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RESEARCH PERSPECTIVES: A BROADER VIEW,[object Object],Lucy Montgomery,[object Object],Centre of Excellence for Creative Industries and Innovation, QUT,[object Object]
The rapid growth of China’s creative industries.,[object Object],Transformative Technological Change.,[object Object],Business model innovation.,[object Object],Opportunities for international businesses in the Chinese market.,[object Object],Implications for policy beyond China?,[object Object]
COPYRIGHT AND THE CREATIVE INDUSTRIES,[object Object],New technologies for copying, sharing and distribution.,[object Object],Networked creativity.,[object Object],Challenge to copyright industry business models. ,[object Object],What role does IP play in the growth of creative industries?,[object Object]
MUSIC,[object Object],	“Illegal sales of music in China are valued by [the] IFPI at around US$400 million, with around 90 percent of all recordings being illegal. No creative or knowledge-based industry can hope to survive in such an environment” John Kennedy, IFPI,[object Object]
DIGITAL LEAPFROG,[object Object],“China has leapfrogged into an age of digital music”,[object Object],By 2005 digital outperforming physical sales.,[object Object],Record labels struggling…,[object Object],But a booming mobile market.,[object Object]
FILM,[object Object],Booming box office.,[object Object],Widespread availability of ‘pirated’ content.,[object Object],Cinema as part of the experience economy.,[object Object]
FASHION,[object Object],Ready access to ‘fake’ fashion items.,[object Object],But on track to become world’s largest market for luxury branded fashion products by 2014.,[object Object],Chinese designers … not just Chinese factories.  ,[object Object]
CONCLUSION,[object Object],Need to engage with transformative changes impacting on creative industries internationally.,[object Object],Dynamic opportunities and markets.,[object Object],Need for business model innovation in all markets.,[object Object]

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Editor's Notes

  1. Hi, first of all, thank you once again for coming along today. This session considers business model innovation and the role of copyright in a digital age from a broader perspective. It asks whether there are there lessons that might be taken from ‘Blue Ocean’ markets like China and India and how attempts to untangle some of the questions associated with the challenges of informal economies and their relationships with more structured industries focused on formalised trades in intellectual property rights. The key question for this panel is, in the context of dramatic technological change and globalizing markets, what role does copyright play? Our panel speakers today are myself – I am a research fellow at the ARC Center of Excellence for Creative Industries and Innovation, Xiang Ren a doctoral student who previously worked as an academic publisher in China, Vijay Annand, who is in the early stages of a PhD on the shift from informal to informal economies in India’s film Industry, and Sampsung Xiaoxiang Shi, a post-doc within QUT’s faculty of law.
  2. My presentation today is based on work from my book China’s Creative Industries: Copyright, Social Network Markets and the Business of Culture in a Digital Age.  Perhaps one of the most important implications of China’s rapidly developing economy and growing creative industries is that, in the context of digital technology and global flows of content and culture, Chinese firms and consumers are challenging businesses and policymakers in developed markets to begin thinking about creativity and creative business in new ways.  Debates about the role that copyright plays in the creative industries are a clear example of this. Although efforts have been made to create an international framework of intellectual property rights in order to facilitate global trades in creative and cultural products, copyright law still depends on enforcement at a national level. As a result the world’s fastest growing markets for the creative industries are also markets in which copyright enforcement can be problematic, such as China.
  3. So what does this mean for businesses hoping to make the most of global opportunities in the creative industries? And for policymakers hoping to ensure that their country’s creative industries are able to take full advantage of opportunities for international collaboration and rapidly developing markets? The importance of copyright protection in copyright industry business models is well established. It is often stated that a strong intellectual property system is vital to the success and international competitiveness of Australia’s creative industries. However, the creative industries are much larger than the ‘copyright industries’ and new technologies for creating, copying and distribution are allowing new business models and consumer practices to emerge.  This makes it difficult to predict the approaches to intellectual property that are most likely to encourage the growth of new markets in creative industries, many of which couldn’t have been imagined even a few years ago.
  4. A great deal of attention has been focused on the impediment that low levels of copyright enforcement pose for international creative industries firms attempting to expand into the Chinese market. The argument seems to go that it is impossible for creative industries to grow and creative businesses to succeed in a market in which copyright can’t be easily enforced. The music industry is a fantastic example of this: In 2006, CEO of the International Federation of Phonographic Industries, John Kennedy, addressed the International Forum on the audio-visual industry in Shanghai, stating: “Illegal sales of music in China are valued by [the] IFPI at around US$400 million, with around 90 percent of all recordings being illegal. No creative or knowledge-based industry can hope to survive in such an environment.”
  5. But, in fact, China’s creative industries are growing quickly in spite of a difficult copyright environment. It seems that the existence of consumers who are eager to enjoy the products and experiences of the creative industries and Chinese businesses that are eager to expand into emerging commercial spaces are combining to produce business models that are succeeding in the context of very low levels of copyright enforcement. While the IFPI was calling on China’s authorities to crack down on music piracy in order to make it possible for a commercially focused record industry to develop, the Chairman of the Chinese Audio-Visual Society was declaring that the nation had “leapfrogged into an age of digital music”. By 2005 digital distribution had generated profits of 3.6 billion yuan, compared to just 2.7 billion yuan in the “best year” of physical music sales in China. And although record labels in general, and major international record labels in particular, have struggled to make headway in the China, the mobile music market is booming.
  6. It is a similar story for the film industry – where box office is booming and cinema distribution is struggling to keep pace with demand, in spite of the widespread availability of ‘pirated’ content.
  7. And also for the fashion industry, which is developing rapidly in spite of the widespread availability of ‘fake’ luxury branded fashion products. All of this raises important questions for Australian creative industries firms eager to develop strategies that will allow them to engage successfully with the dynamic opportunities, and challenges of the rapidly evolving global market.
  8. It also raises important questions for policymakers in Australia who are searching for ways to encourage continued growth of creative industries and to ensure their ability to compete in the global markets of the twenty-first century. There is a real danger that too much emphasis on protecting twentieth-century copyright industry business models may discourage the business model innovation that will be needed by creative industries firms if they are to be successful within the rapidly changing, global markets that characterize the creative industries of the twenty-first century.  Although China has many unique characteristics, the challenges faced by its rapidly developing creative industries also have a great deal in common with those that are confronting the creative industries elsewhere in the world. The struggle to find business models capable of capitalizing on creative populations, peer-to-peer communication and transformative technological changes are precisely the challenges facing established copyright industries in the United Kingdom, the United States and Australia.  Engaging meaningfully with the global opportunities for creative industries firms that are associated with digital technologies thus demands much more than better education in cultural etiquette or more strident efforts to enforce copyright law. It requires engagement with the transformative technological, economic and political changes impacting on the growth of the creative industries in the twenty-first century and recognition of the need for dynamic, innovative business models capable of adapting to the creative and commercial realities of the markets they function within, whether they are in China or Australia.