The War on ISPs

25 07 2008

Interesting perspective on the recently muted ISP change in position from Digital Music News:

Resnikoff’s Parting Shot: British Big Brother

Can a letter-writing campaign curb piracy?  American file-swappers have been getting letters for years, and not the toothless type.  On this side of the Atlantic, the recording industry unabashedly declared war on illegal downloading years ago, and waged battles against ISPs, file-sharing applications, startups, universities, and music fans.

But none of it curbed illegal file-sharing, nor did it save sinking recording revenues.  And file-swappers quickly figured out that the likelihood of getting sued is similar to the chances of getting struck by lightning.  The RIAA couldn’t scale its lawsuits, ISPs continuously pushed back, consumers got pissed, and the piracy train never slowed down.

Two different countries, two different campaigns, same broader technological transition.  But get a letter in the US, and the RIAA is the bad guy.  Get a letter in the UK, and the bad guy is the BPI, ISP, or both.

Sure, British file-swappers won’t be forced to called a settlement center. They won’t have to scrape together thousands of pounds they don’t have, at least not yet.  But the threatening, big brother mentality is bad for business - both for access providers and the recording industry.

And British majors want more.  On Thursday morning, the BPI “accidentally” outlined a plan that included three distinct steps, ending in termination.  ISPs quickly reaffirmed their commitment to warnings only, and the trade group eventually clarified.  But the underlying agenda was rather obvious.

In that context, the BPI has forced ISPs to cross a critical psychological threshold.  Against the threat of an unwanted governmental hammer, the access providers were willing to make a dirty compromise - one that compromised the privacy of its subscribers.  And the BPI was able to pry the door open, and begin working towards more serious concessions.

But to what end?  Is a three-strikes assault the way to revitalize the recording industry?  Is an RIAA-style war the way to save this business?

The answers are obvious.  Just ask EMI, or any other major label.  Scarcity is over, most music fans find their music for free, and the RIAA is still trying to bury LimeWire.

But the British discussion is far from over.  Also on the table is an ISP-level, blanketed fee for unlimited music.  And other groups, including publishers, have yet to seriously weigh in.

Then again, this is a notoriously fractured industry, one that rarely finds agreement in anything.  Even if every stakeholder committed to an ISP-level, blanketed fee, the details would quickly get bogged in this rate, that rate, this concession, that concession, this contract, that lawsuit.  It could quickly resemble the cacophony that characterizes issues like non-interactive streaming rate structures in the United States.

But this is an industry that only exerts limited control over its consumer and surrounding marketplace.  The shapeless, decentralized mass of music fans has already determined its methods for acquisition.  And these habits largely fall outside of sanctioned, industry offerings.  Sending a letter could curb some file-sharing behavior, though the broader impact will be negligible - and possibly negative.

Forging a broader payment system around existing behavior makes more sense, though it may take years before the industry - British or otherwise - is ready to truly embrace such a plan.  And the disintegration of existing players, including major labels, may be required before a radical reinvention can truly take place.

Paul Resnikoff, Publisher
(Find me here: http://www.digitalmusicnews.com/stories/profiles/paulr)

Permalink: http://www.digitalmusicnews.com/stories/072408parting


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