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EC foresees digital roadblocks

Broadband inequality and piracy to blame

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The European Commission has identified unequal broadband provision and piracy as major "roadblocks" to the development of Europe's online creative content industries.

Despite the fact that broadband penetration is slowly increasing across the European Union, the commission is concerned that vast gulfs between adoption in different member states is harming the development of revenues derived from online creativity.

The commission predicts business revenues from online content such as music and video downloads will reach €8.3bn by 2010 in Europe - a growth of over 400 per cent in five years.

EU Commissioner for Information Society and Media Viviane Reding is currently preparing a "Content Online in Europe's Single Market" initiative which will be commenced in the second half of 2007.

"The long-awaited digital convergence is becoming an economic reality, creating great opportunities for Europe's consumers, content providers and technology industries," Reding said in a statement. "To capitalise may require casting a fresh eye at the technical and legal issues where a modernised and internal market-oriented approach would add value to European content."

A commission report released on Thursday expects that revenue generated online will become massively important for creative industries - many of which have already embraced the e-commerce revolution. The study predicts Europe's entire music industry will take one fifth of its total revenue from internet-based transactions by 2010, while one third of the indigenous video game industry's revenue will be solely originated online.

The latest report on the development of internet-based business models for the creative industries, Interactive Content and Convergence: Implications for the Information Society, has found that although the sector is growing steadily, technological, economic and legal challenges - notably intellectual property rights and interoperability - need to be addressed for Europe to have faster market uptake.

The study also found that Europe trails the US in developing interactive fixed broadband services, and lags behind Japan and Korea when it comes to mobile services.

Slow uptake of 3G in Europe, and the sometimes confusing pricing structure of mobile operators' data tariffs were two specific areas which come in for criticism.

Widespread piracy of music and video downloads is also a major concern within the commission. It believes piracy siphons off potential revenue and deters media companies from putting content online.

Brussels' answer is "Efficient Digital Rights Management (DRM) systems to manage and protect digital content are necessary for a secure and sustainable roll-out of digital distribution".

However, a lack of interoperability or standardisation in DRM was noted as a longer term stumbling block for digital content services and devices.

Copyright © 2007, ENN

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