Dutch entertainment sector discusses digital distribution of creative content

Last Monday, September 5^th, the second Symposium 'e-commerce for copyright' was held in The Hague. The event was organized by the NVPI (branch organization for the entertainment industry), and ECP-EPN, platform for the information society. Future of Copyright attended this event, which was held for the first time since 2008.

The central focus of this symposium was the report "Facts to share”, by research and consultancy firm Considerati. "Facts to Share" provides a comprehensive overview of the current market for legal and illegal distribution of creative productions. The research analyzes consumer behavior, the impact of filesharing and downloading from illegal sources on the legal sales of creative content and the broader economic and social implications of digital content distribution. Keynote speakers at the event, besides the author of “Facts to Share”, Bart Schermer, were Menno Bangma of TNO, Paul Solleveld, chairman of the NVPI and journalist Robert Levine.

Mr. Schermer’s presentation of the report marked the beginning of an interesting discussion, especially for panelist Arda Gerkens (HCC), Paul Solleveld (NVPI), Rob Jongmans (Walt Disney) and Geert Noorman (Dutch Publishers Association).

It appeared from the debate that increasing the availability of legal content on the digital market is the most commonly suggested solution to the difficulties the creative sector currently faces due the massive downloading from illegal sources. In addition to availability of authorized products on the digital market, it is crucial for the entertainment sector to develop successful new online business. However, the development of innovative business models is hindered by the availability of illegal content.

Especially the music industry suffers from the fact that consumers download from illegal sources. Several representatives from the entertainment industry told the conference that they struggle with unfair competition in their field. Illegal distributors have no need to invest in the creation of content, they merely distribute the available content. Furthermore, illegal distributors are not bound by consumer law, privacy law and competition law. It is difficult for the entertainment industry to compete against these rivals.

The main conclusion that can be drawn from this event is there appears to be a need to change the mentality of Dutch consumers with regard to downloading content from illegal sources, as this is still widely accepted among the general public. The publishers and content producers strongly support a ban on downloading from illegal sources, as this is currently not forbidden in the Netherlands. A legal basis for such a ban may make it easier for the industry to change consumer culture and to combat illegal filesharing sites and services more effectively. Very recently, the Dutch government has supported this view. The secretary of Justice has told the Parliament that legal consumption of digital content will be the norm from now on and that the government will back a ban on downloading from illegal sources.

During the symposium the need to combat illegal supply became apparent, in order to create a level playing field for providing legitimate services to consumers. Consumers should be informed and enticed with good legal offer. Journalist Robert Levine endorsed this in his presentation. He said it is important to make it convenient for consumers to buy legal content and to make it more inconvenient for them to access illegal sources. This can be done by offering user friendly, attractive and competitively priced products, but also by maintaining stringent enforcement policies, primarily towards illegal providers. Mr. Levine also warned that creative diversity may dry up if content is supposed to be free.

Some panelist noted that a further change of mindset within the entertainment industry is also badly needed. Arda Gerkens suggested that cultural products should be viewed as a service, once they are presented online. Menno Bangma noted that the current video-on-demand services do not always fit the needs of the consumer. Potential VOD-users experience substantial barriers when buying paid content. According to Mr. Bangma, VOD-services could be redesigned so that payments no longer coincide with the moment of 'consumption' of the service, as this may bring about negative associations towards watching a VOD-product. Furthermore, the content offered is not always up to date and is often only available for a limited time after purchase. Moreover, an interesting signal to the government was that it is an essential precondition to the sector that consumers have sufficient trust in online business and transactions.

Paul Solleveld (NVPI) called upon the creative sector to cooperate closely with rights holders and Internet Service Providers to structurally improve online business models and to increase the supply of legal products as soon as possible. According to NVPI, these stakeholders should also discuss how consumers should be made aware of the need for buying legal products.

All in all it was an exciting afternoon, although discussions on this topic are far from finished. We invite you to stay informed on current developments in the Netherlands through our website.

With special thanks to NVPI and ECP-EPN