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I had the pleasure of sitting down this week with Bill Patry, one of the country’s top copyright scholars and a leading thinker on digital r…

Bill Patry

I had the pleasure of sitting down this week with Bill Patry, one of the country’s top copyright scholars and a leading thinker on digital rights issues. Here’s a short account of our chat followed by three specific pieces of advice Patry, now counsel for Google (NSDQ: GOOG), has for content owners trying to adjust to the digital age.

I met Patry in a Barnes & Noble (NYSE: BKS) which seemed like a fitting place to discuss the state of the content industry. The bookstore giant is a leader in providing both content and community but faces the same existential threats that felled similar icons like Borders and Tower Records.

Patry, who was copyright lawyer to the US House of Representative and authors a seminal textbook series, is also an obsessive book and music consumer. He boasts of blowing thousands of dollars a year on sheet music and recordings, and letting his 10-year old daughter buy whatever she likes in Diane’s Books in Greenwich, Connecticut. He is rooting for the content industry.

“I want them to be wildly profitable because I love their stuff.”

As for the laws that protect that content, Patry is dismayed by the state of dysfunction that pits publishers, creators and consumers against one another. He has ideas for legal reform but is also realistic. He believes copyright has long been about ideology not evidence, a phenomenon he attributes to people’s passion for the creative arts. Patry also says there are inherent political problems that prevent dislodging lobbyists and reforming copyright.

“In the grander scheme of American politics, copyright is small potatoes. We’re not going to elect a President based on his view of copyright issues.”

Patry also questions whether another giant of copyright law, Laurence Lessig, made the right decision in launching a “rootstriker” campaign to fix Congress rather than simply running for office himself.

High discussions of copyright are all well and good but, for many creators and publishers, the more pressing issue is how to find a business model that will let them survive in the digital era. Patry’s new book, How To Fix Copyright, offers a mix of theory and practical ideas. We will have a proper review of the book this weekend but, for now, here are three concrete pieces of advice from Patry:

Focus On Access Not Copies

Control over the reproduction of books, music and movies was forever the cornerstone of the content industry’s business model. Today, though, the significance of copies is becoming meaningless in an era where an infinite number of digital reproductions can be made at nearly no cost. In practical terms, this means that content owners should focus on expanding access through technology like streaming rather than controlling copies.

This may not reassure content owners who confront others who share their products without permission. Patry thinks the response here once again turns on access:

“The answer to the contraband stuff is flooding the market with authorized versions.”

Pricing Matters As Much As Piracy

Patry is aware that global piracy is a concern for the content industry but believes that the issue is “more a pricing problem than a moral problem.” He thinks that the industry is leaving money on the table by holding out for Western level pricing rather than making digital media available at prices that consumers in developing nations can afford.

This means increasing the customer base and making money from a larger number of small transactions. Doing so, Patry says, also requires recognizing that copyright is a means to an end — putting money in artists’ pockets — rather than an end in itself.

Focus On The Product Not The Law

Media products, like those in other industries, have a finite life cycle and it’s ultimately futile trying to extend that cycle after consumers have embraced a new era of products. Publishing industries, though, are fixated on passing stricter laws in an effort to wring more revenue out of dated products. This is a mistake.

“You can’t control through laws a product cycle that is over. Laws aren’t going to help you force people to buy things they don’t want to buy in the first place.”

Patry suggests it’s better to focus on providing consumers with new products in “formats, places and times” they will embrace.

He also suggests that publishers concentrate on value-added features. They can do so for digital products but also for legacy products like hardcover books and music compilations. Patry explains he recently refused to buy a $30 DVD of Kung Fu Panda 2 because there is no added value to justify the cost. But he will happily shell out much more than that for the beauty and tactile joy of an elegant edition.

It will be interesting to see if publishers think Patry’s prescription is a viable one — lots of access to affordable digital products coupled with retailers that sell pricey but beautiful legacy versions.

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  1. Thanks for the interview Jeff. I wanted to give context to the quoted statements about the relative importance of copyright in our political system (“potatoes and Presidents”). That context was in our discussion of the technical, procedural rules of the House of Representatives — specifically the suspension calendar versus going through the Rules Committee, and the rules of the Senate — floor debate with the threat of a filibuster versus the unanimous consent calendar. In that context, we discussed the pressures to work out differences rather than have full-blown floor fights as one might have with, say health care, budget issues, or declarations of war.  I wasn’t suggesting that copyright is unimportant to the economy and certainly not to content and technology issues, as the debates about SOPA and PIPA demonstrate.

  2. Emmett McAuliffe Thursday, January 12, 2012

    This is a facile, completely unexamined conclusion: “[T]he significance of copies is becoming meaningless in an era where an infinite number of digital reproductions can be made at nearly no cost … this means that content owners should focus on expanding access through technology like streaming rather than controlling copies. ”

    Copies may be “less significant” (whatever that means) but that doesn’t mean you go into the dark night of charging for access (whatever that may entail).

    The problem is that Mr. Patry doesnt use the word “counterfeit” once. Failure of “experts” to understand that it is not illegal copies, per se, but counterfeits which are the problem is hampering our efforts to create a Digital Content Exchange which would control counterfeits.

    I love “access” as much as the next person. But I access stuff that I own. Or I access stuff that Netflix, Spotify, Rhapsody etc. own and are renting to me. In any case, the Exchange knows who owns what, whether that owner is Netflix, Spotify or Emmett McAuliffe.

    So, in the end, the choice isn’t just “Control Copies” or “Forget Controlling Copies, Just charge for access.” There is a third option: “Control Counterfeits and Allow Free Access”.

  3. Thanks for your comment, Emmett. If I understood Bill Patry correctly, his point is that current copyright law is constructed on the premise that copies are finite, scarce and relatively easy to control. Applying the concept of analog scarcity to digital abundance can produce incongruous results — just as if we used the law of horses to regulate automobiles.

    I don’t believe Patry means that counterfeit copies are ok — just that trying to stop the act of copying in a digital era is increasingly impossible. 

  4. Emmett McAuliffe Thursday, January 12, 2012

    “As for the laws that protect that content,
    Patry is dismayed by the state of dysfunction that pits publishers, creators
    and consumers against one another. ”

    Well, yes.  There is a natural antagonism
    there. Enter the Digital Content Exchange.  An exchange by definition allows competitors to compete to
    create efficiencies and alleviate problems (such as counterfeiting).  That
    these three groups are not even talking about forming a Digital Content Exchange
    is itself indication that, yes, there is either “dysfunction” there or they
    just don’t know about it yet (because the experts in this area havent alerted them
    to it).

    Meanwhile, millions of dollars in online transactions is lost to the illegal market.

    If you were dismayed by the state of
    dysfunction that pits publishers, creators and consumers against one another,
    you would be flabbergasted at the way banks, brokers, and boards (stock
    exchanges) fought tooth and nail in the early 70s.  Yet, they were able to
    bury the hatchet to form the Depository Trust Company in 1973, which conquered
    a “lack of security” issue that vexed their industry.  The
    securities industry has been in the digital era and has thriven since the 70s.

  5. Emmett: I do think you misunderstand my points, which are expressed in the book fully and not in a facile manner as you think. I myself am very much a hard copy guy. I like physical books, physical CDs, and print newspapers. My point about access — not surprisingly in a blog called paidcontent.org — is on what is the best way for authors and copyright owners to get paid. You can sell me all the hard copy you want. But you won’t be able to do that to my children or many others. You can spend all the time you want battling counterfeiters, pirates or whatever else you want to call them, but that will put a penny in your pocket or anyone else’s if you ignore how legal consumers consume. There is much more money to made by fostering a healthy legal market; that market as Netflix realizes, is not in DVDs you get in your mailbox as I still do, but in streaming and access; authorized to be sure. I doubt there is any actual difference in our views, other than your apparent wish to make this a moral issue, whereas I see it as an economic challenge, one I want copyright owners to succeed in solving.

  6. As a user, if I can get something for free (especially if it is real-free and not ad-supported free, or hook-me-into-a-premium-service-free), why would I pay for it? Because I’m a nice guy? Gee thanks, that just cost be $10 to be a nice guy. The not-very-nice-guy next door is now $10 better off than me – I must be some kind of idiot…

    As an artist, if I am creating something and want to get paid for it but my “customers” can get it for free, how can I get paid? My offer is that if they pay me $10, they can get it but if they don’t like my price, then have a nice day and thanks for looking. I mean it’s fair enough if I am demanding too much money that a customer says “sorry pal, I’m not paying that much” but isn’t taking something without permission simply theft?

    There is something wrong with the idea that if they don’t like the price, they can get it anyway and not pay me anything. How would that work in your local supermarket? A restaurant? A bar? An airport? A car dealership? An open house…? In the real world, property rights holders are protected by laws and police officers that enforce those laws allowing the whole economy to work.

    Imagine I walked into a dealership and didn’t like the $30k price tag on what I wanted, so I drove it away without paying. Would the police come along and say to the dealer, “It’s your fault for trying to charge too much and you did give him the keys for a test-drive so what do you expect. He gave you a false ID and disabled your systems to prevent that? That’s your problem – we don’t go after car thieves any more. Tough.”

    While I agree with Bill that the content industry has got their pricing horribly wrong for the last ten plus years, that doesn’t change the right that the creators and rights holders have to set the price they want. Even if that price is too high, they deserve protection just as the car dealership deserves the same protection. Civilization depends upon it…

    1. No one should suggest, and I certainly don’t, that if you don’t like the price you should get something for free. And with some exceptions you should be able to set the price you want. The exceptions are the compulsory licenses, tarrifs/levies, and collective management of rights. Increasingly, compulsory licenses, tariffs/levies, and collective management of rights are seen as a way for creators to get paid in an environment where they can’t control copying. The non-copyright examples that are pointed out above are of physical copies (cars, food, etc.) usually in public where you can police theft and where the theft that occurs is usually on a small level. What is different about digital is that unauthorized copying occurs in private and on a global scale. It is in this environment that different solutions to getting paid are necessary, and one of those solutions I think is flooding the market with legitimate copies. We will never be free of thieves, but let’s give the good guys, paying customers, every opportunity to pay us. My book is an example. I know there are torrent copies of it available. I am not getting paid for those copies, and I regard it as lazy to take a book scan it and then put it up there for everyone else to have for free. The book is available from Amazon and Barnes and Noble for $14.99; that’s not a lot of money, and it’s easy to buy. Hopefully most people will, but I know some have gone the torrent route. There is nothing I can do about that, realistically, so I don’t worry about it an try to focus on those who will pay. If the book had been priced at $100 a copy, as we could have done, I think there would be far fewer sales and far more torrent copying.
      Bill Patry

      1. I agree with everything you say about driving more sales, Bill. Of course the answer is more happy paying customers and that a lot more effort should go into positive reasons to pay.

        I don’t think that is the whole of the solution though – just because it is somewhere between hard and impossible to stop me stealing your book, I don’t think society should give up trying to protect your legitimate rights to get paid for your work. I think this also protects the people who still choose to pay for your work when they could have downloaded it for free. They don’t want to feel that the $15 is an idiot-tax.

        The simple truth (in my view) is that the free copies devalue your work in the eyes of people who would otherwise be happy customers. What I mean is that if there weren’t free copies available, $15 might feel like a bargain for such quality writing, but if I know I could have got it for nothing, then I might feel that I am getting ripped off. I certainly wouldn’t feel $15 was a bargain. That isn’t fair on you, and I think as a creator, you deserve the same protection for your copyright as (I think we agree) you deserve for your other property rights.

        1. I too agree that creating as many happy customers as possible is not the whole solution. We do need enforcement efforts against those who make a business out of stealing other people’s works (or property). Those efforts will be helped, I believe, against a backdrop of a healthy, functioning market, where the general public has access to legitimate product and we can therefore see the bad guys for what they are. I learned a great deal from Tom Tyler’s book “Why People Obey the Law,” discussed in Chapter 6 of Hw to Fix Copyright. Prof. Tyler’s argument is essentially this, “a law-abiding society is one in which people are motivated not by fears, but rather by a desire to act in socially appropriate and ethical ways … To have a law-abiding society, we must have a polity in which social values lead them to feel responsible for following rules, irrespective of the likelihood of being caught and punished for rule breaking.” I think that is true generally, and certainly in the case of copyright infringement, which largely occurs in private. Having a healthy, functioning market creates a desire to act in a socially appropriate way. Having an unhealthy one makes it difficult. 

          Two months ago, I was on a panel in Sydney Australia. A representative of the music industry took the position that copyright owners could choose to offer their works when they wanted (or not at all), at what prices, and on whatever terms they wanted. People would just have to get over, he said, the idea that paying customers should be able to get what they want when they want it. I find that an unhelpful way to view your customers: you are fortunate enough to create demand for your product and then you withhold it and say “it’s my property and I can do what you want with it?” 

          I asked the audience (which was made up of government officials, academics, copyright owner groups, and lawyers), how many of them were satisfied with their access to paid content. Out of the hundred or so in attendance, only one person said they were satisfied. Enforcement efforts are made very very difficult in such an environment. So yes, we need a mix of a healthy market and enforcement efforts, but I think the two are symbiotically related.

          Bll

  7. Flooding the market with legitimate copies means driving the price down to zero – that is why authors need enforcement, even if it is inevitably only partially effective.
     
    Of course, if you are selling access to creative work (whether ad-funded or fee-based), based on possession of source materials (Google Book Settlement, anyone?), that would be an alternative model. However, it leaves authors out in the cold.
     
    This is why Google campaigns globally for the weakening of copyright protection – and it can afford quality help.

    1. Lakanal you are wrong on all points. Flooding the market with legitimate copies has nothing to do with price, it is a metaphor for making paid copies or access available so that there is an alternative to a market with only unauthorized copies. I am an author too and one that has great relations with all of my publishers. I want them to succeed and I want to make money off my books. By now I am wearily used to all the cheap, baseless shots at my employer and merely note you don’t know what you are talking about.

      1. Mr. Bill Patry,

         

        I am amazed by all the article here in paid content, every
        single comment that has preceded this last one of yours. I am amazed, truly a
        maze within itself, is the extensive decisive deliberate focus dedication to
        which you have gone in this effort- copyrights. It is way beyond the Nimmer
        effect, where he left off you are, you have taken the torch like an Olympic
        athlete, training all-this-time, for just the moment of absolute.

         

        Copyrights; every angle, every prism of light, every nuance of
        effect you have studied. Items like the observations / interpretations’ such as
        “Moral Panics and the Copyright Wars,” and the 7-volume “Pantry
        on Copyright,” – ‘a definite work,  ‘
        just to name a few, well, life-time works of the universal gravity of copyrights.

         

        Copyrights: Learning it, digesting it, engaging it,
        redefining it, and then, at the right evolutionary,  evolutionary ?, and then,  a natural co-existence between co-dependents
        has appeared in the ecosystem.

         

        A kind of ‘goopatry.’  A substance on how to fix something that has
        been years of effort of ‘patry,’ of re- clarifying it, perhaps almost
        redefining it, in a skillful, almost reshaping it, ever so precisely, efficiently,
        slowly, year by year, in preparation for the right time. Almost done, in a
        most, indeed, in a most masterful way. Tah-dah. There it is. The answer.

         ‘Just in time for
        holiday gift giving, December 2011, “How   
        To     Fix Copyright,” by
        Bill Pantry. ‘ P. Fakley.

         I was, and still am,
        more now in January 2012 completely, well, Nimmerized, so to speak. Fascinating
        timing what with all the ‘other,’ recent happenings. 

        Almost like, ummm, ‘goo-off”, lay it down, people get it
        stuck on their shoe and there you are, ‘goo-off.’ It’s almost undetectable,
        except for the footprints left behind. You’d have to be blin…..  In essence, rewriting that which was written.

         

         

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