13 July 2010
Introducing incentives through compensation could provide a framework for a solution to the piracy problem
PRS for Music is launching a paper in an effort to continue the fight against music and wider media piracy and ensure the industry is properly compensated for illegal file-sharing, it was announced today.
The organisation, which collects royalties on behalf of songwriters and composers, has circulated a discussion paper titled ‘Moving Digital Britain Forward Without Leaving Creative Britain Behind’ to key stakeholders in the music industry, government and technology sector as the estimated illegal consumption continues to dwarf that of legal music services*.
The premise of the paper is underpinned by changes brought about by the Digital Economy Act. The Act states that the UK now has to measure peer-to-peer usage and that allows its harm to be priced. PRS for Music offer all stakeholders in the content and connectivity industries a new solution to the perennial problem of media piracy by introducing incentives, through compensation, that can benefit both content and connectivity industries.
1. Media piracy is a problem, and with the advent of next generation internet access, that problem will not only get worse, but affect a broader range of media industries, including TV, Film and Gaming.
2. With the introduction of the Digital Economy Act, the harm caused by the problem of piracy has to be measured, and if a problem can be measured it can be priced.
3. PRS for Music offers all the stakeholders a solution, essentially by introducing incentives through compensation, so that they can work towards eliminating the piracy problem.
4. The desired end game is one of no compensation as there is no pollution of piracy on networks – allowing ‘dumb internet pipes’ to get smart and become the Next Generation Broadcasters.
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The full PRS for Music Economic Insight paper, available at www.prsformusic.com/economics
Written by Will Page, Chief Economist at PRS for Music and David Touve of Washington and Lee University, the authors acknowledge that up until now, control and enforcement have been the only options available to the music and media industry since the launch of Napster in 1999.
The fact that the UK communications regulator OfCom is now obliged to provide “…an assessment of the current level of subscribers’ use of internet access services to infringe copyright” changes the game significantly. The authors believe that by aligning incentives, this could not only lead to compensation, but accelerate a market based solution, which would make both content and connectivity better off in the long run.
Will Page, Chief Economist at PRS for Music, said: “What co-author David Touve and I have been working on developing are market-based solutions to the harm caused by illegal file sharing over the Internet. More importantly, we explore what legal options exist for recovering the value of that harm, and offer an economic framework that can be considered when structuring a resolution”.
- The most recent economic analysis on illegal music consumption not only suggests that the black market continues to overshadow the legal one, but the means of consuming unlicensed content are far more diverse than generally assumed-
- Harris Interactive suggest that 25% of their sample of UK online adults engage with piracy either ‘regularly’ or ‘occasionally’ in their most recent wave survey for 2010 Q1, whilst the BPI reported that only 13% of the UK population aged 12-74 making a legal digital purchase online during 2009.
- Harris Interactive also illustrated an ongoing increase in illegal consumption across the array of different ways consumers can access music for free.