(note: Jesse Brown is host to the CBC's Search Engine radio broad/podcast. In recent weeks several items have referred to the future of the music industry. The November 30th show addresses the issue of a forthcoming Canadian law on copyright.)
Dear Jesse
Your show is excellent and influential. Your interest in what will happen to the music industry might end-up having a significant influence on the outcome of the debate which is about to formally open (on how to regulate copyright in this country).
1) Technology has profoundly changed the (set of possible) rules of the game. Prior to mp3 and the Internet, music was a private good. This is a technical term economists use to describe most of the things we produce and consume. A chair is a private good. The key ideas are that once a manufacturer has sold me the chair, he no longer has it; property law is such that I am allowed to restrict the usage of my chair as I see fit; legislative actions are needed because you and I cannot share a chair. If I sit on it, you cannot. In technical terms, we say that consumers are rivals when it comes to private goods. We also say that there are exclusion mechanisms (property rights). Chairs, cars, underwears.... you have yours, I have mine. Not easy or even desirable to share them. So we have exclusive rights and several industries.
Prior to mp3 and the Internet, music is a private good. If I buy a CD, I have the CD, you do not. I can listen to it, you cannot. Consumers are rivals when it comes to CDs. So an industry is born.
After mp3 and the Internet, music becomes a public good. I can share my mp3 with others and still listen to my mp3. No rivalry anymore. The problem is that when there is no rivalry nor exclusive right, the industrial logic breaks down. This is the problem of public goods (such as the sea, the air, parks and so on). No one has an (individual) economic incentive to take care of public goods so society has to intervene and regulate.
Two weeks ago you asked about P2P and the industry. Well, it depends what we mean by industry. The music marketplace is made of lots of people: composers, performers, engineers, distributors, listeners, media reporting what happens and so on. What the legislator must do is to consider the sum of all interests. The problem is that the debate is distorted because one group (let's call them the industry) is challenged by technological changes and fights for its survival. This group's interests are arguably overly visible. Notice how the Reuter's story you reproduce states that the recording industry wants tougher protection to protect artists, while the artists' association says "not so." The CRIA ("our" RIAA) represents the vested interests of the recording industry. We must respect their right to defend vigorously their interests, but we should understand that the RIAA asks to increase the rights of the recording industry, not those of the artists.
Copyright is not about protecting the authors rights. (if it were, these rights would be infinite). Just like patents, just like any rights, the legislated rights try to strike an appropriate balance across conflicting interests.
Okay -- so what is the deal? The deal is that without legislation consumers might lose. The industry could vanish if there were no ways to make a reasonable profit and the quality of what is available could diminish. Nothing is clear at this stage of the game as the convenience of legal download sites might be leveraged. Or advertising to support music (or movies or books). Or the sale of collateral goods. Or something else.
To summarize: for private goods (chairs, cars and underwears), we worrry about things such as safety but generally leave the market to itself. For public goods (the environment, digital goods) society must take a more proactive stance.
Now. What kind of legislation would be appropriate? Public funding? Or privatizing a public good (i.e. imposing artificial restrictions to create a private market for what is in fact a public good). I'd say that the latter is more promising as a publicly funded scheme would probably end-up being more unfair and inefficient than a market regulated scheme.
What are the appropriate rights? I wish I would know. But there are at least two things I think I know. The essential idea is that it would be idiot to forgo the benefits of digital technologies in an attempt to salvage the recording industry (not for the benefit of the industry itself but for the benefit of the society as a whole, as we have not outlawed electric refrigerators to salvage the icebox manufacturers)
2) Do not restrict the domain of fair use. I recently became worried as I read accounts on a trend towards restricting the right to make copies for personal uses. This is bad. The intuition is that if I acquire digital work, I want to know that I can put it on any machine I want. To make backups, to listen when I walk, in my home. I want to be able to string bits into longer pieces, to split long pieces into smaller bits, to mix and match. (For instance, I want to legally rip my DVDs to be able to tweak how and when the subtitles are displayed). I certainly do not want to be locked into what the supplier of the work wants me to do with it. This is obviously restricting my freedom. More importantly is stifles innovation.
3) Be maximally careful in defining what is a circumvention technology. These restrictions are what matters the most. Making copies of CDs/DVDs/pure-digital-media requires tools. If the tools are illegal, fair use becomes meaningless. What I am saying here is that it is not enough for our policymakers to say that you (still) have the right to make copies and edit digital material for personal use as you wish. They must also provide a safe environment to ensure that tools are available and that their creators will not be forced out of business by litigation.
So far, I have not read first hand accounts that those rights (fair use and innovative technologies) are under fire in Canada. I have read that P2P is under fire. Frankly, I think that a reasonable argument can be made that unauthorized P2P should be discouraged. Yet, another equally reasonnable argument can be made that unauthorizing P2P should be discouraged :) The evidence, I would suggest, is that the recording industry is learning that the latter case is stronger. Marketing against consumers' wants is an uphill battle.
I will follow your show so I can better understand our government's intentions. I hope that our policies will strike a better balance than what we find in the US DMCA.
I hope you can make a difference
Stephane
