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COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 2
Agenda
›APOCALYPTIC TECH ADVANCES
›FACTS AND FACT BASED›WE THINK: GUIDING ENFORCEMENT PRINCIPLES
›CONCLUSIONS
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 3
Professional Media Industry- Continued TRANSFORMATION
Content type
Function
Audiovisual
Audio
Photo
Text
Information Education Entertainment
AcademicJournals
Books
NewspaperConsumerMagazines
Radio RecordedMusic
TV Film
Gaming
Source: The Internet and the Mass Media, Kung, Picard, Towse, 2008
• Digitization• Miniaturization• Screens• Storage• Processing• Networks• Broadband access• Business models• Falling transaction costs• Media Convergence• Online behaviors
Expect continued changes in business conditions
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 4
MEDIA industry owes its existence to technological advances
Film
MusicRecordingTelephony
Telegraph
Print Media
RadioFM
Radio
TVColor TV
Satellite TV
Text TV
VCR
Digital TV
CDCassette MP3 Streaming Audio
Internet Radio
Digital Radio
Videotext
E-mailFTP
WWWHTTP
P2PBlogXML
DVD
Streaming video Internet TV
MTVIPTV
Source: The Internet and the Mass Media, Kung, Picard, Towse, 2008
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 5
There is nothing new under the sun
*
* Music industry refers to Record Music IndustrySource: Lucy Kung, 2010
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 6
The apocalyptic advances of technology in creative industry
1906: Advent of the music recording industry threat:
i.e. gramophones (today CD-players and DVD-players), players pianos and talking machines. The technologies threaten to negate the value of sheet music and the future of creativity; Composer John Phillip Sousa to the US Congress: “…these machines are going to ruin the artistic development of music….the vocal chord will be eliminated by process of evolution, as was the tail of a man when be came from the ape”
1920: Advent of the FM radio industry threat:
“recording industry fears the new medium that would provide close substitutes to buying records”.
Source: Arguments before the US Commission on Patents of the S & H.R, Conjointly on the Bills S 6330 and H.R. 19, 853 to Amend and Consolidate the Acts Respecting Copyright 1906.Source: Harvard Business Review File-Sharing and Copyright, Felix Oberholzer-Gee and Koleman Strumpf, May 2009
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 7
The apocalyptic advances of technology in creative industry
1960: Advent of the cable-TV industry threat:
Broadcasting industry (terrestrial TV) complained that CATV operators neither need nor deserve a free ride at the expense of copyright owners and the activities of “CATV operators constitute a clear moral wrong”. In 1975, the Film Industry describes cable industry as a “huge parasite that is feeding and fattening itself off local television stations and copyright owners”
1980: Advent of home recording industry– the VCR threat:
Stanley M. Gortikov, president of the Recording Industry Association of America (RIAA), explained in hearings before a House committee on 14 April 1982, “I’m scared, and so is my industry. Changing technology today is threatening to destroy the value of our copyrights and the vitality of the music industry. Our nemesis is home taping.”
Source: Tim Wu “Copyright’s Communication Policy” 1043 Mich. L. Rev.278, 313 (2004)Source: Harvard Business Review File-Sharing and Copyright, Felix Oberholzer- Gee and Koleman Strumpf, May 2009
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 8
Monocausal explanations are simply not true …
› The MPAA* has discursively portrayed the digital
transition, in the press and in policy circles, as a zero-sum
situation with only two possible outcomes:
– the elimination of control, through piracy; or
– the perfection of control, and hence the protection of
creativity and property rights
› It is time to demystify the false zero-sum doctrine and put
it to the past.
*Source: (Vaidhyanathan, 2001, 2004) quoted in Currah, Andrew(2007) 'Hollywood, the Internet and the World: A Geography of Disruptive Innovation', Industry & Innovation, 14: 4, 359 — 384
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Going digital is not a zero-sum game : Norwegian CASE
› Total annual industry revenues grew from 1.4 BNOK to 1.9 BNOK which is + 36%
› Number of Music artist increased by + 28%
› Per Capita inflation adjusted annual artist income has increased by +66%
Source: The Norwegian Music Industry in Age of Digitalization, Bjerke & Sorbro, BI Norwegian School of Management, Oslo 2010
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 10
The Economist reports half year results (2011)
› The Economist Group’s consistent growth has been built on the Group’s long-term investments in both the editorial content and digital distribution.
› This approach reflects the business’s view that new technology such as e-readers and tablets are significantly changing reader behavior
› Economist is discovering great opportunities in digital. For us, as for many publishers, digital is not a zero-sum game.”
Source: The Economist
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 11
The Economist group Experience – digitization not a zero-sum game
Source: The Economist
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 12
Agenda
›APOCALYPTIC TECH ADVANCES
›FACTS AND FACT BASED›WE THINK: GUIDING ENFORCEMENT PRINCIPLES
›CONCLUSIONS
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 13
Fact based approach - Hargreaves report
› No one doubts that a great deal of copyright piracy is taking place, but reliable data about scale and trends is surprisingly scarce.
› A detailed survey of UK and international data finds that very little of it is supported by transparent research criteria.
› Meanwhile sales and profitability levels in most creative business sectors appear to be holding up reasonably well.
› Many creative businesses are experiencing turbulence from digital copyright infringement, but that at the level of the whole economy, measurable impacts are not as stark as is sometimes suggested.
Source: An Independent Report by Professor Ian Hargreaves, page 6 May 2011
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Fact based approach - Hargreaves report
› Such research as exists indicates that we should be wary of expecting tougher enforcement alone to solve the problem of copyright infringement.
› Instead, Government should respond in four ways: –by modernizing copyright law; – through education; – through enforcement and –by doing all it can to encourage open and competitive
markets in licensed digital content,
› which will result in more legitimate digital content at prices which appeal to consumers.
Source: An Independent Report by Professor Ian Hargreaves, page 6 May 2011
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Displace “free” with lawful digital services !
Base: Spanish on-demand (streaming & downloading content) users (513 users out of 1000)
Base: US on-demand (streaming & downloading content) users (591 users out of 1000)
Spain
US
New & old content Attractive pricing User friendly & simple
BASE: Spain & US [On-demand users that watch streamed or downloaded video content at least several times per month]Source: Ericsson ConsumerLab TV Video Consumer trends 2011 & 2012
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 16
displace FREE with LAWFUL Digital Services
Study from Norway (Norwaco/Synnovate Report 2011 for 2010):› The Norwegian Collecting Society NORWACO findings over the last
few years, are quite remarkable. › From 2008 to 2009 the number of illegal copies of music fell
dramatically› In 2008/9, > illegal copies down - 40%› In 2009/10 > illegal copies had gone down even further - 13%› No enforcement measures; threes-strikes or graduated responses
were introduced during this period. › Spotify , a legal digital music service (among others) was introduced in
2007/8
Source; http://norwaco.no/nor/content/download/7259/83338/version/2/file/Synovaterapport+2010.pdf
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 17
Sheer count of lawful services is not relevant
We need to move away from a sheer count of lawful services and look more closely at factors determining the successful adoption and growth of lawful digital services.
Factors that define the level of success are:
timely availabilitythe range and depth of titles available, business model (subscription, download to own, advertising)ability to time/format/device shift content, payment methods (credit card, pre-paid), easy of use and affordable price points.
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 18
Declining physical sales (MUSIC)
› Format shifting (LP-CD) peaked around year 2000
› Lawful digital services displacing physical sales (Korea, Norway, UK, Sweden)
› Increased competition from other platforms, Music (CD sales) migrating to TV (X-factor, Idol and Gaming)
› Increased competition from Live Performances
Sources: GOA United States Government Accountability Office, Report to Congressional Committees, Intellectual Property, April 2010. See also: Harvard Business Review File-Sharing and Copyright, Felix Oberholzer-Gee and Koleman Strumpf, May 2009, Digital Opportunity, a review of intellectual property and growth, Ian Hargreaves, May 2011 UK
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 19
Content ACCESS BARRIERS – copyright not the only barrier
› Access barriers are barriers to unhindered consumption of content, the presence of which often results in the personal consumption needs of consumers being unmet.
› WIPO identified following access barriers:– Consumer barriers (affordability)
– Content exclusivity and limited competition
– Deliberate non-availability of content (windowing, territoriality)
–Policy and regulatory barriers:
› Content regulation
World Intellectual Property Organization, Twentieth Session, Geneva June 21 to 24 2011, or access: http://www.wipo.int/edocs/mdocs/copyright/en/sccr_20/sccr_20_2_rev.pdf
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 20
The market supply failure of lawful “on-demand/digital” content
Source PWC Global Entertainment Outlook 2012
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 21
Agenda
›APOCALYPTIC TECH ADVANCES
›FACTS AND FACT BASED›WE THINK: GUIDING ENFORCEMENT PRINCIPLES
›CONCLUSIONS
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 22
we think – Guiding principles
› Continued educational efforts are necessary› Reasonable expectations need to be accommodated
› Enforcement is just a part of the solution› Balancing the interests of innovators and intermediaries
› Governments must stimulate growth of lawful digital content services– Reform copyright – but not liberalize file sharing
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 23
we think – Continued educational efforts
› Educational and awareness raising campaigns on the value of intellectual property should be encouraged and promoted.
› Education about appropriate user behaviour, on one side and enforcement measures on the other, are certainly part of the solution, but they are not enough.
› More compelling lawful digital offers must be allowed to enter the market.
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 24
›TIME SHIFTING›DEVICE SHIFTING›PLACE SHIFTING›PRIVATE SPHERE›LAWFULLY ACQUIRED
In combination with a legal system that
promotes availability of
digital licensed content and
efficient licensing
we think – reasonable expectations must be met
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 25
we think – direct enforcement by rights holders
› Direct enforcement by rights holders is an undisputed right to enforce private property rights.
› Rightly so, this right is undisputed and available option to rights holders to act on infringements.
› The primary and often the sole beneficiary of private enforcement is the private rights holders.
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 26
we think – indirect enforcement
› There is a serious and important difference between requiring intermediaries to pass allegations of infringement on to end users
› And requiring intermediaries to take action to impose sanctions on their users for alleged infringement
› Intermediaries are obliged and must respect the right to privacy, freedom of communication and presumption of innocence
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 27
we think – indirect enforcement
› The rights holder is the primary and often the sole beneficiary of preventive infringement actions
› Accordingly, it is appropriate for the rights holder to cover the costs of the action (including ISPs) and also bare any associated risks
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 28
we think – indirect enforcement
› To the extent that enforcement action of rights takes place, relying on the evidence provided by a rights holder, the rights holder should take responsibility for the consequences of the action
› There is great variance in the accuracy and trustworthiness of automated systems that are employed (quality of alleged infringements)
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 29
we think – indirect enforcement
› No outsourcing of law enforcement to intermediaries should take place.
› Any sanctions should remain the prerogative of the courts.
› Only due legal processes can ensure that allegations are properly evaluated, defences adequately considered, and proportional punishments imposed .
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we think – innovation is also essential
› As technologies and business models continue to develop, limitations of intermediary liability through safe harbour regimes and explicit defences play an extremely important role in enabling innovation.
› While placing increased liability and responsibility for copyright infringement on intermediaries can assist in making enforcement more efficient, such moves must always be considered in light of the impact on the intermediaries and investments in new innovations.
› Innovation should not be limited on the basis of conventionalism or apocalyptic rhetoric or narrow interest.
Source: Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School, Harvard University, Cambridge, MA. In the paper titled; “The Impact of Copyright Policy Changes on Venture Capital Investment in Cloud Computing Companies, 2011
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 31
›Increasing availability of lawful digital/on-demand content
›Decreasing technology specificity of copyright/licensing/exceptions
›Minimize transaction costs
We think- stimulating lawful digital services – should be the main focus of policy reforms
More information available : Digital Content Promotion
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 32
we agree with - RIAA statement 1 Dec. 2011
“To be clear, no legal efforts are a panacea — compelling legal
consumption options are the most important”
Source: The Tennessean, 1 December 2011, RIAA largely succeeds in goal of bringing piracy under control
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 33
Agenda
›APOCALYPTIC TECH ADVANCES
›FACTS AND FACT BASED›WE THINK: GUIDING ENFORCEMENT PRINCIPLES
›CONCLUSIONS
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 34
conclusions› Digital creative transformation is our common
destiny
› Digitization is not a zero-sum game
› Adequate enforcement is just a part of the solution
› Fact based enforcement policy approach is necessary
› We need a Digital Copyright Reform to:
› Stimulate the growth of lawful digital market
› Formulate a sustainable approach to displace illegal access and grow industries
COPYRIGHT ENFORCEMENT PRINCIPLES | Public | © Ericsson AB 2012 | 2012-11-01 | Page 35
Conclusions- Adequate enforcement is
1. Fact based2. Balanced3. Focused on end user demand4. Respects the right to privacy5. Supports continued
innovation6. Promotes growth of lawful
digital services7. Respects the relative nature
of copyright8. Avoids outsourcing of
enforcement to private third parties