TCS Daily

Share and Share Alike?

By William F. Adkinson - July 16, 2003 12:00 AM

The music industry is ratcheting up its legal fight against Internet piracy. The Recording Industry Association of America (RIAA) has announced that it will take legal action against those who illegally distribute ("upload") copyrighted music files on the Internet, making them accessible for free copying by virtually unlimited numbers of consumers around the globe. Major distributors, who offer the largest number of files, will be the primary targets. Even so, opponents rail at the prospect of having so-called "file-sharers" subject to legal sanctions for their actions.

But these file-sharers are unquestionably breaking the law. Courts have repeatedly and unequivocally ruled that "file-sharing" -- unauthorized distributing or copying copyrighted files over the Internet -- is illegal. Nor does the First Amendment offer any protection to such acts of piracy.

Indeed, "file-sharing" is emphatically not "sharing." As Professor Jane Ginsburg observes "Before Napster, sharing meant giving up something so other could enjoy." Internet distributors retain their copies, and copiers get content for free. "'[F]ile-sharing'" is "simply unpaid copying for personal enjoyment."

Economists have a word for such conduct: free-riding -- enjoying for free what is available only because paying customers are footing the bill. Any consumer would prefer to get a product for free, while others pay. Free-riding may appear harmless, since it does not interfere with others' enjoyment directly. However, it is purchases by paying customers that create the incentives for providing content. Free-riding undermines the incentives for producing the content that all consumers -- paying customers and free riders alike -- value.

Copyright is designed to curb such free-riding. As the Supreme Court has explained, copyright, creates the "marketable right[s]" that "suppl[y] the economic incentive to create and generate ideas." To effectively market these rights, copyright owners must be able to limit access to paying customers. Copyright enforcement actions, such as the actions the RIAA is taking against Internet distributors, thus protects "the engine of free expression."

"File-sharers" ultimately free-ride on the paying music customers, to the detriment of all music consumers. By reaping the benefits while refusing to ante up themselves, free riders reduce the resources that will be devoted to producing content. There will be fewer artists promoted, fewer film projects pursued, fewer new games designed, fewer books published.

Quite simply, paying customers are critical for investment in quality content. That's why pay cable channels can provide premium content. And the more people paying for a type of product, the greater the incentive for producers to invest. That's why media industries create many products favored by mass audiences and relatively few products desired by narrow segments. Creative effort and investment follow the paying customers; not free riders.

The cornucopia of music available online now is largely the result of expenditures made while copyright protection was effective. It makes free-riding especially attractive now, but consumers in the future will pay the price.

Significantly, the industry is also introducing new online distribution models that are transforming the marketplace, offering consumers tremendous variety and flexibility at bargain prices. Those who pirate content can no longer blame the music companies for not offering attractive alternatives; these new models take this previously dubious justification out of play entirely. And since the education has long been central to the music industry's enforcement efforts, they will be hard-pressed to plead ignorance.

To pursue unauthorized distributors, the RIAA will have to do what the "file-sharers" do -- scan the directories of files freely available through peer-to-peer (P2P) systems (using specialized software) and download potentially infringing files. There is rich irony in complaints that this violates the distributors' privacy. Internet distributors are clearly operating in the public realm when they chose to make files on their hard drives available to the world for illicit copying over P2P systems. Using these techniques to identify illegal distribution is poetic -- and real -- justice.

Some claim that the industry is erring by suing its own customers. That's a canard. The RIAA is suing the unauthorized distributors of their members' content, who are central players in today's rampant online piracy. Unauthorized distributors, like everyone else, must be held responsible for their illegal conduct. Unauthorized Internet distribution violates the copyright laws, which were enacted to protect everyone -- artists, producers, and especially consumers -- from the pernicious effects of free-riding.

The RIAA's initiative should be welcomed by everyone since it is critical to protecting incentives to create the high-quality digital media products of the future. If copyright protection is to extend to the Internet, the widespread piracy on the Internet must be checked; through education where possible, but if necessary through traditional means such as legal action. Without effective enforcement, copyright law will be an empty shell on the Internet, and everyone -- especially consumers -- will lose.

William F. Adkinson Jr. is Senior Policy Counsel at The Progress & Freedom Foundation and fellow at its Center for the Study of Digital Property. The views expressed here are his own.

Editor's note: For another perspective on this debate, click here.

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