<!-- f3 -->
For an analysis of the economic impact of copying technology, see Stan
Liebowitz, Rethinking the Network Economy (New York: Amacom, 2002),
-144–90. "In some instances . . . the impact of piracy on the copyright holder's
-ability to appropriate the value of the work will be negligible. One obvious
- instance
-is the case where the individual engaging in pirating would not have
-purchased an original even if pirating were not an option." Ibid., 149.
+144–90. "In some instances . . . the impact of piracy on the
+copyright holder's ability to appropriate the value of the work will
+be negligible. One obvious instance is the case where the individual
+engaging in pirating would not have purchased an original even if
+pirating were not an option." Ibid., 149.
+<indexterm><primary>Liebowitz, Stan</primary></indexterm>
</para></footnote>
</para>
<para>
How do these different types of sharing balance out?
</para>
<para>
-Let's start with some simple but important points. From the
- perspective
-of the law, only type D sharing is clearly legal. From the
-perspective of economics, only type A sharing is clearly harmful.<footnote><para>
+Let's start with some simple but important points. From the
+perspective of the law, only type D sharing is clearly legal. From the
+perspective of economics, only type A sharing is clearly
+harmful.<footnote><para>
<!-- f9 -->
See Liebowitz, Rethinking the Network Economy,148–49.
-</para></footnote>
-Type B sharing is illegal but plainly beneficial. Type C sharing is
- illegal,
-yet good for society (since more exposure to music is good) and
-harmless to the artist (since the work is not otherwise available). So
-how sharing matters on balance is a hard question to answer—and
- certainly
-much more difficult than the current rhetoric around the issue
-suggests.
-</para>
-<para>
-Whether on balance sharing is harmful depends importantly on
-how harmful type A sharing is. Just as Edison complained about
- Hollywood,
-composers complained about piano rolls, recording artists
-complained about radio, and broadcasters complained about cable TV,
-the music industry complains that type A sharing is a kind of "theft"
-that is "devastating" the industry.
-</para>
-<para>
-While the numbers do suggest that sharing is harmful, how
- harmful
-is harder to reckon. It has long been the recording industry's
- practice
-to blame technology for any drop in sales. The history of cassette
-recording is a good example. As a study by Cap Gemini Ernst &
-Young put it, "Rather than exploiting this new, popular technology, the
-labels fought it."<footnote><para>
+<indexterm><primary>Liebowitz, Stan</primary></indexterm>
+</para></footnote>
+Type B sharing is illegal but plainly beneficial. Type C sharing is
+illegal, yet good for society (since more exposure to music is good)
+and harmless to the artist (since the work is not otherwise
+available). So how sharing matters on balance is a hard question to
+answer—and certainly much more difficult than the current
+rhetoric around the issue suggests.
+</para>
+<para>
+Whether on balance sharing is harmful depends importantly on how
+harmful type A sharing is. Just as Edison complained about Hollywood,
+composers complained about piano rolls, recording artists complained
+about radio, and broadcasters complained about cable TV, the music
+industry complains that type A sharing is a kind of "theft" that is
+"devastating" the industry.
+</para>
+<para>
+While the numbers do suggest that sharing is harmful, how
+harmful is harder to reckon. It has long been the recording industry's
+practice to blame technology for any drop in sales. The history of
+cassette recording is a good example. As a study by Cap Gemini Ernst
+& Young put it, "Rather than exploiting this new, popular
+technology, the labels fought it."<footnote><para>
<!-- f10 -->
-See Cap Gemini Ernst & Young, Technology Evolution and the Music
- Industry's
-Business Model Crisis (2003), 3. This report describes the music
- industry's
-effort to stigmatize the budding practice of cassette taping in the
-1970s, including an advertising campaign featuring a cassette-shape skull
-and the caption "Home taping is killing music."
-At the time digital audio tape became a threat, the Office of Technical
-Assessment conducted a survey of consumer behavior. In 1988, 40 percent
-of consumers older than ten had taped music to a cassette format. U.S.
-Congress, Office of Technology Assessment, Copyright and Home Copying:
-Technology Challenges the Law, OTA-CIT-422 (Washington, D.C.: U.S.
-Government Printing Office, October 1989), 145–56.
-</para></footnote>
-The labels claimed that every album taped was an
-album unsold, and when record sales fell by 11.4 percent in 1981, the
-industry claimed that its point was proved. Technology was the
- problem,
-and banning or regulating technology was the answer.
+See Cap Gemini Ernst & Young, Technology Evolution and the
+Music Industry's Business Model Crisis (2003), 3. This report
+describes the music industry's effort to stigmatize the budding
+practice of cassette taping in the 1970s, including an advertising
+campaign featuring a cassette-shape skull and the caption "Home taping
+is killing music." At the time digital audio tape became a threat,
+the Office of Technical Assessment conducted a survey of consumer
+behavior. In 1988, 40 percent of consumers older than ten had taped
+music to a cassette format. U.S. Congress, Office of Technology
+Assessment, Copyright and Home Copying: Technology Challenges the Law,
+OTA-CIT-422 (Washington, D.C.: U.S. Government Printing Office,
+October 1989), 145–56. </para></footnote>
+The labels claimed that every album taped was an album unsold, and
+when record sales fell by 11.4 percent in 1981, the industry claimed
+that its point was proved. Technology was the problem, and banning or
+regulating technology was the answer.
</para>
<para>
Yet soon thereafter, and before Congress was given an opportunity
effect of file-sharing technology. In my view, however, he
underestimates the costs of the legal system. See, for example,
Rethinking, 174–76.
+<indexterm><primary>Liebowitz, Stan</primary></indexterm>
</para></footnote>
They see a system that has been around for hundreds of years, and they
assume it works the way their elementary school civics class taught