The Copyright Act Explicitly Says Disruptive Innovation Should Be Blocked
from the isn't-that-a-problem? dept
A few weeks back, we wrote about a proposal by Rep. Jerry Nadler, which we referred to as the RIAA Bailout Act of 2012 because it sought to change the nature of satellite radio royalties to put them on par with the absolutely ridiculous and unsustainable royalty levels for internet radio. In case you don't know, there are basically three very different tiers for the royalties that need to be paid to musicians (separate from songwriters) for broadcasting the tracks on which those musicians played. If it's played on the radio, the stations have to pay nothing to the musicians, as Congress long ago decided that radio play was the equivalent of advertising (a viewpoint that is pretty accurate, given the decades of payola that have shown that radio play is so valuable that labels will pay stations and djs to get their songs played). Then there are the satellite radio guys (basically Sirius XM at this point). They pay a rate that they already think is too high and pass those rates directly on to consumers. In preparation for a new rate-making process, they're already seeking out legal ways to get away from having to pay statutory rates.But what the satellite guys have to pay completely pales in comparison to what internet streaming companies like Pandora have to pay. There, the rates are so crazy that it's become clear that Pandora has little likelihood of ever being profitable unless something drastically changes. Matt Schruers, over at Project DisCo, has an absolutely fascinating look back at why these rates are so bad, and it comes down to this simple, but positively scary point:
When the Copyright Act of 1976 was passed, it was so taken over by regulatory capture by a few key industries, that they explicitly put into the Copyright Act that it should be used to stop disruptive innovation from challenging legacy businesses. I've read the Copyright Act many times, but have to admit that I'd never quite noticed this line from 17 USC 801(b)(1)(D), which explicitly states that the role of the Copyright Royalty Judges on the Copyright Royalty Board that sets the rates for internet radio are there:
To minimize any disruptive impact on the structure of the industries involved and on generally prevailing industry practices.Yeah. Their job is to set rates that basically kill off disruptive innovation in favor of "prevailing industry practices." As Schruers notes, this goes against absolutely everything we understand about the importance of disruptive innovation in driving forward the economy:
That’s right: employees of the U.S. Government who dictate price inputs for entire industries are statutorily charged to resist change. While the CRT / CARP / CRB has always had other statutory guidance as well, for example, maximizing availability of works, affording copyright owners a “fair return” and users a “fair income under existing economic conditions”, Congress enshrined this explicit rule that no one be permitted to upset the existing players’ apple cart. There is no pretext here, no cynical appeal to some higher objective that justifies minimizing disruption of the prevailing industry — change is inherently bad. The statute gives no consideration of whether a better business model might come along, and in fact affirmatively discourages any — not only because the statute aims to minimize any “disruptive impact”, but also because this license was limited solely to “pre-existing” services by the Digital Millennium Copyright Act in 1998. New arrivals were out of luck.How the hell did something so explicitly corrupt and so clearly a form of crony capitalism get directly into the Copyright Act? Take a wild guess:
So how did this “minimize disruption” language wind up in the Copyright Act of 1976, given that it so clearly violated the First Rule of Defending the Status Quo? The “minimize disruption” requirement is a vestige of a copyright legislative process that stretched over many years, starting in the 1960s, at a time when fewer people appreciated copyright and fewer still understood the contours of the legal system that created those rights. Much of the initial drafting of the ‘76 Act was by the Copyright Office, which chaired a series of meetings with prominent industry copyright lawyers throughout the 1960s.And... believe it or not, that's not even the end of the story! That part of the Copyright Act is the part that impacts the satellite guys. But the streaming internet folks? For them it's even worse, as the statute takes things even further to create even more incentives to further kill off these new innovations -- by basically saying that a "proper" license is one with which a "willing seller" is happy. In other words, it sets the statutory rates almost entirely based on the interests of... the existing, entrenched players.
Counsel for publishers, the recording industry, broadcasters, were well represented in these discussions. The future, as the saying goes, had no lobbyist. It is not surprising, therefore, that the multi-factor test that determines the rates paid by services like satellite radio under the Copyright Act’s statutory licenses would reflect the perspectives of the existing parties to the arrangement. The standard from the ‘76 Act remains today (although at the time, the statute was focused on regulating “coin-operated phonorecord players”.)
And that's why Pandora may never be profitable if nothing changes. Because we've actually built into copyright law that disruptive innovation is bad and should be minimized at the interests of the legacy players.
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Filed Under: copyright, copyright royalty board, disruptive innovation, innovation, internet radio, royalties, satellite radio, webcasting
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Copyright intent
I'm pretty sure we can declare copyright broken as of 1976. Can we scrape it and start over with someone lobbying for the future?
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Re: Copyright intent
someone with some sense doing the lobbying would be a big help!
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Re: Copyright intent
That begs the question, at what point should the service be allowed to make a net profit and what percentage of net profit should they be allowed to make, if any.
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The law is good.
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Re: The law is good.
Or, break it. Works for me. If the lawmakers don't care to play fair, I'm good with that game too.
-C
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Re: The law is good.
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Step 1: Stop paying royalties for broadcasts. Satellite, internet, whatever.
Step 2: Make argument playing the song is same as advertising, just like radio.
Step 3: Make argument widely public. Show data. Use whatever media available to spread argument.
Step 4: Watch lawyers freak out, old media lobbyists come out of woodwork, and politicians take bribes.
Step 5: Expose morons from step 4 to the public. Explain how technology works. Demand changes to the system, because it's 20fucking12 and any argument against moving onto different platforms is simply retarded.
Step 6: Point and go 'U MAD' at legacy media as they lose and crumble into dust.
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simply stop playing the music full stop. see how long before the legacy industries are complaining because they are getting no advertising, free or otherwise
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Now, they don't have to prove you've played one of 'their' songs before they send you a bill, they send the bill beforehand and you have to prove that you haven't. Even then they'll still charge you, just in case you happen to play one of 'their' songs.
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"by basically saying that a "proper" license is one with which a "willing seller" is happy. In other words, it sets the statutory rates almost entirely based on the interests of... the existing, entrenched players."
If there were other, new sellers, the rates would change. The real issue here is that as soon as anyone makes it in the music world, they are suddenly very happy to get the higher rates. Nobody wants to sell cheap.
If this system is entirely defective, if there is so much of a gap in there that millions of dollars are lost, don't you think someone wouldn't have shown up by now to scoop it up?
There is no downward pressure because, unlike how you try to portray it, there is no real alternate music source. People generally want to hear hits and well known material, they don't want to hear nothing but bands they don't know all day. The new business models have failed to take advantage of all the apparent sloth and abuse you see in the system because they aren't turning out the material the masses want.
Maybe if you concentrated on how to make the NEW models better, and stopped trying to drag the old ones down, you might have something. So far, I don't see any new models that are beating the old guys down.
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They could fight it and probably win, but it's not like the RIAA would pay back the millions lost in court and lawyer costs. And god help them if they ever make a mistake (like play a song that kinda, sorta sounds like one covered).
There's more to being a monopoly then just not having other options.
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Not true. If they prove that everything they play will be ONLY through other collection agencies or mechanisms, they can get exempted.
They will have a hard time to prove it, considering that many of today's breaking artists seem content on lifting other people's work to create their own, thus thrusting things back to the old system.
Oh, oops. You did it to yourself, you did, you and no one else... thanks Thom!
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As for the first part of what you said:
"They could fight it and probably win, but it's not like the RIAA would pay back the millions lost in court and lawyer costs. And god help them if they ever make a mistake (like play a song that kinda, sorta sounds like one covered)."
Plus the "breaking artists seem content on lifting other people's work to create their own" is universal, not just indie (Big Secret: That's how art is made).
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> be ONLY through other collection agencies
> or mechanisms, they can get exempted.
Why in the blue hell should that burden be on the business? Why should I have to prove what I won't do in the future? *How* can I even realistically do that?
No, any sane, non-corrupt system would place the burden on the collection agency to prove that the service or venue is playing music covered by its clients.
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Because the old guys are beating the new models to prevent them from flourishing. Anyway, you missed the point entirely.
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Response to: Anonymous Coward on Sep 17th, 2012 @ 10:56am
We have a law in place that keeps those with the power (in 1976) shielded from new forms of business innovation. So even though there are plenty of new and different types of reliable sources to get and listen to music, the only reason they can't continue to flourish is due to the fact that a law requires them to not be as competitive as other companies? Um, that really sound wrong and broken to me!
Considering how fast technology advances in this day and age, its pretty obvious that any laws pertaining to it should be heavily looked over and adjusted for the current times.
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Yay for circular logic.
1) Major labels own or influence the distribution channel and advertising that most people only hear what the majors want them to hear.
2) Claim people only want to hear what they know about.
3) Claim there are no legitimate alternatives because of #1 and #2.
4) Use #3 to get potential competition shut down before it can threaten #1.
:places marker on his logical fallacy bingo sheet:
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Re: Your opinion doesn't matter tho
RIAA is not as healthy as AC seems to be convinced. If only that proud ol' business model ran on belief!
site:torrentfreak.com riaa-revenue-dwindles-as-labels-cut-back-120817
There is a new model that is better. It's called file-sharing. It has smashed the old model and this article is a stellar example of why the old model prevents business new business models from competing with the undefeated champion that is internet piracy.
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Now I'm out of business! Those pesky inventors killed my ice making business!
And while we're at it, my horse breeding business also wants the feds to step in and throw Mr. Ford in jail for piracy, for his 'cars' that ruined the horse breeding business. Look at all the evil Mr. Ford's cars have been used to commit, like running people over, & transferring stolen goods!
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Let's cut the crap once and for all.
The US so-called government couldn't give a rat's butt about individual citizens and cares solely about how much money is lining their personal pockets. All the legends about the "founding fathers" and the "constitution" (or as the former US dimwit-in-chief GW Bush called it "just a piece of paper" ) will never change that, so let it go. The country is ruled by the corrupting influence of money, period.
The MAFIAA may be full of some of the slimiest creeps ever to crawl this planet but they're not stupid and they know exactly whom to bribe in the corrupt US government (it does not matter at all what party wins anything - your government is corrupt) to get things the way they want them.
And that's what they do. And it works. And they laugh at you because they can't believe how gullible you are.
Democracy my backside.
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Re: Let's cut the crap once and for all.
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LMAO! Well-played.
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People have been questioning me about it for years. I haven't changed my opinion about whether it's infringing. I changed my avatar so people would stop derailing conversations by changing the subject to my avatar. I want to focus on the issues. It's really that simple. People here are so desperate to take me down a notch. That's understandable since I obviously don't drink the same Kool-Aid. So now I've taken away one common thing people pull out to distract attention away from my points. Simple as that. I've explained why I don't think it was infringing several times at length. It still cracks me up that the same people who see noninfringement everywhere they look suddenly have a different point of view. But I digress...
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Heh. Says the guy who two minutes ago was cheering on some meaningless childish mudslinging about Mike in diapers.
At this point, I think your constant reversals must be intentional. Nobody could be as self-contradictory as you without trying.
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'THE REPORT BUTTON(tm)'!
It handles ad hom arguments, it handles pointless swearing, it handles obvious lies and strawmen arguments, it even makes julienne fries*!
Act now and you too can get all this and more for the low low price of just visiting the site!
*Feature to be included in the soon-to-be-released* 'THE REPORT BUTTON(tm) v2: Now with even more pink!'
*Geologically speaking
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All reported messages are guaranteed to come in a shade of pink that only the non-morally/legally/whatever-the-fuck-is-troll-buzzword-of-the-day outraged can see! Want trolls with reported comments to complain that no one can see their handiwork and throw tantrums over misguided definitions of what censorship really means?
NOW YOU CAN!
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That's right, only you are allowed to derail conversations.
"I want to focus on the issues."
No, you don't. As anyone who has read any of the Funniest/Most Insightful articles of the past month or two can see. Should we link to them and show how off topic you drag them? Or should we count how many comments you make along the lines of "No, Mike WHAT ARE YOUR MORALS? RAWR! ANSWER ME!" or "No, MIKE THAT ISN'T THE ANSWER I WANT, WHY WON'T YOU ANSWER ME?! RAWR!"
"It's really that simple."
No, aj, it's not really that simple. Because if it was you'd quit harping like you do. You asked about morals, people gave you their responses and you dismissed them outright or went with "but but but the law".
If things were really simple, we wouldn't have the problems or issues regarding copyright and copyright infringement like we do. But we do. Why? Because despite what you wish to think, things aren't cut and dry/simple.
"People here are so desperate to take me down a notch."
Yeah, again, I guess it's only okay when you're the one doing that. But heaven forbid anyone use your tactics against you. Oh no. Can't have that. AJ will be the first to cry foul or say let's all behave.
Oh yeah, and insulting Mike and Leigh and telling people to fuck off and die... that takes yourself down a notch. People don't need to do anything besides point to your comments and say, "I rest my case."
"That's understandable since I obviously don't drink the same Kool-Aid."
Mhm. Don't like what people are saying so claim they're brainwashed. Mature attitude you have there. Not.
I'd rebut the rest of your comment on a sentence by sentence basis, but you know what? I don't want to and you're not worth it. You're a joke. And not even an entertaining one like bob. Which is pretty sad.
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Average_Joe? No. He's the complete opposite. He has sentence structure, proper grammar and does present his arguments in a nice to follow manner. The problem here is that a guy that can actually write that well and clearly should not be making the kinds of arguments he makes. bob at least has an excuse: he's a complete idiot. Joe though doesn't. He's got a JD (or says he has one) so he's got at least some education in him.
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BTW, you forgot to use the trademark symbol when you mentioned Kool-Aid, and I'm presuming you have paid for permission to use it.
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AVERAGE JOE IS A THIEF AND STEALER OF OTHER PEOPLE'S PROPERTY!
The Law is the Law. There are no shades of gray, right? All copyright violations are theft after all.
He should be sued for $150,000 PER INSTANCE (per post) that used the ILLEGALLY STOLEN images, right AJ?
Live by the sword, die by the sword my friend.
So which is it? Its not actually theft, or are you a giant hypocrite?
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Which, of course, means there is no reason to bitch about laws passed in the early years of our country that have to practical purpose, right. I mean, I wasn't around when they passed the laws against sodomy and homosexuality. Most people alive now weren't, so we have no right to try to fix them?
This means the perfect way to have an incredibly bad law passed is to hide it within another less bad law that can hang around until the people who it is most likely to affect can't have 'standing' because they weren't old enough to oppose the law originally?
If that's what you truly believe, you should be living in a country with Sharia laws (or maybe you already do, but sure as shit not in one where the populace is actually supposed to have voice about the legislative process.. especially the right to REPEAL laws..
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Missing the forest for the trees
Mike, the copyright act was already "explicitly corrupt and clearly a form of crony capitalism". It's just your indoctrination that persuades you that Queen Anne and her cronies were 'the white witch of the east and her beauties' who could do us no ill, and moreover, that kind old James Madison who repeated her good spell, also had mankind's well being at heart.
Read http://culturalliberty.org/blog/index.php?id=276 and deprogram yourself, or continue your quest in search of the holy grail - the mythical goodness within copyright.
Do people think the 18th century was some kind of utopian period in which the powers were pure, benevolent & corruption free? That legislators always put the interests of the people before the state?
You should have noticed the stench the moment a law found it necessary to state up front that it was for the benefit of the people. Ever noticed such pretexts behind laws against murder, burglary, fraud, kidnapping, etc.?
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Mike - that's why disruption will destroy them
So they'll hold on to their little fiefdoms for a while longer, but in the end, instead of being pulled 'kicking and screaming' into the future... they'll just be left behind.
Just like the buggy whip makers you like to talk about.
They've set up a system where, for progress to happen, it needs to be progress they don't approve of, that they don't have control of, that they aren't attached to. Progress will happen....
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Re: Mike - that's why disruption will destroy them
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Re: Mike - that's why disruption will destroy them
Look at music, it's been around for thousands, possibly millions of years. The notes have been around even longer. The instruments used have been around for hundreds of years. It's all just evolved over time, slight changes here and there to become what it is today. This wasn't done in a vacuum, Mozart didn't compose without knowing the music that came before.
Legally forcing people to recreate the wheel ever single time they want to do something will slow progression to a crawl and more then likely force people to do it illegally.
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I have said it before and I will say it again Copyright was killed in 1976 and was replaced with Right of the Author or droit d�auteur.
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Leave it to the goram lawyers to take a single clause and twist it to mean everything.
I'm reminded of the "bottom of the ocean" joke again.
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BTW, the term used is "minimize", and not "blocked".
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RIAA
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If you do not ever play any of the Copyright Maximalist Material then there should be no issues.
I have always really appreciated when a Radio Station has played Material from the Bands I have played in.I never asked em for money and never will.I love the exposure.
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Practical tip for consumers
Once the last American internet-based radio stations/streams are finally killed by unreasonable financial burdens: go international.
There are very good radio stations from all over the world that you can listen to over the interwebs. I daresay that one of the advantages of these here interwebs is that by definition, stuff is available globally by default, unless blocked.
So, if you want good radio, go here:
http://www.nederland.fm (Fresh FM here is my personal favourite)
http://www.deutschland.fm/
http://www.lafrance.fm/
http://www.italia.fm/
http://www.d anmark.fm/
http://www.england.fm/
etc.
I'm not sure about the other countries, but in the Dutch version (nederland.fm) I believe the license structure is like this: radio is radio. It's already licensed for radio. The website is only making an existing radio stream available through the interwebs. Done.
I might be naive, but then again, I don't really care. I just know that as an end-user I have plenty of choice of radio stations that just work. :)
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If this is an exact quote from the constitution, I seem to be confused. It says only the creators get exclusuve rights. If this is true do the creators sell these rights to gatekeepers. If they do can they still do what ever they want with their creations? If not then the creators no longer have exclusive rights. According to the constitution, by law only the creators can be given exclusive rights to their work.
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Check out these links to resolve your confusion:
http://culturalliberty.org/blog/index.php?id=289
http://culturalliberty.org/blog/in dex.php?id=291
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