digital content promotion q1 2013
TRANSCRIPT
Digital content promotion
POLICY RECOMMENDATION
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 2
Agenda
›TRANSORMATION
›PUBLIC POLICY ISSUES
›REFORM IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 3
Professional Media Industry- digital transition
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
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 4
The magic trick – new business conditions
› The business-trick is to control NOT the copies of your work
› but instead a relationship with the customer
› that is what customers ultimately want
› because they see it as an assurance of a continuing supply
› of reliable, user-friendly and timely content
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 5
What ever can go digital will go digital
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 6
more digital than physical books – highest book growth rates in over 10 years
Source: Amazon, Annual Meeting June 2011, http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-presentations
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 7
The Economist group Experience – digitization not a zero-sum game
Source: The Economist
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 8
Going digital: Norwegian Music Industry 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
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 9
Digitization is what you make of IT….
Kodak Files for Bankruptcy as Digital Era Spells End to Film (Jan 2012)
› The photography pioneer which traces its roots to 1880 that invented:
– the first hand-held camera, – held a leading position in film for
decades – invented the first digital camera in
1975, which it shelved because it would threaten its lucrative film business
› Their history was so important to them, a rich century-old history that generated a lot of money along the way. Now their history has become their liability.
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 10
Agenda
›TRANSORMATION
›PUBLIC POLICY ISSUES
›REFORM IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 11
The market supply failure of lawful digital content
Source PWC Global Entertainment Outlook 2012
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 12
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
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 13
We think: root causes to market supply failure
1. Deliberate limited availability of digital content, facilitated by copyright
2. Technology specificity of copyright
3. Unreasonable transaction costs
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 14
We think: Key reform objectives
Promote open and competitive markets in licensed digital content that promote service innovation.
With the aim to increase availability of more legitimate digital content at prices which appeal to consumers.
Decrease technology specificity of copyright, e.g. exhaustion, exemptions/fair use, safe harbor*.
Increase efficiency in licensing by decreasing transaction costs e.g. administrative time and complexity.
Reasonable consumer expectations must be met.
* Not an issue in the EU and the US
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 15
Agenda
›TRANSORMATION
›PUBLIC POLICY ISSUES
›REFORM IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 16
Increase Availability
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 17
BASE: Core 7 markets (US, UK, Sweden, Germany, Spain, China and Taiwan) (Showing those who consider the service worth paying for)Source: Ericsson ConsumerLab TV Video Consumer trends 2011, 2012
What should a reform deliver to citizens ?
MORE LAWFUL DIGITAL CHOICE
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 18
FIRST RELEASE WINDOW MUST TOO GO DIGITAL
CLOSING THE ANALOGUE CULUTRAL EXCLUSION
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 19
EQUIVALENT to the price of TWO CINEMA TICKETS FOR THEATRICAL VOD SERVICE
End User willingness to pay for Theatrical VOD Service
Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8 Source: http://www.filmthinktank.org/
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 20
WHAT COULD MAKE YOU WATCH MORE MOVIES ON TV?
Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8
~ 70% would consume more film At the level of 2x Single Cinema Ticket price
Source: http://www.filmthinktank.org/
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 21
Technology Neutral Copyright
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 22
How many years does it take to assemble the rights necessary to launch Online service ?
› A technology specific approach inevitably leads to inconsistencies and uncertainties as formerly distinct classes of works, rights or media types converge.
› The consequences of fragmentation of rights are disturbing in the digital age, as digital technology produces a breakdown and conflation of technology specific works/rights that were meaningful in the analog era.
› The transmission of audiovisual content on the Internet now involves making reproductions and public performances of both the recording and its underlying content.
› Consequently, the same act can be viewed as a reproduction and distribution of copies on the one hand, and a public performance or display of the work on the other. Since these rights are controlled by different parties and agents, the complexity of the system leads to a gridlock of control that may hinder development.
* Source: An Independent Report by Professor Ian Hargreaves, Digital Opportunity, 2011
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 23
..and continue to expect payment each time….
› The current technology specific rights clearing needs to be balanced with realities of the demand side of the digital market.
› There is a need to recognize, end users’ actual consumption of content
› .. and avoid the cumulative effect of technology specific rights slicing, doubling or tripling the cost of identical content for an identical user and for unaltered right to use.
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 24
Any screen – remuneration in digital world
› Remuneration based on actual, identifiable consumption based on ;
– Download to Own– On-demand (time limited)– One time view
› Irrespective of technology– Transmission Technologies– Delivery Networks– Devices– Screens It is unreasonable to potentially triple
the cost of identical content, over multiple screens for same user
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 25
Private Storage of legal content
› The copyright regime and praxis should be applied technology neutrally, e.g. independently of any physical storage, architecture and media format.
› Any storage solution architecture e.g. if the storage function is embedded in a local consumer device or in a network should be able to compete freely.
› Notably, PVR and private cloud have the same functions and should not be discriminated by law or require special consent from rights holders.
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 26
DIMENSIONS OF availability
› Territoriality > Timed availability across nations
› Territoriality and place shifting > Follow me › Territoriality and long tail – regional/global
niches› Time and Timing > windowing and exclusive
licensing› Time, place and format shifting – at home and
on the go› Range of choice > depth and width of
catalogue› A’ la carte > Freedom to choose (my content)
and timing (my time) and screen (my screen)
HOW ABOUT AN “AWATAD” RIGHT ?
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 27
Ultimately we end up with the question of exhaustion
› “The first sale principle of the original of a work or copies thereof by the right-holder or with his consent in the Community, exhausts the right to control the release in the Community of a work incorporated in a tangible tool”
› The paradox of “tangible” exhaustions ; in a legislative measure such as the EU INFOSOC DIRECTIVE which was devoted to the online context, the only purpose of market integration was confined to the offline context.*
› Creators should be able to freely exercise their right to or not to exhaust – BUT why should digital be discriminated once “analogue” free choice to exhaust has been made?
* Source: EU Study, Legal Analysis of a Single Market for the Information Society October 2009
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 28
SIMPLIFY &DECREASE
TRANSACTION COSTS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 29
Transaction costs
› Simplify current state of (indirect) licensing play
› Decrease fragmentation of rights, rights owners and licensing practices with the aim to:
› Increase availability and decrease effort – nationally: One-Stop-Shop, Digital Copyright Exchange, etc
› Decrease effort cross border, simplify cross-border licensing, collective rights management
› Regulate natural and/or legal monopolies > efficient and transparent collective rights-management
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 30
REASONABLECONSUMER
EXCEPTIONS
TIMEPLACEDEVICESHIFTING
EX
PE
CT
AT
ION
S
MUST BEMET
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 31
we think – reasonable expectations – Must be accommodated
› Lawful content
› Time shifting
› Device shifting
› Place shifting
› Private sphere
In combination with a legal system that
promotes availability of digital
licensed content and efficient
licensing
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 32
legal attractive digital services can compete with and Displace “Free”
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 33
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
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 34
enforcement alone is not an adequate response
› 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, Digital Opportunity, 2011
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 35
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
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 36
Agenda
›TRANSORMATION
›PUBLIC POLICY ISSUES
›REFORM IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 37
conclusions
Increasing availability of lawful digital content
Technology neutral copyright
More efficient rights clearing
Reasonable end user expectations must be accommodated