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Copyright Law Paper

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Sarah Burton

on 27 April 2010

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Transcript of Copyright Law Paper

If You Can’t Beat Them, Join Them:
Copyright and Free Music in the Digital Age PICK ONE $ 2 $ 1 $ 1 FREE PICK ONE Free is better because... Free product is all benefit
No time wasted doing cost analysis
Free has power Where is the economic incentive in free? Free means greater access but access must be in equilibrium with creation assuming economic incentives are necessary for creation, FREE first, let's challenge those assumptions

(2) Incentive to create does not require selling music recordings. giving away music for free can be a good marketing strategy and not hurt creation

(4) Free Access is good for democracy
and creation The monopoly of copyright and economics of cross-subsidies
Cross-subsidies are "an internal flow of cash implicit in the rate structure from one service (paying 'too much') to another (paying 'too little')"
Example: Prince gives out CDs for free in Daily Mail (paying 'too little'). The free CDs helped boost record-breaking concert sales (paying 'too much'). Concert sales "subsidized" CD sales.
But cross-subsidies are ineffiecient in regular markets. However, copyright is essentially giving monopoly power to intellectual property owners (music). Cross-subsidies regularly appear in markets with monopolies. price discrimination
if its all free, you just judge quality Copyright gives intellectual property owners a legal monopoly over their work
Cross-subsidies often appear "under conditions of regulation, in which a government authority establishes prices and restricts entry"
Government imposes copyright so that there may not be any competition from "substitute" works
Monopolies allow for cross-subsidies, as in the CD/concert sales example.
Type of beneficial price discrimination- those with more $$ can pay for concerts, while everyone, even the poor, now have access to sound recordings. Monopoly defeating mechanisms Fair use
Public Domain
Idea/expression dichotomy
Exhaustion Doctrine Many of these mechanisms have been weakened by new copyright laws reacting to digital age
File-sharing has blurred private/public and crippled the first-sale/exhaustion doctrine
DCMA has weakened fair use (only technologically savvy can circumvent copy control devices, limiting ability to use work for fair use purposes) Copyright law is out of equilibrium The monopoly of copyright and economics of cross-subsidies Instead of embracing file sharing under first sale doctrine, rejoicing at the ease at which people can digitally copy for fair uses, and taking advantage of monopoly power to employ a "free" marketing strategy using cross-subsidies,
the music industry has done the opposite. File-sharing is everywhere
P2P made up 45% of all intenet traffic in 2008
Yet from 2003-2008, the RIAA sued over 35,000 people for copyright infringement
Lawsuits were costly and a public relations disaster
"If the RIAA think that these lawsuits will curb music piracy, they had better think again." Research by Harrison Green
Survey administered from 2004 to 2005
P2P downloads per student did not change
In other words, the lawsuits did not deter drm, the other weapon the rootkit fiasco In 2005, sony bmg released 4.7 million cds containing rootkits
rootkits are an invasive type of DRM meant to stop copying of files
instead, the rootkit opened the computer up to viruses total costs for sony for cd recalls and ensuing litigation: 50 million in other words,
sony was more concerned with "protecting" intellectual property than catering to consumers and making a profit. People want free. What benefit is there for musicians? Tweedy: internet is like radio.
Stopping file sharing would damage culture. Artists who have done "Free"
Radiohead's In Rainbows - You choose what you pay.
Fans wishing to pay effectively subsidized those wishing to download for free
$2.7 million in profits
"Free" digital album helped concert sales
Later-released CD version of album still hit No. 1 on Billboard charts Types of Cross-subsidies
Allowing hardcore fans to subsidize casual listeners But... does free dissemination of music hurt creation?
No. File-sharing did not hurt supply or quality. (Oberholzer-Gee)
What about start-up bands?
Their probability of success has always been low
At least now they can easily disseminate music without help of a label
If free dissemination of music does not hurt or help creativity, does free really matter? Free matters for democracy.
study suggests file sharing has added social welfare
people create because they find meaning in it
amateur culture is rising - creativity is democratizing
free music means there is a process of discovery, we can find the best music regardless of price
copyright is starting to encroach on the democratizing aspects of free and digital age
copyright can now limit/regulate amateur culture
copyright can now restrict access through DCM
BUT if...
Music industry can help democratizing features of digital revolution by encouraging free
free professional music will be better able to compete with free amateur music
musicians can market free of labels, taking power away from big music companies
Musicians can market music for free
using cross subsidies, the economic incentive to create will remain
free will mean greater access
free will be better for democracy (1) the digital revolution (and law's reaction to it) has taken copyright out of equilibrium (3) the music industry has thus far only attempted to keep copyright out of balance, taking away access from public
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