Copyright and P2P Networks

This article is Copyright 2003 by Chris Halsall. All rights reserved. Content may not be reproduced for any purposes without the express written consent of the author.

What does this mean? Technically, it means I have complete and sole control of the language making up this article. No one can reproduce this article without my permission, with the exception of up to two paragraphs which must be credited to me.

Practically? It doesn’t mean a thing — I’m a small time, non-syndicated author who doesn’t make much money from my writing; it’s not worth it for me to retain legal talent to enforce my copyrights. And, frankly, most small creator like it when their works are distributed — we create to promote an idea or simply to express ourselves. Redistribution helps in this regard.

Of course, not everyone shares this view. Particularly Big Media — companies whose profit centers are based on creative works. Book, magazine, music, movie and software publishing companies all rely on copyright to protect their interests. Every time a new technology has been introduced which enabled copying there have been attempts by these parties to block their use, from photocopiers to video tape machines.

In 1984 the US Supreme Court handed down a landmark decision in the Sony vs. Universal case. This decision set a precedent for allowing consumers to make copies of broadcast, copyrighted works for time-shifting and archive purposes, considering this a fair-use.

Universal Studios, along with several other content providers, had argued that Sony, as a manufacturer of copying equipment, was an contributory infringer. The court disagreed, arguing that while Sony’s Betamax could be used for piracy, the fact the equipment had legal uses and Sony had no control over such use meant they were not responsible for illegal activities. Copyright owners would have to find and prosecute individual pirates.

Needless to say, Big Media didn’t like this decision at all. Which is ironic when you consider that movie rentals quickly became a major source of revenue for the studios. Yes, some piracy resulted, but overall this new technology was a boost to the studios’ bottom line.

To Big Media, modern computer technologies are a new and much more dangerous threat. Digital copies of audio and video are nearly perfect and don’t degrade through successive copies. And the Internet, of course, allows users of Peer-to-Peer (P2P) networks to share such copies almost instantly.

Napster, the well known music sharing P2P network, was sued by the Recording Industry Association of America (RIAA) and ordered to shut down by the court. Napster made the mistake of maintaining a central directory of all the content available from its users, and thus was deemed to be a contributory infringer.

Many other P2P networks popped up to fill the gap left by Napster, but learning from its mistakes. Kazaa is the most popular at the moment, and was also sued by the RIAA. However, because Kazaa doesn’t maintain a central directory, and has legitimate purposes, it escaped prosecution for the same reasons Sony did.

The RIAA is responding to this in three ways. One is to begin suing users of P2P networks — already several people have been prosecuted and forced to pay exorbitant fines. Another front is for the RIAA to hire firms which attack the P2P networks themselves, uploading bogus files which appear to be popular music content and downloading content themselves to consume the resources of the network.

The third and most disturbing method is to lobby the law makers to change the laws — if you can’t win under the current rules, change them. A bill was just introduced in the US which would make uploading a file to a P2P network an automatic felony. The RIAA has also tried, but failed, to have a law passed which would allow them to hack into and destroy a P2P network user’s computer system.

Users in Canada are already familiar with the extra taxes charged for all recording media, from video tapes to CDRs — the collected funds are given to media companies as compensation for losses from piracy. The fact that such media is often used to back up content produced by the consumer appears to be irrelevant. When Lyle backs up his files used to produce the Business Examiner, entirely original content, record companies benefit.

The media companies argue they deserve these rights and compensation because the new technologies are causing them to lose revenue. I would argue that the real reason for their declining profits is that the content being produced now appeal to fewer people, and is not delivered in a form that people want. Consumers want to be able to purchase individual songs over the Internet rather than an entire CD from a retail store.

Apple’s iTunes Music Store demonstrates this well. Launched at the end of April, it has already sold 6.5 million songs. Some groups are refusing to allow Apple to sell their songs individually, clinging to the old “Album format” (consisting of two or three quality songs with the remaining being filler).

Modern technology transfers the power to the individual consumer, something which will never be possible to resist. When Big Media stop trying to block new technology, but instead embrace it, everyone will benefit — both the consumer and the producer, both large and small. The longer they wait, the more they have to lose.

Published in the Victoria Business Examiner.