (1999).
33. Matt Peiken, MP3// Music at Your Fingertips, St. Paul Pioneer Press
(1999).
34. Free Tom Petty Track Pulled from MP3 Site, but Still Available Online,
MTV News, March 9, 2012, www.mtv.com/news/articles/1433145/free
-tom-petty-track-pulled-from-mp3-site-but-still-available-online.jhtml.
35. David Y. Choi and Arturo Perez, Online Piracy, Innovation, and
Legitimate Business Models, Technovation 27 (2007): 16878.
36. Chris Anderson, The Long Tail: Why the Future of Business Is Selling Less of
More (New York: Hyperion, 2006).
37. On the history of payola see Fredric Dannen, Hit Men: Power Brokers and
Fast Money Inside the Music Business (New York: Random House, 1990).
38. See, for instance, Ram D. Gopal, Sudip Bhattacharjee, and G. Lawrence
Sanders, Do Artists Benefit from Online Music Sharing?, Journal of Business
79, no. 3 (2006): 150333; Sanjay Goel, Paul Miesing, and Uday Chandra, The
Impact on Peer-to-Peer File Sharing on the Media Industry, California Management Review 52, no. 3 (2010): 633; Magali Dubosson-Torbay, Yves Pigneur,
and Jean-Claude Usunier, Business Models for Music Distribution after the
P2P Revolution, in Proceedings of the Fourth International Conference on the Web
Delivering of Music, WEDELMUSIC 2004 (Washington, DC: IEEE Computer
NOTES TO PAGES 8184
211
www.billboard.com/articles/news/1046867/radiohead-nudges-blige-from
-atop-album-chart.
57. Kyle Anderson, Prince Says Internet Is Over, But Radiohead,
Trent Reznor, and Others Beg to Differ, MTV Newsroom, July 7, 2010, http://
newsroom.mtv.com/2010/07/07/prince-internet-is-over/.
58. Greg Kot, Ripped: How the Wired Generation Revolutionized Music (New
York: Scribner, 2009), 64.
59. Andre Paine, Prince to Release 20Ten for Free in Europe, Billboard,
June 29, 2010, www.billboard.com/articles/news/957575/prince-to-release
-20ten-for-free-in-europe.
60. What Is a Sufjan?, Bandcamp: the blog, August 24, 2010, http://blog
.bandcamp.com/2010/08/24/what-is-a-sufjan/.
61. Amanda Palmer: The New Record, Art Book, and Tour, Kickstarter,
launched April 30, 2012, www.kickstarter.com/projects/amandapalmer
/amanda-palmer-the-new-record-art-book-and-tour.
62. Amanda Palmer, Where All This Kickstarter Money Is Going, May 22,
2012, www.amandapalmer.net/blog/where-all-this-kickstarter-money-is-going
-by-amanda/.
63. Amanda Palmer @ Harvard: Toward a Patronage Society, July 8, 2010,
https://www.youtube.com/watch?v=3lJQjihCp1E.
64. Data from Kickstarter, www.kickstarter.com/help/stats.
65. Ethan Diamond, Cheaper Than Free, Bandcamp: the blog, January 3,
2012, http://blog.bandcamp.com/2012/01/03/cheaper-than-free//.
66. Jan Hoffman, Justin Bieber Is Living the Dream, New York Times,
December 31, 2009.
67. The Top 10 Viral Videos of 2010, Spike, December 22, 2010, www
.spike.com/articles/kkpro9/the-top-10-viral-videos-of-2010.
68. Eliot Van Buskirk, Gregory Brothers of Bed Intruder Fame Discuss
TV Pilot, Antoine Dodson, Wired, August 13, 2010, www.wired.com/
epicenter/2010/08/gregory-brothers-bed-intruder-antoine-dodson-autotune.
69. Mike Thomas, Really Hot, for Real, Chicago Sun Times, November 29,
2010.
70. Alex Leavitt, May 12, 2012, https://twitter.com/alexleavitt/status
/201440625684529152.
71. According to the RIAAs searchable database of gold and platinum
certified releases, available at www.riaa.com/goldandplatinumdata.php.
72. Universal Censors Megaupload Song, Gets Branded a Rogue Label,
TorrentFreak, December 10, 2011, http://torrentfreak.com/universal-censors
-megaupload-song-gets-branded-a-rogue-label-111210/.
73. UMG later claimed it took down the video using YouTubes Content
Management System (created in order to comply with the DMCA) without
specifically claiming any infringement under the DMCAwhich is actually
worse. For more details, see Bruce Houghton, Megaupload Video Back on
YouTube, after UMG Offers We Yanked It Because We Could Defense,
Hypebot, December 16, 2011, www.hypebot.com/hypebot/2011/12
/megaupload-video-back-on-youtube-after-umg-offers-we-yanked-it-because
-we-could-defense-.html.
NOTES TO PAGES 8690
213
215
17. Irv Lichtman, Cohen Studies Industry Future, Billboard, December 19,
1981, 48.
18. Ed Christman, Best Buy, Circuit City a Potent Combo, Billboard,
June 17, 1995, 80.
19. Ed Christman, Worsening Retail Conditions Finally Arrive at Labels
Door, Billboard, February 10, 1996, 58.
20. Fredric Dannen, Hit Men: Power Brokers and Fast Money Inside the Music
Business (New York: Random House, 1990).
21. Jerkins is better known for his work in the R&B/pop idiom than with
boy bands per se.
22. RIAA, Top 100 Albums, RIAA.com, Top Tallies, www.riaa.com
/goldandplatinum.php?content_selector=top-100-albums; this is a measure of
the US market only.
23. Hunter Schwarz, Lady Gaga Joins the Seven Figure Club, Rhombus,
June 3, 2011, www.rhombusmag.com/2011/06/03/lady-gaga-joins-the-seven
-figure-club/. It should be noted that prior to 1991, the recording industry used
different methodologies to establish sales volume; therefore this method of
analysis is somewhat biased toward recent releases. Nonetheless, it is broadly
accepted that this era was a golden age of quick market successes for the music
industry.
24. National Bureau of Economic Research, US Business Cycle Expansions
and Contractions, September 20, 2010, www.nber.org/cycles.html.
25. US Census Bureau Income, Expenditures, Poverty, and Wealth,
2012 Statistical Abstract, www.census.gov/compendia/statab/cats/income
_expenditures_poverty_wealth.html.
26. United Nations, Creative Economy Report 2008, http://unctad.org/en
/docs/ditc20082cer_en.pdf.
27. Sherman, What Wikipedia Wont Tell You.
28. Terra Firmas Annual Review 2008, TerraFirma.com, www.terrafirma
.com/annual-reviews.html.
29. Although most popular music didnt take quite so long as the Beatles
to appear in DRM-free downloadable formats, some major artists, such as Led
Zeppelin, AC/DC, and Garth Brooks, remained absent from iTunes digital
shelves for even longer.
30. Warner Music Group, Annual Report (Form 10-K), November 17, 2010;
Warner Music Group, Annual Report (Form 10-K), December 1, 2006.
31. Quoted in Charles Duhigg, Getting Warner Music More Upbeat,
Los Angeles Times, August 28, 2006, http://articles.latimes.com/2006/aug/28
/business/fi-lyor28.
32. Chris Anderson, The Long Tail: Why the Future of Business Is Selling Less of
More (New York: Hyperion, 2006). Andersons premise is that because digital
commerce provides an infinite amount of shelf space and digital broadcasting
provides an infinite amount of air time, there are significant opportunities to derive profit from the work of less popular artists and producers than those who have
traditionally been exploited in the of bricks-and-mortar and broadcasting sectors.
33. Quoted in Steve Knopper, Appetite for Self-Destruction: The Spectacular Crash
of the Record Industry in the Digital Age (Berkeley: Soft Skull Press, 2009), 181.
216
217
53. www.ei.com/viewprofessional.php?id=41.
54. Sherman, What Wikipedia Wont Tell You.
55. According to its website (www.iipa.com), the IIPA is a a private sector
coalition, formed in 1984, of trade associations representing U.S. copyrightbased industries. The RIAA and NMPA are two of the seven members.
56. Stephen E. Siwek, Copyright Industries in the U.S. Economy: The 20032007
Report, prepared for the International Intellectual Property Alliance, June 2009,
www.iipa.com/pdf/IIPASiwekReport2003-07.pdf.
57. Who Music Theft Hurts, RIAA.com, Piracy, www.riaa.com
/physicalpiracy.php?content_selector=piracy_details_online.
58. Julian Sanchez, 750,000 Lost Jobs? The Dodgy Digits Behind the War
on Piracy, Ars Technica (blog), October 8, 2008, http://arstechnica.com/tech
-policy/2008/10/dodgy-digits-behind-the-war-on-piracy/.
59. I discuss SOPA in greater depth in chapter 8.
60. US Government Accountability Office, Intellectual Property: Observations
on Effort to Quantify the Economic Effects of Counterfeit and Pirated Goods, Report to
Congressional Committees, April 2010, www.gao.gov/new.items/d10423.pdf.
61. www.riaa.com/faq.php.
62. Frontier Economics, Estimating the Global Economic and Social Impacts
of Counterfeiting and Piracy.
63. US Government Accountability Office, Intellectual Property, 19.
64. Stephen E. Siwek, Copyright Industries in the U.S. Economy: The 2011 Report,
prepared for the International Intellectual Property Alliance, November, 2011,
www.iipa.com/copyright_us_economy.html.
65. Janko Roettgers, Sorry, Hollywood: Piracy May Make a Comeback,
GigaOM, August 11, 2011, http://gigaom.com/video/file-sharing-is-back/.
6. Is the Music Industry Its Own Worst Enemy?
1. Quoted in Lawrence Robert Dicksee and Frank Tillyard, Goodwill and Its
Treatment in Accounts (New York: Arno Press, 1976), 2.
2. John Owen Edward Clark, Dictionary of International Accounting Terms
(Canterbury, UK: Financial World, 2001).
3. Michael Sack Elmaleh, Financial Accounting: A Mercifully Brief Introduction
(Union Bridge, MD: Epiphany Communications, 2005), 91.
4. William M. Krasilovsky and Sidney Shemel, This Business of Music: The
Definitive Guide to the Business and Legal Issues of the Music Industry (New York:
Watson-Guptill Publications, 2007), 317.
5. Echo Research, The Value of Corporate Reputation: 2012 US Reputation
Dividend Report, June 2012, www.echoresearch.com/data/File/2012_reputation
_dividend_report.pdf.
6. Jared Moya, The Pirate Bay Spectrial Day #11Prosecutions Closing
Arguments, ZeroPaid.com, News, March 2, 2009, www.zeropaid.com/news
/10037/the_pirate_bay_spectrial_day_11__prosecutions_closing_arguments/.
7. RIAA Wins Worst Company in America 2007, Consumerist, March 19,
2007, http://consumerist.com/2007/03/riaa-wins-worst-company-in-america
-2007.html.
218
219
30. Jane Black, The Keys to Ending Music Piracy, Bloomberg Businessweek,
January 26, 2003, www.businessweek.com/stories/2003-01-26/the-keys-to
-ending-music-piracy.
31. IFPI Online Music Report 2004.
32. MP3s Biggest Threat, Maximum PC, September 1999.
33. John Borland, RIAA Sues 261 File Swappers, CNET News, August 8, 2003,
http://news.cnet.com/2100-1023_3-5072564.html.
34. Felix Oberholzer-Gee and Koleman Strumpf, File Sharing and Copyright,
in National Bureau of Economic Research Innovation Policy and the Economy, vol. 10,
ed. Josh Lerner and Scott Stern (Chicago: University of Chicago Press, 2010).
35. Paul Lauria, Infringement! Artists Say They Want Their Music Site
Dough, New York Post, February 27, 2008, http://www.nypost.com/p/news
/business/item_glszDqoJCb8e6qBvDjeHTL.
36. The most extensive chronicle, to my knowledge, is Recording Industry
vs The People, the blog of Ray Beckerman, an attorney who specializes in
defending those sued by the music industry, available at http://
recordingindustryvspeople.blogspot.com.
37. John Borland, RIAA Settles with 12-year-old Girl, CNET News,
August 9, 2003, http://news.cnet.com/2100-1027-5073717.html.
38. Andrew Orlowski, RIAA Sues the Dead, The Register, February 5, 2005,
www.theregister.co.uk/2005/02/05/riaa_sues_the_dead/.
39. Ray Beckerman, RIAA Wants to Depose Dead Defendants Children;
But Will Allow Them 60 Days to Grieve, Recording Industry vs The People,
August 13, 2006, http://recordingindustryvspeople.blogspot.com/2006/08
/riaa-wants-to-depose-dead-defendants.html.
40. Anders Bykund, RIAA Sues Computer-less Family, 234 Others, for File
Sharing, Ars Technica (blog), April 24, 2006, http://arstechnica.com
/uncategorized/2006/04/6662-2/.
41. Jessica R. Towhey, Naval Academy Seizes Computers from Nearly 100
Mids, The Capital Online, November 23, 2002, http://web.archive.org/web
/20021125141336/http://www.hometownannapolis.com/cgi-bin/read/live
/11_23-19/NAV.
42. Cassi Hunt, Run Over by the RIAA: Don . . . t Tap the Glass, Cassi Hunt,
The Tech Online Edition, April 4, 2006, http://tech.mit.edu/V126/N15/RIAA1506
.html.
43. Electronic Frontier Foundation, RIAA v. The People: Five Years Later,
September 30, 2008, https://www.eff.org/wp/riaa-v-people-five-years-later.
44. Ray Beckerman, RIAA Sues Stroke Victim in Michigan, Recording
Industry vs. The People, March 13, 2007, http://recordingindustryvspeople
.blogspot.com/2007/03/riaa-sues-stroke-victim-in-michigan.html.
45. Ray Beckerman, Elektra v. Schwartz, Case against Queens Woman with
Multiple Sclerosis, Settled, Recording Industry vs. The People, August 13, 2008,
http://recordingindustryvspeople.blogspot.com/2008/08/elektra-v-schwartz
-case-against-queens.html.
46. Ray Beckerman, Voluntary Dismissals Because Suit Was Brought
against Wrong Party, Recording Industry vs. The People, May 24, 2008, http://
220
recordingindustryvspeople.blogspot.com/2008/05/voluntary-dismissals
-because-suit-was.html.
47. As I mentioned in chapter 3, the industry largely ceased to bring
lawsuits against P2P users in 2008.
48. Daniel Reynolds, The RIAA Litigation War on File Sharing and
Alternatives More Compatible with Public Morality, Minnesota Journal of
Law, Science & Technology 9 no. 2 (2008): 9771008.
49. Chloe Lake, Major Label Pressures Anti-piracy Groups, News.com.au,
January 22, 2008, www.news.com.au/technology/major-label-pressures-anti
-piracy-groups/story-e6frfro0-1111115372785.
50. Eric Bangeman, RIAA Anti-P2P Campaign a Real Money Pit, According
to Testimony, Ars Technica (blog), October 3, 2007, http://arstechnica.com
/tech-policy/2007/10/music-industry-exec-p2p-litigation-is-a-money-pit/.
51. Declan McCullagh, Newsmaker: RIAAs Next Moves in Washington,
CNET.com, News, May 25, 2006, http://news.cnet.com/2008-1027
_3-6076669.html.
52. Ellen Messmer, Recording Industry Gives Net Music Pirates a Break,
Network World (1997): 95.
53. The Motion Picture Association of America is a trade organization
representing the six major Hollywood studios.
54. Quoted in Declan McCullagh, Hollywood Hacking Bill Hits House,
CNET News, July 25, 2002, http://news.cnet.com/2100-1023-946316.html.
55. The Computer and Communications Industry Association is an
advocacy group promoting openness and competition in technology and
communications, with several large companies in both sectors comprising its
membership.
56. McCullagh, Hollywood Hacking Bill Hits House.
57. Hal Plotkin, Berman-Coble Goes Too Far / Legalizing Hacking of P2P
Networks Hurts Start-ups, Not Thieves, SFGate, May 21, 2013, www.sfgate
.com/news/article/Berman-Coble-Goes-Too-Far-Legalizing-hacking-of2798931.php.
58. Mark Russinovich, Sony, Rootkits, and Digital Rights Management
Gone Too Far, Mark Russinovichs Blog, October 31, 2005, http://blogs.technet
.com/b/markrussinovich/archive/2005/10/31/sony-rootkits-and-digital-rights
-management-gone-too-far.aspx.
59. Full disclosure: I served as an expert witness for the plaintiffs in one of
the suits.
60. J. Alex Halderman, Not Again! Uninstaller for Other Sony DRM Also
Opens Huge Security Hole, Freedom to Tinker (blog), November 17, 2005,
https://freedom-to-tinker.com/blog/jhalderm/not-again-uninstaller-iotheri
-sony-drm-also-opens-huge-security-hole/.
61. Jolie ODell, Once This Hits 4chan, Its Over: RIAA/MPAA Privacy/
Security Failure, ReadWriteWeb, May 14, 2009, http://readwrite.com/2009/05/14
/once_this_hits_4chan_its_over_riaampaa_privacysecu.
62. Ernesto Van Der Sar, RIAA and Homeland Security Caught Downloading Torrents, TorrentFreak, December 17, 2011, http://torrentfreak.com/riaa
-and-homeland-security-caught-downloading-torrents-111217/.
NOTES TO PAGES 130132
221
63. Ernesto Van Der Sar, Busted: BitTorrent Pirates at Sony, Universal,
and Fox, TorrentFreak, December 13, 2011, https://torrentfreak.com
/busted-bittorrent-pirates-at-sony-universal-and-fox-111213/.
64. www.bumastemra.nl/en/about-bumastemra/organisation/.
65. Most details of the Rietveldt case are from Ernesto Van Der Sar,
Copyright Corruption Scandal Surrounds Anti-piracy Campaign, TorrentFreak,
December 1, 2011, http://torrentfreak.com/copyright-corruption-scandal
-surrounds-anti-piracy-campaign-111201/.
66. A Google search for the phrase RIAA pick on the little guy yields
36,000 results.
67. An industry interviewee told Michael Carrier that the scorched-earth
litigation strategy had threatened the magic around music perceived by
consumers (Copyright and Innovation, 59). Given Walter Benjamins famous
rumination on the fate of aura in the age of mechanical reproduction, one
wonders whether this is, indeed, a tragedy.
68. Survey: Half of People Think Not Paying for Music Is Acceptable,
MusicWeek, July 13, 2012, www.musicweek.com/news/read/survey-half-of
-people-think-not-paying-for-music-is-acceptable/049573.
7. This Sounds Way Too Good
1. Pandora was involved, however, in prolonged arbitration regarding the
webcasting royalty rates, which was followed by additional contractual negotiation with the digital performing rights organization SoundExchange.
2. According to the companys most recent public filings at the time of
writing.
3. Aram Sinnreich, Digital Music Subscriptions: Post-Napster Product
Formats (Jupiter Research, 2000).
4. Peter Kafka, Spotifys Daniel Ek on Profits, Label Deals, and Angry
Musicians: Were Doing Really, Really Well AllThingsD.com, December 6,
2012, http://allthingsd.com/20121206/spotifys-daniel-ek-on-profits-label-deals
-and-angry-musicians-were-doing-really-really-well/.
5. Jeff Dyer, Hal B. Gregersen, and Clayton M. Christensen, The Innovators
DNA: Mastering the Five Skills of Disruptive Innovators (Boston: Harvard Business
Press, 2011).
6. Steve Blank, Four Steps to the Epiphany: Successful Strategies for Products That
Win, 2nd ed. (Foster City, CA: Cafepress.com, 2006).
7. Steve Blank, Why the Movie Industry Cant Innovate and the Result Is
SOPA, SteveBlank.com, January 4, 2012, http://steveblank.com/2012/01/04
/why-the-movie-industry-cant-innovate-and-the-result-is-sopa/.
8. Michael A. Carrier, Copyright and Innovation: The Untold Story,
Wisconsin Law Review 2012, no. 4, 959, 958, available at http://ssrn.com
/abstract=2099876.
9. These stories are based on my interviews with principals of the companies. I personally interviewed and/or advised many of the multitude of these
businesses in my capacity as a digital music analyst and consultant at Jupiter
Research and Radar Research.
222
10. Jeremy Silver, Skype interview, July 20, 2012; all quotations are from this
interview.
11. Uplister licensed these clips, at a relatively low cost, from the aggregator
All Music Guide.
12. Justin Ouellette, telephone interview July 18, 2012; all quotations are
from this interview.
13. The original Tumblr post is available at Muxtape, http://jstn.cc/post
/29796928.
14. Not long before our interview, Tumblr had been sued by Perfect 10,
an adult entertainment company, for enabling widespread and uncontrolled
copyright infringement.
15. David Pakman, telephone interview, July 18, 2012; all quotations are from
this interview.
16. Remote data storage and maintenance, now the cloud, was then a
nascent idea more frequently referred to as the sky.
17. As I previously discussed, fair use is a poorly defined concept that often
must be defended in court, at great expense, in order to be exercised in new
technological and social contexts. This uncertainty can have what legal scholars
call a chilling effect on innovation. For a thorough analysis of the subject, see
Patricia Aufderheide and Peter Jaszi, Reclaiming Fair Use: How to Put Balance Back
in Copyright (Chicago: University of Chicago Press, 2011).
18. Bertelsmann eCommerce Group had purchased Pakmans former
employer CDnow the previous year and also made a bid for Napster (which
had been bankrupted by major label lawsuits) in 2002.
19. Billboards Twitter 140: The Music Industry Characters You Need to
Follow, Billboard, July 27, 2012, www.billboard.biz/bbbiz/record-labels/2012
-twitter-140-1007674952.story.
20. Michael Robertson, telephone interview, July 23, 2012; all quotations are
from this interview.
21. UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y. 2000).
22. The full text of Judge Rakoffs decision is available at www.law.uh.edu
/faculty/cjoyce/copyright/release10/UGM.html.
23. Despite having launched several high-profile companies in the years
since, Robertsons Twitter handle is @MP3Michaela nod to his continuing
public association with the company he founded, and lost, many years ago.
24. All details and quotations in this section are from my telephone interview
with Jack Foreman, former Warner Music SVP and Choruss principal, July 19,
2012.
25. Larry Kenswil, telephone interview, July 25, 2012; all quotations are from
this interview.
26. Greg Sandoval, Last Waltz for Playlist.com?, CNET, News, August 24,
2010, http://news.cnet.com/8301-31001_3-20014495-261.html.
27. Jon Pareles, The Cloud That Ate Your Music, New York Times, June 22,
2011.
28. Apple reportedly paid an advance of over $100 million to the labels, in
addition to a pledge of 70 percent of revenues from the service, which charges
consumers $25 per year.
NOTES TO PAGES 140158
223
224
225
33. The bill stalled in the Senate in August 2012, after a Republican filibuster.
34. European Observatory on Counterfeiting and Piracy, Evidence and Right
of Information in Intellectual Property Rights, http://ec.europa.eu/internal_market
/iprenforcement/docs/evidence_en.pdf.
35. Somini Sengupta, U.N. Affirms Internet Freedom as a Basic Right, Bits
(blog), New York Times, July 6, 2012, http://bits.blogs.nytimes.com/2012/07/06
/so-the-united-nations-affirms-internet-freedom-as-a-basic-right-now-what/.
36. The original document is no longer available online, but an extensive
analysis of its contents is Richard Esguerra, The Entertainment Industrys
Dystopia of the Future, April 14, 2010, https://www.eff.org/deeplinks
/2010/04/entertainment-industrys-dystopia-future.
37. Gigi Sohn, Before SOPA and PIPA: A Decade of Bad Ideas, paper
presented at The Digital Broadband Migration: The Challenges of Internet Law
and Governance conference, February 1213, 2012, University of Colorado.
38. Tony Chavira, ACTA: A Government-Approved International Conspiracy, FourStory.org, Blog, January 31, 2012, http://fourstory.org/posts
/post/acta-a-true-american-conspiracy/.
39. Nate Anderson, Senator: Web Censorship Bill A Bunker-Busting
Cluster Bomb Ars Technica (blog), November 20, 2010, www.wired.com
/business/2010/11/senator-web-censorship-bill-a-bunker-busting-cluster
-bomb/.
40. Macon Philips, Administration Responds to We the People Petitions
on SOPA and Online Piracy, The White House Blog, January 14, 2012, www
.whitehouse.gov/blog/2012/01/14/obama-administration-responds-we-people
-petitions-sopa-and-online-piracy.
41. HM Government, The Government Response to the Hargreaves Review
of Intellectual Property and Growth, report by Rt. Hon. George Osborne, MP,
Rt. Hon. Vince Cable, MP, and Rt. Hon. Jeremy Hunt, MP, August 2011,
www.ipo.gov.uk/ipresponse-full.pdf.
42. Dana Smith, What Warners Recklessness Says about SOPA, Public
Knowledge Policy Blog, November 11, 2011, www.publicknowledge.org/blog
/what-warners-recklessness-says-about-sopa.
43. Mike Masnick, Fox Issues DMCA Takedown to Google over SF
Chronicle Article . . . Claiming It Was the Movie Chronicle Techdirt, May 29,
2012, www.techdirt.com/articles/20120525/01520819073/fox-issues-dmca
-takedown-to-google-over-sf-chronicle-article-claiming-it-was-movie-chronicle
.shtml.
44. Ben Sisario, How a Music Site Disappeared for a Year, Media Decoder
(blog), New York Times, December 9, 2011, http://mediadecoder.blogs.nytimes
.com/2011/12/09/how-a-music-site-disappeared-for-a-year/.
45. Jonathan McIntosh, Buffy vs Edward Remix Unfairly Removed by Lionsgate, Rebellious Pixels.com, Blog, January 9, 2013, www.rebelliouspixels.com
/2013/buffy-vs-edward-remix-unfairly-removed-by-lionsgate.
46. Office of the United States Trade Representative, Partners Sign Groundbreaking Anti-counterfeiting Trade Agreement, press release, October 2011,
www.ustr.gov/about-us/press-office/press-releases/2011/october/partners
-sign-groundbreaking-anti-counterfeiting-t.
226
227
About It, online report published by Open Rights Group and LSE Media Policy
Project, May 2012, www.openrightsgroup.org/assets/files/pdfs/MobileCensorship
-webwl.pdf.
66. James Love, USPTO Blocks Web Access to Political/Activist Groups
Including KEI, ACLU, EFF, Public Citizen, Redstate, DailyKos, James Loves
blog, Knowledge Ecology International, September 18, 2012, http://keionline
.org/node/1548.
67. How Copyright Law Censors Campaigns, Daniel Nazer, Stanford Law
School Center for Internet and Society Blog, July 19, 2012, http://cyberlaw.stanford
.edu/blog/2012/07/how-copyright-law-censors-campaigns.
68. Ryan Singel, YouTube Flags Democrats Convention Video on Copyright
Ground, Wired.com, Threat Level, September 5, 2012, www.wired.com
/threatlevel/2012/09/youtube-flags-democrats-convention-video-oncopyright-grounds/.
69. Rebecca Giblin, How Litigation Only Spurred on P2P File Sharing, iTnews
.com.au, Telco/ISP News & Opinions, November 11, 2011, www.itnews.com.au
/News/279763,how-litigation-only-spurred-on-p2p-file-sharing.aspx.
70. Paul Resnikoff, Report: The MegaUpload Shutdown Hasnt Reduced
File-Trading at All . . . , Digital Music News, February 10, 2012, www
.digitalmusicnews.com/permalink/2012/021012postmegaupload.
71. Nic Healy, Pirates Who Pay: Do Illegal Downloads Actually Help the
Box Office?, CNET Australia, Home Cinema: News, November 26, 2012,
www.cnet.com.au/pirates-who-pay-do-illegal-downloads-actually-help-the
-box-office-339342557.htm.
72. Olivia Solon, French Culture Minister Thinks Hadopi Is a Waste of
Money, Wired.co.uk, News, August 8, 2012, www.wired.co.uk/news
/archive/2012-08/08/hadopi-funding.
73. Raphael Satter and Venessa Gera, US Sites Hacked as Objections Grow
to Piracy Deal, NBC News.com, February 17, 2012, www.msnbc.msn.com/id
/46427642/ns/technology_and_science-security.
74. Matt Warman, European Parliament Rejects ACTA Piracy Treaty, The
Telegraph, July 4, 2012, www.telegraph.co.uk/technology/news/9375822
/European-Parliament-rejects-ACTA-piracy-treaty.html.
9. Is Democracy Piracy?
1. The wedding video is available on YouTube at www.youtube.com/watch?v
=yYAiZ-L4gXg.
2. Kopimist Constitution, Kopimistsamfundet.org, www.kopimistsamfundet
.org/main/kopimist-constitution.
3. Lawrence Lessig, Code: And Other Laws of Cyberspace, Version 2.0 (New York:
Basic Books, 2006).
4. Det Missionerande Kopimistsamfundet, Welcome to the Missionary
Church of Kopimism, http://kopimistsamfundet.se/english/.
5. The Monastery of Christ in the Desert website, A Brief History of
Scriptoria and the Evolution of the Book, http://christdesert.org/Seeking
_God/Scriptoria/index.html.
228
6. Ibid.
7. There are, of course, strategic risks to sacralizing aspects of communication policy. As William Patry has pointed out, the piracy crusade bears many
of the hallmarks of a classic moral panic, and thus Kopimism runs the risk of
reducing the copyfight to a moral argument between irreconcilable dogmas
rather than maintaining a rational, ends-oriented policy debate.
8. The PPI website is available at www.pp-international.net/.
9. Can Pirates Shake Up European Politics?, Aljazeera.com, The Stream,
April 9, 2012, http://stream.aljazeera.com/story/can-pirates-shake-european
-politics-0022165.
10. Adam Taylor, German Pirate Party: Were Growing as Fast as the Nazis
Did, Business Insider International, April 23, 2012, www.businessinsider.com
/pirate-party-nazi-martin-delius-spiegel-2012-4.
11. Pirate Party UK, Greater London Pirate Party Agenda, www.pirateparty
.org.uk/forum/viewtopic.php?f=28&p=8699.
12. Jared Moya, Euro Anti-Piracy Group Calls Pirate Party Message
Criminal, ZeroPaid.com, News July 24, 2009, www.zeropaid.com
/news/86705/euro-anti-piracy-group-calls-pirate-party-message-criminal/.
13. Jessica Litman, Real Copyright Reform, Iowa Law Review 96, no. 1 (2010):
156.
14. Stephen Evans, Germanys Pirate Party Riding High, BBC News, May 11,
2012, www.bbc.co.uk/news/world-europe-18017064.
15. James Madison, Federalist no. 43, in The Federalist Papers: Hamilton,
Madison, Jay, ed. Clinton Rossiter (New York: Mentor, 1961), 272.
16. Neil Weinstock Netanel, Copyright and a Democratic Civil Society,
Yale Law Journal 106, no. 2 (1996): 386
17. Thomas Jefferson to Isaac McPherson, August 13, 1813, available at
http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12.html.
18. U.S. Const. art. I, 8, cl. 8.
19. Citizens United v. Federal Election Commission, 558 U.S. 50 (2010)
20. For a hilarious and instructive meditation on this subject, see Kembrew
McLeod, Freedom of Expression: Overzealous Copyright Bozos and Other Enemies of
Creativity (New York: Doubleday, 2005).
21. Mark Helprin, Digital Barbarism: A Writers Manifesto (New York:
HarperCollins, 2009).
22. Cory Doctorow, Why I Copyfight, Locus Magazine, November 2008,
www.locusmag.com/Features/2008/11/cory-doctorow-why-i-copyfight.html.
23. Eric S. Raymond, The Cathedral and the Bazaar: Musings on Linux and Open
Source by an Accidental Revolutionary (Sebastopol, CA: OReilly, 1999).
24. Siva Vaidhyanathan, Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity (New York: New York University Press, 2001).
25. James Boyle, The Second Enclosure Movement and the Construction of
the Public Domain, Law and Contemporary Problems 66, no. 1 (2003): 3374.
26. Lawrence Lessig, The Future of Ideas: The Fate of the Commons in a Connected
World (New York: Vintage, 2002).
27. Jessica Litman, The Public Domain, Emory Law Journal 39 (Fall 1990):
965.
NOTES TO PAGES 181185
229
28. Tim Wu, Copyrights Communications Policy, Michigan Law Review 103
(November 2004): 278.
29. Tim OReilly, Piracy Is Progressive Taxation, and Other Thoughts
on the Evolution of Online Distribution, OpenP2P.com, December 11, 2002,
http://openp2p.com/lpt/a/3015.
30. Cory Doctorow, Content: Selected Essays on Technology, Creativity, Copyright
and the Future of the Future (San Francisco: Tachyon, 2008).
31. Rip! A Remix Manifesto, dir. Brett Gaylor, initial release 2008, National Film
Board of Canada.
32. Copyright Criminals, dir. Benjamin Franzen and Kembrew McLeod, initial
release (Canada) 2009, www.copyrightcriminals.com/.
33. Good Copy Bad Copy, dir. Andreas Johnsen, Ralf Christensen, and Henrik
Moltke, initial release (Denmark) 2007.
34. Aram Sinnreich, Mark Latonero, and Marissa Gluck, Ethics Reconfigured:
How Todays Media Consumers Evaluate the Role of Creative Reappropriation,
Information, Communication & Society 12, no. 8 (2009): 124260.
35. Mark Latonero and Aram Sinnreich, The Hidden Demography of New
Media Ethics, Information, Communication & Society (forthcoming 2013).
36. The American Assembly, Columbia University, Copyright Infringement and Enforcement in the US, research by Joe Karaganis, November 2011,
http://piracy.ssrc.org/wp-content/uploads/2011/11/AA-Research-Not
e-Infringement-and-Enforcement-November-2011.pdf.
37. Ron Grossman, Where Left Meets Right: Outsiders? Theyve Always
Been In, Chicago Tribune, March 7, 2010, http://articles.chicagotribune.com
/2010-03-07/news/ct-perspec-0307-movements-20100307_1_tea-party-huey
-long-fdr.
38. Hayley Tsukayama, SOPA (Stop Online Piracy Act) Lawmaker Opposition Grows as Debate Heats Up, Post Tech (blog), Washington Post, November
17, 2011, www.washingtonpost.com/blogs/post-tech/post/lawmaker
-opposition-to-sopa-grows/2011/11/17/gIQAeCEMVN_blog.html.
39. According to publicly available campaign finance data searchable at
http://influenceexplorer.com/.
40. For more information, see Tim Jordan and Paul Taylor, Hacktivism and
Cyberwars: Rebels with a Cause? (London: Routledge, 2004).
41. Ramona Emerson, SOPA: Anonymous to Protest Anti-piracy Bill on
January 18, Huffington Post, January 12, 2012, www.huffingtonpost.com/2012
/01/12/sopa-anonymous-january-18_n_1201397.html.
42. Ernesto Van Der Sar, Artists and Hacktivists Sabotage Spanish Antipiracy Law, TorrentFreak, March 1, 2012, http://torrentfreak.com/arists-and
-hacktivists-sabotage-spanish-anti-piracy-law-120301/.
43. Hacktivist Group Anonymous Lead Anti-piracy Protests after Claiming
New Agreement Will Violate Consumer Rights and Censor the Internet,
Mail Online, updated January 27, 2012, www.dailymail.co.uk/news/article
-2092990/Hacktivist-group-Anonymous-lead-anti-piracy-protests-claiming-new
-agreement-violate-consumer-rights-censor-internet.html.
44. For an in-depth examination of the political role of Anonymous, see
E. Gabriella Coleman, Anonymous: From the Lulz to Collective Action, The
230
231
61. The Final Debate (editorial), New York Times, October 23, 2012.
62. Timothy Lee, Influential GOP Group Releases, Pulls Shockingly
Sensible Copyright Memo, Ars Technica (blog), November 18, 2012, http://
arstechnica.com/tech-policy/2012/11/influential-gop-group-releases-shockingly
-sensible-copyright-memo/.
63. Texts of both the brief and the memo are archived on the American Conservative website at www.theamericanconservative.com/an-anti-ip-turn-for-the-gop/.
64. Timothy Lee, Republican Staffer Fired for Copyright Memo Talks to
Ars, Ars Technica (blog), January 7, 2013, http://arstechnica.com/tech-policy
/2013/01/republican-staffer-fired-for-copyright-memo-talks-to-ars/.
65. Data are publicly available and searchable with tools created by the
Sunlight Foundation at http://influenceexplorer.com.
66. Richard Hooper, CBE, UK Intellectual Property Office, Rights and
Wrongs, The First Report of the Digital Copyright Exchange Feasibility Study,
March 2012, www.ipo.gov.uk/dce-report-phase1.pdf; Richard Hooper, CBE,
and Dr. Ros Lynch, Copyright Works, independent report for Intellectual
Property Office, July 2012, www.ipo.gov.uk/dce-report-phase2.pdf.
67. Andreas Udo de Haes, BREIN Dreigt TPB-proxy Met Strafrechtelijke
Aangifte, Web Wereld, June 28, 2012, http://webwereld.nl/nieuws/110976
/brein-dreigt-tpb-proxy-met-strafrechtelijke-aangifte.html.
68. Mark Hachman, Piracy Pays for Itself, Swiss Government Says,
PC Magazine, December 2, 2011, www.pcmag.com/article2/0,2817,2397173,00
.asp.
69. Pedro Nicoletti Mizukami, Ronaldo Lemos, Bruno Magrani, Pereira de
Souza, and Carlos Affonso, Exceptions and Limitations to Copyright in Brazil:
A Call for Reform. Access to Knowledge in Brazil: New Research on Intellectual
Property, Innovation, and Development (2010): 4178.
70. Pedro Paranagu, Brazils Copyright Reform: Schizophrenia?,
Intellectual Property Watch, February 8, 2011, www.ip-watch.org/2011/02/08
/inside-views-brazils-copyright-reform-schizophrenia.
71. Michael Geist, Brazils Approach on Anti-circumvention: Penalties for
Hindering Fair Dealing, Michael Geists Blog, July 9, 2010, www.michaelgeist
.ca/content/view/5180/125/.
72. Marcel Leonardi, Brazils Proposed Internet RegulationAn Update
(Thats Actually Good News) (Guest Blog Post), Eric Goldman Technology
& Marketing Law Blog, May 6, 2010, http://blog.ericgoldman.org/archives
/2010/05/brazils_propose.htm.
73. Everything Is Connected: Can Internet Activism Turn into a Real Political
Movement?, Economist, January 5, 2013.
74. Q&A: Patents in India and the Novartis Case, Doctors Without Borders
.org, Briefing Documents, February 14, 2012, www.doctorswithoutborders.org
/publications/article.cfm?id=5769.
75. Copyright Law of the United States of America, www.copyright.gov
/title17/92chap1.html.
76. I make this argument fully cognizant of Benjamin Kaplans admonition
of over forty years ago that it is almost obligatory for a speaker to begin by
invoking the communications revolution of our time, then to pronounce upon
232
233
INDEX
Adele, 53
Adorno, Antoniotto, 23
Adorno, Theodor, 121
advertising, 27, 61, 67, 101, 189; radio and,
46, 48
aesthetics, 5053, 103, 107; in music, 2122
Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), 166,
194
Ahmad II ibn-Muhammad, 2
AIDS-HIV, 194
Albini, Steve, 91
albums, 124; unbundling of, 1089, 138,
14041
All Delighted People (Stevens), 87
Allen, Lily, 85
Allen, Woody, 48
All You Need to Know about the Music Business
(Passman), 91
Amazon, 108, 110, 112, 158
Amazon Web Services, 145
American Civil Liberties Union (ACLU), 176
American Federation of Musicians (AFM),
47, 51
American Idol, 50
A&M Records v. Napster, Inc., 3435
Anderson, Chris, 112, 216n32
Anonymous (hacker collective), 187
Anthology of American Folk Music (Smith),
8485
Anti-Counterfeiting Trade Agreement
(ACTA), 167, 171; negotiated in secrecy,
163, 184; opposition to, 16465, 177,
18688; surveillance and control powers
under, 16869
anti-piracy agenda, 68, 16471, 200;
economic self-interest as driver of, 36,
18687; extension of penalties, 26, 16668,
196; government support of, 161, 18587,
200; impact on civil liberties of, 1213,
16061, 164, 16971, 17677, 187; impact
INDEX
digital subscriptions, 45
digital technology, 7, 35, 58, 120; music
industry and, 17, 1067, 133, 13839
Doctorow, Cory, 166, 185
Dodson, Antoine, 89
Dotcom, Kim, 90, 214n76
Dove, Daniel, 77
downloads, 60, 65, 8081, 132, 134, 16667;
of independently distributed music, 112;
from iTunes, 67, 89, 9192, 107; litigation
against customers for, 6162, 129; and
music sales, 7677; by P2P users, 7677,
153; stream-ripping, 49; Swiss allowance of
free, 82, 193
Drahos, Peter, 174
Dvorak, John C., 59
Dyer, Jeff, 139
Dylan, Bob, 103
economy, US, 1045, 11213, 117
Edison, Thomas, 37
Edwards, Blake, 177
Eisner, Michael, 61
Elberse, Anita, 109
Electronic Frontier Foundation (EFF), 35,
129, 162, 166, 176, 185
Elite-Torrents, 77
EMI, 96, 100, 130
Eminem, 92
Empire Records, 111
Enemy of All, The (Heller-Roazen), 32
Eshoo, Anna, 187
Espinel, Victoria, 164
European Union and Parliament, 166, 177, 188
Facebook, 9, 87, 198
Fagen, Donald, 52
fair use, 34, 63, 147, 172, 200, 223n17
Fanning, Shawn, 63, 146
Federal Communications Commission (FCC),
38, 47
Federal Trade Commission (FTC), 116
Feinstein, Dianne, 161
50 Cent, 82
file sharing. See peer-to-peer (P2P) file sharing
film industry, 62, 75, 114, 177
Flynn, Sean, 174
FM radio, 4649
Fogel, Karl, 166
Foreman, Jack, 15253, 155
format replacement cycle, 41, 43, 4546, 100,
107
INDEX
237
INDEX
239
INDEX
Netherlands, 193
New Kids on the Block, 103
New York Times, 72, 80, 94, 158, 163
Next Big Sound, 83
Nielsen SoundScan, 96
Nine Inch Nails, 67, 8587, 208n35
No Electronic Theft (NET) Act, 166
noncommercial reproduction and use, 9,
3335, 60, 166, 190
No Safe Harbor, 191
N Sync, 1034, 107
Obama, Barack, 167, 176
Obama, Michelle, 176
Oberholzer-Gee, Felix, 78
Occupy movement, 186
OConnor, Sinad, 121
Ok Go, 67
Ondrejka, Cory, 66
Online Protection and Enforcement of Digital
Trade (OPEN) Act, 192, 231n60
Open Rights Group, 176
OReilly, Tim, 185
Organisation for Economic Co-operation and
Development (OECD), 97, 116
Ouellette, Justin, 14246, 155, 15758
overdubbing, 49, 51
Pas, El, 173
Pakman, David, 14650, 15455
Paladuk, John, 129
Palmer, Amanda, 8788
Pandora, 11011, 138, 222n1
Pareles, Jon, 158
Pariser, Jennifer, 130
ParSoft Interactive, 13031
Passman, Don, 91
patents, 17576, 189, 191; in medicine, 174,
194
Patriot Act, 62
Patry, William, 166, 224n14, 229n7
Patterson, Lyman Ray, 23
Paul, Les, 49, 51
Paul, Ron, 187
payola, 8384, 121
PC Magazine, 59
peer-to-peer (P2P) file sharing, 11, 110; artists
and, 82, 8593; cultural benefits of, 7273,
8285; how it works, 7376; impact of
on marketing and promotion, 72, 8283;
MP3 and, 59, 63, 71; music industry legal
241
INDEX
243
X Factor, The, 50
244
INDEX