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Its not just the pirates who want it
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A multidisciplinary research group at the Institute of Information Law (IViR) at the University of Amsterdam conducted a large-scale empirical social, economic and legal study of Alternative Compensation Systems (ACS), which, for a small monthly fee would legalize currently copyright infringing online practices. We have shown that digital consumers and pirates show strong support for such a non-market based way of paying for digital content, and they are willing to put their money where their mouth is. The ACS idea enjoys considerable legitimacy, and would be welfare enhancing. But it would also completely upset the status quo. What are the consequences?
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the lower and a
ch that much yeah thank you for coming but I would like to the trees and now is a result of a two-year project that the dead the
University of Amsterdam The does an interdisciplinary team of 3 lawyers economists and social scientists and the dusted off and ID that was quite popular some time ago and that's the cool to a flat-rate idea which is of you know is it possible to to to change the regime and the and try to find an Scotch enough for the market but rather through a license system which is managed by or at least statutorily our proposed by the state and which is actually a Le'vy tied into our on Internet subscription which collects money and then distributed amongst rights holders and which in turn would legalize the among commercial private use online uses some of which are licensed currently some of which are illegal and then be many studies on this
site but before that those studies were not really good enough because of what they are as this would be of willing to pay like 10 euros for the ability to download music and who wouldn't say yes to get the Soviet people were very to such a question so we think that despite the best efforts of the method to ask
such questions was not not really good because what we are trying to establish here is a willingness to pay for a public good so and it has a
methodology that was how it was developed in the homes of environmental economics at trying to put a price that thinking air reward working water so it has a very it's a highly sophisticated methodology which was not putting this question and be the tried to replicate that and I'll go into the details of
how to design a culture flat-rate system which would be a socially acceptable so we have 3 questions to clarify do people support such an idea because without social support anything can fail and you you ask a question if there is a support tool supports it and what actually what they support because this is a quite complex question that's what they support make any economic sense because if it doesn't if it doesn't if if the math doesn't work out for rights holders or intermediaries that uh it makes more sense to think in these terms and is it legally feasible so I would like to present the findings for these questions are more insight into the methodology so I'll the the task he had to deal with was how to translate a half half highly complex legal policy issue into something that can be asked from corpora rightly people but there are many vaster involves the only people in the policy process we have seen a couple of minutes ago the public consultation is 1 of the 2 D elicit feedback from interested parties we don't think it's the best thing because it's really difficult to say anything about the representativity of both those results so we tried to come up with something that that could be enabled a representative feedback on highly complex policy issues so we tried to break down this a compensation scheme into product features like a Spotify product how much would it cost of what would be included in a music or films or books what can you do the reading that license download share may be modified but who did the bigger usage be monitored and so on and so on and so on and the creative products more than 650 of them out of these different on configurations of ACS and they asked for a representative sample of Dutch people 5 thousand of them exactly to choose between 2 slightly different versions of an ICS and the non option which would mean that you prefer the status quo the don't we are not interested in any of the cases proposals we also ask them about their media consumption habits just to understand who they are and how they consume the culture at the moment what kind of legal and illegal online and offline updating and the right around the channels they use them to consume culture so this is the the experimental setup and and what is learned 1st is that you know there is a very is very strong uh dhabas from division lines among people on how they use how they consume culture the all the people I didn't don't consumer culture at all or only from TV or if they are more educated Davies training books but they don't use to digital channels these are the non consumers and the book its accounting for nearly half of the people of the total sum the rest are younger than me the use the of music I use the internet to consume free music like you were Spotify free and they sometimes by the these things that they like or they are hardcore digital consumers who either use pirated color channels or not and that's was also something that conference with previous findings that pirates hot as serious legal digital consumers has non pirates of with the exception that they also use some heritable access channels to complement the consumption so these
are the 5 groups that we were able to identify and they're very well defined so this was not some fuzzy fuzzy boundaries to summaries abundance in them and so the next thing we ask is that OK are given that there are these 5 groups how how supportive are day for any change In the corporate system out there about how supportive they are for the status quo and so that the they asked them to choose between the non option and the 2 are that ACS versions we measure commonly times case shows the non options and for those who always shows the option chose the DAC assumption we thought that they are the closer to the closest to the status quo
they don't want any change they're not interested in any of the ACS proposals however the formally and ever others who always chose something other than the status quo and read to the this of within this spectrum you try to place
these 5 groups and this is the result this from that country counterintuitive because the most so the people who are most interested in the change of those who consume through legal channels the most which is which is strange if you think that if you believe that the current legal offering Spotify Netflix the user what about the paper UT-VE of the so good then you wouldn't expect digital consumers to support a change in the status quo the same with the pirates if if this thing and the thing to do in the Netherlands and the enforcement this sinking on existing so it's not like the German situation if you think that pirates are so happy that the pyruvates and uh and at the age
of size then what popcorn times then they wouldn't be supportive over overpaying alternative they are those who are not supportive under non consumers and the book 4 of those people who are not part of the digital digital European what part of the digital ecosystem but they will die quite soon and so on so and every and everyone else this everyone as the society is very important interchange experiment with things other than the status quo yeah
and the on so that's that's that's that's something that's a representative of the evidence and and evidence based a representative data in support of and a change that is based on the license model we also ask them what would be the most preferred version and in across the board including this would be the most preferred license package they want to download they are not interested in sharing what they what it's interesting and modification rights they want to download music and films and TV programs from a temporary restricted catalog meaning that they're willing to Beaufort grace period of 6 months but they don't have access to words only few shops and and and being websites but after some grace period they want to have access of a full catalog without them being monitored for the usage of and doubt any guarantees on the minimum share for the artists then reduce the distribution when it's coming in from the form of relatively low price founded the about the price land and you know this preference this this is the most beloved what ACS package does some interesting stories the 1 is that people are willing to tolerate grace periods there really they understand that parties have to break even on the market but they are not willing to tolerate the Netflix problem that they don't have access to the full title that was 1 of the tastings of problems a couple of days ago expressed the that users have disappointed but it's on what where and when the the fact that the 2nd that is that despite all this hype about user-generated content and remix culture and or what people are not willing to pay for those
rights it's either because it's not being forced to I understand that the on Roma rights are important from a legal or political perspective from a practical perspective people are not willing to invest to have those rights but but they're willing to pay for a package there willing to pay more for a package that respect prior privacy so privacy fears and given that
the not being to pay more for a package that would argue that use half of the money is to artists and reformers I think that artists and performers ability to explain
that they being screwed over in the current system has failed so they have a terrible PR problem on their hands OK does it
make any economic sense but they made some calculations we already have 2 calls calculations for the music industry and we are working on the calculations of for the older this industry so he chose the most preferred music only package there only interested in the music market and attachment pocket and that's the most preferred music package download and share so if that it comes on the music people prefer sharing of music from a temporary restricted cattle the fixed to the artists without monitoring and and we ask people only calculated how much would be the average willingness to pay under 2 scenarios 1 is that of the state statutory imposes this ICS ECS on every infinite subscription in the Netherlands in that case the average willingness to pay of would be 9 . 25 euros per month for such a package this would be the average mean willingness to pay within the plants and if you are if you multiply that by the number of months in a year and the number of households in the Netherlands that could generate 6 125 million euros per year for the music industry on the other hand the Dutch music market is record the music sales not record its ourselves in the Netherlands was around 143 million euros per year so there's this huge gap between what the music industry currently does in the Netherlands that's 1 . 7 you for a month and what the people are willing to pay for have access unlimited access for the music that's more than 9 set any price between these 1 . 7 and 9 . 2 would be benefit economically beneficial for both the consumers and the music rise fall there are hundreds of millions of euros lying on the table and
reducing it of we tested it under a voluntary so it's it's not statutorily imposed but it's an option that can participate in it was generated by another 400 million euros per year for the industry so the question is are if there are millions hundreds of millions of euros left on the table every year by don't the sharing the consumers and producers rights holders and artists together of I do the share
of by the view based on millions of and hundreds of millions of euros per year 1 enforcement of which a license would field as a necessity you don't need to enforce if all the legal uses unlicensed when you don't have to spend public and private resources and enforcement when there is no enforceable infringement
of if you free people or to download and share and may be modified non-commercially privately then you also removed the
legal liability both intermediaries look like the Pirate Bay because the part based on commercial but for the likes of Wikipedia could do not of Wikimedia Foundation do not show advertisment but why don't we have such a license would moved the legal liability off non-commercial intermediaries and the 3 of the huge in electing innovation potential this middle layer which is currently being monopolized by a few American companies are who gained exclusive control of both to consumers and to present we don't fund that because we see what's happening you see the artist whose back we see the poem planes would see the uncertainty that these middlemen who may or may not be able to provide the remuneration necessary for cultural production and we see how they abuse their privileged position of having an ACS with removed that because then all the Nederlands will not the in the competing 1 day exclusive a chance to negotiate contracts and rights holders they would have to compete other things like a service and it also
makes some consumers are happier than they are now because is moving from the this and legal analysis does it make any sense legally are in the middle of the finding that out of the qualified cautious answer is that but there are some formulations which would pass the burns three-step test but as it is now especially that this whole system to generate tax revenues for rights holders but the real question is is it the technical legal problem do we have to prove that it passes the three-step test was of a political problem that we have to convince each and every state for the important but this is an alternative 1st consider considered that I believe in the latter and so for ask that question is maybe the would reflect debated especially in the in Germany is accused the cable but maybe at this at this point of time it's time has has come again and maybe we need to think again about both you know decide in particular and the how to better engage consumers for privately people in the corporate process more systematically in a better way given the fact that the European agenda within that so on an invitation we organize a symposium neutralize announced them to discuss all these issues are discussed the economics the legally use and the political social and all the domains in which the alternative compensation models can be inserted into the operators are from agenda these the already confirmed guess again I have used from wonderful panels so please consider yourself invited and hopefully see uh each other in Amsterdam and we can discuss in more details and more than just another half an hour so this is really
an alternative worth considering that they're moving forward yeah thank you very much
few thank you that as the great presentation any questions from the audience limited from you crazier hands yeah just a very simple 1 so 1st of all thank you very much for a great presentation was very interesting is you study available for parents like us this study is it available for pirates like
us absolutely 1 of their
several papers being written up how long it has been accepted for publication for the Journal of cultural economists attention that you and the other is under review to send
me an e-mail address and that to you and they will be about available in open access journals varies thank you very much from
you already said that the main barrier is the musical or the media industry or any ideas yet as to how can convince them that that is a good idea that's a very good question because of for a while I I I
so that if 1 has convincing numbers than that's so that's a good way to discuss these ideas so if I'm able to show that you can make extra 600 million euros per year had they then everyone will be on board but that that's not the case and it's thought to discuss so it does not necessarily rights holders but the representatives of those represent frightful there's them now than did the deed this whole discussion becomes very fluid like trying to catch a bowl of mercury so I said this extra money OK but it's what it's all about about us not being able to control distribution but you're not controlling distribution of the moment tries give some extra it fits the initial control here but but then again you know how I will make money actually you have to make money but then the idea and and it's always the other counter is always shifting so I'm not quite sure where I'm trying to engage in France for those this like what is the what is the argument that I what what is the argument of what what what I can do
is to try to come up with scientifically tested methods that try to cover the grounded by the time the time to
cover the ground of money and remuneration and that is more or less power control on this in different issue happening now it's not just that they're covering but it's it's fortified and future and uh and all of the others for covering the contribution and I hope I can only trust so that you know that it's a rational discourse at the end of the day and and an enlightened enlightenment the person in that sense In a i monarchs
and a lot of interesting them questions remain open and this to walk and I was and quite impressed by the numbers but there is the 1st problem for the Huygens fate you mentioned there are of people who are not interested in
using digital copies so that when using music digitally
so that firstly the question is why do you want to pay them for staff they won't use that to the question and if you if you think
from our market perspective it's so poor are super and just to make someone for something that that he or she is what you if you think from the perspective of culture being the public good but then you and then then in this goes away because you are paying for all of you know military defense even if no 1 is affecting you at the moment right so you pay the taxes for public education even if you don't have a kid in the school system you pay the money to finance these at the start of the dual Proust even if you don't like whole produced because you think that there is a public you in finance and things and what you're doing here is not being taxed for the time for direct election of culture and that's beneficial even if you don't give them about some of the artists that are being that of being reproduced the system so that's that's the radical shift In this
and that the the the the the financing of culture take it away from the market and make
it to the public good good which if this in theory and and in that sense I think it makes a lot of sense to us to think about this as a was a public public goods problem and this is what the used in the methodology as well treated as a public good use the same methods as well as people scientists that policy makers of governments fight to the value of the public select pork or clean air clean water or what how much is it worth to you as a taxpayer to have fought in your neighborhood and thank you very much and
I and what like to ask on the site of the active and actually to carry on which they have to fulfill to get into the system after could have left right and what's the border to get into the system so the only thing from being of a
protracted due to cover the artist is of the artist participation affects the catalog so if you if you if you let know what this participation to be voluntarily you end up with a fragmented catalog again because you will never know who decided to be part of the license and who doesn't and a measure that consumers somewhat be willing to tolerate incomplete catalogs they have really fed up of IT systems that they pay for and then they called the and then it's not there to their favorite artists of the song of the TV show is not there the and they don't want to pay for something like that they do because they don't have
another option that they're don't did they prefer a complete castle so from the artist perspective the participation of seems like should
be mandatory why because that's the only way to guarantee In a focus the only the only the he's in that the only compromises in that is that people are very much seem to be very much willing to tolerate the fact that they only have access to something free free will be after invasive period of about 6 months and that's I think that's a fair deal you as an artist have 6 months to break even in and the indirect restore and and in the uh in the iTunes markets and then it becomes public and that's that's something that can be very that's from all sides palace
thank you and he went through the efficient thinking get this straight talk the the the
the the term