Music industry must embrace illegal services

Tue Jan 20 2009, 10:40 AM

The music industry must take its inspiration from illegal download services and stop railing against file sharers in an effort to win profits, claim prominent industry figures, including the head of the British Phonographic Institute (BPI), Geoff Taylor.

Speaking at the MidemNet music conference in Cannes, Taylor said that talks between record labels and internet service providers (ISPs) were "the future". He advocated a legal peer-to-peer trial in the Isle of Man that permits broadband subscribers to pay a small tax in exchange for the right to share copyrighted music.

The comments come days after the International Federation of the Phonographic Industry (IFPI) reported that 95% of all music downloaded from the internet is illegal. The news could foreshadow an about-turn for the music industry, which has worked tirelessly in the past to stem the tide of illegal file sharing.

Fergal Sharkey, the CEO of UK Music, a recently-established, pan-industry body, claimed that 80% of file sharers would be prepared to pay for a legal P2P service.

Speaking at the same event, the former Undertones singer added: "To paraphrase Dr Strangelove - 2009 should be the year the music industry learns to stop worrying and love the bomb."

Meanwhile, Nicholas Lansman, the secretary general of the Internet Service Provider Alliance (ISPA), said that laws to restrict filesharing would "push P2P underground". He gave further support to a union between rights holders and ISPs.

The support for a revenue model that taps the prevalence of illegal downloads comes a week ahead of the UK government's draft report on the future of digital communications, Digital Britain. According to press reports last week, the Lord Carter-produced document will call for the introduction of a regulatory rights agency, and may force ISPs to monitor and subsequently disconnect "serious and repeated infringers".

However, Sharkey warns that a heavy-handed approach from the government "has the potential to do a lot of damage not only to the music industry but also to technology companies themselves.

"Any intervention must be designed to embrace new horizons and must be fit and proper for use in a modern world," he adds, claiming that the UK music industry may be just "weeks or months away from finding some solutions for music lovers".

Also speaking in favour of a more progressive music policy was Google's VP of content partnerships, David Eun.

Commenting on the part played by Google-owned video site, YouTube, Eun quipped: "Being partners means that you work together ... and you don't necessarily presume that the other person is trying to screw you".

Eun claims that YouTube, while not focused on music videos, "probably streams more videos containing music than any other site". The site recently failed to renegotiate contract terms with Warner music, causing the major label to remove all official Warner content from YouTube.

Also with an axe to grind was MP3.com founder and head of MP3Tunes, Michael Robertson. He was forced to appear at Midem via video link due to an ongoing copyright infringement lawsuit, launched by EMI.

Defending the role of music pirates, Robertson said: "You have to look underground, to see what people are doing and then give them commercial outlets that mirror that. When you sue a new technology, you lose the opportunity to channel that into a positive direction."

While recognising the problems inherent in their current business model, major label representatives were less keen to speak in favour of sanctioned P2P.

"There's no issue about creating demand for your product - the issue is finding a way to get paid for it," says Warner Music's Howie Singer. Former EMI head Eric Nicoli says: "Any company that relies on music sales will be exceedingly challenged."