More Details On Copyright Register Maria Pallante's Call For Comprehensive, 'Forward-Thinking, But Flexible' Copyright Reform

from the details,-details,-details dept

On Friday, we had two stories breaking the news that the Register of Copyright is expected this week to call for comprehensive copyright reform, including both a slight reduction in term as well as some of other changes. It's somewhat surprising that (as far as I can tell), no other publications are reporting on this, considering the magnitude of this bit of news. There was a brief bit of speculation in Billboard, but most other publications have stayed silent so far.

Today we have even more details. First, we have Pallante's expected testimony on Wednesday before the IP subcommittee of the House Judiciary Committee. It's a pretty short and simple piece that basically says "let's get this process started, because Copyright Reform is going to be a long and arduous process, but it needs to be done." And, as we noted last week, it sounds like a lot of stuff is on the table.

It has been fifteen years since Congress acted expansively in the copyright space. During that period, Congress was able to leave a very visible and far-reaching imprint on the development of both law and commerce. It enacted the Digital Millennium Copyright Act (“DMCA”), which created rules of the road for online intermediaries (e.g., Internet service providers) and a general prohibition on the circumvention of technological protection measures (so-called “TPMs”) employed by copyright owners to protect their content. The DMCA also created a rulemaking mechanism by which proponents could make the case for temporary exemptions to the TPM provisions in order to facilitate fair use or other noninfringing uses (the “section 1201 rulemaking”).

Nonetheless, a major portion of the current copyright statute was enacted in 1976. It took over two decades to negotiate, and was drafted to address analog issues and to bring the United States into better harmony with international standards, namely the Berne Convention. Moreover, although the Act is rightly hailed by many as an accomplishment in balance and compromise, its long trajectory defeated any hope that it could be effective into the 21st century In fact, former Register of Copyrights Barbara Ringer, who had worked closely with Congress for much of the 1976 revision process, later called it a “good 1950 copyright law.”

I think it is time for Congress to think about the next great copyright act, which will need to be more forward thinking and flexible than before. Because the dissemination of content is so pervasive to life in the 21st century, the law also should be less technical and more helpful to those who need to navigate it. Certainly some guidance could be given through regulations and education. But my point is, if one needs an army of lawyers to understand the basic precepts of the law, then it is time for a new law.

For the most part, I absolutely agree -- especially that last line. I will note that, Pallante, who has been stung repeatedly in the past for displaying a very strong bias towards copyright maximalism, is clearly being much more careful in these remarks -- something that we should all appreciate. In her talk to Congress, a number of the things she suggests should be reviewed are things that many of us here would agree are in dire need of study and updating.

A central equation for Congress to consider is what does and does not belong under a copyright owner’s control in the digital age. I do not believe that the control of copyright owners should be absolute, but it needs to be meaningful. People around the world increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws.

Moreover, while philosophical discussions have a place in policy debates, amending the law eventually comes down to the negotiation of complex and sometimes arcane provisions of the statute, requiring leadership from Congress and assistance from expert agencies like mine. The list of issues is long: clarifying the scope of exclusive rights, revising exceptions and limitations for libraries and archives, addressing orphan works, accommodating persons who have print disabilities, providing guidance to educational institutions, exempting incidental copies in appropriate instances, updating enforcement provisions, providing guidance on statutory damages, reviewing the efficacy of the DMCA, assisting with small copyright claims, reforming the music marketplace, updating the framework for cable and satellite transmissions, encouraging new licensing regimes, and improving the systems of copyright registration and recordation.

In her speech, she also highlights that the public interest is the most important thing, but also notes that the interests of creators are intertwined with those of the public. Again, we agree, though I think that we agree in different ways. Her focus appears to be mainly on the full-time, professional content creator, whereas we believe that any law must recognize that nearly everyone "creates" content these days, and must take that into account.

If Congress considers copyright revision, a primary challenge will be keeping the public interest at the forefront, including how to define the public interest and who may speak for it. Any number of organizations may feel justified in this role, and on many issues there may in fact be many voices, but there is no singular party or proxy. In revising the law, Congress should look to the equities of the statute as a whole, and strive for balance in the overall framework. It is both possible and necessary to have a copyright law that combinessafeguards for free expression, guarantees of due process, mechanisms for access, and respect for intellectual property.

To this end, I would like to state something that I hope is uncontroversial. The issues of authors are intertwined with the interests of the public. As the first beneficiaries of the copyright law, they are not a counterweight to the public interest but instead are at the very center of the equation. In the words of the Supreme Court, “[t]he immediate effect of our copyright law is to secure a fair return for an ‘author’s’ creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.” Congress has a duty to keep authors in its mind’s eye, including songwriters, book authors, filmmakers, photographers, and visual artists. A law that does not provide for authors would be illogical —hardly a copyright law at all.

Separately, the Copyright Office has released the full text of her speech at Columbia University from two weeks ago, in which she lays out her ideas in much greater detail. It's an interesting read, and I hope that most people here will take the time to read through the whole thing carefully before jumping into the discussion. There is a lot in there to process -- some of it good, some of it troubling, some of it that requires more thought and study. Assuming that Congress does move forward on this point, there is going to be an awful lot of back and forth over the next few years, and it wouldn't surprise me if it takes a decade or more before something is finally hammered out.

In her speech, Pallante, (not surprisingly) says many of the same things as in her upcoming testimony. She talks about making copyright law "forward thinking but flexible" which is a good way to think about it -- though, I imagine that just what that means will vary quite a bit based on where you sit in this debate.

The next great copyright act must be forward thinking but flexible. It should not attempt to answer the entire universe of possible questions, but, no matter what, it must serve the public interest. Thus, it must confirm and rationalize certain fundamental aspects of the law, including the ability of authors and their licensees to control and exploit their creative works, whether content is distributed on the street or streamed from the cloud.
This control cannot be absolute, but it needs to be meaningful. After all, people around the world increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws. Thus, Congress has a central equation to consider today: what does and does not belong under a copyright owner’s control. Congress also will want to consider the exceptions and limitations, enforcement tools, licensing schemes, and the registration system it wants for the 21st century.

She then goes through the big list of "major issues." First up is the performance right. In the US, Congress decided long ago that since radio was a form of advertising for music, radio stations do not need to pay royalties to performers (they do need to pay songwriters/publishers). Most of the rest of the world does have to obtain a performance right however, and for years there's been a push from the labels (and the Copyright Office) to "harmonize" this and basically force radio stations to pay an RIAA tax for playing music. As I've argued in the past, this is somewhat silly, since the history of radio is littered with stories of payola, in which the labels funneled huge wads of cash to radio stations and their employees to get their music on the air. In other words, if left to the free market, the market has said that labels value airplay so much they'll pay for it -- yet they're looking for legislation that requires the reverse: where radio stations should be expected to pay labels. I still haven't seen how that makes much sense, but given the decreasing importance of radio (though, yes, it is still important today), and the importance of many of the other issues discussed, the performance right issue will almost certainly get rolled up into any big reform effort.

She also suggests a clarification on "the distribution" right, to determine whether or not you actually have to distribute, or if merely "making available" violates that right. The courts have more or less been split on the issue with a few rulings in either direction. Not surprisingly, I strongly believe that there needs to be evidence of actual distribution to violate the distribution right, and merely making available does not violate that right (though, certainly should put you at risk of violating that right). Pallante does not come down on any particular side, but notes it as an open issue.

The scope of the distribution right also is a central theme today, as courts work through whether and how it may be implicated and enforced in relation to use of works over the Internet.58 One key issue in the courts is the degree to which a claimed violation of the exclusive right to authorize distribution of a work requires a showing of actual dissemination of a work or whether the act of making the work available online is sufficient.

Next up: incidental copies. As Pallante rightly notes, "new technologies have made it increasingly apparent that not all reproductions are equal in the digital age." Specifically, the nature of the way computers work is that they are giant copying machines, and you could argue that much of what they do is infringement, but there is growing concern that "incidental" copies made in the process of computing should not be considered infringing. Pallante points out that Congress has dealt with this in the past through duct-taping on bits and pieces to the Copyright Act to exempt certain types of copies, which (though she doesn't mention this) leads to convoluted rulings like the one in the Cablevision remote DVR case, in which the court knew it shouldn't be infringing, but had to twist itself into a series of complex knots to make that argument under existing law.

From there we get into enforcement, which kicks off with some implied praise for "voluntary" actions like the six strikes plan, but also a hint of support for SOPA-like restrictions, specifically calling out payment process, advertising networks, search engines and internet service providers as "having a role" in enforcing copyrights. That should be closely watched. Similarly, she highlights another issue that was in SOPA: expanding copyright coverage to go against "streaming."

One critical issue is the ability of law enforcement to prosecute the rising tide of illegal streaming in the criminal context. Streaming implicates the copyright owner’s exclusive right of public performance: it is a major means by which copyright owners license their rights in sporting events, television programs, movies, and music to customers, who in turn access the content on their televisions, smart phones, tablets, or video consoles. Under current law there is a disparity that may have once been of little consequence but is today a major problem: prosecutors may pursue felony charges in the case of illegal reproductions or distributions, but are limited to misdemeanor charges when the work is streamed, even where such conduct is large scale, willful and undertaken for a profit motive. As a practical matter, prosecutors have little incentive to file charges at all, or to pursue only those cases where the rights of reproduction and distribution are also at issue. This lack of parity neither reflects nor serves the digital marketplace.

Again, this was a part of SOPA (and while not a part of PIPA, there was a separate Senate bill that covered this concept, which resulted in the famed Free Bieber campaign. While Pallante presents this in a matter of fact manner, it is not nearly as clear cut as she states. After all, we've seen that the government is already going after "streaming" sites, like TVShack, ChannelSurfing and NinjaVideo. In those cases, we often see that the government has a very dangerous (i.e., extremely confused) understanding of how internet streaming works, often being willing to blame site operators for third party actions, and quick to blame a platform site for content streamed from third parties, without ever directly touching the streaming site. The war against streaming sites is incredibly misguided, and is the latest in a long series of attempts by the entertainment industry to lash out at enabling technology when it should be learning how to use it to their own advantage. It's disappointing, though not surprising, that Pallante is offering up clear support for further criminalizing this area, in a manner that will almost certainly be abused to create chilling effects on innovation.

Also among possible reforms: small claims court for copyright infringement. Copyright is limited to federal court, and as someone who was just (ridiculously) threatened with a "small claims" court over a bogus copyright issue, we're certainly well aware of why it's a good thing to keep copyright out of small claims courts. Last year, we had an even more detailed discussion about the issue in the form of a guest post from the folks at New Media Rights.

Then we get to one of the big ones: statutory damages:

This brings me to statutory damages. Some would eliminate the precondition in section 412 of the Copyright Act that limits the availability of statutory damages to those who register with the Copyright Office in a timely manner.74 They believe that it places an undue burden on the people who need statutory damages the most but are least likely to be aware of the condition, namely authors. Cost is also an issue, particularly for prolific creators like photographers, who may be unable to register each and every work under a separate application and have for years enjoyed a reduced rate through a group registration option. This gives photographers the ability to claim statutory damages, but often without providing effective public disclosure of what the group registration covers. Section 412 also acts as a filter, reducing the number of claims from copyright owners and the level of exposure for infringers. Unfortunately, it does this for bad faith actors and good faith actors alike.

Section 412 was designed as a precaution and an incentive in 1976 — a time when the law was moving to automatic protection and many were worried about the ramifications for authors, the public record and the Library of Congress’ collection. Section 412 thus creates a bargain: the copyright owner preserves his ability to elect statutory damages in exchange for registering, thereby ensuring a more complete public record of copyright information and a better collection for the Library of Congress.

[....] More globally, arguments abound on the subject of statutory damages, suggesting that they are either too high, too low, too easy, or too hard to pursue. Statutory damages have long been an important part of copyright law to ensure that copyright owners are compensated for infringement, at least where actual damages are unworkable. The Copyright Act of 1790 included a provision awarding the copyright owner fifty cents for every sheet of an unauthorized copy that was printed, published, or imported or exposed to sale.77 Statutory damages should remain squarely in the next great copyright act irrespective of section 412. However, there may be plenty to do on the edges, including providing guidance to the courts (e.g., in considering whether exponential awards against individuals for the infringement of large numbers of works should bear a relationship to the actual harm or profit involved), and finding new ways to improve the public record of copyright ownership.

That, at least, is a tiny, tiny, tiny step towards a more reasonable look at statutory damages, but I'd argue it needs to go much, much further. As it stands today, statutory damage threats used against individuals, especially for use that is clearly for personal use, is a huge part of the problem.

She then moves on to the DMCA's safe harbors and, as we feared, seems to be suggesting that they need to be revamped to take the burden off of copyright holders, and place it more on service providers. This is dangerous for a number of reasons, which we'll explain shortly:

The section 512 safe harbors in particular have generated more than their fair share of litigation on issues such as eligibility for the safe harbor, inducement, and monitoring. Some of these issues were imaginable at the time at the time of their enactment, and others were not. There are other concerns that go more generally to the question of whether the burdens of notice and takedown are fairly shared between copyright owners and intermediaries.

This is the part that scares us most about any reform proposal -- and, we fear, the key point as to why this is being discussed. Copyright holders have been trying to change the safe harbors for years, putting the burden for "enforcing" copyright onto intermediaries and service providers, turning them into copyright cops. The idea, as Pallante suggests, that this burden should be "fairly shared," isn't just misleading, but rather it makes no sense. The reason you don't put the burden on service providers is they have no way of knowing if something is absolutely infringing. This was clearly demonstrated in the Viacom/YouTube case in which well over 100 files that Viacom sued YouTube over were uploaded by Viacom employees as part of their jobs in marketing. It is impossible for the intermediary to know, for certain, if works are infringing or not. This is about the "fairness" of the burden, but simple reality.

Furthermore, putting the burden on service providers does two horrible things. First, it locks in the large players like Google/YouTube who can invest in expensive filtering systems, but denies any new competition from entering the market. That's just bad for innovation. Second, it will massively inhibit all sorts of new types of services that involve any "user generated" component, just on the fear that they could face massive liability because of an action of the user. None of this absolves liability on the actual person who is infringing, but placing such liability on the third party service provider is dangerous and counterproductive. We don't blame Ford when someone speeds. We don't blame AT&T when someone calls in a bomb threat. We don't blame Bic when someone forges a check. Don't blame service providers for infringement done by users.

While Pallante does also suggest some review of the anti-circumvention provisions, she appears to only focus on the triennial review process -- and not the anti-circumvention process themselves. This is bad news. If they're going to open up the safe harbors, at the very least, completely throwing out the anti-circumvention concept should be on the table. It's a horrible part of the law that simply is not needed. Anti-circumvention only serves to make illegal actions that do not infringe copyrights. If you use an circumvention tool to infringe on copyright, we already have basic copyright to make that illegal. Making the creation, distribution and use of circumvention tools illegal on top of that only makes it harder for people to do what they want to do in manners that don't infringe. For those who are infringing with such tools, it is already illegal. If we're going to reform copyright law and the DMCA in particular, near the top of the list we should include the possibility of dumping the anti-circumvention "digital locks" stuff entirely.

Next up: first sale. She doesn't take a stand here other than to say it needs to be looked at. I tend to hate "on the one hand, on the other hand" arguments, because they feel so wishy-washy. Take a stand. First sale rights are important. You should own what you've legally purchased without question. There's no reason why the Copyright Office shouldn't be able to take a stand in favor of that.

On the one hand, Congress may believe that in a digital marketplace, the copyright owner should control all copies of his work, particularly because digital copies are perfect copies (not dog-eared copies of lesser value) or because in online commerce the migration from the sale of copies to the proffering of licenses has negated the issue. On the other hand, Congress may find that the general principle of first sale has ongoing merit in the digital age and can be adequately policed through technology — for example, measures that would prevent or destroy duplicative copies. Or, more simply, Congress may not want a copyright law where everything is licensed and nothing is owned.

Moving on, we have a section on "exceptions and limitations." As I've argued in the past, this is the wrong framing entirely. This should be known as the rights of the public, because that's what it accurately describes. Labeling it as "exceptions and limitations" minimizes the importance of these items, despite the fact that they should be a central component of any copyright law. The UN's "declaration on human rights" puts the rights of the public to share and participate in cultural life first, above the ability to "protect" content.

Unfortunately, Pallante fails to suggest a comprehensive review of this area, but rather focuses narrowly on carve outs and patches -- such as for schools, libraries and archives.

On the question of licensing, Pallante suggests that we might be better off with some sort of blanket licensing for digital uses, while noting that with the variety of business models out there, the licensing landscape has been a total mess. It is true that current licensing regimes are a total mess, and have slowed the rise of important digital services. Tragically, at times, it seems that copyright holders themselves have been their worst enemies here, demanding as much money as possible upfront, making it almost certain that no digital service can go through the necessary growth period to build a sustainable, popular service that pays artists well. Instead, they strangle and cripple each new service to hit the market, demanding more and more upfront, such that we have a very limited marketplace, with few services that can succeed. At best, we're left with one or two giant players, rather than a truly competitive market that helps to both support artists and to provide unique and valuable services to individuals. Unfortunately, Pallante's talk does little to address this issue, other than to note that Congress may have a role in making licensing work better to reduce "gridlock." We'll see, but my fear is that this turns into another mess like the Copyright Royalty Board, in which you have a few ancient judges, with no understanding of the digital marketplace, setting ridiculously high rates.

Moving on to copyright term, as we reported, she calls for potentially rolling back the Sonny Bono Copyright Term Extension Act, such that copyright goes back to being life plus 50, rather than life plus 70, but leaves open the ability to get that last 20 years by proactively renewing for it.

Perhaps the next great copyright act could take a new approach to term, not for the purpose of amending it downward, but for the purpose of injecting some balance into the equation. More specifically, perhaps the law could shift the burden of the last twenty years from the user to the copyright owner, so that at least in some instances, copyright owners would have to assert their continued interest in exploiting the work by registering with the Copyright Office in a timely manner. And if they did not, the works would enter the public domain.

This both is and is not big news. It is big news in that this would be the first time that the US ever shortened copyright terms. From a symbolic standpoint, that is a big deal. It is also important in that it, at least, opens the door to returning to a system in which some portion of the copyright term requires proactive renewal. It's not big news in the fact that life+50 is already insanely long and any competent copyright system should require proactive renewals way, way, way earlier in the process. As we've pointed out in the past, prior to the 1976 Act, most creators did not even bother to renew their copyrights after the first 28 years. If the copyright holders themselves don't value the copyright past 28 years, why are we automatically giving it to them for much longer. Now, obviously, Pallante is focusing on life+50 because that's what's in the Berne Convention, but we shouldn't let the Berne Convention stop us from doing what's right. And, some have suggested that you could potentially tiptoe around the Berne Convention by allowing renewals up to life+50, but not automatically going all the way there.

Next up, opting out of various collective licensing deals. Tragically, I had hoped she would also talk about the ability to "opt out" of copyright altogether, which isn't really possible for the most part.

She discusses making copyright law more accessible. On this point, we agree entirely.

Finally, as noted earlier, the copyright law has become progressively unreadable during the very time it has become increasingly pervasive.

When the Copyright Act was enacted, it contained seventy-three sections and the entire statute was fifty-seven pages long. Today, it contains 137 sections and is 280 pages long, nearly five times the size of the original. As former Register Marybeth Peters observed in 2007, the current “copyright law reads like the tax code, and there are sections that are incomprehensible to most people and difficult to me.”

This is not merely a paradox; it is damaging to the rule of law. The next great copyright act should be as accessible as possible.

From there, she discusses "the policy process" itself, with a few head scratchers. In particular, I found it bizarre, and completely unsupportable, that she claimed that content from online business "can't compete with that from traditional media businesses." Really now? What is that possibly based on? And, even if you can make that statement today, will it be true next year? Five years from now? 20 years from now? Doubtful, at best. And, really, is the distinction even relevant any more? All businesses are online businesses today or they don't exist.

Similarly, she jumps on the silly trope that "information wants to be free." This statement tends only to be used by those who wish to mock the role of free information in the wider ecosystem, not by the digital natives it is often ascribed to. But, Pallante points to it, and then argues:

But in order to have a robust knowledge economy, we need content that is both professional and informal; we need content that consists of information, commentary, and entertainment, or sometimes all of these combined into one; and we need content that is licensed, content that is free, or in some cases, content that is licensed for free.

Whether or not all of that is actually needed may be an open question, but even if we assume it's true, I find the implication that "professional content" needs be covered by copyright, fee-based and "licensed" to be highly questionable. I produce professional content for a living -- you're reading it right here, and yet we dedicate it to the public domain. While later on she does admit that perhaps some artists prefer "receiving credit to receiving payment" or to use Creative Commons and that "the law must be flexible enough to accommodate these decisions," it still feels like she is suggesting that such uses are "amateur" and "informal" rather than professional.

I would think that if we're doing a big rethink on copyright law, perhaps one key starting point would be to address the myth that copyright is the only way to make money from producing content. If we're starting with that myth, then we're going to end up in the wrong spot.

Finally, Pallante does, in fact, push for greater powers for the Copyright Office, effectively promoting it to full agency status, like the Patent and Trademark Office. While you can understand the desire there, and it is true that it might help the Copyright Office make some basic changes in policy on the fly without Congress (increasing flexibility), I think there is quite a reasonable fear that this will also lead to much greater regulatory capture. The revolving door between the entertainment industry and the Copyright Office has been well documented in the past, and we've seen how the Patent Office has tended to support gradual expansionism as well. Raising the Copyright Office up only seems likely to lead it to support more maximalism, instead of more reasonable policies.

In the end, she is thinking big, but there's a lot to worry about in here, along with a few good things. Perhaps of even greater concern than Pallante's thoughts, is that, for the time being any process in Congress will be lead by Rep. Bob Goodlatte, who chairs the House Judiciary Committee. While Goodlatte is slightly better than Lamar Smith -- and, as he constantly reminds people in Silicon Valley, his son works at Facebook, Goodlatte has a long history of siding with the maximalists, and having little grasp of the importance of the public benefit in copyright.

Also telling is that nowhere in the entire speech did she mention anything about SOPA. Pallante was an unabashed supporter of SOPA, testifying before the House Judiciary Committee in favor of the bill back in 2011. The fact that the public rose up against it highlights how these issues have become a significant concern to the public, and one would hope that it would lead Pallante to make clear that any such discussion needs to take that into account.

Filed Under: anti-circumvention, copyright, copyright reform, copyright term, distribution, dmca, enforcement, fair use, first sale, incidental copies, licensing, making available, maria pallante, orphan works, performance rights, safe harbors, small claims court, st

Disney Chooses Netflix As Its Exclusive Distributor Beginning In 2016

from the mouse-in-the-house dept

Shock generally isn't an emotion I feel when I come across a story to write for Techdirt. Anger? Sure. Sadness? Of course. Dismay? You know it. But not shock. I can't say that's true in this instance. Recall two recent stories we've had about Netflix. The first is a piece I wrote about Disney opting out of their Netflix streaming deal, resulting in so-called Disney knock-offs to spring up to fill the void. The second is a story Leigh Beadon covered in which one television analyst somehow looked at parents having the ability to provide their children with more entertainment choices via Netflix and decided that was a bad thing, urging companies like Disney to veer away from Netflix altogether.

It would appear that Disney is now reversing course and embracing the ever-living hell out of Netflix as the future of its distribution model.

If you’re a Netflix subscriber and you have kids, you’re about to make those kids happier. Netflix and Disney just inked a new deal, making the former the exclusive American subscription TV service for “first-run live-action and animated feature films from The Walt Disney Studios.”

This marks the first time that a major Hollywood studio decided to side with a digital distribution rather than a traditional TV provider. The deal is also a high-water mark for a company that some were speculating was ripe for takeover as recently as last month.

According to the press release by Netflix, Disney's releases, and those of its subsidiaries (including, presumably, LucasFilm), will be available on all platforms beginning in 2016. Ostensibly, this would include Netflix's streaming platform, which is a break from Disney's previous dropping of streaming through NetFlix. Perhaps even more impressive, Disney is releasing at least a portion of their back catalog through NetFlix as well, as early as this coming year.

The article goes on to note that if you think this is a dagger in the heart for pay-TV, there's still another massive hurdle to leap.

“The pay TV business as we know it is on really safe grounds until sports distribution changes,” Cryan added. “It’s technically difficult to distribute that stuff online at scale. In addition to that, the business is stacked up so you pay a lot for ESPN and other sports channels not available elsewhere. Until that changes, the core of the pay TV business is on relatively safe ground.”

Now, I happen to think that sports streaming isn't the challenge Dan Cryan makes it out to be, but he's right that the barrier is still there and it's massive. Still, keep in mind that ESPN, unfortunately the king of cable sports, is a Disney owned operation. If the house of mouse is beginning to shift the aim of its movie distribution towards a digital provider, it isn't a huge leap to bring sports streaming along with it.

Filed Under: distribution, movies, streaming
Companies: disney, netflix

Kenyan Filmmaker Looking To Cuts Costs By Using 'Pirates' As His Distributors

from the pirates-as-middlemen??? dept

It's not often you'll see a filmmaker turn to pirates for help. Almost every American film takes great pains to inform paying viewers just how awful these people are and how much trouble they'll be in if they're ever caught. That's "our" culture, as delivered by the MPAA: the only good pirate is an arraigned pirate (or one that has a boat, died a couple hundred years ago and resides safely on the MPAA's side of the screen).

But that's the US. Other cultures have their own take. Notable Indian filmmaker Anurag Kashyap views piracy as just another way to get his message to the masses. Incredibly efficient pirates in Nigeria spread purloined films as far as they could reach, creating new markets for Nigerian filmmakers. China's film industry continues to thrive despite being held up constantly as an example of unchecked IP infringement.

Here's another filmmaker who recognizes what pirates can offer a filmmaker on a budget. Patrick Mureithi, a Kenyan filmmaker who currently lives in Springfield, Missouri, is hoping to show his documentary on post-election violence and rebuilding in his home country, and is raising travel funds via Indiegogo. Most of this $5,000 will go directly to travel expenses, as Mureithi is counting on some of his countrymen to handle the rest.

I need to raise at least $5,000 for airfare, meals and transportation. Airfare is $2,000, transportation and meals another $2,000, and $1,000 is for miscellaneous expenses. My hope is to show the film on national television, and also to distribute it at minimum cost via the DVD piracy industry. Anything extra that I raise will go towards venue and equipment rental so that I can host public awareness forums.

When money's tight, no one does better, cheaper distribution than those whose only "business" is cheap distribution. With this "industry" already well established in Kenya, Mureithi simply needs to get his finished film into their hands and let them do what they do best -- get his film into the hands of as many Kenyans as possible.

"Kenya: Until Hope is Found," tells the story of severely traumatized men and women who learn various ways of taking responsibility for their own healing. This is a message that will resonate in the hearts of many, and will help start conversations about the need to heal from trauma, without which there can be no lasting peace. This is a message that is relevant not just in Kenya but to EVERY human being on the planet.

Hopefully, Mureithi will get his film funded and spread throughout Kenya. Roger Ebert has tweeted his support, calling the filmmaker's project an "urgent documentary." With Kenya teetering on the edge of genocide (according to Genocide Watch), the upcoming 2013 election could prove to be the tipping point, one that Mureithi hopes to head off with widespread viewing of his film.

Filed Under: anurag kashyap, distribution, kenya, movies, piracy

Why Do We Even Have 'Distribution' As A Right Protected By Copyright?

from the no-copy-is-made... dept

Under US copyright law, there is a series of "rights" granted to the copyright holder, described in Section 106. The key ones are reproduction, preparation of derivative works, distribution and public performance. These rights tend to be taken for granted as being a part of copyright law... but the more you think about it, the "distribution" right seems... weird. Why is it there and does it really belong? Sherwin Siy questions why it even exists as a response to the Kirtsaeng case about someone reselling (in the US) books he bought (legally) abroad. As Siy notes, the problems and questions around the first sale right really come up because of the whole "distribution" aspect of copyright law. Get rid of that and you don't have a problem:

If someone rents a DVD from Netflix, he isn't its owner—merely its possessor, or renter, or lessee. If he distributes the DVD to someone, for instance, giving it to his daughter, he would not only be stealing the copy from Netflix, but also, apparently, infringing the movie studio's copyrights. More strangely, the daughter, even if she was ignorant of the DVD's provenance, would herself be infringing copyright if she were to give the hot DVD to a friend. The tainted disk would afflict each of its subsequent owners, making them copyright infringers when they pass it on, even if they were uninvolved in the original sin of the theft from Netflix.

The fact that you can create such a legally poisoned copy is one of the larger flaws in the implementation of first sale

Basically, the real infringement is in the making of the copy, not in distributing the copy. The whole problem is solved if you get rid of the "distribution" right. That doesn't mean you get free copies, because the reproduction right is still an issue. If you make an infringing copy, that's still infringement. But with the "distribution" right, we're talking about cases where no copies are made, and that seems like an odd use of "copyright." Siy even points out that you could build certain cases back into the law by merely noting that distribution of an infringing copy is itself infringement. But, right now the law allows for the control of distribution, with a few exceptions. And that's backwards.

While he doesn't get into it, this would actually help fix some other problems with copyright law. There is an ongoing debate, for example, over whether or not "making available" a work is, by itself, "distribution" and thus illegal. One camp argues that since no copies are made, there is no "distribution." The other argues that merely making a work available is the equivalent of putting it on a store shelf and thus is "distribution." But if we got rid of the distribution right for copyright, you'd solve that debate, and make it clear that there's only infringement when a copy is made.

There's an even bigger problem with the distribution right under copyright law, which copyright lawyer Andrew Bridges has brought up numerous times, but which most copyright lawyers like to ignore. Technically, the distribution right under copyright law does not apply to digital files. Yes, the courts tend to ignore this all the time, so you could argue that they've decided that it doesn't matter. But the exact wording of the distribution right under Section 106 is:

to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

The important bit here is "copies or phonorecords." From there, let's jump over to the definitions part of copyright law, found in Section 101, where it defines "copies" as:

“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.

Note, quite clearly (and twice), that the Copyright Act says that copies only refers to material objects. A digital file is not a material object. How about "phonorecords"?

“Phonorecords” are material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “phonorecords” includes the material object in which the sounds are first fixed.

Yeah. Back again with the "material objects." The distribution right -- which is what many people are sued for online (uploading is seen as "distribution") -- only is supposed to apply to the distribution of "material objects" according to the very definitions found in copyright law. This isn't to say that file sharing is legal under copyright law: in many cases, it likely would violate the reproduction right. But the distribution right is problematic in all sorts of ways.

Perhaps it's time to just get rid of it entirely?

Filed Under: copyright, distribution, first sale

Inexplicable: Jeff Price Pushed Out Of TuneCore, Despite Tremendous Success In Helping Artists

from the not-good-news-for-artists dept

We always talk about how various industries are changing such that gatekeepers are history and enablers are the future. One of the most impressive enablers around in the music industry has been TuneCore, a company built up over the last half-decade or so to provide artists with direct access to various digital distribution channels that were previously closed to them. TuneCore, co-founded and run by Jeff Price, had a singular vision of doing everything to make life better for musicians. They didn't take a cut of the royalties -- you just paid a flat-fee to use their service. They had very clear reporting and payments for artists -- basically the exact opposite of how major labels worked. Most recently, they set out to revolutionize the publishing business, and were well on their way towards that goal as well.

And, because of that, TuneCore, in many ways, surprised much of the industry while upending much of the industry. Many of the core functions that artists previously relied on labels for, TuneCore did better, in a more useful way, without asking the artists to hand over all their copyrights and 85% of their revenues. It became such a standard thing that almost every indie musician I spoke to used TuneCore, and many big-name musicians started moving in that direction as well.

The company was founded by Jeff Price, Peter Wells and Gary Burke a little over six years ago, and achieved some impressive things in that time. Jeff, as CEO, was pretty famous for his outspokenness -- and we've quoted him multiple times. He was certainly quick to point out all of the fallacies of the old RIAA way of doing business, which upset some of those legacy players, but it was clear from the beginning that what Jeff Price wanted most was to help artists. He, unlike so many, recognized the challenges and the opportunities musicians faced, and wanted to help get them past the challenges and reach the point of enjoying the opportunities.

I only met Jeff for the first time a few months ago, and saw him one more time after that, but he was one of those people that never seemed to stop focusing on a singular goal: making things better for artists, and helping them embrace what the internet enables. And from everything I've seen and heard, he was amazingly successful in doing so. Multiple artists I've talked to have spoken highly of TuneCore and what it enabled them to do. I didn't always agree with Jeff on everything (though I probably did more often than not), but even when we disagreed, it seemed to be over our interpretations of which way forward would actually be best for the artists themselves.

So I was surprised to find out that Jeff Price (and Peter Wells) have both been pushed out of TuneCore. I've spoken to a number of people associated with the company, and all of them are shocked and dismayed that Jeff and Peter are gone from the company. I've tried, multiple times, to get the main VC backing the company, Gill Cogan from Opus Capital, to comment on the situation, to no avail. But, many, many people stepped up to speak out strongly on Jeff's behalf. You can read Jeff's open letter linked above, in which he talks about all the company accomplished:

Under our tenure, TuneCore took significant market share away from the traditional major labels. As of July, 2012, TuneCore artists represent over 4% of all US gross digital music sales revenue and have sold over 610,000,000 units of music generating over $310,000,000 in gross music sales. More than four songs a second are sold on iTunes somewhere in the world by a TuneCore artist. Through the execution of the vision and the trust of the artist, TuneCore achieved about 40% of the market share of EMI and 25% of the market share of Universal in regards to digital music sales in the United States.

We were also able to attract artists across the spectrum: from emerging artists to the older legends and the new legends. Artists such as Drake, Soulja Boy, Sonic Youth, Nine Inch Nails, Zac Brown Band, Hoodie Allen, Civil Wars, Lecrea, Boyce Avenue, Kelly, Colt Ford, Ed Sheerhan, Alex Day, Aretha Franklin, Jay Z, Girl Talk, Blood On The Dancefloor, Jason Mraz, Nice Peter, Tiesto and hundreds of thousands more used TuneCore to place number one albums and songs on iTunes, Amazon and many other digital stores, breaking the control of the traditional industry while democratizing it.

I spoke to Jeff to get a bit more background. While no one is willing to say why or how Jeff and Peter got pushed out, it seems pretty clear that this was not what Jeff wanted -- and not what many people involved with TuneCore wanted. Jeff highlighted how everything he's done has been about focusing on the artist, and you can tell that he's worried that the company may no longer be able to do so (though, of course, he doesn't say that directly):

We started the company with a mission and philosophy to make the world a better place for artists. I believe the success TuneCore has had under our guidance is based on never losing sight of that mission and philosophy. Stay true to the DNA of the company and no matter how the market changes you can adapt with a rock solid foundation. As the Founder and CEO I tried hard to instill my beliefs and passion into every aspect of the company, to never let the employees or board of directors forget the mission, the "why" of TuneCore's existence. My hope is the philosophies, vision and mission statement that have allowed the company to succeed are so entrenched that it continues on the path created for it. Serve the musician. Thats how you, the artist, the shareholders, the digital music stores and the consumers win.

The challange becomes when a company loses that vision. Neither Peter or I are even remotely in the league of Apple or Steve Jobs, but you look at what happened to Apple when John Sculley came in as CEO. He changed the Apple vision from making "insanely great easy to use products" to one of "making money at any expense". When Jobs came back and reinstituted his vision Apple soared again. Its the vision that drives the success and revenue, not the other way around. We did everything we could to instill the vision as deeply as we could. We just hope it sticks.

I reached out to Peter, as well, who seems equally baffled by the situation, noting that the company had been doing great, hitting all of its goals (and more):

Astonishing success under the original regime, really--that's been TuneCore these last few months. We fulfilled our promise to create a Publishing side, with a new office in Burbank, CA, and it represents another revolution for artists, the next step along the path we started along when the company launched. Back in New York, things have been fantastic, up to and including a launch of the new look of the TuneCore home page, which Gary, Jeff and I helped shape and which I think is superb. This real success makes me all the more puzzled at very recent developments

Peter noted that he was saddened about losing his own job, but that his reaction to Jeff being pushed out was on another level altogether:

"Stunned" doesn't begin to describe it. Okay, so the company asked me to leave--I can accept that, I'm a founder at heart, the company is no longer a startup, perhaps it's time to move on. But Jeff is the heart and soul of TuneCore, and frankly, its brains. No one knows this space like he does, especially when it comes to publishing. I said earlier that TuneCore was having astonishing success--it is, and that's due to a lot of hard work from a lot of brilliant people (whom Jeff found and convinced to come on board). It's also due to Jeff's vision and leadership. Why on earth would Jeff be asked to leave? Why now, in the face of so many successes, and on the cusp of doing for publishing what he'd already proven he could do for distribution? It makes no sense.

I reached out to some others who were intimately involved with TuneCore from the early days onwards, and they too are somewhat shocked at this turn of events. One of the original advisors to the company, George Howard, who is an executive VP at Wolfgang's Vault, told me that Jeff was astoundingly good at accomplishing what he set out to do with TuneCore:

Jeff is one of the few people who has genuinely moved the business forward. So many people talk about what the business could/should/might be, but Jeff actually had a vision and brought it to fruition with his founding and running of TuneCore. That's the key: bringing something to fruition. Jeff actually gets things done - implementing a vision via his role as CEO. In so doing, he, by creating a system that provided access to thousands and thousands of musicians who had - prior to Jeff's implementation of a vision - been denied access by industry gatekeepers, undeniably changed the music business for the better.

Similarly, Dick Huey, a long-time music business insider, who was an early advisor to TuneCore, seemed equally surprised at the removal of Jeff, and reiterated some of the things he'd been able to accomplish in spite of all the odds:

TuneCore was all Jeff. I remember the dinner where he first ran the idea past me, along with the old company name. I thought the idea sounded radical (it was), I thought there was a fair chance it wouldn't work (I was wrong), and I knew I wanted to be involved as an advisor (I am). Jeff didn't doubt the idea from the outset, and since we started talking about this, I'm not sure I've met a more tireless leader who is more singularly focused on executing on his vision. I feel pretty strongly that Jeff came onto this concept in a moment in time, just at the outset of artists starting to realize that digital distribution could be for everyone, not just signed artists. And he executed, and built what I consider to be a successful, remarkable, and growing business. I believe there are few individuals who could have delivered on this business idea the way Jeff has done for TuneCore.

Huey also went to great lengths to highlight the many, many things that Jeff accomplished with TuneCore that most others wouldn't have bothered with, or wouldn't have even thought to bother with. He detailed how he got Apple to allow TuneCore to be a key entry point to the iTunes store for unsigned (and signed) artists, taking control from the gatekeepers. He talked about establishing better standards for reporting and payment. He talked about all of the many artists that TuneCore helped to be able to make a living.

When I asked Huey if he was comfortable with TuneCore without Jeff at the helm, he didn't hold back on his concerns:

I'm extremely concerned about the direction of the company without Jeff at the helm, as a shareholder in TuneCore, especially given the lack of information available about why he is no longer there. It should be clear from my responses to your questions that I consider Jeff Price to be the man who started or drove every major initiative at TuneCore of which I'm aware. I've heard no announcement of a new CEO, and I'm suspect that Jeff could even be properly replaced, given his unusual and unique combination of outspokenness, deep industry knowledge, wholehearted commitment to the company and to its staff. Jeff made you a believer, and even if you didn't believe, detractors largely respected his vision and commitment.

I've been interested in companies that help enable artists for a long time, and I've seen over and over again that these companies almost always succeed on the strength of their leadership -- a leadership that is committed to going to incredible (and seemingly impossible) lengths to actually help content creators, rather than feeding an old industry that looked to feed gatekeepers. I was surprised when I started to hear rumors of Jeff's ouster, and in talking to a bunch of folks, I've yet to find anyone who seems to think any of this makes sense.

I've spoken to some other people as well and may do some followup on this. In Jeff's open letter, he notes that he and Peter "look forward to continuing to change the industry on a global scale" and hints at something new coming soon. Peter, too, seemed eager to get started on something new, so I get the feeling this won't be the last we hear from the two of them, though I do wonder what will become of TuneCore without their leadership.

Filed Under: artists, distribution, jeff price, music, peter wells
Companies: tunecore

You're Only Making Things Worse For Yourself (And Us Too), Media Industries (Part II)

from the double-parking dept

Summary of Part One: Consumers, trained by content providers to think most entertainment can be enjoyed freely, no longer take copyright seriously as a legal or moral imperative. It's like a parking meter that's rarely checked. When we do get a (large) ticket, we're outraged. After all, no one else got one for doing exactly the same thing. Our cognitive dissonance has left copyright a law in name only.

Media industries have made things worse for themselves by training customers to think of ads and other indirect sources of revenue-generation as an inconvenience, a feature of programming best not talked about. Ads are woven into the flow of the programming, and increasingly hidden in product placements and other inline forms of sponsorship. My favorite brand of frozen pizza is now co-marketed with the new "Avengers" movie. The psychology of advertising is subtle and complex—or maybe not.

In either case, the result is that at the most basic level—at the reptilian cortex of the brain—consumers are encouraged to ignore the reality that advertisers pay for or highly subsidize most forms of content. Because the economics of content are kept mysterious, we have no reason to believe that if we enjoy movies, music, books or television shows at the wrong time, or with the wrong people, or without the ads, we're undermining the basic rules of the industry. How can we be expected to understand that doing so is not only dangerous to the continuation of that longstanding model but also a crime, punishable by enormous fines and even possible jail time?

What consumers do see, however, is that as content has been translated, often kicking and screaming, into digital form, the unit cost of production, distribution, and marketing has plummeted. Yet for most media, the price has not decreased proportionally, largely because rightsholders want to protect increasingly uneconomical physical media formats such as hardcover books, newspapers, and movie DVDs.

Worse, even as the unit cost of media declines, the rules against unauthorized copying have become stricter. It's as if there were suddenly millions of new parking spaces available across Manhattan, but parking lots keep charging more than $10 an hour. And all the meters are suspiciously broken.

How did this happen? Since well before the invention of the photocopier, media industries have pursued a consistent if counter-productive legal strategy of responding to disruptive technologies that decrease costs and open new markets by lobbying for extensions to copyright terms, increased penalties, and criminalizing more behaviors.

Their theory—if there is one—is that technologies that make it cheaper to create and distribute content also make it cheaper to violate copyright (see Napster, et. al.). Cheaper production is ignored, while increased potential for violations requires enhanced penalties that can't, in any case, be enforced. It's a lose-lose-lose strategy for producers, creators, and consumers. And it's a loop we've been stuck in for decades.

One result of that fatal loop is that under current law the concept of fair use—long understood as a safety valve to an otherwise economically-dangerous copyright monopoly—exists in name only. And with copyright terms continually and retroactively extended, almost nothing enters the unrestricted "public domain" anymore, even though the continued expansion of the public domain was the whole point of granting the "limited" copyright monopoly in the first place.

Copyright was designed as a low-cost and largely self-enforcing mechanism for achieving two important goals: incentivizing creators to build the intellectual capital of a new nation and making sure that their efforts could be used and built upon as quickly and as freely as possible. Copyright gives authors a monopoly, which necessarily reduces potential social value. (Economists call it "dead weight loss.")

But there's an essential caveat. Once the limited period of the monopoly expires, all rights are unreserved. The public can do as it pleases with the work—copy it, adapt it, reframe it, anthologize it, mock it. (Some amount of mocking is allowed even before the term expires.) As the Constitution puts it, Congress shall have the power—and not the obligation—"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

But copyright law no longer promotes the progress of anything. It just secures more rights. And patent law, in its own state of disarray, is even worse. It's actually counter-productive, as if to make it a crime just to think about parking.

This dangerous imbalance in the system is the result of misguided efforts to preemptively rescue American content industries from wave after wave of disruptive copying technologies, each seen as the certain destroyer of the content enterprise. Jack Valenti's infamous testimony that the VCR was "to the American film producer and the American public as the Boston strangler is to the woman home alone" is still chilling in both its rhetorical excess and its misreading of the future. (And how was the "American public" threatened at all?)

The imbalance of copyright today is the result of Hollywood's irrational fear of the unknown. As Prof. Tom Bell made visually clear with his 2009 "Mickey Mouse Curve," the regular extension of copyright terms and penalties, especially in the last hundred years, has not been based on the reasoned deliberation of Congress so much as the unrelenting lobbying of the Disney Corporation, determined to spend whatever it must to keep every iota of its creative work out of the public domain. Worse, Disney's obsession is about control, not maximizing profits.

As Bell's curve demonstrates, whenever the earliest works of Disney are about to lose copyright protection, Congress steps in to extend it retroactively. This is no coincidence. But it is ironic coming from a company whose oeuvre includes so many films based on content (the Hunchback, Hercules, Mulan, Tarzan) that had only recently entered the public domain. Or maybe not ironic at all.
Source: Tom W. Bell
(It is a persistent myth, by the way, that allowing "Steamboat Willie"—itself a parody of a Buster Keaton film—to enter the public domain would mean the end of protection for Mickey Mouse. While freely copying those early cartoons would no longer violate Disney's rights, all the later works would still enjoy their full run of exclusive rights. And Disney's trademarks in its characters and character designs would greatly limit what others could do with Mickey beyond copying the public domain cartoons themselves. Trademarks are valid so long as consumers continue to associate them with a particular source—potentially forever.)

Irrational policy decisions produce unintended consequences. The successful campaign to continually and dramatically extend copyright is increasingly a pyrrhic victory for the content industry. By removing all of the safety valves against abuse of the "limited" monopoly, copyright, as Supreme Court Justice Breyer has argued in dissent, has effectively become permanent. The law is now rewritten solely to protect the interests of a few large rightsholders.

Yet traditional forms of legal enforcement have become nearly impossible. Consumers use a constant supply of disruptive technologies (the cloud, P2P protocols, encryption) to rebel against a dictatorial copyright regime. And the speed of innovation has long-since outstripped the speed of Congress and the courts. Most consumers now see themselves and each other not as lawbreakers but as freedom fighters. Copyright, in its current mutant form, is now firmly on the wrong side of history.

Next: How to Reset the Balance and Save Copyright from Itself

Filed Under: advertising, distribution, dvd, product placement, public domain

Jack White Releases Single... By Launching 1,000 Balloons With Flexi Discs Attached

from the ah,-the-amazing,-flying-flexidisc dept

The tacocopter may be necessary if you want to take to the local skies to deliver a product to a specific location, but what if you just want to distribute a product semi-randomly? Famed musician Jack White -- who has quite a history of doing cool experiments with new business models that make use of unique scarcities -- has released a new single from a forthcoming album by tying 1,000 flexi-discs with the single on them to 1,000 giant blue balloons, and launching them into the sky. Yes, this was done on April 1st, and the whole thing was done somewhat tongue-in-cheek (it was described as "an experiment exploring nontraditional forms of record distribution and a way to get records in the hands of people who don't visit record shops"), but it's still pretty cool.





Third Man Records, the label White created, admits that "the typical recovery rate on similar balloon launches... is around 10%", making these flexi-discs pretty likely to be extremely rare for those who find them. As the Creators' Freedom Project points out:

It’s super unique, the balloon distributed discs will be a hot item when they’re eventually recovered, and the instructions on how to tell the rest of the world via social media will help to spread the word about the record since the actual release of the album is the next week.

Indeed, the label is already tracking where the balloons are being found and reported.


I know that some of our usual critics will come up with ways to mock this, but it's yet another example of an artist doing something fun and creative that is a unique way to connect with fans.

Filed Under: balloon, distribution, flexi-disc, jack white, single

A Rational Way To Dispose Of Counterfeit Designer Clothes: Donate Them To The Homeless

from the we'd-be-crazy-not-to dept

The narrative around counterfeit goods usually ends with their seizure. We rarely get to hear or see what happens to them afterwards unless some token burning or breaking is laid on for the cameras' benefit. That makes the following story doubly noteworthy: we not only find out where fake designer clothes go after they have been seized in the UK, we discover that they are put to an excellent use:

Instead of handing counterfeit designer clothes to customs or trading standards to be destroyed, they are being donated to a charity for redistribution to the homeless and vulnerable.

That charity is called His Church, and in the last six years it has managed to convince 90% of British Trading Standards Authorities, which have the job of dealing with counterfeit goods, to pass on the clothes for patching – can't leave those labels visible – and then for redistribution. That's good for the homeless people that receive them, and it's good for the British government:

Every year customs and trading standards spend a fortune on storing fake clothes while waiting for a court decision, and then once the items have been proved to be fake the authorities have to fork out further for incineration or landfill costs.

His Church has removed all such costs and pass on the high quality goods to some 250 homeless centres and women's shelters across the country.

This is such an obviously sensible thing to do you have to ask why the same approach isn't more widely adopted. Presumably it's from some residual fear that allowing fake clothes to circulate will "confuse" customers.

But as Techdirt has noted before, it's likely that people know exactly what they are getting when they buy counterfeits, and that they are not confused in the slightest. Moreover, there's no evidence that the sales of genuine designer clothes in the UK have suffered over the last six years as a result of all these fakes being allowed on to the streets: were there any, the scheme would certainly have been halted by now. So is there any good reason why other homeless and vulnerable people around the world shouldn't benefit too?

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: counterfeits, distribution, homeless, uk

Miramax CEO Finally Admits: Control Over Distribution Channel Is A Much Bigger Issue Than 'Piracy'

from the but-of-course dept

As a ton of folks have been submitting, Miramax's CEO, Mike Lang, recently admitted that control over the distribution channel is a much bigger issue than "piracy." Of course, that's what some of us have been arguing for ages. The "fight" over "piracy" has always been a fight about control of the distribution channel.

"Piracy really is not the bigger issue for our company or for our library," Lang said. "It's been a lack of exploitation, just not getting it out there."

Nice to see someone in the industry actually willing to step up and say it. He also notes that he wants his movies to be available in as many places as possible, because actual competition will be better for everyone. Interesting to see him willing to say this out loud. Wonder if he'll get a "talking to" from the MPAA folks about undermining their whole argument by admitting the truth.

Filed Under: distribution, mike lang, piracy
Companies: miramax

Why Are We Letting An Obsolete Gatekeeper Drive The Debate On Anything?

from the simple-questions dept

Rick Falkvinge has a nice column pointing out how disruptive innovation works: obsolete middlemen are innovated away. He uses the example of ice men: the folks who would deliver ice to be used in "ice boxes" prior to electricity and the refrigerator becoming common. But, of course, technology made such people obsolete:

There were many personal tragedies in this era as the icemen lost their breadwinning capacity and needed to retrain to get new jobs in a completely new field. The iceman profession had often been tough to begin with, and seeing your industry disintegrate in real-time didn’t make it any easier.

But here are a few things that didn’t happen as the ice distribution industry became obsolete:

No refrigerator owner was sued for making their own cold and ignoring the existing corporate cold distribution chains.

No laws were proposed that would make electricity companies liable in court if the electricity they provided was used in a way that destroyed icemen’s jobs.

Nobody demanded a monthly refrigerator fee from refrigerator owners that would go to the Icemen’s Union.

No lavishly expensive expert panels were held in total consensus about how necessary icemen were for the entire economy.

Rather, the distribution monopoly became obsolete, was ignored, and the economy as a whole benefited by the resulting decentralization.

As he notes, we're now going through the same sort of disruptive innovation today, with many who slavishly rely on copyright as a business model for content distribution coming to terms with their own obsolescence. Yet, rather than be ignored and go away and let the economy benefit as a whole, they're pulling a different sort of trick. They're falsely convincing politicians, the press and even some of the public that rather than representing obsolete distribution mechanisms, they represent the content itself. It's why you hear the recording industry referred to incorrectly as "the music industry."

But the truth is that the main advantage these particular gatekeepers had was in distribution. They controlled the gates to distribution, and knew they could charge huge rents to get through. Copyright was merely the mechanism that built the gates, but the fact that there was a gate at all was a function of technology. Now technology has done away with that, and opened up the playing field wide. So wide that gates are meaningless, and the real focus needs to be on enabling content providers to do amazing things to stand out in the wide open field. But that's got nothing to do with copyright.

Unfortunately, the industry is pretending that it has everything to do with that. What they're really looking for are laws not to build back up the gate of copyright -- but to take us back into history, whereby the walls of limitations are back up and people have to go through the gates. That era is over. But what's truly amazing is that we still think the gatekeepers matter here. They don't. There was no refrigerator fee and we shouldn't have to set up special systems to re-animate the dead corpse of an obsolete distribution model that the recording industry was built around.

Filed Under: disruption, distribution, innovation