Michael A. Carrier, Copyright and Innovation: The Untold Story: Really interesting piece based on interviews with people in tech and music about the effects of Napster and Napster on digital music innovation. One nicely made point (of many): record labels had trouble adapting not just because they didn’t want to disaggregate tracks, but also because they had so much physically invested in the old way of doing things—and had managed to capture most of the gains to be had in the distribution channel from end retailers like Tower. If you’ve spent a billion dollars buying trucks to deliver CDs but have ongoing distribution costs down to the minimum, digital looks extremely problematic. Also, they didn’t have the rights clearance issues worked out (surprising how often that happens in copyright industries—the people who yell loudest about owning property might not really be the owners). Short-termism and a culture focused on yearly bonuses also comes in for criticism, as with other sectors of the economy. A quick overview:
One innovator likened the uncertainty to “a protection racket” or “the way that I imagine politics work in corrupt countries” where “everything is OK until it’s not OK.” In those settings, “you do what you want until one day you can’t and they come and your tail light’s broken.” That situation, in which “there isn’t a strong rule of law,” is similar to “the current copyright system” in which it’s “actually impossible to run a fully legal music service.”
Contrast this with Steven J. Horowitz, Copyright’s Asymmetric Uncertainty, which claims that because “users are risk seekers in the face of liability, they engage in more (not less) expression under an uncertain regime than under a clear one. Copyright holders by contrast are risk averse, valuing clear entitlements more than equivalent murky ones.” Horowitz reaches this conclusion in substantial part by defining users as “those who want to use preexisting works to create novel expression . . . . Unlike the copyright holder, the potential user tends not to create with an eye toward exclusive distribution of his work.” Not for nothing when we're talking tolerance for being accused of breaking the law, this ideal type is explicitly a “he.” Also of course this skims over key sources of uncertainty for platforms, documentarians who need E&O insurance, educational fair use, etc.