Some Like It Hot

OK, P2P is "piracy." But so was the birth of Hollywood, radio, cable TV, and (yes) the music industry.

Lawrence Lessig

Wired

March 2004

If piracy means using the creative property of others without their permission, then the history of the content industry is a history of piracy. Every important sector of big media today - film, music, radio, and cable TV - was born of a kind of piracy. The consistent story is how each generation welcomes the pirates from the last. Each generation - until now.

The Hollywood film industry was built by fleeing pirates. Creators and directors migrated from the East Coast to California in the early 20th century in part to escape controls that film patents granted the inventor Thomas Edison. These controls were exercised through the Motion Pictures Patents Company, a monopoly "trust" based on Edison's creative property and formed to vigorously protect his patent rights.

California was remote enough from Edison's reach that filmmakers like Fox and Paramount could move there and, without fear of the law, pirate his inventions. Hollywood grew quickly, and enforcement of federal law eventually spread west. But because patents granted their holders a truly "limited" monopoly of just 17 years (at that time), the patents had expired by the time enough federal marshals appeared. A new industry had been founded, in part from the piracy of Edison's creative property.

Meanwhile, the record industry grew out of another kind of piracy. At the time that Edison and Henri Fourneaux invented machines for reproducing music (Edison the phonograph; Fourneaux the player piano), the law gave composers the exclusive right to control copies and public performances of their music. Thus, in 1900, if I wanted a copy of Phil Russel's 1899 hit, "Happy Mose," the law said I would have to pay for the right to get a copy of the score, and I would also have to pay for the right to perform it publicly.

But what if I wanted to record "Happy Mose" using Edison's phonograph or Fourneaux's player piano? Here the law stumbled. If I simply sang the piece into a recording device in my home, it wasn't clear that I owed the composer anything. And more important, it wasn't clear whether I owed the composer anything if I then made copies of those recordings. Because of this gap in the law, I could effectively use someone else's song without paying the composer anything. The composers (and publishers) were none too happy about this capacity to pirate.

In 1909, Congress closed the gap in favor of the composer and the recording artist, amending copyright law to make sure that composers would be paid for "mechanical reproductions" of their music. But rather than simply granting the composer complete control over the right to make such reproductions, Congress gave recording artists a right to record the music, at a price set by Congress, after the composer allowed it to be recorded once. This is the part of copyright law that makes cover songs possible. Once a composer authorizes a recording of his song, others are free to record the same song, so long as they pay the original composer a fee set by the law. So, by limiting musicians' rights - by partially pirating their creative work - record producers and the public benefit.

A similar story can be told about radio. When a station plays a composer's work on the air, that constitutes a "public performance." Copyright law gives the composer (or copyright holder) an exclusive right to public performances of his work. The radio station thus owes the composer money.

But when the station plays a record, it is not only performing a copy of the composer's work. The station is also performing a copy of the recording artist's work. It's one thing to air a recording of "Happy Birthday" by the local children's choir; it's quite another to air a recording of it by the Rolling Stones or Lyle Lovett. The recording artist is adding to the value of the composition played on the radio station. And if the law were perfectly consistent, the station would have to pay the artist for his work, just as it pays the composer.

But it doesn't. This difference can be huge. Imagine you compose a piece of music. You own the exclusive right to authorize public performances of that music. So if Madonna wants to sing your song in public, she has to get your permission.

Imagine she does sing your song, and imagine she likes it a lot. She then decides to make a recording of your song, and it becomes a top hit. Under today's law, every time a radio station plays your song, you get some money. But Madonna gets nothing, save the indirect effect on the sale of her CDs. The public performance of her recording is not a "protected" right. The radio station thus gets to pirate the value of Madonna's work without paying her a dime.

No doubt, one might argue, the promotion artists get is worth more than the performance rights they give up. Maybe. But even if that's the case, this is a choice that the law ordinarily gives to the creator. Instead, the law gives the radio station the right to take something for nothing.

Cable TV, too: When entrepreneurs first started installing cable in 1948, most refused to pay the networks for the content that they hijacked and delivered to their customers - even though they were basically selling access to otherwise free television broadcasts. Cable companies were thus Napsterizing broadcasters' content, but more egregiously than anything Napster ever did - Napster never charged for the content it enabled others to give away.

Broadcasters and copyright owners were quick to attack this theft. As then Screen Actors Guild president Charlton Heston put it, the cable outfits were "free-riders" who were "depriving actors of compensation."

Copyright owners took the cable companies to court. Twice the Supreme Court held that the cable companies owed the copyright owners nothing. The debate shifted to Congress, where almost 30 years later it resolved the question in the same way it had dealt with phonographs and player pianos. Yes, cable companies would have to pay for the content that they broadcast, but the price they would have to pay was not set by the copyright owner. Instead, lawmakers set the price so that the broadcasters couldn't veto the emerging technologies of cable. The companies thus built their empire in part upon a piracy of the value created by broadcasters' content.

As the history of film, music, radio, and cable TV suggest, even if some piracy is plainly wrong, not all piracy is. Or at least, not in the sense that the term is increasingly being used today. Many kinds of piracy are useful and productive, either to create new content or foster new ways of doing business. Neither our tradition, nor any tradition, has ever banned all piracy.

This doesn't mean that there are no questions raised by the latest piracy concern - peer-to-peer file-sharing. But it does mean that we need to understand the harm in P2P sharing a bit more before we condemn it to the gallows.

Like the original Hollywood, P2P sharing seeks to escape an overly controlling industry. And like the original recording and radio industries, it is simply exploiting a new way of distributing content. But unlike cable TV, no one is selling the content that gets shared on P2P services. This difference distinguishes P2P sharing. We should find a way to protect artists while permitting this sharing to survive.

Much of the "piracy" that file-sharing enables is plainly legal and good. It provides access to content that is technically still under copyright but that is no longer commercially available - in the case of music, some 4 million tracks. More important, P2P networks enable sharing of content that copyright owners want shared, as well as work already in the public domain. This clearly benefits authors and society.

Moreover, much of the sharing - which is referred to by many as piracy - is motivated by a new way of spreading content made possible by changes in the technology of distribution. Thus, consistent with the tradition that gave us Hollywood, radio, the music industry, and cable TV, the question we should be asking about file-sharing is how best to preserve its benefits while minimizing (to the extent possible) the wrongful harm it causes artists.

The question is one of balance, weighing the protection of the law against the strong public interest in continued innovation. The law should seek that balance, and that balance will be found only with time.