(Editor’s note: A few months ago, I wrote an article about what I perceive as the hypocrisy of record execs who get all their CDs for free from other companies, but suddenly become indignant when a consumer downloads an mp3, ignoring the fact that many full-length albums are sold after people check out one pirated track.

I was surprised and gratified to be contacted by Brendan Scott, who is a lawyer with a firm in Sydney, Australia. Mr. Scott has written a very well researched article into the history of copyright law, and believes that, “although promoted as being in the interests of authors, it is designed in such a way as to be primarily a right which benefits distributors and publishers.” I am quoting from the introduction on the excellent site that published his paper - it’s called First Monday.

First Monday describes itself as a “peer-reviewed journal on the internet.” It includes such topics as “cyborg logs and collective stream of (de)consciousness capture for producing attribution-free informatic content,” “electronic citizenship and global social movements,” and “a study of Internet usage in Nigerian universities.”

Brendan Scott has allowed PSW to excerpt a section of his paper, and I have chosen “Issues for Copyright Going Forward.” We are certainly experiencing a great deal of “friction” these days, courtesy of digital technology’s ability to scan, rip, burn, copy, transmit and market text, music, and images. You can see the full-length version of the paper on First Monday, which includes extensive footnotes.

Hey, it does your brain good to stop thinking about audio for a few hours, and check this out! I recommend it highly. – C.K.)

Issues for Copyright Going Forward

As we have discussed above, the copyright law is primarily designed to protect the publishers and distributors of copyright works. Originally, the key purpose of the precursors of copyright law was to serve a censorship function, so the focus on distribution was entirely appropriate.

Even after the demise of this function, much of the pre-existing structure was co-opted to support the new legislation protecting publishers and, indeed, this has remained the case up until the twentieth century. However, towards the latter half of the twentieth century we have seen the emergence of a number of distribution mechanisms which are "pull" technologies and which had not been previously anticipated by the law. The most famous of these technologies is, of course, the Internet.

On one view, the Internet is a system of "self distribution" in which only the creators of content, the consumers of content and the providers of telecommunications infrastructure are relevant to the equation. From the content consumer's perspective, any distribution or production costs over and above those imposed by the telecommunications infrastructure provider (with perhaps some allowance for sorting and evaluating works) are of no value, being pure inflation.

Similarly, from the content producer's perspective, if there is an established market, then these distribution and production costs are equally irrelevant. As a case in point, it is not unusual for the artist of a CD to recover 10% or less of the sale price of the CD, with the balance of the sale price going to the retailer, the record label, producers, marketers designers the distributors of the CD and a host of others (which are often subsidiaries of a vertically integrated conglomerate, so profit from each of these steps is really profit of the conglomerate).

Both the consumer and the content creator of a CD have an incentive to pare back excess costs to a minimum. If, a consumer doesn't watch or doesn't like the video that accompanies a song, why should they subsidise the additional production costs which are involved in producing that video (and which are bundled into the price of the CD)?

That said, third party intermediaries do play substantive roles in the production of things such as music, books and films. In particular, they play a "gatekeeper" role by selecting and identifying commercially viable content and giving it preferential treatment over non-viable content. Further, they provide an administrative function for the collection of royalties and other payments on behalf of the author of a work. On the Internet, we see these functions being, in part, overtaken by community-based alternatives.

For example, consider the purchase of a camera. A consumer proposing to purchase a camera can conduct research into that purchase by approaching a number of different camera stores seeking their opinions and also approaching the major manufacturers of cameras within their price range for written material and specifications on their cameras. However, by engaging in this exercise, they are likely to discover that the information they tend to receive is biased in favor of the person giving the information (in all these instances, their interest is in securing a sale), either through the overemphasis of certain aspects of the information or through the omission of pertinent details.

They are also likely to discover [62] that it is difficult to receive a comparative evaluation of one brand against another. In short, the traditional system of research doesn't provide information which is of use to the potential purchaser.

Compare a similar research task conducted on the Internet. The potential purchaser, assuming they have adequate internet research skills, are likely to discover a wealth of knowledge and experience. Many other people are likely to have asked exactly the same questions, received a variety of responses and, what is more, will have summarized the key issues highlighted by those responses. While some of those responses will clearly be biased for one reason or another, they are each biased for different reasons (rather than each being biased in favour of securing a sale) and, as there is no sales motive to disguise the bias, those biases are more easy to discern.

As a general statement also, information on the Internet is usually open and honest and likely to include pertinent information relevant to a consumer which they might not have thought of themselves. Assuming they are confident of being able to make their own assessment as to the credibility of the various reports available on the Internet, ultimately making their purchase on the basis of that information is going to lead to a result which better fits their needs. This form of assessment goes by the name of "community rating". Its basic premise is that the contribution of disinterested individuals (perhaps on a massive scale) is more effective than targeted "marketing" material propagated by those seeking to influence the ultimate purchasing decision.

The introduction of monopoly interests in relation to information undermines the independence of that information and, consequently, consumer trust and confidence. This in turn increases the transaction costs incurred by consumers for the acquisition of information. One result of this is the implicit creation of large barriers to entry in the information market.