Recording Industry's Latest Plan To Mess Up The Internet: Do Away With Safe Harbors

For the most part, the recording industry has been rather quiet of late concerning copyright reform. With labels pulling funding from the RIAA and its international sister operations like the IFPI, the focus on copyright reform has been left mainly up to Hollywood and the MPAA. The recording industry has been much more focused on smaller issues like performance rights and other licensing issues. But, apparently, the recording industry hasn't yet truly given up on the idea of completely undermining key parts of the internet to get its wishes. According to the IFPI, its "top" goal for copyright reform is attacking the so-called "safe harbors" found in copyright law, like the DMCA's Section 512.

If you're unfamiliar with it, copyright's safe harbors are designed to make sure that the internet thrives, by avoiding frivolous litigation that would stifle free expression and innovation. Honestly, the safe harbors are a pretty simple concept: put the liability for infringement on the parties that actually infringe the content, rather than the internet services that they use. Think of it this way: you don't blame Ford for providing the getaway car in a bank robbery, and you don't blame AT&T for providing the phone service used to make a bomb threat. As such, it makes no sense to blame a hosting company because a blogger posted an infringing image.

IFPI's main target, not surprisingly, is YouTube. It makes a strained argument that the DMCA's safe harbor is costing the recording industry hundreds of millions of dollars -- and it does this by comparing apples to oranges.

Which results, the record industry argues, in what the IFPI calls a “value gap”. The trade group says: “An illustration of this can be seen in comparing the share of revenue derived by rights owners from services such as Spotify and Deezer, and those derived from certain content platforms like YouTube or Dailymotion. IFPI estimates music subscription services have 41 million paying global subscribers, plus more than 100 million active users in their ‘freemium’ tiers. This sector generated revenues to record companies of more than $1.6 billion in 2014″.

It goes on: “By contrast, YouTube alone claims more than one billion monthly unique users and is thought to be the world’s most popular access route to music. Yet total global revenues to record companies generated by certain content platforms including YouTube amounted to just $641 million in 2014, less than half the total amount paid to the industry by subscription services such as Spotify and Deezer”.

Note the implicit (and wrong) assumption, though: that YouTube and Dailymotion are the equivalent to Spotify/Deezer. Yet, much of the value in YouTube and Dailymotion is that they are platforms for anyone to upload any content, the vast majority of which is not music. But that point never seems to be considered by the IFPI at all. Instead, it wants to remove the safe harbors entirely from YouTube, by arguing that since the company is also providing services to help artists make money, it should lose its safe harbors:

Calling for action, IFPI chief Frances Moore said: “The value gap is a fundamental flaw in our industry’s landscape which sees digital platforms such as Dailymotion and YouTube taking advantage of exemptions from copyright laws that simply should not apply to them. Laws that were designed to exempt passive hosting companies from liability in the early days of the internet – so-called ‘safe harbours’ – should never be allowed to exempt active digital music services from having to fairly negotiate licences with rights holders”.

She added: “There should be clarification of the application of ‘safe harbours’ to make it explicit that services that distribute and monetise music should not benefit from them”.

But think about the obvious consequences to such a move (obvious to everyone but the recording industry, it seems). Removing the safe harbors from YouTube would have tremendous collateral damage, basically making the platforrm useless for all user generated content. It would effectively require Google to carefully pre-screen every video that goes up (beyond what it does now with ContentID -- which already, problematically at times, goes beyond what the law requires).

Furthermore, the message that Moore and IFPI are saying to the rest of the internet is don't help us monetize because the second you do, you should lose your safe harbor protections and immediately become liable for the actions of your users. How shortsighted can Moore possibly be? The recording industry's plan here is to basically tell the internet: don't build services that help us make money or we'll sue you. How is that possibly a smart strategy?

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