The socio-economic impact of file sharing [popular science edition]

I just finished reading ‘Ups and Downs – the economic and cultural impact of file sharing for music, film and games’ (see my earlier post for context). All in all the full version does not contain a lot of surprises when compared to the executive summary (which my first post was based on): It is a well written report that, although it makes a lot of sense to someone familiar with the subject, does not really come up with much new insights either. The strength of the report is that it places file-sharing within the wider social and economic context (as opposed to placing it solely within the economic logic of the entertainment industry). While they sometimes appear naive (it does not seem to occur to them that buying CDs or renting DVDs from the video-rental-shop is rapidly becoming obsolete from a technicals point of view) the researchers do seem to have a fairly good understanding of what is going on.

The core of their argument (to be found in sections 5 & 6) is that there is no direct causal relationship between file-sharing and the decline in revenues in the music industry. On top of this the researchers argue that even tough it is likely that there is a substantial decline in revenues for the recording industry as a result of file sharing, this is offset by an even more substantial increase in welfare for the general public (or at least that proportion of the general public that downloads musical works). This finding is based on an economic model that is summarized in figure 6.1:

figure 6.1 from ‘Ups and downs’ – blue boxes and grey arrows and labels mine (personally i am a bit surprised by the relative amounts of lazy and smart peple implied by this figure. life experience tells me to expect the opposite distribution).

  1. The orange block represents the revenue generated by selling recoded music in the absence of file sharing, which equals the maximum possible revenue for the recording industry. In this situation the rich people(a.k.a stupid people) profit (save money) because they would have been willing to pay more than the market price. All the people to the right of the orange colored block simply could not afford to buy recorded music.
  2. With the possibility of file sharing available to consumers we see a shift: a certain amount of people who used to buy recorded music now download it for free (’cheap people‘). In addition the smart people (a.k.a poor people) now have the same access to recorded music as all the others and finally there also is a group of lazy people who simply cannot be bothered to download because they perceive the process as too burdensome.

When comparing the changes between (1.) and (2.) in economic terms the researchers conclude that while there is a negative impact on the recording industry (caused by the cheap people) the fact that the smart people now also have access to recorded music represents a much bigger increase in economic welfare (and does not hurt the recording industry as it is ‘demand without purchasing power’ that is being met)1. As mentioned in my earlier post the researchers value the damage to the recording industry at a maximum €100 million p.a while they value the socio-economic gain caused by the increased access to recorded music at at least €200 million p.a.

Personally i am not sure if this will be of any consolation to the recording industry, but as far as i can see it is a fairly adequate description of the current transformation process: A business model anchored in an outdated means of distribution is (partially) being replaced by a social practices that are (a) more in line with the technological state of the art and (b) provide greater socio-economic benefits to society at large.

For the rest the report does not contain much news: Chapter 3 (’the legal framework’) gives a solid and up to date (it even includes last years legislative battle around the EU’s telecom review) overview of the legal implications of file sharing (in the Netherlands) and Chapter 5 gives an overview of recent studies on the economic impact of file sharing2. Apart from the economic model described above chapter 6 also lists a number of ‘dynamic and indirect’ effects of file sharing that are fairly obvious but nevertheless worthwhile to repeat: The researchers argue (p.123) that while it is likely that file sharing hurts big successful artists (as cheap people will buy less CDs from them) it has a positive impact on smaller artists (as it allows more people to sample their works, which will turn some of these people into buyers of their CDs or make them attend concerts). More interestingly the researchers also argue (p.125) that acceptance by consumers of the substantial increases in ticket prices for live-concerts has to be seen in the context of file-sharing: The increased willingness to pay high prices for concert tickets may be due to the fact that consumers are aware that they are spending less on recorded music (or the other way around: as they have to pay more for concert-tickets consumers are less willing top pay for recorded music and resort to file sharing).

When it comes to their conclusions the researchers note that file-sharing is here to stay and that we (the recording industry) are beyond the point of no return: It is impossible to build a successful business that is solely based on trading recorded music. According to the researchers is is also highly unlikely that there will be a point in the future where all music will be obtained from authorized sources (p.136). Given this they argue (inter alia, their official recommendation comes down to a pathetic paragraph where they make a plea against criminalization of end users and for more awareness building among file sharers) for a model where internet service provides offer internet subscriptions that include a fee for the access to copyright protected content (a.k.a the content flatrate).

  1. note how the rich people profit in both scenarios: they always pay less then they could (or should). this is probably why the distribution model the Nine Inch Nails used for Ghosts I-V worked so well.
  2. Chapter 4 ‘Downloading in the Netherlands’ is a bit of a disappointment. If presents the results of a representative survey that was conduced (by an external research-firm) among Dutch internet users. While the researchers repeatedly mention that the survey shows that file sharers have no clear understanding of what they are doing the data presented by them also underlines that the researchers (or the company contracted to carry out the survey) lack a clear understanding of their research object: see table 4-9 (usenet and newsgroups are two synonyms for the same source of files) or table 4-13 (most sites listed as sources for paid-for downloads do not offer downloads to users based in the Netherlands). Given this Chapter 4 casts a shadow on the otherwise high methodological standards claimed by the research team.

The National Archive and Spaarnestad Photo release new photos on The Commons on Flickr.

It has been a busy week here at the National Archive. On the 18th of December the National Archive and Spaarnestad Photo launched new photographs on The Commons on Flickr. This time the photographs related to various subjects. Firstly,  as part of the National Archive’s Afscheid van Indië project (www.afscheidvanIndië.nl), The National Archive published some photographs of the Dutch East Indies on Flickr. Secondly, the National Archive also published a number of photographs by the famous Dutch photographer Willem van de Poll, which can also be viewed on The Commons. Then, getting in to the Christmas spirit, our partner, Spaarnestad Photo published some photos with a Christmas theme.

The National Archive has now been on-line for almost two months and so far it has generated about 650 000 views, about 1400 tags and 250 comments.

The initiative has caused quite some commotion in both the Dutch and international archival community. Last week I gave a talk in front of a critical audience of Photo journalists at a conference of the European Federation of Journalists (EFJ). The title of the conference was: “Photo Journalists: an endangered species in Europe? Development of an European sustainable quality agenda for photo journalism.” Photo journalists from all over Europe gathered to discuss their profession, and what they see as its possible decline.

Although they were a critical audience, it was still very interesting to hear the photographer’s point of view on initiatives like The Commons on Flickr and big digitalization projects like “Images for the Future”. Although, there was a general agreement about the fact that digitalization should be done to preserve historical photo collections. There was much less agreement about how to handle the copyright issues. It is clear that  solutions in the course of general licensing need to be found.

What was striking to me, was that photographers and copyright holders, who were present, were not up-to-date with the general licensing methods and Open Content initiatives like Creative Commons. The big learning for me was that it is good to bear in mind that archives and heritage institutions can benefit from maintaining a regular dialogue with photographers and copyright holders. This dialogue will allow both parties to inform each other about these sorts of initiatives and enable them to work together in finding solutions for the copyright issues, encountered by big digitalization projects.

If you would like to find out more about my talk you can find my presentation at SlideShare:

In the meantime you can still see all our photographs at http://www.flickr.com/photos/nationaalarchief/.

Maaike Toonen

Copyright specialist, National Archive “Beelden voor de Toekomst”

German Federal Archive publishes photos on Wikipedia under Creative Commons license

On December 6th, the German Federal Archive and the online encyclopedia Wikipedia announced their cooperation in making publicly available 100,000 digitized images under Creative Commons licence (CC-BY-SA) in exchange for linking the photos to Wikipedia’s Persondata. A big step for opening up public content and data.

The commons

In September 2007 the German Federal Archive already made 113,000 images available on their own online digital archive. In total the Federal Archives keeps approximately 11 million still pictures, aerial photographs and posters from modern German history. The cooperation with Wikipedia is the next big step for the German Federal Archive in opening up the archive, as the vice president of the German Federal Archive Dr. Angelika Menne-Haritz said during the press conference.

persconferentie
Photo: Raimond Spekking, Creative Commons Attribution ShareAlike 3.0.

The photos are not of the highest resolution, about 800 pixels on the longest side. But, this is an enormous addition to the commons. According to Wikimedia, the repository of free content images, sound and other multimedia files on Wikipedia, the donation by the German Federal Archive of 100,000 images is the single largest one to Wikimedia Commons so far. This is even more than the archival project Flickr Commons makes available now in cooperation with 16 archival partners around the world.

Click here for the image gallery: http://www.bild.bundesarchiv.de/

bundesarchiv

Photo: Mitglieder des Deutschen Reichstag, German Federal Archive (1889). Author: Braatz, Julius. Creative Commons Attribution ShareAlike 3.0.

Creative Commons License

The images by the German Federal Archive are licensed Creative Commons Attribution ShareAlike 3.0 Germany License (CC-BY-SA). This means that you are free to share and remix the images under the condition that you give attribution and spread this with a similar or compatible license. The Federal Archive can do this because they own sufficient rights on the images to be able to grant this kind of license. To use such a free license for archival material is really exciting. Few archives work with Creative Commons licences. One of the rare examples is the McCord Museum and the Brabants Historisch Informatiecentrum. And, the archival project Flickr Commons works with “no known copyright restrictions”.

Persondata

The other part of the cooperation between the German Federal Archive and Wikipedia is a tool for linking people from a list compiled by the Federal Archive to the German Wikipedia Persondata and to the person authority file of the German National Library. Something German Wikipedia has already been doing since 2005. Around 27% of 100,000 photos is already done. The expectation is that because the cooperation is now public, the tempo will speed up. Moreover, the users will add new information to the images. You can find the To Do list here.

Conclusion

Though projectleader Creative Commons Germany, Markus says that this is only a small revolution for German notions, this could very well set an example for other archives to make their content publicly available and therefore grow bigger. It will be very interesting to see where we can find the photos and in which (rich) context. Because that will make a strong argument for archives to experiment with this.

Archives and fans on Flickr: Seminar ‘Nationaal Archief joins Flickr the Commons’

On the 21st of October 2008, the Nationaal Archief (National Archive) and its partner Spaarnestad Photo placed a part of their collections on the Commons on Flickr. And not without success. During the seminar ‘Nationaal Archief joins Flickr the Commons’, George Oates of Flickr announced that the amount of visits to the Nationaal Archief pages had increased to 430.000 since the 21st of October.

seminar.jpg

Photo: by Kennisland on Flickr.com

  • Download the report of the seminar here (English and Dutch version available):

Report seminar (English) or Verslag seminar (Nederlands)

  • Find photos of the seminar on:

http://www.flickr.com/photos/kl/sets/72157608701768228/detail

  • Find the presentations on:

http://www.slideshare.com/kennisland/

  • Watch the video of the presentations:

Video presentation Fiona Romeo


Video presentation Judith Moortgat

During the seminar Judith Moortgat (Nationaal Archief), Georges Oates (Flickr) and Fiona Romeo (National Maritime Museum) gave presentations. Furthermore a panel discussion took place on the topcis ‘The user perspective’ (with Mettina Veenstra, Telematica Instituut), ‘The archival perspective’ (with Peter van den Doel, Spaarnestad Photo) and ‘Copyright issues’ (with Annemarie Beunen, Royal Library). The panel discussion was moderated by Dick Rijken (Haagse Hogeschool).

The discussion was very lively as experiences, ideas and opinions were exchanged. If you would like to find out more about the seminar, you can download a detailed report, all presentations, videos and ofcourse photos above! A final report of the pilot will be placed on this blog in due course.

Nationaal Archief publishes photos on Flickr The Commons

The National Archive (Nationaal Archief), the largest Dutch archive, has put a selection of their collection on Flickr The Commons . It’s the first Dutch heritage institution to join Flickr The Commons, a project intitiated by the US Library of Congress and international photo-sharing website Flickr.

nb3-nationaalarchiefflickr.jpg

Click here for the pictures on Flickr The Commons

Parts of the special collection ‘Labour Inspectorate’, digitized in the Images for the Future framework, are placed onto the Flickr website. Users are invited to add tags and comments to the photos. As a result of the new collaboration between the National Archive and Spaarnestad Photo, photographs of this archive have been added to the Flickr collection as well.

On the 4th November, there is a seminar about the value of social tagging, with among others, delegates from Flickr and the National Maritime Museum. In the first two days, the photo’s have been viewed over 300.000 times and more than 400 comments have been added.

The Nationaal Archive is proud to be a member of The Commons on Flickr. Photographs of the Nationaal Archive that are part of the Commons on Flickr have “no known copyright restrictons”, this means that there are no copyright restrictions on the works designated, either because the Nationaal Archief owns the copyright of the photographs and authorizes others to use the work without restrictions, or because the copyright may have expired.

International Study on the Impact of Copyright Law on Digital Preservation

The Netherlands: pioneer in digital preservation cultural heritage

The Library of Congress has recently issued a joint report on digital preservation and copyright. This authoritative report was compiled by the National Digital Information and Infrastructure Preservation Program, and in cooperation with partners in Australia, the Netherlands and the United Kingdom. SURFfoundation is responsible for the Dutch contribution.

The report, International Study on the Impact of Copyright Law on Digital Preservation, notes that digital works are ephemeral, and unless preservation efforts are begun soon after they are created, they will be lost to future generations. The report found that although copyright and related laws are not the only obstacle to digital preservation, there is no question that those laws present significant challenges.

Recommendations are provided for legislative reform and other solutions to ensure that libraries, archives and other preservation institutions can manage copyrighted digital information in a manner consistent with national and international laws.  Specific recommendations include structuring national copyright laws to provide exceptions for preservation institutions to proactively preserve at risk copyrighted material in digital form, subject to measures appropriate to protect the legitimate interests of right holders.

The Dutch contribution to the report takes inventory of current digital preservation efforts in the Netherlands. It also looks at the way in which the Netherlands regulates the preservation of and access to digital materials: through agreements between cultural institutions and entitled parties, which ensure that 20th-century works will remain publicly available. Higher education institutions in the Netherlands, collaborating within SURF, have indicated that they want clarity about preserving and providing access to cultural resources.

The recommendations for reforming Dutch legislation also focus on works from collections in museums, archives and libraries. These works need to be digitized for preservation. A secure network would have to ensure access to these digitized works.

For the Netherlands, the report is particularly important in view of the leading international position which the National Library of the Netherlands has achieved with its e-depository. The Library is often quoted as ‘an example of good practice’.

The importance of the report is underlined by Dr. Wim van Drimmelen, Director of the National Library. In an article in the Dutch newspaper ‘NRC Handelsblad’ of 17 April 2008, the National Library argued for removing the legal obstacles to digitizing 20th-century library collections. In addition, Van Drimmelen argues that clear regulation and legislation in this area is also of paramount importance for new, digitally born documents since their accessibility is under greater threat than that of traditional information carriers.

According to the report, copyright laws should permit preservation institutions to preserve copyrighted works in accordance with international best practices for digital preservation, including making copies for administrative and technical purposes; migrating works into different formats in response to technological developments and changing standards; and maintaining redundant copies among preservation institutions and legally authorized third party preservation repositories to protect against catastrophic loss.

The report further recommends that copyright exceptions for digital preservation should not be conditioned on the category (such as literature or music) or format (such as compact disc or website) of the work.

The Images for the Future project is mentioned at page 48.

Download the report ‘International Study on the Impact of Copyright law on Digital Preservation’

Source: www.surffoundation.nl

Open Images: Kick-off Meeting

As part of Images for the Future the Netherlands Institute for Sound and Vision and Knowledgeland are developing Open Images. The aim of this project is to offer online access to a selection of archive material for creative reuse. Reuse includes remixing of archive footage in new videos. Open Images also supports interlinking with other data sources (like Wikipedia), allowing the easy creation of mashups. Access to the content will be based on the Creative Commons model which proposes a middle way to rights management, rather than the extremes of the pure public domain or the reservation of all rights. The ‘open’ nature of the project is underscored by adapting open formats and using open source software. Software resulting from Open Images will also be released under a open source license.

The development of the project started with a kick-off meeting at Knowledgeland in Amsterdam, earlier this month. The aim-of-the-day was to map the (open source) digital video solutions that are available today and to get feedback. Eight experts in the digital video field where invited to this informal brainstorm session. After an introduction of Images for the Future and the Open Images project plan, the invited experts gave inspiring presentations of their current work. At the end of the day there was a general discussion about the project plan and the first steps that ought to be taken.

Please find a report of this day below. Open Images aims to launch a Beta release by the end of the year.

Read the rest of this entry »

Interesting links

Below you’ll see some interesting reading material which could be useful one way or the other for our project Images for the Future (and of course other digitization projects). Click here for previous links. Some of the entries are in Dutch.

1. ‘Als ik op het bord ga, gaat m’n hart sneller kloppen’
2. Trent Reznor’s Path To Accepting And Embracing New Business Models
3. Eerste cijfers aantal video streams: Q1 2008
4. Topman Microsoft: Papieren krant over 10 jaar verdwenen
5. iTunes opens 700-film UK film download store
6. New copyright agreement provides greater online access to film
7. Eerste onderwijsgame ter wereld als open educational resource
8. Auteursrecht en het recht op informatie verzoend

Economies of the Commons blog posts

Students from the MA programme ‘Preservation and Presentation of the Moving Image’ covered the event with posts on this blog. You’ll find the sessions in the list below:

ECC videoec-morepics.jpg

Economies of the Commons and the Blogosphere

Students from the MA programme Preservation and Presentation of the Moving Image are covering the event with posts on this blog. Other participants are also posting reponses on their respective blogs.
First finds:
Jon Phillips @ Technophobiac News
Pierre Gorissen @ ICT & Onderwijs BLOG
Stoffel Debuysere @ Diagonal Thoughts
Alek Tarkowski @ Kultura 2.0
Peter Suber @ Open Access News
Meike Richter @ Commonspage.net
Gulli Community Verein @ Gulli
Jonas Woost @ Twitter
Silke Helfrich @ CommonsBlog
Brianna Laugher @ All the Modern Things
Felix Stalder @ Nettime.nl
Robin Kawakami @ weeklyblog
Paul Keller @ Kennisland
Twan Eikelenboom @ neW Media Wanderings