Transcript Copyright in the digital age

Copyright in the digital age
Mark Smith
8 July 2010
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Overview
• Challenges facing content owners;
• Brief overview of the Digital Economy Act;
• Developments in other jurisdictions;
• How content owners are adapting to the digital
environment;
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Challenges facing content owners
• Creative works are now easier to produce and
reproduce than they have ever been;
• Consequently consumers are less willing to pay
the prices that are charged for these works;
• Many consumers have turned to piracy;
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Challenges facing content owners
• UK creative industries generate 6%-7% of GDP;
• According to the Digital Britain report:
– BPI claim peer-to-peer file sharing costs the UK
music industry £180m per annum;
– IPSOS estimated a loss in the UK for the TV and
film industry of £152m in 2007;
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Challenges facing content owners
• Content owners face real challenges monetising
their content;
• Need to take effective action to reduce piracy;
• Pressure to develop new business models;
• Should aim to offer consumers something they
value at prices they are willing to pay;
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Digital Economy Act 2010
• Controversial piece of legislation;
• Passed in “wash-up” in April 2010;
• Implemented many aspects of Digital Britain
report;
• Response to the problem of piracy via the internet;
• Various obstacles to implementation of measures;
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Digital Economy Act 2010
• Content owners can issue copyright infringement
reports (CIRs) to ISPs providing an IP address;
• ISPs must notify the relevant subscribers of the CIR;
• ISPs must also supply copyright infringement lists
(CILs) to content owners listing subscribers who have
exceeded a threshold number of CIRs;
• CILs will be anonymised, but content owners will be
able to recover subscriber details by court order;
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Digital Economy Act 2010
• Contains provisions granting SoS the power to require
ISPs, by order, to take technical measures against
repeat infringers (e.g. suspending their service);
• Permits SoS to make regulations granting courts
powers to order blocking injunctions in relation to
specific websites;
• Increases and standardises maximum fines for
copyright offences generally;
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Developments overseas
• Similar legislation recently adopted in France:
– ISPs follow three-strike procedure on notification by a
rights holder;
– Internet access suspended if infringer fails to comply;
• New Zealand Copyright (Infringing File Sharing)
Amendment Bill proposes a similar system;
• Government ministers in other countries (e.g. Germany
and Australia) have rejected calls for legislation there;
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Developments overseas
• South Korea introduced a similar system to the UK in July
2009;
– Physical and digital music sales increased;
– An indicative survey suggests that 45% of infringers had
reduced their illegal downloading;
• IFPI report suggests countries with the least stringent antipiracy measures suffered the most serious falls in sales
(e.g. Canada and Spain);
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Adapting to the digital age
• Rights owners have tried to adapt to the digital
age in a number of ways:
– Pursuing copyright infringers;
– Employing Digital Rights Management (DRM);
– Developing new business models;
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Pursuing infringers
• Some content owners have acted by taking legal action
against pirate websites:
• Pirate Bay case
• Twentieth Century Fox v. Newzbin [2010] EWHC 608 (Ch)
– Defendant's website provided an indexing and search
tool facilitating the download of films by its members;
– Held that it had communicated films to the public
contrary to s.20(2)(b) of the CDPA 1988.
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Pursuing infringers
• Other content owners have decided to pursue individual
file sharers;
• IP addresses identified and court orders obtained
compelling ISPs to hand over physical address details;
• ACS:Law has sent thousands of letters to alleged
infringers on behalf of content owners;
• Letters invite the alleged pirates to settle out of court;
• Resulting negative publicity and SRA attention;
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Digital Rights Management
• DRM imposes limitations on the usage of digital content,
such as the number of times it can be copied or the
devices it can be played on;
• Used by companies including Sony, Apple, Nintendo and
the BBC to protect their content;
• DRM is usually cracked leading some opponents to argue
that it is pointless;
• However, it could still offer protection during the key initial
release period of a product and deter casual pirates;
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Digital Rights Management
• Since February 2010 Ubisoft has included DRM in its PC
games which requires an always-on Internet connection;
• Attracted harsh criticism especially from those with poor
internet connections or who game on the move;
• Encouraged denial of service attacks;
• However, piracy was undoubtedly reduced, even though
the DRM was eventually cracked;
• Ubisoft considers effective DRM "vital" to the success of its
PC games;
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New business models
• Music industry is a pathfinder for other creative industries
in this area;
• Smaller size of files has traditionally left it more exposed to
new technologies;
• Initially slow to respond to the digital market;
• Now arguably leading the way;
• Advances in technology mean that TV, film and computer
games are increasingly vulnerable too;
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New business models
• Emergence of music downloads:
– iTunes is now the biggest music retailer in the US;
– Traditional bricks and mortar retailers such as HMV and
Tesco now sell music online;
• Streaming services such as Spotify:
– Often advertiser funded with short adverts streamed before or
between songs;
– Alternatively can be subscription based;
• Monetisation of music videos;
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New business models
• UK music collecting society PRS has responded by:
– Reducing its royalty rate from 0.22p to 0.085p per track
played online;
– Increasing its share of licensee’s advertising and other
revenues from 8% to 10.5%;
• Lured YouTube back to the UK market following previous
failure to reach license agreement;
• Currently consulting on royalty fee for live concerts;
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New business models
• Examples of music industry players responding to
consumer demand:
– Record label Apple releases material to download
for the first time;
– Amazon cutting download price of some tracks to
29p;
– iTunes and other major stores responding to
preference for DRM free music;
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New business models
• Developments in other industries:
– Increasing trend for digital distribution;
– Launch of Borders eBooks offering 1.5 million
titles;
– Emergence of MMOGs;
– Product placement in TV, films and computer
games;
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Questions?