Will there be a “Fiverrization” of the creative industries?

Uber changed the way the taxi industry worked; Airbnb had a similar impact on holiday lets and rentals. It is now the turn of the creative industries, often called the copyright industries, with online platforms going by names such as Quidjob, Upwork, PeopleForHour or Fiverr. And yes, ‘Fiverr’ hints at the fact that you may be able to commission and ‘buy’ creative content for… a ‘fiver’ (read -- five dollars, five pounds, five euros etc.). 

But commissioning bespoke creative content is not as simple as ordering a taxi ride because it inevitably involves the transfer of intellectual property rights. As a result, these platforms have the potential to not only disrupt how creative works are made (the creative industries) but also to impact on entire fields of law (copyright and performers’ rights). The ‘Fiverrization’ of the creative industries and intellectual property rights may be around the corner.

Uber/Fiverr: same concept

Platforms such as Uber or AirBnB are based on the same principles: use the Internet to enlist and match offer and demand, taking a cut for each successful transaction in exchange of a service that is seemingly free to consumers. An important aspect of these platforms is that amateurs and professional alike can become service providers, which makes the market very competitive for its consumers. In the process, these platforms control some of the terms and conditions of the transaction, such as price or quality (this is an important detail that we will go back to in a minute).

Until recently, the creative industries remained relatively unaffected by the ‘uberization’ that hit many markets [according to Collins Dictionary ‘New Word’, ‘uberization’ stands for : ‘The conversion of existing jobs and services into discrete tasks that can be requested on-demand; the adoption of the business model used by the taxi service Uber’]. This statement held true until service providers such as Fiverr, PeoplePerHour, Quidjob or Upwork came along and extended their services to offer bespoke creative content. Clients (companies, organisations or individuals) can now directly from their platform purchase services such as logo design, video-making or radio idents produced by professionals or amateurs based anywhere in the world.

Unsurprisingly, a quick survey of the standard terms and conditions of such creators often involve transferring all intellectual property rights in the content to the purchaser via an exclusive perpetual licence or the full assignment of the rights (see here and here). It should be noted that the platforms seem to vary on exactly the precise form of the transfer of rights, usually referred to as ‘buy-outs’ or ‘rights buy-outs’ (see for example Fiverr …although Merpel often finds the wording of these standard provisions confusing and most naturally construed as a full assignment of rights, whatever the ‘package’ or ‘buy-out’).

Uberization/Fiverrization: same cause, same effect?

Platforms such as Fiverr impose standard-form contracts to their customers (artists and buyers) and cap control the upper price range [see here]. This is notably the case of QuidJob who advertise on their website’s home page that “[e]very service on [their] platform is under £200. You can be sure that you will get good value for your money”. The price control implemented by some of these platforms ensures that prices stay below a maximum amount which is still significantly lower than the going rates in the UK voice-over industry [for the UK industry Voiceover Rates Guide here; for the experience of a UK voice-over actor see here; for the experience of a US-based voice-over actor see here]. For example, QuidJob’s £200 cap would neither fully remunerate the artist’s recording time in the studio, normally covered by ‘basic studio fee’ which typically amounts to £250 [see the Voiceover Rates Guide for the range of applicable fees], nor would it pay for the subsequent commercial use of the recording (known as 'usage fee').

Again, it should be noted that platforms, such as Upwork, stress in their T&C’s that freelancers are responsible for negotiating rates in accordance with what is agreed upon between the parties (this principle would presumably include negotiating fees in accordance with the type of assignment or licence required) (here).

More worrying perhaps is that the pricing standard set by these platforms is undercutting negotiations and deals made off-line through the ‘traditional’ routes, i.e. directly between the client and the artists or via artists’ agents. Platforms such as Fiverr give the impression to clients that professionally-made creative content and intellectual property rights can be bought for a fraction of the standard remuneration rates (here). 

The ‘Fiverrization’ of the creative industries comes with the risk that extremely low rates for the transfer of intellectual property rights will become the ‘norm’, dampening any hope for artists to reasonably monetise their rights. If this ‘Fiverrization’ catches on, this may be the end of the hope that copyright and performers’ rights ensure fair remuneration [a hope that, while slight, is still alive… here and here].

By imposing standard-form contracts, which include the outright assignment of all rights for sums as low as five pounds, these platforms hit copyright and performers’ rights right in their Achilles’ heel: their ability to be assigned away for low or close to no financial remuneration. Vulnerable to weak bargaining power, an artist who is not in a position to negotiate a favourable contract will not be able to leverage his or her intellectual property rights to receive a reasonable level of remuneration.  

Yet not all rights are assignable. In 1992, EU countries introduced ‘equitable remuneration rights’ to buttress artists’ contractual position (here, see here for UK implementation). These ‘equitable remuneration rights’ provide that producers and broadcasters redistribute a portion of the revenues generated by the communication to the public (amongst other protected rights) back to the relevant authors and performers.

Although limited to a narrow subset of works and performances, ‘equitable remuneration rights’ apply across the EU. As a result, it is likely that a good number of the transactions operated by Fiverr, Upwork, Quidjob or PeoplePerHour will fall within the scope of these rights. This begs the question of whether contracts made through these new platforms discharge the legal obligation to pay artists the ‘equitable remuneration’ to which they are entitled.

Further, the potential that these new platforms will standardise the level of compensation for intellectual property rights at the low end may well endanger ‘equitable remuneration rights’ in the long-term. This is because the level of payment applied in the context of ‘equitable remuneration rights’ (by the parties themselves or the UK Copyright Tribunal) follow ‘standard’ or ‘comparable’ rates for a similar work for similar commercial exploitation of the work and similar contribution by the artist to the work. Should the level of such rates decline (following the "success" of Fiverr and the like), will the level of remuneration found ‘equitable’ at law decline as well?

Not all hope is lost…

The potential for ‘Fiverrization’ of the creative industries, and the intellectual property rights on which this industry relies, does not have to portend all doom and gloom. In fact, we could argue that these new platforms provide an opportunity to educate clients on the importance remunerating creative professionals in a reasonable fashion.

As much as the new ‘Ubers’ of the creative industries have the potential to set low standards of remuneration, they also have the ability to set (new) high [or higher] levels by reminding platform users of the importance of remunerating creative labour fairly. For example, this could be done by inserting ‘creator-friendly’ terms and conditions, limiting the transfer of rights to what is needed for the purpose of the transaction (i.e. avoiding the blanket assignment of all rights for no purpose or without remuneration) and reminding all parties of the existence of equitable remuneration rights where applicable. Better remuneration will make for better quality work, as it will encourage the production of creative content of professional quality. Under this scenario, the long-term game ends with a win-win situation for all parties involved.