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IFPI Claims Success of Progressive Reponse in Curbing Infringement January 30, 2012

Posted by Bill Rosenblatt in Europe, Law, New Zealand.
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The International Federation for the Phonographic Industry (IFPI), the global umbrella of national music trade associations like the RIAA in the United States, published its annual Digital Music Report last week.  Among the most interesting findings is results of studies of the effects of the progressive response law enacted in France in 2009.

The French Creation and Internet Law, which is referred to as “Hadopi” after the agency it created (Haute Autorité pour la Diffusion des Oeuvres et la Protection des droits sur l’Internet), is one of a handful of so-called progressive response regimes, in which ISPs in a given country are obliged to respond to complaints about file-sharing by issuing a series of increasingly stern warnings and then potentially suspending their Internet accounts or fining them.

IFPI worked with Nielsen to measure Hadopi’s effects on file-sharing in France, and found that the effect was to decrease file-sharing by 26% over the year after Hadopi’s October 2010 implementation, although the numbers have been creeping back up a bit since October 2011.  IFPI’s report also published the results of a separate academic study by economists at Carnegie-Mellon University and Wellesley College that claims a net increase of 22.5-25% in paid iTunes music downloads from before to after Hadopi was implemented.

The IFPI report also cites studies that show that warning messages have an effect: a May 2011 study found that 50% of people who either received a Hadopi notice or knew someone who got one stopped their illegal file-sharing.  The same measurement for South Korea, another country with progressive response in place, was 70%.

Critics of progressive response reply that P2P file-sharing has been decreasing anyway, that file-sharing is “yesterday’s problem” as copyright infringement moves from file-sharing networks to torrent sites, cyberlockers, and other places.  It’s hard to argue that the reduction of 26% in French file-sharing means “piracy has decreased by 26%” (and in fact IFPI isn’t arguing that at all).  Yet the graph in the IFPI report clearly indicates a drop in file-sharing activity that coincides with the deployment of Hadopi.

It’s worth bearing in mind that the vast majority of Hadopi activity is warnings, which fall under the heading of “education” instead of “technical protection measures,” because the warnings don’t actually prevent users from doing anything that they could do before.

At the same time, there is one sour note in the IFPI report: in a discussion of the graduated response system in New Zealand (which accompanied a decrease in P2P usage of 16%), rights holders complain that “the high cost of notifications to ISPs … could prevent the graduated response system being used over the long term to optimum effect.”  In other words, it’s not enough to have a government-mandated requirement for ISPs to act on complaints of file-sharing; copyright owners also don’t want to have to pay to generate the complaints.  I don’t know what they call this in New Zealand, but in France, Marie Antoinette might have called it “Qu’ils ont de la brioche et la manger aussi.”*

P.S. The IFPI Digital Music Report also contains the very exciting statistic that the total of paying users of music subscription services has shot up 65% over the past year to an estimated 13 million plus.  That number blows by the 10 million that I thought would be reached by next September.

*”Let them have their cake and eat it too.”

Comments»

1. Jean-Henry Morin - January 30, 2012

Let’s face it, this group (IFPI) among others, is desperatly trying to convince … well nobody actually! They’re fooling themselves and a few likeminded who still believe they might get away with their (more of less secret SOPA / PIPA / ACTA) plans to invade privacy and the the homes of ordinary people who only ask for a reasonable user experience for what they pay for.
I strongly suggest to have a look at the following LeMonde.fr article (in particular the second graph -Google translate the article to get an idea, it’s in French). They reconstructed the graphs not using “Hadopi” as the search but “iPhone” showing iTunes purchase peaks can be correlated with new releases of iPhone and holiday seasons.

http://www.lemonde.fr/technologies/article/2012/01/24/hadopi-source-de-la-croissance-d-itunes_1633919_651865.html?utm_source=twitterfeed&utm_medium=twitter

How much more time will this industry fight the un-fightable (digital evolution) and finally embrace it as a true opportunity, making the users part of the solution rather than the problem ?

At the end of the day, the only down to earth, reasonable conclusion one might draw is : given the right business model (i.e., availability of legal, hassle free, enjoyable, affordable alternatives), revenues go up. And that’s about it !

2. Bill Rosenblatt - January 30, 2012

Hi Jean-Henry,

Excuse me but I think you are seriously overreacting here.

First of all, the study reviewed in the Le Monde article is the academic study that claimed (my choice of words) to show correlation between increased music sales and implementation of Hadopi, not the actual IFPI/Nielsen study of the decrease in file-sharing after Hadopi implementation.

Secondly, we all know how easy it is to discredit these kinds of academic economic studies. All this Le Monde article says is: “Faut-il pour autant nier un ‘impact pédagogique’ lié à la mise en place de la Hadopi? L’effet existe indéniablement, mais il est en revanche extrêmement difficile de le quantifier.” Or if you will permit me a most likely poor translation: “Should the ‘educational impact’ of Hadopi implementation be denied? The effect undeniably exists, but however it is extremely difficult to quantify.” I agree with this; even more difficult to quantify any correlation between reduced infringement and increased sales, however much an organization like IFPI would like to.

Before I wrote this article, I searched the “usual suspects” to see if anyone had debunked the central statistic here, which is the 26% reduction in file-sharing. No one would touch it; the closest I found was a piece of under-researched snark in The Register (UK) that simply raised the point that “the pirates will just go elsewhere.” In fact, the 26% was so under-reported among the techblogorati that I concluded it is probably a solid fact.

Measuring P2P file-sharing traffic is actually straightforward and fact-based; it is a far cry from the bogus “studies” that we get from trade associations on both sides of this issue about effects on the GDP and so on; moreover, Nielsen measures this kind of thing routinely. I think that IFPI deserves credit for trying to measure what’s measurable and reporting the facts.

3. Yolanda - February 10, 2012

the dircefenfe between unauthorized and illegal is neglible. copying is depriving a sale for the artist or the creator. just because the method is one step removed doesn’t deny that fact.


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