The Blog

Is Content King?

The days of unrestrained Internet downloads and open access content are approaching the end. People are the Internet's biggest content owners and they want their share of value.
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The battle between Facebook's 'open' web and Google's 'closed' web is on. It will be intriguing to watch these two giants going head-to-head for years to come, as they race to define the future content usage models of the Internet. What Google has already discovered, and Facebook is yet to seriously encounter, is that those setting the rules happen to be content owners, including their users, who are insisting on increasing control over their copyright.

While Facebook demonstrates irreverence in the 'open' web approach, it too will eventually wall its garden, as Google has been doing ever since losing the cherished position as defender of the open web. Each has followed the approach reflective of so many Internet development cycles: beg, borrow and steal as much content as possible in the race to build distribution, before strangling users with revenue-centric marketing as investors demand performance.

With massive amounts of new content uploaded to the web each day, it is only a matter of time before consumers collectively recognize the value of their worth to website publishers, and enforcement of their copyright becomes important enough for them to demand equitable treatment. Consumers as creators of videos, blogs, photos, documents and posts most often get nothing from web sites that benefit from their efforts. Imagine being a lyricist or a composer and not being compensated? The global music publishing regime ensures this is not the case, but on the web, creators of popular content are expected to be satisfied with the 'fame' afforded to their contributions, while shareholders of the site obtain equity valuations calculated as a multiple of the future revenue.

Look at the rise of Pinterest as an interesting study of this phenomenon that is occurring with photographic content. On the one hand Facebook embraces its approach, and in fact the growth of Pinterest has been significantly enhanced by Facebook's present open web ideals. On the other hand, Google has all but shut them down, doing its best to undermine Pinterest's easy technical 'click to pin' enablement for users who want to leverage Google's indexed links and hijack their neatly ordered content. Google is concerned because Pinterest users are picking the best fruit from its well indexed orchards. While Google doesn't like it one bit, Facebook is tied to the success of Pinterest via its user registration and social graph, through which they privately trade valuable information about a user's activities.

Copyright owners, particularly in music and movies, reacted adversely to massive piracy of their content, which eventually led Viacom to file a lawsuit against Youtube. The pre-litigation activity pressured Google and Youtube to build a filter to 'fingerprint' and track content uploaded to their network. As soon as Youtube and Google had formal technical knowledge of uploads and the extent of infringement on their network, they had little choice but to proceed to the next logical stage -- to recognize content ownership rights and offer owners a share of benefits from its advertising revenue -- but other sites have not followed the same path for obvious reasons.

The cost of filtering is significant, and implementation alone cannot be by half measure because of the legal liability that may transfer as a result. Therefore, companies not threatened by litigation do not filter; although statutory regulations require ISPs or search engines to take down content when identified in accordance with the DMCA safe-harbor statute, other sites or social networks don't have such an immunity shield to lose, and therefore they have little incentive to act. Regardless, as corporations and consumers become acutely aware of the value of their content to these increasingly commoditized social and search networks, demand for copyright filters is sure to increase. Service providers like Vobile, Audible Magic, Technicolor and others are profiting from the growing need for copyright fingerprinting and filtering, and demand for similar services is growing.

A recent Australia lawsuit brought by members of the Motion Picture Industry against ISP iinet failed to place liability squarely on the shoulders of the ISP, but it did go so far as to define the type of knowledge that may cause trouble for ISPs in the future. The ruling has Australian ISPs working overtime to ensure they are not caught in the litigation trap. As ISPs make more use of deep packet 'sniffing' technologies to manage traffic networks, they get very close to actual knowledge of infringements by their users, and the tipping point that will require them to introduce Youtube type filters is near.

The days of unrestrained Internet downloads and open access content are approaching the end. People are the Internet's biggest content owners, they want their share of value, ISPs want more control over services to provide their customers, and the share of revenue ordinarily attributed to website publishers is uncertain because content owners want to get paid. The name of the game is changing as ISPs and carriers begin to realize their technical prowess to enhance user services, grab control over website advertising, transform themselves into the copyright bankers of the future by compensating content owners and shift the equitable result. Deep packet inspection and packet profiling is a sea change for ISPs; their tide is coming in and King Content is floating in on it.