Post DEA, some home truths for the music industry

by Chris UnLimited 11. April 2010 12:48

STUFF BY ME WEEK-ENDING 11 APR 2010

So, the Digital Economy Act is law, and soon OfCom will begin a consultation on exactly how the copyright components of this eclectic bit of legislation will work. That includes the controversial three-strikes system for combating file-sharing, and the slightly wish washy process via which ministers will be able to order copyright infringing websites be blocked.

Now, for reasons I will explain, I actually support some of the objectives behind the copyright section of the DEA (even if I'm not 100% in agreement with the way those objectives are to be met). But I would like to take this rest stop in the 10+ year old story of the battle against the online pirates to remind the wider music industry of three home truths (you can think of them as my three "strikes" if you like). Here we go...

1. Three-strikes won't work.

2. It doesn't matter that it won't work.

3. There is a bigger challenge that the industry still has to face up to.

Three-strikes won't work
Or, that is to say, three-strikes won't stop file-sharing. Nothing will stop those web-users who actively want to access illegal sources of content from doing so.

Partly because, even by simplifying the process for taking legal action against such people, which three-strikes will, it's still not going to be practical to issue copyright orders against hundreds of thousands of people. And there are probably at least that many serial file-sharers online in the UK at the moment.

And partly because said serial file-sharers already know how to hide their sharing from the piracy police. When I first spoke to 5Live about the three-strikes concept two years ago, the presenters seemed surprised that it was possible for the music industry to spy on the file-sharing networks and, from that, work out which IP addresses were involved in online infringement.

Such spying has been going on since the early days of file-sharing, and is in some ways part of the problem, it's because the record companies can track online piracy so easily that it bothers them so much, even though the whole music industry turns a blind eye to other forms of widespread non-commercial copyright infringement every day. But tech companies have been so good at monitoring online sharing, it's been hard to ignore.

But, actually, it's harder to spy on serial file-sharers now than back in 2008. Partly because BitTorrent file-sharing, which is the norm these days, is harder to track anyway.

And partly because persistent file-sharers have developed and are now using technology which makes it harder to see files being shared, harder to know the source of such files, and harder to work out what content is contained in shared data. And, as the three-strikes system goes live, the file-sharing community will be more proactively distributing and employing such technology than ever before.

And you should add to that the growing trend for music to be shared via email, or via legitimate digital file-distribution networks (where illegal content gets hidden by legitimate data exchange), or offline from one digital device to another, which is totally impossible to track.

That's not to say it will be impossible to track all file-sharing. The tech companies employed by the content industries might occasionally crack the encryption systems file-sharers employ. And content owners can still infiltrate file-sharing communities and try and work out the identities of those who infringe. And, of course, more casual file-sharers won't necessarily be clever, or tech savvy, enough to hide their infringing activity. There'll be enough evidence available to send out a fair few three-strike warning letters.

But the serial file-sharers I first referred to will continue to share files illegally on the net, and three-strikes simply won't stop them.

It doesn't matter that it won't work
But, that three-strikes won't stop file-sharing is only an issue if you assume that is the absolute aim of the system in the first place, ie if that was the sole or key objective that the copyright section of the Digital Economy Act set out to achieve.

I accept that, for some of the more optimistic music industry lobbyists and pro-copyright parliamentarians, that was an objective, and possibly the overriding objective, when they were pushing for and writing the Digital Economy Bill. And those people are going to be disappointed. But, for some copyright owners, the more realistic ones, there are other objectives at play here.

Most people don't want to break the law most of the time. But most people have a somewhat fluid interpretation of which laws are serious and absolute, and which ones are, in reality advisable but bendable. Some copyright laws fall into the former category, others the latter. Few of us would set up a stall selling bootleg CDs at the local car boot sale, but most of us would burn an album to CDR for a friend who asked for a copy.

For me the achievable objective of the Digital Economy Act is to make online copyright infringement seem more serious to the average web-user, both by communicating that it is, and by having, or being seen to have, a slightly tougher enforcement system in place. Basically to ensure as many people as possible know that file-sharing is wrong, in the eyes of the law that is, and that infringing is not without its risks. That the whole matter is serious enough that more mainstream music fans will think about trying out legitimate digital music services before going the file-sharing route.

Now, given all the negative implications of the DEA and the three-strikes system that were wheeled out by those who opposed the legislation, is achieving that slightly more abstract objective actually worth it? Well, both sides in the DEA debate hyped up their arguments, so much so the anti-Bill brigade were guilty of quite a bit of unnecessary scare-mongering.

A lot of the negative implications listed were exaggerated, and misleadingly assumed that, once the Act was law, copyright owners would have carte blanche to order anyone they suspected of illegally file-sharing just a handful of files be cut off the internet. That ignored the fact disconnection was never on the agenda, that only persistent file-sharers will be targeted, and that a legal process will exist for those accused of infringement to fight the charges made against them.

But I do think, in PR terms at least, the pro-Bill lobby missed a trick by not pushing for clauses in the Act that more clearly outlined the responsibilities of web-users, and in doing so gave said users some protection. So that the Act said:

1. These are our rights and we plan to enforce them.

2. This is how we will enforce them.

3. These are the things we expect you, the web-user, to do to limit infringement (eg password protecting your Wifi, being wary of BitTorrent access to music and film, having a take-down system on your website for infringing content).

4. But if you do these things, we will accept you are not liable for infringement, even if some infringement inadvertently takes place via your website or net connection

One hopes the last two points will be the main feature of the Code Of Conduct that will be written by OfCom before three-strikes goes live. And that that Code will take, as its starting point, the idea that the main objective here is to make people (ie most people) take copyright and its online infringement more seriously, while accepting that a minority never will.

Because, in the wider file-sharing debate, we too often focus on the minority of serial file-sharers, and not enough on the mainstream web-user and music fan. The former will continue to steal music whatever you do; copyright owners don't have to have like that, but they do have to learn to live with it. The latter, however, can be turned into legitimate digital music consumers, and that's where the opportunity lies for the music business.

Which brings me to another point about why the fact three-strikes won't ultimately stop file-sharing doesn't matter. There is a movement in the music industry that argues that, because record companies can't stop serial file-sharers, they should instead licence P2P file-sharing, or set up all-you-can-eat MP3 download services. I'm not convinced by this argument, as I rambled in this blog here.

Yes, record companies can't stop serial file-sharers. But does that mean they have to risk everything to create a service said sharers might possibly be persuaded to sign up to? No. I say fuck em, if they won't pay, they won't pay. And if you can't stop them, you can't stop them.

The home taping brigade didn't pay in the late eighties and early nineties, but it didn't matter because the record industry was able to make buckets of cash from those consumers who would pay. Those are the people we should be focusing on. Using the law to encourage those people to take copyright seriously, and then providing great licenced services where they'll want to spend their money.

There is a bigger challenge that the industry still has to face up to
So, while I am in many ways supportive of the Digital Economy Act's copyright section, providing the subsequent Code Of Conduct focuses on users' rights and responsibilities, I still urge the music industry:

1. To not expect too much from their success in parliament.

2. To not focus their minds exclusively on implementing three-strikes moving forward.

3. To take some time to look more inwardly.

Because the bigger challenge for the music industry is an inward one. For all its sins, and it has many, the music industry is actually one of the best structured of the creative sectors in both creative and business terms, in that a system is in place whereby those enjoying commercial success today invest, as a matter of course, in the new talent of the future, even when the new talent is radically different to what is generating money today. This is a great system, and is why the music industry, of all the British creative industries, receives the least government money and yet is the most successful on a global scale. It is a system that should be celebrated, and protected.

But there is a problem with the system. At the moment the machine that takes money from today's success stories and invests it in tomorrow's talent is fed by only one of the wider music industry's revenue streams, the sale of sound recordings. This is because, until recently, that was the most secure and affluent income stream. But, as we know, that has changed. Now, and in the future, there will be no one income stream that offers that security or affluence. So we need to find a way to link more than one source of money into the talent investment machine.

That, more than the battle against piracy, is the real challenge for the music industry in the next decade. People know this of course, and some moves have already been made to address this problem. But not enough in my opinion. So much so, this is definitely a topic to which I shall return in the future. Though probably after the General Election. I feel some constitutional blogs coming up.

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STUFF I WROTE THIS WEEK
A round up of some of the news stories and articles I wrote for UnLimited's media in the last seven days...

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MUSIC BUSINESS STUFF...

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Gang Of Four sign up to Pledge [CMU Daily 06/04/10]

In The City to move to Piccadilly [CMU Daily 06/04/10]

New music business school launches [CMU Daily 06/04/10]

Chrysalis buy First State [CMU Daily 06/04/10]

BMI announce management revamp [CMU Daily 06/04/10]

Commons pass Digital Economy Bill on second reading [CMU Daily 07/04/10]