Same Tactic, Same Redundant Result

Intellectual Property is one of the more misunderstood rights in the new millennium. To say they made complete sense to people before the new millennium would be a stretch, but because these intangible rights were attached to seemingly tangible objects, they at least carried some meaning. The objects however were merely the fixation of a more ambiguous idea and the underlying concept not well defined to the average person. Sadly, the inherent value of intellectual property in the US is a near-term zero. This is unfortunate as the rights are granted by the Constitution and was held initially in a high enough importance to be included next to the formation of modern Western based democratic government.

Due to the misconceptions about intellectual property law and the lack of transparency in the industries that leverage those granted rights for profit, as well as those who utilize the rights not-for-profit, the general public owes little to understanding and these rights. Typically, if they are taught in school as part of learning about the Constitution they are glossed over with little fanfare and even in latter classes covering business and social issues that the rights touch upon, little time is spent actually explaining them.

The advent of the internet changed the way content is distributed and in the late 1990s the culmination of decades of under-education became an albatross for Intellectual Property rights holders. Music was one of the higher profile examples of how consumers did not fully understand the distribution mechanism attached to Copyright, but that was hardly the only issue at the time. Intellectual Property abuse on the whole effected trademarks and patents as well.

The traditional mechanism for curtailing infringement included a series of legal moves that were developed both through common law court decisions and the codification of concepts by the government. One of the underlying principles in the responsibility of the intellectual property right’s holder is that they must police their right or mark. Failure for the owner to uphold their own rights could mean they forgo the right itself. Rightsholders loosing control of their right is not an uncommon occurrence either and because of the ease by which it can occur, stakeholders to those rights have the obligation to continuously re-secure them.

It is by this notion the music industry’s infringement suits are not surprising. The first incarnation of these suits sought to reign in peer-to-peer networks facilitating the sharing of content over their platform. The industry generally ignored individual person-to-person sharing even in the physical world under the disgruntled guise of fair use. However, person-to-person in that context was a tedious process that often was confined to well acquainted individuals. The en masse anonymous redistribution of content via peer-to-peer networks was alarming to the industry and it quickly dubbed the facilitators platform for piracy in aiding the redistribution of content with out licensing.

The music business stakeholders led by the Recording Industry Association of America quickly moved on peer-to-peer network piracy using the traditional litigious methods available that served them well in the past to combat illegal redistribution. Unfortunately, despite the early courtroom victories, the timing was ill fated. For, as quickly as one service could be shuttered, competing offerings already migrated over users.

The lawsuits accomplished two other extraneous problems that are open for separate discussion. The first is the concentration on legal matters and the focus on piracy drained resources away from the industry’s adoption to monetize this new distribution chain. The second is they created ill-will with a disenfranchised consumer by attempting to strong arm their inherent rights back from the end-user.

The second was especially disheartening when the industry began pursuing individual infringers after attempts at attributing the infringement to the facilitators were unable to curb the distribution. How the consumer came to become originally disenfranchised is again open for another discussion, however, the free-for-all assault on what the RIAA deemed as the most aggressive infringers generated such a negative backlash from the consumer it only served to further throw an already disrupted industry into a tailspin.

Part of the anger over the suits was the simple fact that the average consumer did not understand the law they were breaking in-and-of itself. Rather than the rights owners seeking to educate the consumer and win them back with novel product offerings focused on this new distribution channel they embraced scare tactics in an effort to maintain the current distribution channel. This was a short sighted effort that only served to push the consumer further away and relay even greater confusion about what the intellectual property owner’s intent was.

That is not to say if people understood how Intellectual Property law functioned they would embrace following it any more. After all, the average person claims to know how vehicular law functions, yet they constantly break it with some subtle combination of self-centered elitism in the assumption the rules apply to everyone else and not them and the idealic nature that in breaking the rule they are sticking it to the man. Chances are, even those with a solid foundation in IP would find the same paradox.

After years of high profile law suits that involved the deceased, computer owners who were unaware of fellow users actions, minors who would have no knowledge of it being wrong and other anomalies created by less-than researched suits the RIAA is finally forgoing its current tactic of sue them into subordination.

There were a lot of bad-press sob stories of non-infringers who were caught and unnecessarily tried, or infringers who were slapped with excessive penalties due to the existing nature of the current law’s structure. The first is an unfortunate by product of the system that occurs both in civil and criminal trials all the time, however, it is possible stronger due-diligence on the part of the RIAA may have curtailed the trend. The second is a function of the out-dated laws themselves and how property is valued in the cases of infringement.

None-the-less, a decade after this sorted affair began it is now coming full circle. Same ol’ tactics, same ol’ results.

The RIAA’s new tactic is to work with network providers to assist in the control of potential infringers. Sadly, this looks all to much like their approach with peer-to-peer networks in the beginning. Albeit a different approach, it is still the same general tactic, if you cannot control the distribution mechanism. It might appear on the surface to fit better into the core model of Intellectual Propoert to seek control of the distribution chain, but to circumvent authority by grabbing control of the distribution chain via service providers seems excessive.

There are a lot of unannounced loose ends to be tied up in these agreements, so commenting on the specifics is impossible at this point. However, it sure sounds like an afront to the concept of net-neutrality as it stands right now. It also sounds like a consumer could be unwarntedly hindered based solely on accusation and circumstance rather than given the ability to rebut the claim or be provided adequate substantiation.

Service providers should have monitored their networks all along and built into their network usage contracts better controls for usage long ago. However, at this point, consumers built an expectation of use in their minds and back-peddling on the usage will create confusion and animosity.

Another question is how much will warning letters and some throttling really do to change usage patters at this point? The previous scare tactics did not utterly change usage and a quick glace at different file-sharing mechanisms finds nothing more than a maturing industry with flat growth patterns, not a true pullback or change in fundamental user patterns. If there were shifts in core usage than paid downloads would have risen faster than illicit by substantial amounts signaling that shift that netted greater amounts than the losses occurring with physical product, or there would have been a combination of paid download and physical copy buoyancy that occurred as rather than the continued deterioration of of sales on the whole. Furthermore, this needs to occur in both raw content numbers and pure-margin dollar values and not in year-over-year percentages, as the underlying value of the percentages are not on equal planes.

If the RIAA believes working with ISPs will allow them to clog the supply line enough to control illegal distribution they are probably mistaken as there are more forces at work online than just the ISPs influence. Changing the core consumer pattern is not just stopping the existing pattern it is facilitating a new one in which the experience more closely matches the consumer need. Until the RIAA and its partners can better develop that model there will be a demand side steeped in illicit exchange and cutting out the industry from profit.

Simply trying to scare the consumer into doing something is not enough. It has not been enough for the last decade and will not be enough for the music industry or any other cartel styled business model. Sadly, the complexities of the current incarnation of the internet make it difficult, if not impossible in some regard, to negotiate with the vastly different distribution models now in existence a fair valuation of licensing of content.

The ongoing problem with monetizing music on the internet is the fundamental business model is still not developed. There is a segment that is cost conscious, but if free were the only conceivable price than the industry would have indeed collapsed years ago rather than trudging along at a severely decelerated pace. Rather, the actual consumer is a splintered mess that wants convenient, cost-effective choices and is willing to submit to some mechanism(s) that provide some balance of those needs. Effectively creating a platform that addresses all the stakeholders has been the problem to this point moreso than anything else and the lack of early understanding by the industry to what that would mean delayed it’s creation and continues to contribute to the problem.

After all, what is the value of the content now? Placing monetary value on the physical product and maintaining a consumer base willing to pay that value is proven difficult enough, at this point, with a segment of the product being valued at times as free (or negative, when you consider some of the product cannot even be given away effectively) how easy will it be to valuate the intangible version of the intellectual property the music industry owns?

Until someone can answer that question, stifling the consumer, be it with lawsuits to scare them out of usage or partnering with service providers to control the supply line and scare them out of usage, until a truly viable alternative exists there is no place to scare the consumer over to.