Law in the Internet Society
Because we only meet once a week, I was hoping to maybe use this as a vehicle for some discussion outside of the actual lecture.

Especially in the wake of the recent news about Netflix, as well as the rapid rise of music services, like Spotify, there's been a lot of commentary recently about how we are moving from a model of Ownership of media to Access to content. Rather than actually buying physical media that contain books, songs, movies, TV shows, etc., the new model appears to be purchasing access to them. Access can be in the form of a DRM-protected E-book or MP3, or it can be a subscription-based service like Netflix Instant or Spotify -- either way, what's been purchased is a license and not some underlying property (to which the first sale doctrine would apply). The role of sharing and lending as a way of spreading knowledge about a book or a band is, in this model, replaced by the use of social media to point your friends to its location on the service that they also use.

There has been a lot of commentary about the appeal of the Access model. For example, the cost to the consumer is less than what buying books, CDs, and DVDs now. Proponents claim that this is because rather than paying for the costs of the media, consumers pay only for the cost of the actual content. There are also practical advantages like mobility, convenience, a form of "sharing", etc., which are all legal -- and given the DMCA, decisions like Grokster and LimeWire? , and the willingness to enforce steep statutory damages on individuals, there aren't a lot of alternatives. (But, if there are, I'd love to learn more about them.)

Does anyone in the class use services like Spotify? Own a Kindle or Nook? Personally, I frequently use Grooveshark, Hulu, and the CBS.com website, and I've had access to a Netlfix Instant account that is now cancelled. And if you've thought about policy ramifications, what do you think? Are you bothered by the role of control and monitoring in this context, or at least less bothered by it than in the starker example of the mobile phones we were talking about last week?

-- BahradSokhansanj - 27 Sep 2011

I would actually be more specific in describing the Access model. I do not include DRM-protected e-books or MP3s in an Access model. Those files are stored locally, while I think of Access models as cloud storage with streaming media. While it is clear that true Access content is not owned by the subscriber, I think there is a question as to whether locally stored digital files amounts to ownership. This is further complicated by tethered media, such as e-books on Kindles. Tethered media may be more akin to Access models because the devices serve as terminals and the content is still pulled from the cloud (despite being stored locally on the device).

I've also considered the implications of moving to Access models. I can see that model not only applying to consumer media, like books, music, movies, games, but also to software. Companies that write software have traditionally released their products under restrictive licenses, thus circumventing the first sale doctrine. If consumer media moves to an Access model, I can also see software moving to a cloud subscription model. The software would be accessed and paid for in regular installments, thereby more mirroring a lease than a sale. I think this would be less problematic from a first sale perspective because the consumer expectations of ownership are better mirrored by the economic reality of the transaction.

Another advantage of Access models is better price discrimination. This may lead to lower consumer prices. Different uses for media could be sold at different price tiers and resulting in more consumer surplus. However, if the Access network owners control this market, would the lack of a secondary market result in higher prices ultimately for the consumer? It is unclear whether the first sale doctrine guarantees a secondary market or merely allows it. Also, if a secondary market exists, can that market not be controlled by the primary sellers too?

-- AaronChan - 27 Sep 2011

I'm having a hard time understanding what you gentlemen are talking about. "Streaming" is just slow downloading. Your "Access" model therefore just involves so-called "owners" trying to prevent people from keeping and sharing what they're sold. From my point of view, you are once again inventing reasons why you like being cheated, which are—mirabile dictu—the very justifications why cheating you is good for you that the cheaters have paid to have washed into your brains.

At least in the music industry, part of the problem is the concentration of power among a small group of powerful record labels. These companies collectively own about 85% or all sound recording copyrights, which includes the exclusive rights to reproduce and distribute such sound recordings.

When the original "streaming" laws were written and finalized by the DMCA, they made sure they protected the market for a physical commodity (phonogram such as a CD or tape). Accordingly, to provide an access model such as Spotify, a service (identified as an "interactive service" under 114) has to negotiate blanket licenses with each individual content owner, most importantly the market oligarchs (no one wants a service that can't get me any song I desire).

This proves problematic, since 1) Media companies are loathe to give up historic revenue streams such as CD sales; and 2) new technologies make the universal access (celestial jukebox) model more attractive to consumers and it isn't being implemented as it should.

As far as I know, only Spotify (headed in the US by CLS alum Ken Parks) has managed to get such licenses, and they were on unbelievably uneven terms. In addition to giving all of the record labels an equity stake, they don't properly compensate the artists whose songs are played on the newly licensed service:

http://paidcontent.org/article/419-fair-dos-a-million-spotify-streams-earned-gaga-167/

Until the content owners are forced to make their catalogs available for a reasonable fee, the number of consumer-friendly services will remain extremely small.

-- MikeAbend - 10 Oct 2011

 

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