Why we need better online copyright, an interview with Mark Bide

March 23rd, 2012

Mark Bide is the Executive Director of EDItEUR, the global trade standards organisation for the book and journal supply chains.

He is also a consultant with specialist media consultancy Rightscom and has recently been working with the European Publishers Council on the establishment of a project called the Linked Content Coalition.

He has worked in the publishing industry for over 40 years and he writes here in a purely personal capacity.

What is the biggest challenge facing traditional media companies?

I am not sure I would want to identify a single “biggest” challenge. It is facile to say “the Internet” – since evidently (see my answer to the next question) the existence of an increasingly ubiquitous global communication network creates both challenges and opportunities for traditional media companies. The challenges and the opportunities are the opposite sides of the same coin.

Instant, inexpensive and increasingly ubiquitous digital communication opens up many new business opportunities; but these are often easier for new entrants to exploit than for incumbents, simply because they are by their nature predatory on existing business models. An obvious example is classified advertising, which has disappeared as sites like Craig’s List have taken over. It is hardly surprising that it is difficult for incumbent businesses to accept that a new business model may be successful but at much lower margins than have traditionally been enjoyed.

A second major challenge is the tendency of the network to create natural monopolies, through “network effects” – the reality that each additional node in a network creates additional value for each existing node. This is simply true, and is well-exhibited by the increasing tendency for businesses of various kinds to create monopolies, each in its own sphere of operation. This has proved extremely difficult for the media to deal with as what are effective monopolistic channels to market have arisen with tremendous market power; what has perhaps proved more difficult to deal with has been the immense political power that their financial success has afforded to those same businesses.

It is prima facie unlikely that any business ever sets out to execute a strategy which states unequivocally: “We will become the monopoly provider of (name your product or service).” Equally, no business which achieves an effective monopoly ever gives that position up lightly, particularly when it can argue that its monopoly benefits consumers (the argument of every monopoly business from the dawn of capitalism – and quite probably true at some level).

The sheer size of these dominant players makes them formidable and difficult business partners with whom the media has to find an accommodation.

And this brings us to the final challenge – the systematic destruction of copyright. The central tenets of copyright have been at the heart of (almost) all media business models for the last three centuries and more. Ultimately, the value of media products has never been in the package but in what it is packaged. And the protection of the value of “content” (a word I deprecate, but for which I can find no satisfactory alternative) is dependent on copyright. It is all very well for others outside the creative industries to demand that the media find “new business models” that do not depend on copyright, but the search for these has (so far at least) proved almost entirely fruitless, except for those businesses which are parasitic on content they don’t generate themselves.

For at least some of the giants of the internet, and for many other online businesses, other people’s copyright is a barrier to their business model (although other forms of intellectual property – particularly patents – are often fiercely defended). However, the argument that copyright is an outmoded concept because of the ease with which content can be copied and disseminated is politically seductive, not least because it fits with a public perception and with the preference for simple solutions to complex problems.

My somewhat unfashionable view is that governments and regulators have been bamboozled by technologists into believing that “the Internet doesn’t work like that” and that attempts to bring the order of civil society to the internet are in some way old fashioned and will “break the Internet”. What politician will want to be remembered as the person who broke the Internet? The failure properly to enforce the rule of law on the Internet – and copyright is only one small facet of this – is, I suggest, a major dereliction of the duty governments have to protect their citizens.

So, if must choose one, I will say that the greatest challenge to the media lies in finding a solution to the problem of the management of copyright on the Internet. This demands the more effective deployment of technology, but also it demands that there should be a stronger political will and commercial drive.

What is the biggest opportunity that new technology presents to publishers?

As I have already suggested, the opportunity lies in a distribution network which already connects you to one third of the world’s population – an unprecedented opportunity for friction-free marketing and distribution.

Your work involves something called the information value chain.  Can you explain what that is?

A value chain is simply a way of modelling the processes by which raw material is converted into a product for which a consumer will pay. So, crudely, the traditional book publishing value chain could be characterised by the processes through which an author’s manuscript is edited, typeset, printed, distributed to a bookstore, and finally made available to a consumer to purchase; however, there are value adding activities which sit outside this “supply chain” model, including those like selection of which books to publish, and creating demand through marketing and brand building (the latter usually of “author brands”).

In the physical world, the different media have typically had markedly different value chains – and indeed even in an industry like “book publishing” it is easy to discern very different value chain models in different market segments: the value adding activities are often similar or the same, but their relative importance is often different.

Online, the same thing is true, but the similarities between the value chains of different media are much more easily discerned. This doesn’t mean they are the identical, but the activities that add value are congruent. This is what I mean when I talk about the “information value chain”.

Why is it important? Because it helps to distinguish between activities that genuinely add value (i.e. those activities that a consumer will pay for) and those that simply add cost (activities that consumer’s won’t pay for!). Value chain theory tells us that the greatest “economic rents” (that is money) can be earned from the value chain by those with control over the point of greatest scarcity. The lowest rents are earned where the value adding activity – however valuable – is commoditised (i.e. easily substituted).

This is where copyright comes in – it provides the creator with the point of greatest scarcity, the ability to control all copying and distribution. The destruction of that point of scarcity moves the ability to make money elsewhere in the value chain – and it is easy to see this happening.

What is one nonexistent technology you wish you could see in the world?  If you could eliminate one technology that does exist, which one would it be?

Here I am going to cheat a bit. I am working not on creating a non-existent technology but on a project which has as its objective the implementation of technologies that already exist – technologies that will allow the effective management of copyright on the Internet.

People often assume that I am talking about “DRM” – but I’m not. I am addressing the “digital management of rights” or the “management of digital rights.” This isn’t about the deployment of technical protection measures, but about the much more effective deployment of rights and licensing data.

Over the course of the next 10 years, the internet will undergo another transformation. This is often (although I suggest inaccurately) called “Web 3.0” (inaccurately because I am not convinced that it really has much to do with “the Web”). In the same way that the Internet over the last 20 years has become the infrastructure for communication to people, over the next 10 it will become the infrastructure by which machines talk to machine. We don’t need to invent anything for this to happen, but we do need to deploy technologies effectively to make it work – and primarily we need to get our data in order. Developing the necessarily information infrastructure for rights management online is the challenge that is being addressed by the “Linked Content Coalition” (www.linkedcontentcoalition.org) which I have been helping to set up.

Technologies cannot never be “un-invented;” there are days, though, when I wish email would simply go away…..

What five media sources do you find essential?

I am not sure I know exactly how to answer this question. BBC News is my “home site” and I would regret having to do without that, exactly as I would find it difficult to give up BBC Radio 4, which is my other primary source of “live” news. I read The Times (of London) most days. I read a lot of books (both physical printed books and on my Kindle). And I listen to a lot of music (on CD, iPod and sometimes Spotify).

If I could keep only one of these, it would be books.