Study: File Sharing Leads To More, Not Fewer, Musical Hits Being Written

As Techdirt has noted many times, much of the debate around filesharing is driven by dogma rather than data. That's beginning to change, although there has been a natural tendency to concentrate on economic issues: that is, whether filesharing causes sales of music and films to drop or not. But copyright is not fundamentally about making money: it's about encouraging creativity. So arguably a more important question to ask is: does filesharing harm or help creativity? That's precisely what an interesting new paper entitiled "Empirical Copyright: A Case Study of File Sharing and Music Output," written by Glynn S. Lunney, Professor of Law at the Tulane University School of Law in New Orleans, seeks to explore (found via TorrentFreak.) Here's the background: 

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Italian Public Prosecutor Says File-Sharing Site Is 'Receiving Stolen Goods'

Sites that share unauthorized copies of various kinds of digital files are hardly news, and neither are attempts to shut them down. But a recent case in Italy breaks fresh ground here: 

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German Court Holds Internet User Responsible For Passing On Unknown, Encrypted File

A natural response to the increasingly harsh enforcement of laws against unauthorized sharing of copyright files is to move to encrypted connections. It seems like a perfect solution: nobody can eavesdrop, and so nobody can find out what you are sharing. But as TorrentFreak reports, a German court has just dealt a blow to this approach. 

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HADOPI Wants To Research File Downloads: Shouldn't It Have Done That First?

One of the most important aspects of the UK's Hargreaves Report was that it called for copyright policy to be based on evidence. It also noted that so far that simply hadn't been the case, and that practically all of the so-called "studies" used to justify laws in this area came from the copyright industries, with missing or dubious methodologies. 

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Time for MPs to Face the Music on Sharing

Another ill-informed opinion piece from a politician about file-sharing:

Platinum selling artists Radiohead and Pink Floyd have said they are happy to see their music used as a sort of digital loss leader to sell other products, but these groups are the exception rather than the rule. The average musician earns less than £15,000 a year and losing royalties makes the day-to-day struggle even harder for them.

Those average musicians - just like average authors - will tell you the biggest problem they face is getting known, not getting paid. What musicians, and authors like me, struggle with is to get the word out about our stuff amongst the million other offerings out there. Believe it or not, simply having a distributor does not solve that problem: in my experience they pretty much expect *you* to do the marketing.

Paradoxical as it may seem, giving your stuff away is one of the best ways to make money. Not necessarily from the content - although that is possible, too, for example by selling physical CDs/books to people who have digital versions - but from ancillary revenue. This is not to be sneezed at: *all* the top pop musicians make much more from their live appearances than they do from their CDs (which is why an artist like Prince *gives away* CDs to people who attend his concerts).

As the quotation above concedes, giving away stuff isn't a difficulty for the top artists, and as I've indicated, giving it away is precisely the best way for less well-known musicians to break out of their low-income ghetto.

So, really, the only people who lose out from the sharing of music online are the record companies, who find themselves without a role. But the idea that civil liberties should be curtailed simply to keep afloat a dying - and widely-hated, both by artists and consumers - industry, should be self-evidently absurd.

It's worrying that the author of this latest simplistic attack on file-sharing, apparently "a former member of Runrig", is unable to see this. He and other demagogues that attack sharing for whatever reason would do well to look at the facts, and not glibly regurgitate the propaganda of the industry and its lobbyists.

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Lies, Damned Lies and Media Industry Numbers

A few months back, I wrote about how some figures quoted in the "Copycats" report produced by University College London's CIBER for the UK governmnent's Strategic Advisory Board for Intellectual Property Policy were based on nothing more than wishful thinking by the media industries. You would have thought that having been caught red-handed once, they might have stuck to the truth. It seems not:

The British Government's official figures on the level of illegal file sharing in the UK come from questionable research commissioned by the music industry, the BBC has revealed.

Specifically, we're talking about that emotive "7 million people" that are engaged in allegedly illegal file sharing:

As if the Government taking official statistics directly from partisan sources wasn't bad enough, the BBC reporter Oliver Hawkins also found that the figures were based on some highly questionable assumptions.

The 7m figure had actually been rounded up from an actual figure of 6.7m. That 6.7m was gleaned from a 2008 survey of 1,176 net-connected households, 11.6% of which admitted to having used file-sharing software - in other words, only 136 people.

It gets worse. That 11.6% of respondents who admitted to file sharing was adjusted upwards to 16.3% "to reflect the assumption that fewer people admit to file sharing than actually do it." The report's author told the BBC that the adjustment "wasn't just pulled out of thin air" but based on unspecified evidence.

The 6.7m figure was then calculated based on the estimated number of people with internet access in the UK. However, Jupiter research was working on the assumption that there were 40m people online in the UK in 2008, whereas the Government's own Office of National Statistics claimed there were only 33.9m people online during that year.

If the BPI-commissioned Jupiter research had used the Government's online population figures, the total number of file sharers would be 5.6m. If the researchers hadn't adjusted their figures upwards, the total number of file sharers would be only 3.9m - or just over half the figure being bandied about by the Government.

I don't want to focus on the way the government supinely relies on the media industry for its "data", or the fact that the media industry continues to resort to these fabricated figures to justify its insane actions. Instead, I'd like to look at two other aspects.

First, let's give some kudos to the BBC for deciding to investigate these figures. At a time when the BBC is under attack (a) from interested parties like James Murdoch for daring to exist, and from (b) trouble-makers like me over its weak coverage of the computing sector, it's great to see some great reporting from it.

But what I really want to underline here is the own goal scored by the content industries. The more plausible 3.9 million figure mentioned above would have served their purposes admirably: it's quite big, and so is "shocking" enough. By foolishly going for the 7 million figure, the media moguls have dug their own grave.

By quoting that number, they are effectively saying a vast swathe of the UK population is engaged in that activity. And as history teaches us, when such a vast proportion of a nation is doing something that is technically breaking the law, this shows not that these people are bad, but that such a law is self-evidently unjust to that nation.

So, whether we believe it or not, we should use this 7 million figure, and throw it back in the face of the media industries as proof that they are totally alienated from their customers. And based on that, we should invite them either to show that they do indeed care about such people by changing their approach radically, or at least frankly to admit what seems obvious to any dispassionate observer: that they actually hate their customers for revealing them to be liars, bullies, cheats and fools.

Follow me @glynmoody on Twitter or identi.ca.

EU Telecoms Promote "Legitimate" Content

Interesting initiative from the European Telecommunications Network Operators' Association (ETNO):

ETNO is launching a new online content web site today, to raise awareness of attractive online offers put on the market by its members throughout Europe to download music, films or watch TV. ETNO members believe that offering a wide choice of online services is the best way to promote a legitimate use of the Internet and fight against illicit file-sharing.

"The rapidly growing choice of legitimate online content services illustrates the increasing cooperation between e-communications providers and content owners in order to respond to consumer demand for price-worthy, secure and user-friendly services”, says Michael Bartholomew, ETNO Director.

The new ETNO web site gives a non-exhaustive overview of services available including IP TV, video on demand or music downloads, offered by ETNO members through different platforms and devices to meet user’s demands.

"User-demand for content is the basis of our actions. ETNO members develop and promote business models for content online offers, including music, films and TV. This list will of course need to be continuously updated,” says Patrik Hiselius, TeliaSonera, Chair of ETNO’s Content Working Group.

Increasing choice of legitimate content online and raising awareness among users are the best instruments to fight against illicit file sharing.

“Illicit file sharing represents a major burden for all stakeholders, including internet service providers. Education is key. Users should not be unreasonably criminalised or stigmatised. Through this new web site, ETNO members show their commitment to play their part and cooperate with rightsholders under the existing legal framework, in a scenario where choice and availability for the consumer, and rights and privacy for the citizen are all fully guaranteed”, added Bartholomew.

ETNO calls on policy makers and stakeholders to work together in order to ensure the wide availability of legitimate content offerings and to enable new creative market-driven business models to emerge.

This isn't perfect - I have problems with this "illicit file sharing", and the phrasing of "users should not be unreasonably criminalised or stigmatised", but what's interesting is that it shows an awareness of the broader issues, and of the fact that customers have rights as well as holders of intellectual monopolies. It suggests to me that the telecoms companies are beginning to understand that things are changing, and are beginning to change their own stance in response too.

Is the EU Acting Duplicitously Over ACTA?

As I and many others have noted, the current negotiations over the Anti-Counterfeiting Trade Agreement (ACTA) are, on the one hand, shrouded in secrecy for the general public, while on the other, being conducted in close consultation with media industries. This leads to the doubly deplorable situation that an important treaty is being negotiated to favour a particular industry without allowing those most affected by it – the tax-paying public – to even offer comments on it.

One measure of the growing impossibility of sustaining this position was the release by the EU of its “fact sheet” on ACTA, last updated in January. This smooth-talking document attempts to assuage the concerns of the little people, assuring us:

ACTA is about tackling large scale, criminal activity. It is not about limiting civil liberties or harassing consumers.

ACTA will not go further than the current EU regime for enforcement of IPRs – which fully respects fundamental rights and freedoms and civil liberties, such as the protection of personal data: This Community acquis on IPR enforcement is without prejudice to national or Community legal provisions in other areas, in particular in the area of personal data protection, as regulated by the Data Protection Directive and the Directive on privacy and electronic communications.

ACTA is not designed to negatively affect consumers: the EU legislation (2003 Customs Regulation) has a de minimis clause that exempts travellers from checks if the infringing goods are not part of large scale traffic. EU customs, frequently confronted with traffics of drugs, weapons or people, do neither have the time nor the legal basis to look for a couple of pirated songs on an i-Pod music player or laptop computer, and there is no intention to change this.

Of course, in the absence of any details about what the treaty contains, it's hard to tell whether this is just palliative spin or not.

Fortunately, the sunlight of openness is beginning to pierce even the sepulchral gloom of the ACTA negotiation process, and leaks of its current text are beginning to seep out. The news is not good, as Michael Geist explains:

The Border Measures proposals are also still subject to considerable disagreement. Some countries are seeking de minimum rules, the removal of certain clauses, and a specific provision to put to rest fears of iPod searching customs officials by excluding personal baggage that contains goods of a non-commercial nature. The U.S. is pushing for broad provisions that cover import, export, and in-transit shipments.

The proposals call for provisions that would order authorities to suspend the release of infringing goods for at least one year, based only on a prima facie claim by the rights holder. Customs officers would be able to block shipments on their own initiative, supported by information supplied by rights holders. Those same officers would have the power to levy penalties if the goods are infringing. Moreover, the U.S. would apparently like a provision that absolves rights holders of any financial liability for storage or destruction of the infringing goods.

...

The Criminal Enforcement proposals make it clear that the U.S. would like ACTA to go well beyond cases of commercial counterfeiting. Indeed, their proposal would extend criminal enforcement to both (1) cases of a commercial nature; and (2) cases involving significant willful copyright and trademark infringement even where there is no direct or indirect motivation of financial gain. In other words, peer-to-peer file sharing would arguably be captured by the provision. The treaty would require each country to establish a laundry list of penalties - including imprisonment - sufficient to deter future acts of infringement. Moreover, trafficking in fake packaging for movies or music would become a criminal act as would unauthorized camcording.

Now, it may well be that the EU is fighting tooth and nail against the intrusive border control measure, and the criminalisation of P2P file sharing – both of which would certainly “limit civil liberties” and “harass” consumers. But the best way for the EU to demonstrate its bona fides would be to bring the negotiations out into the open.

It is clear that the scope of this treaty is far reaching: indeed, there is a clear attempt to use it to slip in very powerful clauses that would over-ride national and international legislation. This is simply unacceptable. Moreover, if it turns out that the EU is *not* fighting the above moves, it is nothing short of scandalous that it should be acting in such a duplicitous fashion over ACTA – in which case, those responsible for following this course should be called on to resign.

More Evidence that File Downloaders Buy *More*

One of the central fallacies in the argument that sharing is bad for business is the idea that every file downloaded is a sale lost. In fact, there is growing evidence that the contrary is the case - that people who share stuff, buy *more* stuff. Here's some more:

The Institute for Information Law in the Netherlands reports that the average downloader buys more DVDs, music, and games than people who never download. Illegal downloaders represent 45 percent of consumers who purchase content legally, the institute recently reported.

The Institute estimates some 4.7 million Dutch Internet users 15 years and older downloaded hacked and pirated DVDs, games, and music in the last 12 months. This would imply a staggering 25 percent of the Dutch population (from the 2008 figure of 16.5 million) who view illegal downloading and sharing as socially acceptable, even as they're also legally acquiring content in parallel.

So that seems to say that 25 per cent of the Dutch population share stuff, but that they represent 45 per cent of the sales. In other words, they are buying quite a lot more than people who don't.

Perhaps one day the content industries will realise that they should be *encouraging* sharing, becuase it boost their sales: it's called marketing.

German Constitutional Court Backs Privacy

I always did admire those sensible Teutons:

The Federal Constitutional Court in Germany has ruled that the identities of file-sharers must remain private and can longer be revealed to media companies who accuse them of copyright infringement. In future, only those accused of ‘heavy’ crimes such as murder, child pornography or kidnapping will be revealed.

This is eminentally sensible, but the content industries will doubtless keep trying to equate file-sharing with those "heavy" crimes - with the result that they will make themselves look even more ridiculous.

The Deranged Disc Drive Disease

First Seagate, and now Western Digital:

One of the world's largest hard disk manufacturers has blocked its customers from sharing online their media files that are stored on networked drives.

Western Digital says the decision to block sharing of music and audio files is an anti-piracy effort.

Presumably Western Digital will soon be installing radio-linked video cameras in its hard drives to ensure we are not breaking other laws as well.

MPAA Jets in To Spread Some Cinematic Fantasy

When are these people going to get a clue?

Motion Picture Association of America (MPAA) president Dan Glickman is today lobbying UK film minister Margaret Hodge, advisers to prime minister Gordon Brown and the UK Film Council to make camcorder recording in cinemas a criminal offence, FT.com reports.

I have no time for idiots who try to record films in cinemas - but they aren't the problem. As Michael Geist noted, when he was rebutting a similar attempt to force stupid laws on Canada, earlier research has shown it's mostly the film industry itself that is to blame:

77% of these samples appear to have been leaked by industry insiders. Most of our samples appeared on file sharing networks prior to their official consumer DVD release date. Indeed, of the movies that had been released on DVD as of the time of our study, only 5% first appeared after their DVD release date on a web site that indexes file sharing networks, indicating that consumer DVD copying currently represents a relatively minor factor compared with insider leaks.

Criminalising the use of camcorders will simply be one more stupid piece of legislation, one more thing the police and legal system don't need, and one more paranoid response to a non-problem.

So MPAA, do us all a favour: save your fantasy world-views for the silver screen.