Wednesday, 25 November 2009

Students quiz me on piracy

I've been asked by a couple of our Magazine Journalism students to help them with a second year module by answering some questions about filesharing. I thought I'd share the questions and my responses to them here as they touch on some of the issues I've been posting on here in recent weeks. There is a little but of cut and paste to be found in one of the answers but mostly, the questions and the answers differ.

Student 1's questions:

I am going with the angle that as much as the government is trying to get rid of file-sharing, it is always going to exist because it is a relatively new technology and is still evolving. The first generation of file-sharers have established the act but now the new generation are expanding it making it close to impossible to eliminate completely.

Do you think that the government were slow to act on file-sharing sites and underestimated how popular they have become?

What do you think to the 'three strikes and you are out' method of coping with individuals? is it all coming too late?

Do you think that the DEMOS report on file-sharing has shown us anything that we didn't already know?
Do you think that file-sharing will continue to exist and what from will it take?

My answers:

The government were very slow to react to digital file-sharing, as was the entertainment industry. The reason for this is complex but comes down to their suitability as a regulator of the Internet - a technology which transcends traditional (read: old media) forms of regulation in that traditional territorial rules don't always clearly apply. A file-sharing site may be registered in one country, it's servers hosted in another, it's user's in many different countries - which national legal system should be drawn upon? How does the law react to these international issues? Generally, laws take a long time to be proposed, written and drafted into being. Given those logistics it's no surprise that the responses were slow.

The 'three strikes' policy as it stands is poorly thought out and is wholly inadequate as a method for combating file-sharing. There are a number of reasons for this - too many to go into here, I suspect. However, I shall try and outline the key points.

Firstly, the methodology for identifying suspected copyright infringers is far from an exact science - a 2008 report from the University of Washington Computer Science and Engineering department revealed how a networked printer managed to be implicated in DMCA takedown request. It was highly unlikely that the printer was downloading copyright content! This hasn't stopped over zealous legal firms like Davenport & Lyons from issuing false claims against innocent parties with insufficient evidence, such as Mr and Mrs Murdoch (aged 66 and 54) who were accused of downloading the Atari game Race07.

Secondly, the law fails to take into account the role of the exact infringer - many people may share an Internet connection, especially if they live in large family or student household. An infringement may take place on the network but it is very difficult to prove who was responsible for the act without a thorough investigation - something the 'three strikes' policy refuses to do. The accusation would then fall at the feet of the bill payer who may not have done anything wrong, but will potentially be labelled a criminal.

Thirdly, an unsecured wireless network may be used to share bandwidth meaning that anyone in a certain radius can access the Internet with that connection. There are different legal implications regarding this behaviour, but ignoring those for now, the bill payer will be held responsible in this instance despite having not committed a crime. There are many reasons why a network may be unsecured, from a lack of technological knowledge through to a purposeful attempt to share bandwidth - the proposed 'threes strikes' ruling would treat both as the same when they are clearly not.

Add to these factors the increasing dependence on the Internet for public services and its future use as a medical tool (video streaming a doctor!), then disconnection seems wholly disproportionate and at odds with a recent All Party Communications Group report (.pdf) regarding the promotion of eGovernment.

If a crime is committed it should be dealt with in the courts, not by the content industries who employ dubious methodology to make their accusations.

As for the DEMOS report, I'm not quite sure what you mean about the 'what we didn't already know' bit. If you are referring to the claim that file-sharers typically spend more money on music than those that don't admit to file-sharing then the report does echo the sentiments that have been expressed quite vocally on many public and private file-sharing sites and services. However, what the report does do is it points to an empirical basis for measuring attitudes towards file-sharing. I think a Norwegian paper from earlier in the year did much the same thing

One of the key ways in which file-sharing is monitored is by tracking the IP addresses of people involved in torrent swarms. This how the basic tracker service works in torrent technology. However, technologies like DHT, PEX and Magnet Links completely do away with the need for file sharers to be identified in this manner. Add to that, people can use encrypted VPN (Virtual Private Networks) or services like TOR to hide their identity online and continue their file-sharing activities. WASTE networks will also play a part. If the deep-packet-inspection (DPI) techniques some ISPs are using continue to improve so they can examine traffic on their networks then I wouldn't be surprised to see the exchange of large but portable hard drives in school yards and parking lots in much the same way cassette tapes were traded in the 1980s.

Student 2's questions

1) What was your reaction the news that file sharers also buy the most music legitimately?

2) Why do you think people choose to download illegally?

3) How much of a negative effect, if any, do you think it has on artists and labels?

4) What are your thoughts on the digital economy bill and the proposed move to ban users who download illegally from the internet?

5) Do you think, in practice, it is possible to completely quash illegal downloading?

6) What could record labels do to encourage music fans to buy legally before looking elsewhere?

7) What are your views on artists joining the file sharing debate, for example Lilly Allen and her recent (bizarre) comments which you twittered the link to?

My responses:

1) I wasn't at all surprised by the findings. The claim that file-sharers typically spend more money on music than those that don't admit to file-sharing in the DEMOS report does echo the sentiments that have been expressed quite vocally on many public and private file-sharing sites and services. However, what the report does do is it point to an empirical basis for measuring attitudes towards file-sharing. I think a Norwegian paper from earlier in the year did much the same thing

2) The reasons for piracy are nebulous and far ranging. I can give you at least 10 reasons off the top of my head without even going down the 'free music' route:

1.File-sharers resent years of overpriced products (expensive CDs & ‘filler’ tracks)
2.Pre-release exclusivity
3.Discover new music/ lost classics without financial risk
4.Community spirit (private sites, social networks, blogs)
5.Very easy to do and low risk!
6.Reaction against mainstream mass-produced pap/pop
7.Fan ownership of musical products & free will vs. industry attempts to control content
8.DRM encourages passivity and limits future development/creativity
9.The sound quality of legitimate digital music is insufficient for many audiophiles
10.Music consumption has changed (gigs, merchandise, Guitar Hero, etc)

Have you seen this study (.pdf) by some behavioural economists who experimented with price differences to see how people reacted? They offered a group of subjects a choice between two chocolates, Hershey's Kisses for one cent and Lindt truffles for 15c. Three quarters of the subjects chose the truffles. When they did it again after reducing the cost of each chocolate by 1 cent (now free & 14c), they found the obvious - that the order of preference was revered with more people choosing the free offer. Now despite the price difference being the same (14c) the consequences of shifting to 'free' was dramatic - it produces a completely different consumer dynamic.

3) It's difficult to quantify a 'negative effect' in this case as there are way too many variables to consider. If music fans stop paying for music then there is an obvious problem, but there is little conclusive evidence to suggest this is the case - in fact, a recent report (.pdf) by the Performing Right Society concluded that UK music economy is getting bigger, not smaller. The figures bandied around pointing to how widespread file-sharing is are also subject to exaggeration. The point I'm trying to make is that nobody really knows how harmful filesharing is, if it is at all, but it is PRESUMED to be in a common sense manner taken as fact. Very problematic. The real problem, as I see it, comes through the typical royalty rates given to artists by labels - as seen in the Gowers report from 2006 (p51). This was typically about 9% for CD sales and is about 8% for digital downloads. Labels and retailers (& even credit card companies!) make more more than the creators. Even though there is no shop space or physical packaging to pay for, the artists are worse off due to the licensing of digital content.

4) My thoughts on the Digital Economy bill are on my blog (mentioned above: pirate finder general post). I think that the bill is an attempt to force unworkable laws into being that will end up doing more harm than good. Copyright needs reforming, but not in the ways proposed by Lord Mandelson.

5) I'm not convinced it will be entirely possible to quash illegal file-sharing. Technology has a knack of offering new possibilities at a rate far faster than the legal system can adapt. One of the key ways in which file-sharing is currently monitored is by tracking the IP addresses of people involved in torrent swarms. This how the basic tracker service works in torrent technology. However, technologies like DHT, PEX and Magnet Links completely do away with the need for file sharers to be identified in this manner. Add to that, people can use encrypted VPN (Virtual Private Networks) or services like TOR to hide their identity online and continue their file-sharing activities. WASTE networks will also play a part. If the deep-packet-inspection (DPI) techniques some ISPs are using continue to improve so they can examine traffic on their networks then I wouldn't be surprised to see the exchange of large but portable hard drives exchanged in the school yards in much the same way cassette tapes were traded in the 1980s. Even if a new method for blocking content is developed I suspect hardcore copyright infringers will find a way to continue their activities - they may just be physically scaled down somewhat.

6) I'm not really sure what record labels can do about this. Usually they fund lobbyists groups like UK Music or the BPI to do this in the form of educational campaigns about the problems of piracy (ie hurting artists). There have been a few innovations in recent years that are often heralded as an alternative to piracy (eg Last.FM, Spotify, We7, iTunes, RouteNote, etc) but as for whether or not they actually help support artists is another argument entirely given the royalty deals mentioned earlier. There have been some stories that suggest Spotify pays artists slightly more than nothing for streams, but only just! One of the problems with setting up new services like Spotify is that these small companies have to negotiate with the record labels to be able to carry their copyrighted content. If one of the major labels refuses or demands a royalty rate higher than Spotify can afford to recoup then the service will be incomplete or it may struggle to scale up and find a sufficient user base to make it a viable alternative. Record labels could help foster innovation and their long term survival by relaxing their restrictive licences.

7) I'm all for artists joining the debate about filesharing. It's possible to find many artists who refuse to condemn the practise as they see it as a potential business opportunity. I'm thinking of Matt Mason on 'The Pirate's Dilemma' and Chris Anderson's 'freemium' argument here where free content (downloaded music) can serve to act as a marketing tool around which other services/goods can be sold (gig tickets, merchandise, naming rights deals, etc). Lily Allen, I think, has a tendency to engage in public arguments without always fully understanding the range of positions available. She has done so in the past when talking about being middle class, she did it again with the piracy debate and her most recent outburst: "If someone comes up with a burnt copy of my CD and offers it to you for £4, I haven't a problem with that as long as the person buying it places some kind do of value on my music". The woman is a walking contradiction.

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