UK Music - Illegal File Sharing Interview Part1

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Posted by Mark Jackson January 25, 2009 at 07:26:15:

In reply:
Privacy? Hah! posted by Mark Gibbs June 27, 2008 at 12:55:30:

Original text: Last week I discussed how debt collectors operate, how much data they have access to and just how exposed our personal information is. Unfortunately this is very much an IT issue ..

"Internet providers may now risk the prospect of tougher legislative sanctions from the government unless a way forward can be found"

The past few weeks of early January 2009 have certainly been very eventful for the UK music industry, which is attempting to work with broadband ISPs toward the development of a method designed to counter the increasing prevalence of illegal file sharing (To Ban or Not to Ban ). This process began in earnest last year when six of the country’s largest ISPs signed a Memorandum of Understanding (MoU) with the creative industry and agreed to the principal of warning illegal downloaders about their activity ( ).

The MoU was ultimately seen as an ignition switch to kick-start the process toward developing tighter restrictions and better solutions for the problem. Unfortunately, despite the International Federation of the Phonographic Industry (IFPI) warning in its 2009 Digital Music Report that 95% of music downloads (40 billion files) are illegal and unpaid for ( ), the creative (music, movies etc.) industry, government and ISPs have so far failed to reach a voluntary agreement ( ).

Internet providers may now risk the prospect of tougher legislative sanctions from the government unless a way forward can be found. To that end ISPreview has hooked up with UK Music (who? ), an organisation representing the UK’s commercial music industry, to discuss some of the problems and potential solutions to this situation. This interview includes feedback from UK Music’s Press and Communications Executive, Adam Webb, its CEO Feargal Sharkey and Chairman Andy Heath.

NOTE: This interview was completed only days before the recent failure to find a voluntary agreement and as such one or two of the questions and answers may appear out of step.

1. Who are you and what do you do?

UK Music: My name is Adam Webb, I am press and communications executive for UK Music. UK Music is a recently-launched organisation that represents the UK’s commercial music industry – our members include representatives of artists, songwriters, composers, musicians, record labels, music publishers, music managers, studio producers and collecting societies.

Before UK Music launched in October 2008, our previous incarnation was an organisation called British Music Rights that represented the interests solely of the composer and publisher community.

2. How much progress has been made on implementing the new anti-piracy scheme since the memorandum of understanding was first signed and what hurdles have yet to be overcome?

UK Music: As you know, the memorandum of understanding was built upon three strands: education; the development of new business models; and, for those consumers who still won’t use legitimate music services, a dialogue as to what should be an appropriate response to discourage them.

I wouldn’t term the MOU as an “anti-piracy scheme”. The overriding emphasis is to bring music and telco businesses together, develop new partnerships and stimulate growth. As such, it is very much the start of a process, not the end game.

3. Are the BPI’s figures, which estimate that 6 million Brits regularly use P2P networks to download music unlawfully, an accurate assessment of the scale this problem has grown to (any more recent statistics than that)?

UK Music: Those are the BPI figures, and certainly a huge number of UK consumers are actively using P2P networks to download music for free.

This was backed up by a survey published by British Music Rights and the University of Hertfordshire in July 2008 (the biggest-ever academic survey into the music consumption habits of 14-24 year-olds in the UK). In this, 63% of respondents claimed to download music from P2P networks, while 42% allowed others to upload their music collection.

More encouraging was the fact that 80% of those downloaders indicated that they would pay for a legal file-sharing service. This is clearly the direction that the UK music industry wants to continue moving – offering music fans what they want legitimately, while growing our respective businesses.

4. In public most ISPs appear to be against the idea of a flat disconnection as punishment for illegal file-sharing and reports suggest that some form of service restriction (speed reduction etc.) might be more palatable. What alternatives to disconnection are being discussed with ISPs for those that ignore the warning?

UK Music: Any potential alternatives are to be discussed as part of a working group, and we await Government’s response.

5. Regardless of what punishment is eventually agreed, does the music industry itself still believe that disconnecting customers from their ISP is a solution and if so, why?

UK Music: I don’t think anyone is framing this issue in terms of “punishment”.

I realise that statement may be a source of disappointment to some critics of the music industry; but most individuals within this business – whether they’re artists, labels, managers, publishers or collection societies – want to continue embracing the possibilities of digital distribution, and develop partnerships where they get paid for use of their work.

Let’s face it, music has always been a fantastic way of attracting a crowd, and it has a real and determinable value whether that’s online or offline.

6. Do you think there is still cause for the government to step in and force ISPs to act by passing new legislation (what kind of measures would you like to see)?

UK Music [EDIT AMENDMENT @ 11:59am 22nd Jan 2009]: Ideally, we would like to see focus on a market solution. However, to ensure that the MOU or any future working codes of practice are adhered to, it is important that there is some form of regulatory control. We have to ensure there is a level playing field for all ISPs.

The bigger picture for Government, as defined by Lord Carter’s vision of a Digital Britain, is to consider how the UK can build next generation broadband, while also stimulating and supporting our creative industries. (Industries that - given the current state of the UK’s economy - will play an increasingly important role in terms of employment and export potential.)

Where possible, the music industry wants to be working in tandem with ISPs to achieve mutually-beneficial goals.

7. Isn’t it wrong to blame ISPs for allowing such activity when in reality their hands are tied by laws, technical limits and the fact that illegal downloading makes their services more expensive to run and not less? In reality many providers are concerned by P2P’s often disruptive influence upon their networks, causing once casual users to download vast quantities of data and challenge the very survival of their tight economic models.

UK Music: I’d agree that ISPs see little benefit from illegal downloading either, especially now that broadband installation is reaching saturation point. This is a point Feargal has made consistently, both as CEO of British Music Rights and UK Music.

Given the expense and disruption of the status quo, this could be financial incentive for ISPs to move into the business of content distribution.

8. Much has been said about the prospect of ISPs being able to launch online music subscription services alongside their broadband packages. Many different ideas have been suggested although precious little is known. Is this an active part of discussions with ISPs to help tackle piracy and if so then what options look to be the most favourable for all sides?

UK Music: This, ultimately, is the whole point of the MOU. Potentially, there could be all variety of subscription services, although obviously they have to be commercially compelling to all concerned.

9. Would such a music subscription service also be offered to smaller ISPs or are you only discussing it with the largest players, is it not prudent to consider smaller providers too?

UK Music: We are very sensitive to the needs of ISPs and there has been significant dialogue between us and ISP representatives.

10. Several online music stores have justifiably expressed concern that plans for ISPs to offer their own music subscription service could seriously damage market competition and might be an anti-competitive move. What are your thoughts on this?

UK Music: I understand those concerns, but that hasn’t been the case in Denmark (with TDC’s Play) or in France (with Orange’s Musique Max). In both these instances, ISP subscriptions have not resulted in significant displacement elsewhere.

The UK’s digital music market has continually evolved and will do so in the future. The appearance of Amazon’s competitively-priced MP3 a la carte service before Christmas, in addition to Nokia’s Comes With Music, Datz, Spotify and We7, all point to a huge diversity of services, aimed at specific demographics.

However, at the moment, you’re talking about a market where the vast majority of consumption is unlicensed, and that which is dominated by one company [Apple].

ISP subscription services could play a huge part in monetizing unlicensed consumption. These could be huge incremental revenues, in addition to what is already there.

Related News and Articles of Interest:

11th March 2008: To Ban or Not to Ban (Illegal File Sharers)

24th July 2008: Six Major UK ISPs Sign Key Anti-Piracy Deal

27th Oct 2008: UK Music Industry Preps United Approach to Illegal File Sharing

16th Jan 2009: UK Government Fails to Reach Illegal File Sharing Consensus

16th Jan 2009: IFPI Warns That Nearly All Downloaded Music is Illegal

18th Jan 2009: Music Industry Voices Concerns about Illegal File Sharing Legislation


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