Mapping the digital future

All digital highways led to Rome last January, as hundreds of government officials, policy experts and companies descended on the Italian capital for a conference on the future of the digital economy. Jointly hosted by the OECD and the Italian government, the meeting marked a turning point in the digital content debate as several long-simmering concerns emerged as mainstream issues.

The discussion pointed to two competing approaches for the creation and distribution of digital content in the Internet era. One approach, advocated by conventional content companies such as the movie and music industries, as well as by US government officials, emphasised the need for digital rights management (DRM) technologies to “lock down” content. They argued that DRM allows them to set specific limitations on the use of content, thereby facilitating commercial models such as individual downloads or full subscription services.

DRM supporters assured delegates that their models were gaining marketplace acceptance as the content owners claimed that they stand ready to license their content for distribution on multiple platforms such as the Internet and wireless devices.

While the emphasis on digital rights management was not unexpected, the alternative approach, which focused on user-generated content, took many delegates by surprise. Described as “amateur” content, the conference featured numerous presentations on how the combination of easy-to-use technologies and widespread Internet access has unleashed an unprecedented array of new creativity.

These included discussions on Creative Commons, a non-profit organisation whose alternative licensing system has enabled individuals to make more than 60 million works available to the Internet community; Flickr, the Canadian photo sharing site that now features millions of digital photographs; and the BBC Creative Archive, which allows UK residents to re-use original content from that country’s public broadcaster.

The popularity of web logs, or blogs, also attracted considerable interest. Jason Sifry, the founder and CEO of Technorati, a blog search engine, reported that his company now tracks more than 27 million blogs, with 75,000 new blogs created every day. Moreover, the popularity of blogs is no longer a strictly North American phenomenon; in January 2006 Technorati tracked more blog postings written in Japanese than in English. Blogs are also booming in Europe, notably in France.

Notwithstanding the support for the DRM and user-generated approaches, both face threats that could hamper their development.

DRM supporters seemed ready to acknowledge that the technology has created consumer concerns. Nevertheless, there was little discussion of the privacy and security problems that were typified by a controversy last year after Sony distributed CDs that featured DRM and caused security vulnerabilities in individual personal computers. Sony eventually issued a recall on the affected CDs and agreed to a class action settlement in the US that provides consumers with new privacy and security protection. Many speakers admitted that the lack of compatibility has made it difficult for consumers to transfer lawfully acquired content from one device to another. One often cited example is the Napster music subscription service, which has been hurt by the inability to transfer songs to an Apple iPod.

Rather than addressing the problem by reducing their reliance on DRM, however, the content owners lay the blame on the consumer electronics makers. The aim should be “content neutrality” and the DRM backers would be looking to legislators to require the electronics makers to reconfigure their devices to allow the locked content to work on all devices.

While the content owners battle the electronics makers over DRM solutions, the growth of user-generated content faces two threats. One threat comes from the limitations of DRM-enabled content, which can severely limit or prohibit legal modification of content. For instance, public domain material that was locked behind a DRM would become inaccessible to many users. Or take the case of someone who wants to take a small clip from a DVD purchased abroad. Even if the clip is covered by fair use rules at home, the user might not be able to get at it, since DRM would limit the ability even to play the DVD. These concerns were raised recently at a UK parliamentary committee hearing on DRM by well-respected organisations such as the British Library.

User-generated content also faces the threat of the two-tiered Internet, which has attracted increasing attention in recent months. This concerns plans by Internet service providers (ISP) to restrict subscriber access to potentially band width-heavy (and therefore costly) software applications such as BitTorrent, which is widely used to distribute usergenerated content, such as independent films or open-source software.

The two-tier Internet could also hamper the growth of tools used to locate user-generated content, since ISPs such as BellSouth, Verizon and Telus have all raised the prospect of charging websites and services for the right to deliver content to their subscribers. While established major websites may pay such tolls, many smaller sites could be forced out of business by these demands.

Could the Internet’s age of innocence soon be smothered by more “e-mature” businesses? Certainly, the message from the conference about the future of the digital economy was mixed. The Internet has sparked a remarkable outpouring of new creativity and provided all kinds of conventional content owners with exciting new marketplace opportunities. However, legislators may have to intervene to ensure that consumers are protected from onerous digital rights management restrictions and that ISPs are prevented from using their positions as Internet gatekeepers to stifle innovation.

*Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at or online at where another version of this article also appears.

Future Digital Economy: Digital Content Creation, Distribution and Access, conference jointly organised by the OECD and the Italian Ministry for Innovation and Technologies, Istituto San Michele, Rome, Italy, 30-31 January 2006.



©OECD Observer No 254, March 2006

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