Music industry to carry cost of catching pirates

The British government has said on Tuesday that rights holders in the music, TV and film industries will have to bear 75% of the expense of notifying and pursuing illegal downloaders — estimated to be as much as £14-million a year.

Internet service providers will foot the remaining 25% of the bill to notify and pursue those identified as illegal downloaders.

Rights holders will also have to continue to pay millions to initially identify illegal downloaders under the government’s plan to deal with internet piracy. It had been hoped that ISPs would be forced to share some of the initial identification costs.

The cost-sharing mechanism will be introduced in the first half of 2011. Ofcom has been given three more months to complete the Online Copyright Infringement Initial Obligations Code that will govern the notifications and cost process.

Several reports have been published with estimates of the annual cost of implementing the government’s proposed filesharing notification system — with figures ranging from £8,5-million to £13,8-million annually. This excludes the millions that rights holders currently spend on identifying illegal downloaders. The government and Ofcom have not provided figures yet.

To date, rights holders have footed the bill for detection, which it is thought runs into the millions of pounds per year, and the industry hoped sharing the costs with ISPs would allow significantly more investment in pursuing pirates.

‘Business as usual’
However, the government’s decision, based on a consultation on the cost-sharing proposal, said that the argument to split detection costs had been rejected as a “business as usual” bill for copyright holders.

“This argument was rejected as the initial proposal to share costs 75/25 was made in the full knowledge that copyright owners did have these separate costs to bear,” said the government. “At the level of the individual copyright owner the level of detection activity [and any legal action] is a matter for them. It was considered these were largely ‘business as usual’ costs that copyright owners would face as part of protecting their own copyright material.”

The government also said that after giving “serious consideration” it has decided not to charge consumers fees to appeal a notification that they have been illegally downloading.

“As a free system risks the possibility of large numbers of unnecessary appeals, the government will monitor the situation closely, and reserves the right to introduce a small fee at a later stage,” the government added.

Ed Vaizey, minister for communications, added: “We expect the measures will benefit our creative economy by some £200-million per year and as rights holders are the main beneficiaries of the system, we believe our decision on costs is proportionate to everyone involved.”

Unsurprisingly, rights holders argued that they have been hard done by.

“We continue to believe that ISPs should bear a greater proportion of the costs of communicating with their customers about illegal peer-to-peer use on their networks,” said a spokesman for the British Recorded Music Industry (BPI), which represents the UK’s music companies.

“We will work closely with the government and Ofcom to ensure that the costs framework overall is workable and affordable, in particular for small labels, and that the Code can be swiftly implemented.”

However, consumer group Consumer Focus argued that levying the 25% charge on ISPs could lead to tens of thousands of consumers being “priced out of broadband” as fees will have to pass on to subscribers.

“Consumers should not be picking up the tab for the enforcement of copyright laws that will benefit the music industry to the tune of millions,” said Robert Hammond, head of post and digital communications at Consumer Focus. “The previous government admitted any extra cost on ISPs may push up the cost of broadband, making it unaffordable for thousands of vulnerable consumers who need internet access to get vital services and cheaper deals.” –

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