The digital economy
p2p news / p2pnet: Last week all roads in the digital world led to Rome as hundreds of government officials, policy experts, and companies descended on the Italian capital for a conference on “the future of the digital economy.” Jointly hosted by the Organization for Economic Co-operation and Development (OECD) and the Italian government, the meeting marked a turning point in the digital content debate as several long-simmering concerns emerged as mainstream issues.
The discussion pointed to two competing approaches for the creation and distribution of digital content in the Internet era. One approach, advocated by conventional content companies such as the movie and music industries, as well as by U.S. government officials, emphasized the need for the digital rights management (DRM) technologies to “lock down” content. They argued that DRM allows them to set specific limitations on the use of content, thereby facilitating commercial models such as individual downloads or full subscription services.
DRM supporters assured delegates that their models were gaining marketplace acceptance as the content owners claimed that they stand ready to license their content for distribution on multiple platforms such as the Internet and wireless devices.
While the emphasis on DRM was not unexpected, the alternate approach, which focused on user-generated content, took many delegates by surprise. Described as “amateur” content, the conference featured numerous presentations on how the combination of easy-to-use technologies and widespread Internet access has unleashed an unprecedented array of new creativity.
These included discussions on Creative Commons, an alternate licensing system that has enabled individuals to make more than 60 million works available to the Internet community, Flickr, the Canadian photo sharing site that now features millions of digital photographs, and the BBC Creative Archive, which allows UK residents to re-use original content from that country’ s public broadcaster.
The popularity of web logs or blogs also attracted considerable interest. Jason Sifry, the founder and CEO of Technorati, a blog search engine, reported that his company now tracks more than 27 million blogs, with 75,000 new blogs created every day. Moreover, the popularity of blogs is not strictly a North American phenomenon as last month Technorati tracked more blog postings written in Japanese than in English.
Notwithstanding the support for the DRM and user-generated approaches, both face threats that could hamper their development.
DRM supporters seemed ready to acknowledge that the technology has created consumer concerns. Although there was still little discussion of the privacy and security problems that were typified by last year’ s Sony rootkit controversy, many speakers admitted that the lack of interoperability that has made it difficult for consumers to transfer lawfully acquired content from one device to another has become a major problem. For example, the Napster music subscription service has been hurt by the inability to transfer songs to an Apple iPod.
Rather than addressing the problem by reducing their reliance on DRM, however, the content owners lay the blame for the lack of interoperability on consumer electronics makers. This was characterized as “content neutrality,” with the DRM backers looking to legislators to require the electronics makers to reconfigure their devices to allow the locked content to work on all devices.
While the content owners battle the electronics makers over DRM solutions that may still leave consumers paying more for less, the growth of user-generated content faces two threats. One threat comes from the limitations of DRM-enabled content, which can severely limit or prohibit legal modification of content. These concerns were raised last week at a UK parliamentary committee hearing on DRM by well-respected organizations such as the British Library.
User-generated content also faces the threat of the two-tiered Internet, which has garnered increasing attention in recent months. This refers to Internet service provider plans to restrict subscriber access to software applications such as BitTorrent, which is widely used to distribute user-generated content such as independent films or open source software.
The two-tier Internet could also hamper the growth of tools used to locate user-generated content, since ISPs such as BellSouth, Verizon, and Telus have all raised the prospect of charging websites and services for the right to deliver content to their subscribers. While established web sites may pay such tolls, many smaller sites could be forced out of business by these ISP demands.
In light of these developments, the conference ultimately sent a mixed message about the future of the digital economy. The Internet has sparked a remarkable outpouring of new creativity and provided conventional content owners with exciting new marketplace opportunities, yet legislators may be forced to intervene to ensure that consumers are protected from onerous DRM restrictions and that ISPs are precluded from using their positions as Internet gatekeepers to harm innovation.
Michael Geist
[Geist is the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. He can be reached by email at mgeist[at]uottawa.ca and is on-line at www.michaelgeist.ca.]
