The Ironic History of Media Piracy

Some consider it ironic that the same institutions that are viciously persecuting file-sharing today have a record of not taking intellectual property too seriously themselves and of aggressively attacking new technologies in fear of change.

Others find it just sad how these change-averse incumbent conglomerates are increasingly being supported by legislature like the DMCA and the ever-extended copyright law!

The Phonograph

When Thomas Edison invented the phonographic record player, musicians branded him a pirate out to steal their work and destroy the live music business, until a system was established so everyone could be paid royalties.

The composers (and publishers) were none too happy about this capacity to pirate. The innovators who developed the technology to record other people’s works were “sponging upon the toil, the work, the talent, and genius of American composers,” and the “music publishing industry” was thereby “at the complete mercy of this one pirate.”

The innovators who developed the player piano argued that “it is perfectly demonstrable that the introduction of automatic music players has not deprived any composer of anything he had before their introduction.” Rather, the machines increased the sales of sheet music. In any case, the innovators argued, the job of Congress was “to consider first the interest of [the public], whom they represent, and whose servants they are.” “All talk about `theft,” the general counsel of the American Graphophone Company wrote, “is the merest claptrap, for there exists no property in ideas musical, literary or artistic, except as defined by statute.”

Movies

Since the 1890s, Thomas Edison owned most of the major American patents relating to motion picture cameras.

A January 1909 deadline was set for all companies to comply with the license. By February, unlicensed outlaws, who referred to themselves as independents protested the trust and carried on business without submitting to the Edison monopoly. In the summer of 1909 the independent movement was in full-swing, with producers and theater owners using illegal equipment and imported film stock to create their own underground market.

With the country experiencing a tremendous expansion in the number of nickelodeons, the Patents Company reacted to the independent movement by forming a strong-arm subsidiary known as the General Film Company to block the entry of non-licensed independents. With coercive tactics that have become legendary, General Film confiscated unlicensed equipment, discontinued product supply to theaters which showed unlicensed films, and effectively monopolized distribution with the acquisition of all U.S. film exchanges, except for the one owned by the independent William Fox (founder of the Fox Film Corporation) who defied the Trust even after his license was revoked.

Many independent filmmakers responded by moving their operations to Hollywood, whose distance from Edison’s home base of New Jersey made it more difficult for the MPPC to enforce its patents.

Radio

  • AM Radio – Though sound quality and reception on the radio cannot rival the quality of discs at this time, the record companies rush to draw up contracts to forbid major artists from working in the rival medium. These efforts to limit the output of radio are thwarted as improvements in radio technology rapidly refine sound quality and reception. Record sales plummet as a result.
  • FM Radio – The invention of FM Radio threatens RCA’s hold on the AM radio market, and the company fights back by launching a campaign to smother FM radio. RCA’s first attempts at persuading the Federal Communications Commission (FCC) to limit FM radio capabilities fail, but as the nation becomes distracted by World War II, the company succeeds. The FCC announces that FM radio would be moved to a new spectrum and the transmittal power of FM stations would be cut. These regulations effectively cripple the emerging FM market and the inventor appeals. RCA declares his patents invalid and refuses to pay him.

Cable TV

When cable entrepreneurs first started wiring communities with cable television in 1948, most refused to pay broadcasters for the content that they echoed to their customers. Even when the cable companies started selling access to television broadcasts, they refused to pay for what they sold.

Broadcasters and copyright owners were quick to attack this theft. The practice was viewed as a kind of “unfair and potentially destructive competition.” There may have been a “public interest” in spreading the reach of cable TV, but “Does public interest dictate that you use somebody else’s property?”

Again, the demand of the copyright holders seemed reasonable enough:

All we are asking for is a very simple thing, that people who now take our property for nothing pay for it. We are trying to stop piracy and I don’t think there is any lesser word to describe it. I think there are harsher words which would fit it.

These were “free-ride[rs],” Screen Actor’s Guild president Charlton Heston said, who were “depriving actors of compensation.”

But again, there was another side to the debate:

Our point here is that unlike the problem of whether you have any copyright protection at all, the problem here is whether copyright holders who are already compensated, who already have a monopoly, should be permitted to extend that monopoly. . . . The question here is how much compensation they should have and how far back they should carry their right to compensation.

Copyright owners took the cable companies to court. Twice the Supreme Court held that the cable companies owed the copyright owners nothing.

Audio Cassette

Most cassettes were sold blank and used for recording (dubbing) the owner’s records (as backup or to make mixtape compilations), their friends’ records or music from the radio. This practice was condemned by the music industry with such slogans as “Home Taping Is Killing Music”.

Various legal cases arose surrounding the dubbing of cassettes. In the UK, in the case of CBS Songs v. Amstrad (1988), the House of Lords found in favor of Amstrad that producing equipment that facilitated the dubbing of cassettes did not constitute the infringement of copyright.
In a similar case, a shop owner who rented cassettes and sold blank tapes was not liable for copyright infringement even though it was clear that his customers were likely dubbing them at home. In both cases, the courts held that manufacturers and retailers could not be held accountable for the actions of consumers.

In 1971 the U.S. Congress declares sound recordings worthy of copyright protection. Though this amendment is proposed largely in response to the record industry’s complaints of vinyl bootlegging, it is applied to the burgeoning recordable cassette market. Record executives complain that teenagers tape and swap their favorite albums, and advocate a tax on blank cassettes to make up for the lost revenue from tape trading. With music sales still growing, the objections to taping are largely unheard.

By the late 1970s, music sales slide, and the record companies begin an industry-wide campaign to curb home taping. The RIAA continues its fight for taxes on blank tapes into the 1980s and legislators eventually grant the music labels a portion of every blank tape sale.

Digital Audio Tape (DAT)

From the outset, the RIAA argues for a device to be placed within the DAT recorder to prohibit duplication. Even after the device, called a “serial copy management system,” is included on every DAT recorder exported to the U.S., publishers and composers argue for royalties on each DAT machine or tape sold in order to compensate for possible home taping. The continuing debate slackens record industry support for the format. As record labels begin to see the DAT as not viable, they choose not to market or produce pre-recorded DATs. In the absence of pre-recorded tape, the consumer will not buy the recorder. Without recorder sales, there’s no market for pre-recorded tape. The DAT does not break into the consumer market.

VCR

In 1976 Universal Studios and Walt Disney Company sued Sony and its distributors, alleging that because Sony was manufacturing the Betamax, a device that could potentially be used for copyright infringement, they were thus liable for any infringement that was committed by its purchasers.

The Supreme Court of the United States ruled that the making of individual copies of complete television shows for purposes of time-shifting does not constitute copyright infringement, but is fair use. The Court also ruled that the manufacturers of home video recording devices, such as Betamax or other VCRs cannot be liable for infringement.

Time Shifting

Jamie Kellner, Chairman and CEO of AOL-TimeWarner, had some harsh words for those PVR users who skip commercials:

“[Skipping commercials is] theft. Your contract with the network when you get the show is you’re going to watch the spots. Otherwise you couldn’t get the show on an ad-supported basis. Any time you skip a commercial . . . you’re actually stealing the programming.”

Mr. Kellner added that “there’s a certain amount of tolerance for bathroom breaks.” He added, however, that “if you formalize it and you create a device that skips second increments, you’ve got that only for one reason, unless you go to the bathroom for 30 seconds. They’ve done that just to make it easy for someone to skip a commercial.”

In October 2001, numerous TV companies, including the three major networks, filed a lawsuit against Sonicblue, which at the time marketed the ReplayTV device. The main culprit, the ReplayTV 4000 series, was part of an “unlawful scheme” that “attacks the fundamental economic underpinnings of free television and basic nonbroadcast services” according to the lawsuit.

The TV industry attacked ReplayTV for two reasons:

  1. The machines enabled people to record television programs and then watch them without commercials via the “AutoSkip” feature
  2. The machines allowed users to share programs they’ve recorded with others via the “Send Show” feature, which transmits digital copies of shows over the Internet to other ReplayTV owners

SonicBlue filed for bankruptcy before a verdict was reached.

Digital Radio

  • On March 2, 2007 the Copyright Royalty Board (CRB), which oversees sound recording royalties paid by Internet radio services, increased Internet radio’s royalty burden between 300 and 1200 percent. At the request of the RIAA, the CRB ignored the fact that Internet radio royalties were already double what satellite radio pays, and multiplied the royalties even further.
  • A group of record labels including the four majors and a group of music publishers recently filed lawsuits against XM Satellite Radio. Both lawsuits allege that XM violated copyrights by marketing the Inno – a portable satellite radio with a built-in digital recorder. The Inno allows users to record upto 50 hours of music from satellite radio broadcasts, disaggregate the recordings, and listen to them in whatever order they like.

Digital music

  • In 1993 Frank Music Corp. files a suit against the online service CompuServe. The suit argues that CompuServe’s music forum allows users to download music files without the consent of the copyright owners. The suit is settled in 1995, when CompuServe pays the Harry Fox Agency more than $600 per song allegedly infringed.
  • In 1998, the RIAA files against the Rio MP3 player manufacturer, Diamond Multimedia, stating that the MP3 player does not contain the prohibitive device required by the Act of 1992 and therefore cannot be distributed.
  • In 2000, A&M records and several other recording companies sued Napster for contributory and vicarious copyright infringement under the DMCA.
    Napster lost the case in the District Court and appealed to the U.S. Court of Appeals for the Ninth Circuit. Although the Ninth Circuit found that Napster was capable of commercially significant non-infringing uses, it affirmed the District Court’s decision.
  • The lawsuit against Grokster and Streamcast was filed in 2005 by MGM studios, along with 28 of the largest entertainment companies. When the case reached the Supreme Court, the court reasoned that Grokster and Streamcast were liable because they had distributed software with the intent that it be used for infringement. The court based this inference on internal communications of the companies and the fact that they did not work to develop software that would filter for infringing uses. By focusing on the intent of the technology provider rather than the designed use of the device, the Grokster court side-stepped the Sony doctrine of substantial non-infringing use.
  • In February, Warner Bros, MGM, EMI, Colombia Pictures, 20th Century Fox, Sony BMG and Universal sued four contributors to the torrent tracker “The Pirate Bay” in Sweden for facilitating piracy as well as conspiracy to break Swedish copyright law.
    In April, the court found the “organized team” of defendants guilty of commercially helping users commit copyright violations “by providing a website with … sophisticated search functions, simple download and storage capabilities, and through the tracker linked to the website.”

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