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Peter Wayner Interviews Lawrence Lessig
Peter Wayner: You offer a number of proposals for keeping the layers of the Internet and the software world independent. The U.S. tried to pursue these same goals in the early part of the 1900s in the hope of limiting trusts and conglomerates, but much of that spirit has faded. Can you draw many lessons from the past?
Lawrence Lessig: Innovation always and only happens when the new is protected from the power of the old. The internet could take off only because the telecoms were not allowed to kill the competition; cable TV could thrive independent of the networks because copyright law was narrowed to mean that broadcasters couldn't leverage their power in broadcasting into control of cable.
PW: So it's not about monopolies or cartels as much as as the past and the future.
LL: Yes, these examples are not so much about "trustbusting" legislation. They are all about limitations on the power of the past to control the future.
PW: But surely the people who worked so hard in the past must be given something, if only to encourage new developers who want to have something when today and tomorrow becomes the past?
LL: I'm all for making sure that the "people" who "worked so hard in the past" be given "something." That's different from giving the companies of "the past" the power to stifle new innovation. We didn't give the horse-and-buggy industry the power to stop cars; or the railroads the power to crush commercial trucking. Why should we give (through government granted monopolies called "copyright") the labels the power to stop a new way to produce and distribute content? Or cable television the power to tilt the internet against new forms of video competition?
PW: Sometimes the future even helps the old alliances, if only because they're best prepared to take advantage of the competitive opportunities. The local phone companies complained about the Internet, but they've made a fortune on second lines. The coming of cable and satellite television has really helped everyone except the old broadcast networks and even they've benefitted. NBC has several cable channels. ABC is tightly aligned with ESPN. Is it possible that loosening copyright's grip might actually help the music industry?
LL: Would my proposals be "good for the industry itself?" Who's the industry? If you mean the existing labels? Then no, my proposals won't benefit them. If you mean artists and consumers, yes, the changes I describe would enable much greater innovation than is allowed just now, and that would benefit creators and consumers. I am not someone who believes that the future produces no losers. I just believe that the losers should not control the future.
PW: You open the book with a great example of the legal shackles that bind the film makers in Hollywood. I love the story of the chair designer who sued because his chair was in a film without his permission. Does it really make sense for an industry to push so many legal rights for artistic creations?
LL: It makes sense for those who can benefit, relative to others, from cumbersome legal regulation. Who is that? Old industries, protecting themselves from the new. A world where you need a lawyer to sneeze is a world where only the large and entrenched have the freedom to breathe.
PW: But sometimes the small fry can succeed. The freelance writers dealt the New York Times a big blow. I keep imagine that some coalition of artists will find a way to grab large, six figure damage awards from a label that underreported royalties. Do the large companies need to be wary of being branded pirates?
LL: There is a strong movement growing to resist the labels. In February, there will be a benefit for artists opposed to the RIAA, and there are many others who are increasingly frustrated with the existing system. But I'm not yet convinced the resistance will be enough.
PW: Could a car maker copyright their car and use the anti-piracy laws to destroy the competitive marketplace in replacement parts? Could they stop remanufacturing parts to save money? Do they have the power now to treat wrenches and screwdrivers as pirate tools? Does the DMCA apply to a car if you consider the fact that cars come with dozens of CPUs and millions of lines of code embedded in ROM?
LL: If the lawyers at Sony could convince Sony management that they should threaten legal action against an owner of the Sony dog, Aibo, then I imagine it is just a matter of time before car manufacturers start thinking "creatively" about ways to inhibit creativity in their field too. I would expect such claims to fail, however. Car companies have lots of lobbyists; lobbyists protect their clients against bad and destructive legislation well. Now if only WE could get some lobbyists...
PW: The computer industry used to work hard to expand the demand for their products. Intel used to claim that wooing new customers for the Intel PC platform made more sense than battling AMD. Where are their lobbyists now? The PC is about to be turned into a cable television box as the content industry pushes to destroy the power of the desktop boxes.
LL: For some reason, the computer industry has been cowed into believing that the future will only be allowed if computers perfectly enforce the control of content by copyright holders. Perfect control might protect the "architecture of revenue" (as John Seely Brown describes it) of these dinosaurs, but it will not produce the fastest growth for this industry.
PW: The car industry used to strive to destroy the replacement part market so they could make bigger profits off of their users. Now Ford, Honda and others are actively sharing information with the parts industry in the hopes of encouraging people to add some zip to their cars. They realize that the coolest customers demand an aftermarket for parts with enhanced performance and the only way they can satisfy these people is to support the marketplace. Does the car industry know something that the music industry doesn't?
LL: I think it is less about learning something than it is about facing real competition. Businesses are great innovators when the market truly disciplines them. The music industry (unlike the artists) has not yet had to face the market.
PW: The fashion industry is one of the last manufacturers left to afford New York City's astronomical rents. Yet they have no copyright protection for their creative work. Do you think that the lack of legal armor leaves them better prepared to compete in the world?
LL: Yes. What we have got to learn again is that ours is a system that favors competition, not monopoly. The free market is all about inducing competition, not about granting protections from competition. Sometimes, small exceptions to this principle are needed. But they must be kept small if they are to remain exceptions.
PW: I like to think of this as the Napster recession. If you plot the stock markets before September 11th, you can see that the crucial court rulings are almost like hinge points where the market bends up or down. The stock prices go up after a favorable ruling for Napster and drop afterwards. It's probably a bit silly to ascribe all of the market's zeitgeist to one company, but the end of Napster is really the biggest roadblock for the personal computer. Until Napster crashed, everyone kept predicting more, bigger and better things for the humming space heaters under the desks.
LL: This is an important and under discussed point. We have seen a dramatic crash in the market. Why? Most attribute it exclusively to "irrational expectations." But meanwhile there has been a very dramatic change in the legal environment within which the take-off occurred. This change must have had an effect.
PW: We've also lost the rational exuberance. Now, we've got to ask mother-may-I before developing any neat software? Why bother? Can we blame Hollywood for this?
LL: While it would be irresponsible to try to say with any precision how much is a function of the content industry lawyers, it is also irresponsible not to at least acknowledge that some part of this decline is due to the different way the law regulates the net. Laws protecting dinosaurs from the content industry are killing the opportunity for growth. Why? Only because the only thing worse than well paid lobbyists is well paid lobbyists with movie stars.
PW: Several people have suggested that it is silly for the computer industry, which generates hundreds of billions of dollars a year in revenue, to cower before the world of Hollywood which generates only a few billion dollars. Can you think of ways for Intel, Dell, Gateway and perhaps IBM to get together and buy out the recording industry? Maybe Intel could distribute grants or gifts to recording artists that let their music flow freely over Napster? Or perhaps they could sponsor their concert tours? Or maybe just buy a few record labels and put them out of business?
LL: Wait. There's "Hollywood" or "the labels" on the one hand, and then there are "artists" on the other. They are not the same. I think there is a rich and vibrant future for artists; it would be richer and more vibrant if it were not exclusively controlled by the labels. The problem today is that "the labels" have been held to have in effect the legal right to veto the future they don't want. This is the consequence of concentrations of almost perpetual copyrights. If they couldn't veto the future, then there would be many competing to attract artists and consumers, with the result that both would be better off relative to where they are today.
PW: My understanding is that the record labels at AOL Time Warner make little money. Maybe AOL should just roll all of that music into the extra content provided by the monthly subscription price?
LL: AOL could help define a great future, if it built off of the instincts from its past. Make it easy for consumers to get access to communities and content: here's the important feature that Napster and AOL shared.
PW: Many of the effects of laws are strange, disconnected and lingering. The Dutch, for instance, are big publishers of books in English, a language that isn't really their official tongue. Even today, some of the biggest publishing firms are in Holland, not London or New York. Some date this juggernaut to the days of the English star chambers where secret courts told printers what they could and couldn't print. In light of historical examples like this, do you think the content czars in Hollywood are behaving rationally and trying to maximize their shareholder's profits?
LL: Yes, they are. But "their shareholder's profits" is not the same as the profits of a nation as a whole. Protectionism always harms the nation to benefit a favored few.
PW: But I would argue that the protectionism even hurt the British publishers too. I think it's kind of odd for a small country with a different official language to have such a large presence in English language publishing. But they do. And the German presence is substantial too. Shouldn't the British publishers wonder whether all of the protectionism robbed them of the ability to fend off the folks from the continent?
LL: The problem is protectionists will always think that any problem is caused by imperfections in protectionism, not by the imperfections of protectionism. We need to give up the idea that they will ever understand what good policy is, and focus instead on what good policy is.
PW: A few of the hottest directors in Hollywood are coming from countries with no tradition of respecting copyright. Should we view the success of directors like John Woo and Ang Lee as proof that pirate dens like Taiwan and China are comfortable spawning grounds for artists?
LL: That's too big a jump for me. I don't believe the choice is between zero protection for copyright and perfect protection for copyright. That's the choice Valenti and Rosen would have us make. I think there is an important role for a strong but limited copyright law to play; I therefore don't think people should get away with massive and broadscale piracy of other peoples' work. But I also don't think it is piracy whenever I use someone's work in a way that person hasn't authorized. Perfect protection kills innovation, just as the perfect absence of protection kills innovation.
PW: Much has been made about the decline of CD sales since the destruction of Napster. I think the problem is deeper. While they sell plenty of CD's, much of the growth comes from higher prices. There are other indications that the industry is losing the ability to engage the fans. The concert business is in a real slump. Most of the bands playing arenas and summer pavilions are leftovers from the 1980's. There just aren't that many bands that manage to get people to stand in line for tickets. Why can't the industry produce stars anymore? Is there no economic incentive? Or does the increasing concentration of power destroy the artistic marketplace's ability to discover talent/value?
LL: There is a deep cynicism about managed culture, and this is our modern popular culture. A kind of sovietism that worked. Passion for artists is reserved for those artists who have made it outside the managed track. There are many such artists, who promise a greater threat to the managed label system than the internet itself.
PW: Ah, sovietism. That's an excellent word. There really is that committee-made feeling about the packaged quality of modern music. The music industry likes to borrow many words and metaphors from the free market people. They talk about efficiencies of scale, synergy and distribution mechanisms, but in the end there's just a small committee deciding what we hear. It 's not really a marketplace anymore.
LL: It is control by a relatively few, in a world which could allow much greater freedom to the many. What possible justification could there be for protecting the power of this few, when the technology could allow so much more for the many?
Many thanks to Peter Wayner for conducting this interview.
Was it just me, or did this sound less like an interview and more like two guys who agree making alternating points? I don't have a problem with that, they made some good points, but it really didn't seem interview-y.
Complexity is Easy. Simplicity is Hard.
Peter Wayner said:
Maybe AOL should just roll all of that music into the extra content provided by the monthly subscription price?
Unfortunately it's not this easy. AOL/TW only owns the mechanical rights to their works. However, there is another component to copyright called publishing rights. In order to deliver content in a legal manner over the internet, one needs to obtain both mechanical and publishing licenses.
Who owns the publishing rights? Publishing is a huge hornets nest. There are literally thousands of small groups that own the publishing rights, most of which are represented by the Harry Fox Agency.
The crux of the issue is that it's a total nightmare to obtain publishing licenses from Harry Fox. Harry Fox barely knows what licenses they represent, and in order to grant a publishing license they have to obtain written permission from one of the thousand small publishers that own the license.
Not only that, but sometimes publishing licenses can be issued for only geographic regions so that publisher A owns the rights for North America while publisher B owns the rights for Europe. This is a huge pain in serving music legally over the internet because if you get permission from B but not A you have to figure out the geographic location of all of your subscribers.
So when it's all boiled down, even the copyright holders themselves can get around the legal quagmire that they've constructed to protect their business models.