Our role in the digital age

Debunking myths about copyright and piracy in the digital age

Creative content is at the heart of European cultural diversity

Creative goods are an important aspect of our daily lives. Most people spend time every day reading, going to the cinema, listening to music, watching TV shows or sport, or playing video games. Yet creative content is more than everyday entertainment. It communicates cultural and social values and creates shared experiences.

Culture is at Europe’s heart. It is intertwined with and reflects our linguistic and social diversity, a true source of strength. The creative and cultural sectors mirror Europe’s pluralism, making them incredibly open and dynamic. Their influence is growing at this time of radical technological, social, cultural and economic change. They unite high and popular culture, technology and economics. As post-industrial economies and societies evolve, images, words, sounds and ideas have increasingly become the drivers of innovation, jobs and prosperity. New cultures are created, new stories told and movements born. Creators are an integral part of Europe’s cultural and economic fabric, and are central to its development.

The creative and cultural sectors represent an economic investment in Europe’s future, contributing to our global competitiveness. They represent 3% of total employment, and are a source of jobs for young people at a time when other industries lack this potential. And just as diversity is a source of strength for Europe, our internal diversity reinforces our creativity. This is reflected in the way that our sectors have weathered the current economic crisis, emerging mostly unscathed with above average growth rates. Our resilience is largely based on the EU’s current intellectual property framework, and we should not underestimate the current threats to that framework.

Our competitive advantage depends on an innovative cycle of creative talent, artistic expression, entrepreneurship and reward. Thousands of artists, inventors, storytellers, innovators, technicians, designers and entrepreneurs stand behind the films, music, books, television programmes, sports matches and video games we all enjoy. They also make up the 1.4 million small and medium-sized businesses generating and distributing creative content all over Europe. SMEs make up an above average share of creative content companies, with around 50% of overall employment being attributed to micro-enterprises of 1-3 employees. Often, these smaller companies cooperate with larger players across organisational and sectoral lines and provide the creative impulses on which our sectors together thrive. The ability to co-create and collaborate in flexible professional networks – two essential capabilities needed in modern knowledge economies – lies at the heart of our industries.

Our sectors also inspire new generations by giving them professional role models and goals to aspire to. Creative people’s popularity online speaks for itself: 9 out of 10 of the most ‘liked’ people on Facebook today are artists, and 7 of the top 10 most followed people on Twitter are artists too. The majority of content is created, produced and marketed for specific cultural and linguistic markets. Europe’s great diversity inspires its creators, artists and thinkers to create new stories, or reinterpret old ones. It fuels books, films, music and other creations in all genres. The creative sectors help keep culture alive, ensuring it will evolve for generations to come by nurturing new talents and promoting established ones. As Swiss writer and intellectual Denis de Rougemont once said: “Culture demands a paradoxical pact: diversity must be the principle of unity, differences must be highlighted, not in order to divide but in order to enrich culture even further.” To ensure that Europe’s cultural richness can continue to develop, the right conditions must be in place so that everyone in the creative value chain can thrive.

Innovation is central to our work

The internet is a fundamental part of our lives. People everywhere, particularly the young, care passionately about it. So do we. All creative sectors are committed to the production of innovative, professional and top-quality creative content for audiences across Europe, and to developing convenient and appealing ways for Europeans to enjoy it on- and offline. We share a vision of the internet that protects everyone’s rights and freedoms.

The development of the digital economy depends on the production of content, which in turn depends on the creative and innovative power of the mind, on imagination, experience and vision. The ability to envision a story is key to turning images, sounds or words into a creative good. But crafting stories means giving ideas the time and space to mature. As Scottish author Irvine Welsh remarked in 2013, younger generations in the digital age have fewer opportunities to develop their envisioning capacity. We believe that Europe must continue to nurture the craft of professional story-telling, otherwise a generation of digital natives risks inheriting a hollow cultural landscape. This was underlined by Welsh when he said that “without content you have nothing” .

The internet has become a revolutionary communications vehicle, enabling new voices to be heard for the first time. It has provided a sophisticated technological architecture for creative works to reach ever greater numbers of people. It is an unparalleled revolution in creative expression. The results are jaw-dropping: one hour of video is uploaded onto YouTube every second, with nine of the top ten most viewed clips being music videos, clocking a staggering 6.1 billion views between them. The photo-sharing service Flickr counts uploads in billions. The pattern is similar for all modes of creative expression. Against this background, professional content – be it music, books, video games, and other creative content – is essential for the internet to thrive and creativity to flourish.

Online content offers are blossoming, reaching more Europeans every day and providing access to a wide range of local, national and international creative goods. Whatever your tastes and interests, a growing range of purchasing options have allowed more content to reach more people faster than ever before. There are now 550 licensed digital music services in the EU27. Total spending on online video transactions soared to €673.7 million in 2012, 97.1% up from 2011. Today, Europeans have access to over 30 million licensed songs; over 3000 Video-on-Demand (VOD) services; and over 2 million e-book titles. Revenues from digital music alone now account for over 30% of overall music sales, and there are 656 branded open TV-like channels on video-sharing platforms like YouTube or Daily Motion. With new offers going online every day, we are actively working towards an internet that makes prime time anytime.

Innovation is the lifeblood of the creative economy. New technologies enable creators to develop new ideas and ways to reach a wider audience. The games industry is a prime example of how creativity and technology can interact and bring enjoyment to consumers: the app explosion is largely games-based, with 72% of all App Store revenue now coming from that sector. However, new technologies must nurture creativity, quality content and rightful access, not hinder them. This is key to ensuring that investors continue to invest in the production and delivery of creative content. As new business models and forms of delivery continue to be invented, the ability for content creators to license their work, and so be confident in advance of a return which will support new creative projects, will be vital to the stability of the market.

Intellectual property and freedom of expression nurture creativity

Intellectual property connects creators to their work, giving them the rights to their own creations. It goes hand in hand with freedom of speech, since without copyright, a work can be changed or distorted. This is not a new idea. In around 400 BC, Greek authors had already begun to sign their works. Archives existed where originals were kept, providing a reference and a check against misuse. Copyright has withstood the test of time, proving its agelessness as a fundamental cornerstone of professional content.

As consumers, we have grown used to the idea of paying for the delivery format rather than the content. Digital technology means that many distribution formats – whether they are CDs, books or DVDs – are transforming into digital services. With physical delivery formats declining, intellectual property is becoming ever more important for protecting the rights to distribute and monetise content. This ensures that our sectors can continue to reinvest in quality creative output. For example, major commercial broadcasters in Europe spend over EUR 15 billion annually on content – a mind-boggling EUR 41 million every day.

We believe that the creativity and originality of all creators, be they authors, composers, directors or others, should be respected and rewarded. The question of value – economic and socio-cultural – is a central issue in the debate about creative content in the digital age. Popular catchphrases dominating public discourse on intellectual property may suggest that “information wants to be free” at all times, implying that anyone attaching a price tag to creative works is placing a constraint on the free flow of information. Yet this well-known quotation by American writer Stewart Brand does not end there. While Brand did assert that “information wants to be free, because the cost of getting it out is getting lower and lower all the time,” he also maintained that “information wants to be expensive because it’s so valuable”. Professional content is the sum of countless hours of creative process and labour. Digital distribution is making it possible to reach more people faster and in some cases at a lower cost. But this does not mean that the inherent value of content is dropping to zero.

Each creative work is a prototype that is created in a specific way and for a specific market. Often, its economic value cannot be determined until it has been released in a given market. Due to this uncertainty and high upfront investment in creativity, development and marketing, creative content involves significant artistic and commercial risks. Companies tend to work on multiple projects at the same time in order to minimise the risks of an undertaking that might result in losses. Similarly, a successful project can usually offset the losses of several other projects. In the European film industry, experience shows that several successful films are needed in order to make up for other projects which either had to be abandoned at project development stage or which simply did not recover production, marketing and distribution costs. The highly collaborative nature of creative content markets across Europe often results in a commercial model where several stakeholders commit to pre-financing a project before it is realised.

Therefore, copyright exclusivity and contractual freedom are absolutely fundamental to this delicate ecosystem of creation and financing. Both help to spread risks and enable different players to work together. Moreover, the model ensures continued investment in new talent, from script writers, novelists and game designers to musicians and other creators. In the digital age, intellectual property is more important than ever. We need balanced rules and fair competition to enable the internet to grow in a way that protects consumers, ensures that creators are properly compensated, fosters investment in the development of new cultural works, rewards financial entrepreneurship and supports businesses.

An internet for all

The transition to a digital society is influencing social and cultural norms and involves everyone as consumers, users or producers of professional content. We believe this has upset the balance between technology and creativity, and that the relationship between creators, investors, their rights and the means of distribution needs to be restored.

The great technological advances that we have made should not lead to our fundamental values falling by the wayside.

We want an internet with rights for everyone. The right to privacy, the right to free speech, and the right of artists and creators to protect their works. We want an internet where the privacy and security of all users is guaranteed. And to protect our rights online, we need to apply solutions that have long worked offline: democracy, transparency and the rule of law. Protecting the rule of law online is not censorship, but a guarantee that individual rights are observed. Without it, online society could become an environment where a few powerful companies or individuals make all the rules. We believe that the internet must work for everyone. It must be a place for investment, innovation and creativity.

People’s love for our goods is indisputable – the fact that many go out of their way to experience our creative works is a clear sign of their enduring popularity. Yet while we are actively working on offering consumers more and more new services and ways to enjoy our content, we do face challenges. Providing such legitimate services means meeting obligations such as remunerating all rights holders and everyone involved in a final piece of work for their efforts, paying taxes in Europe, and following property rules. Pirate services do not do this. In February 2013, the servers for the game Battle Dungeon crashed after more than 99% of login attempts involved false user accounts, according to industry press reports. The developer cancelled the game service and refunded all paying players.

Existing legal services are reliable and secure, offering smooth delivery and a customised experience, while pirate sites are often fertile ground for identity theft, viruses, malware or spyware. These services often specialise in the type of creative content they deliver, and can more directly cater to the needs and interests of consumers. Music services such as iTunes, Spotify and Deezer, and more than 250 others across Europe, are offering consumers legal access to the widest possible choice of works. Video games are now available for online play or download through many outlets and on a wide range of screens. Each of today’s main game consoles works in tandem with an integrated, console-specific online marketplace that enables consumers to purchase various forms of digital content for download. Films can now be enjoyed in more ways and on more devices at better quality than ever before. In book publishing, the number of e-book titles is expanding as publishers digitise their back-catalogues, while enhanced interactive content is being developed, and the e-pub standard is enabling visually impaired people to buy and read new titles in an accessible format as soon as they come out.