Memorandum submitted by Edward Barrow
1. BACKGROUND
This response is submitted in a personal capacity
by Edward Barrow, a copyright consultant specialising in new media.
It represents purely his personal and professional
opinions, not those of any of his clients.
2. NEW BUSINESS
MODELS
The new media, in particular connected, on-line
media, are already having a great impact on the "creative
industries", and indeed on society as a whole; an impact
which is likely to turn out to be as significant as the invention
of the movable-type printing press itself.
The creative industries must adapt to a new
environment having two major characteristics, and two associated
issues:
2.1 Non-industrial reproduction
The reproduction of creative content is no longer
exclusively an industrial process. Anyone with the equipment necessary
to access creative content—a digital computer of some form—has
the ability, unless the ability is disabled by some technology,
to reproduce content. Compare this to the printing press, which
requires substantial investment in plant and typesetting.
2.1.1 Protecting Investment
Copyright developed in the centuries following
Herr Gutenberg's invention in order to protect the investments
made by printers and publishers. But its social and economic significance
is that it underpinned, and continues to underpin, a business
model in which many people each pay a little towards the
cost of creative content.
Preserving this business model is, arguably,
desirable: the alternative is that the first consumer will be
forced to bear the entire cost of production (as distinct from
the costs of reproduction, which continue to fall).
2.2 Interactivity
Connected devices are read-write, which means
that the citizen is no longer a mute consumer but can be an active
participant in the creative process.
2.2.1 Unleashing the creative citizen
One of the most significant features of the
new media is its potential to unleash the creativity of individuals
who have hitherto been denied access by established barriers to
entry. This potential is already being realised in, for example,
the proliferation of "blogs"—which may be this
year's fad, but which nevertheless represent an important change
in the dynamic of public expression.
Technologically, the read-write capabilities
of the new media are the consequence of its ability to reproduce
content freely, and vice versa; controlling one necessarily involves
restricting the other.
3. TRUST—THE
MISSING COMPONENT
Non-industrial reproduction, including photocopying,
home-taping and now file-sharing, has seriously undermined the
copyright-based business model in which many people each pay a
little towards the production costs of creative content. These
costs involve skilled, creative people—authors, editors,
producers, performers and directors—and do not fall in the
same way as reproduction costs fall. The fact that we can buy,
for less than £20, a music CD whose production involved months
of rehearsal by a full orchestra; or for a similar price a book
which took the author half a lifetime to write, is an important
democratic benefit of which we should not lose sight in the rush
to embrace everything free and open.
Yet home-taping and file-sharing have undermined
the creative industries' trust in their customers, to the extent
that they find it necessary to impose digital rights management
"solutions", in some cases by deception. The most egregious
example of this remains the notorious use by SonyBMG of the XCP
content-protection system which installed software without the
user's consent and in so doing introduced dangerous vulnerabilities
to the user's computer system; but it is by no means the only
case.
3.1 DRM and Distrust
DRM is, almost entirely, predicated on the distrust
between the creative industries and their customers. This distrust,
rather than the entirely understandable goal of wishing to protect
the "many people each pay a little" business model,
is the main driver of investment and deployment of DRM and is
its main weakness.
3.2 The Music Industry and its consumers
The music industry is youth-focused and has
to face the fact that its most avid and loyal consumers tend to
have low disposable incomes, yet for a large part of its income
it depends on a demographic described as "£50 man"[21].
Unlawful use of content is not universally bad for the music industry;
indeed, to some extent it depends on the free exchange of unlawfully-copied,
infringing copies whether by file-sharing, home-taping or even,
in some sectors, by pirate radio broadcasting, to promote and
disseminate its artists.
This unlawful use enables younger consumers
with less disposable income to consume more, and more diverse
music than they might otherwise do.
3.2.1 Bogus Arithmetic
The committee should beware of the bogus arithmetic
sometimes used to quantify the industry's losses to unlawful copying.
If those who currently use unlawful means (such as file-sharing
and home-taping) to enjoy their music were forced to pay full
price for the content they now "steal", it is inconceivable
that they would do so, since they do not have the disposable income.
They would just listen to less music.
4. REBUILDING
TRUST
A healthy industry trusts its customers; the
mainstream creative industries, arguably for good reasons, do
not. The level of distrust between the creative industries and
their customers has never been higher, and will only get worse
if the industry proceeds on its present course. The current generation
of digital rights management solutions will not help rebuild trust,
and while the distrust and the tensions remain, the industry cannot
be considered to be in good underlying health, whatever its financial
statements may say.
4.1 Setting the limits to DRM
The wholesale dismissal of DRM—as many
activists on the "left" of the debate advocate—is
as unrealistic as the suggestion that it should be hard-coded
by law into all computing platforms. The existing protections
for DRM set down in Article 6 the EU's Information Society Directive[22],
and implemented by the UK government, have not yet been shown
to be deficient and legislative changes, if any, should be deferred
until the market for such protections has matured. (Cases brought
under the analogous provisions in the US, under the Digital Millennium
Copyright Act, have, however, highlighted the risks to freedom
of expression in such legislation.)
4.1.1 Principles
A set of six principles to which DRM systems
should—in the opinion of this author—adhere is listed
as an appendix.
4.1.2 Trust-Based Digital Rights Management
It is possible to conceive of a system to manage
digital rights based on consumers' trust, rather than on cryptographic
enforcement. Prima facie, such a system might not be able to offer
rightsholders the same level of assurance as the systems based
on strong cryptography, but no system can offer absolute security;
and a trust-based system could provide equivalent or enhanced
levels of both integrity protection and usage recording.
4.2 Collective Licensing[23]
Collective licensing has a long history as a
solution to difficult rights management problems (in particular,
but not limited to, licensing the public performance of musical
works). It is not without its disadvantages, but has not significantly
been developed for the new media and may still have significant
potential. Economies in the administration of collective licensing
as a result of the global nature of the market and by the application
of technology mean that competitive collective licensing—in
which different collecting societies compete to license the same
or similar uses of the same content—may now be practical,
thus dealing with the objection that collective licensing creates
unresponsive monopolies.
The creative industries, however, have so far
preferred to take the DRM route. Collective licensing could address
the same problems but without being based on distrust, therefore
helping the creative industries to rebuild a relationship of trust
with their consumers.
5. ALTERNATIVE
SCENARIOS
5.1 Copyright Breaks Down
If the creative industries cannot maintain a
democratic business model ("many people each paying a little"),
the market for creative content will change dramatically, and
is likely to become polarised. On the one hand will be amateur
producers, who will rely on a day job for their income; while
on the other, professional productions will have to rely on government,
corporate or private patronage and sponsorship.
21 Referring to the average spend per visit to a record
store; £50-man is typically middle-aged. Back
22
Directive 2001/29/EC of the Parliament and the Council of 22
May 2001 on the harmonisation of certain aspects of copyright
and related rights in the Information Society. Back
23
The author is a consultant to the Copyright Licensing Agency
Ltd (CLA), which carries out the collective licensing of print
publications in the UK. This paragraph does not purport to represent
the views of CLA or any of its members. Back
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