The end of ‘free’ is sweet music for artists

Paul McGuinness  Globe and Mail  07/13/11

Three years ago, somewhere between U2’s No Line on the Horizon album and the 360 Degree world tour, I plunged into the raging debate over the future of music in the age of “free.”

My campaign has focused on the role of Internet companies and the crucial difference they could make if they confronted the systemic copyright infringement that has helped wipe out so many musicians, bands and labels in recent years. It has been a frustrating and slow-moving process. In many countries, Internet service providers have consistently and stubbornly resisted co-operation.

Now comes good news, however, from the world’s largest entertainment market – the United States. The biggest U.S. ISPs have just agreed with the music and film industries to introduce a new system of “copyright alerts.” These are warnings that, with escalating urgency, aim to nudge broadband users away from piracy toward downloading and streaming music from legitimate services. There will be the prospect of deterrent sanctions for those who repeatedly ignore the warnings, which is a crucial distinction from the voluntary agreement that exists in Canada.

This has been agonizingly slow in coming, but it is an important step forward in the international debate over music in the digital age. The idea of ISPs taking on obligations to stop copyright theft on their networks is moving into the mainstream.

The United States is not the first country where ISPs have started to co-operate with rights holders. Similarly sensible thinking broke out in France in 2007, thanks to President Nicolas Sarkozy. France, along with a growing number of other countries such as South Korea and New Zealand, has introduced a so-called graduated response law, obliging ISPs to take pro-active steps to help curb copyright abuse. Britain has passed its Digital Economy Act, which, if implemented effectively, will go down a similar route.

Different countries will approach this their own way, and there can be no one model for exactly how ISPs get involved. The U.S. agreement is a voluntary private-sector deal – elsewhere, the route almost certainly needs to be different. In virtually all other countries, private negotiations have proved worse than fruitless, leaving legislation as the only route possible.

Why is the needle on the move? First, no doubt because “free” is no longer just a problem for the music industry. Film studios, book publishers and newspapers are all now in the same storm, caught in a race against the clock to sort out successful business models before being sunk by illegal file-sharing or other forms of “free.”

Another reason is that it is now impossible to argue, as many used to, that there is a purely market-based solution to piracy. The music industry has led the field with new models for consumers – there are more than 470 digital music services worldwide, many of them “free to consumer” sites such as Spotify and We7. None of these services has much hope of long-term success while competing in a world where, according to the International Federation of the Phonographic Industry, 95 per cent of all music downloads are illegal.

For some years, “fighting free with free” seemed the answer to all our problems. That honeymoon is over. Spotify, which is in many European countries the champion of free-to-consumer music streaming, is now cutting back on its free offering. It is trying to migrate its fans into payers, offering a $15 monthly subscription. That is a huge challenge.

Like newspapers, which have hastened to erect website pay walls they prematurely abandoned years ago, the music industry has discovered the inconvenient truth that “free” does not really pay. It cannot sustain the artist royalties, the copyright fees and the investment that makes an artist’s career possible in the first place.

And that is the fundamental problem: Who will fund the future of music? This is not an issue that directly affects a band like U2, of course. Yet I still don’t see a clear answer to the question I asked in my maiden “ISP speech” three years ago – in a world of 95-per-cent piracy, where is the investment going to come from to fund the next generation?

To me, the answer is clear. A thriving music business needs a fair, responsible environment to work in, and ISPs, the Internet’s gatekeepers, hold the key to this. By the graduated response approach and other measures like systematically blocking infringing websites they can significantly reduce digital piracy. Surveys, the latest by Hadopi in France in May, prove what should be obvious: that when people see rules protecting copyright being enforced, they actually change their behaviour.

No one expects teenagers brought up in the age of LimeWire to convert overnight to legal download sites. Yet the migration to legitimate ways of enjoying music, respecting copyright owners, will happen over time.

The U.S. ISP agreement is good news for music and the creative industries. It is time now for action elsewhere. Michel Barnier, the European Union’s internal market commissioner, is reviewing copyright enforcement rules for the digital age. This is a chance for Europe to use its legislative clout to get ISPs to co-operate.

Other governments have long been debating their own approaches. Now is the time to stop the thumb-twiddling and the soul-searching. ISPs need to be active partners, not bystanders, in shaping a legitimate Internet where artists and creators can be sustained by their work. In the United States, they have made a welcome voluntary step in that direction. Elsewhere, it will need the pressure of government and legislation to make it happen.


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