British Phonographic Industry-funded study finds that bundled digital music services could earn ISPs £203 million ($303.9m USD) by 2013.
The British Phonographic Industry (BPI) is once again trying to lure in UK ISPs to help it fight illegal file-sharing on their networks, this time by releasing the results of a study it funded that found ISPs there could earn as much as £203 million ($303.9m USD) by 2013 if they launched a bundled digital music services for their subscribers.
It also said the offering could help ISPs reduce the cost of “subscriber churn,” that a simple 10% reduction could help a big ISP with around 3.5m customers would generate indirect value of more than £20m per year ($30m USD).
“It’s increasingly clear that it isn’t smart to be a ‘dumb pipe,’” says BPI Chief Executive Geoff Taylor. “This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs. UK music companies want to innovate and develop exciting new digital offerings. ISPs such as Virgin Media have recognized that legal digital music services offer a more exciting and profitable future than continued widespread piracy.”
It’s ironic that it would cite Virgin Media as an ISP willing to offer digital music services considering the ISP spent years and a staggering eight figure sum developing “Virgin Music Unlimited” only to see it fall apart thanks to last minute by major record labels. Virgin Media later came to an agreement with Universal Music last June, but the service, promised to appear towards the end of last year, is still nowhere to be found, so it should hardly be held up as an example by the BPI.
Further damaging the credibility of their statements is the fact that the BPI tries to suggest that ISPs could make even more from bundled digital music services if only they were “offered to consumers in tandem with meaningful action to tackle illegal music downloading. ”
In other words, if they get on board with the BPI’s proposals to fight illegal file-sharing ISPs could make a lot of money.
In response to the study UK ISP TalkTalk, which claims to be the country’s largest broadband provider with over 4.25 million customers, sarcastically thanks the BPI for its “strategic business advice,” but says the £203 million ($303.9m USD) figure glosses over the fact that it would have to criminalize the behaviors of many of its customers in an ultimately “expensive” and “futile” pursuit.
“Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalize its biggest customers. As it happens TalkTalk does offer a legal download service (emusic), as do other ISPs,” it said in a statement. “Perhaps there is a goldmine for ISPs in legal downloads but that will not alter the fact that the copyright protection proposals being proposed threaten human rights. They will penalize innocent broadband customers. They are expensive, unwieldy and utterly futile.”
It’s silly that the BPI is even offering such “innovative” ideas for others to follow when it can’t seem to come up with any for itself. It’s like getting workout tips from a couch potato.
One has to wonder why people would even want a bundled digital music service when they already have, in the BPI’s own words, more than 35 legal online digital music services to choose from.
The BPI ought to commission more studies that find out what consumers actually want, and try to give it to them. Instead the music industry seems to continue doing the opposite, first figuring out what it wants and giving consumers only what it’s forced to to make a profit, but even then profits are secondary to control of access.