Continuation of discussion with David Touve, co-author of the recent “Moving Digital Britain Forward, Without Leaving Creative Britain Behind” paper produced for PRS for Music, where he offers his thoughts about the paper and the overall need to “jumpstart (or in some cases resuscitate) the market for licensed music venues online.” The Q&A is the second of a two-part series.
Yesterday I published a Q& session I conducted with David Touve, one of the co-authors of “Moving Digital Britain Forward, Without Leaving Creative Britain Behind,” to learn a bit more of what his thoughts are, and to ask him to expand on the ideas he presented.
PRS for Music, the UK’s leading royalty collection society, is calling for “market based solutions” to solve the problem of online copyright infringement, and the paper outlined two different possible approaches to solve the problem: a “negative spillover” approach that would assess a fine that “would rise and fall based on the level of piracy on an ISP’s network,” or a “positive spillover” approach that would require ISPs to pay a fee to obtain a blanket license that would allow them to transmit copyrighted material on their networks.
I’d like to remind readers that David Touve does not work for PRS for Music nor does he speak on their behalf. The back and forth series of questions that follow is merely among two people.
With this in mind here is the second half of our discussion.
ZP: Alternatively, late last year the BPI even began blaming non-P2P methods for declining music sales. It found that the number of people using web-based, non-P2P methods of downloading music illegally, such as unlicensed MP3 pay sites, newsgroups, or blogs and forums linking to file-hosting sites like Rapidshare and Mega Upload, is growing considerably.
All of these methods lie outside any possible measuring framework.
Only the blanket license approach your paper suggests would be able to take this “harm” into account, but measuring it for the purpose of determining the fees that “might occur as a result of changes in the level of media transmitted that has been directly licensed from rights holders” would be difficult would it not?
In other words, if Ofcom plans to measure P2P and your paper suggests solutions to mitigate its harm, then as people switch to illegal non-P2P methods then how would it be measured and what would you propose as the solution?
DT: Again, and to clarify, this discussion was about unlicensed sources/venues, of which P2P applications are only one part. Furthermore, I do not believe it is Ofcom’s expectation to measure simply or only P2P traffic.
A shift in behavior away from P2P-applications and towards other sources (e.g., Rapidshare) could/might be noticed and even measured. Packets do reveal protocols and source domains. I say that while also agreeing (and cringing) with many folks that measuring this sort of traffic has limitations and implications.
If the shift were away from unlicensed sources and towards licensed sources (places lacking “legal implications”), then frankly, under a sort of cap and trade approach, the compensation pool would be reduced.
If the shift were away from “measurable” unlicensed sources towards those that were unmeasurable, then the compensation pool might also be reduced, this being a shortcoming in the cap and trade approach (as you highlighted)—one which I believe we describe in the paper. If this issue was overlooked, that is our mistake. We recognized this shortcoming.
Again, Will and I, by way of the paper, tried to have a somewhat uncomfortable conversation in public. There are a number of issues in the paper, including the Digital Economy Act, that deserve a far wider discussion.
ZP: Only the blanket license approach your paper suggests would be able to take this “harm” into account, but measuring it for the purpose of determining the fees that “might occur as a result of changes in the level of media transmitted that has been directly licensed from rights holders” would be difficult would it not?
DT: Again, neither approach is necessarily about harm. Either approach (negative/positive) involves an attempt to jumpstart (or in some cases resuscitate) the market for licensed music venues online. The negative spillover approach tries to do so by leveling the playing field, in terms of costs, for licensed and unlicensed sources. The positive spillover approach, in the extreme, just licenses a bulk (or the totality) of transmissions on the network so that music services providers (like We7, MOG, or even Facebook), just plug-in and start serving music. Even previously unlicensed sources might be in essence “covered” depending upon their commercial relationship with an ISP.
Frankly, the level of media transmitted by licensed sources is something these sources already report, explicitly, so any secondary measurement is just that, secondary. You don’t have to sniff packets to get a first and reasonable measure of licensed traffic—and so, this sort of measurement isn’t difficult. But, if you were monitoring traffic, this measure becomes a second data point.
If an ISP paid for some sort of blanket license, then it is worth reducing that value by the fees paid by something like a We7 (in the UK) or a MOG (in the US) operating on that network if these folks license music directly from owners. These folks are ISP customers, as well (a fact that gets overlooked).
Under an ISP blanket the cost of the license for music would have been baked in to the bandwidth costs of these service providers (i.e., bandwidth + music). If these folks go for a direct license, however, then its appropriate to reduce the license paid by the ISP by an amount paid by these providers—no double dipping. In which case, a We7, a Rhapsody or a MOG in essence pays the ISP for bandwidth and pays the music owners for music (as is the case now).
ZP: In a recent conversation you mentioned the possibility of an “arms race” whereby monitoring network traffic incentivizes users to “hide” their traffic via darknets and VPNs for example.
Doesn’t this again negate the success of a “negative spillover” approach?
DT: In the paper, we only had space to briefly introduce the risk of this sort of “arms race.” And yes, this sort of response could negate or at least conflate any approach linked to certain means for measurement. This list of issues goes beyond the size of the compensation pool, and reaches into the methods that guide any distribution of monies from any sort of pool.
We brought the issue up because it is very worth discussing. As I said earlier, in an ideal world, people should *not* feel the need to treat music (or other media) files like national secrets.
ZP: You said you’re “not a fan of graduated response.” Being that Ofcom will eventually requires ISPs to implement as-of-yet unspecified “technical solutions” (unless it achieves a 70% reduction in illegal file-sharing which is highly unlikely) what kind of approach do you think the govt would be better served in taking?
DT: To be clear, in answering this question I am going beyond the content of the paper. That said, you can think of compensation-based approaches—positive or negative in their extreme—as a means to perhaps avoid these sorts of technical solutions. And you can think of measurement as a means to understand how industry responses other than technical solutions (e.g., the emergence of new and different music services) relate to the volume of unlicensed media. Measurement, done effectively and appropriately, is neither a carrot nor a stick.
And also, I don’t think I am in position to direct the UK government. I simply think the conversation among those involved needs to span a range of solutions wider than those that appear to have previously been on the table. I tend to operate closer to the “License” approach, but know full well that this approaches introduces its own set of complications.
Honestly, music may have a relationship with networks and our experiences that warrant a different approach than that which would best apply to other forms of media. In fact, certain types of music owners may be better served by or more comfortable with different sorts of responses.
Under the present circumstances, ISPs are restricted to “technical solutions” in their response. It may be the case, however, that (or at least it is worth asking whether) there is a value to unlicensed media on networks, and that/whether ISPs are in position to enjoy and capture some of this value—inevitably through the willingness to pay of customers in aggregate. And so, rather than filter out these media its more rational financially to just pay for some of it rather than filter it out. The Internet + Music may be worth more than Internet – Music. Its worth trying to figure this out.
I realize the above is an extreme statement, particularly for those who believe copyright should be tossed out altogether. I cannot change the opinion of these folks.
Graduated response also goes beyond mere measurement and crosses the line that involves acting more directly upon the information revealed in packets. Measurement asks and retains simply, “what the hell is the file, in general?” Graduated response asks and retains,” What the hell is this file, what IP(set) sent it and what IP(set) is the intended receiver?”
ZP: What about the concern that older adults and other types of Internet subscribers might have about paying a blanket license fee for creative content they don’t wish to access?
That is a completely appropriate concern. All-you-can-eat pricing, by its very nature, results in some people paying for things (like total bandwidth, or food, or time at the Genius bar) they never consume. Similarly, most blanket responses, regardless of L-word (License, Levy, or whatever) leave it up to the payer to resolve the issue of their own revenue. Radio and TV (even cable TV) pay blanket and may also pay direct licenses for creative content. These folks figure out how to gather more revenue than the cost of these licenses. Some people watch more TV than others, and as regards to these fees get a bargain, as opposed to those who watch little TV.
To reduce this sort of strain, ISPs (and other service providers) have and will differentiate customers based upon the needs of these customers, and creative content may well be part of the strategy—whether that strategy is made explicit or left to be implicit.
Already, ISPs differentiate customers based upon behavior/needs related to speed and total transfer (aka, bandwidth caps). These methods are, in effect, an attempt to tier customers based on their implicit needs—maybe the bandwidth is movies, maybe its music, maybe its huge datasets. Some ISPs, like TalkTalk, are even a bit more explicit about the tiers, marketing tier expansions as appropriate for customers “If your family downloads lots of music and films…”
On the flip-side, ISPs might offer a voluntary “music tier,” a tier explicitly directed a some sort of music service (or set of services) that are supported by the commercial agreements of the ISP. Music is less of a drain on networks than movies, but still music services would benefit—in terms of efficacy and quality of service—from support from the ISP, both in terms of an aggregate commercial relationship with music owners or the quality of service from files hosted within the network.
Furthermore, people forget that households are not the only ISP consumers—there are commercial users of music on networks, like webcasters, subscription music services, and if plausible social networks, etc. ISPs have commercial relationships with these consumer-facing media services, and these relationship are (most likely) the domain within which any L-word would truly operate.
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Thanks again to David Touve for his time and effort in making this interview possible.
Stay tuned.
