The Mystery of What Can Be Owned and Sold

I still own lots of vinyl LP’s. Big black shiny things that came in fantastic thin sleeves with great designs on the front, CD’s could never be as thrilling. But like many people who bought vinyl, and people who still buy CDs, I was confused about what I was paying for. I thought I was buying a slab of plastic. In fact, I was buying a right to reproduce intellectual property – under very specific circumstances. I could reproduce the music for my personal enjoyment but not for profit or, seemingly, other people’s enjoyment, unless nobody minded the reproduction. So playing the vinyl at a school disco is okay, but having it as background music in a shop is not. Ultimately the rules over reproduction are very confused. I mean, when I bought those vinyl records I would have had to be some kind of obsessive to try to make decent copies of the music to give to other people. Now with a cheap gizmo I can pipe the music from my record player, via my amp, into my laptop. Once stored in my laptop, I can clean up the sound using some freeware software, convert it to MP3 and email it to anyone I fancy. When they sold me the LP nobody was thinking about that, but you can be sure the record company bosses think a lot about copying music now.

Personal Video Recorders (PVRs) are a good example of the problems in understanding what people can own and sell. If I buy a PVR and use it to record and replay television shows when I like, that is fine. I can even invite people over to watch with me, without seemingly infringing the rules. But if I tried to copy the data so somebody could watch the show elsewhere, that would be wrong. And if someone was to remotely copy and store a show on my behalf, then that is wrong too. But someone can sell me video on demand which is technically almost identical, but has a different legal relationship in terms of who is doing what.

Of course, like all very complicated rules, it all comes down to enforcement. And rules get enforced when it suits the people trying to make money, and not otherwise. That is why the record industry did not send in a crack military squad to bust up my school disco, and nobody will get too upset if I ask someone to record a tv show just for me.

If people are confused now about what content is, they are about to get a lot more confused. Witness the uproar when Sony BMG tried to stop people copying the contents of music CDs to their digital libraries. Some got very angry, some bought the same music a second time over the internet and some just worked around the problem by writing the content to a fresh CD and then copying the content from that. But this is with CD’s, where there is still something physical. People seemingly cannot imagine content without a physical instance. If you don’t believe me just look at the movies. Every science fiction film has people with laser guns and spaceships that go faster than light, but somehow to get a bit of digital content from A to B everyone gets perplexed and needs to carry it in a strangely shaped bit of plastic. Given that Vinton Cerf loves telling everyone how we need IP (meaning internet protocol this time) addresses for Mars (take a look at this article in businessweek) you have to wonder why outer space heroes never just email things instead of carrying messages back and forth like homing pigeons. For classic sci-fi fans, the big question is why in Star Wars the Millennium Falcon flies back to Yavin 4 with the secret plans for the Death Star, when they know there is a tracking device attached to the ship? Talk about a high-risk strategy. Why not just email the plans instead of leading the Empire’s big new weapon that can blow up whole planets right back to their secret base? For those who like their sci-fi more recent and more Joss Whedon-stylee, the same kind of nonsense occurs in Serenity, where they physically carry around a big block of plastic with the vital video recording to be broadcast by Mr.Universe. If Mr. Universe can broadcast to every planet, why can’t he also receive a transmission? But the worst example occurs in Minority Report. So Tom Cruise is wearing his fancy gloves in front of his big screen, flicking through the images from the clairvoyant mutant kids in the paddling pool. His sidekick is mucking about calling up some information on the design of some houses in a certain part of town or something silly like that. So Tom wants to see the information his sidekick has called up. So how does the sidekick transfer this data across the 3 feet from his desk to Tom’s big screen? He carries it. Yup, that is right. He carries the data In some kind of clear perspex block which he puts into a slot on Tom’s screen. These guys are urgently trying to stop someone being murdered in the next 30 seconds but somehow they do not have the technology to wire up Tom’s screen to the sidekick’s desk. Geez.

The point I am making, if you are still with me, is that the average person just cannot get their head around what data is when you strip it away from any physical context. So when we talk about intellectual property, which is even more abstract, most of the world is even more confused. But sometimes good things come out of confusion. For example, intellectual property currently suits the richest people in the world – because they can afford the lawyers to fight to enforce their rights. And that is why the biggest pop stars and films come out of the richest country in the world, much to the annoyance of the French in particular. But you no longer need to be rich to distribute content. So if you cannot afford the lawyers there will be a simple alternative: give the content away. If you are a poor struggling artist, why not? The worst that can happen is that you get no money, but you were not expecting to get any in the first place. At best you make a lot more fans who maybe will pay for things in future. But you can bet that the big businesses that make money from content are not going to like that and will try to discourage and distract people in order to stop that happening.

The distribution networks have a key role in determining how intellectual property gets handled in the brave new world we are entering. On one side, the distributors can try to specifically charge for the specific content, and so will want to control that content. Buy old media stocks if you think they will win. Probably that is a safe bet – Sony and other huge corporations did not buy content companies just to find their investment undermined by file sharing geeks. On the other, the distributors could try to charge for transmission or advertising around the transmission without caring about what the content is, and spare themselves the DRM headache. And when it comes to the legality of what is going on, they may get forced to intervene, but (as any regulator can tell you) forcing a telco to do something against its will tends to lead to a lot of excuses about technical feasibility, even more foot-dragging and delays, and even the odd bogus argument about privacy. But now that Big Brother is here and we all need to be monitored and recorded 24/7 in case it turns out we are terrorists that last argument may be irrelevant. Buy Google and their ilk if you think that the value of content will be secondary to the power to freely distribute. Of course, the way the distribution network execs are currently trying to profit from intellectual property is very confused. Which I guess goes to show they are human like the rest of us. Some telco execs are wasting money on pointless own brand internet sites, whilst others are happily advocating (when no lawyers are around) that people abuse file sharing all day and night. But one thing that everyone can agree on is that vinyl, much as I love it, is not going to make a comeback.

So the only question left to ask is this. If the advertising industry hates PVRs because people skip the adverts, how long will it take before someone offers browser software that strips out adverts? And when they do, how long will it take Google to turn from being pretend new age hippies into the greedy old school corporate sharks they really are?

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.