Trust becomes an issue in copyright in the digital age because it is based on an implicit understanding of the way content is copied and distributed versus how copyright could be infringed. In the pre-digital age, it is based on a foundation of trust between businesses and the amount of trust that was implied in relationships between creators and consumers. In the digital age, every user has the ability to make virtually an infinite number of copies of creative works for almost no cost and distribute them to anyone they want in the world. And so the copyright owner no longer has this ability to obtain recourse against people who he doesn’t know and who to trust.
In this interview Bill Rosenblatt discusses the various technical means to establish that trust in digitally distributed works, from digital rights management, watermarking, financial means like levies, and other means. He reminds us of the US CASE law and the problem with legislation to solve the trust issue in dispersing digital copyrighted material.
About trust in the consumer of copyrighted works in the pre-digital age
(…) think about what copyright has meant in the pre-digital age and compare that to what copyright means in the digital age. Regarding the everyday people, consumers, if you want to call them that, who engage with media products, they buy them, they subscribe to them and so forth. And so in the pre-digital age, you could trust if you were a media company, a copyright owner, a record label, a book publisher, a movie studio or anything like that, you could, in a sense, trust the consumer not to infringe your copyrights because simply it wasn’t very easy for them to do that. It took some effort and cost to engage in activities that might be considered to be infringing. And then, on the other hand, if you’re if you are making your materials available to a business as opposed to a consumer, then you have trust issues that are bound up in licensing agreements and other contractual bases. And if your licensee or whatever it may be, is doing something that you don’t think is right, you have legal recourse. And the speed at which the entity could do something wrong is roughly equal to the speed of the legal recourse that you could have. You could sue them, you could send them a demand letter. You could do things like that. And so that was the case in the pre-digital age.
About digital watermarking technologies to track copying
(…) But there are other technologies as well that fall in different spots along the trust spectrum. And one of them is the technology of digital watermarking. And that is instead of encrypting the content so that you have to decrypt it to get access to it, there is some invisible or inaudible piece of data embedded in the content that’s known as the digital watermark in reference to watermarked paper or watermarked currency in the past. And so the watermark can contain various types of information. Harry Potter e-books are a well-known example of this. So the organization Pottermore, which is the sort of company that manages all things Harry Potter, distributes e-books on its website that are not encrypted with DRM, but they have a watermark in them, and the watermark contains simply an ID number that no one understands the meaning of, except the Pottermore company itself, but it refers to the transaction in the user where the e-book was purchased. And there are other watermarking technologies that are less trustful of the user in the sense that they embed things like the user’s email address. That’s one example. (…)
What did the digital age change and how did that affect trust?
(…) But then something happened in the late 2000s, which is that the record labels really wanted competition to Apple. iTunes was around, iTunes had an enormous share of the digital music market and then eventually an enormous share of the music market in total, digital or otherwise. And the record labels really wanted a competitor to come in to make it so that Apple had less clout in the market. And along came Amazon. And basically they made a deal with Amazon, one prong of which was Amazon didn’t want to have to deal with DRM. They it was so much easier for them if they didn’t have to deal with it. So they agreed, the labels agreed with Amazon, OK, we’re not going to use DRM. And so they made a deal with Amazon to distribute MP3s without DRM. And so Apple followed suit quickly thereafter and dropped DRM. And then Steve Jobs wrote this public letter taking credit for removal of DRM from the music industry, which is actually a bunch of nonsense. The writing was on the wall about that for a couple of years before Steve Jobs took credit for it. But that’s what happened in music. But just to quickly wrap up on that today, of course, we don’t have downloads so much as we have streaming with companies like Spotify and Tidal and well, Apple‘s doing streaming, Google‘s doing streaming. Everybody is doing streaming. And streaming is all DRM enabled. All streaming services use DRM. So on the one hand, it’s extremely easy to use these services and they give you access to these enormous libraries of music, sometimes for free. But DRM is involved. And so there is I think that does take us back to the trust issue. Because when you’re using a service like Spotify, if there were no DRM, then you could simply download everything that you stream and do whatever you want with it and the record labels and Spotify don’t trust the customer to do that.(…)
In episode 11 of the TrustTalk podcast, we interview two partners of the international accounting and consulting firm EY, Tonny Dekker and Will Weerts on Enterprise Risk. Although Enterprise risk is a fairly broad area, being an expert in this does not mean you know or understand all risks a company could face. Rather both partners consider themselves generalists. Due to their advisory history, they have a lot of knowledge about the way to address risks in an enterprise (being all sorts of organizations, even governments). Risk management is making choices about which risk you are willing to take and building your strategy on that. “Ther is more value money destroyed with poor strategic decisions and poor strategy execution than all the accounting scandals.
In the interview they talk about the risk surrounding KODAK’s failure to maintain their photography technology lead, Apple’s choice to launch the iPad where many believed that would be wrong, and the corporate failures of WorldCom and Nortel at the beginning of the 21st century. The “Six Factors” of risk management are discussed as defined by Loizos Heracleous of Warwick Business School and Katrin Werres, a senior industry analyst at Google as examples of poor risk management strategy, being overly aggressive or showing poor leadership.
They discuss the role of a Chief Risk Officer, the Three Lines of Defence, and the “Catch-22” situation many managers find themselves in. Other subjects that are part of the interview, the challenges of the corona-pandemic risks and IP (Intellectual Property) risks, internal audit function and enterprise risk.
In the interview both EY partners refer to the “Kaplan Model“, named after the Harvard professor who published a risk classification that talks about upside risks, risks and opportunity risks, outside risk, so risk coming from outside the organization which you cannot control, but which you need and want to deal with, and downside risk, so risks that you can manage and monitor yourself.
Listen to the interview on the TrustTalk podcast. The transcript of the interview can be found here:
Further reading on the Kaplan Model: “Managing Risks: A New Framework“, by Robert S. Kaplan and Anette Mikes (Harvard Business Review).
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In the podcast interview Rick Schmitz of LTO Network he explains what LTO does and how it differs from companies that collect data.
LTO Network provides a two-layer approach. In the first layer, you can basically send each other the data through life contracts and automate the tasks that you feel comfortable with. But if there are manual tasks that need to be handled, you can do it with manual input. The problem with that is, is that a blockchain only allows for automated tasks. You cannot do something, you cannot do a click of a button to trigger something in a blockchain. It can only leverage automated communication and verification of data. So our role in this is combining the two layers. The layer one you can put artificial intelligence in. It is you can even use it centralized. But we use layer 2 as basically a notarization of a transaction. Did something take place within that layer 1? So if you’re sending a piece of data between you and me or me and a company or putting my credentials in there of my passport, you can verify that because you have the data. But if you would delete data or you won’t have it anymore or I would alter the data, then yeah, well, we could go into court and say, OK, “this is the copy I have” and I say “this to copy I have”. They are not the same. It’s your word against mine, but putting a blockchain underneath that, gives you that sense of trust, because if that data is anchored, you can prove always with a copy of the data that with that timestamp and that piece of data, actually the transaction took place in a certain time. And that’s the trust blockchain is giving you.
Listen to the full interview on the TrustTalk podcast, or go on the menu of this site to “podcasts” and then to the Interview with Rick Schmitz (where you can also find the transcript of the interview)
