Democracy of Sound (41 page)

Perhaps one might better understand the recording industry’s claims of “lost sales” in the developing world as the potential loss of future sales. The majority of Nigerians or Pakistanis might not have been able to purchase an American CD at full price in the 1990s, but American firms wanted to secure the exclusive right to sell their music, movies, and software if and when those nations attained a greater degree of affluence. As the Philippines example suggests, multinational corporations also wanted to build legitimate markets that could sell high-priced goods to the middle and upper classes in developing countries, without interference from lower-priced, pirate alternatives. While failing to squelch piracy, TRIPS and other trade agreements ensured that, going forward, Western nations could appeal to institutional protection for their output of information technology and
intellectual property—and, by doing so, they could attempt to preserve their commanding position in these fields relative to developing countries.

In other words, US leaders did not want to depend on imports for manufactured goods while seeing their own country’s potential exports of entertainment and technology freely reproduced elsewhere, undermining both the incentive for capital investment in these industries and, in the long run, America’s competitive advantage. The US foreign trade deficit doubled between 1973 and 1980 and continued to grow in the following decades, as the nation imported shoes and shirts from developing countries, as well as higher-value products such as cars and televisions from Japan and South Korea.
⁸⁷
The anxiety over declining manufacturing in the United States and Europe masked the fact that Western firms drove industrialization in the developing world, building facilities abroad or contracting with sweatshops to bring cheaper goods to the affluent countries. As a companion to new technologies and economic growth in the developing world, piracy was a problem to be managed from afar; the dispersal of manufacturing throughout the world created the possibility that American music or software would be exploited by the very people whose labor was exploited by American capital. The businesses that rallied behind the banner of intellectual property successfully prodded US politicians to push for stringent restrictions on piracy in trade negotiations, hoping to maximize the benefits of globalization while minimizing its apparent cost—piracy.

Yet theirs was a puzzling kind of success. Indeed, the entire fracas over global piracy from the 1970s to the new millennium had a funhouse mirror quality to it. Interests in fashion, film, music, pharmaceuticals, and software deplored the devastating effect of piracy even as they prospered.
Saturday Night Fever
and
Thriller
may have been among the most bootlegged records in the world, but they were also among the most profitable hits in the history of the industry. The fact that people listened to them from North Korea to North Carolina attested to their world-dominating success. Record companies conjured the image of a vast, debilitating pirate nemesis, whose size might have been incalculable except for its opponents’ lust for citing astronomical figures—pirate sales in the millions, industry losses in the billions, and each only a fraction of an unknowably large problem. Even the industry’s claims of how many pirate records its agents had confiscated around the world bolstered the image of an industry under siege. Similarly, rich countries like the United States may have exacted concessions from their poorer trading partners, but promises to fight piracy were honored most often in the breach. If anything, the result of struggles over GATT and TRIPS resulted in freer trade and less regulation for multinational corporations, not the draconian copyright enforcement that developing countries feared. The music industry seemed to be winning imaginary victories against imaginary enemies.

Piracy remained widespread, but it did not cripple the corporations that extended the reach of American pop culture and technology throughout the world at the end of the twentieth century. The temporary downturns of the record industry were likely the result of broader recessions in the late 1970s and early 1990s, although advocates of stronger copyright were quick to blame piracy. The familiar pattern recurred in 2001, when another recession struck and the rise of online file sharing took the blame for faltering record sales. However, the market for recorded music did not recover in the new century as it had so many times before. The newest blowup over piracy soon provoked the record industry to a round of panic and recrimination of unprecedented proportions.

Conclusion Piracy as Social Media

I remember buying blank cassette tapes and recording music from the radio. No one said it was illegal, I wasn’t afraid of getting sued and everybody I knew did it. The only difference in downloading from the internet and recording on tape is the type of media you are using. Record companies are gluttonous vultures, stealing money, and music rights from talented, inexperienced artists. Screw their so called loss. If it were impossible to download music, people who download music now would still not buy your $25 cd’s. They download it because it’s there.

—“Jo Jackson” (2011)

Internet commenter Jo Jackson could not quite believe it. In the history of the record industry’s long love affair with hyperbole, there had never been anything like the $75 trillion dollars in damages that thirteen record labels sought in their suit against the file-sharing network Limewire in 2010.
¹
That Limewire could be liable was not much of a stretch; in the previous decade the courts had held companies like Napster and Grokster responsible for “contributory infringement,” or enabling and encouraging Internet users to violate copyright on a massive scale. But the sum sought by these record companies left nearly all observers in disbelief—including federal district court judge Kimba Wood in Manhattan. Quoting the defendants, Wood observed that the labels wanted “more money than the entire music recording industry has made since Edison’s invention of the phonograph in 1877.” Other critics asked if there was even $75 trillion in the world.
²

The labels could be forgiven for asking for the sun, moon, and stars, since American courts had showed remarkable fealty to intellectual property interests in the new millennium. For example, in the 2005 decision
Capitol v. Naxos
, the New York Court of Appeals arrived at the curious conclusion that
no
sound recordings were currently in the public domain, no matter how old they were. Not the Beatles, not Jelly Roll Morton—not even the earliest etchings of sound on tinfoil in Thomas Edison’s laboratory in the 1870s.
³

The case arose when the label Naxos decided to remaster and sell classical recordings originally released by Gramophone (an earlier incarnation of EMI) in the 1930s. Since the compositions performed were already in the public domain, the case depended solely on the copyright status of the recordings themselves. The Sound Recording Act of 1971 only gave copyright protection to recordings released after 1972, and the Copyright Act of 1976 confirmed that common law protections for pre-1972 recordings would remain in place even as it did away with the so-called “dual system” of federal and common law copyright going forward. Previous federal law provided authors with rights only once their work was published, whereas common law copyright protected an author’s private, unpublished work from exploitation by others.
⁴

When EMI’s Capitol division sued Naxos, claiming the sole right to sell copies of these recordings, it actually lost the first round of the legal fight. New York’s Southern District Court determined that the copyright on the recordings had already lapsed in the United Kingdom, where they were first made, and that no other rights remained. The Court of Appeals, however, disagreed. New York’s state constitution held that common law rights were perpetual unless otherwise limited by federal law; Congress, realizing that the 1970s copyright reforms created a situation where pre-1972 recordings might never go out of copyright, passed a measure ensuring that any remaining common law copyrights for recordings would lapse by 2067. But works could only retain common law protection as long as they were unpublished, and the Court of Appeals in
Capitol v. Naxos
ruled that manufacturing and selling copies of records did not qualify as “publication.” As one legal observer concluded,
Naxos
meant “there is arguably no way to ‘publish’ sound recordings.”
⁵

Here was a reductio ad absurdum worthy of a $75 trillion payout. According to
Capitol v. Naxos
, the public domain literally does not exist for sound recordings, because a novel interpretation of the word “publication” allowed one of the oldest and most powerful record companies (EMI) to stop a younger upstart (Naxos) from re-releasing performances from the early twentieth century, many of which were out-of-print. As Barbara Ringer feared in the early 1970s, the battle over piracy resulted in the invention of nearly unlimited property rights. The
Naxos
decision was one more step in a breathtaking expansion of rights in areas where, for much of the twentieth century, most experts doubted if rights existed at all.

From Betamax to Facebook

The legal and political victories may look overwhelming, but popular skepticism about intellectual property continued to undermine the power of rights owners. Jo Jackson, for instance, viewed the trillions in damages the labels sought as the
perfect symbol of their boundless avarice. Its unreal quality seemed to confirm suspicions that a business long held in dubious esteem by the public was exaggerating or even lying about the harm caused by file sharing. Jackson remembers the 1980s and 1990s as a time when listeners were free to copy and exchange music more freely, but she may be too young to recall the battles over copying in those decades. The British Phonographic Industry tried hard to persuade listeners not to copy with their “Home taping is killing music” ad campaign, which was parodied by a variety of artists in the United Kingdom and the United States.
⁶
(“Home taping is killing record industry profits!” leftist punk rockers the Dead Kennedys printed on a 1981 cassette. “We left this side blank so you can help.”)
⁷
Record labels won a ban on sound recording rentals in 1984, on the grounds that rented discs could be easily copied and returned to stores, crippling sales.
⁸
The same year, though, the Supreme Court weighed in to the debate with a landmark decision that affirmed the right of consumers to use the Betamax video system to make personal, noncommercial copies of television programs and movies—over the howls of Universal Studios and other Hollywood interests, which viewed home recording as an insidious form of piracy.
⁹

Online file sharing threatened the compromise forged by the Court in 1984, as individual users could share copies of their recordings not just with a few friends or family but with millions of strangers around the world. Jo Jackson believed the difference between tape recording and file sharing was purely technical—simply a question of “the type of media”—while the record industry argued that the scale and scope of file sharing meant that such uses were no longer personal or private in any meaningful sense. Worse still, the designers of file-sharing software stood to profit from trafficking in the labels’ intellectual property—if, of course, the makers of Napster, Kazaa, or any number of other networks could figure out a way to make money before the courts shut them down.
¹⁰

By the mid-2000s, a wave of new technologies, dubbed “social media,” embraced the Napster model of peer-to-peer sharing but recast it as social networking. From Friendster to Facebook, these websites consisted largely of images, texts, and sounds copied and distributed among users, whose free and uncoordinated labor generated a value that a handful of discerning entrepreneurs learned to exploit.
¹¹
The term “social media” may seem redundant—after all, media are inherently social, a fact immortalized in AT&T’s slogan “Reach out and touch someone.” Yet these new media harnessed the social relationships among people (“peers”) to generate profit, enabling users to distribute copies of works to each other. This way of distributing creative works looked a lot different from the mass production or broadcasting model of twentieth century media.
¹²
File-sharing and social networks brought out into the open patterns of exchange that had evolved in private and underground among bootleg labels, record collectors, tape traders, DJs, and, yes, outright pirates over the past century. At stake
in the debate over copying and sharing was a set of questions that had bedeviled Americans all the way back to the debates of 1906: was the state obligated to protect businesses from their competitors? Was it in the public interest for creative works to be freely copied and exchanged? Should consumers be constrained in what they do with a book, movie, or sound recording after they purchase it?

The answers to these questions changed over the twentieth century. Lawmakers in the Progressive Era denied composers and publishers the right to control how their compositions were used, saying that music lovers were (more or less) free to do what they wished with a song or recording once they purchased it. They could loan it to a friend, like a piece of clothing or farm equipment. Throughout the New Deal era of the 1930s and 1940s, courts still vacillated over how much record companies could constrain the use or reproduction of their recordings, reflecting a preference for free competition and a reluctance to expand monopolies that persisted into the 1960s, as recordings continued to lack federal copyright protection.