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Breaking the boarders on digital content distribution

Chris Andrews

A single European market without borders for creative online content could allow retail revenues of the creative content sector to quadruple if clear and consumer friendly measures are taken by industry and public authorities. This is the conclusion of the European Commission, which last week published its reflection paper on the challenges of creating that single market for books, music, films and video games.

The Commission has reported that the European cultural and creative sector, which comprises content including books, newspapers and magazines, musical works and sound recordings, films, video on demand and video games, generates a turnover of more than €650bn annually. This equates to 2.6% of the EU's GDP, and accounts for more than 3% of the EU work force.

In light of these figures, the paper highlights the importance of copyright as a basis for creativity, and says that specific consumer and competition-friendly rules were needed urgently. Regulatory and territorial obstacles still stand in the way of digital distribution of cultural products and services and can impede creativity and innovation, the Commission said. Illegal downloads on a large scale can also jeopardize the development of an economically viable single market for digital content.

The paper sets out three areas where legislative action is needed: making sure creativity is rewarded for creators and rights-holders; giving consumers a clearly-priced, legal means of easily accessing a wide range of content through digital networks (and hence, in theory, reducing illegal file sharing); and promoting a level playing field for new business models and innovative solutions for the distribution of creative content across the EU.

"Copyright and the Internet are two powerful engines for driving creativity and innovation for the benefit of all Europeans,” said Viviane Reding, the EU commissioner for information society and media. “They should be combined in the new project of a competitive and prosperous Digital Single Market. Such a Digital Single Market can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers."

Reding said it would be her key priority to create a consumer friendly legal framework for making digital content available across borders in the EU, while ensuring robust protection of copyright and fair remuneration for content creators.

"The protection of intellectual and industrial property – copyrights, patents, trademarks or designs – is at the heart of a knowledge-based economy and central to improving Europe's competitiveness,” added the EU’s commissioner for the internal market Charlie McCreevy. “This is a priority for reform: grounded on sound economics, not just legal concepts, and concentrating on solutions that foster innovation and investment in real life."

The European Commission is clearly taking the idea of improved distribution and consumer choice seriously. Last week also saw the Commission running its second Online Roundtable on Music, comprising of Amazon, BEUC, EMI, iTunes, Nokia, PRS for Music, SACEM, STIM and Universal. This was an attempt to work out specifically how online music opportunities can be improved for European consumers, and ties in with the more general aims of the reflexion paper.

The roundtable participants have committed to pursuing new EU licensing platforms comprising the repertoires of several collecting societies, which should consolidate the widest possible repertoire in their catalogues; this would be based on voluntary cooperation among rights-owners. They also agreed that collective rights managers should adhere to certain objective, transparent and non-discriminatory criteria to allow other entities to deliver multi-territorial licences, and they set up a working group to create a common framework for the identification and exchange of rights ownership information.

European Commissioner for Competition Neelie Kroes, who chaired the roundtable, said: “European consumers want and deserve better online music offerings. Today's agreement by the Roundtable on core principles represents real progress in this direction. It is the first time that players from various parts of the market have agreed on a common roadmap. I also welcome the concrete steps and commitments that have been made and which should improve the availability of online music for consumers."

Again this fits in with the idea of a broader open market, and this idea of improved availability, as well as better distribution channels, will hopefully go some way towards cutting down on illegally obtaining content.

Or we can do it the Mandelson way. Last week FBTV reported that UK culture secretary Ben Bradshaw had told the House of Commons culture, media and sport committee that the controversial measures to crack down on illegal file-sharers were to be greatly watered down, and rights holders would have to obtain a court order before punishing persistent offenders by reducing or cutting off their Internet connections.

However, Lord Mandelson, the UK’s business secretary, said this week that the days of ‘consequence-free’ illegal file-sharing were over as he unveiled the government's plan for cracking down on online piracy. It seems that there may be something of a miscommunication between government departments.

Speaking at the government's digital creative industries conference, c&binet, Mandelson said that a ‘proportionate measure’ was to be put before Parliament, giving people ‘awareness and opportunity’ to stop breaking rules; this would appear to be a three strikes policy.

“It will be clear to them that they have been detected, that they are breaking the law and that they risk prosecution,” he said. “If necessary we have also made it clear that we will go further and make technical measures available, including account suspension. In this case, there will be a proper route of appeal. But it must become clear that the days of consequence-free widespread online infringement are over.”

Mandelson said that technical measures would be a last resort, but that the threat for persistent illegal file-sharers had to be real, or there would be no real deterrent for them to stop doing it.

“Neither do we want Internet Service Providers to be unfairly burdened. ISPs and rights holders will share the costs, on the basis of a flat fee that will allow both sides to budget and to plan,” he said.

Mandelson also admitted, in line with the European Commission, that the best long term solution to online piracy would come from the market, in which “those who love music and film, for example, can find a deal that makes breaking the law an unnecessary risk”.

“I know how complicated building these networks and services can be, but in that respect, the industry needs to move faster in a much more agile, commercial and market response orientated way to help itself. There are some good, cheap, legal services operating. If I can help by convening discussions or knocking heads together then I want to know.”

The European Commissions reflection paper can be found here http://ec.europa.eu/avpolicy/other_actions/content_online/index_en.htm and it is looking for feedback from rights-holders, consumers and commercial users by 5 January 2010.

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