Piracy and Fair Use: Finding the Balance Between Copyright Owners and Content Creators Thesis By Narbekov Batyr-Zhantai Submitted in Partial fulfillment Of the Requirements for the degree of Bachelor of Arts In Communication and Mass Media State University of New York Empire State College 2019 Reader: Todd Nesbitt Statutory Declaration / Čestné prohlášení I, Narbekov Batyr-Zhantai, declare that the paper entitled: Piracy and Fair Use, Finding the Balance Between Copyright Owners and Content Creators was written by myself independently, using the sources and information listed in the list of references. I am aware that my work will be published in accordance with § 47b of Act No. 111/1998 Coll., On Higher Education Institutions, as amended, and in accordance with the valid publication guidelines for university graduate theses. Prohlašuji, že jsem tuto práci vypracoval/a samostatně s použitím uvedené literatury a zdrojů informací. Jsem vědom/a, že moje práce bude zveřejněna v souladu s § 47b zákona č. 111/1998 Sb., o vysokých školách ve znění pozdějších předpisů, a v souladu s platnou Směrnicí o zveřejňování vysokoškolských závěrečných prací. In Prague, 09.12.2019 Narbekov Batyr-Zhantai Abstract This paper focuses on the problem of digital piracy. It explores factors that contribute to it, and provides solutions based on the evidence found. Additionally, the paper discusses new media and copyright issues, particularly the application of the fair use doctrine. In order to find a balance between copyright owners and customers/content creators, the paper explores different dimensions of the problem and provides illustrations in the form of case studies. The paper concludes that possible tweaks in the current system could improve the situation drastically both for content creators and for the copyright owners. Table of Contents 1. Introduction 5 2. Piracy 7 2.1 Brief History of Piracy 8 2.1.1 Early Attempts to Prevent Piracy 11 2.2 Piracy Today 12 2.3 Psychology Behind Piracy 12 2.4 Reasons for Piracy 14 2.4.1 Possible Solutions 15 2.4.1.1 Removing the Incentive 15 2.4.1.2 Subscription Service Model 16 3. Fair Use 18 3.1 YouTube 19 3.1.1 Let’s Plays 20 3.1.2 Nintendo’s Creators Program 22 3.2 Possible Solutions for Fair Use on YouTube 24 3.2.1 Lenz Case 24 3.2.2 Automatize Fair Use 25 4. Case Studies 27 4.1 Steam in Russia 27 4.2 Hosseinzadeh v. Klein Court Case 30 5. Conclusion 34 6. Bibliography 36 1. Introduction The way we experience media has evolved quite a bit, especially in the past several years. As the technological progress goes further and further, the way we experience media changes with it. However, even though the technological progress mostly benefits us in a positive way, some people are able to use the new technologies in order to abuse the law. The word piracy in the modern age usually refers to an illegal action of copying a digitally distributed goods. Previously, it was “burning” movies/music/video games on the disc and then selling them, however with the development of technologies and internet piracy has evolved and came up to a different level. It became immensely hard to combat, and it is still growing with the newer technology such as VPN (Virtual Private Network). Some have noted that the laws that relate to media and intellectual property are quite outdated, as the new platforms such as YouTube, Twitch etc. grow, perhaps this is the time where we need to take a second look at the current copyright laws and repurpose them in order to suit today’s media (Belleflamme & Peitz, 2014, p. 1). Digital piracy is a major problem in today’s world and is one of the key things that hinder the development of the distribution of digital goods. Essentially, digital piracy, to be defined in an early chapter, is not an act of stealing as we know it, an act of digital piracy is a process during which a user creates a copy of a digital product e.g. software, music, video etc. and more often than not, uploads it to the internet. In order to properly understand the methods of digital piracy and the variety of tools that were created to fight it, it is quite important to look into the history of digital piracy. It is also important to follow the notions that were relevant during the early days of digital piracy and compare them to the modern ones, to see if there were any changes. The psychology behind digital piracy, the possible reasons people would have that might force them to commit the act of piracy, are quite important to understand. The motivation of digital 5 pirates is useful to explore, in order to identify possible means to prevent those people from committing to piracy. Fair use is a very large issue in the digital entertainment media as many major companies try to ignore fair use in an attempt to earn more money. For example, YouTube is notorious for its predatory practices that allow the copyright holders to claim the videos, essentially taking all the money from the creators, for using even the smallest sound effects/clips that are under their copyright, ignoring the fact that the creator is protected by the fair use doctrine. This paper thus explores developments in information and communication technologies, which continue to impact the relevance and scope of copyright law in the United States. Some feel that businesses and organizations are profiting from content that could/should be protected by fair use policies. The aim of this paper is to examine how companies could protect their copyrighted materials without stifling the creative thought of people online. To do this, the paper will look into the definitions of the important concepts that relate to the agenda of the research such as piracy, copyright and fair use. It will explore current media laws and try to find ways to adapt them to the modern age, explore the current existing tools to combat copyright infringements, and look into the problematic parts of the introduced concepts e.g. the effects and implications of piracy and reasons behind it etc. 6 2. Piracy This chapter will explore the ever-changing world of piracy. It will look into the contemporary history of piracy and notions that were popular throughout time. Then the paper will explore the psychology behind piracy for the purpose of finding the reasons behind it. After identifying the reasons, the paper identifies possible solutions to the problem that are not involved with law. Lastly the chapter explores how some of the larger companies adapted to the countries with a large piracy rate. According to the Merriam-Webster dictionary, the definition of the word piracy is an “unauthorized reproduction of another’s work” (“Piracy”, n.d.) With the development of technology, pirating has become an extremely simple way of obtaining a large variety of digital products, all you need is a working computer, an internet connection and, depending on the country you live in, a VPN (Virtual Private Network) service. Pirate services e.g. PirateBay, Rutracker etc. use the peer-to-peer (P2P) technology in order to spread the downloaded goods in a fast and efficient manner using software such as BitTorrent, Gnutella, QBittorrent. P2P is a way to share files on a website without actually uploading anything on the website meaning that you do not waste server space, instead you allow other users to download the files directly from your device. As one could notice this is an extremely efficient way of sharing digital products and it is nearly impossible to track if users take proper means of precaution e.g. VPN. In the study conveyed by the Business Software Alliance (2016), around 40% of the software, installed on the computers around the world in 2015, was obtained through illegal means, or used without a proper license (Lee, Paek, Fenoff, 2018). In order to properly assess the current state of digital piracy and understand it, it might be important to look through the contemporary history of piracy and the methods that are used during that period, in order to find any notions that were common throughout the history. 7 Intellectual Property 2.1 Brief History of Piracy One of the earliest forms of piracy was Bootlegging. It was quite common even before personal computers were available. Bootlegs of records were widespread and would contain the recordings of live performances or compilations of music. People were releasing and selling counterfeit records, and when the open reel tape desks started to get more popular, even more people were starting to get involved in the record copying from radio to the tapes (Heylin, 2010). With the development of technology personal computers slowly started to make their way onto the market in the late 1970s, the concept of software was very novel and nuanced, hence there was no established control nor legislation concerning it. Even though one could say that the protection of the software was quite similar to the protection of an intellectual property or a published entity (Craig, 2006). When the cassette tape arrived on the market, it created a massive leap towards widespread piracy. Music now was easily copied on the tapes, and then distributed in the small format of the cassette tape. The early personal computers, such as Commodore64, Amstrad, the Commodore Vic, used the cassettes as the storage device, which made pirating even easier. The pirate scene was flourishing as the cassettes were copied and swapped amongst people, mainly due to prices and the availability of the records in stores (De Beukelaer, 2016).