"The digital age has made it easier to... copy content. The harsh reality is that not everyone recognises that they have a moral and legal obligation to return some of the money they generate to those who created the work"
BBC Television Centre, Wood Lane, London
06 May 2009
I’m pleased to have the opportunity to join you here at the BBC, one of this country’s most important cultural institutions. There can hardly be a person in Britain who doesn’t sample the BBC’s output in some way, every day. And the Corporation has a well-deserved global reputation.
That reputation is built on words, on images, and on sound recordings. The BBC both creates and it distributes, but it is not our only source of cultural wealth.
I am proud that the UK creative industries are world leaders in many sectors. For example, our music-publishing market is the 4th largest in the world, with a 9.8% share of international revenues. The games industry is a recent and real success story - in 2006 recorded sales of £1.6 billion. Research conducted last year by the National Endowment for Science, Technology and the Arts underlined the importance of the games industry to the UK’s economic growth. It even predicted that games would overtake music and DVD in overall sales by the end of 2008. And I could go on of course – we have many successes.
We do not just triumph economically though; the quality of our creative output is revered across the globe. Through the glitz of Hollywood ceremonies to the success of young British acts like Leona Lewis.
The digital age has made it easier to create those words, those images and those sounds. The digital age has also made access easier. That is a good thing. But it is also easier to copy content. The harsh reality is that not everyone recognises that they have a moral and legal obligation to return some of the money they generate to those who created the work.
Today I want to talk about piracy. There is a big tension in the piracy debate. As Minister for intellectual property, I can see the two opposing camps. On one side we have those who want strictly enforced rules, and who want to see those rules backed up by state sanctions. On the other there are those looking for other approaches.
So where are we now?
Let’s look at the piracy issue in more detail.
The range of new technologies which have arisen in the few 5 years could and should be used to spread legitimate content, supporting our creators and creative industries. But their main effect is to deprive rights holders of recognition and financial reward. This is particularly so in the music sector where music industry figures suggest that 1 in 4 internet users are engaged in online music piracy and that 19 out of every 20 music downloads are illegal. This means lost revenue for creators and lost revenues for those who distribute their work.
Looking beyond music we see a similar story.
In film the total loss to internet piracy was estimated to be £53 million in 2007 million – an increase of over 350 % from 2006.
Software has also been badly hit, with some reports suggesting that 35% of all software installed in the EU in 2007 was illegal.
BBC shows and sporting events regularly show up in lists of the most popular illegal downloads. They also face challenges linked to the ‘real time’ value in their content –as the window of exploitation can be short.
As the book world goes digital they are beginning to face up to similar problems. Just yesterday I spoke at an event at the British Library and a participant commented that the book publishing world has not yet had its “ipod moment” but no-one doubts that this moment will come.
It is clear that piracy is a serious problem. It has a number of dimensions – technological, social and economic.
The technology dimension. Technology has always tested the copyright regime, this is not a new phenomenon – the printing press, fax machines, television broadcasts, VHS recorders, CD burners - have all challenged copyright in their time. The technological revolution we have seen over the past decade in particular has ushered in some big changes.
Not just the arrival of the world wide web, although the reality of Digital Britain is remarkable, with broadband coverage assessed at 90%.
Technology has changed the process of distribution. Once we needed networks of factories, lorries, and shops to get cultural products in front of the consumer and everyone is that chain was able to take their cut of the profits. But gradually the distribution chain has brought the product in through the front door, and onto the PC.
Technology has also brought us the digital file. It is high quality. It is mobile. It is easy to replicate. The physical barriers have largely gone.
Technology has also made this a global game. Content can move from one jurisdiction to the next instantaneously. This creates both opportunities and problems.
The social dimension is important. There are still many of us around who are old enough to predate the internet. But for the generations growing up, this is the only world they know. It is a part of our daily life as consumers.
What does that mean?
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We have seen the emergence of the “access culture”. People expect to be able to find whatever they want, whenever they want it at the click of a mouse
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“I want it now” means if I can’t get it legally, I’ll get it whatever way I can
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We face no real quality problem in many areas. Yes, there are pirate DVDs out there which are poor quality; fuzzy, blurred. But we all know that you can get an illegal digital copy that’s indistinguishable from a legal copy
Over Easter I was looking to buy the box set of “The Wire”. I tried a couple of branches of Waterstones, HMV, Borders and other high street shops, but couldn’t track it down. In one store the assistant told me not to bother looking for it; as I would be able to download it for free!
The economic dimension is clear. The fact is that IP crime can do enormous damage to an economy like the UK’s which is based on knowledge and innovation. The Rogers Review estimated that IP crime in the UK was worth £1.3 billion in 2006 with £900 million flowing to organised crime – many feel the actual figure today is significantly higher.
The economic loss to industry can be calculated in a number of different ways but one thing we can all agree on is this is a significant problem. This was really brought home to me when I attended a raid in North West London in November. In this raid alone over sixty thousand counterfeit DVDs were seized – including pre-released titles – the street value and profit of this alone was estimated at around £185 000.
It also brought home to me that IP crime isn’t just an economic crime. Among the counterfeit DVDs were a significant number of obscene, disturbing and disgusting pornographic titles that would not have been granted certification in the UK in the first place. This not just puts our economy at risk it puts our consumers at risk.
So what is the role of the law?
The legal framework must set the boundaries for what is acceptable. And the rules must be enforceable and proportionate.
Technology has, as I have said, made this a global game. Different countries have different rules and respond to the threat of piracy in different ways. This can make it harder to track piracy, harder to identify the source and harder to stop the offender.
Are these unchartered waters?
If you look through history this is not unusual. We have seen technological developments before although perhaps the pace of acceleration is greater?
People are adjusting though. We are no longer reeling from the shock of the change. We are now starting to deal with it. That is not to say that we have all the answers, far from it
Solving the problems
So what actions can we take to solve these problems? There are actions for all of us.
The role of enforcement
In terms of enforcement we are committed to playing an active role in tackling IP crime. We are working with industry and enforcement agencies, through our Intel Hub and on awareness.
But it’s not just IP crime that we have to take seriously. We need to tackle the problem of large scale downloading, and in particular P2P filesharing. We need to do this so that revenue is delivered back to creators and so that creative businesses and future creativity is protected. We also need to do it because ‘taking without asking’ is not right.
That is exactly where Digital Britain and the Rights Agency proposals come in.
The government is committed to effective action on P2P. I am working with Stephen Carter to achieve this.
But we need to make sure we get it right. I see what’s happening in the rest of the world. I’ve noticed what’s happened in New Zealand, in Ireland, recently in Thailand, and of course in France. The newspapers are full of stories about the different ways that governments are tackling this problem.
Different countries have different cultures, different legal systems, and different ways of enforcing their laws. So what works in one place may not work in another. There may be no one right answer. I want a solution that works for us.
This is why we have been exploring the role a rights agency might play. A lot of people have engaged with this work. I am grateful. And as with any issue that is important to people, passions tend to run high and agreement can be elusive.
Some elements of the proposals were almost universally rejected. It is clear for example that few people see a role for government in commercial negotiations, and I have to say we are not surprised at that response. The ‘straw man’ paper that we published was intended to be provocative and start a discussion. It succeeded.
Elements of the original proposals do merit further thought. Some parties think that there could be a role for an agency in awareness raising and education. Work in this area is clearly vital if any meaningful reduction in casual piracy is to be achieved. There also appears to be a supporting role which may include settling codes of practice to flesh out the proposed legislation on P2P. This will be vital to protect to ensure that any obligations placed on ISPs are carried out uniformly and fairly.
Do we need a new body to carry out those roles? We don’t yet know the answer to that. But we should be careful not to rule it out completely if it could be a useful tool.
Proportionality
Whatever actions we take at the industry level, we also need to think about how we actually tackle the problem of infringing behaviour on the ground. I hear lots of people arguing for a no-nonsense approach. They want tough sanctions. They want disconnection. They want prosecutions.
I’m not convinced that this is the way to win the hearts and minds of consumers. We need to tackle this problem – and enforcement is absolutely a part of that BUT our response must be proportionate.
The importance of good legal content
Good legal offers are the best weapons we have got. One of the major ways we can tackle the problem is to incentivise the consumer to behave lawfully. I said earlier that we live in an “access culture”, but I don’t think that consumer necessarily demand free access they just want to get content quickly and easily. We need viable alternatives to pirate content. In short, we need good legal offers. We are already doing that; through providing catch-up TV on demand, music sales through iTunes. I am hugely encouraged by new legal businesses such as spotify.. But quite frankly we need more. Across the board we need to make it easy for consumers to be legal, easy for consumers to pay. This has to be made as easy as it currently is to infringe. I want to see creators and distribution businesses working together to give consumers the incentives to stay within the law.
The need for education
The final weapon in the arsenal is education. We need to move people away from thinking that piracy is an acceptable way to behave. We need them to understand and respect the value of content. We need to stop that man in the DVD store thinking it’s acceptable to advise his customers to illegally download.
BUT in doing so we must recognise that the success of such campaigns will depend upon the availability of legal offers. If we want people to turn away from piracy we need to give them something else to focus on. The new FACT campaign itself rightly recognises the value of those people who go to the cinema and support the film industry.
We must also do what we can to make the ground rules simple – we cannot expect 12 years old to become copyright experts before they turn on their PCs. I have spoken before about hiding the wiring, and that is an important part of this. If you want people to play by the rules, those rules have to be simple, consistent and fair. The legal complexities of copyright should be hidden from the consumer, allowing them to make simple choices about where to access content, secure in the knowledge that they are doing the right thing.
Conclusion
We understand the problem. We understand the need to act. We need a joint focus on making it happen.
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We need to continue our efforts on enforcement – in particular in relation to IP crime. This is an area where both government and industry have roles to play
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We need to confront the consumer reality. That does not mean that we just accept mass scale downloading but it does mean we need to do more than just say ‘no’
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We need to do all we can to ensure the delivery of good legal content – and then encourage customers – through education to meet their needs legitimately
