Piracy Made Unattractive

The music business has suffered piracy more than any other media. The past 10 years have been unprecedented with music sales down more than a third in many countries. During this past decade the record industry has also embarrassed itself with desperate attempts to restrict piracy through litigation.
Today, however, more consumer friendly efforts to thwart piracy are gaining considerable strength due to legal alternatives and greater cooperation between the music industry and the ISP’s.
Three Examples

The first is Google’s music streaming service. Google has partnered with Rhapsody, Imeem, iLike, and Lala and receives licensing from EMI, Universal, Warner Music, and Sony Music. Google is allowed to highlight music from independent labels through Lala and MySpace’s iLike. Currently this service is only available in the US.

Next is Nokia’s “Come With Music” package, a full subscription service paid ‘invisibly’ with the purchase of many of its phones. With this subscription model the user has access to over four million songs for up to one year after the subscription terminates. This service was started in UK and is presently available in many countries in Europe, South Africa, Singapore, Australia, Brazil, Mexico, and Russia. “Comes with Music” plans launch in the US in 2010.

Last is Spotify, which permits customers to stream tunes for free with limited commercials. The consumer can easily download and install the application to their smart phone and computer for syncing and then begin listening to music instantly. Spotify may become the most successful model for providing a long-term substitute for illegal downloading. It is not just that it is free, but that it streams instantly and authorizes the sharing of songs and song play lists. It is the most socially engineered alternative to piracy, and provides the most enjoyable experience so far.

In the meantime, the music industry and the ISPs continue to work. together. For example, recently, so-called ‘graduated-response laws’ have been enacted in South Korea, Taiwan, Britain and France. This approach works with the cooperation of national recording industry organizations who report copyright infringers to the ISPs. The ISPs can then send warnings to subscribers and penalize them with a slower internet connection and/or a momentary shutdown.

There are a number of examples here. A newly enacted copyright law in New Zealand states that ISPs must discontinue internet services for repeat violators. Britain and the US are also considering such laws. Also, in April of this year Sweden enacted legislation forcing ISPs to disclose data about their patrons; later, in June, a poll conducted by major marketing research company, GfK, concluded that as much as 60% of all Swedish illegal downloads were being impacted by this provision.

It seem that ISPs are finally striking partnerships with recording organizations worldwide, and making themselves more accountable in the fight against piracy. This unusual co-operation between the sellers of recorded music and the owners of the digital highways, on which pirates have always preyed, is an unexpected yet welcome development for the recorded music trade.

There is more. Recently, in Britain, Virgin launched a music streaming service in partnership with Universal Music Group and Pay-TV mammoth BSkyB. The ISP allows its subscribers use of over four million tunes. In contrast to other streaming services, the consumer retains permanent possession of all downloaded music and can make copies of the song files. The quid-pro-quo is that harsher action is promised against any infringer at the site.

Finally, TDC, a leading telecom firm in Denmark introduced a music service in April 2008 and reports that over 120 million tracks have been downloaded so far. As John Kennedy, Chairman of the International Federation of the Phonographic Industry (IFPI), was able to report:“TDC was one of the first ISPs in the world to see the enormous potential to be unlocked in a service that bundles music into its broadband offering.[TDC] offers consumers access to a vast library of repertoire, while fairly paying artists, songwriters and record producers for their work”.

While such tactics in the fight against piracy are encouraging, they might not yield immediate results. Half of all world sales of recorded music are still in CDs. A company like Spotify, for instance, might hardly make a dent in overall revenue even if it duplicates sales. But if ending piracy absolutely is unrealistic, the indirect strategy of providing stronger incentives for legitimate downloads is working at last.

By Minden Jones

Sources Consulted

http://news.sky.com/skynews/Home/Business/BSkyB-And-Virgin-Media-Sign-New-Channel-Carriage-Agreements/Article/200811115141950

http://news.bbc.co.uk/2/hi/business/7708819.stm

http://www.theiphoneblog.com/2009/10/29/iphone-music-streaming-app-lala-coming/

http://www.economist.com/businessfinance/displaystory.cfm?story_id=14845087

http://arstechnica.com/old/content/2008/12/riaa-graduated-response-plan-qa-with-cary-sherman.ars

New Google Music Service Launch Imminent

http://current.com/1i6hq4cGoogle, Lala, iLike

http://arstechnica.com/media/news/2009/02/nokia-comes-with-music-comes-to-us-in-2009-au-in-march.ars

http://www.foxnews.com/story/0,2933,510283,00.html

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