The Start of the Counter-Attack Against Hargreaves?

As I noted a couple of years ago, one of the most important legacies of the Hargreaves review of copyright in the digital age was its insistence that policy must be based on evidence, not dogma. There were some heartening signs that the UK...

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As I noted a couple of years ago, one of the most important legacies of the Hargreaves review of copyright in the digital age was its insistence that policy must be based on evidence, not dogma. There were some heartening signs that the UK government was indeed following through on that, notably in terms of a series of reports from Ofcom that explore in detail many aspects of the online use of copyright materials – something that was simply unavailable before.

Against that background, it is deeply depressing to see a regression to old-style copyright policy-making based on nothing more than a sense of uncomprehending outrage. We find it in a report entitled "Supporting the creative economy", from the House of Commons Culture, Media and Sport Committee. I've always tended to regard such committees as balanced and well-informed. This is neither: a better title would be "Propping up the sclerotic copyright industry's dying business models", since it is doggedly one-sided and backward-looking.

Take, for example, this gratuitous swipe at the Open Rights Group:

If creative people and businesses are to profit from their labour, there must be in place a strong regime for the protection of intellectual property including copyright. The copyright system is not only crucial in recognising and rewarding creative endeavour, but also in supporting the investment necessary for success. Claire Enders of Enders Analysis and others told us that the UK's enviable knowledge economy is indeed very significantly underpinned by copyright protection. The relationship between the strength of Britain's creative industries and robust copyright laws is acknowledged by the Open Rights Group which aims radically to liberalise the use and sharing of copyrighted content. While we share the Open Rights Group's attachment to freedom of expression via the internet, we firmly repudiate their laissez-faire attitudes towards copyright infringement.

Like the rest of the report, there is no evidence to support the claim that "If creative people and businesses are to profit from their labour, there must be in place a strong regime for the protection of intellectual property including copyright." Indeed, the Committee seems to look down on the very idea of scientific evidence:

The greatest threat to recognition and just reward for creativity is illegal copying, particularly online piracy. Industry representatives put a figure of £400 million on foregone revenue for film and music piracy in one year alone. These figures take into account the fact that not every illegal download could necessarily be converted into a legal one; in fact, one estimate is that there are £1 billion worth of illegal downloads in music alone. It is estimated that 35% all films online are consumed illegally. These industry figures were questioned by the Open Rights Group and Viscount Younger of Leckie stated they were not based on exact science. Such quibbles in our view, however, should not detract from the existential threat that online piracy clearly poses to the creative economy.

The aversion to facts is presumably because they contradict what the report says. Here, for example, is an excerpt from new research carried out by the London School of Economics – hardly known as a hotbed of one-legged, eye-patch-wearing parrot fanciers – released just recently, which looks at the reality, not the fantasy, of the music industry's sales:

Taking total revenues of the music industry into account – i.e. including revenues from concerts and publishing rights, these revenues have not declined as dramatically has been suggested; they have increased considerably from 1998 to the 2000s. These revenues have stagnated in the last few years, but the claims of many in the music industry about a dramatic decline in revenue apply specifically to the sale of CDs and vinyl.

The music industry has experienced overall revenue growth in recent times. In 2013, for the first time, UK revenues from online music were higher than revenues from CDs and vinyl combined (55% for online and 45% for CDs and vinyl of total revenues from sales of recorded music).

In 2012 some 34% of revenue globally (excluding revenue from live performances) was generated by digital channels including streaming and downloads, up from 27% three years earlier ... In addition, worldwide sales of recorded music increased in 2012 for the first time since 1999.

The data on changing sources of revenue show that new business models such as streaming and subscriptions are growth areas. They are bringing in increased income for the industry. This suggests that had the music industry started to adapt to the digital environment earlier, rather than trying to fit the new digital culture into their old business model, the record companies could have witnessed growth much earlier.

But maybe the music industry is exceptional, and films, for instance, are being utterly annihilated by piracy:

Other segments of the creative industries have adapted more quickly. Despite the Motion Picture Association of America's (MPAA) claim that online piracy is devastating the movie industry, Hollywood achieved record-breaking global box office revenues of USD 35 bn in 2012 a 6% increase over 2011.

While US film industry revenues from the sale and rentals of DVDs have decreased by 10% (USD 4.7 bn) from 2001 to 2010, total global revenues for the US industry increased by 5% or USD 4.5 bn over the same period. The US film industry was worth an estimated USD 93.7 bn.

That's a no, then. Perhaps publishing is on its last legs because of all that terrible copyright infringement. Seems not:

Similarly, the publishing industry is performing relatively well with a strong capacity for innovation and with a record of revenue stabilisation.

In 2013, the global book publishing industry was worth some USD 102 bn, larger than the film, music or video games industries. Although revenues from print book sales have declined, this has been offset by increases insales of eBooks and the rate of growth is not declining despite reports lamenting the ‘end of the book'.

So contrary to the Culture, Media and Sport Committee's unsubtantiated claims to the contrary, every sector of the copyright world seems to be flourishing despite the online sharing of digital files in contravention of copyright law, something that also emerges from other studies using only government and industry figures.

A rational person might therefore wonder whether the opening claim by the Committee that "The greatest threat to recognition and just reward for creativity is illegal copying, particularly online piracy" is actually true or not. And of course, it isn't, at least as far as the evidence goes – but the Committee naturally doesn't let a little thing like the facts get in the way of a good prejudice.

The Committee's report also indulges in some by-now standard bashing of Internet companies, as if they were to blame for the copyright industries' attempt to cling to eighteenth-century business models:

We strongly condemn the failure of Google, notable among technology companies, to provide an adequate response to creative industry requests to prevent its search engine directing consumers to copyright-infringing websites. We are unimpressed by their evident reluctance to block infringing websites on the flimsy grounds that some operate under the cover of hosting some legal content. The continuing promotion by search engines of illegal content on the internet is unacceptable. So far, their attempts to remedy this have been derisorily ineffective.

We do not believe it to be beyond the wit of the engineers employed by Google and others to demote and, ideally, remove copyright infringing material from search engine results. Google co-operates with law enforcement agencies to block child pornographic content from search results and it has provided no coherent, responsible answer as to why it cannot do the same for sites which blatantly, and illegally, offer pirated content.

A cynic might also say that the attempts by the Committee to understand Internet search engines have been derisorily ineffective. Google and its rivals provide an index to the Internet, which is why people visit their sites. It is not Google's job to filter that index unless the visitors require that – for example, providing child-safe options. It is, or course, Google's job to remove illegal content from its index, and it does that with child pornography. It also removes allegedly infringing copyright material at a rapid rate – currently 21 million URLs a month - even though it is not required to do so by law, except in very few exceptional cases.

This is something that the Committee seems not to understand: child pornography is removed because is unequivocally illegal. Copyright material is quite different, despite attempts by maximalists to equate the two. As Google points out, many sites hosts legal content as well as unauthorised copies. Many sites host copies that may or may not be illegal, but until a court determines that such content is illegal, it would be entirely inappropriate for Google – or anyone – to act as an arbiter and remove it. What the Committee is arguing for is censorship of the most capricious and uncontrolled kind, something that would be extremely dangerous for society and liberty in this country.

Given the Committee's own allergic reaction to real evidence, and its unquestioning acceptance of tired, repeatedly-debunked industry rhetoric, this paragraph is truly extraordinary:

Following all the evidence we have received, we think Hargreaves is wrong in the benefits his report claims for his recommended changes to UK copyright law. We regret that the Hargreaves report adopts a significantly low standard in relation to the need for objective evidence in determining copyright policy. We do not consider Professor Hargreaves has adequately assessed the dangers of putting the established system of copyright at risk for no obvious benefit. We are deeply concerned that there is an underlying agenda driven at least partly by technology companies (Google foremost among them) which, if pursued uncritically, could cause irreversible damage to the creative sector on which the United Kingdom's future prosperity will significantly depend.

As that makes clear, this report from the Culture, Media and Sport Committee is little more than a thinly-disguised attack on Hargreaves, his proposals, and even his evidence-based approach. Here's what he says in reply:

In my view, the committee's core misjudgement arises from the fact that it appears to be focused exclusively on the perspective of existing, mostly large, creative industry players and not at all upon emerging digital firms and entrepreneurs. Nor does it take account of consumers, who appear to have been left behind in this report.

That last point is key: an astonishing arrogance pervades the Committee's report – a view that the public is irrelevant in this discussion. As far as I can tell, there is not a single reference to what the public might want, what it might think, or what might be good for it. Instead, as Hargreaves rightly notes, the Committee's attention is focused entirely on satisfying the copyright dinosaurs who would rather this series of Googly tubes went away and they could go back to the good old days of price-gouging the hapless public thanks to their government-backed intellectual monopolies.

But as an ever-increasing quantity of inconvenient evidence indicates, those days have long gone; the public is no longer content to be a humble and passive recipient of the wise and beneficent copyright industry's munificence. And no amount of fulminating from the august members of the House of Commons Culture, Media and Sport Committee will change that fact.

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