Did We Miss Our Best Chance At Regulating The Internet?
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In 2010 I was in a leadership role on the data science team at Grooveshark.com. These were the pre-Spotify days, and we were trying to transition customers away from elicit downloads to music streaming. Using the YouTube user-generated content model made a lot of sense. We theorized that if YouTube could democratize the distribution of video, allowing creators from all over the world to distribute their art on a speedy, frictionless platform, it only made sense that we could do the same for music.
On the information products team, our goal was twofold. First, we aimed to discover trending, unknown artists worldwide and serve them up to record labels hungry for new talent.
The second goal was to act as a connector between bands and brands so that artists and labels losing revenue could develop a brand-new channel for monetization. Eventually, we would be able to create affinity profiles on consumers across the globe. That’s something we bragged about back then. Now there’s a bit of shame associated with that type of information collection and rightly so.
While indies were quick to license Grooveshark, major labels did not want to give up their gatekeeper status. We signed deals where we could and took down unlicensed music when notified, frequently beating YouTube’s response time. The majors didn’t want the royalties. They wanted to make sure that any artist with a new or innovative sound had to come up through their farm league.
Lawsuits weren’t new to Grooveshark. We’d been sued a handful of times in state or federal courts. Often, they were disposed of in summary judgments or settled, turning into the licensing deals that we had been asking for all along.
But in November of 2011, Universal Music Group, along with Sony, Warner, and nine other labels, filed a lawsuit against the company and the employees themselves, including me and two junior employees. Generally, employees, especially non-founder, non-participating employees like us, would never be liable for the actions of their employer.
Still, because this was copyright infringement, the majors tried to pierce the corporate veil. They accused us of a combined $17 billion worth of copyright infringement. If found liable, I would have been on the hook for some $900 million that could not be discharged in bankruptcy and would be garnished from my earnings for the rest of my life.
It was a transparent attempt at intimidating new employees and discouraging prospective employees from accepting a job at Grooveshark or any other fledgling tech company hoping to innovate in the music space. The majors had successfully shut down some 20+ startups before us, but we were well funded, growing quickly, and loved by our 20+ million users. Under the leadership of founders Sam Tarantino and the late Josh Greenberg, Grooveshark had survived every attempt previously made.
I remain convinced that I was a party to that lawsuit for one reason and one reason only: I was going to be called as a witness in the House IP subcommittee’s second “Sites & Parasites” hearing. I would have testified to the evidence that major labels were feeding erroneous information to DMCA takedown systems and using the court system to structure settlements that would line label coffers but whose proceeds would never make their way to the artists.
Thus, they prioritized lawsuits over licensing deals. Knowing that no lawyer worth their weight in salt would volunteer a client for a testimony who is a party to a suit like that, I was served just as we negotiated my appearance before the committee.
In the “Sites & Parasites” hearings, representatives from legacy media angled to pass the conveniently titled Stop Online Piracy Act (SOPA) and its Senate sister bill, the Protect IP Act (PIPA). These bills would have given them a virtual veto on any tech platform that allowed users to upload their own content.
Speeches, news articles, music, video, and even user comment sections were well within the boundaries of this legislation. The legacy content industries believed that this was their chance to constrain the Internet. So, they fought like it was existential. For Grooveshark, it was existential. Had the legislation been enacted, Grooveshark would have ceased to exist immediately.
Though we were early into the fray, Grooveshark was only a minor player in the organizing efforts. The RIAA and MPAA were eventually thwarted when Internet creators, activists, and users alike organized to defend themselves, voluntarily blacking out some of the most significant websites on the Internet, and sending so many emails to congressional accounts that it resulted in the first email server outage in congressional history.
Soon after that, SOPA and PIPA were shelved, Spotify sold a portion of itself to the major labels, and we entered a period of detente.
Though it took two more years, that lawsuit did end up taking Grooveshark down. $150,000 per month in legal bills will bleed a startup dry, and having big enemies doesn’t inspire the fundraising they’d need to keep the venture growing. I resigned from my position in 2012, and the case against me was settled shortly after.
Some may argue that this was the preferable outcome. Major labels now embrace streaming. For better or worse, they participate in the profits of artist merchandise sales, live performance, and other exotic licensing opportunities. I’ve harbored a decade-long resentment against Spotify, but even I can’t argue with the amount of access to new and diverse music that my subscription delivers.
As I look back on all the startups that were cut down, the capital squandered, and the artists whose window for global exposure narrowed to just a handful of labels again, I find myself wondering: what did we accomplish in killing SOPA and PIPA?
We thwarted a bill that would have resulted in the most powerful legacy industries on the planet securing a veto on any new web 2.0 technology. We made the Internet safe for entrepreneurs. We protected the innovation sandbox that was the safe harbors, and we helped create hundreds of billions of dollars in new business opportunities and the jobs that went along with them.
We ensured that the Internet would remain a haven for free speech, popular or not, for another generation.
Still, I can’t help myself from wondering: could we have created a system that allowed for sensible regulation, thus pre-empting the maleficence of today’s internet behemoths? Was that our chance? Was that even within the deal space?
The negotiators from tech were not organized for a fight such as the one brought to their doorstep in 2010. You can draw a straight line from SOPA to the well-armed giants of tech now, thwarting regulation of any kind, sensible or not. That was their wake up call, and wake up they did.
Now the Internet companies are the monied gatekeepers and we are further away from sensible regulation than ever before. Recent disclosures from Facebook insiders suggest that polarizing the body politic is not just about clicks. It’s also a legislative strategy. The more polarized our legislative bodies, the less likely they will be to agree on any reform. Still, if I have to choose a side again today, I would not choose the side of censorship.
The Internet remains our best weapon in the fight against tyranny and the suppression of ideas. When they ban books in Texas schools, enterprising students will find them online. When they close polling locations in under-represented neighborhoods, the Internet will organize carpools. When governments silence public figures and force them into hiding for exposing high-ranking officials, the Internet will carry her message across the globe.
The Internet does not solve any of these problems. It is merely a tool. Each of us decides if we will use it to divide or unite. Though there may be a price to pay for free speech, the price is far greater if forced to go without it.
Paul Geller is the founder of Channelshift
This Techdirt Greenhouse special edition is all about the 10 year anniversary of the fight that stopped SOPA. On January 26th at 1pm PT, we’ll be hosting a live discussion with Rep. Zoe Lofgren and some open roundtable discussions about the legacy of that fight. Please register to attend.