DCMS downgrades value of Creative Industries?

If you were a beady-eyed Treasury wonk in the first week of December last year, then the Creative Industries might just have become 30% less important to you than they were a couple of months previously.

In the dying days of 2011, the UK government apparently reduced its view of the value of the Creative Industries. DCMS published a new statistical estimate of the economic contribution and size of the UK’s Creative Industries for 2009,  lowering it from 5.6% of GVA to 2.9% or from £59.1bn to £36.3bn.

Maybe creative industries workers and policy makers were too eagerly focussed on end of year festivities, but this significant change seems to have passed without notice.

Have bit torrent and unauthorised file-sharing finally taken things over a cliff? Has the the complexity of music licensing and the level of commercial friction become so intense as to kill off  more than a third of the value? Did TV advertising suffer a massive subliminal relapse? Did eBooks decimate publishing values? Did social media revenues evaporate in a bubble? Did all this happen without our noticing?

Not really. It’s more a revenge of the statistics nerds type scenario. Apparently, the reasoning for this massive downgrading,  is that in previous years, the “sub-sectors” of  software programming and consulting have been included in the estimates and these have been removed in the interests of accuracy. It’s certainly true that including companies who produce applications for business software products within Creative Industries seemed a bit of a stretch. Equally,  it has been noted for at least ten years that web-companies and social media companies are part of the Creative Industries and still do not figure in the statistics at all. Presumably they get claimed by ICT or Telecommunications. Maybe the statistical nerds are too afraid of an industry lobby group more alert to the value of metrics than the less numerate Creative Industries lobbyists.

Another statistical quirk has contributed to degrading the numbers. A weighting had previously been applied to Office of National Statistics Annual Business Survey information to take into account its lack of full coverage. Allegedly that coverage has now been extended to all parts of the economy. So the weighting has simply been removed. Kerdunk – the economic contribution plumets 30%. But the Annual Business Survey is quite capable of not noticing thousands of micro-businesses and sole operators who make up the warp and weft of Creative Industries. In fact the DCMS report notes (p26 as in previous years) that the majority of crafts business are too small to be picked up by the Inter-Departmental Business Register and so the category is ignored.

Elsewhere in the DCMS report there are a couple of other  contradictory comments. On the one hand, the report observes that last year, analysis methods were changed and therefore tagged “experimental” although the results didn’t differ dramatically from the previous year. This year it has been deemed unnecessary to term these numbers “experimental” and so the term is dropped, suggesting an apparent commitment to this formulation – even though its make up has been radically transformed.  On the other hand, the report also observes that Digital and Creative Industries are increasingly converging on one another and that if the numbers were combined then the figures would be considerably upgraded.

All of this leaves more than a little room for confusion and ambiguity in what should be the “authoritative”, “official” statistics that public spending and policy decisions are based on.

The term Creative Industries is an unwieldy phrase, to which hardly anyone feels much loyalty. It is a flag of convenience that has heritage and continuity on its side, but needs better definition fast.  If we took into account the warp and weft of micro-companies and the convergence with Digital Industries – it would  not be surprising if the numbers leapt back up and then exceeded previous estimates of the UK’s Creative Industries economic contribution.

Ten Predictions for 2012 – what are yours?

1. Startup companies focussed on smart content and technology integration will grow faster and display mind-blowing results. They will look at grownups and say “well of course we’re geeks, writers and designers all working together from the beginning, why on earth would you do it any other way?”

2. Big content companies will continue to campaign against “online piracy” but as their pain increases and even their most somnambulant shareholders start to wake up and notice the approaching precipice, they will experiment more with licensing in more open ways and collaborate with new, more savvy start-ups.

3. Our heads will come out of the cloud and our we’ll plant our feet more firmly on the ground. What we once referred to in shock and awe as “the cloud” will become a much more sophisticated set of services – some of which will offer ubiquity like the Apple iCloud for consumers but others of which will offer much more robust, secure and limited commercial solutions.

4. Search, discovery and recommendation of content of all kinds will grow. We will need meta-discovery engines to filter the range of discovery offerings. Combinations of algorithmic and human selection remain the key. Tastemakers will rule!

5. Talking to yourself is one of the first signs of madness. Voice, movement and facial recognition systems will drive entertainment devices and in car solutions. But people will neither  walk down the street talking to Siri nor talk to her on public transport.

6.  The influence of TV as a platform will only be slowed by TV executives’ unwillingness to embrace technology. Internet connected TVs, set-top box solutions and simplifed home remote control systems will improve. Apple and Google with various new consumer electronics partners will try to do battle for the living room with continued varying results.

7. Security, privacy, hacking and scandals will reach new heights with more of us being exposed to greater invasions of personal privacy than ever. Anonymous will publish some massive quantity of personal private information online which we will all scour for great prurient interest before declaring it scandalous and to be condemned!

8. Closed proprietary solutions vs big open platforms will be the Apple v Google macro-battle writ large across every area of tech innovation… Sony, Nokia and Microsoft will be the big losers of old school proprietary solutions…

9. DIY musicians, artists, writers, film-makers, animators, games creators will be doing it more and more for themselves. The big global superstars of the studio system will look more and more rarified, less and less in touch with the real world. Our cultural snobbishness about self-publishing will diminish, but we will need more and more help to find the good stuff (see 4 above).

10. A small, inexpensive, lo-tech gadget that takes us all back to the very childish basics of human pleasure,  fun and obsessive addictive behaviour will sweep the world and will help a little to relieve us all from the tedium  and anxiety of economic and social uncertainty.

Website blocking – the debate

Website blocking proposals are currently with UK Ministers in the latest phase of the online “anti-piracy” efforts of rights holders and content companies. There is a simple belief that if you prevent consumers from gaining access to illegal content by blocking the sites that display it, they will increase their purchasing habits.

While no one would argue against genuine proactive efforts to get consumers to pay for creative work, there is growing concern that this must be done in ways that do not create a greater danger.  Protestors argue that website blocking will not succeed because the ability of ISPs to shut access down is only exceeded by the speed with which they can pop up again at different addresses. Blocking websites, the argument goes,  will also inhibit those that wish to promote and distribute their work for free.

Based on the norms of web behaviour, it is hard not to conclude that website blocking efforts would be like embarking on a highly dangerous game of  “whackamole” – the old video game where you have a mallet and every time you see a mole you whack it back into its hole, only to be presented with another.  (About 15 years ago, at Virgin Records as Spice Girls frenzy gripped the world, the web team created a game of “WhackaSpice” – different Spice Girls popped up out of the ground and you got to splat them down with a mallet. Management refrained from allowing the game on the Virgin website, but the team  had good fun making it.)   The key thing about the game of Whackamole is that you can’t win it, you compete for a high score, but the moles keep on coming – for ever  – faster and faster.  Many predict that this is what will happen with website blocking efforts.

Another real danger of whackamole antipiracy is a threat to free speech in the process. The process for blocking websites would be in whose hands precisely? On what evidence would they make their decisions? How would they be confident that they were always right?  Justin Bieber and Lady Gaga were both victims of a scam this week, that had their videos falsely taken down by YouTube and Vevo. The video sites run relatively automated systems which respond to “cease and desist” notices with immediate “content take down”.  Someone sent them notices of infringement concerning Bieber and Gaga,  that were convincing enough to take their work offline for a significant period of time. The point about this jokey and fraudulent action is it demonstrates that if you take a “guilty before proven innocent” approach to the web and do that at scale, unexpected and undesired outcomes become more frequent.

How would companies make sure that web sites that had creative work on them that was being shared completely legitimately at the request of artists who wanted to distribute their work for free, were not being closed down too? Or would they just be the small price to pay to preserve value elsewhere? Short term benefit for long term loss… sound familiar at all?

Much debate about filesharing has swung back and forth about its respective qualities as being both sales substitutional and artist promotional. Different creative work at different levels of maturity and awareness experiences these qualities in different ways. Major artists, movie releases, TV series and games  experience sales losses – no one can say how much.  The means to measure it is there, but the published statistics suggest more research is required in this area to understand it. Recent research by MusicMetric suggests that file-sharing on bit torrent declines after release dates much more rapidly than sales do.

Young and developing creative producers often make their material available for free download or for sharing on bit torrrent sites in order to become known, to build a fan base, to create a market for their live shows, etc.

Seeking to block websites that offer creative work shared for free may inhibit innovation and growth. It may do something to inhibit unauthorised downloading of major player content, but it may also seriously inhibit means by which new and developing work can be shared and promoted. It may also inhibit the kind of innovation in business models that is so seriously sought by governments.

It is inevitable that when sitting in global headquarters of major publishing or recording companies executive focus is on the value and ROI of each new major release. The level of investment in major titles is such that the pressure to extract every penny of revenue from those releases exceeds any interest in developing work or any other strategic benefits. The only thing that counts towards your quarterly numbers (and your personal bonus)  is how much money your big release of the month is bringing in. Anything you can do to stop that value being eroded takes all precedence over everything else, for now. And now is all that matters. The future will look after itself.

That may well be a perspective which major corporates feel obliged to pursue.  It is not a perspective that should be foisted on the community at large.

A tale of opacity – two great TED talks from TEDGobal2011

There were two TED talks this year that struck me as particularly interesting, not for what the speakers said but for who they were and what they didn’t say. The talks were from Yang Lan, the Chinese media mogul and Maajid Nawaz, an anti-extremism activist. In both cases, these extraordinary characters told us what to think about their circumstances, not how to explain the journey they had travelled to get there. Yang Lan explained a little bit about navigating a deeply sexist  Chinese broadcasting industry. Maajid Nawaz explained that at 17 years old, having grown up in Essex, an aspiring working class suburb of East London, he began recruiting extremist radicalised Muslims out of Cambridge University and then subsequently went to train himself in a camp in Pakistan and join the leadership of a fundamentalist group. Later, after having been arrested, imprisoned for four years and released, he  saw the light and now campaigns for moderation and is anti-extremist. While his tale is an extraordinary and heartening one, neither of these presenters talked once about the emotional journey which took them to their current roles.  Yang Lan told us nothing about how she negotiated the power structures of  the Communist Party state, despite the fact that with 250 million viewers, she is something considerably more than the Chinese Oprah; she is more likely the most powerful propagandist the Chinese leadership could wish for.  As I reflected on her presentation, it dawned on me that it was more like a market research presentation on behalf  of a media company looking to sell advertising space on its network, than a TED talk. The phrase  that was highlighted in Yang Lang’s presentation was “When it comes to brands, the Chinese are the most visually tuned-in consumers in the world.”      And Maajid Nawaz told us nothing of his emotional journey to move from being a young Essex lad, to becoming an extremist fundamentalist leader,  back to becoming an impassioned analyst and advocate of moderation. There is no question that we would all wish for more Islamic moderation as indeed we would across all the world’s religions and the struggle to understand what it takes to make that transformation is critical. But in the end, one has to believe that such a change is an emotional and psychological adjustment. I would really like Maajid Nawaz to use his compelling powers of rhetoric to reveal that about himself.  TED talks in the past have often enabled the speaker to span a classic narrative arc of story-telling,  allowing powerful  tales to be told and great messages to be conveyed. Here for the first time, in these two presentations, we have the sense that the message is hidden behind the statement. That TED, in commissioning these speakers, who are in one way or another on the edge of our comfort zones, were able to make presentations that did not offer the same kind of candour and transparency that very many “classic” TED talks have offered. By intention or by coincidence,  which we must leave to the curators of TED to tell us,  these two talks struck me as being fascinating for their opacity as much as for the honesty of their stories. As the world shifts ever faster and the socio-eonomic dynamics become increasingly complex, I would like to hope that TED continues to offer us a higher degree  of insight than mere pitching would allow. The sophistication of powerful players makes TED a target, given its great proven power to distribute “ideas worth spreading”. In the process it needs to be careful it doesn’t spread ideas that it might not be so comfortable to have spread. Watch that space and let’s see how this addictive cult of story telling evolves.

TEDGlobal 2011 – the best of the quotes

 “If Americans want to live the American dream, they should go to Denmark.” Richard Wilkinson

“Libertarianism and collectivism are the same thing.” Phillip Blond

“In all the barrage of noise that I’m putting out, you actually know very little about me.” Hasan Elahi

“Unbounded growth requires accelerating cycles of innovation to avoid collapse, but the innovation has to happen faster and faster.”  Geoffrey West

“Wall Street is writing algorithms that make effects that are so rapid we can no longer read them.” Kevin Slavin

“The West’s six killer apps: Competition, Scientific Revolution, Property Rights, Modern Medicine, Consumer Society, the work ethic. Are we deleting our own Apps? Can China succeed without private property rights?” Niall Fergusson

“China’s principle advantage over India is its human capital and its higher levels of education and literacy.” Yasheng Huang

“It’s so hard to admit our own fallibility… we need to be shocked out of it. We need to have our ideas challenged, very painful but essential. Every year 10% of American businesses disappear. It’s very difficult to make good mistakes.” Tim Harford

“I’m an arts graduate, I love myth and legend, existentialism  and self-loathing.” Robin Ince

“The closer the population is packed together, the more languages are found there. But we don’t have sex with people we can’t talk with.” Mark Pagel

“There are two types of company in the world, those that know that they’ve been hacked and those that don’t.” Misha Glenny

“Lying is a cooperative act, its power only emerges when someone agrees to believe.” Pam Meyer

“Torture is the cheapest form of investigative tool.” Karen Tse

“Once they have found a rock to cling to, sea squirts are known to digest their own brains and intestines as they’re not needed anymore (somewhat like academics do once they receive tenure).” Daniel Walpert

“Lips are a genital echo, mimicking the female genitals in shape, colour and texture.” Desmond Morris

“We each have a self, but I don’t think we’re born with one.” Thandie Newton

“Economic empowerment is what allows women to remove the veil.” Nadia Al-Sakkaf

“Religions are so valuable that they’re not fit to be left to the religious alone.” Alain De Bothon

“How inappropriate it is to call it planet Earth. We should call it Planet Ocean.” Arthur C Clarke

“Children are the R&D division of the human species, adults are the sales and marketing.” Alison Gopnik

“The mind is its own place. It can make a heaven of hell or a hell of heaven.” John Donne

“The average American physician interrupts their patient within the first 14 seconds of encountering them.” Abraham Verghese

“The Swiss can be divided into two groups, those who make small exquisite objects and those that handle the money made by those that make small exquisite objects.” Malcolm Gladwell

“In the British Embassy in Kabul, there are only three people who could speak the main native Afghan language and none who could speak the minority language.” Rory Stewart

“Do you know how good you feel when you’re creating or building something?” Jeremy Moon

“the future is already here, it’s just unevenly distributed.” William Gibson, 1994

“Listening is the main way we experience the flow of the time from past to future.” Julian Treasure

Further thoughts on Hargreaves

Although I’m not a member of the Open Rights Group and don’t entirely share their views, they asked me to write a few further thoughts on the Hargreaves Review ahead of the government’s response to his proposals. Check out the article here.

Digital Copyright Exchange – two key drivers to make it fly

Some key elements are starting to emerge as discussions rage around the Digital Copyright Exchange and the tantalising ideas set out at suitably high level in the Hargreaves Report.

How will this thing work and what will it look like? People are asking. A common description is starting to emerge that sees the Exchange as having three tiers. A “telephone directory” type top level – simply aggregating links to existing licensor websites and known rights holders. This is Tier One – a general gathering together in the way of useful roadsigns to that which is already there. Not terribly useful but quick to achieve.

Tier Two starts to be a bit more analytical and have a little more of the Exchange quality. To the gathering of links is added some intelligence which asks what kind of functions an end user wishes to perform on what kinds of content and the seeks to match appropriate licenses to the need – but still in the form of links to third parties who would do the actual licensing.

Tier Three functionality would see the Exchange then actually facilitating the licensing itself and becoming much more involved in an integrated license, search, discovery and execution process. This final stage would therefore really start to have the effect of speeding up the experience of licensees and of automating functions of the licensors.

So far so good – a routemap of sorts and a broad consensus that if we’re going to do this – then this is the right direction of travel.

So it seems to me in the context of this growing understanding, that there will be two key deciding factors on whether the DCE will fly.

First: The ratio of fixed price licenses to negotiated ones.

At present there is no clear data on the proportion of actual deal,  by volume or value, that are individually negotiated in airless rooms by huddles of lawyers – and those licenses that are issued based on published terms and tariffs – and therefore more immediately automatable. Professor Hargreaves is now actively encouraging rights owners to standardise their terms, scale up their offerings and get away from huddles of lawyers. But no one has much idea whether there is greater value in the lawyer beaten out license or the blanket term deals.

Some research on the respective value in the current market of negotiated and non-negotiated  license deals across rights owners would be very timely.

Second: The other key driver will be the extent to which the DCE can start to sign rights directly and begin to take a more immediate licensing role for a very wide range of individuals or rights owning groups. This is much more controversial and potentially complex. I believe that the legacy problems  of poor data and inaccurate record keeping across much of the catalogue of past published works may well be insurmountable. The task of trying to clean up the data, match its veracity across 27 European collecting societies and consolidate into one new database is a task of sysphean dimensions. Our noble friends the music publishers and their Global Repertoire Database are embarked upon just such a project. They have Deloittes at their sides and I wish them god speed.

But in the meantime, let’s get busy. The only way to set up a new model that will provide rapid clarity and global transparency is to draw a line in the sand and start afresh and put new release information into a new set of containers which are not beleaguered by the travails of the past.

It might just be that the DCE becomes more relevant more quickly, not as a telephone directory struggling through its first yellow pages era but as a new vehicle for large scale new rights to be assigned into. It would not need to be in competition directly with the likes of PRS and PPL, in fact it could make use of some of their capabilities – particularly in terms of royalty distribution. But, if it could take on bundled rights that brought together for example in music, the recording and the publishing rights for new works, it could well provide the UK with the most exciting new opportunity to create a 21st Century licensing agency fit for purpose and to lead the globe in digital rights licensing.

And in turn, that might encourage existing rights owners to speed up the publishing and making transparent of their terms and tariffs as Hargreaves is now exhorting them to do.  The thing about great markets is that the prices are there for all to see. It is extraordinary, although understandable in marketplaces where cultural value has been at stake, that transparency has not been its key characteristic. But as cultural value in mass markets seems to be declining that strategy cannot be said to be working. That needs to change, maybe this is a way of achieving it.

Apple’s iCloud Service as P2P Amnesty?

The recent announcement from Apple about its iCloud service was met with the usual rapture and admiration. The record labels according to the New York Post have been paid some $150 million to license the service while Amazon and Google felt compelled to launch their services with no licenses at all. Of course iTunes has been placed on a pedestal; it represents something like 85% of global digital revenues to the record companies. Just as MTV used, in the analogue era, to be the record companies’ best friend until they started running scared of the power they had given them, so Apple today has been elevated to a privileged, protected prime position which (regardless of the alliteration) offers it similarly low levels of competition. This apparently anti-competitive allegiance to one company promoted to the status of market maker, seems to have become a defining characteristic of what it is to be a major music company today. This model, that looks a lot like “control or be controlled”, seems to fit traditional record businesses ways of working.

But haven’t they just scored a huge own-goal in issuing these $150 million worth of licenses for the iCloud service?   The licenses are presumably in order to allow Apple to scan a customer’s hard drive, identify what music files they have and then allow Apple to enable for streaming to a portable or mobile device, a copy of those music files via their digital iCloud locker. This provides a great competitive advantage over Amazon, Google and other digital locker services that require the end user to upload all their music to their locker before they can stream it.  And therein surely lies the own-goal… When Apple scans a consumer’s hard drive, there is absolutely nothing to distinguish a file that has been ripped from a CD owned by the consumer and a file that may have been ripped from another users CD and subsequently accessed by downloading it via for example Bit Torrent or the Gnutella network.  So when Apple does its scan and adds all your music to your locker, under license from the labels and the music publishers and for the modest annual fee of $25 – haven’t they just legitimised your entire collection regardless of whether you paid for it or not? And by the way, since your $25 is an annual subscription, haven’t they just done that going forward for whatever else might find its way onto your hard drive for the next twelve months too?

This looks like a file sharing amnesty via the back door.  Unless perhaps Apple intends to restrict the files you can upload to ones that have been ripped by you on your copy of iTunes? Details of the service have yet to emerge properly. Are we suddenly going to find that the familiar Apple walled-garden has just added another few feet of  barbed wire to its walls because, by the way, Apple has still been rather coy about what kinds of devices you will be able to stream to from its digital lockers, but we can only presume they will be Apple devices not Android ones…

Based on the damages of $75 trillion that the RIAA sought to claim from Limewire  –  or even the $1bn or so they eventually settled for, it does looks as if Apple’s friends in the music industry gave the “Great Turtlenecked One” (as The Economist recently dubbed him) an incredibly heavily discounted rate on monetizing all P2P in the US market for at least for the next twelve months. Is that really what just happened?

Access to finance for the creative industries and a call to define the “public service remit”

Last week, John Newbegin of Creative England organised a unique conference bringing creative industries and finance people together to talk about what they could do together. This week, BIS and DCMS published a really disappointing report on the issues surrounding access to finance for creative companies which did little but demonstrate its own ignorance of the subject.

The “Nice Idea, Nice Little Earner”  conference brought together representatives of private investment companies, banks, trusts, VCs and Angel investors gathered together alongside a broad mixture of creative industries policy-makers. Although the combination was a little bit like oil and water, there was a sense of possibility in the air which gave rise to some optimism.

The key themes to emerge from the discussion were around how to increase “business capacity” in creative industries practitioners. The value of private sector mentors working with publicly funded entities seems clear, but how to gather good quality mentors with relevant experience is more challenging. Alongside this, increasing access to finance and creating “investment ready” businesses and organisations was a major concern. It was clear that the expertise on both the finance and the creative sides of the table had some way to go to find a common language. Whether in describing the technicalities of particular investment instruments or their philosophy of investment, the private sector has an education and  translation task on its hands if this dialogue is to deepen. Equally, discerning the value potential and being clear about how to take a commercial route that could deliver a real return in both creative companies and cultural organisations clearly also requires crisper definition.

This optimism was in stark contrast to a document commissioned and published this week by the DCMS and BIS called Access to Finance for Creative Industry Businesses by Dr Stuart Fraser of Warwick Business School. The report seems to suggest that creative industries may suffer from a greater lack of access to finance than some other sectors but that this is mostly because it is more risky. It also seems to suggest that they don’t bother looking for finance as much as other sectors.  It is a  disappointing and under-researched piece of work. Most of the focus is on a so called “longitudinal econometric” survey of UK SMEs in the creative industries. It is singular in its failure to address any of the complicated issues in the investment cycles required in the development of intellectual property and in the commercial structures that value intellectual property rights. The report seems  woefully small-scale in its ambition for businesses, it suggests that most funding for creative industries is likely to be loan or debt financing, overdraft facilities or indeed forms of hire purchase. Very little attention is paid to private equity investment and yet the general perception in the industry is that this is where the real growth and value will come from. The report also places a curious emphasis on architectural practices, seemingly because most of the creative industries businesses covered by the Small Business Survey that the report’s evidence is mostly drawn from, were in fact architects’ practices. A missed opportunity by no doubt demoralised BIS and DCMS here. Let’s hope that this poor piece of work does not infect the appetite for a closer public private partnership which seems to be, by necessity growing in the creative and cultural industries in the UK right now and in the private sector too.

And more needs to be done. Just as in the academic world where there is increasing pressure to draw up with more clarity the distinctions between pure and applied research,  we need to be able to do a better job of articulating the separation and identification of  what we might call the subsidised arts and the commercialisable arts,  The cultural sector needs to articulate more clearly that which serves a public service remit and that which does not.  It’s not because there is no support for pure research or the subsidised arts (although it’s getting harder to fight against  the growing political pressure to make everything pay directly for itself),  it’s simply that with resources  now under such pressure, greater clarification is required of which activities and programmes come under which headings.

Obviously big players like the Tate and British Museum have resolved this fairly successfully, but there is no UK national articulated definition of the public service remit for cultural institutions and subsidised arts organisations. There needs to be one.  Aside from the obvious motivation on the part of some curators to retain a degree of obscurity here, how can we expect the private investment community to explore commercial opportunities with cultural organisations if they can’t determine what is on offer and what is ring-fenced for the public good?  We need to analyse quite carefully which aspects of education and public access need to be separated out and preserved and which do not.

There is a new landscape of public support developing with new and old players offering a possibility of some kind of continuum,  from the AHRC’s commitment to four new Creative Hubs and a Centre for Copyright and IP Research in the Digital Age, to the Technology Strategy Board’s ictomorrow digital testbed platform, its digital and creative industries programmes and the possibility of a Digital and Creative Industries Technology Innovation Centre, through to the Arts Council’s imminent Innovation Fund and other contributions from NESTA, Creative England and the BFI. The key to making these different interventions successful is the extent to which they are coordinated, differentiated from one another and ultimately are successful in encouraging private investment.  It’s not very joined up yet and it would not be unfair to ask how these different bodies intend to collaborate and how practitioners in the field should distinguish between their different programmes.

The government continues its regular efforts to try to get industry segments to “speak with one voice” through such entities as the newly convened but vaguely agenda’d Creative Industries Council. Meanwhile, perhaps a necessarily smaller group of policy makers and public funders might collaborate to sharpen the focus of new investment and support vehicles for creative industries by convening with the private investment community and collaborating on the shape of programmes going forward to make sure they speak with one voice too.

Hargreaves Review – The Ingenious Carrot

Deep in the heart of the Hargreaves Review, some really powerful gems lurk

It is always dangerous to make early comments on substantial pieces of work like the Ian Hargreaves Review of IP which published this week.  But having given it a first reading, there are a couple of things that jump out as being brilliant and completely engaged with the best thinking around at the moment.

Firstly his concept of establishing  a UK Digital Copyright Exchange is very clever. It would provide the means to reform the UK’s licensing regime without having to dismantle or seek to alter the existing institutions. But instead build a new layer on top of them which ultimately could become the only layer necessary for licensing content.

Secondly he proposes a series of levers that would act as incentives to existing rights owners to cooperate and put their rights into the Rights Exchange. His suggestions (para 4.34 of the Review) essentially created an ingenious carrot to go with the stick that is the Digital Economy Act. What Hargreaves proposes is that if people want to get the benefits and remedies of the law, in going after significant copyright infringers, then they must also put their work into the Rights Exchange and collaborate with a forward looking, constructive development of the market.  He also proposes “giving creators the right to withdraw from future publisher/record companies contracts where the latter are not marketing a creator’s work through the exchange.” This is a brilliant recognition of both the opportunities in creating a new friction-free market and also shows a great understanding of the agendas of the different stakeholders.

These incentives in some respects lie at the very heart of the Review as does the concept of the Exchange. The much needed solutions for how to handle Orphan works both in the commercial and non-commercial sectors are based around the creation of the Rights Exchange too. It will be interesting to consider how this proposal fits with the evolution of the EU’s Global Repertoire Database and the WIPO proposal that are being developed concurrently.

I’m sure that there are more gems, nuances, hints and subtleties buried in this carefully considered report, back to the reading. Now the challenge will be how to ensure that all these good proposals are adopted by Ministers.  I welcome your comments.