The “Scourge” of Betamax

This very informative run through copyright history and theory since the Betamax decision of 1984 is marred by just one thing: the conclusions are EXACTLY 100% wrong. It isn’t Betamax that needs to be overturned, it is the extensions of copyright over the last century past any reasonable time limit, and the extension of copyright holder’s powers via such excremental laws as the DMCA that need to be retooled or simply repealed.

Copyright holders don’t have too little power, they have far too much power and too many privileges – it is the public and our collective culture that has been damaged and stunted by onerous restrictions on what they can do with their own culture.

Writer Roger Parloff is an intelligent, knowledgeable fool:

Entertainment companies say that the time has come to modify that court decision—popularly known as the Sony Betamax ruling. Equipment manufacturers insist that it remain inviolate. As judges try to force perplexing new technologies into the outdated conceptual pigeonholes bequeathed by the Betamax ruling, they are reaching conflicting results. While attention has focused on the record industry’s suits against individual file sharers, this battle, a far more important one for the future of entertainment and technology, has been rolling implacably toward the highest court in the land.

For two technologically eventful decades, the Betamax case – formally, Sony Corp. of America v. Universal City Studios – has defined the tense frontier that divides the rights of entertainment companies from those of technology providers. The conflict arises from a fundamental tension. Copyright laws grant creators a monopoly over the right to reproduce and distribute their works during the term of a copyright. Technology providers make devices that enable consumers to reproduce and distribute copyrighted works – photocopying machines, VCRs, TiVo, “ripping” software, CD burners, and high-bandwidth cable and DSL lines, to name just a few. Does that mean those technology providers are facilitating copyright infringement by their customers? Must technology providers be perpetually seeking permission from entertainment companies every time they want to develop a new invention capable of reproducing a copyrighted work?

Since 1984, the answer in the U.S. has been a resounding no. In the Betamax case the court decided that Sony, by marketing VCRs, could not be held liable for facilitating copyright infringement, even though it knew that some consumers would use its VCRs illegally. The VCR’s “primary” uses, Justice John Paul Stevens noted, were noninfringing. But his ruling then went a step further. He suggested that any technology provider should be protected as long as the device it marketed was “capable of substantial noninfringing uses” – even if the device was not currently being used that way. The idea was that courts should not stifle potentially beneficial technologies in their infancy, before their usefulness might be fully understood.

In the intervening 19 years digital technologies have supplanted analog, and technology providers have devised ever faster and cheaper ways for their customers to copy and distribute content. As a result, the perils those technologies pose to copyright holders have increased. At the time of the Betamax ruling the studios had not yet been able to show any actual revenue loss attributable to VCRs, even though VCRs had already been in circulation for almost a decade. In contrast, since 1999, when a 19-year-old college kid launched the first music file-sharing service, Napster, unit sales of recorded music have dropped 26% and record industry revenues have fallen 14% – a $2 billion decline. It was a measure of the industry’s desperation that last month the Recording Industry Association of America sued 261 file-sharing music fans, knowing full well that it was asking for a public-relations shellacking. Predictably, a 12-year-old girl was among those swept up.

….Many people today have come think of the betamax case as a parable of Hollywood shortsightedness. They claim that the studios, unduly fearful of new technologies, tried to strangle the VCR in its cradle, nearly asphyxiating the home-video market that proved so lucrative later on. Moral: If the entertainment industry simply embraces the new file-sharing technology, it will end up making more money than ever before.

That picture is distorted. If the Betamax ruling had come out the other way, VCRs would never have been stamped out. Rather, a system of royalties would have been imposed, either by statute or negotiation or court order, with a portion of the manufacturers’ revenues going into a pool for artists. That is how copyright holders are compensated for “private” copying in some 42 countries today, including 12 of the 15 European Union nations.

In fact, we have covered so much cultural ground since 1984 that it is startling to recall what was really at stake in the Betamax case. The case was not filed over the studios’ concern that someone might use a VCR to distribute copyrighted works to other people—which is what file sharing is all about. Trying to distribute movies with an analog VCR would have been clumsy, slow, and expensive. Strange as it sounds, the studios were complaining then about only two activities: the building of home libraries of movies taped from free television, and “time-shifting” – taping a TV show so that you could view it once, at a more convenient time, and then erase it. The court’s 5-4 majority ultimately decided that “time shifting” required no compensation of artists at all, in part because it “merely enables a viewer to see such a work which he had [already] been invited to witness in its entirety free of charge…. The time shifter no more steals the program by watching it once than does the live viewer.”

Incredibly, this cautious holding is the one that is now thought to immunize commercial file-sharing services from liability, though their primary use is to enable millions of people to obtain free copies of copyrighted works from total strangers, most of whom have never paid to acquire those works either.

Why did the studios ever think they might be entitled to compensation for consumers’ personal use of their works within the home? Try looking at it this way. What entices people into stores to buy VCRs is, in part, the prospect of taping copyrighted shows. If so, why should equipment manufacturers hoard all the profits, rather than sharing them with the copyright holders? [Fortune]

Roger, that’s exactly how I WON’T look at it, but then I am not a corporate shill writing for Time Warner’s Fortune. By the way, I do agree that the file sharing services like Kazaa, Morpheus, Grokster, et al, are scum for making their profits on the backs of copyright holders, but the copyright holders are equally scum for refusing to license to them.

The only possible solution: unrestricted exchange of files over the Internet and a blanket fee or tax on Internet access. It’s the only way to protect both the Internet AND copyright holders.