Does digital file sharing render copyright obsolete?

By Victoria Shannon
Published: June 3, 2007

BRUSSELS: When the 1980s pop star Robin Gibb writes a song these days, he says he doesn't think about whether it is copyrighted or licensed - he devotes himself to his art and lets his handlers see to its legal and financial well-being.

But when NoobishPineapple, an 18-year-old from Spearfish, South Dakota, uploads his 36-second rap video about fast food onto YouTube, he has no staff of assistants to make sure his creation is protected or paid for - and he probably doesn't care, anyway.

That makes people like David Ferguson, head of the British Academy of Composers and Authors, nervous about how art will be sustained in the future. And it is giving people like Lawrence Lessig, founder of Creative Commons, an opening to promote alternatives to the world's increasingly maligned copyright systems.

The youth craze for making and posting digitized audio and video on the Internet - their own creations and those of others, without regard to ownership or payment - is driving a wedge between the traditional "commercial" economy and the upstart "sharing" market, analysts say. Likewise, it is paralyzing and polarizing the groups that are supposed to make sure writers and composers get the royalties they are due.

At a self-described summit meeting on copyrights in Brussels last week, the world's major groups representing creative authors - the collecting societies at "the bottom of the food chain," griped one executive - vented, fumed and wrung their collective hands about their future. At the end of the event, Italian authors called for a "strike" to suspend licensing any form of public performance for a week in June to call attention to illegal downloading and authors' rights.

In the absence of a wholesale update of royalty systems, billion-dollar court battles - like the Viacom lawsuit against Google, which owns the YouTube video-sharing site - will most likely be the determinant of the value of digital copyrights, analysts say.

"There are an extraordinary number of people who are creating on their own and doing so for a different reason than money," Lessig, a lawyer who allies himself with Google in copyright positions, said during an interview. "Somehow we've got to find a system that ratifies both kinds of creativity and doesn't try to destroy one in order to preserve the other."

Ben Verwaayen, chief executive of BT Group, the British phone company, laid the blame at the feet of the societies, not technology or authors themselves. "The problems are the institutions," he said. "They have to change."

In Europe, collecting societies have so far dodged a bullet aimed at them last year, after the European Commission started antitrust proceedings against their 150-year-old system of coordinating royalty payments and redistributing them to authors.

Gibb, part of the successful BeeGees band of "Night Fever" fame, testified on behalf of author societies at the hearing last summer on the commission's objections over royalty competitiveness issues. Now, he is adopting a more formal role; on Friday, he took over as president of Cisac, the international collecting-rights umbrella organization that sponsored the meeting.

"I feel strongly that it's a moral right for everybody to get what they deserve if they write a piece of work," Gibb said during an interview, "and they have a right to see that it's not used in a way that they're left out of the loop."

The commission has not closed its investigation. But since Gibb's intervention and other conversations with many of the 217 societies in Cisac, Ferguson said, "they are no longer talking about fining us, and they're not talking about taking money out of the pockets of creators."

But something has to give, most agree. Roger Faxon, chairman and chief executive of EMI Music Publishing, said the rigidity of European licensing had crimped digital music sales in Europe.

"We need to loosen it up," he said. "If we don't, we may well go back to a world in which you need a patron in order to make a living as a songwriter."

Gerd Leonhard, chief executive of a digital music start-up and author of "The End of Control," said he believes that the existing structure has outlived its usefulness, and - at a time when royalty-payment functions can be automated - he gives the collecting societies no more than three or five years of life.

Everyone seemed to have their own new way of going forward. After the European Commission's move against the collecting societies, EMI set up Celas, a one-stop shop for pan-European licensing of online and mobile service rights.

"In many ways it is an experiment, an attempt to find a different approach to try to solve the problem," Faxon said.

In Britain, meanwhile, Ferguson and Gibb are starting a cooperative record label called Academy Recordings that is designed from the ground up for the music writers. Ferguson said Academy had already struck deals with Apple's iTunes and the British start-up We7, the ad-supported British music download service backed by the rock artist Peter Gabriel.

Its first release will include members of the British music writers group like Gibb, Gabriel and the Pretenders. Like others before him, Ferguson envisions "a brand new digital business model."

The more, the merrier, some say. "We can't rely on knowing which business model is the one that is going to work," said Larry Kenswil, executive vice president of business strategy for Universal Music. "As content owners, we're obligated to try everything."

Joe Mohen, chairman and founder of SpiralFrog, which aims to start its advertising-supported free digital music store by the end of the summer, urged radical action, saying he had to cut deals with 38,000 music publishers in the United States alone.

"For new companies starting up, it is impossible to license country by country," he said. "If legitimate businesses are forced to do that, they're never going to be able to compete with the pirates. There's got to be some sort of pan-European licensing, and frankly global licensing is the preferred way."

Lessig, whose Creative Commons alternative licenses have been almost as abhorrent as online music theft to the societies, has nevertheless gained a grass-roots following as well as limited adoption by companies like Microsoft and the BBC. The licenses let the author determine whether to apply commercial rights and how much. They are available in 34 countries and were applied an estimated 145 million times last year.

Many collecting societies in Australia, Finland, France, Germany, Luxembourg, Spain, Taiwan and the Netherlands manage authors' rights for them, so individuals cannot apply a Creative Commons license. Lessig, a Stanford University law professor who is on a teaching fellowship at the American University in Berlin, said he hoped to announce a breakthrough agreement with a collecting society at the time of a Creative Commons conference in Croatia on June 15.

The author groups themselves are obviously conflicted, trying to balance supporting the audio and visual arts and making sure their creators get a portion of the royalty pie, when no one knows what the pie will look like.

Last year, more than half of all music acquired by consumers was unpaid, according to NPD Group, a market research company. Social "sharing" of CDs by friends accounted for 37 percent of all music consumption, NPD said.

"The CD is dying at a rate that is predictable at this point," Kenswil said. "It will someday level off into a niche market the way vinyl has. In five years, it will be of very little consequence.

"The problem is there is no physical medium to replace it. It's digital, but digital is in its infancy."

And many of those who would abolish copyrights in the digital age also are young, influenced by Internet social movements like free software code, blogging and file-sharing.

"A lot of people under 30 are 'can't pay, won't pay,' " Mohen said. "Many of them have never purchased a CD, and many never will. They have more time than they have money."

Ferguson can imagine the music distribution business disrupted so much in a few years that the entire world's catalog of music may be prepackaged and prepaid on some kind of key chain sold at gas stations. But he does not see the end of authors' rights groups.

"We're still going to need to license the hairdresser, the restaurant, the small radio station, national broadcasters," he said, noting that digital downloading may well represent an unsustainable business bubble.

But Alex Callier, songwriter and bass player with Hooverphonic, the Belgian pop band, bemoans the focus on business models and digital sleights of hand around "user-generated content."

"It used to be you had to know how to play the guitar and have some talent to make it in the music business," he said. "Some of the mystery and magic is gone."

Gibb, who said he never thought of his work as "intellectual property" but rather the result of an overwhelming need to write and perform, nonetheless was hopeful. "We're chipping away at the stone," he said.

Peter Jenner, chairman of the International Music Managers Forum, suggested a different approach. "I'd lock all the societies in a room until they get their act together," he said.




A HUGE thank you to Michael London for sending me both this article and the last one that I posted just prior to this one...