By Edward Nawotka

“Copyright holders have the right to price and term the works that they have created, the works that they own. That’s a stake in the ground. I couldn’t do what I do for a living without believing that,” says Tracey Armstrong (pictured right), CEO of the Copyright Clearance Center, in a conversation earlier this week on the future of copyright. “We couldn’t foresee the iPad back in 1985, so digitization and the complications that come with it are what we’re working on right now.”

As the head of a US nonprofit tasked since 1978 with the duty of helping artists and others manage the licensing of their rights, it only makes sense that she would take such a stand. Her company manages in excess of 350 million different rights and brokered more some $200 million worth of transactions last year.

Still, Armstrong is aware of the challenges being faced by copyright holders in the age of digitization — an era where the widespread perception exists, especially online, that all information should be free.

“That is something I think will change, as more and more people become stakeholders in the process, as they begin to create their own value,” says Armstrong. She cites China is an example: It’s widely known that Chinese companies disregard for intellectual property and routinely pirate books, DVDs, etc…and it’s something that has been tolerated by the government for a long time. “But,” says Armstrong, “economies start to respect intellectual property when, within that economy, there is enough of their own intellectual property that wants to be protected. That’s something we’re starting to see in China, where they are making advances in science and other areas and want to realize value from that and protect it. I’m going to draw an analogy from that and say ‘evolution can happen.’”

At the heart of Armstrong’s stance is the fundamental belief that, despite the transition from analog to digital culture, the foundation of copyright hasn’t changed. It has only created a greater and more urgent need for expeditious means of licensing the material -– or clearing copyright.

“I agree with the statement that everyone is now a publisher,” she says, “and what that means is a tremendous proliferation of material that is copyrighted and can be licensed.” She describes this as the “atomization” of content –- books being offered as individual chapters and paragraphs, computer software being parsed into individual lines of code –- a phenomenon that is causing exponential growth in the number of “granular” elements that are available to be licensed.

Of course, she adds, “the market is not infinitely elastic” -– and notes that there is plenty of information that will be offered for free, or will have to be.

Then again, there are the iconic, high value works that will never be offered for free. On April 2, New York Times editorial by Marc Arsonson entitled, “The End of History (Books),” lamented the high cost of securing rights to this historical, iconic material, particularly for individual. Aronson suggested a pricing scale “based on the total number of images used in a book; an image that was one one-hundredth of a story would cost less than an image that was a tenth of it.” Mike Shatzkin of the IdeaLogical Company responded, noting that the CCC has something like a solution in place: “collective” licensing, which creates a bucket of content that a user can license and select from at will. He also rightfully noted that owners of the most valuable content are unlikely to agree to become part of a collective, a move that would essentially devalue their product.

On one side, the affordability of collective licensing means more use and thus more exposure for lower valued product, which –- in the long term -– may actually help raise the value; items that already have a pre-existing high value will be used less frequently as a consequence of their high price.

Another upside for the cheaper, even free, product is that the digital world enables a direct link to the licensor, offering the potential to create long-term value. “If you run an obscure museum with an obscure collection of art and artifacts, a linked licensed image could deliver you traffic and customers very effectively,” writes Shatzkin, who adds “As that pool grows and is used increasingly, the incentive will grow for rights holders to place more and more of their material in it.”

For her part, Armstrong argues that the more parties that contribute to these collective buckets of content, the more of an incentive there is for people to participate.

She also maintains that there will likely remain a bifurcated market, one for the most valuable content, and another for the rest. But as we go forward, the vast proliferation of content means there will be viable alternatives for everybody.

“There is only one ‘I Have a Dream Speech,’ and that won’t change,” says Armstrong, “but if you take the more recent example of Obama’s inauguration, you have as many photos to choose from as there were people with cameras and camera phones there on that day. Yes, that makes it harder for traditional artists to make a living. But that to me also creates more of a demand for what we do. The need to organize the sea of information so it can be licensed appropriately is all the more important.”

DISCUSS: Should content licenses be less expensive for digital distribution?