Advertisement
BBC BLOGS - dot.life

Facts about file-sharing

Rory Cellan-Jones | 12:50 UK time, Friday, 27 November 2009

Comments (52)

As the Digital Britain bill starts to make its way through Parliament, the row over its controversial measures against unlawful file-sharers is getting ever more heated.

Peter MandelsonSupporters in the music and movie industries are rejoicing that something is at last being done to protect artists whose property they say has been stolen, while critics of the bill say it represents a fundamental attack on the rights of internet users.

But what's missing from the whole debate is some data. Just how much unlawful file-sharing is going on in the UK and what effect is it having on the creative industries? It's hard to be sure really - the music industry often says that twenty unauthorised tracks are downloaded for every one that's paid for, but I'm not sure how that figure was worked out. The government, too, seems hazy, unable to say how it will know when file-sharing has been reduced by 70%, the target to be attained by the initial deterrence campaign before stronger measures are contemplated.

file sharingThen there are the assertions made about file-sharers' behaviour. Critics of a crackdown say they are the very people who spend more on legitimate downloads, and that they would stop if only there were enough well-priced alternatives on offer. The music industry says there is ample evidence that deterrents work, pointing to an apparent rise in sales of music in Sweden following the legal action against the Pirate Bay.

So in an attempt to shed a little more light on this issue, I asked two of the most vociferous lobby groups to answer five questions about file-sharing, supplying me with a little bit of evidence on each of them.

Geoff Taylor of the BPI, the music industry trade body, and Jim Killock of the Open Rights Group, which believes the Digital Economy bill is deeply illiberal, responded with alacrity. Here's how it went - and even if you violently disagree with what either side says, please try to critique their evidence rather than their characters in your replies.

(1) What evidence do we have of the extent of unlawful file-sharing in the UK?

Jim Killock, ORG: Not enough. Most of it comes from the recorded music industry. We also have evidence in a rapid decline in file sharing: Music Ally thinks it has reduced by 40% [110 Kb PDF] .
Geoff Taylor, BPI: Plenty. There are several pieces of substantial research showing that around 7 to 8 million people in the UK are file-sharing music alone. Let's look at two examples.
 
Harris Interactive conducted research among the UK general public aged 16-54 from February to March 2009, which gave a 23% incidence of music file-sharing using peer-to-peer networks in the UK population aged 16-54, or 8.3 million file-sharers based on ONS population data. This number omits people under 16 completely.
 
Additionally, Jupiter Research conducted consumer research on behalf of the BPI in August 2007, which predicted 6.7 million peer-to-peer file-sharers during 2008, and 7.3 million for 2009.

(2) What evidence is there of the effect that file-sharing has had on the UK music industry?

ORG: Whatever effect it has, we can assume that effect is reducing.
 
Times Labs226And the music industry has grown in the last ten years - it has not shrunk, as many would have you believe.
 
The shift has been towards digital and live music, and away from physical sales.
BPI: The observable link between the onset and growth of peer-to-peer and the decline of UK record sales is an obvious place to start. In 1999, UK trade deliveries were worth £1,133m, compared to £893.8m in 2008.
 
In terms of academic research - contrary to the claims made by critics - there is study after study which demonstrates the link between illegal P2P file-sharing and lost music sales. These include:
 
Jupiter ResearchJupiter Research (UK, 2009): The Analysis of the European Online Music Market Development and Assessment of Future Opportunities [179Kb PDF] - "The overall impact of file-sharing on music spending is negative."
 
Institute Center for Technology Freedom (USA, 2007): The True Cost of Sound Recording Piracy to the US Economy by Stephen Siwek - This study estimates the damage to the USA economy as a result of music piracy and evaluates the impact on jobs, earnings and lost tax revenues, concluding: "Piracy of recorded music costs the US sound recording industries billions of dollars in lost revenue and profits."
 
Jupiter Research (UK) - Music Industry Losses. The report concluded that online music piracy cost the UK music industry £1.6bn between 2001 and 2012; in 2007 alone, online music piracy resulted in £159.2m of foregone spend.
 
Norbert Michael (USA, 2006): The Impact of Digital File‐sharing on the Music Industry: An Empirical Analysis [207Kb PDF] - The study found that file‐sharing had a negative impact on music sales, suggesting that "file‐sharing may have reduced album sales (between 1999‐2003) by as much as 13% for some music consumers."
 
There is a small number of studies which purport to show a positive relationship between file-sharing and music sales, but these have been subsequently heavily criticised in peer review.

(3) Isn't it true that file-sharers also tend to be the people who spend more on music?

ORG: Absolutely. Every academic study has shown this, for instance the Institute for Information Law study in the Netherlands [1Mb PDF]. Most file-sharing is about discovery - finding new things, as people do with radio - which is why new streaming services have eaten into file-sharing.
BPI: It is of course true that many people who file-share buy music, but it is also true that many file-sharers prefer to free-load with little willingness to pay for music at all. The report from the International Federation of the Phonographic Industry, based on research from Jupiter Research and Forrester Research [179Kb PDF], succinctly sets out the case.
 
A recent Demos survey [3.51Mb Powerpoint] garnered plenty of headlines, but its flaws were not widely reported. Firstly, it grouped people who used search engines to discover music in with people who use P2P, but you can of course use search engines to discover music, then listen legally to streamed music for free or buy music.
 
The study simply illustrated the unsurprising fact that, as a group, file-sharers tend to be bigger consumers of recorded music than non-file-sharers - because most file-sharers are very interested in music while some non-file-sharers don't consume music at all. The net effect of illegal file-sharing in the UK and elsewhere has been to reduce legitimate sales. This is why spending on recorded music has fallen every year since illegal file-sharing began to become widespread.

(4) Doesn't the Swedish example show that when action is taken against unlawful file-sharing , there is a beneficial impact on legal music sales?

ORG: We'd need to see the whole figures to know what was happening, but legal music sales are growing everywhere, not just in Sweden. And the real result of the clampdown in Sweden has been the election of two Pirate Party MEPs with 7% of the population voting for them. Hardly a victory for the music industry.
BPI:It certainly looks that way, and there's similar news from South Korea, where the adoption of new anti-piracy laws has seen music sales rebound after years of decline.
 
In Sweden, music industry revenues rose 18% during the first nine months of this year, coinciding with the introduction of new laws in April to tackle illegal file-sharing. This isn't the whole story, though: there's also been a ruling on the Pirate Bay and Spotify has become very popular very quickly. But the increase in sales is very encouraging, and there's reason to be optimistic that revenues in Britain could follow a similar pattern if legislation is passed that steers people towards new legal services.

(5) Aren't there now plenty of legal alternatives for people who want to get hold of music online without resorting to file-sharing?

ORG: We can see this is what's happened, but we can also see that Spotify has closed its doors to new customers because the license payments they make are unreasonably high.
 
Online radio services like Spotify need to have licensing based on revenue share rather than per-play costs in order to make a profit.
 
Online licensing in general is still very restrictive with unreasonable and arbitrary conditions frequently imposed, including handing over of nearly 20% of their business in Spotify's case.
 
It would be well worth the Competition Commission taking a close look at the market abuse that is taking place and restricting trade.
BPI: There are more than 35 legal music services in the UK already. The a la carte download model popularised by iTunes has now been joined by many subscription and streaming services - such as Spotify and We7 - with vast catalogues and catering for all tastes and budgets. In the last few weeks alone, Sky Songs has launched, and retail giant Tesco has revamped its entertainment offering. There's more choice of music retailers online than you are likely to find on your local high street.
 
There is no longer any sensible justification for file-sharing illegally, since many services now allow free access to huge catalogues of music and feature playlist sharing and other social tools.
 
Sadly, these developments haven't made any significant difference to levels of illegal file- sharing. The growth of new music services will continue to be held back unless new legislation is passed, as it is difficult to justify developing new services when the market includes unauthorised services operating illegally to provide music entirely for free.

Wikipedia on the wane?

Rory Cellan-Jones | 14:11 UK time, Wednesday, 25 November 2009

Comments (46)

Will the online encyclopaedia that has become the first destination for millions of web users searching information end up withering away, as its worker bees lose interest in keeping it nourished? That's the question raised by a study of Wikipedia editors carried out by a Spanish academic for the Wall Street Journal. It shows that editors are giving up on Wikipedia far faster than new ones are joining, with a net loss of 49,000 editors in the first three months of 2009.

So why are so many of the people who used to compete fiercely to perfect entries on everything from astrophysics to Abba walking away from the project. One theory is that the whole project has simply lost its early innocence, and that's caused editors to drift away. It was incredibly easy in the early years to plunge in and write a new entry - or more likely edit an existing one. That allowed Wikipedia to grow very rapidly into an extremely broad-ranging source of information, and one that was mostly reliable, despite the carping of academics, rivals and many in the mainstream media.

But gradually the utopian idea of a worldwide community of unpaid enthusiasts creating an invaluable resource, making the world's information available freely to anyone with an internet connection, has had to confront a nasty reality - the web is an argumentative place where a few noisy and sometimes malicious folks can spoil things for everyone.

Rory Cellan-Jones's wikipedia pageRepeated vandalism of controversial entries - and here I must confess I once tinkered with my own entry to make a journalistic point - has led the Wikimedia Foundation gradually to introduce more and more rules about the way articles are edited. It's clear some early enthusiasts have been put off by the increasing bureaucracy surrounding the project. Just look at the comments on this issue which I've gathered this morning from some "Wikipedians":

"Can't be bothered dealing with the officious self-appointed ruling elite of Wikipedia"
"I find the bureaucracy of Wikipedia really offputting. Little things like their policy on phonetic transcription are suffocating!"
"i stopped editing Wiki when every edit seemed to be hit a wall. it's just become too hard work to stay within the rules."
"combination of idiots constantly changing and disagreeing and how everything you write being screened.."
"The Deletionists took our encyclopedia away."

Mind you, some also questioned the source of these statistics and how they'd been interpreted (a very Wikipedian response!) and others made the very good point that with so much of the world's knowledge already included in the online encyclopaedia there was little to inspire new editors.

This morning I spoke to Michael Peel, who chairs Wikimedia UK, and he admitted there was a problem with communicating the rules to new volunteers:

"One thing we're finding is that people are scared off because they get a standard message (when they try to edit an entry) which is not written as well as it could be."

He said the Wikimedia Foundation was in the middle of a big project to make the site more user-friendly for both readers and editors.

Michael, who is a postgraduate astronomy student and contributes to articles on that subject and on the history of Manchester, says there is still plenty of work to be done:

"It's nowhere near what it could be. In my opinion, it could be a lot bigger, a lot more reliable and a lot better referenced, but that kind of job doesn't appeal to the passer-by."

Even if it does become more difficult to get people interested in contributing to Wikipedia, there's no doubt that user numbers just keep on growing. Wikipedia itself reckons between 28% and 37% of the UK internet population are regular users, with similar figures across much of Europe, North America and Asia - though only 1% of Chinese surfers apparently use Wikipedia.

So this is a project that is suffering plenty of growing pains - but with a Wikipedia entry coming top of Google's search results for just about any topic you can imagine, the online encyclopaedia is certainly not on the wane.

Microsoft and Murdoch: Teaming up to bash Google?

Rory Cellan-Jones | 11:24 UK time, Monday, 23 November 2009

Comments (30)

There's a fascinating story in this morning's edition of the Financial Times, which could signal a big shift in the balance of power between parts of the web and other parts of the media. The piece says that Microsoft has been in talks with the media giant News Corporation over a plan which could see the firm behind papers from the Wall Street Journal to the Sun being paid to stop Google searching its news websites.

Rupert MurdochThe implication is that Microsoft's search engine Bing would be the place to go for news - and that Google would have to start paying if it wanted to retain that kind of content.

The FT's story comes a week or so after the Techcrunch UK blog reported that Microsoft had held talks with European publishers about what sounds like a similar plan to get them onside as part of a battle to make Bing a more attractive and lucrative place than Google for their content.

So is there any truth in either report? Well, a couple of days after the Techcrunch post, I was due to interview a senior executive from Bing, and Microsoft called to ask whether I would be asking about that story. When I said yes I would, they said he could not talk about it - and we therefore pulled out of the interview. Make of that what you will.

All of this comes against the background of Rupert Murdoch's campaign to start getting people to pay for the online content of his newspapers, a move fleshed out last week in a speech by the editor of the Times, James Harding.

But Mr Murdoch has also made it clear that Google - and indeed the BBC - are two major obstacles to this campaign, because they are both major ways to get free news. Meanwhile, Microsoft is anxious to do two things - to give Bing a big push, and to get in on Google's profit margins.

So it's understandable that News Corp and Microsoft might want to unite against the idea that news content on the internet should be free. But there are also plenty of reasons why Microsoft in particular would want to keep these negotiations as quiet as possible.

After all, if internet users get it into their heads that Bing's results are not as unbiased as Google's appear to be, because of an alliance with news providers, then they may well be less keen to switch to Microsoft's search engine.

Ah, but what if Bing were the only place to get quality news because such content had been shut out of Google? Well, that would be an interesting test of just how important news is to the mass of internet users. For we professional journalists, that could be a worrying moment - one where we find out the true market value of our content.

Explore the BBC

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.