Living Down Stream

A Drowning Industry

On 24 Jan. 2018, Senator Orrin Hatch (R-Utah) introduced the Music Modernization Act to Congress.[2] The bill reforms section 115 of the Copyright Act and allows the Copyright Royalty Board (CRB) to change royalty rates to match market value.[3]

Keeping Freedom Current

The Founding Fathers knew the importance of intellectual property. Article I, Section 8, Clause 8 of the U.S. Constitution says that “Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

From Boom to Bust

The Recording Industry Association of America (RIAA) reported a staggering $14.6 billion ($21.0 billion, adjusted for inflation) revenue for recorded music in 1999. Fewer than two decades later, that number has dropped to $7.6 billion.[7]

Figure 2 — Recorded music revenue in the USA from 1999 to 2016. Source: RIAA.

Raiders and the Lost Arts

The internet was created with the hope of ultimate democratization. However, it became as lawless as the wild west, full of plundering and moral ambiguity.

The First Pirates

Sean Parker was an unassuming, asthma-ridden kid from Virginia. His dad, an oceanographer, introduced Sean to programming at a young age.[10]

A Safe Harbor

In 1996, President Clinton signed into law the Digital Millennium Copyright Act (DMCA) to enact two treaties established by the World Intellectual Property Organization (WIPO) — an agency of the United Nations. The constituent Online Copyright Infringement Liability Limitation Act, commonly known as the “safe harbor clause”, has proven a flash point for almost all major online service providers.

Legal Loopholes

YouTube is an excellent example of legal piracy.

The Doubloon Standard

After backlash for hosting videos of the extremist Islamic State (ISIS), both YouTube and Facebook implemented systems to screen for extremist videos. [19]

Daylight Robbery

Ultimately, the U.S. Department of Justice has ruled that under the current laws, YouTube’s morally questionable model falls within the bounds of legality.[20] There is no immediate action being taken by Congress to amend the DMCA or its safe harbor clause, but that does not mean we should ignore future reforms.

Swindlers and False Profits

YouTube lauds the normality of its superstars, claiming that their platform can make the common person rich. The Swedish gamer PewDiePie rolled in around $15 million in 2016[21] — anybody can play games, right?

The Lowering Middle Class

I’ve specifically hounded the YouTube business model, but when it comes down to it, I enjoy the convenience of YouTube daily. Nevertheless, I’ve chosen to stick to other platforms to listen to music.

A Necessary Evil

Progenitors of the internet lauded the democratization and decentralization made possible through the network; “information wants to be free” was the rallying cry of the forward-thinkers of the day.[29] For the music industry, that meant that the behemoths that controlled the business — the record labels — would fall.

More People, Smaller Pie

Though record labels will likely need to restructure to survive, they still play an important role in royalty collections, especially considering the contract between Sony Music and Spotify.[34]

Figure 3 — Source: Rolling Stone, Spotify.com

Hope in Democracy

Culture, especially in America, is in constant flux. The asceticism of the 50s led to the sexual revolution of the 60s; the arena-rock era of the 80s invited the punk/grunge scene of the 90s.

2019 Update

The Music Modernization Act was signed into law by President Donald Trump on 11 Oct. 2018. The bipartisan support for the bill was a seemingly rare victory for the modern American democratic process.

NOTES

The original article in its 2018 PDF format can be found at http://www.mountainsidemusic.com/noted/ipo-livingdownstream

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Bobby St. Mute

Bobby St. Mute

Critical thinker in the streets — Musician in the sheets.