Nicoli Speaks On U.K.'s Creative Industries IP Forum

EMI Group chairman Eric Nicoli spoke Feb. 4 at the Advancing Enterprise 2005 conference in London, organized by the department of the Chancellor of the Exchequer Gordon Brown.The following is an edite

EMI Group chairman Eric Nicoli spoke Feb. 4 at the Advancing Enterprise 2005 conference in London, organized by the department of the Chancellor of the Exchequer Gordon Brown.

The following is an edited version of his comments on the U.K.'s Creative Industries IP Forum:

Intellectual Property: In the creative industries, value is created by copyright and other intellectual property. And in the U.K., we have a government that understands the importance of IP.

At the top of the list of our concerns is the need to protect intellectual property and the right of the creator of that property to get paid for it.

I congratulate the U.K. government for setting up the cross-departmental Creative Industries IP Forum.

The Forum has set up three sub-groups to focus on:

1. New business opportunities -- mapping the range of new business models.

2. Education and awareness -- to raise awareness of how the creative economy works, and the need for creators to get paid for what they do.

3. Piracy and illegal file sharing -- to look at specific measures which should be introduced to combat these problems.

The Forum is doing an excellent job for the U.K., but perhaps we now need to develop an international focus.

We very much hope the U.K. government will use its Presidency of the European Union to take these discussions into European and international [forums] and in particular to drive the Lisbon Agenda better and faster.

I respectfully suggest that one of the reasons that Europe's economic reform agenda is in trouble -- or even "a failure," according to the just-published Kok Report -- is the Lisbon Agenda's one-sided focus on new technologies and its complete failure to recognize the importance of creative industries.

We don't ask for subsidies. What we need most is a strong legislative and regulatory framework based on respect for intellectual property.

More needs to be done to track down and pursue illegal use of intellectual property rights.

Just because intellectual property is intangible, it doesn't mean that it has no value. The EU has a role to play in helping to educate consumers about the importance of intellectual property.

The EU should seek agreements with third countries that counterfeiting and piracy are criminal offenses that should be treated no less seriously than other criminal offenses such as forgery, theft and fraud.

Widespread abuse of new digital technologies has led to a proliferation of mass unauthorized theft of content online. This has resulted in loss of investment in content creation, declining sales in the legitimate market, thousands of lost jobs and lost tax revenues for EU governments.

The Digital Revolution: Please don't interpret my remarks as resistance to technological development -- which is a regular accusation thrown at music industry executives. As a scientist by degree, nobody appreciates the importance of technological innovation more than I.

Indeed, the music industry is at the forefront of a technological revolution which has transformed the way we do business. We now have a multiplicity of new products (DVDs, ringtones) and new services (iTunes, Napster).

The biggest challenge for us has been to monetize these new business opportunities -- to make music easier to buy in a variety of different ways and harder to steal. We have invested significant resources both in protecting our music and, most importantly, in negotiating new business deals with a host of new business partners.

We're seizing the opportunities created by digital technology, developing new business skills and adapting our business to enable us to flourish in the years to come.

Right now, record companies have digitized and licensed over 1 million songs to over 230 legal music sites around the world.

Paid-for downloads are up more than tenfold to over 200 million tracks, and we think that digital sales could rise to as much as 25% of total revenues in five years.

Among the many benefits of digital distribution is the facility to make available music from every country and culture to music fans anywhere in the world.

Portable players, led by the hugely successful iPod, and mobile phones are helping transform the consumer experience of enjoying and creating big new revenue opportunities. There are estimates that 50% of mobile content revenues will be from music.

So while driving our own business in new directions, we're driving other new businesses and creating value for our new business partners as well.

In conclusion, while I've talked a lot about the creative industries, I just want to stress that the similarities with other industries are greater than the differences. We all need creativity and innovation, we all need the skill set to compete efficiently and effectively in the future, and we all need the financial resources to invest in exploiting the growth opportunities, wherever they may be. Because of those similarities, I'd love to see the creative industries at the center of the government agenda.