News Column

Digital Parasites: A Threat to America's Culture Business?

Oct. 28, 2011

Scott Gargan

tech questions

As a music journalist working for Rolling Stone in the mid-1990s, Robert Levine marveled at how a file-sharing network developed by a 19-year-old hacker might loosen the eternal stranglehold of major record companies over the music industry.

Napster, a program that allowed users to exchange MP3 files stored on their own computer hard-drives, could end the monopoly Warner, Universal and other corporate behemoths had on music distribution. Artists could take control of their own careers and negotiate better deals.

But as Levine observed over time, it wasn't working out that way. "I thought we would go through a tough transition period, and then we would figure out how artists were going to get paid," Levine, a Stamford native, recalled.

Instead, Napster, backed by powerful venture capitalists, continued to let users download copyrighted music for free. The company grew its user base, while artists and record companies lost out.

But as Levine reveals in his new book, "Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back" (Doubleday), Napster wasn't (and still isn't) the only Internet company that profited from content it didn't create.

YouTube garnered millions of hits by turning a blind eye to uploaded clips that violated copyright law; the Pirate Bay website made money by illegally offering major label records; and the Huffington Post became one of the most popular news sites by rewriting or linking to other news sources.

In his book, Levine lays out a comprehensive analysis of the fallout of what he calls "free ride": an economic dystopia in which the culture industry, beset by rampant piracy and ubiquitous free content, is forced to make cutbacks to their staffs, scale back investments in quality art and settle for online distribution deals that don't cover costs. The horrifying consequence? Companies pull the plug on shows like "Madmen" and other media.

"Let's say you have a guy holding the back door of a movie theater open and selling tickets for $5 instead of $10," said Levine, a graduate of Westhill High School and former executive editor of Billboard Magazine. "You can talk for days about the legal implications of his actions. But in the end, everyone recognizes it as unfair."

But as Levine points out, fairness hasn't always informed the law. Take the 1996 Digital Millennium Copyright Act. While the law solidified copyright protection, it limited the liability of online companies for copyright infringement by their users. What that means today is that sites like YouTube don't have to screen all the videos uploaded to its site for copyright infringement. (Viacom has sued Google, the owner of the video-sharing website, over the issue.)

Other companies, such as Napster, have been effectively shut down by the courts over similar offenses. (Napster was later relaunched as an online music store and is now owned by Best Buy.)

According to Levine, so-called free culture activists such as Lawrence Lessig frame the free information versus fee information debate as evil companies (who want to charge) against regular people (who don't want to pay). However, "that whole story -- it's not based in reality," Levine said.

"The first commandment of journalism is to follow the money," he said. And when Levine did that, he found that many of the academics and activists pushing for free information were being funded by the very technology companies that benefit from it -- most notably, Google.

Not surprisingly, Levine, 40, has been derided as a Luddite by some tech bloggers. But as the author contends, it's far from the case -- he simply believes that content creators, and the businesses that invest in them, deserve to be compensated for the music, films, books, TV shows and news stories they produce.

To that end, Levine offers several solutions, including a reform of copyright law and the institution of modest regulations. Whether or not they can pass in the divisive political climate is another story.

"Ask the RIAA (Recording Industry Association of America), and they will say any copyright infringement will be punished," Levine said. "Ask Google, and they will say nothing should be punished. Neither are good solutions for society." A likely compromise will be an agreement that "makes people happier than they are now and less happier than they would like to be," Levine said.

However, when it comes down to it, Levine's first book isn't really about profits, policy or legal debates; it's about preserving the ambition and ingenuity of the country's content creators. After all, if it wasn't for them, where would YouTube, Huffington Post or Google Books be now?

"If someone wants to work on a book destroying mine, that's great," Levine said. "The point is that those authors need the money to do the actual reporting. You can't do that without the right investment."

Source: (c) 2011 the Connecticut Post (Bridgeport, Conn.)

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