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reading # 6 - THE LAWS OF DISRUPTION‘ HARNESSING THE NEW...

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Unformatted text preview: THE LAWS OF DISRUPTION‘ HARNESSING THE NEW FORCES THAT GOVERN LIFE AND BUSINESS .IN THE DIGITAL AGE LARRY DOWNES’. BASIC E BOOKS A Member of the Perseus Books Group V New York @floo fl LAW SEVEN: COPYRIGHT Reset the Balance Perhaps the most visible breakdowns in the economy of digital life center on the archaic law of copyright. Content producers are pursuing desperate measures to protect: their right to define how, when, and by whom their ideas may be used. Consumers are fighting back with equal passion and, so far, greater success. This chapter explores the history of the copyright re— bellion from its beginnings in the Enlightenment to the perfect storm of copyright abuse made both possible and inevitable by the Internet. I pro- pose a radical but simple solution: reset the delicate balance between infor- mation producers and users, a balance ruined by decades of laws that have shrunk. consumer rights to nothing. The is easy on paper, but requires a global act of common sense to achieve. A YAWNING CHASM The two sides of the copyright debates aren’t even speaking the same language. Consider two articles published in the spring of 2007. The first, “A Great Idea Lives Forever—Shouldn’t Its Copyright?” appeared as a New York Times op-ed from novelist Mark Helprin. Helprin argues that writers and artists are unfairly treated by copyright law. The owners of real estate and other physical property can rest comfortably in their graves knowing their descen- dants benefit in perpetuity from their bequests. Rights to literary works, on the other hand, expire a mere seventy years after the death of their creators. 195 mawam' “Harriet? . ve Na...” , -, .. 196 THE LAWS OF DISRUPTION After that, an author’s work becomes free for anyone to do with as they please, a kind of literary purgatory known as the “public domain.” “No good case exists for-the inequality of real and intellectual property,” Helprin concludes, “because no good case can exist for treating with special disfavor the work of the spirit and the mind.” i In the second article, Chapman University law professor John Tehranian walks us through the seemingly innocent and mundane activities of a hypo— ,thetical law professor named “John,” including replying to e--mails, teaching cllasses, doodling during a faculty meeting, and singing “Happy Birthday to Ybu” at a dinner party. Applying current copyright law, the stunning con— clusion is that the professor has committed multiple felonies. “All told,” Tehranian concludes, John “has committed at least eighty-three acts of in— fringement and faces liability in the amount of $12.45 million (to say noth— ing of potential criminal charges).” At that pace, John’s potential copyright violations leave him liable for more than $4.5 billion in damages each year. Most of the violations John perpetrates are committed every day by nearly everyone. Replying to e-mail messages using the feature that includes the sender’s message in the reply, for example, infringes the sender’s copy— right in the original. Doodling a cartoon that reminds John of Frank Gehry’s design for the Bilbao art museum violates the architect’s right to control “derivative” works. Despite being the most recognized song in the English language, “Happy Birthday to You” is still protected by copyright (currently owned by Warner Music) and will be until 2030 in the United States and 2016 in Europe. Singing it without paying a royalty constitutes an unlicensed public performance. Capturing the moment on a video cell phone is another violation. 7 Tehranianl's story is one answer to Helprin’s challenge. The seeming “in— equality” between physical and so—called intellectual property is explained in part by the expansive protections afforded to information products during their brief period of ownership. There is no crime of “copying” my car; the FBI does not investigate someone writing a play “based on” the contents of my home. Though the vast majority of infringing behaviors are not prose- cuted either by copyright owners or by the government, the fact remains that nearly every literate person in the world breaks the law on a daily basis. That they do so mostly without intending harm is irrelevant. Intent is not a requirement for a finding of infringement. LAW SEVEN: COPYRIGHT , _ 197 The enormous potential liability for “Professor John” suggests copyright is over- rather than underprotecztive. Since the 1970s, legislatures around the world have repeatedly and haphazardly expanded the penalties for infringe- ment even as they extended the duration of copyright and made it easier for owners to sue even accidental infringers. The vast majority of useful copy- rights, like Helprin’s, have been assigned to large media companies, including publishers, music labels, and conglomerates such as Time-Warner, Viacom, Disney, and News Corporation. As the music industry’s recently suspended campaign against file-sharing teenagers demonstrates, large media compa- nies need only threaten litigation to win their case. When the defendants can- not afford to fight back, legal merits play no part in a lawsuit. Today, enforCement of copyright is largely arbitrary and perhaps eco- nomically irrational. This, however, is no reason to abolish the system. Al- though Helprin doesn’t make the point, the difficulty of detecting all the violations that occur and the expense of remedying them may be his best argument for more copyright protection. Why not compensate authors for ' unrecoverable losses by extending their control? Larger penalties, even when they can’t be collected, can act as a deterrent. Longer terms would give au- thors and their families more time to sell licensed copies that might make up some of their injuries, if not sinlk the pirates who inflict them. Successive in- creases in copyright duration haVen’t kept entertainment from growing into one of the largest sectors in the information economy. Indeed, they may have helped. So Why not extend copyright forever? _ Here’s why. Perpetual Copyrights would generate both short—term and long-term harms, both of which can be demonstrated with a simple example. Let’s say that copyright had been around in the time of William Shakespeare and that, as Helprin suggests, it treated original creations as the permanent possessions of their authors. Assume as well that Shakespeare, a notorious borrower of plots, Icharacters, and stories, was not himself an infringer. Today, the rights to Shakespeare’s plays would have descended some twenty genera- tions. Assuming normal birthrates and that: none of his progeny sold their rights, Shakespeare’s: copyrights might today be divided among some 1 mil- lion descendants. (Unlike physical property, which may be impossible to split more than a few ways, information ownership can be divided infinitely.) N0w suppose you wanted to produce Romeo and Juliet in modern attire and language. Not only would you have to pay a shared royalty to the 1 million 198i ‘ THE LAWS or DISRUPTION owners, but you would also need their permission to adapt it. First you’d have to find them, verifying, perhaps through DNA testing, that they were in fact all Shakespeares. Then you’d have to convince them to approve your production. The contract might be short, but the signature pages would run into the thou- sands. The cost of negotiating—the transaction costs—would almost as— suredly exceedthe actual price the Shakespeares would charge. Shakespeare is the easy case—his work has never gone out of fashion. Most literary works don’t survive their authors, and are rarely bequeathed explicitly in trusts and wills. It is nearly impossible a few generations after the death of the author to determine who actually inherited rights that a lit- erary revival might make valuable. Still, the potential for a long-lost relative to appear and make a claim would likely deter productive uses of what have, for practical purposes, become “orphaned” works. 1 That’s the immediate danger. The long-term problem concerns the true nature of authorship. One reason information producers are not given un— limited protection is that there is little original about them. Shakespeare’s practice of borrowing heavily from others was common practice, only slightly less explicit today. Most literary scholars believe there are only a few main themes to all of literature, and these originate in the myths, legends, and religious texts of ancient civilizations. At the most basic level of creativ- ity, authors like Helprin borrow their words from the limited set that make up a language—each of which, at some point, was created by someone. Copyright protection is limited, in part, because drawing the line be- tween the particular expression of an idea (Romeo and Juliet) and the idea itself (love conquers all) is never easy. Change the staging, the characters’ names, and the historical context, and Romeo and Juliet becomes West Side Story. What part of the musical borrows legally from the idea of the play (boy meets girl, boy loses girl, tragedy follows), and what part infringes on Shakespeare’s interpretation of it? Judges, trained only generally on the law and armed simply with reasoning by analogy, blanczh at the task. It requires at a minimum expertise in linguistics, semiotics, literary theory, history, and a dozen other fields in which no judge has likely had any training. All of these problems explain why, contrary to the title of Helprin’s arti-r cle, governments never grant copyriglht to mere ideas or new words or phrases, no matter how‘novel or useful. You may be able to secure a patent on a new invention (the rules to basketball) or place modest limits on the LAW SEVEN: COPYRIGHT 199 commercial use of a phrase (“March Madness”), but you cannot copyright either. Copyright requires significant creativity. It grants rights only to those who transform an idea into a new and tangible expression. Books, music, architectural designs, maps, software, and other creative artifacts are pro- ‘ tected, but only to the extent that they display the novel vision'of an original mind at work. ‘ I ' Take another Shakespeare play, The Winter’s Tale, in which a leading character disappears for years, only to return transformed and redeemed. (Shakespeare took most of its elements from a story written thirty years ear—‘ lier.) Three hundred and fifty years after the play was first produced, a mod- ern novelist borrowed its basic elements for a book that was published to critical acclaim. Its title, Winter’s Tale, begged comparison with Shakespeare. No matter. Even if Shakespeare had a copyright, it would have long since ex— pired. The novel’s author didn’t need the permission‘of any of the Bard’s de- scendants. Nor did he need to worry about being sued, rightly or wrongly, for infringing on their rights. That author was Mark Helprin. AN ENLIGHTENED VIEW OF COPYRIGHT At the accident-prone intersection of innovation and law, no broken light has caused more collisions than copyright. Several books have been pub- lished on obscure aspects of the problem—the fate of the public domain, the economics of collaborative technology, the dangers of closed standards, and the risks of open ones. Even nonlawyers are passionate about the subject. (Judging from the comments posted to inteflectual property blogs, the lack of even a basic understanding of the law doesn’t seem much of a handicap to expressing one’s opinion.) From media company executives to ordinary consumers, everyone seems convinced they know just’what to do. This chap- ter cuts through the misperceptions and blather. It also proposes meaningful reform that could save the system. Popular opinions, informed and otherwise, separate: rather neatly into two opposing camps. One side, led by media, conglomerates and their allies in government, argues that digital technology has undermined copyright, making its enforcement nearly impossible. Content that once had to be transferred to expensive media and then distributed, retailed, and serviced 200 THE LAWS OF DISRUPTION locally can now be effortlessly turned into bits. Likeany other digital infor— mation, these bits can and are spread effortlessly, anonymously, and cheaply through the Internet. The fastest-growing categories of Internet traffic—file sharing, bit torrenting—represent the unwanted and unlicensed exchange of proprietary information. Owners make no money from the widespread traf- ficking of their property, and are powerless to stop it. Their information has been hijacked. ' . . We live, according to the content-owner camp, in a world populated by modern-day pirates. The bandits are a minted group, made up in the United States and Europe of nearly everyone under age 30 and, in the developing world, pretty much anyone with a computer. The thieves have grown up believing that content is and should be free. They download digital music, photographs, and software; they upload television shows and movies—all without making any effort to compensate the creators. They ignore their par— ‘ ents and Interpol warnings; they reject the very idea that what they do con- stitutes a crime. They scour the network plundering the riches of whomever they like without firing a single shot. V ' As soon as illegal businesses are closed, new ones pop up to replace them. Content owners managedto shut down companies like MP3.com, which al— lowed users to listen to albums they already owned on portable digital music players. File—sharing services including Napster, Grokster, and TorrentSpy have been disabled. Russia’s entry into the World Trade Organization has been de- layed in part by the country’s refusal to stop a local Web site, AllOfMP3, which sold digital copies of any album for a dollar each. (AllOfMP3 was closed in 2007; TorrentSpy’s; appeal is pending.) But staring down the jaws of civil and criminal enforcement, including individual lawsuits against thousands of file-sharing users, the pirates have nevertheless grown more numerous and more impudent. Peer—to--peer tech— ~ nology adapts instantly to avoid every court decision aimed at reining it in. The provocatively named Pirate Bay is flourishing despite the 2009 convic- tion on criminal charges of its principals. (The convictions are on appeal.) Despite a pending $1 billion lawsuit by entertainment giant Viacom, the video-sharing Web site YouTube continues to gain popularity with users who post both personal Videos and unlicensed content taken from television p and movies. Music ‘sales have plummeted, DVD movie rentals are dying fast, and newspapers have all but given up. The parasitic behavior of consumers LAW SEVEN: COPYRIGHT 201 with too many computing cycles and too few morals, the argument goes, threatens the creative enterprise itself. As media lawyer and former prosecu- tor Kenneth Starr told the US. Supreme Court in the Grokster case, file- sharing technologies “breed a culture of contempt for intellectual property, ‘ and for the rights of others generally.” At the Other extreme, exemplified best by the work of Stanford law pro- fessor Lawrence Lessig, copyright has become a totalitarian monarch no ‘ longer deserving of respect or obedience. As digital technology eliminates .the need to reproduce creative artifacts in imperfect and intermediate me— dia, creators and their audiences can connect to each other with almost no transaction costs or loss of fidelity. Even more, the plasticity of digital life creates a unique opportunity for everyone to be a creator, to collaborate, remix, enhance, and update each other’s work for an audience of everyone. Applications such as Wikipedia, Flickr, and YouTube, where groups jointly create articles, photo galleries, and short films, represent the beginnings of a new kind of creation, perhaps even a truer form of egalitarian democracy—the ideal of the founding fathers realized in digital life. The only crime being committed, according to this View, is the refusal of the media companies and their lobbyist—influenced allies in- legislatures to embrace the brave new world. Content owners, comfortable in the routines and habits of the analog world, have refused to offer their products legally or at least at a fair price in the digital marketplace. Instead, they have perverted copyright law to make felons of an entire generation of users—indeed, of their own children. They have only themselves to blame for rampant inno- vation by customers to create the products and distribution channels con- sumers really want. > Wors'e, the content owners have corrupted the law in ways that inad- vertently encourage more rebellion. Copyright law “reforms” and one-sided court victories have eviscerated the concept of a limited or “fan'r use” of copy— righted materials that doesn’t require permission or payment. Extensions to the term of copyright, largely at the behest of the Walt Disney Company, have dried up theymain tributaries that feed the public domain. The 1998 Digital Millennium Copyright Act (DMCA) criminalizedl the circumvention of tech- nologies that limit how and by whom'licensed digital copies can be enjoyed, a giant step back in consumer rights. Even as digital technology has dramatically 202 ' THE LAWS OF DISRUPTION reduced the potential cost of every aspect of the creative process, copyright law has been misused to inflate those costs artificially and destructively. This self— ish and unnecessary increase in transaction costs constitutes a crime against economics, one that can’t be forgiven or undone without scrapping the law and starting over. Since governments of the analog world can’t be expected or trusted, the rebels have formed their own social contract, fashioning new ways of protect- ing and sharing information. We stand on the verge of a new regime, a world not of copyright but of “copyleft.” The Creative Commons license, for exam- ple, allows authors to grant all users the right to make productive uses of their creations without having to pay royalties or other fees. The “openvsource” movement establishes a communal and virtual society of like-minded collab- orators who can create software, documents, and other digital artifacts whose Sum is greater than the parts donated by individual members. _ The growing divide between copyright and copyleft is a classic battle in- spired by the Law of Disruption. As the gap between what consumers can do and what information producers are comfortable with widens, relations be— tween the two groups have turned very ugly very fast. Both sides are digging trenches for an extended fight. The owners have the law on their side, but consumers see that as a mere technicality. . Why shouldn’t they? Since World. War II, much of the world’s most valu— able information has been distributed without charge (television, radio) or for next to nothing (newspapers, magazines, paperback books). If a genera— tion of young information users believes that content is free, it’s largely be— cause they’ve been conditioned to see it that way by media companies vying for their constant attention. But now that digital technology has made it possible for consumers to replicate and distribute perfect copies of every— thing without the ads that underwrite their distribution, producers are dust- ing off the legal catapults and battle—axes. We stand on the brink. So let’s take a step back. In some sense, the ongo- . ing copyright war began in the seventeenth century, at the beginning of what is known as the Age of Enlightenment. The Enlightenment movement em- phasized individual liberty through learning, an idea in stark contrast to the closed information architecture of the medieval Catholic Church. Enlight— enment thinkers, including the authors of the US. Constitution, believed that widespread knowledge would give average people the ability to reason LAW SEVENS COPYRIGHT 203 for themselves. These: ideas fueled the gradual and sometimes violent transi~ tion from monarchy to democracy, sparking revolutionary wars in the New World and much of Europe. . The Enlightenment also changed the nature of publishing. In 1710*, Parlia- ment enacted “An Act for Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors. or Purchasers of Such Copies, during the Times therein Mentioned.” The Statute of Anne, as it is known, turned what had been a monopoly by the Royal Stationer upside down. It gave the rights to authors, not printers, and limited the times for which those rights existed. It introduced the radical idea that a copyright: was not simply the codification of some natural right the authors had as creators. Rather, it was a gift from the government given for the specific purpose of encouraging the, spread of information. The grant, in other words, was given only to-the extent neces- sary to meet an explicit economic goal—the encouragement of learning. I The US. Constitution adapted the Statute of Anne into a decidedly more democratic framework. Congress was given the power, if it deemed necessary, “To pronnote the Progress of Science and useful Arts, by securing for limited ' Times to Authors and Inventors the exclusive Right to their respective Writ- ings andl Discoveries.” Under the current system, authors are instantly granted exclusive rights to their books, music, films, and maps from the mo- ment of creation. The authors’ monopoly includes the right to make and sell authorized copies, perform the work in public, and license “derivative” works, which are adaptations from one media to another. (For the book you are holding in your hands, I have assigned the rights to audio versions and translations into other languages to my publisher. My agent shrewdly kept the film rights for me.) Authors can, enforce their own rights in civil actions or ‘ask the government to do so in criminal prosecutions. Thanks to a treaty known as the Berne Convention, copyright laws are nearly uniform andre- ciprocal throughout the developed world. The genius of copyright is that it is largely self-perpetuating, self- maintaining, and ruthlessly efficient. Legislators need not review applica- tions for copyright, nor decide at what point each author must give them up. Authors and inventors are given. economic incentives to create, but without the expense of government subsidies and the politics that might go with evaluating them. The possibility of criminal penalties for infringement de- ters most forms of cheating, keeping enforcement costs down. 204 THE LAws OF DISRUPTION But there’s a paradox. Copyright achieves its Enlightenment goals of de-- mocratizing information by embracing a closed architecture. The exclusive rights encourage new production, but do so by giving the author monopoly power to control or even suppress her creations. How does information spread more freely—promoting arts and sciences—when authors are granted the power to micromanage it? Several important limitations written directly into the US Constitution help resolve this tension. The “limited Times” restriction, for example, em-- phasizes that the monopoly is given only as long as necessary to ensure a creator can earn back her investment plus a reasonable profit. During that period, the author can either sell her rights to a publisher or produce and. sell authorized copies free of competitors who did not incur the author’s. development costs and who therefore could sell at a lower price. Once the author’s investment is recovered, the exclusive rights—indeed, nearly all of the author’s rights—vanish. At that point, the public becomes the owner of the work. A second limitation on copyright is that it extends only to works that ad— vance some social good—those that promote the progress of “Science and useful Arts.” There is no copyright protection for ephemeral writings such as shopping lists, phone messages, and simple recipes. Recent copyright litiga- ' tion included unsuccessful efforts to claim ownership of yoga poses and a 1970.5 dance step called. the “Electric Slide.” The audacious Web site Magnus— Opus invites users to check their touch-tone telephone number against its database of copyrighted melodies, which suspiciously includes every possible sequence. Once a user “tests” his number, he is offered a choice of paying a one hundred—dollar annual license fee or canceling his phone service! The company doesn’t seem to have sued anyone yet, which is just as well. 7 Finally, only the author’s unique expression (her “writings”) is protected. Once written, the ideas themselves are free to be used by anyone, whether they’ve purchased a copy of the work or not. A famous nineteenth-century case, for example, denied the author of a new accounting methodology the right to sue readers who implemented the system without paying additional royalties. “The copyright of a book on bookkeeping,” the U.S. Supreme Court held, “cannot secure the exclusive right to make, sell, and use account— books prepared upon the plan set forth in such book.” LAW SEVEN: COPYRIGHT . 205 RESETTING THE BALANCE Copyright balances incentives for authors to invest in new works against the Enlightenment goal of growing the public domain as quickly and cheaply as possible. Throughout the nineteenth century, the system performed bril- ' liantly. The arts and sciences flourished, and piracy was minimal. The prin- cipal safeguard, however, was the market, not the law. Making unauthorized copies of books, sheet music, phonograph records, and movies required large capital investments in printing presses, disc Stampers, dubbing equip— ment, as well as labor. Selling illegal copies meant hiring trucks to transport the copies and warehouses to store them. Copies had to be sold through es— tablished retailers. All of these activities were hard to conceal. Pirating was both expensive and risky, creating an effective deterrent. Thanks to the Law of Disruption, a succession of low—cost copying tech- nologies has put increasing pressure on the system. Player pianos, invented in the late 18003, allowed anyone to perform even the most complicated works without buying or studying sheet music. Cheap photocopying let consumers make unauthorized copies of printed material by themselves. VCRs brought video-copying technology right into the living room. .As tech- nology got smaller, cheaper, and. faster, the need for intermediaries, capital. investment, factories, and retail distribution channels disappeared. The ex- ' pense and risk of infringement evaporated. Detection and enforcement be- came correspondingly more expensive. Then came the Internet, a costless and limitless copy machine. Once a single digital copy becomes available, any user can make any number of per- fect duplicates. Moore’s Law makes it possible to digitize more and more in- formation and store it on an ever-expanding array of devices, including computers, cell phones, and music and movie players. As it does, Metcalfe’s Law is there to help spread the bits around the world, with or without per— mission. Transaction costs are minimal. Anyone with a computer and an In— ternet connection can buy the latest Beyoncé CD and within minutes post its contents in digital form. Users from around the world can then help them- selves to a free copy. Digital technology makes copying free, while the Inter- net acts as a channel for worldwide distribution, virtually invisible and anonymous. The cost and risk of infringement have all but disappeared. 205 THE LAWS OF DISRUPTION Infringement, in economic terms, is like other information crimes. By undermining the authOrz's exclusive right to sell copies, infringement reduces the opportunity for authors to recover their investment. In theory, rampant cheating by consumers makes authors less likely to undertake new works in the first place, which in turn reduces the production of valuable information ultimately headed for the public domain. If this book becomes available: for illegal downloading, I’m likely to spend my time doing something other than writing books. My publisher may face more dire consequences. lLike . spam, piracy imposes costs on the system itself. Infringement, however, can also effect a productive use of information. Sharing information with more people may increase its value, and may help the information reach markets the author might otherwise have ignored or charged too much to reach. A user who enjoys clips fromThe Daily Show on YouTube may become a regular'viewer of the program. Illegally download- L ing a wide range of music may help a consumer decide which artists he likes best, leading to more rather than fewer real sales. The need to balance productive uses against destructive ones has been forgotten in the escalating war between information producers and infor— mation users. With the invention of each new copying technology, legis- latures have extended the duration of the monopoly (giving creators more time to recover costs) and beefed up the penalties for cheating (more deter— rence against pirates). New kinds of works and new storage media, including music, choreography, TV broadcasts, opera performances, software, and semiconductor chip designs, have also been brought under copyright pro- tection as they entered mainstream use. These fixes have done little to reduce copyright violations. Like most at- tempts to slow down the Law of Disruption, they have instead made things worse. Enhanced penalties discourage productive practices, including criti— cism, parody, and simply making use of the ideas in a work. Extended terms mean new works are entering the public domain at a trickle. The concentra- tion of rights in the hands of a few large corporations has led to one-sided legal battles, like those between the music industry and individual con— sumers, as well as vast expenditures on lobbying for even more advantages. As new technologies for producing, distribution, marketing, and using information are invented and reach an eager market of information-hungry consumers, the copyright balance is constantly shifting. On the one hand, LAw SEVEN: COPYRIGHT 207 new technologies make it easier for “pirates” to violate the monopoly con- trol given to the copyright owner. But those same technologies alsolower development and production costs. Lower costs, at least in theory, make it easier for an author to turn a profit. One might think; that less, not more, in- centive would be needed to satisfy the real goal of the system. _ It is now virtually impossible for average consumers to avoid violating copyright law on a daily basis. It’s as if every time cars were made faster, speed. limits were reduced to minimize the incidence of speeding. Copyright today is the equivalent of a five—mile—per—hour speed limit on the freeway. But laws that are impossible to obey lead rational citizens to give up trying. Getting caught is just a stroke of bad luck. A recent survey by the Pew Inter- net and American Life Project found that 72 percent of Americans ages 18 to 29 don’t care whether the music they download onto their computers was copyrighted or not. Most of it is. A law that makes felons of everyone is no / law at all. Copyright law, however, need not be abandoned. I propose three modest reforms that, taken together, would bring the system into alignment with the realities of digital life: setting realistic time limits, restoring the concept of fair use, and undoing the damage caused by the Digital Millennium Copy- right Act of 2000‘. Copyright law that is synchronized with rather than op- posed to the Law of Disruption can work. When they are pitted against each other, however, it’s already clear which one will win. Set Realistic Time Limits The term of “exclusive rights” granted by copyright} has been extended eleven times in the past fifty years. In 1962, copyright lasted fifty-six years. Today, it spans the lifetime of the author plus an additional seventy years. One unfortunate and unintended consequence of these modifications is that the public domain is drying up. Thanks to the term extensions, no Disney cartoon has ever gone out of copyright protection. That’s no coincidence. Disney is one of the most aggressive worldwide lobbyists for enhanced copy- right protection. Ironically or not, Disney itself relies heavily on the public domain for the stories and characters of its most successful products. The Little Mermaid is based on an 1837 Hans Christian Andersen story of the same name. Snow 208 THE LAWS or DISRUPTION White was published by the Brothers Grimm in 1857. Rudyard Kipling’s Irm- gle Book had just gone out of copyright when Disney began production. Dis— ney paid no royalties to use any of these works. At the same time, the company vigorously pursues even modest borrowings of its own copyrighted works. Bounty—hunting lawyers are paid to turn in retail bakeries that include Mickey Mouse decorations on birthday cakes. Yet Mickey himself began life in a 1928 cartoon, Steamboat Willie, that was a parody of a Buster Keaton film. The Constitution does not define an exact or even optimal length of time for copyright; it does not even require Congress to grant copyrights in the first place. The cavalier decision to continue extending them suggests law- makers have forgotten the part about promoting science and the useful arts. Songwriter-turned—congressman Sonny Bono famously answered the Con- stitution’s requirement that copyrights be granted only for “limited Times” by proposing “forever minus a day.” “That’s a' limited time,” he said, “isn’t it?” He wasn’t kidding, and neither are his colleagues. After Bono’s death in 1998, Congress enacted the Sonny Bono Copyright Term Extension Act, which tacked another twenty years onto the term. It also made that exten- sion retroactive to all works still under protection when the act was passed. The CTEA”s retroactive provision was especially outrageous. Eric Eldred,“ who publishes public domain works on the Internet, fought it all the way to the Supreme Court. Eldred argued that since incentives issued after publica- tion did nothing to promote the aims of copyright, the retroactive provision was unconstitutional. The Court disagreed. It was up to Congress, the major- ity wrote, to determine the optimal term fOr copyrights, even for works that already exist. In his dissent, Iustice Stephen Breyer pointed out that realisti- callly, most copyrighted works have a life expectancy of fewer than ninety-five years. Citing data provided by a group of economists, including five Nobel Prize winners, Breyer noted that extending the term by twenty years meant that for more than 99.8 percent of all copyrights, the term is effectively per- petual. Since the Constitution allows Congress to grant copyright only for “limited Times,” Breyer agreed with Eldred that the law was unconstitutional. The retroactive extension for existing works, Breyer noted, harms more than just the public domain. The longer the term, the higher the transaction costs a potential user faces trying to locate the copyright owners. Many die without leaving their rights to anyone. “To extend that term, preventing works from the} 1920’s and 1930’s from falling into the public domain,” LAW SEVEN: COPYRIGHT 209 Breyer wrote in his dissent, “will dramatically increase the size of the costs just as——perversely——the likely benefits from protection diminish." Even if the tiny percentage of works with residual value did fall out of V copyright, the harm to current copyright owners would be much less dire than the CTEA’s supporters claimed. Disney, for example, argued that in the absence of the CTEA the copyright for Mickey Mouse would expire. Not true. Only Steamboat Mllie and a few other early cartoons would go into the public domain. Disney’s copyright in later cartoons, drawings, and other uses of the character would remain. More to the point, the company’s trademark in Mickey would be unaffected. Trademarks have no time limit. Assuming “ there was a market for public domain copies of Steamboat Willie, anyone making and selling them would be prohibited from using Disney’s marks in packaging and promoting their product. Indeed, they Would likely be re4 quired to disclaim any association with the company. Individual works would become the property of the public, but the company’s truly valuable: informa- tion products would remain securely in the vault. Restore “Fair Use” To stay with the Mickey Mouse theme, consider the long-running animated series The Simpsons. A recurring feature of the show is. a cartoon within the cartoon, an ultraviolent cat and mouse series called Itchy and Scratchy. In a 1992 episode in which the duo get their own movie, a news show touting the film plays their very first black-and-white cartoon, a slhort called Steamboat Itchy. In plot, appearance, and music, Steamboat Itchy is essentially Steam- boat Willie, except'at the end of The Simpsons’ version the mouse chops the cat into tiny pieces and shoves lhim in the locomotive’s boiler. Despite the obvious similarities between the two cartoons, the creators of The Simpsons didn’t need pernnission from Disney to air their version. The reason is an exception built into copyright law known as “fair use.” Fair use, which includes parodies, classroom copying, and short quotations in re- views and other criticism of the work, is the most important safety valve against abuse of the author’s monopoly. It covers a variety of situations ' where the cost of negotiating a license would greatly exceed the value to the parties—situations, in other words, where: the monopoly would create ex— cessively high transaction costs. 210 , THE LAWS or DISRUPTION Since the owner of a monopoly right doesn’t have to license his work to anyone, without fair use it may be impossible to criticize the work effectively: Commentary, however, helps consumers sort their reading choices. It is, therefore, economically productive. Aside from the personal embarrassment of public criticism, even bad reviews may actually help the author sell his work. Without a fair—use exception,‘these productive uses might be forgone, undermining copyright’s larger goals of public enlightenment. Steamboat Itchy lampoons both the Disney Company and its most beloved character. Had producers of The Simpsons asked, Disney may have refused permission to parody their cartoon, even though paying homage to it likely increased the value of the earlier work. Corporate executives don’t take risks with the crown jewels. Another fair use allows users to copy part or even all‘of a work under certain circumstances. You may legally record a television program as it is; broadcast and play it‘later on a VCR or DVR. Under a 2004 FCC ruling, you may even share copies of digital TV programming recorded on your TiVo through the Internet, so long as the sharing is limited to ten or fewer other TiVo devices you own. Courts have held that software buyers can make backup copies of products they buy. Indeed, to View the pages of a Web site, users must of necessity make temporary copies of the text, graphics, and files from the host computers to their own, all of which are considered fair use. Fair use, in all of these examples, eliminates wasteful transaction costs. The law of fair use, unfortunately, has failed to keep up with digital life. i The reason has largely to do with a famous 1984 case that on the surface dra- matically expanded consumer rights but in practice did the opposite. The case involved the Betamax, an early VCR produced by Sony. Initially released in 1975, the $3,000 device allowed users to automatically record television programs on tape as they were being aired. Once recorded, programs could be watched as often as and whenever the viewer wished. ‘ Soon after the launch, Universal Studios and Walt Disney sued Sony, claiming the device was little more than an engine of theft for consumers to steal. copyrighted content. Each recording by each customer was an illegal act. In producing and marketing Betamax, Sony was aiding .and abetting widespread piracy. According to the studios, the only solution was to ban VCRs forever. But by the time the Supreme Court ultimately decided the LAW SEVEN: COPYRIGHT 211 case nine years later, V CRs had gone from expensive novelties to mainstream products. Ten percent of all American homes had one. For complex litigation, nine years is relatively fast. For consumer electron- ics, nine years represents several cycles’of Moore’s Law. By the time the Beta- max case was decided, Sony, along With competitors who had sprung up in the interim had sold. millions of VCRs. The Supreme Court could hardly brand everyone who'owned one as a felon and require them to surrender their machines and tapes to local authorities for destruction. Given the pas- sage of time, the Court had little choice but to find a way to save the Betamax. In the end, the Supreme Court sided with Sony. But rather than reject the studios’ novel effort to hold Sony liable for the copyright violations of its customers, the Court declared that consumers weren’t infringing in the first place. So long as the tape was used only by the consumer for later enjoy- ment, even the complete copying of a program was legal. Time shifiting the program was a fair use. Prior to the Betarnax decision, no one imagined that unauthorized copy— ing of entire programs by millions of users could be a fair use. But in the pre—cable TV age, broadcasters transmitted their programs to any TV set in range for no charge whatsoever. So what damage was done to the studios by a device that let the viewer watch the show sometime other than when it was transmitted? Time shifting, the Court said, caused no harm to the potential market for or value of the programs. The shift in fair-use analysis from the degree of the copying to the eco— nomic harm it caused had unintended consequences. Rather than look at the amount of copying, courts after lBetamax focus instead on the effect the use may have on the market for the work. Just a year later, for example, the Su- preme Court upheld a finding of copyright infringement in a case that in— volved the autobiography of former president Gerald Ford. An early review in the Nation included a three-hundred-word quote from the five—hundred- page book. Those three hundred words explained Ford’s decision to pardon his predecessor, Richard Nixon—the most important decision Ford had made in his entire life. By quoting them, the publisher argued, the market for the book had been severely damaged. The Court agreed. V Ironically, the Court’s expansive reading of the fair-use exception in the Be- tamax decision opened the door to exceptions that have swallowed the rule. 212 THE LAWS or 'DISRUPTION The original reasons fair use was created have been forgotten. Content owners now simply argue that any copying negatively affects the potential market for the underlying work. In theory, it probably does. Media companies have ar- gued successfully that even noncommercial uses, including Internet file shar— ing over peer—to-peer networks, damage the future market for their products and thus are never fair use. The music industry, for one, consistently argues that every illegal download is the equivalent of a lost sale, leading to damage estimates that reach millions of dollars for even a few songs. Of the RIAA’s thousands of lawsuits, only one actually reached a verdict. A jury found a file- sharing user liable for $220,000 for posting twenty-four songs—«$9,250 per song. In late 2008} Congress actually increased the penalties for infringement, and a 2009 retrial of the file-sharing case returned a verdict of nearly $2 milion for the same twenty-four songs. Piracy may substitute for real purchases in some cases, but certainly not all of them. At the same time, widespread sharing accompanied by commen- tary and recommendations has positive value to the copyright holder. It’s free publicity. Yet fair-use cases rarely weigh the productive aspects of shar— ing. Consider the experience of British comedy legends Monty Python, who recently posted their sketches on a dedicated YouTube channel. As the group explained their strategy, “We’re letting you see absolutely everything for free. So there! But we want something in return. None of your driveling, mindless , comments. Instead, we want you to click on the links, buy our movies 8r TV shows and soften our pain and disgust at being ripped off all these years.” DVD sales on Amazon reportedly climbed 23,000 percent. , Years after the industry’s victories against Napster and other P2P ser- vices, musicians have still received none of the nearly $400 million in dam- ages paid to the labels, who claimed all along to be fighting solely on their behalf. Despite a nearly perfect record of wins for the industry in any case, the mass lawsuits did little to deter users determined to share their favorite songs. If anything, the evisceration of fair use as a safety valve has had the opposite effect. Young people are now united in their rejection of the in- dustry’s determination to continue selling music on overpriced CDs. (In the midst of the file-sharing wars, the industry settled price:fixizng charges brought by US. and European regulators, paying nearly $200 Imillionlin fines.) In early 2009, the industry announced it was ending the mass litiga- LAW SEVEN: COPYRIGHT 213 tion strategy, focusing instead on getting ISPs to do their policing for them. Meanwhile, a generation of consumers has been trained to ignore the law and the institutions that support it. After years of expensive litigation aimed at disabling any digital distribu- tion of music, the industry finally gave its tepid cooperation in the creation of legal forms of downloadable music. Apple launched the iPod and iTunes store in 2003. By early 2009, 6 billion legal downloads had been sold. Still, users and musicians are not satisfied that the industry has given them the kind of access to each other that they want and that the Internet makes possi- ble. Increasingly, musicians are bypassing the notoriously corrupt system al- together and.making direct contact with their audiences using MySpace and other media-rich Web sites. In one experiment, the popular band Radiohead allowed fans to download its 2007 album and pay whatever they wanted. Within a week, the band netted l$l0 million. But the real danger to closing the fair—use safety valve is not to consumers but to content owners. The video rental and ownership business, “remas- tered” and limited—edition boxed sets, and direct-to—tape sequels were possi— ble only because the studios lost the Betamax lawsuit. Media rentals and sales generate more revenue today than actual theatrical releases—revenue that the studios, had they won Betamax, never would have seen. In 1984, the year Michael Eisner took over as CEO of‘Disney, revenues were stagnant at $1.5 billion; the total value of the company was only $2 billion. Today, Disney, which now owns ABC and ESPN among other media properties, is worth $40 billion. VCRs didn’t destroy the movie industry; VCRs saved the movie industry from itself. The Law of Disruption knows what it’s doing, some- times better than the companies it actually helps. In the twenty years since the Betamax case, the law of fair use has become a mush. In spite of (or perhaps due to) the continued focus on abstract market effects, average citizens have developed a kind. of urban legend about fair-use law, inventing rules that simply don’t exist. My students and clients tell me with complete confidence that fair use allows you to play the first thirty seconds of any song, or that any copying is allowed as long as you don’t charge for it. My academic colleagues are certain they are permitted to photocopy anything for classroom use, especially if they teach at public universities. All wrong. Despite what anyone else has told you, there are no “safe harbors” in fair use. 214 ' THE LAWS OF DISRUPTION As the Law of Disruption has improved the speed and lowers the cost of digital distribution, the battle between content owners and their customers has moved from photographs (the earliest file—sharing litigation regularly featured Playboy as the plaintiff) to software and video games to music. It has now jumped, like a mutating virus, to television programs and full-- length movies. Collateral damage to fair use has been devastating to both sides. Content owners believe fair use has been vanquished, while consumers believe that any use they can. get away with is fair. Fair use must be restored. Noncommercial uses, even those that might reduce the size of the commercial market, do more good than harm, both to the overall economy and perhaps even to copyright holders. Amending the law to make any noncommercial use a fair use would end most of the con-- flict between copyright owners and their customers. With that distinction in place, courts and law enforcement can focus their attention on. true piracy. Meanwhile, content owners can begin the long public education process needed to rehabilitate those who will live the rest 10f their lives online. Unalo the Digital Millennium Copyright Act The 1998 Digital Millennium Copyright Act was the first serious attempt by Congress to address the copyright implications of digital life. Two of its main provisions, however, have generated rather than reduced conflicts be- tween information producers and users. The first involves a provision that immunizes ISPs from liability for the c0pyright violations of their cus- tomers. So long; as the ISP responds to written demands to remove illegal files from its equipment, it cannot be sued for aiding and abetting. The so- called notice and takedown system, however, has proven controversial. ISPs regularly respond to takedown requests without evaluating whether there is actual legal merit to the complaint. (Copyright owners who act in bad faith can be fined, as we saw in the Diebold case, but such findings are rare.) Copyright owners may also subpoena ISPs to reveal the identities of the users they believe are violating their rights. Some owners have abused the subpoena power to intimidate critics and citizen journalists. In a 2002 case, for example, Wal—Mart demanded Web site FatWallet.com identify an anonymous poster who revealed upcoming LAw SEVEN: COPYRIGHT 215 sale prices the retailer was planning, prices the company believed were its property. Price-lists are unlikely to be protected under copyright law, how— ever, and when a nonprofit law firm announced it would defend the site, Wal-Mart withdrew its demand. A second provision of the DMCA, which prohibits circumvention of technologies designed to control access to copyrighted works, is even more contentious. These technologies, known as “digital rights management,” limit the ways even lawful purchasers can use digital copies. DRM often de- nies purch'aSers the ability to resell their copies when they’re done with them, a right the copyright act elsewhere ensures. Controversial features or even errors are cynically cited as copy—protection technology, stifling criti- cism of the quality of a work. Copy protection may unintentionally frustrate even authorized uses of a product, disabling the application when users switch from one device to an— other. In one instance, Sony included copy-protection software on Cle that, when played on personal computers, opened. dangerous security breaches in the Windows operating system. After public outcry, the CDs were recalled. Several other products, including Apple’s iTumes and Intuit’s TurboTax, have _ removed or relaxed DRM systems in the face of widespread unrest: among their Customers. Anticircumvention also undermines the right of competitOrs to reverse engineer a competitor’s product, even in situations where the law allows and encourages it. Consider the strange business of computer printer cartridges. The cost of cartridges, which can sell for as much if not more than the printer itself, is principally driven by the cost of the mechanism, not the ink. A growing market has emerged to recharge empty cartridges, allowing cus- tomers to reuse rather than replace them. Printer manufacturers, however, would like to control as much of the recharging market as possible. So Lexmark, a leading manufacturer, tagged some of its cartridges with an access protection chip that disabled a cus— tomer’s printer if it detected a cartridge recharged by someone other than Lexmark. These cartridges were sold at a discount to buSiness customers, who agreed to return them after use to Lexmark. The “prebate” cartridges, as Lexmark called them, ensured that Lexmark would control at least some part of the recharge market for its printers. 216 THE LAWS or DISRUPTION A company called Static Control Components, however, developed a " “Smartek” chip that mimicked the functions of Lexmark’s lockout device. ’ These chips were sold to third-party cartridge rechargers, making it possible - to recharge the prebate cartridges without triggering the lockout. Users who sold their discounted cartridges to rechargers other than Lexmark were clearly violating their agreement with the company. But Lexrnark, under- standably, was not eager to sue its own customers. Instead, it claimed that ' SCC had violated the DMCA by marketing a product that circumvented the access protection chip. Under a long line of cases, courts had upheld the re- verse engineering of products by competitors wishing to make replacement ‘, parts, supplies, and other add-ons. The court here sided with SCC. Lexmark ’ was free to penalize customers who violated their user agreements or to can— cel the discount program altogether. Lexmark could not, however, use the DMCA to enforce the prebate program. Like most of the cases involving the DMCA, the Lexmark case demon- strates the danger of giving copyright ownersvnew powers to limit the use of their content, especially when those limits are enforced by secret technolo- gies. The natural tendency of digital information is to move through the network without constraints. Efforts to control or limit how users respond ‘ to content, whether it is to report on it, build on it, or simply pass their copies along to someone else, run contrary to the Law of Disruption. Mar- kets resist. DRM introduces new transaction costs, adding little or no value 'V in return. Overall, the DMCA has done considerable damage to the balance be- tween information producers and users. One proposed bill, the Digital Me- / dia Consumers Rights Act, would have gone far toward solving the worst .5 . offenses. It exempted researchers from the anticircumvention provisions and ‘, allowed consumers to bypass technological controls in order to fully exercise 2 fair-use rights otherwise blocked by the technology. It also exempted anticir— : cumvention technology that enabled noninfringiug uses, such as the lawful i resale of a product otherwise protected by DRM. The proposed law did A. nothing, however, to discourage content owners who \abuse the notice-and- i takedown provisions to intimidate ISPs and their users. In any event, the I proposed “bill of rights” for digital media consumers was never passed. In- “ stead, Congress has repeatedly increased the penalties for DMCA violations. ’4 LAW SEVEN: COPYRIGHT 217 , FAST-FORWARD: THE SHOULDERS OF GIANTS Intellectual property is a fiction, if not an oxymoron. The fiction may have worked, but only because analog life required the transformation of informa- tion into physical artifacts. Since the cost of producing; and distributing infor— mation fell so heavily on the physical copies, information industries organized * .l 1' . . . \- their busmesses around specific media formats. Newspapers focused on the paper, record companies on the records, and movie studios on the film. Ap— plying the property metaphor to the underlying concepts and ideas that were the real source of value created some complications, but only at the margins. As Marshall McLuhan famously said, “The medium is the message.” Treating information as a kind of property just doesn’t work anymore. In K digital life, information need never 'take physical form. It is now a purely non- ' rivalrous good. As content owners have learned to their displeasure, it is ‘ nearly impossible to exclude users from accessing it, despite regular and reck- less expansion of the author’s: exclusive rights and the penalties for infringing Q them. Increasingly, consumers will forgo owning copies of any kind, prefer- _ I'ng always-0n, non-demand access via the network. “For many people,” as Mred magazine’s Kevin Kelly writes, “this type of universal access is better than owning. No responsibility of care, backing up, sorting, cataloging, clean— ~ ing or storage.” ‘ Almost everyone agrees that the copyright system is broken. Users armed by the Law of Disruption with new technologies and new ways of interacting 3'5 with information will continue to challenge it. It can be repaired, but only if the law takes a dramatically different form. It must grant far less protection for authors, including limits on the duration 'of their exclusive rights. There’s no need to feel sorry for the creators. Exclusive rights were only a means to an end, a necessary evil to grow the public domain. All information prod- : ucts, even the most novel and brilliant ideas and expressions, borrow heavily ' from the cultural warehouse of an increasingly global community. Copyright 1. starts with the understanding that civilization advances only when the intel- lectual creations of our predecessors are freely available—free in the sense of :’ being both cheap and available with minimal transaction costs. As Sir Isaac Newton put it, “IfI have seen further, it is only by standing on the shoulders 1 of Giants.” 218 THE LAws OF DISRUPTION Even in a world with relaxed copyright, there are still plenty of opportuni— ties for creators to make a living in the digital age. A provocative 2007 study by law professors Kal Raustiala and Christopher Sprigman even found that g the absence of copyright protection for clothing designs helps rather than '- harms the fashion industry. High—end designers rely on speedy obsolescence, ‘: so the rapid appearance of knockoffs signals to buyers-that it’s time to buy the f newest lines. As. financial writer James .‘Surowiecki notes, “The absence of ; copyrights and patents also creates a more fertile ground for innovation, a since designers are able to take other people’s ideas in new directions.” A short period of exclusivity or something less than monopoly power can be enough for creators to recover their costs and mal and even assisted its audience in making and selling “bootleg” recordings of its concerts, providing direct access to the sound boards for better fidelity. The Dead were not philanthropists. They made their money not so much from recordings (though fans still bought plenty of them) as from concert ' ticket sales and a host of licensed merchandise, including clothing, bumper ; ' stickers, and Other accessories. As comic book pioneer Stan Lee once told me -‘ j with his usual candor, “In the digital age authors should be prepared to give 1' ‘ away everything of value and make their money on the crap.” The losers in the transition from analog to digital information will be the ' middlemen who help transform and sell information in increasingly obso- 1? lete physical forms. This is not to say that all newspaper and book publishers A are doomed. Nor does this suggest that record labels, film distributors, and 3 ‘ mass media retailers will go the way of the dodo. The Law of Disruption al—i . ,1 ways challenges the existing rules and profit allocations of industries, but in i the end it creates more value than it destroys. Newspapers select, edit, and ;_ I organize the day’s news. Publishers and record labels establish brand identi— vi ties that lower consumer search costs when choosing among thousands of if 7 :e a profit. The Grateful Dead, a band popular with three generations of music fans, famously allowed LAw SEVEN: COPYRIGHT ' 219 some of these are and how they will make money for those involved, and I ' can sympathize with some amount of hesitancy by content owners to jump in with both feet. But my sympathy goes only so far. Media companies have shown a dangerous resistance to making the transition, preferring to spend their energy on doomed legal battlesagainst the Law of Disruption. Perhaps the management of these companies knows everything in this chapter. Be- hind the scenes, they are quietly figuring out how to optimize digital tech— nology for creation, distribution, and collaboration. All will be revealed in due time. Meanwhile, to preserve cash flow, they struggle to keep the lid on unruly user-generated innovations. That, at least, is one possibility. l’erhaps the most unstable explosive in the arsenal of the copyright own- ers 1s copy-protection technology. All DRM has done is to inspire more in- novative technologies to break it. Apple’s Steve Jobs, who finally found a way to make file sharing profitable through iTunes, has called on his content partners to abandon this losing' arms race, not for the sake of consumers but for their own bottom lines. “If anything,” he wrote in an open letter to mu- src publishers, “the technical expertise and overhead required to create op- erate and update a DRM system has limited the number of participants selling DRM protected music.” Consensus is growing that he’s right. As the movie studios and other media combatants should have learned from the story of Betamax, preserving the industry in its predigital form is not only impossible but also a bad idea. For one thing, it foregoes vast amounts of new revenue in the name of preserving an inefficient status quo Theatrical releases of movies are now little more than commercials for later releases to pay—per-rview, special-edition media, and licensed products, where the read money is made. Most video game consoles are heavily subsidized to sell more games, and now the games are subsidized to seli related services in- t , eluding new episodes, leagues, and multiplayer online environments. , L1kew1se, television netWork executives today can hardly believe that Vlewers are watching their programs and commercials when they are actu- ally aired. So what? Television is stronger-and more profitable than ever. Ad- vertising sponsorship in the form of product placements has once again become part of the programming itself.'In the digital age, advertisers can sponsor or even own an entire channel of relevant programming rather than lob an unrelated thirty seconds of commercials into the middle of a show. possible titles. Film studios establish reputations for a certain level of pro— ' duction quality These are the values that can and are translated into digital y products and services. g p I The death of middlemen has been greatly exaggerated. To the extent that: intermediaries add value, their expertise can be translated into similar roles" 7 in a digital society. They just have to do it. It’s mostly too soon to say what. ] 220 THE LAWS OF DISRUPTION The threats to traditional media from higher-bandwidth computer net—I works and new software applications such as YouTube, automated syndica— tion, and other “mash-up” tools are more of the same. They allow consumers to remix information—some from public sources, some protected under copyright—to create new content and new forms of commentary. Yet infor- mation producers respond to them with the same shock and awe they did the VCR. These new digital collaborations cannot be stopped. Nor should media companies want to stop them. Information pirates start by slashing and burning. But’new ways of commercializing and profiting from their inno- vations invariably float to the surface from the wreckage of their drunken sprees. I The Law of Disruption is clearly on the side of the rebels. The population cohort of those age 30 and under is remarkably homogenous in their atti— tudes toward information. Today’s youth reject copyright when it stands in the way of what they know to be the best use of content. For them, sharing information is a way of bonding, much as their parents made “mix tapes” ' for each other in the 19605. Unlike previous generations of users, moreover, this group does not have to overcome traditional economic obstacles to take ' collective action... They communicate with each other constantly, through their blogs, instant messaging clients, cell phones, Twitter feeds, and (when they have to) face-to-face. We can’t lock up an entire generation, and that is the line they have'drawn in the silicon. We adapt to their way of using infor- mation or we dozn’t.iRegardless, they will keep doing it. Copyright is always a question of economics—of providing just the right incentives to encourage creative innovation, limiting transaction costs in the otherwise frictionless flow of information, and giving consumers just enough freedom to keep them from storming the Bastille. The solution to the copyleft rebellion is to just say no to the content owners—not only to stave off con- sumer revolt but for their own damned good. ’ We need to reset the scales so delicately balanced by the engineers of the Enlightenment. If the law of copyright doesn’t adapt, the Law of Disruption stands ready to take over. x , ...
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This note was uploaded on 11/29/2010 for the course PSC 222 taught by Professor Jing during the Spring '10 term at Rochester.

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reading # 6 - THE LAWS OF DISRUPTION‘ HARNESSING THE NEW...

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