Geoff Taylor, CEO, BPI
Let me welcome you to the BPI’s new blog. We’ll be updating it regularly with views and opinions on issues affecting the music industry.
One of the most talked-about issues right now is the Digital Economy Bill and its proposed measures tackling illegal filesharing. You may have seen the recent article in The Daily Mail where TalkTalk boss Charles Dunstone describes the measures as a “copyright crackdown we will all pay for.” Feargal Sharkey from UK Music has responded in the Daily Mail to Charles’ original claims, but I thought it would be useful to share with you BPI’s thoughts on this, in particular on the ISPs’ claims relating to costs.
BPI and its partners in the Creative Coalition Campaign have just released the findings of two independent reports that look at the likely costs to ISPs of setting up and running a notification process as envisaged by the Bill to help prevent illegal filesharing. The evidence from the first report, carried out by Sweet Consulting, shows that total costs to the big five ISPs of sending notifications to music filesharers would be £13.85 million in the first year, around £9m in the second year, and would be likely to drop to £3.4m in the third and subsequent years.
A separate report by NERA Economic Consulting, commissioned by the Creative Coalition Campaign, concluded similarly that the total annual average cost would be just over £8.5m, equivalent to less than 50p per ISP broadband account, per year.
Let’s not forget that there is no obligation whatsoever on ISPs to pass any of these costs onto their subscribers. They are perfectly at liberty to absorb the costs out of their large profits, or to pass on the costs of notifications to the account holders whose accounts are used illegally.
We’re announcing our report findings because ISPs have been throwing out fanciful figures to try to persuade the world that piracy’s not worth fighting. We’ve got used to them mischaracterising the measures in the Digital Economy Bill (for example, talking about ‘criminalising’ filesharers), but now their spin operations are focussed on scare stories about £24 a year rises in broadband bills and, even worse, that the internet would become ‘unaffordable’ for hundreds of thousands of hard-up families in Britain as a result.
The unpalatable truth behind Britain’s broadband success story is that it has been driven to a significant degree by the widespread availability of illegal music, movies and games. Millions of people in the UK now treat this free, illegal content as an integral and attractive part of the cost of their monthly broadband subscription, and it has seduced them away from legal online services that reward artists and the companies supporting them.
It’s an easy choice, economically, for some people to make. After all, why buy music, when you can instead just shell out for a broadband connection and download it for free with little fear of any repercussions? In the space of ten years, the UK broadband industry has grown from nothing into a multi-billion pound industry, while revenues for Britain’s recording industry have declined by around 40%. Some of the telecoms giants – household names, run by so-called ‘consumer champions’ – have, in effect, lined their pockets while freeloading on the back of musicians, labels and other creators.
Government is right to recognise that the internet can’t be allowed to be the Wild West. Just as on the roads or any other public network, there need to be sensible rules in place to ensure that the network is not abused, causing harm to others. Most people continue to fileshare because nothing is being done to stop them. This is why we need – alongside attractive legal services – a range of proportionate, effective measures to dissuade illegal filesharing. There is no doubt whatsoever that current levels of filesharing cannot continue if Britain wants to sustain a world-beating creative sector.
But instead we are seeing sections of Britain’s ISP community, led chiefly by TalkTalk, deploying any ruse they can conceive of to avoid taking responsibility for their role in tackling the problem. To us, it simply beggars belief that public companies can ignore widespread illegal activity they are fully aware is taking place on their networks and then oppose all measures to address the problem.
Since the letter-sending trial ended in early 2009, BPI has sent more than a MILLION separate notifications to ISPs where we evidenced a broadband account being used to share music illegally. Although ISPs already have the power to bring the illegal activity to an end, to the best of our knowledge not a single notification was acted upon – not even just to pass it on to the customer concerned and inform them they were breaching their terms of service.
The CEOs of big ISPs may like to talk about not condoning or encouraging copyright infringement, but it is just not credible to maintain that broadband revenues aren’t connected to the ability to illegally fileshare. TalkTalk, for example, makes clear that with its broadband package you can download “55 movies or 900 albums” each month. Then there’s BT’s ‘Heavy Usage’ Option 2 package – “enough to download 3,333 music files.” There are plenty of great music fans out there, but there aren’t too many who buy thousands of tracks a month from iTunes. So who are TalkTalk and BT marketing to?
It is time for some ISPs in this country to stop pretending that tackling filesharing isn’t their problem, and instead act like the responsible, socially aware companies they claim to be. They have profited for years at the expense of the content industries, but those same content industries are now reaching a tipping point where their ability to invest in new talent is under serious threat.
The bottom line is that the law-abiding broadband users in this country who do not fileshare are already paying a penalty for the behaviour of those who do – both in higher prices to cover extra bandwidth costs, and a slower, more congested internet experience. TalkTalk recently acknowledged as much themselves when they complained about the extra P2P traffic costing them money.
Illegal filesharing is making the internet experience worse, and more expensive, for most of us. If you’re one of those law-abiding ISP customers, or one of their shareholders, why not ask your ISP why they won’t do something to improve the internet for people who use it legally?