European Union Enters New Phase of Government November 30, 2009
Posted by Bill Jones in Europe, Law.add a comment
The Lisbon Treaty, which strengthens the European Union’s central government, has been ratified by all 27 states and comes into force today. It creates a new set of relationships within Europe.
Whilst it’s commonly acknowledged that the Lisbon Agenda of nearly 10 years ago — with its wide ranging sets of objectives for the IT industries and technology — was too ambitious, the new constitution proposed at the time was transformed into a treaty and now comes into effect. This is a revamped EU.
Following my comments on this blog in June, the new EU is now a reality. It matters.
The two newly created formal posts of President of the European Council and High Representative for Foreign Affairs (and also Vice President of the European Council) have been filled.
The debate surrounding these appointments brought out the expectations for the roles. It appears that the heads of nation-states do not wish a President in the US style but more a chairman of a consensus-making Council. It’s unlikely that the current heads of states will wish a President to whom they look up as their appointed leader. At a time of economic challenges, the heads of the key nation-states of France, Germany, and Italy are center-right with an inclination to smaller government (like Republicans in the US). All the current indicators in UK are for a similar orientation after the elections due by June 6th of next year.
The principle of subsidiarity also holds.
Other EU institutions include The European Commission and European Parliament. All have a role to play in intellectual property and technology.
One of the articulated benefits of the new arrangements is more efficient internal workings for the EU. Progress of copyright and technology issues (as for all others) have hitherto been slowed by the cumbersome processes. This will now change.
By having an internal market of 500 million people, it makes the EU the 3rd largest internal market globally after China and India and ahead of the US. So economics is one of the powerful drivers of the EU. The intent is to create a platform for competing with the US and BRIC countries (Brazil, Russia, China, India) on innovation and cost.
The EU already has significant technology R&D programs as well as competence and activities in Intellectual Property. The R&D programs are wide ranging and include many programs of interest to this blog. They also include programs on standards and new architectures.
The EU as well as its nation-states (i.e. peer group representation) also has representations in WTO, G8, G20 and at the UN, as well as others, within which Intellectual Property and Technology may play a part to a greater or lesser extent.
So what does this mean for businesses trading with and within the EU?
While naive businesses may ignore the power and role of nation states and head for the “center,” practical businesses will have to understand the nuances and dynamics between the role of the EU and the role of the nation states.
Whatever emerges on copyright and technology will not be a top-down approach, although the instruments are there to give effect to directives and EU laws, and the tendency of a bureaucracy will be in that direction. Instead, consensus will be required between nations before any EU approach will emerge. And in that there remains significant differences between nations on these issues.
Bill Jones is CEO of Global Village Ltd.
Progressive Response in the UK? November 19, 2009
Posted by Bill Jones in Law, UK.add a comment
Many observers of copyright developments in the UK expect Parliament to pass legislation instituting a so-called progressive response program for thwarting illegal uploading of content, in which repeat offenders would have their Internet connections suspended or even eventually revoked. Such schemes are the law in Taiwan, South Korea, and (in attenuated form) France.
Even the Economist recently predicted that such legislation is forthcoming in the UK. We advise against holding your breath.
Yesterday’s Queen’s Speech set out the legislative agenda for the next parliamentary session; it contained a piece on copyright in the Digital Economy Bill. This essentially codified what’s emerged in the reports that have been published so far:
“The plans for tackling illegal file-sharing, detailed earlier this year, will be a two-stage process. Initially the government will aim to educate consumers and, those identified as downloading illegal content, will be sent letters. If this proves insufficient, technical measures which will include the powers to disconnect persistent pirates, will be introduced in the spring of 2011.”
There will be scant more detail than this, since all the Queen and Government do is to get the headline intent into the process for detail to be worked out later. The Queen would only have read out “my government intends to pass legislation on…” But the Digital Economy Bill will be much broader than this and contain many other contentious issues. Copyright will be only be a minor component of the Bill.
The trouble is that the coming parliamentary session is now only 70 days in length for the House of Commons and 30 days for the House of Lords , because an election must be held by June 6th of next year. The perception is that very little of the substance of this Queen’s Speech will make it through to legislation, because there isn’t enough time left. The government (executive arm) will have to determine the priority that this bill will have within its apparently overburdened legislative program. Additionally, the House of Lords is likely to delay politically contentious issues to thwart the incumbent Labour party, which according to opinion polls and commentators is destined to be replaced by the Conservatives.”
Thus it’s unlikely that any progressive response legislation will pass in the UK until at least 2011. By that time we should have enough data from countries with progressive response laws on the books to determine the effectiveness of such a scheme.
Bill Jones is CEO of Global Village Ltd.
Is Copyright a Consumer’s Right or a Citizen’s Right? October 13, 2009
Posted by Bill Jones in Law.1 comment so far
So much of what one hears in the public noise surrounding copyright is about consumer’s rights, file sharing, business models, lost revenues, etc. Digital rights management is often positioned in the space between the corporation and consumers. Does this emphasis distort or enable a sensible copyright regime, and does it focus technological developments in the right areas?
Maybe unwittingly, people’s and governments’ consciousnesses have been taken to the wrong space.
Is copyright a citizens’ right or a consumer right?
As was originally codified (after an existence in common law) in the UK Statute of Anne in 1710, copyright is a citizen’s right – either expressly covered under “IPR clauses” in the Bill of Rights/Constitution, Acts of Parliament, or Common Law. It is a tacit or explicit grant by the state to citizens of that state to be protected by the laws of the state. Citizens may assign that right to others, including corporations, which they often do under employment contracts, subcontract agreements, or publishing agreements. Its international dimensions are enabled by treaties and other instruments of international bodies.
A consumer, on the other hand, is an artifice of corporate channel management, i.e., it’s a class of customer aggregated into a business channel. That channel may find that it’s too expensive to deal with each customer individually. In those cases, addressing customers takes place through volume channels and based on heavily researched profiles which act as surrogates for the individual consumer. Consumers purchase and use some goods and services generated within the economy. Consumers entered the lexicon during the 20th century – much more recently than citizens – and became more prevalent as a category as business and economic theories and practice developed.
But more recently, the two have become interchangeable in many people’s and governments’ minds, as governments became increasingly interventionist in an individual’s life, whether through bills of rights, consumer rights, or human rights.
And as the “freedom” of the internet empowered people to behave differently and generated a modified notion of “free” introduced by economists’ language, advocacy groups argued for consumer rights while corporations and governments had to respond to this new commercial and political force.
In response, governments and the media have internalized copyright as a consumer right rather than a citizens’ right.
The “consumer” has entered the government’s lexicon in many ways, such as:
- Assimilating the language of special interest groups
- Generating laws to protect consumers in the hurly-burly of business and giving them consumer rights. Along the way, the citizen may be forgotten or become commingled with consumers.
- The nature of government has changed so that delivery of public services now borrows significantly from corporate business practices. The citizen as an entity has been unwittingly forgotten. The law as it applies to the citizen becomes and afterthought.
The net effect is that nowadays governments often talk of delivering services to consumers and hardly ever to citizens. Those engaging with government policy makers must do the same to get a hearing. Business oriented consultancy groups have great difficulty advising policy makers in languages other than those of the consumer, business model and value chain.
In demographic terms, all of a nation’s people are citizens; some of its people are consumers of some product and some governmental services; most consumers are citizens (other than visitors and illegals); but not all citizens are consumers of government services.
The copyright world of music and entertainment is generally focused on the 8–35 year old urban resident. Other copyright issues impact other demographics. Consumer rights issues tends to be focused on this young urban demographic. This is where downloads, file-sharing, and so on are generally embedded. This is where certain behaviour traits are to be generally found. This is where price and rights management issues tend to manifest themselves most. And this is where knowledge of legality and illegality may be less pervasive.
For these consumers, the culprit is the enterprise or corporation that is stopping them from doing what technology enables them to do, such as getting access to free downloads.
And as music and entertainment consumers have sought increased consumer rights from governments (e.g., free downloads), which in turn applies pressure to change copyright law, so also have governmental agencies and spokespeople played back the same terminology of consumer’s rights. Yet they don’t probably mean that.
I recently listened at length to an exceptionally well-delivered presentation by a senior European Union IPR policy maker. He spoke using very professional PowerPoint slides about consumers, value chains, business models, etc., but in reality he only spoke about some symptoms of copyright rather than an intellectually rigorous treatise of all of it. It wasn’t clear what problem, if any, he was trying to address.
Government policy makers’ thinking has inadvertently become muddled and befuddled as they tried to be helpful – perhaps with misguided motivations and conditioning.
In short, consumers have become confused with citizens.
This is just a minor part of the copyright universe, but perhaps it is enough to swamp other dialogue.
Is the debate between consumers and enterprises – often facilitated and arbitrated by governments or their agencies – the right one? Would the debate be what it is today, were it about the boundary between consumers and citizens, rather than the boundary between consumers and enterprises? I.e., a debate about people acting in differing ways depending on circumstances, with maybe an enterprise as an agent in the middle. This world is with us as user generated content has people behaving in differing ways depending on their motivations.
Who is looking after the citizen’s right? The citizen should be inserted somewhere into this copyright debate.
And rather than the value chain/business model approach of enterprises selling to consumers, which governments have adopted as their own model, one should be looking at the citizen/person in different guises. That person appears as a provider, a consumer, a citizen and voter. In other words, someone who has both citizen and consumer rights, and in some instances has the interface monetized and in others not. It’s a two sided model with the user on both sides and, the individual oscillating between lean to and lean back or between author and user.
And into this emerges data about the individual.
Hitherto copyright and rights management has focused on the copyrighted object through digital object identifiers and the monetisation of that content as it moves between domains. With the user acting on both sides of the creative and consumption process in user generated content, and acting as a citizen rather than as a consumer in a corporate value chain, the focus should also incorporate digital identity in addition to digital objects, wherein the person assumes differing roles depending on his activity (e.g., citizen, author, user, publisher).
And as that unfolds, we’d probably see arguments from consumer advocates regressing somewhat, as the rebuttals and counters come back from citizens. We might also see governments addressing these issues differently if they were to introduce more citizens’ rights into the debate.
A clear test is to substitute “citizen” for “consumer” in government’s policy statements and see how ridiculous many of them appear.
In extremis, copyright is a citizen’s right and not a consumer right. Price is a separate issue, as is behaviour over the internet, as is the interpretation of the word “free”.
And that would then map onto the technological architectures to implement rights management. A rights management technological architecture that focuses upon the citizen’s digital identity would be very different from that which focuses on the rights attached to the object and on controlling a consumer.
This has profound implications for which architectural and technological solutions are chosen.
Bill Jones is CEO of Global Village Ltd.
UK Government Releases Digital Britain Report June 19, 2009
Posted by Bill Jones in Law, UK.add a comment
The UK Government yesterday launched its long-awaited Lord Carter’s Digital Britain Report. It spans a wide industrial cluster, from media to broadband, mobility, etc.
Minister Ben Bradshaw, in the launch statement to the House of Commons, said that theft of intellectual property is nevertheless theft, and is not to be condoned. The report has a robust legal and regulatory framework to combat Digital Piracy, and it indicates that the government will do all it can to protect Intellectual Property as a cornerstone of a strong economy.
The report itself states that “unlawful downloading or uploading, whether via peer-to-peer sites or other means, is effectively a civil form of theft. This is not something that we can condone or to which we can fail to respond. We are therefore setting out … a clear path to addressing this problem.”
The report is 245 pages long, is ambitious and is detailed. Yet many say it is not detailed enough. It tacitly acknowledges that it is building on prior reports, that the economic circumstances have changed since those reports, and that we now know more since the Caio and Gowers Reviews were published.
And whilst the devil is in the details, the report outlines further work that must be done before primary legislation can be brought forward. (The UK government’s normal process is to undertake “consultations” and “analysis” to guide it towards policy recommendations, initiatives, and drafting of primary legislation.) The Recommendations section of the report includes six on further analysis and one for further review. The interim report recommended 8 consultations, whilst this report introduces 12 consultations, including one on P2P. Nevertheless, the report contains 72 action points. In that sense, it’s not a finished piece of work. It also falls short, in many instances, of indentifying who will pick up the costs of these interventions. It wills the end but not the means.
The huge amount of detail in the report indicates how difficult and challenging it is for governments to deal with this whole area. It is creating a new industrial sector, in which most parties, including consumers, are to some extent legally illiterate. That is, the government has to create new laws and conditions on behalf of its citizens, within which the newer economy can thrive and for which the instruments of orderly commerce are known, understood, have respect and are obeyed; in the meantime, government also does all it can to create the conditions for the UK to be a global leader in the digital industries.
The significance of this report is not in the detail, rather it is in the way in which it has emerged, the audience that it will have, and the ramifications beyond the shores of the UK.
One should not underestimate the international significance of this report. Governmental financial intervention is controlled by European Union “state aid” rules. In this report, state aid components have been cleared with the EU, the IPR components have been discussed at length and therefore probably tacitly endorsed by the relevant international IPR agencies. The UK’s approach to regulatory and legal developments are copied internationally. In short, the UK has not produced this report in isolation.
As the EU’s Lisbon agenda, which includes aspects of Information Communications and Telecoms (ICT), moves towards its 2010 conclusion, the EU can be viewed as “in stasis” on these topics, until it develops a new agenda. Sweden and Spain will hold the next presidencies of the EU; both have taken a keen interest in the report’s development and may view it as an opportunity to create a new agenda. The Digital Britain report may be a basis of such an agenda.
At the same time, one should be aware of the EU’s “water bed effect,” i.e., that initiatives by one nation may bring countervailing movements or initiatives in other parts of the EU. For example, some nations are developing new or alternative proposals on P2p following the French moves in that area.
Many view the implementation and delivery plan detailed in Chapter 9 as the key section of the Digital Britain report. That a government report (white paper) focuses on detailed implementation is interesting on a number of levels. It indicates a government willing to move from macro economic policy to micro economic policy to deliver economic outcomes — i.e. it’s more interventionist than is customary in these areas. It also recognises that detailed intervention is required to ensure law and order and balance among the various stakeholders.
In effect, the government is creating a new economic sector comprised of old industrial silos which it will now nurture and govern in the round. It is creating a new government agency to do this. Media, telecoms, content, IT, etc., are being addressed as a single industrial sector. This may make it easier to address copyright and technology issues. But of course the laws and regulations have to move on to the statute books, and in that sense it’s an uncertain path forward. Nevertheless, the ambition is clear.
Does the EU Really Matter? June 16, 2009
Posted by Bill Jones in Europe, Law.3 comments
For those who have read some of my observations on developments in Intellectual Property in UK and Europe, you may have asked: “does it really matter?”
It’s my belief that it does. The development of intellectual property policy and practice in Europe should be of commercial interest to companies and practitioners in other countries…from the United States to the Pacific Rim.
At the heart of the EU developments (which are directives, R&D programs, regulations and laws, which follow the politically nuanced policy and philosophical developments) is the potential change in the legal systems of many countries, with a more centralised legal and enforcement systems which may end up in the European Court of Justice. Fine, you may say – one court one judgement. It’s all good for efficiency.
The reality today is that the legal systems in mainland Europe are very different from the legal systems operating in UK/Ireland, and dare I say it…in the US, and Pacfic Rim too. UK is Common Law, whereas mainland Europe is based on the Napoleonic system. And of course France is a key driver in the EU.
The US developed its legal system as a reaction to the UK of George III but nonetheless follows the Anglo-Saxon rather than mainland European system. So what does this really mean?
With total attribution to Ambrose Evans-Pritchard writing in the Daily Telegraph, he says: with “apologies to law professors — the crude difference between core Europe and Britain/Ireland is that Napoleonic law forbids unless specifically allowed, while Common Law allows unless specifically forbidden. This Common Law system is the legal foundation of Anglo-Saxon scientific and commercial creativity, and perhaps the reason democracy has bedded better in the Anglo-sphere”
And there are other differences too, such as crudely in UK/Ireland one is innocent until proven guilty whereas under the Napoleonic code there is a presumption of guilt unless the defendant can prove innocence.
So would the current Anglo-Saxon music and entertainment system have evolved had it been under Napoleonic code?
The EU is currently in the process of increasing its legal permeability throughout the 27 European countries, through directives and the progress of The Lisbon Treaty (constitution by another name), as well as the current initiative to progress the concepts of European Patents system, at which many countries are balking.
So what impact does this have from a commercial perspective?
DRM is about the management of legal rights in a technological environment. The choice of legal system that underpins the DRM has a direct impact on the DRM architecture, its effectiveness and validity, and of course its operability (even interoperability).
So how does a company decide on it’s strategy and tactics in this environment?
Bill Jones is CEO of Global Village Ltd.
Will the EU’s Fine on Intel Impact DRM? June 11, 2009
Posted by Bill Jones in DRM, Europe, Law, Technologies.1 comment so far
The European Commission imposed a fine of €1.1 Billion (US $1.1 Billion) on Intel last month for violating EC Treaty antitrust rules on the abuse of a dominant market position by engaging in illegal anticompetitive practices to exclude competitors from the market for x86 (CPUs) computer chips, and cease illegal practices. Intel had a dominant position in the worldwide x86 CPU market (at least 70% market share). Europe accounts for 30% of the worldwide $30 Billion annual market for X86 devices.
Intel will appeal the fine and judgement. This action had a long gestation period and was triggered by complaints from AMD, branded PC vendors (Dell, HP, Lenovo, etc.), and others.
So what has this to do with DRM, you may ask?
Firstly, the market for X86 will be opened up to other suppliers whose chips will be similar but not identical. Over time, this could begin to create featured niches in the market. It will also have an effect on ancillary chips, as well as internal and external communications and memory architectures, as system designers optimise for certain applications. Ultimately it will begin to have an effect upon the applications environment in a world which is becoming more SaaS and Cloud computing based. It won’t all move in that direction, since various limiting factors will stimulate clien- server architectures in a different direction.
Content and rights management has to exist in this evolving world. DRM is a software/technology system that has to ride on platforms and networks. Architecture is crucial to successful implementation and operation. Bias the architecture a wrong way and users get frustrated that performance degrades since the systems can’t respond, or that software architectures are not congruent with hardware architectures. At worst, one can’t port the software onto the platforms.
In a monopoly environment, arguably and initially, implementation is more predictable. Therefore an axiom of the opening up of the market is that rights management may become less predictable, although we don’t know how.
But DRM has to operate in many differing environments catering for many differing types of rights and content. Interoperability is a challenge as “home” increasingly clashes and merges with “automotive,” with “broadcast,” with “office,” with “portable,” with “mobility,” with “games,” with “entertainment,” with “media,” etc.
Each of these silos has evolved its own architectures and solutions driven by industrial clusters evolving from differing geographical markets e.g. PCs from the US and China, automotive from Germany and Japan, mobile phones from Europe and the Far East, gaming from the Far East and US, etc.
The EU had convened a High Level Group to guide it on DRM issues identification. Of the above grouping, only HP participated, others being companies such as BBC, France Telecom, Nokia, Vodafone, Vivendi and a collection of trade associations. Intel and countless others (large and small businesses which could have contributed) weren’t present.
Yet at the launch of Microsoft’s Digital Entertainment offering at the Emmy Awards in LA, it had a large partnership ecosystem of companies and consortia with which it had worked to deliver its offering. Intel was one of these, as were others such as HP, Sony, etc. Intel’s positioning is “Today, Intel supplies the computing and communications industries with chips, boards, systems and software building blocks that are the ‘ingredients’ of computers, servers and networks and communications products.” The X86 is just one of those building blocks around which are other chips, buses, and software.
Yet the silos mentioned above have differing semiconductors underpinning their functionality and enabled by differing software. For example, ARM’s risk based architecture is a key component of the world’s 4.5 billion mobile phones, games console semiconductor devices optimized for gaming underpinned by AMD, Cypress and Freescale devices, broadcast underpinned by SGS-Thomson, Philips, National Semiconductor and others, etc.
But the desire is that content and rights will flow more freely (not in an economic sense) between these silos.
The European Union has interoperability (including DRM interoperability) as a key issue, which it stimulates through R&D programs, policy initiatives, and think tanks. Yet it controls few if any of the means to achieve its utopia. I was instrumental in placing DRM and interoperability on the national agenda in UK in the context of national broadband policy which was subsequently taken up by the EU. And whilst there has been much activity and public comment, there is little clear articulation of any goal or objective and even less of the causality other than a catch all “consumer benefit”.
In a separate strategy piece for a Global 100 company, we identified 10 – 20 DRM and content management consortia operating over 5 platform domains. Most had a genesis in US, some European and PacRim membership operating over various hardware and semiconductor platforms.
Intel is a contributor to some but not all, as other commercial interests drive others. The EU’s fine will curtail Intel’s lobbying and influencing ability as it has done for Microsoft previously. Whether others will step into the gap crated by EU initiatives remains to be seen.
However, in EU’s European Year of creativity and innovation, the probability is that this influence over the semiconductor market will cascade into dependent markets, including content and rights management. Yet the EU does not have the resources to “control” all interoperable markets, so in any possible intervention for “consumer benefits” it must not only ask whether it should, but also what unintended consequences might arise and whether acting on one particular issue alone will bring benefits or impairment.
For that one requires a breadth and depth of understanding that spans markets to law to architectures and technologies.
For now, it will be interesting to observe how this fine on Intel will translate to modified behavior in the DRM markets.
Bill Jones is CEO of Global Village Ltd.
European Union Votes to Extend Copyright Term April 28, 2009
Posted by Bill Jones in Europe, Law.add a comment
By Bill Jones
Last week the European Parliament took a step on the side of the performer in preference to the consumer by voting for an extension of copyright terms in sound recordings from 50 to 70 years. This is to ensure that performers continue to receive royalties for 70 years from the first publication or performances. The EU Commission (Executive Arm) had previously proposed an extension to 95 years.
Not all were in favour of the extension to 70 years – 64% of the votes were in favour, 30% against, with 6% abstentions. Various advocacy groups had been campaigning against the term extension.
Historically the EU has had consumer benefits as a one of its dominant goals and drivers. This vote may appear as if the EU has biased its decisions towards the right of the citizen rather than the right of the consumer. A citizen is a member of a state whilst a consumer is an artifice of corporate channel management.
Music copyright is split into two parts – one for the performers who made the sound recording and the other for the creators who wrote the song. Copyright for composers and songwriters is a separate law and lasts for 70 years after the death of the writer, which is the current term of copyright for non-corporate works in the United States.
Under current EU laws, recorded musical performances are protected for a maximum of 50 years. This means that over a period of 50 years, performers receive remuneration for each time their work is played on the air and elsewhere. After 50 years, artists lose control over the use of their works and no longer receive this income.
This increased copyright protection for performers would also benefit producers / record labels, thanks to additional revenues deriving from the extension. Their royalty would however be levied at 20% to create a fund for session musicians who gave up their rights when signing the contract for their performance. Members of European Parliament (MEP’s) amended a provision relating to this fund so as to give collecting societies, which represent performers’ and producers’ interests, the right to administer the annual supplementary remuneration.
The Parliament has also asked the Commission to launch an impact assessment of the situation in the European audiovisual sector by January 2010, with a view to deciding whether a similar copyright extension would benefit the audiovisual world.
And in the “use it or lose it” clause, if producers, 50 years after the publication of a phonogram, do not make it available to the public, performers can ask to terminate the initial contract they signed to transfer their rights to the label. The producer has one year to make the recording available to the public; failing this, his rights will expire.
The plan has to be passed by EU states in the European Council to become law. If approved by the European Council, the law would apply to all sound recordings that are currently less than 50 years old, as well as new recordings. Member States will have two years to transpose the new legislation into their own laws. With 30% against and, fragile politics and economies demanding new laws, one wonders how keenly national legislators will proceed to new enforceable laws.
This has very interesting implications: Firstly, what impact does it have on performers’ and producers’ business models and the jurisdictions in which they are incorporated and taxed?
Secondly what impact does it have on rights management systems, architectures and technologies over the 70 years? How does one ensure permanence?
Thirdly how effective will the enforcement monitoring and management be, and finally what will be consumers’ reaction?
Even Susan Boyle might benefit!
UK Digital Rights Agency Likely to End Up on the Cutting Room Floor April 21, 2009
Posted by Bill Jones in Europe, Law, UK.add a comment
By Bill Jones
It appears that the recently touted creation of a Rights Agency in the UK is unlikely to make it to the final Digital Britain Report i.e. the idea and recommendation will be dropped. Lord Carter has suggested that the concept has apparently met much opposition; the main one being that the creation of a new government sponsored institution is likely to act as a dampener on commercial deals rather than accelerating new business models. Apparently stakeholders view the idea as having gotten out of hand and out of control when all they wanted was an informal forum for agreeing on a voluntary code.
The government seems to acknowledge that this would not be a good development. We’ll have to wait until June to find out whether this is the case or not.
This is particularly interesting inasmuch as it is the first time in many a year when government has stepped back from becoming more interventionist in the creative industries. Maybe this is a turning point.
How this plays in Brussels’ European Union remains to be seen. Their general propensity remains to adopt a more prescriptive approach which they may continue, or alternatively the UK’s approach may strike a chord with the European Commission.
Bill Jones is CEO of Global Village Ltd.
GSMA Mobile World Congress: Another View March 24, 2009
Posted by Bill Jones in Mobile.1 comment so far
By Bill Jones
Last year more mobile phones were sold globally than the aggregate sales of TVs, PCs, and cars put together. There are approximately 4 billion mobile phones in a world of more than 6.5 billion people. Penetration rates in some European countries are 150% (Italy), while some are as low as 80% (France being one). Industry analysts are forecasting approx 40 billion mobile connections in an “internet of things” which will connect, white, brown, black, utility, automotive goods / products, and so on, but they don’t know how or when. Nonetheless it reaches deep into the home and consumer markets. Content in one form or another will play an increasing part.
It is a consumer market.
The mobile world is characterised by the tension between operators and handset manufacturers as to who controls the customer. Handset vendors view operators as a pipe to carry content; operators view handset manufacturers as a means to connect customers. It’s a very uneasy yet symbiotic relationship where progress by one is rarely possible without the support of the other. Making it all work together is a challenge. It is also characterised by the convergence between mobility and computing, both of which are consumer plays.
The GSMA Mobile World Congress is changing. This year it had fewer attendees and fewer exhibitors, and this was not due merely to the economic activity. Operators were less in evidence, having withdrawn from major exhibits and hospitality suites, partially anticipating lower attendance and partially due to economic pressures placed upon them by regulators to drive down prices. There’s nothing there for them other than networking opportunities and talking with vendors – and these days, why wait to do that once a year?
Infrastructure vendors have merged, amalgamated, or exited the business, so they were also less in evidence. What was in evidence was an increasing array of Pacific Rim and Chinese vendors, which are arguably less culturally attuned to intellectual property and rights management. The buzz in the show was around new handset models, new features, and new content offerings – that is, new plays for consumers. Yet too many handset vendors are posting red ink in a game that is heavily dependent upon market share. Profitability is highly sensitive to market share and they will do nothing to damage that.
So, GSMA vectors have moved away from infrastructure and operators to a more consumer flavor.
And while GSMA is international, the US – where DRM started – operates to a differing mobile standard and architecture from Europe.
DRM is a topic which raises high emotions amongst consumers. For many at Mobile World Congress, it’s a utility. As a handset vendor, are you going to promote DRM or announce it if it has possible negative connotations which can damage market share? In private conversations with participants, many vendors spoke of having implemented DRM and supporting all the latest standards, particularly with increasing content and monetization offerings. Yet none was going to issue a major announcement at this time, preferring to soft-launch new features that would not attract attention and that could be tested in a softer market with less capital commitments.
And since DRM vendors are dependant upon OEM vendors, they are not going to make announcements that could irritate their customers.
We know from our work with the mobile universe that DRM is here to stay. The groundwork is being laid for continued penetration of DRM, and this was acknowledged in private conversations in Barcelona.
Bill Jones is CEO of Global Village Ltd.
Bill Rosenblatt
Azita Arvani
Bill Jones
Niels Thorwirth
