Today we have our second episode with Cory Doctorow, co-author of Chokepoint Capitalism. In this second installment, we dig deep into copyright and how artists can take back control of their precious works.
Today we have our second episode with Cory Doctorow, co-author of Chokepoint Capitalism. In this second installment, we dig deep into copyright and how artists can take back control of their precious works.
Richard Kramer:Welcome to Bubble Trouble, conversations between the independent analyst Richard Kramer, that's me and the economist and author Will Page, where we lay out some inconvenient truths about how financial markets really work. We have a fantastic guest for today, the Inimitable Corey Doctorow. We're gonna dig deep into copyright and how artists can take back control of their precious works. Corey is a prolific author, speaker and activist, and we're delighted to have him with us today. More in a moment.
Welcome to Bubble Trouble. We are back for part two of our conversation with Corey Doctorow, the author of soon to come out or just out Choke Point Capitalism, talking about so many of our favorite subjects, the ins and outs of markets, technology and the fate of creators and artists. We've been covering in part one if you haven't heard it yet, issues like monopoly and monopsony, the failure of regulation or regulatory forbearance as Corey said about it. Um, and some of the deep and dark history of how we got to this place where we've allowed bigness to become celebrated in everything in every corner of the economy. I want to throw it over the Will to pick up on some threads of this conversation and keep going with Corey 'cause we have many other topics to dig into.
Will Page:We sure do. We sure do. So I just wanna kind of take stock like when you're binge watching something on Netflix and it's like, here's your season recap before you go into the next episode. What you are saying in our first show was basically, you perhaps don't have such a big problem in monopoly power. You have a much bigger problem with monopsony power. It's what's happening in the value chain that matters, not so much what's happening with the consumer. But you are also stressed, it does go full circle. There's endogeneity, to use the technical term in all of this. Then I kind of fallen two sides here. One, I go back to that book example. I'm a first time author, you're an established author. Like I said in the last show, a million new front list books are gonna get to market and they do get to market and they are discoverable on the Amazon website.
I'm not sure a million front list books would've got to market had it not been for the size, the presence, the scale of Amazon. I just don't think that might have happened. So I see the benefits of scale, I see the benefits of scale in terms of choice, in terms of cost and in terms of convenience. And what I wanted to quickly describe for the people in the studio here, and it's great to be in real life in the studio for the first time, by the way, in possibly the best podcast studio on the planet, but is to describe for our audience [inaudible 00:02:41], which involves us going to the beach.
So let me just go off on a little bit of a tangent here and see where we end up. Let's imagine we have a beach and this beach is two miles long and there is one monopolist ice cream seller on that beach. And that monopolist ice cream seller on that beach is half a mile from the north end, therefore one and a half miles from the south end. And people on that beach are evenly distributed, this is crucial, evenly distributed 'cause we all want our fair square share of sand. Now I deregulate the market and a second ice cream stall comes in. Where's the logical place for that second ice cream stall to go if the first one is half a mile from the north end and one and a half miles from the south end of the beach?
Corey Doctorow:Well, I think you're supposed to say half a mile from the south end of the beach.
Corey Doctorow:But what people inevitably do is stick it next to the one that's got the long line in front of it.
Will Page:With a little bit of zigzagging. So it'll go half a mile from the south end, but in a bit to steal some of the north ends customers.
Will Page:Who co says, "I'm gonna come in a bit to steal some back of those south end customers. And I'll come in a bit and I'll come in a bit." And when you do look at commerce on a beach, the two ice cream stalls typically are located side by side bang in the middle. Meaning there's a lot of people on the edge of that beach who are getting purely served by the market for 'em. I think where I really find alignment with what you are saying is when we look at markets, we need to look at that beach and say, why are those ice cream stalls together when they should be further apart?
Will Page:Who's serving the customers on the edge?
Corey Doctorow:And what, you know, I'm thinking a very contemporary way. Why are the, uh, CEOs of Unilever and Proctor and Gamble telling us that the reason everything in our grocery store costs more is because of oil shocks and telling their shareholders that they found a bunch of suckers who will pay more because they think that oil shocks are happening? That I think is another example of this kind of, wherever men of commerce gather alone, they immediately conspire to rig the game.
Richard Kramer:But, uh, so I, I have to ask what is so disturbing right now watching, for example, from afar and having three passports, one of them still a US one, but what's happened in the political sphere is exactly the opposite. You've had increasingly large groups crowd at the extreme northern or southerly end of that beach and there feels like there's nothing in the middle. Some of what you're saying, I feel like we need just a few alternatives. We don't need a thousand flowers to bloom in terms of other places to go buy books or hear music.
Richard Kramer:We just need to break the strangle holds of the one that has the, and this is something else I wanna get into that has that default position. And I guess can you reflect a little bit on this power of defaults? The idea that, well, we're all creatures of habit. Once we've gotten used to ordering from Amazon, we just keep doing it. And they've marked out a position which makes it very difficult to overcome the default, the habit forming behavior. It makes it very difficult to unseat them from that position on the beach. And the guy who comes next to them to compete, they will, won't have a fraction of the supply that they do.
Corey Doctorow:So I think this is an area where it's useful to, to actually be a bit of a tech exceptional. There's lots of ways in which I'm not a tech exceptionalist, I don't think the people who run tech companies are evil geniuses. I don't think they're parti- they're particularly genius, but I also don't think they're particularly evil. I think that they're just doing what any ordinary m- mediocrity would do if they just didn't have anyone around to tell 'em they couldn't. But there are ways in which tech is distinctive from other markets. And the big one is that we only know how to make one kind of computer. It's the general purpose computer that can run all the software we know how to write. And that means that intrinsically you can always plug new things into existing things and you can erode default status, you can lower switching costs, you can make it really easy to go from one thing to another.
Corey Doctorow:That's just built in. You know, you, you may remember around 2000, I was a CIO back then. I was helping SMEs keep their new intranets together. And we had a real problem with Mac's on these mostly Windows networks, which is that Microsoft office for the Mac was the single most cursive piece of software Microsoft had ever released. You just had to wave the install disk near a computer and all the files on it would go corrupt. And if you sent the designer or the CEO or the two people who could demand a Mac a Word file, I- if they could open it, if they sent it back to you, it was corrupted forever.
Richard Kramer:Yeah. Yeah.
Corey Doctorow:And so w- we eventually started putting a PC on the desk next to the Mac, that was unwieldy. So then we just put a big graphics card in that PC and we threw away the Mac and we just gave them a graphic design station that ran Windows. Apple knew that this was an existential risk. They didn't go on bent need to Bill Gates and say, "Please fix your intentionally broken Microsoft office with Mac." They had some engineers reverse engineer Microsoft Office and they made keynote numbers and pages, the iWork suite, which reads and writes all the Microsoft Office files. Suddenly the switching cost was the cost of a new computer. All your files would come with you and you could exchange files with anyone else in the world, whether they were running Windows or Mac Os. That saved Apple's Bacon. You may remember they ran this ad campaign, the switch campaign-
Corey Doctorow:... which was just about how easy it was to switch from Windows to a Mac these days. So that's possible. We could hypothetically do something like form uh, a non-profit association of local merchants that standardized all the SKUs on the shelves of all the shops within a couple of miles of you on the ASIN numbers that Amazon uses for its own stock tracking. And then we could give you a browser plugin that whenever you landed on a page on Amazon, it would say, "Well, this is also available around the corner. Would you like to buy it there?" One click, right. If you tried to do that, Amazon would reduce you again to radioactive rubble.
Corey Doctorow:They would say that when they did things like this to other merchants, you know, when Amazon started off, their order sizes weren't large enough to command books on demand from distributors. And so they probed the distributor's stock inventory, found books that were out of print and they would order one copy of the book they wanted and then 10 copies of a book they knew couldn't be delivered and they would make the minimum order and then they would just get that one book because the other, the-
Richard Kramer:They gamed the system.
Corey Doctorow:Yeah. So if you tried to do that to Amazon, every pirate dreams of being an admiral, right?
Corey Doctorow:They would say, "When we did it, that was legitimate. When you're doing it, it's felony contempt of business model."
Corey Doctorow:"And you shouldn't be allowed to." And it would be a felony. They would invoke the Computer Fraud and Abuse Act, which criminalizes violations of terms of service. They would say by reverse engineering their app that you were violating the Section 12, one of the digital law named Copyright Act that makes it illegal to remove DRM here in, in countries that are subject to EU law. Which this one is for who knows how much longer. That would be Article six of the European Copyright Directives. Same thing. They would say that you were engaged in tortious interference with their, with their customer relationships. They would just basically say, when we did it, that was legitimate. When you do it, that's crime.
Will Page:Right. Just [inaudible 00:09:29] very quickly there, we, we, switching costs is a fascinating concept for me because it goes either way. And I remember listening to a presentation by Ofcom, our national regulator.
Will Page:Who Adam Singer reminds me is forever trying to regulate companies that are desperately trying to put themselves outta business [laughs]. 'Cause they don't regulate tech. They regulate old media, not new media. But yeah, they were boasting about how the level of switching amongst ISPs, telco providers in this country had gone up. So I raised my hand, the dumb kid in the classroom and said, "Why are you celebrating that? Because more people are switching. That's a good thing." Well it could be a good thing, it could be a bad thing because these ISPs are performing so badly more and more people are irritable and need to leave. And the hassle of leaving is such a burden. It can take six months to get off Virgin Media and I can't wait to get off Virgin Media. That's actually a net negative for regulation.
So you can view it both ways, which is if lots of people are switching good, we're exercising our right to switch. We have the billboard campaigns called You Switch-
Will Page:... you and I can Switch, telling people, you've got the right to exercise your competition. But then if the markets are performing the right way and these ISPs are performing a great service and we're happy with the bills that we're paying, then I don't want the hassle of having to switch.
Corey Doctorow:Yeah. But if, but if they're doing a good job, they don't need the, they don't need the barriers, right?
Corey Doctorow:They, this is like the Berlin Wall-
Corey Doctorow:... that was, the Berlin Wall that wasn't there to keep the people of East Germany in. It was there to keep all the jealous people out of the workers' paradise, right. You don't need a wall around the business that keeps people from leaving if you're doing a good job. And contrary wise, you can think about an equilibrium where the more it costs you to leave a firm, the worse the firm can treat you-
Corey Doctorow:... be- before you go and-
Will Page:[inaudible 00:11:02].
Corey Doctorow:Yeah. Well, or in the Texas AGs antitrust case against Facebook, are these memos being published through discovery that are top executives at Facebook sending memos to their bosses saying, "We're gonna make Facebook photos as good as possible. We're gonna get people to put their family photos in it. Not because we want to provide a better service, but because we want them to have to give up their family photos if they betray us and join Google Plus. Right. We wanna increase the switching costs."
Will Page:Yeah. Interesting. A- and now just to wrap that one up, 'cause I want to come in at different angle here. This is fascinating. This is genuinely... I, I, for our listeners, I am jet light like a mofo right now. I've been, I didn't sleep on the flight, but I am wide awake. Yeah. So, so collecting [inaudible 00:11:43] where I used to work at the PRS. When I first started in London in 2006, the PRS was under investigation by DG Competition, our Brussels regulator. And the reason why is because he found an email where songwriter, who's member of Gamer, the Gamer, sounds like a horror story and working with him is, wanted to move from Gamer to the PRS.
And they said to Gamer, "I would like to transfer my membership to PRS. I'm moving home, my family's there, I'm an English speaker. It's gonna be easier to follow the contracts." Gamer then wrote to PRS saying, "Will you take this songwriter question mark?" And it's the question-
Will Page:... mark, which is, if they say no, that songwriter couldn't move. And it's a perfect example of interoperability.
Will Page:It made perfectly good sense for that songwriter to jump from a German language collecting [inaudible 00:12:26] to an English language one. But the monopolist, the, the National monopolist and the are National monopolies, controlled the decision to switch.
Corey Doctorow:Well this, so this is an area we get into in the book and I want to plug the book a little here in as much as saying that the second half of the book is a bunch of technical solutions.
Will Page:[inaudible 00:12:43] to this.
Corey Doctorow:They're really... Yeah. And they're not-
Will Page:It's not just pointing at problems [inaudible 00:12:46].
Will Page:Let's get somewhere with this.
Corey Doctorow:Or and then saying, "Okay everybody. Go vote harder, we'll fix this." Right. We wanted to actually explain what you could do if you had the reins of power. Because a weird thing about the rigged arts markets is there have been lots of interventions, really substantial ones. The 2019 digital single markets directive, which is like this dog's breakfast of great things and really terrible things and things [inaudible 00:13:07].
Will Page:Christmas tree bill where everyone puts something on.
Corey Doctorow:Yeah. Yeah. And like there was a lot of political will, many artists don't have the power to make changes, but you know, when Paul McCartney and Debbie Harry back a bill, it, it does very well, which is what happened in this case. It's provisions, some of them, which were enacted in the name of helping artists were not very good. And they really fulfilled what Bruce Schneider and security land calls the security syllogism, which goes, something must be done, "Oh there I've done something." Right. It doesn't matter if what you've done has any nexus with solving the thing that you're angry about.
And so we wanted things that would solve these problems. And one of the things that we talk about is the extraordinary complexity of collecting society licensing. That each one of these c- collecting societies all over the world maintains separate non interoperable databases that there aren't common identifiers.
Corey Doctorow:They often claim that they're unable to locate obscure artists like Beyonce. And, but there are ways that we could fix this. You could create interoperable standards across borders. There are also ways we can fix the incentives. Like we could tell collecting societies, if you can't find an artist, the only thing you can do with the money that you are not giving to the artist that you have no attributable royalty holder for is improve your system for finding words.
Will Page:No taxation without representation.
Corey Doctorow:Yes. You can't, you can't put yourself on higher salary.
Will Page:It didn't work well for people in America, it doesn't work well today. [inaudible 00:14:22] really... I'm so hungry to get into this topic.
Will Page:Give me, gimme some runway here.
Richard Kramer:All right.
Will Page:In my book [laughs], I come up this concept called the strategy tax.
Will Page:And this was made by an observation. And remember I'm a pandemic first time author. I had to finish that book-
Will Page:... in the darkest days of lockdown. But I always spotted this observation with Google Calendars. Gmail user, like many of the listeners, they made it easier to use Zoom than they did to make it use Google Hangout. And a huge chunk of the population was for the first time having to adapt to-
Will Page:... video conferencing. But they made the decision to prioritize a competitor product over their own. And I called that the strategy tax. The thinking being, if it serves a overarching goal of the firm, you would cancel out competition for one of its components. That is what matters more to me making calendar work or making video conferencing work. I wanna make calendars work-
Will Page:... 'cause I'm competing with Apple, another one of the tech monopolies and I'm competing with Amazon, another one, the tech... to make calendar the most attractive calendar feature there is.
Will Page:So I'm gonna beat up on Google Hangout to prioritize a competitor, which is Zoom.
Corey Doctorow:That may be so. I mean, I think the thing I wonder about is to what extent is this just the curse of bigness? Like you have someone whose KPI and bonuses are structured based on Calendar uptake. And so they're like, okay, well if we make Calendar better for Zoom users, 'cause that's what everyone's using and no one uses Google meet, then we will, then my KPIs will improve and I will get a bigger bonus this year. Even if structurally the business would be better off if they were self-referencing, which again as an anti monopolist, I would-
Corey Doctorow:... prefer them not to do [laughs].
Will Page:But self-referencing is one thing, but they actually went to the other extreme to say, go competition.
Will Page:And they made a decision far faster than any regulator could, that would've taken 18 months in the courts to action prioritize Zoom over Google 'cause you're [inaudible 00:16:11].
Corey Doctorow:Well, well they is, they, do you have a theory by which you can say, well reliably firms will prefer competition if the market is structured in thus and so away or?
Will Page:So it's, it is a, a theory and process, but if your job as a tech monopolist or just a large tech firm wanting to get larger is to expand out output, reduce cost and importantly compete for convenience, 'cause that's how you scale, then the strategy tax is an interesting concept to play around with. There are many examples where tech companies will beat up part of their own business to achieve a higher goal-
Will Page:... and a bigger business.
Corey Doctorow:But, but, you know-
Will Page:And that's something that regulation couldn't achieve for the market [inaudible 00:16:46].
Corey Doctorow:But, but Google in the end, just integrated Google Meet, where now it's, you literally can't create a Google Calendar event without a Google Meet showing up in it.
Richard Kramer:But it may have been that they didn't have the API ready. But I wanna go back to, uh, to, to the way Google or a firm like Google behaves. So for the longest time I looked at the Google network business, the placing ads on third party websites.
Richard Kramer:And I said, the traffic acquisition costs the $20 billion they remit to publishers kind of omerta code of silence money for those publishers who have willy-nilly said, "We are going to outsource the placement of ads on our sites-"
Richard Kramer:"... to this third party Google." The bigger question is, and I've, I listened carefully and I love the concept of adversarial interoperability and we all have these ideas that we can have all this wide variety of services we engage with. But how much is this current state of choke point capitalism, the abrogation of responsibility by publishers who've been divided and conquered, by users who've been lazy and just went with the defaults? And even when those defaults were not as good, we said, you know what, it kind of works okay. You, if the calendar function on Google had just defaulted to Hangouts, you probably would've said, "Well, it's just easy to use, I'm just gonna use it." And so h- how can you mobilize a sufficient portion of the population to say, "Well, we'd like alternatives-"
Richard Kramer:... not just the folks like us who, who really want, who live and breathe it and understand that-
Richard Kramer:... there're all alternatives.
Corey Doctorow:Mm-hmm. [inaudible 00:18:14].
Will Page:Just very quickly, just in defense of Google here, if you go to your settings, you choose your defaults.
Will Page:The question is, how many customers can you [inaudible 00:18:21]?
Richard Kramer:They've, they've been required by regulators to put that in.
Corey Doctorow:I think you're overstating it. I mean there, there was a scandal last year when the person who was in charge of Google Location privacy said, "I have unticked 12 boxes that are supposed to turn off Google location tracking and I missed a 13th one and I'm in charge of this program." That was another thing that came out in a privacy lawsuit.
Corey Doctorow:So the, there, there is such a thing as configuration theater, right? Where you tick the box that you think is doing one thing and it's not doing it. Google's privacy settings are notorious for this, right?
Richard Kramer:... that are supposed to be-
Corey Doctorow:By being dumb enough to use the service, you agree that we're allowed to come over to [inaudible 00:18:58] your grandmother, wear your underwear make [inaudible 00:19:00].
Richard Kramer:I, I very simply call it the data donation agreement.
Richard Kramer:You signed the data donation agreement.
Richard Kramer:So how do you mobilize, how do you mobilize enough people to say-
Richard Kramer:... "Yes. We're, we just can't," these are very powerful brands-
Richard Kramer:... Google, Amazon, Facebook and Apple are among the top 10 brands in the world.
Richard Kramer:And that's including China and including places where they don't-
Richard Kramer:... uh, play, well Apple-
Richard Kramer:... does but the others don't. How do you get people to...
Corey Doctorow:So, but you asked two questions.
Corey Doctorow:I wanna ask the, answer the first one first, which is the one about the news media and-
Corey Doctorow:... whether they were lazy, whether they abrogated the responsibility. So let's remember that there're two things that happened. It's possible for everyone to be wrong in this situation, by the way. So first of all, news has historically been incredibly resilient. Right? If you think about the news media, it weathered the telegraph, the radio, the TV, cable television satellite. And it did it in part because mostly news media was, were family businesses. They had substantial cash reserves that they kept that could carry them through technological transitions. And they own their, they own their presses, they own their delivery networks, they own their sales force. It was a huge piece of the-
Corey Doctorow:... strategic advantage of especially local news-
Corey Doctorow:... was that you had a local sales force that literally just did shoe leather sales calls to the butcher and the baker and the candlestick maker to place ads in the paper. So in the run up to the Big Bang of tech, something else happened to news media, which was the deregulation of news media ownership-
Richard Kramer:Yeah. In the US.
Corey Doctorow:... and that... In the US.
Richard Kramer:Mark Fowler at the FCC.
Corey Doctorow:Yeah. Huge consolidation.
Corey Doctorow:And that consolidation-
Richard Kramer:Cross ownership.
Corey Doctorow:Yeah. And it found efficiencies by mass redundancies of the sales departments, which were then consolidated into boiler rooms in the Midwest, where they had no local expertise, selloffs of the physical plant and leasing it back, which exposed them to rent shocks. Outsourcing of their delivery systems.
Corey Doctorow:Right. All of the stuff that was kind of stabilizer in the event of destabilizing shocks they got rid of. Right. They pulled out all the Jenga blocks.
Corey Doctorow:And then someone came along and knocked down the tower. So you have Craigslist, which just delivered better classified ads.
Richard Kramer:And al- also the, the idea that, I mean, w- when I first came to London, I found my flat by looking at a free paper called Loot.
Richard Kramer:And it came out every week and it had-
Richard Kramer:... lots of classified ads in it. And that classifies was a absolute money spinner for the newspapers. And then all of a sudden you realized half those ads you rang up while someone already took the flat or someone had already bought that bike.
Richard Kramer:And if you could keep them up to date electronically, much like the French did with the Minitel in their-
Richard Kramer:... phone books, then it would work a lot better.
Corey Doctorow:I had lunch yesterday with my colleague and collaborator, Charlie Strauss in Edinburgh who cut his teeth writing for Computer Shopper.
Corey Doctorow:Same thing.
Corey Doctorow:Right? So the, uh, news media is now, it's in a brittle and unresilient state. You get Craigslist, right?
Corey Doctorow:And then you get much more rapacious firms that enter the ad market, not just Craig's a kind of a good natured guy who just wanted everyone to get along and wanted it to be easier for people to find stuff. But you get these firms that were much more aggressive-
Corey Doctorow:... that entered the market. And these firms among the ways that they're aggressive is in their acquisition strategies.
Corey Doctorow:So you think about Google as a company, we tend to think of them as like an idea factory. Look at all the cool products they've made. In-
Richard Kramer:No. They bought a lot of companies.
Corey Doctorow:... in truth. Yeah. Google has made in-house a great browser or a great search engine, a browser that is good, but also d- does not act as your honest broker on the web. A pretty good Hotmail clone. Everything else, their whole ad tech stack, ad tech stack, their whole display business, YouTube, their whole, their mobile stack-
Will Page:Acquired, acquired, acquired.
Corey Doctorow:... server management. [inaudible 00:22:48]. And the companies that they started to do it in-house failed.
Richard Kramer:Yeah. And, but I would argue that for a lot of the tech companies, they bought the ideas and then they have poured-
Richard Kramer:... capital into them. And Kubernetes and Hadoop and all of these-
Richard Kramer:... cloud, they were all invented by Google to manage their own infrastructure.
Corey Doctorow:Sure. So we were, but we... No, well they bought the companies that invented and then they improve it.
Richard Kramer:Yeah, yes. Yeah. Yeah.
Corey Doctorow:But we were talking before about, about Rockefeller and Standard Oil. So Ida Tarbell wrote-
Corey Doctorow:... the history of the Standard Oil company, amazing muck breaking journalist.
Corey Doctorow:She was the first woman to get a science degree in America. She was just a, a self-taught-
Corey Doctorow:... journalist. Daughter of a Pennsylvania oil man who'd been ruined by Rockefeller, who made it her mission to, to untangle his empire. And in the last chapter of the book, she's got a thing she describes called illegitimate greatness. She says, "John Rockefeller is good at a lot of things. Right? Of course, he is good at managing a rail network and integrating a rail network with an oil network and running pipelines. Of course, he has to be good at that. That doesn't make him great though, because what he uses that dominance to do is to also be really great at hiring thugs with railway ties to beat the brains out of anyone who tries to compete with them.
And he also was really great at getting that one Ohio senator who's gonna regulate him to take a job at a Rockefeller business in San Francisco, quit his job as a lifelong politician, move to the West coast and disappear from the scene forever." And so the fact that Google is like good at running HR for a business all around the world, owning a lot of real estate, having operations management, managing tech teams, those are table stakes for being a big business. In fact, all we're saying when we say they are good at doing that is that they are a big business. Right. That is what it means to be a big business.
Richard Kramer:Yeah. They have 180,000 employees.
Richard Kramer:And but back to the simple point, which is, is, was it the abrogation of responsibility by-
Corey Doctorow:So that's where I was going. So-
Richard Kramer:... the news media that said, "You know what, we've actually said Yeah, sure. Google-"
Richard Kramer:"... let people come to our site via you so sell our ads."
Corey Doctorow:Sure. They were, I mean they were, they were taken over by a private equity. They were gutted, they were reeling, the people who ran them didn't understand the business. But Google and Facebook merged to Monopoly, took over the whole display advertising business. The buy side, the sell side, and the market in between.
Corey Doctorow:And then as we found out through the Attorney general of Texas's lawsuit against them, they embarked on a program called Jedi Blue where they rigged those markets and stole money from publishers. They stole money in lots of other ways. So Facebook's pivot to video where they falsified data about how their users were interacting with content in order to get publishers to capitalize a YouTube competitor. Right. They said like, "Oh look, our users don't interact with text articles at all, they only watch videos. You should go make videos." Publishers all over the world got themselves way in over their head to make videos having been told by Facebook a lie, and then many of them failed.
Facebook thought, "This is how we can get someone else to foot the bill for us becoming a YouTube competitor." And so today we have this bizarre situation where the news media says, "Google and Facebook are stealing our content." And this is where I wanna push back on your idea that they should have stopped Google from indexing them or stopped Google from linking to them or stop Facebook from letting users describe them. It's not a copyright violation and it can't be to tell you what the headlines are in a newspaper. Right. If you're not allowed to talk about the news, it's not the news anymore. It's a secret. Right.
Corey Doctorow:The problem with w- what, how Google and Facebook interact with newspapers is not that they're stealing their headlines, it's that they're just stealing their money. Right. And you know what, if you stop taking the headlines, which they keep doing whenever they have these news bargaining codes, the newspapers don't make any money.
Richard Kramer:And Springer tried that in Europe. They said, we're not gonna let Google Index [inaudible 00:26:27].
Richard Kramer:... and they came back. And what was so disappointing, and I'll just finish on this and you describe it in your book, but in Australia you have the regulator under the, at the behest of Rupert Murdoch-
Richard Kramer:... say, "We've gotta reset the relationship between the publishers and the tech platforms." And then at the 11th hour, Rupert Murdoch News Corp signs a deal with Google.
Corey Doctorow:Just as a side deal.
Richard Kramer:It's just really about the money, it's not about the principle. We'll be back in a moment to dig deeper into music copyright with two real heavyweights, Cory Doctorow and Will Page.
Will Page:I do wanna squeeze in some questions and copyright before we go to smoke signals.
Corey Doctorow:Yep. Yeah. Sure.
Will Page:And on this I'm gonna ask two. One about the problem and one to offer a potential solution.
Will Page:Which actually comes from this building right here too.
Will Page:So on the problem, I think it'd be fair to say that your views on copyright often get me done down in the media.
Will Page:There's copy left, there's copyright, there's [inaudible 00:27:32] blah, blah, blah.
Corey Doctorow:Sure. Yeah.
Will Page:And we, firstly, let's deal with intellectual property. There's trademarks, there's patents, there's copyright, three completely different things [inaudible 00:27:40].
Corey Doctorow:Trade secrecy, anti-circumvention, non-compete, database rights. It's a big, it's a big weird chimera that we put under a single term.
Will Page:Yeah. But then people just wanna brand it with one brush. But give us, if I say, "Doctorow, let's ask the doctor to give copyright a quick health check."
Will Page:What do you think are the sort of symptoms and cures of what's wrong with copyright today?
Corey Doctorow:So I think that if you're going to make copyright for the benefit of artists, you need to be able to articulate how it is that specific elements of copyright policy will benefit artists.
Corey Doctorow:It's not enough to say copyright's good for artists axiomatically, therefore all copyright is always good for artists. So take for example, extending the term of copyright. Extending the term of copyright, um, produces attacks on new creators because new creators have to license other works in order to make new works. Anyone who claims that new works are made without referencing old works is either kidding you or kidding themselves. But it-
Will Page:It also creates remasters. Led Zeppelin remasters was not because it had to be remastered [inaudible 00:28:40].
Corey Doctorow:Sure. And when those terms are, when those long live copyrights are extracted by firms, it gives firms enormous control over the sector, which is bad for the artists whose copyrights they've appropriated and bad for the artists who come later. And we talked about the Spotify example. So in, in the United States, in the 1976 Copyright Act, there was originally a proposal that all copyright transfers would terminate automatically after 25 years unless the creator took an affirmative step to renew it. This is related to the first copyright in the United States where copyrights assignments terminated after 14 years.
Will Page:This, this is expiring in the copyright, not the reversion of rights, but the expiring.
Corey Doctorow:No, no, no termination of transfer.
Will Page:Right. Okay.
Will Page:So this is reversion. Yeah.
Corey Doctorow:Yeah. I gave you, I, I signed a contract. The contract says I give you this copyright for the full length of copyright even so, after 25 years, I get it back. That got watered down to 35 years and you have to fill in 11 miles of paperwork. Nevertheless, that has been really good for a bunch of artists who got a really bad deal in lots of different ways. So you have artists like the creator of the Sweet Valley High Books and the creator of the Babysitters Club books who've terminated all those transfers. And now if you buy those for a young person in your life, that money is going straight to them. They had very weak bargaining power when they started their careers. Now they've got stronger bargaining powers.
Stephen King has done this with his first half dozen novels and so on. But the most interesting example I think from a music perspective is George Clinton, whose unscrupulous manager forged his signature on a copyright transfer and then made George Clinton sue him for decades using the money that he got from having stolen George Clinton's copyrights to defend himself against George Clinton trying to get them back.
And after decades of this, George Clinton said, "You know what? Fuck it [laughs], I'm just terminating the transfer. You say there was a transfer, there isn't a transfer anymore, we're done." And he got his rights back. So the-
Will Page:My goodness.
Corey Doctorow:... George Clinton is touring in his 70s, not just because he's an unstoppable funk machine, he's touring in his 70s 'cause he is broke, right. Now, he's got money again. That is one of the many ways that we could make this system better because we all know that creators, uh, start their careers at a low ebb in terms of their negotiating power.
Corey Doctorow:And then they get these high ebbs and when they do, they can make a big difference for themselves, for other people.
Will Page:Yeah. And there just a couple of points on that. One rights reversion, what all three labels have done, and I think this is partly accelerated by our inquiry here in the UK, is to have a debt jubilee. So I signed Richard Kramer for 400,000 Pound advance in 2001, and he's only paid 200,000 Pound back. I now wipe off the debt balance and he sees royalties. So there's-
Corey Doctorow:That's right.
Will Page:... progress there. Just one last one and then smoke signals. We are here with Platoon-
Will Page:... set up by Denzyl Feigelson, a real mentor to me professionally and personally and Platoon's vision was to change the agreement between the label and the artist. It's not even a label, it's a services company. So rather than I dangle a big check in front of you, acquire all your intellectual property for all of your life and 70 years after your death and you recoup on a sliding scale, Platoon says, "You retain your intellectual property and we service it. And we'll come to an arrangement about what the commission is for those services that you need. It's not all in all out, it's picking this."
Corey Doctorow:À la carte. Yep.
Will Page:But it's a different way. You think about principal agent, it, it flips it on its head. It's not alone. Cobalt has also pioneered this model as well. Does that model give you hope that the contractual, not the copyright itself, but the contracts that link copyright between creator, indivi- individual and firm is actually moving forward?
Corey Doctorow:I mean, and to a certain extent we have a lot in this book about contractual reform because one of the things that is an element of contract laws, this thing called the doctrine of unconscionability-
Corey Doctorow:... where certain clauses that we think about in these contracts that are the default just shouldn't be enforceable. We talk about in the book that if you have a royalty arrangement and you have the right in your contract to audit the finances of the firm, that, that is supposed to pay you royalty as a game publisher, a music publisher, a label, a studio, book publisher. Typically, when you find an error in your favor, and w- we cite a firm in Los Angeles that's done tens of thousands of record label audits, all of the errors they found-
Will Page:They never come up short, right. They never come up short.
Corey Doctorow:Well, they found one instance in which the artist got a little more than they owed. And all those other instances, the money went the other way. We can only assume that is because of some kind of weird localized probability storm.
Corey Doctorow:But the, the, the, if you find that money, they're gonna tell you, "I think you're mistaken. You just don't understand finances. But I tell you what, if you will sign this non-disclosure agreement, we'll give you a discounted settlement and your auditor has to agree not to audit us again. Someone else is gonna have to do this." We talked about this with the Trash Future Podcast.
Will Page:This is like the small town divorce lawyers. You just canceled all the lawyers who could potentially do the job.
Corey Doctorow:That's right [laughs]. Well, we talked to the Trash Future Podcast about this and Alice said, "This is like the forensics team turning up in the murderer's house and them saying, 'Oh gentlemen, wherever you'd like to dig in my garden, that's fine. Just not in that corner. I'm very sentimental about it.'" [laughs]. And so when you sign that non-disclosure and we spoke to a source who we couldn't name because they signed a non-disclosure, had a six figure error in their favor that was discovered by their auditors. It means that you can't go to similarly situated people and say, "I know where there's some money that was stolen from you and where to get it." Now here's the thing. Contract is a creature of state law. State law is much easier to reform than national law or international agreements. And there are four states in which all of these contracts are consummated.
Corey Doctorow:New York and California, Seattle because of games in Amazon and Nashville, Tennessee. If you were to introduce short bills in those states that said, as a matter of public policy, non-disclosure cannot be enforced where it pertains to material omissions or errors in royalty statements that were down to the detriment of creators who are owed royalties, then at the stroke of a pen, you would put more money into the pockets of more creators all over the world than 40 years worth of copyright term extension combined. Right. That this is like, it's a, a crack in the-
Richard Kramer:Because one clever auditor-
Corey Doctorow:Could find all the money that was stolen from all the creators.
Richard Kramer:... who, who could, who could, who could reverse engineer the algorithm-
Richard Kramer:... would be able to say, "I've seen this movie before-"
Corey Doctorow:Yep. I know how to do this.
Richard Kramer:"... and I'll set up my shingle in the middle of the beach and [inaudible 00:34:35] and, and I'll speed run it." [laughs].
Corey Doctorow:So this is like a crack in the system and you stick a crowbar and you wiggle around and money pours out of the system and into artist's pockets.
Corey Doctorow:And you asked what's a good, how do you fix copyright? I think the problem is that when we confine our analysis of how we help artists to copyright, when all we have is this hammer and, and, and everything looks like a nail when we don't talk about contractual limits, when we don't talk about, um, market structure and competition, we don't talk about all these other things that are actually far more material to the economic fortunes of artists today, then we are confined to tinkering in the margins with things like hoping kind of magic underpants know math, where we're like, "Extend copyright by 40 years something profit." Right. Well, what's the thing in the middle whereby your copyrights extended by 40 years a- and now the four publishers left in the world are gonna give you more money for it. How does that work?
Richard Kramer:Yeah. I want-
Will Page:J- just real quick, I mean, to Denzyl's credit, when he set up Platoon, he always attacked the contracts that you're referring to here. A, a, a typical record label contract with 33 pages. The first three pages explained how, how you're gonna get your money and the next 30 pages told you why you're never gonna see any of it. [laughs], his vision of a contract set on one piece of A4 paper.
Will Page:You own intellectual property, I service it.
Will Page:Let's go to work. Almost like a VC fund.
Corey Doctorow:There was a, There was a great, there, there's a great bit in the book where we talk about the persistence of breakage, royalty deductions into the digital era. Breakage being the percentage of your royalties deducted for the shellac records that break in the back of the lorry on the way to the high street record store. And that's taken out of your MP3 royalties. And we say the GAAP basis for this is, fuck you, that's why.
Will Page:You know about shipping platinum and receiving gold.
Will Page:So platinum's a million records in-
Will Page:... America, gold's half a million.
Will Page:If you want to get certification, you gotta shift a million. If you wanna get your bonus, you gotta shift a million. If you wanna get promoted, you need to shift a million.
Will Page:But shipments aren't sales. So what record labels will do is ship a million.
Corey Doctorow:Yeah, yeah.
Will Page:Qualify for their certification, get their bonus. Then if half a million came back to the factory gate, that's someone else's problem, we've moved on.
Corey Doctorow:In the '70s and '80s, bookstores would get El Ron Hubbard's science fiction novels with their own-
Richard Kramer:[inaudible 00:36:37].
Corey Doctorow:... with their own price stickers already on them because Scientologists were coming and buying them all and then sending them back to the warehouse and then shipping them out again to get them on to the Times bestseller list.
Will Page:Lemme wrap it up with a quote from my dear aunt [inaudible 00:36:47], who is my mentor in the music business. God bless her. Uh, she always described the music history as so bent, it's straight [laughs].
Richard Kramer:So look, we want to get to the last section-
Corey Doctorow:Sure. Smoke signals. Yeah.
Richard Kramer:... that we always do of our podcast, which-
Corey Doctorow:I'm familiar with it.
Richard Kramer:... is it to do a little smoking-
Richard Kramer:... of the in-studio variety. I'm sure this August studio doesn't allow smoking in-house. And ask you for a couple of smoke signals.
Richard Kramer:Things that when you are doing interviews, especially ones with maybe some of the more officious business organs that will say, "Well gee, Corey, talk to me about this choke point capital. What is it all?" The kind of language that makes you go, uh-huh.
Corey Doctorow:No. That really isn't having.
Richard Kramer:The kind of things that set your hackles on end. The excuses for the behavior that you document in the book-
Richard Kramer:... that you feel, for example, the one we hear very often from tech bosses, it's, it's a complicated issue.
Corey Doctorow:Right. [laughs], I would say that anytime we, we hear that it's a matter of individual choice, right. That basically like the climate emergency is there because you aren't recycling diligently enough. The monopoly problem isn't, is there because you aren't shopping well enough. But these structural problems don't have individual solutions. One of the things that happened when we were shopping this book around is we showed it to an editor who raved about it, they, they said, "Everything in the back half of the book, they're systemic answers and it's gonna bum out readers. They're gonna want to know what they can do individually to solve this monopoly problem." We were like, "Dude, you are so close to getting it." [laughs]. Oh my God. [laughs].
Will Page:The penny just dropped.
Corey Doctorow:Yeah. And so I, I think that-
Richard Kramer:You mean if I get a music subscription to every streaming service-
Corey Doctorow:You will have solved the problem.
Richard Kramer:... I'll be a better human?
Corey Doctorow:Or better yet, right. If in- instead of going out and protesting Amazon, you spent four hours driving around looking for artisanal markers that come from a small holder who makes them on the, on their own at, while wearing a leather apron. And you don't even make it to the demonstration because you didn't wanna order your markers from Amazon, then we know that Amazon is gonna win.
Will Page:It's like here in London, individuals all waiting to do their bit for recycling.
Will Page:Altruistic, get it, do good aptitude, get it. All commendable. But nobody asks a question about the systemic problem of recycling policy, which the city has 26 different recycling policies-
Will Page:... and none of them are aligned.
Richard Kramer:The boroughs are all different.
Will Page:My recycling is taken to Germany to be recycled.
Will Page:What's the transaction cost and resource cost of taking my recycling to Germany?
Richard Kramer:And, you know, this is back to the point I was saying about have people been divided and conquered?
Corey Doctorow:Yeah. Well I think that to the extent that we are told that the only way we can address these issues is as individual.
Richard Kramer:As individual.
Corey Doctorow:All the nurses are going out on strike. "Well, if they don't like it, they should have bargained harder individually for their contracts." [laughs]. I think that w- when you hear people say, "Well, if you didn't want to be in the thrall of Mark Zuckerberg, you shouldn't be using Facebook." I'm a Zucker vegan. I don't use Facebook. I'm, I'm, I don't have WhatsApp-
Richard Kramer:I'm not on Facebook [inaudible 00:39:32].
Corey Doctorow:... but I know lots of people who are, and the reason they're on Facebook is because the other people they love are there, and the reason those people are there is because they're on it.
Corey Doctorow:And they're engaged in a form of mutual hostage taking. And the reason that they're mutually hostage taking is because Mark Zuckerberg won't let anyone connect a new service to Facebook that would allow you to leave Facebook, go somewhere else-
Richard Kramer:Yeah. There's no portability.
Corey Doctorow:... and connect to it. And I know you have [inaudible 00:39:53] of, of DMA, but I think that Digital Markets Act actually holds out the possibility of doing something about this.
Richard Kramer:It does. I guess my longstanding concern is that the ability of bureaucrats or bureaucrats to-
Corey Doctorow:To enforce it.
Richard Kramer:... to enforce it is limited. And I still revert back to the five reasons why, unfortunately, I think big tech isn't gonna get broken up.
Corey Doctorow:Well, they get a lot of money if they can fine big tech. And one of the things is that big tech cheats all the time.
Corey Doctorow:So in some ways it's kind of self-sustaining. They can just go levy a couple $5 billion, 5 billion Euro fines.
Corey Doctorow:And then use that to fund enforcement, uh, of the substantial parts of the regulation. And I also think that what's really interesting, I know you're at this thing in March in Brussels, but I was at a CMA thing last spring here-
Richard Kramer:Mm-hmm. Yeah.
Corey Doctorow:... in London in Canary Wharf that was very exciting. And it, part of the thing that was exciting about it is the international cooperation.
Corey Doctorow:Here in the UK, the greatest competition boondoggle there is that they created the digital markets unit of the competition markets authority. It's brilliant. It's 50 full-time engineers. They write the most incredible reports on the inner workings of these rig markets.
Corey Doctorow:The secondary legislation to give them enforcement powers was never passed.
Richard Kramer:Yep. Yep.
Corey Doctorow:So they just make the reports. But you know, who's got a lot of enforcement powers and no headcount, the European Commission.
Corey Doctorow:And they are taking these reports and running with them.
Corey Doctorow:And everybody's happy. Yes, we should have enforcement powers here, but even if we don't, it's not a, it's not gonna stand in the way.
Richard Kramer:Yeah. And I guess in another context, and I founded my company 22 years ago seeing this, the, and we saw this all through the global financial crisis. It is just a cost of doing business for the big banks that they pay fines-
Corey Doctorow:Mm-hmm. The fine is the price.
Richard Kramer:... of $5 billion or $8 billion every-
Richard Kramer:... few years. And we had my friend Jesse, Jesse Eisinger on the podcast, we were talking about, about chicken shit club and that the-
Richard Kramer:... prosecutors, they're never gonna take the cases all the way. Well, I, let's have another smoke signal, something else. Get this, we're not able to, as individuals change everything.
Richard Kramer:It's hard in a world of agency. One more smoke signal.
Corey Doctorow:So it's the inverse, it's the corollary of that. So James Boyles have, and another Scotsman [inaudible 00:41:53], this law professor who runs the Duke Center for the Public Domain with Jennifer Jenkins. He talks about the term ecology. And he says that before the term ecology was coined, it was really hard to know that you're on the same side as other people. If you're fighting about owls and I'm fighting about the ozone layer, what are your charismatic nocturnal avians have to do with my concerns over the gaseous composition of the upper atmosphere? But theology turns all of these issues into a movement.
Corey Doctorow:And you are seeing an overarching thread of skepticism and alarm at corporate power and a sense that these are all connected. That the fact that there's three giant shippers who are in a cartel, who can tell their-
Corey Doctorow:... regulators to go screw themselves.
Richard Kramer:It's all over place.
Corey Doctorow:And that when they say, "Stop making the ship so big, y- your economies of scale are great, but you're gonna get stuck in the Suez Canal." And they're like, "Screw you. We know more about shipping than you do." That that is connected to Luxottica Essilor owning all the glasses, brands and all the high street eyewear shops, which is connected to the web being turned into five giant websites filled with screenshots of text from the other four, which is connected to there only being four major studios-
Corey Doctorow:... and that these are all the same issue.
Corey Doctorow:And that coalition, that idea, that ecology moment for pluralism and blunting corporate power and bringing it to heel, that is I think the beginning of the end for the last 40 years of neoliberalism.
Richard Kramer:And that would be a fitting and fascinating topic for us to keep going off-
Richard Kramer:... in Bubble Trouble because we have been looking at the justification of these bignesses of these, we're gonna change the world ideas, which are really just, for example, in the gig economy labor arbitrage and saying, "Well, hang on a second, that is a bubble just ripe to be popped."
Richard Kramer:And hopefully more and more people will take that skeptical view and look to pop them.
Corey Doctorow:Well, I've just turned in a book to Verso about interoperability called the Internet Con Sees the Means of Computation. So maybe when that comes out, I'll come back in and we'll talk about it.
Richard Kramer:Absolutely. And I can, I thank Will for the fantastic deep dive on copyright and a huge thanks to Corey Doctorow, the incredibly eloquent, thoughtful polymath. Uh-
Corey Doctorow:Let me also mention before we go-
Corey Doctorow:... my co-author on this book.
Corey Doctorow:The lead author on this book is the wonderful Rebecca Gibbon. Brilliant law professor, activist, publisher. She's got 150 books that she's brought back into print that were at the core of Australian literary-
Corey Doctorow:... heritage that she got the rights for. Brought them back as e-books, brought them back as print books.
Richard Kramer:Practice what you preach.
Corey Doctorow:Amazing. So-
Richard Kramer:And, and we'd love to have her on to talk about the-
Corey Doctorow:[inaudible 00:44:08].
Richard Kramer:... the information zone that is in Australia-
Richard Kramer:... with the media ownership and, uh, and that whole thing with the ACCC.
Corey Doctorow:It's a whole thing. Yep.
Richard Kramer:It's a whole thing. Thank you very much, Corey.
Corey Doctorow:All right. Thanks guys.
Richard Kramer:And that's been a fantastic-
Richard Kramer:... double partner on Bubble Trouble.
Richard Kramer:If you're new to Bubble Trouble, we hope you'll follow the show wherever you listen to podcasts. Bubble Trouble is produced by Eric Nuzum, Jesse Baker and Julia Nat at Magnificent Noise. Special thanks this week to Oliver Bloice and Elizabeth Arnold at Platoon Seven Studios in London for helping us record this episode. You can learn more at bubbletroublepodcast.com. Until next time, on behalf of my co-host, Will Page, I'm Richard Kramer.
Here are some great episodes to start with. Or, check out episodes by topic.