The City Livery Company for the
Communications and Content Industries
COPYRIGHT IN THE DIGITAL AGE
Dominic McGonigal, Director of Public Affairs, PPL
Ten years ago, at the height of the dotcom boom, the futurists were predicting the demise of copyright. Those futurists can now skip to the final paragraph to see if they were right. Others might take a journey through the ages and wonder if this is anything new.
300 years ago, copyright was a radical concept, breaking through in the dawn of the Enlightenment. Our forefathers broke the old monopoly system and gave authors control of what they wrote. Queen Anne granted “the Author of any Book or Books…the sole Right and Liberty of Printing such Book and Books.” For the first time, authors had the essential bargaining chip, ownership of their work, when negotiating with the booksellers. They could trade ownership of their work in return for royalties, advances or other benefits.
It is interesting to speculate as to what predictions were made back in 1710 as this new concept was introduced into statute. Certainly there were disputes between booksellers as to nature of copyright granted by the new statute. In time, history confirmed it as a property right which increased the trade in books, based on their intrinsic value rather than an artificial monopoly on production and distribution.
As the Enlightenment gave way to the Industrial Revolution, markets grew and production mechanised to meet growing demand. Copyright remained the mainstay of authors’ agreements, but it was contractual provisions through the distribution chain which controlled the economics of the business. Copyright became the subject of debate again in the 19thC with Charles Dickens deploring the rampant piracy in the original Wild West of America, where there were no copyright laws and Thomas McCauley describing it as ‘the least objectionable way of remunerating’ authors in a debate in the House of Commons. Copyright was still not universally accepted. It was significant then that all the major trading nations met in Berne in 1886 to sign the first international copyright treaty. In the 20thC, international treaties were developed to cover all forms of creative work and their exploitation.
However, throughout these three centuries, from 1710 to 1999, copyright underpinned a renaissance of creative output and ever wider access to literary and musical work, resulting in creative industries which form an essential element in a modern economy. Yet, copyright remained largely hidden from public view, buried in artists’ contracts, distributor agreements and High Court judgements. Copyright infringers were generally rival businesses or illegal operators out to defraud the artists’ business partners.
Then, along came the Digital Age. In 1999, Napster launched and the entire catalogue of the music industry was available, online, free and illegally. Suddenly it became possible for anyone to take, first, a music track, then a TV programme, then a film, a computer game and even a whole catalogue. Consumers met copyright and it was not a marriage made in heaven. Rather than ‘yes, we can’, the first experience was ‘no, you can’t’. By the time the legal services were readily available some five years later, people had already become used to circumventing the normal rules and getting everything free. All the accepted behaviour of the High Street had been usurped in a no-questions-asked culture online.
The digital utopians leapt on this and declared that copyright was dead. They wanted to mix and match with impunity. They heralded a new age when users would generate their own content. The creator is dead, long live the user.
But is copyright dead? Or are the digital utopians simply wearing the Emperor’s new clothes?
In the digital environment, all we have to trade are intangibles. Some of that is raw fact and information. The more interesting material is the smart arrangement of that information and the creations of the heart and the mind.
How do you reward an artist, when a work can be accessed almost anywhere by anyone? How do you retain a link between an artist and their work when it can be cached on a billion computers? Throughout the Enlightenment and the Industrial Age, distribution channels could be controlled and there was a contractual chain from consumer back to artist via a handful of intermediaries. In the Digital Age, a track can be available to billions of consumers from the moment it is released and once it is out there, the artist and their business partners often have no relationship with the end user. Control of a distribution channel no longer works.
And yet, that track, that book, that film, that game still has a value. Arguably its value has increased as more people access it, listen to it, read it, watch it or play with it. It has been freed from its physical shackles and can be enjoyed for what it is. A creative work. A piece of copyright.
That’s where the 18thC concept of ownership comes into its own. If you know that the recording you see on your file menu belongs to those who created it, there is an automatic obligation to the artists and producers. You can’t take someone else’s work, just because it is convenient to you. These principles are well established in the physical world, but we have yet to accommodate them in the virtual environment. It is not the concept of copyright that is dead in the digital age. It is the application of that fundamental principle – that you own what you create – which is yet to be fully realised online.
The key to application of copyright in the Digital Age is licensing. It is licensing which converts the concept of value in a creative work into a reality. Licensing establishes a two-way relationship between user and rightholder, no longer reliant on industrial distribution chains, but rather on the intrinsic value of the work to both consumer and artist.
It is easy for history to assign a date to a revolution – 1789 in Paris, 1914 in Sarajevo, 1933 in Berlin, 1999 on the Internet – but change is never as tidy as that. Just as there is a lag as the world catches up, there are pre-cursors that set the agenda for future generations. Thus, throughout the second half of the 20thC, new licensing models were developing, designed initially for a highly mechanised world where production costs tended towards zero, but equally applicable to a network world where large-scale distribution becomes generally available.
The transformation of music publishing is a case in point. In the 1950s, the sheet music chart was what counted and the business of the music publisher was to reproduce, distribute and sell large quantities of their composers’ work in printed form. By the 1960s, the record chart had taken over and sheet music sales plummeted. Within a space of ten years, their business had moved from control of a distribution channel to licensing the music itself. What mattered then was the value of the song, to the user and to the composer.
Licensing now takes many forms and is arguably most developed within the music industry, although new structures have emerged recently in book publishing and photographic libraries. At one end there is an individual licence for a single work for specific uses. An iconic recording in an advert gives enormous value to the brand and consequently attracts a significant payment in a sync licence. At the other end of the scale are the collective licences where a whole catalogue is bundled in a single licence for multiple use. Radio is the classic example where each trackplay generates a small payment, but those payments are aggregated in an annual licence and paid through a collective licensing body. Effectively, the collective licensing society acts as a clearing house between the millions of listeners hearing hundreds of thousands of tracks and the tens of thousands of performers and record companies who have created and invested in those tracks.
More recently, variants of these two models have been developed to deal with the increasing demands of simplicity and speed. The aim of each is to assess the value of a particular use and return that to the creator, usually using a consumption metric generating royalty payments. It is a dynamic pricing model that is flexible in relation to changing levels of use. Increasingly, the trend has been to reduce the transaction costs to a minimum so that the true value of the work is realised, rather than the incidental physical and administrative costs.
One particularly imaginative variant was developed around twenty years ago in the UK. It addressed the most difficult area, where the potential conflict between public demands for unimpeded use and creators’ concern for the value and integrity of their material was most acute. This was the use of TV programmes in the classroom. No one doubted that children should have access to this valuable resource. The challenge was finding a solution which allowed teachers to incorporate any programme in the curriculum whilst ensuring the rightholders received their fair dues. All the while, the transaction drag had to be kept to a minimum. The result was an ‘exception subject to licence’ introduced into the 1988 Copyright Act. A year later, the Educational Recording Agency was founded, offering a single annual licence to schools, returning the revenue to all the contributors – the broadcasters, the authors, the actors, the artists and the producers. That is a model that is being considered in other similar statutory situations.
We enter the Digital Age then with an apparent paradox. Creative work is consumed more than ever, yet creators’ income is falling. Licensing models exist to deal with the scale and breadth of the networked world, yet online piracy remains the norm. Something is missing. There is a break in the chain. And it is the gaps we have allowed in copyright.
Our forefathers in the Age of the Enlightenment gave authors ownership of their books and largely left them to work things out with the booksellers and others. Our best intentions in accommodating other worthy interests has compromised that ownership and left havens where respect for the artist can be overlooked.
So, were the futurists right? Is copyright dead? No. The Digital Age is the apotheosis of the Age of Enlightenment. Creative work is free of physical shackles. It is copyright which allows its true commercial value to shine through. The challenge now for legislators and others is to allow ownership to take its course so creators can reap the just rewards of their labour for another three centuries. Once we to do that, we will have the truly enlightened age envisaged by our forebears.
Beginning his career as a chorister, Dominic McGonigal studied music at Kings College, Cambridge, where he sang in the choir. He became a trained conducter, performing in front of millions of people on television in productions such as the Festival of Nine Lessons and Carols. He then began to focus more on the business aspect of music, and after a stint at PRS, became an executive director at PPL. He is currently the director of Government relations at PPL, involved in membership distribution as well as being a director of Government legislation. He still finds time to sing in choir performances and do a spot of conducting.
2019 update: see https://www.c8associates.com/dominic-mcgonigal
Abstract: 300 years ago, copyright was a radical concept. It generated disputes in the early days and has periodically inspired controversy ever since, culminating in the abolitionists of the dotcom boom. Ten years ago, the futurists were predicting the demise of copyright. But is copyright dead, or is this the coming of age for this concept, which still feels new after three centuries?
Certainly, the Digital Age has challenged the notion of ownership, when the entire music catalogue is now available, online, free and illegal. When consumers can circumvent normal rules and get everything free, what is the future for copyright? How can artists reap their just reward from their work?
The answer lies in the hidden business activities in the creative industries in the past few decades. Out of the limelight of the digital revolution, a range of licensing models have been developed to deal with the conflicting demands of ever increasing volumes coupled with simplicity and flexibility. The paradoxes are evident. Creative work is consumed more than ever, yet creators’ income is falling. Can licensing bridge this gap? Does copyright have a role in the Digital Age? Are we now living in the true Age of Enlightenment?