Third Breakout Session: Copyright & Society
Clemens Appl & Philipp Homar, Vienna University of Economics & Business, Education 4.0: Recent Challenges to Copyright
From user-generated content to user-generated copyright. Use of materials for educational purposes is one of the most important aspects of the project. Standing on the shoulders of giants: research and teaching is based on preexisting knowledge.
Creation of content in education also matters. MOOCs, other forms. Public as distinct from users/“prosumers,” educational institutions, other intermediaries; European collecting societies are intermediaries who collect remuneration and fulfill social and cultural purposes.
Typical forms of digital learning: digital coursepacks; collaborative learning; student generated content—looking to determine which are the most common/relevant. Reliability and accessibility of resources on multiple devices is required. In terms of ©, we have reproduction and distribution/performance/sharing. Private and public sphere convergence: not a small group in the classroom but all over the world.
E-learning exceptions exist in Austria and Germany, but they’re different so that you can’t have cross-border classes without infringing. Uncertainty despite 2001 Directive allowing use for illustration for teaching or scientific research with credit “to the extent justified by the non-commercial purpose to be achieved.”
Equitable remuneration or Ginsburg’s concept of “permitted but paid” replacing fair use. Statutory licenses for redistribution/not new creativity. Free as in free speech, not free as in free beer. [I don’t much like this formulation.] Equitable remuneration.
Desired outcomes: Regulations with a clear scope; general clauses aren’t enough for the educational sector. Prevent double remuneration of rights holders.
Kristelia Garcia, University of Colorado Law School, Facilitating Competition by Punitive Regulation
Majors (60% of market) tried to withdraw digital rights from ASCAP. Universal secured a rate nearly 2x that ASCAP secured. First time they’d tried to license the digital rights by themselves; collectives have always been justified on ability to minimize transaction costs and use bargaining power, but this result (2x rate!) suggests a weirdness. Assignment is not exclusive; Sony/Universal could have done a deal w/o withdrawing digital rights from ASCAP. ASCAP’s contracts didn’t allow partial withdrawal: voluntary, but if you’re in you’re all in.
Doubling of the rate: ASCAP is responding to needs of differently situated members and operating under consent decrees; thus might not have been able to charge market optimal price. Alternately: pathological private ordering, her position. Negotiations amounted to parallel pricing/tacit collusion. Collective bargaining made more sense in analog world; can’t go around to every restaurant. Easier to know what Pandora played and how many times.
ASCAP had to amend its governing documents to allow partial withdrawal; SDNY as rate court rejected that. This doesn’t bode well for ASCAP, or for majors who don’t want to monitor every restaurant.
Why should we care? Potential for anticompetitive behavior to stifle innovation in the distribution space. Sony/Universal went to the strongest streaming service first—doesn’t encourage new entrants. Can also be a method to cut out artists’ royalties. ASCAP requires royalties to go to artists.
What should we do? The rate court? Antitrust? Antitrust may have difficult time here—parallel pricing and tacit collusion don’t violate the Sherman Act etc. They are concerning, but not enough to violate the law. Merger review is usually effective but doesn’t work here, partly b/c of history of nonintervention by DoJ. When we went from 4 major publishers to 3, it didn’t make the situation worse because it was already crappy. Consent decrees: the big hammer—but it’s already in use; the individual publishers don’t operate under it. Withdrawal = more concern for competition than collectives governed by consent decrees. Network effects in content and tech.
Proposal: have gov’t set prices, but allow opt out of regulation if you can show robust competition in an area. Similar to private utility regulation. That increases the cost of private ordering, but also opens up regulatory gaming/lobbying.
Removing digital rights only = remove lots of revenue while leaving lots of overhead for the group, including the smaller players. Total withdrawal might eventually lead to a market clearing solution/lower payments for smaller players.
Brauneis: §115 is always an option for covers. When you’re talking about petitioned opt-out, do you also mean that you want publishers to be able to exempt themselves from the §115 license?
A: No. Thinking of it on the other end—mandatory so that you can’t go around it, even with Harry Fox. If the licensee doesn’t want to go to the mandatory route and thinks it can work out a better rate w/the publisher, it can do so only if it shows the market is competitive. But should give more thought to the licensor side as well.
§115 is less concerning than public performance rights, b/c Sony and Universal wanted the right to deny licenses altogether.
Matt Sag: how significant is the antitrust exemption for webcasting? Otherwise this looks like a solid antitrust case.
A: We don’t have the smoking gun.
Sag: that’s because they collude with immunity at SoundExchange. Structural problem.
A: agreed. Not enough competition for traditional tools to work.
Sag: in other industries that are this concentrated, the actors are very careful—the publishers found out that they shouldn’t do this in the Apple Books case. But in music, they have a special room where they can discuss how to kill Pandora. Maybe that’s the problem.
A: root problems w/in the industry are a big deal. We could move on to full on barriers to entry, if Sony/Universal pull their content they might be able to prevent successful streaming services other than the ones they allow/control.
Pam Samuelson: who out there could do some worthy regulation? Before we say let’s go, who can do it? The Copyright Office isn’t well situated for that kind of market power analysis. They don’t know enough about the music industry and their report was not warmly embraced. Where is there institutional competence to right this particular balance? Maybe the FTC over others, but they’d need some congressional delegation of authority.
A: that’s the sticking point. (Samuelson suggests Tim Wu’s Copyright’s Communications Policy.)
Lisa Macklem, University of Western Ontario
Cash For Content: Profiting from Copyright on the Internet
© uses boundaries to control, while the internet was designed to increase communication/exchange knowledge. Schumpeter’s theory: evolutionary—different flows that disrupt existing equilibria. Posner: overregulation = artificial rents through scarcity. Virtually all transactions have some uncompensated third party effects. Differences in the kinds of IP make them inappropriate for property treatment—sui generis understanding is best.
New entrants: internet intermediaries. Technological neutrality isn’t obviously connected to ©, but changing the form of the internet has important implications for ©. Courts approach new technologies with new understandings—TV through internet is not legally the same as TV through the air.
Aereo: search for the best analogy. If the goal is to be technologically neutral, are they finding the right analogy? Unintended winners in Aereo: consumers insofar as the service spurred TV companies to speed up authorized online access.
Cloud computing: technologically the decision could have applied to it, but distinguished—this is a danger of getting the analogies wrong.
ESA v. SOCAN, 2012 SCC 34 (Canada 2012)—ESA wanted to double-dip when video games were played online. Licensed music w/in a video game doesn’t justify an additional royalty when the game is downloaded; that shouldn’t be different than when a physical disk is purchased.
CBC v. SODRAC: CBC uses incidental copies to produce an end copy that is ultimately shown; simple matter of creating final product. Now before the Canadian court. Tech neutrality as central to ©. Part of the balance b/t copyright owners and copyright users. [History of discourse around what counts as “equal treatment” suggests that agreement on what neutrality is will be hard to come by.]
How Netflix gets it right: tech neutrality can foster increased distribution/dissemination of knowledge. More rights owners may have to be satisfied with smaller slices of the pie. Netflix doesn’t rely on standard Nielsen ratings—pushing the boundaries of innovation on content.
Lea Shaver, Indiana University Robert H. McKinney School of Law
Book proposal: Book hunger: economic demand for published works is different from cultural demand. Zulu language—10 million speakers, a lot of them poor, so standard publishing model doesn’t work and doesn’t generate many books for them. When social entrepreneurs/nonprofits have taken up the challenge, though, there is great demand. Pratham Books in India—sold cheaply largely to institutional buyers—huge interest. Unexpressed demand: publishing for the blind.
Social publishing: Driven by sense of social mission. Rely on social subsidies to make the revenue model work—charitable contributions, gov’t support. More creative approaches to © because not dependent on recouping costs from sales. Social distribution: want to deliver books at the lowest possible price.
Business model innovation: they are forced by necessity, b/c going after hard to reach market niches, to radically innovate v. traditional publishing model. Amazon innovated at one point in the product market; but these organizations have to innovate at every step to drive down costs of doing business.
Content acquisition: First Book is US based organization that works with for profit publishers who agree to make copies of works available at 70-90% discount to closed marketplace of organizations, about 70,000 across the US, that serve low income children. They’ve targeted diverse books—minority characters and authors, not produced by standard market—they’ve set up an advance purchase commitment w/publishers to change what gets published.
Book Dash: South Africa. Come together to write a book and give it away.
Pratham Books: Illustrations are donated to a bank. Any person can tell a story in their language using these pictures. Disrupts our construct of authorship, revealing it as an effect of the conventional publication model.
Distribution/printing/education: African Storybook Project distributes works in the form of PowerPoint—the costs of 50 print copies shipped across bad roads is much greater. Enables teachers to translate slides into other languages.
Bookshare in US: Often approached by for-profit publishers interested in their expertise in ebook platforms and publishing.
Marketing and sales: PJ Library: Funding comes from Jewish philanthropic sources; Jewish themed books, and work w/different community orgs to identify Jewish families and mail them a free book each month. Book serves as marketing for the organizations.
Pratham books—reaching the most remote villages, “the last child.” Tried partnership with post office; with Unilever. Even if we could ride the Coca-Cola trucks, it wouldn’t work—because books aren’t a commodity like Coca-Cola. It’s important that the book be relevant to this particular person in this particular language. Digital distribution can have a broad selection and address niche market as well as mass.
“Mission-driven innovation.” These organizations not focused on money/profit are able to innovate better than for profit organizations especially in areas of market failure. We should fund organizations that are willing to do the difficult and expensive work of innovation, which carries large risks of failure. Future of publishing industry more broadly?
Q: Consider also failures. Wikimedia Foundation’s Wikibooks, which has been around for years but hasn’t succeeded very well. [Great point: taking lessons only from success is a classic problem of examining innovation.] Ways to quantify/reward community production, e.g., with tokens.
Samuelson: Brewster Kahle’s Bookmobile in developing countries: prints out books and gives them away.
A: signs of the variability of the possible form.
Q: What about “altruistic piracy”? People who are disseminating cheap copies but not following all the rules.
A: Reminds her of questions about the history of publishing for the blind—doesn’t know if that story has been told.
Matt Sag: There are places where exemptions for blind are rarely used—other factors are preventing production.
A: that’s the story this book plans to tell. You need more than an exemption.