Is there some learning going on?

By Scott Bradner
Network World, 07/19/99

They fight technology each time something new shows up. When they lose, as they have so far, it turns out they actually win. But they still fight the next time.

The "they" I speak of are copyright holders - in particular, those in the entertainment industry. They fought audiotape, VCRs and digital audio tape (DAT), and now are fighting MP3 music technology and the Internet. Each time the copyright holders have lost all or most of their arguments when they have gone to court.

In one case, regarding DAT recorders, the copyright holders went to Congress to get what they could not get in court. Much of the ugly history can be found at www.hrrc.org/history.html. Each time they have fought, the principal effect has turned out to be a delay in the widespread availability of some new technology.

Considering the clarity of the Supreme Court decision in a separate VCR case, it is not hard to see why the copyright people went to Congress instead of depending on the courts: "The sale of copying equipment ... does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes or, indeed, is merely capable of substantial noninfringing uses." Yet,
last year copyright holders did the same thing again and went to court in an attempt to get a portable MP3 player banned from sale in the U.S. Copyright holders again lost in court, although they could still appeal to the Supreme Court.

What's wrong with this picture? Every time the entertainment industry has lost its argument and the new technology has become widely available, the industry has made a pile of money. The best example is VCRs. The movie industry now makes almost as much money off video sales as it does from first-run theater tickets. VCRs have provided a way for the movie people to sell to couch potatoes. One area in which this has not happened is with DAT; the legal delay seems to have killed the technology.

There may be a hint that learning is going on in the copyright world. The Recording Industry Association of America (www.riaa.org/) is working on a plan that will permit the sale of MP3 devices (which the courts might force anyway) in exchange for an agreement by equipment vendors to also support some yet-to-be-finalized secure digital audio technology in the future.

But what I don't see is real thinking. Why don't copyright owners determine new ways to do business in which consumer honesty is not penalized as much as it is with CDs - in which the sale price is 10 to 15 times the manufacturing cost (and you know the artists are not getting all the difference). If I could legally download a single song over the 'Net for 50 cents, I'd do that in a heartbeat rather than go through the pain of copying a friend's CD or using an illegal download site that might keep a log of visitors.

Disclaimer: Real thinking is what Harvard is all about, but the above lament is mine alone.