If You Love Music,

We Should Work Together to Update the DMCA

Let’s face it: most people have never heard of the Digital Millennium Copyright Act (DMCA). But, for some of us, this Internet law from the days of “dial-up” has a profound effect on our business. And for all of you who love music, the current debate about whether to modernize it will affect you, too.

My colleague at the Internet Association, Michael Beckerman, recently argued that the DMCA operates just fine the way it is, thank you very much. But can an online enforcement law from 1998 (i.e., the last millennium) actually operate effectively in the high-speed digital age? (To put things in context, Google opened its first office in 1998, Shawn Fanning wouldn’t release Napster for another year, Apple’s iPod was three years away and YouTube wouldn’t start for another seven years.) Spoiler alert: it can’t, and we in the music community have the (unfortunate) data to prove that some recalibration is urgently needed.

Let’s be clear: We have never called to “unwind the balance struck in the law and hold internet companies liable for policing every single piece of online content.”

Rather, recording artists, songwriters and the entire music community merely strive to restore that initial balance — to ensure that the DMCA lives up to its original intent and promise — to provide, as Mr. Beckerman reminds us, a system that “would grow the internet and protect rights holders’ ability to thrive online.” Regrettably, that balance has been dramatically upended in recent years, and continues to be steadily eroded by the DMCA’s outdated and ineffective notice and takedown system.

It doesn’t take a rocket scientist to figure out that the current system just isn’t working.

Try Googling your favorite song and see how many links to unlicensed works you get in the first few results. Look no further than new data from MusicWatch Inc. reporting that 57 million people in the U.S. still get music illegally. To date, the RIAA and our fellow music trade associations BPI and IFPI together have collectively sent Google 280 million DMCA notices, the overwhelming majority for songs that have already received a prior takedown notice. And IFPI has reported that 94% of all takedown requests they sent in 2015 related to recordings uploaded repeatedly to sites already notified that the content was infringing! Who would consider that a productive and efficient system? Think of the Sisyphean task outlined by artists like Maria Schneider, who begins each day deciding whether to make music or to send a never-ending stream of takedown notices to sites illegally offering the songs she’s already created. It’s a no-win proposition.

This isn’t “pushing a divisive narrative,” as Mr. Beckerman suggests. Rather, it’s narrating a growing divide in the benefits afforded by the DMCA.

So how has this growing divide contributed to the difficulties faced by the music industry? For one thing, the DMCA has allowed blatant pirates to operate openly and with impunity for years until expensive and time-consuming lawsuits can shut them down. Grooveshark streamed music for nine years without paying a dime to creators, all the while depriving legitimate music services of the customers they needed to operate successful businesses that pay creators.

But perhaps even more disturbing is that, even in the case of legitimate actors like YouTube, the DMCA provides an unfair competitive advantage, hurting other music services and undermining the value of music. With YouTube, creators are presented with a “Hobson’s Choice”: accept bargain basement licensing terms, or be relegated to the futility of the DMCA’s notice and takedown process. This is a de facto government subsidy to some giant Internet companies (the very ones who argue against modernizing the DMCA), and devalues copyrighted content for the entire marketplace.

All of this amounts to what we call a “Value Grab.”
Consider the striking disparity between the amount of revenues proportionately being returned to creators by two leading companies, namely Spotify and YouTube. Spotify does not rely on users to upload music to its service, so it does not benefit from the DMCA. YouTube, on the other hand, is the epitome of a DMCA beneficiary. How do they compare?

Spotify paid music creators $18 per user in 2014, the last year of available data; by contrast it is estimated that YouTube delivered less than $1 per user to music creators in 2015.

And the disparity in value is only getting worse. Consider that in the last year alone, the volume of video streaming has increased by 102%, but revenues from these song plays only went up 17%.

Or the fact that revenues from the retail sale of vinyl recordings surpass those from on-demand, ad-supported video streaming.

These facts are important, because they illustrate some of the real-world impacts of the DMCA on creators, unlike the rosy abstractions others rely upon when debating the effectiveness of the DMCA. These numbers also explain why the entire music community has come together in an unprecedented way to highlight the very real threat to our creative future.

We get the “$1 trillion” success of some technology giants who are now among the most valuable companies in the world, and we applaud it. But even though music and recording artists have made a significant contribution to that success, the American music community has not shared in it.

Since the DMCA was enacted, the formerly $14 billion music business is now half the size it once was, and the cultural and economic toll to that downsizing has been real: thousands of lost jobs, artists dropped from rosters, and fewer working musicians.

Of course, the plight of the music business cannot be attributed solely to piracy or the failure of the DMCA to do anything to control it.

Neither should the success of the technology industry be viewed as dependent on a DMCA frozen in time.

In fact, the DMCA is an issue of concern only to a subset of tech companies whose business model is to monetize other people’s content. The vast majority of DMCA takedown notices are sent to a very small handful of companies, some of them hugely successful.

Regardless, we have no desire to withdraw from these companies the significant protections of the DMCA. This is not the zero-sum game that some make it out to be. An effective notice and takedown system would benefit us all.

We acknowledge this isn’t an easy problem to fix, but that’s why we need to work together to figure out how to improve the system for everyone. Legislation is an obvious route, but much progress has also been made based on voluntary measures developed out of constructive dialogue among stakeholders. We all thrive on innovation and creativity (musicians happen to be the most followed or liked profiles on many of these platforms). Surely we can engage in good-faith discussions to come up with a system that works for tech and creators alike.

It’s time to update the DMCA.

Cary Sherman, Chairman & CEO, RIAA

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