UK government warns ISPs over music piracy

By February 22, 2008Music

The UK government announced yesterday that ISPs would be hit with legal sanctions from April 2009 unless they take concrete action to curb illegal downloads of music and films.

I think the government needs to be really careful here.

For sure I sympathise with the music industry – their copyright is being infringed left right and centre, to their massive cost.  But I think the answer lies in changing the way music is delivered, rather than legislation.  Hence my belief in  free ad supported music.

Remember that there has always been piracy, but because it was a hassle copying music to cassettes relative to the price of buying CDs not much of it went on and the music industry wasn’t that bothered.  With the advent of the internet and Napster that equation changed.  Copying music became much much much easier, but music has remained roughly the same price.  Hence piracy has exploded.

It is possible that with free ad supported models the music industry makes less per track than it used to in the past.  To that I would say a) something is better than nothing, and b) remember that the price of CDs was artificially inflated.

The structure of retail distribution (physical CDs and stores) previously allowed the industry to make super-profits, and going forward the structure (digital files and downloads/streams) might not.  That is unfortunate, but it may simply be a fact of life, of progress even.

So by focusing on ISPs I think the government is looking in the wrong place, and I have sympathy with the argument that asking ISPs to stop illegal downloads is akin to asking the Royal Mail to check the contents of every letter it sends.  I fear that legislation might have unintended side effects which would stifle innovation elsewhere.

That said, I suspect there are small things that ISPs could do which would make it a bit more difficult to pirate music and hence help the record industry a little.  They could probably work out a system for identifying and blocking offending URLs for example.  The way that ebay blocks the sale of items like Nazi memorabilia strikes me as a precedent for this type of action.

Let me finish by saying thank you for your comments on my post earlier this week on ad supported music.  I intend to digest those over the weekend and come back with a response next week.

  • Hi Nic,

    I’m in agreement that the ad funded model makes sense and that ISP’s will struggle to prevent the illegal downloads of music.

    The internet offering many things to customers, but the overriding driver, and what’s changing market economics the most, is one simple word – choice.

    Consider The Pirate Bay, a peer to peer file sharing ‘solution’. Or in other words a method for people to download paid for content for nothing. Pirate Bay is currently being investigated by the Swedish authorities as well as being sued by Prince and perhaps more surprisingly The Village People. Also according to http://www.news.com.au the site mysteriously disappeared from Yahoo! search results on February 18th only to re-appear again on the 20th. Suggesting Yahoo! Australia decided to take matters in to their own hands and then thought better of it.

    Do consumers care? With a reported 10 million customers it would appear not. The choice these customers made was not to pay for content. Read any blog about Pirate Bay and you’ll see massive support and justification of such download sites, one extract below sums up consumer sentiment.

    “For years I was forced to buy CD’s for $30+ where I’d find about three good songs and the rest fillers! Who are the real pirates here? The record companies got away with it for too long.. Drop CD.. drop the big production costs..”

    This is of course questionable logic, and I’m not advocating illegal downloads. But the lesson is clear. The internet has given consumers much more choice and what people want is what they don’t have to pay for.

    Some sites will get shut down, and some might get blocked from search results, but the internet simply isn’t controllable and free content will always be available for those that want to seek it out.

    Glen Conybeare
    (Note: Extracts from the above are taken from the a recent article in Marketing that I was the Ghost writer for)

  • Hi Nic,

    I’m in agreement that the ad funded model makes sense and that ISP’s will struggle to prevent the illegal downloads of music.

    The internet offering many things to customers, but the overriding driver, and what’s changing market economics the most, is one simple word – choice.

    Consider The Pirate Bay, a peer to peer file sharing ‘solution’. Or in other words a method for people to download paid for content for nothing. Pirate Bay is currently being investigated by the Swedish authorities as well as being sued by Prince and perhaps more surprisingly The Village People. Also according to http://www.news.com.au the site mysteriously disappeared from Yahoo! search results on February 18th only to re-appear again on the 20th. Suggesting Yahoo! Australia decided to take matters in to their own hands and then thought better of it.

    Do consumers care? With a reported 10 million customers it would appear not. The choice these customers made was not to pay for content. Read any blog about Pirate Bay and you’ll see massive support and justification of such download sites, one extract below sums up consumer sentiment.

    “For years I was forced to buy CD’s for $30+ where I’d find about three good songs and the rest fillers! Who are the real pirates here? The record companies got away with it for too long.. Drop CD.. drop the big production costs..”

    This is of course questionable logic, and I’m not advocating illegal downloads. But the lesson is clear. The internet has given consumers much more choice and what people want is what they don’t have to pay for.

    Some sites will get shut down, and some might get blocked from search results, but the internet simply isn’t controllable and free content will always be available for those that want to seek it out.

    Glen Conybeare
    (Note: Extracts from the above are taken from the a recent article in Marketing that I was the Ghost writer for)

  • Get the music industry out of retail, instead license the web sites (and cell phones, cable TV, etc) and let them do what they want with the music at a consumer level. Ad supported is just one model.

    The monetization point in music is when you are choosing it, not when you are listening to it.

    The cost to consumers for the burden of archiving purchased music so that you don’t lose it is quite high. Music that is lost needs to be repurchased. Music in the wrong DRM format needs to be repurchased. When you add in these costs, buying digital music is still very expensive which make P2P look cheap.

    A very different strategy is for the licensed web sites to allow unlimited non-DRM downloads in addition to streaming. Now there is no archival or format burden on the consumer. Consumers can delete and redownload their music at will. This will result in a lot more monetizable browsing and higher licensing fees to the music industry.

    With this model p2p will just fade away since the quality (search, labeling, loudness, etc) will be consistently better from the licensed sites. The RIAA is kept busy too – they get to chase the sites not buying licenses. Non-licensed sites are obvious fair game for the RIAA instead of children and grandmothers.

    Create a model when the music industry can monetize what consumers are already doing (p2p) and the music industry will be saved.

  • Get the music industry out of retail, instead license the web sites (and cell phones, cable TV, etc) and let them do what they want with the music at a consumer level. Ad supported is just one model.

    The monetization point in music is when you are choosing it, not when you are listening to it.

    The cost to consumers for the burden of archiving purchased music so that you don’t lose it is quite high. Music that is lost needs to be repurchased. Music in the wrong DRM format needs to be repurchased. When you add in these costs, buying digital music is still very expensive which make P2P look cheap.

    A very different strategy is for the licensed web sites to allow unlimited non-DRM downloads in addition to streaming. Now there is no archival or format burden on the consumer. Consumers can delete and redownload their music at will. This will result in a lot more monetizable browsing and higher licensing fees to the music industry.

    With this model p2p will just fade away since the quality (search, labeling, loudness, etc) will be consistently better from the licensed sites. The RIAA is kept busy too – they get to chase the sites not buying licenses. Non-licensed sites are obvious fair game for the RIAA instead of children and grandmothers.

    Create a model when the music industry can monetize what consumers are already doing (p2p) and the music industry will be saved.