Digital Rights. Digital Impasse.

Michael Hedges July 13, 2009 Follow on Twitter

Ah, the great digital impasse is as deep and muddy as ever. On one side there are the ‘digital natives’ reshaping media content faster than you can say Guttenberg. On the other are content producers and distributors, squeezed to a pucker, looking to squeeze anybody.

In a wide ranging speech outlining the challenges of Digital Europe, European Commission (EC) Info Society and Media Commissioner Viviane Reding took content producers and rights holders to task for failing ‘digital natives’, the generation for whom the internet is the medium of choice. Commissioner Reding spoke (July 9) in Brussels at the Lisbon Council’s Ludwig Erhard Lecture. Scaring people into becoming consumers is not a solution.

“While many right holders insist that every unauthorized download from the Internet is a violation of intellectual property rights and therefore illegal or even criminal,” she said, neatly summing up this digital impasse, “others stress that access to the Internet is a crucial fundamental right.”

“Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side.”

Commissioner Reding’s reference point is the internet and who charts its future. Rights holders – from the music and film industries to publishers – hate the ‘no charge’ zone and are demanding money at every step. The internet, say others, thrives on unfettered access to wide ranging content thus fulfilling the publics right to a free flow of information.

“In my view, growing Internet piracy is a vote of no-confidence in existing business models and legal solutions,” said Commissioner Reding. “It should be a wake-up call for policy-makers.” The EC has opened a public consultation on Digital Europe. (See release here)

The European Publishers Council (EPC) made its own proclamation on rights last week, the Hamburg Declaration, seeking attention from the EC to starving publishers across the continent. Publishers remain focused on internet search engines and aggregators, believing great piles of money exist at the end of that rainbow, just there for the mining. If Google and others won’t adopt their cash-register system, the Automated Content Access Protocol (ACAP), publishers are calling on “regulators to back it up,“ said WAN president Gavin O’Reilly. (See EPC presser here)

The search engine people – led by Google – have ignored ACAP, saying existing internet language (i.e. robots.txt and htaccess) provides publishers with all the tools necessary to protect their copyrights. Simply block the robots from accessing your sites, they say. Anyway, Google News only displays – for free – a headline and snipit…like opening the door.

“We want a fair share of the revenues, which are already being generated through the commercial exploitation of our content by others, as well as the development of a market for paid content in the digital world,” said Axel Springer CEO Mathias Döpfner. “We are confident that the representatives of search engines and other aggregators will join us in realizing and opening up the opportunities of the market for legitimate paid content in the Internet.”

German publishers, led by Mr. Döpfner, are lobbying for the creation of neighboring rights law for publishers similar to that available to music rights holders. This, logically, would lead to rights “collecting societies” that would operate like those suing grandmothers for downloading a dozen songs. What happens when people begin hiding their computers for fear of the midnight knock on the door from the newspaper collectors?

The music people have, seemingly, learned little from the public relations – not to forget business model – disaster from aggressive collections. The Swedish Performing Rights Society (STIM) is visiting workplaces checking for people listening to music while they work. Perhaps a quieter office will increase productivity. Perhaps people will… oh, never mind. Free music on the internet became an issue in recent Swedish elections for the European Parliament and the Pirate Party – loosely associated with the music download site Pirate Bay – will send at least one representative to the next European Parliament.

Perhaps, too, one of the best businesses to get into now is rights collecting and management. Giant private equity firm Kohlberg, Kravis and Roberts (KKR) joined Europe’s biggest media company Bertelsmann in an expansion of Bertelsmann’s music rights exploitation business – BMG Rights Management. Henry Kravis of KKR is, according to FAZ (July 7), adding €250 million. Rights exploitation – selling songs for television commercials, for example – is not the same as performance rights collecting. But it is not a major leap. 

"A fundamental safeguard of democratic society is a free, diverse and independent press,” added Impresa CEO Francisco Pinto Balsemão. Without control over our intellectual property rights, the future of quality journalism is at stake and with it our ability to provide our consumers with quality and varied information, education and entertainment on the many platforms they enjoy. In this declaration we call on governments worldwide to support the copyright of authors, publishers and broadcasters on the net”.

The whole cast of rich publishers signed up to the Hamburg Declaration, which says, in part: “Universal access to websites does not necessarily mean access at no cost. We disagree with those who maintain that freedom of information is only established when everything is available at no cost.” James Murdoch – The Younger – signed for News Corporation.

While publishers focus on search engines and aggregators as thieves and the music and film industries focus on individuals, together they misunderstand – or ignore – the internet’s fundamental gift. People – not rights holders – are setting the price point. At the moment, with millions of free-to-access Websites containing all sorts of content, that price point is quite close to zero.

The railing against search engines and aggregators is particularly annoying because rights holders misunderstand – or ignore – the fundamental of retail selling, shelf space. Google and others provide it, without which content producers simply disappear. Consumer goods makers pay retailers for that prime display space. Search engines are nothing more than 21st century newsstands. Sure, they need good headlines to bring people into the store but they make their real money on candy bars and cigarettes.

In the Lisbon Council remarks noting the delicate relationship between the public and content creators, Commissioner Reding said she’s looking for “a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators.” Nobody reasonable argues.

Commissioner Reding tossed the discussion back at content producers and rights holders suggesting that investment on better content appealing to ‘digital natives’ might be better spent than money on lawsuits and punitive measures.