Great panel at the California Copyright Conference tonight with Curt Marvis of Lionsgate, Keith Bernstein of Royalty Review Council/Crunch Digital, Robert Allen of Universal Music Publishing and Dean Kay, ASCAP Board Member and publisher extraordinaire. My opening remarks below. For those who were there, the two startups I mentioned were Patronism and Stageit.
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I’d like to thank the CCC for hosting this panel, especially the planning committee. I’d also like to thank the panel for taking the time out of their days to come and talk about some positive developments in our business. I’m going to make a few remarks and then the panel will introduce themselves.
The first time I spoke at CCC was 1994 and I remember a panelist saying that night that the reason there were not more deals with companies like AOL, Compuserve and what then passed for ISPs was simple—those companies were an immature industry and it was impossible to negotiate with them.
I suggested at the time that maybe it wasn’t that they were immature and did not know what they were doing, but rather that they were immature and knew exactly what they were doing. And what they were doing was trying to roll over us.
It wasn’t that these companies didn’t respect property rights at all. All of them respected their own rights to sell shares of their stock to the public and they welcomed government regulation that gave them access to the public financial markets. They just didn’t respect property rights or government regulation that kept them from “getting big fast” and increasing their market valuations. Things like copyright.
Fast forward to 2011, and we see the triumph of this thinking in the recent Google drugs debacle. Google recently signed a nonprosecution agreement with the US government requiring it to pay $500 million of the stockholders money to keep their executive suite from being indicted for facilitating the importation of controlled substances into the United States.
Why? Because it suited Google over an 8 year period and 7 different sting operations to profit itself not only from those selling counterfeit drugs, but also FDA approved drugs purchased without proper prescriptions. Former Health and Human Services Secretary Joseph Califano believes these drugs were sold to children.
Now compare this to Apple. Depending on the week, Apple is now the second largest American corporation. How did Apple approach selling devices that allowed consumers to listen to music and watch movies? Apple did not pretend they only knew about piracy when copyright owners notified them of it. Apple did not wrap themselves in the flag of “innovation” to engage in “parasitic innovation.” Instead Apple built the greatest filtering software known to mankind. They got licenses. They did the work. They respected the property rights of others because stealing music is bad karma.
Apple got licenses because it was the right thing to do. And the right thing to do paid off.
This is the paradox of our business. I think everyone in this room is committed to a belief in property rights, yet we struggle to understand people who actually do not share that belief. We honor respect for the rule of law and our place in the market economy, and we assume that the ability to do business in peace is a universal value. We also assume that because we are willing to compromise and negotiate, others will, too.
One of my favorite political writers said “Lack of imagination leads to the conclusion that all conflicts can be resolved — if only we’d explain ourselves better, show others respect, address grievances, and offer more generous concessions. But this conclusion is erroneous.”
So what is to be done? Where do we find more companies like Apple?
I think we must balance our attention between fighting to achieve the legal environment for survival with supporting the people who are doing legitimate business or who aspire to do legitmate business. And we likewise have to do what we can to nurture a business environment where people with good karma can thrive.
I think this panel will explore the business choices we need to make in determining whether to do business with the kinds of people who sell advertising for counterfeit drugs and those for whom it is bad karma to steal.
There are many good ideas in our business and our embrace of technology to help our artists prosper is a story that often does not get past the typical narrative. Maybe it was because Steve Jobs was a Buddhist that he chose to do the right thing—if that’s what it was, I will take the Buddhist every time. And so will Apple stockholders.
So tonight we will look at some examples of legitimate alternatives in the entertainment business, and how to be sure creators are collecting from them. And there are a lot of examples of our business embracing technology and innovation.
Because the good news is that the bad news is not the whole story.
Music Technology Policy 
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