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British Music Industry misses (another) historic chance

25 07 2008

By Wolf

British record labels seem to miss yet another chance to regain leadership in shaping music distribution on the Internet: Instead of announcing the launch of an innovative, convenient, legal file-sharing platform, today the national news broke that the music industry, represented by their lobby organisation BPI, had agreed with 6 ISPs serving the UK on a process of distributing “warning” letters for illegal file sharing to their customers. Although the controversial termination of the Internet connection as a final threat, as discussed in previous proposals and planned to become effective in France later this year, has been replaced by the threat of “slowing” the connection, the measures focus on deterring customers from using their Internet connection to use for file sharing.

A recent survey by the publishers and artists association British Music Rights and the University of Hertfordshire has shown how much students value their music, but also how rampant file sharing is in these age groups. Instead of exploring models to capture the social value of file sharing, the music industry continues to believe that they will be able to bring the Genie back into the bottle. These alternatives already exist and do not necessarily require government involvement. Companies like in the UK or Noank Media in the US have developed the models and technology required to collect content fees, measure the amount of file-sharing traffic, and distribute the fees to the copyright holders. Instead of preventing file sharing, they allow ISPs and copyright owners to participate and benefit from the distribution of digital content by consumers over the Internet.

BPI has claimed for a long time that the rampant use of illegal file sharing networks prevented the creation of legal alternatives. Their approach to solve this hen-and-egg problem seems to focus on using the stick first and rely on the magic of the market to bring about the alternatives. If their logic was right, consumers should expect to see legal alternatives emerging soon as the stick is out now. Until then, I will feel inclined to believe that the industry underestimates the social significance of file sharing and will continue to develop models which fail to meet the demands of their (potential) customers.

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