Category Uncategorized

Don’t be afraid to imagine a better internet.

Have you heard about the latest exciting European shenanigans? 

There’s a new Copyright Directive on the way, and boy has it stirred up some passions. There’s an absolutely massive campaign going on to stop it, and air around Brussels is thick with accusations and recriminations. 

Their arguments are impassioned, although anyone who takes the time to look for themselves will see that the changes proposed are not only relatively innocuous but also essential and positive.

The interesting thing is who the arguments are being made by, and how they’re being made.

The anti-copyright-directive gang are what we can now think of as the usual suspects, rehearsing the usual arguments.

For example, author and journalist Cory Doctorow has stated that planned changes are an ‘unthinkable outcome’ which pose ‘an extinction-level event for the Internet’.

Julia Reda’s pleas on behalf of her Pirate Party to #SaveTheInternet propose that Articles 11 and 13 should at the very least be radically amended, and scrapped entirely at the most.

Jimmy Wales and Tim Berners-Lee signed an open letter which states that Article 13 would take ‘an unprecedented step towards the transformation of the internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users’.

Even Stephen Fry has weighed in, calling the proposals ‘the EU’s looming internet catastrophe’. It is ‘not about protecting artists’ copyright’, he argues, but ‘about granting U.S. tech giants a license to dominate the internet’.

These arguments, some of them simplistic, some ridiculous, some bordering on hysterical, all have the same central theme. They confidently predict that these changes will break the internet, render masses of things illegal or impossible, stop people doing the normal things they want to do. Rather gloomy and doomy, rather extreme and actually – under scrutiny – rather wrong. We heard it before with SOPA and PIPA, and earlier this year when this directive had its first vote.

As well as impassioned arguments, the anti-directive campaigners have deployed technology to direct millions of emails and phone calls to EU legislators, purportedly from electors protesting the changes (although only a few hundred turned out to rallies around Europe in August).

The people leading this are, in great part, people who at one time were pioneers, who could have staked a decent claim to represent the future. These one-time pioneers now a little grey haired and grumpy, their objectivity twisted by time, their affiliations and paymasters, old obsessions and quirky perspectives.

The internet they dreamed of, and tried to make, was one which could easily change, which was in constant evolution, which produced greater and fairer opportunity and which gave everyone a voice and access to information and artistic endeavours. 

The internet we have now is, though, quite a long way from that utopian idyll. The online economy is dominated by a small number of companies who capture nearly all of the money and data (whether you know it or not) and who share little of it. Access to all the information in the world isn’t breaking people out of ever-tighter and more easily manipulated filter bubbles – controlled by the same US tech giants that Stephen Fry fears so much.

Meanwhile, the right that everyone has to control their work – copyright – is worthless. Their work gets used without permission being sought, given or rewarded. So creators are going broke and creative companies are going bust.

That is the status quo which these anti-copyright people are trying to preserve.

Unable to paint an optimistic picture of a better, fairer Internet, they resort to predicting an Internet that is somehow even worse.

Ridiculous and untrue as their nightmare scenarios are, they’re also hardly earth shattering. “This will be the end of memes” they claim.

When weighed against the current undermining of copyright, creators’ loss of control over their own work and their inability to make a living from creativity, and the monopolisation of revenue by tax-avoiding mega-corporations, the loss of memes wouldn’t seem like a high price to pay – if it were true. But it’s not. As the Society of Authors points out, memes would be protected from copyright infringement as parody – and arguably other legal exceptions as well

Other opponents have given similarly feeble arguments, criticising the current status quo without offering productive solutions. Wyclef Jean, founding member of The Fugees, has campaigned for change without actually proposing any change. In an article for Politico, he expresses the need to ‘team up and make the music community work better for everyone’ without ‘demonizing and tearing down the internet and responsible service providers’.

“Links will be taxed”, they predict, absurdly. “The whole internet will be filtered by giant mega-corporations”. As if it isn’t already, but in any event, it won’t.

Some of these doom-sayers can be easily explained away. They’re not neutral, they have a vested interest in the status quo even if they try to hide it. Google spends huge sums funding organisations and individuals who can defend its interests while feigning independence.

Other activists are, dare i suggest it, just a bit past it. Stephen Fry, awash with cash, has no need for any Google largesse (and I’m sure receives none) and does not lack the intelligence to understand the arguments. Nevertheless, he still argues for the status quo. Perhaps having lived through the heady early days of the internet he just lacks the energy for any more change.

The internet as we know it now is still unevolved, primitive and brutal. It’s unfair and it farms its individual users as if they’re cash crops for the few. 

We need to believe that it can change for the better. Restoring the rights of individuals is a key starting point for that. 

Anyone who argues, fearfully, that change cannot be good and must be resisted is either being disingenuous or has simply stood by as time has rushed past them and find themselves now looking around and wishing it would stop.

Support the copyright directive, support the rights of individuals, support a fair internet which functions for all its participants.

Imagine it better, then make it happen.

Netflixifying news? Think again…

“Netflix for News”. That’s a phrase I’ve started hearing in the last month.

It refers to an idea about how to save the news industry. I think most people who say it are suggesting a single subscription which users would pay, but which would give them access a wide range of news sites – a kind of super-subscription.

If we take a business model which has had recent success elsewhere in the media, the idea goes, we would solve everything.

Spotify has done it for music, Netflix have done it for TV and movies, why not do it for news? Subscribers would be paying, news organisations would have a new revenue source, and online media would be saved. Hurrah.

It’s easy to see why this idea has surfaced. Spotify has been at the forefront of transforming an industry ravaged by piracy into one that has returned to growth, with streaming increasingly driving it. Netflix is putting unprecedented amounts of money into amazing new commissions.

The news industry most definitely needs to drive direct consumer revenues, and so dreams of similar things happening.

Seems simple. Will it work?

Well… there are a few reasons why it might not be the ideal model.

Firstly, to state the obvious, music and TV are quite different from news. Music persists in a way that news does not. One person might listen to the same piece of music tens – or even hundreds – of times and still enjoy it.

People spend hours bingeing on box sets, sometimes years old. The ‘value-creating life’ of music, especially popular music, can be as long as decades, with TV and movies not far behind.

News, in comparison, tends to be short-lived. Its value-creating life can be as short as minutes or hours. Very few news stories hold significant economic value (or attention) for longer than a few days or weeks.

This means the model for getting payback has to be different. News requires constant re-investment by news companies to continue to have value, which needs be realised immediately. The investment and payback cycle for other media is typically a lot slower.

Is all news equally valuable?

In addition, news products tend to have more variable pricing. Unlike music, which broadly costs the same regardless of what it is, newspapers have always had highly differentiated pricing and products.

How do you equate the value of The Sun and The Times? Are they worth the same? Does someone reading one long article in The Times account for the same amount of value as someone else reading a short one in The Sun?

This is the challenge faced in a super-subscription environment, where the user pays the same regardless of what they read or how much they read.

How do you divide it fairly? Who should get what? And how do you ensure that making more investment in content, and getting it more widely read, delivers more revenue? Without that promise, why would anyone invest in expensive content instead of cheaper commodified stuff? You only have to look at today’s internet to see the answer to that question.

Algorithmic perversity

A super-subscription business model means that an algorithm decides how much individual news products are worth. It’s impossible to make an algorithm for this without producing perverse outcomes – I speak from experience.

If your algorithm pays publishers based on how many articles get read, publishers with long reads get punished. If it rewards “dwell time”, publishers who are good at producing very pithy articles get punished. If it tries to identify a user’s favourite publication and give it a bigger share, other unfairly lose out.

Algorithms like this, however sophisticated, create winners and losers and limit the ability of publishers to diversify their products and business models. On the contrary, they incentivise publishers to adjust their product in order to game the algorithm, rather than to please their reader.

That quickly becomes messy, so to minimise it, the provider needs to keep the algorithm opaque and ever-changing. The whole business model becomes shrouded in mystery. Nobody can ever know quite how the amount they are being paid has been calculated.

If you want to see that problem come to life, just look at how the Google search algorithm and advertising algorithms work. Key to the way they function, and acquire power in the market, is that almost nothing is disclosed about the way they function. Nobody is allowed to know quite how they operate. Those who control the algorithm are totally in control.

Not quite as simple as it looks

So “Spotifying” or “Netflixiating” news has a few challenges, even at a glance.

Perhaps they might be reduced by ensuring there are a number of competing services out there. This, though, raises its own issues.

For example, if services try to compete by doing exclusive deals with publishers, consumers will be left with a choice of incomplete services and might end up having to subscribe to several of them in order to get access to everything they want. Sound familiar to any Netflix and Amazon Prime fans? But if all the competing services have essentially the same offer, how many of them will survive? A competitive market for this sort of thing can be hard to sustain in reality and the consumer offer will be damaged.

So what’s the upside?

There is one outstandingly good thing, though, about these super-subscription models.

They are good at signing up large numbers of subscribers. If you want a subscription product to get to millions of customers, keep the price low – £10 per month or less is what you’re aiming for – give consumers a big choice of content, all included, and try to be the one subscription everyone needs. You’ll find loads of takers.

By comparison, it’s much harder to get people to commit to a relatively restricted product (like a single newspaper, for example) than a massive offering. That’s why subscription success tends to be limited to an exclusive group of high value publishers with affluent audiences.

The largest barrier to making subscription models work is getting that commitment from readers, so giving an immense amount of content in return is a good way to get them to pay.

Even if you could make it work, you shouldn’t want to

But there’s still a huge, massive problem with the whole idea of super-subscriptions.

Once you’ve persuaded all the publishers to take part, and you have the subscribers signed up, and you’ve developed a really compelling product and user proposition, and you have written an algorithm which divides the money up fairly, and you have managed to find a way to put high-priced, low volume products alongside low-priced, high volume products in the same service without any of them crying foul – none of which is easy – you still have to face the fact that you – and the publishers – have a terrible business.

Why?

Because you have set an upper limit on how big it can be. That limit is your subscription price. £10 per month, multiplied by the number of users you can sign up. You have to divide that £10 between all the publishers, and try to have some money left over for yourself.

That money will all be spoken for the day you go on sale. And there won’t be much left over to pay to new publishers who want to come and join in the fun. For them to get anything, you have to take it away from someone else, or try to increase price (and prevent the existing publishers from claiming the increase for themselves). Or the late joining publishers have to rely on advertising revenue – and we all know the issues with that.

It’s revenue, but it’s not a thriving market

So, this model produces some new revenue for the industry. Which is a good thing.

However, the revenue doesn’t increase in response to more content being consumed. It just gets shared more thinly between publishers, just as ad revenue does now. Not such a great thing if you want to see a bigger and more competitive market. More importantly, it reduces the rationale for investing more in content.

In a future “Spotified” world where total income is fixed, the incentive will still be to do exactly the same thing as now – minimise cost, maximise consumption, depend on advertising to drive revenue increases. It will just have an underlying, new, base layer of customer revenue which will only grow as long as new customers are acquired and retained.

It will not lead to a greater incentive to invest in product and content, because the market and opportunity will not grow any bigger in response to that investment. Not only is revenue limited by subscription rates in a “Spotified” world; so is market growth.

Super-subscriptions would be first aid for dying news brands, but not a cure

So, in my view, this model will solve little. It will give the existing players a temporary reprieve, but leaves an internet still far from the vibrant, thriving market it could be. The door is closed to new entrants, because the fixed revenue – the subscription price – means publishers who are involved will defend their share.

Be more ambitious, create a market which can thrive

There is a much more exciting, compelling and tantalising opportunity which publishers and regulators should focus on instead.

Imagine, if you dare, an internet in which every time a consumer reads something (or listens, or watches, or plays) the publisher makes some money. The more people consume their product, the more money they make.

What would happen?

Well… the best content, well produced, well marketed and wisely priced, would make the most money.

Which means the incentive to invest would change radically. We would see a lot more competition for users’ attention (and money). More products would be launched, and creative innovators incentivised to make their content compelling because they’re offered a direct reward.

Consumers would, in turn, increase their consumption because they’ve been given an ever more exciting choice of content to choose from. The market would grow every time someone decided to read more content. The job of the creators would be to get ever more creative about how to get them to engage more. And there are no limits set on the potential revenue for online content.

Publishers win big, consumers win bigger

But what about the poor old consumer, suddenly facing all this in place of what used to be free?

They’re actually the biggest winner of all. Being the source of the money places consumers in control – they become the masters of the algorithm. Nobody is going to part with their cash – or their data – unless what they get in return is worth it. Disappoint your customer and your business will suffer; please them and you win a huge prize.

This is happening right now

If you want to know how this can be achieved, I have spent the last year building the answer to that.

It’s called Agate, and you can try it now on publications like The New EuropeanPopbitch and Reaction.life – and many more to come.

Actually doing it

As some people will notice, my flurries of activity on this blog and elsewhere are somewhat random. I am deeply passionate about the issues around copyright, because they impinge so heavily on so many other things – economic, cultural, political, personal. One of the reasons I have written about it is to try to explain why these things matter.

The other reason is because I can see how things can be better.

Seeing how things could be better demands more than just sitting on a blog being a smart-arse. Instead of just writing about it, I need to DO something about it?

After all, one of the reasons the creative industries have found themselves in such dire straits is that while they have been adept at identifying their problems and pointing the finger of blame in various directions, they have been slow to come forward with – and actually implement – solutions.

The extended silence is because I have been doing just that.

Solving things for the creative industry is really about putting the creators and those who turn their work into products (the publishers, I guess) at the top of the economic pile. They’re the apex value-creators, after all, but on the internet they are far from the biggest earners.

Part of that is about copyright – the way permission is traded for value between, mainly, creators and publishers (and the main focus of this blog). Also the way those who don’t have permission are prevented from exploiting other peoples’ work. We all know how broken that is, and the many projcts (including some inspired and initiated by me) which seek to address it.

But at the other end of the issue there’s perhaps a more fundamental problem which needs to be solved.

How to get money into the value chain in the first place. The money that flows from advertising is largely inaccessible to publishers, controlled by huge platforms and leading to weird product decisions to try to maximise the paltry revenue flow.

The other revenue stream – from users – has been elusive for publishers. It’s a common belief that people don’t want to pay to access media content. That’s not particularly surprising that only a tiny proportion of people actually DO pay. Only 7% of people in the UK have paid for online news in the last year, according to the Reuters Institute – a number which seems, sadly, rather high to me.

That is the problem I have set out to solve. Free doesn’t work, but subscriptions are only taken up by a tiny proportion of the audience.

The 95% of activity which subscriptions fail to reach is a huge opportunity. Asking consumers to pay without asking them to make a formal commitment is a way to start making money in that huge space. Making it effortless is essential.

That’s what the product I have built does. It’s called Agate and you can try it now at Popbitch – go to www.popbitch.com/stories and start reading.

Pretty soon you’ll be able to take it to other sites too, without any further setup or login or any such nonsense.

I hope you like it, and if you do I hope you spread the word (and add @agatehq to your tweets and follow list).

So, I’m making it easier to make money, at prices and on terms that publishers control.

After that the challenge is for the creators and publishers. Can they make something you like enough to want to spend a few pence on? If they can, the prize is pretty big.

That makes pleasing you becomes their most important objective. Not so much pleasing the advertisers.

What a relief and a pleasure that will be!

Rebooting copyright (blog)

Ah hello hello hello. Long time no, um, blog.

I’ve been busy going back to first principles and working out how we can adapt to a world in which the failure of copyright seems to be collapsing the media ever more quickly.

I’m still obsessive about copyright, of course, but I have begun to wonder if we need to focus our attention in a different direction.

Getting right to the nub of it, the central purpose of copyright is to enable creators to benefit from their work. It has lots of surrounding detail but that core function is critical.

Critical and no longer reliable.

So I have paused, for a while, my focus on the legal and regulatory cause of the malaise. Coming up with solutions which work, which I have helped with, can’t solve anything as long as progress is a political rather than practical process.

So I have been focusing on the practical. What can be done, right now, without the need for any political involvement at all?

Not just conceptualising it, but designing it. Not just designing it but building it.

It’s built. It’s about to launch. It makes, I hope you will think, perfect sense. And it changes everything, without depending on the politicians changing anything.

So I’m going to start writing here and elsewhere again, to explain some of the thinking which has led to Agate. Keep an eye on www.Agate.one where a new site will be launched soon, and a product soon afterwards.

Permissions, babies and bathwater

A few months ago I started seeing this when I went to Google sites…

 

Screen Shot 2015-12-26 at 15.42.23

 

Kind of funny, the privacy reminder. I’m guessing most people don’t see this because most people are logged in to Google most of the time and so have accepted their terms explicitly when they log in. But I’m not. As you can see I did a bit of investigating, and about a week later the message changed…

 

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I’m actually banned from using Google unless I accept their terms. I still don’t fancy this so it has given me an incentive to try out other search providers and – guess what – I get along fine. Great.

But it’s a bit more annoying than that because sometimes other people use Google to host things (YouTube videos, maps, documents etc) and so I’m not really using Google when I want to look at those things, Google just happens to be hosting. The price for me to watch the video, view the document, see the map is to make an agreement with Google to collect information about me. A quick look at their privacy policy confirms this is quite a long list of things they want permission to collect.

So… I can work around that if I try – “incognito” browser window (I get the “privacy reminder” message, still, but I’m not blocked), different computer, etc. But it’s annoying.

But look at this:

 

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And this

 

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Really strange. My browser can’t connect to Google sites at all. Now perhaps this was some weird technical thing – but the internet was working fine for other sites (you can see that the second one is a YouTube video embedded in a Bing search result) and I didn’t get the same error in other browsers.

So I can’t help wondering if Google’s servers are now refusing to talk to me at all. Sent my computer to Coventry. Pretending not to be there.

Whether or not that’s what happened it makes me think about the whole issue of permission, Google’s insistence that users must explcitly agree to give them data as a condition of being able to use their service brings the whole issue of “free” into clear sight.

Google isn’t free. They require quite a lot in return for being able to use their services. A quick summary from their privacy policy:

  • Information you give them such as “name, email address, telephone number or credit card to store with your account… photo”
  • Information they just gather from your machine such as device information – “hardware model, operating system version, unique device identifiers, and mobile network information including phone number”
  • Usage information such as “details of how you used our service, such as your search queries; telephony log information like your phone number, calling-party number, forwarding numbers, time and date of calls, duration of calls, SMS routing information and types of calls; Internet protocol address; device event information such as crashes, system activity, hardware settings, browser type, browser language, the date and time of your request and referral URL; cookies that may uniquely identify your browser or your Google Account”
  • Location information

And so on. Lots of stuff you have to give them before they’ll let you use their service. And they use it for a pretty broad range of things, also explained (although not, in my view, very clearly) in their privacy policy.

None of this is a criticism of Google. I think this is rather great, actually. I like that the deal is being made clear – at least to people who aren’t logged into Google, and that they can make their own choice about whether to click the “accept” button.

But it does highlight the issue. Permission matters – and not just in copyright.

It highlights another issue too which I alluded to above. It’s all very well asking me to opt in as a condition of using Google’s services, and all very well for me to decide not to and live without them if I want.

But what about when I’m NOT using Google’s services? I’m using someone else’s and it just so happens that THEY have decided to use Google to help?

Look at this email I got today from a company called Brewbot who make a cool device I will probably never own which brews beer for lazy people like me.

 

Screen Shot 2016-01-08 at 11.21.51

 

I’m a sucker for a chance to win some swag, so I clicked the link to their survey and this is what I got…

 

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It’s a Google doc and it doesn’t work for me. It does if I use another browser, or an incognito window, but in my normal browser I get this inability to connect to Google. Whether or not this is related to the privacy policy issue I don’t know but there does seem to be a pattern here.

So Brewbot, it turns out, seem to have been unwittingly recruited as a data gatherer for Google. Before I can offer my survey results to Brewbot I have to agree to silently give Google the long list of stuff I described above.

Or, to look at it another way, companies using Google to host their surveys, documents, videos, whatever, are actually only able to offer those things to opted-in Google users. Not to everyone. As long as Google remains ubiquitous perhaps the distinction isn’t obvious, but who is aware of it?

This seems dysfunctional to me, and unfair. It seems a high price to pay, for users and for companies who are using Google’s services (and may well be paying for them) for reasons that are nothing to do with Google’s core consumer services.

At its heart it highlights the conundrum which is central to so many of the issues which copyright people – as well as the internet at large – need to sort out. This silent, unknowing, pervasive process which takes the place of permission and transparency is not, in the end, serving the broad interests of the users of the internet.

I’m unusual in not having accepted Google’s terms, which means I am also unusual in seeing these messages which make what’s going on slightly more explicit to me.

But isn’t this an interesting perspective from which to consider the question of price and value on the internet. While money often doesn’t change hands, rendering lots of internet services nominally “free”, lots of other valuable stuff is still given in return – and if it’s not, the service is withdrawn.

At the heart of it all, value is being exchanged for permission. The same thing that happens in the copyright world. It needs to be done better.

Ah… there I am

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.

Disappointing innovation – pitch 1

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.

Paying publishers will “slow down the internet”

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?

Temper, temper…

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.

The answer to the machine… a guest post by Mark Bide of Rightscom and the Linked Content Coalition

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 20th 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.

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