The internet is, at least in industrialized nations, the central communications medium of contemporary times - as well as the number one entertainment medium. The newest pop songs, novels and Hollywood films are only a click away; access to the worldwide data network is an admission card to a digital land of plenty: a gigantic, global self-service outlet with sections for music, films, books, and, of course, pornography.

Most people think that free access to online content simply means access at no charge. Or at least very, very cheap access to content. At first glance, that seems totally plausible. The digital copying of texts, images and videos circumnavigates practically all problems which in real life lead to scarcity, distribution struggles, to inequalities between rich and poor, to content and discontent.

In addition, a digital copy can match the quality of the original exactly. Everything, now and free of charge: It sounds too good to be true. After a moments thought, it quickly dawns on even the most fervent data-freak that something is missing from the equation.

Nothing comes from nothing

But some real human being has to compose and perform the music, write the books, and produce the movies. All the authors, composers, singers and actors, camera crews, sound engineers, and cable pullers don't just do these things for fun, but to earn a living.

Sometimes successfully, sometimes less successfully: Media content producers span a broad spectrum from multi-millionaire to starving artist. The composers and authors aren't alone in their endeavors, but are usually joined by producers and publishers who also want their piece of the pie.

Content mafia and copyright pirates

The players in the music and film industry who do not create but distribute and market content are regarded by net pirates as the exploitative "content mafia." They're accused of artificially restricting entertainment media and selling it on to consumers at overly inflated prices.

The result is that many users avoid paying for content by making use of alternatives such as file-sharing networks. Opponents to such alternatives complain about the collapse in sales or factor the estimated numbers of pirated works in with the official sale price or cinema entrance fees.

Soon enough, losses are totaled at seven-figure sums, though they remain largely theoretical. In the end, the paying consumer's budget is still limited.



Willingness to pay

While the content providers - that is, record companies, film distributors and publishers - push campaigns such as "Bootleggers are Criminals" and rely on current laws to take legal action to defend their digital "intellectual property," it seems that computer users' consciences are clear.

But that is only one half of the truth. Many people are, indeed, prepared to pay for digital media. iTunes is a good example. It's easy to use, the selection is extensive - and those who do have sensitive consciences can breathe easy knowing they've acted ethically.

A question of price

The regularly touted solution to the question of how the demands of media consumers could be aligned with the financial needs of authors and producers is the so-called culture flatrate - the payment of a fixed-rate contribution in return for unlimited access to media content.

At least in the music industry, this erstwhile pipe dream is now a virtual reality: Using streaming providers such as Rdio, Simfy or Spotify, consumers can access a comprehensive online catalogue of pop, jazz and classical music via their computer for 5 euros ($6.60) per month. For 10 euros per month, customers can download singles or complete albums onto their mobile phones.

It sounds and feels exactly like having purchased the media files. The subtle difference is that the music on smartphones cannot be digitally copied - at least not using normal technical devices, emphasized press spokesman Peter Hempel from Germany's music rights organization, GEMA.

Nominal fees add up

Streaming providers employing a subscription fee model for mobile phones pay after the effective tariff 10.25 percent of sales volume or a minimum of 1.25 percent per month and customer to GEMA.

They then transfer the money to the content creators, which are just as reliant on user numbers - the more often an individual piece is heard, the more money the intellectual creator is paid. It remains to be seen, however, how much content creators receive in the end through flat-rate distribution models, and whether the approach is profitable for the streaming providers.

Customers are also warming up to the idea of reasonably priced film subscription services, as demonstrated by the platform Kino.to, which was recently shutdown for copyright infringement. A "premium access" subscription cost around 10 euros per month, similar to the pricing points at operator Megaupload, which in the meantime has also been shut down.

At Kino.to, the money went undiminished into the pockets of the operators; the creators of the works received nothing, which is why the platform now faces criminal charges.

Film industry remains hesitant

A legal offering of films with a truly comprehensive and up-to-date catalogue of titles won't be appearing in the foreseeable future in Germany. Existing online video rental stores demand that customers jump through technical hoops, like setting time limitations and copyright protections, while prices remain comparable to those of regular high-street video stores.

Sooner or later the creators and producers will have to ask themselves the question of how best to deal with the realities of changing media usage. Unlike the music industry, the film industry has been hit relatively late by the piracy problem. Cheap computer hard-drives with enormous data storage capacities and fast internet connections have only recently made this possible.

It may take a generation change in the upper echelons of the industry, speculated an insider, in order to try out new ideas and utilization possibilities - the digital natives have yet to reach the executive chair.

Author: Michael Gessat / hw
Editor: Kate Bowen