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Popular Media Governance: The Great Tinseltown Shakedown

Introductory Observations

Shakedown/n....US sl. A swindle; a piece of extortion

Consider this Oxford dictionary meaning. It is not hard to imagine how corporate media citizens must feel about the effectiveness of copyright laws in the digital age. Irrefutable evidence of brazen copyright infringement is so forensically and empirically overwhelming that it is easy to understand why these copyright owners might perceive they are experiencing a shakedown in popular media.

But popular media governance in a world of digitalisation is infinitely more complex than corporate responses to copyright protection and media piracy. Indeed, on 20 April 2012, in the case of Roadshow Films Pty Ltd (and others) v iiNet Limited (iiNet case) the High Court unanimously dismissed (with costs) the appeal against Australias third largest telecommunications provider (the Telco, iiNet) for acts relating to authorising copyright infringement of the appellants films (collectively referred to here as Hollywood). This Internet Service Provider (ISP), like any licensed entity responsible for providing general human rights in the form of communication rights to Australian citizens, was found not liable for facilitating or enabling and otherwise allowing illegitimate movie and other entertainment downloads via peer-to-peer (P2P) technologies; namely the BitTorrent protocol.

In this landmark international case which affects corporations from the largest and most advanced Western economies, the highest court in Australia was unable to alleviate the concerns major popular media industries possess about being held to ransom by emerging

digital technologies which are carte blanche socially exchanged over the Internet by libertine consumers. Doctrinal examination aside, these developments are worthy of political analysis because technology and media piracy cases also reflect personal attitudes and beliefs associated with liberalism which, after all, is the dominant Western political ideology.

In this light, this paper argues copyright regulation has mainly existed as a faade for maintaining the corporate status quo of a dominant few throughout the 20th Century. But in the 21st Century, an emerging legal reality has revealed significant cultural and technological challenges to popular media governance suggest concentrated corporate control is incompatible with classic conceptions of liberalism. In other words, digitalisation of popular media has raised questions about the capacity for neo-pluralistic metagovernors to continue controlling copyright in its current form.

Interestingly, Hollywood lost its case against iiNet at all levels within the court hierarchy. The disappointment felt by the major players was probably first echoed in the Federal Court in 2010 when Cowdury J remarked (at par.19); The result of this proceeding will disappoint the applicants. The evidence establishes that copyright infringement of the applicants films is occurring on a large scale, and I infer that such infringements are occurring worldwide. However, such fact does not necessitate or compel, and can never necessitate or compel, a finding of authorisation, merely because it is felt that something must be done to stop the infringements.

In some respects, the proceedings which unfolded in the public arena over the next two years resembled a neo-Shakespearean legal tragedy, or perhaps a pseudo-legal comedy or parody la Merchant of Venice replete with theatrical hyperbole - especially when one considers the drama in the court room.

Legal reasoning and melodrama aside, this case raises two questions about the observation that major corporate players in popular film and music especially have enjoyed unfettered control of the status quo of popular media industries.1 First, have new actors such as Telcos created unprecedented tension for popular media governors, and secondly, has consumer empowerment through digitalisation facilitated unprecedented challenge to the future organisation of popular media industries? These two developments are inextricably linked because convergent consumption patterns through digitalisation facilitate concurrent illegal and legal modes of consumption leaving less room for copyright governance considerations.

This paper examines these unresolved issues in the current popular media governance arena (and its alter ego, copyright governance). Copyright industries in popular media promoting film and music are effectively the same stakeholders because media companies control copyright exploitation (intangible rights) for commodification through assigned ownership. Copyrights might be described as spools of several invisible threads which bind popular media products to create a tangible product. The consumer of popular media does not require an appreciation of these invisible threads. The paradox in popular media consumption is that the value in the intellectual property rights vested in the physical products overwhelmingly dwarfs the value of the tangible products. However consumers clearly appear to show flagrant disregard for the inbuilt value contained in the products.

Of particular significance, therefore, is the reaction by corporate copyright owners to new external technologies through digitalisation and emerging consumption patterns. For example, social networking is a mode of communication that invariably invites the consumption of popular media within a broad legal and illegal context. YouTube uploads especially are indicative of a lack of consumer care and consideration when utilising copyrighted media.

This paper is mainly concerned with film and music in popular culture. Gaming is typically also included under this broad popular media entertainment rubric. Suffice to say, the dominant players have vested interests in all three forms of popular entertainment.

This paper also examines the extent to which these developments have challenged the status quo. Balancing public policy interests in favour of corporate copyright controllers is traditionally and historically a routine exercise for the dominant few corporate citizens. But recent developments suggest the Government, Parliament and now Judiciary are being creatively challenged by empowered consumers who resemble socially-networked negative libertarians in a world of digitalisation convergence where the boundaries between the legal and illegal are blurring. These developments are important for an understanding of governance because this liberal and somewhat villainous behaviour on the part of individual citizens did not emerge on or about the time digital downloads became popular in the US in the late 1990s, or when CD burners were integrated in most home computers, or even when blank cassette tapes flooded the consumer market in the 1970s. The concurrent urge to disseminate information legally or legally is a natural tendency which probably pre-dates the first piece of copyright legislation (Statute of Ann 1709). It is argued that only when technological conditions are favourable that these liberal consumption urges become truly revealed.

The conclusion is that digitalisation has enabled consumers as natural citizens to invoke these liberal tendencies in an environment where a dominant few have dictated product commodification; both in terms of price and delivery - from top down, in a horizontally and integrated fashion and without allowing participation of citizens as consumers in the delivery of popular culture. Convergent consumption is a reaction to a mode of corporatized governance which largely has excluded engagement on the part of consumers of popular culture. In liberal democracies, the reaction by citizens to embrace digitalisation should hardly be surprising.

Part I Something is Rotten in the State of Denmark: Issues in the Political Arena

The governance of popular media intersects traditional or established activities in the fields of: a) trade, commerce, corporate regulation, and administration of associations and organisations, and b) copyright regulation as a corporate copyright industry. An important reason for examining the governance of popular media industries is that one of the more dynamic features of popular media controllers is the desire to preserve naturally occurring monopolies in copyright industries which are firmly embedded in exclusive ownership and proprietorship of the owner of copyright and the technologies used to mine these rights.

Copyright law encompasses a diverse range of legal measures, and possesses a most sophisticated form of governance as it transcends national and international boundaries. As copyright is devoid of tangible form, it only materialises when popular media products and services are produced. Furthermore, its level of sophisticated regulation is only matched by the aggressive level of protection undertaken by its owners (mainly corporate owners). It follows copyright governance is as much linked to monopolistic tendencies as it is to the anticompetitive nature of the dominant corporations which exploit copyright in popular media industries. The relationship is therefore somewhat mutualistic. Efficient, economically feasible copyright exploitation by major players connotes large private profitability returns in vested corporate interests.

In principle, the metagovernor of copyright administration, the World Intellectual Property Organisation (WIPO) proclaims to represent all relevant stakeholders. But when one considers the interaction with the Agreement on Trade Related Aspects of Intellectual Property Rights (1994) (TRIPS) mandated by the World Trade Organisation (WTO), it becomes quite apparent

the protection of advanced (exploited) corporate-controlled copyright is the main focus.2 The purpose of such agencies is to internationally implement collaborative regulatory agreements, and thereby monitor and review the impact emerging technologies; namely digitalisation has made on the globalisation of copyright. This is achieved through multilayered protective measures. In short, global perspectives assist in the harmonisation of copyright industries across member countries for the purposes of promoting trade. The last 125 years of copyright governance in the West reflect two significant developments; internationalisation of copyright governance and compliance with the relevant statutory conditions and schemes administered by the WIPO Copyright Treaty (WCT); and regional administration of international WIPO protocols through nation state legislative schemes.

Regulatory change is implemented at the behest of the corporate copyright owners in order to preserve the dominant status quo. Any altruistic public interest considerations are residual to the primary imperative of institutionalising copyright governance for the benefit of corporate copyright owners. The impetus for copyright governance is embedded in a neo-pluralist universe at all levels for the benefit of artificial entities. According to WIPOs website (, each Member State subscribes to the following organisational model:

International Governmental Organisations (Global Governance); National Copyright Administration (Statutory Governance); and International and National Non-Governmental Organisations (NGOs).

The legitimacy for adhering to Western copyright principles along commercial lines is well established. It is Eurocentric by nature because it relies on at least five fundamental Western conceptions of corporate governance. These, relevantly are to: 1. possess the legislative authority to implement copyright laws as private

Refer to Copyright (World Trade Organization Amendments) Act 1994

economic rights; 2. acknowledge the importance of copyright protection; 3. enforce meaningful regulation for the management of private rights; 4. implement international harmonisation; and 5. modify existing regimes if not compatible with the dominant Western system.

Three primary factors support this observation: a) historically favourable legislative change to copyright laws; b) historically underdeveloped competition law allowing favourable market conditions for the establishment of globally and locally well-organised firms; and c) highly integrated powerful international and national associations.

This is a perfect environment for the creation of naturally occurring monopolies in popular media. This is because corporate control of popular media has created a monopoly over content and delivery. In reality competition governance and copyright governance are not symbiotic or mutualistic in liberal democratic societies. For example, music and gaming industries are horizontally and vertically integrated so as to secure as much exploitable copyright as possible in order to organise it in a material form through internal technological control. This approach is not too dissimilar from the motion picture industry where it has been held that external and internal economies of scale combined with imperfect competition and vertical integration have been critical in securing concentrated power (Canterbery and Marvasti, 2001, p. 97).

The rationale for having vested interests in a variety of related industries is obvious. As Longhurst maintains: For example, an artist may record in a studio owned by a company which manufactures a disc from the recording at one of its plants, which is then reviewed in a magazine 7

owned by that company (which may also include a review of the film made by the artist for a film company owned by the same conglomerate) and sold to the public in a shop owned by the company (1995, pp. 33-34).

Such vertical integration allows for complete control and maintenance of the product from start to finish; that is production flow from raw materials (including intellectual property) to sales (Peterson and Berger 1990, p.143).

Enjoying accompanying statutorily enshrined copyright monopolies over respective copyrighted catalogues is not uncommon in the West. As Lee suggests, this behaviour has unequivocally assisted in the consolidation of film, television, recording, publishing, electronics, advertising and talent brokering has resulted in a group of powerful oligopolies that broker cultural materials in much the same way as any other commodity would be sold (1995, p.16).

For example, prior to 1998 a retailer who wished to source a Warner product produced locally under licence by Warner (Australia) was prima facie unable to source the identical product from legitimate overseas suppliers. These monopolistic practices were legally sanctioned by copyright law, and to this end, the majors through their representatives vehemently opposed any change to the Copyright Act 1968. In response to their failure to preserve statutorily entrenched price setting, the aggressively jealous reaction by these corporate citizens to the parallel importation amendment was perfectly normal under the circumstances.

Popular culture sold to consumers by the dominant media industry has little to do with competition. The industry is anticompetitive because in the traditional model, the media does not respond to consumer demands. The creation of naturally occurring monopolies through both the control of technological means (tangible) and copyright (intangible) however creates an interesting scenario. These combined conditions allow firms to set the terms through the 8

creation of monopolies via the control of the copyright through statutes (temporary), and naturally through internal technological ownership (format ownership). But with temporary monopolies, the life shelf of the protection is limited. In this industry, simultaneously, temporary monopolies and natural monopolies therefore converge. As the term suggests, temporary monopolies are supposed to disappear through copyright expiration periods, but copyright periods have been successfully extended at the behest of corporate lobby groups. Through perpetual technological innovation and subsequent exploitation through re-releases and re-masters, they remain, thereby creating an unnaturally anticompetitive state. In theory such an environment might formally be monitored and reviewed, but the legal reality is that substantively these developments have not been proactively regulated.

Take the example of Sony Corporation. It is a market leader in all forms of media entertainment, and since the introduction of the Betamax video cassette in the 1970s, it has dominated the home entertainment media market. It (or rather, a handful of identically organised firms) not only sets the manner and mode in which goods and services are consumed, but establishes the price. This is a natural monopolistic state a state that the majors have largely enjoyed throughout the 20th Century. That is, successive waves of format ownership (from vinyl to cassette to CD and so on) combined with back catalogue ownership and rights to permit covers (and other forms of zero-cost recycling) means virtually no or low interaction costs. Here is where advanced capitalist society finds a convergence of distinct monopolies as the catalyst for anticompetitive behaviour. Copyright temporary monopolies and natural monopolies are not supposed to converge because this provides a barrier to an effective and competitive economy. Successful copyright extension periods through vociferous political action alongside technological innovation have preserved the status quo. In three centuries, copyright monopolies have increased four-fold in Western jurisdictions.

Hollywood leads the charge in increasing the life of copyright. In short, this is how a multinational corporate-driven industry controls popular culture.

Goold and Campbell maintain, in the music industry, the four leading companies will often share the same CD-manufacturing plant in countries with insufficient sales to support four separate plants (1998, 134). By way of further example, in the antitrust/trade practices case against Universal Music in 2003, Hill J at para 295 describes Universals globally encompassing persona as follows: The development, production, manufacture, marketing, promotion, sales and distribution of recorded music and exploitation of copyrights in sound recordings embodying recorded music through a network of Universal subsidiaries, joint ventures and third party licensees in 40 countries or territories around the world. Universal affiliates in each territory sign artists under agreements which typically included an assignment in perpetuity of the worldwide copyright in sound recordings produced by the artist (emphasis added).

In other words, irrespective of geography, by and large, major firms have become internationally and locally integrated in order to maintain international harmonisation. For a compelling investigation of these developments in a broader pop cultural and media sense, refer generally to Schiller (1969 and 2000).

In this light, it is appropriate to describe the popular media industry as an oligopolistic monopoly where only a few participants with similar or near-identical products are substantially concentrated in the market. These major players exert more than obvious influence. They are also acutely aware of their influence over the market place specifically, and consumers generally. They should not be described as monopolistically competitive because they purport to promote different products (through various labels or clever market branding and genre creation). Rather, these sellers of popular culture metagovern popular media, their products are homogenised, and the concentration of power therefore suggests overt market dominance. It follows that issues relating to low barriers to entry for independent 10

players (Indies), fair price setting, consumer choice and other healthy elements relating to economic competition have not traditionally existed in popular media. The gaming industry, the last to be subsumed under a highly concentrated model now tends to lead the charge in terms of barriers to entry (see generally, Williams, 2002). Using the music industry as an example (because it is arguably the most advanced media model), the interaction between corporate actors for favourable minimum statutory royalty setting, unfair product price setting for both the published price to dealers (PPD) and retailers (recommended or RRP) demonstrates the sophistication of copyright corporatism and just how it works as an effective mode of popular media governance.

Formal conceptions of competition law are premised on the ability to strike a balance between protecting consumers from unnatural business behaviour in capitalist society, and ensuring fairness to all producers (great and small) for the benefit of consumption. But realistically, how do consumers as bottom-up representatives of popular media fare against the topdown organisational structure of major corporations? The short answer is consumers have never been properly (if at all) represented formally as stakeholders in popular media governance. Domination has been an absolute design through the convergence of natural and temporary monopolistic behaviour which has enabled such a bold and anticompetitive status quo.

But challenges there are. In the 21st Century, popular media corporations have been competing and interacting with the Internet, related software, Telcos and external technologies as part of a combined machinery of copyright and telecommunications governance at a superstructural level. Digital rights management and protection had not become problematic until recent years. Popular media producers, broadcasters and Telcos were easily distinguishable in the past. It is argued recent developments have caused irreconcilable shifts in the balance of 11

power between the various stakeholders because consumers have been empowered via emerging technologies.

Packets of external, non-neutral digitalised global technologies have arrived. Peer-2-Peer platforms are the latest in a long anticipated digital procession. Now contrast the narrow scope of traditional modes of governance to the infinitely limitless potential of digitalisation; namely the ability to:

a) infinitely reproduce popular media with no loss of quality (uploads and downloads); b) have ease of communication of works, in more than an ephemeral form between individuals and groups (social networks); c) not be burdened by marginal costs of reproduction or distribution of copies (legally or illegally) (freedom of choice); and d) allow anyone with Internet access to view works (democratisation).

The above resemble growing attitudes expressed by Western consumers about ownership of chattels vis-a-vis copyright. WIPO and national associations certainly react to technological change by implementing and administering treaties and international agreements. It is doubtful whether this rigid legal framework possesses the anticipatory capacity for understanding modern popular media consumption and emerging challenges.

This supports the observation made by the Court in another high profile Australian case Kazaa (2005): I have no reason to believe any significant number of Kazaa users, apparently mainly teenagers and young adults, has any knowledge about, or interest in, copyright law or its application to file-sharing. Nor have I any reason to believe that any significant proportion of users would care whether or not they were infringing copyright (Wilcox J, at [340] in Kazaa).


The governance of an abstract and ethereal concept such as copyright must be difficult for consumers to understand. How are ordinary consumers expected to appreciate the complexity of the proposition that abstract subjectification of tangible things somehow possesses a meaningful communicative and social function? Furthermore what does exclusivity, and the placement of artificial and physical restrictions on products mean to a consumer who sees the intrinsic worth in a popular media product as nothing more than an object which provides affective or perhaps altruistic pleasure (for example, sharing the love for a particular song or band)? Current governance policies in popular media do not possess the requisite capacity to subsume recent developments.

Part II All the Worlds a Stage: Digitalisation and Convergence

Digitalisation is a simple but effective utilitarian form of communication and information exchange that empowers individuals who wish to derive affective pleasure from popular media products without interference from an intermediary. But digitalisation complicates matters in terms of whether or not these pleasures should be derived in an unfettered mode.

Digitalisation convergence in terms of technological change; namely convergence of telecommunications and broadcasting are not new concepts (Curran, 1991, pp119-120). But the relevant Telco broadcasting legislation in the digital arena highlights the difficulties in harmonisation of distinct regulatory regimes.3 Convergence suggests broadening of scope whereas copyright legislation is essentially concerned with analysing the meaning of a provision in a more narrow sense. Convergence in the technological sense might be realised,

Compare Broadcasting Legislation Amendment (Digital Television) Act 2006 (Cth) and Telecommunications Act 1997 (as amended). There is nothing simplistic about harmonising legislative provisions for the purposes of a uniform digital agenda.


but in the legal sense, it has further complicated the already intrinsically complex nature of copyright law because Telco laws and copyright laws are not necessarily compatible.

In the second reading speech for the Copyright Amendment (Digital Agenda) Act 2000, the then Australian Attorney-General referred to the anticipated challenges as follows: This extraordinary pace of development threatens the delicate balance which has existed between the rights of copyright owners and the rights of copyright users (Hansard, 2 September, 1999 p.9748).

At p.9750, the Attorney added: The amendments in the bill also respond to the concerns of carriers and carriage service providers, such as Internet service providers, about the uncertainty of the circumstances in which they could be liable for copyright infringements by their customers. The provisions in the bill limit and clarify the liability of carriers and Internet service providers in relation to both direct and authorisation liability.

The law had always intended to typically hold the person responsible for determining the content of copyright material online would be a web site proprietor, not a carrier or ISP. The tensions between copyright and telecommunications regulation were inevitable in the implementation of the digital agenda legislation. But amendments to legislation so as to accommodate the needs of all parties have resulted in disharmony. Indeed, striking a balance between encouraging creativity, promoting the creation of copyright material, exploiting new online technologies, providing enforcement for copyright owners, promoting access to copyright material online, and promoting certainty for communication and information technology have become significantly more complex that policing piracy per se. The iiNet is concrete proof of these unresolved issues. Digitalisation has created legal anonymity. One or more anonymous computers connected to the Internet are indeed problematic. As mentioned in the iiNet submission (2010), users engaging in infringing conduct may be a family member, child, flat-mate, employee or customer of the account holder. In wireless environments, a neighbour may be leaching from 14

another account holders wireless connectivity. It is quite possible for atomistic anonymous users to clone more than one address allocated to the account holder.

One important observation about convergence and digitalisation is the desire to disseminate, communicate and consume popular culture in a broad, open and unfettered atmosphere. Social networking and communication via the Internet generally supports this development. Indeed the Court recognises it. Twittering, blogging, social networking and so on (which are representative of the synergetic relationship formed during uploading and downloading) are essentially an end to a means firmly embedded in ideals associated with communicative emancipation, empowerment, facilitation, enablement and democratisation generally (essentially, a grass roots approach).

In this century, digitalisation explicates the fact just how little room there is to move between each opposing stakeholder and the law. Recent technological developments are formidable because they do not rely on corporate copyright governance models to survive. Users are not necessarily utilising the Internet as popular culture consumers. Consumers randomly accessing popular media, expressing discontent, dissatisfaction and flagrancy as part of a consumption process are demonstrative of the fact that digitalisation is capable of destabilising copyright industries.

Digitalisation as a process of individualisation and self-reflexive exploration has led to a convergence of illegitimate and legitimate behaviour in popular media consumption. Democratising devices and protocols have equipped consumers with the relevant tools to challenge the manner and form of product delivery. Pavlov succinctly summarises the empirical and legal reality, Peer-to-peer technology has transformed music into a widely


available and easily copied public good by allowing consumers to obtain music without paying royalties to copyright owners (2005, p.657).

Personal tastes in media are subjective, and as such consumption has become a complicated process not least of all because so many avenues for consumption exist. For example, it is highly likely that some consumers access popular media legally and illegally simultaneously without seriously considering the consequences of the latter. Ignorance combined with feelings that the majors are really in the business for money (obviously), and not for artistic taste or independent industry protection are probably at play. Entrepreneurial copyright exploitation creates a legal obligation on the part of the ultimate owner (usually corporate owners) to make a profit. In particular, consumer attitudes and indifference highlight the complexities associated with consumption vis--vis product control and copyright maintenance, and might explain the sheer volume of illegal traffic.4

BitTorrent file sharing platforms (P2P) and social networking platforms (especially YouTube) bear remarkably similar characteristics not least of all because they are entirely dependent on the Internet. Specifically situated in a virtual, digitalised Telco realm, these two modes of popular culture consumption are neither a product of corporate popular media nor are they aligned with traditional industries. The fundamental difference between the old consumption regime and the new one is that these platforms easily accommodate both legal and illegal possibilities (and also something in the middle). Emerging modes of hybrid legal and illegal activity are unprecedented in that social networks demonstrate the capacity to dilute or diminish the probative value of copyright in cyberspace.

Figures may be provided on request, but the reader need only consider the forensic analyses in the cases mentioned.


Part III Brave New World: An Old Guard against the Young Guns

Ten years ago, Yu suggested copyright industries should adopt different business models, and private and related uses should be permissible in any event. This certainly has not occurred. At best, value-added models (for example more content for a set or discounted price) might generally be considered as a viable option including end user ISP packages bundling media products into the price of the Internet service, additional promotional materials for the same price (extra footage on DVDs or bonus CD et cetera), free downloads, discounted gift cards and so on. But these developments are challenges and suggest a decrease in surplus value generated through copyright exploitation. Whether corporations are permanently forced to enter into new business models will depend on whether they accept the allegation that the price of their products marketed are too high remains. But it seems consumers have made their own value judgments, and one wonders just how much care and consideration is given to these commercial dilemmas by consumers.

Technological change directly impacts the copyright governance framework. The judge in iiNet (2010) permitted the case to be twittered and so the case went viral indicating just how acutely aware the court was of the technological implications of this case. Social media as a mode of social interaction is the process of communication and information dissemination through digitalised social interaction. The key element to this process is mutualism or reciprocity. Peer users concurrently accessing and publishing respective information via a symbiotic process create plurality in broadcast and information dissemination. This mode of delivery bypasses traditional popular media channels. Copyright infringement issues aside, there are no distinctions between the information broadcasters and information recipients. In this sense its democratising effects are in absolute contradiction to the traditional mode of popular media consumption.


What should be acknowledged then is a growing play for free attitude in the context of private use. It is no coincidence in the past few years that technology-based companies have focused on new delivery platforms and devices supported by the Internet, mobile phones particularly smart phonesand games consoles. In conjunction with ISP and Telco partners focused on broadcast, these platforms allow operators to launch a range of value added services such as catch-up television, content on demandand access to television guides. Social networks form an integral component in these convergent modes because these services are then disseminated through private channels (Facebook, MySpace and so on). Popular media industries have been forced to accept this brave new world exists but the terms may not necessarily be favourable.

What appears to be missing in this digital environment is traditional market reciprocity between buyers and sellers. Suppose a social networker attends a live performance, and uploads a video clip from the footage he or she has sourced as an attendee. The clip is uploaded on Myspace for dissemination on his or her website for altruistic reasons (art for arts sake and not commercialisation). The clip clearly is an unauthorised recording of a performance. The work is an infringement of the copyrights vested in the works performed. The works are unapproved and the entrepreneurial copyright owners will insist Myspace issues a take down notice because it is a breach of copyright. Participating in illegal consumption might be construed as an act of piracy, but there is no commercial gain in such media transactions. Social networking popular media suggests consumers have certainly not lost any interest in popular culture. Lucas (2003) explains: If we do not enforce copyrights to music, will people stop writing and recording songs? . . . . Not likely . . . . If so, then protection against musical piracy just comes down to protecting monopoly positions: something economists usually oppose, and with reason (quoted in Clement).

Just like personal media tastes, consumption has become a complicated process. Now add feelings of discontent. What if consumers on the whole possess an overall feeling that the 18

major players are really in the business for money and not for artistic taste or independent industry protection? The major players feel aggrieved about piracy, but consumers feeling ripped off or being treated unfairly are compelling reasons for unapproved conduct. In a study concerning the brain and the law, Chorvat and McCabe explain the brain reacts to an emotional desire to be treated fairly where cognitive conflict occurs (2004, p.1731). These feelings highlight the complexities associated with consumption vis--vis product control and copyright maintenance. Consider this finding in the light of studies concerning value for money and the rationale for illegal consumption (Furnham and Valgeirsson (2007), and consumer behaviour in relation to infringement generally (Maffioletti and Ramello (2004). Factor in the amorality of infringement (Manesh, 2006) argument, and a case for disappointment and general consumer discontent against major players might be raised with respect to their legitimate corporate interests.

The issue, therefore, relates to value-exchange. The Internet appears to have exposed the artificiality in price setting made by the popular media industries. For example, Australia introduced copyright law amendments to promote more competitive pricing through parallel importation in 1998, and the Office of Fair Trading (UK) (OFT) and similar inquiries in Europe in 2001 have periodically monitored and reviewed allegations of anticompetitive price setting (see OFT391/2002 and generally). Feelings of control from pricing to format might also explain the ambivalent approach to illegal consumption. In Australia, the PPD to RRP ratio adjusted almost immediately in the new release category to reflect equitable pricing when the monopoly position was challenged. In short, prices dropped. The Internet has socially networked these feelings of discontent to a great extent.

In other words, the Internet has created a pseudo-market environment that encourages various forms of reciprocity on an unprecedented scale. Social networking is an extension of social


hub behaviour. But it is also a reflection of consumer discontent in relation to corporate control of popular culture, and as such, exchanges continue to occur freely without a gatekeeper.

As public profiles require shared connections and mutual exchanges, there is very little room for corporate media intervention. Social media should be classed as an external development completely devoid of any corporate popular media influence. It works along P2P principles in that a middleman as content keeper is not required for content delivery or consumption. This is not to suggest Internet-based social media has not attracted popular media corporations. They have entered into mutual benefit arrangements especially advertising, and have alliances with Google, YouTube, Facebook, and MySpace. Businesses now also attempt to reach consumers in this convergent fashion. The problem with social media networking, however, is that copyright which is the conduit in popular media is inherently subjugated in social media. The transient nature of social networking means it is difficult to institutionalise, that is, legitimise the content uploaded with formal copyright governance structures.

Because of social media, disjointed and ad hoc fluid forms of consumption compete with traditional market models. The Internet is devoid of specific location because of its online status. Websites are registered but are not physically situated. A menagerie of Internet forums, blogs, wikis and podcasts which dominate this mode of decentralised consumption has proved problematic for copyright owners because consuming in autonomous nodes and at arms length is the complete antithesis of a corporate and hierarchically structured mode of delivery.

Friends become consumers in the social network setting. Membership is based on social acceptance and not financial status. A friend does not require funds to consume a product (for example a copyright infringing video clip). The decentralised, fragmented approach is unconventional given the essential ingredient is interactivity. Corporations might utilise


Facebook and YouTube for marketing purposes and promotion, but they are hardly substitutes for traditional media commodification processes. Imagine the absurdity of a Sony trade banner being displayed on an anticircumvention spoof. Piracy is not a laughing matter; however the dearth of evidence to rebut that presumption suggests those libertine social networkers cannot resist the urge to mock copyright laws. (Refer to the plethora of anti-piracy parodies on YouTube.)5 Part IV To be or not to be: Tensions between Liberalism, Copyright Control and Technological Change?

Copying perfect or near-perfect media are very standard tasks. It is suggested this behaviour might also be construed as socially acceptable despite the industrys strict prosecutorial stance given the immense popularity of replicating digital products. The BitTorrent protocol for example is used for both legitimate and illegitimate means in large volumes. Its form is extraordinarily fluid, and by virtue of its enabling properties, it also possesses positive aspects of individual behaviour in a liberal society; namely: Self-determination (freedom of choice) through the Internet (without corporate or government coercion); and Self-reliance and the capacity for individuals to evolve naturally free from organisational influence and interference in new or different settings (see Heywood, 2002, pp.55-56). (These processes are inherently private and self-regulating.) It is argued the need for freedom from interference in the exchange of information is a natural desire for citizens in liberal societies. References in famous literary works provide interesting examples of liberal values throughout history.6 Schwarzschild identifies the nexus between

See especially the IT Crowds actors performing a spoof of the most famous anti-piracy commercial produced by the industries representatives, Piracy its a Crime at 6 Shakespeares dramatic works contain several references to liberal attitudes expressed by individuals (for example, see reference to liberal villain in Much ado about Nothing (Act IV, Scene 1), and I will become as


individuality and voluntary exchange; They ensure a degree of moral independence from other people; they are also an indispensible counterweight to government power and the force of social conformity (2006, p.217). Nineteenth Century conceptions of media consumption certainly allowed for a more liberal approach by individuals towards media piracy prior to corporatisation. Innovation not subsumed by popular media corporations reflects these 19th Century ideals.

If it is acknowledged that any freedom expressed by individuals in the 21st Century in relation to advancement (especially replicating tools and P2P software) is more consistent with classic liberal attitudes, then it is difficult to accept natural citizens have become morally derelict in their duty towards corporate citizens. Independently evolving technological developments epitomise emancipatory concepts as espoused by early liberal thinkers such as JS Mill who argued for individual independence and autonomy when there were growing pressures to conform which inhibited individual spontaneity and cultural diversity. Without the space for individual experimentation with life the human potential would be thwarted and society would stagnate (Eccleshall, 2003, p.35). But when conditions allow for liberal expression, problems between the individual and authoritative control are always created.

The recent iiNet case is unusual in that it demonstrates the capacity for challenges to a strict, and formal application of statutory copyright legislation when assessing technological impact on copyright. The differences between innovative change and (copyright) statutory interpretation are succinctly summarised at the outset of the case: An ISP such as iiNet provides a legitimate communication facility which is neither intended nor designed to infringe copyright. It is only by means of the application of the BitTorrent system that copyright infringements are enabled, although it must be
liberal as you; Ill not deny him anything (Merchant of Venice, Act II, Scene II). The first expression can be used to describe a media pirate, whilst the latter epitomizes P2P download/upload culture. In Shakespeares political play Measure for Measure, Lockes notions about freedom and individualism in a state of nature are apparent Liberty plucks justice by the nose (Act I, Scene III). The common thread that binds these expressions is liberalism. Even in an aesthetic context, liberal values are expressed as natural human tendencies.


recognised that the BitTorrent system can be used for legitimate purposes as well. iiNet is not responsible if an iiNet user chooses to make use of that system to bring about copyright infringement (per Cowdury J at 19).

A fragile tension has probably always existed in finished copyrighted products due to the process involved in blending incorporeal chattels within actual objects. The heavily protected copyrights possess no intrinsic worth to the consumer, but the products derive personal pleasure to the individual. As individualism and personal autonomy are deeply embedded in classic liberal thought, emerging digitalisation has called legal and technological divisions into question.

Convergence in popular media has fused the boundaries between certain public and private rights including the right to choose without influence or control. If so, then the effect of statutory interpretation of copyright is being affected. This development potentially undermines the stability of copyright laws and challenges corporate control. It is argued such change is capable of destabilising popular media industries as a consequence of individualistic, self-determining behaviour. These developments create omnipotent

opportunities in liberal society. And the most unprecedented private to public tool capable of upsetting the balance of power is the Internet something regulated by laws other than copyright legislation. It was affirmed in the iiNet case there is no compulsion (under liberalism) on any person to protect the copyright of another. It was held, The law only recognises a prohibition on the doing of copyright acts without the licence of the copyright owner or exclusive licensee, or the authorisation of those is impossible to conclude that iiNet has authorised copyright infringement (per Cowdury J at par.20).

Liberalism is the very political ideology that underscores US, UK, Australian and other significant English speaking Common Law copyright jurisdictions including Canada and New 23

Zealand.7 In this light, Drahos correctly observes property in expression (copyright) conflicts with freedom of expression (1998, p.2). And herein lies the point of contention between the right to unconditionally utilise information via convergence in popular media, and the right to preserve proprietary interests.

It is important to acknowledge this because a fundamental shift has meant the Internet is now probably the major cultural forum. Nonetheless, it is trite law to state copyright protection exists in cyberspace. But the issues remain unresolved, and Lyman (1995) best summarised the ongoing dilemmas at the outset: [N]et-culture - if that isnt an oxymoron - has become hostile to the concept of intellectual property[and] although the Internet has become more sociologically diverse, it still reflects the academic view that knowledge is properly governed by a gift culture in which each of us gives away what we know for free, and takes what we know for free (33-35).

The political and legal reality seems to be that on any objective assessment of media piracy, digitalisation and convergence are occurring on a multidimensional level. That is the popular media industry should make the connection that in a world of digitalised convergence there are social limits to economic growth in areas where multinational majors wish to increase the capacity for a firm to satisfy the profit margin from intangible goods.

A convergence of law, popular culture and behaviour has been occurring for at least 150 years yet the major corporations are in absolute narrow defiance and denial at the deference and/or indifference displayed by consumers. Browne-Wilkinson J identified the the character of the Audience in Performing Right Society Ltd v Harlequin Record Shops Ltd (1979). Of particular importance is consideration of the character of both the unauthorised uploader or

Generally, these nations possess comparable legal systems within a liberal democratic framework. And whilst other Western nations have to a large extent been shaped in terms of a Civil codified legal system within a social democratic political framework, the basic principles of copyright as espoused in the Common Law and other European jurisdictions have become universalised.


supplier of popular media and his or her audience. The monopolistic owner of the copyright cannot see the exchange any other way than one of impropriety and indiscretion. Yet the relevant character of the audience in the exchange is that of the typical character of people throughout the years who have enjoyed unlicensed concerts, or have taped, burned, ripped and now downloaded in a private, semi-private, domestic or quasi domestic situation. In a world of digitalisation, the customer feels payment has been made to the Telco ISP, and given the privacy in which consumption is made, then it is quite reasonable to assume that is the end of the matter. In households where more than one computer and wireless is now the norm rather than the exception, it is hard to imagine parents and legal guardians are not aware of what goes on behind closed doors with children and technology. Should these people be judged as derelict and dodgy?

Corporate expectations about how consumers must behave and how consumers actually behave is more than just a cultural issue. The character of audiences seems to be that people unite for social reasons not for commercial exploitation. Corporations on the other hand come together for commercial reasons without considering society as a whole. As Bakan forcefully (but properly) asserts [A Corporation] compels executives to prioritise the interests of their companies and shareholders above all others and forbids them from being socially responsible at least genuinely so (2004, p35). Best interests for popular media corporations are a) to make profit, b) preserve and protect their dominant status quo, c) essentially represent corporate interests to the effect that the governance system dominates the formal structures, and d) pursue in the narrowest and strictest way any obstacles to profit.

Take another recent example - the Limewire case (one of the worlds largest P2P networks which suffered the same fate as Kazaa). Evidence presented to the court indicated up to 99% of the content that users requested for download through Limewire was protected by


copyright (Heindl, 2010). The sheer flagrancy of the copyright infringement constituted incontrovertible inducement according to the court. Here Limewire, like its predecessors was facilitating copyright abuse, enabling infringement through available software and how to guides, marketing the illegal techniques, and otherwise encouraging media piracy (along the lines of Kazaa).

In the same Western jurisdiction and just one month proceeding the Limewire decision Viacom, one of the worlds largest media conglomerates has had its $1 billion copyright action pursuant to the DMCA 1998 legislation against Googles YouTube dismissed. The reasons for dismissal largely turned on the court being satisfied of YouTubes prompt take down notice (remove works immediately at copyright holders request). Essentially YouTube has relied on safe harbour protection. But the simple fact remains, Googles company was undoubtedly aware of the copyright infringements occurring on its video-hosting site by its social network users. For slightly different reasons (namely the reliance on safe harbour), the Court applied similar reasoning to the iiNet case. The DMCA8s safe harbour protocol allows powerful intermediaries such as YouTube to thrive where they can demonstrate positive acts of compliance (as opposed to shams as in Limewire). Viacoms Complaint filed in 2007 specifically particularises the allegations of copyright infringement as follows:

2. ...YouTube has harnessed technology to willfully infringe copyrights on a huge scale... 30...Because YouTube users contribute pirated copyrighted works to YouTube by the thousands....

On the one hand, P2P platform facilitators such as Kazaa and Limewire are deemed flagrant copyright abusers by the courts (that is, entities and persons classified as nothing more than

The US enacted Digital Millennium Copyright Act (DMCA) (1998) is arguably the most forceful recent universal governance protocol legal tool. Sovereign state members of WIPO are literally pressured to enact mirror domestic legislation.


opportunistic parasites living off copyright hosts). However, Telcos such as iiNet and social network intermediaries such as YouTube are deemed good corporate citizens because their social networking regulatory systems are satisfactory. They are thus not parasitic or piratical in their business conduct, but rather epiphytic because they attach themselves to the copyright host. These legal arguments and analyses are not only ambiguous and confusing, but they must appear preposterous to consumers who rely on these technologies as a form of expression. The level of uncertainty remains, and it is difficult to imagine how litigation and legislation will resolve the substantive technological issues.

In the UK, the Digital Economy Act 2010 is one recent attempt following a long line of legislative responses. Under the Act, ISPs with 400,000 subscribers or more are required to police file sharing and introduce the Three Strikes procedure, which may result in users who continually infringe copyright having their Internet bandwidth reduced or even terminated. The fact two of the leading British ISPs, Talk Talk and BT, had sought judicial review of the Act from the High Court in order to clarify whether the new Act conflicts with the EU's ecommerce directive which limits the liability of ISPs is not a healthy start to the legislative response. This law may also have human rights communications implications. The popular media industries in Australia are also lobbying for the introduction of legislation requiring ISPs to police the file sharing activities of their users. However, because such legislation has only been introduced in other countries during the past two years, there is no evidence to indicate that these measures have any effect in preventing or deterring copyright infringement.

Yet every successive wave of innovation brings along with it moral baggage. Digitalisation is the most recent socio-moral dilemma (if copyright infringement constitutes a social or moral crisis that is). The law determines the state of legal and illegal behaviour but not morality. But unlike copyright laws, technological advancement does not exist in a vacuum. Goddard LJ in Ernest Turner Electrical Instruments Limited v. Performing Right Society, Limited (1943) 1 27

Ch 167 best summarises the dynamics between consumers and technology as follows [at 1756]: [I]n selling a piece of music or a gramophone record, the owner of the copyright contemplates that it will be played, and consents to it being played, by the purchaser and he expects, not that it will be enjoyed in solitude, but that it will be heard by members of the purchaser's household and his guests. In that case, a common sense approach was urged. Technological tools promote enjoyment as much as they incite acts of infringement. Several other old cases about the social urge to participate in the dissemination of popular culture in a convergent manner exist (see Performing Right Society Ltd v Hawthorns Hotel (Bournemouth) Ltd (1933), Duck v Bates (1884).

Fast forward to the 1980s where blank taping was the new terror for corporate governors. Radio, record and cassette taping was and has always been a key feature in the manner in which popular culture is consumed. As with file sharing and social networking, cassette swapping is illegal. In the early 1980s, the concentrated Australian music industry through its peak body ARIA and with the assistance of its collecting societies APRA and PPCA9 demanded greater royalties for public performance because of home taping based on allegations of media piracy in the WEA case (1982). The same fears were peddled in the lead up to the 1998 parallel importation reforms (piracy and job losses). These unfounded allegations about media piracy were largely baseless on both occasions.

Consumers still participate in legal and illegal modes of consumption. The pattern that emerges is that respectable citizens are acutely aware of their actions and the courts consistently insist on good common sense be applied. One indisputable fact is corporate copyright holders are predictably litigious. Yet the results are not always favourable. There must be a politico-economic and social cost to litigation. A cost which cannot be measured is

Australian Recording Industry Association, Australasian Performing Right Association and Phonographic Performance Company of Australia.


the attitude and respectably lost by consumers. So-called common sense as proffered by the Judiciary has been largely ignored by copyright governors.

Concluding Remarks

Tensions between copyright and telecommunications legislation will become increasingly evident. The recent litigation between copyright and Telco industries in the West have attracted much political controversy recently (another Hollywood case against BT is the latest ISP clash in the case of Twentieth Century Fox and Ors v British Telecommunications (2011)). This must be unsettling for legal formalists and those wishing to uphold the dominant corporate status quo. In other words, the metagovernors of popular culture, who have subsumed copyright industries into a corporate, entrepreneurial broad-spectrum right must also view technological developments in the Telco industry and greater judicialisation as a threat to the old ways of conducting business.

In a case where a P2P operator has authorised copyright infringement in the legal sense, there is a defence for those persons who 'merely provide facilities' for these acts. This defence is designed to protect an ISP from being liable for copyright infringement. This is an important observation because it is argued a legislative confrontation between copyright protection and communication preservation is being fought in the public realm. On the one hand copyright regulation has consolidated in order to preserve multinational, corporate, monopolistic homogeneity, but on the other hand, Telco legislative change has impeded these initiatives because it does not necessarily support the formers legal and political agenda. And whilst the latter corporate citizens acknowledge copyright protection as a component of the law, Telcos rights and obligations also rest with their respective customers (and shareholders). It is argued,


these stakeholders are currently at cross-purposes.10 Has technology created a situation where neighbours are turning on themselves? The answer to that is vexed because these digital neighbours require synergetic business models for ensuring content delivery and customer goodwill.

All three arms of power under the Western liberal conception of the separation of powers have concurrently accepted convergence through digitalisation is occurring at a rapid rate. These are reflected in parliamentary debates, speeches and caselaw. Corporations were probably in denial in the early 1990s about the threat of externalities, but the legal reality suggests a narrow power base once enjoyed by the majors can be altered from various angles.

Governance in the light of convergence, and approaches about the best way forward for copyright remain unresolved. And indeed on the matter of copyright preservation, the doctrinal evidence and empirical data suggest prima facie illegal consumption is too complex and multidimensional for copyright laws to provide any meaningful robust protection.

In Dow Jones v Gutnick (2002) the challenges to global governance from developing digital communications (namely the Internet) was identified. This High Court decision recognises the need for different approaches to the current governance framework. Justice Kirby (2002) summarised the issues as follows: To wait for legislatures or multilateral international agreements to provide solutions to the legal problems presented by the Internet would abandon those problems to 'agonisingly slow' processes of lawmaking...The alternative, in practice, could be an institutional failure to provide effective laws in harmony,


ISPs commercial imperatives centre around factors such as the financial benefits to customers, fast speeds, reliable streaming and the promotion of material including popular media. These imperatives do not detract from ISPs legal duties to provide reasonable help to copyright industries where possible. But the paths are nonetheless different.


as the Internet itself is, with contemporary civil society -- national and international (at par.50). The iiNet case is a reflection of this failure echoed ten years ago by the High Court. Technology does not wait for governance frameworks. Alarmingly, pirates in non-Western nations have now embraced virtual three dimensional downloads. And this development begs the surreal but moral question about whether consumers would download a car if they possess the technological means? Shakespeares words resonate in this arena as the dogs of war on individuals, technological innovators and liberal villains can be heard tomorrow, and tomorrow, and tomorrow.


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