Georgetown Journal of International Affairs, Volume 1, Number 2, Summer/Fall 2000

CIAO DATE: 05/02

Georgetown Journal of International Affairs

Volume 1, Number 2, Summer/Fall 2000

Privatizing Culture
Matt Jackson^*

In late 1998, Don Biesinger, owner and manager of Sunrise Family Video in American Fork, Utah, offered his customers the opportunity to own copies of the blockbuster film Titanic that did not offend their moral values. Biesinger did not sell or rent any Titanic videos, but for five dollars customers could have three minutes of objectionable content removed from their copy of Titanic. Paramount Pictures, claiming copyright infringement, threatened legal action against Biesinger. When asked to explain his actions, Biesinger stated: “The studios have too much power over what people can and cannot see, and that’s why we’re doing what we’re doing at this time.” Under current law, Paramount’s claim of copyright infringement was questionable at best. But as copyright law changes, it may well become easier for Paramount to exert complete control over the content of its films and prevent Biesinger from providing this legitimate service to his customers. Such control threatens to privatize and commercialize culture, and to inhibit free speech.

The global march of capitalism over the past decade has fueled two trends that are dramatically influencing culture throughout the world: media industry consolidation and the expansion of copyright law. As a result of liberalization, deregulation, and privatization, media and entertainment companies increasingly are merging with one another to form huge conglomerates. Many commentators view this consolidation as a major threat to free speech and cultural autonomy. A bigger threat, however, lies in the expansion of copyright, which places more power in the hands of copyright holders at the expense of the public. The copyright industries, whose products include films, television programs, music, and computer software, wield enormous economic, political, and cultural influence. Their power is especially felt in industrial nations like the United States where copyright products constitute a large share of the economy and are a significant source of exports. As new technologies lower the barriers to communication, copyright will pose a greater threat to free speech and community than media consolidation.

Media Mega–Mergers

Media consolidation has taken place at an extraordinary pace in recent years. Time Warner, the largest “traditional” media conglomerate, is set to merge with America Online (AOL), the largest Internet Service Provider, creating a media behemoth with almost $32 billion in annual revenues. Its assets will include properties as diverse as CNN, New Line Cinema, Warner Brothers films and music, Atlantic and Elektra Records, the Book of the Month Club, Fortune, Time, People, Sports Illustrated, Netscape, and ICQ software. The pending merger between Viacom and CBS will create the third largest entertainment company, with annual revenues of $19 billion. Further examples include the takeover of Random House by Germany’s Bertelsmann and the merger of Deutsche Telekom with Debis.

Consolidation is also occurring within specific segments of the media industry. Prior to the Telecommunications Act of 1996, individual owners were limited to twenty AM and twenty FM radio stations. The 1996 act removed all national ownership limits for radio, resulting in a 12 percent decline in the number of owners. In the most recent merger announced in October 1999, one company, Clear Channel Communications, will control 830 radio stations. The 1996 act also raised the number of stations that could be controlled by one entity in a single market to eight stations in the largest markets. Since the act was passed, the number of local owners of radio stations has, on average, dropped by 20 percent.

Ownership of cable systems and television stations is also being consolidated. In October 1999, the Federal Communications Commission (FCC) revised how it would calculate the audience reach of cable systems, effectively raising the limit from 30 percent of all subscribers to 37 percent. The change will ease AT&T’s effort to acquire Media One’s cable systems after already acquiring TCI, the largest multiple cable systems operator in the United States. The overall trend toward consolidation within the distribution industries that are regulated by the FCC has been dramatic, and shows no sign of slowing anytime soon. It has been spurred by a climate of deregulation that is retreating from public interest regulation and is instead embracing marketplace definitions of the public interest.

Don’t Fear the Mergers

Many commentators argue that media consolidation will limit content diversity, as the number of different ideas and opinions expressed will be reduced. Such an outcome would clearly threaten political discourse and free speech interests. Many economic and business theories suggest, however, that consolidation will not necessarily diminish content diversity, and indeed, there is little evidence that previous media consolidation has done so. Media companies, like other businesses, focus primarily on market share, or “shelf space.” Just as soda and cereal manufacturers seek to expand their shelf space in a grocery store, content producers and distributors seek to increase their exposure on cable systems, radio stations, and video store shelves. Which scenario provides the consumer with more diversity: four distinct brands of cola or two distinct brands that each have three variations? In each scenario, the consumer has several possible choices. Whether a loss of diversity has occurred depends on one’s definition of diversity.

Ultimately what matters is what content gets produced and is made available to the public, not who profits from its production and distribution. With more than 140 cable networks, seven broadcast networks, and countless direct–to–video productions, there is greater demand for original content than ever before. Cable networks that used to rely on theatrical or television reruns now budget millions of dollars per year to produce original content. The variety of content available to the public has thus expanded, not contracted. Much of what is produced is still disappointing to many, but it is unlikely that television fare would be any better had Disney not purchased ABC/Capital Cities.

In the music and film industries, where a handful of companies control content distribution, there is little evidence that decisions are motivated by censorship rather than profits. Since each song or film is a unique, differentiated product, media companies will continue to promote whatever they think will be the next big hit, often regardless of controversy or political view. Indeed, in critiques of the media, the complaint is often that ethics and morality seem to play no part in decision–making.

Just as cable and satellite technology have dramatically expanded the distribution opportunities for video content, the Internet has expanded the opportunities for publishing and music. For any artist trying to create a book, song, or film, there are three hurdles: funding the production of the work, finding ways to distribute it so that consumers have the opportunity to purchase it, and promoting the work to get the attention of consumers. The advantage of the Internet is that it significantly reduces the first two hurdles. No longer must a band find a record company to produce or distribute its music, or convince record stores to stock its albums. Digital technology and digital networks allow individuals to produce and distribute content at a fraction of the cost that has traditionally been required. For example, MP3 files allow bands to reach a much wider audience than previously possible and thereby gain the attention of record labels. Record companies and music stores still wield considerable power in promoting content, as do radio stations and music critics. However, the band (or any copyright owner) has much more control over its own fate than at any time previously.

Media consolidation is troubling in part because of fears that any reduction in competition is likely to raise prices and reduce access for consumers. However, it is doubtful that current consolidation truly threatens consumers, given the rapidly declining costs of producing and distributing content. Even the huge conglomerates that now control the copyright industries are constantly seeking new content, giving individual authors, composers, artists, and filmmakers countless opportunities to place their works before the public. What happens if Disney makes the ABC television network a subscription service or the Super Bowl moves to pay–per–view? Perhaps those who cannot afford to pay for access will find other forms of cheaper entertainment or even begin to create their own content. In other words, media consolidation may only lead to more citizens actively participating in the production of culture. This transformation of consumers into content producers could have significant benefits in terms of political empowerment and self–fulfillment.

The public has more to fear from expanding copyright law than media consolidation. There is no question that more content is produced today than ever before. In addition, antitrust law ensures that a minimum level of competition will continue to exist in the media industries. This is not to suggest that media consolidation is inconsequential. Indeed, the recent spate of mergers is profoundly troubling, for it will have a significant impact on political discourse and the barriers to entry for new content producers. This is especially true for the media conglomerates, which provide the majority of news coverage throughout the world. However, the attention given to consolidation has overshadowed the more serious problem of copyright expansion. Regardless of the number of firms, content will always be produced and distributed. But what happens once that content is placed into the stream of culture? It is vital that the public has the ability to discuss and critique those works that become a part of the cultural landscape. Copyright law directly impacts the public’s ability to use and debate these media texts.

A Brief History of Copyright

Copyright is a legal concept of relatively recent origin. While domestic and international trade in content can be traced to the earliest human civilizations, the precursors to copyright did not emerge until the development of printing in Europe in the fifteenth century. Soon after the invention of the printing press, many printers requested government–issued privileges to prevent competitors from publishing the same book. Printers used these monopoly privileges to recoup the large sums they had invested in presses and fonts. By making printing an economically viable activity, governments encouraged the dissemination of new ideas and knowledge. However, the authorities responsible for granting these privileges soon discovered that by dispensing them selectively, they could engage in censorship and control the flow of ideas in their societies. A system that began as a form of industry protection thus quickly developed the secondary purpose of controlling the spread of information and ideas.

Over time, copyright replaced printing privileges as a means of protecting the publishing industry. The 1710 Statute of Anne, the first true copyright law, was intended to break the monopoly that the Stationer’s Company held over the publishing industry in England. In order to accomplish this objective, the law granted authors of books a copyright for the first time. Other European nations soon adopted copyright laws, and the United States followed suit after winning its independence. This new right enhanced the ability of authors to profit from their works and spurred competition in the publishing industry. Copyright thus stimulated the development of new cultural products and intellectual property.

As the content industries have grown in economic and political influence, copyright has steadily expanded to offer greater protection for more types of content, especially as new communication technologies have come to the fore. In 1790, the first federal copyright statute in the United States offered protection for maps, books, and charts for a maximum of twenty–eight years. By the beginning of the twentieth century, copyright had expanded to include music, dramatic works, drawings, photographs, and even performance rights, and the length of protection had doubled to fifty–six years. The 1976 Copyright Act subsequently expanded copyright to include all forms of original expression in a tangible medium and extended the term of protection again, this time to the life of the author plus fifty years. Similar expansion of the law occurred in many other nations, particularly in Europe.

International disputes have played a major role in the development of copyright due to the protectionist origins of each nation’s copyright law. Widespread copyright piracy and a lack of protection for foreign authors under many nations’ copyright laws led to the 1886 Berne Convention for the Protection of Literary and Artistic Works, the world’s first multilateral copyright treaty. Under the Berne Convention, each signatory nation is required to enact minimum standards of copyright protection through its domestic laws. The potential for international disputes remains high, however, because signatory nations can have different levels of copyright protection as long as the minimum standards are respected. Conflicts arise as a result of the tensions between these different copyright laws.

The United States did not join the Berne Convention until 1989, when Congress amended the Copyright Act to meet the international agreement’s minimum requirements. One reason the United States eventually joined the Convention was the successful lobbying from content producers who wanted the United States to play a larger role in the development of international copyright law. These copyright owners found themselves with significant power in Washington, especially after the copyright industries became the largest group of U.S. exporters.

The Copyright Term Extension Act of 1997 (CTEA) and the Agreement on Trade–Related Aspects of Intellectual Property Rights (TRIPS) in 1994 represented more victories for the copyright industries. To match laws in Europe, CTEA extended the length of copyright protection in the United States to the life of the creator plus seventy years. TRIPS created rights that go beyond the Berne Convention, requiring nations to provide protection for sound recordings and prohibiting the rental of computer software. More importantly, under this agreement, conflicts may be settled through World Trade Organization (WTO) dispute settlement procedures. One nation’s lack of vigorous enforcement of its domestic copyright law can now be raised to the level of an international trade dispute. U.S. copyright industries favor this system because the U.S. government can now act as their agent to protect their copyrights and profits. Ultimately, TRIPS gives the copyright industries more power to protect their works by putting economic pressure on governments with a history of weak copyright enforcement.

The rise of the Internet has challenged the ability of media conglomerates to enforce their copyrights and illustrates the growing tensions between U.S. and foreign copyright laws. For example, a Canadian start–up called iCraveTV recently began retransmitting television signals over the Internet. In response, major television copyright owners including Twentieth Century Fox, CBS, Disney, and the NFL sued iCraveTV in the United States for infringing on their copyrights. Under Canadian copyright law, the retransmission of TV signals on the Internet without permission may be permissible, but under U.S. law, such an action is clearly a copyright violation. For this reason, a U.S. district judge issued a temporary retraining order to prevent the signals from being accessed via the Internet in the United States.

A software program called DeCSS that was developed in Europe also highlighted the threat that the Internet poses to the copyright industries. DeCSS was designed to break the copy protection program used to protect DVDs. After its creation, DeCSS was distributed on numerous Web sites. A U.S. district court has granted a preliminary injunction forcing Web site owners in the United States to stop distributing the program. However, the global nature of the Internet makes such injunctions meaningless if users can download the software from servers in other countries.

The copyright industries have lobbied vigorously and successfully for increased copyright protection under national laws and international agreements to counteract these perceived negative effects of the Internet. The No Electronic Theft Act of 1997 (NET) dramatically increased the scope of criminal copyright law in the United States. It made it illegal to use the Internet to willfully distribute copyrighted works having a total retail value of more than $1,000, regardless of whether one profits from the distribution. Similarly, the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty, both of which were signed in Geneva in 1996, increased the ability of copyright holders to restrict the use of copyrighted works in digital form, and encouraged the use of technological measures to protect copyrighted works.

The Digital Millennium Copyright Act of 1998 (DMCA), which enacted the two treaties into U.S. law, offered liability protection for service providers who follow notice and take–down procedures, outlawed the manufacture or distribution of devices that can override technological protection measures, and required the protection of copyright management systems. These last two provisions encourage copyright holders to develop technological measures that will control all access to their works. This potentially gives copyright owners complete control over how their works are used.

Copyright has always benefited the industries that distribute content more than the authors who create content. Distributors typically have more negotiating power since they control access to consumers. Recent controversies surrounding the use of MP3 files and streaming audio demonstrate the concern of music distributors regarding the ease with which the public can share files over the Internet. As the copyright industries grow larger in scope and influence, the public’s ability to use and critically debate the content that is provided for its consumption is threatened. If copyright owners are able to exercise complete control over how expression enters the stream of culture, they have the power to limit the role of the public to that of passive consumers, rather than that of active participants in culture.

The Threat to Free Speech

From a public interest perspective, the fact that Disney now owns a variety of distribution outlets to market Mickey Mouse as a commodity is somewhat unsettling, but not particularly harmful. The bigger threat is that Disney might be able to stifle any critique of Mickey Mouse or the values that Disney promotes. The concept of fair use in copyright law has long facilitated dialogue and debate of copyrighted content. Many of the recent changes to copyright law give Disney and other copyright owners increased power to prevent the fair use of their works by shifting the focus of copyright from legal protection to technological protection. This shifts the locus of control from the courts, which are able to balance the need for protection against the competing concerns of access and free speech, to the copyright owners who control the technology used to access their content. These technological barriers may prevent individuals from engaging in fair use and utilizing the facts and ideas contained in the expression that are not protected by copyright.

This trend toward a technological concept of copyright largely results from the copyright industries’ successful effort to characterize their products as economic, rather than cultural, commodities. The interests of the diffuse public are not easily represented, and the social costs of increased copyright protection are not easily quantified. The increasing economic weight of the copyright industries carries the day in an era in which free trade and free markets have become the mantra of government leaders, and the public is characterized as consumers rather than as citizens.

Industrial nations with large copyright exports are using the WIPO and the WTO to pressure other nations to bend to the interests of large media conglomerates. Without legal safeguards to protect citizens of all nations, the media conglomerates will control all flow of data. Policymakers in all nations must be wary of the quick fix provided by reliance on technological enforcement of copyright law. While such technological measures may appear to be the only solution in an age in which content crosses borders as effortlessly as air, the danger of reliance on extralegal controls is significant. Currently, each nation can craft its domestic copyright law to meet its internal public policy objectives. The trend toward international harmonization and technological enforcement of copyright law threatens the ability of each society to determine its own fate. The fact that the Internet is a decentralized, multipoint–to–multipoint network is a significant advantage of its design and one that should not be tampered with lightly. Nations should hesitate to pass laws that attempt to fix this “design flaw.”

The free flow of ideas and information is clearly essential to the maintenance and evolution of culture. Freedom of speech and expression promote democracy and protect the search for truth in the “marketplace of ideas.” Copyright law, which is designed to promote the flow of speech by allowing authors to recoup their investment in the creation of new content, necessarily gives authors the ability to restrict the use of their speech. However, this need to protect ownership over content needs to be balanced against society’s requirement for intellectual freedom. The purpose of copyright is to promote creativity for the public good. This purpose is thwarted if access to content is unduly restricted.

Endnotes

Note *: Matt Jackson is Professor of Communication Studies at Pennsylvania State University. Back.