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Vol. 20 No. 10 — Nov./Dec. 2003

The Seybold San Francisco 2003 seminar, held Sept. 8­12, showed brilliant timing by featuring "The Great Copyright Debate" as one of its keynote sessions. This was a sure way to fire up attendees.

Copyright is a topic that overflows with passion, positions, and sometimes, posturing. There's much in the philosophy of copyright, its applications, and public policies that would benefit from sharp ideas that are crisply argued. Besides being fun, Seybold's choice of a debate format showcased some of the content industry's best wits. The debate featured people who think fast and know copyright. They could spark new thinking by conference attendees from the world of digital media and publishing, content software and hardware technology companies, printing, and the design-industry press.

Copyright Fireworks

Promising the audience "fireworks, intellectual depth, and the finest thinking on all sides of this issue," Bill Rosenblatt, president of GiantSteps Media Technology Strategies and publisher ofDRM Watch, introduced the three debaters: Dean Marks, an influential entertainment industry lawyer and senior vice president of intellectual property, corporate business development, and strategy at Warner Bros. Entertainment; Joe Kraus, co-founder and president of DigitalConsumer.org, a digital rights advocacy group with 50,000 members; and Tim O'Reilly, founder and CEO of O'Reilly Books, a leading technology publishing company.

In his introduction, Rosenblatt lightly touched on daily media headlines about the competing lawsuits by entertainment and Internet companies. He noted intense lobbying campaigns by the entertainment industry and the efforts of consumer advocates to influence the positioning of congressional public policy. Rosenblatt explained the format for the "pseudo-debate": He would start off by asking questions, and each debater would be given an opportunity to comment.

In his first question, Rosenblatt asked speakers to turn back the clock and imagine how they would reinvent and plan for a content-centric Internet. O'Reilly led off with a spirited response. "I would have left things as they were ... and let the future unfold," he said. "Piracy is progressive taxation.... We need to embrace thefuture rather than [protect] the past.... Google and Yahoo! built substantial businesses on free content."

"Technology brings great advantages to consumers," said Marks in response. "Consumers haven't shied away from DVDs with copy protection. DVD sales have skyrocketed," he told the audience. He cited DVDs as a great example of what is right about the entertainment industry's ability to give customers what they want with a technology they accept. He reasoned that the emergence of new technologies and business models did not mean that "laws should be thrown out the window."

O'Reilly countered that he has an aversion to laws that made copy protection illegal and said, "I object to companies that use fear-mongering to buy time and use law as a weapon to suppress competition."

Consumers Want to Create

The debate was off and running. Rosenblatt asked if technology has a responsibility or incentive to provide intellectual property protection that respects copyright.

"American consumers get what they want even if it's illegal," said Kraus in response. He commented on the differences he saw between consumers in the analog and digital worlds. "Analog consumers tend to be passive," he said, describing those who sit back and accept content on an "as is" basis. "Digital consumers ofthe future will be engaged participants who want to be creators of new forms of content." Next, Kraus enthusiastically talked about the availability of protection-quality digital software products that are newly affordable and used by consumers to create digital audio and video entertainment.

Rosenblatt's follow-up question asked if technology had a responsibility to digital media creators. He used the example of technology that makes family-friendly films by deleting R-rated scenes and swearing. Kraus said: "Technology can't be planned in a systematic way.... One of the great advantages of technology is in its unintended consequences.... The Internet is both bottom-up and massively innovative."

As an example, Kraus pointed out the lack of consumer demand for interactive TV. On the other hand, consumers show a great imagination for "rip, mix, and burn" as a way to create something entirely new with digital content. He said this is all part of the unintended uses that are driving new business models for digital content.

His idea took on a whole new meaning when he played clips from a video he created in honor of his 7-week-old son. Attendees saw a video of a beautiful baby augmented by sound and film clips of Jim Carrey as a flummoxed lawyer and Mike Myers in his role as Austin Powers. The audience had an audiovisual experience underlining Kraus' point that consumers use digital content to create new forms from multiple content resources. (If you were wondering, Kraus let the audience know that he purchased the sound clips used in his movie.)

Speaking of unintended uses, Rosenblatt held up his new video cell phone. He said it replaces the pictures of his baby that he once carried in his wallet.

Business Models

Rosenblatt asked which business model can make the transition from the consumer world of"I want" to a new consumer world of"I want it and will pay for it." The response was unanimous. Give customers what they want! "How?" asked Rosenblatt. The three speakers talked at length about the evolution of pay-per-use and subscription models for music. DVDs were touted as the gold standard for the consumer market. DVD sales and rental revenue demonstrate that it's possible to have a successful product with copy-protection controls. Addressing the solid acceptance of digital media purchases, O'Reilly said that in 2004 his company's digital outlet will surpass Barnes & Noble as a channel for selling O'Reilly books.

Rosenblatt asked Marks if, when planning new products, his company "runs the numbers on the magnitude of the numbers of records produced or the magnitude of the opportunities available to Warner Bros.?" Marks, reminding the panel that he is a lawyer and not an accountant, said: "Not only do record companies have to give consumers what they want, it has to be a legitimate and attractive offer. The challenge for companies is how to make it available for a hypothetical $3 for a one-time view, with no ability to make a permanent copy."

Millions and Millions

Sixty million users have downloaded music P2P-downloading software, said Kraus. "We've created a virtual Library of Alexandria with music. More people have downloaded music than voted for the president." Using his figures, Kraus did the math. He pointed out that if everyone had paid $5 per month, this would have amounted to a revenue of$3.6 billion.

There was general agreement among the speakers that Apple found the right pricing with its iTunes model of 99 cents per song. When Marks suggested that people should give the record companies some credit for the success of iTunes, O'Reilly quipped, "With only 5 percent of the market share, Apple has a natural firewall."

What About the Future?

What's the future of digital rights management? The panelists thought that DRM technology certainly will be used for books. "I believe in a level of copy protection that is a moral deterrent. We need to find the right price point for the right content," said O'Reilly. Marks added: "Copy protection is a guideline ... toward proper use. We aren't going to use Fort Knox security for a $15 disc."

Rosenblatt's final three questions were: "Where is the digital entertainment business headed? When will we know we're there? What are the milestones you're looking for?" O'Reilly said: "You're never all the way there. As a consumer, I don't want to have to think about what I want to do." He then suggested a new label for digital content. "My label supports new retailers as a way to identify content from companies that work with customers, not fight them."

"Technology is a constantly evolving thing," said Marks. "We've been struggling with technology for 4 to 5 years." From the consumer's perspective, Kraus suggested using the radio model that dictates "as long as you pay, you play." This would open up the business and attract users. Rosenblatt summarized the panelists' opinions as "mostly optimistic."

Revving the Audience

Debates are good at getting people revved up. They can sharpen the public's perception of headline-grabbing topics and shine a spotlight on people who are keen thinkers and able communicators on all sides of an issue. In a formal debate, participants declare their positions. A debate not only tests the logic of a central proposition, but the winner is judged by the clarity and persuasiveness of his or her argument, pro or con.

If the audience came expecting a tub-thumping, no-holds-barred argument, they might have been disappointed. Seybold's Great Copyright Debate showcased bright thinkers and delivered some great comments that are sure to be repeated. In his introduction, Rosenblatt described the session as a pseudo-debate. He was right. It turned out to be a spirited conversation among four knowledgeable people.

Each was witty and passionate and made incisive rather than incendiary comments. All four agreed that distributing copied digital entertainment content without a license or explicit purchase is clearly illegal. None of the participants was wildly enthusiastic about the Digital Millennium Copyright Act. They agreed that creators and licensed distributors need assurance that digital content can be protected from being copied without permission.

The Real Message

If the audience were tempted to think, "Ho-hum. I've heard that a million times," they missed the clear message. Those who influence content-business models and public-access policies have moved beyond the old "fee versus free" squabbles. People are talking about a foreseeable future in which paid services for digital entertainment are an accepted part of the digital consumer's world.

It would be nice to think that The Great Copyright Debate signaled a move toward realistic, reasonable, and reliable practices that could help consumers, creators, and new business models benefit from the use of digital content.