Music and content anti-piracy battle cries echo globally

Posted by Mohammed Hamza Friday, February 27th, 2009

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The fight against piracy has spread like wild fire in recent months, so much so in fact that it was top of the agenda in a meeting of heads between China and the EU. But is the industry deceiving itself by holding on to the belief that governments really can make a difference given that the attempt at intervention in the UK has served only to sidetrack the stakeholders from the real issue: discovering new business models.

The three strikes and you’re out rule was implemented last year in France and New Zealand plans to go the same way. But several governments have seen the sense in not waving their regulatory wands at the issue.

The German Justice Department and various ISPs recently met and the former showed no interest in pushing through a three strikes policy, seeing it as “completely unreasonable punishment” as well as being “highly problematic due to both constitutional and political aspects”.

Even the EU Parliament has rejected the idea of terminating internet connections as going against basic civil rights.

In fact some of these problems have surfaced in a recent trial. P2P file sharing website The Pirate Bay has been lynched by various international record labels and put on trial in Sweden. The dropping of various charges over the first two days of the trial showed how farcical this whole process is but also highlights the difficult social and constitutional issues that surround this issue of file sharing and piracy. It’s turned out to be a real witch hunt.

Take the first witness, Magnus Martensson, a lawyer with the Swedish chapter of the entertainment industry association IFPI, who tests different file sharing services as part of his job. When asked to explain how The Pirate Bay differed from Google, he clearly showed a level of ignorance as the man who is one of those leading the fight against piracy was not aware that Google could be used to find torrents.

In Norway, the Norwegian Minister of Education Bård Vegar Solhjell writes in a blog that non-commercial file sharing should be legal and that there is no future in fighting against file sharing services. He adds that file sharing is a good way of finding new music and resources that are used to fight piracy are wasted when they could be used to pay the artists.

In the UK, the government’s latest move to force various content rights-holders, ISPs and interest groups to agree on a solution to the problem of online piracy seems to have sent the process into reverse. None of the options highlighted in its consultation attracted widespread support. The UK government is now seeking a collaborative, international strategy to combat illegal downloads agreed with US and European partners by October 2009.

The problem in the industry has been too much focus on regulatory and technological intervention skewing the responsibility issue heavily into the ISPs and operators’ side of the court.

The question is why should ISPs cooperate when they are not receiving much of the revenue share? Very high network usage has a cost to the network operator so it would be in their interest to monitor this. France’s four biggest ISPs, Orange, SFR, Free and Numericable, estimate that it would cost them some EURO10 million each to meet the requirements of an anti-internet piracy bill that was approved by the French Senate at the end of last year.

Many believe that it is simply not possible to control access to such content in any case. So if you cannot close it down then the only option is to monetize it.

Apple has recently removed its DRM from iTunes to open up the market for non-iPod users, which could be seen as an acknowledgement of this and a way to increase their market.

The inability to find a solution to the piracy problem is keeping the industry from committing to the commercial development of new music-business models.

What is more important is the building of a valuable service where music is the raw material and then getting a return from that customer on a monthly basis, rather than just driving down the wholesale price of music, which is what is happening with Amazon and other online retailers. Along with the decoupling of music from albums, it’s this phenomenon that is limiting the potential of digital music.