Record Labels Put Out Misleading Study Trying To Get ISPs To Setup Broken Music Streaming Services

from the neutrality? dept

Tue, Mar 9th 2010 1:55pm — Mike Masnick

The record labels have been trying out all sorts of schemes for a while now to try to get ISPs over to its side in propping up their old business models, and the latest is pretty laughable. BPI at the behest of Universal Music, commissioned a study which suggests that ISPs can make a lot of money by offering music services to their users. No doubt. But that leaves out some rather pertinent details. For example: many ISPs have very much wanted to offer such music services, but have been blocked by the likes of (uh oh...) Universal Music and BPI. Funny how that works.

The problem, of course, is that the ISPs want to offer music services that people would actually use, and the record labels want to handicap the services to the point at which they're completely lame. So there's a bit of a stalemate there.

But the bigger issue is (reading between the lines here) what the record labels are really saying to ISPs here is: break net neutrality. That's because they're not talking about just any music service. After all, there are lots of music services out there that people can sign up for no matter who their ISP is. But what the labels seems to be suggesting here is that ISPs specify one special music service that locks in customers. That's why the report highlights that a music service can "reduce churn." Of course, the only way it does that is if it's locked to that single ISP -- and if your music is limited to you only as long as you're with that ISP. In other words: locking it down so that it's lame.

As if to make the point even stronger, though, BPI blatantly tells ISPs to break neutrality:

"It's increasingly clear that it isn't smart to be a 'dumb pipe'. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs," said BPI Chief Executive, Geoff Taylor.

Being a "dumb pipe" of course is a well-known code-word in the internet world for a neutral network. So, really what the labels seem to be suggesting here is that ISPs break network neutrality for the purpose of serving up a preferred music service that locks you into that ISP. Apparently, no one who put together the study contemplated the fact that this might piss people off and make them look for ISPs that don't lock them in. Thankfully, it appears that some ISPs aren't biting:

"TalkTalk thanks the BPI for its strategic business advice. Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalise its biggest customers," a spokesperson told TorrentFreak.

Exactly. If the record labels were really serious about helping ISPs offer up music services, they wouldn't be blocking them at every turn. This report is a typical red herring.

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Filed Under: isps, labels, lockdown, music, streaming
Companies: bpi, universal music

26 Comments

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:Lobo Santo (profile), 9 Mar 2010 @ 2:00pm

That reminds me
Need to more time into coding transparent end-to-end encryption for the internets...
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Pixelation, 9 Mar 2010 @ 2:02pm

This idea from BPI is a turd for customers.
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Matthew Cruse (profile), 9 Mar 2010 @ 2:16pm

In this day, if ISP's don't want to be dumb pipe, it's pretty much too late. There are DSL through one of three phone providers, Cable, wireless from Clear, or hughes net satellite. Not all are cheap, but the prices are coming down as competition increases. There is also the option of going with just a cell phone and 3G / 4G through that. This is not meant to be a discussion of ISP's and competition amongst them, but the realization that in most of the country, it ain't 1995 anymore and your choices are dial-up or AOL (I know, also dial-up)
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:Lobo Santo (profile), 9 Mar 2010 @ 2:22pm

Re:
Some days I miss the free coasters from AOL...
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NAMELESS.ONE, 9 Mar 2010 @ 2:40pm

sounds like an IPTV coming to my isp that i dont want either
once htey get in bed with media its game over and we should all just do a month or two off this summer and let the isps know who the damn bosses of them are. WITHOUT we the people they do not exist
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Anonymous Coward, 9 Mar 2010 @ 2:45pm

"This report shows that the revenue potential of digital music"

It is unethical to look at the revenue potential of using ones government granted monopoly power (ie: there is an unearned government granted monopoly on cableco infrastructure) to optimize revenue.

It is unethical to try and look at the revenue potential of something if only you lobbied the government to pass unfair laws.

The RIAA is an unethical entity and they belong in jail for all the social harm that they cause.
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Dark Helmet (profile), 9 Mar 2010 @ 2:46pm

Re: sounds like an IPTV coming to my isp that i dont want either
"we should all just do a month or two off this summer and let the isps know who the damn bosses of them are. WITHOUT we the people they do not exist"

Right, let's try that. If nothing else, it'd be an interesting exercise to see exactly how quickly legislation would be passed making an internet connection compulsary for most citizens as a matter of "National Security"....
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Dohn Joe, 9 Mar 2010 @ 2:49pm

Business Partners
I think you've failed to read between the lines, Mike. What they're pushing for is that ISP's become "Music Distributors" (i.e. business partners, albeit the ones who get bent over regularly by the labels) which would give the Labels leverage over ISP decision making since it would then be in their best interest to "protect" that revenue stream and partnership.
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Ima Fish (profile), 9 Mar 2010 @ 2:57pm

"Record Labels Put Out Misleading Study Trying To Get ISPs To Setup Broken Music Streaming Services"

If what you say is true, that the labels want ISPs to set up exclusive deals with online music companies, then the title really should have been:

Record Labels Put Out Misleading Study Trying To Get ISPs To Block Legal Music Services

If your interpretation is right, then as an example, an ISP should enter into an exclusive deal with Amazon to sell music, at the exclusion of iTunes. And to avoid being a "dumb pipe" the ISP should block iTunes because it wasn't willing to pay up.
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Ryan, 9 Mar 2010 @ 3:15pm

Re:
This is pretty similar to the deal they have already between networks(labels) and cable companies(ISPs), brought to you by the copyright system. If laws were passed such that it became illegal to even use iTunes or Amazon without a license, then they would be just like channel streams today - the ISPs have to pay for the license to allow certain websites to be accessed, which of course would drive up the cost of Internet connections as they passed it on to us and then make all "unauthorized" viewing illegal.

As it someone who quit paying for cable and gets a lot of stuff through sites like Justin.tv, this state of affairs is quite maddening. Right now as a pretty big sports fan, I can't help but think how eliminating this copyright protection would do so many things: it would drive down the price the NCAA could charge for tv rights(to merely film from inside the event, because once it was broadcast it would be fair game), and thus the negative influence the need for commercial breaks to recoup loss has on the game. There wouldn't be many commercials anyway, because nobody would watch a stream that kept showing them. We could watch every single tourney game whenever we wanted, switching back and forth because it would all be streamed online. The only way to compete would be in quality/timing, so we'd have everything in HD. Etc, etc, etc...but more likely, it'll go the other way and we'll have to pay a licensing fee just to use music applications.

:(
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Anonymous Coward, 9 Mar 2010 @ 3:45pm

Re: Re:
The problem is that we have a system where the government grants both a monopoly on the content delivery venue (ie: cableco/telco infrastructure and public airwaves) AND on the content (copyright), and as a result, almost everything that's easily accessible to the public is only available at monopoly prices. There should be no monopoly on both the information delivery venue and on the content itself. EVERYTHING broadcasted on public airwaves should be in the PUBLIC domain (both television and radio). Don't like it, then don't copyright your work.
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Anonymous Coward, 9 Mar 2010 @ 3:46pm

Network neutrality is fine, as long as it's optional.
But the bigger issue is (reading between the lines here) what the record labels are really saying to ISPs here is: break net neutrality.

So? Remember, Mike, you're the who's against network neutrality regulations. Network neutrality is fine, as long as it's optional. Remember? Well, this is just exercising the "optional" part.
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Derek Kerton (profile), 9 Mar 2010 @ 5:48pm

Re: Re: sounds like an IPTV coming to my isp that i dont want either
Reminds me of the time Marge Simpson killed TV in Springfield, and everyone went outside, got healthy, took up hobbies, etc. Until the TV came back.
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Derek Kerton (profile), 9 Mar 2010 @ 5:57pm

Re: Network neutrality is fine, as long as it's optional.
U don't get it. Mike loves Net Neutrality.

Techdirt isn't against Net Neutrality regulations because it doesn't like Net Neutrality OR because it doesn't ever like regulation. Mike's just worried that NN regulations end up backfiring and:

- get written by congresspeople who don't have a clue, mostly informed by incumbent lobbyists.
- create a czar that will succumb to regulatory capture
- get lobbied and re-written into ridiculous counter-effectiveness (CAN-SPAM anyone)
- lock in 2010 thinking about the internet, as we ride into some different future
- get gamed by all market players, to some unfortunate distorted outcome
- get revisited in courts with biased views (East Texas?)

Valid concerns! I'm ambivalent on whether NN regs will help us overall, Mike thinks they won't. We both want NN, though. And we both think competition is the real way to achieve it -- by letting the market work (for a change). Local line unbundling now!
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Derek Kerton (profile), 9 Mar 2010 @ 6:03pm

"Being a "dumb pipe" of course is a well-known code-word in the internet world for a neutral network."

Mike, I disagree with you there. That is a wrong way of looking at it, and has logical fallacy.

Yes, a dumb network is always neutral.

But a "smart" network does not necessarily violate neutrality.

A smart network could bill different customer segments for different speeds, different monthly throughputs, different QoS levels, different support packages, different SLAs, different time-of-day usage patterns, and more...

...ALL without inspecting packets with regards to their source or destination. Thus, the network could remain quite neutral, but not be anywhere near dumb.

You and I can debate all day about whether that is a good strategy for ISPs or not, but you should agree that a "smart" network does not require that NN is broken.
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Anonymous Coward, 9 Mar 2010 @ 6:15pm

Re: Re: sounds like an IPTV coming to my isp that i dont want either
"legislation would be passed making an internet connection compulsary"

and it would become a criminal offense to tamper with the integrated web cams in your appliances.
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Anonymous Coward, 9 Mar 2010 @ 6:24pm

Re: Re: Network neutrality is fine, as long as it's optional.
We both want NN, though.

Yeah, I know you do, as long as it's optional, right? Well, like I said, this is the "optional" part in action.

Do laws sometimes have "unintended consequences"? Yes, they do, but that doesn't mean we shouldn't have laws (except to an anarchist). It just means that we should strive to ensure the laws are well written.
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Anonymous Coward, 9 Mar 2010 @ 6:29pm

Re:
...ALL without inspecting packets with regards to their source or destination.

...OR content.
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Anonymous Coward, 9 Mar 2010 @ 6:42pm

Re: Re: Re: sounds like an IPTV coming to my isp that i dont want either
and it would become a criminal offense to tamper with the integrated web cams in your appliances.

Like the Internet refrigerator?
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Mike Masnick (profile), 9 Mar 2010 @ 6:53pm

Re: Network neutrality is fine, as long as it's optional.
So? Remember, Mike, you're the who's against network neutrality regulations. Network neutrality is fine, as long as it's optional. Remember? Well, this is just exercising the "optional" part.

No. I said network neutrality is important, but FORCING it, is not. What I said was that a lack of neutrality is a SYMPTOM of a lack of competition, and forcing neutrality ignores the real problem.

You keep attacking me on this without bothering to understand my position. I favor neutrality -- but I worry about what a neutrality law will look like, with loopholes and unintended consequences. So I don't want that. What I want is real competition so that there isn't even a question of neutrality.

I thought I made that clear, even though you keep pretending to misinterpret my argument.
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Anonymous Coward, 9 Mar 2010 @ 9:38pm

Re: Re: Network neutrality is fine, as long as it's optional.
No. I said network neutrality is important, but FORCING it, is not.

I understand that. You're all for network neutrality, as long as it's optional.

What I said was that a lack of neutrality is a SYMPTOM of a lack of competition, and forcing neutrality ignores the real problem.

That's like saying murder is a SYMPTOM of people mistreating each other and outlawing it ignores the real problem of people not being nice to each other.

I favor neutrality -- but I worry about what a neutrality law will look like, with loopholes and unintended consequences. So I don't want that. What I want is real competition so that there isn't even a question of neutrality.

That's like saying "I'm against murder, but I worry what a law against it might look like, with loopholes and unintended consequences. So I don't want that. What I want is for people to be nice to each other so that there isn't even a question of them murdering each other."

Umm, okay, but let's talk about reality. Until such time as everyone actually *is* always nice to everyone else, we need laws against murder. Come back after that happens and we can talk about getting rid of those murder laws.

I thought I made that clear, even though you keep pretending to misinterpret my argument.

Oh yes, you're very clear, even though you keep trying to deny it for some reason.
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yogi, 9 Mar 2010 @ 10:32pm

Thank you
We should all thank the record labels for supplying us with a constant stream of humor disguised as business communications.

Maybe they would do better as a stand-up comedy conglomerate.
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Any Mouse, 10 Mar 2010 @ 12:18am

Re: Re: Re: Network neutrality is fine, as long as it's optional.
''That's like saying "I'm against murder, but I worry what a law against it might look like, with loopholes and unintended consequences. So I don't want that. What I want is for people to be nice to each other so that there isn't even a question of them murdering each other."''

Wow... You know, it's nothing at all like saying that. Not a damned thing like it. This isn't even a nice try, or even slightly amusing. You're comparing an enforced 'competition and openness on the web' with violently ending someone's life. Crawl back under your rock? Please?
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techflaws.org (profile), 10 Mar 2010 @ 2:15am

and stop the pirates
which also would make them wanna stop illegal filesharers.
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Richard (profile), 10 Mar 2010 @ 4:55am

The question is:
If music services could be so profitable why don't the BPI just do it themselves?

Answer - because they believe that the ISP occupies a priviledged position in terms of accessing (and to some extent controlling) their customers.

Now there is a name for making use of such a priviledge - it is called "abuse of monopoly power".

Of course the BPI can't see why ISPs don't do that, after all "abuse of monopoly power" is the BPI's core business.

Thankfully at least some of the ISPs know better.
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Anonymous Coward, 10 Mar 2010 @ 9:06am

Re: Re: Re: Re: Network neutrality is fine, as long as it's optional.
Wow... You know, it's nothing at all like saying that. Not a damned thing like it.

Well, if you can't see the parallel logic, then that's your own failing.

Crawl back under your rock? Please?

Ad hominem attack, huh? Well, I guess you've got nothing else to go with.
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