Following on from Paul McGuinness’s speech at the music matters conference in Hong Kong last week where ISPs were likened to “Shoplifters” I would like to take this opportunity to examine the issues at stake. It is crystal clear that without the illegal sharing of music and other rich media content on the internet, there would be no market whatsoever for our ever-increasing broadband speeds, which ISPs profit from. In the UK the government has warned both industries that if they cannot come to mutual agreement it will legislate. Despite this threat the ISPs have remained belligerently against coming to the table. Why?
Let’s look at what got us into this mess in the first place. P2P file sharing was already rampant before the music industry worked out how to monetize music in the digital realm. And yes the ISPs stood by and in my mind are criminals in the sense that they blatantly turned a blind eye to copyright breaches that could only occur with the use of their broadband networks and back bone infrastructure. To plead ignorance is not a defense in court. So why have the likes of Yahoo, Google, MSN et al all managed to get away with stating that exact defense?
I’m surprised it has taken the music industry this long to mobilize its lobby resources to actually move the debate into the public sphere. Napster had been around since the late nineties, so how come it has taken almost a decade for the recorded music industry to actually confront the real perpetrators? They stuck their head in the sand and tried to sue their own customers, instead of approaching the real facilitators. Let me be very clear, this issue is about facilitating file sharing and making loads of money from it, whilst groundlessly trying to admonish responsibility.
The positive thing is that the record industry is now tackling the route of the problem head on. So well done on that note! From reading the transcript of Paul McGuinness’s speech I would have to agree that the tables have turned and that the “dinosaurs” are now only actually left in running the ISPs not the music business. In a meeting with Feargal Sharky the CEO of British Music Rights, in late February he was very clear that neither the music industry or the ISPs will be happy if the government carries out its threat of legislating in the UK.
It is interesting to note that at this same conference Lachie Rutherford President at Warner Music Asia Pacific outlined that only 2% of revenues from downloads and ringtones is shared with performers. However, I would like to know how much is actually received by the labels. Whilst it is clear that not only do ISPs and the new digital pipes have to be transparent in their distribution of music, the same goes for record labels. It is fine for labels to be deriding ISPs for non-transparency but labels also need to get their own houses in order as well.
The key argument in the music industries favor is that these digital pipes (ISPs, device manufacturers) continue to derive large revenues based around their broadband subscriptions and from advertising. What proportion of that money is making its way through to the music business? The answer is very little. What would happen to the ISPs, portals and other digital distributors if the rich media content business goes belly up? If no new content is released ISPs will have no content for which users of their pipes actually purchased a broadband connection in the first place.
Research last year estimated that up to 80% of ISP traffic can be accounted for by peer-to-peer networks like BitTorrent and Limewire.. It is obvious that the majority of this traffic is music and film. So why should digital pipes be the only ones making money whilst other industries are suffering due to these same digital pipes ignoring what stares them in the face. ISPs have made huge amounts of money from being accessories to criminal activity. No other industry would have a hope in hell of getting away with being an accessory to millions of copyright crimes for as long as the ISPs have.
Let’s now get back to the core theme of this post; have ISPs been thieves in the past and are they continuing to be thieves now in terms of the music business?
Firstly, I would say that perhaps in one respect they are not the thief in the sense they are not actually stealing the music like the P2P file-sharers are and do. However, they have been and continue to be accessories to the fact of criminal activity by their refusal to take action against people that use their ISP’s broadband connection to break the law. Simply saying it is not their problem is not good enough. In fact, it is downright childish and is not a sustainable defense in court.
The music industry has been forced to grow up quickly in the digital realm, it is about time the digital pipes did so as well. The unwillingness of the ISPs to act against file-sharers by default necessitates that they are accessories to crimes against music copyright owners. Perhaps the IFPI instead of prosecuting its industries end customers should actually begin prosecuting the ISPs?
The music industry, clearly have extremely good grounds to do so. Music consumption is at an all-time high, yet the business is not receiving money for it whilst the digital pipes are profiting from it. If these digital pipes will not come to the table, then they will no doubt in the UK and France for starters, have government legislation imposed on them. In truth ISPs are the only ones who have the power to stop file sharing if they refuse to be proactive in pursuing action to prevent illegal file sharing, they should be prosecuted just like other criminals.
The ball is now in the ISPs court as the music industry has been proactive in reaching out to these same companies who have been active participants in criminal activity against copyright owners. Ideally this would be negotiated in a proper many, However, the olive branch has been extended by the music business to the ISPs. If this olive branch is thrown back in the music industries face the recorded music business will need to bring legal action against the accessories to these crimes. Being an accessory to a crime is as bad as the crime itself, especially when it is enabled to occur primarily due to the negligent behavior of the accessory to the crime.