Two Key Points: Copyright Isn't The Only Business Model; And When Done Wrong Makes Other Models More Difficult

from the keep-those-in-mind dept

We’ve already discussed how the House subcommittee on Intellectual Property is taking the exact wrong approach for its copyright hearings, trying to set this up as if it’s “copyright vs. technology.” Even worse, when you looked at who the actual hearings involved, the first hearing wasn’t about actual creators, but rather legacy means for funding content creators. And, not surprisingly, the argument they made was “more copyright, more enforcement and less fair use.” They built their business models around copyright, and they just want it to be stronger.

But that doesn’t mean that’s best for actual creators or for the public who are supposed to be the beneficiaries of copyright law.

Thus, the second hearing, which was supposed to be about the “technology” really showed a number of companies who demonstrated alternative business models that don’t rely on copyright and have found that many of those alternative means are not only quite profitable, but better overall. In many ways, the two hearings weren’t “creators vs. tech” at all — but rather “business models that rely on copyright and business models that either don’t rely on copyright, or which rely on fair use.” It’s worth watching the hearings, which you can see here:

As part of this, they demonstrated a key point: despite claims to the contrary, there are all sorts of ways to make money that don’t rely on copyright and, on top of that, excessive copyright or excessive copyright enforcement can actually create all sorts of problems. In fact, the focus on just using copyright as the only model can be counterproductive. As Nathan Seidle from Sparkfun pointed out:

Attempting to stop pirates is a waste of time. Show me an anti-piracy law or technology and I’ll show you a dozen 15 year-old girls and boys who can crack it. The resources spent stopping pirates comes at the expense of innovation and improving the business practices that actually serve the customers and industry. The most efficient way to get reimbursed for creative work is to make it easy to purchase and consume that content. How do you get the market to buy your product or service? Provide better support, better quality, better price, and better availability. If you show the consumer that you are a better company with which to do business, they will shop with you. This is not a new business model. This is how business has been done for thousands of years. There is no need to waste time, energy, money and resources suing infringers or pirates; our time is better spent innovating.

Unfortunately, some on the subcommittee (and some commentators) seemed to get the wrong message, thinking that the panel was arguing for no copyright. They were not. But they were making the key point that, contrary to what some believe, copyright is not the only way to make money, and setting policy based on the false belief that copyright is the only way may actually do more harm than good, by limiting many of those other means — other means that may be more effective, more available to more people, and more beneficial to the public. Worse, when copyright policy is focused solely on trying to protect the business models built to rely on copyright, then it can actually do tremendous harm to all those other models and opportunities.

For example, many legacy copyright middlemen have been pushing strongly to make third parties liable for stopping infringement. But, in many ways that would be disastrous for so many artists and so much of the public. That’s because increasing secondary liability — such as forcing companies that allow user generated content to police for infringement would mean that (a) many of those companies wouldn’t exist, as the liability would just be too high and (b) that those that do exist would offer much more limited services, making it that much more difficult for content creators to be able to create, distribute, promote and monetize their works today.

The message being sent wasn’t to do away with copyright — but to recognize that if the goal is to incentivize creativity such that the public benefits, you need to look at the whole market. That’s why it still seems like a much more beneficial effort would have been one that had the kinds of representatives seen on both panels plus content creators plus people who make use of these various platforms in a variety of ways. Then you get a fuller picture of the ecosystem — and understand why a narrow focus on merely “strengthening enforcement” or merely trying to “stop infringement” will often miss the bigger picture, and make things more difficult and less beneficial for both creators and the wider public.

Jonathan Band highlights this point in his discussion about the hearing:

Congress and the Executive branch also constantly call for more copyright education, which typically means teaching consumers about the penalties for infringement and artists about how to better enforce their rights. Indeed, at yesterday’s hearing, several members asked the Rackspace witness about how small rights-holders could better use the DMCA to remove infringing content stored on Rackspace servers. These members missed the point made by the Indiegogo and SparkFun witnesses that most individual creators may well be better off financially pursing open distribution models rather than the traditional copyright model. The government, at the urging of large media companies, has been educating artists about copyright enforcement, when it probably should have been encouraging them to explore alternative means of generating revenue.

This is really the key point we’ve been trying to make for years. This has never been about technology vs creators, as some would like it to be. Many of these services are providing tremendously powerful new opportunities to creators, if they choose to embrace them. The concern is that along with the freedoms that enable many of these platforms and services to exist, it is true that they can sometimes also be used for infringement. That’s only a serious problem if you rely too heavily on “copyright” as the only business model you use. Yet these speakers were showing that there are other ways to do things, and often those ways aren’t just better, but they’re less adversarial towards fans and the general public.

In other words, there is a way to make these things work in a manner that really does benefit creators and the public without cutting off the powerful communications channels that so many people have become accustomed to.

Filed Under: business models, copyright, copyright reform, house judiciary committee