The Digital Skeptic: World Of Copyright Woe Awaits in Global Markets

NEW YORK ( TheStreet) -- Even with the sliver of English he's speaks, Paul Achar Zavalza can describe perfectly the big issue faced by Netflix ( NFLX), Amazon ( AMZN) and even Google ( GOOG) when it comes to global markets.

"It's the same problem," said Zavalza, president of Sociedad Mexicana De Autores De Las Artes Plasticas, a Mexico-based plastic arts rights organization. "Online, you do more, you get less."

Zavalza is one of roughly 3,000 global-rights managers, intellectual content management companies, musicians, artists and consultants gathering here for the World Creators Summit, organized by the International Confederation of Societies of Authors and Composers.

Investors should find this schmoozefest refreshing: The average attendee age is very much on the "plus" side of 40-plus. English is definitely the second language. And there's none of the venture-capital-driven goofiness that renders most such industry-oriented discussions of the future of the Web just so much nonsense.

These content management professionals fly in from all corners of the globe to get the latest intel on what it takes to keeps the world's copyright infrastructure alive. That is, tracking when a performance of a work occurs either live or via mechanical means, figuring out what the creator is owed for that performance, distributing those fees efficiently and protecting the original creation from being stolen in the first place.

The deep investor takeaway? American-based Web content giants -- and that means Netflix, Amazon, Google and all the rest -- are fooling themselves if they think expanding in the global content market is going to be anything but complex, brutal and terribly slow.

Absolutely not one world
What's this global summit shows is there is no such thing as a single global market for art, music, movies, stories or other forms of information.

"People in Iceland want to look at YouTube posts of people in Iceland," said Guorun Bjork Bjarnadottir, general manager at STEF, the Performing Rights Society of Iceland. "And every other country here feels the same way."

This passionate regionalism for stories, movies and art is worsened by a digital content network that struggles to monetize ideas consistently around the globe. Take Rogojina Sergiu, a lawyer at Okuasp, the Organization of Collective Management of Copyright and Neighboring Rights in Ukraine, a 2-year-old start-up that collects artists' fees in that country.

"We see a growing opportunity in administering artist's rights," Sergiu says. He explains that even in the Ukraine -- which is on the U.S. government watch list for piracy -- he has had success in collecting fees at live events and restaurants. But the Internet, he says, is "not real at this moment. There is no market for that now."

Even more worrisome, the mechanisms for assigning the basic rights of a song or book vary dramatically around the world. Joanna Ewa Senderek, an associate intellectual property attorney at the Milan, Italy, law firm Studio Legale Pojaghi said that even though the economic rights for a song may have been bought, European law calls for larger, more complex underlying obligations called moral rights.

"If there is a ghostwriter on a book," she said. "No matter what happens to that book, the writer can come forward and claim ownership of that book even after it has been sold."

It's even more disorganized in emerging markets. Lesley Thulani Luthuli, executive producer at Vala Entertainment, a South African-based entertainment company, explained to me that though his country has a modern intellectual-property system, neighboring countries often make it impossible to produce content, distribute or even tour.

"Africa has hundreds of languages. Hundreds," Luthuli told me. "African people often feel like foreigners in their own countries. I don't know what my neighbors can or can't do."

And it's not like global digital content markets can't work. Cato Strom, managing director of TONO, the Norwegian Performing Rights Society, says his country is well into a planned migration to Web-based content businesses such as Spotify and Wimp.

"Online services do pay if you set it up right," Strom said. "We have a case where we've paid several hundred thousand to two local musicians. It can be done. But it takes work."

The secret? Charge consumers real money for the service. Spotify in Norway runs an unheard-of (in the U.S.) roughly $16 per month, which makes a bigger pie to split among rights holders.

The sad song remains the same
That all means investors will face the same sad digital-age song: The global market for ideas, songs, music and stories will be a tough song to master for some time.

"When companies are small, they can't pay," explained Tero Ojanpera, managing partner for Vision, a Finland-based media investment fund. "When they get big, they don't want to pay. Nobody knows quite yet how to change that."

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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