The following guest post comes from Peter Csathy, a venture capitalist, media/tech executive, journalist, and CEO at Manatt Digital Media.
We live in a world where many share the belief that content is ‘free,’ while rampant piracy has been significantly curtailed by new legitimate services and business models (like subscription streaming). But, it just ain’t so.
One of the biggest and pervasive myths is that piracy is actually decreasing. That couldn’t be further to the truth: Cisco forecasts that file-sharing in North America will grow a massive 51% from 2014-2019. Analyst firm NetNames, in a study commissioned by NBCUniversal, concluded that virtually all P2P file-sharing violates copyright. And, leading consulting firm Bain & Company reportedly concluded that recorded music sales would be 17 times higher in a piracy-free world.
And someone is paying for all this, because piracy robs creators, plain and simple. In the words of Alex Ebert, lead singer of indie band Edward Sharpe and the Magnetic Zeros (and a tech innovator himself), “it degrades the craft.” The act of creation is their work—it is their livelihood, and it’s not free.
Circumventing payment for the results of that work (music, movies, television) is like asking someone to build you a house (or even a dollhouse) and then refusing to pay for it. No one can defend that.
Most creators in all forms of creativity media agree with this, at least privately. So, why is it so hard for artists and other content owners to come out and say that publicly? And, even more, to take the action necessary to proclaim “enough is enough!” and stop the madness (which has, for some, somehow become “right” in some strange twist of fate)?
The answer, my friends, is that artists and content owners today are saddled with the history of the past — a history that has led us to today’s parallel universe where, for some, the act of stealing from creators has become accepted (and frequently encouraged) behavior. And, one in which the “good guys” are the ones frequently depicted with black hats.
(Lars Ulrich of Metallica, 2000, defending his actions against Napster in a segment of Charlie Rose)
Let’s go back in time to see how this all happened first in the music business — and to discuss what the creative community can do about it for all forms of media — unapologetically.
The digital age dawned on a mass scale just prior to 2000, and mass piracy of music soon followed suit. Two early-movers in this completely unregulated and frequently abused world included the original Napster and Swedish-born KaZaA (which, in an ironic twist, was born by founders who later started Skype and music streaming service Rdio — both of whom expect customers and advertisers to pay).
Yes, artists and their representatives felt that something wasn’t quite right — that their products were disappearing from the shelves in a form of mass looting. But things got out of control so fast — and no real tools existed to do anything about it — that little was done to stop illegal downloading of content.
Little could be done. The Internet itself — and the technology enabling that piracy — were still new to everyone. There was no mass education by artists connecting piracy to their livelihoods. Few in the creative community really understood it. And many artists didn’t particularly care as a result of a “system” they felt failed to treat them and pay them fairly. So, no one (even the creators themselves) really talked about it.
P2P piracy was anonymous. There was no visible victim. And seemingly everyone did it. After all, it kind of felt good getting great stuff… all for free!
Except it wasn’t. Not free for the artists and creative community who, like all of us, need to make a living and whose “paychecks” were soon slashed to a fraction. Yes, this happened to major artists who got the most visibility (and the most blowback under the guise of greed when they tried to begin the conversation—perhaps most notoriously, Metallica). But, it happened equally to smaller indie artists and creators—musician “mom & pops” — hitting them right where they live.
As an example, since 2000, the number of full-time songwriters in Nashville plummeted 80%. Once artists and the creative community fully grasped the severity of the situation — and the mass global devaluation of their “product” virtually overnight —the music industry struck back with the only tool it knew in those early, frenzied, frightening P2P days. That tool was the good old American lawsuit — a tool that was both horribly imprecise and wielded with an equally horribly imprecise strategic hand.
As a result, that so-called “strategy,” which seemed to initially focus most on the least egregious cases of piracy rather than on major pirates, failed. Most importantly, it failed miserably in the court of public opinion, with serious repercussions to artists’ and industry brands and images. In a dark form of alchemy, the most egregious wrongdoers proclaimed themselves to be most in the “right” and reveled in stories of 12-year-olds and grandmothers being sued (which purportedly demonstrated pervasive greed across all elements of the music industry).
The result was that mass infringers somehow successfully defined a narrative that deflected the real issue and defended the mass looting of hundreds of millions of creator dollars. Yet virtually no one in their right mind could defend that same mass theft in the physical world. Imagine a warehouse filled with stolen CDs from your favorite indie artists and then multiply that exponentially (because that was — and remains—the reality in the virtual P2P world).
Right? Wrong? You be the judge.
The result? Artists and the creative community were hit where it hurt most — their livelihoods, threatening many from the very act of creation that the most egregious pirates proclaimed they purportedly fostered through their illegal actions. Alex Ebert passionately punctuates this point, underscoring piracy’s potential to create a generation of “hobbyist musicians” unable to focus their lives on the arts (and our enjoyment of it). “To master anything, you must be able to devote your whole life to it,” he explains, something that is increasingly difficult for creators. That means a generation of lost art—songs, shows, movies that we will never hear or see.
Yet, many of those same creators shied away from protecting their own work, their own intellectual property — fearing the loss of their fans’ support (ultimately their most valuable resource) and frequently lacking motivation in an aging system not equipped for the brave new Internet world. And, in the process, artists and the creative community essentially capitulated to a not-very-brave new world of “well, that’s just the way it is.”
So, here we are today. What is different today than before? What can (and should) be done now that wasn’t done then?
The answer is a three-pronged strategy that is properly defined, clearly articulated, and fairly carried out:
The new monetization realities and consumer Zeitgeist of our digital-first world demand reevaluated artist/label and distributor royalty structures, especially since — as Ebert points out — many consumers are willing to pay only if they believe their money is going directly to the artist.
We all know (at least intellectually) that P2P piracy is wrong; artists need to be motivated to openly support one another and be in a position to actively articulate piracy’s impact on their lives… on their art.
We now, for the first time, have the right set of tools to protect artists, target the most egregious pirates with precision, and seek reasonable restitution efficiently and privately. Forget the 12-year-olds and grandmas — focus on the real bad guys — those with the virtual warehouses of stolen CDs in the sky.
One leader on the technology front is Rightscorp (note: Rightscorp is a client), a company supported by some of the music industry’s foremost players (including Peter Paterno, Joel Katz, and David Lowery). Rightscorp identifies content from leading artists like Taylor Swift and Bruno Mars, and counts major industry players like BMG and Warner Bros. as clients. They offer artists and content owners a powerful toolkit that helps them solve the dilemma of monetizing their work (and creative livelihood), while also protecting their relationships with their fans.
Rightscorp’s technology identifies precisely where music, movies, games and any other form of digital content is illegally uploaded or downloaded. They are then able to send a series of low-cost offers to resolve the violations that, if continued, ultimately may result in suspension of the abuser’s Internet service or in a lawsuit from the copyright owner (but not until many warnings are sent and an ample opportunity is given to stop).
In its intent, Rightscorp’s technology is not unlike Google’s IP protection system called ‘Content ID’ (and others like it). The company’s core service follows protocols established by the creative community itself to send — on behalf of artists and other clients — a series of notifications and immediate, discreet settlement options (i.e., no names are made public). There are no surprises to recipients and the creative community can take back what’s rightfully theirs… their livelihoods.
While Rightscorp’s technology is capable of identifying all infringers, its clients focus on the most egregious pirates; for example, repeat infringers who rob artists and the creative community at scale (and, therefore, should be considered ‘fans’ only in the parallel universe discussed above). And, this kind of refined technology enables artists and content owners to protect their work/IP, restore massive lost revenue, and protect their names and brands from being tainted for doing what we all know is both understandable and right.
Rightscorp — and other tools—put the power back in the hands of creators. In fact, to date, Rightscorp (which represents more than 1.5 million copyrights) has returned more than $1 million of stolen creativity back to its partners.
With a significant percentage of all current Internet traffic used to illegally distribute copyrighted content without compensation, artists and content owners are victims still of mass theft valued at multiple billions of dollars just for music. Isn’t it time for the creative community to take that back —unapologetically —and help point the way to restoring what Ebert calls “the sanctity of the arts” in the eyes of all of us whose lives profit so much from the creative work of others?