May 11, 2017
Guest blog post by Per Strömbäck, editor Netopia.eu
So I woke up this morning and it was the year 2025. All of the DSM policies had been implemented. (Don’t ask about the US president!)
I thought back on last night’s football game, with a dramatic late equaliser Viljandi Tulevik managed to tie in the away game against Flora Tallinn. I miss Premier League in Swedish on a Swedish channel, but the Estonian cup is not that bad.
With my breakfast coffee, I read the updates from the usual outlets: Fake News and Filter Bubble. Since the legacy newspapers are gone, we get the news from social media algorithms and sometimes public service which tries to look just like social media algorithms.
Taking the kids to school, I almost said “don’t forget your school books” before I remembered that because of all the exceptions, no new text books have been made recently. Instead, teachers use online resources like Alternative Math and History Revisioned for classes.
When we talk about the Digital Single Market, I think we’re looking for answers in the wrong place. So much of it is about finding digital champions, but do you know when the US introduced the funding policies – the federal loan guarantees – that set equity investment off to a flying start and laid the foundation for the tech industry? 1958! The US Small Business Investment Act of 1958 promised investors loan guarantees of 4 public dollars to every private. Silicon Valley has a sixty-year head start on Europe.
And the Digital Single Market tends to look at Europe as an import market, a consumer market. But digital is global, so harmonise away, but what is Europe’s role in the global market?
Now culture. We tend to think of culture as a cost: if it’s important it should be funded by the public through culture support. If it’s crap, we see it as some kind of commercial necessary evil. Public funding becomes the seal of quality.
So when we’re talk about digital policy, we tend to talk about consumers rights and digital companies. But what if Europe’s opportunity is not in the digital businesses?
European pop culture like music, fashion, video games are great exports. It is no coincidence that the top digital companies from Europe are Spotify – a music service – and a host of games developers – born digital, making content.
Europe has a unique opportunity here: we have cultural diversity for inspiration, great educations for quality, social security systems for freedom to experiment with creative projects without becoming a starving artist, intellectual property rights, freedom of speech, freedom of enterprise: this is the perfect recipe for culture business. Many these ingredients exist elsewhere, but Europe is the only place that has all of them. And when I say culture business, I mean culture export business.
The creative sector grows faster than the overall economy, hires faster than other sectors, has more entrepreneurs. And of course adds great value in the shape of expressions and entertainment.
Creativity is a raw material that Europe has in abundance. I do some work with the game developers in Sweden, and we have Asian companies visiting saying “we have the money, the consumers, the distribution platforms, the technology, but we don’t have the creativity”. The US internet platforms create very little content and very little value around content, instead of quality, they look for quantity: millions and billions of users generating traffic and ad revenue. That has worked great for them, but that spot is taken. Do we really compete with that?
Now, consumers. Consumers want portability and cross-border access. That’s great. But as consumers, we also want context: I’m Swedish and when our top player Zlatan Ibrahimovic played in Paris Saint-Germain, the French football league was more popular than ever. The coverage focused on Ibrahimovic more than the other teams and players of course. Now he’s in Manchester United and no-body really cares about the French league anymore (apologies to French football fans). That’s context, tailored to the local audience. I can get my steak from the freezer at the super market, but I can also get it from the local butcher and have a friendly interaction, get some cooking recommendations, some extra ingredients maybe… that is context. That creates value.
Culture consumers also want context: translation, local marketing, customer support in their own language, offers tailored to their taste, price points in relation to purchasing power. There is not a single European demand. This goes into the topic of territorial licensing, so that is not only a producer interest, but also a consumer priority.
In conversations with supporters of the digital single market policies I’ve pointed to that some of the proposals may hurt European creators and their business partners. The answer has been: but the EU has such plentiful culture funds, we can make up for it from them. Let me disagree with this notion. Those culture funds should be used to promote goals like cultural diversity, pluralism in creators, quality, new voices, cultural exchange or other important culture policy priorities – not to compensate for unintended consequences of new market rules. Make the market work in the first place, use public money to support what the market can’t.
By the way digital consumers are digital creators too. Nowhere is this more visible than in games, when players create their own maps, characters and game versions. Moving from consumer to co-creator to professional creator is seamless. This adds to the talent pool, but with technology we should also be able to better distribute revenue across the co-creators.
So what are my suggestions for the Digital Single Market?
- Look at creative business as export businesses. It’s an opportunity for Europe in the global economy.
- Support investment and talent; invest in education and skills, keep in mind that creative skills are digital skills
- Make sure policies support the freedom of contract for creators and their business partners. Strengthen intellectual property rights. Go easy with the exceptions (normally exceptions are compensated somehow, with levies or subsidies).
- Keep investigating abuses of dominant positions, but also look at what brought that dominant position in the first place: winner-take all economies, misuse of safe harbour. Look at the role of intermediaries to share revenue with creators who populate their platform with content
- Think of the consumers as co-creators and support technologies for two-way micro-transactions
- Respect the consumers need for contextualisation and locally tailored offerings
If we get it right, maybe we can wake up tomorrow in the year 2025 and with an vibrant creative economy, creative expressions big and small and an abundance of great entertainment. Including the Estonian football cup.
This opinion piece is an edited version of a speech this writer gave at CEPS Ideas Forum 2017Blogactiv Team