Disintermediation in Copyright Law – A Skeptical View

Professor Guy Pessach, Hebrew University Jerusalem

Corporate Media is highly criticized by copyright scholars; at times, probably for justified reasons. The paradigmatic producer-consumer corporate equilibrium tends to generate adverse cultural and distributive effects. It may destabilize authors’ and creators’ ability to get a fair share of returns on their investment. It may undermine cultural diversity by inducing and favoring certain types of media products. Finally, it may disrupt active participation of amateurs, civic-engaged activity and end-users that face difficulties and barriers in accessing and utilizing copyrighted cultural materials. Additionally, recent scholarship highlights two related aspects: (a) findings that authors’ and creators’ incentives diversify and far range from copyright’s direct economic incentive; (b) the manners in which digitization and networked communication technologies significantly reduce the costs of producing, storing and distributing content and cultural products.

Put together, these elements are the driving force behind a call for radical disintermediation, including in the context of copyright law. Distributors’ and intermediaries’ dominant role, within the current copyright system, is perceived as a “major copyright ill”, which disfavors and harms creators, readers, users and society at large. A significant reduction in distributors’ and intermediaries’ copyright stakes, rights and attachments is purported as a major goal in any future copyright reform. But, is it really so?

This project uncovers the impacts of disintermediation in copyright law. I argue that contrary to the common view, within the political economy of networked communication platforms and the Internet, traditional intermediaries, such as content producers and distributers (e.g. labels, record companies, publishers and the motion pictures industry) may occupy a fundamental function of “checks and balances”. They balance and mitigate the increasing power held by a handful of meta-intermediaries, such as Google, You-Tube and Facebook. Users’, authors’ and creators’ bargaining position visa-vi networked meta-intermediaries may be far more unequal and alienated than their relationships with traditional content and culture intermediaries. Additionally, the political economy of free content, through commercial networked intermediaries, may disrupt cultural diversity no less than the traditional corporate media model. Consequently, along with creators’ and users’ empowerment, maintenance of traditional vertical intermediaries and corporate culture institutions becomes an important component for cultural environmentalism.

From a broader perspective, I argue that copyright policy requires consideration of two interrelated elements: (a) intermediaries’ determinism - even in a copyright system that aims to skip intermediaries and focus its protection on originating creators and end-users, intermediaries are here to stay. Where there is excess capacity, there is also a profit opportunity to be captured by intermediaries that free ride on power distribution laws. Similar results may occur even within a copyrightless legal system. Once acknowledging this element, a novel function of copyright law in being revealed: corporate copyright entitlements may have a legitimate and desired role in mitigating excessive power of copyrightless distribution platforms; (b) the dynamic nature of power allocation in mass media markets - just like other regulatory regimes which aim to foster free speech, copyright law must adjust and correspond to transformations in the institutional identity and nature of concentrated media power. From this perspective, yesterday’s foes may become today’s friends. Traditional corporate media may have an important role in mitigating emerging mega-networked intermediaries, including through reliance on copyright law. Hence, along with continuous awareness to corporate media’s drawbacks, biases and disadvantages, one must acknowledge their concurrent role in mitigating new emerging coercion media forces.