Money talks in the world of copyright legislation, and that’s a big problem for ordinary Internet users

Copyright has always been about money. That’s why the copyright industry fights so hard to strengthen legal protections, in order to boost its profits. However, getting detailed information about how much money is involved, and who receives it, is hard, because there are so many small pieces to the overall copyright ecosystem. That makes a long post exploring money in the global music business by Will Page on the Pivotal Economics site particularly welcome.

One striking chart shows global music streaming revenues rising from negligible rates in 2005 to $5.5 billion in 2022. This underlines how foolish the music business was to resist the move to online music – it could probably have made billions more dollars had it started earlier. Instead, it sued the pioneering service Napster into the ground in 2001. It was a typically short-sighted move that impoverished not just the music industry, but society as a whole, for a reason Lawrence Lessig explains in his book Free Culture:

When Napster told the district court that it had developed a technology to block the transfer of 99.4 percent of identified infringing material, the district court told counsel for Napster 99.4 percent was not good enough. Napster had to push the infringements ‘down to zero.’

If 99.4 percent is not good enough, then this is a war on file-sharing technologies, not a war on copyright infringement. There is no way to assure that a p2p [peer-to-peer] system is used 100 percent of the time in compliance with the law, any more than there is a way to assure that 100 percent of VCRs or 100 percent of Xerox machines or 100 percent of handguns are used in compliance with the law. Zero tolerance means zero p2p. The court’s ruling means that we as a society must lose the benefits of p2p, even for the totally legal and beneficial uses they serve, simply to assure that there are zero copyright infringements caused by p2p.

It’s good news for the music industry that streaming now brings in $5.5 billion a year, an increase of $800 million over 2021. But it’s unlikely much of that boost reached the people who made it possible – the musicians. In 2021, the Digital, Culture, Media and Sport Committee of the UK Parliament published its second report on the Economics of Music Streaming, which noted:

the major music groups are disproportionately benefitting from music streaming relative to creators. This has resulted in record high levels of income and profit growth and historic levels of profitability for the major labels whilst performers’ incomes average less than the median wage.

Despite some tweaking of streaming payments, musicians still get a rough deal from the current system, as numerous posts on Walled Culture attest.

The Pivotal Economics post calculates that the global music industry overall is now a $40 billion business. At the beginning of his breakdown of this number, Page asks rhetorically:

Why do I go into a bat cave every October and calculate this figure? The primary answer is policy. There’s an axiom in lobbying circles that politicians are more likely to respond to bigger numbers than smaller ones.

This work gives us that number. Regardless of where you work in this complex music business, if you are trying to capture the attention of policy makers in Geneva, Washington DC, Brussels or London – this number is for you. Use it – not just one of its constituent parts.

That’s a really important point that exposes one of the key problems with copyright in the digital age. Politicians are impressed with big money, and tend to listen to those who generate it when they pass new copyright laws. But in today’s online world, there is a whole new class of creators – ordinary members of the public – who are being endlessly inventive with digital material as a routine part of their daily lives.

This new online activity, often given the bland name “user-generated content” (UGC), takes place on a vast scale, but typically generates zero revenue. As a result, politicians generally discount it, downplaying its cultural and social significance. That’s precisely what happened with the EU’s Copyright Directive, where the concerns of millions of ordinary users were ignored in the rush to keep a few deep-pocketed and influential copyright companies happy.

Featured image by Pikist.

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