UK STUDY: P2P Helps “Stimulate Creative Industries”

UK STUDY: P2P Helps “Stimulate Creative Industries”

Researchers from the London School of Economics and Political Science claim efforts to prevent file-sharing only protects out-of-date business models and stifles innovation. Say a more effective strategy is to provide “user-friendly, hassle-free solutions to enable users to download music legally at a reasonable price.”

With the Judicial Review of the UK’s controversial Digital Economy Act now well underway, a new study conducted by researchers at the country’s renowned London School of Economics and Political Science claims that the legislation’s entire approach towards illegal file-sharing is wrong.

In the report entitled “Creative Destruction and Copyright Protection: Regulatory Responses to File-Sharing,” Bart Cammaerts and Bingchun Meng contend that the DEA overemphasizes copyright enforcement at the expense of technological innovation. Specifically, it focuses on the music industry because it has been one of the most vocal advocates of using ISPs to identify and punish suspected infringers.

They point out the fact that in the US file-sharers have responded to escalating legal threats from copyright holders by consistently developing new methods of bypassing each new technical method of copyright protection and means of infringement detection they face, and that the same is likely to occur in the UK. File-sharers won’t simply cease and desist en masse.

A better approach, they argue, is to provide “user-friendly, hassle-free solutions to enable users to download music legally at a reasonable price,” and that it is a “much more effective strategy for enforcing copyright than a heavy-handed legislative and regulatory regime.”

As for declining music sales, the report suggests a multitude of reasons rather than the record industry’s singular blame on illegal file-sharing. It says it can be explained by combination of factors such as changing patterns in music consumption, decreasing disposable household incomes for leisure products, and increasing sales of digital music.

“Household budgets for entertainment are relatively inelastic as competition for spending on culture and entertainment increases and there are shifts in household
expenditure as well,” it says. “The downward pressure on leisure expenditure is likely to continue to increase due to rising costs of living and unemployment and drastic rises in the costs of (public) services.”

The report criticizes the International Federation of the Phonographic Industry’s exclusion of music publishing and live music performances from its revenues figures. When combined with the IFPI’s recorded music sales the numbers show positive rather than negative growth.

“While file-sharing may have substantially displaced album sales, it also facilitated a broader distribution of music, which appears to have expanded awareness of smaller artists and increased demand for their live concert performances,” adds the report.

Considering that most of the money collected from live performances goes directly to artists it could reasonable be argued that P2P was a positive thing for artists, especially lesser-known acts that aren’t quite popular enough for mainstream promotion channels like radio.

It is this overemphasis on alleged economic harms caused by P2P at the expense of its “socially and economically beneficial uses” that has the researchers most concerned.

“Like the creative industry, the DEA fails to acknowledge that peer-to-peer file-sharing is a lawful activity and is often used to share content that creators make freely available and to drive innovation in the sector,” it says.

To stimulate the creative industry, the report says that P2P technology should be encouraged to promote innovative applications.

“Focusing on efforts to suppress the use of this technological advance and on protecting out-of-date business models will stifle innovation in this industry,” it continues.

It notes that industries often face disruptive technologies, and that considering record labels are only distribution technologies it’s important not to lose sight of the real concern which is the relationship between artists and fans.

“The music industry and artists should innovate and actively reconnect with their sharing fans rather than treat them as criminals,” says Cammaerts. “They should acknowledge that there are also other reasons for its relative decline beyond the sharing of copyright protected content, not least the rising costs of live performances and other leisure services to the detriment of leisure goods. Alternative sources of income generation for artists should be considered instead of actively monitoring the online behavior of UK citizens.”

Let’s hope the ongoing Judicial Review does for UK citizens what its representatives shied away from doing in passing the DEA.

Stay tuned.

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