Democracy of Sound: Music Piracy and the Remaking of American Copyright in the Twentieth Century

by Alex Sayf Cummings

  Throughout, judges had to wrestle with these competing claims. Like Learned Hand, they had to identify the elements of value in a sound recording; like the Supreme Court of Warren Burger, they had to determine the economic importance of music and the degree of control a record company could exert over its products. Musicians might follow the path of jazzman Clarence Williams, who collaborated with the Hot Record Society when it prepared a reissue of his music in the 1940s. In contrast, artists as different as Louis Armstrong and Metallica chose to pursue legal action against their copiers. All the while, consumers bought live bootlegs, copied records for their friends, sought out unreleased music leaked from the studio, and opted for cheap pirate editions of hit records.

  The worldwide proliferation of piracy broke from these patterns in the 1970s. In the two preceding decades, bootleggers in Sweden, Argentina, and other countries had satisfied much the same demand as the Dante Bolletinos or Boris Roses of the United States, copying blues, folk, jazz, and classical music for a small, scattered minority of fans. The global boom of piracy that followed looked much more like the profit-driven reproduction of popular recordings like Saturday Night Fever or Grease in the United States, both of which were also smash hits abroad. Moreover, illicit copying of American goods multiplied at a moment when business and political leaders in the United States noted with growing unease the economic competition of the Third World.

  It was no coincidence: piracy in developing nations piggybacked on industrialization, as expanding markets made it possible for consumers to gain access to equipment for recording and playing music, while many people remained too poor to pay the price for the legitimate copies of recordings sold by American and European companies. As musicologist Peter Manuel observed, piracy often disadvantaged local music companies at least as much as their Western competitors, if not more so.2 At a certain stage of development, governments had little incentive to deny their citizens cheap access to books, movies, and music; unlike the United States, which was becoming increasingly protective of its domestic “information industries,” these countries had not yet cultivated entertainment or publishing sectors that were large enough to warrant energetic enforcement of intellectual property rights.

  In the cast of characters in this new world economy, one could find a left-wing Pakistani leader with a demagogic streak telling his countrymen to copy Western textbooks freely, on the grounds that a too-high price deterred education and development.3 Poorly paid policeman in many countries could be “persuaded” not to enforce whatever copyright law was on the books, and judges were reluctant to impose serious penalties on local businessmen for selling pirated music. The representatives of Western corporations and trade groups could be found investigating pirate markets in Thailand or Singapore, while dodging death threats. Meanwhile, a new generation of political leaders, including Ronald Reagan and Margaret Thatcher, sought to protect exports of copyrighted music, patented medicines, and computer software to the outside world, taking an aggressive stance in trade deals with emerging economies such as South Korea.

  US policymakers worried about both the decline of American manufacturing and the ability of the nation’s “post-industrial” industries, such as entertainment and information technology, to sell goods and services in the developing world. While multinational corporations either built or contracted with factories in places like Taiwan and Thailand, entrepreneurs in these countries took advantage of new media to copy sounds, images, texts, codes, and formulas.4 “Movies, computer programs and recordings can be stolen by merely copying, in ways that a shipment of logs or soybeans cannot,” the Journal of Commerce warned Western businesspeople in 1990. “Continued losses in the long run undermine the incentive to invest capital in research and the ability to develop new products.”5 Piracy threatened to dilute demand for the goods that the most technologically advanced nations exported to the rest of the world, creating an imbalance between the manufactured goods that countries such as the United States imported and the compact discs and videotapes they attempted to export.

  The threat was real enough. The United States had benefited from exploiting foreign culture and technology as it developed its own manufacturing capacity in the nineteenth century, eventually surpassing the nations whose copyrights and patents it had pirated.6 By the 1970s, American hegemony was no longer unquestioned; Western Europe and Japan had recovered from the devastation of World War II, and less developed nations throughout Asia, the Middle East, and Africa began to industrialize in earnest. In 1971 the United States began buying more goods from other countries than it sold, and this trade deficit has, with very few exceptions, expanded ever since.7 In the remainder of the twentieth century, business and political leaders, both in the United States and Europe, worked hard to develop the rest of the world on their own terms, encouraging export-led manufacturing in poor countries while attempting to lay the groundwork for the authorized sale of Western goods and services in these markets.

  New media sped the growth of trade—licit and illicit—throughout the world, raising the twin specters of deindustrialization and piracy as the causes of economic woe in the United States and other wealthy countries. Nations such as Taiwan, the United Arab Emirates, and Liberia might have broadly differed in their degree of development and influence in the emerging global economy, but they formed ties with each other as entrepôts within complex networks of trade. In response to the global spread of piracy, a variety of business interests, ranging from software companies to record labels, coalesced behind the idea of “intellectual property,” which became a priority in US trade negotiations for the first time in the 1980s. The antipiracy movement won significant legal and diplomatic victories in the ensuing years, yet piracy remained nearly as common as ever in many parts of the world.

  Crisis at Home, Growth Abroad

  The economic crunch of the late 1970s hit the music industry in the United States and Europe hard, ending a period of prodigious growth that had coincided with the coming of age of the postwar generation. In the United States, the dollar value of the domestic production of records and tapes grew by 112 percent between 1972 and 1977, whereas it increased about 55 percent between 1977 and 1982.8 The recording industry hit a record sales high of $4.1 billion in 1978, shortly before music sales started to tank. “Some industry analysts even suggested that a recession in the general economy was good for the music industry because people would stay home more, thereby increasing the need for music,” economist Laurence Kenneth Shore observed in his 1983 study of the industry.9 Europe’s domestic recording industry also enjoyed substantial growth in the 1970s, as record sales grew at an average of 11 percent per year in the European Economic Community (EEC) between 1971 and 1978. The industry was shocked to find that sales dipped in most of Europe for the first time ever in 1979, and observers worried that the decline would continue in the new decade.10

  Table 7.1 Estimates of Pirate Recordings Seized in Selected Countries, 1980–1985

  Year

  Country

  Number of recordings seized

  1980

  Japan

  4,500

  Germany

  50,000

  Spain

  300,000

  1981

  Australia

  14,000

  Egypt

  25,000

  1982

  United States

  6,000

  Chile

  8,000

  Australia

  12,000

  India

  27,000

  Peru

  50,000

  1983

  Australia

  2,000

  Netherlands

  250,000

  1984

  United Kingdom

  1,000

  Mexico

  10,000

  Cameroon

  140,000

  Benin

  195,000

  France

  350,000

  1985 />
  Canada

  50,000

  Sweden

  52,000

  Ivory Coast

  200,000

  1981–1983

  Singapore

  460,000

  1984–1985

  Nigeria

  460,000

  Source: Publishers Association and Federation of Phonogram and Videogram Producers Association, International Piracy: The Threat to the British Copyright Industries (United Kingdom Anti-Piracy Group, 1986).

  Growth stalled in the late 1970s and early 1980s for a variety of reasons. Recession struck, most severely in 1981, and consumers no longer tolerated the steady rise in the cost of records. The average LP cost $4.98 in 1975 and $7.98 in 1978; the phenomenal growth in sales figures during the decade partly resulted from the fact that the record industry simply charged more per unit, and until 1979, inflation-weary consumers appeared willing to pay more.11 Indeed, the increase in record prices was roughly equal to the rate of inflation between 1977 and 1982, which suggests that record companies could no longer inflate their prices as energetically as they had in the early to mid-1970s. The high price of oil increased shipping costs, which made records, like so many other products, more expensive. In May 1979 Billboard estimated that 700 record company staff had been let go, and the cuts continued all along the chain of production.12 The number of workers who made records and tapes in the United States declined by 26 percent between 1977 and 1982.13

  Economic conditions were not solely to blame. New media such as video-cassette recorders (VCRs) offered consumers alternative ways to spend their entertainment dollars. Industry executives worried that video arcades and home gaming systems such as Atari siphoned off the disposable income of the youth market.14 Lastly, consumers turned to tape recorders to share copies of albums—an appealing option in the face of steadily rising prices. The RIAA began campaigning in the mid-1970s for a tax on tape recorders and blank cartridges, the proceeds of which would flow to the record industry to compensate for its hypothetical losses. This idea also took root in Europe, but in the United States the proposal never became law.15

  Given this inauspicious climate, record companies began looking abroad for growth, but the burgeoning world market soon supplied the industry’s next big headaches. US executives worried that the domestic market had reached a “saturation point” as the seemingly unstoppable growth of the early 1970s tapered off. “Just as people are unlikely to read many more newspapers next year than today,” musicologist Pekka Gronow speculated in 1983, “they perhaps already buy as many records as they need.”16 The recording industry sought to squeeze more sales out of the domestic market by introducing new products, such as the compact disc, that might tempt consumers to re-purchase recordings they already owned on vinyl or tape. However, the “CD boom” was necessarily temporary—once consumers upgraded their record collections by purchasing their old recordings on the new format, sales leveled off once again.17

  Both the technological fixes and the turn toward the world market reflected the extent to which record companies had become part of huge, multinational corporations that sold all kinds of entertainment goods and services. Dutch electronics giant Philips, having introduced the compact cassette in 1964 and the compact disc in the early 1980s, also owned Mercury Records and other labels. Warner Communications International formed in 1981, consolidating the record companies Atlantic, Elektra, Reprise, and Warner under one corporate umbrella with toy, video game, soft drink, publishing, and television interests. The Japanese company Sony bought up CBS Records in 1987 and Columbia Pictures in 1989, becoming a purveyor of both hardware and software. The company’s Walkman, a compact cassette player designed for portability, helped revive the flagging music industry of the early 1980s by boosting sales of both players and cassettes. CBS and RCA already made 50 percent of their sales overseas in 1977, and by the 1990s, it was typical for American music publishers, record companies, and film and television producers in general to earn 50 percent of their revenues from foreign sales.18

  Table 7.2 Sales, Employment, and Investment in the US Recording Industry, 1972–1982

  1972

  1977

  1982

  Value of product shipments (millions of dollars)

  537.3

  1,138.7

  1,768.9

  (1,181.7)*

  Employees (thousands)

  23.1

  17.1

  Payroll (millions of dollars)

  244.6

  292

  Value added by manufacture (million of dollars)

  727.3

  1,189.5

  New capital expenditures (millions of dollars)

  29.8

  36.4

  *The 1982 census offered a different estimate of the value of shipments in 1977 (noted in parentheses).

  Source: US Department of Commerce, 1977 Census of Manufactures, Volume II: Industry Statistics, Part 3. SIC Major Groups 35–39 (Washington, DC: US Government Printing Office, 1978), 36D-20. US Department of Commerce, 1982 Census of Manufactures: Subject Series General Summary, Part 1. Industry, Product Class, and Geographic Area Statistics (Washington, DC: Bureau of Census, 1982), 1–16, 1–17.

  Record companies, then, paid greater attention to foreign sales in the late 1970s and early 1980s as a way to overcome the stagnation of domestic markets in the United States and Europe, a crisis which provoked the reconstitution of ailing firms in large multinational conglomerates with an increasingly global focus. Previously, labels in the United States and Britain looked at overseas profits more as a bonus than an essential source of revenue, yet record label RSO actually made more money on foreign sales of the Saturday Night Fever soundtrack than it did in the United States. The most records were still sold the United States, Australia, West Germany, and other wealthy nations, but less-developed markets in countries like Brazil and Mexico were approaching the level of sales seen in Europe and the United States.19

  Record companies built up infrastructure abroad to capitalize on these new markets in the developing world. Large new pressing plants opened in Nigeria and Venezuela, where burgeoning oil profits propelled economic growth during the 1970s. As Nigeria became a bigger market for recorded music in the 1980s, it also became a hotbed of piracy and a chief target of music industry investigators. In fact, expanded access to tape recorders during the oil boom hastened so much unauthorized reproduction of foreign music and movies that multinational corporations began to abandon efforts to sell their official recordings in the Nigerian market.20

  As the international market for music expanded well beyond the frontiers established by the recording industries of America and Europe, illicit recordings spread across new terrain like an advance guard for the multinational record companies. For example, Grease hit the market in Turkey before the film or soundtrack were officially released there.21 In Saudi Arabia, substantial oil wealth and the complete lack of copyright laws made for a bustling sale in foreign movies and music, whether licit or illicit. The fact that the Saudi kingdom was impoverished in terms of cinema and television also made piracy an appealing option. Similarly, the sounds of Saturday Night Fever went where the Bee Gees and the label RSO could not go: across the borders of communist states such as Vietnam and North Korea.22

  Indeed, tape recorders served the purposes of both entertainment and politics. Revolutionaries in Iran used audiocassettes to circumvent state media and disseminate their radical message to the people, and tapes of Islamic sermons subsequently became popular throughout Africa. Iranian pilgrims smuggled recordings of the Ayatollah Khomeini’s sermons and phone conversations from Iraq, where the radical leader was exiled prior to founding the Islamic Republic of Iran. Khomeini bootlegs were even reported in the Communist republics of Central Asia after the Soviet Union invaded Afghanistan. While distinct from the music market, these uses paralleled the flows of pirate product that brought American popular culture into the Islamic world. Media scholar Douglas Boyd noted
that Rambo was popular in Syria, even though it was “hardly a U.S. client state.”23

  The Sylvester Stallone action hit circulated behind the Iron Curtain as well, along with the films Gorky Park and Moscow on the Hudson.24 Soviet authorities condemned capitalist films for celebrating the “three s’s—sex, supermanism, and sadism,” although some intellectuals acknowledged the quality of films such as Straw Dogs, Apocalypse Now, and The Godfather.25 (Not surprisingly, all these works focused on the ills facing capitalist society.) Much like foreign guest workers in the Persian Gulf took tape recorders home to South Asia, some Soviet citizens snuck VCRs and audiocassette players into their home country after traveling abroad. The bolder ones made big profits by screening Western films in their homes and copying tapes to sell for the equivalent of hundreds of dollars a piece.26