Fixing problem of file-sharing


WIRED:THIS WEEK, I was an invited interloper at a particularly fascinating London meeting. The "ISP Future Content Models and Enforcement strategies" conference was an opportunity for music, movie and internet service provider industries to discuss what might be done to combat copyright infringement and make money with content online.

The meeting was grimly cordial. In Britain (as in Ireland, and practically everywhere else), ISPs and content providers have spent the last few months indulging in a war of words in the press, while negotiating under the eyes of government in private.

Rights-holders like the British Phonographic Industry (BPI) have accused ISPs of profiting from illicit file-sharing. The ISPs, in turn, have publicly boggled at the BPI's demands for justice. These include filtering and blocking the Internet, and cutting off net users for up to a year if the BPI feels that they have broken the law - a penalty that the BPI would like applied automatically, without the need to go to the police or the courts.

Notably absent from these discussions are any representatives of consumer interests. Judging from the positions being tentatively adopted by many of the players, consumers may be beneficiaries after all.

At the conference, the BPI made it clear that it remained convinced that the proposed French model of "three strikes and you're out" (or three BPI accusations and you're thrown off the internet for file-sharing) is the best way forward for protecting revenues.

It described it as an "educational" campaign and insisted that there were plenty of legal music alternatives online for consumers to choose from.

Others in the music industry, however, were rather gentler on a generation of file-sharers, and seemed more interested in working out how to make money from their handing around of MP3 music files, rather than attempt to prosecute and ostracise them.

Most notably, the music publishers' umbrella association, British Music Rights, headed by chief exec (and former Undertone) Feargal Sharkey, seemed more interested in making deals with ISPs than using them as the internet's policeman.

What would that deal look like? That is the real challenge for the record labels. The problem is that a good answer really does require co-ordination from the music industry as a whole. The optimum solution would be a blanket authorisation for file-sharers, in return for a regular subscription. One model would be that net users could pay a small surcharge - say £5 or £10 a month - in return for permission to download and share as much music as they wanted.

The obvious group to help manage such an arrangement on the technical side would be the ISPs. They have the billing systems in place and could (with their users permission) sample what file- sharing is taking place so the revenue could be fairly distributed on the basis of which artists are the most popular.

ISPs seem intrigued by the possibility - but only if the surcharge really did cover almost all music. That means having every major record label (as well as the independents) at the table.

It's a sign of how sophisticated the recording industry is finally becoming about the net - or how desperate it is becoming in the face of declining sales - that so many of them are finally considering this deal. However, they continue to face a daunting act of cross-industry co-operation.

The record labels have proven themselves happy to cut deals with online start-ups when those deals at least partly mimic a traditional music licence. In that kind of arrangement, the internet company pays the labels a pile of money and gets the right to resell content to end customers.

In this brave new world, the music companies would have to go much further. They would have to permit individual consumers to copy and distribute their artists' works: effectively making those the customers both the purchaser and the "reseller". That risks creating a monster: a legal file-sharing network that would challenge their own role as the chief distributor of music, at the same time as eating into sales of their products, such as CD singles and albums.

The recording industry has no choice. It is already faced with that monster and at least by placing a voluntary charge on those who are already sharing their music, it has a chance of benefiting from what is now second nature for many net users. The BPI's plans to hunt down the file- sharers and exile them to a net-free life is simply a continuation of the strategy of prosecuting their own core markets, and criminalising the technologies that could save them. After 10 years, the rhetoric and the sanctions grow louder, but file-sharing shows no signs of slowing down.

The music industry should take this chance to make a deal and run with it. The sad part is that this is exactly the offer that was made to them by Napster a decade ago. Instead, it chose to prosecute that first file-sharing service, driving its users' underground and creating the elusive, pervasive culture of free music downloaders that it faces today.