The Hargreaves report on intellectual property, published last week, is a landmark in the evolution of British policy. Ian Hargreaves concludes the existing intellectual property regime, far from being a spur to innovation and growth, gets in the way. The contrast between this document and the paper on the digital economy Lord Carter prepared for the last Labour government could hardly be more marked. Mr Hargreaves deplores the way government policy has been led by business interests and not evidence of its effects. The Carter report, unintentionally, illustrated his point in every chapter.
Sadly, it may be too late. Britain has for generations enjoyed an enviable competitive advantage in music and book publishing. The future of these industries is now in the hands of three US companies – Apple, Amazon and Google. In the face of supine government policies, only these organisations have had the strength to challenge the political and market dominance of vested interests.
Traditional music publishers and the retailers through whom they distributed are failing, not because less is being spent on music – it is not – but because less is being spent through them. Their decline was probably inevitable, because the digital revolution fundamentally undermined their business model. But the publishers initially made no serious attempt to adapt, seeking instead to use legal powers to shut the new technologies down. These efforts were predictably futile. In books, Amazon rapidly broke the resistance of conventional publishers to making their works cheaply available in electronic format – so rapidly that in the US sales of digital books now rival traditional formats.
As the commercial market is being transformed, anyone who thinks that the policy challenge is to restrict internet piracy has missed the point. Such thinking confuses, as Carter did, the development of successful businesses with the welfare of the industry’s established large companies. The result is that UK companies, and the UK government, are now no more than bit players in a play staged on the other side of the Atlantic. The UK government is at least more enlightened than the European Commission, which seems to be playing in quite another show – one where trade associations and naive artists are the only audience.
Many creative people have been persuaded that these technological developments threaten their interests, but they are wrong. There is huge potential benefit to authors and musicians from faster and cheaper distribution systems, and from a closer relationship between the originator and the user – the bypassing of publishers that these businesses understandably fear.
Mr Hargreaves understands that a single digital archive with easy universal access could spur economic development, innovation in business and the arts, and scholarship and research. Such a resource should be a publicly sponsored project, and the legislature is the appropriate body to set the terms and conditions under which it is used. It is absurd – and for Europeans intolerable – that the nature of this development should be left to negotiation between Google and other American commercial interests, with the public interest represented only by a single judge.
Still, it is better that Google should digitise the world than that no one should. We need people with the public spirit and vision that led men like Sir Thomas Bodley to create great national collections in the 17th and 18th centuries. In the meantime, if Larry Page and Sergey Brin are the best available substitutes, we should support them.
Mr Hargreaves’s recommendations are repeatedly constrained by European policies dictated by money men hiding behind feigned concern for creators and performers. But the future of media will be decided by people like Mr Page and Mr Brin, and Jeff Bezos and Steve Jobs, not by lobbyists and lawyers. And it will develop from Twitter and Facebook, eBay and LinkedIn. The challenge is to ensure that at least some of these entrepreneurs are European. That result is unlikely to be achieved by attacking those who try to use the internet in unauthorised ways.