Thank you all for your comments, here and via email. The most surprising thing about the discourse this week is how many people do not understand what they are buying when they purchase a CD or a download. Let’s review:
When you purchase a digital file of copyrighted, recorded music (for example: a song, spoken word recording, soundtrack, etc.) from a licensed retailer (like iTunes) or, you purchase a Compact Disc or a DVD or a phonograph record or a cassette or any other means of storage, you are not purchasing the content — you are paying for the physical media (if there is any) and the right to listen to the track with your family and close circle of friends in a non-commercial environment. This usually means your house, your car, your personal media device and other personal spaces. You have not purchased any other rights, you don’t own the music nor do you have any other rights to use the content for anything else.
Surprised? You shouldn’t be. I’m sure you’ve noticed the FBI warning at the beginning of most DVDs. Did you ever read it? Perhaps you should.
I’m not a lawyer, but the legal concept we are discussing is called “Fair Use.” This is what they say about it on www.copyright.gov
Section 107 contains a list of the various purposes for which the reproduction of a particular work may be considered “fair,” such as criticism, comment, news reporting, teaching, scholarship, and research. Section 107 also sets out four factors to be considered in determining whether or not a particular use is fair:
1. the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work. The distinction between “fair use” and infringement may be unclear and not easily defined. There is no specific number of words, lines, or notes that may safely be taken without permission. Acknowledging the source of the copyrighted material does not substitute for obtaining permission.
In practice, consumers are prohibited from using personal copies of music in places of business, commercial enterprises of any description and any place where money is being made by using the music to create a commercial environment.
What this means in practice is that if you own a restaurant, you cannot play music from your personal collection to create a “dining experience” without paying additional royalties (known as public performance royalties) to the copyright owners.
Remember when ASCAP (The American Society of Composers, Authors & Publishers) sued the Girl Scouts of America because they were singing copyrighted songs around the campfire? I’m not making this up. The lawsuit may sound absurd to you, but think about it from the composer’s point of view. These songs create a “camp-like” environment. They are part of the summer camp experience. The camp charges the girls money to attend. Shouldn’t the composer who’s work is being used as part of the camp’s consumer value proposition be compensated participating in creating the experience? The short answer is, yes. If you use copyrighted intellectual property to make money from the public, you have to share your profits with the copyright holders. That’s what the “public” in public performance royalties stands for.
And, if you’ve followed the issues we’ve been discussing up to now, you will probably have already guessed that they could not play CDs of the songs at the camp without paying the same exact royalties for public performance.
The restrictions carryover to the use of music on videos or as part of stage plays, podcasts or radio broadcasts. Again, in practice, these rights violations are very hard to police and are rarely the subjects of lawsuits. The notable exceptions are when there’s a YouTube or other large organization around who’s worth suing.
As I said last week, we need to make it easier for people to understand what rights are needed and we really need to “commerce-enable” the process. The baby-steps are technologically trivial. Sadly, the larger “business rules” issues have proven practically unsolvable. Anybody up for building a B2B database business with some APIs to help out the music industry? Drop me a line, I’ll send you the topdown design. 