Music Collection Org: Revenues Are Booming... And That's Proof Why We Need Even More Draconian Copyright Laws

from the say-what-now? dept

As we showed earlier this year in our latest Sky Is Rising report, revenue in the entertainment industry continues to shoot upwards -- and not because of draconian new anti-piracy laws, but almost entirely because of successful innovations from internet companies that have opened up massive new markets for content creators. You'd think that maybe this would make some copyright system supporters think twice about continuing to push for expansionary copyright policies that are likely to hamstring the very internet services that have provided them this windfall, but that would be expecting self-reflection from an industry famous for blaming everyone else for everything that has ever gone wrong.

Case in point, CISAC, the International Confederation of Societies of Authors and Composers (a sort of mega group of most of the various performance rights collections societies around the globe) recently released its annual report on revenue, showing that things were looking up, up, up for songwriters and composers in getting paid. This report fits well with the annual IFPI report, which covers similar data for recording artists (generally speaking, IFPI covers revenue for recorded music, while CISAC covers revenue stemming from performance rights and songwriting royalties). In all cases, these show pretty massive increases, nearly all of it stemming from growth in internet services:

Royalties from digital sources jumped 29% to €1.64 billion, thanks to rapid global expansion of music and subscription video on-demand (SVOD) services. In the last 5 years, creators’ digital income has nearly tripled, now accounting for 17% of collections compared to 7.5% in 2014.

The increase in major markets’ digital collections - notably the United States, France and Japan - are the biggest drivers of global growth. This growth is helped by new and extended licensing deals between societies and digital platforms, from dedicated content services like Spotify to social media platforms such as Facebook and video on demand platforms such as Netflix and Amazon.

That all sounds pretty great, right? Except... that CISAC execs then made the rounds using this report to... call for more draconian copyright laws that would hamstring the internet and limit future growth.

I only wish I was kidding. CISAC's own press release states:

Jean-Michel Jarre, CISAC President, said: “Digital is our future and revenues to creators are rising fast, but there is a dark side to digital, and it is caused by a fundamental flaw in the legal environment that continues to devalue creators and their works. That is why the European Copyright Directive is so momentous for creators everywhere. The Directive has sent an amazing, positive signal around the world, building a fairer balance between creators and the tech platforms”.

Meanwhile, CISAC's Director General Gadi Oron told press outlets like Music Ally that the report only reinforces why the EU Copyright Directive is so important:

On the first of those, the report includes a section on the European Copyright Directive, which was adopted in April and is now being implemented by the EU’s member states.

“It’s very encouraging to see that the digital income is going up at such a pace, including those territories like Mexico, Sweden and South Korea where digital is now the biggest source of income,” said Oron. “I think that will spread to other markets, and digital will gradually become more important. That’s why it’s so important for us to get the legislation in place to make the most of that.”

But the whole point of the EU Copyright Directive is to make it that much more difficult for services to make use of digital music in any form without negotiating impossible licenses, that are designed to strip the platforms from any ability to innovate or offer unique new services. In other words, as is nearly always the case, these laws are designed to strangle the golden goose. For years we've pointed out that every single time the tech industry comes up with a new service that helps make musicians more money, the industry comes along and whines about how it's not getting 100% of the value creation, and then pushes for laws to demand as such, even as it kills these new services.

It's almost pathological. The industry seems simply unwilling to recognize that getting a slice of a larger pie is a better deal. It wants the entire damn pie, even if it means torching the pie to a crisp and making it inedible. The industry is thriving. And yet it keeps pushing for new laws that it insists it needs because the industry is at risk of being destroyed -- and it doesn't care if this effort actually destroys the industry that is helping them. It's insane that politicians keep rubber stamping these moves.

Filed Under: copyright, eu, eu copyright directive, licensing, music, revenue
Companies: cisac

Rep. Wexler And The Lies Of The Copyright Industry

from the time-to-do-some-education dept

Earlier this week, CISAC, a copyright collection society held its "World Copyright Summit," which was effectively a gathering of groups of collections societies and copyright holders who want to strengthen copyright at every turn, so that they can collect more cash -- without ever needing to actually give people a reason to buy. IP Watch has a good summary of the event, where you see it was basically a bunch of people trying to figure out how to have governments around the world force people to hand money over to them. As per usual, the only voice of reason appears to have been Gary Shapiro, who tried to tell the assembled folks that their strategy to date has been a disaster, and they need to understand the differences between "property" and "copyright." In response -- the audience groaned. It would appear his message did not get across.

That said, I wanted to respond to two of our elected officials who both spoke at the event and who said somethings that are quite questionable. Rep. Robert Wexler gave a troubling speech in which he claimed that those who look to protect consumer rights, and question the value of stronger copyright are "lying" and need to be dealt with. Senator Orrin Hatch -- who once suggested remotely destroying the computers of anyone suspected of copyright infringement -- gave another misguided and misinformed talk. Both deserve a response. Let's start with some excerpts from Wexler's talk -- and I'll cover Hatch's in a separate post:

In the public debate, outside Washington and Brussels -- and beyond trade journals and economic reports, most people, first, would not be able to describe what intellectual property is. Second, too many do not see digital piracy -- for example -- as the serious theft that we here in this room know it to be.

These regrettable opinions from the public at large are being harnessed by a ground swell of anti-intellectual property sentiment from the so called 'Napster generation,' which has come of age in a digital file-sharing era

Notice that he immediately goes with the demonization effort, rather than understanding the actual issues. He sets it up that people don't understand intellectual property, rather than that they may have a legitimate beef with what current intellectual property laws have created. He doesn't even consider the idea that many people do have tremendous understanding of intellectual property issues and have found them to be troublesome. Instead, he brushes it off as being the "Napster generation." Finally, he shows that he, himself, does not understand intellectual property (or the law!) in calling it "theft." Rep. Wexler should (as a lawyer and a Congressional Representative) be familiar with the difference between theft and infringement. That he is not is troubling.

Two years ago, as Chair of the Caucus, I sent a letter to my colleagues in the House of Representatives focusing on some of the major problems and challenges we face on intellectual property issues around the globe.

In a tongue and cheek manner, I used the genuine formation of the "Pirate Political Party" in Sweden as an abstract way to point out how silly and extreme those on the other side of this debate had become. Evidently, I was quite wrong about the extreme part.

As nearly everyone in this room knows, this week that same "Pirate Political Party" won a seat in the EU parliament. It won 7.1 % of the total vote in Sweden, and even more shockingly, it had the HIGHEST percentage of 18-25 year-old voters. That statistic should alarm all of us in this room who care about intellectual property law.

First of all, rather than mocking The Pirate Party, perhaps Rep. Wexler should have taken the time to actually understand its arguments. It is a party that is focused on important civil rights issues -- many of which Wexler appears to support.

The fact that younger people came out to vote in such large numbers is significant because we know that getting someone to the poll the FIRST time is the hardest part.

Those young voters are now much more likely to vote in the next election -- and the election after that. Soon, those 18-25 year olds will be home owners, and business owners and employees of major companies.

So doesn't it make sense to pay attention to their concerns and actually understand them before brushing them off?

First and foremost, those of us who understand the importance of intellectual property law have failed to do the job in educating others toward our point of view. Artists, creators, governments, and industry must join together to spread this message.

The truth is that we have a great story to tell and we must tell it better.

Our collective job is to raise awareness of the potential of intellectual property to contribute to the social, cultural and economic advancement of countries and individuals throughout the world.

We must send an unequivocal message that the theft of intellectual property -- whether the corporate piracy of software, organized crime manufacturing of optical disks, or personal Internet downloading -- will not be tolerated.

Does anyone else find it ironic that it's the so-called "creative class" which copyright supporters insist are enabled by copyright supposedly have not been able to tell this "great story?" Perhaps the problem is that there is no great story to tell. Perhaps the problem is that more and more people are recognizing that the "great story" is one that suppresses the rights of every day users, stifles innovation, holds back progress and stamps on our rights of free speech and communication? Has it occurred to Wexler that for the past decade, the industry has been telling this story over and over and over again -- and every time they do, more and more people realize that it doesn't add up?

We are facing two significant problems simultaneously. First, our voices are getting increasingly lost in a sea of misinformation from the anti-intellectual property community. And second, our opponents don't necessarily have to play by the rules.

The anti-intellectual property advocates are free to make simple arguments that often resonate with an audience because they are not based in "facts" or "legal rights."

First, it's rather demeaning to refer to those who believe in actually making sure that intellectual property laws live up to the values put forth by the Constitution ("promoting the progress...") are necessarily "anti-intellectual property rights." Folks like William Patry, James Boyle and Larry Lessig, I think, would all take significant exception to the idea that the ideas they put forth are "anti-intellectual property" and/or not based in "facts" or "legal rights." Rep. Wexler, have you read any of their writings?

And if we're talking about making simple arguments that resonate with an audience because they are not based on facts or legal rights, shouldn't we start with calling copyright infringement "theft"?

Perhaps the real problem is that the arguments put forth by these scholars actually is both based in facts and legal rights, and those facts and legal rights are compelling because they're true.

I found this out on a personal level, when I was in Congress during the original file-sharing debate about Napster. I remember unveiling a strongly worded statement against Napster and a defense of our intellectual property legal regime. I thought I sounded pretty good. I knew I wouldn't be popular with high school and college students in my district. But I was shocked when my father called me and said I sounded like I was on the wrong side of the issue. I knew if I couldn't even convince my own father -- that we had a big problem.

Or, if you couldn't convince your father, perhaps it suggested that you hadn't truly understood the issue and had made an argument that was poorly reasoned. Perhaps the problem wasn't with your father's views or the views of the students in your district -- but with your argument?

Julian Sanchez from CATO has discussed this exact problem, which he calls a "one-way hash" where "for every confused or muddled claim, it would take about a dozen paragraphs of explication to make clear to someone not intimately familiar with [the subject] what's wrong with it."

So, what a blogger in Sweden writes in a few minutes would take hours or days for the copyright community to answer in an appropriate factual response. It takes much longer to argue using facts and precedent than it does to say anything you want because it sounds plausible -- just like it takes far longer to make a movie than it does to steal it.

This is an odd statement for a variety of reasons. Amusingly, of course, it's Julian Sanchez (a sometimes contributor to this very site) who did an amazing job digging deep into research to discover that it's the copyright holders who have been flat out lying about the impact of "piracy" using entirely made up numbers. He, in fact, took the "confused or muddled claims" of Wexler and the entertainment industry, and used about a dozen paragraphs of explication to make it clear to Wexler and others, what's wrong with his very argument.

So what a politician in Washington says in a few minutes took hours or days from the consumers rights community to answer in an appropriate factual response. It takes much longer to argue using facts and precedent than it does to say anything you want because it sounds plausible.

Right, Rep. Wexler?

And, yet, Wexler is simply wrong here as well. Because Sanchez's well, researched, detailed analysis of the lies the copyright industry and politicians tell the public, did get the message out. Because those of us who believe in basing our opinions on factual information have no problem taking the time to read such arguments and understanding them. It's a shame you chose not to.

Even worse, the less someone knows about the subject, the more likely they are to be swayed by these empty arguments -- and the more likely they are to be convinced that they are right. And none of this is going away.

Perhaps we travel in different circles, but I have found the exact opposite to be true. Most people, having been taught from a young age, the "wonders" of intellectual property as a driving force to our economy, have an instinctual, inherent belief that more and stronger IP laws must be a good thing. I know I certainly felt that way for a long time. It was only as I was exposed to more facts, more details and more evidence that I began to realize just how troubling it is to create such intellectual monopolies, in an effort to create artificial scarcity, to lock up ideas and expression -- all to allow profit over freedom of expression. It's the people who spend more time trying to understand these issues that are so troubled by them. It's the people who read and think through these ideas on a daily basis who are so troubled by what you are suggesting. Rather than dismissing us all as know-nothings who haven't considered these ideas, why not try talking to some of us?

For example, a recent UN-sponsored internet governance forum in India brought together various international leaders to discuss the many global issues related to the Internet. This is an important topic, which should have rightfully generated a tangential interest in related intellectual property issues. However, at almost every single panel and discussion there was a significant intellectual property component. And the opinions expressed about intellectual property rights were largely unfavorable. So what we ended up with was a UN-sponsored event educating an international government audience about how strong intellectual property protection is a hindrance to the developing world.

This message is particularly frustrating for me, as I am sure to those in this room, because I believe so strongly that vibrant intellectual property law is a KEY to economic development in these same developing countries.

Perhaps the issue is that the folks talking about the problems of IP in the developing world had actually read the research that showed how damaging IP rights are in the developing world. Perhaps the issue was that they had bothered to understand the details and the facts, and didn't just go on the "strong belief" you seem to have, that is not backed up by facts.

Rep. Wexler, in the next few weeks, we are going to be running a detailed series on the question of IP in the developing world. I would recommend taking the time to read it.

The creativity and innovation that have transformed the United States and enhanced our standard of living should stand as MODELS for nations still in transition to healthy and resilient modern economies. Everyone here knows that intellectual property is the backbone of global economic competitiveness.

Actually, you should revisit what "everyone knows" because the actual research suggests something quite different. Especially in the copyright space, it was the lack of copyright protection that helped grow many of our creative industries when we were a developing country. It was our lack of copyright protection on foreign works that helped spread those books and ideas and helped us grow. It was the fact that Hollywood hid from Thomas Edison's intellectual property claims that allowed them to grow and thrive. It was Walt Disney's copying of the copyrighted film Steamboat Bill that kicked off the Disney empire.

It was only after these industries were built and established that they suddenly called out to the gov't for greater protection against new industries and new upstarts. The Copyright Act of 1909, which was a massive change in copyright law was driven, in large part, due to the supposed "threat" of the player piano. For the past hundred years, all we have seen is the growth and strengthening of copyright laws not as the backbone of our economy and global competitiveness, but because those industries did not want to compete against upstarts and innovations from around the globe.

Almost three quarters of real business value in the US is intangible. The most recent report found that the total copyright industry contributed $1.38 trillion to the US economy or 11.12 percent of the Gross Domestic Product. In 2005, the total copyright industry employed 11.3 million workers in the US or 8.5 percent of the total workforce. The licensing of U.S. patents contributed an additional $150 billion according to KPMG, and that number is growing.

There are millions of jobs created by the U.S. copyright industries -- and these jobs are more important than ever based on our economic crisis. With American, and international, businesses in such dire straights, the value of innovation of these businesses is even more important than ever. And while our overall economy has contracted, the innovation industries continue to grow both in American and internationally.

So why is this not a home run?

Because most people realize those stats are bogus. They realize that they are lies and not based on fact, but are spoken to an appreciative audience because they "sound plausible." The truth is much different, however. The jobs and the economic output are not due to copyright. They may be protected by copyright, but you and many others make the false assumption that those jobs and that content disappears in the absence of copyright. You make the false assumption that there aren't other business models that work much better and which help grow the economy even more, without relying on copyright.

My job for example is likely one of those many millions that are included as being within "the copyright industry." Yet, I reject that claim. I have built a company and a business model that, despite being in the falsely named "copyright industry" does not rely on copyright. The numbers you cite are bogus for the very reason that it assumes that those jobs don't exist absent copyright laws. That is simply not true. Did removing the sugar monopoly mean that no one made money in sugar any more?

The Office of the U.S. Trade Representative cited 50 countries, even key allies, such as Canada and India, for failure to adequately protect U.S. intellectual property rights. A study by the Business Software Alliance showed that software piracy alone amounted to $53 billion in losses in 2008. Intellectual property theft isn't just software and movies anymore either. It is everything from copies of machine tools and counterfeit car parts to knock offs of golf clubs, designer handbags, watches and jewelry.

The BSA's study has been debunked left and right for years. Its claims of "losses" are laughable to anyone who looked at the "facts" rather than at the lies that are written out quickly because they "sound plausible." For someone who insists on not being misled by such lies, you seem to repeat them quite often yourself. We've done a detailed explanation of the mistakes in the BSA's analysis. Perhaps the research and the facts that went into that were too troublesome for you to read over in those many paragraphs, when you could just accept their quick and laughable claims because they "seemed plausible" to you?

Those of us in this room know how intellectual property can bring us together as you create the very technologies that speed communications and make physical borders obsolete. Let us capture and utilize the spirit of international reconciliation that will be fostered over the next four (or eight) years as impetus for us as an international intellectual property community to come together and work collaboratively.

Which "technologies" exactly are you talking about? The MP3 player which the folks in that room sought to have outlawed? The VCR which they called "the Boston Strangler to the movie industry"? The internet, which they're now looking to hamper with new laws and limitations? The player piano? The radio? The television? These are all new technologies that the "copyright industry" freaked out about when they first came about.

However, we must recognize that punitive measures and enforcement-focused outreach alone are doomed to failure in this digital age. It is the battle of message that we must win first and foremost. We can and we will succeed in this effort, but our tactics and messages must improve.

Yes. I agree. Your tactics and message must improve. Because based on this, you are spouting lies and misleading statements without bothering to understand the facts or the evidence. That won't convince anyone.

Filed Under: copyright, intellectual property, robert wexler, world copyright summit
Companies: cisac