March 30, 2011
Intellectual Property Department
Big Media Companies Want Even More Money
Amazon has just launched a new service called Cloud Drive. It's a virtual online diskdrive where you can store your files. These files are then available to you anywhere on the web. If you upload music files, you can play them back on any PC, Mac, or Android device. The first 5 Gigabytes are free, and you can buy plans up to 1000 Gigabytes for $1/GB/year.
What could be wrong with that?
Well, I don't pay a lot of attention to the music business, so this is probably pretty common, but according to a CNET story by Greg Sandoval, the record companies and movie studios are demanding a piece of the action, on the theory that people might use the service to store records and movies. However, they're willing to overlook this little problem if Amazon cuts them in on the action.
What the company didn't do was license the rights to do this from the major Hollywood film studios and top record companies. Certainly, many from the film and music camps believe that without obtaining the proper permission, Amazon's new service violates their legal rights, multiple sources from the entertainment sector told CNET.
That's just nuts. Cloud Drive doesn't allow you to share files with other Amazon users, so the only people who could download pirated content are the people who uploaded it in the first place. Also, Cloud Drive doesn't include software to decode music or videos protected by digital rights management (DRM), so even if people upload their iTunes music or other protected files, they still can't play them on unauthorized devices. Everybody else is uploading content they obtained legally, and I don't see why the content owners should get paid again just because people are using Amazon to store content that they've already paid for.
It sounds like Amazon sees it that way too:
"We don't need a license to store music," Craig Pape, director of music at Amazon, was quoted in the Times as saying. "The functionality is the same as an external hard drive."
Naturally, the minions of Big Content do not agree:
This was not warmly received by some of the top four labels. They have made it clear, since cloud services began to generate attention last year, that their current licenses do not allow for cloud distribution or storage. As far as they're concerned, anyone offering these features needs permission. The Wall Street Journal on Monday evening quoted a Sony Music Entertainment representative saying, "We are disappointed that the locker service that Amazon is proposing is unlicensed by Sony Music."
I'd like to say I'm disappointed that the folks who run Sony Music Entertainment are a bunch of douchebags, but they could only disappoint me if I'd been expecting something better. This is the same bullshit the record companies tried to pull twenty years ago when Digital Audio Tape (DAT) was released. First they tried to stop the technology, and then they tried to arrange to get paid a small fee for every blank DAT tape sold, on the theory that people would be using them to make illegal copies of music.
Let me put it this way: I have a rental storage locker where I keep a lot of old stuff, including a couple of boxes of vinyl records. Do these record companies now think that Public Storage owes them licensing fees for storing my records?
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I love the storage locker-vinyl record analogy. Very helpful to clarifying the issue.
The entire area of patent and copyright is full of controversy. On the one hand, the point of copyright is to give people financial incentives to invent and create. And certainly it only fair that people should be compensated for their investment and work when they create something novel that consumers are willing to pay for. On the other hand, patent law and copyright law has been used to unreasonably suppress competition by extending the length of exclusive rights and in the kind of cheesy moves you're describing. The music industry has been notorious for that. They've been slow to adapt to a changing world, hoping to use old methods to protect their turf, failing miserably along the way. Shouldn't someone in the music industry have figured out that they should create delivery mechanisms just as Napster, then Itunes and Walmart et al have done? Instead, they've tried to solve their problems in court. Incredibly shortsighted and it seems they still haven't learned much.
In the meantime creators are increasingly deciding that they can also produce, promote and distribute themselves, giving Itunes or Amazon a cut on delivery.
Intellectual property law is probably always going to be a compromise between producers and consumers. If it favors the consumers too much, producers will have little incentive to create valuable intellectual property. If it favors the producers too much, they'll create the intellectual property, but only a small number of consumers will be able to benefit from it. So I'm not a big fan of making everything free, but there's no need to give Big Content everything they want, either.