DIGITALEUROPE

A thought piece on modernising time honoured traditions regarding content creation in the digital age.
Cultural diversity has a long history of departing from the established order, be it through immunity to international trade rules – otherwise known as cultural exception – or private copy levies whose claimed purpose of compensating right holders has gradually given way to funding of national culture through an archaic system of collection and re-distribution.

In a number of European member states cultural establishments have talked their government into mandating which content is good for consumers, at what time, and on which platform by way of a complex construct of tax on theatre admission, broadcasting quotas, mandatory investment, and an elaborate definition of what a national film is exactly.
Bad habits die hard
The birth of the internet offered everyone access to a borderless world, and with this irrevocable change, the particular legacy of the analogue era which thrived on fragmentation and ‘toll-gates’ was doomed to become irrelevant, and eventually obsolete. Consumers will shed no tears at seeing the expensive barriers fall, and neither should citizens, since the above practices run against the very values that underpin democracy, freedom of expression, equal chance afforded to all citizens to education, information and culture, fair competition, etcetera.
Early visionaries
Viviane Reding, now Vice President of the Commission, provided a striking illustration, back in 1999, that appropriation of culture by governments will not always meet its intended purpose. On being confirmed to her first stint – on Education and Culture with the European Commission – Mrs Reding told MEPs that she planned to engage with Hollywood to unveil the secret behind their knack for making money out of movies. She knew for a fact that the US government played no part in the unabated success of the US’ top export industry: a hard to match recipe that today still wins eyeballs, hearts and minds of massive audiences around the world.
If the digital industry has taken the wheel in delivering content created by millions of people to millions more hungry to consume it; then it was equally born agnostic when it comes to judging good from less good content. Technology and its kin – electronic devices – tends to leave it to consumers’ judgment to choose the content that suits them. But by affording every creator instant and ubiquitous spread of their creation, it proudly affirms its role as the ultimate multiplier of exposure – arguably the touchstone of success in the eyes of most creators.
The European approach was flawed from the start
Administrative and creative minds rarely mix. Chasing subsidies requires skills and experience that the typical freshman creator lacks. Accordingly, independent creative content outfits must hire expertise in filing applications for government funds. As this luxury eludes many start-ups, they find themselves unable to match more established competition.
The same paradox of assistance mechanisms hitting their intended beneficiaries can be seen at work in the current compensation for private copying, the so-called private copy levies. It is opaque, cumbersome and more user-friendly to mainstream right holders than to the new kid on the block. It has so far dismissed the opportunities presented by digital technology to trigger immediate and fair compensation. As a result of its inability to reform itself, the present system is crumbling under the weight of the heavy burdens imposed on consumers and young artists.

It is a matter of fact that digital natives operate at a different life speed. Time-honoured traditions in a digital light become self-serving and obsolete. BEUC, the consumer organisation, observed in their article recently published in Europolitique: “The majority of consumers are not free-riders. 66% of users would be willing to pay for legal content at a price and of quality that corresponds to their expectations. They are willing to pay a fair price as long as they are given a right to private copying and as long as copyright levies correspond to economic harm.”
Has cultural diversity found its silver bullet?
In a world increasingly driven by intangibles, digital technology proves effective at fostering creation. Indeed, cultural diversity by decree is no match for cultural diversity in action in the digital age. Digital technology spurs imagination by exposing the mind to continuous stimulation. It also enables instant, borderless distribution of creative works. Being thus the most effective catalyst of creativity, it has become the prime driver of genuine cultural diversity, the grassroots variety growing from the bottom up, not the one dictated by bureaucrats.
Consider distribution: French cinema buffs living miles away from theatres can enjoy their favourite entertainment as long as they have a decent connection and screen – provided that it is cleared for online distribution, that is. They can even do it at the time of their choice.
Digital technology has also driven marketing costs down. “The Blair Witch Project” (1999) was a trail-blazer in this respect: a forerunner of what is called viral marketing managed to keep this particular budget line close to zero while the film grossed in excess of $USD400m. With production costs under $USD50,000 this movie is remembered as the quintessential money-spinner.
Still, the digital revolution is most felt on the production side. Here, limitless cultural diversity mirrors a borderless internet. Anybody can create a song or a video footage and upload it onto the web. Only governments are bucking this trend towards affordable creation tools: indeed cameras or sound-recording equipment are still subject to copyright levies, which are an undue impediment to unfettered creation of content.

Unlocking the pent-up resources of the richest creative stream and formidable channels to market enabled by electronic devices, is critical. By tearing down all technical barriers to the production and distribution of creative content, the digital industry has spearheaded the cross-fertilization that genuine innovation is made of. It is time that European governments play their part and abolish the legal fragmentation that holds the European Union back from offering the single largest and most affluent market in the world for digital content.
Meanwhile, analogue-era impediments keep constraining the choice of the consumers in the digital era. As BEUC remarks, they often end up paying levies to the copyright holder several times over for the same content. Think of a consumer who buys music from an online store: he/she pays for the content then saves on a device for which he/she has also paid private copy levies on when buying it.
Consumers are also levied even if they simply store personal content they’ve created by, without any intention of involving copyright protected content for private use. In the same vein, levies are applied to multifunctional devices, such as mobile phones and digital cameras, not meant primarily for doing private copies.Price differences hurt consumers and fly in the face of the Digital Single Market: for example, a €19 levy is raised on 64 GB iPods in Sweden vs a mere €1.42 in Latvia.
An invitation to join the digital world of the 21st century
Ignoring the digital age has serious economic and cultural consequences. Digital natives are growing up fast, and are today voters. An invitation has already been extended to those living in the remotest places to become part of an integral, global, digital community – the borderless, blue sky digital world.

Sitting on the other side of the fence, digital immigrants – those policy makers born before CDs were the rage and before Mpegs were the norm, those who still remember when mobile phones didn’t even exist, let alone became ‘smart’ – have the power to ensure that the system plays catch up.

By Patrice Chazerand, Director Digital Economy and Trade Groups, DIGITALEUROPE

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