SGA President Rick Carnes recently interviewed Chris Castle. Castle is one of the handful of attorneys who have held senior in-house positions at both music and technology companies: Chris was Senior Vice President of Business Affairs at Sony Music Entertainment, Inc., Vice President of Business & Legal Affairs at A&M Records, Inc., and was recruited by Shawn Fanning to join SNOCAP, Inc. as its Senior Vice President of Business & Legal Affairs and General Counsel.
Chris is frequently involved in the more complex and difficult issues at the nexus of music and technology. He specializes in transformative licensing—taking illegitimate online companies and helping them to become legitimate under the laws and business practices of both the US and ex-US jurisdictions.
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1. Your background includes copyright law, technology and music. How did that happen?
I did my first tech deal in 1986 (with Ted Cohen, in fact), and worked on some of the first CD Plus titles and digital distribution issues in the late 80s and early 90s. I moved to Silicon Valley in 1998 because I was tired of beating the drum on digital and getting virtually no support in the music business. I’m back in LA most of the time now, but still in the Bay Area on a regular basis.
I am an unabashed “creator maximalist” but not necessarily a copyright maximalist—those are two different things. My view is that creators have more right to their work product and labor value than anyone else and the law should protect that. No one seems to think that you should penalize any other class of entrepreneurs of the value of their economic freedoms, so I’m not quite sure why creators have been singled out. Aside from the perception that they are easy pickings by public companies with big budgets and lots of lawyers—aka The Man 2.0. But we’re used to dealing with The Man and that’s good experience for handling The Man 2.0.
2. Is it true that you were one of the original lawyers representing Napster?
Yes, and then the core Napster team asked me to get involved with Shawn’s second company, SNOCAP first as an advisor and then as general counsel. I closed up three of their four major label deals and helped them create many aspects of the company that still exist today.
3. Give us your insight into how the Napster case changed the legal, technological and musical landscape.
Okay, you asked. Personally, I think the importance of Napster, the company, was much more significant that the outcome of Napster, the lawsuit. I had nothing to do with the litigation, so maybe I’m biased in that regard. The company changed the music business as we know it.
To say that there was a significant missed business opportunity with Napster is the understatement of the decade if not the century. There were some very bright people on both sides who were able to make common cause, such as AIM, the Harry Fox Agency, Steve Gottlieb, but there were many people on both sides who allowed themselves to be wedged and they way, way overplayed their respective hands.
Most people don’t focus on the Napster subscription service that never launched, but it was not vaporware and it was a significant development. It bore virtually no resemblance to “voluntary collective licensing” and was unlike any of the p2ps who came later. Shawn tried to keep the edginess of Napster within a structure that was rights respecting, or at least ever-cleansing. He never got to launch it.
I often wonder what would have happened if Napster had been able to launch its paid service back in 2000 or 2001. I doubt we would have had to endure the anti-copyright crowd to quite the same extent.
I sometimes think that the anti-copyright world is one big carnie, with side show barkers and thimbleriggers for everyone. First we were told that free was the new paid, then we got the “hybrid economy,” which is a real joke.
The “hybrid economy” was best described by Lessig in his recent Steven Colbert appearance in which he used Flickr as an example of the hybrid economy at its finest—creators (including amateur creators) do all the work, and Flickr makes all the money. The same could be said of amateurs and independent artists on YouTube.
Needless to say, that hybrid model just hasn’t worked for creators, and is built on the back of a largely uncompensated creative class.
Lately, we had a startling revelation from Chris Anderson that free isn’t the new paid, paid is the new free. This is also known as the 10-second MBA: buy low, sell high.
You have major corporations grinding down creators. The Google Books settlement and the YouTube litigation are prime examples of corporate bullying of the creative class. The U.S. government has allowed a major corporation to use its financial might derived from the public markets to essentially steal from creators until they wore them down in litigation which Google can afford to continue essentially forever. Another prime example of why Google cannot be allowed to win in its lobbying efforts for orphan works.
Artists are growing weary of fighting the privileged in Silicon Valley who choose to bully them while offering them beads and blankets in settlement of the fight to steal their copyrights. On the one hand, artists with any leverage are negotiating new business models with downsizing record companies. On the other hand, artists are getting skewered by some tech companies trying to steal their copyrights.
4. Beyonce vs. Etta James in a 10-round cage match, who wins?
Mavis Staples.
5. You represent artists and bands, if I want to be the ‘next big thing’ what is the best route to success in this Brave New Digital World?
That’s a very genre-specific question. It also depends on what you mean by “success.” I highly recommend that artists view the South Park episode on the YouTube stars and their “theoretical dollars.”
6. Can art survive Google? Art doesn’t scale, you know, so that’s a big problem for Google?
On the bright side, it took Steve Jobs, a man of singular creative vision, exactly the right temperament, humor and gravitas, charm and decisiveness, as well as design and marketing genius to will products into existence to create what is still the most significant music retailer in the world. As anyone from “Hollywood” knows, there are lots of people who can come up with great ideas, but there are very few people who can execute great ideas. And we certainly don’t have a monopoly on that realization.
But Eric Schmidt is no Steve Jobs.
Apple has been serving the creative community from the beginning, and Apple understands how to be cool in a world of cool people. Steve Jobs and the Apple team understand that creativity isn’t brought by the stork and originality is not mere regurgitation.
It really saddens me when I hear people in our business bag on Jobs because if it weren’t for him we would be in even worse shape than we are. Apple is one of the shining cities on a hill in this whole online world of corruption and net pollution.
As Hernando de Soto’s work demonstrates yet again, you can’t have a successful market without clear and enforceable economic rights. With very few exceptions, we live in a first world economy offline and a fourth world economy online. iTunes is one of those few wonderful exceptions—but it’s a huge one and an instructive one.
iTunes proves that you can get licenses and you can build a business based on respecting artists, economic freedom and labor value. Even Google appears to be coming around to this realization with the potential deal with Universal—and that is news, that is man bites dog.
We needed a Churchillian figure to stride the globe and knock heads together to make a solution, and we got him in Steve Jobs. I just hope he sticks around forever. I don’t know what we’ll do without him.
I really don’t want to be stuck with The Man 2.0 qua Google. If that’s who we end up with, art will not survive as a means to sustain creators.
7. I see you a lot on Capitol Hill, what are you up to?
You have me confused with Jack Black. He’s up there constantly.
8. ‘Orphan Works’, a myth or misnomer?
If you define “orphan works” as a 1:1 digitization of a library’s holdings if responsible and accountable people try but can’t legitimately find a copyright owner, it is not a misnomer. There is a perfectly legitimate reason to allow real libraries and preservationists to digitize their holdings or restore decaying works. The Europeans have a very good start on this process, as do the Canadians. They also seem to understand the huge potential for big corporations to game the system. Both those cultures show great deference to the rights of creators and stake holders in trying to balance the interests in an orphan works solution.
That wasn’t what the Shawn Bentley Orphan Works Act was about, however. It was a Google-backed fire sale for our culture and violated so many international norms that it was almost certain to land the U.S. back in arbitration before the WTO just like the infamous Fairness in Music Licensing Act a few years ago. The orphan works bills in the last Congress had very little to do with orphan works and everything to do with a give away for big corporations wishing to commoditize art. Jim DeLong has a great piece on this titled “Google the Destroyer” (http://www.ksrlaw.com/NewsPage.aspx?id=Publications&article=1199752418745).
9. With music distribution becoming increasingly decentralized, will music break into a thousand tiny “colonies of the saved?”
If I were starting a label today, it would look quite different than a label I would have started five years ago or even two years ago. The challenge is to fight your way above the crowd just like it always has been, it’s just that now you are fighting your way above the crowd in a 100 million title bargain bin.
The one thing that is a constant, at least so far, is the live performance. There is just nothing that beats connecting with the fan one on one. Fans still buy CDs at shows, they still buy tickets, they still crave that direct connection. That hasn’t changed, and clips on YouTube will never replace the live show.
I had an argument with a leading member of the digerati one night who said to me in his best Marie Antoinette impression, “Well artists will just have to learn to get along on less money.” I thought to myself, I’d love to hear you say that at a 6 a.m. roadie breakfast in front of a 30-man road crew at the Holiday Inn that’s 2 miles east of West Armpit. Orcs wear makeup — if you catch my drift.
10. You constantly take pro-copyright positions that are unpopular with many in the tech community. Since you are a lawyer and all the big money these days seems to be in tech, have your pro-copyright views been bad for business?
Well, it is a bit schizophrenic. There are some music lawyers who have essentially abandoned their roots in a rush for the gold, but I’m not one of them. I have been trying to explain the goals of the technology community to the creative community and those of the creative community to the technology community for over a decade. You’re almost certain to make someone mad at you.
I like to think that I try hard to understand where the other side is coming from. When you think about how software is created it’s much easier to understand the collectivist thinking in the anti-copyright groups and the open source mindset in particular.
Code is often created by large groups of people who don’t really benefit very much from the commercialization of their work product and get virtually no individual recognition for it. Because engineers know going in that they will likely never own the rights to the code they create, ownership is almost not a factor. That makes it easier for them to embrace the open source concept. They do get some stock in their companies, but not much and the number of big payouts are relatively small compared to the number of washouts in the boom-and-bust cycle.
Songwriters and artists can and often do own or control every aspect of their work. And this is, I think, the origins of the individualist thinking that makes our creative community different from technology. They have little hope of controlling their labor value and maybe don’t care as much about it because they don’t ever expect to have anything to say about how the Google algorithm is used, for example.
I think it’s a shame that part of the extraordinary value that engineers confer on Google is compensated in free food. Can you imagine saying to a songwriter, we own all your songs, but invite your friends over for mac and cheese? It’s kind of sad. It’s easy to see why they don’t want any union organizers in there.
Engineers are often completely mystified by how many songwriters can control one song and there are many complaints about the complexities of music licensing. They just don’t understand how someone who owns 1/16th of a song can be as important as the writer who owns 50%. That scenario doesn’t seem to happen in the tech world. That’s not a value judgment that one is “better” than another.
I think that many people confound pro-copyright with pro-corporate and that is not true. I don’t think that a pro-copyright position is inconsistent with many tech companies since they rely on copyright as part of their IP treasure chest (see Tom Rubin’s many good statements on these issues). It’s incorrect to bunch all tech companies under the same tent.
On the other hand, it is absurd—absurd—that we are into the digital reality 10 years by anyone’s measurement and there are at most three or four companies that have managed to stick out the ridiculously complex licensing requirements for music online. It is virtually impossible to launch a global music brand now without tiptoeing through a minefield of licensing agreements that even experts have trouble navigating.
We have to find a way to lower transaction costs on these licensing problems while maintaining a robust system of economic freedoms and protecting labor value. Every day that goes by without a solution just increases the likelihood that entrepreneurs will prefer to seek forgiveness than ask permission.
11. How about that Creative Commons?
One of the best marketing campaigns in business history was when Arm & Hammer baking soda convinced people that buying the product and pouring it down the drain was a way to keep your pipes clean.
You have to admire Creative Commons’ ability to raise money for their organization on the basis of something that is already a right of every copyright owner. I don’t have a problem with any copyright owner disposing of their rights in any way they want, that’s all fine with me. The problem I have with Creative Commons is the license as it applies to music. I haven’t ever thought about any of their other licenses. Joan McGivern of ASCAP has an excellent article on the subject (http://www.ascap.com/playback/2007/fall/features/creative_commons_licensing.aspx) .
I am somewhat mystified by Creative Commons, the organization, and why they have to raise so much cash. It sure does cost a lot of money to give things away for free.