UK Government Report Shows That Digital Economy Bill Will Cost More Than Highest 'Piracy' Estimates, Drive 40,000 Offline
from the this-is-good-for-who-exactly? dept
As the UK considers Peter Mandelson's Digital Economy Bill, a UK government report that looks into the likely impact of the law is incredibly damning. It finds that the plans to send threat letters to users and eventually kick them offline based on accusations (not convictions) would cost consumers in the neighborhood of £500 million. Note, of course, that the music industry itself claims that £200 million worth of music is downloaded in the UK per year (and, of course, that's only "losses" if you use the ridiculous and obviously incorrect calculation that each download is a "lost sale"). The report also finds that these greater costs on ISPs for managing such things (all of which will get passed along to consumers) will likely caused 40,000 residents to just give up their broadband, rather than pay the higher fees.You might think that this would be reason enough to drop the bill as quickly as possible, but not so fast. The report also, without any evidence, suggests that the same law would also increase sales for the music and movie industry by £1.7 billion over the next ten years. That's odd, because there's still no one who can explain how kicking people off the internet actually gets anyone else to buy anything. In fact, we already have proof that it won't. Prior to the threats of losing your internet access were the much more threatening prospect of ending up being fined millions for sharing two dozen songs. And that didn't convince people to buy more.
Either way, the cost side of the equation makes it quite clear that this is the government asking consumers to artificially foot the bill for an entertainment industry that appears unwilling to adapt to a changing marketplace that requires new business models.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: consumers, copyright, costs, digital economy bill, peter mandelson, three strikes, uk
Reader Comments
Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
and of course the profit margins of rich corporations is more important than consumer surplus and our basic freedoms to use the Internet at a decent price.
[ link to this | view in chronology ]
Yep
[ link to this | view in chronology ]
Re: Yep
[ link to this | view in chronology ]
Re: Yep
[ link to this | view in chronology ]
WHo is that other dude?
Wow, talk about jumping to conclusions.
Mike, first and foremost, the numbers appear to be "pulled out of their butts". Taking an ISP number of 25 pounds per user without any other backup is a pretty big logical jump. The ISPs hate this plan, they might actually have to work for a living and upgrade their networks enough to actually have a clue who is using them. I am suspecting that most of that cost is to do work the ISPs should have already done.
Second, the Times story is total scare mongering.
BT also stepped up its attack on the plans, which it said represented “collective punishment that goes against natural justice”. John Petter, managing director of BT Retail’s consumer division, said: “Put yourself in the shoes of a small businessman who has a rogue member of staff. Your internet access could get cut off because of the actions of one individual.
This is a load of crap. First off, in a three strikes situation, if a business owner is too stupid to heed warnings one AND two, then they are at risk. Second, and just as important, it would require that they are caught. Businesses as a matter of course shouldn't tolerate employees misusing their internet access.
As for your other comment:
we already have proof that it won't. Prior to the threats of losing your internet access were the much more threatening prospect of ending up being fined millions for sharing two dozen songs. And that didn't convince people to buy more.
One of these days you will look more deeply into what is happening and Sweden and think harder. They didn't even have to remove their internet access, they just had to make them less anonymous, and suddenly people start to choose the legal route instead of the illegal route.
No, there is no 100% solution that stops piracy, or speeding, or people passing gas in elevators (that should be a hanging offence!). Making people take responsiblity for themselves is a very good way to encourage people to take the legal and correct course.
[ link to this | view in chronology ]
Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: Re: WHo is that other dude?
Do you not think that perhaps, just maybe, the law might allow companies to indentify the individual and have them face justice?
You guys can't seem to think past the ends of your noses.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
The above quote
"First off, in a three strikes situation, if a business owner is too stupid to heed warnings one AND two, then they are at risk."
suggests that this should not be the case.
Secondly, our current intellectual property laws are an injustice to society. Someone being punished for breaking unjust laws is not justice.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
The wal-mart near my house has an internet kiosk to allow people to go onto their website. I have been able to use this kiosk to go to other websites. And sorry, but music can be over http. So, I think I could actually use their internet connection to download music just as a customer.
In addition, what about McDonalds? I use a free wi-fi hotspot there regularly. Are they responsible if I download music there?
Finally - your quote "Do you not think that perhaps, just maybe, the law might allow companies to indentify the individual and have them face justice?" goes completely against what you are suggesting - that the company is responsible. Is it the company, or the employee?
[ link to this | view in chronology ]
Re: Re: Re: Re: WHo is that other dude?
this is what a lot of people in the UK hate about it the other is the cost why should the customer pay for the music companies they want they shpuld pay.
and oh yes if you listen to any internet radio stations in the UK remember that the music industry say they are ALL file shearers yes included licenced ones.
[ link to this | view in chronology ]
Re: WHo is that other dude?
You operate from the incorrect assumption that people are willing to take responsibility for themselves. The majority of people in the world today care for little more than themselves, their next meal, and their next good time. Unless you plan to re-educate the entire world on the benefits of responsibility then your argument here is entirely untenable.
If policing normal users was cost beneficial to the entertainment industry, why don't they offer to foot the bill? Since they are "losing" so much money due to piracy and since they believe that eliminating piracy would force users to purchase content and thus bring them back to their former profit levels this should be the obvious solution.
[ link to this | view in chronology ]
Re: WHo is that other dude?
If the ISP's are to upgrade their network it should be meaningful upgrades that increase bandwidth and decrease price. It shouldn't be upgrades that are meant to enforce something as useless and harmful to society as intellectual property. We as a society have already let intellectual property get in the way of progress far too long, it's time to stop intellectual property from getting in the way of progress just because a bunch of evil rich people and corporations intend to use it to exploit the public.
[ link to this | view in chronology ]
Re: WHo is that other dude?
Legal is not always correct, especially when the law is created by a bunch of evil rich corporations that only have their own interests in mind.
[ link to this | view in chronology ]
Re: WHo is that other dude?
This just goes to show how tyrant our governments are and how they are intended only to benefit the rich and the powerful at public expense, even if that means creating laws that restrict our freedoms and invade our privacy only to benefit evil rich people.
[ link to this | view in chronology ]
Re: WHo is that other dude?
And this is something the industries NEVER seem to realize. When you start trying to focus on how to stop that 1% over and over and over and over again each time becoming more and more strict in how you stop that 1% it doesn't stay 1% over time. You end up punishing the other 99% of people who do obtain everything legally and then as they get more frustrated that 99% drops and that 1% you were trying to stop will soon become 5% or 10% or more. The industry needs to focus on that 99% of the consumers and realize there are ALWAYS going to be pirates. However when you try to make that 99% happy, and you cater to the demands of that 99% then those 99% will stick with you and continue to buy your product.
[ link to this | view in chronology ]
Re: Re: WHo is that other dude?
The issue is huge, it makes department store shrinkage look like a rounding error. If the number was down below that 10% level, it likely wouldn't be a subject of discussion. The problem today is that piracy went past a tipping point a while ago, which makes a large part of the population think they can get away with it, that it isn't bad, it isn't at all like stealing, and it isn't hurting anyone. The idea I think of laws like this (or IPRED, etc) is to re-tip things in the other direction, where people understand again that there is harm, that it is illegal, and that it is not socially acceptable.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
The only harm is the fact that intellectual property lasts nearly as long as it does and the fact that big corporations and evil rich people with no regard for morality think that society somehow owes them a monopoly on anything.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
and the laws are entirely one sided, they're one sided in favor of evil rich people at public expense. They get a monopoly on cableco/telco infrastructure and who can use existing and build new infrastructure and they get a monopoly on the content on such infrastructure, they get a monopoly on who gets to be a taxi cab driver, they get a monopoly on public airwaves and the content on public airwaves, and all because they the only thing they do well is lobby the government. Intellectual property lasts ridiculously long, the punishment for breaking it are extreme, even far more extreme than the punishment for fraudulently claiming copyright on something in the public domain, the laws only apply to poor individuals and not to evil rich people (ie: the CRIA), they get to have secretive meetings with government officials that don't involve the public. Yes, the laws are ONE sided, in THEIR favor.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
Perhaps this is just an indication that the laws in place are not laws that represent the will of society. They're laws that represent the will of an evil rich minority who unfairly benefit from them at public expense because thanks to their complete disregard for morality. If the government doesn't want to pass laws that represent the will of society why should we have a government to begin with? If the government doesn't represent WE THE PEOPLE perhaps we are better off without a government.
[ link to this | view in chronology ]
Re: Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
...a large part of the population think they can get away with it
We can and do on a daily basis. A three strikes law won't change that fact in the slightest.
that it isn't bad
It isn't bad. You can whine and moan as much as you like, but it doesn't make it so. Go cry to your mother if it helps, she may actually agree with you.
it isn't at all like stealing
It isn't stealing at all, or even similar. That's why the law makers call it copyright infringement, but good try. Again, see above comment - cry and moan all you want but it won't make it true.
and it isn't hurting anyone.
It isn't. You and those like you have consistently failed to show any proof of this claim. It's incredibly boring.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
Piracy only hurts you when you keep making it out to be the enemy. When you embrace the new technology, find a way to turn it into a positive, and keep working to better your music, your distribution methods, and how you interact with fans then you beat piracy.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
If that's the idea of these laws, then they are doomed to be complete failures.
All these laws are doing is encouraging the general public to view the mainstream music industry as "the enemy," which will only encourage the very things that you decry here -- but with en ever-increasing sense (however misplaced) of moral justice.
The mainstream music industry is digging its own grave by going down this path.
[ link to this | view in chronology ]
Re: Re: Re: Re: WHo is that other dude?
Agreed. Do you want to see the future? I worked together with a couple friends and we came up with timelines and predictions based on historical events, market dynamics, competition, the slow erosion of their artist base, and psych workups of the fan base. It’s pretty bleak for the record labels and collection societies.
Its fun to watch though, they are following the path that led to the fall of 20 plus countries over the past 2-3 centuries. Alienation, oppression, ever escalating threats and punishments, people escaping from the system, and eventually wide spread revolt.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: WHo is that other dude?
and how do we get big corporations to take responsibility for their actions?
http://www.techdirt.com/articles/20091207/1201017234.shtml
Or is it that the law only applies to poor people and not to rich people who hide behind corporations.
[ link to this | view in chronology ]
Re: WHo is that other dude?
I really don't understand why you keep bringing this up as if we had not discussed it thoroughly with you directly in the past. It's as if any time we prove you wrong, your brain just ignores it and you accuse us of not paying attention to things.
So, one more time, when Napster shut down, there was a minor, temporary boost in sales that lasted a few months before disappearing. That's what happened in Sweden. Let's talk again if the numbers continue to show increasing sales of music directly.
In the meantime, the more important numbers in Sweden show that, despite all that "piracy" the amount musicians have been making... keeps going up. Those are the numbers you like to ignore (or rather, amusingly, you like to mix them up with other numbers and declare that revenue has stayed the same -- but you ignore the fact that this is not true: revenue to middlemen has gone down. Revenue to artists has gone up -- significantly).
[ link to this | view in chronology ]
Re: Re: WHo is that other dude?
See, this is why I keep bringing it up, because you keep playing loose and fast with the facts.
1) Net, there is no increase in consumer spending. They bought less recorded music, paid more for live concerts.
2) There is no indication that there was more concerts, just that more money was generated.
3) There is no indication that artists actually keep more NET money, just that they are seeing more gross money.
4) There is no indication that more musicians are making money, only that there is more money going to musicians.
revenue to middlemen has gone down. Revenue to artists has gone up
Again, this is a concept not supported by the numbers. It only shows that the gross income of artists went up. There is no indication if their net revenues are up, or if they are paying the same "middlemen (aka, agents, promotions, marketing, etc)" off the other side and coming to the same net money.
Also, and this is very important, the time frame of this study does not include 2009. Before IPRED, this may have been true. But with an apparent 18% increase in music sales (and consumers seeming to be consistant in the amounts paid overall for music) there is potential that concert takes for 2009 may also be down (if the historical trends continue).
See? It's a topic that needs more discussion, and really should be looked at more closely.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
2) There is no indication that there was more concerts, just that more money was generated.
3) There is no indication that artists actually keep more NET money, just that they are seeing more gross money."
A: If they don't have to pay the middlemen that's more money to the artists (less recorded music and more money on concerts means more money for artists and less money for the middlemen. This is especially true for small artists who are generally ignored by the RIAA et al).
There is no indication that concerts cost more to conduct though you seem to be indicating that price was increasing.
It's reasonable to conclude that artists are probably getting paid more without the middlemen than with.
"4) There is no indication that more musicians are making money, only that there is more money going to musicians."
except this is not true.
[ link to this | view in chronology ]
Re: Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: WHo is that other dude?
How is that replying to what Mike was saying? And in what crazy world is it the job of ISPs to monitor WHO is using their networks?
"This is a load of crap. First off, in a three strikes situation, if a business owner is too stupid to heed warnings one AND two, then they are at risk. Second, and just as important, it would require that they are caught. Businesses as a matter of course shouldn't tolerate employees misusing their internet access."
Bullshit. Say an employee downloads something and they get a warning, he gets fired. Two years later, another employee downloads again and the connection gets cut off.
Possibilities are infinite and even quite obvious, but it seems you have no intention of even trying to look at things from a different angle than usual.
"One of these days you will look more deeply into what is happening and Sweden and think harder."
Do tell us, please. Link us to a credible source detailing what is happening in Sweden, because you keep telling us about Sweden but you fail to produce any evidence of anything. Is that incompetence, or are you simply insecure about your facts?
"Making people take responsiblity for themselves is a very good way to encourage people to take the legal and correct course."
You're confusing responsibility towards society (not speeding etc) to protect the common good, with responsibility against a bunch of companies (no copyright infringement). What responsibility does anyone have towards the record companies? Copyright infringement isn't even theft, because nothing gets stolen!
The real problem is, record companies are ridden in debt and have been for a while now -- something they brought on themselves. Piracy is a scapegoat for that situation, and getting rid of it will not fix their problems.
But, in their fight against piracy, they're obviously taking some of our rights away, and _that is what is wrong with the Digital Economy Bill_. If YOU don't mind these companies snooping on your internet connection 24/7 and lurking in the shadows waiting for you to click on the wrong button so they can punish you, then sir, you are an idiot.
[ link to this | view in chronology ]
Re: WHo is that other dude?
Yes, the anti mike is correct and I think this penalty before conviction idea has legs. We should put everyone in jail right now, because as you all know - 99% of the population breaks laws every day and this must stop at any cost. The other 1% includes me and my company.
Thank You for your support
[ link to this | view in chronology ]
Re: Re: WHo is that other dude?
[ link to this | view in chronology ]
Re: WHo is that other dude?
You assume that the party is actually guilty. Bear in mind that these warnings are sent by a third party with a track record of making false and inaccurate accusations. Also bear in mind that no court is involved, and no due process is guaranteed, and the evidence involved is often flimsy and easily faked (IP and MAC addresses).
I've said it before, but you ignore any points that contradict your own views. The problem with this "three strikes" idea is that it cannot be implemented in this form without causing a lot of collateral damage. Then we have the question of why such innocent people should lose their livelihoods to protect the unproven losses of the entertainment industry.
"One of these days you will look more deeply into what is happening and Sweden and think harder. They didn't even have to remove their internet access, they just had to make them less anonymous, and suddenly people start to choose the legal route instead of the illegal route."
You repeat this, but you always fail to consider that at the same time, four major new digital retailers opened their doors to Swedes. There was a temporary increase in sales that's not directly proven to have been caused by the legal events there. It could just as well have been because people in Sweden actually had access to buy legally for the first time. Lack of access to legal alternatives is something that anti-regional protection folks like myself (because it's the bane of my daily entertainment attempts) constantly point out as being a cause of demand for piracy.
Correlation != causation.
[ link to this | view in chronology ]
Re: WHo is that other dude?
[ link to this | view in chronology ]
nUMBERS
so thats ?? $170 million per year??
it still doesnt pay.
AS well as pissing off THEIR own customers..
And limiting access to itunes WHICH has most of the market(according to APPLE).
You limit access to OFF LINE, and what do you have?
SMALL shops that cant cover the WHOLE market/GENRE/SELECTION that could be sold.
ANOTHER POINT:
HOW long does copyright last? 20, 30, 40 years??
WHY hasnt the OLDER stuff hit the FREE selections??
SAME with movies..Gone with the wind should be OUT THERE and free to watch.
[ link to this | view in chronology ]
Re: nUMBERS
the answer to your 'why' question is 'because they keep extending the copyrights'.
[ link to this | view in chronology ]
Guess USA is a great place after all
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Pot, Kettle, Black
"We are confident that those costs will be a mere fraction of the stratospheric sums suggested by some ISPs, and negligibly small when set against their vast annual revenues.”
I say the same thing about the record companies and their 'losses'.
[ link to this | view in chronology ]
Can we ask?
CUT the DRM
CUT the lobbyists
CUT the lawyers
WENT to a full DIGITAL distribution system, with NO...
Shipping/handling
Middlemen
RADIO STATION PAYOFFS to play..
NO artwork, unless they want it.
No distribution system..
Packaging..
Lawyers
Lobbyists..
Setup there OWN system to sell songs and movies..
Can you see a NEW movie, just released hitting the net at $5 and you can play it AT HOME..
According the RIAA, music from itunes earns about $0.35-0.40 per song as Payoffs to the music industry, the REST is profit. HOW about $0.50 per song and you CHOOSE which you want? do you think it would sell??
Automatic REFORMAT to the form you NEED..
[ link to this | view in chronology ]
Re: Can we ask?
Instead, change the laws so $500 million is paid out from our pockets to patrol the internet Orwell-style, in case their content is being copied without permission.
[ link to this | view in chronology ]
Re: Re: Can we ask?
[ link to this | view in chronology ]
Re: Re: Re: Can we ask?
LOL - wat?
[ link to this | view in chronology ]
We're asking UK citizens to get in touch with their MP and explain to them why the Bill must be stopped, and possibly to meet them at one of their surgeries to discuss the specific problematic points of the Bill in detail.
We believe that visits and letters from voters will help change the minds of MPs currently for the proposals; our representatives will then see that people care about their rights and, as their duty is to vote in accordance with constituents' opinions, we hope that they will then oppose the Bill.
If you, or your readers, want to know more details about the specific problems picked out by ORG and its supporters, don't know who your MP is, need help with wording a letter or arranging a meeting with them, drop me an email - katie@openrightsgroup.org - and I'll do my best to get you the information you need; all you have to do is the talking.
[ link to this | view in chronology ]
I want to hear from the other industries who will suddenly find themselves £670mil a year worse off as a result of consumers no longer having the money to buy their products.
The amount of money available to consumers is finite and or this legislation is doing is robbing Peter to pay Paul. Next we'll have some more legislation to protect the industries affected as a result so they'll re-rob Paul to pay Peter and all the time there will be some lawyers in the middle taking a cut.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
So I take it "Sam I Am" calls himself "the Anti-mike" now?
As for the claim that stuff like this is intended to "tip" things in the other direction: are you REALLY that stupid? Every copyright-term extension has been "tipping" things in the direction of "perpetuity on the installment-plan" for DECADES. Hell, by the "logic" of "anti-mike", it would be more reasonable to claim that used bookstores and record stores represent "lost sales", simply because the "rights-holders" (monopolists) don't get bribed....oops, I mean "compensated".
I'm pretty sure, between the poorly-formulated RIAA talking-points, and sermonizing, that I recognize this guy from other boards. "Sam I Am"? Or is it "Reasoned Mind?" Which of your IP-apologist, Corporate shill identities is it, hmmm?
Don't waste the time here, folks -- just another corporate shill regurgitating the same, ill-informed claims they've been making since the "Home taping is killing music" bullshit.
[ link to this | view in chronology ]
Re: So I take it "Sam I Am" calls himself "the Anti-mike" now?
No. Two separate trolls...
[ link to this | view in chronology ]
"However misplaced?"
How exactly is a global-scale rebellion against runaway IP laws "misplaced? You really, honestly think that corporate lobbyists buying their corporate overlords retroactive copyright-term extensions is a good thing, then? Personally, I don't think the widespread -- and growing -- contempt for bullshit like this (OR the organizations lobbying for it) is "misplaced" at all.
You nailed everything else, except for the claim that the reaction is "misplaced".
[ link to this | view in chronology ]
[ link to this | view in chronology ]