Posts Tagged: "digital economy"

The European Commission has recently proposed new tax rules that would significantly alter the tax regime faced by technology companies operating in the European Union, including American tech giants like Google and Facebook. The proposal from European authorities would tax tech company revenues in the country where those revenues are generated rather than where the companies are regionally located; supporters of the proposal note that this would keep tech companies from reducing tax payments by locating regional headquarters in European nations with lower tax levels.

I think the long-term benefits to authors are greater than the downsides or the risks. But, like any time there’s a shakeup of an industry, there are short-term and long-term winners and losers. I’ll even use the term “digital disruption,” although it is way overused these days (and too often used as a poor excuse for infringing copyright). Digital technology is disrupting the industry as a whole. We had the same business models for the better part of at least a century, and while things are starting to change, we’re still largely operating as we did in the past, based on old business models with just a few tweaks. We haven’t fully evolved yet, and as a result we’re mostly seeing a little bit of the downside. Whenever there’s a disruption in business models, someone is negatively affected. Unfortunately, here it is the authors, and creators generally. And that’s because creators in these industries tend to have the least bargaining power and they tend to be a line item in a budget where there is some discretion.

Between August 2012 and February 2013, digital publishing apps saw an average growth in their readership of 200 percent according to a state of mobile tech report released by computer software company Adobe Systems. Online statistics portal Statista report statistics showing that 88 percent of North American newspapers were distributing content on mobile devices by 2010. It’s not just readers that are heading to the digital realm, but advertising dollars are also helping to buoy the nascent digital magazine sector. Forecasts reported by professional services network PricewaterhouseCoopers (PwC) indicate that digital advertising expenditures should rise from $2.4 billion in 2012 up to $3.8 billion in 2017, when they will account for one-quarter of all advertising spending.

Judge Leval found fair use and ruled in favor of the defendants. However, this was quickly reversed and remanded by the Second Circuit Court of Appeals under the logic that that previously unpublished works were immune from fair use due to a right of privacy. Leval now thinks his opinion deserved to be reversed, but the Court of Appeal’s opinion was even more problematic. He opined that the “[i]nability to quote from unpublished documents would seriously impair history, political commentary, [and] journalism.” As he described Craft v. Kobler (1987), New Era Publications v. Henry Holt & Co. (1988), and American Geophysical Union v. Texaco (1992), a pattern became clear: Judge Leval’s application of the fair use doctrine throughout the past thirty years has been based on furthering the advancement and edification of the public.