Digital piracy costing millions according to US Chamber of Commerce

I am writing today as a proud citizen of Digital Britain. We are increasingly dependent on the Internet for everything from political discourse to grocery shopping. Digital technology has advanced at a meteoric rate. Law and policy are slower to develop. The rules that govern the online community are shrouded in uncertainty. Its ephemeral quality has given rise to numerous questions. Copyright owners are amongst the loudest askers. How can copyright be enforced in the digital context? They entreat.

Naturally, they are worried for their revenues. And recent statistics have certainly given them cause for concern. The U.S. Chamber of Commerce have sponsored a new paper to look at the profligacy of digital piracy online. It transpires that it is really quite prolific. The brand-protection firm Mark Monitor have identified forty three websites as “digital piracy sites”. Whilst carrying out this new research, they have found that these sites generate 53 billion visits annually. Surprised? I’m not.

53 billion visits is hardly an insignificant figure, admittedly, but consider how people actually use such sites. They visit repeatedly to access and download digital content. Illegal downloading has become normalised. 95% of music downloads are now accessed unlawfully. Piracy is no longer the exclusive domain of computer experts and teenage boys. This practice is certainly not stigmatised in the way that copyright owners would wish.

Not only have the moral barriers been diminished, but the practical challenges have also been vastly reduced. It is not difficult to access copyrighted material. When a user has freely downloaded digital content once, there is little incentive to pay for such content in the future. As clichéd as it may be, one cannot ‘compete with free’. It is little wonder that piracy is rife, and it shows no sign of stopping.

The internet is an open resource, so it is not feasible to limit access in the way one can with tangible products. Ease of access and wide availability has given users a thirst for free content. The results of this paper make this obvious. The existence of sites such as Napster and the Pirate Bay demonstrates that a whole global industry has grown up around piracy.

This was one of the most politically volatile issues of 2010. The Digital Economy Act 2010 is a highly controversial piece of legislation. It was passed during the Labour government’s wash-up prior to the General Election. The scope of the Act is very broad. It covers several innocuous subjects, such as the regulation of television and radio services. However, the most heavily contested provisions relate to online infringement of copyright.

The Act has introduced a system whereby alleged copyright infringers would receive warning letters from their ISPs. This is similar to the practice adopted by the French government under so-called HADOPI law. Will these letters deter infringers from their piratical pursuits? This seems unlikely. Even where technical measures (such as digital rights management) are imposed, the dedicated infringer will quickly find a way to surmount such obstacles.

Technological progression has meant that the traditional copyright regime has become outmoded. This is a business model which is unsuited to contemporary reality. Artists have adopted strategies such as offering some content for free to entice new customers, and encourage sales of their work. There is wisdom in this approach.

Studies have found that users who download copyrighted material unlawfully actually spend more on music than their law-abiding counterparts. So piracy may not really be quite as damaging to the industry as copyright owners would have us believe.

This tactic goes part of the way to solving the problem of revenue loss. Piracy is a fact. Most content is downloaded illegally. This paper has once again highlighted the scale of the problem. The entertainment industry must respond to this impetus with practical solutions. Imposing draconian, but ultimately impotent, legal constraints is not the answer. A more fundamental strategic overhaul is required.

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