A few folks have sent over a Forbes article by David Israelite, the head of the National Music Publishers Association (NMPA), provocatively entitled: We Need Strong Copyright Laws Now More Than Ever. I read it carefully, expecting an argument to discuss concerning copyright law... but it never comes. Instead, the entire article appears to be about how the Consumer Electronics Association is big, and the NMPA is small. So, copyright.

Technically, the article is a "response" to another Forbes piece, by Gary Shapiro, the head of the Consumer Electronics Association, in which he notes that a series of recent issues suggests that copyright law is not serving its proper function, and the time is right to take "a fresh look at copyright laws." The article makes the case that copyright laws do have a purpose, and it even celebrates some actions by the entertainment industry to seek to innovate and embrace some new technologies. There's actually very little that I think anyone on any side of the debate should find particularly controversial. So, without an actual argument possible to make, Israelite decided to just focus solely on the fact that CEA is bigger than NMPA.

The first eight paragraphs of the article are just attacks on CEA. Then there's finally one paragraph that actually talks about copyright. Just one:

Copyright significantly contributes to the trade balance for our nation. A song written decades ago in Nashville can be heard, legally, in Japan, and today’s American hits instantly become top international downloads. Products associated with copyright, and this goes beyond music to include television, movies, newspapers, magazines, books, and computer software, are one of the few sectors expanding internationally. The most recent data finds copyright industries outpacing aircraft, auto, food, and pharmaceuticals in sales and exports. And as our economy gets back on track, consider the power behind songwriter-driven small businesses that provide jobs in every state.

Of course, there are multiple problems and misleading aspects to this paragraph. It assumes that copyright is the same thing as the music itself. While the music may contribute to the economy, that does not mean that copyright itself contributes to the economy. Second, he assumes that "stronger" copyright laws would somehow increase the ability of those sectors to make money, when there's little evidence to actually support that. There's just a big correlation/causation error. Either way, nothing in the post actually touches on the title of the article. It basically is just a piece to bash the Consumer Electronics Association because Shapiro mentioned in his article that the NMPA supported SOPA last year, and how that was a move in the wrong direction.

We recently wrote about how different parts of the music industry -- the RIAA, NMPA and DMA -- had come to an agreement on new royalty rates, as well as designating royalties for "new classifications" of services. While the groups celebrated this solution for being "flexible" for new providers, the details suggest a different story. We already expressed concerns about what are apparently licensing requirements for services that shouldn't need any license (i.e., personal music lockers). However, that was just based on the press release. When you look at the full details (pdf and embedded below), it gets even more troubling -- to the point that the whole agreement should probably be rejected.

Here's the big concern. This is a settlement among a few parties, who certainly don't represent the entire industry. Yet, if the Copyright Royalty Board and their (typically out of touch) judges accept the settlement, the details of the settlement become law. And that's problematic, because this thing is pretty crazy with restrictions -- some of which are nearly impossible to understand. If you think the tax code is confusing, you haven't tried to figure out what you have to pay to license certain services. Let's just say you want to set up a locker service that allows users to buy music which automatically goes into the locker. Well, among a ton of other rules, try this sucker on for size:

In the case of a purchased content locker service, the percentage of subpart C service revenue applicable in step 1 of &sec;385.22(b)(l)(i) is 12%. For the avoidance of doubt, paragraph (l)(i) of the definition of subpart C service revenue shall not apply. The minimum for use in step 1 of &sec;385.22(b)(l)(ii) is the appropriate subminimum as described in paragraph (b) of this section for the accounting period, where the all-in percentage applicable to &sec;385.23(b)(l) is 18%), and the sound recording-only percentage applicable to &sec;385.23(b)(2) is 22%, except that for purposes of paragraph (b) of this section the applicable consideration expensed by the service for the relevant rights shall consist only of applicable consideration expensed by the service, if any, that is incremental to the applicable consideration expensed for the rights to make the relevant permanent digital downloads and ringtones.

That's on page 40 of 44 pages. And is just one paragraph. Good luck figuring out the rest of the rules without a cadre of lawyers (oh wait... perhaps that's the idea).

But the bigger issue is that this agreement is a way to actually sneak DRM into copyright law. While existing copyright law has anti-circumvention rules, it makes no statement on how DRM actually impacts royalties or requirements (beyond anti-circumvention). Yet, this "agreement" has multiple sections that define types of DRM and with different rules for those specific cases. That is, the agreement defines the idea of a "limited download."

Limited download means a digital transmission of a sound recording of a musical work to an end user, other than a stream, that results in a specifically identifiable reproduction of that sound recording that is only accessible for listening for—

(1) An amount of time not to exceed 1 month from the time of the transmission (unless the service provider, in lieu of retransmitting the same sound recording as another limited download, separately and upon specific request of the end user made through a live network connection, reauthorizes use for another time period not to exceed 1 month), or in the case of a subscription transmission, a period of time following the end of the applicable subscription no longer than a subscription renewal period or 3 months, whichever is shorter; or

(2) A specified number of times not to exceed 12 (unless the service provider, in lieu of retransmitting the same sound recording as another limited download, separately and upon specific request of the end user made through a live network connection, reauthorizes use of another series of 12 or fewer plays), or in the case of a subscription transmission, 12 times after the end of the applicable subscription.

(3) A limited download is a general digital phonorecord delivery under 17 U.S.C. 115(c)(3)(C) and (D).

Is this really what we want in the law? A specific legal definition of DRM that applies to others despite not being a part of the negotiations? The main issue is that this is a standard contract between private parties. That's fine if it only applied to those parties who were subject to the negotiation. But thanks to the CRB process, the end result may be to stuff this private contract between private parties directly into the law, and that will expand copyright in highly questionable ways.

There are lots of other concerns about the document as well. It has lots of "this or that" calculations -- all of which default to the "greater of" option -- meaning that the rates are going to keep going up. Also, the agreement repeatedly defines "minimums" but we'll be waiting a looooooong time for you to come back with where the "maximums" are. The whole thing is crazy confusing, and while it may be perfectly fine if it were just a contract among a few players, the second it becomes part of copyright law, we should be concerned.

Two high level Congressional staffers who have been instrumental in creating or moving forward both PROTECT IP (PIPA) and SOPA have left their jobs on Capitol Hill and taken jobs with two of the biggest entertainment industry lobbyists, who are working very hard to convince Congress to pass the legislation they just helped write. And people wonder why the American public looks on DC as being corrupt.

Allison Halataei, former deputy chief of staff and parliamentarian to House Judiciary Chairman Lamar Smith (R-Texas), and Lauren Pastarnack, a Republican who has served as a senior aide on the Senate Judiciary Committee, worked on online piracy bills that would push Internet companies like Google, Yahoo and Facebook to shut down websites that offer illegal copies of blockbuster films and chart-topping songs.

Pastarnack went to the MPAA where she'll be "director of government relations" and Halataei to the NMPA (music publishers and songwriters) where she'll be "chief liaison to Capitol Hill." The Politico article linked above notes that this kind of "revolving door" is all too common. It may not be directly corrupt, but to the public it sure feels corrupt. It certainly gives off the appearance of "hey, write us the insane bill that we want, and then we'll reward you with a super cushy high paying job." At the very least, it should raise significant questions about whether or not these two bills were written with the public's interest in mind (I know, I know, don't laugh....) or their future employers'. Technically, neither of them can directly lobby the specific committees where they worked, but they can certainly assist in the process.

“They can provide invaluable insight to people on the outside — even in the consultation mode,” one tech industry lobbyist said, noting that Halataei had been Smith’s secondhand person and knows how the Texas Republican thinks and what would be an effective lobbying strategy.

Additionally, the Senate and House panels work closely together, and both Halataei and Pastarnack have ties to staffers in the chambers they didn’t serve in and aren’t banned from lobbying.

Also, as the Politico article notes, a year from now, you can bet there will still be fights about either this or similar legislation. American politics is a disaster.

One of the favorite misleading tricks of supporters of more draconian copyright laws is to put out a report each year about the "size" of "the copyright industries," by the "International Intellectual Property Alliance" (a trade group made up of other trade groups, including the RIAA, MPAA, BSA, ESA, NMPA and others) There are numerous problems with this report. First off, it makes the ridiculously wrong assumption that "the copyright industries" exist solely because of copyright law. That is, they use the size of the numbers to suggest that stronger copyright law is necessary. Yet that's ridiculous. They present no evidence that the industries would be any different size, if copyright law were weaker or stronger. They simply present that as the obvious implication. Furthermore, their definition of what makes up "the copyright industries" is insanely broad, and tends to include plenty of operations who don't actually want stricter copyright laws at all. For example, I'm sure Techdirt technically qualifies under whatever measure they're using. After all, we're a publisher, so technically we're in "the content industries." Yet I can tell you right now that exactly zero percent of our revenue is due to copyright law. That's true of many, many of the companies included as being in "the copyright industries."

Unfortunately, this myth persists that if you add up all of the broadly defined "content industries," it somehow shows why you need stricter copyright. But that makes no sense. If they actually showed a direct causal relationship -- or even any evidence that copyright policy directly drives aggregate revenue, they might have some argument. But they don't go near such things. But it doesn't stop grandstanding around the issue. With the latest release, Senators Sheldon Whitehouse and Orrin Hatch, along with Reps. Bob Goodlatte and Adam Schiff, welcomed the various lobbyists who produced this report (i.e., the heads of the ESA, NMPA, RIAA and MPAA) to cheer on the report and use it to falsely pretend this is proof that more draconian copyright laws are important.

This makes no sense and, frankly, it insults the intelligence of just about everyone, to pretend that total revenue within an industry is the automatic indicator of how policy should be determined for that industry. You determine policies based on deltas, not absolutes.

It gets even worse, when you look at the actual report, which shows the industries in question are doing tremendously well. In fact, as many are noting, the report actually appears to undermine the industry's entire argument that "piracy" is somehow decimating their businesses. Instead -- even through a recession, these companies are making a ton of money, and there's no evidence of significant job losses.

It's a pretty weak move when our Congressional leaders to then take those points, that simply do not support the need for more copyright law in any way... and then use it to support such policies. Each year, of course, CCIA puts out a report that shows that if that's how you're going to calculate "the copyright industries," it's only fair to use the same methodology to calculate the industries that are built from "exceptions to copyright law," which turns out to be significantly larger than "the copyright industries." So if any of the elected officials praising this latest report are intellectually honest, they should actually be advocating for weaker copyright laws. After all, the same methodology shows that exceptions to copyright law contribute much more to the economy than copyright law itself.

Sometimes it just feels like the legacy music industry folks spend their time trying to make it easy for us to call them on their bizarre positions. The latest is a pretty laughable angry letter from a who's who of the organizations, who represent the past of the music industry. Signers to the letter include (among others) the heads of the RIAA, ASCAP, SoundExchange, BMI, SESAC, NMPA, AFTRA, Harry Fox and the Songwriter's Guild. The target of their scorn? Well, officially, it's the CEO of Ziff Davis, publisher of PC Mag, for publishing two articles in the wake of the shutdown of Limewire telling people about "alternatives" to Limewire. The problem? Well, beyond being totally pointless, PC Mag only published one of the articles (the one the letter seems to find less objectionable). The other article that they complained about was published by a totally different publication. Accuracy is not big with the old school music industry, it seems.

Yes, PC Mag published an article highlighting alternatives to LimeWire, just like a ton of other websites did. Anyone who was looking for an alternative to LimeWire didn't need PCMag to find them. In fact, many reports noted a noticeable increase of downloads of those alternatives pretty quickly after LimeWire went down. The lobbyists get pretty worked up about all this, though:

Let's be honest. The vast majority of LimeWire's users were interested in one thing and one thing only: downloading our music for free with the full knowledge that what they were doing was illegal. The harm done to the creative community when people are encouraged to steal our music is immeasurable. Disclaimer or no, when you offer a list of alternative P2P sites to LimeWire -- and include more of the serial offenders -- PC Magazine is slyly encouraging people to steal more music and place at risk the tens of thousands of music industry jobs -- including singers, songwriters, musicians and the technical professionals who put it all together. Even worse is offering a direct link to a "resurrected" Limewire as follows: "I went ahead and downloaded LimeWire Pirate Edition for *ahem* research purposes, and can report that it appears to be working very smoothly. In the event that you, yourself, would like to do some research, you can download the client here (direct link)."

Yes, they're quite upset about that article about the LimeWire Pirate Edition (which we wrote about as well). Only problem? PCMag didn't publish it. Nor did any other Ziff Davis publications. It was actually in PC World, which is published by IDG -- a totally different company than Ziff Davis. Now, it's not hard to confuse PCMag and PC World -- lots of people do. But when sending an angry letter condemning a publisher, you would think that maybe one of these super powerful industry lobbyist/mouthpieces would think to actually check the sources before mouthing off.

Apparently not.

Given this mistake, it should come as little surprise that the rest of the letter is also full of factually ridiculous claims, such as "job loss" numbers due to "piracy" -- numbers that have been widely debunked so many times that it's almost pathological that these groups still cling to them like some talisman. Also, it's kind of funny that they imply the publishing business would feel differently if it had also been decimated by free competition (they call it "piracy," but they mean free competition). Ziff Davis is, in fact, a shell of its former self due to exactly that situation. However, the company has been trying hard to resurrect itself by actually competing in the marketplace -- something the signers of this letter could learn from.

Of course, I'm sort of curious what these groups actually think they're accomplishing with a letter like this. If it's to pressure magazines like PC Mag (or, ahem, PC World) not to publish such stories, that won't stop the info from getting out there. It will only increase the irrelevance of those publications -- especially if they feel brow-beaten by a bunch of dinosaurs, who refuse to adapt no matter how many times it's been shown to them how they can embrace the future successfully. This really feels like the sort of letter that these guys signed onto so they can show their constituency that they're "doing something" by stomping their feet, rather than actually doing something helpful like helping those they represent to adapt and embrace new opportunities. The full amusing letter is included after the jump...

It's really incredible to watch music industry folks shoot themselves in the foot over and over again with a simple inability to understand that promotions can lead to more sales, and that you don't need to get paid for every promotional effort. We've seen some in the industry gleefully admit that they'd rather have $1 today than $100 tomorrow. But this sort of thinking seems to pervade so much of the music industry at times that it's really quite stunning.

The latest comes from rumors that Apple was going to double song sample lengths in iTunes from 30-seconds to 60-seconds. There's apparently plenty of good reasons for this, as research has shown that 60-second samples lead to more purchases.

And yet, despite the rumors, you'll notice that Steve Jobs did not announce the expected doubling of samples. Why? Apparently Apple had the approval of all four of the major record labels... but he forgot to go groveling and beg for permission from the other side of the coin: the music publishers. Apparently, various music publishers read the rumors of the doubling and were quite upset that Apple hadn't asked for their permission, and even started lawyering up to sue, in case Apple announced such a plan without first getting permission from various music publishers.

And people say we're exaggerating when we show just how ridiculous music licensing is. This isn't about copyright or revenue or anything. This is just childish foot-stomping by a group that demands that everyone ask permission before helping them make more money. Stunning.

We've already seen how music industry execs and lobbyists cynically use "child porn" to their advantage (even, sickeningly, declaring "child porn is great") by lumping it in with copyright infringement in trying to force filters or other third party policing of the internet on politicians and companies. What's amazing is that they don't seem to have any shame at all in doing so. The latest example can be found in the "open letter" put together by a bunch of music industry trade groups (RIAA, A2IM, AFM, AFTRA, ASCAP, BMI, NMPA, SESAC, SoundExchange, the Recording Academy, the California Songwriters Association, the Music Managers Forum, and the Nashville Songwriters Association International) to Verizon and Google asking them to make sure their proposed "framework" for net neutrality still doesn't cover forcing ISPs to be copyright cops. It's no surprise why they sent this letter, but the inclusion of "child porn" with copyright infringement is really ridiculous:

The music community we represent believes it is vital that any Internet policy initiative permit and encourage ISPs and other intermediaries to take measures to deter unlawful activity such as copyright infringement and child pornography.

The industry seems to work overtime to try to link these two concepts together, despite the vast differences between them. It's really an incredibly cynical, exploitative and disgusting move by the recording industry, and people should really start calling them on it.

The RIAA is still fighting to force LimeWire to shut down completely after its legal win over the company. Given the nature of the initial ruling, it seems pretty likely that LimeWire is fighting a losing battle. Recently lots of folks were discussing the ridiculous damages that the RIAA is claiming LimeWire owes. On top of that, however, it looks like the music publishers have decided to pile on as well, and have filed a separate copyright infringement lawsuit against LimeWire. Honestly, this seems like it's just for the sake of vanity, or to be able to primp and preen for its members about how it's "doing something." The initial lawsuit will almost certainly kill off Limewire as a company. This new lawsuit can't kill it again. It's just a waste of time and money. Meanwhile, LimeWire users will have just moved on and will continue sharing files.

Back in August we wrote about the ridiculous situation with the National Music Publishers Association suing a bunch of lyrics sites for not paying up to help promote songs. This action helped push at least one of the sites, LyricWiki -- which was user generated lyrics -- to shut down (though, Wikia picked up the project and paid up to the NMPA). Now it appears that the NMPA has forced another one of these sites to shut down and hand over all of the money it made. Once again, be careful singing along to or quoting any lyrics. The songwriters and publishers want to get paid every time you do.

Sherwin Siy (one of the few people who actually was allowed to glance briefly at parts of the proposed ACTA treaty, though under strict NDA) has written about yet another letter sent by the entertainment industry to the government in support of ACTA. This letter includes pretty much everyone who benefits from abusing copyright laws and is afraid of the internet:

Advertising Photographers of America
American Association of Independent Music (A2IM)
American Federation of Television and Radio Artists (AFTRA)
American Society of Composers, Authors and Publishers (ASCAP)
American Society of Media Photographers, Inc. (ASMP)
Association of American Publishers (AAP)
Broadcast Music, Inc (BMI)
Commercial Photographers International
Directors Guild of America (DGA)
Evidence Photographers International Council
Independent Film and Television Alliance (IFTA)
International Alliance of Theatrical Stage Employees (IATSE)
Motion Picture Association of America, Inc. (MPAA)
National Music Publishers Association (NMPA)
NBC Universal
News Corporation
Picture Archive Council of America (PACA)
Professional Photographers of America (PPA)
Recording Industry Association of America (RIAA)
Reed Elsevier Inc.
Society of Sport & Event Photographers
Software & Information Industry Association (SIIA)
Stock Artists Alliance
Student Photographic Society
The Advertising Photographers of America
The Walt Disney Company
Time Warner, Inc.
Universal Music Group
Viacom Inc.
Warner Music Group

Funny... isn't it, that all these companies and industry groups are supporting a deal that no one's seen yet? Oh wait... that's because many of them have seen it and actually have had a hand in creating it. But what's really damning is that no where in the letter do they explain why this is actually needed or how it will do anything valuable. Instead, it's a pure faith-based letter saying "if you pass this secret treaty, good things will happen." I don't know about you, but generally, I prefer there to be actual proof and evidence that restricting consumer rights around the world actually leads to some sort of real benefit.

Tellingly, they don't respond to any of the points we raised earlier. This is not a treaty to help people or the economy. It's a deal to try to sneak through a system for propping up an obsolete business model by companies who don't want to adapt.