Jonathan Richards
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The music industry took a firm swipe at internet service providers (ISPs) today, accusing them of being in large part responsible for the dramatic loss in profits record labels have suffered as a result of illegal downloading.
In a strongly worded statement, the IFPI - the music industry body - called for the EU to draw up legislation that would place obligations on ISPs to monitor the traffic across their networks, and to suspend the accounts of customers who broke the law.
In its annual report, the IFPI said that revenue from digital downloads had risen by 40 per cent to $2.9 billion in the past year, but that this had not been enough to offset the "sharp decline" in CD sales which had resulted from "systemic piracy" on the internet.
"Copyright theft has been allowed to run rampant on their networks under the guise of technological development," John Kennedy, the IFPI's chief executive and chairman, said. "ISPs have largely stood by, allowing a massive devaluation of copyrighted music."
"This in turn has prompted a crisis that has wide implications for the whole digital marketplace. The moment for EU legislation to be drawn up has arrived."
Mr Kennedy's ultimatum was delivered as IFPI reported that revenues from digital music now accounted for 15 per cent of overall sales, but that the growth of digital sales had dropped from nearly 100 per cent between 2005 and 2006, to 40 per cent last year.
The IFPI estimated that 1.7 billion tracks were downloaded in the past year, but that for every song accessed legally, 20 were downloaded illegally using so-called 'peer-to-peer' networks. In Brazil - where 1.8 billion tracks were illegally shared - music sales had slumped by 50 per cent in the first half of 2007, while in Mexico, they fell by 25 per cent, according to research by IPSOS.
ISPs have long argued that they should not be responsible for the illegal file-sharing that takes place on their networks because they could have no way of monitoring the entirety of their traffic and are "mere conduits" of information.
They say that the content being accessed illegally is hosted on servers elsewhere - which they are powerless to close down, and that in any case data protection legislation prevents them from looking at individual packets of information being sent.
"ISPs are no more able to inspect and filter every single packet passing across their network than the Post Office is able to open every envelope," a spokesman said.
The IFPI report found that the US was still the largest market for downloads, where digital music accounts for 30 per cent of all sales, followed by Japan and the UK. In the UK 77.6 million tracks were bought online last year, up 47 per cent on 2006.
The report was also sceptical of the so-called 'advertising supported' model for digital music, where listeners are able to stream songs from a site 'for free' in return for watching or listening to ads. On Wednesday, Last.fm, the social music site, announced it had done a deal with all the major labels which will mean people can hear tracks up to 3 times, in their entirety, while being exposed to ads.
"Questions remain as to the potential for these models as some believe the addition of ads on free services will [send] consumers elsewhere, and there are continuing concerns about copyright infringement," it said.
Among the other findings of the IFPI report were:
- the top downloaded single in 2007 was Girlfriend, by Avril Lavigne, which sold 7.3 million copies
- sales of music directly to mobile phones grew by 100 per cent to account for 12 per cent of all sales. In Japan, sales of music to mobile accounted for 90 per cent of all digital music revenues
- there are now more than 6 million tracks licensed to be accessed through digital services, up from 1 million in 2003
- in South Korea, long a bellwether country when it comes to the uptake of new technologies, 60 per cent of the music bought is downloaded
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How many times have we heard about bands being ripped off by their record companies, how many times have artist ripped us off by being paid well over the top for their services by record companies, Eg, Robbie Williams, a £70,000,000 contract, come on even Robbie is not wrth that much in one hit.
There are many examples of artists and their record companies earning extravicant amounts of money at our expence, the price of CD,s in the US has always been cheaper than the UK, the record companies know about this and so do the artists and has anything been done, No!
You only have to watch a few episodes of Gribs on Sky TV to wounder how much artists are being paid to be able to afford multi million pound houses.
Sure charge us for downloading music but make it an amount the public are happy with paying not the price they have set themselves today.
Dont artists make most of their money out of concerts rather than record sales anyway !!! But I never see ticket prices dropping.
Richard, Slough, Berks
The music industry execs are getting their just desserts after years of fleecing the public and music artistes. If they had refrained from over inflating the price of CD's etc in order to line their own greedy pockets this situation would not be what it is today, so boo hoo to you!
Any bands / singers with real talent know they can earn plenty of money from touring and live shows, they just might have to do them a bit more often to maintain the 'star' lifestyles they have become accustomed to rather than sitting back whilst the recording royalties roll on in, and the public aren't going to complain about that if it means they get to see their fav bands play live more frequently.
Sarah Hosking, Leigh, UK
90% of the CD's that I have bought this year I've got from amazon - used, so not one penny has gone to the record companys or the artists for that matter, should that be made illegal. most bands will make 30-40p out of the price of a £10 CD, I think thats your crime.....I remember as a kid, girlfriends who's whole album collections were 100s of tapes and maybe 6 or so CD's .....Criminals all of them.....they must be stopped before our whole way of life burns in a pit of hellfire....they are dirty and must be put to death....oh sorry I don't know what came over me....I am the criminal for not paying retail....I now know what I must do....goodbye ....oh hold on first I must make a will out leaving all my estate to the IFPI .
jay, manchester, England
Shame, the poor music companies. They no longer squeeze huge profits out of both artics and consumers as their legacy sales channels of music stores and huge investment in CD's is no longer required. The internet is killing off the middle man, and that's all that the music giants are. People will pay for music (as iTunes shows), so why not have artiists making their own MP3's, selling them on the internet, and cutting out the music companies completely ?
Tom, London,
why would i want to buy a CD?? i do not believe i own a CD player anymore.. The world is changing...fast, those companies that can be flexible and adapt will succeed, the rest will get left behind.
charlie smith, CA,
The music industry mafia is getting its comeuppance at last. The genie is out of the bottle. People now realise that they have been paying an arm and a leg for media that costs pennies to make. The music industry mafia has bullied the public for far too long. It's time its enormous power (especially in the UK where it preys on newspapers and magazines with libel suits, using whoreish libel laws) was destroyed.
Not one person on Planet Earth outside the industry has any sympathy with the music industry's predicament. It's time the fat cat music execs and their hitmen corporate lawyers got the jobs they deserve - mopping the floors of abbattoirs.
James Trubshaw, Düsseldorf, Germany
The music industry has long been over charging us for music and I'm afraid this is the consequence. Until prices are lowered there will always be a method and motive to download media for free. Perhaps if the music industry stopped over paying its artists and artists started living a much more real lifestyle without splashing money left right and centre, the costs to the industry and thus the consumer would be greatly reduced.
Steve Powell, Lydney, Gloucestershire, UK
The idea thatdownloading hits small bands more is a myth, in fact it can if used correctly bolster sales by allowing them access to customers who wouldn't usually hear of them.
If a band is small it by definition has less people who listen to them and own cds so therefore there are less peers to download from where a large band will have mny download sources. In other words the variance is linear suggesting that the loss would be a constant percentage of sales ad in the benefit of having advertising for small bands (big companies can fund this themselves) it gives them a competitive edge if anything.
craig, london,
Simple cure?
Music industry cuts prices to what production costs plus a small percentage, NOT to what they think they can get away with, piracy suddenly becomes uneconomical, problem solved.
greed has been your undoing.
the gravy train has reached its final destination
Dave, York, UK
Suing ISPs because of copyright infringement is like suing the M1 because of speeding drivers. This all smacks of desperation.
Warren, Shanghai,
So the music industry want ISPs to monitor our networking traffic. How are they going to do that? It cannot go by download rates as there are legitimate large files downloaded nowadays. Ahh I see they want to invade our browsing privacy by seeing each and every site we visit.
Len, Argyll,
Homebrewers that make open source peer to peer programs will always find a way around traffic monitoring.
Steve , Newington Green, London
Internet is the great leveller. For far too long music companies have had their own way.
Mr T, taunton, somerset
What the music labels do for its artist besides giving the artists 1 pound or less for evey cd sold ? Why has money become such a important factor in making music ? Making such stupid amount of money from cd's has to stop . What has the cd brought to all these rich artist besides more problems then they can handle ?
The truth is that a very good arist shouldnt make more than 5 million a year . And i think that is fair . And if your a small band then you should know that the only way to make money is to tour . And thats the point of music to be played live .
And if the odd 500k a year manager that does nothing will loose his job . then be it
allan , london,
Having seen groups of illegal immigrants selling a whole range of DVDs and CDs for as little as â¬2.50 each in the larger towns - I am shocked the the recording industry hasn't figured out what everybody else knows - the primary vectors for copyright theft on a grand scale are criminals - not music lovers.
If people are quite happy to pay out â¬2.50 for the music they want - even if it comes in a plastic envelope with a shoddy photocopy inside - is the slump in music sales really due to the Internet? Or is it that people are fed up with paying through the nose for music?
The people who download music are taking a single copy for their personal use, the people who rip their CD collections to their iPods are merely "device shifting" what they already own - but these criminals are stealing music for resale purposes and making a handsome profit from other people's work.
Who are the biggest criminals?
drk, cadiz, spain
Illegally downloading music is having a profound impact on many, many musicians. (and the people who work with them)
When the indie labels sprung up and gave the big boys a run for their money they were applauded, yet this p2p file sharing onslaught is killing off not the big boys, but the indies. Musicians for who the difference of just a handful of sales is the make or break line.
What we will end up with is the big boys still dominating , and the hobby musicians (who fund their hobbies via independent income like a good job) The indies will be unable to survive.
What illeagl downloading will achieve is knocking out the heart, soul and stuffing out of a vibrant music scene.
Then the folks who thought it was ok to take whatever the hell they like with no thought of the consequences will sit up and complain about the appalling state of music.
Something needs to be done to stop this selfish behaviour.
Rachel W., Wilts, UK
The Music industry is moaning about loosing a physical supply chain which is obsolete.
Sites such as iTunes offer bad quality (low bit rate) copies at outrageous prices.
If the industry offered high quality downloads at reasonable prices âpiracyâ would disappear.
Kevin, Hereford, England
last.fm is going to be the way forward. It is the ONLY site that offers what it has, with potential to steal the market entirely. iTunes and what not is pathetic, none of the music I listen to and a cloggy, poorly structured program.
The record labels seem only to be parasites on the artists nowadays, its quite irritating. And the self-appointed regulators RIAA/MPAA/KKK are meerly leeches dwelling underneath society.
What happened to the days of labels actually helping bands. I'm all for moves such as Radiohead's 'In Rainbows' 'stunt' of label-free artists
Bobby BigKnuckles, Essex,
If your car got stolen, can you blame the people that build the roads along which the stolen vehicle was driven away on? No of course not.
Its the same here, the ISP's build the Roads (or conduits as they put it), what travels along them is out of their control. The actual control of usage on roads is done by police patrols, so maybe instead of inspecting every packet all the time, conduct random 'digital stop and searches'. If something suspicious is found, investigate further, else leave that transmission alone.
LB, London,
John Kennedy is, of course, massively out of touch with the average person and doesn't see the massive hypocrisy when complaining about copyright theft when the recording industry is happy to sell the same piece of copyrighted music to a customer many times over.
When CDs came out 25 years ago there was no option but to rebuy your music again on the new format at full price (and of course the same goes for VHS->DVD->Blu-Ray). You were also expected to buy two copies of a CD if you wanted one for your car and one for home even though you can only listen to one at a time.
The music industry's customers are not stupid they have been ripped off for too long to care about what the industry thinks now.
Chris Hall, Clapham, London, UK
If we start inspecting internet traffic for illegal downloads, how long before we start inspecting for terrorist information, child pornography, criminal gangs communicating.
Though most see preventing these activities as laudable, just becasue we do not see something does not mean it is not there.
The internet has improved communication in every way, the above problems were endemic before the internet, and will continue as such despite any attempts to filter it.
If we make ISPs filter one type of information, how long until all types are filtered, the Government could choose which sites have the "correct" information in a 1984 style Ministry of Truth
A filtered internet is an Orwellian dream, every piece of information can so easily be altered and "updated" to show the past and present as the author wants them to be:
"We Are At War With Eurasia. We Have Always Been At War With Eurasia"
Devon Buchanan, Bristol,
You cannot legislate for everything in life and think that magically the problem will go away (UK gun crime teaches us this). Rather than get into bed with Apple and come up with yet another banal compressed format why donât the record companies move into the real 21st century world and give the record buying public, the recording artists and themselves what they deserve - Real Hi-Fi Music i.e. Super Audio Compact Disc (SACD)? Itâs a know standard developed by the big boys Philips and Sony, gives you much better quality than the current 80âs CD technology but with the ambience the vinyl purists crave and the discâs can still be played on older CD players (albeit without the very high quality). Give the youth of today the âRealâ listening experience theyâre currently missing out on, the artists the âQualityâ promotion they deserve and the record companiesâ big profits in the process â everyoneâs a winner!
Colin, near Basingstoke, UK
Implementation of DPI on every ISP (to inspect every packet) would cost hundreds of millions of pounds.
Who is going to pay for it? Are the record labels willing to fund this technology? If they are then they should put up or shut up.
If they are not it won't be the ISP's it will be us the end users through our monthly broadband bills. Assuming 2% of users illegally download then 98% of broadband users will have to unfairly pay to maintain record companies margins.
So we get hit with a double whammy of higher broadband bills and uncompetitively priced music.
They all want a piece of every single one of us.
Lets hope the ISP's stand together and collectively tell the IFPI where they can stick their strongly worded statement.
And as for the privacy issues of looking at every piece of data I send from my computer, well the UK government continually shows the contempt with which bodies regard private data.
Salty, Reading,
I have two daughters at senior school who daily come home with new music tracks & ringtones.
So, how does the music industry intend policing bluetooth technology? Will schoolchildren be the next group accused of illegally sharing music?
Cari Francis , Deepinthebowelsof, Essex
If the musuc industry had half a brain they could be making money hand over fist, look at iTunes.
Another example..
http://www.sciam.com/article.cfm?id=rock-band-guitar-hero-dri
Fizz, Ottawa,
Cd sales are falling dramatically not because of rampant piracy but because of the digitization of music. Why pay for an entire album when you only want three songs? It is the industry's failure to adapt to technological advance and create an attractive new business model for consumers that has led to this sorry state.
Cd sales are already dead and so will be sales of all other physical media once people get a media center pc under the tv in the living room. Adapt or die, this is the law of the market, no amount of blatant lobbying attempts will save you from that.
As for the music industries figures they have been known to blatantly misrepresent e.g. in the case of student illegal downloading taking up 40% of profit loss as opposed to 15%.
Also the notion of monitoring every piece of data traveling through UK isps is orwellian at best, no different to strip searching everyone getting a bus, a total invasion of privacy which removes burden of proof on accusers.
smith, birmingham, durham
These music industries r full of it. I haven't payed for a song download in months. Me and my friends just use spiralfrog and download the music for free! This music u can put on your computer and portable mp3 player. And its perfectly legal.
I really cant see the difference between this and sharing music as far as the music industries profits go. Either way the person getting the music is not paying other than having to renew his membership each month, which is free, is far easier than paying.
Thanks!
Sterling, lexington, North Carolina
The music industry chiefs are completely out of touch with reality. instead of thinking outside the box and embracing the new digital era of music, they harass their customers, other businesses and now ISPs. What a bunch of clowns...
Clearly an indication of the death of the big labels that refuse to join the new world of music. They look to blame everyone else. Its their greed that is pushing a faction of listeners to download illegally. They sell their CDs at $15. you can download the same for $9. Their greed is evident...
They forget that the economics of scale say that if they priced their downloads at $6, they would sell more music and in the long run sell more to more people and the price would be low enough to discourage the casual downloader.
To All of you BIG EXECs in the recording industry... Your days are numbered, you better start looking for new jobs. you are being replaced by computers and the internet and savy shoppers...
GOOD RIDDENCE
Ed, Essex, CT