A Brief History of Copyright

Brandt Redd – June 2018

In the early 2000s I began writing a book titled Frictionless Media. The subject was business models for digital and online media. My thesis was that digital media is naturally frictionless — naturally easy to copy and transmit. Prior media formats had natural friction, they required specialized equipment and significant expense to copy. Traditional media business models are based on that natural friction. In order to preserve business models, publishers have attempted to introduce artificial friction through mechanisms like Digital Rights Management1. They would be better off adapting their business models to leverage that frictionlessness to their advantage. My ideas were inspired by experience at Folio Corporation2 where we had invented a sophisticated Digital Rights Management system for textual publications. We found that the fewer restrictions publishers imposed on their publications the more successful they were.

I didn’t finish the manuscript before the industry caught up with me. Before long, most of my arguments were being made by dozens of pundits. Nevertheless, this chapter, “A Brief History of Copyright,” remains as relevant as ever. In 2018 I updated it to include recent developments such as Creative Commons.


At the beginning of the 20th century the phonograph and the Player Piano emerged as the first popular devices capable of playing recorded music. Singing around the piano was a common entertainment in those days and sheet music publishers shared revenues from this lucrative business with popular composers. But new technology threatened existing businesses. The sellers of phonograph cylinders and piano rolls didn’t pay royalties to publishers or composers. Publishers didn’t tolerate this for long.

In 1906 the White-Smith Music Publishing Company, a publisher of sheet music sued Apollo Company, for producing piano rolls that included two titles for which White-Smith owned the copyright. A number of interested parties joined the fray and arguments for prohibition of the new machinery reached hyperbolic extremes.

For example, John Philip Sousa wrote, “Children are naturally imitative, and if, in their infancy, they hear only phonographs, will they not sing, if they sing at all, in imitation and finally become simply human phonographs – without soul or expression?” On the fear that people might cease to sing, Sousa went so far as to suggest that American lungs, vocal chords and chests would atrophy. But for all of his seeming concern about physical health, Sousa’s real concern was that the producers of piano rolls and phonograph records could reproduce recordings of his works without owing him any money. Indeed, the Sousa-directed United States Marine Band had been recording with the Columbia Phonograph Company since 1890 and had more than 400 recordings for sale at the time.3

The case, “White-Smith v. Apollo”, went all the way to the U.S. Supreme Court. In a surprising 1908 decision the court ruled that a piano roll was nothing more than a mechanical device and that it did not infringe the sheet music copyright.

By this time Congress had already taken up the issue. The Copyright Act of 1909 reversed the Supreme Court position determining that producers of mechanical reproductions (phonograph records and piano rolls) did indeed owe a royalty to the music composer and publisher. The act also handed a carrot to the nascent recording industry by introducing the Compulsory License. The act grants the composer rights to directly license the first recording of his or her work. But once that recording is publicly distributed, anyone else can make and publish new recordings so long as they pay a royalty to the original composer. The creator is compelled to license his or her work. The royalty for a compulsory license was set by statute at two cents per copy.

The new law established the legality of the new business while creating a new revenue stream for existing businesses. With new revenue from licensing royalties, even critics of the new law eventually converted to the new business model.

Patterns of History

The history of media technology is tightly coupled with the evolution of copyright law. Each time a new medium is introduced the beneficiaries of status quo seem to panic. As with Sousa, their arguments often include hyperbolic predictions of widespread chaos.

While new media has yet to incite disaster, most new media forms have forced adaptation or wholesale replacement of existing business models. This kind of adaptation is uncomfortable to the incumbents. In many cases the new media have also provoked updates to copyright law. But because congress and the courts have consistently extended rather than reduced the concept of copyright, the success of each new medium has generally ended up benefiting existing copyright holders. In some cases, existing companies have adopted the new business model such as when movie studios – after a fight – finally embraced the VCR. In other cases, existing constituents have benefited from royalties paid by new media companies – as with television or recorded music.

Book Publishing

The printing of the Gutenberg bible in 1452 represented the first mass-publishing of any text but it took more than 250 years before copyright law caught up with medium. While the Gutenberg bible was reasonably well-received, not all books fared as well. William Tyndale’s English translation of the bible was deemed so dangerous that the Bishop of London led an effort to collect as many copies of the Tyndale bible as possible and burn them. Tyndale himself was ultimately captured and burned at the stake in August of 1536.

In the 17th Century, England and much of Europe continued struggling to manage the new medium. Initially, a scarcity of presses granted individual publishers a virtual monopoly to the works they printed. However, by the middle of the century it was clear that some kind of regulation was needed. The Licensing Act of 1662 preserved monopoly conditions by creating a register of licensed books. A group of printers, called the Stationers’ Company, maintained the register and had the authority to censor unauthorized publications. But censorship proved too strong a remedy and the statute was allowed to lapse in 1695.4

The Statute of Anne, passed by the British Parliament in 1710, was the first modern copyright law. It established author’s ownership of content and granted that copyright for twenty-eight years.5

The authors of the United States Constitution recognized the importance of copyright and specifically included copyright among the limited powers of Congress. The constitution states, “Congress shall have power … to promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”6

With that authorization, congress passed the Copyright Act of 1790. Modeled after the Statute of Anne, it granted authors the exclusive right to print, re-print, and publish their works for fourteen years with a fourteen-year extension if the author was still alive. Later acts lengthened the copyright term until now, for most works, it is the life of the author plus seventy years.7

In 1886 a number of European countries adopted the Berne Convention, a common set of copyright laws that extend protection across their borders. The Berne Convention has been revised and updated five times since its original adoption. U.S. and European copyright law remained separate but similar until the U.S. adopted the Berne Convention in 1989. Under the Berne convention copyright is extended for the life of the author plus a minimum of fifty years. In addition, copyright is automatically presumed, and it is no longer necessary to claim copyright or for a work to be registered with the copyright office.

The Phonograph

Thomas Edison’s recitation of “Mary Had a Little Lamb” on December 6, 1877 was the first intelligible recorded sound. At the time, a number of others were working on similar concepts, but Edison was the first to succeed. Early phonographs mounted a wax or foil cylinder on a screw drive. This elegant mechanism combined tracking and rotation in the screw drive allowing the recording and playback mechanisms to remain stationary. But it was the disk, not the cylinder which would dominate recorded music for more than a century.

Research notes made by Charles Tainter in 1881 give the reason. “These disks can be very easily manufactured and sold for a small amount and are much more convenient than the cylindrical form, as they give the maximum amount of surface with the least bulk and weight… Casts can be obtained of the groove in light metal … and other disks made from these molds.”8

Although cylindrical molds proved workable and many prerecorded cylinders were sold, the molding process was complicated, and cylinders consumed a lot of space. By 1893 the disk format was already catching on. The U.S. Gramophone Company sold more than 1000 players and 25,000 7-inch records that year. Among the last holdouts, the Edison Phonograph Company finally capitulated and converted from cylinders to disks in 1913.

The simplicity of the cylinder recording mechanism preserved its use in dictation machines until the advent of the electronic tape recorder. But mass-production and storage advantages favored the disk. Even today’s digital CDs and DVDs are mass produced using pressing and molding processes similar to those used for records in the late 1800s.

Radio and Pop Media

The Copyright Act of 1909 addressed issues of recorded music, but that stability didn’t last very long. In 1907 Lee De Forest invented the Audion vacuum tube thereby enabling the transmission of sound over radio waves. He began experimental radio broadcasts in New York that same year. From the very beginning his broadcasts included recorded and live music.

Radio station WOR, sponsored by Bamburger Department Store began broadcasting on February 22, 1922. Bamburger’s, in Newark, New Jersey, sponsored the station to help promote sales of crystal radio sets. This motive, combined with their periodic announcement, “L. Bamberger and Co., One of America’s Great Stores, Newark, New Jersey,” defined WOR as one of America’s first commercial radio stations.

Radio pioneers knew that a new business model would be required if the new medium was to become commercially viable. Like WOR, most of the early broadcast stations were sponsored by businesses for publicity purposes. However, sponsors were nervous about the public’s tolerance of outright commercial promotion. Early on, Lee De Forest proposed that radio might be supported by subscriptions similar to a newspaper. But in those days, it was impossible to limit broadcast reception exclusively to subscribers.

In the early 1920s, AT&T entered the radio market. One of their stations, WEAF in New York, began transmitting in 1922 with the purpose of leasing airtime for others to use. This model, known as “toll broadcasting,” was the first attempt to derive direct revenue from the operation of a radio broadcasting station. Later that year, WEAF placed an ad in the New York Times indicating that they would “consider” accepting advertising. Bruce Reynolds jumped at the opportunity, bought up an inventory of advertising time-slots and began producing and selling radio advertising. Radio station management at WEAF only tolerated the operation for a few months before Reynolds had to search for another station. He finally settled into a relationship with WAAM. Before long, the advertising model was proven and accepted across the entire industry.9

Despite, or perhaps because of the Great Depression, radio listening exploded in the 1930s. Between 1931 and 1938 radio penetration grew from 40% to 80% of households. About the same time, record sales plummeted from $75 million in 1929 to a low of $5 million in 1933. Some of this decline can be blamed on the stock market crash of 1929 and the subsequent depression. But the ascent of radio accounts for the rest.

A parallel pattern manifest in the early 21st century. Portable digital music became practical in the late 1990s with the popularity of MP3 audio encoding. The Diamond Rio MP3 player, launched in 1998, granted portability to the digital format and the launch of Napster in 1999 enabled easy access to a world library of recordings. In 2000 the internet stock bubble burst and the economic recession was accelerated by the terrorist attacks on September 11, 2001. Meanwhile, record sales fell from $14.6 Billion in 1999 to $11.9 billion in 2003. It’s difficult to tell whether the new digital medium or the economic recession was the greater cause of depressed record sales but both factors certainly contributed.

The recording industry survived the challenge of Radio as it did the challenge of digital media. Adaptation to radio came in two steps. First, artists and recording companies established their rights to revenue from radio performance. Second, they learned to use radio to increase the popularity of recordings and thereby foster record sales.

In 1914 The American Society of Composers, Artists and Publishers (ASCAP) was formed by a number of composers with the help of Nathan Burkan who had argued the White-Smith case before the Supreme Court. The Copyright Act of 1909 had established the rights of composers to receive royalties for public performance of their works. However, there is too much overhead required if every performance of every musical work must be monitored and a corresponding payment made. ASCAP consolidates that effort by collecting an annual blanket fee from businesses and then distributing the money to artists proportional to the popularity of their material. ASCAP won an early victory against Shanley’s restaurant in Times Square where live music was performed. The case was appealed to the Supreme Court where the validity of ASCAP’s model was upheld. In 1923 ASCAP won a similar lawsuit against Bamburger’s and WOR thereby defining radio broadcasts as “public performance” of recorded music and creating a licensing model for broadcast music. All radio stations (including Internet radio) pay royalties to ASCAP and its peers for the public performance of their recorded music.10

In 2010 ASCAP, BMI and SESAC, the three main Performance Rights Organizations, distributed more than $1.6 Billion in royalties.11 This accounted for approximately 18% of recording industry revenue that year.12 The balance came primarily from record sales. Shortly after ASCAP started collecting royalties from radio stations, artists and record companies discovered that radio was the best channel for promoting their recordings. Record companies send free copies of new releases to radio stations and actively promote airplay to disk jockeys and program managers. This raises awareness among listeners and results in increased record sales.

Prior to 1995 performance royalties were only owed to the composer of a piece of music. Recording artists and record companies did not receive any royalties. The Digital Performance Right in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 granted royalties to artists and record companies but only for digital transmission by satellite and the internet. Subsequent to these acts SoundExchange was created to manage royalties for these types of performances.13 In 2010, SoundExchange distributed $252 million in royalties.14

The emergence of radio initially reduced record sales. Some record company execs must have must have wondered whether their industry would survive. But copyright owners successfully established their right to a share of the radio revenue. And they ultimately found ways to leverage the new medium to enhance their business. The roots of popular media were also established at this time. Personal taste in music and other media is influenced primarily by peer interests and reinforcement loops – “I like it, so you like it, so I like it.” The most popular musical groups, movies, and television shows reach their popular status because of social peer networks.

Television

For almost half a century the movie industry operated under the protective umbrella of natural scarcity. Movie projectors were large, expensive and required expert operators. Movie theatre chains were either owned by movie studios or had clear distribution agreements. Thus, movie studios controlled distribution of their works from production to performance. The introduction of television changed all of that.

Practical television had been anticipated by radio pioneers for many years. Most of the early experiments involved electromechanical devices. In the 1920s inventors Philo T. Farnsworth and Vladimir Zworykin worked independently on the fundamental technologies behind all-electronic television. The 1929 meeting between David Sarnoff, an influential VP at RCA, and Zworykin launched an influential partnership. Sarnoff hired Zworykin and by 1931 RCA was ready to produce televisions and production equipment. Despite this progress it took another two decades before television broadcasting became common. The FCC refused to license television broadcasts until a common standard was approved. To do so, patent and intellectual property issues had to be worked out between the Farnsworth and Zworykin groups. The immaturity of the technology itself slowed the standardization process as research groups kept introducing improvements. Finally, a joint standard was approved in 1941 and the FCC began issuing television broadcast licenses. But only a handful of stations were licensed before the government imposed a freeze due to World War II. With the end of the war, both technology and market were finally ready for TV.15

Sarnoff anticipated the need for good content to transmit via television. With financial backing from Joseph P. Kennedy, RCA purchased the Keith-Albee-Orpheum theatre chain, Pathe Studios, and the Film Booking Office of America. These were merged in 1928 to form Radio-Keith-Orpheum – RKO Pictures. RCA contributed their Photophone movie-sound technology and the new company produced the first all-talking movie, “Syncopation” in 1929. The new release was a smash hit and through the 1930’s RKO produced more than 600 films achieving more than 150 Academy Award nominations. Sarnoff seemed to have secured his content source.16

The Academy of Motion Picture Arts and Sciences was worried about television and in 1938 they appointed a research council to study the problem. The council concluded, in essence, that the best defense was a good offense – movie studios and theatre chains should take over the television industry by purchasing broadcast stations and by installing television systems in their theatres. Paramount took the lead. In 1938 Paramount purchased a significant interest in DuMont Laboratories which operated television stations in New York and Washington D.C.; and in 1940 and 1943 they launched new stations in Chicago and Los Angeles. At that point, Paramount owned four of the nine operating television stations in the United States. Paramount and other theatre chains also began adding “Television Rooms” to their theatres and there were a number of experiments with closed circuit transmission of live theatre performances and sporting events.

Despite Paramount’s foresight, things didn’t work out as planned. In the 1940s there were a series of antitrust convictions against the movie studios and in 1948 the FCC ruled that it would not grant a television license to any company convicted of monopolistic practices. The Supreme Court affirmed the regulation thereby barring the rest of the movie studios from opening television stations. And while there were numerous proposals for television projection systems the technology proved to be expensive and impractical. These barriers, combined with growing affordability of home television sets, would confine television to the small screen for five decades.17

Early television broadcasts had to be performed live. The first practical videotape recorder wasn’t introduced until 1956. And since the television cameras of the day weren’t very sensitive, actors had to perform in front of intense lighting. The alternative was a “Film Chain” or “Telecine”, a device that converted movie film into video for broadcast. Movie studios had already perfected the process of filming, editing, duplication and distribution of movie prints. For television productions they just delivered prints to broadcast houses instead of movie theatres. Just when television broadcasting was drawing audiences away from movie theatres, the studios found a ready new market in television stations and networks. Film productions could go on location, use more camera angles, and were edited into much more polished productions than their live counterparts. The results were consistently better ratings and by 1959 most prime-time programming originated with the movie studios.18

Once the studios had warmed to television, they dusted off their old movie collections and opened them to television broadcasting. The experiments were tentative at first because they feared further damage to theatre patronage. Samuel Goldwyn is said to have quipped, “Why should anyone pay to see a bad picture in a theatre when he can see one for nothing at home?” But residuals, the royalties paid for new broadcasts of older works, turned out to be a very lucrative new business. At first studios started earning residuals from their old movies. Then, once the first season or two of television serials had passed, the studios gained residuals from reruns. Finally, studios began to make movies for direct release into television. It might also be argued that the challenge of television raised the quality of movie production. So-called “B” movies mostly disappeared with the advent of television.19

Cable TV

Up to this point, television had not created any new copyright challenge. The movie studios maintained effective control over their works without needing any assistance from Congress or the courts. The challenge came with the emergence of cable television.

Cable Television was originally known as “Community Antenna Television” or CATV. It originated in small townships where signals were weak. A CATV company would erect a large receiving antenna on a tower or ridge and, using cables and distribution amplifiers, share the signal among hundreds or thousands of homes.20

This was a boon to rural viewers. But the studios didn’t see it the same way. While television stations had to pay for broadcast rights, cable companies seemed to be freeloading. In 1966 United Artists sued Fortnightly Corporation, a Pittsburgh cable company for copyright infringement. The case went to the Supreme Court which found in favor of the cable operators. The court’s opinion was that cable companies were more like viewers of a television signal in that they helped customers receive and view television programming. Copyright law regulates the reproduction, distribution, and performance of a work, not its consumption. According to the court, cable companies didn’t perform nor copy, they just assisted reception.

Royalty-free cable operation was challenged again in 1974. By this time, cable operators were using microwave relays to bring in major independent stations from distant cities greatly expanding audiences beyond the stations’ original markets. Again the case went to the Supreme Court and again the court found in favor of the cable operators this time pointing out that the market expansion should result in expanded revenues to the originating station and corresponding royalty increases to copyright holders.

Congress disagreed and specifically addressed the cable television issue in the Copyright Act of 1976. First, Congress indicated that royalties were indeed owed for the retransmission of the content. But, balancing that requirement, Congress established a compulsory license in which copyright owners were compelled to license their content at a reasonable rate. As with the compulsory license established in 1909 for audio recordings, Congress preserved rights, created a new revenue source and saved a nascent industry. In the year 2000 cable operators paid about $200 million in compulsory licenses to copyright holders with the majority going to movie studios and sporting leagues.21

As cable offered more channels and better reception it moved from the country into the city. The next innovation was pay-TV channels. Unlike broadcasters, the cable company could use filters and set-top boxes to control reception of premium channels. Cable companies collect premium subscription fees and pass them on to the premium television networks. The networks use the direct revenue to purchase premium programming and offer commercial-free viewing. Later cable companies began offering pay-per-view transmission of first-run movies and special features. More recently, cable companies offer on-demand viewing which greatly increases the selection of available content.

Pay-TV, pay-per-view, and on-demand viewing are useful precedents for digital media. Like cable companies, internet services can individually control reception and they can use e-commerce systems to collect payments either on a subscription basis as with premium channels or on a pay-per-view basis.

Home Video Recording

The advent of the home Videocassette Recorder (VCR) launched one of the most colorful episodes in the history of media and copyright. Hyperbole was pushed to greater extremes, legal battles consumed more resources, public opinion was more biased, and the stakes were higher than ever before. The movie industry lost every legal case and they also lost in the court of public opinion. Yet, despite these losses, the industry adjusted, found new markets, prospered, and earned record profits.

Sony introduced the Betamax VCR in 1975 with the slogan, "Now you don't have to miss 'Kojak' because you're watching 'Columbo' (or vice versa)."22 In 1977 RCA launched the Matsushita-made VHS competitor. It would take a few years for the prerecorded videotape market to emerge so the primary use of a home VCR in 1975 was timeshifting – the recording of broadcast programs for later viewing. In 1976 Universal Studios and Walt Disney Productions sued Sony for producing equipment that could be used to violate their copyrights. The case would spend eight years in the courts before a definitive decision was made by the Supreme Court in 1984. In the meantime, home movies, not timeshifting, became the dominant use of VCRs.

The VHS format offered two hours of recording per tape – twice as much as the first Betamax recorders and sufficient for most feature films. Andre Blay recognized an opportunity. In 1977 his company, Magnetic Video, approached 20th Century fox with the proposal that they license 50 top movies for videotape distribution. Blay chose his target carefully; Fox was economically troubled at the time and was open to the proposal despite industry-wide suspicion of the new medium. Fox also had a library of classic and popular movies. Blay offered a $300,000 advance and a minimum of $500,000 a year against a royalty of $7.50 per videocassette.

The operation was called the “Video Club of America,” and launched with a TV Guide ad featuring popular titles like The Sound of Music, Butch Cassidy and the Sundance Kid, Patton, and Hello, Dolly! The bestseller was MASH. By the end of the year Blay had sold more than a quarter of a million videocassettes and his factory was running 24 hours a day.

Just a few months later, George Atkinson launched “The Video Station,” the world’s first video rental store. Like video sales, the rental business was an enormous success. Atkinson quickly expanded beyond his Los Angeles flagship store and a year later he began selling franchises.23

Meanwhile the legal battle was percolating along. In 1979 the District Court of California found that home taping of television programs was a “fair use” of copyrighted works and therefore legal. The Ninth Circuit Court of Appeals reversed the decision in 1981. Not only did the court state that home taping of copyrighted broadcasts was not a fair use, the court also held that Sony could be held liable for the use of its product.

The public outcry was enormous. One political cartoon showed a picture of a VCR and of a handgun with the question, “On which item have the courts ruled that manufacturers and retailers be held responsible for having supplied the equipment?” Several senators announced their intention to overturn the decision by statute. A columnist for the Los Angeles Times wrote that enforcement would make “Prohibition look easy.” And in a “Tonight Show” sketch Johnny Carson portrayed households being visited by the “Video Police.”24

Shortly afterward the Supreme Court agreed to hear the case and Congress began holding hearings on the subject. Testifying before a House subcommittee, Jack Valenti, president of the Motion Picture Association of America (MPAA) stated, “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”25

Ultimately, Congress decided to wait for the Supreme Court to make a decision before taking any legislative action. In January 1984 by a 5-to-4 majority the Supreme Court decided in favor of Sony. Known as the “Betamax” case, this set an important precedent that has also been applied to digital media.
That same year, the movie industry was delivered another legal blow. Under the first sale doctrine, the purchaser of a copyrighted work is free to dispose of that work as he or she pleases. He may resell the copy, lend it out, rent it, keep it or destroy it. In 1984 Congress considered a prohibition on the rental of audio and video recordings because of the potential to facilitate copyright violation – a renter could make a copy of the rented work and then return it to the store. After some debate Congress passed a law prohibiting the rental of audio recordings but declined to prohibit the rental of video recordings.

I can only speculate on why congress treated video and audio differently. Perhaps Congress didn’t want to shut down an existing industry. By that time video rental stores were common and multiplying but only a handful of music rental stores had appeared, starting with the advent of the Compact Disc. Another possibility is the difference in use patterns between the two media. Individuals listen to music over and over while movies are typically watched only a few times.

Following these failures, Jack Valenti of the MPAA said in an interview, “You’ve got to be pro-consumer, and we were never able to show that we were pro-consumer.”26 Despite this statement, however, it a long time for Valenti, the MPAA, or related industry associations such as the RIAA to have learn the pro-consumer lesson.

In spite of dire predictions and legal failures, the movie industry ultimately triumphed. Or perhaps it should be said that the new medium turned out to be a friend instead of the enemy it was perceived to be. As the market matured, movie studios began to orchestrate the home video release of movies just as carefully as the theatrical release. Rental chains would miss potential revenue when new releases were all rented out so instead of relying on the first sale doctrine, they negotiated royalty-based rental contracts with the studios and then made enormous numbers of copies with no per-copy charge. Even without compulsory regulation video rental stores and studios found that royalty-based agreements benefitted both parties.

Among the pioneers of royalty-based agreements was Netflix which started in 1997 as a mail-order DVD rental business. Ten years later, Netflix introduced online video streaming. Since the first sale doctrine only applies to physical media, Netflix relies exclusively on royalty-based licenses for their streaming business.

Meanwhile, box office receipts continued to grow even while the secondary market in video sales and rentals brought in new revenue streams. In 1980 only 2.4% of U.S. households had a VCR. That year, the U.S. movie industry grossed approximately $2.27 billion in box office (theatre) receipts. By 2003 gross box office receipts had grown to $9.49 billion while the home video market grossed $22.2 billion. In that year movie studios received 60% of their revenue from home video rentals and sales. During the 23-year period from 1980 to 2003, which included the emergence of home video, the movie theatre market suffered only five down years. The new medium greatly expanded the movie market without measurable cannibalization of the existing business.27

Photocopiers

In 1959 Haloid Xerox Inc. began selling the Xerox 914, the first practical plain-paper copier. Dry printing, or “xerography,” was pioneered by Chester Carlson and was originally intended as an alternative to ink-based printing. But the model 914 introduced the concept of self-service office copying. Xerox followed up with bigger and faster machines. Soon all university and research libraries were equipped with large copy centers.

In 1968 Williams and Wilkins, a publisher of medical and scientific journals, sued the National Library of Medicine and the National Institutes of Health. The library copy center had grown into a sophisticated operation in which physicians and researchers could order copies of specific articles and the library would copy, bind, and ship the article to the requestor. While this operation was a boon to scientific research it threatened the business of Williams and Wilkins because many of their specialized journals had very limited circulation.

The case was decided by the U.S. Court of Claims in favor of Williams and Wilkins. However, when the case was appealed, the full panel of the Court of Claims found in a 3-4 decision in favor of the library. Finally the Supreme Court heard the case ending with a 4-4 split decision with one justice not participating. The result was that the appeal decision was left to stand. In their opinions, several judges noted that Congress was already considering the issue as part of an overall update to copyright law.

Another concern was the photocopying of copyrighted periodicals and books by businesses. The concept of “fair use” was vaguely defined but it was generally understood not to apply to commercial, for-profit operations.28

The Copyright Act of 1976 addressed most of these issues, sometimes clearly and sometimes vaguely. In the case of library copying, the act limited fair use to small portions of works while allowing exceptions for such things as research, security, and the preservation of damaged or deteriorating works. The act also recommended the creation of a copyright licensing organization similar to ASCAP that does for print reproduction what ASCAP does for music performance.

In 1978 the Copyright Clearance Center (the CCC) was formed by authors, publishers and users to be the Reproduction Rights Organization (RRO) for print publications in the United States. The masthead or copyright page of covered publications typically contained a notice like the following one found in Science News: “For permission to photocopy articles, contact Copyright Clearance Center at 978-750-8400…” While the CCC offers licenses on an ad-hoc basis the primary licensing method is the Annual Copyright License in which businesses pay an annual fee for a blanket license to all CCC-registered publications. Licensees are expected to participate in random surveys which determine the appropriate fee as well as direct the disposition of royalties to copyright holders.

The CCC is similar to ASCAP and BMI in that it offers a central clearinghouse for copyright licensing. Its innovation, however, is the offering of blanket licenses to end-users.29 It’s surprising that similar licenses haven’t emerged for other media.

21st Century Issues

With the advent of the new millennium, the media industry faced myriad issues related to the emergence of digital technology. These include blurred boundaries between license forms, Digital Rights Management, the Digital Millennium Copyright Act and the advent of open licensing.

License Separation: Reproduction, Distribution, and Performance

SiriusXM Satellite Radio is a subscription radio service that offers hundreds of channels representing nearly every musical genre plus talk, sports, and news. Many of these channels are offered commercial-free. SiriusXM uses digital transmission for high quality and the signal also includes digital program information such as the title and artist of the song currently being played. Early on, before XM merged with Sirius, they offered the XM Personal Computer Receiver (PCR). This was an inexpensive device that connected to the USB port on a computer. The included software let the listener use the computer to select channels and programs while playing the music over the computer’s speakers.30

Scott MacLean, a computer programmer in Ottawa, lamented missing concerts and programs that were broadcast while he was asleep or at work. So, in 2004, he wrote a program that used the PCR to watch for programming of interest to him and automatically record the result as an MP3 file. The program, TimeTrax, was useful enough that he decided to offer it as Shareware for $19.95. Thousands of people downloaded his free trial and hundreds paid for the full version.31

The trouble was that XM had a license for performance of musical content. But TimeTrax enabled the music to be recorded for later playback thereby converting XM’s operations from performance to distribution. And it also enabled the reproduction of music recordings by the customer.

The legality of timeshifting television programs on videotape for later playback is well established but a corresponding legal precedent has yet to be established for music or audio recordings. Since XM sold the PCR, a device that could be used to copy music, XM faced the prospect of a lawsuit from the RIAA. Rather than consider that possibility, XM simply withdrew the PCR from the market (though they claimed the withdrawal of the product was due to lackluster sales). Shortly afterward the PCR, which originally sold for $70, was selling for over $400 on eBay.32

A Performance Rights Organization (PRO) licenses the performance of creative works. In the United States, ASCAP, BMI, SESAC and SoundExchange are PROs that license the performance of music. Other countries have similar organizations and international treaties support cross licensing. The legal definition of performance extends beyond live performance to include public playback of recordings whether at a club, store, or over the radio.

Rights to copy or distribute copyrighted works are managed by Reproduction Rights Organizations (RROs). In the U.S. the Copyright Clearance Center was established as an RRO for print works. They also offer limited rights licensing for audio and motion picture media. However, their catalog is limited.33 There is no Reproduction Rights Organization dedicated to music or motion pictures.

With no substantial aggregator of reproduction rights licensing, the incumbent movie studios and record companies had a big advantage due to their large catalogs compared to small publishers or individuals. That advantage continues so long as the distribution model involves thousands of radio stations, TV stations, and local retailers. However, online distribution channels like YouTube, iTunes, Google Play, and the Microsoft Store are shifting the power center from the licensing organization to the distribution channel. Generally speaking, they grant equal access to producers small and large with promotion based primarily on popularity.

Peer Networks

The Darknet is the sum of all peer networks for exchanging digital media. It includes simple exchanges of CDs between friends as well as internet-based exchanges like BitTorrent or the original Napster. The Darknet has always existed to some extent. In the 70s, high school and college students shared mixtapes. Before the Internet became popular, hobbyists dialed into computer bulletin-board systems by modem to exchange messages and software. Pirate bulletin boards were the designated nemesis of the software industry before Napster ever threatened the music industry.

Though the Darknet had existed for a long time, it was not given a name until 2002 when Four Microsoft employees presented the paper “The Darknet and the Future of Content Distribution” at a conference of the Association for Computing Machinery that November. They discussed in some technical detail the efficiency that internet-based peer networks add to the Darknet. The authors concluded that the Darknet cannot be stopped by any reasonable legal or technical means.34

That copyright can’t be enforced by technical means has been demonstrated both in theory and in practice. In 2003 Apple Computer launched the iTunes and with it, the largest catalog of Digital Rights Management (DRM) protected content to date. An inevitable arms race followed between Apple improving its “FairPlay” DRM system and others determined to break it. That race ended with Steve Jobs’ famous “Thoughts on Music” open letter.35 Released in February of 2007, Jobs admitted that any DRM system must hide keys on the playback device and that “smart people … with a lot of time on their hands … discover those secrets and publish a way for everyone to get free (and stolen) music. … It is a cat and mouse game.”36 Later in the letter he points out that “DRMs haven’t worked, and may never work, to halt music piracy.” His point was that despite piracy, enough people still purchase music, either out of honesty or because of convenience, to maintain a healthy music industry. In April of that year, the first DRM-free tracks appeared on the iTunes Store and by 2009 the entire iTunes music catalog was DRM free. Nevertheless, as of 2018, most of the video content on iTunes remains DRM protected and there continue to be tools for removing DRM protections.

In the absence of effective technical barriers, copyright law remains the primary structure enabling media producers to earn money from their efforts. Enforcing copyright law against peer networks has proven to be challenging because potential liability is distributed across thousands of participants rather than one central entity. In 2001, the original Napster network folded after being found liable for listings of copyrighted works by its members. The peer-network void left by Napster was quickly filled by alternatives such as Morpheus, Grokster, Kazaa, and later BitTorrent. These attempted to avoid a central target by distributing the catalog as well as the files. This time, the entertainment industry sued on the basis of “contributory infringement.” They argued that the “safe harbor” established by the Betamax decision didn’t apply because the operators of these services promoted the use of their networks for copyright violation. In 2005 the U.S. Supreme agreed in a unanimous decision that shut down these three.37 Services like isoHunt and ThePirateBay emerged as replacements. Like their predecessors, they fell to lawsuits, but it took time. IsoHunt launched in 2003, was sued in 2006, lost the suit in 200938, and finally lost an appeal in 2013. During all of this they were able to continue operations.39

Concerned about the slow progress of lawsuits like these, the RIAA, MPAA and related organizations tried other strategies. Between 2003 and 2008 the RIAA sued tens of thousands of individuals for copyright infringement through file sharing.40 Through intermediaries like MediaDefender and Overpeer they flooded peer networks with fake or corrupted files and clogged networks with excess upload and download requests. They also sought legislative relief. In 2011 the SOPA and PIPA bills were introduced in the U.S. Senate and House respectively. These would have brought criminal liability for facilitating copyright infringement and would have granted law enforcement the authority to shut down access to websites by interfering with DNS – the core directory protocol of the internet. On 18 January 2012 thousands of websites protested by blacking out their pages and shortly thereafter the bills were abandoned.41

The Digital Millennium Copyright Act (DMCA) was passed by the U.S. Congress in 1998. Its purposes were twofold: First, it was intended to tune copyright law in anticipation of digital media issues. Second, it was the final step in bringing the United States into compliance with international copyright treaties.

Among the provisions of the act are the following:

  • Limitations to the liability of Internet Service Providers.
  • Preservation of rights to operate internet radio stations.
  • Anti-circumvention of electronic copy protections.
  • Anti-tampering of copyright management information.

The first two of these provisions have been positively received by new media advocates. Internet service providers (ISPs) had been sued or threatened with lawsuits for allowing their customers to distribute unlicensed content over their services. ISPs didn’t have the capacity or even the ability to police all of the content transmitted by their customers. Under the DMCA, service providers are exempted from liability under the following conditions: if the content is transitory, that is, it simply passes through their network; if it is cached in compliance with provider instructions; if the storage of content is strictly under the control of customers; or if the storage is for the purposes of information location. In order to be eligible for these exemptions, a service provider must disable accounts or take other appropriate action when they are notified that a customer is violating copyright law.

YouTube, begun in 2015, is among the businesses enabled by these exemptions. By responding quickly to copyright takedown notices, they avoid liability. And, increasingly, they are able to negotiate licenses and keep the copyrighted material online.

Like conventional radio stations, internet radio operates under license from Performance Rights Organizations like ASCAP. Prior to the DMCA, record companies argued that a special license should be required. The DMCA divides streaming media operations into three categories: Free internet radio stations may continue to operate under license from the PROs just like their conventional radio cousins. A new compulsory license was created for subscription-based internet radio. The rate is currently set at between 6 and 7 percent of gross revenues. The third category is streaming stations that allow listeners to pick the songs to be played. Since this might facilitate the recording of specific content or eliminate the need to purchase recordings, a separately negotiated license is required.

Pandora operates in the first and second categories depending on whether a user chooses the free or paid plan. Even though listeners can create custom radio stations, they do not control the exact songs or the playlist. Essentially, Pandora operates a collection of millions of internet radio stations. Spotify is in the third category. They charge a subscription fee and grant listeners full control over the playlist. Accordingly, they have to negotiate licenses directly with the record labels.

The other two provisions in the DMCA are the U.S. implementation of two treaties negotiated by the World Intellectual Property Organization (WIPO). The first forbids the circumvention of electronic copy protection mechanisms. The second forbids tampering with or removing electronic copyright management information. Both criminal and civil remedies are specified.

As part of the anti-circumvention provision, all analog videocassette recorders were required to detect the Macrovision copy-protection encoding on any video signal and refuse to record that content. However, the act explicitly states that there is “no mandate” for recording devices to “affirmatively respond” to any other technological measure.

Both civil and criminal penalties are allowed. Civil penalties require that the plaintiff be damaged. Criminal penalties require that the copy protection circumvention or tampering be done “for purposes of commercial advantage or private financial gain.” The act also calls out exemptions for purposes of encryption research, software interoperability, nonprofit libraries, and a number of other special cases.42

On the surface, the act seems pretty reasonable. However, Lawrence Lessig, A Stanford law professor, has questioned whether it’s necessary to have three levels of copyright protection. Laws already exist that protect authors’ rights over their creations. Concerned that in the digital age, these legal protections are insufficient, Digital Rights Management (DRM) was been invented to offer a technological protection. Sensing that DRM is weak, congress has now added legal protection over the technology.

The biggest problem with the DMCA was a deliberate disregard by lawyers of the exceptions called out in the statute. Here are some examples:

The Secure Digital Music Initiative (SDMI) was a joint effort by the music industry to develop DRM technologies for music. In September of 2000 they issued a public challenge to see if anyone could break any of their proposed watermarking systems. Edward Felten and a group of his colleagues at Princeton University and Rice University took up the challenge and within the three weeks they successfully broke all four proposed schemes. Rather than accept the small cash prize offered by the SDMI (in exchange for their silence), they chose to present their results at an academic conference. The RIAA and the SDMI Foundation threatened to sue and they had to delay their presentation. Fortunately, the Electronic Frontier Foundation and other supporters mounted a legal defense and they eventually did present, but at a different conference four months later.43 The concern remains that the “freedom to tinker” with purchased devices is reduced by the threat of lawsuit. Exactly whether freedom of speech protects this kind of communication remains an open question.

Adobe’s electronic book technology included DRM provisions that limited customer’s ability to use content in unlicensed ways. The technology is very similar to the DRM provisions I helped develop for Folio Views 4.0 in the mid-1990s. A Russian software company, Elcomsoft, developed software that allowed licensed purchasers of eBooks to extract the text for purposes of backup and accessibility for the visually handicapped. In July of 2001 Dmitry Sklyarov, one of the programmers at Elcomsoft, presented a paper at the Defcon conference in Las Vegas about the workings of Adobe’s DRM technology. When Adobe complained to the FBI they arrested Sklyarov. He was kept in jail for three weeks before being released on bail with the provision that he remain in California. After five months, charges against Sklyarov were dropped and he was allowed go home. In exchange, he agreed to return to the U.S. and testify when the case against his employer went to trial. He did return and testify and in December of 2002 a federal jury found Elcomsoft innocent of all charges.44

The Content Scramble System (CSS) is a DRM technology incorporated into most commercial DVDs. CSS is licensed by the DVD Copy Control Association (DVD CCA) to the manufacturers of nearly all DVD players and playing software. A DeCSS program (named after the first program to do this work) is an unlicensed CSS descrambler. In October 1999 an unknown person posted the first DeCSS program on an Internet mailing list. Immediately a number of internet sites picked up the code and republished it. In the years following many lawsuits were filed resulting in extended legal battles. Much of the controversy revolved around one Judge’s declaration that possession of DeCSS is illegal and that computer source-code is not protected speech under the first amendment of the U.S. Constitution. This provoked a number of challenges including people printing the code onto t-shirts, incorporating it into artwork, and even the generation of a large prime number that incorporates a compressed version of the code (the so-called “illegal prime number”).45 Ultimately, most lawsuits related to DeCSS either failed or were dropped. In essence, the DVD CCA conceded that CSS was no longer a trade secret.

Open Licensing

In 1985 Richard Stallman founded the Free Software Foundation kicking off the open licensing movement. This countered an overall trend toward broader and more restrictive copyright efforts. As described previously, successive copyright acts have lengthened the period of copyright grants. The Berne convention established reciprocal protections among participating countries and automatically granted copyright rather than requiring creators to claim it. Commercial and private practice tended to follow the expanded legal protections. Organizations and individuals claimed copyright by default and were careful about licensing on the assumption that any asset may be valuable for future licensing.

The free software movement countered those assumptions. Stallman’s initial motivations centered on the freedom of consumers to review and adapt the software that controls their devices. Over time this expanded into an effort to eliminate barriers to sharing, thereby allowing people to build on each other’s work rather than constantly starting over.

The Free Software Foundation advocates for “Copyleft” licenses such as the GNU General Public License (GPL).46 These licenses require that any derivative work be bound by the same license. “Permissive” licenses are a more moderate form. Derivative works from permissively licensed code are not required to be open source. This enables business models where the majority of a system is open source, but a service provider may add proprietary enhancements that give them an advantage in the marketplace.

For 16 years, open licensing centered on software source code. In 2001, Larry Lessig and colleagues formed Creative Commons to extend the same licensing options to other media. The core of the Creative Commons licensing framework is the Creative Commons Attribution License, abbreviated “CC-BY”. This grants anyone the license to copy and redistribute the work so long as attribution to the author and the license reference remain attached to the work. Optional riders to the license allow authors to prohibit derivative work, require derivative works to be licensed in the same way (making it a copyleft license), or to prohibit commercial use.47

Creative Commons has also developed the “CC0” public domain dedication. This is a legal way to waive all rights to a work and, in effect, put it in the public domain. Since adoption of the Berne Convention grants copyright by default, authors have to make deliberate effort to put works in the public domain. “CC0” is a way to accomplish that.48

Final Thoughts

Technology and copyright have evolved in lockstep. Innovations in media technology invariably threaten existing business models motivating incumbent players to seek excessive protections. Indeed, the protections offered by copyright law have grown considerably with successive copyright acts. However, copyright law has remained reasonably balanced between the needs of consumers and those of producers.

There have been repeated attempts to add criminal penalties to copyright law. Doing so would engage government law enforcement agencies in copyright enforcement. To date, however, U.S. lawmakers have stuck with civil remedies and I believe this is a good thing.

The open source and free culture movements are relatively new phenomena where content creators deliberately choose fewer copyright protections than those provided by law. There are both philosophical and pragmatic reasons for choosing open licenses. The success of open-source efforts like Linux, mixed projects like Android, and open content projects like Wikipedia have proven how open licensing can achieve broad impact while preserving sustainable business models.

Perhaps the most important lesson from the history of copyright is that creators should give careful thought to the licenses under which they publish their works. Rather than sticking with default provisions, they should consider their goals for the work and what licensing and distribution scheme is most likely to achieve those goals.


  1. Wikipedia, “Digital Rights Management”, https://en.wikipedia.org/wiki/Digital_rights_management, (Retrieved June 7, 2018)
  2. Wikipedia, “Folio Corporation”, https://en.wikipedia.org/wiki/Folio_Corporation, (Retrieved June 7, 2018)
  3. John Philip Sousa, “The Menace of Mechanical Music,” Appleton's Magazine vol. 8 (1906), pp. 278-284, http://www27.brinkster.com/phonozoic/menace.htm (Retrieved 14 July 2004)
  4. Association of Research Libraries, “A History of Copyright in the United States,” http://arl.cni.org/info/frn/copy/timeline.html (14 July 2004)
  5. Mark Rose, Authors and Owners: The Invention of Copyright (Cambridge, Mass.: Harvard University Press, 1993)
  6. United States Constitution, Article I, Section 8, Clause 8
  7. Tom W. Bell, "Copyright Term Chart: Trend of Maximum U.S. General Copyright Term", http://www.tomwbell.com/writings/%28C%29_Term.html (Retrieved June 7, 2018)
  8. Charles Tainter, Tainter Papers (Washington D. C.: Smithsonian National Museum of American History)
  9. Ben Gross, I Looked and I Listened, (Arlington House, 1970; Originally Published in 1954) Quoted by: Thomas H. White, Early Radio History http://earlyradiohistory.us/WAAM.htm (Retrieved 16 July 2004)
  10. Edward Saumels, The Illustrated Story of Copyright (New York: Thomas Dunn / St. Martin’s, 2000 , pp. 40-44
  11. ASCAP, “ASCAP 2010 Financial Results Reflect the Challenging Music Licensing Environment”, 31 March 2011, http://www.ascap.com/press/2011/0331_Financial_Results.aspx (11 February 2012)
    BMI, “Money Matters”, http://www.bmi.com/about/entry/533106 (Retrieved 11 February 2012)
    ASCAP distributed $845 million, BMI distributed $789 million SESAC doesn’t disclose its distributions.
  12. RIAA, “U.S. Shipment Numbers”, http://www.riaa.com/keystatistics.php?content_selector=2008-2009-U.S-Shipment-Numbers (Retrieved 12 February 2012)
  13. SoundExchange website, http://soundexchange.com/ (Retrieved 11 February 2012)
  14. SoundExchange, “SoundExchange Reaches New Milestone – Record 2010 distributions top $252 million in digital royalties.”, 17 March 2011, http://soundexchange.com/2011/03/?cat=27 (Retrieved 11 February 2012)
  15. Jerry Whitaker, “The Revolution of Television,” The History of Television, http://www.tvhandbook.com/History/History_TV.htm (Retrieved 19 August 2004)
  16. “The Internet Movie Database,” http://www.IMDB.com
    “RKO Pictures Home Page,” http://www.rko.com
  17. Jerry Whitaker, “The Role of Film in Television,” The History of Television, http://www.tvhandbook.com/History/History_film.htm” (Retrieved 19 August 2004)
  18. Saumels, Story of Copyright, p. 63
  19. Whitaker, “Film in Television”
  20. Broadcast Cable Association of Pennsylvania, “The History of Cable Television”, http://www.pcta.com/history.html (Retrieved 19 August 2004)
  21. Saumels, Story of Copyright, pp. 63-66
  22. Consumer Electronics Association, “History – The Video Age – VCR,” Digital America, http://www.ce.org/publications/books_references/digital_america/history/vcr.asp
  23. Ibid.
  24. Samuels, Story of Copyright, pp. 68-69
  25. “Hearings before the Subcommittee on Courts, Civil Liberties, and the Administration of Justice…,” United States Congressional Record (1982)
  26. James Lardner, Fast Forward: Hollywood, the Japanese, and the VCR Wars (New York: WW Norton, 1987)
  27. Motion Picture Association, “2003 MPA Market Statistics,” http://www.mpaa.org (Retrieved 6 September 2004)
    World-Wide Box Office, http://www.worldwideboxoffice.com (Retrieved 6 September 2004)
  28. Samuels, Story of Copyright, pp. 21-23
  29. Copyright Clearance Center, http://www.copyright.com (Retrieved 6 September 2004)
  30. “XM Radio Home Page,” http://www.xmradio.com (Retrieved 10 September 2004)
  31. Wired, “Homemade Sat Radio Software Bump”, https://www.wired.com/2004/08/homemade-sat-radio-software-bump (29 August 2004, Retrieved 7 June 2018)
  32. Paul Festa, “XM Radio Pulls PC Hardware Amid Piracy Concerns”, CNet News.com, 30 August 2004, http://news.com.com/XM+Radio+pulls+PC+hardware+amid+piracy+concerns/2100-1026_3-5330698.html (Retrieved 4 September 2004)
  33. Copyright Clearance Center, http://www.copyright.com (Retrieved 7 June 2018)
  34. Peter Biddle, Paul England, Marcus Peinado, and Bryan Willman, “The Darknet and the Future of Content Distribution,” November 2002, http://crypto.stanford.edu/DRM2002/darknet5.doc (Retrieved 10 July 2004)
  35. Jobs, Steve; "Thoughts on Music", February 6, 2007, https://web.archive.org/web/20070207234839/http://www.apple.com/hotnews/thoughtsonmusic (Archived from the original on February 7, 2007. Retrieved June 23, 2017)
  36. Jobs, Steve, “Thoughts on Music”
  37. “MGM v. Grokster”, http://en.wikipedia.org/wiki/MGM_Studios,_Inc._v._Grokster,_Ltd.
  38. Wikipedia, “isoHunt”, http://en.wikipedia.org/wiki/Isohunt
  39. Hollywood Reporter, “Studio Fight Against IsoHunt Gets Trial Date”, http://www.hollywoodreporter.com/thr-esq/studio-fight-isohunt-gets-trial-603447
  40. Electronic Frontier Foundation, “RIAA v. The People: Five Years Later”, September 2008, http://www.eff.org/wp/riaa-v-people-five-years-later
    David Kravets, “Copyright Lawsuits Plummet in Aftermath of RIAA Campaign”, Wired, May 2010, http://www.wired.com/threatlevel/2010/05/riaa-bump/
  41. Wikipedia, “Stop Online Piracy Act”, https://en.wikipedia.org/wiki/Stop_Online_Piracy_Act, (Retrieved 8 June 2018)
  42. U.S. Copyright Office, “The Digital Millennium Copyright Act of 1998, U.S. Copyright Office Summary”, December 1998, http://www.copyright.gov/legislation/dmca.pdf (Retrieved 15 September 2004)
  43. Edward W. Felten, Scott A. Craver, Min Wu, Bede Liu, Adam Stubblefield, Ben Swartzlander, Dan S. Wallach, Drew Dean, “Reading Between the Lines: Lessons from the SDMI Challenge”, 13 August 2001, Publication History and Article at http://www.cs.princeton.edu/sip/sdmi/ (Retrieved 15 September 2004)
  44. “EFF U.S. v. ElcomSoft & Sklyarov Archive”, http://www.eff.org/IP/DMCA/US_v_Elcomsoft/ (Retrieved 15 September 2004)
  45. Wikipedia, “DeCSS”, https://en.wikipedia.org/wiki/DeCSS (Retrieved 8 June 2018)
  46. GNU General Public License, https://opensource.org/licenses/gpl-license (Retrieved 8 June 2018)
  47. Creative Commons License Chooser, https://creativecommons.org/choose (Retrieved 8 June 2018)
  48. Creative Commons CC0, https://creativecommons.org/publicdomain (Retrieved 8 June 2018)

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