One of many conversations I had at Telco 2.0 resurfaced a question that ISPs like to throw into a debate about unlicensed music distribution (AKA p2p filesharing). Why, instead of trying (with great difficulty it must be said) to get record companies to accept money for the music on the networks, why should ISPs not charge them for carrying the product to the customer?
It is after all a very valuable service. Without that free carriage – provided at zero incremental cost over the standard consumer broadband charges – download services such as iTunes and Napster would be looking at very different economics, and labels would not get their current majority share of retail revenues. We just need to look at mobile music services to see how this works. The networks take about one third of the retail price just for delivering the file.
As an ISP we could have taken that view too. The very low chance of getting targeted by the BPI for filesharing, coupled with a few simple and cheap services we can bundle with the ISP subscription, such as encrypted VPNs and online digital storage lockers, would mean that our subscribers had access to safer and more convenient ways to share music without paying the people who make it.
But that would have left us in the same competitive position as every other ISP, charging the same for music as they do for spam, and fighting a low level war of attrition with rights owners over p2p filesharing they refuse to license. Our customers tell us they love music; they want more of it, more conveniently delivered, and they’re happy to pay. Read the Playlouder MSP research for yourselves if you are sceptical.
So rather than pick up pennies on delivering music for other companies, which our technology would allow us to do just as it allows us to report on licensed music traffic, we set out to unlock the true value of music, for our customer, for us and for the creators. We’re sailing with the wind here, as we learned recently that p2p filesharing is by the music industry’s own calculations the lesser of many evils besetting the music business.