Music Industry Going Back To Basics – Trying To Bribe Their Way Through (UPDATED 2)

money stacks music Music Industry Going Back To Basics   Trying To Bribe Their Way Through (UPDATED 2)With nearly every underhanded, under the table or slimy move of the music industry (ACTA or Digital Britain anyone?) almost instantly posted on blogs and tech sites around the world, and with ISPs refusing to be the industries lap dogs the industry has gone back to basics… hoping to bribe their way into the ISPs hearts since threats have not gotten them very far.

A few points to ponder:

“Is There A Commercial Argument For ISP Music Services” commissioned by the BPI on behalf of Universal Music

Do NOT even for a second miss who the report was commissioned by.
I guess the next article we should wait for is why foxes make the best guards for hen houses – written by foxes on a report commissioned by wolves…and foxes.

Next we come by numbers posted by the BPI/IFPI and their “studies”, we all know exactly how accurate the content industries numbers tend to be…

TF again has the skinny:

A new study commissioned on behalf of Universal Music reports that if ISPs got involved in the digital music market, they could make millions in the years to come. But one can’t help wondering that this is less about the music biz helping ISPs to make more profit, but more about giving them an incentive to do something about piracy.

Around seven years ago when pressure was first starting to form against the then-fledgling BitTorrent scene, attitudes were pretty much as they are now. “They’ll never stop it, we’ll always find a way,” cried the masses grabbing music, movies and software for free, and few disagreed.

Of course, there will always be a way to acquire media free of charge, the last few decades have shown us that. But the media industries are now having to find new ways to defend their corner. There has always been talk of Big Movies or Big Music ‘owning’ politicians and lawmakers, but while this is true to the extent that their immense lobbying power allows, there has also been another more serious threat on the back-burner.

If the RIAA or MPAA owned – literally – all the major ISPs, they could affect the piracy landscape quicker than ever before. A simple rewrite or tweaking of subscriber’s Terms of Service would ensure that anyone proven to be a pirate could be ejected from the Internet in an instant, no laws needed. While this is unfeasible right now, there are easier ways of encouraging the same, like business partnerships and promises of profit.

According to a new study titled “Is There A Commercial Argument For ISP Music Services” commissioned by the BPI on behalf of Universal Music and carried out by industry analyst Ovum, if the UK’s most prominent ISPs all more or less immediately launched subscriber packages that included bundled music, they could generate new revenues of £103 million by 2013.

The BPI say this figure is based on a ‘medium adoption scenario’ and is an amount equal to 41% of the total 2009 digital music market. In an ‘accelerated adoption scenario’ the study says that the revenues could nearly double to £203m.

Aside from the profitability implied by these revenues, the report seems keen to offer other incentives to the major ISPs – Virgin Media, Sky, BT, O2, Orange and TalkTalk – to get involved in the music business. The study suggests that the inclusion of a music element to bundles would reduce subscriber ‘churn’ – the rate at which customers cancel their contracts. The example given is that an ISP with 3.5m customers could save £20m if the bundling of music cut churn by 10%, although there is no information to show that it actually would.

While suggesting good business is to be had in getting a little involved in the music business, the BPI is keen to point out that for ISPs, the more involved they get, the more they can make.

“The revenue prospects for bundled ISP music services would be substantially increased if services were offered to consumers in tandem with meaningful action to tackle illegal music downloading,” say the BPI.

We approached TalkTalk, an ISP referred to in the study, for a comment.

“TalkTalk thanks the BPI for its strategic business advice. Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalise its biggest customers,” a spokesperson told TorrentFreak.

Clearly TalkTalk doesn’t want to do the music industry’s dirty work for them, but if other ISPs got heavily involved in the music distribution business it might be considered natural for them to try and protect their revenues. That said, the leap from simple common carrier to having a vested interest could complicate their position.

Nevertheless, another issue the report highlights is that heavy competition is driving down the price of broadband services while consumer desire for bandwidth continues to increase. In any business working in plain commodities, the desire to bring in more profitable “added-value” products is strong.

“It’s increasingly clear that it isn’t smart to be a ‘dumb pipe’. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs,” said BPI Chief Executive, Geoff Taylor.

So let’s imagine that the ISPs want to get involved in this market, offering bundled music for an extra £6.49 (the price level suggested in the report) – what would be so wrong with that? It’s pretty affordable after all, so why not give it a chance?

“With the right service platform, user experience and merchandising strategy, ISPs have an opportunity to reach a green-field digital music market that mainstream download-to-own services such as iTunes do not reach today,” explains report co-author and Ovum’s principal analyst, Adrian Drury.

So these suggested services aren’t of the “fill up your iPod” type, but of the “can only be used sitting-at-your-computer streaming services with limited download allocation” type. Surprised? Us neither.

Trying to convert those currently using file-sharing services over to paid models is already a big challenge. Trying to switch them to an inferior product whilst being hounded by their ISP on behalf of the music industry if they fail is a different matter altogether, and something TalkTalk refuses to be drawn into.

“Perhaps there is a goldmine for..

Read the rest of the article as well as commentary on Torrent Freak.

Anything that comes from the mouths of the BPI or IFPI must be regarded as the deadliest venom and analyzed as such, it would be easier and much wiser to take the devil on his word than to take the garbage these lowlife scumbags people give you at face value.
For instance as pointed out by one of the commentators on TF:

Notice in this article there is a very careful step-around about what this will cost the subscriber of the net service. Not nary a peep about the associated costs that the customer will bare.

The IPSs are not going to police the net for the entertainment industry for free. It costs labor, programs which are not free, and time to tend to those that will have to be found and then issued all the proper steps.

The entertainment industry wants this for free.

Indeed.

Related article on TD

Record Labels Put Out Misleading Study Trying To Get ISPs To Setup Broken Music Streaming Services

The record labels have been trying out all sorts of schemes for a while now to try to get ISPs over to its side in propping up their old business models, and the latest is pretty laughable. BPI at the behest of Universal Music, commissioned a study which suggests that ISPs can make a lot of money by offering music services to their users. No doubt. But that leaves out some rather pertinent details. For example: many ISPs have very much wanted to offer such music services, but have been blocked by the likes of (uh oh…) Universal Music and BPI. Funny how that works.

The problem, of course, is that the ISPs want to offer music services that people would actually use, and the record labels want to handicap the services to the point at which they’re completely lame. So there’s a bit of a stalemate there.

But the bigger issue is (reading between the lines here) what the record labels are really saying to ISPs here is: break net neutrality. That’s because they’re not talking about just any music service. After all, there are lots of music services out there that people can sign up for no matter who their ISP is. But what the labels seems to be suggesting here is that ISPs specify one special music service that locks in customers. That’s why the report highlights that a music service can “reduce churn.” Of course, the only way it does that is if it’s locked to that single ISP — and if your music is limited to you only as long as you’re with that ISP. In other words: locking it down so that it’s lame.

As if to make the point even stronger, though, BPI blatantly tells ISPs to break neutrality:

“It’s increasingly clear that it isn’t smart to be a ‘dumb pipe’. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs,” said BPI Chief Executive, Geoff Taylor.

Being a “dumb pipe” of course is a well-known code-word in the internet world for a neutral network. So, really what the labels seem to be..

Read the rest of the article at TD

Update 2: related article on ZP

British Phonographic Industry-funded study finds that bundled digital music services could earn ISPs £203 million ($303.9m USD) by 2013.

The British Phonographic Industry (BPI) is once again trying to lure in UK ISPs to help it fight illegal file-sharing on their networks, this time by releasing the results of a study it funded that found ISPs there could earn as much as £203 million ($303.9m USD) by 2013 if they launched a bundled digital music services for their subscribers.

It also said the offering could help ISPs reduce the cost of “subscriber churn,” that a simple 10% reduction could help a big ISP with around 3.5m customers would generate indirect value of more than £20m per year ($30m USD).

“It’s increasingly clear that it isn’t smart to be a ‘dumb pipe,’” says BPI Chief Executive Geoff Taylor. “This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs. UK music companies want to innovate and develop exciting new digital offerings. ISPs such as Virgin Media have recognized that legal digital music services offer a more exciting and profitable future than continued widespread piracy.”

It’s ironic that it would cite Virgin Media as an ISP willing to offer digital music services considering the ISP spent years and a staggering eight figure sum developing “Virgin Music Unlimited” only to see it fall apart thanks to last minute by major record labels. Virgin Media later came to an agreement with Universal Music last June, but the service, promised to appear towards the end of last year, is still nowhere to be found, so it should hardly be held up as an example by the BPI.

Further damaging the credibility of their statements is the fact that the BPI tries to suggest that ISPs could make even more from bundled digital music services if only they were “offered to consumers in tandem with meaningful action to tackle illegal music downloading. ”

In other words, if they get on board with the BPI’s proposals to fight illegal file-sharing ISPs could make a lot of money.

In response to the study UK ISP TalkTalk, which claims to be the country’s largest broadband provider with over 4.25 million customers, sarcastically thanks the BPI for its “strategic business advice,” but says the £203 million ($303.9m USD) figure glosses over the fact that it would have to criminalize the behaviors of many of its customers in an ultimately “expensive” and “futile” pursuit.

“Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalize its biggest customers. As it happens TalkTalk does offer a legal download service (emusic), as do other ISPs,” it said in a statement. “Perhaps there is a goldmine for ISPs in legal downloads but that will not alter the fact that the copyright protection proposals being proposed threaten human rights. They will penalize innocent broadband customers. They are expensive, unwieldy and utterly futile.”

It’s silly that the…

Read the rest of the article on Zeropaid

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