Thursday, March 10, 2016

Educational fair dealings battles: Collective Societies

Anyone who follows copyright in the news will have heard the epic battles around educational fair use.

To hear it from the perspective of those who represent collective societies it is a battle between starving artists on one hand and thieving big business educational institutions on the other.

To hear it from the perspective of educational institutions it is charities providing a public service trying to reduce costs to students and taxpayers any legitimate way they can.

The problem is that both of these perspectives are wrong.

This article is in two parts, with the second part addressing educational institutions.

Collective Societies

Collective societies don't "represent" creators, starving or otherwise.  They provide a specific business model service available to copyright holders, and compete in a marketplace that includes a wide variety of other business models available to copyright holders.

Collectives don't "represent" creators in the sense that an elected politician or union representative might claim to represent constituencies, any more than ScotiaBank can claim to "represent" me simply because I happen to be a customer of some of their financial services.

If a large number of home owners who had mortgages with Scotiabank decided to switch to BMO, Scotiabank would never be allowed to claim that there was a crisis in the mortgage business or home ownership, and lobby the government to try to force home owners to take out mortgages from Scotiabank.

This is essentially the argument that certain collective societies have been making for many years in Canada. Copyright holders and educational institutions have been migrating to directly licensing works through a wide variety of online services where there is a direct flow of money from the institutions to the copyright holders.

This is the reality of the marketplace today: the overwhelming majority of works used within an educational setting are directly licensed.  What remains to be sorted between collective licensing and fair dealings is decreasing in size all the time, and it is this modernization that bogus "studies" by PricewaterhouseCoopers failed to take into consideration.  The fact that revenues flowing through collectives has decreased is not an indication of a failure, but an indication of a successful ongoing transition to more direct licensing models.

Collective societies should have always been understood as a licensing model of last resort.  Authors licensing directly is ideal, and if that isn't possible then through a publisher or some other intermediary. Collectives are only needed when normal direct licensing options are somehow failing, and creating indirect licensing is the only remaining option.  Rather than copyright holders licensing directly they become members of collectives and receive payments based on very rough statistics about possible uses of their works.

With modern digital delivery mechanisms the costs of creating accurate statistics and offering transactional licensing has dramatically decreased, which means that the pre-digital collective management option will have diminishing value in the marketplace to either authors or users.

Collective management of copyright is nothing like collective bargaining

One of the more warped suggestions you will hear is that collective management is comparable to collective bargaining, and that collectives are simply representing their members like a union does in negotiating with the employers for better fees.   This claim is nonsense for many reasons.

The closest thing that authors have to an employer is the publishers, not the customers of the publishers. Workers at a Ford plant don't picket in front of the homes of car owners as a mechanism to get better wages, they picket in front of their place of employment trying to convince the employer to give them better wages.  While authors require this type of representation as the deals offered by many publishers are unfair to authors, collective societies aren't helpful in that scenario.

In the case of collectives like Access Copyright, the publishers (employers) already dominate the money flowing through them and as much as some collective devotees try to claim otherwise also control the organizations politically.   Normally a union isn't made up of a mixture of employees and employers, where the employers control the agenda -- so suggesting that a collective is like a union makes no sense.

As collectives exist in a competitive marketplace, and authors and users are switching to better licensing models, you will see collectives fighting against these competitive pressures.  An analogy might be having the employees and management of Ford picketing outside Chrysler headquarters complaining to Chrysler employees that Ford isn't getting paid because people are switching to purchasing Chrysler vehicles rather than Ford.  It is an odd mentality, and it violates much of what a union normally stands for as you have workers from one employer picketing against the workers from another employer, in solidarity with their management rather than their fellow workers.

Some oppose any form of fairness in copyright law

Of that diminishing proportion of works which are not available for direct licensing, we are left with sorting between those uses which should be considered fair dealing and uses where a royalty would be paid through a collective society.

As with the other aspects of this debate, the "sky is falling" rhetoric is false as the vast majority of uses we are discussing are legitimately fair dealings that would be recognized as fair by anyone who remotely believes that copyright law should have the concept of fairness within it.  The loudest people you will hear complaining about legitimate uses of fair dealings, even with the fairly conservative policies most educational institutions are using, are people opposed to their being any limits or exceptions to copyright at all.  These extremists should be recognized as outsiders from the core of the policy debate.   As discussed in earlier articles, they certainly don't represent the interests of authors who depend on these limitations and exceptions to create our own works which build on the past.

The blanket licensing problem

After we consider direct licensing and necessary limits and exceptions to copyright, there still remains an extremely small number of uses or works that are still worthy of consideration.

What educational institutions have been asking for is a mechanism to provide transactional licensing for those instances where a work that is used in an educational setting is not already available through direct licensing, and where the copyright holder is in the repertoire of a collective society.  As the marketplace advances these instances are becoming less common, but this service would still provide value to copyright holders and their potential customers.

Unfortunately some collective societies have been fighting against this eventuality for decades.  They want to offer blanket licensing (an expensive per-student price, regardless of what copyrighted works are ever used), and refuse to offer transactional licensing except to those institutions that already have a blanket licensing.

Like the frustration consumers have with other unfair bundles like much hated cable packages leading people to "cut the cord", this failure caused by collective societies are inducing more and more institutions to cease any type of licensing with the collectives.

I see this scenario as similar to what I have already written about the Orphan works and Netflix region restriction problems.  The general policy proposal was this:

Fair dealing for non-commercial uses of works not otherwise offered for license under reasonable terms is not an infringement of copyright.
The onus should be on the copyright holder to provide appropriate licensing options to educational institutions if they wish to get paid royalties.  If they refuse to offer direct licenses through the variety of existing mechanisms, and are only members of a collective society that is refusing transactional licenses, then they shouldn't expect much sympathy for their complaint that they aren't receiving royalties.  (Note: I offer a funding program suggestion in the second part)

Members of collective societies should be demanding that collectives provide transactional licenses, otherwise the copyright holders should form a competing collective to replace the failing one.  This has been discussed in the past, such as by a splinter group contemplating creating a Creators' Access Copyright as they recognized that Access Copyright primarily represented the (often competing) interests of (largely foreign) publishers.  While that group was drinking the same cool-aid that Access Copyright devotees are in opposing fairness in copyright law, they at least recognized one of the largest problems with Access Copyright: there are obvious conflicts of interests between authors and older business model dependent publishers.

Competing interests of authors and collectives

The politics of this situation is made more confusing because there are individuals that represent the interests of collective societies against competitors who allege to represent the interests of artists. You will see press releases coming from professional writers associations and unions echoing the false claims of collective societies.   I have never believed that these individuals represent the interests of artists but the increasingly conflicting interests of collective societies.

One of the best things that fellow members of the creators rights movement can do is distance themselves as much as possible from collective societies, their lawsuits, and their counter-productive political campaigns. If you are a member of a union or professional association whose leadership is parroting the rhetoric of a collective it is time to get together with other members and depose those with this conflict of interest.

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