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UNLIMITED | CMU | BPI say ISPs could make millions by becoming digital music providers

BPI say ISPs could make millions by becoming digital music providers

by cmumusicnews 9. March 2010 12:54

Lobbying groups on both sides of the three-strikes debate published research yesterday, as chatter on the Digital Economy Bill reached its final stages in the House Of Lords and preparations to take the slightly controversial proposed legislation to the House Of Commons began.

The copyright section of this Bill, of course, will introduce the three-strikes procedure for targeting prolific file-sharers, like the really evil ones, who probably also bully teddy bears and pull the legs of spiders. The new laws would allow a government agency - probably OfCom - to suspend those file-sharers' internet access, seize any cuddly toys in their possession and put an exclusion zone between them and all arthropods.

The first bit of research came from one of the groups who support three-strikes, record label trade body the BPI. Their researchers Ovum reckon that if the six biggest internet service providers were to launch internet packages that had a licensed digital music service bundled in this year, the extra revenue they could generate on an annual basis by 2013 would be £103 million, assuming there was a "medium adoption scenario", which is my favourite sort of scenario.

I'm not quite sure how they figured that out, but obviously the point is that the ISPs, who oppose three-strikes, and who complain about having to contribute to the cost of running any new anti-piracy systems, have something to directly gain from the legit digital music market expanding which, the BPI would argue, is only possible if the provisions in the DEB become law.

Commenting on the report, BPI top man Geoff Taylor told CMU: "It's increasingly clear that it isn't smart [for an ISP to just] be a 'dumb pipe'. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs. UK music companies want to innovate and develop exciting new digital offerings. ISPs such as Virgin Media have recognised that legal digital music services offer a more exciting and profitable future than continued widespread piracy".

Of course, the idea that ISPs help content owners police piracy in return for the two parties collaborating on new services, bundled into ISP packages, and on which the net firms can earn, has been around for several years now, and was the basis for voluntary talks between the two industries before three-strikes legislation was on the agenda. Virgin Media have been most proactive in pursuing this option, though their aim to launch an allyoucaneat MP3 service as part of their ISP package never got off the ground because all the majors except Universal Music weren't too keen on the proposition.

The ISPs would probably argue that they are more than willing to form content partnerships with the music industry, but that the financial terms previously offered aren't acceptable, especially when bundled in with piracy policing demands. And it has to be said, any digital music service set up by an ISP would probably be awful.

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