Re:Creating Reality: NAFTA, Dangerous Harbors & Unfair Use

Re:Creating Reality: NAFTA, Dangerous Harbors & Unfair Use by Neil Turkewitz, President, Turkewitz Consulting Group

October 11, 2017

Note: The views expressed in this post are those of its author.

Every once in awhile, one encounters an article in which there is no central mistake but rather a series of equally flawed observations cascading on one another, and like Jenga, addressing one structural element doesn’t necessarily bring down the edifice, regardless of the structural infirmity of the remaining architecture. This was on display in a recent article published by Joshua Lamel, Executive Director of the Re:Create Coalition, entitled: “Entertainment trade associations looking for opportunity to push a false narrative.” Re:Create is itself worth examining on its own, but there is no time to explore that here. Suffice it to say that they are predicated on the, how to say this politely…odd, proposition that the act of repurposing is somehow more socially and culturally valuable than original creation. They actually have a member whose name is the Organization for Transformative Works. I kid you not. But let’s save that for another day–there is already too much material to address in their fantastical attempt to paint a portrait of what they claim to be a false narrative.

So where to begin? It would make sense to start with an examination of the supposedly false narrative. But to be honest, having read and reread the article several times, I am not sure exactly what it is. That copyright is in need of updating to correspond to the challenges and opportunities of the internet? That the professional creative community is struggling to survive in a rapidly changing environment? That we should seek to enhance responsibility throughout the value chain to ensure that commercial uses of creative materials are undertaken with the consent of the creator? That it advances the US national interest to ensure the existence of incentives to invest in original cultural and educational creation, and to sustain creators? Are these false narratives? I get that Re:Create is no fan of copyright since having to obtain licenses from creators would increase the cost of goods and services their members provide, but to suggest that they form a false narrative is both hyperbolic and irresponsible.

Okay, so what does Re:Create have to say? Let’s dive in.

“Hollywood wants U.S. trade negotiators to believe that they alone represent “creators.” Yet they continue to neglect the interests of millions of creators who create using online platforms. From bloggers and podcasters to internet video stars and Etsy artisans, these “new creators” represent a significant component of the new creative economy.

The old economic model — where creators had to enter complex deals with big studios and record labels to distribute their content — has been supplemented by a new world of tools for creativity and distribution.”

First, note the use of “Hollywood” to try to suggest that this is about perceived titans of old media. Putting aside the fact that “Hollywood” invests tremendous sums of money in original production that sustain a wide variety of jobs, both in front of and behind the camera, it is not just “Hollywood” that is demanding effective copyright protection. Why doesn’t Re:Create address the fact that all of the unions representing labor support modern and effective copyright protection? See for example: That scores of individual artists, songwriters, photographers, authors, etc. are clamoring for more effective protection? Could it be that’s a truth that doesn’t suit Re:Create’s narrative well?

Perhaps even more importantly, Re:Create tries to fashion its copyright crippling message as important to a new class of creators and new innovative forms of delivery. But that’s a bald-faced lie. No one is trying to protect a business model through NAFTA discipline–the only issue is the extent to which a creator–ANY CREATOR–can exercise control over the use of his or her creation. Creators should be free to give away their works, to use CC licenses how they please, or to enter into contracts with traditional media companies. Nothing in NAFTA pits one group of creators against another–except to the extent that some putative creators want to be able to use others’ works without authorization. But that is a far cry from Re:Create’s battle cry for the future!

Re:Create continues: “Trade agreements must reflect this new world, not cripple it. In utilizing big and small online platforms like Shapeways, YouTube, SoundCloud, Instagram, and eBay, new creators all rely on balanced copyright provisions such as safe harbors and fair use — two key parts of U.S. law.

Without these protections under U.S. copyright law, user-generated content platforms would not have existed in the first place. And without corresponding protections abroad, creators will be hamstrung in leveraging platforms to reach new audiences and generate revenues in other countries.”

Of course trade agreements should reflect (and respond/shape) the new world, but it is Re:Create’s position that would cripple the vitality of the Information Age not the other way around. If we don’t sustain original creators, there is nothing of value to access, whether as a passive user, an active repurposer, or a generator of transformative works. I wrote about this earlier this year in connection with Fair Use Week. “Celebration of fair use is actually a celebration of the benefits of fueling original creative expression, for if we fail to produce cultural artifacts worth accessing, fair use becomes irrelevant. We have no interest in accessing that which we don’t value. Thus, fair use is, on its own, an exceedingly odd thing to celebrate. “Fair” is contextual, and “use” assumes a desire to access.”

Re:Create’s magic incantation calling safe harbors and fair use “balanced” doesn’t make them so, and ignores mountains of evidence highlighting the prejudicial impact of overbroad interpretations of safe harbors and inadequately circumscribed fair use which have favored huge platforms at the expense of individual creators. And Re:Create uses another favorite of the copyright-skeptical crowd–that without these protections, UGC platforms would not have existed in the first place. Nice to posit when there is no counterfactual. And what they actually mean is that UGC might have developed differently and instead of feeding off the dead carcasses of creators, micro-licensing for UGC might have developed, producing an environment where creators of both original and “re:created” works were adequately compensated.

Re:Create continues: “There’s more than just anecdotal proof that it is in America’s interest to protect safe harbors both here and encourage their use abroad. Fair use industries equate to 16 percent of the U.S. annual economy. That translates to 18 million American workers employed in fair use-based jobs generating $5.6 trillion in annual revenue. Meanwhile, a recent study found that weakened safe harbors would result in the loss of 425,000 American jobs and $44 billion in U.S. GDP each year.

Safe harbors for online platforms are not “vast loopholes” as the entertainment trade associations would lead you to believe. They are critical components of U.S. copyright law — without them, the internet would cease to function as we know it.

Safe harbors have also been instrumental in spurring dramatic global growth for the music industry. For the fourth year in a row of consistent growth, U.S. wholesale revenues from music increased 9.3 percent in 2016, and online music streaming is driving revenues up almost 50 percent to $2.5 billion in the first half of 2017. Online streaming and other online platforms like Netflix, YouTube and Hulu actually help drive down infringement and theft — despite Hollywood claims.”

I assume that re:Create must realize that “fair use industries” is a complete oxymoron. Fair use in US law is essentially designed as a safety valve to ensure that certain uses that don’t undermine the economic value of the original material are allowed. Fair use is not an industry–it is part of the legal environment that shapes the creation and consumption of original works, and is relied upon by “traditional” creators and users as well as their supposedly less-traditional counterparts. If “fair use” is understood as supporting an industry that supposedly dwarfs the size of the creative sector whose works are being used, one might be forgiven for thinking that fair use itself has been transformed from shield to sword, and that something is fundamentally not “fair.” But of course, the size of whatever industries Re:Create is using for this figure has only the remotest relationship to fair use or safe harbors. I assume it is the value of their output–mostly providing access to works protected by copyright! These presumptive “fair use industries” should actually be mostly categorized as copyright-dependent industries. And please, let’s never hear the term “fair use industry” again. It is indefensible.

Finally, what does the increase in streaming revenue have to do with fair use or safe harbors? This growth was driven by subscription services–growth which was limited by YouTube’s drag on the online music environment. The creative community wants to see new services succeed, but not at their expense. Indeed, that is the very objective of the copyright community’s efforts in NAFTA and elsewhere–to reduce the distortions resulting from unauthorized uses, and to create an environment based on the consent of the creator–to expand choice and sustain creators in fair market conditions. NAFTA rules should not defend or prohibit business models–governments shouldn’t be picking market winners and losers. But governments do have a responsibility to make sure that competitive markets work, and NAFTA is an opportunity to do precisely that. The first step is to not be mislead by Re:Create’s efforts to paint this as an inflection point which requires balancing the past and the future. Re:Create just doesn’t get balance.