UK Record Companies Want To Bring In 'Three Strikes' Using A 'Voluntary Code' For Punishing Alleged Illegal File Sharers

As we reported a few months back, the UK's misbegotten Digital Economy Act continues to go nowhere fast, with warning letters for alleged illegal filesharing unlikely to go out until 2016, if ever. As you can imagine, the UK recording and film industries aren't exactly overjoyed by this prospect, and have come up with Plan B, as reported by The Guardian: 

On Techdirt.

Recording Industry Rep Suggests Parents Should Slap Their Children To Stop Piracy

One of the many problems with the "guilty until proven innocent" approach to tackling unauthorized filesharing is that it's not clear exactly who should get the punishment. For example, in France, we saw someone convicted not for infringement that he had committed, but something his then-wife had done and even admitted. And it's not just spousal activity that is problematic, as TorrentFreak reports in this interesting case from Germany: 

On Techdirt.

Should the Music Industry Pay ISPs for Piracy?

In the wake of its “success” in pushing through Digital Economy Act, the British music industry is hoping to move on to the next stage: using it as a lever to get more money out of the system (even though the music industry is currently thriving).

The UK royalties collector PRS For Music has just published a rough blueprint [.pdf] for how this might be done, entitled: “Moving Digital Britain Forward, without leaving Creative Britain behind”. It's a fascinating document, and merits close reading.

As the title suggests, there are essentially just two players in this analysis: the music industry, and the ISPs (the public are obviously irrelevant here). The ISPs are no longer lowly bit-mules, mindlessly obeying Net neutrality by conveying digital files hither and thither without a thought as to their content, but are to be regarded as “Next Generation Broadcasters”:

operators of networks that connect supply with demand in a market for media.

That's important, of course, because it reframes the debate about file-sharing in terms of old technology: radio and TV. It permits the argument to be made that such “broadcasters” have to pay for the privilege of broadcasting all that content – just like the radio and TV broadcasters do.

The paper makes a very good point about the increased capacity networks that are being built:

One of the few studies to be published comes from MoneySupermarket, who found that more than a third of consumers surveyed believe the advent of high-speed, next-generation broadband services would encourage greater piracy and make it easier to illegally download content. The report concluded that: ‘Illegal downloading is already a big problem for the likes of the music and film industries ... with superfast broadband packages set to become commonplace, the problem seems likely to get worse.’

I think that's true, but the analysis dismisses too easily the main reason for this:

Perhaps, like iTunes, these legal venues could increase the range of content on offer, but this increase comes at a high cost when already at a significant disadvantage to “free”.

That's a vicious circle: music companies won't offer more content to compete with free, unauthorised sites because it would cost too much, which means that there won't be so much authorised content as unauthorised, which means that people will continue to be forced to opt for unauthorised downloads, which music companies aren't willing to compete with.

The report even mentions iTunes, which backs up this view: for once iTunes made available most of the content previously only found on unauthorised sites, it started raking the money in. And yet the report chooses to ignore this rare data point, and stick with its circularity – the reason being, it has a Cunning Plan. The ISPs – sorry, Next Generation Broadcasters – must pay:

If changes in the scale of unlicensed media can be measured, we can put a price on this spillover to bridge the value gap. Simply stated, at some date a price would be placed on the indexed measure of unlicensed media on ISP networks. If at a later date the measure of infringement increases, the value transferred (from ISP to rightsholders) would increase accordingly.

Conversely, were the measure of infringement to decrease, the amount transferred would decrease accordingly. The options for pricing such spillovers should be the subject of further research.

They should indeed: I think this is a splendid idea – if we could make just one tiny tweak.

For this to be fair, we must of course make sure that we capture all the effects of unauthorised file sharing so that its true economic effect is measured. That is, we shouldn't be measuring anything so crude and vague as the flow of allegedly unauthorised copyright materials across a network. After all, it's impossible to say whether some of that flow might be permissible uses, and then there's the question of whether people would have bought the equivalent content etc.

Instead, what needs to be ascertained is the knock-on economic effects of that file-sharing in the *real world*. And of course, one very important aspect that has to be included in that is the fact that those who share files buy more, not less, music. As Mike Masnick explains through a splendid series of links:

Study after study after study after study after study after study has shown the exact opposite -- noting that people who file share tend to be bigger music fans, and are more likely to spend on music.

So I think we should try out this report's suggestion that ISPs should pay for the consequences of their users' actions – provided the recorded industry pays the ISPs if it should turn out (as those six reports linked to by Masnick might suggest) that file sharing actually *increases* the sales of recorded music. What could be fairer than that?

Follow me @glynmoody on Twitter or identi.ca.

Why the ICC Report Makes Me Ick

I have restrained myself from writing much about the ICC's "Building a Digital Economy" report, because I knew it would make me too cross. Fortunately, someone who is rather calmer me than me has done a better job than I would with some careful, rigorous analysis.

I urge you to read the whole thing, since it points out really well the huge holes in the report's logic and methodology. But there's one paragraph I'd like to pull out:

Most telling is the fact that the ICC report states that cinema ticket sales are also dropping, and seems to blame piracy for that. However, the MPAA has recently reported that global ticket sales are at an all-time high, with a global increase of 30% since 2005! More importantly, there is a lot of investment going into the industry, which indicates that it is very healthy. The MPAA reports that the number of digital 3D screens in Europe has grown from 0 in 2005, to 3,495 in 2009. That is hardly an industry affected by piracy.

I really think this is key: people are re-discovering both cinema and live music (something I've written about extensively on this blog). The fact that these are ignored is why the latest report is not just wrong, but completely wrong-headed. It perversely ignores the fundamental shifts in people's taste that the industry needs to understand and build upon.

And that's what really makes me sick: the fact that the media companies doesn't even want to acknowledge that it actually has a huge opportunity, but prefers instead to try to blame ordinary users for sharing and thus promoting their content.

Follow me @glynmoody on Twitter or identi.ca.

South Korea Joins the "Three Strikes" Club

For years, the content industries having been trying to get laws passed that would stop people sharing files. For years they failed. And then they came up with the "three strikes and you're out" idea - and it is starting to be adopted around the world. First we had France, then countries like Italy, Ireland - and now South Korea:

On March 3, 2009, the National Assembly's Committee on Culture, Sports, Tourism, Broadcasting & Communications (CCSTB&C) passed a bill to revise the Copyright Law. The bill includes the so called, "three strikes out" or "graduated response" provision.

...

The provision gives authority to order ISP to send warning letters to the users, delete or stop transmission of illegal reproductions, suspend or terminate the accounts of the users, or close the bulletine boards to the Ministry. It also gives power to order information and telecommunication service providers to block connections to their information and telecommunication network of such ISPs.

...

The modified bill will be up for vote in April, and it is most likely that the bill pass in the National Assembly and come into force in April.

What's the secret? why has the "three strikes" idea caught on where others have failed? And what is the best way to stop it spreading further?

Follow me on Twitter @glynmoody

Standing up to the Bully-Boy Lawyers

Davenport Lyons have engaged in such morally-repugnant behaviour that they are fast becoming one of the worst possible advertisments for their profession. At last, someone is calling their bluff:

Lawyers for the consumer rights lobby Which? have filed an official complaint to the body that regulates solicitors over Davenport Lyons' campaign of letters alleging illegal filesharing.

For several months Davenport Lyons has been sending letters to individuals accusing them of pirating videogames via peer-to-peer networks, and demanding £500 on behalf of rights holders. The London-based law firm recently branched out into threats on behalf of producers of hardcore gay porn.

Now Which?, formerly known as the Consumers' Association, has reported Davenport Lyons to the Solicitors Regulation Authority (SRA). Announcing the move, Which? said it had drawn regulators' attention to the detail of Davenport Lyons' letters. The complaint includes claims they "make incorrect assertions about the nature of copyright infringement; ignore the evidence presented in defence; and increase the level of compensation claimed over the period of correspondence".

The only positive aspect of this sordid case is that Davenport Lyons are bringing the whole idea of enforcing copyright into such disrepute that the general public will turn against it sooner rather than later.

Update: If you should be unfortunate enough to be on the receiving end of any of this, there's great advice here about what to do.

One Strike and They Miss the Point

On Open Enterprise blog.

The BPI Makes the BBC Broadcast its Stupidity

When I read this riposte by British Phonographic Industry's chief executive, Geoff Taylor, to an eminently reasonable column by Bill Thompson, who had noted the futility and counterproductive nature of attempts to stop filesharing, one passage immediately struck me:

Let's look at the figures. More than six and a half million people in the UK illegally access and distribute music, and it is plain wrong to say that this is good for music.

Independent research has shown time after time that people who download illegally generally spend less on music than people that don't, which undermines investment in new music.

Hang on a minute, I says to mesself: isn't it exactly the opposite - that there are oodles of studies that show that people who download music actually spend *more*? Alas, I was feeling lazy, and I couldn't be bothered hunting out the verse and chapter to show that Mr Taylor was talking a load of nonsense.

But then, the wonder that is the blogospher kicked in. Techdirt's Mike Masnick picked up the rather insubstantial gauntlet flung down by Graham, and answered thusly:

The real kicker, though, is his claim that independent studies say that those who use file sharing spend less on music. That's simply untrue. Study after study after study after study after study after study has shown the exact opposite -- noting that people who file share tend to be bigger music fans, and are more likely to spend on music.

If that's not a refutation, I don't know what is.

But what's really pathetic about this is that somebody in a nominally responsible position - one capable of making the BBC print "his side of the story" - should so barefacedly misrepresent the facts in order to cast slurs on an journalist's reputation.

Wouldn't it be rather better to face up to reality, admit that things in the digital world have "moved on" in Tony Blair's oft-repeated phrase, and come up with a better business model? Not least because it's pretty damn obvious to even the spottiest teenager else what that might be.