COPY RIGHTS, COPY WRONGS

The Future Of Music Copyright In A Digital World

Published in SOS March 1999
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People : Industry/Music Biz

Music on the Internet has brought into sharp focus the changes that will need to be made to global law to ensure the safety of music copyright. Debbie Poyser and Derek Johnson assess the possible impact of new technology.

You're probably pretty fed up by now of being told that we're in the middle of a digital entertainment revolution. In fact, as a hi-tech musician with an interest in computing and digital audio hardware, chances are you're already more aware of the possibilities than most people. What you may be less aware of is how profound an effect new technologies in music broadcasting and distribution could eventually have on the shape of the music industry. And if you're already working within that industry, or trying to get into it, there are implications for you.

The British music industry is a massively successful one -- on a worldwide basis. A recent report by the Government's Creative Industries Taskforce (CIT), set up to maximise the impact of the creative industries and assess any threats to them, came to some dramatic conclusions. As well as employing 1.4 million people and generating billions of pounds in economic activity, the creative industries assure Britain a 16 percent share of the global export market, the highest percentage of any industrial sector.

Music plays a very important part in the above figures, as the UK is the world's second major player in the music industry (coming behind only the USA), and the money it earns for Britain outstrips film and TV revenue put together. In the light of these figures, the government is sitting up and taking notice when it comes to technological developments which could affect the music industry adversely. Indeed, Culture Minister Chris Smith recently made the opening address at a seminar held by entertainment law specialists Campbell Hooper, in which he emphasised the government's commitment to the music business.

MP3: Almost Better Than Sex?     In last month's Net Notes, Simon Trask covered the world of MP3 digital audio files on the Internet. MP3, short for MPEG 1 Layer III audio codec (MPEG is an acronym for the Motion Picture Engineering Group), is a widespread compression standard for audio files, most notoriously used for pirated music on the Internet. The recent development in the MP3 world that concerns the music industry the most is the introduction of stand-alone players for MP3 files, the most visible of which has been Diamond Multimedia's Rio PMP300 (www.diamondmm.co.uk), a compact unit offering 32Mb of flash RAM (an hour of audio storage), a 16Mb RAM card slot, headphone socket, and a parallel port for PC interfacing. Other companies are moving into this market: notable consumer electronics companies such as the Korean Samsung and Saehan (www.mpman.com/eng/main.html) both have similar products. Samsung's Yepp is a credit card-sized player, with a more advanced version offering external recording, and Saehan's MPMan family is already five strong. The SolidAudio project, which aims to develop another credit card-sized device, is a joint development of Japan's NTT (Nippon Telegraph and Telephone Corporation) and Kobe Steel (www.solidaudio.jpn.net/) that uses the TwinVQ coding format mentioned by Simon in his column. Not all of these devices, or the many others that can be read about on the Internet, will necessarily make it into Europe, but their imminent proliferation does demonstrate that the format could be here to stay. One unusual variant of the MP3 player is British company Empeg's Car Player in-car system (www.empeg.com), a compact, dedicated PC designed as a replacement for CD changers. Using a PC docking station and custom software, CD audio is converted to MP3, in the same way that you'd make tapes of CDs for in-car use. Empeg are at pains to point out that the Car Player's software has been designed so that you cannot retrieve music from the unit onto other media -- to quote their web site, "it's a player and not a mechanism to support music piracy". Record companies worldwide are obviously concerned about the potential loss of revenue due to the downloading of unauthorised audio files, and the RIAA (Recording Industry Association of America, www.riaa.com) in the USA tried (unsuccessfully) to slap an injunction on Diamond and halt the Rio's release. The RIAA's argument was that Rio would encourage piracy of copyright works, and it was looking for a royalty on Rio sales and also to force the implementation of some form of copy prevention so that copies couldn't be made from CDs. Diamond's defence essentially boiled down to the fact that Rio is a just a temporary store for audio held in its memory, and that it can't actually interface with domestic stereo equipment. Sony were reported, in an issue of the Financial Times last December, to have instructed its labels "to ensure that a comprehensive range of of online rights are included in artists' recording contracts". A certain amount of re-negotiation for existing artists is also in the offing. This move can be seen as acknowledging that direct digital distribution is inevitable -- whether by the Internet or some other delivery system. And in another surprise development, the RIAA themselves have announced the formation of the Secure Digital Music Initiative (SDMI), "a framework to work with the technology community to create a voluntary digital music security specification by next fall". Several major labels are involved in SDMI, the aim of which is to legitimise the distribution of music via services such as the Internet, while providing protection for copyright holders. One thing's for sure: there's a lot of interest in MP3. Searchmasters (www.searchterms.com), a web page dedicated to collating what people are looking for on the Internet, recently placed 'MP3' as the second most common search term, after 'sex'!

In January '98 the CIT created the Music Industries Forum, in which copyright, an issue that's crucial to the health of the business, was addressed. The Forum concluded, unsurprisingly, that the 'digital revolution', including the Internet, poses threats and offers opportunities, and that its impact on the musical industries is set to increase. The traditional distinctions between the broadcasting and retailing of music may disappear, but, said the Forum, new direct music distributors must be taught that copyright is just as important now as it ever was. Strong copyright protection in an online environment is of great importance, and the government is pushing for international acceptance of the principle. The Internet, after all, is a global phenomenon, and loopholes in copyright law anywhere in the world could undermine copyright everywhere.

It's easy to imagine that all this talk of a major threat to copyright is exaggerated. Think again: entertainment law barrister Nanette Rigg, currently head of British Music Rights, which was established in 1996 to represent artists, publishers and collection societies, spoke at the copyright seminar on this very subject. She revealed that there are currently over 25,000 Internet sites which offer copyright music free, without payment of any kind of license fees. During a live demo she logged onto an unlicensed Swiss site which stores lyrics for over 92,000 songs but features no copyright or author information whatsoever. MP3 sites (see 'MP3: Almost Better Than Sex?' box) offer CD-quality audio for easy downloading. But those responsible for enforcing copyright legislation are still struggling with the huge problems of identifying, tracking and eventually prosecuting those who hand out copyright material for free on the Internet.

Rigg singled out other examples of how new technology is being used to abuse copyright. Digital radio stations in the Far East broadcast entire albums at specified times, so that all the listener has to do is set up a digital recorder at the right time and he or she has a perfect digital copy of an album. This isn't broadcasting as we know it -- it's a music distribution system masquerading as radio and delivering recorded works to the consumer -- but the consumer doesn't pay for them and the radio station only pays license fees as a broadcaster.

Stephen James, head of large publishing company Dejamus, also highlighted the blurring of traditional distinctions. UK regional radio stations pay license fees to the Performing Right Society (PRS) on the basis of the audience available within their transmission 'footprint'. But since many of them now have web sites which broadcast simultaneously over the Internet, they have a vastly increased potential audience -- up to 200 million people, said James. In his opinion, the basis of music licenses has to be re-thought, otherwise composers and copyright holders could be losing out on a huge scale.

Royalties collection societies the PRS and the Mechanical Copyright Protection Society, two of the few bodies with a vested interest in protecting the concept of copyright, are also concerned. Completely new systems will be needed to deal with the purely mechanical aspects of collecting royalties for music use on the Internet. John Hutchinson, the Chief Executive of the MCPS/PRS Alliance, spoke at the seminar about whether collection societies can survive in the digital revolution, and addressed the problem of creating systems to deal with it. The Alliance has dedicated an R&D team to examining new technological developments and their implications for royalty collection, but technology moves so fast that there's a danger that those seeking to enforce copyright legislation will always lag a few steps behind those seeking to contravene it. Chris Smith did refer in his opening address to watermarking systems being developed to protect digital data (see the 'Marking Time' box), and this at least offers some hope for enforcing copyright legislation.

Perhaps the root of the problem is the prevalent attitude to copyright, something which many of the speakers at the seminar brought up. Jean-Loup Tournier, head of French music royalty collection society SACEM (Societe des Auteurs, Compositeurs et Editeurs de Musique), tells an interesting story about copyright. Although SACEM has existed to serve the interests of composers since 1850, when people passing by its Paris headquarters were recently asked "To whom does music belong?", they variously replied "to no-one", "to God", and "to the people", amongst other answers. Not one person responded with the right answer: that music belongs to its composer (who is thus entitled to be

"The Internet is a global phenomenon, and loopholes in copyright law anywhere in the world could undermine copyright everywhere."

paid for its use). The problem is that you can't see intellectual property; most people who buy original paintings have no idea that they do not have the right to reproduce them, for example, and without awareness of this concept there's no basis for the artistic industries as we know them.

Some help is forthcoming from governments: in France the obligation to teach about intellectual property rights was recently inserted into the national curriculum and into teacher training courses. However, what's being given with one hand is often being taken away with the other, on a global basis: the USA's National Restaurant Association was successful last year in having significant amendments, detrimental to the financial interests of composers, added to a government copyright bill. The NRA amendments exempt retail outlets of 2000 square feet and bars and restaurants of up to 3,750 square feet from paying for the use of background music. BMI, an American performing rights society, have said that this legislation "effectively expropriates the intellectual property of songwriters and publishers without compensation", also revealing that the average songwriter's income from performance royalties is $4,700 a year, compared to the average restaurant owner's income of $44,000 a year. Publisher Stephen James described the amendments as "the thin end of a very long wedge", and some royalties collection societies have lodged a formal complaint about them with the US government.

But if new technology in the hands of people who regard copyright as trivial could threaten the livelihood of the professional musician in some ways, it also offers exciting new possibilities in the hands of legitimate users. Nanette Rigg mentioned several of the many licensed sites that are setting the pattern for responsible music commerce, including the Music Sales sheet music web site. She also demonstrated the purchasing of a track (for US$1.49!) from a licensed Californian site.

Simon Hochhauser, head of VideoNet, a video- and music-on-demand company which is currently running a pilot project in Hull, also weighs in on the side of new technology. VideoNet store vast amounts of video and music material on servers, connected either by telephone line or by cable to the home, where a decoder is located and users decide what they want to watch or listen to. The Hull pilot project encompasses 3000 people, and Hochhauser revealed some encouraging statistics. VideoNet have registered a doubling of each household's music listening (and viewing of music video), as compared to before the start of the project. Users also extended their listening into areas they hadn't previously encountered, and a significant finding is that the young people in the project have been tending to listen to music more usually associated with their parents' generation -- including Country & Western and MOR. However, more esoteric and adventurous music choices are also being made.

"Without strong copyright, music can't be a professional career, for you or for anyone else."

Hochhauser observed that traditional music delivery methods are inflexible (an observation with which many would tend to agree), and that in his opinion distribution changes will result in major pressure on traditional retailers. He feels strongly that direct music distribution to listeners will result in more money being spent on music (even though the music itself may cost less) because listeners will build larger and more eclectic libraries.

Other implications arising from VOD and MOD include the possibility of record labels becoming cheaper and easier to build -- something that will no doubt be exciting to many SOS readers. Distribution methods such as that being pioneered by VideoNet should allow niche markets to be attacked more easily. In a video context, this could lead to more local and ethnic programming, while in a music context, music that can't currently find shelf space in the traditional record shop should be more readily available. Hochhauser also emphasised Videonet's copy-protection measures: data is fingerprinted, and anti-copying devices are incorporated into the hardware used. The system also means that the number of times a given piece of music is chosen and listened to can be monitored, so that composers can be paid their royalties accurately.

New music delivery methods really could transform everything about the music business as we know it. It'll take quite a while -- just the fact that the technology is there doesn't mean that everyone will immediately be able to use it, after all. But as musicians who might already be published -- or may be in the future -- SOS readers who write their own music should understand the importance of protecting their copyright and that of all other composers in the midst of technological change. Because (as David Stoll, the co-chairman of BAC&S emphasises) without strong copyright, music can't be a professional career, for you or for anyone else.

Marking Time     Watermarking digital audio is one potentially powerful method of identifying and tracking copyright material, not to mention enabling hardware to prevent the copying of unauthorised material. The idea is that information regarding the owner of the music's copyright is embedded, inaudibly, in the digital audio contained on a CD, MiniDisc or in an MP3 file. Such information also has a potentially productive, as opposed to protective use: it facilitates the logging of sales and the collection and distribution of resulting royalties arising from downloads from commercial web sites or other retrieval systems. One high-profile system is Musicode, developed by ARIS Technologies (www.musicode.com/home.htm); the first commercial CDs to implement Musicode were the recent CD reissues of synth whizz Larry Fast's nine Synergy albums from the '70s and '80s. However, as reported in a recent issue of New Scientist (Vol 161 No 2168, January 9, 1999), a problem has arisen: tests on digital watermarking have thus far been on the compact disc digital standard of 16-bit, 44.1kHz sampling. This technology will not work satisfactorily with the higher resolution provided by DVD (Digital Versatile Disk, the new video and audio technology) which can offer sampling resolution of up to 24 bits at 96kHz. The International Federation of the Phonographic Industry (IFPI, www.ifpi.org/home.html) is working to develop a watermarking standard that is compatible with both systems.