1. Digital
content
promotion
POLICY RECOMMENDATION

2. Agenda
›TRANSORMATION
›PUBLIC POLICY
ISSUES
›REFORM
IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 2

3. Professional Media
Industry- digital transition
Content type Expect continued
changes in business
Audiovisual conditions
TV Film
Gaming
• Digitization
• Miniaturization
Audio Radio Recorded
• Screens
Music • Storage
• Processing
• Networks
• Broadband access
Photo
• Business models
Consumer
Newspaper Magazines • Falling transaction costs
Academic • Media Convergence
Journals • Online behaviors
Books
Text
Function
Information Education Entertainment
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 3 Source: The Internet and the Mass Media, Kung, Picard, Towse, 2008

4. The magic trick – new
business conditions
› The business-trick is to
control NOT the copies
of your work
› but instead a relationship
with the customer
› that is what customers
ultimately want
› because they see it as
an assurance of a
continuing supply
› of reliable, user-friendly
and timely content
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5. What ever can go digital
will go digital
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6. more digital than physical
books – highest book growth
rates in over 10 years
Source: Amazon, Annual Meeting June 2011, http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-presentations
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 6

7. The Economist group
Experience – digitization not a
zero-sum game
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 7 Source: The Economist

8. Going digital: Norwegian
Music Industry CASE
› Total annual industry
revenues grew from 1.4
BNOK to 1.9 BNOK which
is + 36%
› Number of Music artist
increased by + 28%
› Per Capita inflation
adjusted annual artist
income has increased by
+66%
Source: The Norwegian Music Industry in Age of Digitalization, Bjerke & Sorbro, BI Norwegian School of Management, Oslo 2010
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9. Digitization is what you
make of IT….
Kodak Files for Bankruptcy as Digital
Era Spells End to Film (Jan 2012)
› The photography pioneer which
traces its roots to 1880 that invented:
– the first hand-held camera,
– held a leading position in film for
decades
– invented the first digital camera in
1975, which it shelved because it
would threaten its lucrative film
business
› Their history was so important to
them, a rich century-old history that
generated a lot of money along the
way. Now their history has become
their liability.
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 9

10. Agenda
›TRANSORMATION
›PUBLIC POLICY
ISSUES
›REFORM
IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 10

11. The market supply failure
of lawful digital content
Source PWC Global Entertainment Outlook 2012
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12. Content ACCESS BARRIERS –
copyright not the only barrier
› Access barriers are barriers to unhindered consumption of
content, the presence of which often results in the personal
consumption needs of consumers being unmet.
› WIPO identified following access barriers:
– Consumer barriers (affordability)
– Content exclusivity and limited competition
– Deliberate non-availability of content (windowing,
territoriality)
– Policy and regulatory barriers:
› Content regulation
World Intellectual Property Organization, Twentieth Session, Geneva June 21 to 24 2011, or
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 12 access: http://www.wipo.int/edocs/mdocs/copyright/en/sccr_20/sccr_20_2_rev.pdf

13. We think: root causes to
market supply failure
1. Deliberate limited availability of
digital content, facilitated by
copyright
2. Technology specificity of
copyright
3. Unreasonable transaction costs
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14. We think: Key reform
objectives
Promote open and competitive markets in licensed digital
content that promote service innovation.
With the aim to increase availability of more legitimate
digital content at prices which appeal to consumers.
Decrease technology specificity of copyright, e.g.
exhaustion, exemptions/fair use, safe harbor*.
Increase efficiency in licensing by decreasing transaction
costs e.g. administrative time and complexity.
Reasonable consumer expectations must be met.
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 14 * Not an issue in the EU and the US

15. Agenda
›TRANSORMATION
›PUBLIC POLICY
ISSUES
›REFORM
IMPERATIVES
›CONCLUSIONS
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16. Increase Availability
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17. What should a reform
deliver to citizens ?
MORE LAWFUL DIGITAL CHOICE
BASE: Core 7 markets (US, UK, Sweden, Germany, Spain, China and Taiwan) (Showing those who consider the service worth paying for)
Source: Ericsson ConsumerLab TV Video Consumer trends 2011, 2012
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18. FIRST RELEASE WINDOW MUST TOO GO DIGITAL
CLOSING THE ANALOGUE CULUTRAL EXCLUSION
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19. End User willingness to pay
for Theatrical VOD Service
EQUIVALENT to the price of TWO CINEMA TICKETS FOR
THEATRICAL VOD SERVICE
Don't Know
Norway
241-275 SEK
Denmark
Sweden
200-240 SEK
0 10 20 30 40 50 60 70 80 90
Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8 Source: http://www.filmthinktank.org/
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20. ~ 70% would consume more film At
the level of 2x Single Cinema Ticket
price
WHAT COULD MAKE YOU WATCH MORE MOVIES ON TV?
Flexible Showtimes
Norway
Newer Films
Denmark
Sweden
Better Films
0 10 20 30 40 50 60 70
Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8 Source: http://www.filmthinktank.org/
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21. Technology
Neutral Copyright
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22. How many years does it take to
assemble the rights necessary
to launch Online service ?
› A technology specific approach inevitably leads to inconsistencies and
uncertainties as formerly distinct classes of works, rights or media types
converge.
› The consequences of fragmentation of rights are disturbing in the digital
age, as digital technology produces a breakdown and conflation of technology
specific works/rights that were meaningful in the analog era.
› The transmission of audiovisual content on the Internet now involves making
reproductions and public performances of both the recording and its underlying
content.
› Consequently, the same act can be viewed as a reproduction and distribution
of copies on the one hand, and a public performance or display of the work on
the other. Since these rights are controlled by different parties and agents, the
complexity of the system leads to a gridlock of control that may hinder
development.
* Source: An Independent Report by Professor Ian Hargreaves, Digital Opportunity, 2011
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23. ..and continue to expect
payment each time….
› The current technology specific
rights clearing needs to be balanced
with realities of the demand side of
the digital market.
› There is a need to recognize, end
users’ actual consumption of content
› .. and avoid the cumulative effect of
technology specific rights
slicing, doubling or tripling the cost
of identical content for an identical
user and for unaltered right to use.
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24. Any screen – remuneration
in digital world
› Remuneration based on actual, identifiable consumption
based on ;
– Download to Own
– On-demand (time limited)
– One time view
› Irrespective of technology
– Transmission Technologies
– Delivery Networks
– Devices
– Screens It is unreasonable to potentially triple
the cost of identical content, over
multiple screens for same user
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25. Private Storage of legal
content
› The copyright regime and praxis should
be applied technology neutrally, e.g.
independently of any physical
storage, architecture and media format.
› Any storage solution architecture e.g. if
the storage function is embedded in a
local consumer device or in a network
should be able to compete freely.
› Notably, PVR and private cloud have the
same functions and should not be
discriminated by law or require special
consent from rights holders.
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26. DIMENSIONS OF availability
› Territoriality > Timed availability across
nations
› Territoriality and place shifting > Follow me
› Territoriality and long tail – regional/global
niches
› Time and Timing > windowing and exclusive
licensing
› Time, place and format shifting – at home and
on the go
› Range of choice > depth and width of
catalogue
› A’ la carte > Freedom to choose (my content)
and timing (my time) and screen (my screen)
HOW ABOUT AN “AWATAD” RIGHT ?
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27. Ultimately we end up with
the question of exhaustion
› “The first sale principle of the original of a work or copies
thereof by the right-holder or with his consent in the
Community, exhausts the right to control the release in the
Community of a work incorporated in a tangible tool”
› The paradox of “tangible” exhaustions ; in a legislative
measure such as the EU INFOSOC DIRECTIVE which
was devoted to the online context, the only purpose of
market integration was confined to the offline context.*
› Creators should be able to freely exercise their right to or
not to exhaust – BUT why should digital be discriminated
once “analogue” free choice to exhaust has been made?
* Source: EU Study, Legal Analysis of a Single Market for the Information Society October 2009
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28. SIMPLIFY &
DECREASE
TRANSACTION COSTS
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29. Transaction costs
› Simplify current state of (indirect) licensing play
› Decrease fragmentation of rights, rights owners
and licensing practices with the aim to:
› Increase availability and decrease effort –
nationally: One-Stop-Shop, Digital Copyright
Exchange, etc
› Decrease effort cross border, simplify cross-border
licensing, collective rights management
› Regulate natural and/or legal monopolies >
efficient and transparent collective rights-
management
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30. REASONABLE
CONSUMER
EXPECTATIONS
EXCEPTIONS
TIME
PLACE
DEVICE
SHIFTING
MUST BE
MET
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31. we think – reasonable
expectations – Must be
accommodated
› Lawful content In combination
with a legal
› Time shifting system that
promotes
› Device shifting availability of
› Place shifting digital licensed
content and
› Private sphere efficient
licensing
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32. legal attractive
digital services can
compete with and
Displace “Free”
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33. Displace “free” with lawful
digital services !
Spain
Base: Spanish on-demand (streaming & downloading content) users (513 users out of 1000)
New & old content Attractive pricing User friendly & simple
US
60%
50% 2011
40% 2012
30%
20%
10%
0%
Other File sharing Apple iTunes Amazon Instant Operator On- TV Network Hulu Netflix
Video demand homepage
Base: US on-demand (streaming & downloading content) users (591 users out of 1000)
BASE: Spain & US [On-demand users that watch streamed or downloaded video content at least several times per month]
Source: Ericsson ConsumerLab TV Video Consumer trends 2011 & 2012
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34. enforcement alone is not an
adequate response
› Such research as exists indicates that we should be wary of
expecting tougher enforcement alone to solve the problem of
copyright infringement.
› Instead, Government should respond in four ways:
– by modernizing copyright law;
– through education;
– through enforcement
› and by doing all it can to encourage open and competitive
markets in licensed digital content, which will result in more
legitimate digital content at prices which appeal to consumers
Source: An Independent Report by Professor Ian Hargreaves, Digital Opportunity, 2011
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35. we agree with - RIAA
statement 1 Dec. 2011
“To be clear, no legal
efforts are a panacea
— compelling legal
consumption options
are the most
important”
Source: The Tennessean, 1 December 2011, RIAA largely succeeds in goal of bringing piracy under control
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36. Agenda
›TRANSORMATION
›PUBLIC POLICY
ISSUES
›REFORM
IMPERATIVES
›CONCLUSIONS
DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 36

37. conclusions
Increasing availability
of lawful digital
content
Technology neutral
copyright
More efficient
rights clearing
Reasonable end user
expectations must be
accommodated
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