Transcript: Dr Mark Williams

Transcript of Dr Mark Williams presentation at the Rights Online Forum, Arts Law Week 2007, 9 May, Cinema Nova, Melbourne.

What I’m about to say [may be] too offensive and some of it will be a bit discursive but I hope we can explore that in a minute in relation to just the general question & answer that goes on afterwards because there’s a whole lot of ideas going sort of simultaneously.

I wanted to talk what it’s all about and a diagram that you can’t even actually see from up the back there. This comes from a report called Culture in Content which was produced by Terry Cutler’s company in 1994 so we’re not talking anything new here. This was his idea of a generic value add chain and it applies, curiously enough, in just about any industry I’ve ever worked in. It works really well in waste management, for example. It works quite well in relation to the conventional model for distribution of stuff.

[On the] left hand side: Participants. In a malfusian (sp?) sort of environment, the number of people will always exceed the food supply, who want to produce stuff. As a general rule, we call them the content creator or developer – you, generally speaking. Down the bottom here, a retained percent of consumer price – so, retained amount of the, if you treat it in percents, at the far end, between 3 to 15 percent going to the creator at the beginning of the process.

And that’s true. Waste management, round about 3%. If you’re Steven Sondheim (sp?) doing a musical, about 15%.

Move through to the packagers, the publishers, the producers, the people who actually aggregate this stuff, get it into a form that people want, pick the zeitgeist, do all that sort of stuff. Many, not lots. Quite large proportion of the final amount going to them. Somewhere around 25 to 45 percent. Book publishing, 45% is about right for the publisher. And then out of that will come something in publisher’s net receipts back to an author. Same thing in relation to a film producer, certainly in relation to the producing of live stuff.

Service providers – we’re getting a thinner pipe. Wholesale distribution - we are getting a very very tiny pipe indeed. You think of the record industry – the recording industry majors, just 5 of them. And then suddenly we’re out into the retail distributor outlets – they’re taking between 50 and 60 percent between the distributors and the retail outlet. And then finally we’re getting to that mass market, hundreds of thousands, millions and millions of millions, that we all hope to get to. If we stick around for long enough and it passes from person to person long enough, heaven forbid, our stuff on that side might not just reward us, it might become something which we call part of the culture – but, it’s got to go through a very fine pipe.

If you think of the television industry, you’ve got 5 channels, 6 channels in Melbourne, you can say the same thing in relation to a whole lot of other things.

Terry Cutler pointing out in 1994 that with convergence technologies we were about to go from creator to the hundreds of thousands through either a very thin pipe indeed, that only has one person’s name on it, and it might be Telstra, or a pipe many to many, or few to many, which we’re going to call the Internet, and that that channel is actually designed to be proof against any one person shutting it down.

Next set of debates – next set of dichotomies that are going on and that are now probably 10 or 15 years old. Law vs Code: Most people, if you read Nicholas Negroponte from about that time, if you read Lawrence Lessig – I don’t know if anyone’s aware of Lessig – Code and Other Laws of Cyber Space – fantastic book – Code was going to be the answer. I went to a thing in Geneva in 1999 and all the techies were saying we’re going to either be shut out by people copy protecting everything that we can’t hack into or code is going to mean that we don’t need laws in cyberspace anymore – you’re either on or you’re off. I went back two years later - it was only a couple of days after September 11 – suddenly in that two years things had changed. Everyone realised that there were going to be areas in relation to cyberspace in which code was just not going to work – that we were going to have to have laws of some sort. People live places, in fact, as a general rule, people who want earn, to enjoy the fruits of their ill gotten gains, will tend to want to live in nice places where they have reasonable laws against getting mugged and getting your bag stolen. So too they’re going to have reasonable laws about getting your stuff stolen.

There’s another debate that’s been going on for a while about what copyright’s all about – if you listen to the American people, it’s all about copy right – right to copy, it’s all about industries that are downstream from the right to copy. If you go to the Europeans, they talk about la deteur, if you’re speaking French – certainly the rights of the author across the European side tend to be privileged, over and above the issues of the right to make mass market and monopoly profit. Then we’ve got this other economic question that the economists are really having problems with – are copyright laws about incentives to create so that you get a fair reward for what you do and you actually decide not to become a stockbroker, you actually choose to be a film maker for 20 years of your life because there’s going to be some reward for this effort. Or do we actually just accept the myth that because of our fatal decision to become a film maker or a painter we are never going to get a reward for effort. The laws have always been designed to actually do something about this incentive vs reward issue – and some people will argue that the extension of the copyright term in fact is an acknowledgement of the fact certain things, particularly if they’re cutting edge, take longer and longer to put together over time and take longer and longer for the rest of the world to understand what you’re all about.

Now, some people will give you a reactive model about the way that the world is working at the moment. That technology allows you to do stuff, so people do it. Why should that be wrong? Technology is like thought in that sense. It’s regarded as a human good, which allows us to roll over other things that are going on. And certainly there are some communications company that think it’s fantastic that we’ve got lots and lots of users and they don’t particularly want anyone to pay for the content because they’re already getting money from owning the pipes. Ok, fine. I happen not to agree with that. People do, however, do establish norms. Once you get something, whether it’s your mobile phone, whether it’s your computer, whether it’s a book, there are certain ways in which it is used, produced, transmitted from one person to another, resold if necessary, hired out, lent. You know we’ve had libraries that have responded to the book. The photocopier has responded to the book in certain ways and book publishing has responded to photocopying in other ways. As the behaviours develop and the norms of what is and is not OK behaviour when we use these machines gradually establish. Finally, at that point, so this model goes, we have law. We start getting sanctions. In some cases law, under the common law in dealing with cases from time to time about who sold this Internet company to the other, establish certain things about what is and isn’t a fair thing. In other cases, owing to political pressure, Parliament will step in and make laws – and we’ve just seen this experience with the latest copyright amendment act. And then we’ve got sanctions – we can’t have law, so the argument goes, unless we’ve got sanctions, unless we’ve got a big stick. And it’s the big stick that we’re always afraid of. And it’s certainly, when you’re dealing with getting someone else money that isn’t creative, that isn’t smart, that just wants a return on its investment, it isn’t going to go anywhere where it could lose that money or get fined or bashed up, so there’s this general feeling that law, under this model at least, is something that’s stopping you from doing things.

I tend to look at it in a slightly different way – that it’s law is informing all of these things. We don’t necessarily pass a law that says when a contract is made by email, it’s going to stick. Contracts have been made by email since the early 70’s, particularly in relation to bills of lading for ships. Huge cargoes have been changing hands on the basis of electronic communications. We didn’t have a law to say that. We’ve now got an electronic transactions act that says it’s OK to buy and sell things on the Internet. People came to see me about eBay a few years ago, or an equivalent of eBay, and said can we do this or can’t we? And of course, you had to say if there are humans involved in this, even though it’s mediated by machines, we think that the laws will go in this way. And certainly that it’s been a feature of my career, 5 to 10 years out ahead of what the laws are going to say, you actually have to make contracts – people have to make private treaties between one another. So there’s an awful lot of human interaction, from the known to the unknown, going on in relation to these technologies. And the norms that we establish when we’re dealing with one another and the behaviours that we have, all of these things that have been enabled by technology.
Now each of these things, and we’re talking about rights on line, and I appreciate very much that this is an Open Channel outfit and that a large number of you are film makers, but I thought I’d just go through the different responses at least, in a very sketchy way, about how the different industries and different media, which have been, if you like, in these different funnels in the copyright law, have responded in the last little while. And music, of course, is the one that everyone’s most exercised about at the moment. Apparently on the 12th of April, about 3 weeks ago, the 100th millionth iPod had been sold and someone’s statistic at least says that only 3% of iPod downloads are currently being sold out of iTunes. So, that’s a little bit in excess of the 60% of pirated stuff, this one suggests that somewhere there’s 4% missing, if we look at the addition there, that might be legitimate, but the other 93 or 97 percent came from somewhere else entirely.

Digital sound broadcasting, however, is interesting – as opposed to the file sharing and really easy copying technologies – broadcasting technology, point to multi-point or point to point, which is directed, is a slightly different story. Proprietary devices or open source technology like MP3 is none the less working in certain predictable ways and the technology is still, to a certain extent, being controlled. Mobile telephones certainly – the use of copyright material on mobile telephones is something that’s reasonably complicated technology, heavily regulated by government because they don’t want the airwaves getting gummed up, as a result it’s still operating in a fairly orderly market. WiFi radio is going to be quite interesting, certainly WiFi and the fact that radios are streaming on the ‘net is a very interesting space to me at the moment. There’s also this question about the fact that it is there, that broadcasting is actually there, so you go and get it, as opposed to having it pushed down the airwaves at you, in certain situations. So the APRA statistics indicate that their licensing models that are going on – anyone here a member of APRA by chance? Good! – Anyone else here know what APRA is? Good – most of you, that’s great – So, for those of you who might not be aware, the Australasian Performing Rights Association, also associated with the mechnical copyright owners association, the sound recording people, who collect on behalf of composers, from the big users of copyright material, who if the want to stay on air, have to abide by the law, as opposed to the other people who are sitting at home, who think that technology just allows me to do this so I can. And certainly the APRA statistics indicate that they are doing very very well. There’s a similar statistic you’ll find in the AMCOSS annual report that says they received $5 million for Australian composers from the moment iTunes opened up – now they consider that still only a very small proportion of the downloads that are going onto people’s iPods, but none the less, these rights that have been created under the Digital Rights Amendments are bearing fruit for some people.

We move into digital publishing and copying and the expectation that books and journals on demand, pay per view by download are going to increase, is being reflected in the way that CAL works. Now CAL is the Copyright Agency Limited, it’s the equivalent collecting agency for publishers and authors, and it was created to compensate for the hammering that book publishing was getting from the photocopier. As someone at CAL said when we were doing the hearings into the digital amendments, it’s taken nearly 30 years for the copyright industry to work out what to do about the photocopier, let alone what is going on in relation to online. But I don’t think that the message for creators or aggregators is all bad. It just takes a little bit more time. Let’s face it, it took a lot of people about 300 years to work out how to effectively market books. And certainly the online licenses are on the increase, so last year, 11.48 million was distributed from TAF and University electronic use. That is definitely going to rise. Another 4.8 million from people who want to do the right thing, or who can’t afford not to do the right thing, was also distributed under the voluntary license system. And that represents about a quarter of the 116-odd million that CAL distributed to publishers and authors last year. So this is quite big money that’s involved, and certainly for any of you who have ever received an APRA cheque or a CAL cheque, it does make things worthwhile, it doesn’t mean that you made a fatal decision to be poor all your life in relation to things that the world wants.

Going through to digital visual art – several different models going on here as well – I was on the board of vizcopy for a number of years and we got a particular grant that allows us again to enable people to do the right thing, both to get a file in a format that they actually can use, and in this case this could be anyone from someone who wants to do greeting cards or big big billboard style posters right through to someone who just wants it for their wall. So they can get a file in a size they want, as well as a license for a price they want and they can get it right through the site at the same time. That’s one model that, I think, is going to be easier and easier. And again, the MP3 people will say look, the whole point is if you make things easy and the stuff is good, people will tend to want to do the right thing.

Red Bubble, another little portal that’s opened up recently, Melbourne based – anyone know Red Bubble at all? Any of you contributing to Red Bubble at the moment? – It’s essentially an online community arts site, designed for people to put up their own artwork and then, if you like it, you can apply and they will post you out a properly printed, or a proper version of what you’re getting, rather than just trying to use a thumbnail. So there are only thumbnails up in the case of the Red Bubble site, the best stuff is not up there, and as a result that model seems to be working quite well. They’ve only been launched for about 6 months now but I commend them to you as a different way of both building a community, increasing the amount of dialogue and also enabling people to do the right thing by one another.

Digital video broadcasting – the holy grail – we haven’t got there yet because real time downloads are a way off yet. But again, DVB is a European standard which is being worked on by all the big European broadcasters to enable both pay per view and enable people to make things freely available, either on commons licenses or once only use licenses or just have a look and then move on. Bolted onto that can be content protection and copy management protocols in one form or another and again this is code being a method not of saying no and waving a flaming sword that no one can ever get past, but one that says - flags - please do not copy here, if you do there will be sanctions, law will follow on. So law and code operating in tandem with one another, not locking one another out.

Then there are some other unifying factors that are going on in the rights environment online and this is outside the copyright area, but complimentary, and this is the thing. No one thing operates in isolation from one another. Good manners, the norms by which we behave to one another, slides into hard edged law by which you get shot for copyright infringement, but it’s a continuum, there’s no one solution here. But identity and trust is becoming very important. In relation to any art, where it came from, the authenticity of it, that I am dealing with the artist, that if this distribution chain has now shortened a great deal, I feel that I am actually supporting my artist at a fair price by buying the music from them and not some bogie multinational which has been set up by other people, is tending to protect the record sales of artists who behave in a way that is not rapacious, dare I say it. If you look at the big rock n roll, big pop music areas, yeah they are suffering badly from copyright piracy, online piracy. If you look at folk, if you look at country, if you look at a whole lot of niche markets, they are not suffering the same. In some cases that’s because the distribution channels are much more direct.

So, who you are, the signature that you place on your work, whether it’s by style or whether it’s by an actual signature, your URL, working out by web search optimisation or whatever other tools that you’re using, that people are being funnelled to the right place and not the wrong place, and carrying on those sorts of activities in cyberspace, and having validation through your own trademarks, and your own design rights and your own patent rights and, dare I say, in some cases your own copyright certification. Until a couple of years ago I would have said no need to get copyright certificates out of the United States, no need to register since the United States became part of the Bern Convention. Nowadays, I’m not so sure and the view I would take is that certainly if you want to sue in the United States, you have to have registered your copyright, so that there is some benefits in doing those sorts of thing now.

Building the community. Having those links to tangible things that mean that people know that you are going to come out and tour as a result of your getting lots and lots of hits on your web site. That you go where your public is, that you actually use the web in such a way that you get feedback as well as just pumping it out in return for money. And then linking to the live, so that you again keep this online environment real, seem to me to be all features of the way we’re going to move through online mediated space and into something that looks a little bit like the present but also looks a little bit like something else entirely. So the opportunity is that online is a medium, it’s not the end in itself. There are still very very few people making money out of just being online. It allows you one to many, one to one, many to one but you can’t necessarily do one to many in the sense that you can’t push it at people, they have to come and find you, so you’ve got to actually be enticing if you’re going to be doing these sorts of things and building your identity on the ‘net. It shortens the distribution chain certainly and it certainly lets you bundle it, lets you allow people to have the dvd, the music, the sheet music even. It allows them to have their shopping carts and all those other things. And certainly some people who are aggregating in these areas quickly are doing very very well indeed out of it.

So my take away message would be that content is still content. Better content is still always going to be more attractive than stuff that is pirated, fuzzy, useless, liable to blow up in your face, out of date. And that the person who is most interested and has the most concern in relation to content is going to be the creator. The Internet is liable to allow that creator to be privileged in continuing to preserve that link and that integrity between creator and the ultimate person that you want to speak to and who wants to speak to you. Identity in integrity in what you do haven’t left the building by any means, in fact they’re probably things that people should be thinking about enhancing more. And that one’s identity on the ‘net is still simply an idol on of what you are, a halo what you are, it’s still not what you are. Now obviously you can make what you are more strong to people – if you do I think there are rewards there. Of course, as an artist, you are always giving away good stuff. But, in this online environment, there is certainly some models by which one can reserve the better stuff for the people who really want it and that you can preserve it yourself as well. So my message is it’s not all doom and gloom by any means, and for people who are wanting to take stuff, do you want it done to you? It’s one of those reasonably simple principles.

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