Is file-sharing wrong?

Geoff Taylor, chief executive of the BPI, argues that serious action needs to be taken to discourage illegal file-sharing

File-sharing remains a massive problem for British music companies, and it isn’t going away. Globally, more than 95% of music tracks downloaded worldwide are unlicensed and illegal – an estimated 40 billion downloads in 2008.

In the UK alone, research has shown that more than seven million people regularly download music illegally, reducing sales of music by £200 million a year. Opponents have tried to challenge these figures, but they’re very conservative assessments, carried out by leading independent experts.

They don’t treat every song downloaded illegally as a lost sale – they factor in that many downloads may not have been purchased, or may lead on to purchases. The argument that file-sharing helps record sales simply isn’t supported by the facts. Academic studies around the world have found that file-sharing has a significant negative impact on music sales and that the global decline in music sales tracks the rise of P2P.

Investing in artists by helping them record, finance, market and promote their work is more important in the digital era than ever before, with record companies spending around 20% of their income on finding and nurturing new talent.
Without the income from the sales of successful, established artists, record companies struggle to support new talent Without the income from the sales of successful, established artists, record companies struggle to support new talent. As a result, fewer new bands get a chance to make a living, more get dropped before their careers can take off, and labels are incentivised to play safe with their signings.

Music companies have reinvented their business models in the digital age, and there’s already a fantastic range of legal online music services in the UK. The à-la-carte download service pioneered by iTunes has now been joined by many subscription and streaming services such as Spotify and We7, with vast catalogues catering for all tastes and budgets.

Some ISPs are set to launch services linked to their broadband packages. There is now no real need for music fans to file-share illegally, since many services now feature playlist sharing and other social tools.

Sadly, none of this has significantly changed the levels of illegal file-sharing. The growth of new music services will continue to be stifled unless something is done, as it’s hard to justify investing in new services when the market includes unauthorised options operating illegally to provide music entirely for free.

The Government is right to recognise that, as on the roads or other public networks, there must be sensible rules in place to ensure the network isn’t abused. People continue to file-share because nothing is being done to stop it.

This is why we need, alongside attractive legal services, proportionate, effective measures to dissuade file-sharers. There is now widespread agreement within Government, Parliament, creative businesses and even some ISPs that current levels of illegal file-sharing are simply intolerable.
The Government isn’t advocating cutting off broadband connections as a penalty for illegal file-sharing, or imposing criminal penalties Let’s be clear – the Government isn’t advocating cutting off broadband connections as a penalty for illegal file-sharing, or imposing criminal penalties. Temporary suspension of an account is just one of a range of possible measures, and would only be applied as a last resort after an account holder had received prior notifications. These would contain advice and guidance on securing wireless networks, and would show how and where legitimate content could be found. And there would be an appeals process to deal with any disputes.

We’d be delighted if notifications alone reduced levels of file-sharing by 70% or more. We don’t want to see large numbers of broadband accounts suspended any more than the ISPs do.

But an effective deterrent is required – people won’t change their file-sharing behaviour if nothing meaningful happens following the notifications.

We’ve heard proposals that file-sharing should be legalised or licensed, or that we need to develop radical (although unspecified) “new models” that somehow allow the free-for-all to continue unabated. But once you strip away these stale arguments, you have little more than shallow justifications for continuing to take music without paying.

If the credit crunch teaches us anything, it’s that you can binge in the short-term, but that economic reality always catches up. We know that most file-sharers love music. So if they want great music in future, it’s time to support one of the many legal services that put something back into music.