The future of copyright, new business models and the public interest

This session examined the growing importance of copyright issues within the public consciousness over the last decade and the rising inclination of young people to fight for their right to access, share and download online content. It was noted that there is a growing consensus around approaches to copyright enforcement – although technical measures to enforce copyright are unlikely to be fully effective without significant curbs on innovation and online freedom. Discussion also suggested the development of new revenue generating business models will be the swiftest route towards providing attractive legal alternatives to copyright piracy. The copyright landscape is also likely to become more complex as the boundary between the consumers and producers of online content and services becomes progressively blurred – and further challenges emerge in relation to applying copyright to content dynamically created by machines. The future creative incentives for content producers and the implications of advertising/commercially driven content creation models were also explored – alongside the role of trust networks in supporting collaborative online creation and consumption. Finally, it was considered whether access to the Internet should be defined as a human right or public good, or whether the best approach would be to leverage and enforce existing human rights within an online context.

Specific questions for further discussion

(links take you to the relevant forum subtopic):

Q1: Online trust networks - how far can they go?

Q2: does the "creating to share" incentive have a limited online shelf life?

Q3: Should governments intervene to balance the public interest against online commercial incentives?

Link to main discussion topic:

Increasing importance of copyright in the public consciousness

One of the most significant developments in the field of copyright over the last 10 years was the arrival of Napster in 2001 which put copyright and intellectual property rights on the front page of virtually every magazine in the world, as well bringing such issues to the forefront of young people’s minds. So pervasive was Napster’s impact in this area that it rapidly became one of the top 5 most recognisable global brands, without spending a single penny on marketing or advertising.

Thanks in part to the extensive coverage of the rise and fall of Napster, copyright issues have risen to the forefront of the public consciousness and vigorous debate is happening in a wider social space than ever before. Young people are increasingly prepared to fight for their right to access, share and download online content. Indeed this has become a significant social issue which cuts across political divides. Against this backdrop there are also examples where the realm of copyright is expanding. In 2003 the Mexican Congress amended the 1996 Copyright Act to extend the term of copyright to be the duration of the author/creator’s life plus 100 years – an action which some would see as supporting copyright rentierism.

Growing consensus on enforcement approaches and rising challenges

There is also increasing consensus on approaches to enforcing copyright. From the EU perspective, site blocking is now seen as an entirely appropriate response to deal with websites hosting infringing material. A number of countries including the US are also embracing the approach of sending warning notices to Internet users who upload/share files which are subject to copyright restrictions.

A 2012 report from the Hautes Autorité Pour la Diffusion des Oevres et la Protection des droits sur Internet (HADOPI) – the agency created in 2009 by the French government to administer a graduate response approach (sending warning letters) to combat illegal downloads – concluded that the initiative had been largely ineffective and had generated only a handful of successful prosecutions. The report also suggested that increased emphasis should be placed on monitoring streaming and direct download services (as opposed to simply P2P sharing services).

While graduated enforcement responses may have an initially positive impact for content creators (in terms of reduced numbers of transgressions) – it was suggested that attempts to combat illegal downloads using site blocking and Internet user monitoring techniques will be likely to provoke a technical “arms race” in which the only winner will be the pirates (as ever increasing numbers of mainstream users adopt practices to circumvent these measures using proxy servers…etc). It was concluded that there is no effective technical solution to piracy which does not throw they baby out with the bathwater in terms of limiting Internet freedom and stifling innovation.

The point was made that across society copyright is not universally understood which creates significant challenges in terms of effective national and international. Another challenge is the level of innovation associated with piracy. Another factor is that digital licences have replaced the concept of ownership in many commercial contexts – which leads some young people to declare “if it is not mine – then it is everybody’s”! Internet users are also becoming increasingly aware of extortion schemes where service/content providers charge for access to material which should be (or is already) publically available.

Copyright in emerging economies

An important question will be how these trends play out in different parts of the world including emerging economies. It was suggested that the next three billion Internet users will be significantly poorer than those that gained online access in the past.

Micro content purchases which can be supported by online credit card-supported payment systems like PayPal are functional in a developed country context – but in the developing world where people are far less likely to have reached this level of financial inclusion, this could lead to large numbers of Internet users being excluded from such new services.  In many instances students rely on piracy to access online content. In India, Brazil, South Africa and Russia the local film production industries are totally reliant upon pirated software.

There is a need for enhanced cooperation at a global level in relation to copyright and IPR implementation, in a context where the second largest country in the world (China) sees little incentive to comply with Western IPR regimes. In China the decision to ignore copyright is essentially economic in nature. It was also contended that societal or communal enforcement routines (tribal mechanisms) are more important in effectively incentivising law abiding behaviours than technical countermeasures or mechanisms.

In Africa access remains the most important issue with less importance accorded to copyright. Africans are increasingly generating their own local solutions (such as young people designing their own mobile applications) although as these solutions gain in maturity and commercial appeal, there is concern that they are currently insufficiently protected in IPR terms. Nevertheless it was predicted that in the next 5 years Western businesses will be competing with young African entrepreneurs who will successfully build the next batch of billion dollar companies.

Access to the benefits of the Internet is not the same as access to the Internet. The latter simply involves an Internet connection, while the former requires skills, information literacy and access to content and services. In addition, certain Internet services depend upon individuals achieving a baseline of financial inclusion in order to complete transactions or register to access content platforms (such as a credit card or a PayPal account).

In Africa many libraries are embracing the “tech hub” model with information/content hosted on shared Dropbox accounts. In five years’ time many Africans will be browsing library content on their mobile phones.

The rise of new business models

Today the debate is gradually migrating from a focus on digital piracy towards an emphasis on digital business models. Figures released in 2012 by the International Federation of the Phonographic Industry (IFPI) showed that worldwide music industry revenues increased by 8% in 2011 to reach $5.2 billion.

Ultimately the war on online piracy will only end when new business models supersede that battle by successfully generating revenue. There are a range of new business models which are worthy of consideration. For example in India many devices come with free pre-loaded content, with the option of purchasing value added services related to that content. There are also free children’s e-books which come with embedded video content and text to speech functionality which can be unlocked for an additional fee. There are also examples of Western companies voluntarily adapting to the constraints of particular markets, such as in India where Microsoft elects to sell DOS-based desktops and laptops in recognition of the fact that most customers can only afford to install bootleg software on these machines.

Moving forward the important question should be “which business models should be developed and implemented?” as opposed to “which enforcement methods should be adopted?” The primary purpose of government should be to ensure a level playing field for businesses, rather than acting as an enforcement agent in a context where punishment is manifestly not achieving the desired results.

It was commented that users are generally more comfortable with employing legal approaches to accessing content – but that these must be priced appropriately and sensitively and above all must contain the content that users want to access. Young people use iTunes because its large repository of desirable content. However, users are increasingly resistant to being imprisoned or locked into particular platforms or proprietary systems.

The blurring of the boundary between consumption and production

Previously there was a general demarcation between Internet users (usually individuals) and producers (usually organisations). This demarcation is now becoming increasingly blurred. Furthermore, as more and more users become content producers they will often be more supportive of copyright enforcement as they begin to be more interested in compensation for their work. Alongside copyright and IPR regime enforcement, there are also other routes emerging for content producers (amateurs, professional-amateurs, and professionals) including licencing through the Creative Commons framework, as well as other options which strip out traditional intermediaries such as direct donations from users, global sponsorship opportunities and crowd sourced micro-funding.

Machine to machine connectivity and communication

Another big trend is the rapid increase in machine-to-machine (M2M) connectivity and communication. This in turn raises the question – how do we apply copyright to content which is dynamically created by machines in a context where both people and machines both produce and consume content and information. It is not clear whether current business models are equipped to accommodate these new developments. In a situation where a human being aggregating content from various sources (in terms of say writing an online news article) will usually not breach copyright (effectively it creates new copyrighted content) – and yet a machine aggregating material from numerous sources and applying automated methods to produce an article could well be judged to be in contravention of copyright. This could have significant implications for open source and open access resources in terms of their future position vis-à-vis copyright and IPR regimes.

Future incentives for content creation and potential for monetisation

The question was posed – in the absence of effective copyright regimes, what is the incentive for creators to create? One response was that they should seek to capitalise on revenue from added value services or advertising. A further point was raised in relation to confusion between the distribution and creation of content. The traditional content providers use a number of mechanisms (versioning, windowing and merchandising) in order to maximise revenue. However, our new hyper-connected world has fostered the growth of a diversity of different narrative forms of content as well as the ability to recycle and remix that content. In a context where many content providers and platforms merely offer aggregation services, there is significant scope for other actors (such as libraries) to deliver curatorial strategies which more amply respond to the values and needs of local cultures. However, it was also commented that in some instances aggregation can be a form of content creation in and of itself (depending upon the sophistication of the aggregation process).

It was suggested that the fact that the group discussion had focused on “monetizing content” instead of copyright was a potential indication that the centre of this debate had migrated from IPR protection towards an examination of viable business models.

Copyright is a brake on innovation - but many creators are pressing ahead regardless

Copyright is not part of the value chain and in many cases acts to stifle innovation. For example an on-going European Court of Justice case (referred from the Swedish Court of Appeals) will determine whether publishing a hyperlink to content (without the author’s consent) can be considered a communication to the public, and therefore implicitly a breach of creator’s copyright (it is already considered illegal in France). In this context it is easy to see how copyright represents an impediment to value creation.

Nevertheless it would appear that many creators do not seem to care, judging from their enthusiasm for sharing and uploading their work (for example 72 hours of video are uploaded to YouTube every hour). Indeed it would seem that creators are not waiting for new business models to be finalised or copyright reform to be implemented – they just getting on with it. The opportunity of sharing creative content with others remains a primary and powerful motivator for a large number of Internet users. In this context, the use of crowd-funding and advertising revenue are key routes to successful monetization. However, the proliferation of the advertising driven revenue model will have implications and consequences for privacy, surveillance and ultimately protection of the public interest.

The importance of online trust and public interest considerations

The phenomenon of collaborative online consumption depends on evolving networks of online trust which develop in a non-linear fashion. Communities (both offline and online) are powerful vehicles for building trust. The question is - can new ways of mobilising trust supplant the copyright system? Could a trust renaissance replace copyright?

Trust between application developers and platform providers will certainly be of paramount importance. Application developers need to trust the platform providers to deliver payment. In addition, in the context of digital platforms the era of scarce shelf space has been supplanted by abundance, availability and (in theory) limitless storage capacity.

The question was posed – what happens to the public interest and non-commercial values in a context where monetisation and market value are the key drivers? It was argued that a worst case future scenario would be one where neither top down regulatory structures or industry self-regulation approaches are effective, producing a regulatory vacuum where the law of the jungle prevails.

It was also commented that the new information environment will be the sponsor of several waves of creative destruction with established industries (such as the publishing industry) being replaced by other new industry players (Amazon….etc).  

Is Internet Access a human right; is the Internet a public good?

In discussing the concept of the “public good” or “public goods”, and defining access to the Internet as a human right, concerns were raised that these approaches invite government intervention. It was suggested that government intervention through, for example a system of treaties and regulatory accords, could have significant and unintended consequences for a free and open Internet. A case study was offered of the UN Special Rapporteur on the Internet Frank LaRue who contended that it is better to leverage existing human rights (such as freedom of speech and freedom of association) in relation to Internet usage, as opposed to creating a “new human right to the Internet.” It was also pointed out that in a context where Internet access is swiftly becoming an indispensable economic and social enabler within a modern hyper-connected world – without Internet access it is becomes increasingly challenging to take full advantage of existing human rights (such as freedom of speech, civil and political freedom as well as potentially social and economic freedoms). Libraries have role to play as institutions which support human rights and freedom of access to information in a digital world.

The question was posed – should the Internet and access to the Internet be considered a global public good (like access to water and breathable air) in that the ideal future scenario is one in which no citizen of the world can be prevented from accessing and enjoying the benefits of the world wide web? How can the public interest be protected in the absence of suitable regulation? It was also questioned what mechanism should be used to support public Internet access – constitutional right, legislative requirement or universal service commitment from government? Should this be expanded to include additional components such as freedom of access to unfiltered search results?

It was commented that we are potentially witnessing a fundamental shift towards a bi-polar world where one side believes that the availability of Internet access and resources should be driven by free market forces – while the other continues to see government as the primary agency behind successfully expanding access to the Internet.