(Original in Portuguese)

Leandro de Carvalho & Maria de Fatima Rodrigues Makiuchi^[1]

Introduction

This chapter aims to analyse how the arguments in favour of the approval of the Proposed Constitutional Amendment (Proposta de Emenda Constitucional – PEC) 123/2011 – known as Music PEC – were built discursively. These arguments are found in the “Justification” section of the referred proposal (Brasil 2013) and served as basis for discussion in public hearings and plenary votes.^[2] To achieve this goal, we have organized this article around the analysis of three structuring aspects of the Music PEC argumentative orientation: “defence of national culture”, and how the PEC’s text uses a business model to justify the country’s cultural practice; “defence of the adversely affected”, which proposes to discuss one of the bases of the criminalization discourse around music sharing; and the “piracy-profit relationship”, which treats sharing as a source of loss to the musician.

The proposed constitutional amendment, which was introduced in congress in 2007, and enacted at the end of 2013, suggests the following amendment to the Federal Constitution:

Add paragraph “e” to item VI of Art. 150 of the Federal Constitution, instituting a tax waiver on Phonograms and Musical Video phonograms produced in Brazil, containing musical or literary-musical works of Brazilian authors, and/or works generally interpreted by Brazilian artists, as well as the material supports and digital files containing them (Brasil 2013: 2).

In other words, the Music PEC extends the tax waiver already granted to books, to national phonograms and video phonograms as well, thus exempting the levy of the Value-added Tax on Sales and Services (Imposto sobre a Circulação de Mercadorias e Serviços – ICMS), the Tax on Services (Imposto sobre Serviços – ISS), and the Tax on Financial Operations (Imposto sobre Operações Financeiras – IOF). It has been speculated that such exemptions would reduce the price of the phonograms and videograms by 30%, according to non-official calculations^[3] estimated by specialists when consulted by the press.^[4]

The proceedings leading to the PEC’s adoption was a political process that was on the agenda for over six years. The text of the proposal was discussed in seven public hearings, six in the Chamber of Deputies and one in the Federal Senate; afterwards, it was analysed and voted in both Houses so as to amend the Brazilian Constitution.

The text used to justify the PEC will give us clues as to the argumentative orientation adopted by the legislator, and enable us to discuss the objectives of the tax waiver: does it predominantly aim at broadening access to culture, or does it seek to guarantee a market reserve.^[5]

The notion of discourse permeating the present discussion is based on the discourse theory elaborated by Eni P. Orlandi, the Brazilian expert on the theory that was first discussed in France by Pêcheux and Foucault. We are interested in the discourse because we understand that it constitutes a mediation between man and natural and social reality, and “it makes permanence and continuity as well as displacement and transformation possible for man and the reality he lives in” (Orlandi 2005: 15). In this article we propose to look at “meaning and strength relationships through the traces these leave in the stream of the discourse” in order to understand “how it is said”, “who says” and “in what circumstances” (Orlandi 2005: 64).

According to Orlandi, “every discourse is established in relation to a former speech and points towards another one. No discourse is closed on itself. What we have instead is a discursive process from which different states can be cut out and analysed” (Orlandi 2005: 62). Thus, we shall consider the text “not only as linguistic data (looking at its marks, how it is organized, etc.), but as a discursive fact”, understanding that it is “the facts which allow us to reach the memory of the language” (Orlandi 2005:70). The text is “the analysis unit affected by production conditions and it is also where we find the connection with language representation: sound, word, space, directed dimension, size” and it is also “play on meanings, work on language, and workings of discursivity” (Orlandi 2005:72). Following the author’s guidance, we shall assume that the “meaning” is “a determined relationship of the subject with history”, affected by the language, and that “there is no discourse without a subject” and “there is no subject without ideology”. Through language, “ideology and unconscious are materially connected” (Orlandi 2005: 47). To Orlandi,

when saying, the subject expresses him or herself in determined conditions, compelled on the one hand by language, and on the other hand by the world, by his or her experience, by facts demanding meaning, as well as by his discursive memory, by a know/can/must say, in which facts make sense because they are incorporated in the discursive formations that represent them in the discourse (Orlandi 2005: 53).

According to this theory, we can understand that, while drawing up the PEC justification, the legislator identified with the same discursive formation most businessmen and artists belong to, as we shall present and analyse in the following sections. As far as we are concerned, we understand that it is interesting to be familiar with facts and other viewpoints that may expand perspectives and show that piracy points out to new production and cultural consumption arrangements, and that information technologies promote a restructuration of that production chain.

I – Defence of National Culture

The legislator starts the justification with a passage that introduces the PEC as a defender of Brazilian culture: “The proposed constitutional amendment is, above all, a cry of defence for national culture” (Brasil 2013, p. 3). Although it is just an introductory text, it is not irrelevant to think that the “defence of national culture” would boil down to creating mechanisms intended to reverse the crisis of a business model, eliminating taxes from their price composition and lowering the prices of CDs and DVDs. Can we infer that the legislator understands that the phonographic sector crisis is a threat to national culture? We understand that this is indeed the case upon analysing who was present at the public hearings to discuss this “defence of national culture”.

Apart from the representatives of the metallurgic and electronic industry, who were invited to talk about producing the materials, representatives of both the Brazilian Association of Record Producers (Associação Brasileira dos Produtores de Discos – ABPD) and the Brazilian Association for Independent Music (Associação Brasileira de Música Independente – ABMI) were present, both arguing that the reduction in record sales volume – supposedly because of high prices – made it impossible for companies to survive in this market, thus threatening the continuity of musical production in the country, the solution to this problem being to eliminate the fiscal burden, which would consequently reduce the price of the products sold by the companies these association represent (Brasil 2008).

We will address the relationship between prices and the reduction in record sales volume but shall first focus on the notion that the phonographic market is the origin and the reason for being of Brazilian musical production. Around 2000, when new technologies started to facilitate uncontrolled music copying and distribution, the presidents and directors of the major record labels operating in Brazil started to associate their business crisis to the inevitable end of Brazilian musical production. This discourse was recorded in an interview granted to the newspaper Folha de São Paulo in 2001, when the presidents of the four major record labels operating in Brazil and affiliated to the ABPD were invited to talk about changes on the music market and comment on strategies against what they called piracy. Aloisio Reis, president of EMI^[6] records at the time, thus summarized his viewpoint on the matter:

Do you know what happens when there is a blackout? People find out that Brazil has run out of electric power and any time now they will discover that Brazilian popular music is over. It’s the same thing. But then it will be too late, they will have to ration. What we want is to warn you that this is true, it is not alarmism. We are letting artists go, we are not signing any new ones. It will be over. And when it is over, “oh… it’s over!” and there will be no fixing that! (Sanches 2001).

When only four^[7] companies dominate the market, they start thinking that any change in their structure would define the business characteristics of the sector. Until the end of the nineties, it was easy to agree with this logic simply because releases were controlled by these companies. Known as majors, this oligopoly was controlling the chain vertically, from prospecting talents to producing albums, from media/support fabrication to promotion/marketing. The more they centralized the chain, the more control and profits they obtained. Controlling access had always been a central aspect of the phonographic industry business, and did not demand much effort, since media production was expensive and the marketing involved would rather deal with huge sums, centred on a few contracts.

It so happens that technology challenged the majors’ influence, in terms of the means of innovation and launchings of new artists. Even with the majors still controlling two thirds of the music business, they no longer control music production. This is a subtle difference, but the reality is that the four big companies no longer control more than about a hundred artists under contract. Remunerated musical production no longer needs to happen in a single way – now, artists can work independently, without intermediates, and make use of the most varied technologies to reach and interact with their audience. Today, part of the intermediation is done by companies that are specialized as access platforms: if the use of their platforms is motivated by an artist or by thousands of artists, not much changes in this business model – what really matters is the final volume of access and the advertisement spaces sold. It is a radical change, when compared to the traditional business model in the phonographic sector, which needs to concentrate its efforts on a few artists considered as having a big sales potential. From the viewpoint of diversity, access platforms create opportunities for more productions to be known without causing major costs either for the platform or the artists.

The phonographic industry lost the power to dictate which would be the next success. Countless other factors were at stake. If, on the one hand, experience and contracts between record/distribution companies and radio/TV stations guaranteed access to the public and minimized risks for the chosen artists, today there is less certainty but countless new ways to go. The new recording and distribution technologies (mainly the Internet) have a central role in this development and an even bigger one in the transformation process of the access to what is produced.

II – Defence of those adversely affected

Going back to our initial reading, after presenting the PEC’s intentions, the author of the project shows to have some knowledge of the new dynamics at play in the production/recombination/distribution of content through digital means (discussions found in Leão & Nakano 2009, Lessing 2001, Silveira 2009) when he says that “it is urgent that measures to strengthen Brazilian musical production be implemented, in face of the cruel avalanche of piracy and the inexorable reality of the computer global network (the Internet)” (Brasil 2011: 3). As one can see, the use of the word “cruel” gives a defensive tone, but the legislator did not keep the same qualification when mentioning the “computer global network”; this he refers to as “inexorable reality”. Although both of them are “avalanches”, the author chooses to qualify piracy negatively, and use softer terms towards “global network”, thus avoiding disassociating it from its progressive image, which would immediately refute his argument.

Further on, in the first part of the PEC statistic substantiation, the legislator presents the fall “in the world ranking of phonographic producers” as a loss that “our authors, composers, producers, artists, and music professionals in general” would have to face.

The figures presented by the APDIF – Protective Association of Phonographic Intellectual Property Rights – demonstrate that Brazil, once holding the 6th position in the world ranking of phonographic producers, today sees its market reduced to the 12th place in the same classification; moreover, it is in the 1st place regarding losses resulting from musical piracy, with our authors, composers, producers, artists, and music professionals in general being the most directly affected by the illegal industry (Brasil 2011: 3).

This excerpt reproduces one of the main phonographic industry strategies, which has been to personify the loss deriving from piracy by using well-known artists in campaigns that relate piracy to crimes against life and the artists’ subsistence. The discourse thus constructed reinforces the notion that every uncontrolled copy amounts to theft and directly affects the artist concerned.

Although personalized, this strategy does not have any effect on the amount pirated, since people have never been included in the production process and do not know how it works (so that they do not question it, among other things). They are equally unaware of the fact that their downloads affect the artist. For them, a pirate CD or DVD or direct download from the Internet represent a way to access culture for a socially fair price.

Further on, the legislator uses the same argumentative resources:

Between 1997 and 2004, the effects of piracy on the phonographic sector were devastating, and the number of contracted artists dropped by 50%, in addition to a loss of over 40% in the number of national releases. Moreover, it is estimated that nearly 2,500 sale points have been closed and over eighty thousand formal jobs have been terminated since then. As from 2004, the situation seemed to stabilize, but at a very critical level already, with over half the market overtaken by illegal products and informal job positions, demonstrating that the interest in the phonographic product hasn’t died, but that the huge financial distance between legal and fake products has reached alarming proportions and has to be fought against (Brasil 2011: 3).

The data used in this excerpt of the justification do not, however, mention the fact that the year 1997 was the best year in the history of recording companies, which had been growing by 30% annually and reached their peak in 1997, when they sold approximately 105 million copies. Benefiting from the economic stabilization and the consumers’ perception of their higher purchasing power, the phonographic market reached its peak and these good years are used as the parameter for its “fall”.

After the golden years, revenue fell from R$810 million in 1999 to a little over R$300 million in 2012, according to the Brazilian Association of Record Producers (ABPD 2004: 2012). This drop keeps being understood/announced as a crisis (to be reverted) and not as the structural transformation of the business model. Even if we accepted the scenario presented as reversible, would the recovery be measured against the revenue attained in the best period, that is between 1997 and 1999?

The text that was put together to justify the PEC excludes, deliberately or not, several influential factors for the phonographic industry crisis, other than the so-called piracy. Resorting to the tax waiver, in this case, burdens the population with the responsibility of maintaining profits that were way above the average in the other sectors, within a market that did not worry much about efficiency (using the same marketing terminology), and which was taking advantage of a cycle of growth and confidence in post-inflation consumption.

III – The relationship between “piracy” and income

After associating piracy to a loss for the musicians, the legislator turns his argumentation to the relationship between piracy and income, a discourse that has been well disseminated but which we do not consider duly problematized.

The proposed constitutional amendment intends to interfere with this picture by removing from the equation a factor that effectively makes competition between pirated products and original products almost impracticable: the high taxes that burden the original product make its final cost far higher for the consumer. Independently of the technical quality, known to be far lower in the illegal product, and even of the buyer’s possible desire to honor the national artist’s genuine work, the low price appeal ends up being irresistible, notably for the part of the population with limited means, which cannot afford to pick a more expensive product when the market offers equivalent ones at lower prices (Brasil 2011: 3).

We believe that instituting a tax exemption on the production and commercialization of music composed and/or recorded by Brazilian artists and commercialized on various supports, as it has already occurred with “books, newspapers, journals and the paper intended for their printing”, can significantly mitigate the economical barrier that weighs over the original product, making it more accessible to consumption and popularizing its access even more to the less privileged classes in the country, disseminating and consolidating this important foundation of Brazilian culture and thereby providing music with the condition of resuming the prominent place it deserves in national economy (Brasil 2011: 4).

The legislator states that it is difficult for a poor family to consume cultural products and that, due to high prices, these families would choose to purchase less quality for lower prices. At this point it is necessary to talk about this discourse: would the consumption of pirated products be a consequence of the budget available in the family? In other words: does the family choose the non-licensed product because they cannot afford to buy the official product? Upon analysing several recent surveys, even those totally against music sharing, it is evident that the pirate behaviour is quite similar in all income groups studied. The 2012 IPEA survey points out that 81% of downloaders could be considered “pirates”. In any income and educational level group surveyed, the percentage of “pirates” is above 70% of users, as we shall see next.

The analysis conducted by IPEA’s technicians based on 2010 TIC Domicílios data demonstrates that “out of a total of 10.6 million users surveyed by 2010 TIC Domicílios, who gave valid answers about downloading and purchasing music or films, 8.62 million were considered “pirates” (IPEA 2012: 15). Additionally, it was shown that “75% of individuals were classified as pirates in Class A; 80% in Class B; 83% in Class C; and 96% in Classes D and E. As far as geographical distribution is concerned, piracy rates are higher in the North-east (86%), followed by the South-east (82%), South (79%), North and Midwest (73%)”. In the age group category, “pirates” are also the majority in any group surveyed: “piracy is more intense among 10-15-year-old users (91%), 16-24-year-old users (83%), 45-59-year-old users (82%), 35-44-year-old users (81%), and less pronounced amongst 60-year-old users (67%)”. The same occurs in relation to the education level: “it can be seen that piracy is higher among those with a lower education level (92%) and lower among those with a higher educational level (77%)” (IPEA 2012: 15).

Although terms such as “less pronounced” or “lower” are used, it is evident that this is not a minority or marginal behaviour, but indeed a generalized interest, which leads us to understand that we are facing a structural change and not only a matter of opportunism issue related to prices or non-payment – as demonstrated by the numbers of pirates in the income groups that can afford to buy CDs at real prices.

We are not dealing, therefore, with a behaviour exclusively influenced by the price of the cultural product: we are dealing with a new perception of value. By all indications, even if prices were reduced to the equivalent of the pirated copies’, the volume of sales would not increase proportionally.

Piracy represents a business-model issue precisely because it offers the same product while questioning the prices so far established. This is not only a matter of charging lower prices, but of questioning what is being delivered for the amount charged. People are not aware of the expenses involved behind each popular artist, from the definition of the market segment to the adequacy to the target public and up to the best sale channels.^[8] If an automobile is sold at a high price, for instance, everybody knows that the material used makes up a significant part of the price and that the design and creation process of a brand does not make up a large percentage of the sale price. What piracy does is to prove, without any shame, that the cost in materials is derisive for each copy, and there is therefore no reason to accept a price that cannot be justified.

It is not a thinking error on the part of the consumer, since he was told to relate a price to a material product. The industry decided to treat music as a material asset and the public accepted this instruction. For a long time, physical supports and music were conflated and that benefited the companies that controlled the market. In addition to this instruction, neither the production process nor the profitability involved were addressed. Now that support is no longer the centrepiece and it has cheapened to an unthinkable level, no basis exists for a discussion about “rights” – after all, there are no production or authorship rights on physical products, there are ownership rights. Thus, the same market that had reduced music to its copy and developed a business model based on restriction can no longer justify to its customers that the production involved is not, in fact, akin to the production of a material commodity. From the consumer’s viewpoint, the price reduction provided by the pirated copy is a way of working around the access barrier and does not generate moral issues of any kind because the “how’s” and “who’s” are involved in the production they wanted to access had never been discussed.

The situation is not different in other markets. We do not know of any group of companies who discuss their costs or production processes with their clients. However, material commodities demonstrate in their very form that a minimum of human labour, raw material and means of production were necessary for the product to be produced, and that any other producer of the same item would have similar conditions to produce the same commodity. What we mean is that the music market was able to set prices while it was controlling access, and because it did not communicate with its public, it now finds itself in a new scenario where its production processes are not understood, or worse, they keep on being understood in the material terms according to which demand tends to prefer the lowest price for the product, ignores the production process and disregards copyrights.

It is no longer possible to justify that recording technology requires great expenses to produce a high-quality-sound product. Pirates have proven that high quality and durability, which are characteristics of material products, do not need the access barriers (price) the original ones set. When production technology was no longer controlled by the phonographic sector companies, these lost the power they had to restrict access and their product then became plentiful again, and it is not possible to set a price on what is plentiful.

The legislators failed to pay attention to this other aspect of the music production process. By listening exclusively to the phonographic industry’s representatives, they failed to question what had really changed in this business, where music was the main source of profits. We are not dealing with a new behaviour, presented as illegal and immoral; we are dealing with a renewed perception of music, in which the influence of the material support was minimized and what used to be plentiful becomes plentiful again.

In any case, even if we held the argument that relates income, prices and piracy as accurate, why should the price reduction be paid for by the overall population? If industry really believes that its product has price-elasticity characteristics, would it not make more sense to reduce prices and increase the sale volume, going back to former sale levels? What is evident here is that the industry already knows that its product presents practically inelastic demand characteristics, and that any price reduction financed by the industry itself would have little effect on their income volume. Therefore, it looked wiser to them that the price reduction be transferred to taxes, so that any change in the sale volume resulting from price variation, even disproportional to its reduction, would be seen as an increase in the companies’ profits. Thus, public money is used to fund a market that does not know its public, contributes very little to the democratization of culture, and resorts to old, repetitive and implausible discourses to justify maintaining its historical profits.

IV – Privileged voices and perpetuated meanings

During the six public hearings^[9] held between March 25, 2008^[10]11 and April 14, 2009 at the House of Representatives, three associations representing Brazil’s record companies, both the majors and independent ones, were heard, and they spoke in five distinct occasions; the musicians’ union was invited and spoke in one of the hearings; representatives of metallurgic and electronics associations were heard in six occasions, to talk about the tax waiver in favour of the production of the materials and its possible impact on Manaus free-trade area (Zona Franca, which already benefits from a tax waiver); also, the representative of the Federal Revenue was heard in one of the hearings; and singers/composers spoke eight times to give evidence.

Our understanding is that the composition of the hearings privileged the voice of the market, reinforcing the discourse about the crisis in the national phonographic sector. In the public hearings as in the anti-piracy campaigns, phonographic sector companies defend that music and its supports are synonymous, reducing musical production to production profiting from copy-making. They fail to mention the great proportion of artists that are not amongst those contracted by the record labels, who insure their revenue and sustenance through live presentations, with their CD sales being not a main source of income but a complement.

The discourse in defence of the business model is present in the declarations of the associations representing the musical sector companies, but the question remained whether the same discourse was present in the singers’ individual statements. It will not be possible to analyse the speeches of all eight singers present at the hearings, but we would like to focus on one of them and demonstrate possible meaning shifts for the purpose of our discussion. Singer Leoni, now closely linked to the movements defending the unrestricted circulation of music, was present at the April 15, 2008 hearing and summarized his position at the time in the following manner:

With the crisis we have been through, the market has shrunk by 80% since 1996, and we need a little help to keep on providing the services we have been providing to Brazil.

(…)

Our attitude in relation to piracy has been weird, for nobody warns the consumer that he is receiving a stolen-product. An automobile is expensive and nobody justifies it by saying: “Oh, I’ve bought a pirated car, stolen right there, and things like that, because a car is very expensive”.

(…)

Music deserves a better treatment. (…) What we are asking is that Brazilian music be treated on a par with books. We are not defending the physical product, CDs, record labels; we are defending Brazilian music, which has been providing such important services to the country since forever.” (Brasil 2008: 15 – 16).

In this and other occasions of the public hearing, singer Leoni relates the music business to national culture, and echoes the notion that treats the support (phonograms and videograms) as crucial for the national music production. The same singer, a little over a year later, in 2009, would post on his site and sign the manifesto Movimento Música para Baixar (MPB) – “Music for Download Movement”, which gathered several Brazilian artists in favor of the free circulation of music, not restricted to phonograms, as one can see below:

What used to be a market defined by few agents, owning the monopoly of communication means, has become a huge fauna of cultural diversity, bringing opportunities and wealth to national music – not only from the artist’s and producer’s viewpoint, but also from the user’s.

This is why we are now forming the movement Music for Download (MPB): a gathering of artists, producers, internet activists and music users in defence of musical freedom and diversity that circulates freely in all formats and on the Internet.

Whoever downloads music is not a pirate, but a promoter! He spreads musical projects for free!

Our purpose is to debate and act for the loosening of production chain laws, so that they not only ensure our authors’ rights, but the free and democratic dissemination of music as well.

(…)

A new age needs new values. Issues such as solidary economy, flexibility of copyrights, free software, digital culture, communitarian and cooperative communication are fundamental aspects in the creation of opportunities of a new reality for those who create, produce and use music.

The MPB will promote debates and take actions that allow the agents of this process to become the creators and managers of the future of music, in a broader and more participative manner. (Movimento… 2009, our emphasis).

We are not aware of the circumstances that motivated this change in perception on our theme; however, the excerpts presented prove that there can be more than one way to understand the changes that have occurred in distribution of music, and that some of them, such as the movement Music for Download, can be diametrically opposed to the discourse disseminated by big companies in the sector. It appears that the debate is not only commercial, but political: it deals with the notion of culture and access to culture that we desire for our country.

Considering the limits established for this study, we hope to have achieved our objective of discussing what motivations were expressed in the text used to justify the music PEC. It is our understanding, after analysing the text, that the discourse contained in the PEC is evidently aligned with the defence pushed by the big phonographic companies. Thus, the Music PEC amends the Constitution and generates costs of hundreds of millions of reals, without demonstrating any interest in cultural diversity in its justification, restricting itself to defending that a business model should be preserved, and corroborating the discourse that musical production finds its origin and reason in the companies of this sector. Besides, it spends most of the text trying to picture the State and taxes as the villains behind the bad turn taken by these companies’ historical profits.

References

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ABPD (2012) Publicação Anual do Mercado Fonográfico ABPD 2012, Rio de Janeiro: ABPD.

Brasil. Congresso. Senado (2007) Proposta de Emenda Constitucional nº 98, de 2007, Brasília: DF.

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Movimento Música para Baixar (org.) (2009) Manifesto do Movimento Música para Baixar. <http://musicaliquida.blogspot.com.br/2009/07/manifesto-movimento-musica-para-baixar.html> (accessed 06 October 2016).

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Ulhôa, R. & Brandt, F. (2013) ‘Senado aprova ‘PEC da Música’ em primeiro turno’ Valor Econômico. <http://www.valor.com.br/politica/3267410/senado-aprova-pec-da-musica-em-primeiro-turno> (accessed 06 October 2016).

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