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Music industry eases tactics in fighting piracy

DENVER (Billboard) - The Recording Industry Association of America’s decision not to pursue new lawsuits against online file-sharers marks a fundamental shift in the music business’s battle against piracy, from one focused on enforcement to one emphasizing education.

But as it makes this tactical adjustment, the industry and its representative trade group face new challenges. It will have to drop the largely go-it-alone nature of its recent court battles in favor of a more cooperative approach that will require the participation of cable companies, telecommunications carriers and even public officials and legislators.

The RIAA said it has secured the agreement of Internet service providers to participate in a “graduated response” strategy, under which ISPs would send warnings to infringing users to stop their activity or risk losing Internet access. That, in turn, could open the door to additional collaboration with ISPs, such as imposing surcharges on monthly broadband accounts to cover the cost of a blanket music license, something Warner Music Group began exploring last year.

Although the graduated-response strategy developed independently from the surcharge idea, the two run on a parallel track, RIAA general counsel Steve Marks said.

“Any time you have companies working together on one issue cooperatively, it probably sets a good framework to work together on other things,” he said.

Marks said the ISP plan was modeled after the RIAA’s antipiracy initiatives at U.S. universities. Under that template, the RIAA worked with partner MediaSentry to flag the accounts of peer-to-peer (P2P) network users who were uploading tracks for others to share. It then sends the universities the account information of each infringer and asks the institution to warn the offending students to stop or face disconnection. In most cases, disconnected students can regain their Internet access after paying a fine, and various appeals processes are set up to settle disputes.

TOUGH NEGOTIATIONS

Enlisting the ISPs as allies, however, hasn’t been an easy task. The RIAA claims it has secured the cooperation of leading ISPs in its graduated-response efforts, but Marks would not disclose which are onboard. Verizon, the second-largest U.S. telecom carrier, has said it is not participating at this time.

Sources close to the negotiations said the ISPs were resistant to participating until New York State Attorney General Andrew Cuomo’s office approached them during the summer to hammer out an antipiracy solution. These sources said Cuomo’s office took on the task after several New York-based record labels communicated their concerns to him about the piracy issue -- an ironic twist, considering that the attorney general’s office under Eliot Spitzer had battled with the major labels a few years ago during its investigation of radio payola.

The RIAA maintains that it won’t seek government regulatory or legislative enforcement to get ISPs to agree to the plan, hoping they will voluntarily participate for business reasons as part of a broader network management solution. But label sources say the passage of similar “three strikes” laws in Europe have put pressure on U.S. ISPs to play ball.

As the RIAA moves away from suing file-sharers, it can look back on a litigation campaign that in many ways succeeded in its goal of raising public awareness that unauthorized P2P downloading is illegal.

But a 2008 NPD Group report said that 19 percent of U.S. Internet subscribers 13 and older still downloaded music from P2P services, little change from the 20 percent reported when the RIAA began its consumer litigation campaign in 2003. Moreover, the amount of music those users traded increased dramatically as new technologies like BitTorrent allowed them to trade entire libraries rather than just a few songs.

“It would be astonishing to me in this day and age that there is anybody in this country who believes that downloading music without paying for it is not unlawful,” said Barry Slotnick, a copyright attorney for Loeb & Loeb in New York. “To the extent that people didn’t know that before, they certainly know it now. So you have to move on to the next stage.”

A 2008 study conducted by British consulting firm Entertainment Media Research found that 70 percent of survey respondents who currently use P2P networks said they would likely stop trading music files online if their ISP issued a cease-and-desist warning.

Reuters/Billboard

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