TCS Daily

Tipping Their Hand

By Glenn Harlan Reynolds - August 7, 2002 12:00 AM

For years now, I've been saying that the record industry's long-term legislative strategy had less to do with preventing copying than with sewing up the market to ensure that Big Entertainment companies won't have to worry about competition from independent artists. It looks like I've just been proven right.

The proof comes in the form of a bill sponsored by Sen. Joseph Biden (D-Del.) that would make it a crime to fool "digital rights management" systems, even if doing so were for a legal purpose. Here's how the bill would work:

Biden's new bill would make it a federal felony to try and trick certain types of devices into playing your music or running your computer program. Breaking this law--even if it's to share music by your own garage band--could land you in prison for up to five years. And that's not counting the civil penalties of up to $25,000 per offense. "Say I've got an MP3 collection and I buy a new nifty player from Microsoft that only plays watermarked content, and I forge the watermark to allow my legal MP3 collection to play," says Jessica Litman, who teaches intellectual property law at Wayne State University. "It is certainly the case that if I pass that around, I could be trafficking (in violation of the law)."

I believe that the goal here - and, implicitly, the goal behind the Digital Millennium Copyright Act, and Fritz Hollings' sponsorship of various bills for Hollywood interests who give him a lot of money - isn't protection against pirating. And it's not entirely even about blocking consumer copying that, though legal under copyright law, might cost the record companies or Hollywood a few sales. It's really about protecting these old-technology dinosaurs from the competition that new technologies make possible.

The music industry is already suffering from this. Though the record industry tries to blame Napster, AudioGalaxy, or some other flavor-of-the-month file-trading system for its CD-sales woes, the real problem is that it releases a lot of crap. There are too many management types working for record companies who make too much money for doing, well, not much of value. Meanwhile, artists are being cheated out of royalties (according to the New York Times, 99.99 percent of audits show artists to have been underpaid by record companies) and even their pensions while regulators and politicians who claim to be for the little guy look the other way - or, as with Biden, Hollings, and Rep. Howard Berman (D-Cal) carry water for the industry.

People in the record industry know that they face a problem. But rather than trying to deal with it, they've responded the way Mel Brooks, playing the Governor in the movie Blazing Saddles, did: by calling together their henchmen and saying "Gentlemen, we've got to protect our phony-baloney jobs."

And they're right to be afraid. While Britney Spears and the Backstreet boys are replaced by ever-younger teen bands, independent artists on the web are making quality music - and often making it available for free. Salsoul goddess Cecilia Noel has had over 1.3 million plays on the Internet, earning her $41,773.29. That doesn't sound like a lot, but it's more than most big-label artists ever earn. (And it's a lot more than the $67 / month pension Sam Moore of Sam & Dave is getting, thanks to his record company's failure to make required payments into his pension fund.) The web is full of other good artists: just check out blues guitarist Hector Qirko or the many independent artists available on the Angry Coffee website.

Few of these artists will every sell as many CDs as Britney Spears, or even the Backstreet Boys. But there are tens, maybe hundreds, of thousands of them. To the record industry every CD they sell is a CD that a big label didn't. That's why the record companies have been assaulting music-sharing systems so vigorously. It's not the copying they mind, so much as a system that breaks their stranglehold on promotion and distribution, in which bands rise or fall based purely on the quality of their songs. The technology for motion-picture distribution hasn't come as far yet, but the movie industry has felt the
cold breath of competition on the back of its neck, and it doesn't like it.

What they're trying to do is to create a system that's not so much proof against copying - a mostly impossible task anyway - as a system that's very unfriendly to content that comes from anyone other than Big Media suppliers. It's not about copying. It's about competition.



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