A Battle of Epic (Inverse) Proportions

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The record industry’s poor financial state has received frequent but shallow coverage by the media.  Most often the headline is followed by a sound byte about pirates and the music-stealing teenagers that support them.  While the proliferation of piracy is certainly a factor in the industry’s financial health, it may simply be a symptom of a much greater war; a struggle between two industries that has been largely ignored by the media, Content vs. Technology.  Some savvy pundits have described the battle between California’s content and technology industries as an economic civil war.[1] Here, the virtual Mason-Dixon line divides southern California, the historic capitol of content creators and rights holders, from northern California’s Silicon Valley, a potent cluster of technology juggernauts like Apple, Facebook, and Google.  Although content currently appears to be losing ground to technology’s blitzkrieg in this most public of battles, both content and technology will need to find an amenable compromise -a treaty of sorts – to thrive together in the marketplace.

The value of content is much broader than its oft-celebrated sociological, psychological, and cultural benefits.  Content is a source of not only geopolitical capital and influence abroad but also tremendous wealth for our Country.  Some might be surprised to learn that intellectual property, including compositions and recordings of music, is the United States’ number one export. [2] In a time where much of America’s manufacturing has relocated to more cost-effective locales, such as China, intellectual property has maintained its position as a dominant source of revenue.  Maury Yeston, Ph.D, a multiple Tony Award-winning Broadway composer and former director of undergraduate music studies at Yale University, encourages us to “consider the massive and disproportionally [sic] positive influx of income the export of our intellectual property has on our nation’s balance of trade, not only in song, but also in film and theatrical products.”[3] Intellectual property is one of a shrinking number of “products” America exports with a positive trade balance but for some reason it is losing the consumer adoration and respect it once had.

Content, such as music and film, must fight to retain its perceived value for the content industry to maintain its valuable economic posture.  Advocates for the value of music often assert the necessity of pecuniary incentives to induce an artist to create. Moreover, some recall the honor and respect artists of the past received for their craft.  Veteran entertainment lawyer Ken Abdo echoed this sentiment at a recent speaking event stating “[w]e’ve got to kill the idea that music is free.  Making music is hard, and it’s honorable, so don’t give it away and don’t steal it.” [4] The idea that music should be free is a dangerous systematic devaluation of an art form and an idea all too readily adopted by America’s consumerist youth which is then further fueled by the proliferation of technology and the propagation of technology’s self-serving agenda.

Futurist Gerd Leonhard posits “[t]echnology has always created larger, more vibrant markets and the consumer has always ended up benefiting from it.”[5] While Mr. Leonhard’s statement is most certainly accompanied by hyperbole, his core assertion is canonical; consumers love the benefits technology provides.  America’s obsession with technology is without dispute. For example, 100 hours before the first iPhone was to be sold some ardent consumers had already formed a line.[6] They spent more than four days of their lives to buy a phone!  This unrequited love of all things tech has created a perpetual cycle enabling the technology industry to grow by orders of magnitude.   This unprecedented growth is clearly illustrated by marvels like Google.  Few industries could enable a company to grow from its inception in a founder’s garage to an estimated market value of $23 billion in only six years.[7]

Not only has our love of technology grown to the point of obsession, it is now certifiably an addiction.  Dr. Akikur Mohammad, a professor of clinical psychiatry and behavioral sciences at the University of Southern California’s School of Medicine classified “[p]ersonal technology addiction [a]s a behavioral addiction.”[8] Psychologists argue technology addiction is an impulse disorder that can be as socially devastating as alcoholism, gambling, sex and drug addiction.[9] Internet/Computer Addiction Services in Redmond, WA, estimates that 6 to 10 percent of the approximately 189 million Internet users in the United States have a potentially devastating technology dependency.[10]

Unlike technology, American jurisprudence is necessarily slow to adapt and evolve.  Often content’s legal battles with technology bring vindication much too late after irreparable damages has occurred in terms of lost profits as well as a loss of the perceived value of creative content.  Similarly, changes in legislation generally come at a snail’s pace due to the great caution, forethought and deliberation necessary to properly draft and pass a bill into law.  Without being subject to the market pressures of industry, like technology is, the law develops in vacuum absent any competition.  Therefore, there always has been, and will continue to be, a gap between the marketplace and the law.  Futurist and former Grateful Dead lyricist John Perry Barlow argues the:

[l]aw adapts by continuous increment and at a pace second only to geology in its stateliness.  Technology advances in the lunging jerks, like the punctuation of biological evolution grotesquely accelerated…the law will get further behind, [and] more profoundly confused.  This mismatch is permanent.[11]

Assuming, arguendo, that the pace of law could be accelerated to a rate greater than that of technological innovation, even then the relationship between the two would be asymptotic at best, as law is a regulatory response to the environment that it governs.  In all fairness to our lawmakers, even entertainment industry analysts often lack the vision to predict the broad shifts in entertainment that technology can dictate.  A New York Times reporter in 1939 infamously opined “TV will never be a serious competitor for radio because people must sit and keep their eyes glued on a screen; the average family hasn’t time for it.[12] Without the ability to consistently and accurately predict the tides of technological innovation and consumer response to such innovation, lawmakers generally grant the marketplace a chance to level the struggle first.

The creative content industry is not wholly dictated by technology, rather and co-dependency exists between the two.  Moreover, technology has little value at all absent the broad dissemination of content. Technology on its own is simply a tool; a lifeless processor incased in plastic and glass.  What use is a super-computer with nothing to calculate?  A high-definition TV with nothing to watch?  Or, an iPod with no music to play?  From an economic perspective, the lower the cost of content to the end-user the greater the perceived value of technology.  This negative correlation between the monetization of content and technology is the gravamen of this war.  As long as the two remain inversely proportionate with respect to consumer spending, the record industry will suffer, as well as the end-user.

It is curious that technology companies appear to the lack the foresight to appease content creators.  One passionate content advocate at FairplayforCreators.com argues: “Wake up Google, respect the value of the creative industries, remunerate and support them, WE ARE YOUR FUTURE CONTENT!”[13] Without the availability of the content of tomorrow sites like YouTube.com would cease to exist.

Content creator’s disdain for technology is not a new concept. John Phillip Sousa, legendary American composer and conductor, held a very low opinion of the emerging and upstart recording industry. In a submission to a congressional hearing in 1906, he argued:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy…in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.[14]

Rather than show respect and offer remuneration to the creators of its entertainment programming, technology has applied a much more devious strategy.  A cost-effective method to serve technology’s best interests is to substantially devalue content in the eyes of the consumer.  If the next generation of consumers believes content should be free and is willing to go so far as to break federal laws in exercising that belief by downloading music or films, technology will enjoy a short term victory.  However, once tomorrow’s artists are not able to sustain their lives by pursuing their passions both the quality and quantity of content will fall dramatically.  What remains to be seen is how the public at large would respond to a marked decline in the competency and relevancy of content.  Perhaps public outcry is precisely the swing of the pendulum needed to restore popular opinion of art to the esteem it once celebrated.

[Photo by plain_jane53177 @Flickr]

[1] Jonathan Handel, Hollywood Under Siege, 26 Ent. & Sports Law. 10 (2008).

[2] Francis-Smith, The Journal Record (Oklahoma City, OK) July 30, 2007 (quoting Ken Abdo, chair of the Entertainment Law Initiative at the Grammy Foundation).

[3] Maury Yeston, BMI Bulletin (December 2008).

[4] Francis-Smith, supra note 2.

[5] Gerd Leonhard, Music 2.0 (2008).

[6] See http://gizmodo.com/gadgets/apple/iphone-line-has-started100+hours-early-272088.php (last visited February 12, 2009).

[7] Cynthia L. Webb, Google’s IPO: Grate Expectations (August 19, 2004) available at http://www.washingtonpost.com/wp-dyn/articles/A14939-2004Aug19.html, (last viewed 4/22/2009).

[8] Jennifer LeClaire, Personal Tech Addiction Snares Teens, Adults (September 20, 2006).  Available at http://www.technewsworld.com/story/53102.html.

[9] Id.

[10] Id.

[11] John Perry Barlow, Economy of Ideas (1992) at 7.

[12] David Smith, Global Futures and Foresight (quoting New York Times, 1939).

[13] Nigel Elderton, MD Peermusic UK and MPA Chairman (April 8, 2009). Available at http://www.fairplayforcreators.com/hp-comments.html, (last viewed 4/21/2009).

[14] Lawrence Lessig, Remix (2008).

*Ian Gibson, Esq. is an attorney licensed to practice in the state of California. This article is for informational purposes only and is not intended to constitute legal advice. Visiting iangibson.com does not create an attorney-client relationship. This material may be considered advertising under applicable state laws. Copyright © 2012-2013 Ian Gibson, Esq.

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