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Music: Sounding out the Future, International Copyright Forum

Beijing, November 18 and 19, 2010

Opening Address

Francis Gurry, Director General, World Intellectual Property Organization

The Honorable Liu Binjie, Minister, National Copyright Administration of China (NCAC),
Excellencies,
Distinguished Guests

It is a great honor and pleasure for me to be present here in the dynamic city of Beijing and to join Minister Liu Binjie in the Opening Ceremony of this major event on Music: Sounding out the Future. I am delighted that the World Intellectual Property Organization (WIPO) has, once again, the privilege to cooperate with the National Copyright Administration of China (NCAC) and I should like to extend our thanks and express our gratitude to the NCAC for hosting this Forum.

Few activities are as fundamental to the human species as music. It is central to every culture and springs spontaneously from every child. It is, arguably, as fundamental to our species as language and, indeed, a debate has raged for several hundred years as to which provided the basis of the other: whether language arose out of music, as Darwin believed, or whether music evolved from melodious speech.

Despite the primacy of music and its centrality to human existence, music is losing ground as an economic activity. The overall entertainment and media market worldwide was estimated to amount to $1.32 trillion in 2009. Yet recorded music accounted for only about 1.9% of that market, or $30 billion. For a fundamental and much-loved past-time and passion, which accompanies, through ear-phones and other devices, increasing numbers of people in so many aspects of their daily lives, the economic value of the music market appears to be under-nourished.

The cause of this under-nourishment is well-known. Digital technology, with its perfection of imitation, and the Internet, with its power of distribution, have shaken the foundations of the music business. They are not the first technological changes to affect music, which has seen its audience successively enlarged by printing, which allowed compositions to be published, and by recording, which started the possibility of mass audiences. But they are the most challenging of technological changes. The evidence shows that business models are adapting, but not necessarily adeptly enough to maintain the market. While digital sales increase, they do not increase sufficiently to compensate for the loss of physical sales and, thus, we see the total global market decreasing.

What does the future look like? A number of different approaches are being adopted around the world that will influence the answer to this question. Some of these are legislative and focus on dealing with the phenomenon of rampant piracy - the massive illegal space for down-loading - by increasing penalties for offending consumers and by establishing intermediary liability. Other approaches emphasize new business models for value chains in the digital environment which, it is hoped, will create the right incentives for legal dealing in online music files. Without denying the importance of those approaches, I would like to suggest that there is an underlying condition that needs to be addressed before they can be really effective. That underlying condition is the alignment of legal forms of online exploitation with the expectations of actors in the online environment.

The expectations of actors in the online environment are created by the technology. They are, quite simply, the expectations of a global marketplace, a space where composers, performers and their business associates can aspire to a global audience, where consumers can aspire to a global repertoire and where the transactions needed to realize those aspirations may take place simply and quickly, if not automatically. For various historical reasons, those transactions do not take place simply. Both territory and the division of rights in music according to the respective contributions of those who have created the marketed sound conspire to defeat simplicity and efficiency. But consumers operating in the online environment think of neither territory nor the component contributions of the final sound. Indeed, the technology encourages them to think otherwise, to think of the immediacy of the availability of the music, wherever it may originate, and the experience of the sound, whatever its component contributions.

The absence of alignment of legal forms and the expectations of actors in the online environment exacerbates the problem of piracy, as expectations can be satisfied more easily through illegal than through legal means. To achieve the needed alignment, a simple, speedy system of global licensing is necessary. Such a system requires, as a first step, a global repertoire database on the basis of which the licensing transactions could take place. A global repertoire database is an idea whose time has come. It is an essential piece of global infrastructure for the digital economy and society. It is time to work on the expression of the idea.

Giving expression to a global repertoire database is not a simple process. For the idea to have any chance of success, I believe that the global repertoire database would need to be a global public asset, based on voluntary participation and available to all as a basis for operating or building business models for the management or exploitation of rights. It would need to be embraced by all sectors of the music industry and it would need a governance structure that takes account of both the public and the private interests which the database would serve.

The International Forum provides a wonderful opportunity for us all to imagine the future of the economic structures and social organization of music. I look forward to hearing the thoughts of the many talented and experienced speakers whom I thank for joining us. I should like, once again, to say how pleased WIPO is that the Forum is taking place in Beijing, in cooperation with the NCAC, and to thank our hosts not only for the excellent organization of this Forum, but also for the wonderful series of events that accompany it. I look forward, in particular, to seeing and hearing the fine artists whose performances will, I am sure, remind us how important it is that we imagine the future well.