By Kevin Fitzgerald
The future success of the UK economy is highly dependent on how intellectual property (IP) is managed both in the UK and globally. The digitisation of content brings both great advantages in terms of access but also threats in terms of a sustainable economic model for creators and publishers. In this article, Kevin Fitzgerald, the CEO of the UK’s Copyright Licensing Agency and Chairman of the European Union group for Reprographic Rights Organisations, explores how collective licensing has been responsive to market demands with the inclusion of digital-born, Smartboard , Virtual Learning Environment and website content in its licences. He also observes the importance of working closely with UK government to ensure a robust international legal framework for IP. He works through the example of the UK education sector and concludes that collective licensing helps to balance the opportunities and threats of the digital age.
Collective Licensing: Responding to the challenges of the digital age
Content digitisation, and the internet in particular, have changed the game for rights holders and moved the goalposts for copyright, as the digital age continues to erode the traditional economic and legal models of our industry.
As we enter the ‘teenies’ decade we are getting used to living and working in an age where digital technology enables creative work and information to be published, shared and re-used more easily than ever. Our content is distributed via a myriad of organically evolving channels, many outwith professional publishers and authors. As publishers, libraries and bookshops have been relinquishing sole control of the distribution channels, information and creative content have become easier and cheaper than ever to make available and for users to access. This has made it harder for writers and other content creators to retain control over how their work is used. In this new world the relevance of copyright, and the wider protection of intellectual property (IP), rather than being rendered less significant, has, if anything, grown in importance. In fact the health of the UK’s creative industries will increasingly rely on an effective system of IP protection; a fact recognized in the Gowers report to government:
“The UK’s comparative advantage in the changing global economy is increasingly likely to come through high value added, knowledge intensive goods and services. The Intellectual Property (IP) system provides an essential framework both to promote and protect the innovation and creativity of industry and artists”.
In the digital world, the ability to share content legally becomes ever more important.
As with the analogue world, all rights holders still want their content to be used and they still want to be paid for their work. Licensing mechanisms are still part of the economic model, though they will have to evolve to remain relevant. And as secondary licensing through collecting societies helped to address market failures in the analogue world, so it can in the digital world. The Copyright Licensing Agency, CLA, is one such collecting society and exploring how it supports the education sector, just one of those which it serves, will demonstrate continued opportunities.
Experience from the education sector illustrates how CLA is responding to change and illustrates the advantages provided by the collective licensing model. The sector has been a key element of CLA’s licensing income since the establishment of blanket licensing schemes for state schools and colleges in 1986 and higher education in 1990. Our licences help over 11 million pupils and students to benefit from the permissions included.
In a digital environment, it is now more important than ever to understand what copyright material is used, how it is used and to obtain feedback from users. When the first education licences were issued in the 1980s, photocopying was the only common method of copying and print was the primary vehicle of delivery. The surveys we undertake across education for distribution purposes have shown that photocopying and printed distribution still remain important for education but also the growth in the use of material from more and more diverse digital sources. The prevalence of computers in schools has meant greater use of the internet in teaching. Widespread use of other media such as virtual learning environments (VLEs), interactive whiteboards and even mobile learning provide far more versatility in the ways in which content is delivered. At the same time, content is now often published digitally, with CDROMs, e-books and digital subscriptions playing an important role in education across the sector from primary schools to universities and adult education.
Modern education is therefore fragmented, diverse and complex. One of the key characteristics of the provision of learning in schools is the drawing together of teaching materials from a variety of sources, the personalising of them to adapt to students’ needs and delivery in any number of discrete ways. For example, teachers will frequently generate their own lessons using material from electronic subscriptions and websites in addition to traditional textbooks. Then they will deliver their lesson via an interactive whiteboard, a mobile device or a virtual learning environment (VLE) network. There have been numerous encouragements from the UK government directing teachers to deliver this sort of ‘blended learning’.
Whilst a digital learning environment offers huge benefits to students and teachers, it also presents new challenges regarding the management of copyright and obtaining of legal permissions.
CLA licences and the collective licensing system are uniquely placed to deliver a solution that balances properly the needs of all parties and realises benefits for the students, educational institutions, rights holders and for society in general. Schools and universities avoid huge costs, financially, and in time and convenience by ensuring they have permissions in place without fear of infringing the rights of creators and publishers of content. They also have the best quality information and teaching materials available to them to teach students. In return, copyright payments are immensely important to publishers, since profit margins in specialist publications are thin and net revenue paid to publishers from copyright licensing goes directly to the bottom line. Writers and other creators receive money that enables them to make a living, or continue to create for the benefit of all.
Strong partnerships in education have allowed us to deliver key extensions to our licences over the past two years. In higher education, institutions can now extend their licence to include additional rights covering copying from digital sources such as e-books and e-journals. All CLA educational licences allow institutions and their teaching staff to utilise platforms such as VLEs and interactive whiteboards in their teaching. CLA is also working on solutions to facilitate ‘networking’ (the sharing of material between educational institutions via an intranet) – a development that is becoming more widely used in schools. A licence including the addition of free-to-view website content rights is also currently under development. This demonstrates that CLA’s licence offering has had to evolve relatively quickly to incorporate new rights that meet the needs of users and also return secondary revenue to rights holders for digital forms of copying and within a framework of legal permissions.
As can be seen from just one sectoral example the UK market often finds its own commercial solutions. Few creators or publishers are arguing for a heavy regulatory hand, however, the underlying legal infrastructure still needs to be fit for purpose. There have been a number of recent reports and consultations in the UK, including the Gowers Review, the Digital Britain Report and recent IPO consultations on the role of Copyright Tribunal and ‘Developing a Copyright Agenda for the 21st Century’, and others at the European Union and the UN’s World Intellectual Property Organisation, WIPO. Relatively few of the recommendations contained in these various reports have yet been implemented.
CLA has made full submissions to these reviews and we have consistently reiterated our opinion that copyright is standing the test of time with the existing legislative framework still being fit for purpose. Important areas, such as enforcement and education need to be addressed and we are pleased that concrete proposals to deal with these issues have now emerged from the final Digital Britain report among others.
There have been fears recently at UN WIPO that some countries are seeking new exceptions to existing copyright conventions for the education sector in future international trade treaties. Thus far the British government has been robust in defending the interests of British publishers and creators as the UK educational publishing sector continues to generate significant foreign currency flows and supports the public diplomacy goals of the Foreign and Commonwealth Office in sharing British language and cultural values.
In summary, the needs of the market continue to change at an ever increasing pace. Creators, publishers, government and organisations such as CLA continue to respond to those changes. As Charles Darwin once said: It is not the strongest of the species that survives, nor the most intelligent, it is the one most capable of change.
Kevin Fitzgerald - CLA Chief Executive
Kevin Fitzgerald is the Chief Executive of the Copyright Licensing Agency Ltd (CLA). He joined the CLA in 2007. During his tenure licence fee income has increased from £47m to £60m per year.
Kevin joined the Thomas Cook Group in 1997. Amongst his various roles he was one of the founders of thomascook.com, which grew to some £50m of turnover in just three years.
In 2002 he joined Pearson PLC as Managing Director of Rough Guides. He increased global sales by 50% and gross margin from 45% to 65% in four years.
Kevin holds other public appointments/non executive directorships. He has an MA from Oxford University and is a Fellow of the Royal Geographical Society.
 Gowers Review of Intellectual Property, December 2006