The Pirates used to have the perfect opinion strategy. One message for the masses: free entertainment. And one message for the elites: internet privacy. (Plus a cool name.) How come they moved from a political future promise to insignificance? The main reason is that these messages have a built-in conflict.

The pirates love to paint the entertainment industry as a threat to the freedom online. Any attempt to protect copyright online will create a surveillance state and given the choice of culture or freedom the latter wins. The pirates used to be great supporters of (and supported by) the telcos and big technology, as their positions on anti-copyright and non-regulation online coincided. But since then, the debates on big data happened and Edward Snowden made his reveals and so it turns out that it was not the entertainment industry that brought the surveillance state after all, but the pirates’ tech company allies. And the lack of regulation online turned-out to spawn very powerful niche monopolists that have made an internet that is anything but free.

The built-in conflict is that privacy and information freedom are on opposite ends of the spectrum. In order for privacy to be real, some information must be kept secret (or, well… private). But information freedom fundamentalists say everything must be available to all because information wants to be free. These kinds of conflicts are very common in society and the balance is typically sought through democratic process, but if that option is not available (see non-regulation above) it’s more difficult. Some then say it’s a question of privacy for the citizen and transparency for the state, but that will still require regulation, unless of course the technology is set up to support such a distinction anyway. Of course that is not the case with today’s internet, where personal data is the most important resource for the big data businesses.

The pirates may have done a lot of damage to the online society over the years. The good news is that their ideology is consuming itself with these contradictions, opening for more balanced and interesting ideas. Not a day too soon.

What or who decides how our world develops? Many factors and many individuals of course. But some factors are more equal than others. Climate change, globalisation, urbanisation and demography, I would argue are the most important (or most equal). Let’s call them super trends. Some would add digitalisation, but let’s get back to that.

All of these trends are consequences of human behaviour, but on a scale that is far beyond each individual’s decision. Climate change will not stop because you switch to a hybrid car, but you may hope to influence others and pave for political decisions and multi-lateral agreements that can help. Globalisation is accelerated by digitalisation, but depends on things like air travel and long distance naval shipping. Urbanisation may also be accelerated by digitalisation, but it is in many ways a basic trait of human civilisation: moving to a bigger city has often been the answer to finding a job or other opportunity throughout history. And last but not least, as economies develop, fewer children are born, populations age. Technology enables or accelerates these trends, but can also develop as an answer to them – like the hybrid cars mentioned.

Now, while each one of these trends are outside the scope of our individual influence, we employ many strategies to deal with them. Climate change is the focus of many investment projects, research endeavours and international agreements. Globalisation is addressed through trade agreements and cooperation between government authorities. Urbanisation by more efficient commuting and of course construction. When urbanisation happens too fast, governments create incentives to attract people to smaller communities or distant regions. And of course many financial and health policies have been developed to tackle the aging population. So we make all these efforts to support the good sides of the super trends and try to avoid the worst. And while digitalisation may or may not be one of the super trends, should we not have a similar strategy for that? Rather than say any democratic involvement will break the internet? That does not look like a very smart strategy next to the others.

Are machines more reliable than humans? In the wake of the tragic Germanwings crash in the Alps, which took 150 lives, suspicions that it was an extended suicide by one of the pilots have brought about suggestions that human pilots should be replaced by automats and remote control. It is technologically possible, at least in theory. A big part of most flights are already autopiloted, and human error causes a large percentage of incidents. But are pilots really only about taking the plane and passengers to the destination?

Malcolm Gladwell spends a chapter in Outliers (Little, Brown & CO, 2008) on plane crashes, and he gives some examples of how the human factor is the cause (but he doesn’t suggest pilots be replaced by machines; rather, he talks about how communication between the people involved can improve). Gladwell also recounts an event where Sri Lankan flight captain Suret Ratwatte had a passenger who took seriously ill on a flight from Dubai to New York. It was an Indian lady from a small village; her husband spoke neither English nor Hindi, only Punjabi. It was probably a stroke and the lady needed immediate hospital treatment. Ratwatte found himself over Moscow but had little trust that the poor Punjabi couple would be treated appropriately by the Russian authorities, so he decides to land in Helsinki. Because this happens early in the flight, Ratwatte’s plane is heavy with fuel, but dumping it would demand a detour that could further jeopardise the lady’s life. So he has to take down very carefully with a too heavy plane in an airport he has never been before, at the same time communicating with doctors on the ground and among his passengers, the Helsinki ground control, his flight staff, the other passengers and his superiors on the ground. In the end, the landing went well.

Perhaps a machine will one day be able to do something like that: make complicated decisions, communicate with several people at the same time (handling both emotions and facts), and at the same time pushing complicated machinery beyond the limits of what it was built for. And perhaps some of those difficult decisions could also be made by people on the ground, remote controlling the machines that fly the plane. But even if all that becomes possible, were you a passenger on that flight—would you rather have the person ultimately responsible up there in the air with you? Or somewhere else, far away from the situation?

Humans have one unique feature over machines. A killer app: Responsibility. We humans can be held accountable for our decisions and their consequences. Machines can’t. That makes a world of difference.

(For the reader that appreciates irony, I write this blogpost on a plane.)

As has been widely reported, this week a court in Stockholm seized The Pirate Bay’s domain names in the .se top-level domain. This is another nail in the coffin lid for the once-dominant torrent directory. In the early days, The Pirate Bay was known for its cocky responses to legal requests, but since the jail sentence against the founders in 2009, there has been no public face of The Pirate Bay. Some of the cockiness remains in the website design: after the servers were seized in a police raid last December and the site was offline for almost two months, the logo was changed to a hydra. Except, behind the scenes, the hydra’s heads were biting each other, with administrators debating how to run the service. Now, with the .se domains gone, the hydra slides further down the slope toward insignificance. Of course, the hydra now boasts new top-level domains, but these websites barely make the top 100,000 of the Alexa ranking. The original www.thepiratebay.se was top-100 for many years. Anyone who thinks new domains, even combined, will ever rival that? To paraphrase the great T.S. Eliot: This is how The Pirate Bay ends. Not with a bang, but with a whimper.

Can the Digital Single Market live up to the expectations? And what’s behind the big numbers? Netopia takes a closer look.

Jobs: 3,8 million jobs – or 2,5 million – or actual job loss? The promise of jobs is appealing, but will the Digital Single Market create more than it kills?

Money: Nine months ago, the expectation was €17 Billion per year, today it’s 415. Any more bids?

Safe Harbour: Will the DSM be the end of the “safe harbour”-principle that lets internet services and telecoms take the money and let somebody else deal with the fallout? The Commission is committed to the principle, but is smart enough to launch a public consultation on the topic. Wild guess: the result will be that safe harbour has run its course and the time has come for intermediaries to step to the responsibility. What’s that noise? Netopia cheering!

Copyright Reform: The “balance of interests for creators and consumers” is a trap – copyright gives creators the right to decide the price for their works, and the consumers decide if they want to pay. That is fair and balanced, just like any market. Problem is that if this right is being reduced, that will not only hurt creativity but also jobs. Case in point: exceptions for educations and scientific publishing hurts the jobs in this sector. And the difficulty in getting such a reform through the door would be tremendous. As one think-tank director put it “Copyright reform is where commissions go to die”.

Can Europe emulate the digital single market of the United States? For all the Commission’s best efforts, there is one big piece that’s missing in its puzzle: venture capital. Silicon Valley could not have been where it is today without a big supply of money with an appetite for risk. Access to capital is arguably a much bigger issue for European start-ups than many of the problems the DSM-strategy hopes to fix. That’s where the next bold move should be! Vice President Ansip, do you read this?

This is Netopia’s newsletter #16, distributed May 13 2015

Interview with European Commission Vice President Andrus Ansip
By Per Strömbäck

Commission vice president Andrus Ansip have often said he misses his home country’s football and how that is a reason to make a “digital single market”. So how does football feel about that? Netopia talked to Mathieu Moreuil, Head of EU Affairs at Premier League.

I’m excited, the Swedish football season just started.

Yes and you are able to watch it from Brussels! Actually the Swedish games are not geo-blocked. The Swedish broadcaster C-More acquired the rights for the Swedish league in Sweden and agreed with the League to make the games available for viewing outside of Sweden. The reason is simple: the Swedish League has no substantial value outside of Sweden. So they try to increase their coverage and exposure by allowing people outside of Sweden (mainly Swedish ex-pats) to access the content. It is obviously a different strategy for the Premier League or the Bundesliga as they find interest from broadcasters in every EU member state and therefore sell exclusive rights in every member state. Broadcasters then use territorial arrangements such as geo-blocking to ensure they can benefit from these exclusive rights and recoup their investment. For sports, it is rather simple, either you have a local broadcaster and territorial arrangements are used or there is no local broadcaster and therefore normally no geo-blocking.

What is the “Digital Single Market”?

I don’t really know what it means! As far as Premier League and sports in general are concerned, the DSM is difficult to define. For us, Europe is more a combination of markets built on different cultural tastes and preferences. Whether we like it or not, sports remain very national, people like different sports in different countries: they watch different events. The idea of a digital single market is difficult to grasp. Does digital single market mean one digital single demand and one digital single offer? Obviously for us it does not work like that. The Premier League in France, Belgium and the UK are not the same products. Our broadcasters show different games, with different commentaries with special focus on players from their countries etc. We use local broadcasters so the content is tailored to local preferences, to what consumers want. For us the digital single market feels more like ideology than reality. The reality of the EU is a vast cultural diversity which is also an asset and a richness.

Why is football so often used as an example in these discussions?

I think it is very often used because it speaks to people and it seems a concrete and easy example to understand.  However, people who use these examples very often simply do not describe what the situation is. I’m going to give you three examples.

When Vice President Ansip mentions he cannot get access to Estonian football, I am not sure it is actually the case. The Estonian league is broadcasted by the Estonian Public Service Broadcaster and a lot of that broadcaster’s content is available non-geo-blocked on their internet streaming service.

Commissioner Öttinger said in his speech at the #Digital4EU-conference, that he does not understand why you cannot watch the Chelsea-Liverpool game in Belgium. Of course you can watch Chelsea v Liverpool in Belgium! It was on our two Belgian broadcasters. Yes in Belgium, we have two licensees because Belgium is not one single market, people do not speak the same language and consumers want commentaries in their own languages. So that Chelsea v Liverpool match is definitely available in Belgium and tailored to the Belgian audience with a strong focus on the three-star Belgian players Simon Mignolet, Thibault Courtois and Eden Hazard. The English version of the same game, from BSkyB or BT (our licensees in the UK) is not available on the internet in Belgium because there are Belgian broadcasters who acquired the Belgian rights.

Finally my favorite one, Robert Madelin, Director General of DG Connect responsible for the DSM, mentioned in an interview to Euractiv back in September that Maltese consumers cannot legally access the Premier League in Malta and “cry into their beer”. Actually it takes ten seconds on the internet to find out that we do have an official licensee there, called Go Malta, which acquired the rights.

To cut a long story short, people who use these examples about football are usually not the ones watching the games. The content is there, believe me! Of course, there will always be something that is not available, like maybe second division Finnish ice-hockey. But the vast majority of the most popular sports events are available, either through traditional or online broadcasters or through a combination of both.

But don’t expats want to use the services they are familiar with?

Sure, but when expats arrive in Belgium they have to pick a new bank, get a new insurance for their apartment or their car, a new mobile phone contract. That is part of the exciting experience of living abroad. We expats are 3% of the EU population according to the latest Eurostat-numbers. If you take the Belgian example, you have on the one hand ten million Belgians potentially interested in the Belgian service for the Premier League, on the other hand less than half a million UK expats interested in the UK service for the Premier League. So the market solution to this equation is not difficult to find. Also if you cannot provide your broadcasters with territorial exclusivity anymore, there is a risk that the availability of offers will be limited in the future. At the moment we sell our Premier League content in the UK for approximately £1 billion per year. If I take the 27 other member states put together, it hardly reaches €150 million. The value is very different in the home market and in other markets, it’s a 10 to 1-ratio. If I take the example of the French Football League, the ratio is even bigger, €700 million in France and €7 million in the 27 other member states. So  if you cannot provide your licensees on your main market with exclusive rights (i.e. if there is a risk customers subscribe to other services elsewhere) the logical answer then would be to stop selling outside the home market. For instance the French Football League might decide not to sell their content anymore in Belgium, if there is a risk that French citizens subscribe to the Belgian offering. The Belgian citizens would have to get the French subscription which is more expensive and not tailored to their tastes. So the whole cross border access thing is a bad idea for consumers because it could mean less content available at a more expensive price.

The UK price point would be the norm across Europe?

Yes, the same could happen with the Premier League. The risk is that you will end up with only the home market subscription, not tailored to local preferences and at a higher price than before. UK ex-pats will be happy but Belgian football fans may be frustrated. This would not help the image of the EU. The value of the sporting content is not the same everywhere, this is simply not the case.

How do you expect the DSM to influence growth and jobs in Europe?

In our sector, it will not create any additional jobs or growth. If you cannot deliver what the market wants, i.e. territorial licensing, if you have to sell on pan-European basis, the biggest broadcasters – whether that is television or internet – will get all of the content. There will be less competition at national level and at EU level. At the moment, a small Estonian broadcaster can acquire the rights to Premier League and package a nice, attractive offer probably combined with other sports or other audio-visual content to serve consumers in Estonia. So there is a competitive market at national level. Broadcasters invest in the content, get advertising revenues, subscription revenues, there is a whole economy around it. If tomorrow you are not able to use territorial arrangements and therefore you have to sell on pan-European basis you might end up with competition for Premier League in the UK market only which effectively becomes the EU market. So no opportunities for local broadcasters anymore, less competition overall. It is actually totally in contradiction to what the EU competition law is trying to achieve. It would only favour the big guys. You should ask local broadcasters what they think about these ideas of banning geo-blocking, I can tell you they are not happy about that.

What is the difference between portability of services and cross-border access?

As I said, it seems very risky for the Commission to ban geo-blocking and make cross-border access compulsory through passive sales. It is a big gamble in terms of jobs and growth to challenge a licensing regime which works well for sports and for the broadcasting sector. There are not so many sectors where Europe is actually world leader and sport is one of them.

However, we are aware of the issue faced by European citizens traveling for a short period of time in another EU Member State for business trips or holidays, when their subscriptions cease to function. This is something we are ready to discuss with the European Commission and our licensees. If a UK citizen go to Spain for two weeks holiday, he or she you should still be able to watch the Premier League games he or she subscribed to. We at the Premier League understand that and we want to address it. It is not as straight forward as people might think especially when it comes to sport content which has to be sold on free-to-air broadcasters by law, but we can certainly discuss with our licensees and find a solution to ensure the portability of lawfully acquired content. It would involve conditions of residence though otherwise it is just cross border access by the back door.

To cut a long story short, we say to the Commission, be careful what you wish for. If you want to ban all territorial arrangements, the situation that we have now with local broadcasters everywhere in Europe will not remain. If you change the conditions by which we sell the content, the end result will be different and you might end up with less choice, higher prices, maybe happy ex-pats but frustrated consumers.

Full disclosure: Premier League is one of Netopia’s sympathisers. (full list here)