Prohibition never works
by Marcus Fergusson
The Digital Economy Bill is struggling: an extraordinary 300 amendments are being discussed in the Lords, mostly centred on proposals to prevent illegal file sharing by making internet service providers (ISPs) tell pirates they are breaking the law, and especially on Lord Mandelson’s 'three strikes' idea under which repeat offenders would be disconnected.
The Bill is flawed in three ways. First, evidence for the scale of the problem is biased. Rights holders like BMI say illegal file sharing causes significant damage to the UK's creative industry, yet by its covert nature it is impossible to know how much. Government consistently relies on figures from the UK's creative industries, such as a survey by Jupiter Research that the BPI commissioned estimating losses at £200m per year, but neither organisation will explain how they arrived at this figure. The Department for Business, Enterprise and Regulatory Reform (BERR) puts costs to the creative industries at £400 million per year, but admits “this figure may not be a completely accurate estimate of the displacement effect… [as] we haven't been able to fully assess the reliability of the methodology used.” This is dubious basis for legislation that will directly affect an estimated one in 12 of the UK population – 7 million people.
The second flaw is design. The solution is disproportionate to the problem and will cost consumers £500 million, adding £25 a year per broadband subscription according to ISPs. Government wants to encourage the digital economy yet reckons this measure will make 40,000 households sacrifice their internet. It will raise a measly £35m per year in VAT. Other unwelcome effects are harder to quantify. The ISPs will have to snitch on their customers – an invasion of privacy that may be against European law. The aggressive pursuit of P2P file-sharers will just make encryption software cheaper and more widely available.
Thirdly, prohibition never works. The temporary closure of Sweden’s Pirate Bay in August 2009 led to a 300 per cent surge in the number of rival sites. Last week’s unanimous acquittal of Allan Elis, owner of the OiNK music-sharing website and the first person in Britain to be prosecuted for illegal file-sharing, suggests that both the creative industries and the Government are out of step with public opinion on this issue.
The government should listen to both sides instead of accepting the biased view of the creative industries, and independent research and analysis should happen before badly designed and illiberal laws are railroaded through Parliament. Copyright laws no longer reflect the realities of the digital age, but the creative industries are in denial. This is nothing new. Every time content distribution has evolved – the printing press, sound recording, radio – the old guard and the forces of change have clashed. It’s no surprise that the forces of change won every time.
Alistair Beattie
The Tedium is The Message.
The music industry's broken business model should not be the concern of the government - they should focus on revising the copyright laws to make sense in a post-digital world. The music industry and the artists it represents should be acting positively to create new ways to sell their work to consumers that are more attractive than indiscriminate anonymous file-sharing. Part of this process will be to understand that they do not have an inalienable right to earn lots of money, but they do have a right to be paid appropriately for their artistic work and the value they create for consumers.
Gervase Clifton-Bligh
From an artist's point of view, the huge increase in market reach enabled by the internet should more than offset the corresponding increase in unlicenced usage. Publishers that adapt to a higher volume, lower margin model can also prosper. Eroding civil liberties in a vain attempt to maintain the antiquated business models of a hand-full of large corporations is not acceptable.
Moussa Clarke
Very good post.
It's no real surprise that vested interests are trying to fight the new digital paradigm, but unfortunately for them it won't work, whether or not this thoroughly wrong-headed, unenforceable and easily circumvented piece of protectionist legislation comes into being in the meantime.
The media will eventually settle on new relevant business models. As fas as music is concerned, the record industry is a subset of the music industry, they are not the same thing. The business of music will continue as ever, and I suspect it will do just fine.
Penny Nagle
Finally - some sense! 3 Strikes and You're Out is crazy talk from a generation of policy makers which has never downloaded a film or song in their lives. All this proposed policy will do is encourage encryption so they can't be snooped on (and how much harder will this make catching REAL criminals in a world where everyone encryptes?). Commercially it has to be bigger business to work out a payment model via the ISPs. Who is going to take up the challenge against this absurd legislation? which unfortunately is being championed by all the sorts of good people like Lord Puttnam who only know the old world they're told exists - because those are the statistics they are given.
James Flint
Agreed - the genie is long since out of the bottle (and other assorted cliches); there's no revert to the old models as far as any kind of digital media are concerned.
The way for publishers/promoters/creators to make money is by finding smart new business plans that capitalise on the new habits of consumers rather than battling them. Magazine and book publishers are currently pinning a lot of hopes new platforms like the iPad, launched today; it remains to be seen if this will work or not, but given the explosion in the App industry, it may well prove workable.
The music industry, having finally embraced the trio of ringtone, download and live event, has started to make money again. The film industry needs to follow suit - until it's easier to buy a film digitally than pirate it, the pirates will win. But piracy isn't free to the end user. It takes a commitment of time, guilt, technology and bandwidth to pirate, all of which cost. When the film industry rolls out models that make it easier to buy than to pirate, then piracy will fall away and become a manageable problem, rather than an industry-toppling one.
James Greenslade
A post from Lord Puttnam. There has been a lot of talk about these smart new strategies but I'm waiting to see one that isn't just making the best of a bad situation. The music industry has survived but only because the live experience cannot be replicated. When the downloading of film becomes as widespread as music there will be real problems because there is no live equivalent (except maybe 3D cinema). You only need to look at TV to see what happens when budgets are slashed across the board as a result of falling revenues. As for newspapers...
The smart business strategies of the future are artists and producers using the internet to raise money directly for films, albums etc. This would get rid of the corporate monsters that everyone is so upset by. The new internet investment sites are definitely one way forward. But there is no point doing this if people don't get anything back - illegal downloaders don't care whether the film has been funded by Universal or the artist.
The answer is just not to let people get stuff without paying because otherwise no-one will fund films, it is as simple as that. The British film industry is hand to mouth enough as it is in this recession without losing more money. There is no civil liberties issue about taking other people's work without paying.
The real problem with illegal downloading is that Steve Jobs doesn't care what happens to people working in films or music or books because he makes money selling his IPods/IPhones not the music/films people play on them. Check the recent US litigation over Blackberry to see how fiercely they guard their own intellectual property.
Maybe people are right that a total ban is unenforceable in practice and would only affect this country anyway but the ISPs should be forced to make more effort to make people pay. They complained loudly enough when it was suggested they were liable for defamatory posts on their sites. Now they just take the posts down routinely without a murmur.
John Holborow
I think you make some valid points , Marcus, and certainly the proposed legislation is flawed . However, your figure of £25 per subscriber is at best as unreliable as the creative industry evidence you dismiss. I am as uncomfortable with this sort of scaremongering - Charles Dunstone take a bow- as I am with prohibition.
And what are you proposing instead? Easy to snipe at this legislation, to lampoon the slow-witted creative industries and to talk about smart new strategies. But I find it hard to conceive of what strategies there can be which do not require the cooperation of ISPs, and they have a vested interest in allowing filesharing to persist - and no doubt welcome all and any support for their attack on the bill.
I agree that prohibition generally fails but unfettered piracy cannot be a good thing, and I can see why in the ranks of the creative industries - and perhaps its not fair to write them all off as 'old guard'?- there is a sense that some degree of constraint, imperfect though it may be , is better than none. No single strategy is likely to succeed- it will take a carrot as well as a stick.
Marcus Fergusson
Thank you for all of your comments. John, I realise that the £25 per subscriber figure has come from the ISPs and admitted as much in my post. This issue has become so emotive and there has been so much mud-slinging already, that it is difficult to accept any figures from any side. However, it is notable that this legislation was put forward without ministers bothering to estimate independently what these measures would cost.
see http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article6969105.ece
As to what I propose instead? There are, obviously, no easy answers… but I agree that the ISPs will have to be involved and I also agree that unfettered piracy cannot be a good thing. One question is whether all (currently illegal) file-sharing should be considered piracy in the future, or only file-sharing that is done for commercial gain.
Of course, not all of the creative industries are of the same persuasion as the ‘old guard’ (although they sometimes find it difficult to speak out against them) – but those ‘old guard’ elements are generally in a position to lobby government and they have an unfortunate tendency to be reactionary rather than to investigate alternative solutions. Much more work and research needs to be done before either legislation or market forces will arrive at a solution that is equitable for all. Intriguing suggestions such as Voluntary Collective Licensing have been shot down in flames by the ‘old guard’ without their merits being properly considered.
see http://www.eff.org/wp/better-way-forward-voluntary-collective-licensing-music-file-sharing
However, the main thrust of my post is that the legislation currently before Parliament has not been properly thought out – and so yes, I am sniping at this legislation.
Peter Jenner
There is a lot to be said for collective solutions. If there was a revenue of £1 per month from every broadband enabled device paid by the ISPs and MSPs the recorded music industry would probably get in something between £5 and 800Million per year. Given the inertia in people's use patterns traditional uses would continue , though they would decline and the traditional business models would adapt. If the industry also looked at the possibilities of segmenting the market , and working out how the public might be willing to pay for new offers for relating to both the music, the artists, the community of fans and the peripheral value that could be gained, it is likely that revenues to recording artists and writers could boom. It is also likely that in time the grip of the majors would be weakened , at least in respect of their control of entry into the market through their huge financially driven influence on marketing and promotion. This new approach could also have advantages for the Digital Service Providers who want to share in the potential of value added services as well as just being in the utility business which is now reaching saturation, while competition is pushing prices down and government is demanding ever faster connectivity. Imagination and co operation between the industries is what is required to enable a better, more competitive and more open market to develop. If we do not find a solution there is a huge danger of the UK recorded music industry going the way of the UK motor cycle industry. The employment potential of building the first 21st century recorded music market is enormous. Protecting the old business models will not work and slows down the need to develop models that work with the new technology.By the way the fight is not for the creators , it is for the companies which want to keep themselves in the business of control, rather than the business of service. All this needs a lot of work , and certainly implies copyright legislation which is in touch with the reality of the technology. I could go on....
webbo
I agree with everything you say but if the BPI can't justify their £200 million loss figure where do you get your £500 million cost to the consumer figure?
Marcus Fergusson
A good point... It is cited here as being a figure admitted by government ministers - http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article6969105.ece
The article does not say where this information came from but I suspect it was extrapolated from the June 2009 BERR Consultation on Legislative Options to Address Illicity Peer-to -Peer (P2P) File-Sharing - http://www.berr.gov.uk/consultations/page51696.html
This admitted that the reasoning behind the legislation was based on the assumption that 70% of illegal file-sharers would stop if contacted by their ISPs (this figure derived from just one survey). It went on to say that “Compliance cost figures are very sensitive to the underlying assumptions. If only 50% instead of 70% of infringers stopped, annual costs of compliance would increase from a range of £6-20 million to a range of £10-30 million. If instead of one letter a year rights holders required two letters a year to be sent to serious infringers, the costs would double”
Add in the operating costs of “approximately £19 million” and it is easy to see that the cost over the next decade could be around £500 million... It is right to flag this possibility as, once again, this is the information that the legislation is partly based on.
As to the £25 a year figure, I acknowledged in the blog that this was provided by the ISPs rather than from Government: it does now appear to have been a guesstimate (Charles Dunstone says he doesn't know where the figures came from) but, equally, if the costs do come in at £500 million, this would seem reasonable, given that this would need to be shared between approx 20 million broadband account holders Once again, these costs need to be assessed more accurately before legislation is introduced.
cosplay
top jewelry
fashion blog
life world
choose handbag
Tiffany Jewellery
fashion life
manoloblahnik sale
xmas gift
Ckloo
jewellery
dresses
shoes blog
jewellery
ed hardy blog
wedding sale
James Cooper
The problem here is that the companies (music lables, publishers etc) seem to have morality on their sides "But what about the artists?" they cry "how are they supposed to make a living in a world where content is free." The cruel reality is, however, that most artists don't make a living from their art.
Take writers: novelists get around a pound for each novel they sell, and with most novels selling less than 3000 copies, what kind of living is an artist really earning?
A better model for artists would be to sell their work directly to the consumer, at £1 a book/CD, thereby earning the same that they would have earnt through a lable/publisher without the having earned some fat-cat music executive millions for doing nothing.