Groups and committees

The Convergence Conversation

Groups & Committees

The new rights arena

July’s Convergence Conversation looked at the knotty subject of new media rights, a topic that divides views as much as it enrages passions. The meeting was true to form and extreme opinions were expressed: from pleas to foster respect for the work that artists have created (the word ‘content’ being considered too bland and inappropriate) to the view that the arrival of the digital age signals the endgame for copyright, which has been rendered unenforceable.

The music industry has been at the forefront of both the threats and the opportunities of convergence, small file sizes having left them exposed at the front of the queue when the internet tidal wave hit the content industries. The wave has forced transformation in the industry, which has now worked out how to make money from a potential crisis. Six to seven percent of revenues now come from digital sales and that percentage is expected to rise to 25-30% in the next three to four years. Yet, despite this progress, copyright owners remain hugely frustrated by the existence of businesses that make money by exploiting other people’s content. The important test case of MGM vs Grokster, where the US Supreme Court ruled that peer to peer file sharing networks are illegal, gave the music industry a vital tool with which to fight Grokster, KaZaa, Limewire and the like, but the essential file sharing and piracy challenge remains. As usual the BBC causes controversy here, and in some conversationalists’ views they are the greatest perpetrators giving content away for free.

With richer media and larger file sizes, the audiovisual sector is arguably few years behind their music colleagues, and this is reflected by the fact that in rights negotiations, broadcast rights are still the big deal. However, as broadcasters, telcos, producers and others fall over each other in the land grab for new television platforms such as IPTV and mobile TV, corresponding rights deals are taking place. Again, some viewed that the unique way in which the BBC is funded caused distortion in the rights market place as new media rights negotiations between independent producers (PACT) and the traditional broadcasters took place this year. The resolution of these deals was not viewed to have hit the rights debate on the head, however, and confusion continues to reign, arguably because no-one understands the true value of new media content or has any certainty about the future success of new platforms.

Understanding the inherent value of IP has a direct impact on the approach taken in defending it. As one conversationalist pointed out, ‘you need to understand the value of your property before you can work out whether you afford to police it.’ But while everyone agreed that adequate laws exist to provide the legal basis for defending IPRs, there were varying views about how legal content could eventually triumph over illegal file-sharing in practice.

DRM is, of course, a highly divisive subject, one conversationalist viewing it as a useful and simple tool which keeps things honest for everyone (‘it’s about getting what you pay for and paying for what you get’), although it is sometimes seen as a mechanism to lock up content that wants to be free. It has, though, enabled businesses to make money from distribution of digital files in the face of competition from pirates – iTunes, with its restrictions on the devices that files will play on and the number of times that files can be copied, being the most successful example. A few days after the Conversation, however, the DRM approach was challenged by established media players Sony BMG and Yahoo, who have a released Jessica Simpson’s ‘A Public Affair’ without any rights protection, saying that ‘DRM doesn't add any value for the artist, label or consumer’, who does not want the content they have paid for to be tied to a particular technology. Sony and Yahoo also used the argument that DRM is too expensive a policeman – ‘"DRM has a cost. It's very expensive for companies like Yahoo to implement’. However, in removing the protection, they have also increased the price of the file – up to $1.99 instead of the usual 99 cents. Whether consumers will pay for the right to own the file on all platforms remains to be seen but the approach is interestingly different to another suggested at the Conversation.

It was proposed that the only way to combat pirates is to compete with them on price. Enforcing copyright is either destined to ruin the experience of accessing the content itself or deemed too expensive or politically incorrect to pursue (taking teenagers to court, for example). The only way to fight piracy, therefore, is to make it cheaper to buy a legal copy than an illegal copy. As there are costs inherent to large scale illegal copyright, such as storage, a legal file that costs, say, 10p instead of 79p could compete with the illegal version, hypothetically.

Whatever the solution the meeting made it clear that although digital rights are sometimes viewed as a ‘black art’, practised only by specialists, their role is crucial in making the most of the convergence opportunity. With broadband and voice prices in a race to the bottom, and traditional advertising revenues falling away as audiences fragment, it is imperative for all the players in newly emerging converged value chain that we determine how to create, protect and extract value from content as it makes its way down the chain to the consumer.

For further information contact:
Vicky Read
T 020 7331 2174
E This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Group links

SME Resource Centre

The Convergence Conversation

Groups & Committees