Digital Economy Bill

I wouldn't normally do a blog post on a political topic, but the Digital Economy Bill is big news at the moment, and I, like many, am worried about the direction in which it is going, particularly the parts aimed at addressing copyright infringement.

What problem is it trying to solve?

The copyright infringement parts of the bill seem to be written largely to answer the complaints of the music industry, whose arguments just don't add up.

The BPI claim that illegal file sharing cost the music industry £200m in 2009, however this figure seems to be based on the mistaken idea that a download is a lost sale.^[1]

The BPI's own figures on UK music sales from last year paint a different picture. The full article is worth a read but here's the choice quote:

"Across the entire year, singles sales increased by 32.7% to a record 152 million, with 98% of those being digital downloads."

So last year, the height of a recession, was a record year for music single sales. Another analysis of the same figures, which merges single and album sales shows a steady increase in overall sales since 2003, which was the year that digital music seemed to take off.

So where is this £200m hole created by illegal file sharing?

It seems obvious to me that if 10 years ago the majority of single sales were CD singles costing ~£3.99, but now the majority of single sales are digital downloads costing ~99p; that this is going to result in a revenue loss. But this isn't something I've ever seen pointed out in news stories on this topic. This also has nothing to do with file sharing.

At the same time the industry seems to be ignoring some potentially positive aspects of illegal file sharing. 

In the BBC's Panorama on this topic (15th March 2010), UK singer Kate Nash attributed file sharing to launching her career. Her view is that after starting on MySpace, people downloaded her songs via. file sharing networks and came to her gigs as a result. She has since had three successful albums and three top 40 hits in the UK.

The overall increase in music 'consumption' is also likely to be why 2009 was the first year in which income from live music (festivals, concerts etc.) overtook income from recorded music.

As musician Billy Bragg put it in the Panorama programme mentioned above - "the Music Industry is thriving, it's the Record Industry that is dying on its feet".

Protecting our creative industries

Apparently the measures put forward to combat file sharing are required to protect our creative industries. However none of the aspects of the bill provide any extra money to the content creators, or pave the way for innovation that might do this. In fact the opposite is true - the music industry will likely bear the majority of the cost of identifying illegal downloaders, and the administrative costs of dealing with complaints will be born by the ISPs. The latter will inevitably be passed on to the consumer. How does this benefit anyone?

Even some Government estimates apparently concede that these measures might cost £500m to implement. And this is to try and address the music industry's dubious claim of £200m in lost revenue?

An exercise in futility

If these measures had any hope of working, perhaps opinion might be different. But the measures in the bill are so trivially easy to circumvent that it seems unlikely they will result in any reduction file sharing.

As long as there is a demand for the content, technology will exist to meet that demand. And the technology will always be 10 steps ahead of any methods to try and combat it.

In the Panorama programme I mentioned above, one of the musicians interviewed likened the plans to cut off persistent downloaders to "going round and confiscating people's record players, and then complaining that no-one's buying records".

Democracy at work

I've watched a few of the House of Lords' sessions debating this bill via. the iPlayer and the BBC's Democracy Live website. Not being one to generally show much interest in politics, it was interesting for me to see how the process works and the sort of things being debated. At the same time it was scary to see how few people in the debates seemed to have a good understanding of the issues being discussed, and how these stalwart few are the sole reason the bill doesn't just get approved without question or modification.

Even more worrying is the way in which this bill is being pushed through parliament, a concern that was raised in the House of Lords debates.

Here's an example. The item in the bill that caused the most controversy was "clause 17", which would have given the Secretary of State sweeping powers to amend copyright law at will, without parliamentry oversight. Apparently this was to allow laws to quickly be introduced to combat future forms of piracy. However no justification was provided to suggest why existing laws might not be sufficient (after all, if it's illegal it's illegal, future technology is not going to change that).  

The Lib Dem's put forward a "clause 18" to replace clause 17. This was the 'web blocking' clause which caused an equal amount of controversy. It would have allowed court injunctions to be issued forcing ISPs to block access to websites that enable access to copyright material. Ignoring the futility of such an action, filtering the Internet is an extremely dangerous road for the Government to go down. This is exactly the sort of thing that recently earnt Australia a place on the international "Internet Enemies" list due to their own filtering plans; a list currently occupied by countries such as Iran and North Korea.

This clause was also eventually withdrawn. Hooray for common sense.

However what seems to happen now is that the Government will replace these two clauses with 'something else'. This 'something else' will not be discussed in the House of Lords, cannot be amended, and will be first seen in something called the "wash up", which is where Parliament tries to rush through lots of last minute bills before it is disbanded in preparation for the upcoming General Election. 

Even members of the House of Lords seem to have concerns over this. Here's a quote from the Earl of Erroll (one of the few people talking sense), from the final debate on the DEB where clause 18 was being discussed:

"I'm delighted that the noble minister realises the shortcomings of this clause and also that this clause has replaced the previous clause 17 which I didn't like either, and therefore something better will appear. On the other hand, I think that the method by which it's appearing is by complete and absolute abuse of parliamentry process, and I'm not quite sure why we bothered to sit and debate any laws at all if basically the front benchers in another place can get together and put whatever they like into legislation."

Digital Economy Bill, House of Lords, 15/3/10, approx 1:24 in.

My fundamental problem with the Digital Economy Bill is that I believe it will do nothing to stimulate the digital economy, and will in fact have the opposite effect, giving record companies reason to continue their doomed attempts to try and regain control over the distribution of music.

The Internet is the greatest medium for content distribution ever invented. Remember those music sales figures I quoted from 2009? 98% of single sales last year were digital downloads - this medium didn't even exist 10 years ago.

Spotify has over 2 million users in the UK, however last month Warner Music announced it was going to withdraw its music from streaming services, saying such services were "clearly not positive for the industry" (which I read as meaning they will never get as much revenue from it as they would equivalent music sales).

Surely the Digital Economy Bill should be implementing measures that encourage innovation and new business models, paving the way for the iTunes and Spotifys of the future. Until these services exist, any attempts to combat illegal file sharing will fail, and generations of people will grow up knowing file sharing software as the only way to get music.

1. Whilst there will certainly be some people who will illegally download songs that they would have previously gone out and bought, there will also be a (in my opinion much larger) proportion of people who will download large amounts of music simply because it's free, and readily available. How many people have built up collections of many thousands of mp3s through file sharing? Would these people have instead spend tens of thousands of pounds on buying music? I think not.