Archive for the 'digital products' Category

The Future of Books in the Digital Age: Conference Report

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Today, I attended a small, but really interesting conference chaired by my colleagues Professor Werner Wunderlich und Prof. Beat Schmid from the Institute for Media and Communication Management, our sister institute here at the Univ. of St. Gallen. The conference was on “The Future of the Gutenberg Galaxy” and looked at trends and perspectives of the medium “book”. I’ve learned a big deal today about the current state of the book market and future scenarios from a terrific line-up of speakers. It was a particular pleasure, for instance, to meet Prof. Wulf D. von Lucus, who’s teaching at the Univ. of Hohenheim, but is also the Chairman of the Board of Carl Hanser Verlag, which will be publishing the German version of our forthcoming book Born Digital.

We covered a lot of terrain, ranging from definitional question (what is a book? Here is a legal definition under Swiss VAT law, for starters) to open access issues. The focus of the conversation, though, was on the question how digitization shapes the book market and, ultimately, whether the Internet will change the concept “book” as such. A broad consensus emerged among the participants (a) that digitization has a profound impact on the book industry, but that it’s still too early to tell what it means in detail, and (b) that the traditional book is very unlikely to be substituted by electronic formats (partly referring to the superiority-of-design-argument that Umberto Eco made some time ago).

I was the last speaker at the forum and faced the challenge to talk about the future of books from a legal perspective. Based on the insights we gained in the context of our Digital Media Project and the discussion at the forum, I came up with the following four observations and theses, respectively:

Technological innovations – digitization in tandem with network computing – have changed the information ecosystem. From what we’ve learned so far, it’s safe to say that at least some of the changes are tectonic in nature. These structural shifts in the way in which we create, disseminate, access, and (re-)use information, knowledge, and entertainment have both direct and indirect effects on the medium “book” and the corresponding subsystem.

Some examples and precursors in this context: collaborative and evolutionary production of books (see Lessig’s Code 2.0); e-Books and online book stores (see ciando or Amazon.com); online access to books (see, e.g., libreka, Google Book Search, digital libraries); creative re-uses such as fan fiction, podcasts, and the like (see, e.g., LibriVox, Project Gutenberg, www.harrypotterfanfiction.com).

Law is responding to the disruptive changes in the information environment. It not only reacts to innovations related to digitization and networks, but has also the power to actively shape the outcome of these transformative processes. However, law is not the only regulatory force, and to gain a deeper understanding of the interplay among these forces is crucial when considering the future of books.

While fleshing out this second thesis, I argued that the reactions to innovations in the book sector may follow the pattern of ICT innovation described by Debora Spar in her book Ruling the Waves (Innovation – Commercialization – Creative Anarchy – Rules and Regulations). I used the ongoing digitization of books and libraries by Google Book Search as a mini-case study to illustrate the phases. With regard to the different regulatory forces, I referred to Lessig’s framework and used book-relevant examples such as DRM-protected eBooks (“code”), the use of collaborative creativity (“norms”), and book-price fixing (“markets”) to illustrate it. I also tried to emphasis that the law has the power to shape each of the forces mentioned above in one way or another (I used examples such as anti-circumvention legislation, the legal ban on book-price fixing, and mandatory copyright provisions that preempt certain contractual provisions.)

The legal “hot-spots” when it comes to the future of the book in the digital age are the questions of distribution, access, and – potentially – creative re-use. The areas of law that are particularly relevant in this context are contracts, copyright/trademark law, and competition law.

Based on the discussion at the forum, I tried to map some of the past, current, and emerging conflicts among the different stakeholders of the ecosystem “book”. In the area of contract law, I focused on the relationship between authors and increasingly powerful book publishers that are tempted to use their unequal bargaining power to impose standard contracts on authors and transfer as many rights as possible (e.g. “buy out” contracts).

With regard to copyright law, I touched upon a small, but representative selection of conflicts, e.g. the relation between right holders and increasingly active users (referring to the recent hp-lexicon print-version controversy); the tensions between right holders and (new) Internet intermediaries (e.g. liability of platforms for infringements of their users in case of early leakage of bestsellers; e.g. interpretation of copyright limitations and exemptions in case of full-text book searches without permission of right holders); the tension between publishers and libraries (e.g. positive externalities of “remote access” to digital libraries vs. lack of exemptions in national and international copyright legislation – a topic my colleague Silke Ernst is working on); and the tension between right holders and educational institutions (with reference to this report).

As far as competition law is concerned, I sketched a scenario in which Google Book Search would reach a dominant market position with strong user lock-in due to network effects and would decline to digitize and index certain books or book programs, for instance due to operational reasons. Based on this scenario, I speculated about a possible response by competition law authorities (European authorities in mind) and raised the question whether Google Book Search could be regarded, at some point, as an essential facility. (In the subsequent panel discussion, Google’s Jens Redmer and I had a friendly back-and-forth on this issue.)

Not all of the recent legal conflicts involving the medium “book” are related to the transition from an analog/offline to a digital/online environment. Law continues to address book-relevant issues that are not new, but rather variations on traditional doctrinal themes.

I used the Michael Baigent et al. v. Random House Group decision by the London’s High Court of Justice as one example (has the author of Da Vinci Code infringed copyright by “borrowing” a theme from the earlier book Holy Blood, Holy Grail?), and the recent Esra-decision by the German BVerfG as a second one (author’s freedom of expression vs. privacy right of a person in a case where it was too obvious that the figure used in a novel was a real and identifiable person and where intimate details of the real person were disclosed in the book.)

Unfortunately, we didn’t have much time to discuss several interesting other issues and topics that were brought up and related to the generation born digital and its use of books – and the consequences of kids’ changed media usage in a changed media environment, e.g. with regard to information overload and the quality of information. Topics, to be sure, that John Palfrey and I are addressing in our forthcoming book.

In sum, an intense, but very inspiring conference day.

Update: Dr. David Weinberger, among the smartest people I’ve ever met, has just released a great article on ebooks and libraries.

New OECD Must-Read: Policy Report On User-Created Content

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The OECD has just released what – in my view – is the first thorough high-level policy report on user-created content. (Disclosure: I had the pleasure to comment on draft versions of the report.) From the introduction:

The concept of the ‘participative web’ is based on an Internet increasingly influenced by intelligent web services that empower the user to contribute to developing, rating, collaborating on and distributing Internet content and customising Internet applications. As the Internet is more embedded in people’s lives ‘users’ draw on new Internet applications to express themselves through ‘user-created content’ (UCC).

This study describes the rapid growth of UCC, its increasing role in worldwide communication and draws out implications for policy. Questions addressed include: What is user-created content? What are its key drivers, its scope and different forms? What are new value chains and business models? What are the extent and form of social, cultural and economic opportunities and impacts? What are associated challenges? Is there a government role and what form could it take?

No doubt, the latest OECD digital content report (see also earlier work in this context and my comments here) by Sacha Wunsch-Vincent and Graham Vickery of the OECD’s Directorate for Science, Technology and Industry is a must-read that provides plenty of “food for thought” – and probably for controversy as well, as one might assume.

Positive Economic Impact of Open Source Software on EU’s ICT Sector

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The EU commission recently released an impressive 280+ pp. study on the economic impact of open source software on innovation and the competitiveness of the ICT sector in the EU. The report analyzes, among other things, FLOSS’ market share, and its direct and indirect economic impacts on innovation and growth. It also discusses trends and scenarios and formulates policy recommendations. Some of the findings that I find particularly interesting:

  • Almost two-thirds of FLOSS is written by individuals, while firms contribute about 15% and other institutions 20%. The existing base of FLOSS software represents about 131.000 real person-years of effort.
  • Europe is the leading region as far as the number of globally collaborating FLOSS developers and global project leaders are concerned. Weighted by average income, India is the leading provider of FLOSS developers, followed by China.
  • The existing base of quality FLOSS applications would cost firms almost 12 billion Euros to reproduce internally. The code base has been doubling every 12-24 month. FLOSS potentially saves the industry over 36% in software R&D investment.
  • FLOSS is an important growth factor for the European economy. It encourages the creation of SMEs and jobs and is unlikely to cannibalize proprietary software jobs. The FLOSS-related share of the economic could reach 4% of the European GDP by 2010.
  • Europe’s strength regarding FLOSS are its strong community of active developers, small firms, and secondary software industry. In contrast, a generally low level of ICT investment and a relatively low rate of FLOSS adaptation by large industry (if compared to U.S.) are among its weaknesses.

As to policy recommendations, the report suggests a focus on the correction of existing policies and practices that currently favor proprietary software. Among the recommendations: support FLOSS in pre-competitive research and standardization; encourage partnerships among large firms, SMEs and FLOSS communities; provide equitable tax treatment for FLOSS creators.

Wunsch-Vincent on WTO, Internet, and Digital Products

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Sacha Wunsch-Vincent, an economist at the OECD”s Information,Computer and Communications Policy (ICCP) Division and scholar at the Swiss National Science Foundation, has written a must-read on the WTO, the Internet and Digital Products. Here’s the abstract of the seminal book (forthcoming, Hart International Trade Law Series):

The rapid development of the Internet has led to a growing potential for electronic trade in digital content like movies, music and software. As a result, there is a need for a global trade framework applicable to such digitally-delivered content products. Yet, digital trade is currently not explicitly recognised by the trade rules and obligations of the World Trade Organization.

This study provides a complete analysis of the related challenges in the ongoing WTO Doha Negotiations to remedy this state of affairs. It elaborates on the required measures in the multilateral negotiations to achieve market access for digital content and examines the obstacles that lie on the path to reach consensus between the United States and the European Communities. Negotiation parameters analysed include the current US and EC regulatory approach to audiovisual and information society services and the evolution of their applicable trade policy jurisdiction. Finally, this examination takes stock of how the Doha Negotiations and parallel US-driven preferential trade agreement have so far contributed to securing free trade in digital content.

More information about the author and the book is available here.

More on the Controversial OECD Music Report

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Check out the Berkman Center’s website for reactions. It turns out that the entertainment industry still does not like the study. We’ve also made public our comments on the draft OECD report on digital music.

OECD Music Industry Report

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Find here a terrific report by the OECD on the digital music industry (pre-release.) The report includes, inter alia, references to Terry Fisher’s seminal book Promises to Keep as well as to the Berkman Center’s iTunes case study.

The report concludes that online music distribution will grow significantly over the next few years, will force the music industry to reconsider their business models, and will continue to pose regulatory challenges to governments. The study includes a detailed impact analysis of digital music distribution on artists, consumers, the record industry, and new intermediaries.

The OECD underlines the positive potential of digital distribution, both as a new business model and a cultural phenomenon. It’s report further concludes that Internet-based piracy may be reduced, if licensed file-sharing and new forms of superdistribution evolve.

The study, part of the OECD Project on Digital Broadband Content, is the outcome of work involving a wide range of stakeholders, including many governments. It’s among the first roadmaps exploring as to how public policy should be re-evaluated in this space.

The Berkman Center’s Digital Media Team was invited to comment on a draft version of this report. Today, we congratulate the study’s authors to a thorough multi-stakeholder analysis, written in a challenging environment.

Stay tuned.

Update: The OECD report is also featured in the latest edition of The Economist (subscription required.) See also WIRED News with reactions from IFPI.

“Volez ce MP3!”

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Interesting Wired article on a French judge’s critical take on the copyright industry’s battle against file-sharers, copy-fighters, and the like. With great comments from my colleague at OECD, Sacha Wunsch-Vincent: “Now is the time for the content industry, access and technology providers to get out of courts and back to business.”

OECD Report on Online Computer and Video Game Industry

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Our colleagues at OECD have just released a report on the online computer and video game industry as part of OECD’s project on Digital Broadband Content. Stay tuned for similar studies on digital music and scientific publishing.

Adobe Shuts Down Digital Media Store

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Robyn Weisman reports on PDFzone that Adobe is going to shut down its own e-book/e-doc store. Joe Wilcox, analyst at Jupiter Research, provides some background analysis and mentions consumer patterns and pricing as reasons for Adobe’s lack of success with the digital content store. Some months ago, I’ve heard similar comments from my colleague Mike McGuire at GartnerG2. Adobe is pointing to increased competition by online retailers such as Amazon.com and eBooks.com. (via BNA Highlights)

DRM and Consumer Acceptability

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Our colleagues at the Institute for Information Law (IViR) at the University of Amsterdam released, as part of the INDICARE project, an interesting report on Digital Rights Management and Consumer Acceptability. It seeks to provide an overview of the state of the (European) discussion from a multi-disciplinary perspective, and analyzes social, legal, technical, and economic issues.

The report concludes that surprisingly little is know about consumers’ acceptance level of DRM, and what users’ expectations are regarding the use of digital content. The report, inter alia, calls for a better involvement of the consumer side and a joint dialogue between the market players.

The report will be updated. Three pointers to Berkman reports and papers in this context:

* re section 6.5 of the report on alternative business models, see also “Content and Control: Assessing the Impact of Policy Choices on Potential Online Business Modles in the Music and Film Industries.”

* re section 4.2 on the EU-Copyright Directive, see also “Transposing the Copyright Directive: Legal Protection of Technological Measures in EU-Member States,” and the respective Berkman project website.

* re section 4.4 on interoperability, see John Palfrey, Holding Out for an Interoperable DRM Standard, in Christoph Beat Graber, Carlo Govoni, Michael Girsberger, and Mira Nenova (eds.), Digital Rights Management: The End of Collecting Societies? (Forthcoming, April 2005.)

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