The Global Outpost

For too long, consumers have been considered to be the main perpetrators of piracy and the bane of the music industry whilst corporations use them as human shields in devising new ways to deprive artists of their rightful revenues.

The following is Part 1 of a 2-part series examining the less obvious aspects of the state of music piracy. Part 2 can be read here.

Part 1 - The Consumer as the Fall Guy

In his book City of God, St Augustine recounts Cicero’s anecdote about a captured pirate being questioned by Alexander the Great on what he was thinking of that he should molest the sea. The pirate replied with defiant impudence:

“The same as you when you molest the world! Since I do this with a little ship I am called a pirate. You do it with a great fleet and are called emperor”

Piracy is conveniently blamed on developing countries but with suspect practices in the music and tech industries prevalent in the developed world, Adrian Johns, author of the book Piracy observed,

“Piracy has not been superseded in the developed world – indeed, its impact there remains comparable to that in developing nations – and the globe has seen more than one trajectory to more than one way of being modern. Yet the myth matters. The notion of a dissolving frontier between us and them creates real consequences – but consequences that we need to confront, not assume”

Today even Google, arguably the world’s most recognized Internet brand, struggles to stay on the right side of piracy not only from a legal standpoint, but also ethically, it has been accused of crossing the line by others – ‘Don’t Be Evil’ be damned.

So What Exactly Is Piracy?

With little clarity or delineation between the legal and ethical definitions of piracy and with various parties with their varying agendas obfuscating the situation, it makes it harder for a clearer understanding of piracy to be part of the mass consciousness.

The common notion of piracy perpetuated by the powers-that-be is the kludging and some say, misguided “You Wouldn’t Steal A Car” slogan disseminated worldwide in a host of languages by the Motion Picture Association of America (MPAA).

This equating of theft to piracy has been turned on its head by the ‘file-sharing is not piracy’ lobby, which points out that when you share a file, the original owner still owns the file. There are legions who argue that piracy is not theft, or as Professor Stuart P. Green of Rutgers Law School phrased it in an op-ed in the New York Times, “When stealing isn’t stealing”. And this digital conundrum seems to have festered into a formidable defensive platform adopted by many in the tech sector.

Whilst the industry had been based on the music-ownership model comprising vinyl, tapes, CDs and, of late, downloads, it is now definitely moving into an era of the music-access model via streaming. With this comes a new mode of consumption as well as remuneration…and institutionalized piracy. The concept of piracy will change as a consequence whilst the industry struggles to define what it encompasses.

One Man’s Piracy…

The situation is exacerbated by some artists or managers/agents who say piracy has been good for them and speak up in support of it. Even if it is said that one man’s piracy is another man’s marketing, the fundamental issue is that when these artists, managers, or agents are reconciled with their music being distributed for free, knowingly or otherwise, it then transcends from piracy to legitimate free distribution. Although some artistes might be fine with this aberration in the application of the piracy term, it is a fundamental mistake to expect other musicians to accept this stance.

A Little Knowledge…

With so much confusion at the industry level as to what exactly constitutes piracy, it is bewildering that some governments and music industry bodies are contemplating or instituting three- or six-strikes laws against consumers, who are now supposed to figure out on their own as to what is legal when batteries of supremely qualified copyright lawyers and judges are not defining it clearly in the first place.

It is unreasonable to expect consumers to understand the convoluted intricacies of copyright law whilst corporations can hide behind Section 512 (c) of the US Copyright Act (or its equivalent in other countries) asserting that they “do not have actual knowledge that the material or an activity using the material on the system or network is infringing.” So a multi-million dollar corporation is allowed to claim that it does not know if a Madonna track available on its network for streaming or download is infringing copyright whilst a lone user who streams or downloads the song is expected to figure it out or else be potentially liable for an infringement? This does not compute.

Just as the Recording Industry Association of America (RIAA) misguidedly tried to sue music downloaders in the early 2000s and Sony infamously violated legitimate music customers’ computer systems with their rootkit fiasco, governments are now likewise introducing punitive action against consumers whilst wholesale ripping-off of artistes takes place at an institutional level, often times by corporations abusing a dysfunctional Safe Harbor law or by the adoption of creative accounting. This echoes the war on drugs, where it’s more expedient to nab small-time junkies and the resultant statistics paraded as a showcase of successful action, rather than putting in the hard time to go after the bigger operatives who are protected by wealth, lobbying influence, and an army of lawyers.

The ‘Freehadist’ Movement

In China, for example, consumers have for years been downloading unlicensed music for free from music services run by the likes of Baidu and Xiami, but when these services started licensing the majority of their content in the past couple of years (though pockets of pirated content still exist), consumers continued exactly as before, still blissfully unaware and none the wiser about the changed copyright status of the music. The point is that it is easy to point the finger at consumers, but corporations are the ones that eventually decide if they want to adopt and profit from a pirate model or not.

This does not absolve consumers from all responsibility with respect to copyright infringement, but when corporations base their business model on facilitating the transfer of large amounts of unlicensed content and on the premise that consumers can be enticed to download or stream this content, this is akin to an arms manufacturer setting up stall in a war zone of their own making.

Consumers who have now developed the notion that musicians should simply donate all their music for free as it has no monetary value are wholly misguided and have been cannily co-opted by tech corporations. The oft-repeated mantra ‘Information wants to be free‘- misappropriated by the tech sector and adopted by the freeloading masses, insidiously leaves out the first half of the quote by Stewart Brand : “…on the one hand, information wants to be expensive, because it’s so valuable” and is bookended by “so you have these two fighting against each other“. It is usually literally applied to the music sector but rarely to other forms of intellectual property belonging to tech corporations.

 The Music Piracy Complex - Part 2 can be read here.

Image Credit:
Silicon Valley by Cult of Mac & HBO

New music copyright protection guidelines have been announced by the Beijing Copyright Bureau which aim to redress the burden of proof imbalance between copyright owners and those engaging in and in many cases, profiting from institutionalized piracy.

The Beijing Municipal Bureau of Press and Publication (Copyright Bureau) brought together Copyright Owners including representatives of record labels, publishers, composers, music distributors and industry associations amongst them Taihe Rye, Dong Music, Music Copyright Society of China and R2G who voiced their opinions and support for the guiding framework late last week.

It was noted that the law needs to objectively state what defines Copyright Ownership, as currently there is a heavy burden of proof upon Copyright Owners with the balance tilted in favor of Service Providers. Copyright Owners have an inordinate amount of work to not only prove their ownership but also to issue take-down notices whilst Service Providers seek sophisticated ways to perpetuate music piracy, most commonly abusing Safe Harbour Laws and using their technology platforms as a cover to facilitate users’ uploading of copyrighted content. In fact, Service Providers including music Search Engines themselves get into the act and simply upload the copyrighted content whilst conveniently blaming their users.

As Music Ally stated in its China profile report (subscription only) last month:

“Only two online companies have fully-licensed music streaming and downloads services in place: Google-backed Top100 offers free ad-funded downloads and streaming, while R2G’s wawawa has paid-for streaming and downloads, too. Both companies, however, face fierce competition from other dubious portals and services, amongst which stand out Sina, QQ Music, Xiami, VeryCD, and the infamous Baidu.

Although some of these have some form of licensing in place, they all carry pirated content too, fueling traffic levels that generate advertising and adjacent service revenues in the hundreds, if not thousands, of millions of dollars. Whereas piracy in the West remains, for the most part, an activity based on end-users sharing and downloading contents by themselves over one platform or another, in China it is mainly driven by commercial operations”

As traffic is important to these infringing Service Providers, they constantly feed users with unlicensed free content and cite their users’ habits and attitudes which are actually shaped by these corporations as an excuse and human shield to deflect from the institutionalized piracy that they engage in. As these companies are profiting from music piracy, their attempts to undermine actions against music piracy include feeble if non-existent efforts to take-down infringing content. It will be interesting to observe how Baidu will also join this “partial licensing as cover for pirate activity and traffic magnet” model once they launch their upcoming Ting music service

The Beijing Copyright Bureau has recognized that the law can be seen as a polariser as in practice it is an arduous task to prove Service Providers’ subjective intent even as their actions contribute to copyright infringement. As such, a new framework of guidelines to complement the existing laws have been proposed by them.

The most significant of the guidelines which will come into effect from 1 June 2011 are the following:

• The Beijing Copyright Bureau will set up a publicly accessible website for Copyright Owners to register their works and Service Providers who provide file-sharing services, search, links or act as channels are then automatically required to take down links to these known copyrighted works or prevent users from uploading these works to their properties.
• Service Providers are thus effectively required to automatically take down copyrighted works that they know of or should have known that users do not have the right to upload or disseminate.
•  Service Providers are required to remove infringing content immediately or latest within 24 hours upon notice by the Copyright Owner.
• Service Providers are required to take down the same copyrighted work that had been previously taken down/ disconnected based on notification from the Copyright Owner.

The full list of the Guiding Framework on the Protection of Copyright is available here

Currently, Service Providers have been able to employ a variety of means to perpetuate illegal use of copyrighted material by counting on the arduous tasks and barriers that Copyright Owners have to overcome if they are to take legal action:

1. Service Providers require take-down notices to be accompanied by an Authorization Letter from the Copyright Owner or an exclusive Authorization Letter from the assigned distributor
2. Some Service Providers contend that Authorization Letters are insufficient proof of ownership and demand that lyrics be also provided before they will consider a take-down while others require notarized Authorization Letters
3. URLs of each case of infringement have to provided.
4. The Service Provider then sneakily moves the infringing content to a new URL or simply ignores the take-down notice.
5. To then undertake legal action, every page on the website showing the infringing content will first have to be printed and notarized as proof
6. The infringing content itself has to be downloaded, and as further proof, a video camera will have to capture the download/ streaming process
7. A full chain of authorization from the artist, the music composer to the label and distributor has to be provided, and each of these has to be notarized.
8. Physical CDs will also have to be provided which indicate the copyright information [(P) and © symbols]
9. And then begins a long wait to have the legal case accepted in courts, before a further waiting period yields a hearing.

As Wu Jun, CEO of R2G summarized it, current difficulties include:

• Complexity and arduous process of establishing and proving rights ownership
• Costly and heavy burden of proof whereas infringement carries little cost
• Difficult process to inform infringing companies (to take-down content)

It is thus important that Copyright Owners play their part  in registering their works with the Beijing Copyright Bureau so that the new regulations can be enforced once it becomes active from 1 Jun 2011.

There will definitely be a trend towards licensing but at the same time, this will not happen in a vacuum if Content Owners do not pursue the required piracy monitoring and necessary legal actions to inhibit infringing companies from their practices of theft. It will also require investment and collective pressure from Content Owners against infringing companies  if they are to effect the necessary change in action and attitudes, and this will likely be reciprocated by accompanying government support.

The bold and united stand taken by Chinese authors against Baidu’s Wenku site which hosted and made available millions of copyrighted books and documents for free and the subsequent announced step down by Baidu is an example of collective action at work.

The other area to note is that the major infringing companies will periodically announce that they are pursuing a licensing strategy when faced with mounting pressure only to revert to their infringing habits once the spotlight is off them. So it is partly in the hands of a united music industry to effect change - Content Owners that undercut each other are effectively devaluing their own market

With the Beijing Copyright Bureau seeking the views of the music industry as part of this year’s initiative to address the endemic copyright problems in China, a cautiously optimistic approach might be in order.

Update: As a result of the review process, the Beijing Copyright Bureau has delayed the start of this trial copyright regulation program to 1 Aug 2011. It was also announced that search engines will initially not be subject to the regulations stated above - instead, a separate set of regulations are likely to be put in place for search engines.

At the same time, as reported by MusicDish, under the auspices of the Ministry of Culture, more than 20 companies have formed the Alliance of the Digital Music Industry (ADMI) and committed to jointly comply with the basic principles of “abiding by the laws and regulations, implementation of genuine, insistence on original, and orderly operations.” The purpose of this would be to establish mechanisms for the healthy development of the online music industry, specify industry business behaviors, and together promote and protect the healthy development of the digital music industry in accordance with the law.

Mathew is President at R2G