Digital media and it's Ramifications
The Media and Entertainment (M&E) industry globally is undergoing a rapid change with the innovation of the digital media which includes the use of computers, mobile phones and the internet for the transfer of digital information.
The digital revolution has had an impact on every branch of the entertainment industry, primarily in terms of advertising, music and film distribution. Music, motion pictures and television programmes are increasingly available on mobile networks and the internet. Currently in the United States, record labels in the music industry are crying foul over the market invasion by the digital music distributors starting from the era of Napster and then CD Baby, Itunes, Walmart.com etc. A lot of music artistes in America have gone "Indie" starting their own independent labels that can be distributed on the internet for a dime a dozen or even for free. Before our very eyes, digital media is fast transforming the face of the entertainment industry.
A number of factors have informed this trend: globalization, shifting consumer behaviors and technology advancements etc; an increasing number of consumers especially the younger generation now opt for instant, cost-effective access to entertainment and information. All these have left the conventional players in the industry gasping for breath.
Trends in the Nigerian Media and Entertainment Industry
- Rising Internet Penetration:- With over 10 million people currently enjoying access to the internet (though this still is a small market share compared to Nigeria's population) file sharing and downloads of movies, musical clips, television series, sport events and so on have become extremely popular. The face of advertising has also changed as social networking sites (e.g Facebook, Hi5 etc), blogs and online communities are increasingly used as platforms for advertising products, movies and even political campaigns!, as opposed to the conventional billboards and static indoor media displays.
- Mobile Phones:- The introduction of mobile phones has changed the face of business activities. Mobile phones which enable faster and easier communication has brought on a productive increase in business activities. A BBC report in 2002 estimated that one mobile phone at that time could generate $8,000 in new business. Major mobile operators have capitalized on the inherent revenue opportunities in the mobile phone and the boom in the entertainment industry by creating digital platforms that enable users for a minimum of N50 send SMS, download music including the latest hit songs, videos, ringtones, real-tones, caller-back tunes and pictures which may serve as wall papers or screen savers.
- Interactive Games:- The interactive online/computer and mobile gaming market has enjoyed substantial growth over the past couple of years. Today, it is not unusual to find many games that have soundtracks of popular artistes, which make them very appealing to the users. For example, our own Femi Kuti, an Afro-beat icon and the son of the legendary Fela Kuti, provided the tunes and the talk for a radio station in the brand new Grand Theft Auto game. He can be heard as the voice of the video game's in-game radio station called IF99.
Legal and Commercial Implications
The introduction of digitization into the media and entertainment industry has created a number of industry-wide implications. These challenges will be discussed under two headings: Legal and Commercial Implications.
ü One vital implication for the artistes, investors, producers and co-creators of the artiste's work is the definition of rights, i.e who owns what. It is important that the ownership of the intellectual property rights and other related rights such as performance, recording, broadcast, reproduction and digital rights be properly defined. As time progresses, we will begin to see more sophisticated contracts in which the parties and their ownership rights will be clearly spelt out depending on their input or investment in the work.
ü The legal and regulatory framework for digitization in the media and entertainment industry is bound to grow in scope and operation. The Copyright Act refers only to digitization in Section 2(b) which provides for the eligibility of copyright as "work which has been fixed in any definite medium of expression now known or later to be developed". Digital media also does not appear to be within the purview of the Nigerian Copyright Commission. This lacuna gives room for the present players to create their own rules as they go along. A review of our laws is therefore imperative to adequately reflect the changing realities in the industry. In this regard, the United States of America is already blazing the trail by enacting copyright laws which are in tandem with the growing realities of the media and entertainment industry. Federal legislations such as the Digital Millennium Copyright Act 1998 and the Family Entertainment and Copyright Act 2005 govern and protect the legally enforceable rights of creative and artistic works in the United States.
ü The convergence of telecommunications, broadcasting, information technology and the entertainment industry presents the regulating bodies such as the Nigerian Communications Commission (NCC) with new challenges. It is therefore important that the NCC, which serves as a regulator for the telecommunications sector in Nigeria should establish and enforce a robust legal and regulatory framework which will ensure a level playing field for all market players; provide an efficient dispute resolution mechanism and ensure that the artistes earn the right revenues for their work. For instance, Nigerian Telecommunication companies being the major players with the infrastructure to distribute digital media currently charge as high as 60% of revenues from digital distribution of artiste's work via SMS leaving 40% to the service providers, record labels and the artiste, which invariably leaves the creator of the work with next to nothing.
ü As transactions and contracting become more sophisticated so will the ensuing disputes, the courts and other avenues for alternative dispute resolution including regulators will need to build their capacity and knowledge base to resolve such disputes.
ü The structure and efficiency of our Collecting Societies is also challenged here because as long as Nigerian artiste's work are on digital portals on the internet, their work can be downloaded anywhere in the world and the mandate of the Collecting Societies should be to collect revenues worldwide on behalf of artistes signed up to them. The question here therefore is: Are our collecting societies ready?
ü Digitization affords Nigerian artistes the opportunity to reach a wider audience internationally as digital platforms such as Youtube, Itunes etc are employed in distributing the artiste's work. This in turn should translate to more revenue for the artiste. Artistes, in fact, have the opportunity to non-exclusively license the same piece of content to a number of service providers who cater for different market segments.
ü End-users of artiste's work also enjoy cheaper and more convenient ways to access digitized content of mobile entertainment and information systems.
ü We should also see a reduction in the exploitation of artiste's work by Nigerian "Marketers" through cheap copying and distribution of records, albums and videos etc because artistes will have greater control over the production and dissemination of their work. In most developed countries, independent labels and digital distributors succeeded at almost eliminating the physical distributors (Record labels) by making content cheaper and more easily available, selling single music tracks in online stores like the Itunes, Amazon and Walmart.com. The Record labels in turn have been compelled to transform their business models, distribution strategies and to launch innovative products and services to sustain their market share and create new revenue sources. Record labels in the United Kingdom and in the United States, for instance, in response to the digital trends have begun to enter into 360 degree deals with artistes so they can share revenues from all incomes earned by the artistes including digital sales, distribution and licensing.
The flip side to these emerging trends, however, is that a lot of end users are increasingly getting access to content for free. This gives rise to the need for technology to ensure that copyright ownership rights are adequately protected. For example, it was reported that an unfinished version of the long awaited movie "X-men Origins - Wolverine" had been released on the internet for free even before the movie premiered. New technologies have emerged to combat these infringements. The Digital Rights Management System allows the copyright owner some form of control in the distribution and dissemination of the artiste's work by preventing unauthorized access, copying or conversion to the other formats by end-users.
The advent of digital media would also contribute to a more robust media and entertainment sector with more players and new entrants building capacity and knowledge base. Consequently, as the sector becomes more economically viable, it should be more attractive to investors.
Welcoming a Digital Future
No doubt, the digitisation era will produce opportunities and challenges for the traditional media and entertainment industry. However, the opportunities far outweigh the challenges posed. With a population of over 150 million people, a growing middle class and societal thirst for new information and entertainment, very few countries in Africa and the world can match Nigeria's promise and potentials. For instance, Nigeria is MTN's biggest market with an estimated 20 million subscribers as at 2008 and Nollywood (the Nigerian film industry) alone is worth over $5 billion. There is still so much that remains untapped.
The charge for all existing and potential participants in the Nigerian media and entertainment industry then will be to critically assess these emerging trends in the sector and utilise the opportunities they offer!
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