IPSC Breakout Session I

IPSC Breakout Session I: Copyright: Music & Remixes

Assessing France’s Graduated Response Scheme Against Piracy & State Interventionism in the Marketplace for Copyrighted Content

Nicholas Jondet

Strong philosophical attachment to ©, and economic interests—Universal Music is French-owned.  In practice, low fines and no convictions despite misdemeanor status of infringement and possible 3-year sentence and €30,000 possible penalties.  2006: wide consensus for adapting criminal provisions. Proposal of €150 fines for uploading and €38 for downloading. Struck down by constitutional court: infringement is the same whether it’s offline or online.  2007: review of system, which recommended a graduated response adminstered by a dedicated body b/c private parties on their own couldn’t deal with mass piracy.

Constitutional council said that proposals didn’t fit the French human rights framework, notably the 1789 Declaration on Human Rights, requiring balance of copyright and freedom of expression; disconnection must be done by courts.  Two phases.  Authority sends warning; access to internet isn’t absolute but penalty must be imposed by court.  Internet user has duty to secure network against use for infringement.  Hadopi: 2010.

2012: Hollande was elected; his party wanted to get rid of Hadopi.  But he personally was more circumspect.  Tension in independent administration from the start: the carrot and the stick.  Budget was large, but decreased and went up last year to €8.5 million.

If you’re a rightsholder, you collect info and notify Hadopi. 5 million first warnings sent; 500,000 second warnings and 3,000 third warnings.  Last year there were 1.6 million first warnings sent.  2221 deliberations about referring a case to the courts. 361 cases brought to courts. Courts assess the infringer; 51 decisions reported back to Hadopi. Fines between €50-1,000. Copyright societies think the courts are too lenient. One disconnection reported so far.

A lot of studies about whether it works.  Hadopi argues that it doesn’t have enough funding to fulfill its mission.  There’s a database of legal French services done by Hadopi—making it easier for people to find content.

Justin Hughes: detection is the responsibility of a rightsholder.  Data collection has to be approved by the relevant authority, as opposed to what happens elsewhere.

Annemarie Bridy: we use the Copyright Alert system in the US, though it’s not producing any reports or information.  They’re renegotiating the MOU.  Talk about relative benefits of gov’t system?

A: public scrutiny.  The fact that you have an authority in charge of checking that privacy is respected helps w/due process and ability to appeal.  Real issue w/French system is costliness for taxpayer.  The rightsholders should/could put money into the system.

Copyrightability of Digital Remixes and the Right of Remixers

Yahong Li

Remix as a general condition of culture; digital remix brings back Read-Write culture, as argued by Lessig. Musical remixes as prominent examples: Grey Album, Mix the City, Girl Talk.  Legal reality: protection has been strengthened for copyright owners, ISPs, mainstream social media, but remixers and creators fall into a legal vacuum, potentially oppressed both by ISPs and by copyright owners.  Peter Menell: mashup as defining genre, but uncertain contours of copyright pushed this underground and stunted its development, depriving artists of compensation and further alienating netizens from © as a system. Recent cases not just in US; many remixes in Soundcloud were taken down.  Righthaven trolling; FUD in uncertainty of remix.  Andy Baio: “the chilling effect is palpably real.” 

Legislative developments: Canada, UGC exception for noncommercial remix.  UK: new fair dealing exceptions didn’t include UGC; other countries have rejected/not mentioned. US Green Paper says still needs exploring. Questions: is fair use enough? Predictable v. unpredictable. Is it a defense or a positive right?  Does the P have to rebut the defense or does the D have to prove the four factors?

Q: what rights does a downstream remixer have?

A: Right included in copyright.

Q: does the legal culture affect whether uncertainty is good or bad for production?  Or is it more about whether the producers are noncommercial producers?  Compare to dojinshi in Japan.  There, it’s a huge commercial business, in essentially open conflict with formal Japanese law, but there are very few legal conflicts. Why, and can it be exported?

Q: what about eliminating the possibility of injunctive relief?

The New Problem with Music

Peter DiCola

Spotify: huge net losses. The more they make, the more they lose. Partly owned by © owners. What’s going on?  “Why Tech is Eating the Music Industry,” from Digital Music News.  Apple, Alphabet, Microsoft, Amazon, have bigger market cap than ExxonMobil; FB is just behind. Compared to 2006, when it was just Microsoft at the top.  Amazon is about to jump into streaming; like Google & Apple, has deep pockets and doesn’t actually need the music side to be profitable. Music as an add-in to Amazon Prime increases customer loyalty; if they move the needle on retention of a few percentage points, that’s worth billions to Amazon.  The other piece is that music services have special data about us.  Wal-Mart was the biggest music seller before the internet; cheap prices on music got people into the stores.  Music now is not about its own value, but about keeping people on platforms and collecting data about them. Think about how customer data has changed in the new music industry.  Think about changes in the broader context.  Music industry used to require a lot of trains and trucks shipping; big box retailers made music stores smaller part of business and music stores concentrated into chains; labels had little customer data other than record clubs.  In 2000s and 2010s, consolidated into major labels while unauthorized copying exploded. Retail inventory becomes enormous, stable, and generally always growing. Interaction w/customer data—digital retailers have data; shipping is no longer a problem. 

Steve Albini, The Problem w/Music, 1993, the Baffler: recording engineer on Nirvana’s last album; also band members. Net income from a year on a major label contract: $4,031.25.  Today, he thinks Spotify and streaming are great. He says: We never made any money from selling records; now I can reach fans worldwide and support touring and other ways musicians make money.  What could contracts look like in industrial organization terms? Hard to imagine © owners having leverage; not just largeness, but large user base: you have to be on YT, even Taylor Swift agrees.  Hard to imagine Amazon agreeing to give music companies a cut of lawnmower sales, even if data from music helps shape the pitch Amazon gives for the lawnmower.  So downward pressure can be expected to increase. Customer data: could they negotiate for access to who’s buying?  Could © require this?  Raises serious substantive privacy questions, and questions about ©/privacy overlap.

Q: South Korea: Samsung launched “Milk,” w/every phone sold.  Free music service, but rightsholders and fans objected—if people become used to getting free music, then no one will want to pay for it.  Samsung withdrew the music service.

RT: How does this interact w/§512 and the industry’s complaints that YT drives down prices?

A: Everything structural is going against the music industry. Consumer surplus is huge; music fans are saving $100s per year w/access.  So that’s why you have to go look at the development of industry; makes §512’s configuration less pressing/solving the last problem.  Changing §512 is not going to solve these problems.

Q: is Tidal working?

A: No. $19.99 initial price point; market says no, that’s not the price point for music.  Consumers aren’t yet interested in higher quality.  Hard to get consumers to care about artist-owned services, and part of that is that artists make it hard for audiophiles to buy the highest quality FLAC; it’s so much easier to use Spotify.

Annemarie Bridy: Tussle b/t Spotify and Apple re: antitrust w/r/t in-app purchases.  So interesting to watch evolution of exclusivity/fragmentation in availability of content, attempts to differentiate v. antitrust.

A: may need to formally model incentives of people to be in and out of exclusive deals.  What contracts we should expect is a really interesting question; also affected by DoJ ruling on ASCAP.  There are people in the industry who think Spotify can’t survive on its own b/c it doesn’t make any money.

Q: Is Albini saying that artists’ interests are more aligned w/intermediaries than w/labels at this point b/c intermediaries aren’t acting as bottlenecks?

A: Yes, but the one point is the data—if you want to tour, you want to know where you’re popular.

Who Killed the Radio Star? How Music Blanket Licenses Distort the Production of

Creative Content

Ariel Katz & Eden Sarid

Cultural production in radio’s Golden Age: mix of music and talk, mostly talk. In-house production, mainly live.  Mid-50s/60s shift in content to much more music, less talk.  Less quality in talk that remained. Music is prerecorded; content is outsourced, not live/commissioned by radio stations.  Explanations: television; other tech changes; social and cultural changes (video killed the radio star).

Alternative explanation: music is crucial to radio; broadcasters get blanket licenses to perform music from CROs. Conventional wisdom: CROs produce efficient reduction of transaction costs; but raise concerns about lack of competition, market power.  Our point: blanket licenses also distort cultural production, artificially diverting resources away from other cultural products and to music. Where marginal price of playing another song is zero, you play more songs and have less talk.  Unless you’re a publicly funded radio station that need not behave according to pure economic rationality.

But why only after the mid-1950s?  Sound recordings aren’t fit for broadcasting yet; broadcasting is live and all content has to be performed in the studio. The cost advantage of blanket license is less pronounced.

RT: these last two papers have a dialogue about the effects of “all you can eat” both on intermediaries and end users.  Increased social value overall, decreased value to individual input.  Both papers also have a dialogue about placing music within the context of other economic outputs, and the effects of that on what look like internal doctrinal and market issues.  Glynn Lunney’s work is also of note here.  Question: Commercial radio: what’s the role of diversity/niches such as Rush Limbaugh?  Role of product differentiation, as discussed in plenary?  There is an incentive to capture the non-music fans somehow.  Maybe people are satisfying their talk needs with the internet and PBS Newshour.  Also: When you say distortion, you might be asked: compared to what? What would the world look like without CROs? 

A: We could do without them, and so we should be mindful of what they actually do.  Talk radio: may need public funding to produce it.

Hughes: Not clear that there’s any evidence this increases or decreases users’ utility.  Would pay per play be a better system? We could certainly do that, and that might distort less than a blanket license, but that’s only true if the people negotiating a blanket license don’t know much about the radio station, which they do.  I negotiate a blanket license = I know a lot about their users and how much music they play; it actually represents something closer to pay for play than you seem to assume.  “All you can eat” can be predictable if you know who you’re feeding and you’ve been doing it a while.  [nicely said]

A: compare to situation w/o CMOs.  That doesn’t mean pay for every play necessarily; that could be inefficient.  Sony might bundle all its music. 

Hughes: recorded music, not blanket licenses, might be the cause.  Session performers were driven out by recorded music—would have to be really high price before it would justify live music.

A: true, it’s a combination.

How Law Defines Music

Joseph Fishman

Law has focused on melody.  Blurred Lines case: lawyers and music professors agreed that it’s only been melody.  Musicologists saw a sea change b/c all that’s been protected before is melody.  ?uestlove says there was no plagiarism b/c the melody different. But recent cases, not just Blurred Lines, have adopted a more multidimensional view of what counts.  Until about a decade ago, the commentators would have been right.  How did we get here? Older view was in tension w/what other genres went through, where any aspect could in theory be the basis of a © claim. If what we want is theoretical purity, then the trajectory is good; healthy outcomes for music, however, would return to the old focus on melody. The reasons for rejecting melody only were good ones but we end up with a suboptimal, unpredictable, overly broad law as the result.

Commentators in the West used to think melody was the most important, influential part of a musical work. Music publisher rearranged serious opera into light dance music; court rejected defense of fair abridgement b/c melody was that in which the whole meritorious part of the invention consists.  Thus, it wasn’t an abridgement, in reality.  But melody’s dominance is not true of lots of music today, from jazz to pop music.  Producers are paid lots to contribute elements long before melody enters.

Traditional justification is weak, so we shouldn’t be surprised by Blurred Lines type cases in which courts don’t feel bound to dismiss claims notwithstanding the absence of melodic copying.  Other recent cases: New Old Music Gp. v. Gottwald (SDNY 2015)—purely about percussion.  BMS Entm’t v. Bridges (SDNY 2005)—case about reuse of phrase “like that.”  Court says original selection and arrangement is enough: jury question for total concept and feel.  Blurred Lines fits both these templates.  Each individual element isn’t de minimis isn’t a matter of law. Not as much of an outlier as sometimes portrayed. If there’s a trend, where do we go?

There is a better, doctrinally neglected reason to focus on melody: would make infringement assessment more predictable. Music is relatively modular. It’s often possible for composers to break off a discrete chunk called melody and focus on that as the thing to avoid copying. You don’t have to play the impossible game of divining a similarity index with elements of unknowable weights, from melody to orchestration to percussion to timbre etc.  Good for downstream creativity.  This rule would be an improvement b/c it cabins the inquiry. Only problem is that ex ante predictability as a policy lever for substantial similarity has never gotten much traction, though it’s been tried.

Shyam Balganesh: take a look at Mark Rose’s new book, Authors in Court, w/behind the scenes study of case in which the attempt was tried.  The plaintiff’s atty had written a treatise on breaking down works.

Hughes: is this shift b/c of the rise of recorded music and the fading of the score into the background?  You said in the paper jazz musicians understood this melody rule about ©, but I don’t think that’s true.

A: Mark Osteen studied bebop in 50s and 60s and said it; have to go back and check his sources.  Popular legal consciousness: not terribly nuanced, but understood that melody = lawsuit but borrowing arrangement would not.

Andrew Gilden: wouldn’t this make it easier for famous artists to take from nonfamous artists?

A: why asymmetry?  Would make it just as easy for relatively unknown artists to copy nonmelodic stuff. 

Pam Samuelson: writing was pretty much the melody prior to 1976, so that history might support your thesis.  Might not be bad idea to go back and bolster the argument around the 1976 Act by looking at what the cases were focused on at that time. One question: is music different now than it was at the time these issues were being decided by Congress?