Benifei: Embed blockchain in copyright reform

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The Commission and Member States should start looking carefully at the developments in blockchain technology.

The Commission and Member States should start looking carefully at the developments in blockchain technology. [Shutterstock]

Blockchain technology can provide a win-win-win between the fight against censorship, verified traceability of digital artworks, and a fair remuneration for its creators. The copyright reform debate is a good opportunity to embed blockchain and create a better regulatory framework, argues Brando Benifei.

Brando Benifei MEP (S&D, IT) is a member of the Employment and Social Affairs Committee in the European Parliament.

The European reform of copyright will have a direct impact on the creative industries and all their related actors that operate with digital artworks and contents – as for instance start-ups, digital platforms and media aggregators. The aim is to update current legislation on copyright, in the attempt to close the gap with the revolutionary innovations brought by the advent of internet, which has already reshaped significantly the way contents are produced, distributed, and finally enjoyed by the users.

As every disruptive innovation, digitalisation has brought new opportunities for innovations in the creative industry, but it also implied a deep rethinking of the business processes, concerning fundamental implications at an artistic and technical level, posing challenges that in some cases transformed into real existential threats for the less flexible players.

One of the objectives of the reform is to safeguard the publishing sector from the big aggregating platforms of digital contents, given the losses derived from the rising availability of online offer, the decline in printed copies, and the lower revenues coming from advertising.

However, the proposal of the Commission contains a series of controversial aspects, which have generated a fierce debate in the past months, as the introduction of neighbouring rights for publishers, intended to guarantee higher revenues and to compensate previous losses.  However, as the German and Spanish precedents show us, introducing another layer of protection did not result in increased profits for publishers or creators. Conversely, it harmed the sector, creating the conditions for further market concentration and higher legal costs for start-ups, aggregators, and small publishers, who exited the market, contributing to a lower access to information for citizens.

Hence, the reform of copyright does not simplify the present regulatory framework, because the Commission’s approach does not represent a fair and stable equilibrium among all existing interests.

In order to find a balanced compromise that complies with the ultimate objective of the Digital Single Market, a possible solution could come from the application to the creative industries of the blockchain technology – the one at the basis of the bitcoin. In the next years, this innovation is considered to become the base for a more transparent, democratic, and upgraded version of the internet.

Among the various applications of the blockchain to our every-day life, there is one concerning the issues lying behind the crisis of the creative industries, particularly suited for the music sector. According to the Rethink Music initiative, this innovation has the potential to contribute positively on matter of copyrights, ticketing, and fan and data management, establishing what can be defined as “an artist-centric model”.

For instance, an independent band could decide to produce and license their new album for various uses and receive royalty payments via smart contracts, without having to deal with record labels and distributors anymore. As fans purchase the band’s new album on blockchain-based platforms, this mechanism allows to transfer revenues automatically and instantaneously into the cryptocurrency wallets of the creators, without any further intermediary passage. In this way, creators of digital artefacts need no more to share the majority of their profits with the industry’s middlemen, and could also have stronger control over their own publications and artistic careers.

This business model already finds application in the real world, given that some start-ups and social media platforms, as Steemit for example, work with it, rewarding the authors of media contents on the base of their popularity via cryptocurrency payments.

Even assuming that blockchain-based platforms and aggregators could fall into the scope of the present proposal on copyright reform, I do not think that the right approach towards digitalisation is to rely on further protection from regulators. In such a competitive environment, publishers should start reconsidering their business model, in order not to be outclassed, but swiftly adapting to innovation.

For these reasons, I think it would be more reasonable to embed blockchain in a more comprehensive discourse on matter of copyright reform. This technology can in fact provide the tools to reach a balanced compromise on matters of fight against censorship, verified traceability of digital artworks, as well as for establishing a fair remuneration scheme for creators.

However, if this model represents a win-win solution for artists and customers, the same thing cannot be said for those who work in the intermediate production phases of the music industry, as record labels and distributors, who, on the contrary, will face the concrete threat of seeing their job substituted by a blockchain version of themselves.

Well aware of the huge potential for growth and incentives for renovation of obsolete industrial models, the Commission and Member States should start looking carefully at the developments in blockchain technology, starting from the possibility to integrate it in the reform of copyright, which – on this ground – risks to be already outdated. The European Parliament will have a crucial role to play in this debate too; nevertheless, as policy makers, we need to address innovation consciously, favouring the establishment of fair normative frameworks that can spread the benefits and limit the unintended negative consequences for the society.

To do this, we need to provide the necessary conditions to consumers and businesses to adapt to a decentralised – or even distributed – model that the new blockchain-based applications could have on the creative industries – and more in general on our society, through progressive reforms for a balanced introduction of this new technology in our increasingly connected economy.

Brando Benifei is also co-host of the 9th European Innovation Summit and the first EUTop50 ‘Hemicycle Start-up Convention’, this year organised in the context of the first ever European Innovation Week (27 November to 1 December 2017). EURACTIV is a Media Partner of these events. 

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