The Content Wars

An author creates a work, a book perhaps, or a movie or recorded music. The point at which the author grants access to the work and how the author grants access to the work is a critical juncture in the life of content. And how content is created and distributed is changing rapidly. We have said that before, indeed have said that with each revolution in communications. The telegraph was the wonder of its day and radio exploded. Television and cable grew into the dominant media of the late 20th century. Now the emergence of the Internet and a broadband infrastructure have radically decentralized the opportunities to create and distribute content.

This change in distribution technology has powerful consequences for the transition point between private content and taking the content public (publication in a word). For most of the history of content, built-in technological limitations of the media of distribution meant that publication brought with it certain control over content. For a consumer, books, movies and recorded music were hard to copy and even harder to distribute in large numbers. The Internet has changed this. To possess a copy of a work is to have the power of distribution in your hands. For a creator, to sell a single copy of a work is to sell the practical ability to distribute content for free. Sold once, free everywhere.

We pay for content directly—cash forked over for a copy of a book—or by watching commercials (television) or at least accepting the risk of being exposed to the ads. Some content is supported by a mix of payments and ads (newspapers, magazines, cable TV). If content will be available for free everywhere, we are running an honor system for content. Pay if you want to or if you feel the need. The same show or song is available for a fee on DVD or a CD or as a pay download from iTunes and is simultaneously available for free on a peer-to-peer system. Click on iTunes and pay, click on the current hot p2p system and get the content for free. The wonder is that anyone pays at all.

If we really live in a world in which only a single copy can be sold and then it will be free everywhere, we will need to abandon sales of content. We will be relegated to a world of free, advertising-supported content. For ad-supported content, we don’t need to figure out a way to get consumers to hand over cash for a copy of the content. Ad-supported content carries with it its own payment and sharing the content on p2p systems doesn’t change that. Advertising-supported content may be given away for free—sheet music years ago and broadcast TV and radio today—and that reduces the need to control what happens to copies. Making another copy just spreads the advertising to another potential buyer (though the history of cable TV shows that this is much more complicated). So if sold once, free everywhere means that no one will pay for content, we will need to add advertising to that content.

But that will change content itself, plus it isn’t so easy to guarantee that the ads actually stay with the content. Take those points one by one. Ad-supported content is sold, but the purchasers aren’t the users, the purchasers are the advertisers. Content that the advertisers don’t like—often controversial, edgy content—won’t get purchased. Advertisers also don’t care about reaching all consumers; they only want to reach the consumers who can afford to plunk down money for their products. The content that they will pay for will be tailored to the demographics that the advertisers want to reach.

The sold copy has represented a simple way of organizing consumers to pay for content. When consumers pay for content, they are the patrons served by content producers. If consumers don’t pay for content, the advertisers are the patrons and it is their interests that will be served. Sold once, free everywhere is a world in which volunteers pay for content and we may find it quite difficult to organize users to pay for content. Organize is the operative word. The copy, sold and paid for, has served as that organizing device, but in a world of instantaneous free distribution, consumers/users will lose voice, as a group, and advertisers will be heard instead.

Assuming of course, that their messages are heard at all. Advertising-supported content depends on exposing enough consumers to the ads so that the advertisers remain willing to pay to reach those consumers. They can’t actually make us watch the ads, of course, but they can hope to seduce us into paying attention. But with copying technologies that make it possible for consumers to unbundle advertising and content, we have a problem. We will all just watch the show but not watch the ads—TiVo and fast-forward—and the number of viewers exposed to the ads will drop. If no one watches the ads, how will we pay for television? We all want the other guy to watch the ads, but we don’t want to watch ourselves.

These powerful abilities to manipulate content—to copy it and distribute it and to copy it and unbundle the ads from the content—put at risk the ways in which we pay for content. Free or fee: you decide. Pay it you want to. Faced with these powerful technologies, content makers have understandably looked to technology for help. They hope that technology will help them control copying or how content is used. They hope that this control will vindicate the exclusive right of a copyright holder over copies. But many fear that when content producers can reach into your house and control how many times you play a song or whether you can fast-forward over commercials, we will have shifted control over content in a dramatic way.

The emergence of the Internet has created enormous opportunities—and posed particular challenges—for content and content rules. By content rules, I mean the rules that we use to regulate how content is created and distributed. These rules are a mix of copyright and communications policy, with antitrust and constitutional law thrown in for good measure. This clash of law and technology gives us the content wars.

Comments

[greglas]

Hey Randy, what is this? It sounds a bit like a long abstract but also a little like a manifesto. I guess it's just a blog post but the style is kind of interesting.

While I agree with much of what you say about the shifting trend in some copyright arenas toward ad-supported content (which has always dominated radio and tv content distribution models) I'd like to comment on two points here.

First, the dichotomy of "content" and "advertising" you rely on might be overdrawn. I understand that those terms have an accepted common meaning, but my hunch is that if we're talking about DRM and copyright generally, we should be careful about explaining how advertising can BE content (think Superbowl commercials) and content can BE advertising (think of most children's cartoons). There's quite a lot to question in our typical ideas about "advertising" and "content." Arguably, the advertising/content division is best defined in terms of general payment practices, not in terms of empirically defensible categories that justify legal interventions in the market.

You might take a look at Ellen Goodman's piece on Stealth Marketing, which kicks up some dust in this area:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=896239

Second, I think you've tending to get just a bit apocalyptic about the social & market implications of P2P: "So if sold once, free everywhere means that no one will pay for content, we will need to add advertising to that content."

No one will pay for content? A price of zero is a powerful thing, but you seem to imply above that when equivalent goods are priced zero and non-zero, that the non-zero market is doomed. That's not always true, right? Bottled water is making a killing these days. Relatedly, there are plenty of people who might choose Napster 2.0 over a "free" P2P service due to interface appeal, quality issues, reliability, concern over spyware, ethical qualms (social norms), etc.

So while I agree with you that the trend in copyright is toward a culture with greater advertising push and less price payment, I don't see this as an either/or proposition at all.

Finally, just because a producer doesn't get cash for producing a work, that doesn't mean that the producer wouldn't encourage others to distribute the work for "free." Despite that Samuel Johnson quote, many artists are motivated by the prospect of realizing non-monetary returns. See, e.g., free software and Creative Commons.

Just a few thoughts. I deal with a lot of these issues in my recent "Digital Attribution" draft on SSRN, btw, which you might find of interest:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=917396

[Phil Throckmorton]

Speaking of copies and copying, I frequently wish the articles in this forum were formatted for easier printing.

[Doug Lay]

This reads like the intro to something. Are more posts going to be forthcoming?

FWIW, you completely ignore the argument that technical controls over how content is used by consumers - a.k.a. DRM - simply don't work. This view is very widespread - close to universally held - in the computer security community.

[Bob]

Unless we are going to outlaw public libraries, I don't see what the fuss is all about. I rip mp3's from CD's I get from the library all the time. I have over 8,000 songs on my PC. I've been doing this for years. I never downloaded one song from napster or any other download service because the quality was not consistent. I even copy DVD's and VHS stuff from the library. My collection is huge. It is all also perfectly legal. So, tell me, will we let the MPAA and others outlaw libraries?

Digital media is just another media. Why should it cause anyone to change their copyright laws? Due to ease of use? Due to ease of copying? Or due to lower profit margins?

I'm starting to question the whole concept of copyright law. Once a product is sold to the public, it would seem to me to be in the public domain. I would enforce the "no copying to resell," but trying to enforce "no copying for personal use" is rediculous. It can't be done.

If you think about it, copyright law gives someone a monopoly on a product or idea for a given timeframe. Maybe it would be best to reduce this timeframe to something reasonable, like 2 years. That way, one can still make his profit upon release. Besides, most music and technology becomes obsolete within 1-2 years anyway. Same goes for patent law; reduce it to 2 years. Anything longer than that is just plain excessive greed (and no, greed is not necessarily a bad thing...it motivates people to be creative).

Regardless of what they decide, I will continue making trips to my public library to copy whatever the hell I choose. Everything in the public library IS PUBLIC DOMAIN. I don't care what copyright law says. Think about it. How can a DVD be in the public library and no be considered public domain? Or are libraries some kind of special twilight zone where copyright law doesn't exist? Kind of like "no free speech" zones near Bush when he wants to deliver a speech (assuming he can babble his way through it).

[Doug Lay]

My comment yesterday was made too quickly, and was not entirely correct.

DRM can "work" to a greater or lesser degree at preventing what is generally termed "schoolyard copying" - where posessors of a legitimately purchased copy make further copies and pass them along to acquaintances.

Where DRM is useless - according to the vast majority of security professionals - is in preventing "darknet" copying, where copies that have already had the DRM stripped off are passed around the Internet via p2p networks.

Next problem: Your comment that "But many fear that when content producers can reach into your house and control how many times you play a song or whether you can fast-forward over commercials, we will have shifted control over content in a dramatic way" is an extreme oversimplification of the objections to DRM and (especially) DRM-protective laws like the DMCA. It's not just control over content that's at stake - it's control over the technological infrastructure that carries content.

DRM+DMCA is incompatible with open source software, and, more broadly, with what Ed Felten calls the "freedom to tinker". It's also incompatible with "remix culture", which Lessig has taken to calling "read/write" culture of late. Even in an introductory section, simply summing up objections to DRM+DMCA as "fear" of "shifted control over content" really misses the boat.

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