2020 Vision: Trends and Topics for the New Year

Happy New Year. The 2010s, among other things, were a decade of profound, rapid and often gob-smacking change in the media industries and their intersection with other industries, particularly technology and the internet. So, as we look ahead to a new year and a new decade, what should we expect?

Some consolidation of gains, still more turmoil, and additional smacking of gobs would be my guess. Without venturing any hard predictions that would no doubt quickly be proved wrong, here are some trends and topics we think will be making news in the year(s) ahead:

Read More »

Droit d’A.I.?

The World Intellectual Property Organization this week issued a request for comments on whether copyright, patents or other intellectual property rights could or should be extended to works produced by artificial intelligence. The notice comes as part of a public consultation the United Nations agency launched back in September, and the comments will be used to refine its working draft (pdf) of the topics and questions to be addressed in the next, formal policy-development phase of the consultation beginning in May 2020.

The WIPO consultation parallels a similar process underway at the U.S. Patent & Trademark Office, which issued its own request for comments on the same topics in October. Other countries have also begun wrestling with questions of authorship and ownership in the emerging era of machine creativity.

The formal inquiries are at a very preliminary stage. Both WIPO and the USPTO acknowledge in their requests for comment that they are still trying to figure out what question they should even be asking and how they should be framed.

Read more and sign up for our weekly newsletter.

USMCA: Safe Harbors Still Safe…For Now

The agreement reached this week on a new — and apparently final — version of the U.S.-Mexico-Canada trade agreement (USMCA, née NAFTA 2), is likely to be viewed as a setback by those looking to rein in the influence and market power of Google, Facebook and other U.S. technology giants.

The new agreement retains language mirroring Section 230 of the Communications Decency Act, despite a last-minute push by members of Congress from both sides of the aisle to get it removed.

The provision, which provides digital platforms with immunity from legal liability for content posted by their users, was originally intended to create a safe harbor where online platforms could find their sea legs in the early days of the internet. But it has come to be viewed by many in Congress and elsewhere today as a sop to the now behemoth tech companies, allowing them to profit from the spread of fake news, harassment and other dubious content unconstrained by regulation.

Retaining the language in international trade agreements could make it more difficult for Congress to repeal of modify Section 230 in the U.S. — as many on Capitol Hill would like to do — by obligating the U.S. by treaty to maintain the current, laissez-faire standard.

“I had one disappointment… [Section] 230, but I was too late coming in on it,” House Speaker Nancy Pelosi (D-Calif.) said at a press conference Tuesday to announce the agreement. “I lost – they had 230 in the agreement, there are some members that wanted that… it’s a real gift to big tech.”

In another win for tech companies, the agreement also includes language barring Canada and Mexico from enacting data localization laws that could force U.S. companies from processing and storing data collected from Canadian and Mexican citizens in those countries. A similar localization requirement in the European Union’s General Data Protection Regulation (GDPR) forced many U.S. technology companies to significantly retool their operations, at considerable expense.

Many outside the U.S. view such “data sovereignty” laws as a way to push back against the implicitly American-ized cultural and economic influence of the internet’s dominant platforms, and see the E.U. standard as a model for other territories. The provision barring them in the USMCA could raise at least a speed bump against their further spread.

Technology companies dodged another bullet could have poked a hole in their copyright safe harbor as well. The agreement retains language modeled on Section 512 of the Digital Millennium Copyright Act that shields user-generated content platforms from copyright liability for content posted by users, so long as the platforms follow a prescribed notice-and-takedown process.

Though once championed by rights owners looking to export U.S. copyright standards, many have since soured on the idea of including DMCA-like language in trade agreements, and the music industry in particular pushed hard for its removal from the USMCA.

With technology companies increasingly viewed as on the run politically — from GDPR and the E.U.’s recent adoption of a new Copyright Directive to rising concerns in the U.S. over their market power and porous content moderation — many in the copyright industries see their best chance since since the DMCA was enacted to roll back the scope of the safe harbor, which they blame for diverting billions of dollars of value from rights owners to technology providers.

The U.S. Copyright Office in coming weeks is expected to release the long-awaited findings from its nearly five-year review of Section 512, which are widely anticipated to include recommendations for modifications of the law.

The head of the Copyright Office, Karyn Temple, this week stepped down from her post to join the Motion Picture Association as general counsel, a move widely viewed in Washington as indication that the report’s findings will be favorable to copyright owners.

As with Section 230, however, retaining the 512 safe harbor in trade agreements could throw a wrench into legislative efforts to amend the DMCA by limiting Congress’ room to maneuver.

In a statement following announcement of the agreement, National Music Publishers Association president and CEO David Israelite lamented the result, saying publishers “remain concerned that the DMCA safe harbors in the agreement continue to devalue creators’ work and protect Internet service providers who should be doing more to prevent piracy and infringement.”

If there is hope for Sections 230 and 512 reformers at this point, it lies with the Senate, where Majority Leader Mitch McConnell, once a vocal supporter of USMCA, seems to have gotten cold feet on putting it to a vote now that a deal has been reached. In a statement Tuesday, McConnell said the Senate will not take up the USMCA until sometime next year, angering Democrats in the House, who want it see it done before Christmas.

McConnell is likely reacting to concerns raised by some Republicans that, in his zeal to claim a legislative victory, President Donald Trump made too many concessions to the Democrats, and Democrat-aligned groups on the terms of the agreement, particularly those relating to worker and environmental protections.

With an impeachment trial of Trump looming, where McConnell will need to hold his caucus together, he likely wants to avoid forcing his members into an awkward position of possibly opposing the president on a key priority until after the impeachment furor dies down — one way or another.

Delays can be deadly in Congress, and McConnell has now set the USMCA on a highly unpredictable path. Even in normal times, the appetite for taking potentially high-profile votes tends to dry up in election years. And these are anything but normal times.

A lot of mischief could still be made between this week’s hand shakes and whenever the USMCA ultimately comes to the Senate floor for a vote.

The Last Picture Show?

The U.S. Justice Department is preparing to end the so-called Paramount consent decrees that have long barred major movie studios from owning movie theaters.

The decrees have been in place since 1949, the result of a series of anti-trust actions brought by the department against various studios over restrictive booking practices, including the favoring of their own theaters over others in distributing their movies and “block booking,” in which studios forced theaters to book an entire slate of films to get the highest-profile releases.

In announcing the move, the head of DOJ’s anti-trust division, Markan Delrahim, noted that technology and market realities have long-since left the original purpose of the decrees behind, as streaming and other non-theatrical forms of distribution have grown more important to Hollywood’s bottom line and reshaped how people watch movies.

Read More »

Spotify Works the Margins

In its first-quarter earnings report, Spotify missed Wall Street’s earnings target by a whopping $0.53 a share, despite beating expectations for both revenue and paid subscriber growth.

The streaming service posted a net loss of $0.90 per share, compared to the consensus estimate of $0.37, even as top-line revenue grew by 33 percent year-over-year and beat the Street by 3 percent.

Part of the shortfall could be attributed to various promotion campaigns the streaming service ran during the period, which included discounted service bundles offered in partnership with Hulu. But the stark disconnect between revenue and earnings underscored a long-standing concern over Spotify’s core business model.

“The most important thing is [Libra] will enable paying for things digitally in many of the places around the world where those kind of methods just doesn’t exist. A service like Spotify, you can imagine what would happen by allowing users for instance to be able to pay artists directly,”

Read More »