Select Committee on Culture, Media and Sport Fifth Report


48. In theory, creators are in a powerful position as the source of the material on which whole industries are based. "Content is king", said a witness from Ingenious Media—"the fuel that powers the media engine". In his view, "it is consumer demand for better access to compelling content, through enhanced technology, which is forcing established media conglomerates to adapt themselves in order to maintain their market shares of consumer spending".[114] He cited Sky's acquisition of rights for 24, a US television show, as an example of a company using "compelling, quality content" to drive new subscriptions.[115] Sports and film broadcast rights have performed much the same function, at a price. The British Screen Advisory Council observed that whereas cable technology might have been the best for supporting TV platforms, it was Sky, based on a satellite platform, which had proved "the real winner" as it had "understood the consumer far better than anyone"[116] and had satisfied the demand for compelling content. Equity told us of the need for broadcasters to secure distinctive and high quality programming in order to maximise a fragmented audience.[117] Mobile phone operators have likewise recognised the importance of music in attracting "a high-spending young demographic" to their networks.[118]

49. In this section, we look briefly at the opportunities for creators to use new media outlets to widen their audience reach and to distribute their products directly to consumers, and at the impact of new media on creators' control over their content.

New outlets

50. The sudden explosion in the number of media platforms provides creators with new outlets and, for those that have rights to sell, new scope to earn revenues. The Design and Artists Copyright Society, for instance, noted the value to creators of visual content of exposure to wider audiences through new media, which could lead to future commissions.[119] Hutchison 3G noted that some artists had released music videos as content downloadable to 3G mobile phones prior to general release, or had broadcast a live 3G link to a concert.[120] Newspaper publishers have identified opportunities to expand their services, for instance by offering parallel online newspapers and mobile phone messaging services.[121] The Bridgeman Art Library told us that digital convergence had enabled it to enhance sales of reproductions via the web and to exploit new markets, such as screen savers for mobile telephones and computers.[122]

51. The profusion of television channels on satellite and cable platforms would appear to offer plentiful new opportunities for producers of television programming. The BBC saw the growth in the number of television channels as having been "very good for audiences and very good for creative industry".[123] As Channel 4 observed, the capacity of new digital television platforms far exceeds that of analogue platforms:[124] the number of channels has increased by a factor of ten or more. Much will depend, however, on how much new material is commissioned by owners of new outlets.

52. Of potentially more significance is the new scope for performers and creators—particularly in the music industry—to gain direct access to consumers through broadband and the Internet. Almost anyone can now create and distribute content worldwide from their own homes. Channel 4 spoke of the "increased democratisation of digital production and distribution";[125] British Music Rights described personal computers as being "latent composition and recording studios";[126] and the Music Managers' Forum described the opportunities for creators and performers to "do it themselves", bypassing record producers and publishers and selling recordings to the consumer direct from a website.[127] One witness described these opportunities as "fantastic"[128], and another said that the DIY band phenomenon was "extremely exciting" and "a fantastic leveller".[129] The Association of Independent Music, a trade body representing independent record labels, told us that several of its members were record labels operating entirely online, producing no manufactured product at all.[130] Google spelt out the equation in economic terms, observing that if online distribution was cheaper, and if that saving could be reflected in the price charged to buyers, more people would be likely to buy the product.[131]

53. Direct distribution of content and the successful exploitation of rights both require particular skills, however. The Minister for Creative Industries and Tourism told us of small enterprises which had been generated through creative talent but in which the individuals involved had neither received formal business education nor acquired the necessary skills; yet they found themselves running £100,000 or £500,000 turnover businesses.[132] Ingenious Media, a major investor in the sector, told us that businesses would need to professionalise and transform themselves from producers into rights owners, exploiting all of the new revenue channels that are developing; and to do this, they would need to develop an interface with consumers and acquire financial and business skills.[133] A similar point was made by Google, who identified two new challenges for content creators: understanding the monetisation models available to them, and being able to adapt.[134]

54. While the cost of producing a music track at home and uploading it to the Internet may not be prohibitive, the cost of creating brand awareness and marketing may still be. The Music Managers Forum warned that there were limitations on what could be achieved without the "serious marketing investment" provided by record companies, which could take artists "right through to another level". Some, it noted, had succeeded on their own, but they were the exception.[135] The Forum also pointed out that, whatever advances were made in direct distribution and marketing, the DIY model still depended upon collection societies to collect royalties.[136]

Creators' control over their content

55. The Design and Artists Copyright Society remarked that it was becoming increasingly difficult in the new media environment to ensure that artists received the credit which they sought.[137] The Creators' Rights Alliance warned that the ease with which digital files could be copied and adapted made it easier for unscrupulous publishers to re-use work while copyright remained with the creator and that, "for a myriad of reasons", work initially commissioned for print appeared on the Internet without the creator's permission. The Alliance listed a number of organisations which insisted on assignment of copyright when commissioning work from freelance creators, including rights for exploitation in electronic formats. It argued that the bargaining power of freelance creators was weak,[138] as did DACS, which referred to "huge pressure" faced by freelance creators "to agree to a range of uses for their work wider than they may have intended or wished for".[139] There are parallels for independent producers of television programming, who may fear that refusal to agree to broadcasters' proposals on rights will jeopardise the possibility of future commissions. We deal with this issue at paragraphs 102-118.

56. Creators may decide that a commercial approach, involving monetisation of their product, may not in fact best suit their needs. For some, recognition is more important than remuneration; some see it as a duty to society to make creative content freely available; and others judge that making some of their product available for free is in fact a strong marketing strategy which, by encouraging take-up, builds a customer base and will allow revenue streams to develop as a result. Google make available facilities like Google Earth and Google News free in the belief that it helps their rank and enhances their core business.[140] The Association of Independent Music, representing independent record labels, noted that a loss of some measure of copyright control was a factor in reaching new and enthusiastic markets around the world,[141] and one witness suggested that even unlawful use of content had some benefit in promoting and disseminating artists in the music industry.[142]

57. One approach is to adopt a form of licence—such as a Creative Commons licence—specifically authorising (and thereby encouraging) copying and re-use of a creator's work. Broadly speaking, there are six main forms of Creative Commons licence, allowing redistribution of a work and varying degrees of freedom to re-use or change that material for either commercial or non-commercial use, with a credit to the original creator.[143] The intention behind the licences is to provide a tool for authors, educators and artists to "mark their creative work with the freedoms they want it to carry".[144] We were told in May 2006 that more than 100,000 websites were using Creative Commons licences, including Flickr (a photo-sharing website) and a number of small record labels.[145]

58. A form of Creative Commons licence was used by the BBC's pilot of the Creative Archive, which enabled users to download "clips" of content broadcast by the BBC and use them for their own creative purposes, as long as the source was attributed and there was no commercial gain. Clips from Planet Earth had been made available in this way; as had material from BBC Radio One. Channel 4 pointed out that it had pioneered the use of Creative Commons in the UK and that the creative re-use of existing content had been a core component of several education projects which it had promoted.[146]

59. Not all witnesses were enthusiastic about the Creative Commons model. The Creators' Rights Alliance warned that the licences "would not work in certain types of industries", arguing that they made it impossible ever to monetise the products covered; and it dismissed the concept as being a product of academics who "do not understand the rest of the world".[147] The BPI took a more measured view, reserving judgment on whether such licences would offer commercial benefits, believing that this would be determined by the market. It did, however, warn that some creators, especially those at the beginning of their careers, might sign up to Creative Commons licences without being aware that they applied in perpetuity (thereby permanently limiting the scope for commercial exploitation).[148]

60. In our view, some of the argument about the merits of Creative Commons licences is misdirected. The licences represent an attempt not to change copyright law but to work within it.[149] The BPI acknowledged this, saying that Creative Commons licences were not an alternative to copyright but "a series of principles applied to existing copyright law".[150] The British Screen Advisory Council told us that Creative Commons licences were now accepted by industry as a valid alternative and that they could sit alongside conventional, traditional systems.[151] Channel 4 urged large media companies to "overcome their innate conservatism" and contribute more openly to the debate on issues such as Creative Commons.[152] We believe that Creative Commons licences are a valid option for creators who make a conscious and informed decision to make their work available for re-use. We accept that they can in fact be a useful marketing tool, as long as licensees understand the limitations on future commercial exploitation. Creative Commons licences should not, however, be regarded as the norm; nor should more radical rights-free regimes. Creators are entitled to demand payment for their product and the success of the creative industries depends on their ability to do so.

114   Ingenious Media Ev 225 Back

115   Q 499 Back

116   Q2 Back

117   Ev 367 Back

118   British Music Rights Ev 32 Back

119   DACS Ev 53 Back

120   Ev 84 Back

121   Ev 110 Back

122   Ev 335 Back

123   Q 304 Back

124   Ev 164 Back

125   Ev 164 Back

126   Ev 32 Back

127   Q 74. The Arctic Monkeys are an obvious example. Google cited others: see Q 563 Back

128   Mr Stopps Q 74 Back

129   Ms Pike Q 76 Back

130   Ev 323 Back

131   Q 563 Back

132   Q 630 Back

133   Ev 225 and 230 Back

134   Q 521 Back

135   Q 74. The Arctic Monkeys are the most obvious example, although the BPI told us that the Arctic Monkeys had used the Internet not so much to bypass record companies as to get a better deal from them: see Q 132 Back

136   Q 74 Back

137   Q 96  Back

138   Ev 50-51 Back

139   Ev 53 and Q 96 Back

140   Q 549 Back

141   Ev 324 Back

142   Mr Barrow Ev 331 Back

143   See Back

144 Back

145   QQ 68 and 83 Back

146   Ev 169 Back

147   Q 98 Back

148   Ev 73 Back

149   See Mr Ahlert Q 68 Back

150   Ev 73 Back

151   Q1 Back

152   Ev 169 Back

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Prepared 16 May 2007