These days, a band or artist can record a track in a garage, mix it in a bedroom, and get it onto Spotify, Apple Music and Amazon Prime in a matter of days. Yet while the path to market is getting shorter and more direct for musicians and other creators, the path to payment of royalties, residuals and participations is getting longer and more complex, not just for music but for many other types of media as well.
The battle over the European Union’s Directive on Copyright in the Digital Single Market was thought to be all over but the shouting. The final text of the directive was adopted by the European Parliament last year and the deadline for member countries to implement the directive in their local laws was set for June, 2021. All that was left was to figure out how member state legislatures, rights owners and digital platform providers would give it practical effect.
But proposed guidance issued by the European Commission for the “transposition” into law of Article 17 — the directive’s most controversial provision — has reignited the fierce debate over whether and in what manner platforms should be required to pre-filter uploaded content for potentially infringing material, and once again pitting rights owners groups against the platforms and their allies among consumer groups.
In a sharply worded letter sent as the public comment period on the proposal was closing earlier this month, a group of copyright organizations including IFPI, Impala, the MPA and others, accused the Commission of attempting to “amend” the directive “without due legislative process.”
According to the guidance, any use of automated upload filters should seek “to ensure that legitimate content is not blocked when [such] technologies are applied.”
Thus, “the guidance would take as a premise that it is not enough for the transposition and application of Article 17 (7) to only restore legitimate content ex post, once it has been blocked. When service providers apply automated content recognition technologies under Article 17(4)…legitimate uses should also be considered at the upload of content.”
The guidance goes on to recommend a procedure for the use of ACR technologies similar to one proposed by public interest groups during the stakeholder dialog. In particular, if an upload is initially flagged as containing copyrighted content but is determined to be “not likely” infringing, the platform would be required to notify the uploaded who would be offered a chance to challenge the initial flagging.
If challenged, the upload would be reviewed by humans but would remain up while the review is performed. If determined to be non-infringing it would stay up, although the rights owner would be able to send a takedown request, which would then go through a separate adjudication.
To the rights owner groups, such a procedure would effectively reverse the victory they thought they had won through the hard fought adoption process: the shifting of the burden of policing platforms for infringing content to the platform providers. Instead, rights owners would essentially be back in the business of having to file post hoc takedown notices while their content remained online.
As a technical legal matter, the issue concerns whether Article 17 represents only a clarification of the “communication to the public” right spelled out in the earlier EU directive on the information society (“InfoSec Directive”), as rights holders argue, or if it is a new, sui generis right (“lex specialis“) that requires separate interpretation.
The guidance comes down firmly on the side of a sui generis right.
Article 17 is a lex specialis to Article 3 of [the InfoSec Directive] and of Article 14 of [the Electronic Commerce Directive]. This is confirmed by Recital 64 [of the stakeholder dialog], which states clearly that Article 17 does not affect the concept of communication to the public or of making available to the public elsewhere under Union law, nor does it affect the possible application of Article 3(1) and (2) of [the InfoSec Directive] to other service providers using copyright-protected content. As such, Member States would not be able to rely in their transposition of Article 17 on their implementation of either of those directives in relation either to the notion of ‘authorisation’ or indeed for the notion of ‘communication to the public’.
The proposed guidance is preliminary. The Commission will now consider the submitted comments and issue its final guidance next month. But if the final guidance follows suit with the proposal, it would mean the only two implementation (transposition) plans submitted so far — by France and The Netherlands — would be inconsistent with the Commission’s formal recommendations.
It also sets up the possibility of several months of intense wrangling ahead over individual countries’ implementing laws and the potential for varying, and even conflicting applications of Article 17 in different EU member states.
In coming months, our RightsTech Roundtable webinar series will be taking up the debates over the implementation of the EU Copyright Directive, including both Articles 17 and 15, the so-called link tax provision, and what both rights owners and platform providers need to do to prepare ahead of the June, 2021 deadline.
Stay tuned for more details on our upcoming programming.
The RightsTech Project is pleased to announce the RightsTech Roundtable, a weekly free webinar that will be part of the Digital Entertainment World Let’s DEW Lunch webinar series. Each Thursday we will highlight the important news of the week and a deep dive into a critical topic or issue for the RightsTech community featuring expert speakers and presenters. Click here for more information on Let’s DEW Lunch, and on speaking and sponsoring opportunities.
In 1604 and into 1605, London was ravaged by Plague, forcing much of the city into what today we would call lockdown: Many types of public gatherings were banned, theaters were shuttered, and houses that had been touched by the disease were marked with red crosses and the occupants told to stay indoors. William Shakespeare used his forced downtime to write “King Lear” and “Macbeth.”
Source: Distance Learning
The U.S. Copyright Office will convene a day-long symposium in Washington, DC, on Friday, Dec. 6 to examine the problem of unclaimed royalties in the music industry. The meeting is part of a study mandated by the Music Modernization Act to evaluate steps the newly created Mechanical Licensing Collective (MLC) should take to identify and locate rights owners entitled to the unclaimed royalties and to reduce the incidence of non-payment by better matching data on sound recordings with data on their underlying music works.
The RightsTech Project is pleased to announce the inaugural RightsTech Europe conference, which will beheld on April 9-10, 2019, in Frankfurt, Germany. The two-day conference, at the Instituto Cervantes, or “Spanish Cultural Institute,” in Frankfurt’s West End district, will be co-produced by the RightsTech Project and Frankfurter Buchmesse (Frankfurt Book Fair) organizers of the world’s largest book fair and publishing rights marketplace.
With final negotiations underway among the European Parliament, Council and Commission over the European Union’s proposed Copyright Directive, and lobbying for and against it at a fevered pitch, Article 13 of the directive, which could force online service providers to actively screen content uploaded to their platforms for copyright infringing material, remains at the center of the debate. This week, however, cracks began to appear in once solid wall of support for the measure among major rights owners.
In a letter to the negotiating parties, the Motion Picture Association, representing the major studios, along with the Independent Film & Television Alliance, the Association of Commercial Television in Europe, and several major European sports leagues, took issue with changes being considered in the “trilogue” to the version of Article 13 passed by the European Parliament in September, claiming they would further cement the dominance of major online players such as YouTube, and asked that their content be excluded from provision should those changes be adopted.
“Recent proposals would undermine current case law of the Court of Justice of the European Union (CJEU) which already makes it clear that online content sharing service providers (OCSSPs) communicate to the public and are not eligible for the liability privilege of Article 14 E-Commerce Directive,” the organizations wrote. “Recall that the initial goal of Article 13 was to codify the existing case-law in a way that would enable right holders to
better control the exploitation of their content vis a vis certain OCSSPs which currently wrongfully claim they benefit from the liability privilege of Article 14 E-Commerce Directive. However, unfortunately, the Value Gap provision has mutated in such a way that it now strengthens even further the role of OCSSPs to the direct detriment of right holders and completely undermines the status quo in terms of the EU liability regime.”
The purported “mutations” appears to be a reference to a proposal by the Council of Europe, made up of representatives from EU member governments to adopt certain existing copyright filtering systems, such as YouTube’s Content ID, as the standard to meet for all online platforms, which would leave it to rights owners to identify their content and instances of infringing uses on the platforms, rather than shifting the burden of identifying and filtering infringing content to platform providers.
“Some of the options proposed for discussion at trilogue level indeed wrongfully undermine current law and weaken right holders’ exclusive rights by, among others: creating a new liability privilege for certain platforms that have taken specific steps to avoid the availability of infringing copyright content on their services (but have failed to do so effectively), and conditioning protection of copyright online on right holders bearing the full burden of identifying and notifying copyright infringing content to platforms,” the letter said. “These would constitute gifts to already powerful platforms, and would de facto constitute the only real change to the current status quo in legal terms, thus improving the position of platforms, but not of right holders.”
The groups’ complaints come even as YouTube has continued its ferocious lobbying against Article 13 altogether, claiming it could still compel the Google-owned platform to remove huge swathes of legal content for fear of liability.
The music industry, meanwhile, largely continues to support the measure, pushing back forcefully against YouTube’s claims.
In their letter, the TV and sports organizations suggest narrowing the scope of Article 13 to single out music and exclude other types of content.
“If…any new safe harbour/”mitigation of liability” would be part of a final trilogue agreement, we would respectfully urge you to disapply the entire value gap provision to our respective sectors,” the letter said. “This could simply be achieved by making Article 13 specific to musical works and phonograms, as was the case, for example, in Title III of the Collective-Rights-Management-Directive of 20145.”
One more negotiating session is scheduled, currently for December 14. A final vote on the directive is tentatively slated for mid-January.
The RightsTech Project will host a full, two-day track of panels, keynotes, and presentations again this year at the Digital Entertainment World expo in Los Angeles on February 4-5 at the Marina Del Rey Marriott.
As always, RightsTech will bring together our unique mix of creators, entrepreneurs, technology developers, and rights owners from all sectors of the media world to discuss and debate technology-enabled solutions to the common challenges of managing and monetizing rights in the digital era.
Topics on the agenda for this year include:
- The Future of Rights and Royalties
- What’s Next for the Music Modernization Act?
- Tools for DIY Artists
- Blockchain Goes to the Movies
- Managing Rights at Enterprise Scale
- Metadata Standards and Management
- Bringing Transparency to Royalties and Residuals
- … and more
RightsTech@DEW kicks off an expanded slate of conferences for 2019, which will also include the first RightsTech: Europe conference in Frankfurt, Germany April 9-10, and the annual fall RightsTech Summit in New York.
Click here for information on how to register for Digital Entertainment World.
For speaking and sponsorship opportunities contact Paul Sweeting at email@example.com.
For general inquiries regarding DEW, or information on other conference tracks, contact Tinzar Sherman at firstname.lastname@example.org.
Sony Corporation, along with Sony Music Japan and Sony Global Education, this week issued an intriguing but rather vague press release announcing the development of “a rights management system for digital content that utilizes blockchain technology.”
According to the release, the new systems “is based on Sony and Sony Global Education’s previously developed system for authenticating, sharing, and rights management of educational data,” that Sony developed last year using IBM’s blockchain platform. The latest version, however, includes additional “features functionality (sic) for processing rights-related information.”
That last part appears to point to a system that could accommodate user-generated, or at least third-party content not created or owned by Sony, as the release kinda, sorta spells out:
Today, advances in technologies for digital content creation allow anyone to broadcast and share content, but the rights management of that content is still carried out conventionally by industry organizations or the creators themselves, necessitating a more efficient way of managing and demonstrating ownership of copyright-related information for written works. This newly-developed system is specialized for managing rights-related information of written works, with features for demonstrating the date and time that electronic data was created, leveraging the properties of blockchains to record verifiable information in a difficult to falsify way, and identifying previously recorded works, allowing participants to share and verify when a piece of electronic data was created and by whom. In addition to the creation of electronic data, booting up this system will automatically verify the rights generation of a piece of written works, which has conventionally proven difficult.
The most intriguing part of the announcement, however, is Sony’s claim that the system, “lends itself to the rights management of various types of digital content including electronic textbooks and other educational content, music, films, VR content, and e-books.”
That suggests Sony could have big plans for the system, and indeed, the release states the company “is contemplating possible uses in a wide range of fields.”
Just how big those plans might be, however, is hard to tell from the announcement. The system is still in prototype, and according to the announcement, plans to commercialize it are still under discussion.
Sony wouldn’t be the first major media company to dabble in blockchain only to let it go, should nothing come of this week’s announcement. Disney developed its Dragonchain private blockchain platform back in 2015 and 2016, only to spin it off as an open-source project under the auspices of a non-profit foundation.
But the Sony release contains additional hints that blockchain is a genuine priority for the Japanese conglomerate.
“Sony Group is also considering innovative ways to make use of blockchain technology for information management and data distribution in a host of different fields,” the release said. “Through the technological development and commercialization of blockchains, including with this new system, Sony will continue exploring the possibilities that blockchain technology holds for Sony Group’s diverse and wide-ranging business domains.”
Earlier this year, Sony applied for two blockchain-related U.S. patents that may contain clues as to what sort of information management and data distribution applications it has in mind.
One filing, 20180218027, describes a new type of crypto-mining hardware that includes additional circuitry to compress the data that goes into a new block before adding it to the chain, reducing the storage requirements of the chain. Further, the blockchain supported by the new hardware would incorporate the compression processing into its proof-of-work consensus mechanism.
“As mentioned, the mining process of a block which shall be added to the distributed ledger includes compressing data of the block,” the filing says. “In some embodiments, the mining process is won by the electronic node which provides the smallest block which is to be added, i.e. the block having the best compression may win.”
Each block could also consist of multiple sub-blocks “wherein a sub-block may include at least one of: transaction data, video data, image data, audio data, document data or the like.”
The other filing, 20180219686, describes a type of distributed ledger maintained in part by a number of “virtual nodes” that could continue to maintain the ledger “when the number of [physical] nodes is small, and consensus may be maintained when some devices go offline.”
Together, the filings could point to some sort of restricted, or perhaps permissioned, blockchain-based, peer-to-peer content distribution platform that could accommodate large data payloads by compressing them before adding the data to the chain.
Whether all of those threads ultimately tie together is unclear at this point. What is clear is that Sony is looking hard at potential blockchain use cases.
Sweeting and Kenneally discuss the growing investor appetite for rightstech companies, the emergence of securitized rights and royalties as a financial asset class, data and transparency, and plans for the RightsTech Summit.
“What’s happened in the last two decades at an accelerating pace has been a transformation of the primary mode of consumption from one based on ownership to one based on access,” Sweeting noted. “What that’s done to the media businesses and rights-owning businesses is it’s fundamentally changed how they make money. They no longer sell or they no longer predominantly sell copies of things. They have recurring revenue streams resulting from licensed access. That recurring revenue stream model has meant recurring payout obligations to those media companies.”
Where you have recurring revenue streams, Sweeting explained, “you have a measure of predictability of the returns on rights, because you can measure the recurring revenues and make projections with a reasonable degree of confidence as to what those revenue streams will be five years out, 10 years out. So where you have a measure of predictability in returns, essentially rights are becoming something like a financial asset class in their own right, because investors are always looking for predictability of returns.”
The full podcast is embedded below, but is also available on CCC’s website, and on Apple Podcasts, Google Play and Stitcher Radio.
The full transcript is available here.