From piracy to “The Producers?”

Lilian EdwardsProfessor of E-Governance

University of Strathclyde, GlasgowDeputy-Director CREATe

CambridgeApril 2015

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CREATe’s work on music (create.ac.uk)

• Copyright law eg exceptions, fair dealing, transformative use; term; moral rights

• Socio-legal or socio-cultural studies around musicians eg rappers, jazz musicians, amateurs

• Role of collecting societies• Behavioural economic/psychology work on why people

fileshare or act unlawfully (Watson, Zizzo and Fleming)• Business models (not especially music)• Quantitative analyses (ditto)• Enforcement of copyright• Role of intermediaries as tools for policy making online

(copyright, porn, hate speech, libel etc)

Law vs piracy - the P2P wars• Napster, first centralised P2P client, 1999; Grokster, decentralised P2P, 2001• Suing intermediary chokepoints rather than millions of individual downloaders

obviously attractive• Question of “secondary liability” for copyright infringement – authorisation,

vicarious liability, profit from, etc – both (eventually) lost• Did piracy then end? No.• Torrent sites continue to disregard law, enabled by extraterritoriality, ease of

movement offshore, “whack a mole”• So eg Pirate Bay (torrent site) lost in Swedish courts, 2009, but has continued to

function mostly by moves to other jurisdns, global proxies, distributed cloud storage (drone servers in space? Undersea subs on high seas?)

• What next? Go back to suing users? But - Unpopular, scattershot, costly, often seen as tantamount to blackmail (UK Goldeneye v Telefonica case), penal damages not allowed as in US.

• Instead, the rise of graduated response laws• Note lobbying based on extremely contested or no or partial evidence

“Graduated response”• Seeking ISP co-operation (by legislation, by court order, by voluntary

co-operation) in some or all of–– Identifying users from IP addresses harvested by rightsholders– Passing on allegations of infringement (warnings, strikes) to

identified filesharers (“notice and notice”)– Imposing sanctions on identified filesharers, usually on some

threshold , eg, “three strikes” (France) “six strikes” (USA), 3 or none (S Korea)

– Sanctions can include traffic slowing, restricted access to certain sites, monitoring (DPI), disconnection/suspension ; fines

• Imposed by law, France (HADOPI), UK (Digital Economy Act) , NZ, S Korea, Taiwan; voluntary schemes Ireland, US (“six strikes”); Oz?

“Graduated response” – pros and cons• Speedy and cheap for © industries compared to

suing (some) users in court - and better PR?• IFPI 2007 “disconnection should become the

parking fine or speeding ticket of ISP networks”• Deterrent, as more chance of “being caught”

and educational, as user typically gets several warnings before sanction

• BUT : (arguably)did not work (UK, France) – why?

The fall of graduated response- 1• Moral foundations shakey – why should ISPs act as copyright

cops? Complicity of ISPs in pirate profits always shakey • Adverse implications for society: Human rights eg expression,

privacy, due process, digital inclusion? Effect on public sector bodies eg libraries, universities?

• Adverse implications for economy & innovation: Newer intermediaries may suffer uncertainty about potential liability

• Even more unpopular than volume litigation – part of the global reaction against PIPA, SOPA, TTIP – Anonymous group – Creative Commons etc..

• Doesn’t work: easily avoided (eg proxy servers) plus much evidence biggest downloaders also biggest spenders. No clear evidence of success in improving sales, plus muddied by replacement of sales by streaming.

The fall of graduated response - 2: Costs too much

France: Lescure Report 201318m infringement reports Reported cost of 12 million Euros – all paid by French govt in return for 4 trials and one 15 day suspensionFrench culture minister Aurélie Filippetti: “unwieldy, uneconomic and ultimately ineffective” Similar issues in UK – where costs not paid by govt but to be shared between rtsholders and ISPs 75: 25 (after litigation)

More fun with laws and code• Voluntary agreements , see Us, Ireland, replaced DEA stautory graduated

response scheme in UK, “notice and notice”, VCAP, starting 2015?– No sanctions – will this last?

• Website blocking – Popular in UK since Newzbin2 [2011] EWHC 2714 (Ch) using CDPA s 97A, orders since

vs Pirate Bay et al– BPI report 70% reduction in traffic to 25 blocked sites – But effect on sales??– Still easy to avoid (and blocking easily misused)

• Non judicial (& non transparent) measures• Tampering with search engine results eg depreciating torrent site returns

– What of search neutrality? Algorithmic transparency? Redress if wrongly obscured?• And “follow the money” – stopping payments made by advertisers via Visa,

Mastercard et al• Are these measures needed given music revenues now rising, in UK and globally

(IFPI, 0.8% growth in 2013; BPI,1.9% rise for UK, 2013) – but mainly due to legal streaming?

Another approach – getting paid for things other than copies

• Live music – overtook recording revenues since 2009 (UK), $1.3bn vs 1bn for recorded music 2013 (BPI, 2014)

• Merchandise, teeshirts etc• Advertising revenue from

“free” ad-supported services services – eg from YouTube, Vevo, grew by 31% in 2013 (BPI, 2014)

• Repurposing music for ads, soundtracks etc

• Patronage? Kickstarter – will this help all artists or only the media-savvy, trendy and Twitterati supported?

Legal streaming as the cavalry?• October 2012 – IViR study for Netherlands 2012 - downloading

illegally 3rd for acquisition of content, after buying physical copies and legal digital acquisition – mostly streaming for free

• Not apparently connected to sanctions on filesharing –cf Pirate Bay users reported no difficulty finding other illegal routes when it was blocked - but because legal alternatives available

• “Alternate business models” – lawful online streaming services- finally coming of age – eg YouTube, Spotify, Pandora, last.fm, Tidal

• Spotify (also Poort) claim access to legal streaming in NL has reduced piracy by c 10% cf Italy, rates twice as high, poorer access to legal streaming. Artist “holdouts” also suffered more from piracy eg Rihanna, Swift.. (Red : for every sale, one illegal download)

• Many issues for users (lack of complete backlists, diversity); publishers (cannibalises own for-sale product, associated ads, brand); artists (how much do they get?, the death of the album)

So is the world safe for young musicians now?

• Do online streaming services simply shift problem of getting paid in a digital world from piracy paying nothing, to free/freemium streaming services paying v little?

• Is streaming more like radio or buying copies? What is a fair price? Is permanent ownership now overvalued in a mobile+cloud world

• Should artists drive own distribution rather than go through 2 layers of intermediaries? -> Beyonce, Swift, JayZee etc launch of Tidal, 2015

• NY Times “Is Spotify the music industry’s friend or its foe?” Nov 2014 • Spotify pays 70% of its revenue to labels but little transparency beyond

that – c 1 download pays same as 150 streams?• “Here’s the simple fact that no one wants to talk about. Spotify says it

pays out seventy per cent of its revenues to rights holders. Well, that’s very nice, that’s lovely. But if I’m making a shoe, and it costs me a hundred dollars to make it, and the retailer is selling that shoe for ten dollars, then I don’t care if he gives me seventy per cent, I don’t care if he gives me one hundred per cent—I’m going out of business. Dead is dead.”

Future problems – the algorithmic creation of music?

• Imagine all music in future consumed via legal streaming services (Spotify soon to be rivalled for streaming by Apple, YouTube (Music key), Amazon, Google etc)

• Complete knowledge of audience consumption – duration, frequency, mood, stops etc

• Netflix model – creation of new TV done algorithmically using big data collected from streaming AV content - > ? Hits like House of Cards, Orange is the New Black.

• For music? Software already algorithmically creating novels, newspaper articles. Is music the work of a creative spark – or can it be automatically produced?

• The new Producers?? Back to the bad old days of SAW? Or are we there anyway? Spotify playlists already curated by AI to fit mood.

• “Music’s always been produced to a formula.” Ghetta, Rudimental.

https://youtu.be/PGNiXGX2nLU?list=RDPGNiXGX2nLU

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