BPI Unhappy With Techdirt, Seeks To Correct The Record… But Still Gets It Wrong

Say That Again

from the sorry,-that's-just-not-accurate dept

So, we recently wrote about how Geoff Taylor, head of BPI (the UK’s equivalent of the RIAA) seemed to be going after British Telecom (BT) with a variety of highly questionable claims about how BT had some sort of obligation to stop file sharing on its network, and that BT was using unauthorized file sharing to prop up its own business model. Both claims are flat out ridiculous, but BPI apparently was quite upset with us pointing that out. Of course, rather than actually respond in the comments where we might have a conversation about it, they’ve been sending us a series of emails, taking issue with our statements and laying out their claims in more detail. In the interest of an open debate, I’ll post BPI’s comments here, with my responses mixed in (but of course):

It’s unfortunate that in a piece which wrongly charges BPI with making things up, you have misrepresented what our Chief Executive said. He did not say that “BT broke the law in not stopping file sharing”, as you assert.

Hmm. Let’s look at what he did say: “If you operate a commercial service and know it is being used to break the law, taking steps to ensure it is used legally is a cost of doing business.” Perhaps there’s a way to interpret that, which doesn’t imply that BT is breaking the law in not stopping illegal activity, but it seems like that is the rather clear implication of his statement. But, BPI goes on to say they actually just meant BT has a “social responsibility” to stop the illegal activity. Ah.

BT fosters a reputation as a socially responsible company. BPI has questioned whether it’s appropriate for such a company to do nothing about 100,000 instances “a small sample” of the illegal behaviour that BT knows is occurring on its network. BT knows about this activity because BPI provides detailed weekly notifications enabling BT to verify each and every infringement. BPI’s notifications are based upon robust copyright infringement detection techniques which have been accepted by the UK High Court in over 150 cases.

I see. Would that be the same “robust copyright infringement detection system” that a recent study in the UK found was accusing elderly couples of downloading gay porn, along with a significant number of other “false positives”? Furthermore, there’s quite a difference between knowing that there is illegal activity on the network and being able to stop it. As we noted in one of our original posts, in a land with due process (the UK has that, right?), people aren’t guilty upon accusation. It appears that BPI has leapfrogged beyond even the draconian “three strikes” proposals and is looking for something of a “one strike.”

But this is a serious question for BPI: really, what would you have BT do? You are informing them of activity you claim is infringing, but BT has no way of verifying that is a fact. Secondly, by the time you’ve informed BT, the activity is over. So what is BT to do at that point? Finally, how is BT to determine what ongoing actions are actually legitimate? Plenty of smart content creators choose to give away their works on purpose. Plenty of the record labels represented by BPI, even, have long histories of sending out mp3s themselves for promotional purposes. BT has no way of knowing which content is legit and which is not. Pretending that BT can wave its magic wand and suddenly be all-knowing is just silly.

Oh yeah, as for the claim that BT “fosters a reputation as a socially responsible company,” I would think that such would include not violating the civil liberties of its customers by spying on what they do online in an effort to prop up someone’s obsolete business model. Wouldn’t you?

We understand that BT employs very sophisticated traffic and network analysis technologies that allows it to see the proportion of network traffic that is P2P. We have never said that all P2P traffic is illegal, because not all of it is. But the weekly notifications we send to BT relate solely to music files which we know are being shared illegally.

Again, BPI assumes that BT can magically tell which content is infringing and which is not. Just recently, we pointed out that EMI — in the UK — was happily distributing infringing mixtapes from Lily Allen off of an EMI owned website. If someone is downloading such content, should BT stop them? How could it possibly know which content in real time is authorized and which is not? And, more importantly, why should that be BT’s responsibility? Just because the folks at the labels that make up BPI haven’t been able to adapt? If BPI believes that individuals are breaking the law, why is it not going after those individuals? Obviously, because it knows that it would be a public relations nightmare. But just because BPI has a PR issue, it doesn’t mean that BT should have to spend a ton of money trying to fix BPI members’ broken business models.

Since 2003, annual UK broadband revenues have increased from £0.6 billion to £2.7 billion (2008). Recorded music revenues have fallen every year in the same period, principally due to illegal filesharing. It is therefore not difficult to see that the growth of BT’s consumer broadband business has been assisted by the increase in illegal filesharing.

Wow. I mean… wow. Talk about a logical somersault. Seriously? First off, just because one industry’s revenue falls and another’s grows, it does not mean the two are causal. I mean, this is really, really basic stuff. Correlation, causation, blah blah blah. But, even then, the link is so tenuous as to be laughable. First, the claim that recorded music revenue is falling. Well… be careful. As we’ve been pointing out, PRS in the UK has admitted that the music industry is actually growing, not shrinking. Apparently, the folks at BPI don’t read the PRS economic reports. If they did, they’d know that the study found that the overall industry is growing, with a big shift in money going from recorded music to live music.

BPI, you’re blaming the wrong culprit! It ain’t the ISPs, it’s the live venues! And those bands playing live shows! Why aren’t you demanding that they cut it out! After all, wouldn’t it be the “socially responsible” thing for them to stop gigging so that people would go back to buying CDs?

And, of course, the whole claim that the decline in recorded music sales is “principally due to illegal filesharing” is also flat out, ridiculously, laughably wrong. Study after study has shown that file sharers tend to buy more. Isn’t it a lot more likely that the decline in recorded music revenues is due to a shift in the marketplace due to technology? That technology has taken away the monopoly on distribution that BPI members used to have. Whenever you lose a monopoly on distribution, it’s to be expected that you lose monopoly rents and your revenue goes down. That’s Econ 101 (or maybe 201, if we’re talking monopoly rents… depends on your econ prof).

Besides, we spend a lot of time here working with and talking to and about musicians who have embraced file sharing, and put in place smart business models to take advantage of it. And, you know what? They’re doing better than they did in the past. The problem isn’t “illegal filesharing.” It’s bad and obsolete business models. Those who are embracing file sharing in combination with a good business model are doing better than in the past. That rules out “file sharing” as the problem, and suggests the real problem is BPI’s resistance to smarter business models.

Other ISPs are recognising that it is not sustainable in the long-term for a high percentage of ISPs revenues to be based on the transmission of illegal data, and that in future they need to share in revenues from providing high quality entertainment services for their customers

This is again ridiculous. ISP revenues are not “based on the transmission of illegal data.” ISP revenues are based on the fact that pretty much everyone needs an internet connection these days just to function. It’s how people communicate, you know? Claiming that BT is making any more revenue because people file share is laughable. People are using the internet because it’s useful for all sorts of things. Hell, we keep hearing ISPs saying that they need to break net neutrality because all this file sharing is filling up their network and costing them too much in network upgrades. How can they be making so much money off of file sharing if it’s costing them so much?

Once again, this is typical entertainment industry drivel. They totally overestimate how much their own stuff is “worth” to the wider ecosystem, and then demand that everyone just pay up. Except… that’s not the way the world works. The world works by having smart people with smart business models figuring out ways to make people want to give you money, not by sitting back and demanding others just hand over money.

So, thanks for the emails, BPI, but at least work on making your statements a little more believable next time. And, as always, our comments are wide open for you to reply to and interact directly with people here.

Filed Under: economics, file sharing, isps, music, record labels, uk
Companies: bpi, bt