FINISHED TRANSCRIPT
EIGHTH INTERNET GOVERANCE FORUM
BALI
BUILDING BRIDGES – ENHANCING MULTI-STAKEHOLDER COOPERATION FOR
GROWTH AND SUSTAINABLE DEVELOPMENT
OCTOBER 23, 2013
2:30 PM
WORKSHOP 309 and WORKSHOP 345
NORMS AND VALUES IN DIGITAL MEDIA: SHAPING GLOBAL FRAMEWORK
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This text is being provided in a rough draft
format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.
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>> MODERATOR: Hello, good afternoon. We'd like to have a more intimate interactive discussion. Unfortunately it's not conducive to that. All right. It's working. I don't think we actually need it because we don't have a ton of people here. But good afternoon, everyone. Welcome to this workshop. I'm here from the World Economic Forum. I really want to thank everybody for joining us today.
It's really exciting to be here at the Internet Governance Forum. So this workshop called Norms and Values in Digital Media. It is, in fact, part of a project the World Economic Forum has taken on for the past year and a half. For this project we wanted to look at emerging norms and values on the internet today and how they've impacted critical issues like privacy, intellectual privacy, and freedom of expression online. What we've done to really have a global conversation, we went in places like India, Turkey, Brussels, to really try to understand what's working, what's not, and what are the unintended consequences. For the second year, we have focused on ‑‑ so far on intellectual property in the digital age. Some of the questions have arisen along the way is copyright dead? Is it relevant?
What is the value of digital content today? Is it purely monetary, is it recognition, also a form of value. How do incentivize and encourage concentration? How do you stimulate creativity in this day and age? Along with these questions, I would like to introduce our moderator and panelists. Kathleen is going to moderate this session for us. I would like to hand it over to her and she will take us through the hour and a half of hopefully very stimulating and exciting conversation. It's an honor to have this opportunity. One of the really exciting things I think about this panel is that you're about to hear a real diverse change of voices on these issue which is emblematic of some of the really big challenges that lie ahead. Some of core disputes and debates and ideas that are coming out are so variable in this space.
So without further ado, I'll introduce first of all, Andres Guadamuz, who is a senior lecturer of intellectual of international property law. David Fares, who's the Executive Director at 21st Century Fox based in London, Shinto Nugroho, who is head of public policy with Google in Indonesia, and Andrew Puddephatt, who is the executive director for Global Partners Digital in the UK, Sarah Wynn‑Williams, who's with the global public policy team for Facebook based in the U.S. And Shinto Nugroho ‑‑ Oh, sorry ‑‑ and Ari Juliano Gema, who's the project for Creative Commons in Indonesia. We thought that it might be helpful to have each of these different panelists share with you their introductory remarks so that we can get into a discussion and debate on this exciting issue of norms and values in digital media and what it means for IP and creativity online. So we'll start right at the end here. Thank you, very much, Andres.
>> ANDRES GUADAMUZ: Thank you very much for the invitation. I'm delighted to be here. I usually start my talks or forums or presentations often with an apology. If I am rambling or incoherent at some point, it's because jet lag has hit me really hard this afternoon. So I am delighted to be in the panel for several reasons, I think. We've been looking or we're going to be looking at creativity and the creative industry and the creative process and values what it means in the digital age. I'm hoping we're going to be able to provide a more broad approach then sometimes narrow narrative of creators, as a very small group of people.
Also, think of the value of what it means to create and the value obtained by creation in a much broader sense which is what my perspective is going to be.
>> DAVID FARES: Thank you very much for the invitation to participate. I'm a late edition. I'm very glad that you've asked someone from the content industries to be on panel because I think our perspective is very important to the discussion. Of course, I will take the perspective of a company who is engaged in the production of professional content. From a film industry perspective, I would say that you know, it's a very risky investment to make a film. Seven out of 10 film lose money.
What do we do? We create content that consumers want, and we distribute that content across a whole host of different platforms and copyright is the means by which we both create the content and distribute the content. So it's fundamental to what we do. So but so is freedom of expression. If we want to be able to produce the content that challenges government, that educates users and entertains and informs users, we need to have the ability to choose what content would actually attract the consumers.
There's often a false tension made between copyright and freedom of expression. I believe they're mutually reinforcing and mutually beneficial. There's also sometimes dichotomy made between content creators and internet platform forms. I had think they're mutually reinforcing because we create the content and we need the intermediaries to distribute the content for us. When we get to the questions and answers, I will actually provide some statistics and information that will help back up these introductory remarks.
>> SHINTO NUGROHO: Thank you. I'm Shinto Nugroho from Indonesia. Thank you for this opportunity. I think this is a really interesting opportunity and a great place to actually share some of our experience. As you know, for Google, this is especially relevant because as David is talking about how expensive it is to create one content. Actually, our experience with YouTube for example, has enabled those who would not have any access to the capital to create new content which has basically equalized the opportunity for everybody that wouldn't be possible before.
As we go along in the sessions, I will share more experience both from Google perspective and from Indonesia perspective. Thanks.
>> ANDREW PUDDEPHAT: Thanks, very much. I guess I will cover a number of things in the conversation. I mean, for me, capitalism is going through one of those intense periods of creative destruction that makes it a very exciting system to live with. That means that some industries will be destroyed and some will be created. Old sources of wealth will disappear and new sources of wealth will reappear. I think the fight is a very key fight between industries as to who should get ‑‑ extract the most money from the value chain that's being created by modern communications. I think that's something to bare in mind from a free expression point of view. From the human rights point of view, if we get access to quality content and access to good quality information, that's what's important.
It’s not important us which industries thrive, which live and which die. What matters is what happens to the information in the communication environment. That's the perspective outcome of it. Copyright, I think is one of the most breached regulatory systems in the world. The recent study which I can quote later on that showed 98 percent of bit torrent users are probably violating copyright. Bit torrent users have traced their IP addresses to the U.S. Department of Justice (the regulatory body), U.S. Homeland Security, the U.S. House of Representatives, the Dutch, the European Parliament, the Dutch Parliament, et cetera.
In other words, the lawmakers and law regulators themself on an individual basis are violating copyright regularly by using bit torrent applications to file share. So this is not teenagers in their bedrooms, these are our lawmakers that are ignoring the laws around copyright that exist. So when you have systemic law making on that scale, you've got a problem with the law. So I think the key issue is there a philosophical framework which enables you to come up with a satisfactory solution that can balance the interest of copy holders and those who wish to access content. I think there might be an answer in rethinking how we can conceptualize freedom of expression at that level.
I think the answer won't be found by rigidly enforcing copyright laws which are heavily disregarded. I think they are going to require some rethinking and reconceptualization. Personally, I have a question for discussion as to what the principles at this level ‑‑ that they've been drafted which is really flying at kind of 40 or 50,000 feet in the air really do solve some of the key problems because there's not much ‑‑ we can all agree with it.
The issue is not the high level principle. The issue is in the detail about what is a permitted restriction on copyright? What is the permitted access? Principles of this level really don't answer those key questions. So there's a whole bunch of issues there that we might want to come back to in the course of the conversation.
>> SARAH WYNN-WILLIAMS: So I work for a company that is less than 10 years old but in that time has amassed over a billion users. Each of which has become a content creator by virtue of their interaction on the platform. I think once you have a disruptive technology come along and get a following like that, you're fundamentally changing the eco system. So you've now got a billion people who are invested in content creation and in innovating with that content, sharing that content building, and using the connections that are possible through that platform for both freedom of expression but for content creation and content sharing.
I think that the industry and governments and a lot of stakeholders are still trying to work around given that rapid change. How to you manage that? What does that actually mean? I think a really good manifestation was ‑‑ well, a really interesting manifestation that was the surface of the debate in the U.S., where you had activation from the internet community, from internet users suddenly being ‑‑ suddenly being so invested in their content and the value that they saw in that, that they were engaged in a regulatory debate which had previously seemed very removed from your everyday person and internet users. I really hope we get the opportunity to explore some of those issues and try to understand what it means when you're bringing a billion plus people into an area that had previously been fairly industry specific conversation.
>> ARI JULIANO GEMA: Thank you, very much. As we know that copyright is the exclusive right for the creator to reproduce or to publish. The principle ‑‑ exclusive right is when someone copies another person ‑‑ another person's work, then they have to get permission from the other person, the related person.
That's why we're here, Creative Commons license, creative Commons the license, propose the license as an option ‑‑ another option for the people who want to use content. Who want to make content from the other content with the Creative Commons license so they can easily make ‑‑ creating content and sharing content and then to access the information as well. Thank you.
>> MODERATOR: Thank you, very much. Andres, you spoke at the beginning about the new definition of creators and yet you spend a lot of your time professionally thinking about not only defining that, but what are the cost imperatives, and how can that level of participation be expanded but what kind of guarantees need to be in place for a new economy. As someone who's studying this so closely, what do you think are the opportunities that can be garnered out of this really painful debate?
>> ANDRES GUADAMUZ: I like stories. So those one session in the morning, I already told a story. So I'm just going to tell a story. I need sort of a ‑‑ to answer your question and as an example of what I'm going to try to say that this new environment provides new opportunities. I have props about my story. Some years ago I'm an academic and as an academic, I wrote a book, you know, that's not surprising.
Academics write books all the time. We're supposed to. They don't sell that well which means that they generally are priced by the publishers out of the reach of normal people. My book is priced at $109 at the moment, 79 pounds or something like that. It's something that most people would not buy. It's expected. It's completely understood that this book isn't going to be read by a lot of people because it's boring or I don't know. The whole idea, whole premise of this system is predicated on selling very few books so we price them very high. I did not like that. I want to be read. I became an academic to have my ideas shared. So I did something. I convinced my publishers to publish the book under a Creative Commons license.
They accepted to my surprise. I explained to them, you know, people are going to be able to take a PDF and copy it and share it, and so I traveled around everywhere with this prop which is ‑‑ and whenever I'm talking to people and the topic of my book comes up, I take out the nice Russian doll and ‑‑ there's a nice poetic thing about having a book inside of a Russian doll. I don't know ‑‑ I give it to them. They can go and buy it. It's selling, apparently.
It's still selling and I'm trying to share it as much as I can. People are sharing it and it's in some websites and if you Google my name and you'll find the book. So I'm losing money here, but the reason why I wanted to tell this story is that, precisely today I received an e‑mail and I've been receiving some of these e‑mails during the last year, and since the book has been published, inviting me to go and speak to an event in Brussels, and I really liked your book and we read it.
And I'm guessing that they didn't buy it. I don't know. The idea is this: the more people that are sharing the book ‑‑ and I'm delighted when someone comes and tells me I read your book or someone tweeted me recently, oh, I read this paragraph from the book and it looks complete will unexpected. I wasn't expecting to read something about Kevin Bacon on the first paragraph that I read. It makes sense if you read the book.
What I'm trying to say is that losing money is not important. And this doesn't work for everyone. I'm not trying to say the music industry and movie industry should try to do this. But it works for me. It creates more value to actually have it shared online and people can Google it and download it for free and maybe some people will read it and like it.
>> MODERATOR: So Andres, you articulate very well the value of the book to a much broader a community. What does your own personal story tell you about your value? You started talking about the value of your book and then you ended by saying you got invited to something. Are you describing the beginnings of an alternative economy where the value of your content is different and that's more important to you or just as important?
>> ANDRES GUADAMUZ: Well, you know, I love to travel. I love being invited to things I have more stamps in my passport than ‑‑ I am getting jet lagged in interesting places, but this is part of the value of things that I hold dear. I will give away my book for free in exchange for those things.
Sometimes things of more value that will pay the rent will come up for a consultancy will appear, an invitation where someone will actually pay me to write something or ‑‑ all of these things start happening because if I go to places and I talk and I present and I ‑‑ it creates ‑‑ it creates value for me and it creates value for, I'm hoping, people who are interested in things that I have to say. It's a new idea that ‑‑ it can generate, as well, Money. We need money.
It's an alternative. You know? That's what it is. I don't think everyone is prepared to share their book for free but I highly recommend it.
>> MODERATOR: The concept behind Creative Commons was considered pretty impossible when it began. There was an enormous amount of feedback to the tiny community that began what was thought to be a project that would likely fail. It has become ‑‑ and its founders always communicated that they would create an entirely different system for dealing with copyright that would attack the question of what a new digital economy would look like and try to and make information more widely available.
How do you see your work going forward given that Andres agrees with you, there is an alternative way to look at it. There's a huge challenge out about what to do with the value of that content.
>> ARI JULIANO GEMA: The value of the content of Creative Commons content. Okay. Basically, the Creative Commons have a value like sharing to empower because we believe that any content that we share, we'll make another person have another value from the content and also can help their life ‑‑ economic life. As we know, some people say that Creative Commons license minimize the economic benefit. It's not correct because with Creative Commons license ‑‑ maybe you don't have ‑‑ you cannot get money like Andres said, but when using Creative Commons license your works, your content will be spread easily and then people will say ‑‑ and people in more easy to get your content and then you as a creator of the content will be famous. Nowadays, I think famous has been monetized. So I think it's simple that yes, sharing to empower is our value. Thank you.
>> MODERATOR: Sarah, you were discussing in your earlier comments that you have this massive number, an unprecedented number of creators in the world. You're essentially the largest aggregator of the largest loose community in the world. How are you seeing the value of that content and how are you ‑‑ is Facebook essentially discussing with its users and internally how that value can be protected or grown for the users who are basically coming onto Facebook?
>> SARAH WYNN-WILLIAMS: So I think when we talk about value, there's a very quick assumption to think of it in terms of monetization. I think one of the things about Facebook is that yes, that's a piece of it, but that's actually not within how the majority of users derive the value from Facebook. So for most people, it's the ability to communicate with friends and family. It's the ability to see photos of newborns on the other side of the world or family vacations.
So I think part of it might be useful for the panel to think about a little more is how do you expand the definition of value, because, you know, there's a lot of debate around content control but the number one question that Facebook users on our site have is, will your service remain free? So people are concerned because they have a lot of value and identity tied up in the platform. That's a free platform. There's a concern that there will be an attempt on our part to monetize that or charge. Our CEO has been very clear that Facebook is free. It will always be free.
I just think that we shouldn't immediately when we talk about value, assume that we're talking about monetization. Within that, I think there are very interesting ways that people are using the platform because what it's giving you is this very large audience and not just a passive audience. It's a collaborative innovative audience. So you're bringing together an eco-system of people who can offer value in different ways. So that can be creative value, that can be intellectual capital, that can be you know taking ‑‑ add developers who take a concept, refine it, bring it into a new concept. That can be taken an initiative that worked really well in small towns and transferring that to Indonesia. You're also creating value by globalizing and internationalizing a lot of intellectual capital that's there. I think we're still working through what that means and how people, you know, whether ‑‑ how they derive and how they define that value is still in evolution.
I think that's part of the reason it's useful to talk about those concepts. That's pointed out by other panelists, it's a baseline. But at least we're starting to broaden out and not just try and catch the conversation up to where the disruptive technologies have taken us.
>> MODERATOR: There's a relatively new discussion going on around the personal data movement and how that might be defined. Is this something that people are bringing to Facebook and how is that conversation evolving?
>> SARAH WYNN-WILLIAMS: Sure. Could you be more specific?
>> MODERATOR: There's actually a community that started in Silicon Valley that has been thinking through frameworks for the beginning point and end point of personal data, so perhaps not just what you share but your digital footprint When we talk about semantic data and the usage of different kinds of platforms and devices, that there's an enormous amount of data that's inside that that's being gathered by those who are best at doing it.
There's a question mark in this rapidly evolving environment about how that can be harnessed or what might happen to it given that it has an unknown value to an individual at this point, but it's of increasing value which isn't often qualified by many companies around the world.
>> SARAH WYNN-WILLIAMS: Sure. So I think the way we think about it in terms of the service that we provide is to structure that service around three commitments to our users which are transparency, accountability, and control. So we want to ensure that what our platform is doing, we're transparent about it and we're still innovating the ways that we do that, but we will communicate through blogs, we'll communicate through media. We'll communicate through a lot of different avenues because our product is ‑‑ it's an iterative platform. It's not static. Facebook today is not Facebook of 2007, and I think that's for the better for everyone. I think in terms of accountability, we have to recognize, and I hope ‑‑ I think there's a growing recognition among companies globally that they have to be accountable to their users. They have to maintain that relationship of trust. That's only going to exist where there is accountability where ‑‑ and there have been times when we've innovated products and then put our hand up and said, sorry moved too fast. I got your feedback, we're changing it.
So I think that's a piece of accountability. And then the third is control. I think that's really important. When you're using technology that you feel you have the ability to control the content that you share. We have again, innovated on that, so, you know, the product, Facebook, you know, a few years ago had fairly blunt tools in terms of who you could share with, and how you can control that information. Now, we've gotten to a place where every piece of content that you share on that platform, you select the audience. You exercise control over who that is shared, with and you decide the extent to which that's going to be shared.
>> MODERATOR: Thank you. Andrew, are there going to be winners and losers with this much disruption.
>> ANDREW PUDDEPHAT: There certainly will. I think we need to figure out who are the people who want to win, who do we need to win? I think for me, there is a real issue about how content is created and paid for. I take Sarah's point. I can blog and tweet and create content. I can't create Breaking Bad. Breaking Bad is a fantastic series, one of the best things I've seen on television. Shakespearean in scope. But for me to consume that, there had to be a very substantial investment in the directors, the set, the writers and actors. These people have to paid.
Someone has to get paid. The fact that the internet allows all of us to be creating content, does not mean we're suddenly going to be making Breaking Bad for nothing and giving it away. So you do need an economic model to be working here that incentivizes really creative content. Now, creative content can come in a number of ways. Shakespeare had no protection from copy right law. It came with 1713. He made no money from his plays other than being the part owner after of a theater. That was his business model. He made money come from the audience coming from the door. He borrowed his plots from every other source. He was a hopeless plagiarizer. He would be done on 18 copyright regulations if he was writing now because nothing he wrote was original.
He had a business model that was sustainable that enabled that kind of creation of content in that environment. We've got to think about this quite carefully because we need to find a business model that's appropriate for the digital age. I think rigidly enforcing a law that's being systemically broken by lawmakers is clearly not it. But it equally has to be something that recognizes there's a need to generate serious professional content and for people to be willing to pay and able to pay for that content, either directly or through a taxation on their platform companies who are making vast amounts of money by exchanging content or whatever. Just a correction, I mean, Facebook actually isn't free. I mean, in the internet if you're using it free, you are the product.
I mean, my data is being sold or I'm being marketed stuff. That's how Facebook makes its money. It's not a kind of philanthropic enterprise. It's a business. It just has a different business model to Fox which has a different business model. I think we need to look at balancing how we incentivizing really creative free expression and at the same time, protect the rights of people to access content as openly as possible. There are ‑‑ I think current regulations that are far too restrictive. The academic world which is predominantly publically funded, finds most of its output shielded behind hopelessly expensive academic books, published by specialist publishers. I see that as a theft from the public commons. My taxes are going into paying academics like Andres, and his books are far too expensive for me or anyone else to buy. That should change. That's just ridiculous. That's not a viable ‑‑ that's not a public interest or a viable business model. I think it's a complicated argument.
I think we have to recognize that creators have interests that we should respect. Distributors have interests that we should respect. We all have rights of access to content that should be respected. I think we have to rebalance the current regime. It's a complex issue. There will be fights over it and winners and losers. But in that, we have to recognize that there's a genuine crisis around the creation and sustaining of quality content if you look at what's happening to the media in most of the developed world where there's a good internet. Quality is declining because people won't pay for content. There's a genuine problem. Let's be honest and say there's that problem. I'm sure we've all broke copyright at some time in our lives.
>> MODERATOR: Right. So if you're talking about one of the oldest laws around content in the world. It's an 18th century legal construct. If we're looking to today and we're imagining or supposing that this is the most disruptive time yet for such a law, what would be examples of how we could more carefully think about how we might address that challenge? We're very good at articulating the problems, and we've become increasingly aware of what many of those are, but on the other hand, there's been a real struggle to find the solutions to those in a way that addresses not only the changing market but what it means for individuals everywhere.
>> ANDREW PUDDEPHAT: Well, let's look at examples where it has been successfully balanced ‑‑ antiviral drugs, which the pharmaceutical industry tried to insist were sold at high costs throughout world. There was a big battle with Indians and South Africans about producing generic antivirals at a much cheaper price. Eventually, the big pharma came around to that and accept there would be a high price in the developed work but cheaper in the less developed markets. So they allowed heavy discounting or local licensed reproduction at much lower costs. You're going to have to look at things like that where you recognize in developing markets people are not going to be able to afford content.
If they can't afford it, they'll take it unless you adjust your pricing mechanism to a point when it becomes affordable for an average citizen Indonesia to buy Breaking Bad, which at a western price would not be affordable. I think there's going to be a spectrum of policy globally. I think rather than try and fight a global battle by the content providers which I think they'll lose, they'll lose the big legislative battles because of proper opposition. The content providers need to moderate their view. Some of the platform companies need to think if people are using our platforms to show and exchange this content, should we make a contribution to funding people who provide content? You know, should we be offering if there's ‑‑ someone publishing an interesting article and there are hundreds of thousands of hits, should we be providing on some taxation on our own profit, a bit of income, to produce that content? Is there a business model for that? I think we need to be more imaginative then we've been now and recognize there's going to be some profound changes produced by this technology.
>> MODERATOR: David, I mentioned earlier about the critical value of high quality content that the studies now show and the absorption now shows that even with a massive proliferation of videos and things that are made, antidotally, easily at home by groups and communities, by crowds, that there's still an enormous appetite for really high quality product which takes time and resources to build.
So there is a defensive argument that's been described by private industry that specializes in this and there's a long history of how they've succeeded. Where is it going to end up when you move further into this debate and also beyond it in terms of where you think content creation is going to go.
>> DAVID FARES: Content creation or content distribution? Are you looking at the split between professional content and more user generated content? I'm not sure what aspect of the question you're asking to answer.
>> MODERATOR: In the first instance, it's actually about the creation of content. So Breaking Bad is not necessarily for 20th Century Fox, but I'm sure there are many others but, I mean, literally 20th Century Fox is involved in some of the biggest film making in the world ‑‑
>> DAVID FARES: Glee, modern family.
>> MODERATOR: Let's give him a plug. So we know that this is valuable. We also know that there's enormous challenges. There's a huge amount of piracy around this. We know in a place like Indonesia, I can probably buy Glee much more cheaply here then if I could go to downtown New York or to download it.
>> DAVID FARES: I think as I said at the outset, we have two overarching goals with content creators. Number one, is to create the compelling content that people want to consume. Number two is to distribute that content as broadly as we can across as many platforms as we can. We don't produce content as commercial producers of content to keep it from public consumption. It is about consuming content that people are willing to pay for and people want to therefore consume. So we will continue to do that. We will do it in a way that adapts with technology and I think that we've been very good at adapting to technology. I will just give you a few examples. First of all when the DVD first came out and people started ‑‑ DVD came out so did more mobile devise.
We originally started to provide a digital copy of DVD once we realize that people weren't just sitting at home and watching a DVD but wanted to have it on their I‑PAD. We gave them an additional option to watch it at home and to watch it when ‑‑ to be able to download that to their I‑Pad and watch it on the go.
As consumers moved more online, we all licensed or content to i‑tunes. People talk about the technology industry as driving innovation but we've actually licensed our content that actually makes those services relevant to the user. So it's a symbiotic relationship between us as the content producers that licenses the content to the more innovated platforms. In i‑tunes it allows for format shifting.
Basically when you've licensed the content you can watch it across different devices. Now we've moved to yet another model which is called ultraviolet. I don't know if you're all aware of it but it's a cloud based service whereby if you license particular content by a DVD or you license it from an online distributor, there is a key held up in the cloud. I'm not a technologist so I might not use all the right terms, but we have a technologist from our industry in the room. Correct me if I don't say this proper.
But there's a key that will indicate that you have purchased access to that content. Six family members can access to content across 12 devices. So we as an industry have had to keep up with the changing lifestyles that are our consumers are living. We've adapted our business models to do that. I think continued adaptation of our business models is key. I would like to come back to the point and Andrew said which I think is part of it, is when there's systemic disregard for a law, you have to reassess that law. Well, I think if you look back at history at least in my country, there's been different ways that we've handled some of these systemic disregarding of the law. First when you think of drinking and driving in the United States, there was widespread drinking and driving in the 60s, 70s, et cetera. Government realized, that that was a huge health issue, huge problem from a societal perspective.
Therefore, they changed the law to make it illegal but they also engaged in a huge educational campaign to inform people of the dangers and the economic and health risks that went along with drinking and driving. Same with seatbelts. They first passed laws that said, you must wear seatbelts. Widely ignored. But yet, again, governments decided we've got to change this behavior because it's something that society should not incur. Huge educational campaign to do it. Now, I think almost everybody at least in the United States and Europe, the first thing you do when you get in a car is you put on a seatbelt. So it's not just about ignoring what is important for whether it is safety, culture, society.
It's trying to define what's important and then defining a legal framework that protects those things that are important to society. I would argue that culture is incredibly important to society. We promote culture by producing content. We promote making sure that people are informed by the news that we produce, by the content that we produce. Ensuring an informed society is important to the overall country's overarching goal. So I think we need to define what's important and protect what is important. And develop legal frameworks and cooperative arrangements to promote those things that are important to society.
>> MODERATOR: So you're comparing a legal framework for privately produced content at scale with some of the largest behavior change campaigns in the world that were government funded. Are you also saying that it's ‑‑ it behooves and is incumbent upon every government to do a better job to help protect your industries with new laws? When we respect upon the drink and drive campaigns and when we look at the issue of seatbelts, in both cases, the greatest successes of both of those campaigns has been based on punitive measures related to the law.
One of the reasons why in the United States there's a greater number of car deaths is because there's a higher tolerance and different state laws around what is legal with alcohol consumption and driving. So we've seen that punitive measure work in other places. We know that these behavior change campaigns have been very elaborate. They continue to be studied and the behavioral economics of those have been rolled out over the course of decades. So what does this really mean if we're talking about creating new legal frameworks?
>> DAVID FARES: I don't think we ‑‑ perhaps there are some areas where we need new legal frameworks, but I think we need to promote behavioral change. That can largely be done through education. I think we need to ensure that responsibility is assumed by all actors across the value chain, so that they take their perspective roles to promote, not just the safety of their users but also the creation of a legitimate marketplace online. A few examples.
Let me talk about things that don't require legislative change right now. First of all, I think the research indicates that many users don't know the difference between a legitimate and illegitimate website. So we need to actually take specific measures to prevent illegitimate websites from looking legitimate. What are some of those measures that can be taken. Number one, you need to stop advertisements appearing on those sites, in particular from legitimate brands. The second thing you need to do is stop legitimate payment processors from facilitating financial transactions.
If I can pay for content on a site with my master card, as a user I would assume that that's a legitimate website, right? So I think those are some things that can be done and are actual being done cooperatively across the industry sectors. We have self-regulatory regime being developed with the advertising industry and with the payment processors. I also think that there is responsibility for the internet access providers. I think that there is a broad framework in place in Europe where we can obtain injunctions against the intermediaries ‑‑ there are no fault intermediary injunctions, whereby they block access to sites ‑‑ that offshore sites that are providing infringing content to subscribers in their country. This has actually been a very cooperative arrangement with the ISPs in the UK and across Europe. It's a no fault process as I said.
So we're not arguing that the intermediaries are liable. But since they're the best places to stop the infringement, we get an injunction. They get an injunction. They work with us. They don't impose the injunctions, and they actually block access to the site, and there hasn't been any problem. What we've seen is traffic to the sites has dropped significantly, I think, by some measures over 80 percent. So I think there are things that we can do together to legitimize the marketplace.
When we talk to a lot of our online distributors and we ask them what barriers they're confronting, one of the first things they say is piracy. How can I compete against a website that is actually not paying licensing fees when I'm paying licensing fees to content producers? I can't do that. I can't compete with that. So even the innovative online platforms identify privacy as a big problem. We need to work together to educate users between legitimate and illegitimate and the value of copyright. I'm going on and on.
Tell me to stop whenever. When people think about film studios, they often think about the wealthy stars, but you know, behind those stars, is a carpenter that has built the set. There is the sound guy who is, you know, making sure that the sound is right. The hairdressers. There are a whole host of people whose livings are based on the production of our movies. It's copyright that allows us to be able to pay those people to do their jobs and to earn a fair wage.
MODERATOR: Shinto Nugroho, YouTube gets requests everyday by organizations like David to be involved in takedowns to ensure that copyright is observed and yet Google prides itself on being the largest, most innovative spaces for the communication of all kinds of content. There's a vigorous debate about whether this is moving into the new economy and it needs to be disruptive and some of this is okay. And how to protect the more traditional producers who are looking for new ways to protect that content.
>> SHINTO NUGROHO: Thank you. That will always be a very interesting debate. At Google we have the Google content ID Right now, I think 21st Century Fox is also part of the license holders that are basically uploaded their images and their data bank to be part of the Google content ID. It's not perfect which is why ‑‑ it's not perfect. Right now, I think we have like some 50 million images and adding more, which is basically also coming from those license holders as well as the usage generated content. It's not perfect. That's why we have the other mechanism. We have the flagging system as a trend. The takedown system. We've been working very well with the music and film industry to help them protect their copyrights.
But what I would like to also highlight here is not just that aspect but also the aspect that you were mentioning in your previous questions which is the user generated content. The platform like YouTube has enabled content creators that otherwise would not have had the opportunity because they don't have the skill or they don't have the capital that the people at Breaking Bad were able to have. They don't have the skill set. They don't have the access to or the connections that people making Glee have. I like stories as well.
So I will be taking some stories for example from Indonesia. There are a number of Indonesia content creators but they're doing it because they like it. It's free. It's giving the opportunity for people to just try and fail. I think it's a really good attitude. You know, it wouldn't ‑‑ it wouldn't get recognized if it has to go through all the distribution channels or the traditional distribution channel that exists. For example, on the YouTube channel, which is, you know, you can create it very easily. It's free and you can upload, you know, whatever you want as long as you're not basically taking over the copyrights that others have.
There's a Saturday Night with Mico [phonetic] which is basically a stand‑up comedy and a series of sketches which no TV station would pick it up but the audience loves it. Because the audience picks it up and loves it then, then the mainstream media start taking a look at it. These are also content creators that need to be paid attention, especially in this era in which it's very democratic and it's provided a lot of equality to others as well. And then another thing ‑‑ this is also happening in Facebook. A lots of people who use Facebook are actually using Facebook for online shopping or online shops.
Now, they still use Facebook but they put what they sell on YouTube. This actually gives the small and medium enterprises a possibility to do for app for their own ‑‑ without having to go through advertising agency, without having to make their own advertisement which would cost enormously and probably would bankrupt them. Another example is some small handy craft furniture shop and maker of Yokatta which exports are now going global. They have a website. They put it on, you know, Google maps as well as they show their products on YouTube and then people can start ordering. This also opened another set of question and another set of challenges.
Online payment, for example, in the number of countries, the regulatory system and the regulatory framework is actually not ready to cope and to accept and to adapt this new business model. I think that's some of challenges that we still need to work together. Looking, I'm remembering another small or medium enterprises that actually are focusing on preservation of another Indonesian heritage by putting it online. If it wasn't because of the digital age, it wouldn't be put online so you would only see the type of thing that you see. The flexible regime based on some work that's been done by the Creative Commons allows some modification and some expansions of the traditional motives while preserving the heritage itself.
So these are the new phenomenons that we need to take into place, and I think there's a huge rooms that need to be taken by either the industry, the user, the consumer, to continue educating the user for us in terms of consumer protection, as well as to inform the regulator of the changes. By the end of the day, it's very difficult for this new growth to continue growing if the regulator is so way behind. In different country, this is what happened. The first thing that any regulator or anybody ‑‑ it's very much human nature when you don't know things, you stay away from it.
If you are a regulator and you don't know you're not comfortable, you do not want to be blamed, then you ban things. The moment you start banning things, you stop progress. So finding the balance of continued cultivating progress, at the same time, continue to protecting the copyrights is a delicate balance that still needs to be worked out, especially in the underdeveloped countries.
>> MODERATOR: Thank you. Sarah, are we missing anything when we're talking about and thinking about rewarding creator? You described some of the trends early on that you're seeing that were unexpected in the way that so much of this technology changed and the value of it is unexpected. What's coming down the line? What are you seeing that's the newest of this and where is it going to progress? Is there anything to say about where it might head?
>> SARAH WYNN-WILLIAMS: Sure. I mean, it's always speculative and particularly when you're in an area like this that just evolves at such a fast rate. I think the points that Andrew was making before about the need for the system to sort of evolve. I think we're going to see that a lot more because you're having ‑‑ I think you're having a whole range of people accessing an audience it never did. Part of the challenge, I think, is working through how you reward that. I don't think we're there. I don't think ‑‑ there are a couple of interesting things. One of the questions, one of the real problems is access. You still got a very divided internet, so we're talking about a technology which isn't available to around 5 billion people who don't have sort of access.
I think that's going to be a significant change. You're going to see a lot more people having access to the internet in the next five to 10 years. Once you've got a truly global internet, that's going to present a whole lot of challenges as well. That's going to further democratize the issues of access and markets because you've got a very western, I think, dominated initially technology. I think Andrew's point about winners and losers will emerge but I think that it's really hard to pick ‑‑ a lot of the start-ups that people rely on now to whatever Facebook, whatever, people thought of that as 120 characters, how is that going to be a business model? How are people going to make money with that.
How is that going to revolutionize media and yet it has. So I certainly don't feel expert enough to sort of look into the crystal ball and tell you to buy Twitter stocks but I think part of it is being open‑minded and having two trends. One is the shift to mobile and making sure that people are conscious of that and they're conscious that our connection is not desktop technology anymore. And then the shift away from an internet of 2 billion people to hopefully an internet that incorporates everyone.
>> MODERATOR: Thank you. I what does Creative Commons in Indonesia have to teach the rest of the world as one of the countries where you're seeing huge changes to content consumption and sharing as people more rapidly get online.
>> ARI JULIANO GEMA: Okay. Basically we're trying to introduce Creative Commons license in Asia by introducing copyright system because as we know, copyright is a very ‑‑ it's complicated issue in Indonesia. They don't ‑‑ most of the people don't understand about what copyright is, what is prohibited and what is permitted. So we started with the giving knowledge of what copyright is and then after that, and we introduced Creative Commons license. When ‑‑ before we introduced Creative Commons license, they always ‑‑ they create something but they don't care and understand this is prohibited or not to take someone works but when they know about creative comment license, they are more aware about the content who has a, license, Creative Commons license or not, and they also know about the exemption and limitation in the copyright so they have another option to use the content to create content and access all information. Thank you.
>> MODERATOR: Thank you. We have a little bit of time for questions and comments from all of you. So who are our first takers? Sisco Daviano.
>> SISCO DAVIANO: My question is for Facebook, because we've been discussing about this previously in Jarkata, our minister said it's really difficult to tax the big players in Indonesia therefore the Indonesian content are really ‑‑ content producer was kind of shallow in quality because even though there's a lot of people are actually creating content, it couldn't scale because they don't have the capital to actually move it forward. The first thing that came to the minister's mind is actually taxing but how? It is hosted somewhere else, not in Indonesia. It has different regulations. She is open to any suggestions on how the big players could actually benefit in Indonesia. One of the participants was actually saying that the things that the big players consume in Indonesia that is actually more important is that they have data.
In order to make decisions they usually need data. The one that they don't have because the big players do, they have it there. So they have to ask like what ‑‑ I just thought to myself because Facebook is actually using the data for something else, is it possible if the taxation is about data, that we tax you with data for Indonesia as a country?
>> SARAH WYNN-WILLIAMS: So that's an issue that's playing out in Indonesia but also globally. I know one of the suggestions that the Indonesian government is considering is around having data localized within Indonesia precisely for the economic reasons that you stipulated. I think there are a number of challenges for that. Firstly, companies like Facebook, Google, others, don't segment data on a national basis. So we don't have a data center for Swedish citizens. We don't have a data center for UK citizens. The data is intermingled and not based on national jurisdictions. So in looking at passing legislation like that it creates a real challenge because the technology is not yet there to where we could say here is our Indonesian data center for everyone in this data territory.
You're also potentially instead of enabling and sort of innovative culture, it's going to end up in a situation where that creates a lot of cost and so because you've got a different technical structure in specific jurisdictions, you simply won't roll out some of the best products that you have or you're going to have to pass on costs in other ways. So the potential there is also, I know, the instinct and intent is to try to enable and get more money into the system, but potentially you risk adding costs to users. So I think it's an area where the models are going to continue to evolve. We've got to make sure that they do it in a way that is cognizant of the technical challenges.
>> MODERATOR: I might ask Shinto Nugroho to also respond for a lead with policy with Google.
>> SHINTO NUGROHO: All right. I think there's a very interesting question and statement. Something that we have been discussing with the government as well. The way we should look at it is that actually looking at it, you know, end to end. What does the Indonesian government want? My understanding is that with the many conversations that I have had with the government is, first of all, they want the data localizations because a number of reasons, consumer protection is one of the reasons. But we need to look at it in terms of facts. In terms of taxation.
Is taxing the data is actually more beneficial for Indonesia or actually the government should create a regulatory framework that would be so robust and so innovating in helping content creators because we have a lot of Indonesian content creators. What happens if you want them to end ‑‑ and you know like a growing e‑commerce business as well. The Indonesian government always said that we do not want to be on the market. We want to be a player. In order for Indonesia to be a player, Indonesia needs to continue working to incentive of having more local content creator which is ‑‑ I'm not sure about Facebook but Google is doing it. Microsoft is doing it. Some other technology companies are also doing it on the ground. Helping Indonesia to get on Google play.
Right now they can get on Google play but when it comes to paid apps, they can't because central Banks do not allow it. So who's ‑‑ but the moment you can actually download the Google apps, the paid Google apps from Google pay, that means that Indonesia content creator can get money and Indonesian government can get tax out of it. Which one do we want? That is a source of revenue that's ‑‑ because it's human capacity. It would never ‑‑ it's not like coal which would be, you know, depleted at some point. We've got numbers of SMEs.
Some of the examples that I use that was able to grow global but then when they want to ship their stuff, they're unable to do so because of the logistical problem. They're also ‑‑ whereas if they can send their stuff, it's very different in the Indonesia government. So there are a numbers of issues that need to be looked at really strategically and carefully in order for Indonesian government and the whole eco system to be able to benefit the best from the digital age.
>> MODERATOR: Andres, at the risk of extending a conversation that includes the word taxation in it, a quarter to four in the afternoon, are there new possibilities and trends in this area for tackling these problems?
>> ANDRES GUADAMUZ: Yes. I was actually going to turn the table and maybe, why doesn't the Indonesia government want to tax ‑‑ what does it want to tax in this area? I'm really curious because I hear the T word and ‑‑
>> SHINTO NUGROHO: It's the ministry for creative industry. The ministry would like the creative people content and not only the business because I'm from Indonesia language Wikipedia. That's not business. A lot of things but the ministry thinks it needs infrastructure to actually help the content creators to scale. Right now, even the good one couldn't scale, it couldn't move on. Like she said, there's a Google play, there's a Google this and Google that, it's still using a Google streamline. So what about our own. Agreed that if we're taking the approach of China, it means that we shut down everything in order to have it all localize. We don't want that because even in Facebook where people are selling ‑‑ not selling but people have profile, they are selling stuff so it becomes economically beneficial too. At the same time, the ministry thinks it should have a capital and although not entirely agreed that it should be the form of tax because the minute that it comes to the taxation department, it won't go out.
So she was thinking like what other things that can be done that we should do it. Since we are being ‑‑ how do you call it. We're being put as consumers only, we want to, you know, switch it. So I think it's really cool way to think. Even though I'm from the anarchy side, I believe that she has a point.
>> MODERATOR: Do we have any more questions or comments?
>> BALO ANDERES: Thank you, very much. Thank you very much for the very thoughtful comments that I heard and you touch on many different issues. I would like to stress one remark. One comment and two small questions. The remark is although it's nothing knew and I know it's an underlying principle crosscutting all intervention, it was never mentioned that there was a difference between illegal and free. I mean, free does not equal illegal. In fact, free is compatible with business models, with legal business models while illegal is not compatible with business. We can see a clear trends toward this kind of legal offer that in developed markets are growing.
The media industry is growing in terms of numbers. Okay. It's growing in terms of numbers. So that's one point. In terms of question, I'm very much agree with the fact that we need to find a balanced solution to keep rewarding and creativity, the profession creativity. My question is how do you find ‑ how do you reach the balanced solution that will keep rewarding economically the professional re‑creators? Do you believe leave it to the industry model?
Do you leave it to technological development to new social networks development. Is that the solution or do we need a little bit of intervention from public power. That's an open question. I'm not assuming the answer. On a second question, let me play what I see partially. Partially, a missing element, in the panel. It is the first chain ‑‑ it is the first ring of the chain. The creators, the authors. I know we have the creators or authors. We have the industry but you know very well, David, that you don't always have the same interest. I wouldn't put the hairdresser with all due respect at the same level of film creator or film director or creators in the music industry. They play a different role and they possibly deserve a different treatment. That was the original objective of copyright.
I think we're missing at least the mention of those people that ‑‑ some are essential to kick start the creation process. So nowadays we're facing a situation where the numbers in the industry is growing. At the same time if you look at royalties collected by societies, the weight of digital revenue did not reach 5 percent. If you compare those analysis and those numbers it's pretty striking. Do you see this as a problem? Do you see something that creates a general problem to be sold or it will be passed through new ways, new channels at which the creators will receive the economic remuneration they need to make a living.
>> MODERATOR: So as we talk about the democratization of the ability to create and share content, the truth is that the economic scale get nowhere near the traditional privately created content that has a higher value and traditional sale value. Is that what you're saying?
>> DAVID FARES: if I'm not mistaken, I'm sure that you're thinking how do you know that the creator is not the producer of the professional content. How do we ensure sufficient remuneration as we move from the more traditional business models to online?
>> BALO ANDERES: We ‑‑ if you want clear ‑‑ we have industries, professional producers but on the side and within the industry, you have professional creators. If you look to the revenue stream and how the industry works, they do not have always the same interests. Several times they have conflicting interests. We need to somehow highlight those differences in how you defend an economic viability of their activity.
>> MODERATOR: Andres, in your work with Global Partners, talk to people around the world about how to think about legal policy and frameworks to address issues like this. What kind of advice can be given or can those creators and others prepare for what's happening?
>> ANDRES GUADAMUZ: I don't think there's going to be a simple answer. If you protect the creator, the important person who's the creator, not the industry, sometimes the creator needs the industry but actually the online worlds can mean the creator can bypass the industry. There's a group in the UK called London Grammar, a trio, with very simple instruments. They've been producing music online and putting it out on YouTube for about nine months free. They issued an album. It went to number two in the charts. They made a lot of money even though a lot of the songs on the album have actually been available online for sometime. It's a very interesting example of how the internet can be used to market and create an audience awareness. Now, you can't do that for Breaking Bad. Breaking Bad is a serious major investment in production.
So these things aren't comparable. I think that music is a in a place where film is not yet. Maybe film will one day mutate there but I doubt it. The way I look at is not a property right versus free expression which is the classic legal framework but two forms of free expression. Incentivizing the expression of the creator versus protecting the public interest and right of access to information and free expression for the user ‑‑ that would require getting into more legal language here. You have property right versus free expression then you apply a certain standard and restriction on content being available have to be necessary in democratic society, proportionate, governed by law and so on. There's a formula. If you see it as two competing free expression rights then essentially you have a spectrum here where in different environments the spectrum will move much more toward the protection of the creator and the person providing the access.
That will defend very much on the practical reality of the industry or of the distribution mechanism and the content themselves. It's a messier thing. It's a new approach being looked at by an Argentinian law, a faculty at Palermo University, and a Canadian organization. They're exploring this now. I think they're coming up with what I would say a very interesting and innovating approach to rethinking this kind of balance on copyright. So I think there's not a simple answer to your question because I think the world is moving at a very complex manner and the disruption of the internet is impacting very differently on different kinds of creative industries.
>> DAVID FARES: So I'm going to bridge the two questions into a single answer. As Sarah mentions, if there's a cost imposed on Facebook, they're going to have to either figure out a way to monetize it so that they can recoup that cost through some sort of payment or they're going to have to pass it on in some way to another party. Well, when we produce a show like Glee or Modern Family, not Breaking Bad, you know, it costs us millions and millions of dollars. If you look at some of these new and innovative remuneration regimes, it's very unlikely that they would be able to produce that compelling content. I think Andrew recognizes that shows like Breaking Bad are going to be different then some of the newer forms of content that are being produced online.
Now, how do we go about insuring the creator, perhaps is remunerated. You have to look at different content sectors differently. For example, in the film industry, the rights are actually concentrated in the producer. So we basically have to engage in a contractual negotiation with the performers, with the creators, et cetera, and make sure that they're getting what they perceive is a fair share of the pie. I don't know if you do remember this, but a few years back the studios were engaged with very difficult negotiations with the screen actors guild and were basically going to go on strike because they didn't feel they were getting a fair share of the digital revenues. We went to the table and came up with a commercial agreement between us and the screen actors guild. A lot of this is handled through commercial negotiation between the producers of the content, creators, and the screen actors, et cetera. You have to look at different content sectors differently.
I truly believe you have to differentiate between nonprofessional content and user generated content and very expensive professional content where we actually need to develop a business model that allows us to recoup, the money from what is a very risky investments. As I said, seven out of 10 films don't make money. An advertising base business model is not going to work for us when we're spending so much money on producing content. I think if you want to look at one industry that has been impacted by attempting to engage in an ad based business model, all you have to do is look at the newspaper industry in the developed world.
A lot of that has to do with their initial attempts of trying, as they went from the more traditional distribution of newspapers from physical world, to digital, they attempted to move only to an advertising business model and it just didn't work. It's expensive to produce news. You have journalists, you have editors, you have the whole value chain in the production of a newspaper. Ad business models just do not reward the entire creative value chain sufficiently for professional content.
>> MODERATOR: Do you have another question or comments?
>> Jeremy Blackman: Thank you. I'm Jeremy Blackman from Australia. I wanted to come back to a point you made earlier about behavior change programs referring back to road safety wearing of seatbelts and the kind of regulations that support ‑‑ or the laws that support that and encourage people to follow that and I'm kind of relating it back to copyright in the same way. I think the work we've done with behavior change in terms of online safety and also kind of being responsible with online ethics including copyright as well.
What we've learned ‑‑ and actually one of our programs is based on road safety programs in Australia including sun smart and the quit smoking campaigns. Is that the change in behaviors has to stem from an actual fundamental attitude change so that the actual user or the consumer of content has to feel like they're making that choice based on their own attitude. From those of you who have seen the movie Inception, it's the same idea. It can't be top down based. So to relate it back to seatbelts, they're making a choice to wear seatbelts because they believe that without wearing them, it endangers their life. We do a lot of work with kids actually and their attitudes toward content and copyright and I can broadly say that a lot of the kids that we've had on panels and workshops really do openly confess to entitlement mentality of downloading content, even though they're not kind of money earners in the same way that adults are.
They are moving into adulthood, not really respecting the kind of the resources that have gone into making this professional content even though they are, of course, themselves content creators.
>> ANDRES GUADAMUZ: I completely agree. I'm just using my own stories today. It's the only way of keeping myself awake. I pirated ‑‑ I can say or I downloaded illegally the first two ‑‑ yeah I'm saying ‑‑ the first two seasons of Breaking Bad to give an example. Also, I'm incredibly huge fan of Game of Thrones which I as well, downloaded illegally. Now, I opened an account for Netflix specifically to pay because I wanted more Breaking Bad. Just because it was being offered. It is fantastic. It felt really good. I can pay and I can pay my way. I don't have to spend hours and I was in Costa Rica at the time and download speeds in Costa Rica were horrible, and my Netflix was going really well.
So I made that change. For Game of Thrones, I bought the books, I downloaded illegally but I kept buying as soon as they're available, the DVDs, even if I don't watch them. I actually don't even put them in the player. I am buying them because I want more Game of Thrones. I'm obsessed. This is a conscious decision of ‑‑ I completely agree that the change has to come from the consumer. The consumer makes the decision. I want to reward the things that I like. So I go out and buy them. But, you know, illegal downloading takes place from time to time as well from those different consumers. Will I be prosecuted for this?
>> MODERATOR: We have time for one last question or comment. Okay. all right. We're just about on 4:00 o'clock. I just want to say thank you to all of our panelists here for just a broad and wide ranging discussion about such a complex set of issues and to thank you all for coming here this afternoon to share with us. Thanks a lot.