The Digital Economy Down Under

Minister Conroy released on 14 July a report Australia’s Digital Economy: Future Directions, which he has described as a road map for Australia’s digital economy future.

Amongst other things, in (sort of, kinda, a bit) similar vein to the EU’s Commissioner Neely, the report notes:

The digitisation trend is changing customer habits and expectations. Increasingly, they expect an on demand experience, that is, the ability to enjoy what they want, when they want, on the device they want. This has been facilitated by digital video recorders and music and video sites that offer on–demand content for streaming or downloading.

The digitisation trend is changing customer habits and expectations. Increasingly, they expect an on demand experience, that is, the ability to enjoy what they want, when they want, on the device they want. This has been facilitated by digital video recorders and music and video sites that offer on–demand content for streaming or downloading.

but has attracted attention in the press for foreshadowing a crack down on file sharing.

Certainly, at p 19 (of the Snapshot), the report states:

Several rightsholder groups in Australia argued that a role for Government exists in addressing the apparent popularity of peer–to–peer file sharing of music and movies, without the necessary permissions of the relevant copyright owners. File–sharing is cited by the content industry as a barrier to further investment in sustainable and innovative content initiatives in Australia. However, some of the solutions proposed by rightsholders to address file-sharing have been criticised as raising issues of due process and consumer rights.

The Australian Government recognises a public policy interest in the resolution of this issue. The Government is currently working with representatives of both copyright owners and the internet industry in an effort to reach an industry–led consensus agreement on an effective solution to this issue.

Earlier, a pp 12-3, the Snapshot foreshadows further consideration of the scope and availability of the ‘safe harbours’ from copyright infringement:

At present it is unclear whether the present scheme works effectively for some types of online service providers that have subsequently grown in popularity since the scheme’s introduction. The platforms provided by newer online service providers allow social engagement, content distribution and political communications, through features frequently referred to as user–generated content and Web 2.0. This includes social networking sites such as MySpace, Bebo and Facebook (which launched in 2003–05), the online photo sharing site Flickr (which launched in November 2004), and video sharing sites like YouTube and Vimeo (which launched in 2004–05). ….

The limited availability of the safe harbours to those who qualify under that legislative triumph of drafting encompassed in the definition of “carriage service provider” has been under review now almost since before it was enacted. One wonders what there can be left to consider!

Also, with reference to Gov 2.0, the report does encourage Government to open access to appropriate categories of public sector information. I guess the devil lie in the detail of what is “appropriate”. For example. (Trying very hard not to mention that Senator Conroy is also the Minister responsible for the Government’s plans to censor the internet.)

In a positive move, consistent with the Gov 2.0 approach, the report has been released under a creative commons licence.

You can find the Snapshot (a 35 page synopsis) and the full report here in various formats.

Harvard Bus School on the impact of file sharing

Felix Oberholzer-Gee at Harvard and Koleman Strauss at Uni. of Kansas take an empirical look at the effect of file sharing on copyright industries.

They accept that file sharing has weakened copyright protection (although they are quite sceptical about the studies trying to prove this). They argue this is only part of the question, however, for policy-makers. They contend that, if the role of copyright is to provide incentives to create new works, it is necessary to look rather more widely.

For example, they note:

  • the publishing of new books increased by 66%
  • the number of new albums released more than doubled;
  • the number of feature films produced has increased by 30%,

in the early years of the 21st century.

They also note that revenues from concert sales and merchandising and the like has also increased.

Exploring this, their tentative conclusion for policymakers:

The role of complements makes it necessary to adopt a broad view of markets
when considering the impact of file sharing on the creative industries. Unfortunately, the
popular press – and a good number of policy experts – often evaluate file sharing looking
at a single product market. Analyzing trends in CD sales, for example, they conclude that
piracy has wrecked havoc on the music business. This view confuses value creation and
value capture. Record companies may find it more difficult to profitably sell CDs, but
the broader industry is in a far better position. In fact, it is easy to make an argument that
the business has grown considerably.

The role of complements makes it necessary to adopt a broad view of markets when considering the impact of file sharing on the creative industries. Unfortunately, the popular press – and a good number of policy experts – often evaluate file sharing looking at a single product market. Analyzing trends in CD sales, for example, they conclude that piracy has wrecked havoc on the music business. This view confuses value creation and value capture. Record companies may find it more difficult to profitably sell CDs, but the broader industry is in a far better position. In fact, it is easy to make an argument that the business has grown considerably.

Download the pdf here.

Lid dip Joshua Gans