In this series we have been talking about three ways of enforcing copyright: locks (part 1), levies (part 2) and lawsuits (part 3). This article is intended to discuss an alternative to enforcement which is licensing the specific usage.
We really need to ask ourselves an important question in the
copyright debate: are potential customers of copyright holders not
paying because there is some break in the morality of society leading
more people to break the law, or because copyright holders are not
offering their works in a manner that customers wish to pay for it?
Most people will agree that there is a spectrum with some people
existing on both ends. Those who are constantly calling for “stronger”
copyright seem to believe that we are decaying as a society, and the
“solution” is some sort of “law and order” approach by increasing
enforcement. I believe that in the majority case it is outdated methods
of production, distribution and funding that aren’t meeting the needs
of potential customers, and that more enforcement of the old models
will only reduce revenues to creators. I believe the largest problem
today is that copyright holders are not offering a “buy me now” for their works under reasonable terms.
There are statistics tossed out by special interest groups all the
time talking about levels of infringement, but each time I read one of
these studies I find major flaws in their statistical methodology.
These studies don’t adequately differentiate between copyright
infringement and past customers who have moved their money to other
perfectly legal activities.
Creators, or people they hire, must think more like entrepreneurs.
Copyright is simply a series of activities that require permission from
the copyright holder in order to do. Copyright holders need to look at
this bundle of rights, analyze the needs of those who want to carry out
a specific use, and decide on licensing models that offer the best
match. They need to get past requiring royalties for every possible
use, as sometimes they must offer some uses royalty-free in order to
provide enough value to audiences to make the work worth paying for.
There is no such thing as one size fits all, as every type of
creativity has different traits, and exist in different markets. For
some creativity/markets it will be best to use one-off arrangements,
such as the deals made between music composers and film producers. In
other markets this same music by the same composer will use a
collective society to automatically license the work, such as with
public performances in bars and restaurants.
There is a full spectrum of licensing options from the one-off
arrangements between the copyright holder and the user, licenses which
offer specific uses of a specific work under common terms accessible by
any customer, and collective licenses where a specific range of uses
are able to be licensed on a royalty-bearing basis by a collective
society for any works in their repertoire.
Breaking it down further, there is a range of options for collective societies. The May 2004 Interim Report on Copyright Reform from the Standing Committee on Canadian Heritage offered a good summary of the options.
“Licensing could take one of three forms: voluntary licensing,
extended licensing, or compulsory licensing. In voluntary licensing,
copyright holders and users contract directly with one another.
Extended licensing allows a copyright collective society claiming to
represent a “substantial” repertoire of certain types of material to be
recognized as representing the entire international repertoire of such
types of material, but individual authors would have a right to “opt
out” of the collective society. Under compulsory licensing, copyright
owners are legislatively required to allow use of their work according
to statutorily described conditions and prices.“
Voluntary licensing, either through a royalty collective society,
through publicly offered terms, or through one-off arrangements is
always the ideal. We sometimes run into the situation where most
copyright holders of a given type of work want to use royalty
collective licensing, but there was no administratively reasonable way
to verify that all copyright holders wanted to do this. This is where
the extended licensing comes in.
We discussed under levies (part 2)
the least desirable situation, which is when copyright holders are
refusing to license for a socially beneficial use, and the government
needs to step in and impose conditions and prices in the statute.
An option that is obvious to me, but that some copyright holders
seem to miss, is that sometimes it is more lucrative to offer
permission for certain uses without any compensation at all. There are
a wide variety of scenarios when this applies.
In multimedia entertainment (music, movies, television) there is a
business model where you have some expenses (advertising, etc to gain
audiences) and revenues. Sometimes you can simply offer a specific use
royalty-free as a form of advertisement, securing revenues from other
uses. This is used quite lucratively by some musicians who have used Creative Commons
to offer royalty-free licenses for non-commercial sharing of the music
by fans, while retaining all the traditional commercial uses as
revenue-generating.
There are less biased studies documenting how P2P doesn’t decrease,
and can even increase music sales. I strongly believe that this is a
decision that should be left up to the artists, and that music fans
should only share that music where the artists have authorized it to be
shared. This keeps the activities legal, and actively encourages
artists to license their works this way in order to receive these
marketing benefits. Music fans should be willing to punish those
outdated companies who are frightened of P2P file-sharing by denying
them any benefits. People who share music without permission aren’t
“sticking it to the man”, they are working as pawns for the benefit of
these outdated companies.
For other types of works, counting and charging for copies lowers
the value of the work. For many types of journals the value in the
article is not the royalties that will be received, but in having the
work read and cited by more people in the field. This is why Open Access
licensing is growing so quickly, where it makes sense for the
publication to be paid by the source of the material (usually as part
of the grants offered to the researcher), rather than paid for by the
recipients of the material who are allowed (encouraged) to share the
material freely with others.
Another example is Free/Libre and Open Source Software (FLOSS) where
commercial suppliers charge using units that are different than “per
copy”. In my case I charge my customers a one-time fee for the service
that I offer to them, and never charge royalty fees for my software. My
business is dependant on other authors doing the same thing, so that I
can come in to a customer with 95% or more of what they need already
available in existing FLOSS where I just get paid for filling in the
missing 5%. If I had to offer 100% of the solution myself, only the
largest of customers could afford my services, and there would be far
fewer jobs in this sector than there are today.
Royalty-based software has always been consolidating, meaning that
while there are still large revenues for those few companies that
remain, the sector is getting smaller and less lucrative all the time.
The most lucrative option for most software authors is to join the
FLOSS sector where such consolidation isn’t an issue, and where we will
always be able to find customers wanting something just a little bit
different than what existing software offers, with us having the
ability to make those changes.
This growing sector is only possible due to the fact that an
increasing number of fellow software authors are using licensing terms
which publicly grant permission to run, copy, distribute, study, change and improve that software without additional permission or payment.