Why Emerging Business Models and Not Copyright Law are the Key to Monetising Content Online

Abstract

The multimedia Internet is here to stay. Rich media - including videos, music, podcasts, and flash animation - is already a key feature of the Internet experience, and will only grow in diversity and importance. As Internet users increasingly crave - and technology increasingly enables - multimedia content delivered on demand over broadband connections, the number of songs, videos, and other media online will increase exponentially to feed the demand. As online media consumption increases, so will expectations for its capacity to generate revenue for content owners and creators. Analysts boldly predict a bright future for the entertainment industries, especially in Asia, with broadband Internet cited as a key growth driver. Yet, to date, the vast majority of music and video acquired or consumed online is free and uncompensated. Despite the rising expectations for monetizing content on the Web, no clear sustainable, scalable model for monetizing content has emerged that compares to the level of revenues copyright owners have enjoyed in the "physical" (as opposed to online) market.

This chapter considers the primary strategies that the international music and film industries have employed to date, namely lawsuits and technological protections, and why these strategies have failed to produce a viable path to long-term revenue generation. I argue that content owners should not hold out hope that using law (in the form of copyright infringement lawsuits against individuals) or technology (in the form of digital rights management encryption software) will unlock the Web's potential for monetizing their content. Instead, successful monetization of content online will come through business models that can harness and monetize the current behavior of Internet users. There are three emerging such models analyzed in this chapter, each of which has significant potential and challenges: retail online content subscriptions, ad-supported content, and voluntary blanket licensing.

The discussion in this chapter is mostly broad, outlining circumstances facing copyright owners globally, and some emerging potential solutions. Nevertheless, I make a point throughout to highlight the situation in China in particular. China is a challenging but dynamic Internet and digital media market, and is the first market in the world where all three of the emerging models discussed in this chapter are being deployed in an effort to jumpstart the digital creative economy. China is an important market for the rest of the world to watch regarding emerging monetization models.

Keywords: copyright law, copyright, digital content, digital rights management, drm, china, intellectual property, internet