Viewpoint: Copyright Under the Microscope

By IFTA President & CEO, Jean Prewitt

Friday, April 4, 2014

 

Los Angeles, CA —  As our industry debates the future of the “evolving digital marketplace,” policy makers are debating whether copyright laws—rewritten less than a decade ago—should again change in recognition of that evolution. For those who work to finance, produce and distribute film and television programming, and for those who enjoy that programming, it is critical that the copyright policy process support the growth of the legitimate commercial marketplace, rather than attempt to lead it.


Why is a reexamination of copyright policy taking place now? The content industries that depend on copyright as a framework for financing and distribution are faced with a twin dilemma: to recoup investment, extraordinarily expensive “products” must be protected from widespread theft online; at the same time, consumers’ expanding demands for online availability must be met. On the other hand, online services and new technology vendors want to see subscriber growth without complications, but also need to attract legitimate content and show that their online marketplace is safe and reliable.


At the same time, consumers want ease, convenience and inexpensive access to entertainment. And policy makers want satisfied voters and strong economic growth within both the creative and technology sectors. The debate is increasingly polarized between those who depend on copyright and those who see copyright as an obstacle to technological innovation and freedom of expression.


As a result, the world has recently seen a wave of so called “copyright modernization” exercises, with multiple countries engaged in the process of reviewing their copyright laws to ensure that the legislation is fit for purpose.


Countries have approached their copyright reviews from different perspectives, largely based on policy-makers’ perception of the public’s “sore spots.” For example, a central premise of the European Commission’s Licenses for Europe exercise in 2013 and its new Public Consultation on Copyright is a desire to increase cross-border access and portability of audiovisual content online. The Commission has suggested measures that would require providers to license cross-border online distribution without regard to traditional licensed territories based on national boundaries. In the United States, concerns that existing copyright laws, including the fair use defense to infringement, are insufficient to accommodate new forms of creativity and use by consumers has been a theme in the comprehensive evaluations of the U.S. Copyright Law currently underway by the U.S. House Judiciary Committee and the U.S. Department of Commerce. Other jurisdictions are following similar paths.


There is no intention within policy circles to damage film and television production. Indeed, there is regular discussion of “encouraging creativity and innovation.” But the process of financing and producing audiovisual content is not well understood. And there is a persistent myth that consumer demand exists for all content, everywhere and at all times and that this mythical demand is sufficient to drive investment into our sector. Copyright law should not be built on this erroneous theory.


In fact, of course, the independent sector of the film and television industry relies on license fees resulting from copyright ownership to pre-finance and produce new content. After assessing the value of a project and local consumer appeal, local distributors enter into license agreements with the independent producer that provide minimum license fees (minimum guarantees) to be paid in order to secure exclusive distribution rights to a project before its production. These deals, grounded upon copyright protection, support bank and equity investment. These national distributors take on the responsibility of marketing the project within their own territory.


Especially for independents, it is at the national level that public awareness of a work is created and where financing for this and future projects is generated. The emergence of online platforms does not change the practical reality: where there is identifiable consumer demand for a project, producers and distributors will assume the risk of satisfying that demand.


Looking ahead, copyright industries are growing at a record pace. In the United States alone, the core copyright industries added over $1 trillion in value to the U.S. economy in a single year, accounting for almost 6.5 percent of the total U.S. GDP, and accounted for $142 billion in foreign sales and exports.


As governments review their copyright laws, decision-makers should not amend existing legislation merely to “fix” short-term gaps that the marketplace will bridge over time. Governments should recognize the unique business and financing models of independent film producers that rely on copyright protection and their ability, as rights-holders, to exploit content in a framework that respects the demands of the local marketplace. With this in mind, the current policy efforts should be used as a stock-taking on current developments, rather than an occasion for inappropriate action to change the dynamics of our industry in a harmful way.

 

Jean Prewitt is the president and CEO of the Independent Film & Television Alliance