Part Two: Can Copyright Be Fixed?

Q. Boyer

In a previous column, I addressed the goal for what I’ve termed the “post-fix” world of copyright. Now comes the hard part: describing in greater detail how we get to the desired end state from where we stand today.

Oddly enough, one idea that could form the basis for a system that presents some hope for the future of digital media monetization was conceived of not in the recent past, but in the 1980s. It was envisioned as a means of direct digital file transmission, much like Apple’s iTunes or Amazon’s digital goods stores, only the path between seller and buyer would be even more direct, offering artists and rights-holders the opportunity to sell their creations directly to consumers, with all the necessary royalty payments and transactions fees automatically accounted for by the system’s software.

The difficulty of doing something is not a good reason to avoid doing it, if it is something that must be done.

So, who was the visionary behind this concept? Was it a technologist? No. Was it an attorney with a keen sense of how the development technology was greatly outpacing the evolution of intellectual property law? No, again. The man behind this vision was none other than legendary American composer and musician Frank Zappa. As an artist who had serious issues with his treatment at the hands of record companies, Zappa had great motivation to conceive of a better means of distributing his work to fans in a way that cut out superfluous middlemen.

Zappa was also a businessman, however, and while he clearly wasn’t “only in it for the money,” to paraphrase of one of his classic album titles, he was certainly inclined to see that to the extent that his work did make money, that money went into his own bank account, and not into the wallets of corporate interlopers, opportunistic pirates, or anyone else whose name was not Frank Zappa.

In a nutshell, Zappa’s system involved direct digital transfer of music to consumers, delivered via phone lines and cable TV systems, with both royalty payments and consumer billing being accounted for automatically by software incorporated into the system.

The one major problem with Zappa’s concept is that it was ahead of its time; the available technology simply wasn’t up to the task. By 1989, Zappa declared his idea a “miserable flop,” as he put it in his autobiography, “The Real Frank Zappa Book.”

My argument is not that Zappa’s concept is a perfect fit for the current digital goods market, so I’m not going to describe it in detail here. What’s important is the core of the concept, and how that core can be expanded upon to account for and accommodate current trends in technological development and consumer behavior.

The technology that was sorely lacking when Zappa tried to execute his concept now exists – the commercial Internet, widespread broadband access, robust wireless networks, sophisticated transaction tracking, micropayment processing, advanced digital rights management protocols – these are all now part of the digital landscape. The central challenge in realizing something like Zappa’s vision is no longer a technological one; it is now a matter of law, policy, politics and systems standardization.

In order to adapt Zappa’s concept to the current market, one new wrinkle needed is the ability to track access to, and usage of, digital files in any context, including consumption on free sites and even in a peer-to-peer sharing context. In an ideal, post-reform world, here’s how I see digital goods distribution working:

  All new (and reissued) music, movies, e-books, etc. distributed digitally would be encoded using a standardized digital fingerprinting mechanism, yielding a file that’s easy to identify and track. The fingerprinting would enable detailed accounting of how, where, and by whom a file is accessed, displayed, or otherwise transmitted, which would in turn enable sophisticated accounting with respect to “micro-royalties” and “minicommissions” (more on those concepts below)

  A “micro-royalty” system would be established under which mere views and playbacks of a file would be charged royalties at a minimal rate, with the individual distributor (be it a website, a service or an individual consumer sharing files he has purchased) receiving a portion of the payment as a ‘mini-commission.’ Alternatively, distributers could choose to swallow the payment of micro-royalties in order to offer free content to end-users of their site/service.

  By necessity, the microroyalties would have to be very small on an individual view/play basis, but the aggregate revenues would be substantial, particularly for very popular files that draw hundreds of millions of views/plays.

  Artists, record labels and movie studios, in addition to their current distribution channels, would offer their products for direct download by consumers, and include limited redistribution rights predicated on the payment of micro-royalties.

  Files that end-users purchased strictly for their own personal use would not be subject to micro-royalties, until and unless the end-user chose to redistribute or share those files, at which point micro-royalties would begin to accrue in proportion to third party use of/access to the files.

  Copyright law would have to be revised to permit redistribution using the automated micro-royalty, contingent upon distributors and file-sharers meeting their obligations with respect to paying royalties. Those who attempted to evade or abuse the new system would be subject to fines and other penalties, much like the current statutory damages for copyright infringement.

  To expedite adjudication of relatively small civil copyright claims that might still arise under the system, the current means of litigating online copyright claims through complex actions in federal court would be replaced by a ‘small claims’ court for copyright disputes (a type of copyright reform that has already been proposed by the group American Photographic Artists).

  Services like cyberlockers would have a choice to make with respect to the distribution of copyrighted/fingerprinted materials via their system: they could offer such content for free to end-users and pay the sum of the accrued microroyalties themselves, offsetting the cost via advertising revenue or some other means of monetizing their service, or charge consumers for access to copyrighted/fingerprinted materials.

If such a system were created, not only would it present rights-holders a means of making money from widespread file-sharing (a consumer behavior that seems very unlikely to go away any time soon), it would also serve to co-opt piracy to a great degree, turning erstwhile pirates into paid, legitimate distributors through the use of approved mini-commissions.

In order for such a system to be created, of course, all stakeholders involved would have to give up something dear to them. In the case of rights-holders, they’d have to give up a fair degree of control over their products, but haven’t they already lost that control without being compensated for the loss? Certain savvy consumers would have to give up on getting for free all the entertainment they are supposed to be paying for, but they are supposed to be paying for it, after all. ISPs and OSPs would have new obligations foisted upon them, but the inherent reductions in liability presented by these reforms would be a substantial benefit to them, as well.

Obviously, the description above represents a very simplified picture of how such a system would function, one that is full of holes and not really possible under existing copyright law. It might also be a very tough sell to rights-holders who believe that they should have the right to control distribution of their work in a very tight and narrow way. The system would not eliminate online piracy, although I believe it would substantially reduce it, and push piracy back down to the level where it is an unfortunate-butbearable cost of doing business in the digital world.

With all those caveats in mind, the difficulty of doing something is not a good reason to avoid doing it, if it is something that must be done – and if the current state of the market for adult entertainment, movies, software, music and other digital goods demonstrates nothing else, it is that reforming both copyright and digital distribution protocols is indeed something that must be done.

Q Boyer, an online adult veteran, leads Pink Visual’s PR efforts.