Before the war in Afghanistan, the Taliban deliberately used violence to suppress music.
Today, North Americans are unwittingly using piracy towards the same end. It’s ironic that Western high-tech tools are achieving one of Osama bin Laden’s reactionary ideals – the decimation of the arts. But watch and wait, the stakes are about to get much higher.
It’s now ubiquitous, but the technology is still astonishing. With a decent computer and high-speed Internet connection, you need do little more than think about a certain recording and it is there, instantly and “for free,” via the right file-sharing software.
What’s new is the success of technologies such as DivX, which can now compress a full-length, full-screen, high-resolution movie to fit on a standard CD. DivX essentially makes films and TV as vulnerable to the easy, anonymous, invisible looting that has recently plagued the music industry.
Monsters Inc. and Lord of the Rings, not yet available on video, can be downloaded from the Internet in a few hours using a cable connection, then stored on a CD and passed around – I know it happens, even in church and school. Unchecked, this practice will lead to entertainment-industry-wide deaths by a thousand cuts.
If you think I am exaggerating, look at the numbers in the music world. The New York Times has reported that, in the United States, the top 10 albums sold only 40 million copies in 2001. That is down dramatically from 60 million in 2000, the year electronic file sharing began to soar. Total recording revenues have gone down almost five per cent in the same period.
In Canada, the overall decline is similar (five per cent), according to a recent report of the Canadian Independent Record Production Association.
“The fact is, only one in every 10 or 11 products becomes a success. And like every other branch of the entertainment industry, it’s the big winners that carry the ones that don’t earn that kind of money,” says David Basskin, president of the Canadian Musical Rights Agency. “If you undermine the ability of the big winners to earn back their investment, you don’t need a PhD in economics to know what happens next.”
If you think only the millionaire musicians and multinational companies are being affected, the Grammy awards last February served as a poignant reminder of the deeper cost of piracy. Recording Academy president C. Michael Greene said: “Many of the nominees tonight, especially the new and less-established artists, are in immediate danger of being marginalized out of our business.”
In 1997, to help mitigate the harm of illegal copies, the Canadian government authorized levies on recording media: chiefly blank cassettes and CDs. The money collected from those levies will go to musicians, composers, and other music-industry stakeholders based on a 50/50 weighting of airplay and sales data. The levy rates are set by Canada’s Copyright Board, which bases them on survey data collected by the Canadian Private Copying Collective. Media that are used most for music face the highest levies, currently 21 cents per data CD and 77 cents per audio CD and MiniDisc.
The collective has recently stirred up controversy with its proposal to add a 2003 levy to MP3-type devices ($21 per GB of memory), blank DVDs (at $2.27 per unit), and flash-type memory devices ($8 per GB), as well as almost tripling levies on CDs and tapes. People in the popular press have been complaining about the way such levies penalize honest users, and the way they implicitly endorse illegal activity.
This could lead to a slippery slope. Next, the movie industry is going to press for a levy. After that, software makers and photographers will make a plea. Soon, PC hard drives, servers and external drives (which are not now covered, nor proposed to do so) will face levies, and by then the cost of a computer could easily increase by $2,000 or more.
Even Basskin acknowledges that levies are not perfect. “I would prefer a system where we made nothing from the levy because nobody was doing private copying anymore.”
But who has a workable alternative to levies or a realistic way to counteract the theft? I haven’t heard any concrete solutions.
The new levies, while justifiable for iPods and the like, will hurt honest, small businesses which distribute information on CDs, for instance, since U.S. competitors wouldn’t face those charges.
As movie copying on hard drives increases, governments will be faced with a Catch 22: charge tariffs on hard drives and discourage the single biggest efficiency booster this country has seen in many years – computers – or allow the copying to proceed unimpeded, weakening the entire intellectual property sector. This bind, that will catch businesses in the middle, should drive all of us businesspeople to nip this criminal activity in the bud. The tariff is the nasty symptom, not the disease.
I wish there were an easy safeguard. Unfortunately, history is not encouraging. No copy protection invented to date has proven unbreakable and unavoidable. The Internet is impossible to regulate. Napster variants are getting good at avoiding prosecution by basing themselves in countries without copyright laws, and they spring up faster than punitive judgments can take them down.
Until the laws changed in 1997, Basskin tells me it was illegal to make a copy of a CD you owned, even for your own personal use. Technically, you were forbidden from making “favourites” tapes of your own records or CDs, for example.
It was a ridiculous law. But that’s why consumers and law-enforcers alike ignored it.
Unfortunately, that unjust law had the effect of turning authorities into passive observers even as grey-market copying turned into rampant looting.
“Part of the issue is that attorneys generals feel that their resources are so stretched that they would really prefer that the courts be left for criminal matters, not disguised commercial matters,” Basskin says.
I would suggest to law-enforcement officials, governments and even religious leaders that they have to wake up to the new realities and make a call to arms.
We are not talking about kids spending hours recording a few fuzzy versions of songs off the radio anymore. We are talking about perfect copies, made in seconds, done on an industrial scale and distributed worldwide by millions of cognizant adults. It’s grand larceny. A white-collar crime committed in some cases by good church-going folk (some of whom I know).
One presumably well-paid computer programmer who works in my building has acknowledged that he captures several movies per week by programming Morpheus to download and share while he sleeps and works. He told me Shaw Communications called him once, concerned by the bandwidth he was consuming. I didn’t hear a societal uproar when Napster was shut down about a year ago, and I don’t think many would cry if this guy were hit with a $5,000-plus fine.
But considering the seriousness of the offences, Basskin still doesn’t see the courts as the proper tool for addressing piracy. “I suggest to you that we have to live with the fact that the mob is there and the mob is your kids and mine. But it’s a societal problem of a very large order.”
Is public education, parental guidance, and eventual peer pressure going to bring substantive change? I hope so. If that fails, are Crimestoppers-like whistle-blower incentives workable? Is the option of voluntarily submitting to surveillance to avoid levies reasonable? Such odious measures become conceivable when respect for private property degrades as completely as it has today.
The very health of businesses in the Western world rests on how seriously we take piracy. Otherwise, it’s not just the entertainment industry that will lose, it’s anyone who could benefit by intellectual property, or anyone who expects to pay a fair price for a computer.
