UK ponders a Digital Rights Agency

The British Intellectual Property Office on Friday published a discussion paper asking the public for input on whether their might be a useful role for a new, industry-backed Digital Rights Agency in reducing illegal file-sharing as well as facilitating the development of legal online services. The 29-page paper (PDF) is presented as a “straw man,” meant more as a conversation-starter than as a concrete set of proposals. Yet it’s also of a piece with a separate, formal consultation underway in Britain on proposed legislation to require Internet service providers to warn file-swappers identified by their IP addresses that their activity is illegal.

Since the new report raises the question of ISP liability–and a possible role for a new non-governmental agency in enforcing it–it’s bound to spark controversy. But it would be a shame if that were to become the sum total of the discussion around it because the text of the report suggests two key, related insights on the part of its authors that, in Media Wonk’s view, can’t be emphasized enough in trying to figure out how to respond the collision of creative works and digital networks.

The first key insight is the recognition that Web tends to reward enablers more than publishers, and that business models might be more workable if they were focused at the application level rather than at the content itself.

By itself, “content” has little market value on the Internet because scarcity — the traditional pillar of value for creative works — is so hard to maintain. Content becomes valuable on the Internet when people are able to access and make use of it in ways that are valuable to them, regardless of its scarcity or ubiquity. As a result, the players best positioned to capture a portion of that value are often the technology providers who enable that access and use.

Here’s what the report says on that point:

The old business models suited to the analogue environment are not set up to exploit these new markets. Whilst there is a plethora of new offerings only a very few have gained significant traction, and it is not yet obvious there the value that consumers undoubtedly set on creative content can be extracted and therefore who can monetise it. New players are now part of the creative value chain – ISPs, search engines – and may end up being better placed to develop the customer relationship or exploit the advertising potential from driving traffic than those creating and producing the content itself.

In the old analogue and physical world a lot of the value in creative content is protected by restricting where and when it can be accessed. For example, windowing and regional coding in the film industry aims to control who can access content at a given time in a given place and to direct the value of that access to specific parts of the value chain.

But that model is increasingly irrelevant online. Consumers are no longer prepared to be told when and where they can access the content that they want.

Like Willie Sutton explaining why he robbed banks (“because that’s where the money is”) if I were a content owner I’d be looking to go where the value is: at the application level. I’d be trying to get to a point where I could put all my content behind an API, or a series of APIs. I’d publish the API spec, provide a guide to the structure of my metadata, and say to service providers and application developers, “come and get it.”

Build any application you want (within reason) to make use of my content, and I’ll license you the API that lets your application access it. I would put certain terms and conditions on the continued use of the API — such as not building an application that allowed someone to go into competition with me by providing my own conten t– but if there’s a problem, and a dispute arises, it would be a simple contractual issue. No need to get into a debate over fair use or the constitutional limits of copyright and the rest of it. Just license my API, monetize your service or application as you will, and pay me my fee.

Far, far easier said than done, I know. But it leads to the second, key insight I see reflected in the report: the notion of market failure, or at least market inefficiencies.

Anglo-American copyright (as opposed to the Continental variety) has always been fundamentally utilitarian. The  exclusive rights embodied in our copyright law do not exist for their own sakes but to establish the conditions in which markets can develop for creative works, as a way of incentivizing creativity. Such markets could be for individual copies of a work, or for access to a performance of a work, or for licenses to others to exploit those rights. But the premise and goal was always markets.

That mechanism isn’t working very well right now, however, in part because of the fundamental incompatibility between digital networks and exclusive access. The licensing of creative works for use on the Internet is extraordinarily complex — as any would be music service provide can tell you — in part because of the large number of different exclusive rights, controlled by different rights owners and administered by different agencies for a single work.

Regardless of whether all of those exclusive rights and the mix of compulsory and voluntary licenses around them are justified or fair in their own right, their complexity has become an impediment to the creation of efficient markets for the works themselves, rather than establishing the conditions for efficient markets.

From the point of view of utilitarian copyright law they very nearly defeat their own purpose.

One of the proposed roles of the Digital Rights Agency discussed in the British report, then, is to provide a venue for the various stakeholders to work together, in a non-adversarial way, to devise new market modalities.

From the report:

It is very difficult for business to compete on the basis of pay models with “free” and “easy,” even if that free and easy is also unlawful. We have nevertheless seen innovation in the content industries over recent years. Increasingly it is possible to get legal access to popular content from a variety of sources. But it is against a background of ever growing illicit copying. So there is a real challenge for all who want the content markets to flourish, and to safeguard the viability of investment in creativity in the future, to come together to work out how to move forward. It is not Government’s job to mandate how rights are traded or used, but we should look at whether we can facilitate a market space where it would be simpler and easier for commercial and free negotiations to take place. For the consumer, “inexpensive (or apparently ‘free’) and easy and legal” can be an effective substitute for “free, easy but unlawful”. We need to encourage rights owners to develop business and distribution models that meet those consumer needs and fund the creation of future content.
[…] Put at its most ambitious, our vision for a rights agency is to facilitate a major change of approach across the whole value chain as to how content is provided, packaged and sold to consumers. Business models need to develop that are not only sustainable but that provide real opportunities to build the successful businesses of tomorrow.

I know. A lot of weight to put on a bureaucratic missive. But it’s worth a read, as much for the questions it raises as the solutions it proposes.

If nothing else, it beats arguing over whether a download is both a reproduction and a performance, or just one of them.