Earlier this year, the European Union passed sweeping copyright reform rules set to go into effect by April 2021. Each member country is now tasked with passing its own version of the legislation, which may vary slightly but must comply with the spirit of the EU Directive on Copyright in the Digital Single Market. This article explores how copyright owners, such as Marvel, the BBC and other studios and production companies, should address these changes as the deadline approaches. Those who are ready for the changes will find themselves with new monetization options, but these options don’t come without preparation and a strategic approach.
First, a bit of explanation around the articles and the proposed changes.
Colloquially known as a “link tax,” Article 15 of the Copyright Directive aims to limit the amount of information that social media platforms, such as Twitter, Facebook and LinkedIn, can use to summarize a news article. In the past, the use of article summaries or photos discouraged the audience from linking to the original article in such a way that the publisher received revenue for the traffic. Article 15 requires platforms to pay the publishers if they continue this practice. France was the first country to codify this into a law, which recently took effect. To comply, Google said it will share only headlines and a few words of description in its article summaries.
Currently, platforms have no immediate liability if copyrighted material makes it onto their platform; penalties ensue only if they fail to act after being notified. It’s as if victims of car theft had to find the car on their own before the police would acknowledge a crime was committed. Article 17 holds the platform immediately responsible, shifting to them the monitoring responsibility. While this benefits copyright owners, it also saddles them with a new administrative task. Platforms will only be responsible for identifying content that is shared with them, meaning new processes need to be defined by these platforms to make sure they can accept new user-generated content without creating infringement liability. More importantly, copyright owners can now monetize pirated content on these platforms, either through new licensing options or by monitoring the platforms for content that falls through the cracks.
To be sure, there are unknowns associated with the directive, as individual countries debate and draft their individual versions. For example, while France has already moved forward, Poland is challenging components of the directive and may not make changes until closer to the deadline. Nevertheless, copyright owners have a clear deadline and a framework they can work within now — so this is the time to assess the potential impact and opportunities.
Before determining whether investment or change is needed, copyright owners should answer the following questions:
Businesses shouldn’t overlook the complexity of the global rights landscape when analyzing the impact of the new EU directive. Consider this example: Game of Thrones was broadcast on HBO (WarnerMedia) in the U.S., Sky (Comcast) in the UK, and OCS (Orange) in France. Naturally, WarnerMedia is interested in protecting the franchise globally, as it will eventually get the rights back and will want to exploit them further in France. But for its part, Orange must protect its short-term investment and prevent piracy that competes directly with its broadcast. Moreover, Sky is also impacted; it’s easy for a London viewer to pirate the French version with subtitles. In this landscape, it’s important that copyright owners monitor piracy not just of their own content but also of others’ content that might impact their audience. Media companies need to monitor social and online outlets to understand demand for pirated content and thus the lost revenue for content they own or license in the EU.
To decide whether a business case exists for changes, copyright owners need to know whether their content is making money for any offending platforms. This makes it vitally important to monitor platforms to measure the views of pirated content. Monitoring can be performed via manual searches or though robotic process automation or other automated tools. While the top goal is preventing piracy, copyright owners can also monetize any content that slips through the cracks. Not only would this result in an immediate fiscal benefit, but it would also discourage further pirating. There are also licensing opportunities — some platforms may sign licensing agreements proactively to cover any content that they miss with upload filters.
There are two primary process changes with which copyright owners can exploit the copyright directive. First, as noted above, platforms must now monitor for any content of which they are aware. This change allows copyright owners to send their entire content library to make sure platforms are evaluating everything. While most copyright owners are only evaluating new releases, we encourage copyright owners to take advantage of this opportunity and prevent piracy across their entire catalog/library.
Second, copyright owners should also continuously monitor platforms for any content that has slipped through filters without appropriate permissions; they can both request the material be taken down and make a claim for any ad revenue that was paid while the content was available. But before proposing changes, copyright owners must study their operations and understand how substantive any changes would be to comply with this. This will be key information to integrate into a business case.
While the deadline may not be until April 2021, the recent movement by France shows that some countries are acting sooner. Further, Google’s response to France’s law demonstrates that platforms’ responses to new laws will hardly be predictable.
In short, it’s a tumultuous time for enterprises that own copyrighted material in EU countries. They must be proactive and patient at the same time. Copyright owners should start assessing the impact of these laws and begin actively engaging in scenario-based planning so that when the landscape firms up, they can move quickly.
Figure 1 illustrates factors that need to be considered now to inform a plan for 2021. Copyright owners must follow nation-by-nation developments closely, prepare for the changes that will be needed and ensure those changes have the intended effect.
Inevitably, some copyright owners will wait until the very end to act. But media companies that understand the opportunity provided by the directive to both protect and monetize content will begin planning immediately.
Written by David Ingham, Head of Broadcasting and Media Practice, Cognizant UKI.