The elephant in the room of the recording industry trampled the entire business. A decade ago, no record company wanted to address Napster as anything but a criminal enterprise, and that obvious shortsightedness has plagued them ever since.
While they try to come to grips with the aftermath of their missteps, the same elephant now lurks in the boardrooms of companies that produce television and films.
Despite the scrambling of these companies to prove that they’re hip to what consumers want by offering shows online and on demand, the fact remains that, as technology improves, it will only get easier for consumers to obtain their products through the same kind of file sharing that wrecked the record business.
Though the unraveling of the record industry may not have been a totally bad thing for music as an art form, it could have much more dire effects on visual media due to inherently higher production costs. The Internet has allowed musicians to write, record, and produce work without the costly physical distribution that big record companies thrive on.
But big-budget TV and film carry with them the costs of writers, actors, directors, set designers, and a host of other personnel and infrastructure that are necessary for a great visual production. If the same problems that the record industry encountered with file-sharing technology are inevitable for television and film, then the question changes a bit.
The music industry fell short, asking, “How do we profit from this?” But the television and film industries really need to answer the question of “How do we pay for this?”
Fortunately for television and film, they can look to the mistakes and evolution of music for a guide. However, as more people are fast-forwarding commercials on their DVRs and downloading series through torrent sites, they need to make some decisions rather quickly to support their businesses and avoid the same fate.
There are two very serious questions here. The first is how to develop a business model to compensate those involved with the production. The second is how to reform and evolve copyright law to make sense in the digital age.
The issue of a legitimate compensation model is no easy question. Models that rely on downloading from a single source, like iTunes or eMusic, seem to be fighting the tide of technology, in which peer-to-peer file sharing is clearly dominant.
One possibility, advanced by the Electronic Frontier Foundation (www.eff.org), is a “voluntary collective license,” in which ISPs, institutions, and individuals would pay a small amount per user each month to have unlimited access to copyrighted material through licensed P2P networks.
The alternative is government regulation in the form of a tax on technologies that provide access to this media (computers, iPods, ISPs, etc.). In either case, the money is pooled and paid out to artists or organizations based on how often they are downloaded.
Both of these models resemble the outcome of a dispute that record companies had with radio stations decades ago that resulted in the creation of ASCAP and BMI.
Record companies wanted to know how they could get paid for the broadcast of their songs in markets all over the country, and before lawsuits could swallow the whole industry, these publishing houses were created to collect license fees from radio stations.
Then they pooled the fees to pay out record labels for the use of their music. Though these institutions are far from perfect, at least they hint towards a sensible business model for Internet media in an era when none yet exists.