Music industry: a finger in the dike and a head in the sand

Recently, Justice Murray Wilcox brought down his judgment on the Universal Music Australia Pty Ltd v Sharman License Holding Ltd, owners of the Kazaa peer-to-peer (P2P) file sharing system, court action. The judgment was not good for Sharman. Neither was the judgment good news for the music industry. Justice Wilcox dismissed several claims brought against Sharman including the dubious claim of conspiracy. Sharman are appealing.

Justice Wilcox stuck to the letter of the law as specified in the Copyright Act of 1968. He found Sharman had authorised users to infringe the applicant’s copyright. The most interesting statement from Justice Wilcox is that he did not consider the fact the Kazaa website warning against sharing copyright material, and an end user licence agreement under which users are made to agree not to infringe copyright, sufficient defence because Sharman had long known that the Kazaa system was used to distribute copyrighted material.

In his judgment, Justice Wilcox displayed an extraordinary understanding of the technical issues involved: a level of understanding that is appallingly lacking in our federal politicians. He ordered Sharman to incorporate into Kazaa filtering technologies. He also stated that he was reluctant to shut down file sharing completely without unnecessarily intruding on others’ freedom of speech and communication.

This case however, has done nothing to bring the Copyright Act into the digital age. This is a job for federal government, which has been musing about introducing fair use into the Act since May this year. But given federal governments’ previous attempts to legislate for the digital age, they are unlikely to get it right.

Even though the music industry has won a battle and is likely to win many more battles, it is locked in a war that it cannot possibly win. The P2P community has moved on from the likes of central server-shared swapping systems such as Kazaa. The BitTorrent protocol used by popular P2P software such as Limewire and eDonkey has all but replaced Kazaa. These P2P systems incorporate a distributed model, which is hard to track.

However, even these BitTorrent systems are being left behind as users move to private P2P networks such as Waste, which incorporates encryption, making it virtually impossible to track. The P2P developer community is busily working on bringing this encryption out into the public. As you can see, the music industry will never be able to catch up and eradicate P2P networks.

One of the big problems with the Australian Copyright Act is that it does not contain the concept of time shifting which is common in most copyright acts in other countries. So when you go home tonight and record your favourite TV show or record your favourite radio program, know this, you are breaking the law that is punishable by heavy fines and or imprisonment.

The entertainment industry has been very vocal in its opposition to P2P networks and the distribution of copyrighted material. But it has been very silent on why it is illegal to tape a TV show or radio program. It has been silent on why it is illegal to transfer songs from a legitimately bought CD to a portable music player such as an iPod. It has also been silent on why it is illegal to convert your old vinyl records to digital format.

The entertainment industry needs to explain why we are forced to buy our favourite albums again and again because of changing technology. How many of you have repurchased your favourite album on CD because you can no longer buy a needle for your record player. Even now, DVDs are replacing CDs and it won’t be long before HD DVDs, such as the Blu-Ray disk replaces DVDs. Within 10 years, the CD player will go the way of the record player and you will find it difficult to find CD parts as it is difficult to find record player parts today.

The entertainment industry also needs to explain why every time you go to the supermarket and you hear a song being played, a song that you already own on CD, you have to pay to listen to that song again through higher prices on the goods in the supermarket. Why, when you hear a song on the radio, a song that you already have bought on CD, you are paying a higher price on goods and services to cover the cost of advertising. This is one of the few industries where you are required to pay for the same product over and over again.

The concept of copyright is to protect the rights of the creator of content. So the entertainment industry needs to explain why the copyright of content usually ends up in possession of the corporations and not the creators. Copyright has become a tradeable commodity. Can the entertainment industry explain to me why I am obliged to pay AOL Time Warner a royalty every time I sing "Happy birthday", a song composed in the 19th century?

In the long term, I believe that P2P will help most creators of content, as they will be able to directly engage with their consumers without having to deal with the gatekeepers. This will allow them to retain and control their copyright. Even now, there are many artists whose works are widely available to the public that would not normally be available because they do not meet the gatekeeper’s requirements. In fact many artists are now directly dealing with online distributors such as iTunes. As New York musician Moby asks, “Why is a record company any more qualified to send an MP3 to iTunes than I am”?

Instead of the record industry continually fighting against the P2P world, they should see this as an opportunity. I believe the future for the record industry lies in subscription services. For subscription services to work, you must first ask why you need to own an album. After all, how many times have you played that CD before it gathers dust at the back of a cupboard?

Upon signing up to a subscription-based service, you will be issued with proprietary software and a portable playback device. You would then be able to download a certain number of songs based on your subscription fee. When you want to listen to more songs, you will have to return a song for each song booked out, just like borrowing a book from your library. You would not have to worry about continuity. As technology changes, so does the software and portable playback device. As with your current mobile phone plan, at the end of your mobile phone contract, you sign up for another one and get a new mobile phone. The same would apply for subscription services. No more dusty piles of vinyl records sitting in the corner.

A subscription-based service would open up all sorts of possibilities. If you’re in a jazz mood, you can download the most popular jazz songs, or the jazz play list as recommended by leading jazz musicians. You could even download what your favourite celebrity is listening to. The BBC have already begun trials to allow viewers to download TV shows and radio shows seven days after they have aired.

We are at a crossroads. No matter how many lawsuits the entertainment industry initiates, the way we access our entertainment has changed forever. Like all waves, you can either catch it or get dumped by it.