Copyright and Community

Although copyright laws and notions are an outgrowth of experience with the written word, the music industry seems permanently destined to confront first the copyright challenges posed by new technologies. Sometimes fears of technology are unfounded. People have been taping copies of music on cassettes for their own personal use for years and the record industry and artists have survived and prospered. The high quality of reproduction possible with digital technology that allows for distortion free replication of music poses new and unresolved exigencies.

The music industry traditionally fights new technology in the courts and legislatures rather than markets. Industry opposition to high-fidelity reproduction by Digital Audio Tapes (DATs) largely killed the wide spread acceptance of this medium in the consumer market. However, the Internet and compression technologies have circumvented industry intransigence. Popular MP3 file formats retain audio fidelity while permitting sufficient compression for reasonable Internet transmission times. Industry efforts to prevent the sale of portable MP3 players have failed in the courts; while the ubiquity of pirated music on the Internet makes copyright enforcement difficult. Enforcement is further complicated by the fact that the Internet is international making copyright enforcement contingent on the enforcement zealotry of the least committed country.

Artists are entitled to compensation for their efforts and copyright protection is necessary for the long-term nurture of creativity. Inaudible audio watermarks embedded in music may uniquely mark various versions of a musical piece making it easier to trace pirated matter and enforce copyrights. Whether there are convenient technological solutions to this challenge is still an open question.

The large markup in the retail music industry, averaging 60% worldwide, may be an important source of the problem. If the most economically efficient distribution of music is electronic or through direct mail or Internet ordering, forcing buyers to pay retail markups makes piracy more lucrative. Absent this large markup, piracy may become an isolated nuisance. In any case, the ultimate resolution of this issue in the audio domain will have profound consequences and act as a precedent when bandwidths increase enough to make high-quality transmission of the video material possible over the Internet.

Perhaps even more profound is the fracturing of the music community made possible by this music free-for-all. Record companies act as filters making available a limited number of titles suiting the tastes of a large sector of the population. Now, in economic terms, the cost of entry is low and the music industry becomes a closer approximation to a completely free market. The capital costs of producing a recording, mastering a CD, and distributing copies are low enough to permit independent companies and individual artists to sell and distribute their own wares.

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