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Loading ...Content industry vs content delivery providers: who is the customer?
One of the common problems you will see in policy discussions is that many people are focused on their narrow issues, sometimes even tiny edge-cases, and not investing any time looking at the bigger picture of how different policies interact. This leads to the solutions to these edge cases sometimes causing even worse problems for the proponents.
We had one of those moments at CopyCamp when I tried to demonstrate a bigger picture issue by adding in “Net Neutrality” related discussions into a narrow discussion of business models for authors.
When you talk about the Internet with an author who is more familiar with pre-Internet thinking about business models for creators, you get a very familiar story. They believe that Internet service providers (ISPs) are making money “on the backs” of authors. They claim these ISPs would have no value without the works of the authors they represent, and they believe that they deserve to get a (large?) cut of the revenues from ISPs.
On the other hand, some “ISPs” have stated that they believe that the content industry is delivering content on the backs of the network providers, and believe that the network providers should have the right to charge higher rates for delivering this content. Those creators who don’t have the money to pay the distribution networks the premium rates will be put onto the “slow lane” of the Internet, with these content creators ending up with smaller and smaller audiences. This forms the core of what is often called the “Net Neutrality” debate.
Each of the content industry and content delivery industry believe that they have the more valuable product/service and that the other industry is unfairly benefiting and should be charged a premium. Each of them consider themselves the supplier and the other industry the customer.
Which is right? In my mind there is a bit of truth to what each is saying, but that both of these sectors are largely wrong. In both cases you really need to look at competitors to understand what is really going on.
The “ISP” companies that are most visibly using this rhetoric are companies like Vidéotron who are better understood as a cable company that just happen to offer an Internet-like service. Like the phone companies, cable companies want to offer services that more closely match their legacy services that are not at all like the Internet was designed. The Internet was created under an end-to-end design where the network is dumb and the terminals were smart, enabling massive innovation at the edges of the network that doesn’t require additional permission or payment to the network providers. Competing with the phone and cable companies are companies that are not traditional phone or cable companies who want to offer true end-to-end connectivity. These true ISPs don’t talk in terms of making special arrangements with specific content industry companies, and recognize that the true value of their service is to enable their customers to make all those choices in a neutral fashion.
The more the phone and cable companies are allowed to impose their policies onto the entire networks, like what Bell Canada is trying with their (likely illegal) throttling of the regulated data Gateway Access Service (GAS) that competitors must use, the less true ISPs are able to exist.
The content industry and creator groups who think the networks owe them money believe that imposing collective licensing (copyright levies) onto ISPs is the right solution. This subset of the creative industry are in competition with creators who are using alternative methods of production, distribution and funding. These competitors are an obvious counter-example to the claim that without the content from the copyright holders that believe they are owed that there would be no content on the Internet, given the majority of the content on the Internet today is offered by these competitors. Many of these competing creators use business models where they do not charge any royalties at all and want their works to be legally shared royalty-free in order to receive some other benefit (think of Open Access, Free/Libre and Open Source Software, so-called “User Generated Content”, and political/etc commentary. See Cory Doctorow: Think Like a Dandelion : Reproductive strategies for the Internet era). The more all audiences have to pay a fixed fee no matter what creativity is accessed, the less these competing business models can exist given their greatest competitive advantage (no royalty fees) are wiped out by the imposed levies.
Not surprisingly it is the battles between the pre-Internet content and network companies that are seeking policies against each other, while the Internet-era content and network companies are far more cooperative towards each other. Internet-era content and network companies don’t believe that the other is making money off their backs, and recognize that both benefit from the existence and growth of each other.
In the end, the pre-Internet content industry won’t ever be able to receive the benefits that they are asking for. The more they promote a marketplace where a small number of non-neutral/”smart” network providers dominate, the more they are promoting media concentration. This is an issue that has been a problem for the content industry for a far longer time than the Internet has existed. The more concentrated the media becomes, the more this concentrated media can dictate business terms (whether or how people get paid) and sometimes even content to the content industry (produce what the media executives like, or your work will never get distributed). One of the greatest promises of the Internet was to break up this concentration, allowing creators to easily reach audiences without the gatekeeping by concentrated media companies.
Some components of the content industry are very blatant in their misguided lobbying. The Recording Industry Association of America’s chief has publicly come out against Net Neutrality this week in a US House of Representatives subcommittee hearing. They are lobbying for the Internet to become a “dumb terminal, smart network” style of communications network where the smart networks can filter content. They seem oblivious to the fact that the same technology that can theoretically be used to stop copyright infringement will be used to enforce whatever other policies that the network providers want. Given the strong differences of opinion on “who is the customer” between the content industry and these network providers, we know for a fact that the policies set by these network providers can not possibly benefit the recording industry or any other part of the content industry.
This is a problem with focusing only on ones narrow issues and not on the bigger picture. You need to be careful what you ask for as it may end up making things far worse. This is what I’ve been observing with the content industry and how they have handed the Internet as well as other digital technology, with them promoting policy under “net neutrality” and copyright (compulsory licensing and digital rights management) which are highly detrimental to the content industry itself.
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