P2P, licenses, and the future of music and movies

An amazing and elevated discussion about file sharing, collective licenses, and the future of the music and movie industries is taking place over at Larry Lessig's blog today. Rep. Rick Boucher -- the most tech-savvy member of Congress -- asked for opinions about compulsory license scheme in a P2P era, and there are a host of insightful comments. (I had briefly lined up an interview with him for my upcoming book, Darknet: Remixing the Future of Movies, Music & Television, but in the end decided not to delve into that level of detail regarding Congressional policy.)

Boucher writes in the comments:

As unlikely as it may sound, further analysis may presuade the industry that it is not losing so much from file sharing after all. Earlier this year, 2 notable graduate business school professors published an in depth study concluding that file sharing is not causing loss to the industry at all. Apparently, file sharers are the largest purchasers of recorded music both from stores and from download sites. They sample on P2P and then buy what they like. The quality is more assured with the purchased product ,and one gets the added virtue of being legal. (I would strongly maintain that if you have bought the music, even after the fact, your file sharing should be seen as fair use for products that you eventually buy--perhaps a creative interpretation, but certainly consistent with fair use theory). When teamed with the fact that a major reason labels are losing revenue is that they are simply putting out less product than they used to, the study has opened some eyes. Perhaps more such studies focusing on other aspects of file sharer behavior would further reveal that the industry is not as badly harmed as it claims by file sharing.

But then he goes on to add:

Such a realization combined with the futility of enforcement may bring the industry around to a collective liscensing arrangement.

I don't see why that conclusion follows. The congressman himself notes that a recent credible study suggests that file sharing is *not* hurting music sales. If that's the case -- and it may well be true -- then I don't see the point of a voluntary collective license.

I suspect P2P will ultimately undermine the record industry's hit-making machinery, but that's to be applauded. And a collective licensing agreement could undermine the rise of a new regime of independent artists who make music for a living, selling 10,000 to 50,000 CDs rather than the mega-selling albums of the Britneys and Eminems. When the record industry loses money on every CD that doesn't sell 500,000 copies, something in their business model is seriously askew.

I think Charles Willamson makes the best suggestion in the comments field: Congress should do nothing. Let P2P services continue. Let the music and movie industries adapt to new technologies and changing times. Let a million business models bloom. As Williamson notes: "[Licensing] provides a band-aid on the problem of excessive litigation, but in fact hinders any further exploration into the purpose and durability of copyright in a digital world. Moreover, it furthers the idea (I think incorrectly) that corporate entities, as opposed to individual creators, are the proper custodians of copyright."

Carlos has a similar persuasive argument against collective licenses: It dampens purchases and thus revenues to artists:

by telling the world that simply paying 5$ a month makes across the board music filesharing is OK, you’re pretty much stifling the one thing that makes it possible for albums to reach the networks in the manner they do-- purchases.

Since the turn of the year alone, i think i’ve purchased between 12 and 15 cds. Your average consumer/ pc user is going to chuck any moral obligation to purchase an album in the future, negating it with a quick click and a five dollar charge. Parents/ aunts/ uncles are going to save the trips to the “weird” part of the city to get their kids the obscure punk cd they wanted for christmas, and tell them to download it instead-- “Don’t worry, son-- it’s paid for!”

Boucher smartly responds to Williamson this way:

I take your point that Congress should do nothing to protect the old business model of the record labels. That model is failing and is doomed .The labels still basically want to cling to the sale of an entire CD at $16 or so when the consumer really only wants 3 tracks on the CD. ...

Why is doing nothing not the best option? The basic problem is that the 60 million file sharers are technically acting outside the law. When that many people are law violators, respect for law generally is affected.

It's a good point, but I don't think it should be the overriding reason for treading into these choppy waters. My riposte would be simply this: With the current Congress, any attempts to delve into the waters of copyright, P2P and digital rights will only make matters worse.

Eventually, years from now, Congress may revisit the digital rights arena to modify copyright law to reflect and enshrine user behavior. But let's not forget that every time Congress has waded into these waters over the past decade, it has mucked things up even worse: the DMCA, Sonny Bono Act, and now the proposed INDUCE Act. (Some bills -- such as Boucher's Digital Media Consumers’ Rights Act -- clearly deserve passage. I'm not optimistic that will happen. I hope I'm wrong.)

Yes, it's a noble goal to restore balance in copyright law, but I don't see that happening with this Congress (or the next). I asked the congressman: How can you guarantee us that the result of Congressional action won't be a copyright regime even more onerous than the one we have today?

I say this, as always, as a writer and author who is no foe of reasonable copyright.