Category: regulation

The UK Government has announced another review into IP under Professor Ian Hargreaves; does it or does it not, on balance, generate the optimal amount of GDP growth and jobs?

The UK is, relatively, a major creative power, being a net exporter of music, and not doing too badly in areas like computer games, advertising, media production, and a lot of the ancillary services that support the creative industries. The EU has some difficulties, partly due to language issues, but also some deep rooted cultural bias (there’s not much of an export market for Schlager music), but has many initiatives in place to help and encourage the creative industries and the knowledge economy.

All this to my mind is a strong argument for ‘no change to copyright’, if it were not for the systematic distortion of wholesale markets by rights holders and the debilitating knock on effect on consumer services, innovation, and some minor issues such as privacy and freedom of expression.

The framing here is very important, and seems to me to be well understood by the Government in the way that they have set up the Hargreaves review. It is an open question in my mind as to whether a tweak to copyright law is the right or the best way to deal with problems in the wholesale rights licensing market, but the EU must be looking at the ‘safe harbour’ provisions in the DMCA and wondering whether YouTube, for instance, might have happened in Europe if the EU had got there first.

Simultaneously of course the licensing administration infrastructure is being overhauled, with an EU ‘nudge’ for a single EU music (works, not recordings) rights database now being upscaled to a global pan-industry WIPO project – that was the big news from the Midem music industry conference in Cannes, 2011. This is I suppose what’s known as a technical fix – change the roads and the cars change too.

My own view has been that stronger enforcement of fairness and openness in wholesale copyright markets would make a lot of the problems copyright owners are currently trying to externalise go away; and, that some good would be done by strengthening the rights of creators and performers so that they can make better contracts with producers and distributors. We need incentives for a middle class of creators more than we need them for superstars. I am sceptical about the potential for either technical or legal fixes to produce a balanced benefit rather than simply shifting the harm.

Just reading through the documents from WIPO’s December meeting of the Advisory Committee on Enforcement, and in particular looking at price comparisons between the retail versions and the pirate versions of CDs and DVDs.

One thing stood out to me, that these products are very highly valued by people, no matter how they manage to acquire them. The retail markets might be relatively small, but the prices when you look at purchasing power parity with the US are stratospheric. Presumably fear of parallel importing is one restraint on more accessible pricing strategies. Another might simply be cultural bias, in that entertainment executives hang out with an international elite rather than the local street.

The other thought that occurred, was that online piracy looks a far greater threat to the disc piracy business than it does to either local or international entertainment production and distribution companies. If people stop buying from the rug on the floor that’s an existential threat to the vendor, not just an irritation. Nor do those vendors have the option of moving their own business online.

Of course if the business all moves online anyway then those at the end of the disc piracy supply chain are going to be out of work no matter what. But the work WIPO is doing here is a good reminder that the world is much more complicated than we might like it to be. And that, in such a dynamic system as the global entertainment business, displacement happens in all sorts of interesting ways. Perhaps we should be encouraging torrent trackers for the effect they might have on the kind of pirates who have disc pressing plants, and guns to protect them with.