In this article the author argues that the current system of digital media artist compensation by means of copyright protection is in the process of a "creative destruction" instigated by the internet and its users. "Creative destruction" is described as the process by which economic structures evolve via the destruction of old systems and the simultaneous rise of new ones. He points to the current "digital dilemma," the availability of mass copying and distribution of copyright protected digital media through the internet, as the catalyst for the "creative destruction of copyright and proposes several solutions. Some scholars have suggested a "pay-per-use" scheme to compensate artists for works distributed over the internet. Critics, however, insist that this scheme is not optimal since it would inhibit some fair uses of copyrighted works. The argument, in the author's opinion, boils down to a conflict between artist compensation and social welfare. He therefore proposes that in the face of the "digital dilemma" it is best to abolish the current copyright regime since there are currently drastic differences in the sources of revenue for artists and distributors of digital works and, while it is in society's interest to provide artists incentives to produce, it is also in the public's interest to reduce costs associated with distribution of digital works.

This article also discusses proponents of the copyright system that support expanding its reach throughout the internet and opponents who fear it because of potential limitations to fair use. It also delves into two cases regarding the internet and digital media copyright: the Napster and MP3.com cases. With respect to the fair use doctrine, it is clear that sharing of music over these networks did not constitute fair uses because it encroached on the market for digital music and deprived artists of potential revenues. The author continues to argue, however, that in the face of the internet, copyright has become irrelevant. The internet eliminates the free rider dilemma of digital music reproduction and distribution because users internalizes distribution costs by purchasing the hardware and software required to access the internet and the recording industry should collect royalties from the sales of these products. Digital media distribution via the internet the recording industry can also eliminate nearly all costs associated with distribution. An even more radical opinion considered is that there is no longer any need for copyright to protect the reproduction and distribution of digital media since there are drastic asymmetries in the revenue structures of artists and distributors. The article shows that artists derive very little revenue from the actual distribution of their works and that even if distribution revenues were eliminated, there could still be sufficient financial incentives for them to produce works.

I would like to use this as background evidence in my paper to show some sources of uncertainty in digital media copyright and potential new avenues that lawmakers and the courts could take. I would like to take into account the recent ways in which the recording industry has dealt with unlicensed online file sharing, namely by filing lawsuits and shutting down services providing free downloads or imposing licensing fees. I would also like to use the opinions regarding the current revenue structure of the music industry with respect to artists as support for the need to a new copyright system in the future.