The Pirates Will Always Win, Says UK ISP

TheEvilOverlord writes "The head of UK ISP TalkTalk, Charles Dunstone, has made the comment ahead of the communications minister's Digital Britain report that illegal downloading cannot be stopped. He said 'If you try speed humps or disconnections for peer-to-peer, people will simply either disguise their traffic or share the content another way. It is a game of Tom and Jerry and you will never catch the mouse. The mouse always wins in this battle and we need to be careful that politicians do not get talked into putting legislation in place that, in the end, ends up looking stupid.' Instead he advocates allowing users 'to get content easily and cheaply.'"

Comments

They hit the nail on the head

[Simon (S2)]

It is really refreshing to see someone, sometimes, who understands the situation and puts it down this clear in an unbiased manner.

we need to be careful that politicians do not get talked into putting legislation in place that, in the end, ends up looking stupid.

or even worse, introduces new problems without solving the intended ones.

Re:They hit the nail on the head

[A coward on a mouse]

Nuts to this argument. The packaging, extras, quality, and convenience that are offered as part of non-pirated media will keep the honest artists and publishers going strong.

The music industry as it exists today is horrifically ineffecient and has had to settle price-fixing litigation as a result. Even after this wake-up call, they refuse to lower their prices signficantly. Do you honestly believe that it costs more to produce a 45 minute CD than it does to produce a 90 minute DVD?

Finding decent quality rips and downloading them takes time and effort. A lot of people would rather not go through the hassle and instead just buy the product from a legitimate retailer if the prices weren't artificially twice as high as they ought to be. This is not a case of people not wanting professionally produced works or of people not being willing to buy them for a fair price. It is a case of the media industry refusing to sell things for a fair price.

When CDs came out, they were fifty to a hundred percent more expensive than vinyl, but we were all told that the prices would come down because CDs are cheaper to make than vinyl or cassettes. Guess what - that didn't happen. Instead, the music industry just decided to charge as much as they wanted to charge and dare us to find a way around them. We found a way around them, and now they're trying to lobby and sue the entire world into submission. This guy is not the first one to tell them there's no way it works and that they'd better just start making the adjustment now to a less-lavish lifestyle now that large parts of the contribution they used to make to music production and distribution are no longer needed.

Re:They hit the nail on the head

[arkhan_jg]

The reason CD prices and DVD prices are what they has virtually nothing to do with the cost of production. It's because they lie on what the companies believe to be the optimum point on the price/demand curve - i.e. the maximum they can get away with. This is the result of monpoly distribution - if you want a legitimate copy of a particular artist on a major label, or a particular film, you go to their media representative and pay their price, or you don't buy it at all.

If you look at the price breakdown of either media, the largest slices of the pie go to the retailer, the label, and the taxman, generally in that order. The artists get a very small percentage. Where you see price drops, thats due to competition between the retailers (i.e. supermarkets) reducing their cut, rather than the label taking a hit. Of course, the record labels have used it as justification to reduce the artist's cut, even though their own profit margins have increased due to the substantial falling cost of production. Pressing plants are a lot cheaper, and while a good studio engineer and producer still costs money, the equipment is a lot cheaper and time needed to run it through autotune has fallen.

Just take radio; payola is still in business, so labels literally pay to get their music on the air, as a promotional tool to drive album sales.

With DVDs, most of the costs of production have already been paid anyway; most films at least break even in the cinema, so DVD sales are just gravy, and they'll take as much as they can get away with. It's also why prices are so wildly different between regions; they price to what local demand will allow (prices are generally 50% higher in Europe compared to the US), and use DRM and import restrictions to prevent customers price shopping around.

So, the internet. The long tail has turned out to be somewhat of a myth - online sales have emphasised the marketshare of the top marketed artists, not flattened it. Many of the more obscure back catalogues don't sell anything at all, as generally teenagers want the latest new hit, not some crusty 20 year old album from a band they've never heard of.

What it has done though is freed the indies. OK, their share of the market might not be very big, but the market itself (if you include piracy) has grown quite a lot. indie music doesn't end up on piratebay much, and they can price themselves very low and still keep almost all the profit. Self-production is pretty cheap indeed now, and there's various indie distribution channels such as cdbaby that leave the artist with almost all the money. You might not make the megabucks of being a heavily marketed hit teen sensation, but it's still enough to make a decent living. Even major artists have twigged that once they're famous, if they can break free of the label they can really make a killing using the internet. Just look at radiohead.

So the record industry is being squeezed between two places. Internet distributed indies are showing how the internet can make you money not lose it; and piracy is utterly destroying their artificial distribution monopoly, and its monopoly prices. They had their chance to become the go-to online distributer buy buying napster and keeping it running, and blew it big time - now apple have that title. The film industry is not making the same mistake; with services like netflix, and video streaming via xbox live, or even just over cable they're trying to stay ahead of the curve by offering convenience for a price. If they can keep that price low enough, and get titles out fast enough not to drive the general public to piracy, they'll survive. Plus of course, they have the cinema chains to fall back on; anyone prepared to watch a cam rip wasn't likely a customer in the first place.

My maxim is always this - in a world where you can sell bottled water, you'll be able to sell packaged entertainment media. You might not make as money as you'd like, but give the customer a cheap, easy to use experience that 'just works', and you'll stay in business. Trea

Re:Amazon!

[adona1]

Yes, pirates should check out Amazon. I've checked it out. However, because I don't live in America, they wouldn't let me give them my money. Credit card out, mp3s selected, and bam...sorry, you're in the wrong country (nothing stopping me buying the CD from Amazon though). And the record companies wonder why they're dying...