Ryan believes content services centre would be a smart move

 

MEDIA & MARKETING:The Minister plans to lure digital content holders to Ireland in the hopes of creating thousands of jobs, writes SIOBHAN O'CONNELL

IRELAND COULD be set to become a gatekeeper in the media industry’s ongoing war against content piracy.

At least that’s what Minister for Communications Eamon Ryan would have us believe after he unveiled an ambitious plan to establish an international content services centre (ICSC) in Dublin.

Modelled on the International Financial Services Centre (IFSC), the idea is that the ICSC would become a broker between digital content developers and owners and the major content distributors.

Ryan believes such a centre could lead to thousands of new jobs, though there are quite a few hurdles to overcome first.

The proposed ICSC forms a central plank of Ryan’s policy document, Technology Actions to Support the Smart Economy.

The idea was proposed by Neil Leyden, who runs a small company called Calico Media in the Digital Hub in Dublin. Ryan’s adviser Barry McSweeney has bought into Leyden’s vision.

The background to the proposal is the fact that digital content is now a globalised commodity. However, the free flow of content is hobbled by rights issues. For example, when a film- maker or TV programme maker sells distribution rights to a broadcaster, this inhibits the availability of the content on video-on-demand platforms. This “scarcity” at the retail end leads to piracy, and rights holders react by targeting internet service providers.

In Ryan’s view, the issue could be addressed by a centralised, back-office clearing house to help rights holders manage and distribute their content globally.

“This would be in a tax- incentivised, pro-business and flexible regulatory environment matched with the required infrastructure and technological solutions to ensure quality of service in terms of warehousing and distribution,” he said.

“The centre would serve both multinational interests as well as local indigenous players with global scale or ambition.”

Ryan added that as advertising online became increasingly of the rich-media variety, there was also an opportunity to centralise advertising networks’ back-office functions to one territory.

The Minister envisages the IDA approaching content rights- holders and organisations worldwide with a view to them becoming clients of the ICSC.

“With Disney now buying into Hulu.com, the third most watched video content site in the US, there is an opportunity to help roll out this service worldwide, with Ireland being the base for European operations,” said Ryan.

“Other potential customers include music rights organisations, large traditional media content holders like Time Warner or online games providers such as Electronic Arts.”

Just like the IFSC, one of the key draws for the content centre would be tax breaks.

With the right carrot, Ryan believes multinational content holders might “house” their content in Ireland, though this part of the offering has yet to be fleshed out.

Ryan envisages the ICSC being established in 2010 and is setting up a working group of stakeholders to “flesh out” the proposition. The Green Party Minister is evidently excited by the idea but it remains to be seen whether his colleagues, in particular Minister for Finance Brian Lenihan, will be equally enthusiastic.

The changing media landscape is reflected in the new Broadcasting Act, which took more than a year for Ryan to shepherd through the Oireachtas.

The new law increases the fines for possession of an unlicensed television set from €635 to €1,000 for a first offence, and from €1,270 to €2,000 for second and subsequent offences.

Taxing computer owners for watching television on their PC is provided for in the Act, although Ryan signalled this was not on his agenda for the moment.

“While the system will no doubt evolve and the technological developments that occur will lead to change, they are not yet at a stage where it is clear to us how we can make an effective change, given the evolving nature of the situation,” he said. “We will have to change, but not at this time.”

The main innovation regarding the licence fee is that fixed payment penalties have been introduced as an alternative to court proceedings.

Under the new regime, the television licence inspector who uncovers an errant householder can issue two reminder notices to pay up or else.

If after 56 days no payment has been made, the inspector has the option of issuing a fixed payment notice requiring the payment of a fine of one-third of the cost of the television licence. If the fine is paid and a licence purchased, no prosecution will ensue.

The measure is intended to stop clogging up the courts with television licence cases. Scores of people are jailed every year for non-payment of the licence and subsequent court fine.

However, with the fine having been raised at a time when unemployment is soaring, it seems inevitable that prisons will continue to be filled with people prepared to do time rather than buy a licence.

siobhan@businessplus.ie