Don’t Stop The Music

By M H Ahssan

Recording industry studying alternative revenue models to survive.

According to the International Federation of Phonographic Industry (IFPI), a body representing the interests of the music industry, more people than ever like a good tune, but less can be persuaded to pay for it. In its latest report on digital music, IFPI estimates that 95 per cent of music downloaded over the internet is done illegally. Legal online music sales are also growing — now around 20 per cent of total sales, up from 15 per cent in 2007 — but this isn’t happening fast enough to halt an overall decline in sales. As a result, the recording industry is contemplating different ways of making money from online sales. One suggestion is that the industry moves to online and mobile services that allow listeners to download unlimited number of tracks for ‘free’. The idea is that users will be charged a fee, included in the monthly broadband access fee, by the internet service provider, who will then pass on that extra revenue to record labels.

This suggestion has merit. The industry’s premier body, the Recording Industry Association of America (RIAA) has been unsuccessful in its strategy of suing consumers it suspects of pirating music. Not only did it make them unpopular, it also failed to make a significant dent in online piracy. So, if reports are to be believed, the RIAA is going to stop suing downloaders. However, that doesn’t solve the problem of piracy. The RIAA has to examine innovative ways of getting people to pay for something they have become used to getting for free, not an easy thing to do.

Revenue sharing by internet service providers is merely one model that the industry is experimenting with to fight piracy, but it is the one with the most chance of succeeding. There is a growing view in the music industry that the most effective way of combating piracy is to make internet service providers liable for illegal file sharing and to prevail upon them to limit broadband speeds. This, however, would limit internet access for consumers and invest the ISPs with too much control over online traffic, which could be dangerous.

Other content creators, like Hollywood and the television industry, will be watching the music industry’s attempt to cope with piracy with interest. They have yet to find a satisfactory model where movies and television shows can be streamed or downloaded over the internet profitably. Disguising the cost to the consumer so that the content creators can be paid while users can download as much of their favourite music and television shows as they like, might be the best way to deal with piracy.