Why New Business Models Struggle to Serve the Old Copyright
New models suffer a dire need to improve, while at the same time remaining bound to old laws born of a geriatric business model. Mike Masnick explained new business models which make proper use of the technological innovation of media distribution are prevented from being used my new business models that would harness these improvements due to a small section of the Copyright Act of 1976.
Apparently, the law demands that royalty rates paid by any such business model which makes use of innovative technology be set at such unreasonably high rates that it prevents such models from developing into a profitable solution to broken business models. A great example given is the exorbitant rates that Pandora and other such services must be in order to operate within the confines of US copyright law.
This is quite the shame for innovative business models as they have been pushed into one of three basic groups that exists within the content distribution industry of the digital age.
- Innovative Business Models
- These models rely on new improvements in broadcasting technology. The most useful and obvious innovation currently being the use of internet. As reasonable, cost effective, convenient, efficient, environmentally friendly, economy boosting, job creating, and otherwise beneficial these new models may be, they are bound to broken copyright law and thus never given an opportunity to succeed or fail in the free market. By law, they fail to become profitable before they begin.
- Dead Business Model
- The days when tangible media, such as CDs, being sold as a product and a primary means of accessing copyrighted material are little more than the pages of expired calendars. Meanwhile, in the age of iPods, radio probably isn’t the most popular medium for accessing music. RIAA, for example, has revenue spinning out of control to the point where their organization is attempting to survive by charging greater fees to new business models and proposing that the feds legislate bills that would demand greater fees from all current and future broadcasters. All without ever producing anything new or of greater value than what they currently have to offer, which isn’t much to begin with. tl;dr version: They want everybody else to pay them in exchange for nothing.
- The People’s Free Distribution
- The only thriving model of distributing content subject to copyright. It’s called file-sharing. It has smashed the old model and none of the new models can touch it because they are bound to the outdated laws of the old model. At the rate they are going, both the old models and new models will fail entirely because neither can afford to operate at a loss. Meanwhile, file-sharing uses shared, community resources and is not generally concerned with turning a profit. It could very well become the only viable solution to the distribution of copyrighted content.
Masnick’s article is a stellar example of why copyright law which was drafted poorly for the sake of the old business model prevents new business models from offering legitimate competition with the undefeated champion that is internet piracy.
Remember, nobody is competing with the old model anymore. It’s quite obviously dead and merely lingering around like a bad fart. New business models exist to compete with free, community driven file-sharing. It’s not that they are unable to offer services that are worth paying for compared to what is already available for free. They most certainly offer valued services that many would prefer to pay for. Unfortunately, they have to pay the expensive medical costs of keeping grandpa RIAA on life support or else getting written out of his will entirely.
The rest of us who have no vested interest in the success of copyright have no need for concern. We can sit back, eat popcorn and read/write/copy CC licensed blog posts while ignoring whatever the hell Bieber is doing. Is Bieber still relevant? Just replace that with some other reference to a pop artist of the minute and pretend that it makes any sort of difference.