Chad Perrin: SOB

21 June 2007

quick primer on theft and copyright, in case you can’t tell the difference

Filed under: Liberty — apotheon @ 03:43

Anyone who thinks copyright violation like downloading MP3s from a peer to peer filetrading network is “theft” doesn’t know much about copyright and property:

  1. It’s not theft because nothing is taken from anyone. No one is deprived of a possession. Thus, it is copyright violation, not theft.
  2. Sales are not a guarantee or a pre-existing possession, so the “deprived them of sales” argument is complete crap.
  3. Even if it was theft when the first person ripped an MP3 from a CD, it wouldn’t be theft for someone else to download it later on a peer to peer file trading network. At worst, it might be accessory after the fact — but you’d have to prove it was knowingly receiving stolen property for that to stick. Because of 1 and especially 2, though, it’s not even theft when the original MP3 is created, so point 3 is kinda . . . pointless.

Unfortunately for those of you who think organizations like the RIAA and Microsoft aren’t doing anything wrong, and want to argue for the ethical and moral necessity of copyright law, that means that most of your arguments have gone up in smoke. This isn’t anything revolutionary, by the way — what’s new is the belief by many that copyright violation constitutes “theft” in some way, or that copyrightable works are intellectual “property”. In fact, back when the debate over whether to include a legal basis for copyright (and patent) law in the Constitution was settled by the extended “family” of the founders of the United States, copyright was understood to be nothing more than a temporary grant of monopoly power via governmental force. The substance of the debate centered around whether this was justified by an unproven, but intuitively appealing, idea that such temporary monopolies might help foster innovation.

If you want to argue for copyright-based protectionist practices, you’re better off trying to prove that such monopoly power fosters innovation better than the freedom to build upon the works of others and the lack of opportunity for corporate copyright holders to lobby for copyright term extensions into infinity (and beyond). Keep in mind that copyright has long since become about far more than mere innovation fostering: it by definition exists for a term that far exceeds the natural life of the creator of a copyrightable work in most of the world (usually the life of the creator plus fifty or more years). With a particularly successful and valuable copyrightable work, this actually seems more likely to encourage an innovator to sit down, shut up, and collect royalty checks for the rest of his or her natural life, rather than to ever create anything again.

Only the chokehold on copyright ownership in various media publishing industries (book publishing, record publishing, et cetera) by large corporations, acquired because of the juicy value for stockholders of such revenue generating contents’ copyright longevity, prompts creators to create again. After all, most of the money that can be had through leveraging copyright goes to the publisher, not the creator, thus leaving the creator somewhat impoverished except in extreme edge-cases, forcing such creators to expend a heck of a lot of time in other industries. The longer the term of the copyright, the more money it can generate — but the more likely large corporations are to sit up, take notice, and dominate an industry in a manner that squeezes the creators themselves out of the picture when it comes to collecting dollar bills. In other words, ironically, the more revenue generating potential delivered by copyright law, the less revenue the innovator is to actually receive. It has gotten to the point now where in the record industry “success” is far more likely to leave you in debt than rich. No, really:

At a major label, most artists are unlikely to earn anything unless they sell at least 1 million albums, and even then, they could wind up in debt. Everything from studio time to limo rides are charged against their royalties, which might be only $1 per disc sold.

This is what you get for strengthening copyright law to foster innovation.

From whom are you stealing when you download a song in violation of copyright law? You’re certainly not stealing from the artist. He or she was already robbed by the record label. What exactly are you stealing? Nobody’s deprived of the song just because you have a copy, and chances are good you wouldn’t have bought the damned thing anyway.

No . . . all you’re really doing is throwing a monkeywrench in the works of the theory of fostering innovation through monopoly grants. If it’s that easy to do, it doesn’t really work worth a damn anyway. That’s predicated upon an unproven assumption that it would be successful in a net beneficial effect on innovation even if copyright law magically made everyone behave nicely toward everyone else anyway.


  1. You’re certainly not stealing from the artist. He or she was already robbed by the record label. It’s fascinating that you’d say this about a voluntary contract. Are recording contracts so much more confusing than (say) real estate contracts that they constitute a variety of fraud?

    Side-question: How many contracts are readable by lay-people the way they (would be? will be?) interpreted in court?

    Comment by SLR — 22 June 2007 @ 03:55

  2. It’s fascinating that you’d say this about a voluntary contract. Are recording contracts so much more confusing than (say) real estate contracts that they constitute a variety of fraud?

    I got a little carried away with that statement, perhaps. I think that qualifies as hyperbole.

    On the other hand, the record industry has become so thoroughly dominated by corporate interests that have institutionalized the process of extracting every last possible dime from a recording artist’s work that even someone cognizant of the dangers of entering into a contract with an RIAA label may feel trapped, unable to make any choice other than either taking the deal that’s offered (no matter how piss-poor a deal it is) or not getting any deal at all. It’s a bit like either paying the troll beneath the bridge or turning around and going home when you know the troll is there in advance — which, while ultimately a voluntary decision, still involves getting robbed.

    Side-question: How many contracts are readable by lay-people the way they (would be? will be?) interpreted in court?

    That’s a good point — and pretty relevant. I think it’s a pretty bad sign that entering into a real contract (as opposed to these “end user license agreements”, which aren’t really very legally binding by comparison) without the expense of a lawyer to okay the deal is essentially an inexcusable act of folly in our current legal system. It gets worse when making deals like those that are a daily occurrence in the record industry, because recording artists must not only understand the contract, but also understand the financial implications of the deal well beyond the range of expertise of most lawyers that aren’t so institutionalized by the record industry that they think it’s normal.

    Ultimately . . . yeah, at some level, record executives are complicit in a widespread, generally targeted act of fraud. I think very few recording artists would have signed the deals they did if they knew the likelihood of outcomes, and that the record industry is in large part organized around fostering such ignorance in the people off whose work it generates its revenue, and taking advantage of that ignorance.

    I remember the day that TLC announced it was filing for bankruptcy back in the early ’90s, and I remember (being unfamiliar with many of the workings of the world) thinking they must have been pretty stupid to waste all that money they were making, being all over the radio and MTV and so on. I didn’t realize, of course, that the only reason we didn’t hear about a lot more recording artists filing for bankruptcy was that most of them didn’t realize they could get out of their recording contracts in that manner, and were resigned to what amounted to a life of indentured servitude. It wasn’t until Willie Nelson went down the financial tubes that I started to think something smelled fishy, and in the years following that event I’ve learned a lot more about what’s going on in the record industry (thanks to the Intarwebs). I’m no expert, but I know better than to sign a deal with EMI without a good lawyer, a good accountant, and an experienced former record executive in the room with me and on my side, negotiating a good deal and advising me — and even then I’d be skeptical (assuming, of course, I had anything EMI wanted).

    The link I provided at the end of this SOB entry, by the way, wasn’t the link I wanted to provide — it was just the one I could find. What I had been looking to use (and was probably amongst the URLs I lost at the beginning of the year when I suffered a small bookmarks problem with a Firefox upgrade) was a weblog post by a former record industry deal-maker who laid bare much of what’s going on in the record deal signing process. The read was, frankly, horrifying in its implications for the mainstream record industry. Things are beginning to change, in large part because of the ability to self-promote on the Web, but it’s not that long ago that you essentially couldn’t enter the record industry as a recording artist without signing whatever the label put in front of you. It’s surprising these guys aren’t subject to prosecution under the RICO act.

    Comment by apotheon — 22 June 2007 @ 10:46

  3. From my PoV, the likely fraudsters are the agents who say, “This is a standard contract” (true, beside the point) under the guise of and under the professional obligation to seek good contracts for the artists. I wonder if it’s possible to apply the pressures of “fiduciary responsibility” to an agent.

    The record-label’s contract is bad and unreadable; the former is expected at the beginning of negotiations, the latter is how the legal system works.

    That aside, the wickedness of the record label doesn’t change the fact that they have been assigned copyrights, or publishing privileges (usually the former, because of the misery of music-industry contracts). I don’t think “stealing” is the right word for what happens when somebody ignores a copyright, but… ignoring the copyright owners copyrights is wordy. (ItCOC?)

    So, to get down to my personal stance, I believe that copyrights do, generally (which is to say, not necessarily as they are now), have a positive effect on innovation, because without copyrights, innovation is an economic public good where the whole world is “the public.” The monopolies granted through copyright are a lazy-government’s way to… not necessarily find the optimum point but get closer to it. I guess without any economic data to back it up, that the length of copyright now has overshot, but I dunno. The German government directly subsidizes a variety of musical endeavors (think NEA grants to musicians) but maybe it doesn’t work that well because they’re not even trying, to put money in the hands of the economically (socially) valuable innovators, pretty much the opposite actually (on the idea that the economically valuable innovators are getting rewarded by the semi-market economy).

    Patents aren’t very long at all (17+17 years?) but are still actively concentrated by big patent-accumulating corporations (Xerox, pfizer, etc)

    Thanks to a little cutie called “economy of scale,” music copyrights are probably worth more to a copyright accumulating corporation than they are to the innovator. The innovators need to start demanding that the copyright accumulators pay what the rights are worth.

    Anyway, I haven’t studied economics recently, so my application of the “public good” concept may be off base. But if it is appropriate, at least it’s some explanation for why (regarding copyright-law) at all: artificially creating a market which will determine the value a work and reward the copyright holder that amount.

    ItCOC is essentially bad for artists you like (that are signed to major labels) by turning a “midlist” artist into a “we don’t give a shit about you” artist and that means worse treatment if/when they recontract, less leeway to musical self-determination, fewer or shorter concert-tours. It sounds totally disgusting to say it, but giving money to the record label helps to buy your artist better treatment from the label. Is that the way it should be? Probably not… I happen to like owning CDs, so I buy them. But I also ItCOC to the extent of space-shifting, and ignoring (I think, so far unenforceable) claims against my ability to resell (not that I resell much, but I do buy a lot out of a resold market).

    Comment by SLR — 22 June 2007 @ 08:48

  4. […] The following is in answer to the points brought up by reader SLR in answer to my previous post, “a quick primer on theft and copyright”. I only separated this from the collection of comments there and chose to make a new post of it because it grew so long and, I think, is worth presenting more visibly — if only because it addresses reasonable questions directed at my statements, coming from the perspective of long familiarity and even comfort with our current system of copyright law. In other words, I think these are ideas and implications in need of answer. […]

    Pingback by Chad Perrin: SOB » responses to objections to some statements on copyright law — 28 June 2007 @ 11:12

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