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Economics, and the Clash of Technology and Copyright

Posted By Barry Ritholtz On April 16, 2005 @ 7:37 am In Finance,Music,Web/Tech | Comments Disabled

Berkeley professor Hal Varian [1] notes in the NYT [2] that MGM vs Grokster case is only "the latest installment of a longstanding battle between
technology companies and copyright holders"

"In the early 1900′s, the disruptive technology was player pianos.
Manufacturers of player piano rolls purchased a single copy of the sheet music
of a song, hired someone to record the music and then sold these mechanical
reproductions to consumers. The songwriters held that this was copyright
infringement, while the piano roll manufacturers pointed out that they had paid
the appropriate copyright fees when they purchased the sheet music.

In 1908, the Supreme Court found in favor of the piano roll manufacturers,
but practically invited Congress to consider new legislation on the issue.
Congress responded with the Copyright Act of 1909, which created a new form of
intellectual property, mechanical reproduction rights.

The new law required piano roll manufacturers to pay songwriters a fee for
each song. Subsequently, mechanical reproduction fees have been extended to new
technologies like phonographs, audio tapes, CD’s and online streaming digital
music.

In the 1908 case, songwriters did not try to ban player piano technology.
They clearly recognized that the additional distribution of their songs was
potentially advantageous. Their goal was simply to get a fair share of the
proceeds from the piano roll sales."

The friction between new technologies and copyright is already a century old. History shows that it is possible too come up with the right balance between competing interests.

Source:
File-Sharing Is the Latest Battleground in the Clash of Technology and Copyright [2]
By HAL R. VARIAN [1]
NYT, ECONOMIC SCENE, April 7, 2005
http://www.nytimes.com/2005/04/07/business/07scene.html


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URL to article: http://www.ritholtz.com/blog/2005/04/economics-and-the-clash-of-technology-and-copyright/

URLs in this post:

[1] Hal Varian: http://www.sims.berkeley.edu/~hal/

[2] NYT: http://www.nytimes.com/2005/04/07/business/07scene.html?ex=1270526400&en=4dd863386f862bcc&ei=5090&partner=rssuserland

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