RIAA: There's Been No Innovation Stifling Here!

from the oh-really-now? dept

I already wrote about my response to Michael Carrier's paper on the "Untold Story" of copyright and innovation, in which he talked to entrepreneurs, venture capitalists and music industry insiders to explore how new technologies and services were stifled in the wake of the RIAA's successful legal campaign in the late 90s to shut down Napster. I wanted to discuss the two other responses that the Wisconsin Law Review published, focusing mainly on the RIAA's response, penned by the General Counsel of the RIAA, Steven Marks, entitled Debunking the "Stifling Innovation" Myth: The Music Business's Successful Transition to Digital. Just the fact that they had a lawyer discussing how successful they were at business and innovation should already tell you there's a problem here, of course.

Basically, the paper tries to paint a rosy picture, rewriting history left and right -- where the labels were dragged kicking and screaming very, very, very slowly into the future by various tech services, often having to fight expensive and damaging legal battles. The RIAA describes this as a "success" story, one "of vigorous licensing of new models by large and small record labels, large investments in music services and related technology, and a vibrant digital market that dwarfs the growth in other media industries."

This is kind of hilarious if you actually lived through any of this. Every new service got threatened or sued. The "authorized" services from the RIAA were purposely designed to be awful, expensive and fragmented. Yes, the music industry has moved forward, by inches, over the past 15 years, but never willingly and never with the kind of speed and embracing of innovation that was necessary. Marks also, somewhat ridiculously, pretends that Carrier ignores the content side of the equation. He did not. He repeatedly made it clear from the various interviews that everyone understood the importance of content, which is why they all desperately wanted the recording industry to move forward with them, which it resisted at every turn.
Professor Carrier also mischaracterizes the relationship between technology and copyright. Professor Carrier inappropriately pits copyright against innovation as though the two are boxers sparring for control rather than partners that work collaboratively and interdependently. The desire of consumers to listen to music has been a driving force for technology and recording companies to build and invest in new platforms and configurations, from vinyl record players to cassette players to CD players to iPods.
The only mischaracterization here is from Marks. Carrier (and the people he speaks to) are pretty clear that the innovators wanted to work with content creators. It's just that the RIAA and its labels did everything they could to make that impossible. Yes, eventually walls were broken down, but way later than was reasonable. The industry refused to license digital music at all for years. It put restrictive DRM on it that made it less valuable. It sued left and right and scared innovators and investors entirely out of the market. It had no interest in actually working with innovators. All it wanted was massive upfront payments.

In the end, though, the crux of the RIAA's argument entirely misses the point of Carrier's piece. It basically says "look, there are lots of services today, what are you complaining about?" But the point was never that killing Napster stopped innovation, but rather that it hindered the pace and nature of that innovation. And the RIAA doesn't address it at all. There's a difference between the direction of change and the rate of change, and the key point is the rate of change, but all the RIAA wants to discuss is the direction, which is meaningless. Innovation can't be denied forever, so of course the direction will move forward. What Carrier's piece discussed, quite clearly, was the pace -- and the RIAA wants to avoid that, and pretend that everything that happened between 15 years ago and now didn't happen to get here. If we were at the point we're at today in 2003, they might have a point. The fact that it's taken us this long and we're still just reinventing radio... well, we've got a long way to go and should have been much further along.

The final response to Carrier's paper comes from law professor Randy Picker, who generally is a pretty strong supporter of copyright. His paper is called Copyright and Innovation: Deja Vu All Over Again, which basically argues that, yes, tech and innovation are in conflict, but because Carrier's paper doesn't suggest any reasonable solutions, it adds little of value.
The real question is not whether copyright matters for innovation; the entire history of copyright and distribution technology suggests that it does. Instead, we need to focus on a more nuanced way in which particular copyright settings can matter for innovation. “The Untold Story” does very little of that. So the article is critical of the efforts of music industry incumbents to protect their positions through litigation and also critical of possible reforms to copyright suggested by academics (including by me). But the article does not really say much about how one would write a copyright statute with distribution innovation in mind.
Notice some built-in assumptions, which may not actually be true. Either way, he looks specifically at three areas of copyright law that are often criticized: duration, secondary liability and statutory licenses. He points out that duration is mostly meaningless, since so much infringement is recent material. On the other two points, he admits that they create uncertainty for businesses, but then suggests that existing rules on both have been set to favor innovation:
The critical question here is how we should calibrate the tradeoffs between copyright enforcement and open-ended innovation. Both Sony’s test and the DMCA safe harbors tilt in favor of innovation and sacrifice the enforcement of copyright. Defenders of those regimes often focus on precisely the way in which the safe harbors enable innovation. The classic vision of Silicon Valley innovation is two guys in a garage, not two guys with their lawyer. Critics of those regimes, and “The Untold Story” points to this work, want more tailored rules to better balance protection of copyrights and innovation, but the discussion is precisely about that tradeoff and the relationship between innovation and copyright has not been lost on anybody participating in that discussion.
Of course, it's not clear that it's actually a tradeoff at all. This assumes that "greater enforcement" actually leads to some noticeable benefit -- and we've seen little evidence to support that (at least in any long term manner). On the other hand what we have seen -- which Picker totally ignores -- is that when innovation occurs it tends to massively expand the markets for the creators themselves. The point I've made repeatedly is that a mere four years after Jack Valenti said that the VCR would be the "Boston strangler" to the movie industry, the home video market was making more money than the box office.

These aren't "tradeoffs." These are maxima reductions. They're removing efficiency from the system to protect an inefficient, legacy way of doing business. That doesn't help expand the market. True innovation creates a bigger pie. It may be challenging at first, because people haven't totally figured it out, but it's not about one party losing and one winning. This isn't a zero sum game, like many seem to think. The "tradeoffs" are between a smaller pie and a bigger one, and Picker seems to be upset if the law favors a bigger pie. I can't see how that makes any sense from an economic standpoint.

Not surprisingly, I don't find either of these responses particularly compelling or convincing. They're arguing things based on claims without a basis, and ignoring reality. What Carrier's paper did so well was bring actual reality into the picture: the stories of entrepreneurs and investors whose innovation was chilled or stopped. The RIAA can pretend it didn't happen and Picker can pretend that it doesn't matter, but basic history and economics say that both are not true.


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    Jeff (profile), May 30th, 2013 @ 8:04am

    RIAA vs. World

    Of course they can't see the harm they are doing to innovation. Narcissistic personalities always believe everything they do is unicorns and rainbows.

     

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      gorehound (profile), May 30th, 2013 @ 9:39am

      Re: RIAA vs. World

      Fuck the RIAA ! Stop Supporting the MAFIAA Garbage Now !
      Come on over to our side......Purchase and Support your Indie and Local Non-MAFIAA Art.
      Time to strangle the incomes of the MAFIAA and we can do this by not Buying their garbage, not supporting them, and moving to Purchasing and Buying the Non-MAFIAA Art.

      MAFIAA Are the Enemies of the World !

       

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    Anonymous Coward, May 30th, 2013 @ 8:12am

    MegaBox

    Lets see if the RIAA lives or dies when MegaBox is finally launched.

     

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    Anonymous Coward, May 30th, 2013 @ 8:27am

    So Mike,

    You constantly complain about how IP rights hinder innovation, but can you explain how it could work any other way? All innovation must take place within the existing legal framework. I can't go into the automobile manufacturing business without being constrained by rules, regulations, and the rights of others. It's the same with companies that go into the content distribution business. They have to take into account the rules, regulations, and rights of others--especially those who own the content that they are distributing. Is there any innovation that isn't hampered by rules, regulations, and rights of others? I'm trying to understand why it upsets you so much when it's copyright.

    You say: "These aren't 'tradeoffs.' These are maxima reductions. They're removing efficiency from the system to protect an inefficient, legacy way of doing business." Can you please give us a concrete answer as to what you mean by this? You often repeat your claim that their business models are outdated and inefficient. What precisely do you want them to do?

     

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      S. T. Stone, May 30th, 2013 @ 8:32am

      Re:

      You often repeat your claim that their business models are outdated and inefficient. What precisely do you want them to do?

      I can sum it up in a simple sentence: they need to provide convenient, hassle-free delivery of non-DRM-laden content that can play in any given media player, and they need to offer it at an affordable price in any region of the world on the day of release.

       

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        Anonymous Coward, May 30th, 2013 @ 8:45am

        Re: Re:

        "I can sum it up in a simple sentence: they need to provide convenient, hassle-free delivery of non-DRM-laden content that can play in any given media player, and they need to offer it at an affordable price in any region of the world on the day of release."

        If they don't offer that, how does it impede innovation? I don't follow you.

         

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          Anonymous Coward, May 30th, 2013 @ 8:59am

          Re: Re: Re:

          What he described IS innovation. Not offering it is therefore impeding innovation. It is a simple concept that even a child can understand. This is not simply an exaggeration because I just got asked by a 10 year old reading this "are people really that stupid?" I don't really have a good answer for him.

           

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          Anonymous Coward, May 30th, 2013 @ 9:03am

          Re: Re: Re:

          To protect a monopoly you actually have to outlaw anything that could threaten that.

          Huskers playing music on the streets of a city?
          It must be stopped, the city must be responsible for the infringement the occurs in their streets. Sounds crazy, well ask the many mayors that had to deal with collection agencies because of that they don't think it is funny.

          Want to sing a song?
          You better have a license or else.

          Want to make musical app? photo app? any app that deal with images, video and sound?
          Good luck with that. You will be harassed by crazy people claiming ownership over what they don't even own.

          Want to print what your children draw?
          No,no it is owned by someone else.

          We are talking about people who worked once in their life and believe they should get paid for the rest of their natural life plus 75 years after that, crazy fucks.

           

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          PaulT (profile), May 31st, 2013 @ 1:31am

          Re: Re: Re:

          Because the innovators then have to work around restrictions.

          If the content has to have DRM, you can't offer a universal experience with the content as not all uses can be supported, and thus innovation is stifled. If you have to restrict by device, innovation is stifled. If you have to restrict by OS, innovation is stifled. If you have to restrict by region or language, innovation is stifled. If you have to offer one piece of content to one set of people, then not offer it to others until an undeterminded later time, innovation is stifled.

          This isn't complicated. If you're going to restrict what people can and can't offer, then what they can innovate with is reduced, and innovation is stifled.

           

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        jupiterkansas (profile), May 30th, 2013 @ 9:05am

        Re: Re:

        The idea that anything is "out-of-print" or unavailable in the world today is simply ridiculous. Once something is published, it should be available forever.

         

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          Anonymous Coward, May 30th, 2013 @ 9:21am

          Re: Re: Re:

          Generation Entitlement thinking that infinitely reproducible content should just be available forever.

          What is this, the 21st century?

           

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        art guerrilla (profile), May 30th, 2013 @ 12:27pm

        Re: Re:

        ME TOO!
        what he said about sums it up...

        i might add a lot more about freeing OUR kultur to be used by US for US (bufu?); but for the consumer side of the issue, you've summed it up clearly and concisely...

        art guerrilla
        aka ann archy
        eof

         

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      Anonymous Coward, May 30th, 2013 @ 8:33am

      Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

      Rules and regulations can and should be changed when they become a hindrance to growth in a technologically evolving marketplace.

      The rights of others only hinder innovation when they seek to exercise those rights to block innovation rather than join in and profit from it.

       

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        Anonymous Coward, May 30th, 2013 @ 8:41am

        Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

        "Rules and regulations can and should be changed when they become a hindrance to growth in a technologically evolving marketplace."

        The point made by Professor Picker in his article is that the rules inevitably do change. It's an ongoing process. When things come to a head, a compromise reached, and progress marches on. The law is technology neutral. When new technology bumps up against it, the pros and cons are weighed, a decision is made, and life goes on. I'm not really sure I understand how Mike or anyone else thinks it could otherwise work.

         

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          Keroberos (profile), May 30th, 2013 @ 8:44am

          Re: Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

          Really? Can you show me one change to IP law in the last 20 years that had any benefit to anyone but the rights-holder?

           

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            dennis deems (profile), May 30th, 2013 @ 9:24am

            Re: Re: Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

            Hell, go all the way back to 1976.

             

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            Anonymous Coward, May 30th, 2013 @ 9:43am

            Re: Re: Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

            Or, for that matter, where the rights-holder is actually the person who did most of the innovating in most cases.

            If I controlled a system where the vast majority of innovators had to relinquish their rights to me for any sort of monetary gain, and was then able to market those right into massive profits, I'd probably be inclined to spend a good part of that income into ensuring they didn't change the system so that I didn't actually have to work either.

            But then I'm a person who believes a person should honestly earn what they receive, which probably explains why I went from a staunch supporter of the RIAA and copyright, and that you shouldn't "steal" the works of others for personal use, to one of their harshest critics when I realized that the people screaming this the loudest were actually using the works of these people for massive profits with often very little return compensation.

             

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          Anonymous Coward, May 30th, 2013 @ 9:26am

          Re: Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

          The law is NOT technologically neutral, because today when they pros and cons are weighed that are almost done exclusively in favors of the incumbents and not for the betterment of society.

          People think it can work otherwise because history has already proven it can. Hell, all anyone has to do is read up on Benjamin Franklin, who never relied on IP protection, who firmly believed that protectionism severely hindered innovation, and proved it by innovating the hell out of things.

          People sometimes like to point to Edison, but while he did so a fair amount of innovating on his own, much of his "innovation" was largely based on convincing others (especially once he got established and his was the only path likely to lead to any sort of financial success) to sell their works which he would patent (or having purchased the patent) then market it for massive profits.

          Which is the system that most of the entertainment industry uses today. Ironic, considering that (despite the MPAA's effort to rewrite their origins) movie makers had to move clear across the country to be outside of his legal reach in order to innovate and create the modern movie industry, to then turn around and use the very same model to try to prevent others from doing the same.

          Sorry, but you can't have it both ways.

           

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          Franklin G Ryzzo (profile), May 30th, 2013 @ 12:06pm

          Re: Re: Response to: Anonymous Coward on May 30th, 2013 @ 8:27am

          This is exactly how it should work, but I think even you can agree that this is not what is currently happening. All new changes to laws have been beneficial only to the content owners that wrote and paid for said changes, continuously diminishing the rights of the public. These changes are extremely slow and attempt to react to a technology that has normally surpassed itself by several generations by the time the reaction becomes codified, and then the now outdated change is attempted to be applied to the newer innovation like squeezing a square peg in a round hole.

          The reality of the situation is that no amount of legislation will ever change the fact that the internet can be used as a giant copy machine. The content owners are not trying to compete on a realistic playing field. They have this notion of what they want things to be like and think that additional legislation will solve their problems, but this line of thinking is quite similar to living by a river in Egypt. Until they realize that their only option is to compete with the reality of free, they will continue to fail.

          This is exactly the point of the article about hindering innovation. Every time a new startup comes up and tries to fill in a gap to provide a service that there is clearly demand for, they are blocked at every turn in the best case scenario, and sued out of existence in the worst. If the content owners were truly providing the innovation and the services their customers want, then these startups wouldn't even need to exist since the demand would already be met. The content owners have repeatedly shown their desire to work against their customers, not with them, and trying to claim anything to the contrary is truly the definition of disingenuous.

           

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      PaulT (profile), May 30th, 2013 @ 8:34am

      Re:

      "You constantly complain about how IP rights hinder innovation"

      No he doesn't. He explains why the way they're being enforced, combined with the refusal of legacy corporations to allow innovative models to be used, are hindering innovation. He explain that while DRM, attacking innocent 3rd party service providers, increasing restrictions, etc. are used, innovators are going to be put off doing anything that would fall foul of the legacy corporations. He explains that the corporations are doing everything they can to block innovation, while the tactics used are putting off true innovators from even trying.

      It's not about the existence of IP rights, it's about the stupid ways they're used and the changes that defy their original purpose. It's very simple. IF you read the actual articles, and don't insert your preconceived assumptions to assume some alternative subtext.

       

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      Robert (profile), May 30th, 2013 @ 8:49am

      Re:

      Actually you can go into the automotive business. You can do so without worry. You must conform to safety laws with whatever products you produce and labour laws, but those are for safety, not legalized monopoly. Quite different.

      Second, why don't you do that, design the perfect electric car, charges via solar panels, uses the ideas built upon the Panasonic battery patent owned by Chevron, so you can create a car that charges in an hour, has a 500mi range on full charge (6-8h) using standard 15A 120VAC power (likely more given the power required for such a range), all stored within a super efficient, lightweight, environmentally friendly, reliable battery (maybe scrap the Panasonic idea base and come up with your own). And the vehicle will be built in the US, by domestic employees whom are paid a decent wage (not GE's definition of a decent wage), and will be affordable, half the cost of Tesla's vehicles.

      Then watch the legal shitstorm that follows you, from oil companies, car companies, all claiming you can't innovate like that, you're violating their bought laws, you'll kill the entire economy, and even if they haven't a legal leg to stand on, their money will bankrupt you back into the horse and buggy era.

      Only then can you compare to what has happened thanks to Napster lawsuits and the attempts at innovation in the music biz.

       

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        Lowestofthekeys (profile), May 30th, 2013 @ 9:31am

        Re: Re:

        In Colorado, you are only allowed a certain amount of solar panels on your home because Xcel Energy, our energy provider, doesn't want to lose out on all that precious money.

        We could all be saving a ton of money due to the fact that solar technology has been getting rapidly cheaper and cheaper(http://www.economist.com/blogs/graphicdetail/2012/12/daily-chart-19), but myself and a lot of other people are restricted from innovating our homes because Xcel's profit margin is more important.

        This is the constant with these companies. The monetary needs of the few over the majority.

         

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          Robert (profile), May 30th, 2013 @ 9:41am

          Re: Re: Re:

          Our most expensive electricity bill was for using just over a kWh (1.08kWh) for an entire month. I could easily handle that with solar panels on our garage and bury a 6AWG cable through to the main panel. But I'd only zero out the usage, not make a profit.

           

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          art guerrilla (profile), May 30th, 2013 @ 12:31pm

          Re: Re: Re:

          don't they have some *totally* fucked up laws in colorado about how you can't collect rainwater from your own fucking roof to rain barrels for watering landscape/gardens ? ? ?

          on the other paw, i hear they have free dope in colorado!
          hee hee hee

          art guerrilla
          aka ann archy
          eof

           

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      Anonymous Coward, May 30th, 2013 @ 8:49am

      Re:

      Did copyright protect the loss of revenue of the big labels after they started suing their customers?

      As I recall very clearly after a year later they were begging consumers to not stop paying for it, the entire industry was halved.

      That is the most clear answer to whether enforcement would work or not, it won't, it destroy the market because it destroy two basic principals that are essential, trust and goodwill.

      On the opposite side you get real proof that copyright is not even necessary, you get an entire industry that was born on the concept of purposefully not protecting anything and allowing free use of what it produces, it sounds crazy doesn't it? but open source is today a multi billion dollar market.

      Wanna bet on who will endure and who will bite the dust?

       

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      Dave Xanatos, May 30th, 2013 @ 8:51am

      Re:

      You constantly complain about how IP rights hinder innovation, but can you explain how it could work any other way?

      That's an easy one. Drastically scale back IP laws. Rewrite them to favor innovation. Stop giving established content industries effective veto power over new technologies.

      All innovation must take place within the existing legal framework.

      The existing legal framework is the result of lobbying and regulatory capture by existing players. The legal framework is wrong.

      Furthermore, the content industries have tried to obliterate practically EVERY DAMN NEW TECHNOLOGY that has anything to do with IP at all and a lot that had very little to do with it. Their strategy is "new? Kill it." The law has very little to do with it. They try to bury it in legal costs whether their case has a basis in law, or not. How many new technologies can you name that they *haven't* tried to kill?

      You say: "These aren't 'tradeoffs.' These are maxima reductions. They're removing efficiency from the system to protect an inefficient, legacy way of doing business." Can you please give us a concrete answer as to what you mean by this?

      How easy is it to move media around these days? I can download entire libraries in 1/1000th of the time it would take to go to the store and buy each copy of each work. Now how easy is it to *legally* move media around? How much easier would it be to find *anything* if the *AA's would just get out of the way?

      You often repeat your claim that their business models are outdated and inefficient. What precisely do you want them to do?

      Don't try to kill everything new. Relax their stranglehold on the market. Provide something that people want to buy.

       

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        JEDIDIAH, May 30th, 2013 @ 9:18am

        My Digital Copy

        My digital copy is a good example of an innovation hindered. The current state of the law prevents certain devices and software from being offered to sale to consumers. This limits the options of what non-enthusiasts can do with "entertainment media".

        My digital copy is just a file. It's DRM free. It's pretty universal. It doesn't play well with Apple devices but I could change that if I wanted. I can play my digital copy on any device that supports the relevant format. I can copy it freely to any mobile device. I can use other software (not banned) to stream it to any mobile device.

        It's not a coupon code for iTunes.

        It's not a coupon code for Ultraviolet.

        It's an actual digital copy. It's easy enough to create but hampered by legal barriers.

        It's the kind of digital copy you should get when a BD/DVD package says it includes a digital copy: an actual file.

        My digital copy makes my physical copies tremendously more useful because I get to use iTunes on steroids. Since my digital copy is not trapped in one vendor's walled garden, entire world of innovators is available to me.

        I can (and have) even add a few tweaks of my own.

         

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      Anonymous Coward, May 30th, 2013 @ 8:53am

      Re:

      Please explain to everyone here the merits of a granted artificial monopoly.

      I am betting you can't do that, because you don't know what you are talking about.

       

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      Mike Masnick (profile), May 30th, 2013 @ 10:24am

      Re:

      You constantly complain about how IP rights hinder innovation, but can you explain how it could work any other way?

      Yes, you could allow innovation without making it illegal.

      All innovation must take place within the existing legal framework.

      That's meaningless. It doesn't mean that that legal framework won't hinder innovation or economic growth.

      I can't go into the automobile manufacturing business without being constrained by rules, regulations, and the rights of others. It's the same with companies that go into the content distribution business. They have to take into account the rules, regulations, and rights of others--especially those who own the content that they are distributing.

      Again, you seem to think that there is no impact of those rules on the pace or nature of the innovation. That's laughable.

      I'm trying to understand why it upsets you so much when it's copyright.

      I'm upset about any rules and regulations that hinder innovation. We've written about things like uber and airbnb which have been held back by stupid laws. We've written about healthcare being held back by stupid laws. It's not just copyright. We write about copyright frequently because the clashes are clear and happen frequently. As I've said before, the copyright issue is really just a leading indicator for the types of disruptive innovation fights that nearly every industry will be facing (if they aren't already). And I want people to understand how to avoid the same mistakes made in that industry as those battles get repeated elsewhere.

      You say: "These aren't 'tradeoffs.' These are maxima reductions. They're removing efficiency from the system to protect an inefficient, legacy way of doing business." Can you please give us a concrete answer as to what you mean by this?

      You've said in the past that you don't understand economics. This is one of those cases where that's clear. I'm not going to teach you basic economics, but one aspect of economics is seeking out the maxima point in a market -- in short form, the point at which the pie is the largest (there are some caveats there, as the splitting of the pie may matter as well, but I'm trying to keep this simple).

      You increase maxima by decreasing costs/friction. Decreasing the costs of inputs (resources) is one way to do so. Increasing productivity is another. There are lots of ways to do so.

      But adding friction by artificially restricting resources, artificially inflating prices, or putting tolls on information exchange is a situation in which you are clearly moving down the line to a sub-optimal point, less than the maxima.

      Put another way: in a zero-sum world, each "tradeoff" comes out equal. Someone wins, and someone loses. Picker's piece is arguing exactly that. That there are tradeoffs and it all balances out in the end.

      But this world is not zero-sum, it's a non-zero-sum game, in which certain regulations lead to a bigger pie and greater opportunity, and some lead to a small pie. You can't just scream "tradeoffs" and walk away. You try to aim for the maxima. But Picker doesn't, and neither are you.

       

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        Anonymous Coward, May 30th, 2013 @ 11:53am

        Re: Re:

        Yes, you could allow innovation without making it illegal.

        So you think that all innovation is good, no matter what? You think we shouldn't consider how innovation will affect other people? Do my rights not matter if they stand in the way of your innovation? Are you seriously suggesting that there should be no limiting principle?

        That's meaningless. It doesn't mean that that legal framework won't hinder innovation or economic growth.

        Of course the legal framework hinders innovation to some extent. That's my point. We can't just innovate anything we want. We have to take certain things into consideration, like the safety and rights of others.

        Again, you seem to think that there is no impact of those rules on the pace or nature of the innovation. That's laughable.

        I don't think that at all. I KNOW that the rules hinder innovation. They always have and they always will. I'm asking you why you think that copyright is so special and different that the rules, regulations, and rights of others shouldn't shape the innovation that happens in this sector. If your innovation is a device that makes it super-simple for millions of people to violate my rights, shouldn't my rights somehow matter? You seem to have this "innovate at all costs" attitude that I don't understand. Don't other people matter?

        You've said in the past that you don't understand economics.

        I've been studying up.

        But adding friction by artificially restricting resources, artificially inflating prices, or putting tolls on information exchange is a situation in which you are clearly moving down the line to a sub-optimal point, less than the maxima.

        So please be clear here. The thing that you don't like is the ARTIFICIAL monopoly created by copyright. In other words, you don't like how copyright pretends that something is excludable when it naturally isn't. Am I right? If so, then you clearly think that there shouldn't be any copyright because it's all just unnecessary friction. I'd love a direct answer if you wouldn't mind.

         

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          Robert (profile), May 30th, 2013 @ 11:59am

          Re: Re: Re:

          Does exercising your "rights" interfere with basic rights, natural rights, that people have been exercising since the dawn of time?

          If so, your temporary, lobbied "rights" are the problem, not the innovation.

           

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          art guerrilla (profile), May 30th, 2013 @ 12:50pm

          Re: Re: Re:

          reply to dingleberry:

          That's meaningless. It doesn't mean that that legal framework won't hinder innovation or economic growth.

          "Of course the legal framework hinders innovation to some extent. That's my point. We can't just innovate anything we want. We have to take certain things into consideration, like the safety and rights of others."

          with one HUGE BUT(t): your premise (in ALL these arguments) is that the existing laws are necessary, reasonable, and fair, and that -by golly- we all just have to play by the same rules...

          EXCEPT:
          1. they are NOT necessary, reasonable, and fair, which blows your fawning obeisance to The Law as simply being naive in extremis...

          2. *as if* said laws were made with all the stakeholders involved and a balance between their interests to achieve the greatest good for the greatest number... that is the OPPOSITE of what happens: a few wealthy/powerful interests control and dominate the process to the exclusion of 99% of us...

          3. ...which results in: an UNFAIR system slanted to the interests of the MAFIAA, NOT us 99%...

          4. which YOU then posit as some ideal set of laws which are inherently fair, and -gosh, golly, gee- why don't evil pirates want to follow such reasonable, fair laws...

          dick...

          art guerrilla
          aka ann archy
          eof

           

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      Anonymous Coward, May 30th, 2013 @ 11:19am

      Re:

      Freedom / Privacy > Copyright

      That said.

      Go fuck yourself.

       

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    Some Guy, May 30th, 2013 @ 8:31am

    As much as i do think that MegaBox is a step in the right direction, it is far from the only solution. All you have to do is see that artists such as Macklemore have been very successful independently releasing music. There is no need for a middleman period. Any artist can release their own music and get recognized which is the beauty of the internet. Major record labels obviously are completely becoming useless very fast.

     

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      Anonymous Coward, May 30th, 2013 @ 9:55am

      Re:

      @ #4

      'There is no need for a middleman period. Any artist can release their own music and get recognized which is the beauty of the internet'

      exactly! and that is why the entertainment industries want to control it. imagine what it is going to be like if they get that control. there will be no artists releasing music unless they go through the labels and no movies released unless they are made by, licensed by and released by the studios. the Internet is the best distribution medium invented. it's gonna take something very special to top it. torrent files are the best format for transferring large files, data or otherwise. with control of the Internet, torrents will turn from being the plague of the industries, containing viruses and all sorts of other nasty things, to being the poodles privates that everybody MUST use!!

       

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        jupiterkansas (profile), May 30th, 2013 @ 10:01am

        Re: Re:

        The RIAA will never be able to control the release of music on the internet, but they have hoped to try and control the services people use to listen to music on the internet, and then do everything they can to make their music the only music they listen to.

         

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      Mike Masnick (profile), May 30th, 2013 @ 11:32am

      Re:

      All you have to do is see that artists such as Macklemore have been very successful independently releasing music. There is no need for a middleman period. Any artist can release their own music and get recognized which is the beauty of the internet.

      I think it's worth clarifying that statement. Middlemen aren't problems, gatekeepers are. There are still plenty of middlemen, but they help enable artists to do more on their own, rather than pick and choose the winners like gatekeepers. Macklemore used YouTube and iTunes to be successful. Both middlemen, but neither are gatekeepers.

       

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      Karl (profile), May 30th, 2013 @ 12:53pm

      Re:

      There is no need for a middleman period.

      I actually disagree with this.

      Certainly, any artist can release their own music and get recognized. But what then? They'll have a lot of things to do, and they won't have time to design and code their own websites, or administer their own mailing lists, or spend hours per day on promotion, or what have you.

      The more successful you are, the more you do need "middlemen." For example, Amanda Palmer has at least a dozen full-time employees who do a lot of that work for her.

      The big difference is that these "middlemen" are enablers, not gatekeepers. That is the entire problem with the recording industry: they do not see themselves as a service economy, with the artists as clients.

      Instead, they view themselves as bosses, and the artists as employees. Their business strategy is to acquire and maintain a monopoly on all music channels, so that artists have no choice but to be their "employees" if they want access to those channels.

      That is what is falling apart right now. And about time, too.

       

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    Anonymous Coward, May 30th, 2013 @ 8:35am

    "Home taping is killing music and it's illegal"

    No innovation stifling, my foot.

     

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    Anonymous Coward, May 30th, 2013 @ 8:45am

    "The fact that it's taken us this long and we're still just reinventing radio... well, we've got a long way to go and should have been much further along.

    I remember the piece where we talked about the lady who spent 50% of her business' profits fighting piracy and argued about how cost-effective that was.

    I'm curious about how cost-effective all the lawsuits which slowed innovation are. I mean it's pretty trivial to digitally reinvent the radio now, as Mike noted. But even that is being killed off by rising streaming costs.

    Seriously though, if the RIAA (they aren't the only ones) stayed out of the way of (let alone helped) innovators, (more or less) ignored insignificant infringement, and updated their business model to make money off the new innovations rather than fight them in court, how much better off would the music industry be?

     

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    Anonymous Coward, May 30th, 2013 @ 8:53am

    The RIAA describes this as a "success" story, one "of vigorous licensing of new models by large and small record labels, large investments in music services and related technology, and a vibrant digital market that dwarfs the growth in other media industries."

    Innovation == Licensing?

    Definitely written by a lawyer.

     

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      Anonymous Coward, May 30th, 2013 @ 10:09am

      Re:

      I an sure they have made other innovations in their accounting so that they keep more of the income. However they do not want to talk about that as the artists might revolt on mass.

       

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      Anonymous Coward, May 30th, 2013 @ 11:56am

      Re:

      Innovation == Licensing?

      I'm sure that most people on Techdirt, Mike included, think that the real innovation is in distributing other people's content WITHOUT a license. That's the stuff that gets you guys excited.

       

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        Robert (profile), May 30th, 2013 @ 11:58am

        Re: Re:

        Strawman, false assumption

         

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        JEDIDIAH, May 30th, 2013 @ 12:03pm

        Blind greed isn't always a good thing.

        Licenses are burdensome. If you can find some way to allow everyone to get paid with a lot of haggling then that's probably a lot effort that will never be wasted.

        It will also likely empower things that might never have occured.

        It might even benefit the artist that is to stupid to realize a good thing when it's staring right at them.

         

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        PaulT (profile), May 31st, 2013 @ 1:34am

        Re: Re:

        I think you're a lying idiot with a bizarre argument with no basis in reality. Fortunately for me, I have actual evidence to back up my claim.

         

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    JEDIDIAH, May 30th, 2013 @ 9:08am

    Moldy Oldies

    The claim about "recent material" is a farce. It's a really poor argument coming from anyone with a law degree. If a law is not really relevant then it shouldn't even be there. If claims against old material are really so irrelevant, then that's the best obvious reason for reducing copyright terms.

    However, the claim is not true. There are plenty of people being sued for old works that should be in the public domain. Many older works are tied up in a legal quagmire of music licensing that prevents those works being published.

    Plus you've got the most visible victim of industry lawsuits being sued over 20+ year old material.

     

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    Lowestofthekeys (profile), May 30th, 2013 @ 9:20am

    I like this quote:

    "Vidich said he's the one who suggested that iTunes charge 99 cents per track and he remembers Jobs nearly hugged him. At the time, Sony Music execs wanted to charge more than $3 a track, according to Vidich. No doubt a $3 song price would have tied an anchor around iTunes' neck, stifling growth."

    http://www.theverge.com/2013/4/26/4265172/itunes-store-at-10-how-apple-built-a-digital-m edia-juggernaut

    To be honest, I don't think the record labels are intentionally trying to stifle innovation in this case, but their short-term ideal of continued economic prosperity via sale of the physical medium has contributed to their maladaptive attitude and inability to maintain the bottom line.

    For example, they still require ridiculous amounts of money as compensation for what they provide hence Spotify's inability to break even for the first few years it was out.

    T

     

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    Bengie, May 30th, 2013 @ 9:21am

    P2P

    BitTorrent is innovation. Ask them about their stance on that.

     

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    identicon
    out_of_the_blue, May 30th, 2013 @ 9:27am

    Mike NEVER deals with the morality of Napster.

    He just presents "innovation" as if new gadgets some claim on the intellectual property of others.


    Take a loopy tour of Techdirt.com! You always end up same place!
    http://techdirt.com/
    Where arrogance meets ignorance to conspire what they'll do with someone else's 100 million dollar movie.
    05:27:33[g-730-6]

     

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      Anonymous Coward, May 30th, 2013 @ 9:32am

      Re: Mike NEVER deals with the morality of Napster.

      blue, go home - you're drunk

       

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        Pragmatic, May 30th, 2013 @ 9:54am

        Re: Re: Mike NEVER deals with the morality of Napster.

        Cathy's off her meds, hence the inability to write a coherent sentence. Nothing in her comment makes any sense.

         

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      Lowestofthekeys (profile), May 30th, 2013 @ 9:36am

      Re: Mike NEVER deals with the morality of Napster.

      Did you read Michael Carrier's paper?

      Obviously there is a moral quandary over what Napster did, but they paid for it in court, end of story.

      The fact that this technology was then offered in a legitimate way and subsequently shot down with legal threats proves these record labels were complacent with the current state of affairs and did not want to innovate any further.

      One of the people interviewed in the paper said that if the record labels had embraced this technology, they'd could have made millions within those first few years.

       

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        Robert (profile), May 30th, 2013 @ 9:42am

        Re: Re: Mike NEVER deals with the morality of Napster.

        Three years before Napster, Todd Rundgren proposed such a plan and it was shot down as well.

         

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          Lowestofthekeys (profile), May 30th, 2013 @ 10:12am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          I don't mind that a business has the prerogative to keep itself afloat and avoid making decisions that may cost it money (even if the decision means they make more money in the long run), but I hate that their shortsightedness gives them reason to affect the law and by extension the population.

           

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          Ophelia Millais (profile), May 30th, 2013 @ 3:53pm

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          Are you talking about Patronet, his buggy, overengineered, browser-based content subscription service? That seems to have died on its own, and is more comparable to crowdfunding than Napster. Rundgren was vocally anti-Napster and the like.

           

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            Anonymous Coward, May 30th, 2013 @ 7:05pm

            Re: Re: Re: Re: Mike NEVER deals with the morality of Napster.

            According to Todd's video on YouTube, he pitched and it was rejected, not died on its own. But if you have an article that backs up your claim and counters Todd's, I'd love to read it. Perhaps he worded as shot-down because it was less of a shot to the ego?

            He wasn't anti-Napster in the video, maybe he changed his tune? He just discusses how things are and how to move forward and how the industry (labels, lawyers) didn't respond, they reacted (poorly). Thanks for the link though I'll read/watch it.

             

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        wallow-T, May 30th, 2013 @ 12:38pm

        Re: Re: Mike NEVER deals with the morality of Napster.

        Making millions of dollars through embracing file-sharing might have been nice, but the sale of hard CDs delivered $13 BILLION-with-a-B in revenue in the peak year of 2000. Source: http://www.abajournal.com/magazine/article/the_record_business_blues/

        I have a distant memory that the global recorded music business took about 40 Billion dollars in the peak years, but I cannot find a source.

         

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      Anonymous Coward, May 30th, 2013 @ 9:38am

      Re: Mike NEVER deals with the morality of Napster.

      Knowing OOTB it's propably a lie, but I'll tackle the morality of napster if mike did not: Sweat of the brow/creativity does not give you a moral right to a monopoly, therefor copyright infringement isn't immoral.

      However, I do think we should have and enforce copyright for utilitarian reasons, provided length of terms are reduced(or at least no more retroactive copyright extensions to circumvent the limited times requirement of the constitution) as well as making fanfics that aren't novelizations of movies/comics or only minor rewrites of existing copyrighted stories legal.

       

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        out_of_the_blue, May 30th, 2013 @ 9:57am

        Re: Re: Mike NEVER deals with the morality of Napster.

        @ "Anonymous Coward,
        Knowing OOTB it's propably a lie, but I'll tackle the morality of napster if mike did not: Sweat of the brow/creativity does not give you a moral right to a monopoly, therefor copyright infringement isn't immoral."

        THAT'S SHEER ASSERTION. A laborer owns his work.

        The societal deal has been worked out for over a hundred years now. It's a practical scheme whereby those who create are the only ones allowed to try and get income off that work; others are prohibited. New gadgets don't change it.

        See my later post for another point: no one is actually hindered from innovating OUTSIDE the content and methods that RIAA controls, but they want to leverage from existing product, because creating, including paying for, is the difficult part which gives the SOLE moral claim to a work.

         

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          Lowestofthekeys (profile), May 30th, 2013 @ 10:13am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          "THAT'S SHEER ASSERTION. A laborer owns his work. "

          And what if a group of people takes the laborer's work as their own and keeps it for a ridiculous length of time providing only a meager amount of compensation?

           

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          John Fenderson (profile), May 30th, 2013 @ 10:42am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          The societal deal has been worked out for over a hundred years now.


          And the major labels & movie companies were the ones who broke that deal.

          no one is actually hindered from innovating OUTSIDE the content and methods that RIAA controls


          But hey are. Witness the increasing number of bars that won't allow bands to perform their own original music, due to threats from licensing agencies. Witness the increasing number of actions taken against technologies and distribution channels (including private websites) despite their complete uninvolvement with "grifting" (using your own weird definition).

          Not to mention the legal changes are efforts for even more draconian laws that are and will be used for outright censorship of people who aren't engaging in anything remotely like piracy.

          Not to mention the efforts to cripple fundamental internet technologies.

          The actions of RIAA, MPAA, and the like are harming everyone, even those who don't distribute any music or movies at all.

           

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          Anonymous Coward, May 30th, 2013 @ 11:00am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          Quote:
          See my later post for another point: no one is actually hindered from innovating OUTSIDE the content and methods that RIAA controls


          Wrong copycrap doesn't apply only to content controlled by the RIAA or the MPAA, photographs, books, scientific literature, software and a lot of others things fall under copycrap hence why is so damaging for innovation.

           

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          Anonymous Coward, May 30th, 2013 @ 11:20am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          THAT'S SHEER ASSERTION. A laborer owns his work.

          So then, the so-called public roads are actually owned by all those folks in the funny orange vests?

           

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          Anonymous Coward, May 30th, 2013 @ 11:51am

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          THAT'S SHEER ASSERTION. A laborer owns his work.

          Unless he's already been paid for it. He doesn't get to keep selling it over and over again.

           

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          JEDIDIAH, May 30th, 2013 @ 12:08pm

          Re: Mike NEVER deals with the morality of Napster.

          > THAT'S SHEER ASSERTION. A laborer owns his work.

          No. A laborer almost NEVER owns his work. He gets paid for whatever time he toils but rarely does he ever own the result or even any kind of share.

          This is why the rest of society has such a hard time with some has-been coasting off royalties for a 30 year old work.

          > The societal deal has been worked out for over a hundred years now.

          Wow. A whole 100 years. That's weak even by the standard of American history.

           

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          RD, May 30th, 2013 @ 12:09pm

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          "THAT'S SHEER ASSERTION. A laborer owns his work. "

          WRONG! Or at least, if he SELLS the work of that labor, he no longer owns it. He can own his work as long as he wants, as long as he keeps it to himself. You are arguing that if a "laborer" builds a house, he owns that house FOREVER, even if he sells it to someone. Even copyright confers the same structure, and is codified in first-sale laws. Can't have this both ways asshole.

           

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          Anonymous Coward, May 30th, 2013 @ 1:15pm

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          The societal deal has been worked out for over a hundred years now. It's a practical scheme whereby those who create are the only ones allowed to try and get income off that work; others are prohibited. New gadgets don't change it.

          Funny thing about your claim, it only came about after a new gadget, records, became viable. So new gadgets can change societal deals.

           

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          Alana (profile), May 30th, 2013 @ 4:55pm

          Re: Re: Re: Mike NEVER deals with the morality of Napster.

          "A laborer owns his work."

          That's why the entire copyright industry is based around taking away creative rights from the creators and giving them to studios and labels.

          The artist always totally owns their work, totally! Except that statement has no basis in fact.

           

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      Robert (profile), May 30th, 2013 @ 9:38am

      Re: Mike NEVER deals with the morality of Napster.

      The Industry NEVER delivers what customers want. They just present barely usable services while using legal and financial resources to kill any innovative service that delivers what the customer wants and pays the artist.

      Take an acid trip through distorted reality of trichordist.com and riaa.com, it makes Alice in Wonderland seem like Forest Gump
      Where they'll march over the cliff dragging our Governments with them, while we stand on the edge and watch.

       

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    JP Jones (profile), May 30th, 2013 @ 9:38am

    The "tradeoffs" are between a smaller pie and a bigger one, and Picker seems to be upset if the law favors a bigger pie. I can't see how that makes any sense from an economic standpoint.

    This is simple. A bigger pie means that each piece is less valuable. A small pie means that each piece is more valuable. The big pie probably also has a lot more people benefiting from it than the small pie.

    When you're one of the people already benefiting from the small, valuable pie, why would you want to let other people in?

    From a greater economic standpoint, what you're saying makes perfect sense. More accessibility means more people benefiting which improves the overall economy. But from a individual standpoint, the individual making a lot of money now may go down to making less money, and for them that's all that matters.

    I'm not saying it's right. But you can always make sense of human greed and self-serving behavior.

     

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    techflaws (profile), May 30th, 2013 @ 9:45am

    Obligatory Family Guy reference: If the RIAA never existed...

     

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    out_of_the_blue, May 30th, 2013 @ 9:49am

    So, CREATE your own content, and "innovate" with IT all you want!

    The essential idea here at Techdirt is GRIFTING, trying to get your hands on content that someone else made, and get income of it. THAT'S YOUR ACTUAL GOAL. You are trying to find a "legal" way to leverage the big pile of value that the RIAA already has.

    You are NOT prohibited from merchandising fresh content outside of the RIAA box in any manner that you want. GO AHEAD and put it free for all on file hosts, GIVE AWAY AND PRAY, T-SHIRT SALES, whatever you can think of.

    But you should stop trying to STEAL what others own.

     

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      techflaws (profile), May 30th, 2013 @ 9:52am

      Re: So, CREATE your own content, and "innovate" with IT all you want!

      Bullshit.

       

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      Robert (profile), May 30th, 2013 @ 9:55am

      Re: So, CREATE your own content, and "innovate" with IT all you want!

      First and second sentences are wrong, you've been proven this already.

      Second "paragraph" is not the same as what is happening. Even if such a service existed, where it was fast, easy and simple and didn't permit label music on it (for fear of lawsuits) it would be sued out of existence by RIAA/Label lawyers. Already happened.

      Third paragraph: But why would you want competition when you can squash it and offer the sheep only what you deem salesworthy!

       

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        out_of_the_blue, May 30th, 2013 @ 10:03am

        Re: Re: So, CREATE your own content, and "innovate" with IT all you want!

        @ "Robert"

        Your post is not an argument, only simple contradiction.

        FIRST YOU GUYS NEED YOUR OWN CONTENT, NOT TO STEAL FROM OTHERS.

         

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          Robert (profile), May 30th, 2013 @ 10:04am

          Re: Re: Re: So, CREATE your own content, and "innovate" with IT all you want!

          I guess you didn't get it.

           

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          Lowestofthekeys (profile), May 30th, 2013 @ 10:07am

          Re: Re: Re: So, CREATE your own content, and "innovate" with IT all you want!

          "FIRST YOU GUYS NEED YOUR OWN CONTENT, NOT TO STEAL FROM OTHERS."

          Wow, talk about overgeneralization. No wonder no one takes you seriously.

           

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          Anonymous Coward, May 30th, 2013 @ 11:03am

          Re: Re: Re: So, CREATE your own content, and "innovate" with IT all you want!

          First you need to produce something really unique, which I doubt very much you will be able to do.

          Second stealing ideas is not and should never be a crime EVER!

          I believe the fruits of ones work should be owned by the guy who actually worked for it.

          The musician who goes out and play his music should get paid by the public that goes to watch it, that is fair and square, sitting your ass on a couch waiting for royalties is not.

           

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      Anonymous Coward, May 30th, 2013 @ 9:57am

      Re: So, CREATE your own content, and "innovate" with IT all you want!

      Is it really possible to create new and original items in a vacuum?

      Okay, tell us why Disney has utilized public domain materials, then. We all want to know. Was it because they weren't creative enough to come up with something completely original?

       

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        Ruben, May 30th, 2013 @ 11:52am

        Re: Re: So, CREATE your own content, and "innovate" with IT all you want!

        Because there's no such thing as an original idea. Period. Everything any human created was based, in part or whole, off of something previously created.

         

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      Anonymous Coward, May 30th, 2013 @ 11:48am

      Re: So, CREATE your own content, and "innovate" with IT all you want!

      You are trying to find a "legal" way to leverage the big pile of value that the RIAA already has.

      Ummm, yes. Exactly. Why is that a problem?

      You are NOT prohibited from merchandising fresh content outside of the RIAA box in any manner that you want.

      Ironically, here you've hit the nail on the head. In the long run the RIAA will neither win nor lose. They will slide into irrelevance as fewer artists and consumers see any point in them. The real fight is about minimizing the damage they do to culture and freedom along the way.

       

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    Dirkmaster (profile), May 30th, 2013 @ 11:45am

    Steven Marks is clearly a lawyer of the same character as John Steele if he can present this tripe as fact with a straight face.

     

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    wallow-T, May 30th, 2013 @ 12:30pm

    Innovation blocking from the old major labels, just off the top of my head:

    - the lawsuit against the Diamond Rio MP3 player

    - the lawsuits against Bertelsmann from the other record companies, after Bertelsmann made an investment in the original Napster.

    - the steady erosion of the well-settled "Sony" doctrine allowing things which have "substantial non-infringing uses."

    - the Sony Rootkit fiasco

     

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    Anonymous Coward, May 30th, 2013 @ 12:51pm

    Diamond Rio. RIAA sued Diamond over the device, lost the case, but Diamond after the long arduous legal battle, was out of money and that caused them to close up. RIAA not Stifling Innovation? Then explain the Rio. It was an innovation. It was new. But it couldn't possibly live with the RIAA's current stances on technology at the time.

     

    reply to this | link to this | view in chronology ]


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