Friday, August 05, 2005

King Content vs. the Copyfighters

It is too your problemI’m new to Copyfight, and I found Scott Kleper’s Introduction to Copyfighting a useful primer. Kleper defines the premises of copyfight by stating two complementary principles:
  1. “Copyfighters aren’t saying that information should be free.” I’ll call this Selling Bits, which is shorthand for the right that owners of digital information have to make money selling their products in any way they choose.
  2. “We are saying that as consumers of media (film, television, software, literature, etc.) we have certain rights that we would like to protect, [including] Fair Use [and] First Sale.” I’ll call this Fair & First. (Let’s leave aside the fine distinction that Fair Use is not a right but a defense against claims of infringement, and the fact that First Sale case law is murky at best. )
These two principles are the heart of the matter, not least because they are the paragraphs Cory Doctorow highlights in his endorsement of Kleper’s statement.

The hard question is whether both principles can be satisfied simultaneously for digital media. The very existence of the copyfight suggests that they cannot, since it is a struggle over which right trumps the other.

Incumbent content owners and their technology suppliers (“King Content”, for short) argue that DRM is the only way to make money from content. In order to implement DRM, they do not allow Fair Use (since copying any part allows a bad actor to copy and then infinitely reproduce the whole), and prevent First Use redistribution (since digital redistribution without limit means the value of the first copy is zero) by only licensing their goods, and not selling them. (In the interests of transparency: I used to work for King Content.)

The Copyfighters are inventing new business models that uphold Fair & First, since the existing ones which satisfy this principle don’t work very well. The examples so far are not conclusive. Kleper avers that there’s a wealth of content available under the Creative Commons license (CC); but even if one stipulates that volume of content is significant, that says nothing about profitability. Even CC itself allows producers to specify which uses are not allowed – but without DRM, or an equivalent technology, how are those rights to be enforced? And speaking of the Creative Commons Founders’ Copyright, Tim O’Reilly says “It lets publishers like us free up great books after they've lost profitability,” which implies that being free and being profitable are at odds.

The Tussle

Since both principles can’t be satisfied simultaneously, we have two camps, each advancing the primacy of their preferred choice: King Content vs. the Copyfighters. Each side concedes that both principles are important – but not equally important. King Content attempts to simulate some Fair & First functionality, though not at the expense of monetization; and the Copyfighters advance cases for monetization, though not at the expense of Fair Use and First Sale.

It’s a contest on many levels: insurgents vs. incumbents, paradigm shifters vs. the shiftees, and fragmentation vs. integration. The insurgents exalt the diversity and recombinant vitality of the web, and are betting that a new content consumption paradigm will inevitably follow. The incumbents want to keep making money with the least possible disruption; they support the status quo. Since scarcity is a precondition for value and hence profitability, the incumbents want to control as much of the value chain as possible – they want a closed, integrated end-to-end solution, which disgusts the insurgents.

Have no doubt, this is a political struggle. We’re talking about a shift in technology paradigm, which the Copyfighters want to convert into a shift in legal paradigms. If they succeed, it will lead to a shift in business power structures. This is a scary prospect for King Content – though as the Betamax case shows, the outcome could in fact be very profitable for the incumbents. The Copyfighters have a philosophical fervor that reminds me of the story John Markoff tells of the way the Sixties laid the foundation for the PC revolution in his new book, What the Dormouse Said.

In the court of public opinion, it becomes a question of who bears the burden of proof. Should the Copyfighters demonstrate that, and how, both principles can hold at once, or should King Content prove that they can’t? If both can’t hold, should King Content prove that Selling Bits trumps Fair & First, or do the Copyfighters have to establish the reverse?

Put another way: Is there a problem? Who’s problem is it? And who’s responsible for solving it?

At the moment each side is trumpeting the merits of its preferred principle. While Copyfighters mostly care about threat to Fair & First, their opponents see that as a threat to selling bits, since they can’t imagine of a viable business alternative. Both sides feel threatened – hence the passion.

Political skirmishing is well under way. The Digital Millennium Copyright Act (DMCA) limits one’s ability to obtain Fair Use by hacking content protection, on the basis that Selling Bits comes first.

Digital Rights Management

DRM is the Copyfighter’s Grendel. It is the mechanism King Content has chosen to use to charge for its product, and it is antithetical to Fair & First. The arguments against it fall into distinct (though often conflated) categories. DRM is said to be:
1. Inconvenient
2. Impractical
3. Counter-productive
4. Immoral

One of the most spirited cases against DRM can be found in Cory Doctorow’s talk at Microsoft Research in June 2004. He argues that DRM systems don’t work (= impractical); are bad for artists, for business in general, and for Microsoft in particular (= counter-productive); and are bad for society (= immoral). Doctorow, Kleper et al. always provide entertaining anecdotes, including the obligatory one about not being to tape from a DVD, about how infuriating DRM can be in practice (= inconvenient).

The arguments play different roles. If any of the first three are correct, business logic would dictate that King Content should change his behavior. However, neither people nor companies are logical… Given how entrenched positions have become, it’ll be difficult for industry to concede objections One through Three publicly if they turn out to be true. Hence the copyfight’s need for the fourth objection on moral grounds. Copyfighters have to make the political argument that even if DRM were to be convenient, practicable and productive, it is still to the detriment of society.

King Content cannot avoid the moral – that is, political – fight even if it wanted to, since the industry also needs political change. I don’t have a problem with Hollywood and Co stipulating whatever legal business terms they choose for their products. (Some in the copyfight community might disagree, or mightargue that some terms which are legal today shouldn’t be.) If Content’s offer is inconvenient or impractical, customers will spurn it and turn to the alternatives. If the alternative is legal and viable, and the Copyfighters are working to construct such a world, then let the best solution win. But since we’re dealing with new technologies here, legacy legislation won't always fit. King Content will need new law, as it did with DMCA. The debate then shifts from technical to moral ground, and a negotiation about the greater good. The Grokster case postponed industry’s need for new legislation, but cannot defer it indefinitely.

Denial

Both sides are in denial. While the Copyfighters profess to support the selling of bits, the examples I’ve seen where both of Kleper’s conditions are satisfied are anecdotal at best, though good work is emerging on the related topic of Open Source: see eg Perens on the economics of Open Source, and Steven Weber's book The Success of Open Source. Even if the Copyfighters can demonstrate that media in the new world are Free as in Speech, not Free as in Beer, they will still face indefinite trench warfare with King Content unless they can also show the incumbents a viable alternative to their current models. Right now they’re like the old-timer telling someone looking for directions that “It’s quite simple, really, but I wouldn’t start from here.”

It’s a favorite argument of Copyfighters that Bad Actors aren’t their problem. There will always be hackers, it is said (the Darknet paper is invariably invoked here), but most people are good, honest folk. Good, honest folk deserve Fair & First; tough luck on King Content if someone takes advantage of it to squeeze profits. In fact, the Copyfighters argue that there won’t be a squeeze. The folk who work for King Content, though, have a fiduciary duty to protect their business, and they’re still convinced that Bad Actors will suck out all their profits if Fair & First is applied the way Copyfighters want.

If industry has a failed business model, it’s not only its problem – it’s the Copyfighters’ problem, too. Without it, the rebels will only reach the sunny uplands of digital utopia over the cold dead bodies of today’s incumbents. That would be a long and bloody fight.

King Content, in turn, is suffering from “copyfright”. The industry is working hard to maintain the old model using new technologies, and is using legislation and litigation wherever possible to keep the market within the bounds that it’s comfortable with. There’s a resonance between King Content and King Canute, though with a notable difference: Canute was making the point that the sea cannot be held back, not trying to stop it.

The industry isn’t helped by the fact it’s in a “DRM Winter”, but can’t admit it. Like the AI Winter, great things were promised for DRM, but haven’t been delivered. The problem as stated is simply too hard to solve. In the end, many of the technologies AI researchers developed did come to market, but with little fanfare. Similarly, DRM technology will play a useful commercial role however the fight turns out. However, King Content denies the need for a Plan B; it’s DRM (in all its glory) or bust.

Outcomes

Copyright is a socially negotiated balance between content creators and consumers. “Copyfight” is the latest round in this tussle. At its simplest, there are three possible outcomes:

1. King Content wins
2. The Copyfighters win
3. There’s a negotiated settlement
The rebels are looking for a win, but since they’re the underdogs, they would probably settle for draw. The industry hasn’t thought seriously about what an accommodation might look like; it seems too awful to contemplate. It’s not illogical: for King Content, a draw is as bad as a loss, since it changes industry dynamics – not to mention the unacceptable loss of face if the promised DReaM doesn’t come true. However, a mixed world is the most likely outcome. I’ll explore the shape of a Content/Copyfight coexistence in a subsequent post.

1 comment:

Anonymous said...

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