Copyrights Versus Digital Rights

Depending on which side you listen to, a case before the Supreme Court could devastate technical innovation or the entire U.S. entertainment industry.

The justices heard arguments today in MGM v. Grokster, which pits America's movie and recording studios against companies that produce file-sharing software. At issue: whether the software makers can be held responsible when consumers use their products to swap copyrighted material like music and movies.

The list of petitioners for the entertainment industry reads like a who's who of Hollywood and music -- including Columbia Pictures, Warner Brothers Entertainment, Paramount Pictures, Twentieth Century Fox, Arista Records, Capitol Records, Motown Record Company, RCA Records and Sony Music Entertainment. Disney Enterprises and Walt Disney Records, part of ABC News' parent company, Disney, are also parties in the case.

During oral arguments, Justice Stephen Breyer worried that an entertainment industry victory might stifle wide-ranging innovations. But Justice Ruth Bader Ginsburg said that no matter how you look at them, file-sharing services facilitate copying.

The massive amounts of copying going on are what the entertainment industry is trying to fight. The movie industry says as many as 400,000 feature-length movies are illegally downloaded every single day. And those numbers could be just the beginning, Dan Glickman, chairman of the Motion Picture Association of America, said outside court Tuesday.

"We in the movie industry have not yet been as hard hit as the music industry, but it's coming, unless there are some boundaries set for this," he said.

The music industry, which has taken a huge hit from file-sharing, has even more staggering numbers. It is estimated that more than 2.6 billion copyrighted music files are downloaded each month.

The Recording Industry Association of America estimates record sales have dropped by about 20 percent in the last five years, largely blaming the emergence of file-sharing. And it says software providers are to blame.

"These are business models predicated on theft," said Mitch Bainwol, chairman of RIAA. "It's a theft of our property, and the theft of the genius of song writers, musicians and writers -- and it's just wrong."

Beth Nielsen Chapman, who has penned songs for Bonnie Raitt and Willie Nelson and co-wrote the Faith Hill hit "This Kiss," agreed. She said the technology has already put many of her colleagues out of business.

"It's extremely important that there be a defined source of income for the creators of intellectual property," Chapman said. "Without that, they're going to just have to do something else. You know, you have to earn a living."

A few songwriters who gathered at the Supreme Court today sang a similar song, arguing that America's musical and cultural fabric could depend on this case.

"We probably would've never heard of Motown, the Beatles and a whole lot of other people, whoever, because they would've gone and done other things to make a living," said Lamont Dozier, who co-wrote the Supremes' hit "Stop! In the Name of Love."

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