E-News No.47

E-News No.47

Global Challenges of the Digital Market: Overview of the WIPO International Conference on the Global Digital Content Market (April 20-22, 2016, Geneva)

by Diana Ivanova, Member of the Standing Committee on Copyright

On April 20–21, 2016 in Geneva in WIPO headquarters the International Conference on the Global Digital Content Market was held. Delegates including business, government and creative-industry leaders, specialists in IP and other stakeholders gathered together to explore both sides of the impact of the digital transformation on the creative world; the huge benefits and new possibilities on the one hand, and the drastic challenges and hazards on the other hand.

The purpose of the conference was to enhance awareness of what is at stake in the evolution from territorial analogue IP markets to global transboundary digital IP marketplaces. AIPPI attendance was rather relevant because all the topics in question were from the field of copyright.

WIPO Director General Francis Gurry opened the conference. The main idea of his speech was about copyright, which plays the key role in the financing of culture. It is well known that copyright is the central mechanism in the creation of the market for creative works. As such, it is also the principal means for the financing of the production of creative works, enabling the creator to control the commercial exploitation of her works, thereby returning economic value to the creator and ensuring livelihood for the individual creator, and economic sustainability for the creative industries.

Famed writer, composer and tech futurist Jaron Lanier gave the keynote address on the first day. In his opinion, the digital revolution brings as good as bad things. Culture has become digitally obsessed. Jaron Lanier is upset because the online universe has become very segmented and mean-spirited. It is followed by an increasingly isolationist quality. A person seems to be “in a mirror chamber with a narrower and narrower experience of the world”.

Mr Lanier would like to see more systems where ordinary people can be paid when they contribute value to digital networks. To his mind, economically, the digital revolution in all spheres including copyright has not been such a good thing. Using the instance of professional translators, he has shown their losses from the machine translation. “Automated translations are mash-ups of real-life translations. … The problem is we are not paying the people whose data we are taking to make these translations possible. If we found the way to pay people for their actual valuable contributions to these big computer resources, we could avoid the employment crisis that we otherwise will create.”

The next question is the consequences of mash-up culture. Many persons contribute to the creation of content but don’t receive benefit. It serves giant corporations and becomes part of the incredible concentration of wealth. IP is a key thread in constructing a humane future with dignity while machines get better. An employment crisis of mass proportions created by machine improvement could be overcome by attracting these persons to IP industry. People should be paid for valuable information and contributions. IP needs to become more sophisticated and granular, everybody should benefit.

In Louis Cobos’s (composer, orchestra conductor) opinion, in the music industry there is a problem for an author in controlling his work’s fate, there is no feedback at all. Consequently, he/she can’t influence remuneration distribution. Authors don’t agree with the fact that other subjects earn money, not the author who gets, for example, only 46 cents from each dollar when the work is distributed by streaming. Global licensing could be a simple and universal means.

Chairman and CEO of International of Sony Music Entertainment Edgar Berger said that distribution differs in the music industry and film industry. It requires a different approach. In addition, some legislative changes are necessary. In building the Single Digital Market the European Commission intends to hold public consultations and draft amendments to the basic copyright EU Directives.

Christopher Tin, a two-time Grammy-winning composer of concert, film and video game music, said that performers have the possibility to compensate their “loss” by tours and other public shows. Composers haven’t. For instance, the income of a composer in the classical genre depends on downloads and sales of music on discs (in physical form).

After this, the participants discussed the question of streaming on Spotify as an example. The streaming model seems to have become mainstream but there is doubt that this is the best model for creators. For instance, YouTube is used by the youth like free streaming. Canadian singer and songwriter Tammy Weis proposed to build a single system of content distribution.

The founder of the Mi.Mu glove system (Grammy for engineering in 2010) Imogen Heap began to experiment with blockchain technology and smart contracts in order to improve the music industry and secure fair deal for artists.

The Mi.Mu glove system represents an amazing combination of invention, software and art. With a simple pinch action, a sound can be created, captured and recorded remotely by computer software. As such, the convergence of different media – technology, music, art, and filmmaking – has created a source of inspiration for musicians and other artists to draw on. We should find a way, Imogen Heap said, for artists to get feedback about how their music is being used, where, by whom and for what purpose, along with fair remuneration. When an artist is paid the equivalent of one download for a thousand streams, it’s unfair and it’s not possible to earn a living. Creators aren’t fairly compensated for the use of their work.

Mycelia, Imogen Heap’s project, is a trusted body that brings together all the stakeholders to shape the technical, ethical and commercial standards of music industry. A key part of the project is building a database that would be a repository for all the information relating to recorded works (“spore”). It offers artists, online services and fans a verified online source of information about any recorded work and its terms of use. All services are obliged to feedback data to spores.

Another standard of Mycelia is using smart contracts that outline the legal arrangements surrounding the creation and use of a work in multiple contexts. Artists would be notified and the relevant royalties paid directly to all those involved in its creation each time the work was used. Block chain technology helps to make data records tamper-proof even across a decentralized network like Mycelia.

In the panel “Film – sustaining the film industry in the digital environment” the panellists from India (Bobby Bedi), Nigeria (Oreka Godis, Uloma K. Onuma), Russia (Nikita Mikhalkov), Chile (Esperanza Silva), China (Yang Xianghua) discussed transformation in global film industry from traditional distribution channels – such as cinema – to new digital delivery platforms. This transformation is accompanied by a shift in the value chain as digitalization lowers costs, disrupts traditional business strategies and introduces new opportunities for smaller players.

The model of distribution of audiovisual works has some advantages. In China in 2016 use of Internet for low-budget movies’ distribution reduced the price threshold allowing the distribution of 200 new films per month. Many new and young creators get the possibility not only to make their first film but also to enter it into civil turnover.

Similar to the previous panelists they debated on the topic of online platforms like Netflix. The role and significance of regional platforms was recognized. Regional online platforms take into account and configure the context, which is in demand in this region. Also, global licensing was suggested for the legalization of use of audiovisual works by Internet users.

Panel “Broadcasting – new models for connection with the audience” was devoted mainly to Internet mass media. Journalists from different countries (R. Kapur, D. Khatib, N. Nielsen, S. Chopra) shared their experiences in applying modern information and communication technologies in modern journalism. To our regret, there was not a particular referral to copyright.

On 22 April, 2016 there were three panels. The most interesting from the viewpoint of copyright were “Publishing – the codex in the digital age” and “Digital architecture – the soft infrastructure of the global market”.

The panellists recognized that major changes have taken place in how the book in new form reaches the consumer. Digital form of books is more costly to make it, but copies in digital form are cheaper than copies of printed editions.

Authors get more opportunities in promoting their books by themselves. Nevertheless, a publisher has some advantages. He is a professional market player, has the reputation and all necessary knowledge about publishing. Publishing differs very much whether it’s educational, professional or imaginative literature. The first two have more copyright problems than the latter. The publisher is able to assume all risks. One of his tasks is to gather process and store the information.

Nowadays, social networks have a particular role because they have become one of the ways to distribute works in digital form. There are online platforms that suggest educational programs. It raises the problem of the form of handbooks. All agreed that the preferable education would combine digital and printed educational materials. However, there is a problem of financial support especially when it is state educational institution, archive or library.

Some suggestions on fighting piracy measures were made. Firstly, the level of legal education in IP should be increased. Secondly, economic matters should be considered: book price in developing countries has to be lower than in developed countries. Thirdly, we are to enhance efficiency of IP rights protection.

Copyright Hub Foundation, which was presented by its Chairman R. Hooper and CEO D. Young, is now developing open-source technology that allows copyright content on the Internet to be licensed easily for reuse in new copyright works (secondary or permissions licensing). The main purpose is to make copyright licensing easier with very low transaction costs, thus addressing one of the major problems with copyright in digital age. It also acts as a discussion forum to tackle licensing issues and promotes copyright education.

The back-story of Copyright Hub includes a diagnostic report of R. Hooper and Dr. Ros Lynch for the British Government, which identified a wide range of problems in the analogue and digital space. Two main issues stood out: poor data and poor treatment of licensees. Creative industries use poor data to track works and their creators or rights owners. In the analogue world, this might not pose a problem because there are small numbers of high-value transactions with high transaction costs. However, the digital world is characterized by the high volume of lower-value transactions. A third of the users, who wish to reuse copyright content, face difficulties in finding the rights owner, whereby they either do not reuse the work or they pirate it.

For example, in 2011 English schools had to deal with as many as 12 different copyright licensing agencies in order to run a school. It means that in the analogue world licensors of rights were not treating licensees in a customer-friendly way. The administrative and transaction costs of finding and getting permission to use a work in a publication were often greater than the return from so doing.

The principles of working of Copyright Hub as a technology platform are the following. A copyright work on the Internet is given a unique identifier. If someone wishes to reuse that work, with a simple right-click, he connects to the computer of the rights owner, who also has a unique ”party” identifier. After that, the rights owner can offer machine-to-machine standard licenses for reuse requiring payment or acknowledgement. If the reuser accepts the license terms and, where relevant, pays the fee, the newly created work itself acquires a license identifier, which indicates that it has been created legally with the appropriate permissions. Copyright Hub works also as a forum and copyright education (learning by doing).

During the last panel “Opportunities and challenges – markets, policy and diplomacy” results of the conference were summed up.

Conclusions

Mostly issues are similar in different copyright spheres in the digital age. New ways of works’ distribution are followed by the same problems in particular in licensing, remuneration to authors, payment to other rights holders.