The Digital Rights Exchange can grow the economy

Jeremy Silver of MediaClarity, shows how a Digital Rights Exchange could boost creative licensing

By Jeremy Silver on Jul 08, 2011. Comments (0)

Jeremy Silver ©

Carl J Schramm, President of the Kauffman Foundation, is recognised internationally as an authority on entrepreneurial innovation, job creation and economic growth. Visiting London recently, he said: “Governments talk about entrepreneurship totally differently from how they act.” He urged governments: “Do not favour incumbents in the belief that new jobs will be created by them, they won’t. 40% of GDP in the United States comes from businesses that did not exist twenty years ago.”

The Hargreaves Report offers the possibility of innovation enabled by a new mechanism for licensing creative works through his proposed Digital Rights Exchange (DRE). This would lead to the arrival of new entrants, to growth and to the kind of job creation Schramm is describing.

Hargreaves sets out a vision that offers the opportunity for innovative new companies to gain access to creative work more easily, more efficiently and more globally than is currently the case. It is also a vision that sees the best way to achieve growth not by bolstering business models that are declining but by enabling the creation of new licenses for creative work under new models as yet to be defined.

There will of course be many incumbents (corporations and collecting societies) who will argue vociferously that although Hargreaves is a good and welcome thing, that it is also unworldly and not implementable. Certainly his proposals deliberately leave lots of operational detail still to be worked out but that is for business folk to work through as effectively as possible.

Much of what is in the concept of the DRE has already been adumbrated by the Global Repertoire Database for music that the EU is collaborating on with the music publishers (but so far sans record companies). WIPO’s International Music Registry is also coming from the top down to a similar place. The original inspiration may well have been the Google Books Registry (now kicked into touch by US judges - but significant nonetheless) and other ideas such as the Image Repository concept being deliberated by the visual arts community.

All of these elements are components of what could become a global DRE. As Hargreaves argues, it might just be for this brief period, that the UK could take the lead and gain a disproportionate economic advantage by setting out the template and gaining the commercial traction for the first version of a DRE.

Hargreaves implies pretty clearly that if we want new companies to thrive and to come to market with new products and services then we also have to loosen a degree of control on the way rights flow. That control of course has in many ways in reality, already been eroded The ability of file-sharing networks to evade persistent steps to close them down is a fact of technology. It is a game of wack-a-mole that rights holders need to perpetuate but which they also recognise is not winnable and has simply become part of their way of life - along with the piratical rhetoric that goes with it. It is notable though that Hargreaves has not argued to supplement any loosening of control over licensing of rights by a concomitant strengthening of creators' rights. That would seem to be a lever to pull that should be further explored as some kind of opt out option for creators for whom certain kinds of commercial transactions are not acceptable (eg providing a soundtrack for a petrol engine car advert).

Hargreaves warns against the dangers of “lobbynomics” - the possibility that Government could be dissuaded from supporting his recommendations by incumbent companies who realise that change will not build their current business model. This has been the fate of a number of recent IP reviews commissioned by governments and then largely ignored. As a colleague put it recently: “there is no trade association representing the businesses that have not been invented yet”.

Market forces demand that public companies achieve quarterly numbers which in turn drive share prices and the bonuses of executives. Quarterly reporting seems to cripple strategic innovation in creative media companies. It’s not that incumbent businesses cannot or do not want to innovate, it’s just that their short term actual needs will often take a greater priority than their longer term strategic potential. This is particularly true when businesses are forced into being conservative because their plans are failing. But those cannot be the priorities of the nation’s economy. If we wish to achieve growth and job creation through new businesses then we must encourage the innovation that drives them. The Hargreaves Report gives us an excellent roadmap. Now the Government must let us build the vehicle in which to follow it. The opportunity is to enact the “big bang” for creative licensing, the “electrification” of the creative economy.

Jeremy Silver, Strategic Adviser, Mediaclarity.

This essay is part of Open Rights Group's series of essays 'Hargreaves: From Paper to Policy'.