CU71015A Theories of the Culture Industry: work, creativity and precariousness

Student Number: 33260621

What is intellectual property? In what ways is it changing and does it meet the
needs of culture?
January 13, 2014


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One of the most unique and invaluable characteristics of human beings is their capacity
to create. Individual and collective creations originating in the mind are protected by
what we know as intellectual property. Its regulation is invaluable for many reasons. It
promotes the progress of technology, science and culture. It reinforces further
innovation, economic growth and the development of new industries. (WIPO)
The world has experienced enormous changes since intellectual property was first
established back in 1710. Today, creative industries represent an important sector in
society, as well as a significant part of the economy, and cultural expressions are
created on a daily basis, at an incredible speed. Furthermore, digital media has come to
change the way individuals engage with the world and with others, and has enabled
society to access, copy and distribute content in unprecedented ways.
The problem is, intellectual property has not been thoroughly restructured to meet the
needs of a digital era. The changes it has gone through since it was first conceived, not
only detaches it from its original purpose, but also threatens access to culture and
discourages the development of a creative society.
The structure of digital technology has facilitated an overregulation of intellectual
property rights, enabling the monitoring of every act an individual makes online. This has
generated a society that lives on the edge of illegality on an everyday basis, and
therefore inhibits the development of creative endeavours instead of supporting them.
Due to the broad scope of intellectual property, this essay will focus specifically on music
in American copyright law. The aim of this essay is to establish a ground for
understanding the elements that have made current intellectual property regulation of
music inadequate to fulfil the needs of culture, and to question what could be done to try
and regain a balanced regulation in order to maintain its purpose as a supporting
element for cultural development.
To start developing an understanding of the topic, this essay will begin by explaining
what intellectual property and copyright law imply and where they come from, followed
by a brief history of music in US copyright law. Subsequently, the major changes
intellectual property has experienced in relation to music will be stated, along with an
analysis of who have been the key players in pushing those changes through. To be
able to question whether the way intellectual property is regulated nowadays meets the


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needs of culture or not, the effects that the introduction of digital technology has had in
society and culture will be analyzed, along with the role copyright law regulation has
played in that current status. To conclude, a range of alternative regulations in copyright
law that have been proposed by copyright experts in order to improve its suitability for
the present will be explained.

Intellectual Property and Copyright Law Background

Intellectual property is the way ideas and creations are protected. In the case of music, it
is regulated by copyright law. It is, as its name states, a specific kind of property, which
implies ownership of rights over content. The matter of whether intellectual property
should or should not be regulated the same way as other kinds of property is a question
that has challenged many thinkers and policy makers for a long time. Is it reasonable for
someone to own a product of the mind, of the intellect, and thus control other peoples
access to it? Where are the boundaries when every creation is nurtured within the
context of so many other creations? (Hyde, 2010: 5) How to regulate what would affect
access to knowledge and culture in a balanced way? Rights in creative property have
always been treated differently from other kinds of property, and the main difference
relies on the fact that it is a property granted for a specific period of time. The purpose of
this limitation is to encourage new creations, to leave some space for innovation and
free access to culture. (Lessig, 2004: 118-119)
To understand how intellectual property was defined, its imperative to know the context
in which it was built. The English Parliament developed a law that regulated publishers in
1662, it was known as the Licensing Act. This Act specifically protected written works,
granting perpetual rights to publishers over the printing of the books they held the rights
for. It was a practical scheme for the crown to have control over what was being printed.
As rights were perpetual, which means nobody could print a book somebody else held
the rights for, this decree generated a monopoly that not only raised the price of books,
but also eradicated the possibility of open competition and a free market. At that time,
not only did the English Parliament have a clear interest in limiting the power of the
crown, it was also against any kind of monopoly practice. There was also the


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Enlightenment ideal of making knowledge accessible to all. The combination of these
motivations made Parliament push for the abolition of the Licensing Act in 1695.
(Lessing, 2004: 85-89)
After having experienced how perpetual copyright generated monopoly, Parliament
decided that specific kinds of property should be limited. They would grant exclusive
copyright, but only for a limited period of time, and as long as it benefited society. As a
result of this, in 1710, the first copyright law was established in Britain, the Statute of
Anne. This law granted copyright protection to the authors and owners of books for a
limited period of 14 years, which could be renewable if the author was alive. Once this
period had ended, the work was free to access for anyone else to print. For books
written before 1710, the law acknowledged 21 additional years of copyright protection.
(Ibid)
The limitations established by the Statute of Anne provoked conflicts of interest between
the publishers and Parliament, and since it was legally possible for publishers to appeal,
many conflicts arose regarding copyright in England at that time. On one hand, there
were the publishers who were not willing to lose the revenue they made from printing
various authors work, and therefore argued for perpetual copyright. On the other hand,
there was the parliament, fighting to limit copyright, in order to seek an open and
competitive market and the avoidance of monopolies. It was not until 1774, with the
resolution of a legal copyright case known as Donaldson vs. Beckett, that the public
domain was born, and copyright was limited at last. Public domain implied, once the
period of copyright protection of a piece of work had expired, that it could be used and
printed by anyone without permission. Culture in England would no longer be controlled
by a group of publishers. The introduction of public domain marks an important moment
in copyright history, not only because it established the importance of not overprotecting
in order to maintain an open market, but also because to this day it remains one of the
only two clauses of the copyright law that establishes the possibility of free access to
copyrighted creative content. (Lessig, 2004: 90-94)






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Music in US Copyright Law

Introduction of Music in US copyright law and the emergence of a new industry

The first American copyright law was a variation of the British Statute of Anne, it was
developed in 1780 with the purpose of promot(ing) the progress of science and useful
arts Sayf (2013: 14). It wasnt until 1831 that music was included in it. At that stage, the
phonograph had not yet been developed, which means there were no recordings to
protect, and since the structure of the law was based on written works (where only
writers and publishers were included), it only protected composers. Performers were not
even considered.
To understand how regulation of copyright in music has changed, it is important to
mention how record labels were born, since they are one of the most significant players
in this story. Thomas A. Edison introduced the phonograph in 1877, and companies
such as Victor (now part of Sony BMG, one of the major record labels), the Ohio Talking
Machine, Talk-O Phone and Zon-O-Phone commercialized it. At that time, what really
mattered to these entrepreneurs was the quality of the sound and the technology itself,
not the content. The reason for this is because back then, nobody could predict that
such an invention would be the source of an industry that would eventually be worth
millions. The initial purpose of the talking machine was to enable new forms of
transmission of human speech; and since the Berne Convention had excluded
mechanical devices from copyright law in 1886, the mechanical expression of the
recording was not protected at this stage, meaning these companies did not own their
recordings. (Sayf, 2013: 23-27)

Competition between record companies started to increase, which led them to seek new
ways to advertise their products. It was then that these companies started to invest in
recording the artists of the moment. At this point, since wax cylinders could not be
reproduced, the fact that recordings had no copyright protection was not of great
importance for these companies. When Berliner introduced the disc method in 1888,
which generated a master recording (meaning, a primal recording) that could be


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constantly reproduced, companies started to worry. Since there was no law at all to
regulate the use of those recordings, everybody was able to copy them and use them as
they pleased, thus early entrepreneurs in sound recording were free to run riot with
other peoples work, recording performances of songs without paying composers,
copying recordings by other companies and artists. (Sayf, 2013: 27)

From this moment on, record labels started to push strongly to acquire legal protection
for their recordings, and would eventually become (along with other representatives of
the music industry) key players in framing additions and changes in US copyright law.

About one hundred years ago, Congress got into the habit of revising copyright
law by encouraging representatives of the industries affected by copyright to
hash out among themselves what changes needed to be made and then present
Congress with the text of appropriate legislation Copyright bills passed only
after private stakeholders agreed with one another on their substantive
provisions. The pattern has continued to this day. (Litman, 2001: 23)

Some of the elements that strongly influenced the decision made by Congress to
recognize ownership of music recordings included the apparition of pirates and
bootleggers, along with the accessibility technological advances allowed in terms of
copying material.

Since the introduction of the disc method, many efforts were made by entrepreneurs in
the music industry (the record labels) for the government to acknowledge and regulate
ownership of recordings. The rationale they gave to the government was that copyright
should protect the big investments they made in order to offer music and entertainment
to their audiences. Their request was denied for a long time because Congress was
afraid to incur on monopoly practices. Whilst record labels lobbied to obtain the
regulation they sought, many pirates and bootleggers appeared. To understand the
difference, a pirate is defined as someone who profits directly from the unauthorized
use of someone elses work. A bootlegger records materials and performances not
officially published, and also distributes recorded material that has been left aside by
mainstream labels, without trying to sell the product as if it was the original product of a


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recognized record label. (Sayf, 2013: 46-53)

By 1930 an important counterculture movement had arisen. By that time, record labels
already controlled the manufacture of discs and the content that was offered to the
audience. When they decided a specific musical genre was not worth continuing to
distribute, they would just stop making it, and people would no longer have access to it.
This is what happened to jazz at that time. For the record labels, it was a musical genre
that was limited to a small black audience, which meant it could not represent large
amounts of revenue. Since only a few songs became hits and the investment,
specifically in the areas of promotion and advertising, was so high, record labels were
only interested in music that could potentially become a hit for a big market. But music
had already reached the audience on another level. People recognized the value of each
recording and specific interpretations, and many groups continued to seek music outside
the mainstream parameters the record labels imposed. Jazz, as many other music
genres to follow, was protected, recovered and maintained by music lovers, collectors
and bootleggers. They were responsible for keeping old recordings alive and for
generating and distributing rare music recordings from different sources. For many of
them, jazz was much more authentic than the commercially compromised swing that
was being promoted at that time by the record labels. From this moment on, the
independent subculture of the music industry would play a massive role in maintaining
the history of music alive within society, and in widening the scope of the music on the
market. (Sayf, 2013: 46-53)

Meanwhile, the pirate market was blooming. It was easy for them to make large
revenues out of a product that represented such a low investment for them. Despite the
fact that the labels had their very peculiar ways of avoiding or lowering expenses that
where inherent to their business, such as paying very low fees to performers, or
accounting for fewer sells (in order to pay less royalties), their product in fact implied a
significant expenditure for them. Pirates instead, profited from a product they had not
paid for; it was (and still is) a very lucrative formula. It is a fact that their existence did
affect the record labels whose content was being used, and continues to do so. Despite
this, this practice was not legally addressed until years later. (Ibid)



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Technology continued developing, and the access to copying and sharing music kept
becoming easier over time. Bootleggers and pirate markets kept on growing and
reinforcing themselves. Parallel to this, record labels investment in productions and
advertising continued increasing to the point where an albums production would cost a
significant amount of money. Yet why was the cost of producing an album so high? By
that time, record labels had already indulged in serious illegal practices, such as
payola. They would bribe the people involved in the distribution and broadcasting of
the music in order to secure a constant and high exposure of their records, with the
intention of turning them into big revenue hits. (Sayf, 2014: 82-84). Did piracy threaten
the existence of the music industry as a whole, or just the prevailing model for making
and selling music? Did $200,000 need to be spent to inform the public about a particular
recording, and persuade them to like it and buy it? (Sayf, 2014: 143).

This triangle between the huge investments made by an established industry facing the
menace of new technology and a growing pirate and bootlegger market, generated a
snowball effect of lawsuits and pressure from the industry that eventually culminated in
the legal recognition of recordings in 1971.

Important changes in the regulation of music by US Copyright Law prior to the
proliferation of digital media

There has been an important amount of adjustments and additions to the US copyright
law related to music throughout its history. A change of great importance in copyright law
is one that has developed over time. Public domain, the concept that was developed to
enable free access to culture, has suffered dramatic changes since it was first
conceived. When it was imported from British to US Copyright Law, the maximum period
of protection it gave (and just in cases when the author renewed his rights after a first
period of 14 years) was of 28 years. In 1831, the term increased to a maximum of 42
years. In 1909 it increased again to 56 years, and over the last fifty years Congress
extended the term eleven more times, twice in those times not only increasing the term
of existing copyrights but also of future copyrights. Nowadays, the US Copyright Law
protects registered works for a period of the lifetime of the author plus 70 years (this
varies in each country, but the overextended period granted nowadays is quite general


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worldwide). A curious fact to take into account here is, when US Copyright Law was first
established, due to the fact that only works that were registered were protected, 95% of
the ones created before 1800 passed immediately into the public domain (since most of
the works were not registered at all) (Lessig in Evans, 2004). That changed in 1976,
when a new Law was enacted that made copyright protection automatic for all works,
regardless of whether they were published or not (Litman, 2006: 206).

Public domain is one of the two clauses in US Copyright Law that were developed to
allow free access to culture. The other figure is fair use, which refers to a use where
copying is actually legal, though this only allows free use of creative content in very
specific cases, when it is possible to prove not only the intention of non-commercial use,
but also a specific purpose (related to research, critique, quotation, parodies, education
or library archiving) and a limited length of the used content (the material can not be
used in its full length) (WIPO, 2003). This ever-expanding scope of Public Domain takes
all sense away from it, and decreases, in an important way, the possibility of free access
to culture. The purpose of having a Public Domain is to enable society to freely use
culture in order to encourage new creations and the development of culture. What is the
point of having a figure to limit copyright when that figure in itself cannot be limited? The
public domain makes all works produced before a certain date freely available, although
the ever-expanding scope of property rights has begun to threaten the existence of such
creative commons from the past. (Sayf, 2013: 13)

In 1909, there was a huge change in Copyright law; it passed from regulating publishing
to regulating copies. From this moment on, the reach of copyright was bound to
technology (Lessig, 2004: 171). This simple change would generate a great impact 80
years later, since it was the reason why in 1998 the Digital Millennium Copyright Act
(DMCA), an addition to copyright law that delimits online copyright regulation, was
passed (DMCA will be explained in more detail in the following chapter).
In 1971, recordings were acknowledged as property of the record labels that had paid for
their production. This resolution not only had a massive impact on the future of
copyright, it defined an essential change in its rationale. Driven by private interests and
the concern of an unstable economy, it left aside the original purpose it once had; the
pursuit of a free market, no monopolies and an open culture. It was at that moment when


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policies started being developed that were strongly influenced by the interests of the
leading companies in the industry.

Nowadays, US copyright law grants copyright holders a much wider scope of rights, the
right to reproduce the work in fixed, tangible copies; the right to create adaptations;
the right to distribute copies to the public; and the rights to perform publicly and
display publicly!. (Litman, 2006: 17)

Introduction of digital media
Impact of digital technology on copyright law regulation
The introduction of digital technology has had a massive impact on copyright law
regulation and the development of the music industry. Digital media made accessibility,
copying and sharing of content as fast, easy and democratic as never before,
characteristics that changed once and for all the way music is consumed. This kind of
technology also allows the possibility of keeping an accurate control on the monitoring of
access to content, and the way that content is consumed. However, its main
characteristic is that, because of the way the Internet is structured, everything people do
online generates a copy.

Each technological advance inspired a dispute about whether it entitled copyright
owners to expanded rights over their works (Litman, 2006: 23). By the end of the
twentieth century, an important amount of both copyrighted and un-copyrighted music in
digital un-protected format could be found online. Due to the compressed size of the
mp3, downloading and online sharing was fast and easy, and quickly became popular.
While artists, users and entrepreneurs explored the possibilities this new platform could
represent in terms of new ways of distribution; record labels refused to distribute their
content online until they could find a way to protect it and regulate its use. Instead, they
dedicated their time and resources to developing different ways to protect their content
and status, such as educational material to generate awareness of what piracy implied,
pushing for legal protection and developing technology to encrypt music files. (Gillespie,
2007: 41-42)



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As was previously mentioned, in the United States it is common practice for copyright
law to be reviewed by the leaders of the entertainment industries. What is disturbing
about this fact is that no industry is going to vote for legislation that does not benefit it,
no industry is going to support regulations that might enable the development of new
forms in which that industry could be developed, specially if it threatens its own status.
The responsibility of the government should be to protect the public interest, not the
interest of just a few. In 1998, after a long period of music copyright holders pushing for
governments support for the regulation of online copyright control, the Digital Millennium
Copyright Act (DMCA) was enacted. The DMCA not only regulates copies of digital
content, it encourages the use of technological protections to facilitate a pay-per-view,
pay-per-use system using some sort of automatic debit payment before anyone can
have access to anything. (Litman, 2006: 27) The introduction of this law represents a
crucial change to copyright regulation. It passed from regulating multiplication and
distribution of works, to regulating consumption (Litman, 2006: 28). Before digital media,
one could buy a CD, share it, burn a copy for a friend, listen to it the times one wanted
and that could not be regulated. Now, every single use of copyrighted material online
can be monitored, and requires authorisation in order for it to be legal. (Litman, 2006:
28).

Whilst record labels monitored Internet activity to detect unauthorized use of their
content, an online music site called Napster appeared. Napster represented a big
menace for the music industry. It made sharing copyrighted content much easier and on
a larger scale. What is most important, however, is that it pioneered the peer-to-peer
network, which threatened the status of the record labels as the distributors of content.
Peer-to-peer is a decentralized network in which users can be consumer and server at
the same time. Napster generated a community of users in which files on the hard drives
of these users could be directly exchanged between them while online. Peers played the
role of distributors of content. (Gillespie, 2007: 42-46)

This does more than widen the scope of distribution. It challenges the very
assumptions the music industry relies on for profit and longevity: the privileged
place of artists and their designated patrons; the assumption that cultural
expression moves in one direction, from the few producers to the many


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consumers; the relentless commodification of that cultural expression; and the
management of those commodities by established corporate interests through
copyright. (Gillespie, 2007: 43)

As a result of this threat, the music industry kept on seeking technologies to secure a
system for digital rights management (DRM), and still does. Encryption and trusted
systems are a result of this. Though encryption has been commonly used to secure
digital content, the security it offers is not enough for copyright holders. Other kinds of
trusted systems allow the setting of a number of restrictions onto digital content to be
accessed, restrictions that have never been included in the rights the law grants to
copyright holders, such as how many times a file can be accessed, if it can be copied
and shared, among many others. In this sense, technology has allowed the scope of
copyright to extend, since it now permits copyright owners of works in digital format to
monitor and meter the consumption of their works (Litman, 2006: 13). It also transfers
the copyright law regulation of digital content to the technology that encodes it, a
technology that has been developed and thus answers to the private interests of the
industry that built it. As Lessig in Gillespie (2007: 58) states, the code designed by
private corporations will be designed according to private agendas.

There is another important issue to be addressed in relation to technological regulation
of digital content, which relates to fair use. As was previously stated, fair use is the only
legal way (apart from the over-extended public domain) to freely access, use and copy
copyrighted content. Although its use is regulated as legal in US copyright law, its
limitations are not clearly explained, which leaves a lot of room for its interpretation.
DRM systems work under clear specifications, ambiguous concepts like fair use are
impossible to encode. If copyright law regulation is made by technology then, who is
there to decide whether a use is fair or not? (Gillespie, 2007: 60-62)

This is the future of copyright law: not so much copyright law as copyright
code. The controls over access to content will not be controls that are
ratified by courts; the controls over access to content will be controls that
are coded by programmers. And whereas the controls that are built into


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the law are always to be checked by a judge, the controls that are built
into the technology have no similar built-in check. (Lessig, 2004: 152)
Society in the digital era
The digital era has reshaped the world and the way individuals relate to it and to others.
Today, a great deal of the lives of the worlds population takes place online, and that is
unlikely to change. According to the cultureist (2013) in 2013, over two billion people
used the Internet, a figure that represents a third of the worlds population (2013,
worldometers). Of those users, 52% are people between 15 and 34 years old (Statisa,
2013).
Moreover, there are many generations that did not know the world before the Internet.
Palfrey and Gasser (2008: 1) talk about the digital natives, the generation born after
1980, for which being online is a natural part of their existence. For them, digital
technologies are indispensable; they represent the way they know how to apprehend the
world, and to relate to one another. They access their information online, hang out with
friends on facebook and whatsapp, and take pictures to post on instagram. They are
connected to one another by a common culture (Palfrey and Gasser, 2008: 1). These
young generations are the future creators of this world, and nobody creates out of
nowhere. They must have the possibility to access the worlds cultural commons in order
to nurture their creative process, just as anybody else. All that we make and do is
shaped by the communities and traditions that contain us. (Hyde, 2010: 5) The way
intellectual property is being currently regulated is blocking a legal access to a cultural
reference that is indispensable for the creative process.
All authors use raw material from elsewhere to build their works. Novelists,
composers, sculptors, and programmers all incorporate into their works
ideas, language, building blocks, and expressive details they first
encountered elsewhere. If creators were given control over every element
and use of the works they created, there would be little raw material left for
later authors. (Litman, 2006: 15)
Taking a look at the dimension of this information, it is hard to imagine that everything a
person does online is potentially illegal. How can a regulation be suitable to meet the
needs of culture when it cannot even adjust to the technology that is currently the main


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channel of content distribution? If every activity made online produces a copy, and each
copy of copyrighted material is illegal, how many illegal activities must a single individual
do each day?
A law intended to be enforced against individual consumers would have
needed to be structured differently; the current setup would strike many
individuals as unfair. Under the current statute, anyone who invades the
copyright owners exclusive rights without a license or statutory privilege
can be held liable for infringement. (Litman, 2006: 19)
When a legal regulation makes a third of the worlds population infringers, a law that has
been strongly developed by the private interests of a few, that law should be put under
consideration. So uncritically do we accept the idea of property in culture that we dont
even question when the control of that property removes our ability, as a people, to
develop our culture democratically. (Lessig, 2004: 261)

In the search of alternatives for a more balanced copyright law regulation
In his book Remix, Lessig (2008: 254-287) proposes some changes that could be
introduced to the legal sphere, as alternatives to try and regain a balanced regulation of
copyright law. His proposal is the following:
Deregulating amateur creativity: excluding non-commercial uses from the rights
copyright law grants to right holders, society could legally access and exploit the wide
range of cultural and creative content the world has to offer. This stimulating factor would
encourage the development of the creative potential of society. (Lessig, 2008: 254-287)
Clear title: copyright holders should have the obligation to register their work 14 years
after being published. If they should fail to do so, the work would immediately pass into
the public domain, and could be accessed either freely or by the payment of a symbolic
royalty fee. This would not only recover a reasonable time limit for copyrighted material,
it would generate a database of creators which today, because works do not need to be
registered, does not exist. (Lessig, 2008: 254-287)


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Simplify: since copyright law now also regulates users, and people not familiar with the
topic, the law should be stated in a clear, simple way. (Lessig, 2008: 254-287)
Decriminalizing the copy: in a digital world, where copies are an inherent part of the
technology, they should not be target of copyright regulation. The law should instead
regulate the uses that connect directly to the economic incentive copyright law was
intended to foster. (Lessig, 2008: 254-287)
Decriminalizing file sharing: it could either be done by authorizing file sharing with taxes
in order to cover royalty fee payment (Netanel in Lessig, 2008: 271) or by a simple
license with a low fee (Fisher in Lessig, 2008: 271).
Throughout the process of researching and writing this essay, it has become clear to me
that current regulation of intellectual property is far from meeting the needs of culture.
Being able to count upon an adequate regulation of copyrights is indispensable in order
to maintain a balance between a stimulating protection for creators to keep on creating,
and an encouragement for individuals to keep on exploring their culture, and using it as
inspiration to keep on developing their own creations, without feeling like trespassers in
their own environment.

US copyright law maintains its foundation on printing technology that is currently
outdated, and even though it has tried to embrace new media, it has not been
fundamentally restructured to remain coherent in the present. In addition, it is the
governments responsibility to delimit and apply policies that should be developed for the
public interest, not the industries. Boths interests are inherently different, if not opposite.
Intellectual property was created to promote the progress of science and the arts, and to
accomplish that, no private interests can be taken into special consideration.

As Litman points out, today we face the emergence of a new way of thinking about
copyright: Copyright is now seen as a tool for copyright owners to use to extract all the
potential commercial value from works of authorship. (Litman, 2006: 14) It is a very
delicate subject the one that refers to intellectual property as to see it as a mere
opportunity area for its commercial exploitation.

Today, a significant part of the worlds population life takes place online, and that is


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unlikely to change. The most representative group of those users is the young
generation of new creators, the generation that will bring new ways and ideas to life. It is
of vital importance to offer them a stimulating environment to bring out the best they can
give to our culture, and to the new generations to come. The world does not have to
adjust to the concerns of a few, those few are the ones who should adjust to the world.




































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