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PROMISES TO KEEP

Stanford University Press

Contents

Acknowledgments............................................................ixIntroduction...............................................................11 The Promise of the New Technology........................................112 The Baseline: Entertainment Law and Practice in 1990.....................383 What Went Awry...........................................................824 Taking Property Rights Seriously.........................................1345 Online Entertainment as a Regulated Industry.............................1736 An Alternative Compensation System.......................................199Appendix: Where Does the Money Go?.........................................259Notes......................................................................265Index......................................................................321

Chapter One

In June 2001, I gave my younger daughter a new laptop computer as a high-school graduation present. My hope was that she would use it primarily as a tool for research and writing in college. The model that I selected came equipped with many features that would help her work: a fast microprocessor and considerable "random access memory" (to speed her writing and calculations and to enable her to operate several software programs simultaneously); an Ethernet card (to enable her, through her college's high-speed network, to communicate via email and to do online research); a large hard drive (to enable her to store her notes, essays, and the fruits of her research); a DVD drive (to enable her to use the growing amounts of data and software that are commonly stored in that format); and a large, high-resolution color screen (to ease eye strain).

The computer has so far served her well in exactly the ways I'd hoped. But it has also, to my mild surprise, come to function as her media center. The hard drive now houses (along with Abnormal Psychology notes and email archives) over three hundred sound recordings, all downloaded from the Internet. The computer also functions as a mini-theatre. On weekend evenings, a group of her friends will borrow it for a few hours, drop a DVD into the drive, and huddle together on a couch to watch the show. Finally, she was recently given a "CD burner," which, when connected to the computer, enables her to copy audio recordings either from her hard drive or from compact discs borrowed from her sister or her friends onto inexpensive blank discs. In short, my daughter, like most of her classmates, routinely employs her computer, not just to read, write, communicate, and calculate, but also to gain access to and then enjoy music and movies.

Watching the ways in which my daughter and her friends use their computers to obtain entertainment, I've been struck by four aspects in which their experience differs from how, thirty years ago, my college classmates and I experienced entertainment. Most are differences in degree, not kind, but in the aggregate they foreshadow a fundamental shift in our culture.

First, my daughter and her friends experience entertainment as inexpensive. Recorded music, in particular, they experience as free-easily obtained from a variety of Websites and peer-to-peer copying services for no charge.

To be sure, their attitude on this score could be challenged on a couple of grounds. Most obviously, it could be objected that recorded music seems to them free only because they are stealing it instead of buying it. That objection rests upon some assumptions concerning the shape of copyright law and the associated legal rights of the creators of the music-assumptions that will be examined in detail in Chapters 2 and 3. For the time being, it is sufficient to observe that legal constraints have thus far made little dent on either the behavior or the attitudes of my daughter and her friends.

It also could be objected that recorded music is far from free, even to my daughter, when one takes into account all of the costs associated with gaining access to it. After all, her computer (now supplemented by the CD burner) cost a good deal of money, as does a subscription to an Internet service provider, which enables her to download the music. As it happens, my daughter does not bear any of those costs. She received the computer and burner as gifts, and the cost of her ISP access is buried somewhere in the list of fees that accompany her college tuition. But surely they should be taken into account when determining the price of providing her access to recorded music. This well-founded objection points toward a refinement of the characterization with which we began. The average cost to her of each sound recording-taking into account the costs of the computer and the connection to the Internet-is surely positive. But the marginal cost-the cost of obtaining each additional recording-is near zero.

This helps to explain the second of the four ways in which my daughter's engagement with entertainment differs from mine. For her, entertainment is plentiful. Her collection of sound recordings (modest by the standards of her classmates) dwarfs my college record collection. And she has easy, casual access to a menu of movies for which there was no parallel in my experience.

This surfeit of material, in turn, partly explains the third feature: the culture of sharing. To be sure, my classmates and I sometimes shared music. We would occasionally loan our record albums-to selected friends whom we expected would take care of them and return them. And a few of my classmates had tape recorders that enabled them, at a relatively modest cost, to make and give away imperfect copies of albums. But these exchanges are trivial compared to the promiscuous sharing of the current generation.

Finally, my daughter and her friends expect that entertainment of all forms should be available anywhere anytime. The mobility of entertainment technology is of course not an altogether new phenomenon. Portable and car radios have been around since before I was in college. Portable cassette players and CD players are well-established features of the cultural landscape. But until recently, these were experienced as exceptions to a pattern of sharp constraints on space and time. Movies were best seen in theatres, which operated on rigid schedules. Television programs were best watched at home, and (before the advent of the VCR) could only be watched at predetermined times. Music was best heard through a stereo system, which was inconvenient to move around. These distribution channels-and the expectations they engendered-have not disappeared. But the ubiquity of devices that provide users more control over when and where they listen and watch have shifted the locus of normality. Now, temporal or spatial constraints on the availability of recorded or interactive entertainment are seen as exceptions, in need of explanation or justification, not the rule. (Years ago, my daughter, watching broadcast television at home, rose to go to the bathroom. As she left the room, she called back, "Please pause the movie.")

In several ways, in short, the manner in which my daughter engages with recorded entertainment is different from the manner in which I did. Is it better? Yes. Not because she listens to more music or watches more movies, nor because the average quality of her...