Sticks and Carrots
Thursday, July 16th, 2009 by copyright
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Meg the Intern -
Earlier this week, a partnership between research firms The Leading Question and Music Ally released the results of a survey that estimates that the number of teenagers in the U.K. who file-share music has fallen by a third within the last year and the ratio of shared tracks to legally purchased tracks fell from 4:1 to 2:1.
In the release, Music Ally CEO Paul Brindley attributes this shift to an increased usage, especially among teenagers, of “other means of accessing music for free” like the music streaming sites last.fm and Spotify (or the U.S., sites like Rhapsody and Pandora). The increasing popularity of such music streaming sites is good news for record labels, which are paid licensing fees for their tracks.
The survey summary concludes by suggesting that “By the time some of the anti-piracy measures proposed in the Digital Britain report [the government’s “strategic vision for ensuring that the UK is at the leading edge of the global digital economy”] actually come into effect, the nature of the piracy threat is likely to have changed dramatically.” These proposed anti-piracy measures include the warning and blocking by ISPs of users who perpetually share illegal downloads.
Hopefully, new, legitimate music-sharing business models, like online streaming radio, will continue to grow and eventually replace file-sharing as users’ go-to alternative to traditional music purchasing. The probability of this happening, however, is far from certain. Many streaming music sites are supported by audio advertisements that play between tracks (some also offer ad-free music for a subscription fee). Featured songs are also not saved onto users’ computer hard drives and cannot typically be transferred to music devices like iPods. Such disadvantages could prevent file-sharing from disappearing into technological oblivion, at least in the near future.
Providing incentives for fans to access music legally is an extremely important step in the struggle against intellectual property theft; however, it is difficult for content industries to compete against the free, seemingly no-strings-attached downloads that file-sharing currently offers. In the U.S., the RIAA’s letters and lawsuits have provided disincentives for illegal file-sharing, though the effectiveness of this anti-piracy measure has been (unsurprisingly) debated. The RIAA is now taking a step back from initiating new litigation and is looking to ISPs to cooperate in the crackdown of IP theft in efforts that are similar to those suggested by the Digital Britain report.
So far, American ISPs have been reluctant to do much more than forward the RIAA’s warning letters to potential pirates, fearing that anything harsher may divert customers into the arms of their non-compliant competitors. Since ISPs are not legally compelled to work with content industries to crack down on file-sharing (as the Digital Britain report recommends for the U.K.), there will need to be some consensus between internet providers before they will work with the RIAA to establish any further anti-piracy measures.
Interestingly, one of the most effective current deterrents to unlicensed file-sharing is the adware, spyware, and viruses that many computers are exposed to when downloading media from peer-to-peer networks. The pervasiveness of the problem is leading some users to discontinue downloading practices. Hackers are now using the lure of free downloads to steal and sell personal information in increasing numbers, even on legitimate websites like Digg.com . Computers infected with advanced malware can expose their users’ personal information like credit card and social security numbers. It seems that no one likes being the victim of digital theft and litigation may not be file-sharers biggest threat after all. Despite its drawbacks (namely cost and/or ads), legitimate media distribution does offer certain things that peer-to-peer networks do not – security and privacy. Capitalizing on these features may represent a big opportunity for content industries’ to discourage piracy as it currently exists and pave the way for the promotion of safer (and legal!) business models to actually succeed.
7/23/09 Update -
CNN.com just posted an interesting article called “10 Sites to Help You Navigate the New World of Music” about new business models for music distribution. It is definitely worth a look.
