AFR Sunday included an interesting segment yesterday (above) on the diverging opinions on internet piracy, with content providers and incumbents coming to blows with internet service provider (ISP) iiNet over the best way to deal with the issue.
The incumbents, like Village Roadshow and Foxtel, who want to maintain their current business models (and profits), are lobbying hard to make ISPs police internet users and enforce copyright, whilst also expecting them to wear the cost of stamping-out piracy.
By contrast, iiNet has hit back, saying “there are big costs associated with defeating piracy, and nobody wants to pay for it”.
In the middle is Spotify economist, Will Page, who believes that television and movie producers need to learn from the music industry:
“If you build something better than piracy, people will come.” Mr Page estimates music piracy fell 20 per cent between December 2012 and December last year, which he partly attributes to Spotify’s entry into the Australian market.
As argued previously, I believe the big reason why Australians download ‘illegally’ is because legal content is not being made available on both an affordable and timely basis. As noted by Choice last week, Australian consumers are often required to pay premiums of 300% to 400% to stream content online, suggesting that the Government’s internet policy is more about protecting out-dated business models that gouge consumers.
Therefore, any policy response should, as a first step, address the underlying reasons why people download content without paying, rather than resorting to draconian policing that significantly raise internet costs and cause unintended consequences. This requires an end to exclusive deals, geoblocking, and enabling consumers to purchase content in a variety of formats from a variety of locations, as well as making it legal to convert files as one sees fit for private use.
A good place for the Government to start would be to embrace the findings of last year’s IT Pricing Inquiry and move immediately to implement its recommendations. This inquiry, which was released 13 months ago by the former Labor Government, recommended (among other things) an end to geo-blocking of content and amendments to the Copyright Act to allow parallel imports and circumvention of technological protection measures that control geographic market segmentation (summary of report here).
Simply forcing ISPs to censor the internet by blocking various overseas sites that carry copyrighted content, and requiring them to police users’ internet activity and downloading, is retrograde step that would significantly raise overall costs and materially worsen outcomes for consumers.
