With the Stop Online Piracy Act on hold in the U.S. Congress, one might expect the international music industry to lay low for a bit. Think again.
The International Federation of the Phonographic Industry--the overseas equivalent of the Recording Industry Association of America--released this week a far-reaching report on the state of the digital music industry. In the report (PDF), the IFPI sounds off on piracy, asserting that 28 percent of all Internet users access "unauthorized services on a monthly basis" to download content.
"You cannot play down the significance of piracy," Universal Music Global Digital Business President Rob Wells said in the IFPI report. "Spain, which should be the powerhouse of repertoire for Latin America and the U.S. Latin market, is effectively a dead market. Yet in South Korea, where we have new anti-piracy laws, the market is surging and now spreading its repertoire far beyond its own borders."
Given that, it's no surprise that the music industry supported the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) over the last several months. The bills were designed to stop online piracy by giving U.S. law enforcement officials the ability to work with Internet service providers and take down allegedly infringing Web sites. Critics, however, said that the bills went too far and would violate consumer rights. There was also concern that the bills would harm legitimate sites.
After major online companies, including Google and Wikipedia, held simultaneous protests last week, both bills were set aside--for now, at least.
"It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products," U.S. Rep. Lamar Smith (R-Texas) said in a statement last week, adding that he and his colleagues take critics' concerns "seriously."
The IFPI's new report offers its own suggestions for fighting online piracy:
- First, IFPI believes copyright holders and ISPs should work together to develop a "graduated response." The process would include copyright holders monitoring IP addresses that are uploading content to peer-to-peer (P2P) sites, and then contacting ISPs to inform them that they must contact the allegedly infringing consumer to warn them that they should use legal services. If consumers continue using illegal services, IFPI says, ISPs should explain to them that they could face "penalty or sanction."
- Next, IFPI argues that copyright holders should work with ISPs to block "rogue Web sites." The global group says that blocking illegal P2P sites decreases piracy and increases music sales. In New Zealand, which implemented an anti-piracy bill in September that allowed ISPs to block allegedly infringing sites, digital sales rose 35 percent just two months after the bill became law. IFPI would like to see the same policies come to the U.S. and elsewhere.
- But it's not just ISPs. IFPI believes search engines, including Bing and Google, should be putting legitimate services at the top of search results, while pushing allegedly infringing pages down. The organization found that when it typed artist Adele's name and "mp3" into Google, 77 percent of the results pointed to allegedly infringing sites. When it did the same with Rihanna music, 86 percent of Google search results pointed to allegedly infringing pages.
- In an attempt to cut off funding to allegedly infringing sites, IFPI asserts companies that deliver ads and provide payment solutions, such as PayPal and Visa, should get into the mix by voluntarily stopping to provide payment services to illegal Web sites.
- Education is also a crucial component in IFPI's report. The organization says that by promoting legitimate services and improving understanding of copyright law, it can go a long way in reducing the number of people who want to download illegal files.
- Finally, IFPI isn't above filing lawsuits. The organization says that in the U.S., especially, litigation played a crucial role "in the U.S. recovery." Between the fourth quarter of 2007 and the fourth quarter of 2010, the organization says, P2P service use in the U.S. fell from 16 percent of the country's Internet users to 9 percent. The average number of illegally downloaded tracks fell from 35 per person to 18 per person in the same periods.
The music industry has always been outspoken on piracy. And even as its calls for change grow louder, it's seeing more value in digital music than ever. In fact, IFPI says the industry generated $5.2 billion in digital music revenue last year, jumping 8 percent compared with 2010. In the U.S. alone, digital album sales growth was up 19 percent last year.