Thoughts from the Shelf

Today it was announced that Internet Service Providers have finally agreed plans with the music industry that will aim to tackle piracy online.

The Shelf first discussed the proposed plans back in February in an article titled ‘Government Turns Up Heat On ISP’s and Online Piracy’ which discussed how the government was steadily growing impatient with ISP and the music industries failure to come to such an agreement, threatening that if both parties failed to come to agreement legislation would be introduced to curb online Music Piracy

Negotiated by the government, the deal has seen BT, Virgin, Orange, Tiscali, BSkyB and Carphone Warehouse all sign up and will mean hundreds of thousands of letters could now be sent to users suspected of illegally sharing music online.

The music industry is pushing for measures that would see users who ignore written warning having their connections disabled; however ISP’s are unwilling to enforce such measures.

The plan is “a first step, and a very big step, in what we all acknowledge is going to be quite a long process” said Feargal Sharkey, chief executive of British Music Rights.

In contrast to the US which has seen thousands of lawsuits launched against alleged file sharers, over the last couple of years the BPI has been focused on educational efforts to prevent music piracy online, with limited legal action being taken against copyright infringers.

As part of the deal, drawn up by the Department for Business, Enterprise & Regulatory Reform (BERR), ISP will be expected to ensure customers realise that file sharing online is illegal, and take measures to tackle repeated infringements.

The government is still considering plans to give ISPs a legal requirement to tackle copyright infringers.

Recently BT and Virgin have been reported to have been sending letters to customers on behalf of the BPI, a controversial move that many say puts the BPI in the role of net police, a role they don’t belong in.

It is currently he BPI who works out who it thinks is illegally file sharing by trawling file sharing websites and tracing back the IP addresses of users.

It has been announced that internet search giant Google has been ordered by a US court to turn over data on users of its social video site YouTube. The ruling comes as part of Google’s legal battle with Viacom, over allegations that the search giant knowing permitted content to be uploaded across the site that infringed on copyright laws.

The data that will be handed across to Viacom will contain the log in ID’s of users, IP addresses and details of any video clips ever watched.

Digital rights group the Electronic Frontier Foundation called the ruling a “set-back to privacy rights”, whilst others speculated that the ruling was potentially unlawful being that the data contained personally identifiable data.

The Case Details
The billion dollar legal case between Viacom and Google is the biggest case of its kind in history, but is only the latest instance of a company targeting user generated content sites, stating that they are responsible for the content hosted on the site, and subsequent infringement of copyright laws.

Google had consistently denied the allegations that YouTube infringes copyright, saying that it takes down protected videos from the site when asked by content owners, as required by United States law.

Recently EMI also filed a suit against VideoEgg stating similar copyright infringement practices, making the case of Google vs Viacom a landmark ruling, and one that could well have a bearing on how similar disputes are settled in the future.

As part of the legal action Viacom brought against Google, it requested much more than the awarded data on YouTube account holders. For that reason the provision of user data, estimated to total over 12 terabytes, is very much a glass half full/ half empty scenario, with Google scoring a key legal victory keeping all of its trade secrets in tact and Viacom being awarded access to user data.

From a business perspective Google has certainly come out ahead, with Viacom denied access to proprietary code that controls the search facility of both YouTube and Google.com. Viacom had requested access to the code stating it was the only way to truly see if and how Google encourages copyright infringement.

The court denied Viacom’s request for source code stating that the “program’s source code is the product of approximately 50,000 man hours of engineering time and millions of dollars of research and development costs, and maintaining its confidentiality is essential to prevent others from creating competing programs without any equivalent investment”

On the flip side users are the clear losers, with personally identifiable data being handed across to Viacom. This could however have been much worse with access being denied to private video content of YouTube users. This would have entitled Viacom access to videos that can only be viewed by authorised users, video uploaded for personal use, however it was deemed this would be a privacy violation under the Electronic Communications Privacy Act.

The courts did however award Viacom user data whilst forcing them to respect it, threatening to hold them in contempt of court if it uses that data for anything other than specifically proving the prevalence of piracy on YouTube.

As part of the legal action Viacom were also denied their request for Google to turn over databases with information about each video available on YouTube, including titles, keywords, comments and whether videos had been flagged or not. With this data Viacom wanted to demonstrate that defendants have an ability to control infringements, however their request was denied.

Viacom was also denied Google’s advertising and video content schemas with Google arguing their confidentiality. Viacom had intended to demonstrate how revenues were directly related to infringing content.

On reflection, it therefore seems that Google did in fact score a victory over Viacom, keeping propriety code and advertising schemas in tact, in a move that would certainly have dented their competitive edge. Users too can rest in the knowledge that data on private videos, deleted videos and clip data of each video uploaded to YouTube will remain confidential, and the user data that is to be handed over is bound by legal conditions.

After the ruling Google made a statement saying Viacom was “threatening the way millions of people legitimately exchange information, news, entertainment and political and artistic expression.”

After news broke last week that Play.com had launched PlayDigital, offering DRM free music to its customers in direct competition with iTunes, Warner has now increased pressure on Apple by striking a deal to sell its own catalogue DRM free to customers of 7digital.

7digital is one of the biggest online music retailers and has now started selling more than 150 of the most popular albums from Warner, £3 cheaper than iTunes offers the same music for. The deal will allow customers who do not own an iPod and don’t use iTunes to get access to Warner’s offerings.

The DRM protection Apple uses on tracks sold through its iTUnes service has been a frustration for many music lovers for a long time, as in essence it is meant to prevent customers transferring music to portable music devices that are not iPods.

By offering tracks in a DRM free format Warner’s albums are available to customers of 7digital in Britain, Spain, Ireland, France and Germany and playable on almost all digital music players. Material owned by Warner includes that from artists such as Madonna and the Red Hot Chili Peppers.

With the deal 7 Digital becomes the first major European download sevice offering Warner Music and EMI tracks in the MP3 file format. PlayDigital itself is yet to strike a deal to sell the Warner music catalogue. 7digital are also said to be in talks with Sony BMG and Universal to sell DRM titles from the catalogues of these big industry players.

“The addition of Warner Music’s MP3 catalogue means that over 80 per cent of 7digital.com’s 3.5 million track catalogue is now DRM-free.” - Ben Drury, 7digital’s CEO

7digital hope to make their entire catalogue DRM free by 2008.

This deal is just one example of how, due to a decline in CD sales and increased illegal music downloads, the record industry is being forced to find new ways to appeal to music fans.

“Hopefully this will lead to a price war, as I think Apple have had things their own way for too long and are simply too expensive.” - Tim Wiggins of Stuff Magazine

Launching an online music download store has been a popular online money maker with the rise of portable mp3 players, and with that, online retailer Pay.com is the latest company to announce that it has launched such a service, but this time with a difference – its downloads are DRM free.

Providing music tracks without digital right management copy protection will allow customers of PlayDigital to download tracks and albums onto most mp3 devices. Tracks with DRM are restricted to what players that they can be played on, and can even be restricted to a set amount of plays.

Amazon has released a similar service in the US offering DRM free music to its customers. Amazon did have plans to launch in the UK, but PlayDigital is now the first DRM free music download service to enter the UK market.

With the launch of PlayDigital, Jersey based Play.com is challenging the dominance of Apples iTunes service in the UK with Apple selling tracks with DRM included. Tracks bought without DRM from PlayDigital will not only be cheaper but can be played on more mp3 devices including Apple iPods.

The DRM free songs that are to be offered initially are made up from records from the catalogues of EMI, with expansion planned throughout the services first six months pending major deals with other record labels enabling PlayDigital to sell their DRM free music tracks.

Top 100 tracks will be available for 65p as opposed to 79p on iTunes, with albums available from £4.95.

As regular readers of The Shelf will know, we are firm supporters of the Playstaion 3 over the Xbox and Blu-ray over HD DVD for a variety of reasons, of which Sony sponsorship is not one of them, having access to the latest gadgets before they hit the market would have its benefits.

However, recent rumours have started to concern us here, and although they are unfounded according to Sony there has been increasing talk of the PS3 manufacturer taking steps to cut down on the second hand games trade that has been o popular retail model for high street stores such as game.

The plans that have led to an explosion of opinion in forums, blogs and journals online include the insertion of code on game discs that binds it to the machine it is first played on, thus eradicating the second hand sales market overnight.

“The technology would allow an authentication code to be read and then rendered unreadable; making the software unplayable on any machine but the one which first read it.”

The supporting argument here is that second hand game revenue is not shared with the manufacturer of the original game. Although they have clearly already been paid once for the game title, the argument is that often resold games use server resources in the form of tech support. A significant number of people calling up saying “I don’t have my serial number” are quite likely to be from second hand sales and this cost manufactures money.

I personally believe that this is a bit far fetched, when you pay near £50 for a title are you not paying for technical support for the games life – whether it was you who paid that is by the by – the fee for this support has been received.

The other point is that second hand game stores will often promote second hand titles over new ones, and as companies do receive revenue from second hand titles they are loosing revenue. As such manufactures would like to see an official refurbished games policy where both the shop and game manufacturer gets paid.

I see a problem in this. Games manufactures have already been paid once for a title and as such the most successful games are those that sell the greatest volume, and in reality this is a fair assessment. Would implementing the aforementioned policy simply encourage game making to aggressively advertise mediocre games?

After initial sales disappointment in the product would be encouraged so that the game title is sold onto the next person, with the manufactures taking a slice of the re-sale profit. We would the be left with manufactures measuring the success of games by the amount the game is circulated second hand, not by initial sales encouraging lower quality games to be released.

From a user perspective I think this would severely restrict the offering of any console implementing this technology, not to mention an incredibly bad business idea. As a result

1. Users could not sell a game after you’ve played it
2. Users could not buy or play any second-hand games

So what happens when I’ve bought round to a mate’s house to play, even if it’s to encourage him to get a copy so we can play online? I can’t bottom line.

Secondly if you invest in a bad game you are stuck with it, which would mean make people more reluctant to buy game titles.

Thirdly all games that a consumer has invested in throughout the years (for instance PS1 and PS2 console games) would be unplayable on the new PS3 with this technology.

Lastly I don’t know what would happen if like many first generation consoles they needed replacing under the manufacturers warranty. The new console would make the games bought to date redundant, meaning a customer has a lot of expensive drink coasters on their hands.

A quote from Sony has said

“I would like to clarify that this is false speculation and that PlayStation 3 software will not be copy protected to a single machine but will be playable on any PlayStation 3 console. “

But there is often no smoke without fire. Could it be such plans were in the pipeline only to be shelved because of the consumer reaction? Either that or a very clever marketing trick from Microsoft.

It seems in the next step in combating digital piracy the government has opted to step in, as news broke this week that they are considering file sharing legislation in an attempt to push internet service providers to take a more active role in the crack down of illegal file sharers.

The move is directed towards ISPs and industries who are yet to come together to fight the problem. It is thought the preferred solutions for all are voluntary partnerships between creative industries and ISPs so that regulation is not required, but this news seems to says that unless these companies come together and put such schemes in place then the government is ready to intervene.

“”For the most part I think there are going to be successful voluntary schemes between the creative industries and ISPs. Our preferred position is that we shouldn’t have to regulate,” said Lord Triesman

The argument of ISPs is that they cannot feasibly track every packet that is sent across there networks, and although a route by which illegal file sharing took place, does not condone it in any way, shape or form. Searching single data packets that are sent across networks would also break data protection laws in place to protect individuals.

The arguments currently hindering the ideal voluntary agreements seem to centre around the two issues of intellectual property rights and privacy of the user, and the stalling block is trying to find a balance between the two. Privacy advocates will object to any legislation, but it also seems true that illegal file-sharing affects the income of many musicians.

Either way it seems the pressure is increasing in regard to illegal file sharing within the UK. As previously posted about on The Shelf, the US has seen several case studies demonstrating the growing pressure to protect copyrighted material, and in such cases end user pirates have been targeted, but with this announcement came assurances that the government has no interest in hounding young teenagers who share music.

The legislation is more aimed towards “software pirates that sell bootleg copies of programs, games, movies and music, for profit”, and users of P2P programmes who download songs to listen to without paying are not being directly targeted.

This threat of legislation comes at a time when the music industry is already trying new innovative ways of combating piracy. Recently Radiohead released their latest album “In Rainbows” digitally online, with users only paying what they wanted. However even though fans didn’t have to pay anything to get the album legally it was still reportedly pirated 500,000 times.

It seems that in some instances online file sharing is as much a cultural activity as it is about saving money and making profit of bootleg copies of material with copyright in place.