Peter S. Menell, Professor of Law
Director, Berkeley Center for Law & Technology
University of California at Berkeley School of Law
June 11, 2010

Dear Steve:

Congratulations on the iPad, yet another revolutionary product – perhaps Apple’s most transformative.  In just a few months, the iPad has broken through the digital book reader barrier – reading text on a machine is now more enjoyable, engaging, and convenient than reading print media.  The integration with multi-media content is an extraordinary bonus.  Old-timers find your page turning emulation comforting while new readers embrace the digital medium without a second thought.  The migration of all forms of publishing to this long-awaited platform is firmly underway.  The entertainment, education, and business marketplaces will be irreversibly transformed.  You and your Apple team deserve high praise for bringing tablet technology to the masses.

But as Spiderman recognized, “with great power comes great responsibility.”  Your legacy depends on your stewardship of society’s intellectual resources.  The iPad and related Apple products have tremendous capacity to reshape the production and dissemination of knowledge for decades to come.  As we have already witnessed in the music field, the speed with which these changes unfold will outpace the government’s ability to adapt intellectual property laws and enforcement policy, with potentially dire consequences for professional creators who, in a symbiotic way, enhance the value of the iPad.

Unfortunately, traditional publishers have thus far lacked the vision and ability to coordinate their activities to navigate the digital revolution.  Moreover, they fail to recognize that they function as intermediaries connecting creators, consumers, and other creators.  The digital platform has profoundly altered publishers’ role and, in some contexts, eliminated their raison d’être.  Printing and physical distribution are on the decline, yet publishers cling to deal points and royalty splits based on these outdated functions.  This deprives creators of an appropriate share of the value they create and, by inflating prices, fuels resentment and unauthorized distribution in the highly promiscuous Internet environment where copyright enforcement is inevitably incomplete and costly.

There remain some intermediating functions – such as cultivating authors, organizing newsgathering, marketing, licensing, and enforcing rights – but the market value of these components will generally be less than the value of traditional analog-era publishing functions.  Even before digital distribution, digital technology had already supplanted typesetting and other pre-digital functions (such as formatting, aspects of editing, index creation).

Creators remain essential to the digital future.  Yet they have lacked the organization and ability to participate effectively in the digital policy arena.  The ease with which information flows in the digital age is a double-edged sword for creators – it enables anyone to reach a mass audience while at the same time undermining the ability to prevent unauthorized distribution of content.  Creators have historically relied upon publishers to enforce copyrights, but their interests are not entirely congruent.  Publishers support policies that preserve their stake in the digital future – whether or not such interests align with authors and the public at large.

Many consumers have come to view “sharing” of copyrighted works as a victimless technical violation.  Others actively seek to “disrupt” the publishing industries through unauthorized distribution.  Such activities, however, throw out the content baby with the inefficient publishing bathwater.  The long-term impacts are real and significant to creators and ultimately consumers.  Protection of intellectual property serves as a powerful engine for creative expression.  Creators and consumers benefit from competition in a robust market of creators.  But such markets cannot easily survive in a culture of rampant unauthorized distribution.

With government, publishers, creators, and consumers unable to address the challenges posed by the digital revolution, technology leaders have a particularly important role to play.  Apple made a valiant effort to promote the marketplace for creativity by introducing the iTunes Music Store in conjunction with the iPod.  We now know, however, that it was not sufficient to stanch unauthorized distribution via peer-to-peer and related platforms.  These channels severely hampered the marketplace for musical creativity as well as the market penetration of legitimate music services like iTunes.

If the dissemination of literature follows a similar path – with consumers increasingly turning to unauthorized channels for the latest releases – then the iPad will fall well-short of the social ideal: where creators and consumers participate in a competitive marketplace for content with lower prices due to the disintermediation of printing and distribution costs.  Yet the risk of rampant unauthorized distribution of books and other creative expression looms large in the iPad era.  Human perceptible works can never be encrypted – a scanner and optical character recognition software will be able to digitize any textual work quickly and inexpensively.  If book authors in five to ten years find themselves in an analogous position to music composers and recording artists today, society will have gained functionality at the cost of creative expression.

The challenge lies in promoting both technological advance and a vibrant marketplace for digital content.  Like the iTunes Store, the iBooks Store provides infrastructure for digital content.  Many publishers and authors already value the ability to market their wares on this new platform.  But the real test remains – will widespread adoption of the iPad ultimately undermine the marketplace for digital content (and published works) by creating the conditions for rampant unauthorized distribution?

Needless to say, you have a lot on your mind.  You have already spoken about the need for publishers to shift their business models for the digital age.  But that will not be enough.  You are uniquely positioned to begin a dialogue about ethics, technological tools, and business models to prevent the inevitable race to the bottom – myopic, self-serving, and parasitic social norms and business practices that undermine a vibrant marketplace for literature, art, newsgathering, and other vital forms of expressive creativity.

Advertising models will play some role in supporting commerce – as advertising has with radio, television, and Web search – but it introduces its own distortions and cannot adequately support the full range of creative enterprise.  Technology can improve the ability for creators to market directly to consumers, but the opportunity will be severely limited in a world of rampant unauthorized distribution.

By breaking the digital book reader barrier, you stand in a unique position to call attention to this concern, explore technological solutions, advocate for socially responsible norms, and work toward industry standards to combat unauthorized distribution.  You are also in a position to change the rancorous tone of the debate over social norms and copyright enforcement.  This is dangerous territory to enter, but true leadership demands engagement with the foreseeable consequences of technological advances.  For society to flourish, it is essential that the technology and content sectors develop their full symbiotic potential.