Copyright and the commodification of culture

The exercise of political power determines the boundaries between the private domain, where information and culture are commodities to be bought and sold, and the public domain, where information and culture are freely exchanged. It is a given that the free flow of knowledge and information is essential to democracy, yet intellectual property rights are based on exclusivity. The inherent conflict between freedom of access and private control — and by extension the fundamental contradiction between democratic communications and corporate media — is the central focus of this article.

Within the contemporary communications system, copyright serves as the primary institution governing the production, distribution and consumption of informational and cultural goods. To illustrate how this institution works, I will first provide a brief critical history of the origin of copyright as it relates to the rise of capitalism and the printing press, and the immediate intersection between copyright and the concentration of economic and ideological power.

Secondly, I will examine the rise of the culture industry and its use of copyright to build and maintain market dominance in the media system. The Hollywood filmed entertainment industry incorporated cable television and videocassette recorders by using control of copyrights to maintain its oligopolistic status. Hollywood used legislation and litigation to secure private property rights in the face of new reproductive technologies. The state served as a central site of struggle between copyright owners and media users over who would benefit from new means of expression. The filmed entertainment industry also pursued technological and market fixes — encryption and penetration — to thwart unauthorized uses. This history demonstrates how both the state and the market favour the property rights of Big Media over the rights of public access. The site of struggle is tilted in favour of owners of the mass media and against culture producers and audiences.

The final section of the article explores the processes of legislation, litigation, encryption, and market penetration as they pertain to the development of internet distribution of music and movies. I conclude with remarks considering the ideological implications of capitalist control over copyrighted culture and information.

A critical history of copyright

The origins of copyright are bound up with the development of the printing press, the emergence of the nation state, the triumph of possessive individualism, and the rise of capitalism (Bettig, 1992). The city government of Venice granted the first recorded copyright, originally called a patent, to a printer called John of Speyer in 1469. The patent granted Speyer exclusive rights to specific titles and categories of books in the interest of protecting his ‘expensive and speculative undertaking’ (Putnam, 1962: 487).

Copyright was part of a larger project of the emerging nation states to encourage the growth of infant industries and to stimulate the production of manufactured goods. The patenting system evolved into a licensing system as the printing press spread throughout the continent and European aristocracies sought to control the new technology. In exchange for licenses, the state protected domestic printers and booksellers from piracy. In England, the state further protected printers and booksellers from competition by banning book imports. For their part, licensed printers pledged loyalty to the crown and agreed among themselves to police the publication of seditious or heretical works.

The institution of copyright became the means by which the emerging capitalist class would wrest control over artistic and intellectual creativity from pre-existing oral traditions. Eisenstein (1979: 120-121) notes that the ‘literary ‘Common' became subject to ‘enclosure movements’ as the state decided what printing privileges to grant to whom. By the late 17th century licensing of the press came under attack as part of the general assault on mercantile capitalism involving heavy intervention by the state into the economy. In England, John Locke called for the end of licensing altogether. He argued that the practice merely served to protect a publishing monopoly that had (in classic monopolistic practice) produced a scarcity of titles, poorly produced and sold at artificially high prices. For Locke (1979) the call for an end to licensing was a call for freedom of enterprise, not necessarily a call for freedom of the press. As the practice of licensing waned throughout the 18th century, the state turned to seditious libel and knowledge taxes to control the press. Meanwhile, book printers and booksellers turned to copyright to maintain their monopolies.

Copyright and market power

As book printers and sellers lost their state-granted licenses, they turned to statutory law and the Lockean theory of labour to protect their rights to literary properties. Statutory copyright laws recognized the right of authors to own their labour, like the work of the tiller and toiler, but made that right transferable. A system evolved whereby authors were granted rights to their creativity, but were forced to give up these rights to the owners of the capital and technology necessary to bring literary works to the marketplace. In 1725, Daniel Defoe described the situation in England as one in which ‘The Booksellers are the Master Manufacturers or Employers. The several Writers, Authors, Copyers, Sub-writers and all other operators with Pen and Ink are the workmen employed by said Master-Manufacturers’ (cited in Williams, 1961: 161-62).

The ideological justification for intellectual property law is that guaranteeing authors ownership rights to their work stimulates creativity and innovation to the benefit of society as a whole, a dubious assumption at best. The practical effect of intellectual property law is the transformation of culture into commodity as it brings intellectual and artistic creativity into the realm of exploitable labour within the capitalist marketplace. The history of the early book publishing industry demonstrates a logic that continues to guide all culture industries: minimizing risks while maximizing profits. The contemporary book publishing industry is highly concentrated, and horizontally and vertically integrated into the Big Media conglomerate system. Following the logic of capital, the book industry is based on an authorial star system and the promotion of bestsellers, with few opportunities and little ‘incentive’ for unknown authors and independent publishers and booksellers.

Copyright and the culture industry

As the mid-twentieth century approached, the book publishing industry became a sector of what Horkheimer and Adorno (1972) called the ‘culture industry’. They used the term to describe a situation in the United States in which media oligopolies had come to hold significant control over content production, distribution and sales. Concentration in the book, magazine and newspaper publishing industries was evidenced by the rise of mass-produced paperback books, as well as nationally distributed magazines and newspaper chains. Two major radio networks, NBC and CBS, dominated the radio airwaves and provided the majority of prime-time broadcast entertainment throughout the 1930s and 1940s. The music recording industry became oligopolistic during the Depression in the 1930s. Small record companies folded as media audiences shifted their entertainment spending from records to radios and theatre tickets (Frith, 1992). Additionally, the media industry had taken on a conglomerate structure, with the same companies controlling significant market shares in various media industries. For example, RCA controlled the NBC radio network, RKO pictures, RCA records and, on the hardware end, the manufacturing of RCA/Victor radio receivers and phonographs.

From the late 1920s through the early 1950s, five vertically integrated studios controlled the production, distribution and exhibition of movies. Horkheimer and Adorno stressed the centrality of Hollywood movies to the culture industry. By the mid-1940s, average U.S. weekly box office admissions had reached 90 million, over four and a half billion annually. Because Hollywood controlled access to its intellectual property through the turnstile, piracy was a minor problem. At first, Hollywood saw the proliferation of television in the 1950s as a threat, but soon developed a symbiotic relationship with tv broadcasters based on the copyright and performance rights systems developed for radio.

The first real threat to the filmed entertainment copyright system emerged in the 1960s with the rise of cable television (Bettig, 1996: 117-50). Early cable operators retransmitted television broadcasts to subscribers without compensation to either broadcasters or copyright owners. For over a decade, Hollywood studios, broadcasters and cable operators battled in the courts and the Congress over who should reap the benefits of cable technology. The logic of copyright prevailed in the end, as Congress passed a copyright law in 1976 creating a compulsory license requiring cable operators to pay royalty fees to owners of the programs they retransmitted.

Cable retransmission of television broadcasts became a transborder issue between the U.S. and Canada after the 1976 copyright act. Canadian cable operators continued to retransmit U.S. broadcasts without remuneration to copyright owners. After a decade of pressure by Hollywood and the U.S. government, Canadian cable operators were brought into the copyright system through the U.S.-Canada Free Trade Agreement, even though the agreement purportedly exempted ‘cultural policies.’

Today the U.S. cable industry is highly concentrated. Most cable franchises are monopolies and the only alternatives to cable are a pair of home satellite services, DirectTV and Echostar. These companies planned to merge in 2002, but the Federal Communications Commission and Department of Justice questioned a deal that would have given the combined company about 90% of the satellite television market, bringing the merger to a halt. At the same time, nonetheless, the government approved the 2002 AT&T/Comcast merger, creating the largest multi-system cable operator to date with 22 million subscribers. The second largest cable operator, AOL Time Warner, had less than 13 million subscribers in 2002. The vertically integrated operation included Warner Brothers studios and the WB television broadcast networks, as well as cable networks including CNN, WTBS, and HBO. Cable television went from threat to opportunity as the technology once hailed as a means of democratising television became firmly incorporated into the Big Media.

The next perceived threat to Hollywood's movie and television programming rights came from the videocassette recorder (VCR), which was introduced to the home consumer market in the mid-1970s. The industry's first concern was that home recording would threaten advertising revenues as audiences zapped commercials while recording or zipped through them upon playback. Hollywood also feared that VCR owners would build video libraries to watch instead of broadcast programming, reducing audience numbers. Universal Studios and the Walt Disney Company led Hollywood's initial attack on the VCR in 1976 with a suit against Sony. The suit sought an injunction against the manufacture and marketing of Sony’s Betamax VCR within the U.S. When a district court ruled in favour of Sony, Universal appealed and found support from a higher court, which concluded that the VCR enabled infringing uses and deemed that copyright owners should be appropriately compensated.

As litigation was pending, the Motion Picture Association of America (MPAA) also sought help from Congress. Throughout the early 1980s the MPAA encouraged pro-Hollywood legislators to propose a tax on VCRs and blank videotapes to compensate the film industry for revenues it claimed were lost due to home taping. The efforts to tax hardware were stalled in 1984 when Sony won on appeal to the U.S. Supreme Court. The court ruled that home taping of programs from broadcast television was a fair use since it was intended for private, non-commercial viewing and because the ability to record programming to watch at a more convenient time promoted diversity and freedom of expression.

The Supreme Court's ruling for user rights was very narrow, but by that time Hollywood began to realize that the VCR offered greater opportunities for movie rentals and sales. By 1991 the six largest major studios--Disney, Warner Brothers, Twentieth Century Fox, Columbia and Universal--accounted for 77% of the total revenues earned from videocassette sales in the North American market (Berman, 1992). By the late 1990s, the VCR had become Hollywood's largest source of revenue, as nearly 50% of revenues came from sales of videos to rental stores and consumers (versus 25% from the box office).

The proliferation of the VCR permitted the piracy of filmed entertainment on a mass scale. While the industry continued to fight what Dyer-Witheford (2002: 140) calls ‘garden variety piracy,’ it also turned its attention to global piracy operations. The first front was opened in the early 1980s in Europe, where the MPAA found support for its antipiracy campaign from European governments and domestic film industries. By the late 1980s, the major U.S. film distributors had a solid lock on the European video market (Bettig, 1996: 211-2). In the mid-1980s, the U.S. film industry's antipiracy campaign turned from Western Europe to the Middle East and Southeast Asia before moving into Eastern Europe. The Southeast Asian campaign was aided by the U.S. government when Congress passed legislation requiring trading partners to protect U.S. intellectual property rights in exchange for privileged access to the U.S. market. Congress directed the United States Trade Representative to monitor piracy around the globe and recommend appropriate trade retaliation for alleged violations of U.S. intellectual property rights.

The last front of the filmed entertainment industry's antipiracy campaign involved penetrating the closed markets of the former USSR and China. The industry's efforts succeeded in securing the passage of copyright legislation throughout these regions in the late 1980s. Even before the disintegration of the USSR, the Soviet government had begun taking steps to appease U.S. government and copyright industry officials by granting U.S. film distributors copyright and trademark protection. The Peoples Republic of China published its first copyright law in 1991. Both Russia and China, seeking to become major players within the global economic system, including the World Trade Organization, were compelled to recognize — and increasingly to protect — the rights of intellectual property owners. In the long run, piracy probably does the global culture industry more good than harm, since the majority of pirated works are international hits produced by the major studios. The circulation and consumption of such pirated works creates an appetite for products that the Big Media can transform into ‘legitimate markets’.

Enter the internet

Industry concerns over videocassette piracy have given way to concerns about mass piracy of DVDs, and more importantly, the circulation and exchange of movies and television programming over the internet. Based on lessons learned in the cable tv and videocassette copyright struggles, Hollywood has taken a more proactive stance against file sharing of movies via the internet. Allied with the music industry (often subsidiaries of the same media conglomerates), Hollywood has pursued legislation, encryption, litigation, and market penetration in its efforts to incorporate this new medium into existing market structures. These efforts have been replicated on a global scale.

U.S. copyright owners initiated their enclosure of cyberspace through the legislature. In 1997, the U.S. Congress passed the No Electronic Theft Act aimed at criminalizing the distribution of copyrighted works over the internet. The Digital Millennium Copyright Act of 1998 (DMCA) provided copyright owners protection by making internet service providers responsible for policing the distribution of copyrighted materials. Internet service providers who followed ‘notice and take down’ procedures were granted exemption from copyright liability. Another key aspect of the DMCA made it illegal to decode encryption or wash out watermarks. Several constituencies, including libraries, universities and computer programmers, protested this provision of the DMCA, arguing that encryption technologies limit freedom of expression and therefore violate both fair use and First Amendment principles. Jackson (2002: 418) concludes that the ‘DMCA as a whole was a significant step toward the reprivatisation of copyright’ and that its primary purpose was to promote the development of electronic commerce.

Still, copyright owners were not satisfied with the provisions of the DMCA. The music and filmed entertainment industries, in particular, wanted to force makers of home consumer electronics to build encryption technologies into their software and hardware systems. In early 2002, Senator Ernest F. Hollings, a Democrat from South Carolina, introduced the Consumer Broadband and Digital Television Promotion Act, requiring manufacturers of consumer electronics to develop and agree upon technical standards to prevent unauthorized copying of copyrighted materials from the internet, and further compelling them to incorporate copy protection into all digital media devices they sold. Intel opposed the bill, undoubtedly because encryption technologies are expensive to deploy. AOL Time Warner did as well, reflecting its dual role as content provider and deliverer. Access advocates also raised objections to the legislation, but for very different reasons. The larger purpose of the Hollings bill was to force copyright owners to sit down with computer and telecommunications companies and come up with technological fixes aimed at preserving the integrity of copyrighted property on the internet.

In a similar vein, California House Representative Howard L. Berman introduced legislation in mid-2002 that would grant the music and movie industries the right to hack into the computers of suspected copyright infringers in order to disrupt file sharing activities. In addition to ‘ethical hacking,’ the bill proposed that copyright owners be permitted to distribute fake files in order to discourage downloads (Bray, 2002). The bill thus served to justify both invasion of privacy and outright deception in the interest of protecting copyrighted materials as private property.

Copyrights cease to be private property when their statutory term of protection expires. Just as the internet was becoming a viable medium for the Big Media, some of their most valuable copyrights were set to do just that. In 1998, Congress offered a quick fix by passing the Sony Bono Copyright Extension Act, often referred to as the ‘Mickey Mouse Extension Act’ because of heavy lobbying by the Walt Disney Company to protect the mouse whose term was set to expire in 2003. The act extended copyright for an additional 20 years for cultural works, protecting them for a total of 70 years after the death of an individual author or 95 years from publication in the case of works created by or for corporations. The Supreme Court heard arguments against the copyright extension act in late 2002. Opponents of the legislation argued that the U.S. constitution set limits on the terms of intellectual property rights to encourage intellectual and artistic creativity. In sharp contrast to the claim that copyright serves as an incentive to creative expression, those opposing copyright extension argued that the vitality of the public domain is the key to creativity.

Underlying congressional intellectual property legislation was the necessity of bringing U.S. law into compliance with international intellectual property right law. Parts of the DCMA were specifically designed to bring the U.S. into accord with new standards set by the World Intellectual Property Organization and the World Trade Organization. As a major exporter of intellectual property, the U.S. benefits most from such international standards. Hence, once global standards are set, copyright owners can use them to force domestic intellectual property legislation to advance their interests.

The No Electronic Theft Act and the DMCA provided copyright owners with the protection they needed to proceed with the development and deployment of encryption technologies. The costs of encryption are high, and there is always the possibility that efforts taken by copyright owners will be undermined by hackers. With legislative protection, however, copyright owners could proceed with the deployment of encryption technologies knowing they had the support of the state. Already, Hollywood had developed encryption technology to inhibit the copying of videocassettes and DVDs. The music industry introduced CDs using digital scrambling systems intended to make them uncopyable. Watermarking is a related strategy designed to prevent unauthorized copying of digital video. Watermarking works first by making it difficult to copy digital video from one format to another, whether downloading a DVD to computer or making permanent copies of programming delivered via cable set-top or satellite systems. Second, it allows copyright owners to detect and identify unauthorized uses of their property for potential litigation. Both digital scrambling systems and watermarking serve a practical function for Digital Rights Management (DRM).

Two DRM systems are now dominant: one from RealNetworks, Real System Commerce Suite and another from Microsoft, built into its Windows operating system. Their practical function is to track the flow of copyrighted materials on the internet and help track down infringers. The deployment of ‘bots’ such as Ranger, scour the globe through internet Web sites, chat rooms, newsgroups, and peer-to-peer file sharing sites to search for unauthorized downloads of movies (Ahrens, 2002). Thus, as copyright owners aim to crack down on piracy, they also open the door to insidious invasions of privacy.

As the filmed entertainment industry learned with its war on videocassette piracy, copyright laws are useless unless they are enforced. With the backing of the state and the implementation of DRM systems, copyright owners turned to the courts to defend their property through litigation. In 1999, the Motion Picture Association of America successfully sued the publisher of a hacker publication, forcing him to take down links publicizing a DVD descrambling system called DeCSS, which enabled users of the Linux computer operating system to play DVDs on their home computers. The MPAA's main concern was that DeCSS not only violated the DCMA, but also served as the platform for massive sharing of DVD movies online.

The music recording industry began targeting online file sharing in the late 1990s, after the introduction of MP3, a digital compression format enabling audio files to be stored and exchanged from one computer to another. MP3 led to an explosion of web sites dedicated to sharing music files. The record industry oligopoly used its legislative tools to bring suit against MP3.com, Napster, and Aimster, the first major file sharing services. By late 2000, each had effectively been shut down or forced to alter their business practices in line with copyright law, victims of the deep pockets of the five major music recording companies and those of their corporate parents.

After the first assault on internet file sharing, both the music and film industries faced new challenges from peer-to-peer services such as Morpheus, KaZaA and Grokster. These services are fundamentally different from previous ones because the company's servers do not contain a master index of what files reside on the computers of its users and therefore claim not to be liable for any copyright infringement that occurs among their users. Copyright owners have been hindered in their pursuit of these second-generation file sharing services, since they are incorporated in countries where copyright protection and enforcement are lax. Instead of just targeting the file sharing companies, copyright owners directed their efforts to internet services to locate individuals engaged in the exchange of music and movie files. In late 2002, the recording industry initiated a test case by asking a U.S. district court judge to allow them to subpoena Verizon Communications’ internet service subsidiary to obtain names of individuals suspected of infringing copyrights. The recording industry claimed that the DCMA required Verizon to oblige and that the efforts of internet service providers to take action had proven insufficient in protecting copyright. With the names and addresses of alleged infringers in hand, the recording industry planned to send letters to individuals threatening them with litigation for violating copyrights.

The purpose of copyright owners' pursuit of litigation on various fronts is threefold. First and most obviously, they make money from the suits. Winning a suit usually means recovering the costs of litigation plus damages, and the success record for the music and film industries on the piracy front is nearly perfect. This leads to the second strategy, driving potential competitors into bankruptcy, making them ripe for takeover by media conglomerates or venture capitalists looking for a good deal. The third and most important purpose of copyright owners' pursuit of litigation is to protect the integrity of copyright itself. This means the imposition of a system of panoptic surveillance in order to ‘territorialize the Internet in the service of corporate capital’ (Tetzlaff, 2000: 122). Hence, the mere threat of copyright infringement becomes a primary deterrent of activities that may in fact fall under fair use and First Amendment principles.

Every cake you bake, every smile you fake

Legislation, encryption and litigation are merely means to the greater end of market legitimisation. Once a marketplace has been secured, copyright owners are quick to fill it with their own authorized products, and have they implemented rights mechanisms governing everything from cake decorations to professional photographs. In the U.S., bakeries must now pay royalties for birthday cakes decorated with popular copyrighted characters. As the art of cake decorating becomes automated, it is undergoing what Braverman (1998) described as a ‘de-skilling’ of labour. Bakeries now use computer programs capable of generating precise renditions of the desired Disney or Warner Brothers cartoon character—icing the cake, of course, with royalty payments.

The global discount retailer Wal-Mart has turned the low wage employees at its photocopy shop into a copyright police force on behalf of the Eastman Kodak Company in the guise of protecting studio photographers, as well as customers from infringement suits. Accordingly, Wal-Mart employees are barred from copying photos produced by professional photographers on its Kodak Picture Maker machines (Copyright Policy, 2002). In essence, Wal-Mart has agreed to protect Eastman Kodak's monopolistic control over photographic supplies and developing in exchange for access to Kodak's photocopier technology. Like the printers of old, copyright serves here as the basis for economic power. Wal-Mart avoids contributory infringement suits and Eastman Kodak clings to its monopoly over this sector of the economy, even as it declines in the face of digital photography.

Like the bakery and the photocopy shop, the music recording and filmed entertainment industries are bringing panoptic surveillance systems to the internet in efforts to penetrate and capture this new market, while seeking to incorporate the internet into their existing revenue streams. For example, after being party to the execution of Napster, one of the Big Five record companies, Bertelsman, sought to take over the leftovers. The European Commission blocked the deal, in a rare intervention by the state into the ongoing process of media concentration. But the music and movie industries' attempt at enclosing cyberspace through joint ventures and partnerships generally continues unabated. Both industries are developing their own internet systems to distribute music and movies for a fee. They are also slowly and selectively releasing their copyrighted products to competing internet music and movie services, letting the upstarts take the risks of developing viable business models that so far remain elusive, intending eventually to take them over. The control of copyright is essential to this process. By withholding the vast store of copyrighted culture, the music and movie oligopolies continue to hold the reigns over the evolution of new media technologies. They also control the form and range of cultural activities that derive their inspiration from the popular culture domain. At this point, intellectual property serves to suppress new forms of expression, including those that may be ideologically subversive to the interests of capital.

Copyright versus the good society

For many observers the internet still holds the promise of setting information and culture free. Dyer-Witheford (2002) likens the internet to a many-headed hydra, in that as copyright owners lop off one challenge to their property, others quickly emerge. In this view, the intellectual commons will always be contested. By vesting hope in the internet, and ignoring the logic of capital and copyright, such arguments lapse into a form of technological determinism, i.e., that technology will set information free. Vaidhyanathan (2001) argues that since the implementation of statutory copyright law, principles such as the idea/expression dichotomy, fair use, and freedom of expression have successfully balanced the monopolistic nature of copyright but admits that these exemptions to copyright are being threatened as intellectual property owners seek to capture new media. Similarly, Miller, et al. (2001) recognise that the efforts of copyright owners to enclose the internet are leading to mechanisms that privilege pay-per bit systems. In response to the question ‘What is to be done now?’ all of these authors provide pragmatic strategies for defending the intellectual commons within the existing intellectual property system. But they also echo a questionable assumption about capitalism reflected in neo-classical economics: that some sort of equilibrium is achievable within an inherently contradictory system.

The political economic critique of intellectual property reveals how its institutions reproduce the two primary conflicts within capitalism: labour versus capital and the public versus private good. Prodhoun (1970: 395), an early critic of copyright, argued that as material property was ‘essentially hostile to society,’ so also was ‘literary property’ since private property makes it such that ‘social and individual interests are perpetually in conflict.’ When it comes to cultural creativity, copyright owners are not interested in the public realm or social good, their goal is to appropriate it and make money. Capitalism, as Luxemburg determined (1964: 358) will forever seek to ‘reach into every corner of the earth so as to find productive employment for the surplus it has realised.’ This expansionary and imperialistic logic of capitalism is not just spatial; it also means that capitalists will seek to bring more and more areas of cultural life ‘within the grasp of the cash nexus and the logic of capital circulation’ (Harvey, 1989: 344).

Marcuse (1979: 58) ventured a system in which artistic and intellectual creativity would be ‘freed from the horrors of commercial exploitation and beautification, so that Art can no longer serve as a stimulus of business.’ A communication system free of the logic of capital would recognize, along with Williams (1961) that creation is the activity of every human mind. For the production, dissemination and consumption of information and culture to be free and spontaneous, the longer term goal must be the elimination of the capitalist division of labour in which artistic and intellectual labor is subordinate to the logic of capital. In the good society, as envisioned by Marx and Engels (1947: 76), ‘there are no painters; at most there are people who, among other things, also paint.’ n

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Ronald V. Bettig is Associate Professor of Communications at the Pennsylvania State University, USA. He is the author of Copyrighting Culture: The Political Economy of Intellectual Property (Westview, 1996) and co-author of Big Media, Big Money: Cultural Texts and Political Economics (Rowman & Littlefield, 2002). He can be reached at rvb3@psu.edu.