Tag licensing

What do you use, in the end? End (re)users and the evolution of licensing

End users are the focus of everyone in the creative industries. But they’re strangely neglected. It’s time to think of them as active, not passive, customers.

The customer is always, um, licenced

End users are strange beasts, in the copyright world. They’re the ultimate goal of all creative endeavours… what’s the point of creating something nobody wants to see?

But in terms of their interaction with the actual nuts-and-bolts of how copyright works they’re treated almost as an afterthought. They’re the passive recipients of content and they are expected to stay passive.

So while the business of passing copyright around, licensing and trading, is a very active, involved and evolved one for everyone else in the chain – the creators, the publishers, the distributors and others – it’s curiously ossified for End Users.

“Not to be shown on oil rigs”, the warning sternly says at the start of a DVD. That’s a licence, of sorts, but not one you get much say in. “Not to be stored in a retrieval system” say books before you get to the actual story.

You’re not allowed to do anything other than what they say, you’re positively discouraged from doing so. I have no idea what is involved in legally showing a DVD on an oil rig, and the warning notice doesn’t explain, but I’m sure it’s not simple and not cheap.

Previously passive

There are good reasons for this. Principal among them the fact that in the past end users only wanted to consume things. They were naturally passive creatures in a disconnected world. Which is good, because managing the complexity of everyone needing a slightly different licence was way too expensive for the mass market. It all came together in what management consultants would call a virtuous circle, passive consumption leading to a mass market for cheap products, leading to a huge diversity of products and generally falling prices.

But it has changed now. End users are no longer passive. They do things other than just sit and stare. They tweet, they blog, they email, they chat, they link, they post, they comment, they mash-up. They include the content they consume in the output of their online life.

The era of End Re-users

They – we – are not End Users any more. We’re End Re-users.

As far as I know, the term “End Re-user” was coined in the News Corporation submission to the Hargreaves Review of Intellectual Property in the UK (I had a hand in drafting this submission).

I think it’s a useful concept, because it encapsulates both the challenge and the opportunity for the future.

The challenge: End Re-users are often accidental infringers

The challenge is the obvious one. If users want to do all sorts of “use” of content, they’re no longer passive and they’re straying outside the boundaries of the licences they have been given. That makes them infringers. And that fact alone gives rise to a range of proposals from legislators, anti-copyright activists and an assortment of thinly disguised vested interests to change the law. It can’t, many say, be a good law if it throws so many people into breach of it.

Considering this from the point of view of the law is the wrong perspective, though. The law gives end users virtually no rights at all. The thing which allows a user to do something with a piece of content is the licence from the content owner, not the law. The problem isn’t with the law, it’s with the paperwork.

The opportunity: more use of content creates a new market

Which leads to the opportunity. Very few businesses have become really successful by refusing to give their customers what they want. This emergent generation of End Re-users should represent a huge new business goldmine.

All these people who want to user material in different ways are potentially more valuable customers. Every time they want to do something beyond just sit and consume, they’re creating value.

They might not be worth much individually, but there are millions of them out there. And as long as you can collect it simply, even a few pence can be profitable. Just ask The Sun.

The practical barrier to treating them as an opportunity, the complexity of managing all those licences and payments, ought to be eliminated by technology.

A quick word about cost vs value

Some people argue that technology, because it drives the cost of copying content to zero, will inevitably lead to content being valued at zero.

I would make a different argument. In freeing ourselves from the limitations of the physical supply chain for creative products we have also freed ourselves from the mass market constraint that every customer has to want, and get, the same thing.

The real liberation of the move from atoms to bits isn’t the end of cost and price, but the end of the need for one size – and one price – to fit all. It ought to be feasible to cater for the blogger, the passive consumer and the large scale commercial publisher individually and cheaply.

The advent  of the zero-cost copy frees the creative industries, and their customers. from the straitjacket of mass production. Technology creates the opportunity for fabulous growth and innovation, with everyone’s needs met by the right content and a fair price for them.

Meanwhile, back in the real world…

All of which sounds wonderful, but it doesn’t bear much resemblance to the real world of the internet today. If this huge opportunity is lurking in the shadows, why hasn’t it come out into the open yet?

Surprisingly, the answer is only partly that the technology doesn’t yet exist. Most of it does, and what’s left really needs a market to evolve around, at which point it will begin a symbiotic flourishing along with the market.

Perhaps the same could be said of many of the existing media businesses. Incumbent players are rarely the best innovators – they need to be shown the way forward, usually by younger, nimbler competitors snapping at their heels.

But those new entrants don’t really exist, leaving the existing media companies and their still substantial existing businesses with the classic innovators’ dilemma. The absence of these new entrants is another signal that all is not as it should be.

So things grind on, slowly

So evolution online, when it comes to content businesses, has moved at a glacial pace in the last ten years.

New entrants restrict themselves, by and large, to gaming the advertising market with low content costs and clever search optimisation.

Older players, with their high investment in content, struggle to find success to match their huge online audiences.

The underlying issues

In my view the enemies of change in this area are the vested interests of the dominant players on the internet and to some extent the law.

Many companies which make fortunes from the internet depend on the chaotic and un-evolved market of today remaining.

What is needed is technology to manage billions of complex licences, at low cost, on behalf of millions of creators and hundreds of millions of consumers.

The potential of technology to manage these relationships remains unfulfilled not least because it would damage the business of Google (whose aggressive lobbying against the Automated Content Access Protocol betrays their real fears in this area). And without Google’s support, or at least compliance, anything which affects the web broadly has little chance of getting established.

Anyone making billions of dollars a year from the ability to treat the whole internet as a free resource understandably wants to maintain the status quo. As the ultimate re-user they would have lots to lose, and at first glance little to gain, in a world where their use, along with everyone else’s, could be properly licenced.

The law, often, doesn’t help

The law, in the form of various internetfriendly statutes enacted to protect the then nascent ISPs and search engines, to a great extent enshrines and protects this status quo. So it shares the blame.

While copyright law may remain largely intact, the law creates perverse incentives which, my providing immunity for ISP and service providers, effectively protect the interests of infringers. As long as the law makes infringing use of content free and virtually risk-free, it will be hard for competitive new markets to emerge. So the law preserves and protects the new status quo.

But the status quo, while serving a narrow range of limited interests well, serves everyone else badly. End Re-users, the obvious big opportunity online, are un-served by antiquated processes and approaches to licensing. A range of entrepreneurs who would like to be able to use content more easily in their businesses, find it difficult and frustrating to do so. And content owners are wilting in the harsh reality of a digital environment in which audiences generate pitiful returns.

The End Re-user is always an opportunity

So I think we should all keep the End Re-user in mind when we consider the online landscape. Their interests are paramount not just to them, because they want to be able to do what they want with the content they like, but to everyone in the digital ecosystem because well-served end-users will be the generators and beneficiaries of much of the unfulfilled potential of the internet.

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