SOPA and Protect IP are dead. For the moment. But, they won’t stay dead. Understanding the problems that are driving such legislation and how significant they are is a key part of deciding how to view the next round of legislation. My experience has been that much of the general coverage on the issues, while getting better, gloss over critical details.
A few weeks ago, MegaUpload, a service that allowed people to store files on the internet (and was frequently used to share illegal copies of music, movies and software) was shutdown. Unfortunately, all the service’s legitimate business and individual users lost all their files in the process. And the echoes of the Internet Blackout’s concerns about businesses being shutdown because of activity beyond their direct control (e.g. their users and the content posted on sites they link to) are just a little uncomfortable.
Back in August, Google reached a $500M settlement for “knowingly allowing Canadian pharmacies to advertise prescription drugs to U.S. residents.”
Clearly, there’s still a lot of money to be made via the internet. And often it doesn’t hurt your cash flow (at least shot term) to turn a blind eye to the ethics and legality of your customer’s activities. And just as clearly, as both examples above point out, existing legal mechanisms address at least part of the problem.
In the aftermath of the Internet Blackout, the New York Times published an Op-Ed piece by Cary H. Sherman, the chief executive of the Recording Industry Association of America. The RIAA represents major musical labels. The second paragraph in the piece read:
Policy makers had recognized a constitutional (and economic) imperative to protect American property from theft, to shield consumers from counterfeit products and fraud, and to combat foreign criminals who exploit technology to steal American ingenuity and jobs. They knew that music sales in the United States are less than half of what they were in 1999, when the file-sharing site Napster emerged, and that direct employment in the industry had fallen by more than half since then, to less than 10,000. They studied the problem in all its dimensions, through multiple hearings.
Which sounds fine and good until you start questioning those numbers. He doesn’t site a source for his numbers. Which may seem silly, except that there is a history of using made up numbers to back your point when talking to the press and public.
Now, assuming this number is accurate, let’s dig in a little more. He doesn’t say what he means by sales, but let’s assume he means dollars spent buying music from his members. At one time, music CDs sold for around $16. Now, albums on iTunes run $10. Two other big electronic music retailers (Amazon and eMusic) sell most releases for less. If you add in the fact that many people choose to buy a handful of songs rather than entire albums, it wouldn’t surprise me if the average music purchase is about half of what it was in 1999.
But, retorts the music industry, that still translates into flat music sales since 1999. Except that a price collapse isn’t the only thing affecting the music industry. In the heydey of CDs, most people found out about music because it got radio play, because it got covered in a newspaper (or one of a handful of music magazines) or because they heard about it from a friend. The really adverturesome spent a lot of time trying out albums at a local music store. I did all those things. Now, I preview music on Amazon and eMusic, read reviews via the websites of several publications, follow a website that aggregates hundreds of music reviews and listen to local music programs all over the world. While, some of those reviews and finds are releases are still by major labels, the number of albums I purchase from independent labels or directly from the artist has exploded. Every one of those is a paid purchase and none of them represent sales by the music industry. The RIAA doesn’t represent independent Iceland record labels or individual musicians in the Australian outback.
Now, all the above seems to be a way of saying beware of what the establishment is saying (and it is), it is also saying that the big players in this fight (and the glossing over inconvenient facts) are on both sides of the issues. When SOPA round 2 arrives, dig in, understand and decide. You may find yourself somewhere different than you thought you’d be when you started reading.