New York Times Sunday Magazine Piece on Copyright Law Reveals Copyright Law Insanity

Yesterday the New York Times Sunday magazine had a mildly interesting story on a fascinating topic: modern U.S. copyright law. The story itself is about music industry licensing executives, who drive around the country trying to convince those who are using copyrighted music illegally to pay for it:

[Devon] Baker, 30, is a licensing executive with Broadcast Music Incorporated, otherwise known as BMI. The firm is a P.R.O., or performing rights organization; P.R.O.’s license the music of the songwriters and music publishers they represent, collecting royalties whenever that music is played in a public setting. Which means that if you buy a CD by, say, Ryan Adams, or download one of his songs from iTunes, and play it at your family reunion, even if 500 people come, you owe nothing. But if you play it at a restaurant you own, then you must pay for the right to harness Adams’s creativity to earn money for yourself. Which leaves you with three choices: you can track down Ryan Adams, make a deal with him and pay him directly; you can pay a licensing fee to the P.R.O. that represents him — in this case, BMI; or you can ignore the issue altogether and hope not to get caught.


Once contacted by BMI [Broadcast Music Incorporated], owners are given a worksheet. Does their venue use a radio, CD players, karaoke machine? Do they feature live music? If so, how often? How many people can the venue legally hold? For smaller businesses with low capacity that don’t make much use of music, a license may be as little as $300 a year. For really big operators, the cost might be as much as $9,000 per location per year, the maximum BMI is permitted to charge a single customer. (The fees are distributed to artists based on what BMI calls “an appropriate surrogate” — local radio or TV — that reflects a sampling of bars and restaurants in the area.) All in all, the division Devon Baker works for, General Licensing, accounts for 11 percent of BMI’s revenue.

One thing becomes abundantly clear as you read about the mission of Baker and BMI is that the current copyright law is insane. The few coffee shop owners that aren’t owned by sprawling corporations like Starbucks are expected to pay licensing fees of a few hundred to a few thousand dollars? No wonder people just play what they want and hope not to get caught. Their mission seems even crazier when you consider that the RIAA, in an attempt to sue individuals over filesharing, spent more than $17 million in legal fees and recovered less than $400,000. Granted, it’s difficult to judge the deterrent effect on those who chose not to download illegally because they feared a lawsuit, but the expenditures seem disproportionate and irrational.

I’m not going to pretend to be an expert in copyright law — that seems like a job for someone with a Ph.D. or a law degree, neither of which I possess. But it is easy to see the disconnect between the average person thinking that artists should be paid for their work and why the average person isn’t all that interested in paying money for each note he or she listens to.

The challenges of trying to convince people to pay for music in an environment where it’s easier and easier to obtain it for free isn’t so different from the modern world of journalism. From debates over paywalls, micropayments, and MediaPasses, leaders in the industry are desperately trying to figure out how to deal with expanding competition and shrinking ad sales in an environment where everyone is used to reading what they want for free. The fundamental problem is the same: How do you get people to pay for something they’re used to thinking of as free?

I certainly don’t have the answer, but I suspect Baker’s cross-country road trip to notify coffee shops of federal copyright law isn’t it.