Early in my Senate tenure, I met with recording industry representatives to discuss how the Internet was fundamentally changing their business. I argued that it provided an extraordinary opportunity to reinvent the music business by creating new mechanisms for distribution, branding, and monetization. But my advice didn’t get very far. At that moment, their only preoccupation was with illegal downloading. Fresh off a court victory over Napster, they felt sure they held a winning hand.
Over the next five years the recording industry filed 35,000 cases against consumers for violating copyright by illegally downloading music. Industry representatives claimed that this “education campaign” was successful, but the resulting PR was ugly. The dragnet of court filings swept up grandmothers, 12-year-olds, and the deceased, while the growth of illegal file sharing continued unabated.
None of this is to condone illegal downloading. But unfortunately, the combination of digital storage and Internet connectivity makes the unlicensed copying and distribution of music a fact of modern life. The question for music executives was obvious: How could they best deploy resources to create new business opportunities in the digital age? They chose a foolish and expensive path. By pursuing the fantasy of a legal victory over all copyright infringement, they ceded the field of digital innovation to firms like Apple, YouTube, Pandora, and Spotify. By 2008, the industry had enough, conceding publicly that it would no longer aggressively sue students.
Yet even now, not everyone in the business has learned the same lesson. Instead of targeting teenagers, a distribution company called Liberation Music recently decided to pick a fight with Lawrence Lessig, a Harvard professor who has made his name pushing the envelope of copyright law. Good luck with that.
I first met Lessig around the same time I was dispensing unwanted advice to the music industry. We disagree on a number of issues, but he is smart and knows copyright law extremely well. When Liberation Music threatened Lessig, he did what any self-respecting lawyer would do: He sued back.
The topic of their dispute appears trivial at first glance. Lessig posted a lecture on YouTube that included several videos backed by “Lisztomania” — a song performed by the band Phoenix. Ironically, Lessig was discussing how the Internet changes the way people create and communicate, and by extension, the way ideas become popular, branded, and monetized.
This made no difference to the corporate brass at Liberation, whose actions demonstrate a lack of awareness of fair use, the legal concept on which Lessig’s countersuit rests, and of the economic value that viral videos create for musicians.
The fair-use doctrine explicitly protects educational and nonprofit uses of copyrighted material. Lessig argued that excessive copyright enforcement restricts his right to free expression. Since his video was an academic discussion of Internet culture, Liberation may have overplayed its hand — a point they apparently conceded, since the offending video is currently available on YouTube.
Equally troubling, however, is the signal that Liberation has sent to fans, consumers, and innovators across the Web: Don’t use our bands’ music in your homemade videos, tributes, and mashups. Never mind that the viral — and completely unauthorized — “Lisztomania” videos dramatically enhanced the recognition and marketability of the band itself.
Digital technology may make it tougher to protect copyrighted works in the absolute sense, but it also can expose that work to a wider audience than most musicians could have dreamed just 30 years ago. ContentID, technology developed by YouTube, now allows copyright holders to identify their works on the Web, and earn revenue from ads placed alongside the videos. That system put $2 million in Psy’s pocket for the endless stream of horrendous “Gangnam Style” videos that spread like a plague last year. Ultimately, it allows artists to establish successful business models from activity that was once considered copyright infringement.
Today, performers are separated from fans by just a mouse click, and the resulting downloads are easier to audit than the shady music-industry accounting of yesteryear. The new business models are far from perfect, but they’re improving, and they’re putting more power into the hands of creators.
The only losers are the dinosaurs — high-cost music distributors that used to control everything from promotional dollars to the timing of new releases. Although Apple and YouTube are simply new middlemen, they’re also driving the innovation. That’s something record companies should have done themselves. Unfortunately, they were busy monitoring your grandparents for illegal downloads. Some still are.