Private Sector Innovation as a Means of Combating Online Piracy

By Eric W., Jihan S., and Christina I.

   Since the advent of the Internet, the traditional methods to enforce protection of copyrighted material have often not worked. For example, despite strong efforts by the film and recording industries to combat online piracy, the dynamic nature of the Internet has made traditional measures taken through the courts largely ineffective.

   The problems copyright holders face in protecting their works online are many, perhaps the most overwhelming coming from the nature of the Internet, itself. Because of  the  immense volume of information transferred, not only are copyright holders often unable to track single instances of infringement  among the vast amounts of data online, but the inherent anonymity of Internet users makes even the most meager steps to prevent piracy sometimes impossible.  Add to this, the jurisdictional hurdles which may which prevent copyright holders from pursuing infringement claims when users or acts of infringement happen overseas.  In addition, the sheer cost of litigation is immense compared to the small amount of infringers and amounts recoverable that a copyright holder can actually reach.  

   Obstacles that exist when the traditional judicial system applies traditional copyright infringement doctrine within an online context can also be substantial. Not even the biggest players may be able to beat the system.  For example, The Recording Industry Association of America (RIAA) commenced high profile lawsuits and a series of individual lawsuits to combat file sharing of copyrighted music material. The costs of these suits including attorney fees, trials, and even settlements became so large that the RIAA either stopped suing people for infringement or (in 2007) began offering “discount” settlements. In fact, in 2008 the RIAA began to stop  file-sharing lawsuits and announced a 3-strike system for file sharing. However, as of 2009, there have been no major ISP’s that were part of the RIAA’s scheme.

   Another constraint facing the RIAA has been the lobbyist and/or advocates that have vocalized their opposition to the RIAA. One of these organizations is the Recording Artists Coalition. Another obstacle has been judges who seem hesitant to support RIAA in their file sharing cases because the damages and rate of infringement is both enormous and ambiguous. Lastly, copyright lawsuits by the RIAA may be out of touch with the cultural norms of today, as many people do not consider file-sharing stealing, or a serious crime.

   Private companies and artists however have utilized some methods that have proven to be more effective than litigation in the fight against online piracy.

   One method used: some artists have taken control of the distribution of their copyrighted works by offering the work for free or at a low price. An example is Louis CK, a comedian who sold his show “Live at the Beacon Theater” for $5 on his website instead of releasing it on DVD or a premium cable channel. Fans were given the option of paying by PayPal on his website or pirating it. He made well over $1 million in just 12 days, which demonstrates that a good amount of people are actually willing to pay money for something they find worthwhile.  For another method, a rock band who took matters into their hands was the famous band, Radiohead. With their “pay what you want” experiment, they released their new album “In Rainbows” themselves in 2007.  They tested the songs on the Internet through Webcasts then performed a few songs at each show on their summer tour so their fans would be able to recognize those songs.  People paid anywhere from $0 to $212 for the digital copy of?, and the band subsequently sold over 3 million of the physical copies of the album. Using this method, Radiohead sold more records, merchandise, and concert tickets than they had on their three previous albums.

   While these methods are somewhat risky, Louis CK and Radiohead had strategic bargaining power and benefited greatly from these creative releases. Their method fights piracy in a non-repressive way and encourages fans to make complementary purchases, such as tickets to live performances and band merchandise.  Their innovation can pave the way for other artists to achieve similar success. However, it may be more difficult for up and coming artists, without a substantial fan base to be able to release their music in the same fashion.

   Another proven method to deter online piracy is to offer a convenient and inexpensive way to download music. Consumers want an easy way to build their music collections at a reasonable price. Apple’s iTunes store, which offers an extensive library of songs that cost $1.29 or $0.99 is the most well-known example,. The convenience is hard to match especially given the rise of new technologies such as iCloud.

   There are also alternatives that offer free music services, but the drawbacks include advertisements and consumers not being able to play exactly what they want at any time. These alternatives include Pandora Radio, Spotify, and Grooveshark. One advantage for artists is that users will be exposed to new songs, so they might be prompted to buy the album or at least individual songs on iTunes.

   Although online piracy is still a significant problem, hopefully an increasing number of music lovers will be more willing to obtain their music in a legal way that will reward the artists and copyright owners who have created convenient innovations to distribution of their products.