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Kyle Currence
T. Sotirakopulos
English-1102-Honors-01
12 December 2016
Criminal Copyright: Why Outdated Copyright Laws, Not Music Streaming Services, Are to be
Blamed For the Music Industrys Lost Revenue
The music industry is in danger, and concerned music fans have pointed their pitchforks
at the throats of music streaming services, such as Spotify, YouTube, and Pandora, that allow
users to access music digitally without any purchases. Music streaming services are relatively
new, and it can be difficult to understand how they pay musicians, but the services themselves
are not to blame for lost revenue within the music industry. The blame lies squarely on outdated
copyright laws. While Floridian economists Karla Borja and Suzanne Dieringer, along with
economics honor student Jesse Daw, propose that college students who frequently use music
streaming services are more likely than their peers to pirate music digitally, Luis Aguiar,
European Commission Digital Economy Researcher, and Joel Waldfogel, former Ehrenkranz
Family Professor of Business and Public Policy, explain that music streaming services have an
overall neutral effect on the music industry. Co-founder and CEO of Spotify Daniel Ek responds
to detractors of his company by arguing that Spotify is an industry leader in paying musicians
fair wage, and Christophe Muller, director of YouTubes global music partnerships, contends
that YouTube takes pride in its management of copyright and allows musicians more
opportunities to gain exposure and profit from user-uploaded content. However, Cary Sherman,
CEO of the Recording Industry Association of America, states that the Digital Millennium
Copyright Act (DMCA) invoked by YouTube is dysfunctional and outdated, resulting in a lack of
wages for musicians and the labels that represent them. Entertainment lawyer Steve Gordon

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explains the technicalities of the DMCA, and Tricia Riskin of Northwestern Law echoes
Shermans claim that U.S. copyright laws are in severe need of revision to better fit in with
modern digital mediums. Music streaming services, young and full of promise, are still growing
into beneficial tools for the music industry. Copyright laws, outdated and inflexible, are
hindering the growth of the music industry, and I propose that a new system of flexible copyright
laws should be enacted to ensure a safe future for the industry.
Music streaming services are inarguably convenient for users. Users do not need to
purchase individual songs and download them to their devices, saving them immense amounts of
money and digital storage space. This convenience makes for an incredibly consumer-friendly
service. According to a recent survey of 73 individuals, 71 reported using music streaming
services, and 62 reported using music streaming services as their primary medium for listening to
music (Currence). However, some are suspicious that this convenience comes at a price to
musicians. They argue that because music streaming services reduce a users need to spend
money on albums or individual tracks, they reduce the revenue of the music industry as a whole.
On its surface, this seems like a logical argument, and it is seemingly reinforced by the findings
of Karla Borja, Suzanne Dieringer, and Jesse Daw, which indicate a positive correlation between
the use of music streaming services and music piracy among college students. However, in
focusing exclusively on college students, this study paints a false picture of music streaming
services effects on the music industry. Aguiar and Waldfogel find that music streaming services
reduce both digital download sales and piracy, resulting in an effectively neutral impact on the
revenue of the music industry. This report definitively rules out the possibility that music
streaming services themselves are to blame for lost revenue within the music industry. These
findings are in line with claims made by Daniel Ek and Christophe Muller, who claim that

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Spotify and YouTube pay billions of dollars to musicians hosted on their services. However, the
music industry is still undergoing a significant loss in revenue, meaning the blame must lie
elsewhere.
Cary Sherman believes that outdated copyright laws are to blame for lost revenue, and he
points to YouTube as a specific example of copyright laws being handled poorly. Sherman
contends that in its current state, YouTube makes it far too difficult for a copyright holder to have
copyright-infringing material removed from YouTube, as the copyright holder must flag each
individual instance of the infringing material to be deleted by YouTube. This is an unrealistic
amount of work to expect from any individual, as a song could be uploaded countless times by
countless users under countless different titles. Muller, however, claims that YouTubes Content
ID system, a system designed to automate the flagging and removing of copyright-infringing
content, renders Shermans complaint a non-issue. Sherman then goes on to explain that it is
unfair to compare YouTube to streaming services like Spotify, arguing that YouTube is more akin
to radio broadcast. Because of this, Sherman says, YouTube should not be held to the same
standards as a service like Spotify. Shermans claim that YouTube is closer to a radio station than
an interactive music streaming service like Spotify is illogical. A radio station does not allow the
user to pick and choose which songs they listen to. YouTube, however, does exactly that, much
like Spotify and Apple Music do. While YouTube clearly has issues with its identity as a service
and its handling of copyright claims, these faults are the result of even deeper issues with two
seminal pieces of outdated copyright law: the First Sale Doctrine (FSD) and the DMCA.
The FSD was created in 1854, and the DMCA was enacted in 1998. The use of
technology has grown exponentially and changed dramatically since the institution of those laws,
yet the laws themselves have not been updated to match the current state of the digital market. A

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number of problems have arisen from the manners in which the FSD and DMCA interact with
music streaming services, which is an interaction they were never designed to have. The FSD
gives the first buyer of a good the right to dispose of said good however they see fit, including
selling the product, even if the original creator of that product holds the copyright. While this
doctrine may work for physical goods, it was clearly never designed with digital property in
mind, as digital property does not exist only in one state; it can be reproduced, modified, and
redistributed in any number of ways. The DMCA, though newer, is still riddled with issues. It
allows certain digital music providers to play any music recordings without the permission of a
record label, so long as those providers pay fees mandated by the DMCA (Gordon 92). Tricia
Riskin also points out how loopholes within the DMCA and the FSD allow YouTube protection
from major lawsuits, even though YouTube hosts user-uploaded content that violates copyright
laws (Riskin 13). Riskins findings show that Cary Shermans cries for newer copyright laws are
not without merit. Riskin comes to the conclusion that copyright laws should be made flexible
enough to accommodate the wide variety of scenarios for usage possible in the digital realm
(Riskin 37). This seems to be the only reasonable solution to copyright law that will also prevent
future change. While the FSD and DMCA may have been useful in the context of their creation,
they are now more of a hindrance to the music industry than they are a protective measure.
Technology will continue to grow at an exponentially faster rate as time goes by, and the
methods by which people listen to music will likely change as well. Creating another set of
concrete copyright laws will be beneficial for a few years, but will quickly become outdated. If
copyright laws were designed to have some degree of elasticity, much like the US Constitution
does, they could be made future-proof, ensuring that the future music industry does not have to
undergo the struggle the music industry of today is experiencing. This change will only be

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possible if lawmakers are made aware of the harm done by the FSD and DMCA. Musicians and
consumers must petition lawmakers and convince them that there truly is an issue in need of
fixing. If action is not taken immediately, changes may not occur until it is far too late for the
music industry,
Music streaming services dramatically changed the structure of the music industry. While
change has the potential to be frightening and confusing, blaming music streaming services for
problems caused by outdated copyright laws will only bring more harm to the music industry.
Copyright laws must be rewritten and elasticized to prevent current and future conflicts between
copyright laws and the digital marketplace. Depending on whether copyright laws or music
streaming services are targeted by musicians and the general public, the music industry will
either be saved or destroyed.

Works Cited
Aguiar, Luis, and Joel Waldfogel. Streaming Reaches Flood Stage: Does Spotify
Stimulate or Depress Music Sales? Institute for Prospective Technological Studies
Digital Economy Working Paper 2015/05, 2015, doi:10.3386/w21653.

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Borja, Karla, Suzanne Dieringer, and Jesse Daw. "The Effect Of Music Streaming
Services On Music Piracy Among College Students." Computers In Human Behavior 45.
(2015): 69-76. Academic Search Complete. Web. 6 Nov. 2016.
Currence, Kyle. Music Streaming Services. Survey. 16 Nov. 2016.
Ek, Daniel. $2 Billion and Counting. News, Spotify, 11 Nov. 2014,
news.spotify.com/us/2014/11/11/2-billion-and-counting/.
Gordon, Steve. The Future of the Music Business: How to Succeed with New Digital
Technologies - 4th Edition. Milwaukee, WI, Hal Leonard, 2015.
Kafka, Peter. Here's Why the Music Labels Are Furious at YouTube. Again. Recode,
Vox Media, 11 Apr. 2016,
Muller, Christophe. YouTube: 'No Other Platform Gives as Much Money Back to
Creators'. The Guardian, Guardian News and Media, 28 Apr. 2016,
Riskin, Tricia. "Out with the Old, in with the New: How a Functionalist Approach Could Save a
Dying First Sale Doctrine." Journal of International Human Rights 13.2 (2015): 233-54.
Academic Search Complete. Web. 6 Nov. 2016