Archive

Posts Tagged ‘‘death of old media’’

Musicians, Labels, Bankers and Retailers: Who Gets Paid What in the ‘Digital Music Age’?

Here’s something to get you seething, especially if you’re a musician. I came across it the other day in a book I’m reading: William Patry’s (2009) Moral Panics and Copyright Wars (Oxford U. Press).

Patry is a lawyer at Google, but as he admonishes us at the beginning of the book, don’t mistake him as a shill for the company. No, he seems much smarter than that and he gives us a learned treatise on copyright, its history, and the repeated ways in which the copyright industries have tried to whip up the public, nay, the politicians who write the laws, into moral panics.

As he notes, the Copyright Wars have broken out repeatedly for nearly 300 years. In each case, morality and the sanctity of the artist is invoked, yet mostly as a way of legitimating claims that allow the distributors (who are also often the financiers) and not the creators to obtain the lion’s share of the spoils from whatever art form is at stake — books, music, films, etc.

In terms of moral panics, the basic ingredient is to make the industry’s problem a public problem of the highest order, one in which deviants — mods and rockers in the UK that lead to Stanley Cohen’s pathbreaking sociology on ‘moral panics’ in the 1970s that Patry borrows from for his own title– threaten the fundamental foundations of society in one way or another. Now, it is pirates and people who rip and burn music, so the saying goes, that threaten to suck the lifeblood out of cultural creativity.

Patry, perhaps not surprisingly comes down full-square on behalf of the communication and media technology companies, the ones who make things from the VCRs and DVDs of yesteryear to the computers and smart phones of today: the Apples, Nokias, Microsofts, LGs and Google’s of the world. Copyright industries, in a tale well worn, but novelly told by Patry, are the enemies of innovation.

It’s a great read for anyone who wants to see how media technologies over the past four decades have been shackled by the music and movie industry’s penchant for either eliminating or blunting new capabilities that would allow people to say, record a broadcast and watch it at their own time (time shifting) or shift it from one device to another so that they can watch, read or listen to their content on a device or at a place of their choosing (space shifting). Great stuff indeed.

Now here’s the part that really got my goat, from page 118, where Patry breaks down who gets what in terms of the revenue generated from the sale of music. When CDs were king, musicians received about 9 percent of the sales revenues, the big labels (Warner, Sony, Universal, EMI), about 46 percent and the retailers (Walmart) 45 percent.  Key point: those who created the music to begin with were the low folk on the totem pole.

Now, fast forward a few years to the ‘digital music age’, where stuff is downloaded or streamed online from the likes of Apple, Amazon, Spotify and the 460 some odd other legit sites now in operation, according to the Recording Industry Association of America. So, have things got better or worse for musicians?

Worse. When it comes to digital downloads, musicians now get 8 percent (vs. 9), the label’s stake has soared to 68 percent (vs. 46 percent), the digital download sites get 15 percent (although Apple typically gets 30), and those who finance the transaction — credit cards and Paypal — get 9 percent.

It is a bit of a crazy, upside down world when those who facilitate the purchase of music actually get more than those who created the stuff in the first place. This is the intermediaries’ grubby tail wagging the musicians’ creative dog.

It is an index of a world out of whack. It is a world in which it is not pirates or music swapping amongst fans that are the problem but a set up in which the source of it all to begin with rank at the bottom of the heap.

More on how and why all of this ties back to Google, Patry’s place of business after all, and the rest of the ‘consumer electronics’ and ‘network’ industries in the next few days.  There is a tension between the latter and the ‘content industries’, and they are constantly at odds with one another, albeit just as often aligned. As Google introduces its own ‘digital swipe payment’ system, it now gets to stand midstream in the flow of money between media sellers and their audiences, as Visa, Mastercard, Paypal now currently do.

Google, like Apple want to bundle music and other media, with search or devices, and in their own digital lockers, or the more cuddly sounding notion of the cloud. In each, the bundling practice is presented as convenient, effective, technologically sleek and seductive overall. The name bandied about for such arrangements is ‘Total Systems Integration” (TSI).

I’m not sure why this is necessarily a bad thing. However, TSI sounds a lot like the notion of “one system, universal service” that AT&T rode to monopoly status for nearly a century. It sounds administratively technocratic.

Timothy Wu writes nicely about this in the Master Switch. I’ll write more about it, as I said above, in the next day or two. You may find the ‘refresher’ that I offered a few weeks ago on how the telegraph and telephone gave birth to the recorded music in the 1870s.

LobbyNomics: Kings, Queens, Copyright and Canada — Lessons to and from the UK

A new, independent report commissioned by the British Prime Minister has just come out. It’s observations are astute and damning: mostly with respect to the claims used to rush the Digital Economy Act of last year into law after only 2 hours of Parliamentary debate and for the exceedingly poor quality of the evidence upon which that questionable law, and the debate over copyright/intellectual property generally, takes place.

The report was penned by respected journalism Professor Ian Hargreaves, Digital Opportunities: A Review of Intellectual Property and Growth, and based on a team of highly regarded scholars, including the amazingly talented story teller and legal scholar, James Boyle (his 1996 Shamans, Software and Spleens is one of the most splendid books on knowledge and copyright in the ‘digital age’ that I’ve ever read).  The people behind the report are impressive; the range of sources consulted even more so.

The tone is set clearly in the Foreword. On page 1, it asks whether the U.K approach to copyright and intellectual property stifles innovation?  Yes, Hargreaves states without hesitating. Google, for instance, is on record stating that it couldn’t set up shop in the country

Are piracy and copyright infringement real problems. Absolutely, he states. “No one doubts that a great deal of copyright piracy is taking place” (p. 6).

However, the report tempers that with two key provisos — the equivalent of a double-knuckled blow against the central props of the ‘copyright industry’.

First, “sales and profitability levels in most creative business sectors appear to be holding up reasonably well.  We conclude that many creative businesses are experiencing turbulence from digital copyright infringement, but that at the level of the whole economy, measurable impacts are not as stark as is sometimes suggested (p. 6). This is pretty much the conclusion I reached in my column for the Globe and Mail this past Tuesday.

Second, “reliable data about scale and trends is surprisingly scarce” (p. 6). Since I’ve dealt with issues surrounding the economic state of the music and other media industries in other posts, including yesterday’s column, I will focus on the ‘quality of the evidence’ issue here.

Hargreave and colleagues are crystal clear that bad evidence is central to the whole issue of copyright law and adequately determining the vitality of the copyright industries as a whole, from music, to books, television, radio and animation — the whole gamut, including patents. A few examples help to illustrate the point:

  • “A detailed survey of UK and international data finds that very little of it is supported by transparent research criteria” (p. 6);
  • “There is . . . next to no evidence on copyright policy (p. 17);
  • “[R]eliable data is surprisingly thin on the ground” (p. 69).
  • “[W]e have failed to find a single UK survey that is demonstrably statistically robust” (p. 69).

The estimated scale of music piracy in the U.K. in the many studies they reviewed ranged wildly from 13 to 65 per cent (pp. 70-72). Studies globally are much the same, although a single study by Industry Canada and another by the Government Accountability Office (2010) in the U.S. (equivalent to the Auditor General in Canada) are singled out as exceptions to this rule, i.e. they’re good and follow valid analytical methods.

Based on the extremely poor quality of the evidence, the report states, “we should be wary of expecting tougher enforcement alone to solve the problem of copyright infringement” (p. 6).

Worse, not only have lobbyists been remarkably successful at driving an agenda on the basis of poor evidence, they have made “stronger Government action against online infringement . . .  their top priority” without the evidence needed to support such priorities (p. 67).

And the root of the problem?  The authors hold no punches there, either. “Lobbynomics”, they call it, a set of unfortunate circumstances whereby:

“Much of the data needed to develop empirical evidence on copyright and designs is privately held.  It enters the public domain chiefly in the form of “evidence” supporting the arguments of lobbyists (“lobbynomics”) rather than as independently verified research conclusions” (p. 18).

As Lord Puttnam, a leading light in the UK film industries and now MP, stated in regard to the rush job on the Digital Economy Act, “We have been subjected to an extraordinary degree of lobbying… The lobbying process . . . has done none of us very much help at all” (p. 6).

Worse, other MPs have apparently been star-struck by songstresses, celebrities and cinema stars: “there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes. (p. 92)
Cont’d on Page 2 . . . . . . . .

Pages: 1 2

“The Death of the Music Industry” in Canada and other Copyright Myths

The following is my column for the Globe and Mail today, with the addition of a few links here and there. I am fully alert to the fact that this is a very, very touchy subject, not least because musicians and artists are at the centre of the debate, but have been, other than a few megastars, the least to benefit financially from either conditions in the past, or those that prevail today.

Those interested in the topic might find my previous two posts of interests in this regard: the first one looks at the ‘methods’ involved in assessing the state of the music industry. It ends with the crucial proviso that we can collect “all the evidence in the world but still be morally stupid because you’ve thrown the artists and musicians amongst us under the bus”. In other words, this is not just about fun and games, but real people trying to make a real living.

That said, however, I am skeptical of the claims typically made on behalf the ‘music industry’, and equally circumspect that the interests of musicians are interchangeable with those of ‘the suits’ in the business. For those who want to hear something similar from somebody ‘inside the biz’, and who really knows his stuff, look at Bob Lefsetz’s newsletter.

Thanks to Bob, I’m listening to two great bands right now: Fleet Foxes and Mumford & Sons. It’s all about the music, being good, nay great, at what you do, and crucially the fans, those who adore your stuff and rave about you to others.

The second of these two posts sets out the idea that the music industry was in many fundamental ways the offspring of rivalry between the telegraph giant Western Union and then snarly upstart Bell Telephone Company in the late-1870s and 1880s. If rivalry between ‘network technologies’ gave birth to the music industry in the late-19th century, I think it is unlikely that ‘network technologies’ like the Internet and P2P are going to lead to their demise in the 21st century. History, in short, may be a useful and sturdy guide for thinking through the issues now in front of us.

Now, I’ll turn to the slightly revised/extended version of my column from today.

For more than a decade, the music industry in Canada, and globally, has been cast as being in dire straits — a portent of things to come for all media in the ‘digital age’, unless copyright laws are updated soon to combat illegal downloading.

The notoriety of file-sharing networks from Napster in the late-1990s, to Pirate Bay and the meting out of stiff punishment to Limewire is legendary. New sites emerge as swiftly as old ones are prosecuted out of business, fueling perceptions that the music industry is under siege.

Many claim this will only get worse as broadband Internet becomes a taken-for-granted fixture of everyday life. Copyright legislation has been proposed three times since 2005 by Conservative and Liberal governments alike.

Last year’s effort, The Copyright Modernization Act (Bill C-32), died when the election was called. It’ll be back. The Conservative’s election manifesto said it would be.

The Canadian Recording Industry Association (CRIA), backed by the Recording Industry Association of America (RIAA) and International Federation of Phonographic Industries (IFPI), argues that legislation delayed is justice denied. While Parliament dithers, they say, musicians and the music industry are getting slaughtered.

According to the IFPI, “overall music sales fell by around 30 per cent between 2004 and 2009” worldwide. The trend in Canada appears even worse, with “recorded music sales” plunging to a third of what they were in 2004, as the following figure shows.

‘Recorded Music Industry’ Revenues in Canada, 1998 – 2010

Source: Statistics Canada; PriceWaterhouseCooper.

But stop the music. What if this image of a beleaguered music industry is badly flawed?

Cont’d on Page 2 . . . . . . . .

Pages: 1 2

The Great Struggle for the Soul of the Internet and Network Media in Canada (Part 1)

A strange confluence of forces has just made the push to have Netflix and other over-the-top video distributors (OVDs) such as Amazon, Apple and Google regulated by the rules of the Broadcasting Act a whole lot stronger.

Events kicked into high gear this week when Astral Media renewed calls for the CRTC to regulate OVDs just like any other broadcaster. Bell, Rogers and Shaw quickly endorsed the call.

Astral, Bell and other incumbents are coming under increased scrutiny from investment bankers worried that OVDs could wreck their bottom line and this seems to have increased their resolve to thwart would be rivals. Moody’s — the investment ratings agency – also recently raised such concerns, while casting doubt on the dominant integrated media companies’ — Bell CTV, Shaw Global (Corus), Rogers City TV and Quebecor Media – decisions to acquire ever bigger stakes in the television business.

When investment bankers worry, CEOs tremble and Netflix as well as the open Internet generally could end up paying the price.

The Canadian Media Production Association‘s recent appeal to the CRTC to regulate Netflix under the Broadcasting Act added to the full court push, as did the Supreme Court‘s decision last month to hear a case from various groups representing media workers who want ISPs as well as Netflix, Apple, Google, and so on to be regulated like broadcasters.

Lastly, a Standing Committee on Canadian Heritage report published last month and the CRTC’s upcoming reviews of its unpopular wholesale UBB decision and vertical integration have also brought the issues to a head.

These issues are not new. In fact, in its famous “new media” decision in 1999, the CRTC categorically asserted its authority to regulate broadcasting services delivered over the Internet, but decided to stand on the sidelines while such services were in their infancy.

The vertically-integrated, dominant telecom, cable and internet service providers love the approach because it has given them a green light to develop new markets while letting them off the hook with respect to issues about vertical integration, anti-competitive behavior, Cancon requirements and funding commitments in the emerging digital media universe.

The CRTC’s decision to stand on the sidelines has no doubt played well to the ‘hands-off-the-Internet’ crowd, as well. The truth is, however, that this has only postponed the day of reckoning.

That day of reckoning has been moving ever closer since broadcasters finally made a concerted effort to launch substantial video portals in 2007/2008 (e.g., CBC.ca, CTV.ca, GlobalTV.com), while offering some programs through Apple iTunes and YouTube. Simultaneously, they have  fought tooth and nail to defend their existing markets and expand into new ones, while using a well-stocked arsenal of measures to block rival OVDs such as Netflix. Six such tactics stand out:

First, bandwidth throttling was used by Bell in 2008 to cripple the CBC’s attempt to use BitTorrent to distribute an episode of Canada’s Next Great Prime Minister, while today Rogers’ throttling of P2P applications causes no end of frustration for those who play World of Warcraft online.

Second, ‘bandwidth caps’ and Usage-Based Billing are being used by all of the major ISPs to deter online video use. Netflix has deliberately degraded the quality of its service to help subscribers avoid these punitive and restrictive measures as a result.

Third, the incumbents do not apply the same measures to their own services. Bell’s chief regulatory officer, Mirko Bibic, recently provided a great example of the tortured logic used to justify such treatment when he argued that, despite using the same network facilities, Bell’s OVD service is not a ‘true’ Internet-based service, while Netflix is.

Fourth, the incumbent telecom and cable companies’ refusal to interconnect their systems with others has blocked large OVDs and Internet companies such as Amazon, Apple, eBay, Facebook, Google, and Netflix from bringing their ‘content distribution networks’ as close to users as possible.

Fifth, Canada’s integrated multimedia conglomerates have used a combination of program rights, geo-gating and digital rights management (DRM) technologies and a smattering of deals with Apple and Youtube to shore up their control over access to our ‘national media market’. The Rogers, Bells, Shaws, Quebecors, and so on of this country do not like the prospect of having to compete for each and every new digital market with newcomers one bit; nor do cable providers in the United States.

As a recent New York Time’s article observes, Time Warner and Cablevision are locked in battle with Viacom (MTV, VH1, etc.) and Scripps Howard (HGTV, Food Network, etc.), with the cable companies arguing that the rights they have acquired to deliver channels to audiences’ tv sets also lets them beam those same channels over the Internet to iPads and iPhones. Viacom and Scripps Howard vehemently disagree.

In the incumbents’ “perfect world”, they would simply fold the OVD market into the suite of rights they acquire for traditional television markets without having to compete with Netflix at all. If they had it their way, the Internet would just be bolted on to the side of their lucrative television business.

Netflix strengthens the hands of content creators and rights holders on both sides of the border relative to traditional broadcasters. In Canada, this battle over the essential resources of the media economy — networks, money and copyrights — are concealed by a fog of sanctimonious rhetoric about cultural policy led by vested interests.

Seen from the broadcaster’s point of view, Netflix’s recent acquisition of new drama series and its deal with Paramount Studios for online video distribution are just further evidence that the company is steadily encroaching on their turf — one more reason why it should be quickly brought to heel. Even if we thought for a moment that regulating Neflix and OVDs was a good idea, what should we do as Hollywood experiments with using Facebook as a new ‘window’ for blockbusters such as The Dark Knight, Philosopher’s Stone, Yogi Bear, and Chamber of Secrets, among others?

Do we regulate Facebook as a broadcaster too?  I’m all for attending to that company’s privacy issues and other mattters, but Facebook and broadcasting? Obviously, there is no shortage of slippery slopes and pitfalls along the incumbents’ garden path.

The sixth defensive weapon in the incumbent’s bid to hobble new rivals is their coordinated push for government regulation. Perhaps the award for sharpest U-turn on these issues goes to Shaw after it acquired Global TV in the fall of 2010.

After a decade of opposition to the CRTC in general and to the regulation of the Internet specifically, Shaw President Peter Bissonnette laid out the new gospel in front of the Canadian Heritage Committee referred to earlier: “If there’s one message we want to leave with you . . . it is that over-the-top competitors have a free ride. They’re aggregators of broadcasting. They provide broadcasting services in Canada.” They should be regulated like broadcasters.

For anybody still under the illusion that the Internet is unregulable, Shaw and others point to extensive regulatory tools that they’d like to see pressed into service: e.g. ISP levies; extending Section 19 Income Tax Act Exemptions so that adverting on Canadian Internet sites can be written off just as it is for Canadian-owned newspapers, magazines and broadcasters; Canadian Media Fund contributions; Cancon Quotas, etc.

Acceding to the full sweep of this agenda would not just wreck Netflix’s ‘business model’, it would destroy the future of the Internet. To stem the tide, we need to understand just how wildly out of synch the ‘sky-is-falling’ rhetoric is with the fact that the television industry is more lucrative then ever. We also might wonder if Netflix, Apple, Google, Amazon, et. al. might agree to adding some water to their wine in return for a quick stop being put to the discriminatory practices that now hobble their activities in Canada?

Cassandra’s and Copyright: Creative Destruction and Digital Media Industries

A new study released yesterday on peer-to-peer content sharing and copyright in the United Kingdom, Creative Destruction and Copyright Protection, provides a further challenge to those who claim that strong new measures are needed to make sure that swapping digital content online does not damage the bottom line of the media and entertainment industries. The study was co-authored by London School of Economics and Political Science Professors Bart Cammaerts and Bingchun Meng.

It is a part of several steps being taken in the U.K. that challenge last year’s hastily passed Digital Economy Act. The bill became law after only two hours of debate in the House of Commons and is a real gift to the media and  entertainment industries and the various lobby groups that represent them: e.g. the International Federation of the Phonographic Industry (IFPI), its British counterpart, the British Phonographic Industry Association, the Recording Industry Association of America (RIAA), Motion Picture Association (MPA), and so on.

Among other things, the Act turns Internet Service Providers into agents of the media and entertainment industries. Upon notification, ISPs must send a warning notice to suspected copyright infringers and if that does not work they can be directed by the Secretary of State to disconnect the offending user.

As the IFPI noted in its latest Digital Music Report, it has been pushing for such measures around the world in the past couple of years. Indeed, this push supersedes the emphasis earlier in the decade for DRM (digital rights management technologies).  The IFPI has chalked up several ‘wins’ for this approach in the UK, France, Sweden, South Korea, Taiwan, and a few others (see pp. 25-27).

Two of the biggest ISPs — BT and Talk Talk — in the UK have not taken these requirements lying down. They have launched a legal challenge that will be heard this week by the UK High Court of Justice on the ground that the Digital Economy Act’s requirements amount to overkill.

Cammeart and Meng are clear that P2P technologies should be encouraged rather than discouraged. In contrast, the Digital Economy Act stifles innovation and attempts to shore up faltering traditional business models. The message of this report, in other words, is that governments are not in the ‘business model’ protection racket. However, as I have written in earlier posts, that they are in just such a business is also evident in Canada, where Usage Based Billing is clearly linked with attempts to protect the cable and telephone companies forays into the online video business by hamstringing would-be rivals such as Netflix, Apple TV, even Youtube.

In contrast to the current approach, the authors and various people interviewed for the study suggest a significantly different approach. Thus, as one of the report’s authors, Bart Cammaerts states,

“The music industry and artists should innovate and actively reconnect with their sharing fans rather than treat them as criminals. They should acknowledge that there are also other reasons for its relative decline beyond the sharing of copyright protected content, not least the rising costs of live performances and other leisure services to the detriment of leisure goods. Alternative sources of income generation for artists should be considered instead of actively monitoring the online behaviour of UK citizens.”

Early in the report, they also quote from Ed O’Brian from the band Radiohead, who had the following to say:

“We disagree with the industry on what should be done with the persistent file-sharers. The industry has said we will suspend their internet accounts. But you can’t just do that, it isn’t possible and neither feasible. The kind of technical measures that are required to implement this get you into dodgy areas such as civil liberties, tracker software and the second thing is that it costs a lot of money to do this, and even if you do it, you are going to drive a lot of people underground into darknets. Our problem is how do you differentiate between a serial infringer and someone who does it in the spirit of discovery” (Ed O’Brian from Radiohead on BBC, 22/09/2009).
My only real criticism of this report is that the authors take the IPFI’s data on the drastic decline in sale of recorded music at face value, but attempt to offset it by pointing to changing patterns of music consumption, falling disposable household income and the rise of online digital platforms. Their points are well-taken.
Indeed, income levels in western capitalist democracies, including Canada, have largely stagnated for the past 30 years, while wealth has concentrated at the top. To this, we can also had the decline in ‘liesure time’ over the same period, as the historical tendency for the workday to shorten was reversed, resulting in people spending greater and greater amounts of time at work. It doesn’t take a genius to understand that less time and money erodes media consumption.
Such trends run exactly counter to the massive rise in both income and ‘liesure time’ that gave rise to the media and entertainment industries between 1870 and 1945, as Gerben Bakker exhaustively illustrates in his 2009 book Entertainment Industrialized.
These points are indeed important, but I would add another that I think is even more important: namely, that taking into account all sources of income, the music industry has not contracted, but expanded greatly since the late-1990s, precisely alongside the massive popularization of the Internet. In order to understand that, we need to focus not just on the sale of ‘recorded music’ and ‘online revenues’, but also publishing royalties and, crucially, live entertainment. When we do that, as I showed in another post last week, the music industries have expanded greatly.
Here’s the data showing, first, the drastic decline in the sale of recorded music, followed by the full picture:
Figure 1: Worldwide ‘Recorded Music Industry’ Revenues, 1998 – 2010 (US$ Mill.)


Source: Source: PWC (2010; 2009; 2003), Global Entertainment and Media Outlook

Clearly, just on the basis of recorded music sales, the music industry is in dire shape indeed. However, things look decidedly different once we take a look at the full picture, as the following figure does.

Figure 2: Worldwide ‘Total Music Industry’ Revenues, 1998 – 2010 (US$ Mill.)


Sources: PWC (2010; 2009; 2003), Global Entertainment and Media Outlook and IDATE (2009). DigiWorld Yearbook.

The top line shows the picture: a sharp increase in total revenues. Against declining revenues for recorded music, each of the other segments has risen considerably: Internet/mobile; publishing and concerts. Cammaerts and Meng do an excellent job showing the rise of digital revene

Rogues, Pirates and Bandwidth Bandits

Yesterday was yet another day in which the struggle over copyright seemed to be going on at a feverish pitch.

In the U.S., hearings before the House of Representatives Committee on the Judiciary Subcommittee on Intellectual Property, Competition, and the Internet provocatively pitted Internet investment and commerce against pirates and parasites. Daniel Castro from the supposedly ‘non-partisan’ Information Technology and Innovation Foundation (ITIF) tried to set the tone by describing “the impact of parasitic websites” as “an economic leech on the Internet economy”.

Castro set out the costs to various industries, and they were, if he’s correct, staggering:

  • the U.S. motion picture, sound recording, business software, and entertainment software/video game industries lost an estimated $20 billion dollars in 2005 due to piracy;
  • the U.S. recording industry and related alone lost industries lost over $5 billion altogether and 12,000 jobs in the sound recording industry alone, according to estimates by the music industry trade group, the International Federation of the Phonographic Industry (IFPI);
  • the U.S. motion picture industry, by one estimate, lost $6.1 billion to piracy, which resulted in either the elimination or prevention of 46,597 jobs in the film industry.

This is indeed dire stuff (if true).  Dire stuff also requires drastic measures. Here’s some of the drastic measures Castro put on his wish-list:

  • cooperation between the federal government and business to identify “rogue” sites around the world;
  • require ISPs to combat piracy by blocking websites that offer pirated content;
  • encourage bandwidth and usage caps that discourage online piracy;
  • require search engines to remove links to websites that facilitate piracy;
  • require advertisers and financial intermediariers (e.g. Paypal, Visa, Mastercard, etc.) to stop doing business with ‘illegal websites';
  • further private/government cooperation around development, promotion and adoption of anti-piracy technology, including ‘deep packet inspection’ (DPI) by ISPs.

This is essentially a recipe to impose a lockdown on digitally networked media.  It makes a mockery of the separation between state and media demanded by ‘free press’ traditions. But rather than government nefariously interfering with the media, in this scenario, the state is called on to act as the tool of the media industries. Proposals to seize the domain names of rogue sites, cut them off from ISPs and payments, and so on threatens to balkanize the Internet further as nation-States assert their ‘sovereign authority’ over whatever slice of cyberspace they deem necessary to pursue ‘rogue pirates’ (in the US and elsewhere) or to suppress dissident voices and the free access to information elsewhere (Egypt, China, Iran, etc.).

For Canadians, the emphasis of putting ISPs in the role of gate-keepers and promoting the use of UBB and bandwidth caps to thwart would be bandwidth bandits adds another layer to the ongoing debate over these issues in Canada.

But what about these claims about dire losses?  They are mostly a product of cherry-picking data to support foregone conclusions. As my post earlier today showed, worldwide box office revenues for the movie industry are up, not down, from roughly $25 billion to $32 billion over the past five years. And that’s just the half of it, with total worldwide film revenues from all sources up from about $46.5 billion in 1998 to $87.4 billion last year.

Rather than being under assault, as Castro and others would like us to believe, the vast expansion of the film industry is not surprising. This is not surprising given the massive growth in global media markets generally, particularly in China, Brazil, Russia, and India.

This is also not surprising given the vast number of new media channels and distribution platforms.  Note the huge difference between total revenues versus just box office revenues, i.e. $87.4 billion versus $32 billion.  That $55 billion gap between the two is the space occupied by new media technologies. These are basically new media markets.

DVDs and the corner video shop may be going the way of the Dodo bird, but cable and satellite channels have doubled, according to the OECD, from 600 to 1200 channels worldwide over the past decade.  Add to this pay-per view, video-on-demand, streaming internet video (Hulu, Daily Motion, YouTube, etc.) as well as digital download and subscription services (Apple iTunes, Netflix, BBC’s iPlayer, mobile smartphones, etc.), and the vast expansion of the global media economy comes clearly into view.

Let’s look at the music industry. Sure, if we take a tiny slice, say just the ‘recorded music industry revenues’, and let it stand for the whole, than things look bad indeed.  Just how bad is shown in the Figure below:

Figure 1: Worldwide ‘Recorded Music Industry’ Revenues, 1998 – 2010 (US$ Mill.)

Source: PWC (2010; 2009; 2003), Global Entertainment and Media Outlook

Seen from just this angle, things are bad. the sale of “recorded music” (i.e. cds, vinyl, cassettes, etc.) has plunged by nearly half since 2004.  These are the figures that Castro and his preferred source, the International Federation of the Phonographic Industry (IFPI), point to in order to paint their ‘sky is falling’ scenario. It is also the backbone of their efforts to push through an egregious revamping of digital media in the service of the ‘traditional media’, a set of efforts that would likely never see the light of day were it not for the superficial persuasiveness of the case made.

The problem with the case, however, is that it takes the worst part of the entire music business and lets it stand for the whole. A decidedly different view emerges once we take the blinkers off that Castro, the IFPI, MPAA, etc. would like us to where and look at the whole picture. The whole picture doesn’t just look at ‘recorded music’, but concerts, publishing and copyright revenues, Internet and mobile phones.

When we do that, here’s what things look like:

Figure 2: Worldwide ‘Total Music Industry’ Revenues, 1998 – 2010 (US$ Mill.)

Sources: PWC (2010; 2009; 2003), Global Entertainment and Media Outlook and IDATE (2009).  DigiWorld Yearbook.

The fact of the matter is, these trends are similar across almost all of the media industries from television, film, music, radio, magazines, book publishing, Internet access and Internet advertising, except with a partial and heavily qualified exception for newspapers.

The media, as I have said repeatedly before, are not in crisis.  Thinking otherwise only gives the likes of Castro and the lobbying groups of the traditional media a blank cheque to push an agenda that ought to be stopped dead in its tracks.

Thankfully, there are other sources who see things from a broader point of view. Thus, over and against Castro, take a look at the much more interesting presentation of David Sohn from the Centre for Technology and Democracy yesterday before the same committee in Washington. Or take a look at the paper published by the Research Institute of Economy, Trade and Industry in Japan that was released last month. Looking at the impact of files-haring and YouTube on the sale and rental of Japanese animated television programs, the author concluded that:

  • Youtube “does not negatively affect DVD rentals” and appears to “help raise DVD sales,’
  • “file sharing negatively affects DVD rentals, [but] it does not affect DVD sales.”
  • Youtube’s effect of boosting DVD sales can be seen after the TV’s broadcasting of the series has concluded (the ‘electronic water-cooler’ effect);
  • YouTube can be interpreted as a promotion tool for DVD sales.

Repeat after me: the sky is not falling; new media are not bad media; we must be careful because the doomsday sayers, more often than not, would like nothing more than to throttle the hell out of digital media. That would not just be dangerous for the media economy and technology, but for democracy, how we socialize and communicate with one another, and for an open and creative culture overall.

The Search for ‘New Media Models’

Here’s an interesting link to a talk given by Alan Rusbridger, the editor of the Guardian in the UK.  It offers a glimpse of how he, and the Guardian, see the emerging media environment. The tone that he strikes is interesting insofar as it is not one saturated with the ‘journalism in crisis’ trope, but rather the opportunities that exist as established models are forced to adapt to fast paced and relentless changes.

Rusbridger demonstrates an openness and understanding of media trends that appears well ahead of his counterparts in NA media.  He also fleshes out some of the potentials of a ‘collaborative model’ of journalism between the traditional media and new developments in social media, from WikiLeaks to Twitter. In this regard, he points to how the Guardian now casts itself not just as a newspaper publisher, but also a platform for OPC (other people’s content).

Finally, Rusbridger offer his thoughts on the way ahead not by throwing history and serious thinkers from the past overboard, but by embracing them. He discusses the continued threats of media concentration, highlights the undeniable dependence of most media on some form of subsidy, whether advertising, allocations for public broadcasters, wealthy patrons, etc. by drawing on Walter Lippmann’s 1922 classic, Public Opinion and waxes about the relationship between Raymond William’s observations from 1958 on communication and culture and conditions today.

In other words, media ownership and concentration, how stuff is paid for, and the relation of each to bigger questions about the kind of societies and cultures we currently live in, and those that we might imagine, are all given a serious nod.

Follow

Get every new post delivered to your Inbox.

Join 139 other followers

%d bloggers like this: