Digital Content Trading – Current Business Practice Contributes to a Lack of Diversity
More and more digital content is consumed across different platforms, such as streaming services, digital channels of broadcasters, and social media. However, have you ever wondered why there seems to be increasingly “more of the same” digital content to choose from?
Our research explores the underlying business model of content trading in business-to-business environments. We identify challenges in current business practice of buying digital media content. In order to identify strengths and weaknesses in the current business practice of content trading, we draw on the business model canvas developed by Osterwalder and Pigneur to structure our expert interviews. The business model canvas is a strategic management tool to describe how an organization creates, delivers and captures value. Business models are subject to evolution (i.e., business model innovation) due to internal or external changes in an organization’s business environment. As in many other industries, the business models that previously worked well in the creative economy are no longer functional in the digital era. Music piracy created a need for the development of new digital business models (see, e.g., Bustinza et al., 2013). The COVID-19 pandemic further exposed and amplified some of the problems as, for example, music artists could not perform live and relied on income streams from recorded music (MPs on the House of Commons Digital, Culture, Media and Sport Committee, 2021). Meta data that is added to creative media at creation and specifies creator, ownership, and copyrights are often stripped away from the digital content. This lack of meta data leaves digital files without information on whether the content can be used and mechanisms for payments due (McConaghy et al., 2017). Digital rights data is thus fragmented, often incomplete, which potentially results in copyright infringement. Consequently, attribution can become difficult, if not impossible, which creates problems both for content producers and organizations buying content. Content producers rely on accurate metadata to be able to claim royalties and be paid for their work correctly and within a reasonable time period. As digital content can easily be copied and shared online, the content creators’ control is lost. Organizations that buy digital content need to be sure they hold appropriate copyrights for their respective usage. If the copyrights are unclear, companies face economic risk as they could be involved in lawsuits when content creators’ exercise their copyright.
The research was conducted by Dr Birgit Altrichter, Prof Glenn Parry, and Dr Alisha Tuladhar from DECaDE at Surrey Business School. Data collection methods, such as discussions, interviews, and workshops with industry experts were combined to get rich insights on current challenges in different areas, such as the music industry, news coverage, movies, and TV shows.
Our study reveals weaknesses in current business practice of media content trading in five key areas:
- Inefficiencies in the Process: B2B content trading involves many parties, which creates transaction costs and inefficiencies. Content trading is currently very fragmented, and many smaller companies do not have the resources to build their own infrastructure. There are also inefficiencies in the payment process: data on content attribution and ownership is often not available/not accurate, leading to late payments for copyright holders, or worse, they may not receive any payments at all.
- Complexity of License Agreements/Rights Management: License agreements need to determine for what time period, where (i.e., which countries/territories), on which devices (i.e., TV, radio, online) content can be used. Further complexity is added through the dynamics of content shared online (e.g., TikTok using music). The different types of copyrights and different copyright laws per country add further challenges.
- Challenges Related to Metadata: Key questions media organizations ask before they can use digital content: Is the metadata available? Who contributed to this content? Is the content verified? Are the content producers verified? For established artists in the music industry, record labels are doing this; for unassigned artists this needs to be done individually case by case. In practice, however, metadata is often missing or inaccurate, which can disadvantage content creators, both in terms of payments, but also in terms of being discovered (contributing to a lack of diversity, while finding and developing new artists is another key challenge).
- Lack of Diverse Content: There is a lack of diverse content and the related challenge to reach younger audience segments. Furthermore, currently international boundaries act as a barrier to more diverse content. Some artists are brilliant, but widely unknown because they have not been discovered yet. This could be an opportunity to support new artists to be discovered through a decentralized content trading floor.
- Challenges associated to User-generated Content/Content Created by individuals or small organizations (including, e.g., unassigned artists): There is a particular challenge related to content captured at live events: Who created the content? Who performed? Who might be visible on the footage (have they agreed to be broadcast)? New possibilities but also challenges emerge with user-generated content related to the quality of the content, ownership, and authenticity.
Finally, this research explores whether and how distributed ledger technologies (DLTs) could help to resolve some of the identified business challenges in the creative economy. Taking a transdisciplinary approach, we inform future research in the research center as based on the findings of this study, a prototype decentralized virtual trading floor supporting search/discovery, rights models, and ownership/payments will be developed. We also offer recommendations for practice as we seek solutions to potentially resolve some of the challenges in content trading. This work identifies opportunities to create a more equitable digital economy, for example, by encouraging diversity in content creation as the content trading marketplace becomes more accessible to a more diverse set of content producers.
Author- Professor Glenn Parry and Dr Birgit Altrichter
Acknowledgment: The authors gratefully acknowledge the funding contribution of the Engineering and Physical Sciences Research Council (UK) to the Next Stage Digital Economy Centre in the Decentralised Digital Economy (DECaDE) [Grant Reference EP/T022485/1].