The Fall of the CD and the Rise of DMCA


The photo on the right is by Kate Bolin and is used in accordance to her Creative Commons license.

The king really is dead.

Fingers crossed, and barring unforeseen circumstances, an article I wrote for Business Edge should be running in all editions this Friday. It built off of this post about the rise of the MP3 and profiled three independent record stores as they faced off against competition from downloading and online music stores.

One of the people I interviewed was the manager of Boomtown Records in Vancouver. And his interview struck me the most as illustrating the massive change that was filtering through the industry, and how thanks to the MP3 nothing is going to be the same again.

Because Boomtown Records isn’t fighting on. The bricks and mortar store is shutting its doors at the end of the year and heading online instead. And this is significant because of the particular type of store that Boomtown is: Boomtown sells vinyl. Its owners and managers are vinyl enthusiasts. Several are DJs and their work at the store is something they do on the side. But despite their enthusiasm for vinyl, the manager told me that he hadn’t bought a new vinyl record in over a year. Instead, he bought himself a Serato, a device which mixes vinyl records into MP3s. He brings a laptop to his DJing gigs instead of a crate of records. Electronic music has improved to the point where it competes with vinyl well enough in this DJ’s opinion, that the advantage of carting around less stuff is sufficient for him to abandon the records he loves to perform the music he is passionate about.

You can read the full article when it comes online this Friday, but this point illustrated to me more than anything else the dominance of electronic, downloadable music. The people at Boomtown Records were philosophical about closing down a store that had been operating for over twelve years. A medium that had survived the storied onslaught of the CD was now bowing to pressure of a greater enemy, with barely a whimper.

There is considerable debate over the impact downloadable music has had on the music industry. Another interviewee, the owner of Blackbyrd Myoozik of Edmonton, felt that the availability of information and the ease of marketing online was a boon to him, as his customers came to him better informed of the music they wanted. Earlier this year, Industry Canada released a report which disputed the assertion that peer-to-peer downloads of music resulted in fewer people purchasing CDs. Indeed, they found “a strong positive relationship between P2P file sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file sharing increases CD purchases.”

But sales of CDs are dropping precipitously — 35% for the first quarter of 2007 compared to the same period in 2006, according to some studies. And while sales of online music are rising rapidly — tripling in some years — the increase hasn’t offset the loss of CD sales. Worldwide, online music still accounts for only 10% of music sales.

So, what is the discrepancy, here? I suspect that it is the result of people taking the CDs they already own, sticking them into their computers and extracting the tracks into a format that can be played. I have 3150 tracks on iTunes. The majority of those are tracks from CDs I already own. Even selling individual tracks at a bargain $0.99 each, and albums at $9.99, it would cost me over $3000 to replace my CD collection with an MP3 collection.

I’m staggered to think that I’ve spent so much on music over the course of my lifetime, but I’ll be damned if I’m going to spend that much again to switch that collection into electronic format. Nor should I have to. These aren’t tunes downloaded for free from other individuals; this is music that I purchased with my own money. And I didn’t spend that money to collect a shiny disc, a box of plastic and a set of liner notes; I bought this for the music. And if I am enjoying this music on my CD player, or in some other format derived from that CD, then morally as well as legally, I have completed the sale fairly and should be allowed to enjoy my product in peace and without restriction.

Which I suspect irks the large record label corporations no end. They’ve made hundreds of millions of dollars as people have replaced their vinyl collections with CDs, but now that it is possible to take the tracks from CDs (and vinyl) and convert them into MP3s, the revenues are drying up. There is no similar payment to transfer collections from CD to MP3, and so they’ve have no choice but to rely on sales of new music sold on its own merits. And people who currently have large collections of music can be rather selective of the sort of new music they buy.

So I can understand the fear and frustration, here. Change isn’t easy. But I find it arrogant in the extreme when the music industry tries to fight against this by working to limit the rights of consumers to enjoy the product they purchased.

Which brings me to industry minister Jim Prentice and the introduction of revisions to Canada’s copyright act which have been likened to our version of America’s restrictive Digital Millennium Copyright Act (DMCA). The revisions seek to update Canada’s copyright laws, but which has clearly been influenced by lobbying from the North American recording industry. Michael Geist has been following this issue and lists three primary concerns:

First, the bill is likely to include provisions (the anti-circumvention provisions) that have been proven to create significant harm to education, privacy protection, security research, free speech, and consumer interests. Indeed, anti-circumvention legislation trumps fair dealing, effectively eliminating crucial user rights in the digital era such as the right to use digital works without permission for research, private study, criticism, or news reporting. The government has emphasized the need to implement the WIPO Internet Treaties, however, those treaties provide far greater flexibility than what is found in the U.S. DMCA. It can meet the WIPO standard and preserve the copyright balance, but it must reject the U.S. path to do so.

Second, I’m troubled by what is not in the bill. If Canada is to amend the copyright law, then surely we ought to address issues that affect individual Canadians such as protecting parody, time shifting, device shifting, and the making of backup copies. We should eliminate crown copyright and restrict statutory damages awards to cases of commercial infringement. Yet none of this will be in the bill.

Third, I’m dismayed at the way this bill was created. The government last consulted Canadians on digital copyright issues in 2001. Technology and the Internet have changed dramatically since then, yet there have been no further consultations. Moreover, there is general recognition that this bill is chiefly the result of intense U.S. lobbying. The Industry Minister has time to meet with the U.S. Ambassador to Canada, time to meet all the major telcos on the spectrum auction issue, yet hasn’t made time to meet with user community on copyright.

What is meant by anti-circumvention provisions? Well, consider the case of Western Digital. This manufacturer of hard drives has announced that, due to concerns related to America’s version of the DMCA, they will not allow the sharing of media files on its external hard drives when those drives are connected to a network. So, for example, if you were to place all your family’s MP3 files on this drive with an eye to using it as a central repository of music to be played by other computers in your home or a network-linked stereo, you’re out of luck. Western Digital won’t allow you to use the hard drive you bought to play the music or videos you own because of the chance that somebody, somewhere, might try to play downloaded music or videos they didn’t pay for.

That is… if you let Western Digital to render its external hard drives into a particularly expensive plastic bookend. Those hard drives only work in this fashion if you install Western Digital’s software containing its DMCA restriction onto your computer. Which is essentially Western Digital asking you to cut your own throat. The drive works fine without the software. However, under DMCA, refusing to install this management software could become illegal.

The backers of digital rights management have taken on a disturbing propensity to view users as guilty before proven innocent. Cory Doctorow describes a particularly stupid incident where the Science Fiction Writers of America leaned on an online sharing service to pull user materials for suspected copyright violations. Their tactic: a general search on the phrases “Isaac Asimov” and “Robert Silverberg” and issuing DMCA notices on all URLs found. Which, of course, resulted in a lot of false positives:

Included in the takedown were: a junior high teacher’s bibliography of works that will excite children about reading sf, the back-catalog of a magazine called Ray Gun Revival, books by other authors who have never authorized SFWA to act on their behalf, such as Bruce Sterling, and my own Creative Commons-licensed novel, “Down and Out in the Magic Kingdom.”


This is the sort of activity that we could be entrenching if we allow Canada’s DMCA be implemented without proper study. And yet Industry Minister Jim Prentice has been reticent about giving the bill proper oversight. He refuses interviews on the topic, and he announces that questions raised by the public on this bill will be dealt with by a committee that will meet after the law is enacted.

This is unacceptable. I sympathize with the struggles of the music industry, but not to the point that I believe that my rights as a consumer should be drawn back, and I believe that the owners of the independent record stores would agree. None of them saw downloading in and of itself as a problem, and pointed more to the business practises of the large record labels, who needed only to be more flexible in pricing and sales in order to encourage consumers to buy. Practises such as suing users, or limiting their access to the products they purchased, would not be tolerated in a truly free capitalist society, so we have to speak out before the large corporate interests bully our government into giving away our rights, especially when we already pay a levy on blank CDs in order to offset supposedly lost revenues that come from music sharing.

Cory Doctorow has been all over this and encourages everybody to write to their MPs. At the very least, the legislation should be amended to ensure protection of consumer rights, especially “protecting parody, time shifting, device shifting, and the making of backup copies.” I also like Michael Geist’s suggestion that we eliminate crown copyright, as that would end the sort of silliness where people who create an anagram version of the Toronto subway map end up with a cease and desist order from the TTC.

And I would like to ask why this matter has primarily been talked about by the progressive side of the Canadian political blogosphere. I cannot believe that those on the conservative side don’t have MP3 collections, or don’t want their external hard drives to work. I know there are conservative bloggers out there who believe in freedom and consumers rights and would hate to have these restricted. As Jim Prentice is a Conservative minister, their words expressing concern over this legislation would carry more weight. So I invite blogging Tories to speak out. If you have already, good for you; and let me know and I’ll link to you. Let’s hear what you have to say about the DMCA.

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