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Movie and record labels are overjoyed at the support they're receiving from the British government

Late in October DailyTech reported on the new three strikes piracy legislation proposed in the United Kingdom by Britain's majority Labour Party.  Under the legislation those caught pirating would receive two warnings, then would be cut off from the internet.  The real headache, though, is how to police the traffic and enforce the provisions on ISPs and consumers.

Despite mass objections from telecoms, citizens, electronics experts, law enforcement officials, and members of the minority conservative and socialist parties, Labour Party officials have blazed ahead with a framework to allow the legislation to be enforced.

According to Labour Party leaders, the government is planning on handing the expense of the Digital Economy Bill down to taxpayers.  That expense is estimated to be approximately £500M (approximately $800M USD).  On average, that works out to more than £25 more a year ($40 USD/year) per internet connection.

And that's considering that the government is counting on the bill reducing piracy enough to increase media revenues by £1.7B ($2.72B USD), leading to £350M ($560M USD) extra in VAT tax revenue.  If that increase isn't realized, British taxpayers could find themselves on the hook for over $1B USD in enforcement expenses.

The initial letter writing campaign is predicted to cut off 40,000 citizens from the internet and cost £1.40 ($2.20 USD) per subscription.  The government appears to have purposefully neglects to include possible economic losses based on citizens being taken offline in its estimates.

Charles Dunstone, chief executive of Carphone Warehouse, whose subsidiary TalkTalk is the biggest consumer provider of broadband in UK, is flabbergasted at how the punitive bill is gaining so much traction.  He states, "Broadband consumers shouldn’t have to bail out the music industry. If they really think it’s worth spending vast sums of money on these measures then they should be footing the bill; not the consumer."

Still the media industry is cheering the British government's decision to obey their commands, despite the taxpayer expenses and objections.  Writes the Department for Business, Innovation and Skills, an industry trade group, "The overall benefits to the country far outweigh the costs."

They argue that movies like X-Men Origins: Wolverine and Star Trek have been pirated millions of times, amounting to millions in lost revenues.

And it certainly helps their argument that in the UK, like in the U.S., the media industry spends enormous sums on legal representation and government lobbying efforts.  As the growing conflict in Britain is proving, if there's one lobbyist power in the UK and U.S. that's perhaps greater than telecommunication firms, it's the media industry trade groups.




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Here's an idea...
By rs1 on 12/29/2009 6:40:52 PM , Rating: 3
Keep the tax, but instead of spending the extra money on enforcement, distribute it to the IP holders on condition that they stop their bitching and moaning. Then everybody wins, more or less. The people can keep using their Internet without having to fear that their own government is going to come after them thanks to media corporation lobbyists, the IP holders get their compensation, and the government doesn't have to waste a billion dollars a year on ineffectual enforcement measures or the crackpot theory that stronger enforcement will equate to increased revenues for media companies.

As long as the media companies are bent on taking the "all out war" approach to fighting piracy, nobody is going to benefit. That the law is technically on their side doesn't really matter at this point. There needs to be compromise from all sides in order to get things back on track. People need to accept that they need to pay *something* back for the IP they download/pirate. And the media companies need to accept that people are going to download/pirate, and that they can no longer exert the same kind of control over when, how, or how much people pay for content. And the government needs to get off its ass and reform copyright law into something that is more reasonable in today's technological climate, and moreover come up with some legislation that would allow a compromise solution to go forward and be legally binding on all sides.




RE: Here's an idea...
By Manabu on 12/30/2009 12:46:12 PM , Rating: 2
You are not the first to have this idea:

http://en.wikipedia.org/wiki/Alternative_compensat...
http://crosscommons.org/acs.html

An 24h/d library with all humankind cultural creations accessible w/o limitations for an small fee. We have the technology, only arcaic laws are against it. ACS may be an way to revert it.

Thought, there are many problems to this. How to define the amount to be distributed? Who will pay and how? How to distribute the money? If by some statistic like number of downloads, uses, votes, etc, how will it be collected at what costs? How privacy will be affected? Who will receive the money (artists, MAFIAA, remixers)? What types of intelectual productions will be covered?

I'm still not sure if it is the best path. The Sweeden Pirate Party is against this. But surely it is better than this moronic british plan.


RE: Here's an idea...
By rs1 on 12/30/2009 3:37:24 PM , Rating: 2
quote:
Thought, there are many problems to this. How to define the amount to be distributed? Who will pay and how? How to distribute the money? If by some statistic like number of downloads, uses, votes, etc, how will it be collected at what costs? How privacy will be affected? Who will receive the money (artists, MAFIAA, remixers)? What types of intelectual productions will be covered?


Interesting. I think most of those problems can be solved relatively easily. For instance, I would think that:

1. The amount distributed should initially be revenue-neutral to the retail system that exists today, and indexed to inflation thereafter. To use the recording industry as an example, today they have annual revenue of about $12 billion in the U.S.. Let's say that if such a system were implemented, there are would still be about $2 billion in annual retail sales, due to people who would still rather have a tangible copy of an album for one reason or another. So the "tax" needs to generate annual revenue of $10 billion initially. Assuming roughly 100 million Internet users in the US, then that's about $8.25 per user per month. Now index that to annual inflation, and we're done.

2. The ISP's will pay, in the form of a surcharge of $X per user per month, where 'X' is determined as described above. Of course, the ISP's will pass the $X directly onto their subscribers, so really it works out that the Internet users are the ones paying. Which is as it should be, since they're the ones benefiting from all the P2P downloading that they can do. This would also leave open the option for ISP's to opt out of the system, and offer cheaper rates to users who want nothing to do with it. I would think that that such ISP's would be required to implement stringent policies to block P2P traffic on their network, as leaving compliance up to the users would just be foolish.

3. The money will be distributed directly to the rights-holders each month, by whichever overseeing agency it is that collects the surcharges from the ISP's. It should be distributed based upon the relative popularity of each artist's work for that month. So if you create something that gets downloaded even 1 time, you get paid for it. But you also only get 1/1000th of what a person who creates something that is downloaded 1000 times would get. Thus the specific payout disbursement would vary considerably each month, based on which things were the most popular. Kind of just like how retail sales work.

4. Collection of statistics is the tricky part. Maybe you could track it by federating all of the most popular bittorrent trackers. Or maybe the RIAA/MPAA could actually be of some productive use here, since they apparently have way of tracking how many pirated copies are floating around, given how they like to estimate their "losses" from piracy. One plus of the relatively-weighted distribution system that makes statistics collection easier is that you do not need a fully complete set of statistics to reach a fair and accurate distribution plan. All you need is a sample size large enough that it can be said to capture the typical behavior of the system for that month. I think a large enough federated bittorrent tracker network would be able to provide such a sample size.

5. Privacy should remain the same as it ever was (i.e. trackers already count how many times each thing is downloaded, and generally do not keep personally identifiable information along with the count, and pretty much anyone with an Internet connection is already able to see this aggregated data, including government agencies and so on). With the exception that if you want to be compensated for some popular thing that you put online, you obviously need to divulge at least enough information for payment to be made.

6. Whoever holds the rights for a particular work will be compensated. So if the record label is the legal rights holder, they get the money. Just like with retail sales. Of course, given how much easier digital distribution is compared to standard retail distribution, I'd expect to see a lot of artists ditching their record labels and going independent under such a system.

7. Good question. I'd say music and movies to start with, and then maybe other things if the system proves successful. The nice thing about music and movies is that it's generally agreed that an album should cost around $15-$20, and a movie should cost around $20-$25. The problem with things like software is that the market price can range from as small as $10 to as high as $1000+. That makes determining the disbursement plan a bit trickier, as now the retail price of each work needs to included in the calculation as well in order to keep it fair.

In any case, it seems at least workable to me, and probably quite a bit better than the current british plan.


RE: Here's an idea...
By Manabu on 12/30/2009 7:42:21 PM , Rating: 2
There are many more hidden problems. I will link an concise article from 1992, but that is still very actual, that already takes care of many important points, like what is the purpose of copyright, dimishing returns and trade-offs made.

http://www.gnu.org/philosophy/dat.html

Please read it before my post, because I will not repeat this all over.

1. Is current revenue the optimum amount of money to promote culture? Recording labbels will say that piracy affects those results, and that those numbers are incomplete, not accounting for all the money currently made. Others will say that there are too many hollywood movies and pop-hits being made every year because the copyright monopoly, and thus we should pay less. Also, this does not account for all new bussiness models that can be created and destroied in the future.

2. An tax only in internet access will make it too costly. That is against digital inclusion, that some countries are even making an human right. And should an dial-up user pay the same as an mobile internet user and an university? Also, the opt-out system is an problem. First, because it will need this same costly system reported in this news for those who opt-out. Blocking P2P traffic does not equal to blocking media (youtube, http, etc) and does equate to block sharing linux distros by P2P, for example. Also, even those who does not download copyright content (is/will it be possible?) are directly and indirectly beneffited by this law. Copies between friends w/o using the internet also should be alowed, for example.

3. The existing royalities distributing agencies are, to say the least, problematic. Unreasonable contracts to sign-in in the system, part of the money is used for political lobbying, etc. Also, the retail system is not the most efficient way to promote culture. "We can promote music more effectively by making any one musician's share of the tax revenues taper off as copies increase". Also, one download is not the same as one purchase, because a download is perceived as having almost no cost, while you think twice before spending your money to buy something. It will be very easy to trick the system with crappy things that look like good things. That is why the use metric and voting system are also considered.

4. & 5. Statistic collection by sampling really seems like the most viable way. But can the statistic tracking system be tricked/hacked? he difference is that now those statistics is money. I'm not sure of non-obvious privacy problems... I don't researched much in this statistic colection thingy.

6. What to do about remixes? AMVs, parodies, etc? Their creators should not receive any remuneration, only the authors of the works they are using? They don't need this? I don't know. Sometimes artists pay for it's music be played, sometimes they receive money for it. How ACS will treat this? Finally, I don't know if it will work well for all revenue sharing contracts. Also, recoring labels are the devil incarnate for many people (for me not so much) and people want them to die.

7. Forbiding the copy of software will imply in the need of all that costly system in the news and/or stricter DRM. But allowing it as you say will bring many problems to the distribution system. What about free sofware, it should not be incentived? And what about games? And books? And television programs? And photography? And news? Etc, etc....

The problems are many....


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