Wednesday, July 22, 2009

Culture Clash on the Internet

The Internet has devalued content to the point where it is often offered at no charge—newspapers, for instance—or widely misappropriated, as with music and movies. Either way, many people expect much of their content to be free. Why is this, how did it happen, and, focusing on music and movies, what can be done about it?

I’ve previously written about the why, in Huffington Post and Vanderbilt Journal of Entertainment and Technology Law articles, and identified six factors. Let’s focus on two: the culture of piracy, and the rise of ad-supported business models. Underlying both is the belief that content on the Internet should be free (a notion reinforced by the other four factors).

How did this attitude arise? The answer lies in the origin of the Internet. At first glance, this is paradoxical: the Internet began in the late 1960’s as the ARPANET, a project of the Department of Defense Advanced Research Projects Agency, or ARPA. The DoD, of course, seldom fosters self-gratification, a trait that underlies the “free content” culture of the Internet.

However, take a second look. The ARPANET was developed not in-house by ARPA, but primarily by defense contractors orbiting Harvard, MIT and Stanford, and by universities. Their faculty and staff used the ARPANET for social purposes as well as research, for instance by setting up news groups encompassing a variety of recreational interests. No one charged for participation in those groups, or anything else on the ARPANET, and there was little regulation of content—or of file transfers via the network. Those files were primarily documents, data and software, since digitized music and video were effectively non-existent. Still, the precedent was set: file sharing was virtually unfettered.

The predominance of researchers on the ARPANET fostered an academic ethos that includes the concept that information, i.e., content, should be free, since only by openly sharing research can science and other disciplines advance. As the ARPANET grew, the DoD installations on the network were split off in 1983 into a separate MILNET, leaving the ARPANET as primarily an academic facility. The transformation to a free-oriented environment was complete. Significantly, though, the network was primarily used by students and faculty in the computer science field. Its evolution towards the Internet occurred with little public notice until the early 1990’s. By then, its norms were set.

At the same time, an “information should be free” movement was growing, initially focused mainly on the software arena rather than networking. This coincided with the rise of personal computers, and was a reaction to the concurrent rise of consumer software, which of course was generally offered for sale, not for free. As the movement grew to encompass other forms of content, it reinforced and made latent the norms that had developed on the ARPANET.

In contrast to these trends, pre-Internet commercial timesharing systems were being deployed in the late 1970’s and early 1980’s, offering consumers email, information and entertainment, but on a paid basis, as befits a commercial offering. Thus, these systems had different cultural norms than the ARPANET—different histories, expectations, rules and practices. Ultimately, though, these systems were overshadowed by—and their commercially grounded norms had little effect on—the Internet.

During the same period, copyright law began to have meaning for the public in a digital context, but at first only for the limited population who traded in pirated software and games. Prior to this time, the only infringement committed by significant segments of the public involved physical media: mix tapes, concert bootlegs, and album copies on cassette made for friends. Although relatively common among young people, these forms of music (let alone any form of video) weren’t distributed digitally, because personal computers and networks at the time couldn’t process the large files involved. Thus, creation and distribution of these analog tapes was a time-consuming, manual process that didn’t imperil the music industry.

That began to change with the availability of the compressed MP3 audio format in 1995. The format exploded in popularity in 1997 with the release of the free, computer-based Winamp player software and even more so in 1998, with the introduction of the Rio portable MP3 player, a forerunner of today’s iPod. Accelerating these trends, modems were becoming faster, personal computers more powerful, and the Internet more pervasive. People began to rip CDs—that is, copy them to personal computers in MP3 format—and share the MP3 files over the Internet. (Ripping was possible because the audio CD standard, developed in 1980, omits copy protection, perhaps due to a failure to anticipate the capabilities that developed 25 years later.)

The above history, cultural trends, and technical factors appear to be what led to widespread copying and distribution of music and, later, motion pictures. Although educational campaigns have informed and reminded the public that such conduct is infringement, the underlying norms have proved difficult to dislodge, an effect that scholars refer to generally as the “sticky norms” problem. Thus, many people continue to violate the law.

But why? Or, to turn the question on its head, why do people ever obey laws (criminal or civil), even when it may be in their self-interest not to do so? This question has been studied by scholars such as Prof. Tom Tyler of NYU, who lays out several reasons that researchers have examined: (a) people consider the “tangible, immediate incentives and penalties . . . [i.e.,] personal gains and losses” resulting from obeying or disobeying a law (alternatively, the certainty, swiftness and severity of punishment); (b) people decide whether a particular law is moral (i.e., just); and (c) they decide whether a law is legitimate (i.e., promulgated by an authority that has the right to do so).

Evaluated against these metrics, copyright law as applied to content on the Internet falls woefully short. The immediate incentives to infringe copyright are clear: free music and movies. The penalties, in contrast, though severe, are neither swift nor certain, since only a small percentage of infringers are sued (and usually only uploaders of content, not downloaders). In addition, the prevalence of legitimately free content on the Internet—whether user generated content or ad-supported commercial works such as newspapers—probably undermines the perception of copyright law as just; after all, if some content is free, why not all of it? Finally, the perception that content companies are driving the copyright laws (and, of course the fact that they are filing the lawsuits), and a widespread disdain for music labels in particular, delegitimizes those laws.

Two other factors that drain perceived morality and legitimacy from copyright law are the fact that the targets of demand letters and lawsuits were often young people or their sometimes unknowing parents; and that the damages sought or obtained were sometimes grossly disproportionate to the offense. As scholars have discussed, these factors may have precipitated a backlash that actually decreased rather than increased compliance. In any case, ineffectiveness and negative public perception appear to have put a halt to copyright lawsuits against consumers.

What next? When noncompliance is widespread, sometimes the laws change (as in the elimination of prohibition and of sodomy laws) and sometimes behavior changes, as in the case of drunk driving, which was reduced significantly by a combination of stricter laws and broader education. In the case of copyright, though, the laws are strict already, but neither that nor education have been effective.

Perhaps what’s needed is penalties that are less strict—in the scholarly terminology, “gentle nudges” rather than “hard shoves”—but more widely enforced. If demand letters and infringement lawsuits targeting “first offenders” sought significantly lower damages (assuming litigation costs permit this approach), but such letters and lawsuits were issued much more often, public perception might change. Setting the damages at a level that young people or their parents would find affordable but quite unpleasant could reduce the perception of unfairness, but still have sufficient bite. Coupled with widespread enforcement, such damages might change people’s cost-benefit analysis while avoiding backlash. Something has to be done to reduce misappropriation of music and movies, at least until ad-supported business models (or other alternatives) become sustainable, if they ever do. Maybe this is the way.

This article benefitted from discussion with Prof. John Tehranian of Chapman University.

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6 comments:

  1. You forget the most important factor. Content companies failed to react quickly to the consumer's new demands and were thus displaced by piracy.
    It took eleven years to have a decent online music store. Television and movies are still nowhere near that point (except few experiments limited to the US and only 10% of piracy comes from the US) and it's been five years since television and movie piracy has become widespread.
    The Movie business is especially in bad shape trying to hurt in every possible way the paying customer with bluray and hdmi, making the legal product technically inferior to the illegal pirated product. They are, like music industry a few years ago, to the point where obeying the law actually hurts you more than not obeying the law.

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  2. The content industry has been painfully slow to adapt to shifting paradigms in consumer demand. First it was the RIAA and their draconian response to a clear need for modular music access, and more recently it was the film and TV industries. The noted rise of Hulu, and its ad-based success (some advertisers are even paying more for spots on Hulu than on network TV) demonstrates the viability of ad-supported online content distribution, while the "pay-per-download" model manifest in the iTunes service, despite its horrific UI, demonstrates yet another viable revenue generation model. Netflix and others are exploring, with some success, the subscription model.

    So, we already have three somewhat proven models for online content distribution. The secret, however, lies in the fact that web users cannot be pigeonholed into one user group or the other. Successful online content distribution services (the new "networks"?) will recognize that, just as the website visitor navigates using an amalgam of recognition factors (color, position, words, etc), so the online content consumer will wish to have an ongoing choice as to whether they want content on an individual consumption basis (pay per download), free (ad-based), or on a subscription basis. There are also other emerging models, yet to be fully proven, but the challenge lies not in which model will win out, but rather whether the content purveyors will recognize the need to offer options to the end user, who will always seek to exercise their CERN/DARPA-given right to choose, as the now-cliched adage goes "what they want, when they want, where they want, and how they want".

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  3. One thing that I think is not adequately covered -- it is NOT about money. Your final sentence ends on this note, but I think it is central to the issue.

    There is a HUGE social benefit in having content readily and quickly available, in the best available format.

    The RIAA member's long refusal to make content available in digital form is what initially drove piracy, much more than the cost of the content. If you wanted it at all -- you had to pirate it.

    Further, it didn't help that they continually tried to expand the definition of piracy -- trying to kill DAT, for example. Their demand that you go out to a store and by a physical medium worked STRONGLY against wide distribution.

    What we see here, much more than a push toward FREE content, is FREELY AVAILABLE content. That is -- no friction to its distribution -- the ability to quote, reference, remix, compile, index, analyze, slice, and dice the content.

    I think the drive to FREELY ACCESS content pretty much tramples economic concerns, and especially legal concerns.

    Thus, even before RIAA began suing, they were already hated, because they were so oblivious to what the market wanted.

    At this point, I think the RIAA (and their members) have no reason to exist, and no inherent right to do so. They had an opportunity to connect content producers with content consumers in a way that benefited both. They squandered it. They've earned themselves a place at the bottom of the dustbin of history.

    I don't know what happens next. While economic concerns may have been trampled, economic principles still apply. How will high-value content producers be paid? If they're not paid, we'll lack for high-value content, and have to settle for low-value content. I would argue we see the result of this in the world of journalism, where Really Bad Blogging (nor yours!) has replaced anything resembling journalism.

    I don't think your three proven models are really working, and content producers are hurting as a result. Ultimately, this will impoverish our culture.

    The rise of iTunes, and the iPhone app store, etc. I think hold the most promise, at least for low-price high-volume items. But I'm concerned that they're too focused on mass market to really serve many other markets and producers. Selling millions of copies of iFart for a pittance may make someone a millionaire, but what about the guy who spends 10x as much effort on solid investigation of what drives congressional earmarks, and how they're bankrupting the economy?

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  4. Great article. I picked it up from digg, to The Huffington Post, then to here. I am fascinated by the implications of copyright on our culture as a whole. I mean copyright was meant to have strict limits as set forth by the US Constitution to encourage advancement in the sciences and arts. I have written a paper (I am a college student) addressing the issues of copyright and it goes along with your post. If you would like to review it I will give you the link, any insight would be appreciated as well as any critiscms.

    http://www.asongaboutlife.blogpsot.com/2009/07/digital-music-and-copyright-predicament.html

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  5. Well it's not exactly free. Before you can do anything a computer will cost you hundreds-thousands of dollars. Then to get on the internet you have to pay anywhere between 20-50 dollars a month. It's hard to afford anything after shelling out all that money, so I would hope to get something out of the deal.

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  6. Hey Jonathan: Sad to say that the Capital Constituency (RIAA;MPAA) simply don't have the deep pockets to police "gentle nudging". Nor can such a controversial approach find a legislative home through politicization. I see the end game and clever aggregation by the Oligarchs (viz iTunes) on a subscription basis and digital pennies for ad-supported streaming (viz Hulu). Saddest part: none of this is sufficient to support the expense of audio-visual production U.S. are used to.

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