Modern Day Protectionism
How copyright has turned the record labels, software writers and film studios against their own customers

by Vedad Krehic
by Vedad Krehic

The consumer entertainment industry lobbyists lie. They lie over, and over, and over. They lie to the media, they lie to the politicians, they lie to you. The lies in question are rarely looked upon critically by the media or the politicians, only by grassroots opposition. The main lies involved are all variations on the same theme; copying equals theft. That is to say, if you copy a piece of data – be it a software program, a song, a movie, a book, that makes you a thief. You're depriving the producer of that work of money which they supposedly have a right to.

I don't know, maybe I wasn't "educated" well enough in government schools, but no matter how I twist and turn my logic, I still fail to see how this even remotely makes sense. If I walk into a store and leave with a jacket for which I have not paid then I have deprived the store's owner of his or her justly acquired, tangible property. They have one less jacket. They are directly harmed by my action.

If a friend, however, lends me a music CD and if I then make a copy, so that I can listen to the music without having to borrow the disc again in the future, nobody is harmed. It is possible that I could, for example, have made an agreement or contract with him when I borrowed the disc stating that I cannot copy it. If I were to do it anyway, I'd be in violation of a private agreement. If not, who is harmed by my act of duplication? I used my own tangible property (CD drive, computer, and hard drive or blank CD) to fashion a duplicate of the data on the CD. The original CD is still my friend's property. I return it to him, and while he is no better or worse off than he was before, I am now better off. The imprint of the music on my tangible property makes that property marginally worth more to me, as I can enjoy its use to a greater extent than previously.

Was anyone harmed at any point here?

Yes – if you choose to believe the consumer entertainment industry. They claim there was a third party here that was being harmed. Can you see the third party? There was me, and there was my friend. There was my property and that of my friend. I don't see the third party anywhere in that process. I suppose my friend could have been in a contract with the person or organization he purchased the CD from not to copy it, but I wouldn't have been bound by that contract. Either way, I did nothing wrong.

So who is this mysterious third party? At which point does he appear, and how is he harmed?

The third party is the copyright holder. Wait, the what-holder? What's a copyright holder? Where does he come into play?

Well, let me explain. You see, there's this notion advocated by some – primarily media lobbyists, objectivists and government officials – of an intellectual property (IP). What is an intellectual property, you may ask? Well, the gist of it is that if you do anything that requires a bit of work with the big, roundish object mounted on top of your neck, you have a time-limited monopoly on that action if you're the first person to do it.

Not understandable? Let me enlighten you, dear reader, with some examples.

Let's say you are the first to invent a new type of screwdriver. According to the theory of IP, if you register it with a patent office, for all intents and purposes you now own that idea. You own it for a limited amount of time (20 years), after which the ownership magically vanishes. How can you own the idea, you might ask? Well, according to IP, that means that nobody else can legally manufacture the same type of screwdriver for the duration of the ownership. Or, to put it in clearer terms, nobody has a right to compete with you. You have a monopoly. The same applies for all other sub-categories of IP, including copyright, trademarks, trade secrets, and so on; but this article is intended to focus mainly on copyright. For an extended discourse and refutation of the other ones, as well as a more in-depth take on copyright, I recommend to the reader Stephan Kinsella's brilliant essay Against Intellectual Property.

Copyright follows the same logic as the screwdriver inventor. It posits that the act of making a "creative" work – such as writing a book, composing a song, painting a picture, taking a photo and so on – creates a different type of property on top of the tangible property that already exists in that item. Follow me, dear readers, if you can, through the logic. Let's use a painting as an example. The painting consists of a canvas and some paint. That's the tangible property. That's what the painting's owner owns. But, according to the theory of IP, there is (assuming the painting hasn't been placed into the public domain or had its copyright expire) another owner, as well. The painter, or whomever he might have signed over the copyright to the painting.

You see, the owner of the painting can do anything he wants with it (within the bounds of the non-aggression axiom). He can throw rancid tomatoes at it, he can hang it upside down, he can embed a block of wood straight through the middle of it. It's his or her right as the owner. He may not, however, legally duplicate the pattern of paint on the canvas. There is an existing moral prohibition against duplicating it and then selling those duplicates as the original – it's called fraud. There is no such moral prohibition against merely duplicating it, or, for that matter, duplicating it with the intention of selling the duplicates (assuming one doesn't claim they are original). The reason he may not duplicate it is that the "creator," the copyright holder, doesn't allow it. Granted, there are some exceptions, such Creative Commons or other copyleft licenses which explicitly grant the right to copy within the framework of copyright law. Nevertheless, unless otherwise stated by the copyright holder, the legal assumption is that unauthorized duplication is not permitted.

Can anyone please explain to me how someone can be a just owner of something, yet not be allowed to exercise his or her ownership rights over it? He can throw rancid tomatoes at the painting, but not duplicate the pattern that makes the painting a painting, rather than just canvas and paint? Or, to use a different type of copyrightable pattern, how can someone own their own brain yet not own the part of it containing a song they memorized?

The logical conclusion is that the natural right of property and the idea of copyright, and of intellectual property in general, are fundamentally incompatible and conflict sharply. You cannot own something and have someone else dictate to you what you can and cannot do with it, without that being an element voluntarily arrived at through contract. In absence of a contract, the dictating party is initiating aggression against the just owner of an item. Intellectual property is an assault on tangible property.

What we're looking at is protectionism in disguise – government giving preferential treatment to one specific industry at the expense of the rest of society. Now, let's go back to the copyright holder, the mysterious third party who was hurt by me copying the CD's contents. What I've done by copying my friend's CD is violate a government-imposed monopoly on copying the CD's contents, the monopoly belonging to the copyright holder. Hence, according to the idea of intellectual property, I'm a thief. I've had the audacity to compete with the beneficiary of the monopoly. That is the sense in which I've supposedly hurt a third party.

Let's take a quick look at the current "copyright wars" being waged, in light of the above description of copyright. The music industry in particular and the broader copyright-dependent entertainment industries in general are in decline. Their profit margins are going down, and they don't like it. The consumers aren't as pleased with their products as they once were. The seemingly rational course of action for the industry is to look into why consumers aren't pleased with their products, see what they can do better, innovate, and drop their prices to increase demand. What do the industries (by which I mean the members of the IFPI and MPA) do, however?

None of the above.

In fact, not only are they unwilling to innovate, they have gone to the extreme of starting to sue their own potential and real customers – with the number of lawsuits now over being over 20,000. I'm not a business major, but I'm pretty damn sure that's not a good way to gain favour with your customers. In their view, every copy made is a lost sale; each person who makes a copy – and a download from a file-sharing network is a copy – must equal a lost sale. Because I'm sure you've all gone and bought every single song or movie you've heard or seen at a friend's place, on the radio, on TV, and so on. Let's cut the crap, okay?

There are many theories on why the entertainment industries' profits are going down the drain. My own personal favourites are as follows:

1. Lack of innovation and fear of technology. The industries have always been afraid of new technology. The radio, the player-piano, the phonograph, the VCR, cassette tapes etc. were seen as threats by the industry, which responded by attempting to restrict sales and ownership. They're notoriously skeptical towards new technology, and will bend over backwards to prevent it from becoming commonplace. They're unwilling to experiment and find new ways to fulfill customer demand. Apple practically had to force iTunes onto the market, the record labels weren't willing to go along with it at first. They weren't willing to only sell individual songs, they wanted whole albums sold.

One glaring example of the entertainment industries' fear of technology was ex-MPAA president Jack Valenti's 1982 statement to a U.S. Congressional panel:

"I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."

As we all know, VCRs went on to become one of the biggest profit sources for Hollywood in history, and now we have DVDs and Blu-Ray discs filling the VCR's role.

2. Appealing to the lowest common denominator. This applies both to movies and music, but in my opinion, especially music. With their tight working relationship with radio and MTV-like TV channels, the IFPI members of the music industry have, until the last decade, had a virtual choke hold on customers. The radio and TV was the way new music was promoted and exposed to the customer. This is why a good portion of the popular music available today (which, of course, is a subjective opinion – but one many people would echo) is of dubious quality. Need I mention anything more than Britney Spears? The control they once had is now eroding. This is, I believe, one of the core reasons behind their stubborn unwillingness to embrace new technology, and especially the Internet: they give consumers more choice.

Movies and news media, of course, aren't exempt. Every year, Hollywood cranks out hundreds of movies, on which only a handful are truly worth spending one's finite time. Who truly needs to see movies like Brüno? I mean, okay, it's mildly humorous. But it's far from intelligent.

Here is an article by Michael Crichton discussing the quality of the media, with emphasis on news media in particular. While that isn't directly what this article is discussing, its observations can be applied to that of the entertainment media as well.

3. Treating the customer like a criminal. You walk into a cinema, buy a ticket, sit down and wait for the movie to start. Then you see this.

Doesn't give you the impression that they like or trust their customers a whole lot, does it?

But that's just the beginning of it. The entertainment industries lobby politicians to strengthen and lengthen and broaden the scope of copyright laws. When last I checked, copyright in the U.S. lasts for life + 70 years. Who can claim that a musician should still have a monopoly on his or her works 70 years after they die?

Furthermore, they lobby for laws like the DMCA (Digital Millennium Copyright Act), which, among other things, further erodes property rights in that it makes reverse engineering DRM systems illegal. What's DRM, you ask? DRM stands for Digital Rights Management. Restrictions might be a more apt term than rights. DRM is, in short, copy protection technology. It's there on your DVDs, your Blu-Ray discs, your Audible audiobooks, and unfortunately many other places also. Sure, one could have DRM without copyright, but it wouldn't make much sense to do so. DRM makes it difficult, but not impossible, to make copies of the contents of a medium such as a DVD. It's a failed attempt by the copyright industries to use technology to prevent the use of other technology.

The results of using DRM have been mainly preventing non-tech-savvy users from making backups of their own discs (as tech-savvy users can figure out ways to copy them anyway) and to introduce unnecessary inconvenience to the customer. Here are a few examples.

4. The entertainment industries' crusade against file sharing. A truly stillborn, yet relentlessly continued policy. This harks back to #1 & #3, but deserves a mention of its own. File sharing, which is to say, people sharing media content in the form of digital files such as MP3s, has had a history dating back to the beginning of the digital computer age, but in its current, Internet based incarnation dates back only a decade. It started with Shawn Fanning releasing Napster in 1999. There were a few file-sharing networks prior to Napster, such as HotLine and Audiogalaxy, but Napster is the first one that got real traction. Millions of users copying music files from each other via the Internet. The music industry freaked.

They had Napster shut down. Due to its centralized nature, it was a simple case of shutting down the central coordinating server. Since then, file sharing has been a whack-a-mole game with the entertainment industries' lawyers and paid politicians constantly trying to shut down various file-sharing networks, and new ones – more decentralized, anonymized and secure – popping up to fill their place. And with every blow, they make file sharing an even stronger movement. This isn't just me being dramatic, it's a simple fact. They give it publicity. For example, ThePirateBay, a Swedish BitTorrent (a popular file-sharing technology) tracker and search engine, was attempted to be shut down multiple times by various governments, as well as many national government attempting to ban Internet providers in their respective countries from allowing their users to access the site. Every single attempt has been met with ridicule, and ThePirateBay's user base grew exponentially as a result of the publicity. The previous owners of ThePirateBay are now on trial for promoting copyright infringement. More on ThePirateBay's legal saga.

All of these elements combine to form a highly unfavourable impression of the copyright industry in consumers' eyes. Technology is making traditional entertainment industry business models obsolete. Instead of innovating, the industries are using the hammer of government to force their customers to comply with 1970s business models – and now those customers are rebelling. As a result, the measures applied by governments to coerce them just keep getting more and more draconian. The ACTA, or Anti-Counterfeiting Trade Agreement, an international copyright treaty which is being negotiated in secrecy, is just the latest in a series of totalitarian treaties promoted by the copyright-dependent entertainment industries.

That treaty, if passed, would mark the death of the Internet as we know it; pretty much every single website and service with user-uploaded content would be forced out of business by the sheer cost of compliance. Bye-bye YouTube, Flickr, Google Book Search, digg, Wikipedia, etc.

We can't let this insanity go on any longer – eliminate imaginary property!

Thanks for editorial help from John T.

November 9, 2009

Vedad Krehic [send him mail] is a student studying digital media production in Norway.

This article is under the Creative Commons Attribution 3.0 License. Stephan Kinsella explains why.