 Hi, my name is Miriam Jakob. I currently work for the Dutch Embassy, but my question is not related to that. I did a master in business in Amsterdam and my thesis was actually about music business models, and I'm absolutely thrilled that you spent a large part of your talk about music business models, because a big part is keeping online business models sustainable. And the big problem now, for example, Spotify, is that they couldn't uphold their freemium models because so many subscribers were choosing the freemium models rather than the paid models. And I was wondering how can copyright offer flexibility, as you were saying, to issues like that. We might take these one at a time because they deserve particular attention. Sure. I mean, I think there are some very interesting questions there, many of which frankly are just straightforward business questions. It's not so much copyright law that can provide the answer as it is ongoing appreciation by the music industry that offering new legitimate alternatives are the key to transitioning to a new sort of digital economy. I was struck, I just saw a statistic a few weeks ago, that Spotify in Sweden, among those under the age of 34, 56% of Swedes under the age of 34 use Spotify, which strikes me as a shockingly large number for a company that's relatively young. And sure, it's a Swedish company originally, but it shows, I think, that many of those 56% of those under 34, you can probably bet they were using something else before they were using Spotify. And it probably was not an authorized service that they were using before Spotify. So the success in moving customers from unauthorized alternatives to legitimate offers, that's the key. In fact, I think it's quite clear to me at any rate that those kinds of initiatives will pay far larger dividends than increasing focus on enforcement. We've had enforcement for a long time. Enforcement is not going to get 56% of those under the age of 34 to change their behavior. No opportunities like Spotify will. And so from a copyright law point of view, I think the critical aspect to that is fixing the complexity of licensing. This is the nexus of a bunch of different problems. We have, first of all, an orphan works difficulty. What if you can't find the copyright owner? This is true whether you're talking about music or books or even films. There's an enormous amount of material that is incredibly difficult to obtain licenses for at any price, no matter how hard you look. Because there's no one who knows that they are the owner, chain of title, songs have been left behind in the annals of history. Just for my own personal, you know, I was a teenager in the 1980s. And just going back and looking for some of those one hit wonders that I remember so well from a teenager, they're not on iTunes, right? They're not on Spotify. They're not in any of these services. It's not because there's not demand. It's because literally no one can figure out what happened to that little record label that had the one hit and then went bankrupt and maybe the rights were reverted to the performer, maybe not. You know, the mysteries make it very, very difficult. I think I heard an Apple lawyer once say that it cost them an average of $2,000 a track to license each track, just as kind of an average administrative lawyer overhead costs. And so it creates a situation where, well, for some tracks, it's just not going to be worth it if you don't anticipate making back your $2,000. So I think there there is some work that copyright law can do. We need a solution for orphan works. I know the European Commission is considering this issue. The European Commission has thus far really focused, I think, its attentions on archival, educational, nonprofit uses, which I think are incredibly important. But I don't think we should stop there. I think we should consider how do we unlock this material because everyone is made better off. If the works are available, their popularity, you know, that's really the key. And so I think there's work copyright law can do. And frankly, I think some of the experiments that folks have talked about, whether it be in the Nordic countries or again with the Commission or their academics in the United States, these are all ideas that deserve more thought and attention. The other area where copyright law can help is the splintering of rights, which even if you know roughly who the rights holders are, figuring out which collecting society has which rights that you need to clear and which territories is itself an enormous burden. And again, something that Europe could certainly help with in the sense that if we are trying to get ourselves to a common market where you can in fact license Europe wide in a way that you can figure out who the rights holder is, have they withdrawn from their local collecting society, have they moved their rights to a different collecting society. All of these kinds of questions stand in the way of models like Spotify that I think are really crucial. So I do think copyright law has a role to play to kind of break through those transaction costs. But at the end of the day, the rights holders need to understand that these new authorized offerings are the key. They need to get out ahead of consumer demand. And for that, I'm afraid copyright law isn't going to have a magic solution. I can give you some good links to 1980s Dublin music if later on we're going to talk about it. Are they authorized links? They're good. Chuck, there are just some of them. Hello, TJ McIntyre from University College of Dublin. I noticed you mentioned DRM and anti-circumvention in the context of the iPhone as being an obstacle. As you know, in Europe we have a similar obstacle in the area of related rights by virtue of the Suei generous right introduced by the database directive. That's not something you have to contend with in the US. And I was wondering if you had a view. Excuse me. I was wondering if you had a view as to whether or not the database directive was acting to restrict innovation in Europe as compared with the United States. Well, that's a good question. I actually, that's not an area I've done an enormous amount of research. I'm aware of research that others have done to suggest that in fact the database right has not been terribly successful in spurring new investment in activity in Europe as compared to the United States. I believe there's been some empirical research that shows that in fact there's been more investment in innovation in database related products in the US than in Europe after the introduction of the right. So I think that's obviously research that deserves attention. But I can't really speak to whether or not there have been real specific barriers. Certainly it's something we at Google think about all the time. I think some recent decisions that have come down about the database right have been helpful in clarifying its scope and perhaps limiting its scope in such a way that some of those problems may have been diffused somewhat. But I think it's a good example of taking a look at this. You did this here. Is it actually working? I think too often in copyright and frankly this is true for intellectual property more generally, but too often in copyright policymakers don't take the time to look back at decisions that were made and ask, did it work? Was it effective? And I think that it's always a worthwhile question to ask. Up here, Si, for calling you in the front room to the back room, but later here in the third room. Thanks very much. Hi, Rebecca O'Kelly from the Campus Gerald Solicitors. Just to go slightly back on the last point and not to get too much down the music side of things, but just in terms of kind of rights holders maybe expanding their openness to new technology and the Hargreaves reports the copyright license exchange. Do you think that that will open, if that was to be adopted, do you think it would open things up, or do you think it would more segregate jurisdictions even further? I mean, not just in terms of music, but you were talking about the European Library Archive and that kind of thing. So, I mean, obviously it's greater than just music, but do you think it will assist or just create slightly more barriers for rights holders to use? Well, I think it's hard to imagine how having a good registry of sort of a transparent and accessible registry of who owns what, how that would impede. I can think of many ways that it would benefit innovators and others, both rights holders and innovators. I don't think licensing will solve all of our problems. As I say, there will always be orphan works issues. There will always be some issues where we'll need additional solutions, but licensing can solve a lot of our problems. And so Google has always been a very strong supporter of any measure that increases transparency about who owns what in such a way that there is kind of open access so that those who want to license rights know who to approach. And it seems to me there is, whether you're talking from the innovator and user side or whether you're talking from the rights holders, the creator side, the transparency about that is a win-win. And so we have supported a number of initiatives to try to develop things like that. We are certainly open to hearing more specific ideas from the Hargreaves report. Of course, Hargreaves, that recommendation had a number of other things that we're also very supportive of. But I think the idea of a registry so that we know who owns what, absolutely critical. Okay. We need to hear in the front. Hi. I'm Fred Jean Kelly from Mason Hayes. I speak in London at the LES conference. One of the things I remember you speaking about there is the opportunity that YouTube gives to people to monetize content that is there and that quite a number of companies have taken on that opportunity. And I suppose the big story of the moment here in Europe is newspapers, what's going on in the UK. And I think there's an example out there. I think they're for the music industry. Just before I came in here, I was just checking something on Twitter and someone had tweeted something like, I'm not connected to the Guardian newspaper in any way and I don't act for them. I just like them. But someone had said, I really like what they've been doing in all of this. How can I help? And someone had responded, take out a subscription. They're licensing their content. And as an IP lawyer, for someone to see that, your heart almost jumps. It's like someone saying, reward them for what they've created. And they have a very liberal, I would say, paywall policy compared to a lot of newspapers. Plenty of their content is available before you get to the paywall part. I just think there's an interesting example there that it gives a real opportunity to engage in a very meaningful way with your customers and to make money from them. Not just giving it away, but to make money. So it's not a question so much as a comment that a lot of industries are very poor at. Some of the newspapers, I think, have got it very badly wrong. Some of the biggest newspapers in the world have got it wrong. But where you get it right, there you have people who are 17 or 18 years of age talking on Twitter about, hey, the Guardian's a great newspaper. You can't buy that type of publicity. So it's just more of an observation of people using copyright in a creative way. Yeah, I think that's a fantastic point. And it really, in my mind, underscores the notion that the models, the successful business models for the 21st century we're not going to get those because a government has prescribed them. We're going to get those because entrepreneurs are going to try a lot of things. Most of them are going to fail. That's the way it's supposed to work because then the winners we find only by casting seeds widely are you going to find out what's going to take root in this new soil that we're all living in. One need only consider, if you want to sell books online, many may have thought that the big bookstores would be the winner in that fight. Well, no, it turns out companies that started digital were better at it. That won't be true everywhere. In some places I think in some of the e-book world we may see the incumbents push out ahead. We don't know. But what I can say for certain is having the government try to prescribe a winner whether through copyright law or otherwise is likely to result in not getting the answer right. Can I ask a follow-up question there just to take the specific example of the newspaper paper industry. Are there examples you can see of new licensing or other commercial arrangements that are coming in there that you think are going to work? Well, it's interesting you should ask because actually Google has worked very closely with newspaper publishers on a number of new business models. From our perspective, the success of news is the success of Google. Our web search people always say the key to web search's future success is lots of great content on the web. If there's not great content on the web then suddenly web search becomes less and less valuable. So we have a very clear and keen interest in helping publishers find business models to sustain new content. Not just newspapers, of course. Our AdWords and AdSense programs support enormous numbers of bloggers and other new kinds of publishers. But it does include traditional newspapers and we've launched a number of experiments with them through Google News and through other specific programs to try to create new offerings, new ways to reach audiences. I don't want to pretend that we've come up with the magic solution. The New York Times, Washington Post, a number of others have tried various things with us. They've learned important lessons. I don't think they've found, aha, this is going to be the win yet. But just to emphasize, we are very, very interested in their continued success because without good content being created, the internet becomes a less compelling place. Any questions there at the top of my chart? Hi, Nick Kelly. I'm a musician and filmmaker and two various other content creation activities. I just was, as opposed to the point you were making about the person going on Twitter and saying I'd like to take out a subscription. One of the things I think the worries, I mean musicians and filmmakers in particular are eager early adopters of new technology and there's lots of really great things that have happened. I think one of the main problems people have at the moment and the main worries that they have going forward is that we can't see how the money makes sense. At the moment on YouTube you refer to, I mean almost everybody there is vanity publishing and their vanity publishing holds nonsense. The people to make a really great film, to write a novel, to make good music requires a lot of monkeys and typewriters for a very, very long time. And one of the things that a lot of people in the creative industries who are very open to technology but the gap between what people are prepared to pay via whatever monetization systems that already exist and the gaps between what would actually enable us to continue working, all of us monkeys, not the good ones or the bad ones but all of us, is yawning at the moment. And I suppose I'm interested to know, it's a nice idea that people would pay what they felt you deserved but most people don't understand what goes into it and I'm just wondering if there's any sense you have from other countries or places where for example they're exploring the idea of a blanket content license where you would, every time you bought a broadband connection just like you have a TV license fee, you would levy 200 euro and that would be distributed amongst collection agencies. I'm just interested to know whether you have any thoughts about that because on the ground people are giving up in all these pursuits and because they work for five years and something and they know a fifth of the people that used to buy it, now buy it but lots of people are still getting it and that's the issue in Doral's I work in. Yeah and that makes absolute sense to me and I'm very sympathetic. We are living in the middle of a transitional moment where you can be quite sure the business models of 1990 are not going to be the business models of 2020 but figuring, living in the middle trying to guess what's going to work in 2020 is a very difficult position and of course musicians and filmmakers are not alone, photographers, newspaper reporters, there's an enormous number of creators who are caught in this transitional moment and don't get me wrong, it ain't easy in the technology business either. The number of technology companies that start put in years of blood, sweat and tears and then fail because the market just wasn't, they didn't quite get it right is enormous and of course from that comes also great opportunity. It's in the transitional moments that the great new possibilities are built. One just looks back in the music industry to the sort of 50s and 60s, the transition there, the enormous successes that were made possible after those changes took place. So advice for how to get there? Well first, this is sort of my point I made earlier. I'm not sure a blanket levy is going to solve all the ills of the kinds of creators you're talking about. One asks well who's going to be in charge of dividing up that money? How much of it is going to get to artists? There's an enormous number of questions to be addressed there. Not to mention of course the political possibility of whether or not in the current economy the citizens of Europe are going to be eager to take on a levy on top of whatever their broadband bill may already be. So there are challenges there. The good news I think is artists need not sit around and wait for that. There's an enormous number of successes happening. YouTube for example, it is true, well I will start in defense of YouTube as more a YouTube fan than a person employed by its corporate parent. I just want to emphasize one person's trash is another person's gold. And so everyone always cites the cat videos and the toddler videos and of course I point out that toddler video is as boring as the day is long unless of course you're the grandfather of the toddler in the video. So creativity I think finds an audience and I actually think it's a great thing that we have a diversity of creativity. What I may not find compelling someone else might find compelling. I also think that the current and this is just me right I don't have any magical Google marketing crystal ball for you but for me looking at music in particular it seems clear to me that the successes of tomorrow will be the artists who can be someone's favorite artist. I think it will be harder and harder to be successful making something that is kind of generically oh I like it sort of fine. I think the artists who are going to track the kind of support you're talking about the person who's going to send you whether it's through live concert tickets or through purchases of merchandise or whatever it is what some have talked about you know well known in kind of music circle is you want the hundred true fans right you want the fans who are going to send you a hundred dollars a year in whatever form they choose for whatever it is you happen to want to sell you need a group of people who are going to be interested enough in you to make sure you get a hundred dollars a year out of their pockets. You put together a few thousand of those and you have a living which in the old system would have been daft right there's nobody who would have said oh as a band all you need is you know four thousand fans great we'd love to sign you right I think in the new model that can be possible if they're the right fans and I think a lot of the new technologies aim to make that easier I don't mean to suggest that it's easy and I don't mean to suggest that there's a lot of people who are going to have a hard time but we see far more people going out to live music today than we did PRS in the UK has some fantastic numbers about the rise of live concert attendance at the same time that you see physical goods coming down we're starting to see digital album sales pick up in a way that we haven't seen previously as I mentioned earlier consumers are still buying or buying singles but they're buying not a day goes by I don't see yet another band put out a limited edition box set with a vinyl and a this and a that for 90 bucks and then selling it out I was always struck with the Radiohead example everyone Radiohead's famous choose what you want to pay everyone paid so much attention to the oh I could get it for a pound or for nothing or what not nobody paid attention to the fact that they sold 10,000 units of the limited edition box set at 80 pounds a pop so there are new ways there's not going to be a one size fits all but I think there's great excitement the one place I can point artists to who really want to know more about this is a little company called Topspin that's run by a guy named Ian Rogers who used to be the head of music at Yahoo some years ago Topspin is doing fantastic work monetizing the internet for musicians in new ways and I think it goes back to this point of maybe it's not the record labels who have the magic solution for the future somebody will and the task is to find who that somebody is going to be I mean I've paid for my last three records through fan contributions so I don't understand about that and I totally believe all of that stuff I mean it does mean two things one is it means that you're going to lose all the artists who aren't businessmen because basically what's happening is all the industries are going the music industry is going to be gone I mean I think it's very interesting the movie industry where just you know really for a lot of the things you want to see my worry is the cultural impoverishment we're going to lose and some of the won't be good things to lose so I think quite the opposite on that score right I think in terms of cultural diversity in creativity the current environment is fantastically better than what we've had for the past 40 50 60 odd years right today you can reach an audience whether it's through Netflix in the case of you know mail order DVD and increasingly streaming video you can release a documentary on Netflix and get it in front of an audience in a way you never could you needed a theater or a television deal the same is true on YouTube you name it right there none of us have a corner in that market so I think we're going to see far more diverse and interesting it won't just be yet another season of Hollywood blockbusters ever again I think and I not I love I'm going to go see the Harry Potter movie this weekend but that being said I also like a diversity of culture as well and I think the internet is great for that first point you make that is a hard question I do think today more than ever artists have to be more business minded than they were but I'd just like to emphasize that a lot of artists always were like that right if you were a small artist and you weren't in the warm embrace of a major record deal you've always had to be as much business person as creator I think these new technologies will make that easier and I think there are people out there who don't want to take that burden off your shoulders now they're going to charge you a bit for it whether it's topspin or someone else but I guarantee you they're not going to charge you as much as the record labels were charging you in 1995 so I see opportunity not it's going to be you know there's a transition but I see opportunity I mean I think the big thing for all artists is if they just see that somebody is going to look fairly on them getting rewarded they'll be open to all new technology I think the big fear for artists is they think the tech companies just aren't are disregarding that so I think whatever it lands I think that's the artists will be positive about that Can I ask you to hold on for a second finish the point you about to make on film because I did some interest in terms of that old music Well film I mean to make a film even with technology it's a very it's a labour intensive business now it's not labour intensive to film your cat but it is labour intensive to make that Harry Potter movie so if you want to see Harry Potter movies now you can make them cheaper and you can make them better but fundamentally you're talking about an agglomeration of a enormous amount of talent if the day the Harry Potter movie comes out you can get it for free on your iPad see I fundamentally think all technology resists barriers I think in the end if you can get it for nothing and it's convenient and easy and unless there's a really strong morality at existence in the society which makes you think I want to choose to pay like the person paying for the garden which at the moment the jury is very much out on I would say I think you're not going to see your Harry Potter movies now as I say I'm not been conuted like about it but I'm just reflecting what on the ground and I mean I've worked in the games industry I've worked right across the board you're seeing a situation where you could work for four years and something and nobody pays for it but lots of people see it I mean I'll just close that by pointing out the Hollywood studios are doing quite well I don't think you need to worry about Harry Potter I think if Warner Brothers had seven more they would be right up making them today but I think your point is most relevant in the middle ground where it requires a few million dollars to make a film and you need to recoup your few million I mean I'm not worried about the folks who are spending 300 million on a movie they're doing just fine they continue to have record breaking box office for the entire past decade so your point is very well taken for the middle and again I think the new technologies help those films find an audience how to monetize that's a harder problem I think we're working on that a lot of companies are trying to make that business happen but I will close by pointing out for any who haven't seen The Hunt for Gollum Google it if you like The Hunt for Gollum is a fantastic fan made film that is a prequel to The Lord of the Rings which actually is another example for me to sing the praises of copyright flexibility because they made it without the permission of either Tolkien or the New Line cinemas that produced the previous movie and it was the effort of 50 fans working for I think three years to put that film together and it's a fantastic movie it's like 40 minutes long the production values are kind of quite stunning and it shows that creators will find a way and I'm happy to live at a time when we can have that kind of thing alongside Harry Potter 7 I'll take one last question if I can and I might just slide the chat there Thanks Fred, my name is Tom Heary I'm from Microsoft I think it makes some very good points and very interesting and I think the questions about monetizing content very tricky it makes some very good points about how difficult that will be but maybe we could talk about business models because I think the business model of licensing content and monetizing content is problematic but what is not so problematic and what is quite clear is the business model of advertising funding in searching is tremendously profitable and if we look at the topic of that about protecting innovation and while protecting copyright and we think about well in what way is fair use being used as a business model to enable ad funding, ad funded search mechanisms to use vast amounts of copyright because I think there's a difference around the business model of search funded by advertising and the business model of licensing content which we spoke about during this session Well I think that raises some very good points I mean obviously Microsoft Bing is a fantastic search engine you're more than welcome to search for Golem on Bing I encourage it I myself am an enormous fan of Bing's iPad app in particular but fair use and copyright flexibilities are absolutely critical to the existence of search and I mean when I say that not just web search of course when you do web search both Bing and Google we crawl the entire web we make copies of every web page we can find in order to index them and make the content there in searchable and findable copyright law I would venture I think nobody would suggest that that shouldn't be permitted frankly if we can't find the content out on the web everything about the internet becomes radically less valuable to everyone whether you're a content owner or a tech company or a user you name it so to the extent copyright flexibilities fair use in the United States has been a crucial part of that equation enable indexing and search that's fantastic to your point about advertising I'd just like to emphasize that fair use is not just about non-commercial activity if it were it would be far less useful to everyone the non-commercial part is important critically important but most of the fair use decisions in the United States have been decisions that have upheld commercial uses in a variety of contexts including search there was a decision by US court that found that it was a fair use for example to do image search sort of a form of search that's not just traditional web but now we can help you find the images you're looking for and perhaps most interesting to me search is just beginning you know folks think that web search is a solved problem being in Google's competition in the space actually illustrates just how much not a solved problem it is I mean I look at the last year there have been more innovations in search on the part of both companies then for quite some time it's quite there's a lot yet to be done but beyond the web we need to make everything findable searchable that's the future challenge of digital technology right there's a great case involving fair use in the United States there's a company called iParadigms that provides the ability to spot plagiarism in student papers so many students across the United States are required by their schools to submit their papers to this service where it is compared against every other paper that has ever been submitted in order to spot the plagiarism that in the age of Wikipedia I'm sad to say has become altogether too easy for students similarly the kinds of digital content filtering technologies that copyright owners themselves have championed depend on making lots of copies in order to effectively search for a match so for all of these technologies some will be supported by advertising some will be supported by other commercial models all of them are commercial services we need a copyright law that supports them because if the content is not searchable and not findable everybody ends up losing so absolutely I think fair use and search indexing a critical a critically important place that copyright needs to support