Sometimes people ask me what I think about copyright law, file sharing and so called "piracy". The issues are fairly complex. I'll try to pose some of the important questions and my answers. The answers are, for the most part, not facts of nature, but my opinions. I'd be happy to link to more authoritative sources for the history and economics of copying and copyright law.
Copyright is a limited monopoly granted by society to the creator of an artistic work. This monopoly includes exclusive rights to make copies of the work, subject to certain limitations.
Fair use is the term used in United States' copyright law for exceptions to the exclusive rights that copyright grants to authors. An example of fair use is quoting a paragraph of a copyrighted work for a review. Other countries have similar notions, in law or in practice.
File sharing means the sharing of music, television shows, computer programs and other cultural digital artifacts. Small files can easily be sent via email, but for larger files, such as a complete season of a television show, specialized file sharing programs are used.
One important file sharing application is bittorrent. The basic idea is that when one user has received one piece of a large file being shared, he or she passes this piece on to others that are still missing it. This way, a large number of users can get the file without needing a designated server with a high-speed and expensive network connection.
Digital restrictions management (proponents call it "digital rights management") means that files are encrypted by the publisher, together with a specification on how the publisher wants the files to be used. The decryption keys are provided to manufacturers of authorized devices, only if they promise that the device will follow the publisher's wishes on how the file is to be used, rather than the wishes of the device's owner.
The most widespread use of DRM is probably the region system on DVDs. The objective of this system is to make sure that if you have a fully legal and properly licenced DVD player bought in Europe, and a fully legal and properly licenced DVD film bought in the United States, your player is of no use when you want to watch this film.
The publisher's DRM specification on what you may or may not do with a copy you have bought usually collides with your fair use rights under copyright law. So DRM can be understood as a way to use technology to change the way copyright law works, and to abolish fair use.
There are two components, or objectives, of copyright law which I think are basically right and should be kept.
The so called "moral rights". It's not allowed to copy somebody else's work and claim it as your own. This principle is fundamental and it probably predates the rest of copyright legislation.
I'm not sure if it ever expires under current copyright laws; can you take a play by Shakespeare or Aeschylus and claim you wrote it? You won't do any harm to the long dead author, but it still seems like a bad thing to do.
In essence, this principle is a special case of "Thou shall not lie", and orthogonal to copyright.
It's not allowed to take make big bucks from somebody else's work, without permission and without paying the author or artist some share.
I think this is the original motivation for copyright in at least some countries. When copyright was invented, as a reaction to the printing press which made copying on an industrial scale practical, this rule prevents authors from being totally ripped off by the printing industry. And similar considerations apply to the relations between the more recent record industry and artists. To me, this principle makes sense, with a few limitations.
The first limitation is simple: Copyright should expire after some reasonable time. An author who is long dead can't be ripped off. And even if the author or creator is a company (however that could happen; the source of creative thinking is always individuals) which might exist for centuries, it still shouldn't be allowed to lock up it's contributions to culture forever.
The second limitation is related to the commercial nature of the copying. Due to the evolution of technology, industrial copying, which is commercial in its nature, has made a lot of economic sense for five centuries or so. Today, peer-to-peer distribution is becoming simpler and cheaper, due to the availability of cheap general purpose computers and cheap general purpose networking.
If an activity isn't a commercial business, there's no income a share of which the author would be entitled to. Regulation of industry scale operations is one thing, regulation of activities performed by ordinary citizens in their homes and communities is a different matter.
No, there shouldn't be any such right. Or at least, there should be severe limitations to that control. The reason is that if you publish a piece of art, e.g., a song, and people like that, then your work becomes an important part of the life of other people. If you have absolute control over who can listen to your song and when and how, you are also controlling a part of other peoples life, in a way that I believe is not just or not fair.
To be less abstract, some things that an author might want to control, but which I believe he shouldn't be allowed to control:
I admit, these examples are pretty trivial. The point is that the rules about "fair use" is an essential part of copyright law. There's no law of nature that says that if you write a song, you can control in detail what people who hear your song will make of it. The only legitimate way to keep absolute control, is to abstain from ever singing the song to anybody else.
In order of importance:
The recent developments to forbid anti-circumvention devices should be abandoned. The most common application of copy protection is to take away the "fair use" rights in one way or the other.
Say that we have a large green field where you have the right to move freely. Then someday, somebody puts up a square fence in the middle of the field. So now you're allowed to move freely in the area outside the fence, and you're still allowed to move freely in the area enclosed by the fence, but to move between these areas, you have to climb the fence. The ladder you might use, is an anti-circumvention device.
This is highly inconvenient, and installing such an obstacle ought to be illegal. Laws that criminalize the use, sale and possession of "anti-circumvention devices" makes the situation worse, in that they criminalize the very act of climbing the fence. So it's perfectly legal to move around on either side of the fence, but if you use the only means to get from one place to the other, i.e., climb over the fence, you will be sent to prison.
All non-commercial distribution of copyrighted material should be legalized. It's reasonable that copyright law restricts what an industry making big bucks on the work of others can do. But it's not reasonable to forbid non-commercial, spontaneous and peer-to-peer sharing between millions of individuals. Sharing is a human and natural habit, and one of the pillars civilization as we know it rests upon. When you find an interesting article or picture or web page, you mail a copy or a link to your friends. Virtually everybody with Internet access does that. And today, it's getting as easy to share music albums, television shows and motion pictures. If this human and social behavior is criminalized, millions of people are breaking the law in their daily life. To stop this "crime" requires drastic measures. One would need to either:
The lobbyists of the so called "contents industry" are doing their best to push all three fronts.
To draw a line between commercial and non-commercial distribution and use will be difficult, but I don't think it's more difficult than to define "fair use". Such difficulties are inherent in most law-making.
Reduce the protection time. Ever since copyright was introduced as a time limited monopoly, the protection time has been repeatedly extended. Today, in Europe it's author's life plus an additional 70 years (which means that by the time copyright expires, not only is the author dead, but his or her children and most of their children will have died of old age). In the United States, it's author's life plus 90 years. The extensions serve no other purpose than to take from the public domain and give to remote heirs of the author, and to prevent Mickey Mouse from ever entering the public domain.
The benefit for the actual authors is marginal at best. Say you're are negotiating for a contract with a publisher or a record company. You know that for most works, the commercial value is pretty small after only ten years, and you know that it's established economic practice to discount future incomes by the interest rate. Do you think you'd be able to get a better contract if you can sell exclusive rights for your life time plus 90 years, than if you sell exclusive rights for your life time plus 20 or even just 10 years? I doubt that.
And the public domain is a crucial part of our culture. Many of the most well-known works of art, from Shakespeare's Hamlet to Disney's Cinderella, are reusing earlier material. This ever evolving process of reworking, adapting and reusing earlier artistic material has been going on ever since the dawn of mankind. Until now, when Disney and their friends tries their best to put the cultural process to a halt. They'd like to keep using material of earlier creative minds for free, but they want to keep their own contributions to culture locked up forever. And I don't think it's a coincidence that Disney's productions of the last decade has been more dull and less creative than their earlier works.
And when you consider that the same rules, author's life plus 70 or 90 years, also applies to computer games which have a commercial life of at most one decade, things are getting ridiculous.
It will get a lot harder to sell compact discs at current prices. But I don't think CD sales will disappear. The economics depends on how much fans are willing to pay, for supporting the artists, and for getting an beautiful and official copy of the artists work. Only time will tell.
Some artist will probably make less money. On the other hand, more widespread use of file sharing makes it easier and cheaper for smaller artists to reach their fans. And it's unclear how well the current system is working for artists, see for example Courtney Love's analysis of the situation.
Economically speaking, if fans who don't want a physical compact disc can avoid paying for the unnecessary production and distribution of that disc, by using more efficient distribution on a file sharing network, he or she will spend that money in some other way, and hopefully in a way where artists benefit more than the distribution company.
We might see a renaissance of live performances. If you can download all recordings ever made by your favorite band without paying a fortune, what would you do next? Artists were making a living on performances long before copyright was invented, and I doubt canned music is a sufficient substitute, be it cheap or expensive.
I have even less authoritative information on the economics of film making than on the music business. File sharing will be a difficult competition for DVD sales and rentals. I don't think DVD sales will disappear, but prices has to drop, for the same reasons as for CD:s.
What's the future of movie theaters? Can the movie industry find a way to make the theater experience attractive? On the negative side, there's competition from the cheaper and better equipment for enjoying movies at home, which the potential theater visitor will compare to a crowded theater with up to half an hour of commercials and trailers to watch before the actual movie. At least to me, the ever-increasing amount of advertisements is a turn-off.
On the positive side, the same technological advancements that make file sharing possible make distribution of movies to theaters simpler. One could imagine a movie company that makes its movies available via bittorrent, and allows theaters to show the movie to a paying audience for a fee of a few dollars per person (even under the reformed copyright law I'm advocating, the rule of "no rip-off" means that a commercial theater showing a movie for a paying audience should pay the creator of the movie in some way or the other). The theater sells tickets for a price that covers this fee, and the equipment and other costs of the actual theater. As long as people still want to watch a good movie in the company of a lot of strangers, there should be some money to be made there.
I think the current notion of a television channel is dead. Channels (be it by cable or by radio waves) are a distribution technology which was efficient and rational in its time, but it is obsoleted by the general purpose Internet and file sharing. The producer of a television show has to find its own audience, and a way to make a business. I don't know how, but I do know that it has be at least as easy to use as getting the show via file sharing with other fans, and it has to be at least an order of magnitude cheaper than the ridiculously overpriced DVD boxed sets.
It's time to reconsider copyright law, and the tradeoffs between the public interest and the interest of artists. The interests of publishers, on the other hand, is of less importance. If it turns out that a publishing industry in the current form is no longer needed, so be it. Let those companies adapt or die.
Copyright should be about promoting culture and creativity, not about sheltering certain companies from the winds of change.