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Digital technology and the Internet are altering many industries and changing the way people use and enjoy consumer electronic products, media and entertainment. This evolution, though, has exacerbated the tension between copyright holders (individual creators and corporate content providers), technology companies and consumers. This four-way tension is an important driver for business. When it is balanced, it provides all the benefits of a market-driven economy: Products are created, developed and distributed, and consumers choose from a variety of contents and goods—and pay a price they perceive as reasonable. When some part of this digital media ecosystem gains a disproportionate measure of influence, however, the system tends to flounder until balance is restored.

Technological development is the spur for change today and, as in other technologically turbulent periods, old methodologies and business models persist as new consumer-behavior models develop. In the case of digital media—music, movies and print—the transition to fully formed digital distribution services is now in progress.

What happens during this transitional period is important on a cultural as well as a commercial level. In the United States, for example, social values such as allowing access to information and creating an environment that encourages development and creation were important considerations in the codification of copyright law in the U.S. Constitution and later statutes.

Our objective is to provide a foundation to answer key questions facing copyright holders, technology developers and consumers. Among these: How do we balance the legitimate interests of copyright holders with the legitimate interests of the public in the use and enjoyment of digital media? Should technology developers be accountable to copyright holders? What future strategies might compensate copyright holders while also protecting innovation?

In this document, the Berkman Center for Internet & Society at Harvard Law School and GartnerG2 explore the issues surrounding the current digital media ecosystem:

  • The legal and regulatory developments regarding copyright and related intellectual property issues.
  • Business models upset by digital media distribution and new models made possible.
  • Shifts in consumer attitudes and behavior.

Focusing on these topics, we have identified five scenarios that flow from the developments in law, technology and society.