Copyright Blog

What’s the word for hibernating in summer? And winter? And then summer again?

That’s what the blog has been doing while I have been distracted. So I have been seeing issues and debates flying by and left them unremarked on (by me) partly because it’s busy work, this Copyright Hub thing, and partly because I have been in the rather serene position of thinking about copyright not from the point of view of a particular person or industry but – as far as I can – from the point of view of everyone.

In the process some ideas have been emerging and coming to the fore which I have become increasingly interested in writing down and articulating properly. It seems that the debate about copyright is constantly being re-opened all over the world and it always seems to start with something which claims to be first principles. The debate which ensues is often familiar and often, so my mind, misses the point.

So I am going to try to write some things down, I am going to try to do so in book form (yes, sort of the same book I said I was going to write when I left News Corp) and so I thought I might resurrect this blog so I can practice and try some thoughts out on my pitiful but loyal audience.

So when I have a thought, I’ll share it here. In the meantime there’s always this.

I have just spent a day with people talking about the future of the media. In amongst the usual presentation, panels, Q&As and watery coffee they have been hosting brief talks by interesting innovators in the media sector in Europe.

They were mostly perfectly nice ideas, plausible and well explained. But perhaps I have been hearing these ideas and pitches for too long because they felt a bit disappointing. Not only are many of them small, unambitious and in some ways an admission of defeat, but fundamentally they are little changed from the hopeless pitches I was listening to twenty years ago and more at News International.

Here, for example, is one generic pitch which has been around as long as the internet and still keeps popping up with different names…

The “Incremental Revenue” pitch (aka the “money for nothing” pitch)

This one involves saying to an existing media player with an established brand that you are going to conjure them up more money out of thin air. Better than that, it will be money that they can’t themselves get on their own. Better yet, there is no risk of damaging their existing business. What’s not to like!?

The ask

The existing media player is asked to give the start-up access to some or all of their content, plus their brand. The start-up will then cleverly combine it with other content and brands from other places and sell it (under their own brand, but heavily using the established media brand to help) to people who would never buy the core product (this will be young people / foreign people / people in niche sectors being targetted by a special product / people whose purpose is badly served by the core product / a whole new product etc)

The payback

Revenue share. Sometimes of subscription fees, more often of advertising. Usually calculated in a rather opaque way, or as a “revenue pool” which is shared between all the content providers on an arbitrary basis such as how often their content is accessed. If there is revenue then some fraction of it gets paid to their partners. Sometimes they offer a tempting non-financial morsel to appeal to operational people which gets their signature-hand twitching (being able to add to the circulation figures of print products for example, is better than gold to some circulation-focussed publications)

The promise

Nothing really. The established brand and content is zero-valued up-front, they just get a cut of revenue. Inevitably when this pitch is made revenue is approximately zero but huge sums are anticipated by year 3 and after year 5 it will have overtaken Google, Amazon and Apple combined.. Despite the confidence that these predictions are, if anything, conservative, no guarantee of revenue is available (“we’re a startup, we can’t afford to make guarantees”). The established brand is invariably used in pitches to other people (despite being zero rated financially).

The threat

If they deliver their lofty promises, they will get bigger than the brands that are contributing content and become a strategic threat.

The rational response to the pitch

“Come back when those big numbers you’re expecting start to become real” (the likely reply is “but we won’t get there without your content and brand” which leads to the obvious conversation about value)

or

“no guarantee, no deal”.

The ways the start-up might get people to sign up anyway

Either get them to irrationally over-value your offer (auditable circulation is like cocaine to some print publications) or get them to follow the crowd for fear of looking foolish or missing out. Depending who you’re talking to they might be tempted by equity.

Likelihood of the big numbers eventually being delivered

Almost zero (meaning the threat is, in reality, low as well). But some of these turn in to perfectly decent, if unexciting and minimal, revenue streams.

Quite a moderate view from Eric Schmidt, in response to the proposal that German newspaper publishers get a revenue stream from companies which aggregate their content online. The full quote is quite telling, though… “I fear that such a regulation would slow down the development of the Internet because it creates additional costs and leads to inefficiencies”. Equating cost with inefficiency is interesting, it suggests that the most efficient (and therefore best) company is one with no costs. It also suggests that cost is, somehow, bad – free is always better. 

Eric Schmidt works for Google, a company with a 65% gross margin and only one significant revenue stream supporting all their loss-making projects, and who pay nothing for their key resource (other people’s content). They do, however, charge for their own service (advertising), creating cost for other  people. Wouldn’t it be more efficient, therefore better according to his theory, if they gave it all away for free?

Rob Levine has written a review of William Patry’s book “How to fix copyright”. Which you should read. And when you do, you must not neglect to flip over to the comments where Mr Patry has been holding forth in somewhat splenetic style.

Marvellous.

Mark Bide is the Project Director of the Linked Content Coalition, about which you will hopefully soon hearing more. Posted below are some remarks he made to The Intellectual Property Lawyers Organisation

It is hardly a secret that, in the era of the internet, it is increasingly difficult to maintain successful businesses which are dependent on copyright.

It is also no mystery. The ability to make perfect copies and to distribute them instantaneously to over 2 billion people – the 30% of the world population classified as internet users – has irrevocably changed the copyright industries – those industries we also sometimes call “the media”.

This is not a bad thing. The barriers to becoming a publisher – in the broadest sense of that word, someone who makes something creative public – or indeed to becoming a self-published author or creator of any kind – have largely disappeared. We can all be published authors or composers or performers or directors now.

No one can (or at least no one should) object to this. The democratisation of mechanisms for publication and dissemination brings with it a huge benefit. But alongside this, we have seen the steady erosion of the capability to make a return on investment from the creation and dissemination of content.

Business models in the media have – almost without exception – been dependent on copyright for 300 years; copyright has been the mechanism that has provided the rewards for creativity. That solid foundation has enabled the development of the diverse and creative media sector from which we all – individually and corporately – benefit.

Despite the common caricature of the traditional media as dinosaurs who are desperately trying to hold onto a lost past, in reality the media are embracing their digital future. Some sectors have certainly been temporarily wrong footed not just by the sudden and dramatic shift in technology but also by aspects of the law. Copyright law, while remaining for the most part fit for purpose, has been made less effective by interventions such as the DMCA and the eCommerce Directive which have made certain infringing business models viable with almost complete impunity.

So while economic and distribution barriers have come dramatically down, the entrepreneurial response you might expect has been muted by the double-whammy of technology and the law, both contributing to the foundations of copyright businesses being undermined.

Despite this, the overall response from the media has been positive and creative. And with this response has come the recognition that – on the network – rights rather than content are the unit of commerce. We trade no longer in physical objects but in rights of access and use.

However, complete disregard for copyright on the internet has become so commonplace as to be unremarkable, something we may rarely admit to doing ourselves but embarrassedly admit is all too common among our children or grandchildren.

But it isn’t simply individuals who disregard copyright; whole sectors of business have developed on the internet whose entire business model is dependent on turning the principles of copyright on their head, of moving from a permission culture to one that at best offers a limited power of opt out and take down.

On the internet, we now find ourselves in a position where making investment in creating content looks a mug’s game. Investment in exploiting other peoples’ content is a much better bet. On line, the best profits from content are made by those who make little or no investment in content creation, and accept none of the risks and liabilities associated with what it has always meant to be a “publisher”.  They leave that to others. The mugs, whose online content creation continues most often to be subsidised by revenues from their traditional – off line – activities.

At the same time, legislators, under pressure from those who tell them that copyright is somehow old-fashioned and Luddite, seem increasingly inclined to go even further in weakening copyright law.  The media are told they must seek “new business models” that do not depend on copyright – but these have consistently proved elusive.

Unless we find a way to turn back this tide, professionally-created content of all types will inexorably become increasingly rare, particularly on line. Our challenge is simple: we have to make investment in content pay again. If we don’t, there will be no investment. This will be massively impoverishing of our culture and our society.

However, I don’t want to sound as if I believe that all is lost. I would argue that, what we have seen is not a failure of copyright but rather a failure of technology, or perhaps of technological implementation. Bringing the ordered structure of copyright back to the chaotic world of the internet does not require wholesale change in copyright itself (although doubtless there is a constant process of updating required – as Professor Hargreaves has indeed pointed out); rather it lies in finding more effective ways of implementing copyright in this relatively new environment.

To quote the late Charles Clark, adviser to the publishing industry in the latter years of the 20^th Century: “the answer to the machine is in the machine”. If we can make rights management and rights clearance work effectively at the machine level, everyone will benefit. Consumers will get what they want. Authors and their media partners can get a fair reward for their efforts – and we can continue to develop an effective and competitive online supply chain which also profits from its use of content.

So we must find ways of making technology work as well for us in the management of copyright as it has in managing other aspects of the immense complexity of the internet. The internet is not the end of the media, it is a massive marketplace. Technology is not the enemy, it will be our saviour.

I’m not talking about “Digital Rights Management” – or in Euro-speak “technical protection measures” – although well-implemented technology to enforce rights has its place. Rather I am talking about the “digital management of rights” or perhaps the “management of digital rights”.  We need to be able to communicate effectively about rights in order to build automated and semi-automated ways of transacting in them.

I will offer you one sure-fire prediction about the future of the internet in the next decade. In much the way that it has become a pervasive human-to-human communication environment, it is set to become an equally pervasive machine-to-machine communication environment. This is sometimes (although probably erroneously) called Web 3.0. The revolution implied is on the same scale as the development of the World Wide Web as a publishing medium, and subsequently the development of Web 2.0 – social media, and the engagement of us all in the creative process.

We are still in the early infancy of this latest development in the internet. But it is clear that standards for unambiguous identification and description will play a key role in its effective deployment – particularly in a field like automated rights management, which is intolerant of ambiguity about (for example) who controls rights – or even more importantly who should be paid for their use.

Much work has already been done in developing relevant technical standards in different sectors of the copyright industries – but these are isolated in silos.  As all the different sectors converge on a single distribution channel – the internet – we need to find ways of working together much more effectively. Our customers care little about which sector we think we work in – these distinctions are becoming increasingly difficult to define.

This is why – with the support of the Information Society Directorate General of the European Commission – the European Publishers Council (for whom I work as a consultant) are launching a cross-media project in 2012 called the Linked Content Coalition, with a view to building the necessary foundations of this standards-based information infrastructure, to allow the existing trade standards organisations from across the media to learn from each other and to work together on issues of interoperability.

Is this the answer to the challenge to copyright on the network? No, of course it’s not. But it is at least part of the answer. It is only one element of the infrastructure needed – necessary but not sufficient – to facilitate the creation of a voluntary but effective market for automated and semi-automated rights trading. Completing the task will take a long time, and will involve substantial investment on the part of the copyright industries. But I am convinced that this is a task worth undertaking. Our culture is built on creativity and creativity is built on copyright.

We have already seen enough of the damage that a faulty internet does to the creative industries to know that continuing on this path will lead to less media, which will leave end users – you and me – very much the poorer.

We know that copyright is worth protecting because we know how much economic, social and cultural good springs from it. We also know that small changes can produce dramatic turnarounds. We are working on one small change with massive possibilities. I hope to see the internet deliver – finally – on its tantalising potential to create a new army of content entrepreneurs and content products for us all to enjoy.

That’s a world I want to live in, I hope you do too, and I hope you will support our efforts.

Thank you.