Intellectual property rights

Posted by on Jan 31, 2013 in Ken Hatfield Blog | 0 comments

blogpagephotoIntellectual property rights

 

First I’d like to welcome you all to my blog, which is a new feature of the redesigned website.

As many of you may know, in recent years I’ve become increasingly engaged in the ongoing discussion of the issues regarding copyright and intellectual property rights. I became even more actively involved in this since the heated debate about SOPA last year. While there is a great deal of misinformation on all sides of this controversy, among the issues I find most alarming is the manner in which the negligible cost of digital distribution is routinely used to justify free file sharing of copyrighted content such as music, film, or books, etc. This justification often goes something like: “Since it costs virtually nothing to store or distribute recorded music, why does a c.d. cost $15?” In the case of music, especially music performed by ensembles composed of multiple musicians and involving acoustic instruments, the cost of distribution has always been a small percentage of the total cost of bringing a project to the audience. Creating most musical content simply costs more than distributing it. While digital storage and distribution have clearly lowered those costs considerably, those lowered costs for what has always been a small part of the expenditures involved in bringing content to the audience in no way mitigates the considerable production costs of creating the content in the first place. If these production costs are not recouped, very few artists can afford to continue creating or, in any event, documenting newly created content.

I would like to encourage some respectful and thoughtful discussion of this aspect of the process, and hope that empathy for the perspective of both the consumers and the creators of content will be the guiding sentiment. Because most of the musicians I know are both consumers and creators of content, I believe they truly have valuable insights into how we can avoid throwing the baby out with the bath water, while moving toward an equitable and sustainable system that lets folks gain access to content they want, while aiding creators of content in their efforts to survive and even prosper from their work.

I personally feel that a great place to start is with those parties, companies or entities that are profiting from the broadcast or dissemination of content they do not own. Many of these companies offer access to music owned by others via methods like free streaming to the audience. These companies often make their profits from selling advertising. This “economic model” is not unlike that of terrestrial A.M. radio from the 1960s, where the audience was subjected to advertising in return for getting the free broadcast of the music. In that model a reasonable percentage of the advertising revenues the broadcasters received from their advertisers was shared with the content creators via performance rights organizations like ASCAP and BMI (in those days that meant only the composers and the publishers of the music got paid…. not the performers). But in the new world of online broadcasting and streaming, the percentage of revenue shared with the content creators varies wildly even among similar or virtually identical platforms. Some broadcasters/streamers pay virtually nothing (their percentages are so low that they themselves say it’s not worth the cost of “cutting a check” to the content creators), while others actually still pay a fair percentage of what the use of content creators’ work generates.

All of this may appear fair at first glance …….. but it is not. The unfairness lies in the fact that, in addition to the skewed advertising rates, which vary wildly, the percentage of these variable ad rates shared with the content creators is further skewed. This is because many such broadcasters pay a far lower percentage of what is essentially a lower ad rate than similar competing platforms broadcasting identical content, which pay a higher percentage of their higher ad rates. Since content creators cannot (nor should they) participate in the negotiations between broadcasters and their clients purchasing ads, I believe content creators should receive a flat percentage of any and all ad rates across the board. If advertising rates are the “currency” for determining the economic value of a broadcast (whether live or streamed, etc.), then let those whose business it is to determine such things do so, and give the content creators a uniform percentage of whatever the broadcasters/streamers receive via their ad rates. A similar flat rate model for subscriptions fees could also be applied where appropriate. And special provisions could be made to accommodate the unique circumstances of public broadcasting.

These suggestions are certainly not the be-all and end-all of the attempt to find a fair balance between apparently divergent objectives. But something must be done, because an art form as important as music cannot survive if its significance is continually undermined by both its ubiquity and the assumption that it is not worthy of monetary remuneration. People value what is rare and they generally acknowledge that value by paying for it. Any successful reconciliation of the apparent divergence between the desired objectives of the content consumers, the content creators, and those profiting from these differences has to be based on the acknowledgment of the value of what is at stake …….. namely, the content, which has intrinsic value, value that must be affirmed, because without the content, there is nothing to consume, and without the consumers of content, there is no business model for either the broadcasters or the content creators.