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Larry Lessig
Silicon Valley vs. Hollywood
A Civil War in the Digital World
(originally found at Always On)
Lawrence Lessig, Founder of the Stanford Center for Internet and Society and Chair of the Creative Commons project, is in the middle of a battle these days. He’s trying to help Hollywood and Silicon Valley put an end to their disagreements over digital rights and come up with a sensible way to liberate more content for all of us. In Part 1 of this two-part series, Professor Lessig talks about how the fight over content is shaping up. In Part 2, he gives us his take on our antiquated copyright laws.
AlwaysOn: You’ve likened the current battle over content distribution
to the Civil
War.
Lessig: Right. There is this Civil War between north and south—between Silicon Valley and Hollywood. But it doesn’t have to be that way. The distribution architecture for content can be radically different. We could live in a world of persistent broadband, ubiquitous broadband connection, and nobody is going to want to waste time managing millions of files of all the content that we have in the world. Why would you be a database manager in this context when you can get whatever you want directly? In that world then, you don't have to worry about people hoarding content from files, because it would be like taking a tape recorder around with a radio all the time. So in a net world it would be much easier for people to earn money from offering services which make content available in different ways.
The problem we have right now is that the Southerners are fighting like hell to solve the problem of the Internet by breaking its kneecaps. They see the Internet as a threat, and want to build technologies on to the Internet that would have the effect of destroying the perfect connectivity of the medium. They think that's the only way they're going to survive as a business. But here's a problem where the Coase Theorem applies, in the sense that the IT industry has more to gain than Hollywood has to lose.
AlwaysOn: So how would you apply the Coase Theorem here?
Lessig: The IT industry should just buy off Hollywood. We just say "How much do we have to give you for the next ten years so you'll leave us alone? Let us develop our content, our infrastructure, and let's figure out a way to compensate you for the content that is on that infrastructure." At the end of ten years, then we can worry about what's the best business model and how the law has to protect investments or whatever. But between now and then, the most important thing is just to make sure that the law doesn't get in the way of the infrastructure.
So rather than a war, you've got to find a way for us to buy peace.
AlwaysOn: Let's work this out from a business standpoint. For example, a while back there was a rumor that Apple was considering buying Universal Music. Is that what you mean by buying, basically buying the content rights?
Lessig: There's a private way and a public way this can be done. Historically, it's been public. Congress passes a law that says "You’ve got a new technology, so we'll give you a compulsory license for the content. You distribute the content and you pay this very low fixed rate." Artists get paid; innovators get to take off and develop the content however they want it. Make that rate high enough so that the content industry can reasonably think "Okay, we're just going to sit back and let this live for a while without trying to take steps to break the Internet or to break any distribution models.
I think that if Apple were trying to effect a private version of this—if they created services where content was easily available—they would make more money. So they have a vision of what the future should look like. If they bought Universal, then they could take Universal's content and turn it over to that. That would have been really hopeful. It would have shown people the way to do it. And by breaking one chunk of the RIAA cartel apart from the rest, the RIAA couldn't behave like a cartel anymore.
AlwaysOn: The thing Jobs' is trying to do is enable online Mac users to get music content for just 99 cents a single.
Lessig: Yes. The fact is right now it’s a hassle to deal with this stuff. Imagine your iPod that has a hundred CD's on it, and you want to copy that over to your machine and then you want your machine to copy it over to your car radio or stereo. That’s such a hassle. Why do you want to deal with all that stuff?
In the ideal world, where you've got something like iTunes, you just click on whatever you want. It doesn't matter that the content is on your disk or located in some server someplace else. All that matters is that you have a seamless way of getting the rights to get access to that content. Now whether that's by direct payment, or subscription, or advertising—the point is to make content easily and cheaply available.
AlwaysOn: The bottom line is that several generations have grown up buying their music so it’s not a foreign concept. But the longer we stall the process, the more that changes. My daughters’ generation is growing up stealing music; getting them to change is going to be harder because we've allowed them to steal it for so long.
Lessig: Yes, they've grown up stealing music, and this is what really frustrates me. In 1998, people were saying we ought to have a compulsory license. If you had passed the Compulsory License Act then, we would have five to ten companies out there right now distributing music. They'd be collecting money; they'd be getting that money to artists. Instead we have just as much content being distributed for free on the Internet now as it was at the height of Napster, but artists aren't getting anything and you're producing this generation of people who are saying "Why pay? I can get content for free."
AlwaysOn: So why would I ever buy?
Lessig: Why would you? And there’s another way to think about this. People think that the Internet is free, but of course you pay to get access. Ninety percent of the content you get on the Internet is free, but you pay for the access to the infrastructure through the ISP.
Some people are talking about compulsory licenses, in the form of levies that are either in the tax system generally or get charged up front. This way you can do whatever you want on the Internet; the content is free, but it’s metered in a way that makes sure that revenues are distributed as a function of the demand for each product.
AlwaysOn: Currently, about 17 percent of personal computer software is pirated. Then there’s video, and music especially…
Lessig: Right, but the thing that breaks this picture is that there is only one way to collect compensation for services rendered. So separate the issue of compensation from control. The old model of distributed music was you got compensation by controlling physical objects that you distributed. Well, you could preserve that in the new Internet, by building DRM systems into everything and basically making it so no copy moves without somebody’s permission. Or, you could figure out a way to give compensation without controlling the actual underlying physical device. There are a million models for effecting that kind of compensation without controls.
We ought to focus on how to guarantee that you get compensation for your content, and give up the idea that you need to control anything in order to get that compensation.