Recent Changes in Laws Regulating Music Industry and Its Impact on the Industry Players
The music industry in the USA is undergoing rapid changes currently. These changes are mainly being influenced by development and application of technology in the Music Industry. As a result, laws governing the music industry have to change in order to accommodate these changes. This paper examines the new regulations with a view to elaborating their effects on the players in the industry. The paper concludes with predictions of the likely developments in these laws in future and the subsequent effects on the players.
The DMCA directly brings the US copyright law into the domain of the World Intellectual Property Organization (WIPO) copyright treaty and the performances and Phonograms Treaty under it.
The above mentioned provisions incorporate the requirements of the two treaties of the WIPO. The direct effect of these provisions is that they reduce cases of copyright infringement through criminalization and prescription of various forms of punishment. Players in the industry are being forced to keep off activities that are likely to circumvent control to access of copyrighted materials to avoid the heavy fines and harsh jail terms attached to the regulation. For instance, clause A of section 1204 under chapter 12 of DCMA (1998) states that “In general, any person who violates section 1201 or 1202 willfully and for purposes of commercial advantage or private financial gain; (1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and (2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense.” However, the application of the DCMA is not without difficulty. The law still provides that nothing in the application of the law would affect fair use. The term fair use is not authoritatively defined anywhere. This creates a lacuna that may lead to copyright infringements that may go without remedy.
Major exceptions provided in the DCMA may also permit copyright infringement leading to revenue loss to the copyright holders. An example is the unrestricted access to copyrighted material by educational institutions, archives and library which are nonprofit making. Access is allowed to this category of users for purposes of determining whether to acquire a copy of the copyrighted materials work only in situations where identical copies of the work cannot be availed in any other forms. This exception has exposed copyrighted work especially in the music industry to illegal or unfair use with undesirable effects to the holders of copyrights. Secondly, law enforcers, encryption researchers, security testing, matters of personal security, reverse engineers, and minor protections from internet access do not come under this regulation. On 26th October 2012, a new final regulation came into force. This rule as determined by the librarian of Congress provides that people with print disabilities are exempted from measures to protect copyrighted work as it interferes significantly with their right to access information. This provides an avenue that one may exploit to access copyrighted material with the resultant effects similar to the ones that the law seeks to prevent. These exceptions present a challenge in the law to effectively regulate the use of copyrights and provide opportunities for players in the industry to have unauthorized access to copyrighted materials.
Music piracy
Music piracy has been a perennial problem in the industry for a long period of time. This has been made worse with the digitalization of the industry and invention of the internet that has multiplied the problem tenfold. Presently, people are able to share files online through free MP3 and MP4 downloads. Besides, physical transfer of music files has become more rapid through the use of devices such as flash disks and other mass storage devices such as phone and computer memory aids. The sharing of files has been legally recognized as an avenue of copyright infringement as was evidenced in the case of MGM v Grokster. In this case, MGM successfully sued Grokster and Streamcast citing their P2P file sharing service. The court delivered its ruling based on the ratio that since Grokster marketed itself as an avenue for acquiring movies with copyrights, it indeed engaged in copyright infringement. The decision in this case is serving as a warning to those who engage in illegal file sharing in the USA as it reinforces the reality of possible prosecution if found. On the economic side of the laws, private copying levy has been introduced in the USA in order to cushion industry players from the reduced revenue as a result of file sharing. Recordable media such as blank CDs DVDs and tapes are basically tax levied when bought. The reason is that purchase of recordable media significantly reduces the revenue from sales as people are not likely to buy albums but instead make copies of them from a single copy initially purchased. This measure was primarily intended to compensate for sharing files illegally. The introduction of these levies was heavily influenced by pressure mounted by lobbyists from the recording industry in the USA.
Another major avenue for seeking redress for illegal sharing is through filing law suits. One body that has consistently fought for the rights of music copyright holders is the Recording Industry Association of America (RIAA) whose membership comprises of record labels and distributors. It was formed in 1952. Its main function is to ensure that government regulations in the music industry are always complied with resulting into the management of collective rights in sound recording. Other functions include the following:
- Carrying out general research for the improvement of the music industry
- Helping in enforcing the intellectual property rights of artists and their rights in the first amendment.
- Supervising and reviewing laws, regulations and policies that may be relevant to the music industry.
RIAA’s major contribution is against illegal sharing of its music for which it has achieved considerable success. Since RIAA has determined that peer to peer file sharing leads to significant loss of sales revenue, it is stepping up efforts to discourage illegal file sharing of recorded music. It has successfully sued the providers of file sharing services and individual suspect of unauthorized file sharing. These individuals mainly comprise of parents whose children have engaged in file sharing and students in higher learning institutions. Initially, in its efforts to achieve copyright protection, the organization first identified an illegal file sharing activity by tracing an IP address to get the user. Before proceeding to trial, RIAA would offer a reprieve by prescribing the fine amount to be paid. If the offender failed to pay the prescribed amount as determined by the body, it would proceed to trial and demand for compensation for statutory relief of damages as set out in the Digital Theft Deterrence and Copyright damages Improvement Act. This would occasion more money lost in legal fees hence suspected persons preferred to pay the fine as prescribed. However, this was discouraged as it was prejudicial. If the matter did not end up in court, it was not legally determined whether the suspect was guilty or not. Internet Service Providers faced a similar predicament as the individual suspects.
The impact of the RIAAs efforts considerably reduces file sharing due to the fact that it is easier and cheaper to purchase music than illegally acquiring files and risk legal action in the event of discovery. RIAA is significantly successful in regulating the activities associated with file sharing. The best settlement achieved by RIAA is USD 115 million from the owners of the kazaa file sharing network for copyright infringement.
In conclusion, this paper finds that the present regulations in the music industry may not be able to forcefully protect copyright holders against infringement at present and in the future. Whichever the developing technology, the music industry will always be adversely affected especially in the protection of music copyright holders. This rapid change in application of technology in the music industry makes it difficult for the laws to effectively regulate the entertainment industry. The laws need to be constantly reviewed in order to keep up with new developments in technology. Only very coercive laws will achieve the deterrence effect on industry players to eliminate copyright infringement of musical works.
