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EU Appoints New Commissioner to Lead Digital Single Market

European Commission president Jean-Claude Junker this week named Bulgarian minister Mariya Gabriel as his candidate for Commissioner for the Digital Economy and Society responsible for overseeing the commission’s Digital Single Market initiative. Gabriel, whose appointment must still be approved by the European Parliament, would replace Günther Oettinger, who had overseen the DSM strategy since its launch in 2015 but was reassigned the budget portfolio earlier this year, and will report to Andrus Ansip, the commission vice president in overall charge of DSM.

Mariya Gabriel

The appointment of Gabriel comes one week after the EC issued a mid-term review of the DSM strategy, in which it called for swift action by the European Parliament and member states to enact its various recommendations.

“The Commission has lived up to its promise and presented all main initiatives for building a Digital Single Market,” Ansip said in the review. “Now, the European Parliament and Member States need to adopt these proposals as soon as possible, for new jobs, business and innovation to take off across Europe.”

The DSM project has been a focus of controversy from the start, as telecom providers, technology companies and copyright owners have all raised objections to one or more of the commission’s 35 legislative proposals and policy initiatives. Agreement on those proposals among the commission, the European Parliament, and the Council for the European Union has been slow in coming. To date, agreement has been reached on only three:

  • Abolition of phone roaming charges within the EU;
  • So-called portability of online content starting in 2018, under which EU citizens from one country will be allowed to access online services they subscribe to at home while traveling in another EU country, even if the content hasn’t been licensed for release in that second territory;
  • Enhanced data protection regulations

Still pending are controversial proposals to harmonize local copyright regimes among the member states to facilitate EU-wide licensing and distribution of content; an end to geo-blocking that results in consumers paying different prices for digital goods in different EU territories; an update to the cable and satellite directive to facilitate cross-border access to TV and radio programming; an update to the rules regarding content distribution and advertising arrangements; and telecom reform, among others.

Gabriel is currently serving her second term as a member of the European Parliament, where she has focused primarily on visa matters and foreign affairs.

In an interview with Politico Europe Gabriel insisted that her lack of a technical background would not be a handicap in her new position.

Being a commissioner, she told the publication, was “primarily a political job, not a technical one,” adding she was looking forward to working on digital issues because “it’s a field that represents the future.”

 

Competing With Paid

This blog post originally appeared on Concurrent Media.

The rise of subscription streaming services, in both the music and video industries, has given the lie to the old complaint that consumers won’t pay for content online. But to many in the music industry, to say nothing of streaming investors, too many of them still don’t.

Ad-supported free streaming services remain the bête noire of the record labels and music publishers. They rail against YouTube, even as they’re making deals with it, and have fought to restrict the copyright safe harbors that allow YouTube to profit from music posted without license by users. They’ve maintained pressure on Spotify to shift more of its free users to its paid subscription tier, a tune now echoed by potential investors as Spotify eyes an IPO or public listing of its shares, and have begun to restrict when new releases are made available on the service’s free tier.

Pandora, the largest free streaming platform after YouTube, felt compelled to roll out a new subscription tier as it tries to woo investors and potential suitors.

To hear many in the music business tell it, the industry would be better off if free streaming went away altogether.

The video streaming business, however, has lately been moving in the opposite direction, at least on certain fronts. While over-the-top subscription streaming services continue to proliferate, streaming platforms continue to invest in free, ad-supported content.

Ad-supported streaming service Tubi TV this week announced a new, $20 million funding round led by Jump Capital, bringing its total funding since in launched in 2014 to $34 million. While Tubi is targeting the same cord-cutting consumers being catered to by the likes of Hulu, Netflix, CBS All Access and HBO Now, founder and CEO Farhad Massoudi thinks there’s a limit to the amount of paid content consumers will support.

“I think the market is delusional if they think consumers are willing to pay and subscribe to all these apps,” Massoudi told the Wall Street Journal. “In the next year or so these apps are going to disappear, or they’ll see there’s no clear path to significant scale.”

Tubi counts Lionsgate, MGM, Paramount and Starz among its 200 content providers, according to the Journal, and boasts a library of 50,000 movie and TV titles — an indication that TV rights owners are still open to distributing content via free platforms.

Little, if any of the content on Tubi TV is in its first release window, of course, and in many cases has been thoroughly monetized already. So the circumstances are not entirely comparable to the music business. But free, ad-supported video streaming is nonetheless attracting a growing amount of direct and indirect investment in new production.

Facebook, which has made ad-supported video streaming central to its growth strategy, is preparing to debut a slate of original series in June, ranging from mobile-friendly 5-10 minute fare up to more traditional, 30-minute episodes suitable for watching on TV.

Word of Facebook’s plans comes as YouTube is developing its own slate of 40 new original series intended primarily for its free, ad-supported platform. In a recent interview with Adweek, YouTube chief business officer Robert Kyncl made clear the primary role that ad-supported content plays in YouTube’s evolving long-form video strategy:

For many years, [marketers] have been asking me, “When you are going to do big original shows?” Of course, in their minds they mean free [programming] with ads. As you know, two years ago, we started a team to focus on originals, and we created YouTube Red with no ads. At the beginning of last year, we started to think about the fact that advertising is our core business. And big brands and big agencies are our biggest partners. This is something they have been asking for for a very long time, and we should deliver on that…

Secondly, when I started to look at the statistics, they showed a share shift from advertising-supported shows to ad-free shows, which started to increase. I just think that’s a trend that’s not favorable to our biggest partners. We are the biggest video platform in the world. We should play a role in changing that.

Even traditional media companies are eyeing investment in original, ad-supported streaming content, as the list of TV networks and studios lining up to create TV-like content for Snapchat attests.

The reasons for the differences in attitudes toward free, ad-supported channels are both historical and structural. Historically, the music industry’s primary ad-supported business — terrestrial broadcasting — was conducted under compulsory license by broadcasters. Rights owners earned only royalties based on use, under a formula set by the government, or, in the case of sound recording owners, nothing at all.

In contrast, advertising was for many decades the exclusive means of monetization for TV content and the industry’s corporate structure was built around that paradigm. Critically, TV rights owners controlled and conducted the majority of the advertising sales, claiming 100 percent of the revenue it generated.

In the streaming era, music rights owners have been able to tie their earnings more directly to the total advertising revenue pie, but they still don’t control ad loads or prices, and their slice of the pie is still calculated in part by the government. Video rights owners, in contrast, have been able to carry over their direct control of ad sales into the streaming era.

So, could the music business ever accommodate itself to ad-supported business models as the video industry has done? Not without major copyright and structural reforms. But the video industry’s experience suggests that paid and free channels are not inherently incompatible.

Token of My Success

Earlier this month, blockchain solutions provider Tokenly introduced token.FM, a direct-to-fan blockchain-based music platform. Tokenly plans to launch an initial trial of the new platform in early May, along with an Series A fundraising round. The first artist to make her music available on token.FM is singer/songwriter Tatiana Moroz, who introduced the first blockchain-based artist token, Tatiana Coin, in 2014. We asked Tatiana to share her personal story of how she came to embrace blockchain and cryptocurrencies, and how she got involved with Tokenly.

By Tatiana Moroz
Entrepreneurship and managing your career can be a problem that many musicians struggle with. As an independent artist, I know I have. Upon graduation from Berklee, I felt prepared to make my way into the industry, especially with the advent of the DIY tools offered by the internet age. However, what I found was that even though we had taken some steps forward, there was a long way to go to true artistic autonomy.

It wasn’t just the overwhelming amount of work that had to go into creating a career, the new (and unpaid) full time job I was given as master of my own fate, the decision fatigue, and the standard frustrations of a highly competitive industry. The main problems I saw were the industry’s many walled gardens and difficulty accessing financial resources. I also felt that music like the 60’s and 70’s revolution folk that had inspired me, no longer had a place in the world of boy bands and porno pop.

Still, I persevered. Finding my niche, I performed around the country doing political events. Yet I found the DC world to be divisive and fruitless and was quickly disillusioned.

There was a light at the end of the tunnel though, and a technology I fell in love with. I became involved with Bitcoin in 2012, and immersed myself in the space by 2013. In early 2014, I looked at how this technology could be adapted for artists.

By June 2014, with help from Adam B. Levine, host of Let’s Talk Bitcoin and now CEO of Tokenly, I created the first ever artist cryptocurrency Tatiana Coin. The goal was to create an artist specific, personally branded token that would function a bit like a collectible item, but also like a digital gift certificate.

These coins were like flexible rewards. You received a digital token that you could trade, rent, sell, and use at any time. If you wanted to send $5 worth of TC to your friends, there was nothing stopping you. It was also a great way to onboard people into the admittedly challenging cryptocurrency world.

After the initial launch, I put the funds we raised toward recording my new album, “Keep the Faith,” which I put out in March. While the recording part was easy, we wanted to use this technological model for others, and that was the tricky part. It was a little like having a car but without roads or a roadmap. So while I was speaking and singing at conferences and sharing my story, a team assembled under Adam’s leadership, and Tokenly and Token.fm were born.

One of the innovations we have created helps bring scarcity back to the digital space through the creation of tokenized albums. Traditionally, if you buy a record on iTunes, you can’t share it or resell it. However, tokenization of records allows for sharing, trading, and selling of digital music, which gives true ownership back to the fan. Artists can also set their licensing parameters, include their songwriting splits, and automate the sales of their music and merch for retail, commercial, and wholesale use.

Blockchain technology is not just for artists though. It is something the whole music industry should get behind. I have many colleagues who work in music businesses and are frustrated that, instead of helping artists reach their audiences and create meaningful connections, they get bogged down with a costly and time intensive administrative process. Blockchain could change all of that.

Crowdfunding artists via blockchain would allow record-label resources to be focused on growth rather than publishing administration and tracking payments. It would also take pressure off the labels and allow them be more risky and experimental with the acts they sign.

With Adam and the Tokenly team, we are now working toward becoming protocol agnostic. It was important to me that artists have control, and not get locked into another platform. That’s the beauty of crypto though, once someone has your coin, you are forever bound together (till they get rid of the coin anyway), regardless of the platform. So, while we don’t know which blockchain will be the winner, we’ve created an ecosystem where artists can thrive as entrepreneurs and build stronger bonds with their audience.

I think that’s what’s so compelling about Bitcoin and blockchain: the ability to retain control over what is yours, and at the same time, be truly linked to anyone in the world with an internet connection. It is less likely to be corrupted by the touch of man, as math is unyielding in its dependability. It’s more secure, it’s censorship resistant, and more transparent.  I hope that it also allows for more freedom and diversity in music messages.

When artists supported by their fans, and are able to reflect the place they come from, they can offer a real and genuine experience, and that leads to better art. On a personal note, I hope that more liberty in creativity will push our world toward a more peaceful direction.

Tatiana Moroz is an independent singer-songwriter and Founder/CEO of CryptoMediaHub. Her latest album, “Keep the Faith” is available for download from Tokenly and iTunes, and can be streamed from Soundcloud

Why Rights Organizations Want to Make Music Together

Music rights collection societies can’t seem to get enough of each other these days. Last week’s news that France’s SACEM, the UKs PRS, and ASCAP in the U.S. will collaborate in a project to build a prototype blockchain-based metadata linking system was only the most high-profile example of a trend that can trace its origins back at least to SESAC’s acquisition of the Harry Fox Agency in 2015.

Overshadowed by the SACEM/PRS/ASCAP announcement was confirmation last week that Canada’s main performing rights organization SOCAN is in advanced talks with SODRAC, which licenses reproduction rights in Canada about merging the two organizations. In Europe, meanwhile, the cross-border PRO consortium Armonia Online is now up to nine member societies and is eyeing expansion beyond the Continent, Armonia officials told RightsTech.com,  including to North America.

Not all such moves have the same immediate causes or motivations. SOCAN, for instance, has already swallowed MediaNet (formerly MusicNet) and Audiam as it strives to build an end-to-end rights-management platform with reach beyond the Canadian market and a merger with SODRAC, which in addition to representing Canadian songwriters and publishers is the exclusive representative in Canada for music works from 100 other countries, would be of a piece with that broader strategy.

Armonia Online’s growth has been driven by an EU directive to improve transparency and governance of collection societies and facilitate cross-border licensing.

The SACEM/PRS/ASCAP announcement would seem to be at least partly defensive: If blockchain-based metadata management is coming to the music business anyway, better that it be designed to the benefit and specifications of the PROs than risk having to conform their processes to a system designed by and for others.

To one degree or another, however, all reflect the impact of two underlying and related dynamics. One is the increasing complexity of the market for music rights, as both the number of use-cases for music explodes, creating a demand for more efficient and integrated licensing solutions.

The other factor behind the growing urge to merge among collective licensing organizations is the rapid spread of new rights management technology. The growing availability of DIY publishing tools and independent publishing and rights management platforms (think Kobalt) means that, over time, collective licensing organizations will need to manage ever more payouts and account to ever more clients than they have been accustomed to.

That will require much greater granularity of data and greater transparency into the tracking of uses and payment of royalties — something blockchain proponents tout for the technology. But it also puts a high premium on scale. The need to track more uses, and make more and smaller payments to more and smaller rights owners, will generate pressure to drive down the collection societies’ own costs, through greater scale, shared infrastructure around cost-centers like metadata management, and adoption of technology.

Rather than disintermediating collective rights management organizations, in other words, improved rights management technology could, paradoxically, create an incentive for them to get bigger.

Photo: Jens Thekkeveettil (CCO)

Courts, Congress Put Spotlight on Copyright Office (Updated)

This post originally appeared on Concurrent Media.

The federal Ninth Circuit Court of Appeals handed broadcasters a major win this week in their long-running legal battle with Aereo-clone Film On. A unanimous three-judge panel overturned a lower court ruling, which had held that FilmOn was eligible for the compulsory license under Section 111 of the Copyright Act that allows “cable systems” to retransmit copyrighted programming contained in broadcast signals without needing to get permission from the copyright holders.

In overturning that ruling, the circuit court closed an apparent loophole created by the Supreme Court in its 2014 ruling against Aereo, in which it held that Aereo was infringing broadcasters’ public performance right by retransmitting broadcast signals over the internet. In addressing whether Aereo was “transmitting” broadcast signals as defined in the statute, Justice Stephen Breyer reasoned that Aereo was acting, for all intents and purposes, like a cable system, which unambiguously “transmits” a signal, and therefore Aereo required a license under the statute’s Transmit Clause.

Maria Pallante

FilmOn seized on that reasoning to argue in its defense against a lawsuit brought by Fox, that it should be treated as a cable system for purposes of the compulsory license, which is a related but legally separate issue under the law. Several courts rejected that argument (FilmOn was sued in multiple jurisdictions) but one judge, U.S. District Court Judge George Wu, accepted it, ruling in Aereo’s favor, which led to Fox’s appeal to the Ninth Circuit.

While the Ninth Circuit’s ruling is an important victory for the networks, how the court reached its conclusion could turn out to be important in ways that go beyond its legal ramifications.

Writing for the court, judge Diarmuid O’Scannlain did not accept either Fox’s or FilmOn’s argument in full, acknowledging that the statutory language is ambiguous enough that could plausibly be reach the way each side would have the court read it, but that neither interpretation was compelled by either the language or the legislative history. To resolve the question, therefore, O’Scannlain defers to the interpretation of the provision offered by the U.S. Copyright Office, which favored Fox’s view.

In doing so, however, O’Scannlain felt compelled to establish the legal foundation for such deference.

“Because the statute does not speak clearly to the precise question before us, we must decide how much weight to give the views of the Copyright Office,” O’Scannlain writes. ” The first question is whether Chevron or Skidmore provides the proper framework to structure our analysis.”

O’Scannlain then goes on, in a footnote, to lay out the basic legal distinction between the two standards. Broadly speaking, under the Chevron standard (from Chevron U.S.A. Inc. v. Natural Res. Def. Council), courts should defer to an agency’s construction of a statute it has been tasked by Congress to administer where the language of the statute is ambiguous as to the precise question at hand, so long as that construction is “reasonable.”

Under Skidmore, (Skidmore v. Swift & Co.) the weight given to an agency’s interpretation “will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”

O’Scannlain then ups the stakes.

“To resolve this issue,” he writes, “we would be required to rule on constitutional questions that could have outsized consequences relative to this case—such as determining whether the Library of Congress is a legislative or executive agency.” If the latter, presumably, the Copyright Office would have a better claim on Chevron deference; if the former, it might only be due Skidmore.

Then comes this footnote:

The Copyright Office is housed within the Library of Congress, and it is not clear whether the Library of Congress is part of the executive or legislative branch. Compare U.S. v. Brooks, 945 F. Supp. 830, 834 (E.D. Pa. 1996) (“[T]he Copyright Office is part of the legislative branch.”), with Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 684 F.3d 1332, 1341–42 (D.C. Cir. 2012) (discussing why the Library of Congress “is undoubtedly a ‘component of the Executive Branch’”). If the Library of Congress is part of the legislative branch, then the Librarian’s “power to appoint all of the officers who execute the copyright laws” may run afoul of the Appointments Clause of the Constitution.

As it happens, the legal status of the U.S. Copyright Office is very much a live controversy in Washington right now. The Office is currently leaderless, thanks to the abrupt removal of its previous head, Register of Copyrights Maria Pallante, in October at the hands of recently installed Librarian of Congress Dr. Carla Hayden. While theories abound as to the “real reason” behind Pallante’s removal, seen as a blow to copyright owners who viewed her as an ally, one factor appears to have been her outspoken advocacy for separating the Copyright Office from the Library and making it a standalone, executive branch agency, with a presidentially appointed register and its own rulemaking authority — a position Hayden strongly opposes.

Members of both the House and Senate Judiciary committees, many of whom are sympathetic to Pallante’s mission to separate the Office from the Library, expressed bi-partisan dismay over her defenestration, creating a rare rift between the Library of Congress and Congress. Pallante had worked closely with the House Judiciary Committee as it conducted a two-year review of U.S. copyright law with an eye toward reforms, including giving the Copyright Office a measure of independence from the Library.

At a meeting earlier this month, leaders of both the House and Senate committees urged Hayden to hold off on naming a new Register, according to a Wall Street Journal report. But in a letter to the committees following the meeting Hayden stuck to her position and reiterated her intention to make the appointment herself.

The chairman and ranking member of the House Judiciary Committee, respectively, Rep. Bob Goodlatte (R-Va.) and Rep. John Conyers (D-Mich.), struck back this week, introducing the Register of Copyrights Selection and Accountability Act of 2017, which would make the Register of Copyrights a presidentially appointed position with a fixed, 10-year term.

In his opinion in the FilmOn case, Judge O’Scannlain side-stepped the question of the Copyright Office’s status by ruling that even under the less-deferential Skidmore standard the Office’s reading of Section 111 was persuasive, and that internet services like FilmOn and Aereo are distinguishable from “cable systems” and therefore not entitled to the compulsory license.

While that might settle the matter as far as FilmOn is concerned, Judge O’Scannlain’s highlighting of the question of the Copyright Office’s status neatly illustrates what’s at stake in the tug-of-war between Congress and the Librarian over control of the office and the appointment of the Register. Courts have disagreed over the years as to how much deference to give the Copyright Office’s interpretations, particularly in close cases involving the application of an old statute to new technologies.

Clarifying the Copyright Office’s legal status could go a long way toward resolving the question of deference, which could impact cases far beyond Fox v. FilmOn.

Update: On Wednesday (3/29), the House Judiciary Committee approved the Register of Copyrights Selection and Accountability Act (HR1695), which would make the Register a presidentially appointed position but leave the Copyright Office within the legislative branch. The bill now goes to the full House.

Kicking Off Phase II of the RightsTech Project

The rights-tech ecosystem is evolving continuously, and now, the RightsTech Project is evolving with it.

Starting this month, the experiment that began with this website and the annual RightsTech Summit will expand to become a year-round networking, education and service organization open to all members of the rights-tech community. By joining, members will become part of a unique, cross-industry network of creators, media rights owners, technology developers, investors, and entrepreneurs working to find innovative solutions to the challenges of managing and monetizing copyrights on digital platforms.

 

In addition to our e-news, website, and conferences, members will enjoy posting privileges to the RightsTech blog and online discussion forum, access to exclusive networking events, participation on our advisory board, and access to a wide range of business-to-business marketing services designed to help rights-tech entrepreneurs and developers reach more than 40,000 decision makers in the media, technology, and creative industries.

Members can also participate in cutting-edge thought-leadership and research initiatives aimed at educating policymakers, investors, and related industries about the evolving rights-tech ecosystem and its potential to unlock new sources of value for creators and rights owners.

“It’s no secret that digital technology has transformed how media content is created and distributed. But until recently, that technology has not really been brought to bear on how the content gets licensed and paid for,” said Paul Sweeting, principal analyst at Concurrent Media Strategies and co-founder of the Rights Tech Project. “We launched the first RightsTech Summit in 2016 to highlight some of the innovative efforts we saw emerging in a number of different media industries to bring the ‘business’ part of the media business up to speed with the ‘media’ part. Since then, interest in keeping the conversation going has only grown.”

Added Ned Sherman, RightsTech co-founder and chairman of Digital Media Wire “From the outset, the goal of the RightsTech Project has been to provide a community for news, analysis and opinion on emerging technologies and technology-enabled strategies for the management, authentication and monetization of creative rights across diverse media industries. By becoming a year-round networking, education, and service organization, we will be able to provide additional services and resources to innovators and thought leaders from across the full range of media sectors as they each grapple with the challenges of managing and monetizing copyrights on digital platforms.”

Three levels of membership means the RightsTech Project is open to enterprises of all sizes, from startups to Fortune 500 companies. Individual memberships are also available.

Click here for more information on membership and on how to join.

 

More Money for Rights-tech: Dubset Mixes Up a $4M Funding Round

Music remix-rights clearance startup Dubset Media on Monday announced a $4 million Series A fundraising round as it prepares to scale up its platform to address the growing number of licensed streaming and download services looking to include DJ mixes and remixes in their catalogs.

Last year Dubset struck deals with Apple Music and Spotify to add fully cleared DJ sets to those services and plans to announce deals with additional outlets at next month’s SXSW festival, according to the company.

Dubset Media CEO Stephen White

“We’ve delivered thousands of mixes so far and we plan to ramp that up to millions and tens of millions,” Dubset CEO Stephen White told the RightsTech blog.

Dubset’s proprietary MixBANK technology identifies individual tracks within DJ mixes and then links that information with a clearance and payment platform that allows the original rights owners to get paid when those mixes are sold or streamed.

The round was led by venture firm Cue Ball Capital but also included strategic investments from MediaNet and its parent company SOCAN, which currently provide Dubset with rights data and payment infrastructure.

“We’re is excited to be a part of Dubset’s Series A funding,” MediaNet CEO Frank Johnson said in an emailed statement. “We believe MIXBank technology and the services it enables will revolutionize the way electronic music royalties are paid, and will ensure that everyone in the copyright ownership stack is paid for use in emergent listening formats like DJ mixes.”

The raise comes on the heels of private-equity firm Blackstone Group’s acquisition of performing-rights organization SESAC in January for a reported $1 billion, and adds to a growing list of recent VC and private equity investment in rights-tech startups.

The key to opening that spigot, according to White, was to broaden the conversation with potential investors to focus on rights management and clearances generally rather than keeping the focus on the music industry.

“When we started out we were very focused on music and on being a music play. That turned out to be very challenging from a fund-raising perspective,” White said. “VC’s hear ‘music’ and doors just close. They don’t want to hear about it. It was very important for us to shift our story to talk about rights management and rights clearances and not focus on music.”

Investor skepticism toward the music business stems from the industry’s well-documented difficulties in transitioning to digital platforms and the relatively poor track record that venture-backed music-tech startups have racked up over the years — a perception that persists, according to White, despite signs of renewed growth in the recorded music business in the past year.

“There’s still a big overhang in the investment community,” regarding music White said. “Most of the investment you see is in the rights management space and in acquiring catalogs” of rights. “It’s easier to understand, and the revenue is more predictable.”

Johnson added, “We believe that the future of music licensing and royalty administration will be found in strategic partnerships like the one between MediaNet and Dubset, where a combination of investment in exciting new technology combined with long-standing relationships with labels, publishers, rights societies, and artists unlocks new revenue channels for large and small rights holders around the world.”

 

Rights-tech Startups Driving Blockchain Investment

The data-visualization folks at Quid have been crunching some numbers on investment in  blockchain applications and they’ve come up with some interesting charts.

The researchers identified 450 venture-backed companies using some form of blockchain technology. And as you would expect, the biggest recipients of VC money to date have been Bitcoin miners, cryptocurrency exchanges, and companies involved in financial services of one sort or another.

But when Quid stripped out the fin-tech firms a very different picture emerged. Four of the top 10 recipients are rights-tech companies, including ascribe, artCOA, Monegraph, and Revelator.

The scale of the investments in non-finance related startups is far smaller than in fin-tech firms, of course. The top rights-tech company on the list, ascribe, has raised about $6 million to date, compared to more than $130 million for 21 Inc., which sells Bitcoin mining computers. But as Quid notes, its analysis “suggests that blockchain has big potential to transform a variety of industries, particularly those that rely heavily on data authentication and verification, including healthcare and digital media.”

 

A Chunk of History: The Medieval Roots of Digital Publishing

This blog post originally appeared in Concurrent Media.

One of the wonderful paradoxes of the digital era of media is its retrograde quality. We tend to think of inventions like the internet and peer-to-peer digital networks as apotheoses of modern communication, but their economic impact on many media industries has been to unravel their modern industrial structures and to resurrect many of their pre-industrial, folk foundations.

Nowhere has that been more true than in the case of music. MP3 files, P2P networks, and now streaming have blown up the multi-song bundle we called the album — and the profit margins that came with it — and restored the single to prominence, as it was in the days before the invention of the long-playing record (LP).

The much-derided phenomenon of unlicensed “sharing” of music over P2P networks also carries echoes of music’s past. Until the Gramophone and the Phonograph made private performances of music practical, music was almost always shared, in the sense that it was usually experienced as part of a public performance. While the industrial technologies of recording and playback made private performances lucrative the instinct to share music never really went away.

Even modern notions of musical authorship are in part a function of industrial technology and are now being challenged by digital technology. Prior to recording, many forms of folk music (think traditional American blues) held standard lyrical tropes and even entire verses as part of a commons that were recycled and rearranged by performers as needed. It wasn’t until recording technology enabled the fixation of a canonical version of a performance that many folk artists began to think seriously about authorship.

Today, EDM DJs treat recordings as part of a commons, recycling and reassembling their elements into unique performances.

The film and television industries haven’t experienced the same retrograde dislocation as the music industry has, in part because the media themselves are products of industrial technology. Film and TV have no pre-industrial past to resurrect. But even then, they have felt the tug of digital technology against the industrial economics of bundling, as programs are disaggregated from channels and channels are disaggregated from pay-TV tiers.

As a sometime-student of media history, I came across a fascinating recent example of digital technology’s pre-industrial DNA in an interview with David Hetherington, North American COO of Klopotek, ahead of the upcoming London Book Fair.

Klopotek AG, is a German software company that provides CMS and rights management technology to the book publishing industry around the world. Here is Hetherington’s description of one way Klopotek helps academic publishers monetize their works, taken from Publishing Perspectives:

“Typically, thinking in the book business,” Hetherington says, “has started with the book. And I think our view of it is that it really has to start with the grain of content…

“So the idea of taking content from various products and pulling it together means that the initial block of content is no longer sold as it is. It means that the content is able to be parsed and re-assembled.

“The users—whoever wants to re-assemble that content—can identify the pieces they want, can specify the part numbers. This, in effect, means that the owner of the content must give it a unique part number and pass that part number to the potential market.

“At times, in some markets, this has been called the “chunking” of a book, breaking it into salable sections that fit users’ needs. Nowhere is this more easily understood than on campuses, where professors can effectively build their own textbooks for courses by piecing together parts of existing works, a “chunk” at a time, to match the needs of a given set of students.

Klopotek’s sophisticated software helps publishers “chunk” their books and license the chunks separately into customized bundles. It creates a licensed alternative to the “course pack,” in which professors would assemble their custom bundles at Kinkos and then distribute them to students. It also provides a defense against book rentals and used-book sales by providing students an affordable option.

Any 14th Century university scholar, however, would immediately recognize Hetherington’s description as an example of the pecia system.

With the rise of Medieval universities in Europe, the demand for books for use by students increased dramatically. But in the years before Gutenberg made it possible to produce identical copies of texts at scale, reproducing books was a laborious, manual process, carried out mostly by monks or itinerant scribes, and incapable of meeting the demand.

A solution emerged in Italy in the 13th Century and spread quickly to other countries. Books were chunked into pieces (pecia) for copying by individual students, and the pieces were then passed around in what amounted to a peer-to-peer network until each student was able to assemble all parts of the text required for his course work (women were not permitted to attend university).

The system became formalized and regulated in the early 14th Century, beginning at the University of Paris. Certain book mongers were licensed to provide students with pecia rentals for copying taken from master texts certified by members of the university faculty. The rates that could be charged for each work were set by the university, and as demand grew and more master copies were needed to supply pecia, the texts were regularly inspected by scholars to make sure they did not become corrupted through the accumulation of copying errors.

The scholars who oversaw the pecia system were not concerned with authorship per se, of course, let alone droit d’auteur. The concept barely existed at the time, and in any case the texts in question were mostly classical or the works of the early Church fathers. The scholars’ interests were pedagogy and preserving the integrity of the texts, not rights management. But it shows that the use of chunking to affect the economics of academic publishing has a long history.

The printing press, many early examples of which were established in university towns, eventually did away with the need for the pecia system by introducing industrial economies of scale to the reproduction of books, although the system survived well into the 16th Century in some areas.

The mechanical press made the complete text the anatomical unit of the commercial publishing industry — “starting with the book,” in Hetherington’s formulation. But it wasn’t always that way, and with digital technology it need not be that way now.

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