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Digital and Creative Industries Growth Review

1. How can the international regulatory regime, including intellectual property, adapt to the rise of the Internet and its threat to our ability to protect and monetise creativity?

ORG does not accept that the Internet per se threatens our ability to protect and monetise creativity.

There are many examples all over the world where the Internet has enhanced creativity, by enabling artistic collaboration or effective teamwork. Private communication over the Internet is readily available for those who wish to protect their work before publication. The Internet also provides access to markets on a scale never before available to creative people, from the smallest owner run business right up to global companies, not least by vastly reducing production and distribution costs which are key barriers to entry.

The Internet is one of a group of digital technologies that have created opportunities for completely new products and services, from music downloads and streaming to online gaming, blogging, and interactive media production.

Copyright infringement is a serious problem in the online world, just as it is in the physical world. It is ORG's view that copyright owners have been slow to allow services to come to market which take advantage of digital technologies in ways that meet consumer demand.

Instead copyright owners have preferred to use technology to attempt to stop consumers making use of content in new ways, and have successfully lobbied for new legislation on enforcement. Without a wide choice of new and innovative services no amount of new legislation will persuade consumers to support the content industries.

ORG therefore contends that too much protection, along with the promise of more, and more stringent, legislation to come, damages our ability to protect and monetise creativity by incentivising content owners to delay their adaptation to the new world.

Indeed, where possible the international regulatory regime should prefer remuneration rights over exclusive rights, and should seek to ensure that classes of rights owners cannot hold complementary rights holders and rights users to ransom through arbitrary withholding.

ORG further urges the Government to make a full recognition of the role of the creative individuals, small groups, and small and medium sized companies, which are the heart of the UK's creative industries.

Historically the creative people and smaller companies have shown themselves more adaptable and more innovative, as demonstrated for example by UK independent record labels collectively licensing the first Napster filesharing service while the major labels were trying to shut it down.

Lastly, no regulatory regime should itself breach fundamental rights to privacy, nor undermine the traditional balance of interest between the creator and the public. The Government has already enacted legislation which encourages copyright owners to conduct mass private surveillance of ordinary law abiding people in order to catch an infringing minority, and which could be said to presume guilt on accusation.

Technology and contracts are being used to undermine normal educational and private use of content, and are rendering impossible activity which might have been considered 'fair dealing'. Even the copying of a CD onto an iPod remains an infringement, a stark demonstration of the sidelining of consumer interests in the copyright debate.

2. How can the competition regime, and its application, be best structured, empowered and guided to deliver a competitive and thriving UK media sector?

While ORG has no preference for any particular business model, product, or service, it supports innovation and fair competition in the media sector. It is vital that the Government identifies and neutralises any (anti-) competitive forces that are preventing new products and services from coming to market.

ORG notes that new services will not gain wide consumer acceptance without full catalogues of content available, giving key copyright owners more opportunities to act anti-competitively even where they might have a relatively low overall share of the market. For instance, withholding 20% of the 'top ten' in any sector would destroy a popular media service's ability to attract customers.

It is highly unusual that wholesale providers of any product are able to influence the business model, the price, or indeed the ownership of retailers, yet that seems to be the norm in digital media.

ORG asks the Government to ensure therefore that markets are fair and open, and suggests that a healthy wholesale market with non-discriminatory copyright licensing will ensure a competitive and thriving media sector.

ORG suggests, moreover, that apparent attempts to reduce consumer choice, through 'picking winners' and trying to force preferred technologies onto consumers could well be a symptom of overreach by copyright owners, and would be resolved through fair competition and open markets.

3. Do we have the right structures in place to allow our creative industries to exploit developments in technology to maximum benefit?

ORG believes that the wide adoption of digital and communication technologies should present our creative industries with many new opportunities. However, more than ten years after the introduction of broadband Internet services, creative industries organisations are still lobbying for new laws and stronger enforcement despite evidence that serving consumers better is a more effective way to fight copyright infringement.

The Government can contribute to the natural progress of innovation and evolution by ensuring fair and open markets for creativity, and by protecting the fundamental rights of consumers and citizens. ORG suggests that attempts by Governments to intervene in order to protect or promote some industries at the expense of other industries or consumers are unlikely to achieve either a healthy creative sector or widespread popular support.

ORG therefore asks the Government to make a full and close study into the reasons why some parts of the creative industries prefer to withhold their content and outlaw digital technologies rather than ensure consumers have a wide choice of compelling services at affordable prices.