Memorandum submitted by South East Media
Network
SOUTH EAST
MEDIA NETWORK
RESPONSE: INITIAL
COMMENTS
Background
The South East Media Network is a business-led
consortium providing strategic leadership for the region's digital
content sector, it exists to enable the South East of England's
digital content businesses increase their share of the global
market.
SEMN provides two way communications between
businesses, policy makers and support organisations. It informs
local, regional and national strategies and drives improvement
in business performance. SEMN engages with organisations and key
stake holders from across the supply chain to ensure that support
for digital content businesses is integrated and easy to access.
SEMN is backed by the South East of England's Development Agency.
Introduction
SEMN welcomes the opportunity to respond to
the committee's inquiry into new media and the creative industries.
This response is drawn from the results of an SEMN conference
held to discuss the issues of convergence and digital content
industries along with consultation with the SEMN council (comprising
regional networks and national trade associations in contact with
over 5,000 regional companies), and specific input from the board
of SEMN, all of whom represent this sector in the South East of
England.
1. The impact upon creative industries of
recent and future developments in digital convergence and media
technology
From our own consultation, the recent PricewaterhouseCooper
LLP report "The Rise of Lifestyle Media" and the work
that Intellect have been doing on convergence it is clear that
the time of change has arrived.
"Broadband access and the Internet Protocol
(IP) are the technology enablers that have made a new breed of
consumer possible. They will be the foundation through which the
consumers organise their productive/work, leisure, and social
time—and they are the solvent that is penetrating the walls
previously separating the video content, communications and advertising
industries. The rules are radically changing for all value chain
participants now that video content is no longer bound to a specific
access network or device."65[65]
This is dramatically expanding the range of
potential customers for creative AV content. For example, traditional
publishers moving their products online are adding audio, video
and even games to their traditional print content. But also there
is a growing wave of new, pure online businesses, often with new
business models, who are either potential customers for creative
AV content or are a potential new channel to market for creative
content providers. For some creative content producers, digital
convergence offers an opportunity to bypass the traditional distribution
infrastructure (film studios, record labels, TV/Radio broadcasters
etc) and sell access to their content directly to consumers—we're
already seeing this with music.
Issues to be explored:
Citizen Producer/Distributor
— Growth of consumer created content
on an international platform, how will that affect legislation?
Will there be a need for a special category of consumer-publisher?
Freedom of speech or defamation?
— Growth of virtual communities.
Content Producers
— Cheaper means of production.
— Re-purposing content for different
platforms and formats.
— Content creators lagging behind technology
developments.
— The development of a significantly
broader & integrated "brand" offer—the movie,
the game, the merchandise (physical & digital). The song,
the Album, the videos, the ringtone, the syncro, the webcast live
performance.
— New revenue models—share at
retail, from associated advertising, customer acquisition, click
through, reduction in up front payments, more based on results.
Content Distributors
— Significant increases to speed to
market.
— Multiple points of access.
— Instant global distribution.
— How to find the consumer? Perhaps
there will be too much content available so the issue will be—how
to make "noise" in a deafening market.
— Growth of platform specialists.
— Changes in the gatekeepers from film
distributors, major studios and broadcasters to some global multimedia
controllers such as Google, Murdoch, Microsoft, AOL, Verizon etc.
2. The effects upon the various creative industries
of unauthorised reproduction and dissemination of creative content,
particularly using new technology; and what steps can or should
be taken—using new technology, statutory protection or other
means—to protect creators
The management of intellectual property, allowing
proper access and supporting fair usage whilst providing appropriate
protection for rights holders.
There is a balance to find between the need
to protect and encourage content creators and the need to nurture
new, online business models that are sometimes stifled by the
existing IP protection infrastructure (copyright/patent). Rather
than simply tightening up and enforcing creators rights, part
of the solution must be to promote technology that encourages
fair use of content, by making it easier and cheaper to stay inside
the law—for example, micropayments technology that enables
content creators to make money via a large number of small payments
from individual consumers (similar to the iTunes model for buying
individual music tracks).
Piracy can be seen as Peer-to-Peer marketing
through "tastemakers". Genuine loss of legitimate sales
due to unauthorized distribution is, often, the result of incorrect
pricing, difficulty in accessing the content legitimately, easily
and through the consumers choice of medium, especially if the
consumer can see no reason for the unavailability of legitimate
product (why should we wait for the DVD of a film that is at theatre?).
However clear, unambiguous statutory protection
should be in place as a tool for the rights owner to make use
of as required.
Greatest steps must be made in restricting the
activity of the "industrial/professional" copiers &
distributors.
Effort must be taken to extend the principles
of Copyright to countries where they are not currently recognized.
In a world full of unauthorized copies help
should be given to content creators, rights owners and content
distributors to devise new revenue models. Consider: rental; free
to view/pay to own; subsidy from subscription that is a levy from
ISP subscription; linear revenue models as opposed to "silo"
revenue centers where the total revenue is shared between all
the contributors.
3. The extent to which a regulatory environment
should be applied to creative content accessed using non-traditional
media platforms
The consensus of opinion is that right now this
market is experiencing an accelerating rate of change and should
be free from regulatory constraints to be able to establish a
viable framework. However if/when this fails, regulation should
be considered, looking out for cartel trading and restrictive
or uncompetitive markets, for example taking into consideration
the power of the new multimedia players to control access to content.
There is a general concern about the European
Commission's "Television Without Frontiers" directive.
If broadcast style regulations are imposed on all digital content
then Europe products will be disadvantaged by comparison with
other freer markets, in particular with North American content.
One issue here is the impact of existing laws
such as those covering defamation on new online services based
on user-generated content, made possible by the democratising
nature of the Internet. If, as at present, the providers of these
services are treated as conventional publishers, completely responsible
for the content they carry, then the legal risk will make many
of these services impractical. This could put the UK at a disadvantage
to the US, where defamation laws are typically less restrictive.
4. Where the balance should lie between the
rights of creators and the expectations of consumers in the context
of the BBC's Creative Archive and other developments
When the BBC originally commissioned large parts
of its content there was no understanding of these new potential
means of exploiting content, so no sense of the value of archive.
At the time they paid a fair price for transmission and received
value for money when the content was transmitted, maybe including
a few repeats. They did not pay significantly more or less than
other broadcasters. They have not been charged with ensuring a
thriving independent sector so have assumed that any further value
extracted should be returned to the public or to the BBC. This
is very different to the French broadcasters who take the minimum
use of the material enabling the creatives to benefit from further
revenues so stimulating a sustainable creative sector without
ongoing direct subsidy.
There should be a "use it or lose it"
attitude towards any archive material commissioned by a publicly
funded body such as the BBC. That is if the BBC is not prepared
to bring archive product back to the market, then the creator
should have some right to do it themselves. This should take place
before it is all offered for free to the consumer.
Starting from now the contracts negotiated with
creators that include clauses for free public access where required,
and the creatives should be paid appropriately. We should not
raise false expectations. Maybe pay the creators additional revenue
depending on use rather than an initial buy-out fee dependant
on the cost of production.
16 November 2005
65 65 PricewaterhouseCooper LLP "The Rise of Lifestyle
Media". Back
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