Guardian Changing Media: I’ll see you in court: the rights and wrongs of DRM

Nick Higham, moderator
Dr Ian Brown, board member, Open Rights Group
Elizabeth Gibson, corporate legal and IP, BBC
Andrew Gowers, Gowers Review of Intellectual Property
Paul Grindley, head of business affairs, Film4
Paul Keller, project lead, Creative Commons Netherlands

NH: Dr Ian Brown did a good demolition job of DRM in a session in this very room last year, so surprised to see it come up again. Should rights holders be suing infringers? Should we have more enforcement? Or should we scrap DRM completely and make as much as possible free to users? Ian, have things changed since last year?

IB: The technological problems with DRM haven’t changed, but many people in the music industry are beginning to realise that DRM isn’t going to do what they had hoped it would. Surveys have found that music execs are starting to think that DRM reduces sales, and evidence to show that artists who provide their music unencumbered are doing better financially.

NH: So this is moving towards an unencumbered format? And is this making more money?

IB: Many people in the music industry are starting to believe so, yes.

NH: Andrew, I mentioned the Gowers Review, can you summarise it in three lines?

AG: We were asked to look at the changes in the world economy, and look at intellectual property rights, which is a global system so there’s a limit to what you can do in just one jurisdiction, but there were some clear issues, including the effects of digitisation, globalisation, and flexibility – there were a number of sticking points where copyright law was being brought into disrepute or misunderstanding on the part of the public and it wasn’t the public’s fault it was also the industry’s point. How did the gigantic growth in illegal downloading begin? I began because the music industry wasn’t producing stuff in the format that the public wanted, and so they’ve been forced to play catch up and some are now beginning to address the right issues. Blaming consumers for the growth of that thing was not looking in the right place. The second place misunderstanding took place, and which made the law look like an ass, was the act that most of us commit ever day i.e. transfer of music from a CD to a PC and then an MP3 player, the act of format shifting, which is an offence. The fact that it’s on the statute books taints the rest of copyright law. Then the concept of fair use, which is a broader concept in the US and covers more exceptions than in the UK, and we looked at some new fair use concepts such as transformative use, satire and parody. Need to modernise copyright law.

NH: The reaction to your report hasn’t been very good in the music industry.

AG: Broadly, the report was received well and accepted by the government in full, and the Gowers Implementation Team (GIT), are in charge of implementing. There was a distorted response from the music industry – they welcomed the enforcement section, as enforcement for online infringement is lagging behind what’s possible in the physical world.

NH: So they were happy with that, but not everything?

AG: They weren’t happy that we didn’t listen to the unrelenting lobbying from the music industry to extend the term of copyright protection on sound recordings. We looked at the evidence and we could see no case to make a change, so we are leaving it as it is. It was a question of what is the problem we are trying to fix? If there is a problem with the incentives to create then there might be an issue to look at, but there is no problem with the incentive to create in this country or any other developed country. Most recorded works sell the majority of its sales in the first 5 years. Very few acts last even 50 years, which is the current term, and even fewer that last 95 years. So we were being asked to extend the rent for a very small number of musicians for the benefit mainly of one big record company.

NH: Significant for TV too?

PG: Yes, we have been watching the music industry, and we have to grapple with this ourselves. The debate is uncomfortable for those in the business of distributing more collaboratively created content, films are consumed in different ways, there’s a more dense ecology, more entrepreneurial companies working together. This creates a lot of dynamism, so our challenge is to find a more creative solution. C4 sites in the middle of the ecology, so we innovate, develop talent, are producers, we have to look at our own position and industry holistically, and look at DRM holistically, you can’t isolate it from broader economic and cultural trends.

NH: Most film/TV content is high cost, lots of people involved whose time and effort needs reward, the comparison with music is that much music is lower cost and therefore lower value. So do you want more restrictions and more power over the end use of your product?

PG: Traditional models in film is that you can buy a copy, rent a copy, see it in a cinema, have it on TV, so challenge record industry has is that their value add which is marketing and finding talent is now in competition with social networks and other means by which film is discovered. In film, the value add is yes, distribution which will have to evolve, but as far as production is concerned that’s still an enormous cost. The transient copy that’s available on the website, if that became a permanent copy then there’s not much revenue left for the producer. DRM has an effect of alienating users, and that needs to be changed, and it doesn’t match what’s allowed legally under copyright but is it ever realistic that DRM would ever match what’s allowed under copyright. 4Docs, web based social network around documentary, uses Creative Commons licences.

NH: Does the BBC welcome the Gowers Review?

EG: BBC Always sits on the fence as both creator and user of intellectual property. So we accept things like the format shifting, just like it’s good to have time shifting. The exception for caricature, parody and pastiche, which is a natural creative thing to want to do, I’m delighted it’s been adopted although it’s causing a bit of disquiet, but I welcome that. As far as DRM is concerned, the BBC does use that out of consideration to the underlying rights holders and contributors, as they are anxious that their work isn’t used beyond the rights that they have given up. DRM could enable the idea of making one download of your CD on to something else, and our iPlayer trial needs DRM as programmes can be downloaded for a week.

NH: Tension for a public service organisation between making material which has been publicly funded as widely available as possible, and the need to protect and preserve copyright.

EG: We have the Creative Archive, which has just finished trialling, but we don’t have the rights usually. Old contracts didn’t include it. Plus we have BBC Commercial so we have to preserve the ability for them to make money out of things.

NH: The desire to make things widely available, in the final analysis, proves too difficult to do?

EG: It can do. And another problem is orphaned works where you can’t find the author.

NH: Creative Commons takes a different approach.

NK: CC offers copyright licences that allows others to use your work in certain ways. You can invite others to share, remix or reuse your materials. There’s six standard licences, and the main differentiation is between commercial and non-commercial licences. It acknowledges that copyright, which is this monolithic thing created when there were few players in the market, is now something which affects everyone. Everyone can create nowadays, and copyright is a one-size-fits-all thing, which doesn’t work now. We have serious issues with both copyright and DRM. We are interested in giving people the opportunity to express their rights in a way that invites creativity and reuse.

NH: Doesn’t it invite abuse?

NK: As an organisation we are young, so we don’t have statistics about this. But we think there are about 250m works licensed on the internet, but we have had only 3 cases that went to court that involved CC .So this way of expression rights in a term of ‘friendly guidelines’, and there is a bit of friction where people don’t understand the licence, but they are usually easily solved.

NH: What type of content is it?

NK: A lot of writing, lots of blogs, also lots of photography. Quite a lot of music, distribution platforms that take artists who reserve their commercial rights but give away the potential to share and remix.

NH: Are there lessons for the world of commercial copyright?

NK: If I listen to what was said here, CC has a three layered model, we have this licence which is 6 – 8 pages long and then we have a human readable version, and we need to explain what the rights and restrictions are. Need to be very clear about what the rights are, and that might remove some friction, even in commercial areas.

Questions from the floor
Does the BBC and C4 like YouTube?

EG: The BBC did a deal with YouTube, so yes, we like them. We can post trails and clips and specially made content where users can find it, and we get some advertising revenue out of it as well. You can’t download but you can post stuff up for your friends, but that doesn’t stop us enforcing our rights if our materials is posted up by other people.

NH: The BBC material that has adverts is the channel hosted by BBC Worldwide?

EG: Yes.

PG: It can be good if it supports your business, it can be bad if it compete. Maybe you have to tolerate a certain amount of competition in order to promote your stuff. The BBC stuff – what’s not to like, BBC doesn’t have to earn money from it’s material the way C4 does. But you can do other things, such as streaming short films on Second LIfe, no payment out of that, that’s about brand and developing authorial reputations of the creators of those films. Something else we’re doing is taking this community, and doing a movie that’s open source, inviting contributions form people, have input into idea, marketing, etc. Trying to find ways to innovate and try to find ways to use this technology.

AG: I think it’s heartening development – this can be seen as an ongoing negotiation. Sites like YouTube doesn’t mean that traditional means have got to role over and die, they’ve just got to find a new balance. And it’s always been a balance. Those copyright owners who compare their copyright to physical property are wrong, it’s not like physical properly. You can’t make endless copies of your house. What this is is finding a new balance, and there are areas that are grey in law.

NH: But isn’t YouTube encouraging a widespread disregard to copyright.

AG: It’s finding a balance. I’m sure that the courts will find that Viacom has somewhat of a pint and there’ll be a licence to be paid. But this is not

IB: This is about systems evolving, but in Viacom’s case, this was specifically considered in the DCMA. So they said that intermediaries don’t have to hunt through the content they host, but that they do have to take items down when someone complains. But Viacom want another bit of that cherry and want to try and change that.

NK: The problem with orphan works, if no one knows how owns the rights you can’t get permission, there’s a need to revert from the ‘if we can’t find the owner of the work then it can’t be used’ – that’s a waste.

You’ve mentioned different systems and US copyright law vs UK. Can copyright law really be negotiated on a national basis when consumption is international?

AG: It already is international. Much of our review is about EU law and we hope to have input to the review process in Brussels. Whether it needs to be standard is debatable. In the US you can’t get royalties for playing music in bars and hairdressers, but you can in the EU. You will see convergence, not universally, but it’s always in an upwards direction. Since WWII the tendency has been to ratchet upwards, because producers are more articulate than those who consume it.

NH: Is it realistic to expect intermediaries like ISPs to supply revenue to rights holders

IB: It shouldn’t happen in a compulsory way, but there are already ISPs who are negotiating licences, and it’s worth experimenting.

AG: ISPs loomed in our discussions, and the music industry saying that ISPs sold their services on the back of downloading, so the ISPs should look at that.

NG: What will happen is that the ISPs will become part of the content industry, and having a strong legal framework promotes that negotiation.

EG: Contributors should have nothing to fear from this new platform, it’s another way to get more revenue.

NK: we need to take account of open systems, that’s not distributed by major players that deserve remuneration.

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