Friday April 09 2010

How legislation is killing the content industries

P2P networks have done more to solve the problem of illegal filesharing than legislation ever will. Without Napster, Grokster and co. it’s arguable we wouldn’t have the likes of the iTunes Music Store, Netflix or Hulu as they are today. Cheap, comprehensive and convenient, these legitimate services built on the successful interaction models of popular P2P software and point to a future in which illegal downloading is largely redundant.

Like any other, the business of entertainment distribution is a creature sensitive to market forces. In this market, filesharing networks emerged as competitors to retail channels the content industries had traditionally relied upon. Certainly, the incumbents fought them tooth and nail in the courts, and found a slew of specific targets on which to sharpen their legislative arsenal. But the surging interest in filesharing technology had already profoundly disrupted the market.

Buoyed by confrontation with a powerful enemy—and crucially learning from their skirmishes on the digital frontier—the record companies turned to Apple, who gladly stepped in to fulfil the undeniable consumer demand. And the movie and television studios soon followed suit.

An uneasy truce

In the seven years since the iTunes Music Store launched, illegal downloading has been driven underground, confined to the barren and joyless no man’s land of BitTorrent, and the war against filesharing has largely stagnated to the level of a border dispute. The powerful incumbents have again grown lazy, self-satisfied and complacent, and as a result progress too has stagnated. Time then for a revitalising boost to innovation? Perhaps not.

Yesterday, the UK Digital Economy Bill went through the last stages of Parliamentary scrutiny and passed into law as an Act of Parliament. In the final hours of the last parliamentary session before a general election, both major parties forced through legislation that gives content owners unprecedented powers to go after individuals to secure their legal rights online.

But why shouldn’t our “creative industries” be given the power to protect their valuable copyright? Perhaps they should, but this law has been implemented in a way that favours companies too strongly over people, overemphasises the threat, and—more concerning for those industries—it’s a short-sighted move that threatens their business in the long run. Not only is it abhorrent to individuals, it just makes bad business sense.

This act is an attempt to eradicate the most valuable motivation for progress in the future of digital distribution.

Legislation is a necessary weapon of progress and it can be a valuable stabilising force for businesses, but the targets thus far have been specific, named organisations. This act seemingly codifies a blanket attack on “any location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright.” [source]

Such vague and arse-covering terms are worrying, and the fact that it was forced into law by three line whip, under apparent pressure from the BPI, and with the customary lack of scrutiny of the wash-up period has left many baffled as to the state of our democracy.

“Test-beds of innovation”

It doesn’t really look like the government is on our side. But what do they have to say?

The space the legislation provides to develop those models will be important. But rights holders must get a move on. Legislation is not the whole solution to the problems. Rights holders need to develop new ways to make content available to people in formats that they want and at a fair price – reducing the incentive to break the law. Progress has been much too slow.

Speech by Stephen Timms MP, Minister for Digital Britain, Oxford Media Convention, Thursday January 21, 2010

This is the standard counterpoint that’s been touted since the original Digital Britain report was published last year. Here’s Lord Carter—the report’s author, since retired from UK politics—trying to put it another way in June 2009.

</param> </param></param> </embed>

If you’re impatient, skip to 3:12 for a spiel on the importance of new business models and the proposed government “test beds of innovation.”

The “little bit of prime funding from government” he refers to is a £10 million investment from the Technology Strategy Board towards a broadband network designed specifically for trialling new monetization systems, rights models and personal security mechanisms. Details on what exactly this means are scant, but Chapter 4 of the Digital Britain report (PDF) offers some rationale, starting at section 72 on page 19 of the PDF.

The contract to set up this infrastructure will likely be awarded in the next few months, and more details may then emerge, but from what I’ve read there’s an awful lot of emphasis on micropayment and centralised billing structures and not a word on consumer experience.

This is an opportunity.

Comments welcome via email or Twitter