Page 159 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

commissioned by the Intellectual Property Office in the UK pointed out that the retail price of
a leviable device is not influenced by levy schemes as long as the device is in a competitive
194
market. For instance, the retail price of audio recorders in France and Germany (high-
195
levy countries) are not substantially higher than they are in the UK (non-levy countries).
The pricing increment is more imperceptible when levies are applied to as many devices and
196
services as possible. This is why I suggest in Section 5.5.1 that levies should be imposed
on all services and devices whose value has been substantially enhanced by facilitating the
creation of user-derived-content. The introduction of a levy scheme does not substantially
influence the price of leviable devices and services, and thus would not bring much burden
to customers.
Even if the device and service providers separated the levies to customers, as Netanel
197
explained, the low-intensity user subsidy problem has been somewhat overstated.
Many low-intensity users are willing to pay a surcharge for the opportunity to engage in
lawful, unlimited UGC creation, just as we happily spend a thousand dollars to purchase
a smartphone or laptop that provides far more memory and processing capacity than we
198
practically use. In my interviews, many UGC creators expressed the desire to continue
UGC creation and were aware of the risk of copyright infringement. It would therefore be
199
desirable for platform users to assume the cost of the levy scheme as an investment in their
future UGC creation. Such a cost would be modest. The existing levy schemes have not
200
brought any substantial cost to customers. Although there is currently no levy scheme for
services, online platforms have usually adopted subscription fees to charge customers for
additional services. Subscription fees are proved to be affordable and acceptable in business
201
practice.
Furthermore, cross-subsidisation can be regarded as an advantage rather than a

194 Leviable devices refer to the devices that are covered by the levy scheme and should submit levies to copyright owners.
Kretschmer (n 74) 8.
195 Ibid 15.
196 Jane C Ginsburg, ‘Copyright and Control over New Technologies of Dissemination’ (2001) 101 Columbia Law Review 1613,
1615.
197 Netanel (n 73) 70.
198 Ibid.
199 For example, Participant C operates a Wechat account that provides film reviews and parody. Though his account had merely
300 followers at the time of the interview, he expressed the willing of seeking copyright license from copyright owners when
his account become more influential to avoid being sued (Appendix 4). Some UGC creators asserted that their UGCs based
on others’ works are fair use, but, on the other hand, required others to ask for permission for using their works. (Appendixes
6, 10, 12) This contrast shows the uncertainty of the legal status of UGC creation, and a levy scheme can largely alleviate the
uncertainty, for both low-intensity UGC creators and high-intensity UGC creators.
200 Kretschmer (n 74) 15.
201 For example, Spotify provides premium service for free for 30 days, with HK$58.00 per month after. Spotify, ‘Go Premium.
Be happy’ <https://www.spotify.com/hk-en/premium/> accessed 15 July 2019; QQ music, one of the largest Chinese music
streaming website, provides VIP privileges/premium service with a monthly subscription fee from RMB 8 to 20. Tencent
Service Offerings <https://www.tencent.com/attachments/ProductlistofTencent3Q17.pdf> accessed 15 July 2019.

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