Playlouder dev blog

Tomorrow (October 30th, 2007 for posterity) Playlouder has a chance to make its case at the ISPA’s annual conference. Paul Hitchman, along with other ISPs, regulators, commentators and Government will be discussing copyright. It’s a very good time to be raising our heads above the parapet, with relations between ISPs and the music industry looking set to take a far more corrosive turn.

To support our case I have written a short article for ISPA. If you can get past the local references it states our position quite well.

A Copyright Win Win for ISPs

Hearing Lord Triesman’s somewhat confusing description of data banks being matched to music being exchanged on the net was just as puzzling for us at Playlouder MSP (arguably the UK’s only specialist in this area) as it must have been for ISP observers and the more clued up members of the record companies.

With a foot in each camp we at Playlouder MSP can take a stab at how the thought might have got lodged in his head. The ’sue the fans’ strategy implemented by the BPI on behalf mostly of the major record labels, which has had no discernible positive effect on the growth of digital revenues and has been a PR disaster, has run its course. In search of a target other than itself the recording industry has stepped up rhetoric about ISPs being gatekeepers to illegal music, and was hugely encouraged by recommendation 39 in the Gowers report which seemed to agree with them that ISPs could and should do more. Boosted by the Belgian SABAM/Scarlet case, in which the Audible Magic Copysense appliance was mentioned, the BPI has been busy telling anyone who will listen that there’s a cheap and easy way to clear unauthorised music off the internet, and it’s only self-interested footdragging by ISPs that is stopping it happen.

I’m not going to rehearse the arguments, both technical, legal, and strategic, which make any such attempt an extremely bad idea for music companies as much as for ISPs. Instead, there’s a compelling case to be made that music can benefit the ISP industry even more that it currently does. There are a number of obstacles to be overcome, not least on the music industry side, but none are insurmountable. And, far from trying to achieve a ‘least worst’ settlement over copyrights on public networks, a bit of imagination coupled with some negotiation could see a settlement which flips the antagonistic relationship between music companies and ISPs into a model of co-operation and mutual value creation.

If this sounds like I have been drinking the ’special sauce’ (this is the music industry after all), well maybe I have. But Playlouder MSP has been building the model and it seems to us to stack up. First, consumers value music, very highly. For your hardcore music fans it might surprise you to know that music makes up a £10 per month value that they perceive in their broadband service. The real nutters can be stretched up to £20 per month. Even mainstream users reckon that £5 per month is a fair price to pay for broadband music. To us this says that anyone who was sitting on the now deceased OiNK.cd (RIP - looking forward to BOiNK.cd from the Pirate Bay) and its ilk was getting too much of a bargain.

While incremental revenue opportunities here might be limited except for a few niche players, we need now to turn to what broadband music lovers say about ISPs, none of which has so far managed to tap into the emotional relationship people have with music despite chucking a bit of money at ‘brand affiliation’ projects. Over 60% said that music would keep them loyal, and a huge 70% said that music on a competing ISP would make them consider switching.

Those of you with active product strategy brains will already be spinning this out into the future. Today BT’s Digital Vault includes ‘private’ music sharing (itself a bundle of copyright infringements which don’t seem to have bothered their corporate lawyers too much), but how about building public sharing, community, and internet radio right into every broadband subscription? All the value of that past music experience and music preference, coupled with the digital libraries of your customers, and the infinite future opportunities around finding and sharing new music would be stuck firmly to the broadband subscription, and every outreach by a customer to their music loving friends would be an invitation to switch ISPs and join the party.

Back to reality, though. What’s it going to take to stop both sides of the divide from doing all they can to destroy the value of broadband music? The answer is surprisingly simple. A licence and some money. No ‘big brother’ network monitoring, no DRM, no ‘unplugging’ customers, no compliance overhead, no invasion of privacy, and no compromise of the ISP’s ‘mere conduit’ status. I’ve called this a copyright win win. I’ll add another win - for the Government, which surely would prefer to see a private commercial settlement than a bundle of extra legislation that would end up not actually helping the music industry but would add an unwelcome element of risk to the next generation of ‘broadband Britain’.

All comments welcome!