COPYRIGHT
Jerry Pournelle
Monday, June 22, 2009
The Following is long, and of specialized interest, so I am putting it on its own page. Discussion will also be here. This is a very important matter to many of us.
Begin Part Two: A New Discussion
Begin PART ONE September 2004
Dear Jerry:
With all that's going on, I'm not surprised that this one slipped below the radar, but it would be an important step in the right direction for protecting copyrights. Deatails from the Congressional Record below for your information and edification.
Francis
Why hasn't the union taken a position on this? If passed it would make it very easy to go after infringers.
Francis Hamit
By Mr. LEAHY (for himself and Mr. HATCH):
S. 2237. A bill to amend chapter 5 of title 17, United States Code, to authorize civil copyright enforcement by the Attorney General, and for other purposes; to the Committee on the Judiciary.
Mr. LEAHY. Mr. President, the advent of the digital age promises the efficient distribution of music, films, books, and software on the Internet, and an easily-accessed, unprecedented variety of content online. Unfortunately, to see this promise realized, we must overcome some of the challenges presented by digital content distribution. Today I am pleased that Senator HATCH is joining me in sponsoring the ``Protecting Intellectual Rights Against Theft and Expropriation (PIRATE) Act of 2004,'' which will respond to one such challenge. It will bring the resources and expertise of the United States Attorneys' Offices to bear on wholesale copyright infringers.
The very ease of duplication and distribution that is the hallmark of digital content has meant that piracy of that content is just as easy. The very real--and often realized--threat that creative works will simply be duplicated and distributed freely online has restricted, rather than enhanced, the amount and variety of creative works one can receive over the Internet. Part of combating piracy includes offering a legal alternative to it. Another important part is enforcing the rights of copyright owners. Senator HATCH and I have been working with artists, authors, and software developers to create an environment in which copyright is protected, so that we can all enjoy American creativity, and so that copyright owners can be paid for their work.
For too long, Federal prosecutors have been hindered in their pursuit of pirates, by the fact that they were limited to bringing criminal charges with high burdens of proof. In the world of copyright, a criminal charge is unusually difficult to prove because the defendant must have known that his conduct was illegal and he must have willfully engaged in the conduct anyway. For this reason prosecutors can rarely justify bringing criminal charges, and copyright owners have been left alone to fend for themselves, defending their rights only where they can afford to do so. In a world in which a computer and an Internet connection are all the tools you need to engage in massive piracy, this is an intolerable predicament.
Some steps have already been taken. The Allen-Leahy Amendment to the Foreign Operations Appropriations Bill, on Combating Piracy of U.S. Intellectual Property in Foreign Countries, provided $2.5 million for the Department of State to assist foreign countries in combating piracy of U.S. copyright works. By providing equipment and training to law enforcement officers, it will help those countries that are not members of OECD (Organization for Economic Cooperation & Development) to enforce intellectual property protections.
The PIRATE Act will give the Attorney General civil enforcement authority for copyright infringement. It also calls on the Justice Department to initiate training and pilot programs to ensure that Federal prosecutors across the country are aware of the many difficult technical and strategic problems posed by enforcing copyright law in the digital age.
This new authority does not supplant either the criminal provisions of the Copyright Act, or the remedies available to the copyright owner in a private suit. Rather, it allows the government to bring its resources to bear on this immense problem, and to ensure that more creative works are made available online, that those works are more affordable, and that the people who work to bring them to us are paid for their efforts.
The challenges presented by digital content are multifaceted, and no single response will resolve all of them. We must, and we will, offer a broad array of solutions that taken together will help ensure the protection of intellectual property, encourage the deployment of digital content, and allow technology to develop unimpeded. This bill is just one step in this process. I am working with colleagues, members of the private sector, and officials from the Executive Branch, to craft careful and effective responses to other such challenges in the intellectual property arenas.
I hope that my colleagues support the ``Protecting Intellectual Rights Against Theft and Expropriation (PIRATE) Act of 2004,'' and I ask unanimous consent that the text of this bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
S. 2237
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Intellectual Rights Against Theft and Expropriation Act of 2004''.
SEC. 2. AUTHORIZATION OF CIVIL COPYRIGHT ENFORCEMENT BY ATTORNEY GENERAL.
(a) IN GENERAL.--Chapter 5 of title 17, United States Code, is amended by inserting after section 506 the following:``§506a. Civil penalties for violations of section 506
``(a) IN GENERAL.--The Attorney General may commence a civil action in the appropriate United States district court against any person who engages in conduct constituting an offense under section 506. Upon proof of such conduct by a preponderance of the evidence, such person shall be subject to a civil penalty under section 504 which shall be in an amount equal to the amount which would be awarded under section 3663(a)(1)(B) of title 18 and restitution to the copyright owner aggrieved by the conduct.
``(b) OTHER REMEDIES.--
``(1) IN GENERAL.--Imposition of a civil penalty under this section does not preclude any other criminal or civil statutory, injunctive, common law or administrative remedy, which is available by law to the United States or any other person;
``(2) OFFSET.--Any restitution received by a copyright owner as a result of a civil action brought under this section shall be offset against any award of damages in a subsequent copyright infringement civil action by that copyright owner for the conduct that gave rise to the civil action brought under this section.''.
(b) DAMAGES AND PROFITS.--Section 504 of title 17, United States Code, is amended--
(1) in subsection (b)--
(A) in the first sentence--
(i) by inserting ``, or the Attorney General in a civil action,'' after ``The copyright owner''; and
[Page: S3190] GPO's PDF <http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2004_record&page=S3190&position=all>
(ii) by striking ``him or her'' and inserting ``the copyright owner''; and
(B) in the second sentence by inserting ``, or the Attorney General in a civil action,'' after ``the copyright owner''; and
(2) in subsection (c)--
(A) in paragraph (1), by inserting ``, or the Attorney General in a civil action,'' after ``the copyright owner''; and
(B) in paragraph (2), by inserting ``, or the Attorney General in a civil action,'' after ``the copyright owner''.
(c) TECHNICAL AND CONFORMING AMENDMENT.--The table of sections for chapter 5 of title 17, United States Code, is amended by inserting after the item relating to section 506 the following:
``506a. Civil penalties for violation of section 506.''.
SEC. 3. AUTHORIZATION OF FUNDING FOR TRAINING AND PILOT PROGRAM.
(a) TRAINING AND PILOT PROGRAM.--Not later than 180 days after enactment of this Act, the Attorney General shall develop a program to ensure effective implementation and use of the authority for civil enforcement of the copyright laws by--
(1) establishing training programs, including practical training and written materials, for qualified personnel from the Department of Justice and United States Attorneys Offices to educate and inform such personnel about--
(A) resource information on intellectual property and the legal framework established both to protect and encourage creative works as well as legitimate uses of information and rights under the first amendment of the United States Constitution;
(B) the technological challenges to protecting digital copyrighted works from online piracy;
(C) guidance on and support for bringing copyright enforcement actions against persons engaging in infringing conduct, including model charging documents and related litigation materials;
(D) strategic issues in copyright enforcement actions, including whether to proceed in a criminal or a civil action;
(E) how to employ and leverage the expertise of technical experts in computer forensics;
(F) the collection and preservation of electronic data in a forensically sound manner for use in court proceedings;
(G) the role of the victim copyright owner in providing relevant information for enforcement actions and in the computation of damages; and
(H) the appropriate use of injunctions, impoundment, forfeiture, and related authorities in copyright law;
(2) designating personnel from at least 4 United States Attorneys Offices to participate in a pilot program designed to implement the civil enforcement authority of the Attorney General under section 506a of title 17, United States Code, as added by this Act; and
(3) reporting to Congress annually on--
(A) the use of the civil enforcement authority of the Attorney General under section 506a of title 17, United States Code, as added by this Act; and
(B) the progress made in implementing the training and pilot programs described under paragraphs (1) and (2) of this subsection.
(b) ANNUAL REPORT.--The report under subsection (a)(3) may be included in the annual performance report of the Department of Justice and shall include--
(1) with respect to civil actions filed under section 506a of title 17, United States Code, as added by this Act--
(A) the number of investigative matters received by the Department of Justice and United States Attorneys Offices;
(B) the number of defendants involved in those matters;
(C) the number of civil actions filed and the number of defendants involved;
(D) the number of civil actions resolved or terminated;
(E) the number of defendants involved in those civil actions;
(F) the disposition of those civil actions, including whether the civil actions were settled, dismissed, or resolved after a trial;
(G) the dollar value of any civil penalty imposed and the amount remitted to any copyright owner; and
(H) other information that the Attorney General may consider relevant to inform Congress on the effective use of the civil enforcement authority;
(2) a description of the training program and the number of personnel who participated in the program; and
(3) the locations of the United States Attorneys Offices designated to participate in the pilot program.
(c) AUTHORIZATION OF APPROPRIATIONS.--There are authorized to be appropriated $2,000,000 for fiscal year 2005 to carry out this section.
Mr. HATCH. Mr. President, I rise to join Senator LEAHY in sponsoring the Protecting Intellectual Rights Against Theft and Expropriation Act--the ``PIRATE Act''--a measure that will provide the Department of Justice with tools to combat the rampant copyright piracy facilitated by peer-to-peer filesharing software.
Let me underscore at the outset that our bill does not expand the scope of the existing powers of the Department of Justice to prosecute persons who infringe copyrights. Instead, our proposal will assist the Department in exercising existing enforcement powers through a civil enforcement mechanism. After considerable study, we have concluded that this is the most appropriate mechanism.
Peer-to-peer file sharing software has created a dilemma for law-enforcement agencies. Millions of otherwise law-abiding American citizens are using this software to create and redistribute infringing copies of popular music, movies, computer games and software.
Some who copy these works do not fully understand the illegality, or perhaps the serious consequences, of their infringing activities. This group of filesharers should not be the focus of federal law-enforcement efforts. Quite frankly, the distributors of most filesharing software have failed to adequately educate the children and young people who use their software about its legal and illegal uses.
A second group of filesharers consists of those who copy and redistribute copyrighted works even though they do know that doing so violates federal law. In many cases, these are college students or young people who think that they will not get caught. Many of these filesharers are engaging in acts that could now subject them to federal criminal prosecution for copyright piracy.
It is critical that we bring the moral force of the government to bear against those who knowingly violate the federal copyrights enshrined in our Constitution. But many of us remain concerned that using criminal law enforcement remedies to act against these infringers could have an overly-harsh effect, perhaps, for example, putting thousands of otherwise law-abiding teenagers and college students in jail and branding them with the lifelong stigma of a felony criminal conviction.
The bill I join Senator LEAHY in sponsoring today will allow the Department of Justice to supplement its existing criminal-enforcement powers through the new civil-enforcement mechanism. As a result, the Department will be able to impose stiff penalties for violating copyrights, but can avoid criminal action when warranted.
In advancing this measure, I must note that I view this civil-enforcement authority as another tool, hopefully a transitional tool at that. In the long run, I believe that we must find better mechanisms to ensure that our most vulnerable citizens--our children--are not being constantly tempted to infringe the copyrights that have made America a world leader in the production of creative works.
Only recently has America faced the specter of widespread copyright-enforcement actions against individual users of copyrighted works. For nearly 200 years, copyright enforcement was rarely directed against the millions of ordinary American citizens who use and enjoy copyrighted works. Instead, creators and distributors of copyrighted content worked together to negotiate the complex licensing agreements and technological protections needed to distribute copyrighted works in ways that accommodated both the expectations of users and the copyrights of artists.
But recently, some unscrupulous corporations may have exploited new technologies and discovered that the narrow scope of civil contributory liability for copyright infringement can be utilized so that ordinary consumers and children become, in effect, ``human shields'' against copyright owners and law enforcement agencies. Unscrupulous corporations could distribute to children and students a ``piracy machine'' designed to tempt them to engage in copyright piracy or pornography distribution.
Unfortuantely, piracy and pornography could then become the cornerstones of a ``business model.'' At first, children and students would be tempted to infringe copyrights or redistribute pornography. Their illicit activities then generate huge advertising revenues for the architects of piracy. Those children and students then become ``human shields'' against enforcement efforts that would disrupt the flow of those revenues. Later, large user-bases and the threat of more piracy would become levers to force American artists to enter licensing agreements in which they pay the architects of piracy to distribute and protect their works on the Internet.
<<< < http://thomas.loc.gov/cgi-bin/query/F?r108:1:./temp/%7Er108C1lJH5:b46624: >
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"Unfortunately, piracy and pornography could then become the cornerstones of a ``business model.'' At first, children and students would be tempted to infringe copyrights or redistribute pornography. Their illicit activities then generate huge advertising revenues for the architects of piracy. Those children and students then become ``human shields'' against enforcement efforts that would disrupt the flow of those revenues. Later, large user-bases and the threat of more piracy would become levers to force American artists to enter licensing agreements in which they pay the architects of piracy to distribute and protect their works on the Internet. "
Wow, he's going after Apple's iTunes? :)
This is a very important issue, which I am only involved from the "consumer" side - I don't produce any creative works, I don't sell my comments or stories or movies for any amount of money. However, I have read many books (severe understatement) and have bought a fair amount of music and video. So, from the perspective of someone that has a public school education:
"Don't these people have better things to do???"
First of all, they are wanting the DoJ to have civil powers for copyright enforcement. This is all well and good, but why would they want to LIMIT the effects of enforcing laws? In their speech, they talk about "avoid(ing) criminal action". Why? If there is criminal activity going on, why would you want to avoid getting convictions and giving people a record? They would have you believe that it is out of the goodness of their hearts, but I suspect there is something more going on... Just the name of the act points me in that direction. (PIRATE? sheesh...)
For me, the most frightening statement is this one: "For too long, Federal prosecutors have been hindered in their pursuit of pirates, by the fact that they were limited to bringing criminal charges with high burdens of proof. "
I was always told that the American system was based on the "innocent until proven guilty" principle. For me, the most important part of that is "proven". That is a limitation that is deliberately imposed on law enforcement, that they can't simply walk up to someone, say "OK, you are carrying around a CD, and I think you are going to give it to someone else to make a copy. Prove me wrong!" If they want to go after someone, the burden of proof isn't that hard... If they have a copy of something (I'll use music CD's as a common example) on their hard drive, and it is shared on a file sharing service, then they have provided a mechanism for infringement. Whether they know about it or not, it has happened, and "ignorance is no excuse". So, why does this suddenly need to be turned into a civil action?
What the main aim of this act seems to be, is to turn the DoJ into the private law office for the RIAA, MPAA, and whatever the booksellers association is called. By turning copyright infringement into something the government goes into prosecuting full time, their current intimidation efforts are made much easier. Notice, of course, that the penalties paid go to the copyright owner... And that the act specifically states that "personnel from at least 4 United States Attorneys Offices " are to be immediately set to working on prosecuting these civil suits.
I will save the copyright discussion for another time - I have been a long term supporter of libraries and video stores, but I also own >400 books and ~100 CDs... What I object to, is that they are seeking to use the DoJ as their enforcement arm, and I don't believe that it is good for the government to be involved in what would essentially amount to a shake-down gang.
John D. Ballentine III
==========
Though I create intellectual property for various companies I have never sold or tried to sell any of my works (other than via salary) so I am also approaching this issue from the sole perspective of a consumer.
In my opinion the complexity of this issue is so great we may not have a really workable solution that's agreeable for the seller and buyer for some time. Copyright law just doesn't work well when you're talking about things that are as basic as the wheel. Some of the silly stuff that's currently being patented (such as 1 click shopping by Amazon) is just insane. When you combine this with the current monopolistic megalomania of some software companies you'll find copyright being the single biggest obstacle to innovation ever invented.
As far as file sharing and works that are under copyright protection I really have to wonder how much damage is being done. Has there ever been a time that kids didn't record material off the radio and share it with friends. I know, I know, digital duplication and the internet takes things to a new level. However the record companies are not posting any great losses that can be proven to spring from file sharing. So why is the FBI knocking down doors over this! That's the thing that really bothers me. Does there need to be controls on the outright dispersal of copyrighted works without any royalty being paid? Certainly, absolutely! It's wrong and it's against the law! But do we need to devote this much law enforcement muscle to an issue that is primarily an icing on the cake profit for record and movie companies that are already so fat they're sick. Not for my tax dollars!! Speeding is also wrong and against the law. It kills thousands each year. A far worse crime than a business (especially a fat one like entertainment) losing a few bucks. I wonder what the reaction would be to having the FBI bust down doors, confiscate cars and fine you $150,000 for each mile over the limit you were going? Especially if they sent out notices saying that they'll forgive you if you cough up a couple of thousand dollars and admit you were wrong and promise to never do it again. Com'on! Talk about wrong and illegal. I think they used to call that extortion.
Copyright is supposed to be a tool to protect the creator of new works and help enhance innovation. this is a misuse of the law to allow many agencies an unprecedented amount of surveillance on what people are doing on the web and with their computers.
James Kimble
Loveland, Ohio
============
Dear Jerry:
I started this, so I guess I better chip in. As you know and Mr. Kimble does not, I've recently begun publishing some of my old articles online, but singly and in thematic bundles of three to six articles. I distributed through Lightning Source, which in turn resells them through Amazon.com, Powells.com, Elibron and other affiliated sites. This is part of that grand experiment I started late last year to see if a freelance writer can make money directly on the internet without setting up a web site and buying expensive DRM software.
Much to everyone's amazement, including my own (Okay, I'm not that amazed ), I can and am. Not much so far, but we are still putting stuff up. I have a pile of registered, previously published work that is more than half a million words, and more than 300 articles. About a hundred are already being distributed, without my permission, through Gale Group, which resells them to libraries around the world (I found them in the National Library of Iran) and Lexis-Nexis, Dialog, Factiva, Ingenta, et al.
So let's do the math for Mr. Kimball's benefit: The minimum price on Amazon is $1.95. It's the usual bookstore to publisher discount, so I get 45% of that or 88 cents. Therefore, I can argue that every time someone got an unauthorized copy that one of those 100 or so articles, I was deprived of that revenue. How much is that? It's been at least five years and there are almost 100,000 libraries in the country alone...and Gale Group also distributes to more than 100 other countries. So lets just say "lots". Plus the money taken by the paid database companies.
And the issue in not simply copyright infringement, it's also false copyright management information with ownership attributed to the publisher rather than me...and it is also Unfair Competition. That latter complaint can be brought in some state courts; everything else is a Federal case. And this is what makes the PIRATE Act so important. Criminal cases involve jail time and restitution, if any, is at the direction and pleasure of the court. The burden of proof is "beyond a reasonable doubt. " A Civil case is decided on "a preponderance of the evidence" and much lower standard of proof. especially since there are three levels of infringement; direct, contributory and vicarious.
It also takes about $100,000 to prep and bring most copyright cases. (And about five times that to defend, which is why so many are settled before trial) Most publishers assume that a freelance writer will ever have that kind of money, so they ignore us when we complain. That's bad advice from a lawyer because it means that they are not acting reasonably; something the courts place great store in.
I tried to get a Federal Criminal Prosecution against one publisher last year. It didn't happen. If the DOJ can bring a civil case, then the matter can be disposed of more easily.
There is more information for writers and those who are just interested on my blof The Fight For Copyright at thefightforcopyright@forwriters.org. Anyone who wants to see how I format and distribute these articles can just buy one (or two, or five or ten or....) on Amazon in the e-bboks section, or at Powells.
Amazon has really long reach. I've been doing this for just six weeks, but my material is now on offer mot just in the USA, but also Japan, Germany, Australia and the United Kingdom. Now that's distribution!
I'm sure that everyone realizes that Amazon can and does compete directly with the the other firms mentioned above. It provides writers access and a level playing field in the marketplace. Giving the DOJ the ability to do civil suits on our behalf as well as for Big Media will Laos level the playing field.
Finally, being able to distribute and sell an article directly to the reader has interesting implications for the traditional model of publishing short nonfiction, or for that matter, fiction. It leads writers to ask the rude question of editors and publishers, "What do we need you guys for?" More on that anon.
Sincerely,
Francis Hamit
====================
Jerry -
In my humble opinion, any discussion of copyright is enlivened by consideration of Spider Robinson's piece "Melancholy Elephant" which -- at least until recently -- could be found at http://www.baen.com/chapters/W200011/0671319744___1.htm
It focuses on the problems associated with ever increasing lengths for copyrights to protect such icons as "The Mouse That Roared" and does not address issues associated with protection of intellectual property distributed in digital format.
Please note that these comments are solely mine, and are not related to my employer in any way.
Charles Brumbelow, CFO Nashville Public Television
END PART ONE September 2004
Begin Part TWO November 2005
Reopening a discussion on the future of copyright and royalties. You can find previous material from about a year ago on the Copyright page, and the new discussions will be copied to there at an appropriate time.
I begin by copying something from above:
NYT on Google Print.
http://www.nytimes.com/2005/11/14/
arts/14conn.html?pagewanted=all
-- Roland Dobbins
A not unreasonable discussion, but leaves out the key question: what right has Google to index my books, serve them up in snippets, and collect advertising revenue which they keep and don't share with the creators of the material they are using to attract eyeballs to their advertising.
Follow with this long item from Dr. Andrew Burt, an SFWA official in charge of anti-piracy matters. The discussion topic on the SFWA closed discussion forum is "Doomsday," and some mean that quite seriously.
Beware the "Universal Internet Library"
by Dr. Andrew Burt, Chair, Copyright Issues Committee, Science Fiction and Fantasy Writers of America, Inc.
There are three levels of "Doomsday Scenario" for the royalty-based method of author payment based on the existence of three factors relating to how we use technology to read books. All but one of these is now in place, with the final nail poised. This means authors and society need to think about other ways to compensate authors at the same amount of income.
The three levels of doomsday would see an estimated 80%, 99%, or 99.99% decrease in royalties paid to authors. (Note: Authors earn their dinner money via royalties -- payments of a few cents per book sold.)
Okay: Necessary pre-conditions for the "Doomsday" scenario (AKA "end of the royalty-based system of paying authors"):
1) It's shown to be okay to loan/rent digital copies of books, instead of having people buy their digital copies. (Check. Google just announced this service.)
Since author royalties are calculated from copies *sold*. Any money you get from rentals is fine, but there's no law that says a place has to pay you for rentals -- they can buy a copy then rent it out and they keep all the rental income. Blockbuster doesn't pay a royalty to Paramount for renting a copy of Wrath of Khan.Libraries loan print books out for free, so there's no law against it. Someplace could loan out digital copies for free, too; no law against it. (It might be a bad business model, but that's never stopped Enron or thousands of other companies from forming and causing problems.)
2) It's shown to be okay to provide access to digital books by the page, rather than by the whole book. (Check. Amazon just announced this service.) Apparently no law against it.
3) People reading mostly digital copies. This is not true today, of course, but digital paper and digital ink are in production. It's only a matter of time.
(If it's not some ebook device -- which seems unlikely since we've had many -- then "no later than" the date when ordinary paper is a digital thing. 5-15 years is my guess.) So, the problem below is NOT a problem today, but COULD BE a problem in the future if we aren't careful. (And let's not say "publishers and Amazon and Google will look out for authors' best interests..." If you believe that, I've got this swamp land... :-)
How these converge to cause a problem:
Key data item: How many books need be sold to meet demand?
Answer: It depends on the demand curve, but in the first week after release a book might sell 20% of all copies it will ever sell.
(That's the high water mark. A slow, steady selling book might hit a peak of 10% of all copies sold in one week, or 5%, or 1%. Those only make this calculation worse, more doomsday-ish, so let's work from the conservative 20% case.)
Let's work with some numbers. Let's say a book released today, in print, call it "Revenge of the Foo", is ultimately going to sell 50,000 copies. It sells 20% of that in the first week, 10,000 copies. In the second week, maybe it sells 8000 copies. 3rd week, 7000 copies. Etc.
Money, the fun stuff: Suppose the author gets $1 in royalties per copy sold. Author earns $50,000 in royalties over the life of the book.
Problem #1: If you rent books for one week (as Google proposes), then the world only needs 10,000 copies of the book to meet the world demand, which is in that first week (or whenever the peak sales week is). In the next week, those copies are checked back in and available for other renters. The rental place doesn't need to *buy* more copies, so the author has been paid for all copies they'll ever be paid for. Everybody else borrows one of those 10,000 copies in some week or other. (Pays the rental company if they're not free, but the author isn't by law entitled to any rental income.)
Thus: If the book only -sells- 10,000 copies instead of 50,000, because reading demand is met via rentals, the author is only guaranteed royalties on 10,000 copies.
That's an 80% reduction in royalties. Author earns $10,000 instead of $50,000. (If the author hasn't locked in other arrangements to get paid via non-royalty means. But I wouldn't count on "rental income" as being one of them.) (And remember, that was assuming the high water mark was at 20% copies needed in one week; a slow, steady seller might peak at 10%, meaning an even worse $5,000 in total royalties to the author.)
Problem #2: Shorter rental periods. There's no law that says a rental period has to be one week. With a digital copy, you could rent it "as long as you have the book reader device open for reading." That could be one hour while someone reads, then it checks it back in when the the screen saver kicks in or when they close the book. Check a copy back out when they open the book.
I ran some numbers using the math called "queuing theory" and calculated
that with lending periods that short,
you could satisfy reading demand of
100 copies with 1 copy.
(Think about it for a second. If one week's maximum demand is 20% of all copies, one day would be around 1/7th of that, which is about 3% [let's call it 5% to err high], and in any one -hour- that's around 1/24th which is .2%, but let's call it 1% to err high.)
Thus: The author only needs to get paid for the sale of 500 books, ever, for them to be loaned out on an hourly basis to meet the peak reading demand in any one hour.
That's a 99% reduction in copies sold (500) and royalties. Author total royalties from sales, ever: $500.
(Again, that's if the author hasn't made other guaranteed payment arrangements that aren't royalty based; but don't peg your hopes on rental income, since they aren't required by law to pay you for rentals.)(Why doesn't this work today? You can borrow from a library, yes, but each library has to buy a copy, and it takes you time and money to get to the library. If your local one doesn't have a copy, you can't easily drive across country to get another. An online library has none of those physical limits: One library can serve the world, no driving time, and it takes like one microsecond to check a book back in. The Internet increases the speed of certain activities from walking/driving speed to "the speed of light." So you can't really have one physical library to meet the world's demands, because of the cost of moving your body to that library; but you -can- with the Internet, because the cost is near zero and it happens almost instantaneously.)
Problem #3: Access by the page. If Amazon can -sell- books by the page, surely Google could -rent- them by the page.
How many copies would Google need to buy to satisfy the world's maximum reading demand?
If there are 300 pages in a book, any *one* page will be rented out for 1/300th the time the whole book is rented out. Let's err high and call it 1/100th, 1%.
It takes, say, one minute to read one page. But I can loan out page 1 of copy#1 to one person, page 2 to someone else, page 3 to a third person. If two people want to read page 1 at the same time, I need to buy two copies of the book.
1% of the number from problem#2 means that means Google could -buy- a mere 5 copies of this book and satisfy the reading needs of the world.
Sounds fishy? Well, really, in any one minute, on the whole planet, how many people -are- reading page 42 of Revenge of the Foo? It's not a giganto best seller, so five people in any one -minute- reading just page -42-, well, 5 probably isn't that far off.
Thus: Number of copies that need be -sold- to meet reading demand? 5. Author total royalty income: $5 instead of $50,000.
What does this all mean? It means that there's a significant chance that royalty income won't be how authors get paid.
This could happen suddenly (DVDs took off in just a year or two), so it means we should all think about how we -would- like to get paid that $50,000 for Revenge of the Foo.
The law doesn't say we have to get paid for rentals, so it'd be a head in the sand thing for authors to say "Oh, I'll be okay, I'll get paid from rentals."
Publishers would get whacked by this too. But (a) they're not the most forward thinking about technology, nor the most rapid to react to changes, so they could get really beaten up by this, which would be bad for authors; and (b) what solutions publishers (or Google, etc.) come up with will be to -their- advantage, and only to authors' advantage to the degree it helps them. (Um, duh. They look out for themselves. Authors are a means to a financial end. Pay authors as little as possible to maximize profits.)
So we should be looking out for -ourselves-.
I don't have the answers. When I first raised this issue among authors a couple years ago, we talked about some possible avenues, like licensing, patronage, lump sum payments, but they all had severe drawbacks.
There was a lot of (I think non-productive) arguing about how it couldn't happen. But, now that preconditions #1 and #2 have been met, and #3 is ever closer, I hope we can spend more time talking about how we'd like to get paid in a changed world, so we're ready for it.
So I throw open the debate floor with this question:
IF ROYALTIES CEASED TO BE A VIABLE PAYMENT MODEL IN THE DIGITAL WORLD DESCRIBED ABOVE, HOW COULD AUTHORS GUARANTEE THE SAME DOLLAR AMOUNT OF COMPENSATION FOR WRITING BOOKS?
==End of Dr. Burt's analysis.
I take this quite seriously. It is not a model of the future: something will be found to compensate writers and artists. But it is a serious threat. Comments invited.
Larry Niven's take is simple: This will lead to the return of patronage, a system that dominated the arts for a thousand years. Patrons have clients. Artists and writers will be reduced to clientage. Again.
Jerry:
Extensive discussion of Holly's situation vis a vie Google Library/Google
Publisher today on her weblog:
http://www.hollylisle.com/writingdiary2/
Jim W
Gives an account (alas in blog style so it's very difficult for me to figure out what happened to start the thread) of Holly Lisle's situation regarding Google. The advertising revenue is being paid apparently but not to the creator of the work. I hate blog style presentations, and I may have the story wrong. I like to see things go from beginning to end...
=====
Dear Jerry,
I was reading today's mail and noticed the statement in Dr. Burt's mail that authors get about $1.00 per book sold. If I'm going to pay $8.00 for a paperback and $24.00 for a hardback, then I would expect the author to get at least 1/2. After all, the rest is just paper. I know that there are editors involved, and I've seen more than one example of a famous author that wrote a book that badly needed editing, but that is a far cry from the fellow that actually creates the work. In any case, it would seem to me that the electronic world provides an opportunity to make more money. Perhaps by subscription. I get to read whatever you write each year for a fee. Perhaps you could do something tricky such as a canary trap where my version has slightly different wording (computer generated of course), then the next guy's. You could track the big leaks.
Of course, how do you compensate an author for a work like the "Mote in God's Eye" that in today's model just sells and sells verses an obscure short story. One thing that comes to mind is fandom. Aurthors and readers join an organization, the "Science Fiction Lovers of America" in your case, let's say. The readers pony up $100.00 a year. The readers get access to all of the member author's works released that year. Then they vote. And the money gets divided up by percentage. Perhaps some of the reader's membership money gets set aside for previous works.
Publishing is obviously about to go through a strategic inflection point. DRM (Digital Rights Management) sucks and should not be allowed to exist. I reference the Sony root kit. I don't know about the non-SciFi world, but it seems to me that most SciFi readers are pretty decent and that we should be able to come up with a good solution without getting the government involved. And if guys like you and Mr. Niven are only getting a buck or two per book, then publishers are not such a good idea ether.
Phil Tharp,
Mountain View
Publishers receive about 50% of the cover price of a book from the distributor. From that they pay the autho 10% (approximately) of the cover price, or 20% of what the publisher received. They pay for editorial costs, production costs, and generally all or part of shipping costs. They also pay for advances to authors that result in no book (authors are unreliable), and for books everyone thought would fly but which sink out of view. They pay for publicity (if any) and for marketing. In theory an author and a publisher make about the same profit on each sale. That I suppose isn't always true, but it's closer than many think.
That's book publishing. In record publishing the studios make much larger profits, and the authors much less, as I understand it.
It may be that authors can make more selling ebooks direct, but no one ever has so far.
====
Subject: Towards a solution on Copyright
Dear Jerry:
The Google scheme to rent copies of books was pitched to publishers, but it is probably a no sale. Traditional distribution models tend to harvest the maximum revenue at each stage of product release, not the minimum. As Eric Frank Russell put it, "One does not flood his own gold mine". There is also a howling false assumption that electronic distribution will supplant print copies entirely. Not so. Electronic means will never match the simplicity and ease of use of a printed book or paper. Even when purchased through electronic distribution, the usual method of actual consumption starts with printing it out. Reading against a light is hard on the eyes. That has been true since the days of microform, which some visionaries also predicted would kill the traditional printed book.
In terms of compensating for the number of actual readers vs copies sold, this is already done in the European Union with the Public Lending Right. It started in the UK but other nations are jumping on this as a way to support lesser known writers. There is a cap on the total amount, so best selling authors don't end up with all the money.
As for shorter forms we see the aggregators and database providers offering online copies of articles, documents, reports, chapters of books and even entire books. They collect money by subscription, but also by sales of single copies. Every article has at least one tracking number and keeping track of what has sold where, under what terms, in no more more complicated than any other online financial transaction.
So we have the means to pay authors. We also have the technology. What we facing is an ideological stance from the so called hacker community that indulges in some very magical thinking rather than the hard realities of the marketplace. Here's a hard truth: Even if you give it away, most of the printed material that can be put online will remain unread. That which actually is read doesn't have to be given away. There is a point at which someone will choose to pay for it.
So what should our pricing model be? Roger Ebert suggested a penny per page for viewing the Web. Overpriced for casual use. On the other hand, I sell old articles at high multiples of that figure, but only to people who feel that they need them enough to pay the price I've set.
The First Sale doctrine applies, by the way, only to physical objects such as books and tapes and only in this country. Electronic copies cannot be rented out legally without the owner's permission. That's because you create a new copy every time you transfer it, whereas the rented book or tape travels from hand to hand and back. Another copy is not made.
Amazon, with its new "Amazon Shorts" program may have a solution that works for everyone. The price point is 49 cents. The author gets 40 percent of that. All the work is previously unpublished and linked with that author's other work also available from Amazon. I like this model a lot better than the vague promise made by Google to share ad dollars that may be attracted to one of their pages. But even that is better than the wholesale theft committed by the publishers who supply the aggregators and database providers, falsely assuring them the rights are properly secured when they are not.
I've come to the conclusion that there will have to be a global conference on copyright to hammer all this out and come up with a system that both compensates authors and allows free commerce in the printed word. What we have now doesn't do either of those things. Compulsory licensing and aggregated micro payments are the answer I think. Everyone gets paid. Everyone pays, but not too much. I learned a long time ago that any business deal has to be fair on all sides to work.
Sincerely.
Francis Hamit
We disagree on the future. I think the paperback book is pretty well doomed by electronic devices that already exist. You have not tried reading on electronic paper which is indistinguishable from actual paper with the exception that it can but need not be backlit; but in fact my TabletPC is as easy to read as any paperback book and I can adjust the font size, not to mention that the author can include cut scenes, illustrations in color, maps, including active maps, all at no additional cost.
Amazon is in active negotiation with both publishers and writers associations. Amazon's active promotion of used books is a great concern, but perhaps something can come of that. Google, although it poses as the good guys, doesn't seem to want to talk to authors or publishers.
I'm not fond of compulsory licensing. It may be that some kind of lending rights as with Europe will be needed. But Dr. Burt's thought experiments need to be kept in mind.
Dear Jerry:
Well, you and I often disagree, so that doesn't bother me. Let me see if I con refine my thinking on that issue. I do not think there is a "one size fits all" model here and it very much depends on the type of content and the intended use. If you are looking up a few facts, then electronic is definitely the way to go. Unless you are making side by side comparisons. Then paper has the edge because you can mark it up and highlight the most important portions. For longer items , just ask yourself how you want to read a novel: hunched over a computer screen or with the book in your lap. Ease of use is always an issue. I used to sell microform equipment to school districts. The big selling point was that you could get millions of pages into a very small space. The big customer objection was that the equipment was hard to use. However, libraries have now become the place where the so celled digital divide is being eliminated. You may recall that during our recent trip back East I posted from a couple of public libraries. Of course that is proactive communication, not passive reading. I know this much; if you have vision problems you may search for sources on a computer, but you will read what you find on paper print outs, even if you don't intend to keep them in an archive. The so called "paperless office" of the 1980s actually increased paper consumption. My own opinion is that while electronic distribution makes a more dynamic and efficient distribution model, paper will remain and essential part of the overall paradigm.
And for all the talk about "multimedia" it is the printed word that predominates on the Web. Technology has once more gotten ahead of the law here, but , as I said, there are ways to treat creators fairly. Amazon, unlike some of the others in the field, seems to realize this and is actively looking for ways to make sure we get paid fairly. Everyone else, from Google to the Creative Commons lobby and the slash.dot crowd just wants to bully us into working for free.
Francis Hamit
=
You have the wrong idea about modern computers. My TabletPC which is hardly the latest generation even of those is already lighter than a hardbound book, has clearer print, is as easy to read, turns pages at the touch of a button, and can sit on my lap, or an airplane tray, or the arm of a chair, or anywhere you can put a hardbound book. And stays open to the page I am on.
And I can mark it with a stylus that looks and acts like a fountain pen.
Peter Glaskowsky recently wrote to say
I dunno, Jerry, it just seems wrong that you're giving so much play to Dr. Andrew Burt when his analysis is no more legitimate than the work of Steven Jones on the WTC collapses, of which you are properly critical.
Honestly, they're both twisting facts to support preconceived conclusions. It isn't right.
Burt's arguments have been raised before, in opposition to the printing press, the Jacquard loom, the assembly line, and every other technological advance. You've dissected these arguments before, so why aren't you doing it now? Are you just too close to this issue to see it clearly?
. png
I invited him to make the opposition case.
From my perspective, the arguments are:
Copyright is a right, but legal protection for copyright is provided in return for public benefits.
One mechanism for delivering public benefits is "fair use," a limited public privilege to make certain uses of copyrighted material.
My idea of "fair use" is pretty much the same as the common understanding-- using one work to create new original works such as criticism and parody.
I think cataloging is also a fair use. A public catalog of copyrighted works delivers a substantial public benefit.
Google Print is a public catalog combined with a publishing service. We can treat these as functionally independent for the purposes of this discussion. The publishing service is meant to apply only to books that Google knows or reasonably believes to be in the public domain.
Google's definition of "public domain" specifically excludes books published since 1922. Google will only publish these works with the permission of the copyright owner or authorized agent.
It's pretty clear from the case of Holly Lisle and some others that Google hasn't been completely effective at identifying the correct agents. That problem can be solved. Once it is, I think the publishing side of Google Print will be okay.
So back to the catalog service. Even if we stipulate that cataloging per se is a fair use of copyrighted material, we have to know that the cataloging service isn't some kind of back door for publishing copyrighted material. I gather this is your primary concern, and I think the reason I'm not concerned is that I don't see any reason to believe Google is trying to create a back door like this.
First-- Google is claiming this is fair use, and there's a vast amount of case law that limits this sort of claim. If Google goes too far, it will be easy to see, and easy to stop.
Second-- the same technology that would potentially allow someone to reconstruct copyrighted materials from Google's "snippets" can be used to prevent such a reconstruction. It's trivially easy to apply rules that would reduce the exposure of the document below the levels necessary to allow reconstruction.
For example, Google can limit how much of a book can be used to generate snippets. It can also keep track of how much of a book HAS been used to generate snippets, and how many snippets a particular user can get from any book. In fact, Google's own descriptions of Google Print suggest it will do all of these things. This is why you must log in to see more than a very small portion of any book.
But again, if Google's protections turn out to be inadequate, this fact will quickly become apparent, and Google will very quickly be compelled to impose stronger protections. Since the same policies are being applied by the publishing side of Google Print to some copyrighted books under the terms of agreements between Google and publishers, Google's contractual obligations are essentially the same as its obligations under the fair use clause. Even if you doubt Google's commitment to fair use, you have to believe it's committed to these revenue-generating contracts.
Finally, I can also dispense with the direct-infringement argument, which claims Google is not entitled to copy documents by scanning them into its computers even if its cataloging and publishing services are legitimate.
But we all generally accept that copying for purposes of fair use is protected AS a fair use. I mentioned the case of ripping CDs into MP3 files, which is a requirement for listening to CDs on an MP3 player. The legality of this practice hasn't been adjudicated, but the Supreme Court's 1984 ruling that individuals may copy TV shows onto video tape for later viewing is basically the same thing.
Peter Glaskowsky
They intend to create a revenue stream by using their indices of other people's material. They are not even willing to discuss sharing that revenue.
Go back to Eric's thought experiment. (Eris Pobirs came up with this one: They create a set of snippets of the best of Star Trek, or my favorite Stargate Scenes. Any one of those snippets is "fair use". Now they publish that, either as a DVD for sale, or on line with advertising.) Is this fair? It is certainly beyond the intent of those who framed the fair use doctrine, and I can say that with some authority, having been involved in the SFWA negotiations with Congress on the 1976 Copyright Revision.
You have more confidence in Google's bona fides than I do. So far they have not been willing even to speak with SFWA, the Authors Guild, or the Publishers Association.
==
Subject: A single point against Peter Glaskowsky's analysis
In all the points Peter raises, he does not discuss the effect of the Web on ease of *distribution* & *collection*, both of which require attention.
In fair use, as contemplated pre-Web, there was no mechanism that had capabilities within orders of magnitude of the Web that were available to the common citizen. So fair use must be curtailed in using such a distribution medium for copies.
Also, re the Google Snippets issue, what about BitTorrent? It's MADE to stream little bits of a file from many hosts to retrieve a finished product (also to increase throughput, but that's irrelevant here). All that would be needed was a community to desire a document, and to each stream a snippet until the entire work is retrieved, then put all the snippets under a particular BitTorrent name, no?
If I can think of this (and I'm no genius), why hasn't it been addressed by Google et al?
Cheers, and Good Luck in this fight!
Doug Hayden
=
Subject: Fair Use often isn't fair
Dear Jerry:
The Copyright Act and case law such as "American Geophysical Union v. Texaco" and Lowry Reports x. Legg Mason" defines Fair Use as a very limited taking. One copy for personal use. Commercial users are presumed to seek at least an indirect commercial advantage. In "Texaco" it was the creation of an archive of articles for future use and in "Legg Mason" it was the avoidance of additional subscription fees. That kind of copying is theft, plain and simple. Avoiding a payment is the same thing as stealing another copy. That was the basis of the decision in "NY Times v. Tasini". There are safe harbors for non profit libraries and archives and educational institutions in the law. For public, not private, good.
One of the points we are making in my cases is that while the library, as a public institution, may have a fair use of an article in an electronic database, the for profit firm that provided it as part of a larger subscription does not. They make money from other people's work and should pay them for that use. The issue of "commercial advantage" weighs in the Google case because they get that from selling advertising spots. I'm a Google Print Partner and they have promised to share ad revenues with me from those pages generated by my articles. I also have hopes that the ability to sample the products will increase sales. But all of that was a business decision on my part, made as part of my continuing experiment to determine whether or not electronic publishing works for authors. The deal was not forced upon me but freely chosen.
Electronic distribution holds great promise for creating new opportunities for writers through a process of disintermediation. As someone who is starting a new phase of my career, I've become very aware of the Gatekeeper problem. There is a variation of the Pareto principle here where a small portion of the material submitted is actually something that is seen as a commercially viable product. It would be hard to imagine a play where the actors had to whisper their words to someone before being allowed to speak them to the audience, but that is the situation with most forms of writing. Plays are collaborative works and require the effort and imput of other creators to be realized successfully. To a smaller extent that is also true of written text, which is bought, and then edited to fit into the overall collective work. As with the play, you have to buy the entire production, not just a part.
Electronic distribution does allow distribution of the parts rather than the whole and is eliminates most of the gatekeepers. There is a long standing prejudice against all kinds of self publishing as unmediated acts of ego on the part of the author. This may gradually fall away simply because a successful literary product need no longer be a mass market product and electronic publishing provides a much quicker time to market. The Gatekeepers, such as editors and publishers, cannot help but impose their own visions on work submitted to them. Personal tastes, prejudices, and commercial considerations all play into their decision making processes. Often to the determent of the work in question. Electronic publishing has the potential to provide a more direct relationship between the author and the reader; something unfiltered. (This cannot be taken as an excuse for mechanical sloppiness. Errors in spelling, grammar, and layout distract rather than enhance the reader's appreciation and become the responsibility of the author. But, in recent years these tasks have been pushed back on authors anyway. Mechanically perfect copy is now the expectation of publishers and anything less is likely to be rejected without regard for the merits of the work itself).
Electronic distribution is an efficient way to find niche markets, and as you can see on Chris Anderson's "The Long Tail" web site, the size of such markets equal or exceed those of the old mass market theory of selling. The question then becomes what do traditional gatekeepers bring to the sale of new work? Well, they have the brand. They have the promotional machinery. They have the financial power to support long term projects. Most of that is beyond the resources of almost every author. The current situation is unhealthy. The largest publishers have been convinced by literary agents to delegate initial choice of new work to them. They will accept submissions from no other source. The agents are interested in only what will generate commissions. They are particular. They will handle novels but not nonfiction or vice versa, but never stage plays, short stories or genres they have no liking for. These decisions are based upon where they think the money is. And the process can grind on for years, since each demands an exclusive look and declines to compete for business. Why should they when the sheer number of submissions is overwhelming?
Amazon has taken several new approaches to the problem. (Full disclosure here: I'm a stockholder and also a used book dealer through them as well as a content provider). One is to beef up the catalog of electronic documents. Amazon shorts are original electronic documents which have a promotional aspect. You have to be already published and in their system to participate. They link between your products. These guys sell books. They don't have any kind of cultural agenda beyond satisfying customer demand. They've pretty much taken over the used book market with Amazon Marketplace, which recycles used, out of print books much more than new ones. They also now publish books through Booksurge, the Print on Demand firm they bought earlier this year. Print On Demand solves many problems for niche titles. The books never go "out of print" since they are produced one at a time , as purchased. There are no inventories and therefore no remainders of stock sold cheaply without author royalties. This adds efficiencies to the system. Not that any of this will replace the "Best Seller" mentality that dominates traditional publishing, but it will provide more opportunities for authors and more choices for consumers.
Copyright law has to be adjusted to make sure authors are fairly compensated for all uses of their work. Fair Use exists so far because the payments involved are too small to sue over. A version of the Public Lending Right here would be a more fair solution. Heck, you might even be able to make a decent living as a writer based on the merits of what you produce.
Sincerely,
Francis Hamit