loweryThe topic of ad-funded piracy has been increasingly prominent in recent months, with musician David Lowery, Beggars Group founder Martin Mills, music industry body the BPI and the University of Southern California’s Annenberg Innovation Lab (among others) questioning why so many big brands’ ads appear on sites that are engaged in piracy.

Tonight, Lowery and BPI boss Geoff Taylor took part in a MusicTank debate at the University of Westminster in London addressing this very subject – Follow the Money: Can The Business of Ad-Funded Piracy Be Throttled? – on a heavyweight panel that promised plenty of sparks.

They shared the stage with Theo Bertrand, UK policy manager at Google; Alexandra Scott, public policy manager at the Internet Advertising Bureau in the UK; and James Barton, artist manager at The Blue Team.

Lowery kicked off with a solo presentation, drawing on his career as a singer/songwriter, producer, label founder and blogger on artists’ rights for The Trichordist. He’s also been a programmer, mentored tech startups, and on the board of advisers of Groupon. “I’m not unsympathetic to the views of the technology industry, because I’m a part of it,” he stressed.

In fact, until his ‘Meet the New Boss Worse than the Old Boss?’ talk at the SF Music Tech conference in 2012, Lowery was seen as a pro-tech artist, but since then he’s often been seen as a campaigner for artists’ rights against technology, even though that’s unfair – Lowery said he’s embraced the web and technology since his earliest days, and is “fairly ambivalent about informal file-sharing: I’m not the pro-copyright extremist that a lot of people make me out to be.”

His first point: “Artists have always been exploited… it wasn’t right then, and it isn’t right now.” In the 1950s, many artists were exploited (in the bad sense of the word) by their labels: he gave the example of one artist who was fobbed off with a Cadillac whenever he asked about royalties.

“This new ad-supported piracy is kinda 1950s music business, except you don’t get the Cadillac! In fact, it’s actually worse than that. Cadillac, which is made by Chevrolet, actually exploits it.”

“Spotify and Pandora should have probably rightfully got that advertising money…”

Lowery also noted that Google is not the worst of the offenders in terms of ad networks whose ads appear on piracy sites: “They’re just here to defend themselves!” before giving some examples of the different ways free (unlicensed) music is monetised.

The first example: a search on Google for Carly Rae Jepsen’s ‘Call Me Maybe’ – “call me maybe download” – which throws up a host of unlicensed sites. Six of the unlicensed sites have current ad relationships with Google or its DoubleClick subsidiary, while several others indicate they may have done in the past.

iTunes is nowhere to be seen. “You don’t get legitimate sites. You don’t even get Google Play until the second play,” said Lowery, who went on to show a series of ads on unlicensed sites being served by DoubleClick. He also showed banner ads appearing on blog posts full of MP3-download links hosted on the Blogger service.

“In general, though, the online advertising world is pretty out of control,” said Lowery, who showed a still of a YouTube video for an online pharmacy selling Oxycontin, with a pre-roll ad for the Speed Stick deodorant – a brand belonging to the Colgate/Palmolive company. And then a video guide to drugs e-commerce site Silk Road with an ad for ZSL London Zoo. Lowery noted that the same kind of video/ad combinations can be found on other video sites.

“If the future of music really is access to songs rather than owning as many as we do nowadays, those services are all advertising-supported, and they’re competing with these illegitimate sites for these ads,” said Lowery. “Spotify and Pandora should have probably rightfully got that advertising money.”

Lowery thinks this means there’s a real need for technology companies and music companies / artists to work together to ensure advertising finds its way to more legal digital services and less piracy-focused sites.

Is this fight much easier than people think? Yes, according to Lowery. “We should just think of this as a society,” he said. “Just from the point of view of what is good for your country if you think of your country as a business.”

He ended by pointing out that Google, Apple and Amazon’s revenue growth between 2001 and 2012 were 58,319%, 3,396% and 2,000% respectively, yet recorded music revenues dropped 64% in the US between 2000 and 2012, while employment of musicians according to the BLS has also fallen sharply.

“It’s not something that’s easy to address: there’s no one-size fits all…”

Over to Alex Scott from the IAB, to give the online advertising industry’s point of view. “This is a huge industry. We’re talking about hundreds and hundreds of players here. It’s not always obvious to those players where that advertising is going. There’s a huge amount of work that we’re undertaking to address that.”

Why is the online advertising ecosystem so tangled and complex, with so many middlemen wondered moderator Sam Shemtob. “Often those middlemen are helping to make advertising more efficient, more targeted and more relevant,” said Scott.

“I don’t think we want to do away with that, because that innovation is helping to drive the business… Obviously there are concerns about where that advertising is going to appear… It’s not something that’s easy to address: there’s no one-size fits all.”

Lowery chipped in, wondering why he never finds Apple or Coca-Cola on piracy sites (“or pornography sites”), making him wonder whether it IS possible to control whether ads find their way onto such sites.

“If Apple does it, if Coca-Cola does it… There seems to be some way of controlling that. My take on this is that when things get more complex, it’s to insulate institutions and individuals from the liability of bad things that happen. In fact, usually what they say in the financial services system is complexity is fraud! Don’t you think that some of this complexity is to remove liability for the major corporations?”

Scott: “No. I don’t think this is a way of people hiding behind things. If we look at advertisers, it’s their prerogative to say ‘I don’t want to appear against certain types of content’… Where there’s been a difficulty, particularly here in the UK, is what is an infringing site?” So it’s easier to prevent ads from appearing alongside porn and hate speech, but thornier to keep them off piracy sites, in her view.

“Coca-Cola may say ‘we only want to work on a white-list basis, we only want to appear against certain publishers,” said Scott, who agreed that there can be “huge reputational damage” for brands if their ads do appear on piracy sites. “They don’t want to be going on these sites. They’re just not always aware of the issue. They don’t necessarily know it’s happening until there’s a crisis… I don’t think that people actively seek out these sites to go and advertise on… Eyeballs isn’t the only thing for advertising: it’s all about context.”

photo (5)“Most people doing piracy are not some guy in his bedroom…”

At this point, Google’s Theo Bertram gave his company’s view, suggesting that he agreed with most of what Lowery had said. “It does seem to me to be an entirely sensible way to tackle piracy… most people doing piracy are not some guy in his bedroom altruistically sharing music with his friends. It’s people making money out of piracy, and it’s big business: some of these sites have 2m visitors regularly, and they’re not doing a bad business from advertising.”

And Google’s products like YouTube and Blogger? “If people have got content up there that is unlicensed and infringing, that would be a breach of our rules,” he said, citing YouTube’s ContentID system – “which cost us about $30m to develop” – which matches music within videos to a library of licensed songs, for rightsholders to claim, and then either leave alone, make money from ads around it, or get it taken down.”

Last month, Google removed 20m URLs from its search index, with a big chunk of them due to takedown notices from the music industry. “We’re seeing a huge rise in the number of takedown requests,” he said. “The BPI are still number one or thereabouts in the amount they take down.”

But back to advertising. Google published a piece of research last year in the UK, finding that two thirds of the piracy sites that Brits visit are funded by advertising, with 14% of those served advertising by “people within the advertising network who subscribed to industry codes” – a minority, in other words.

“You can tell then that there is some work being done by the far bigger share of the industry that is adhering to industry codes to stop putting ads on these sites than those who pay no heed to these things,” he continued, agreeing with Lowery that a good place to start would be with the brands: “Getting them to say ‘I’m going to be really clear with you: I don’t want you to put advertising on these sites, I do want you to put advertising on these sites’.”

Bertram also said that once an ad has been served, the responsibility for companies like Google is, if they’re serving an ad on a site that has infringing content, “you have an obligation to take it down. We’re doing that at record levels, but we know we need to do more.”

Bertram also talked about Google’s search advertising, which remains the bulk of its business. “We capture people at a moment of intention. If I want to buy a set of new glasses, and I go on to Google and I put ‘wine glasses’ or ‘new tumblers’, the reason that’s of value to an advertiser is that Facebook might know lots about you – you’re somebody who drinks a lot of wine, likes glasses, but it can’t capture you at that moment where you’re looking to buy that thing,” he said.

“If you’re an advertiser, that is when you want to capture someone. So the value of search to advertisers is we are there at the moment of intent. I don’t know if you type in music, there’s lots of adverts that come down at the side… I don’t think the search advertising part is really the problem here.”

Bertram shifted the focus to the big, large-scale piracy sites that are looking for big advertising revenues. “And the only way you get that scale is if you get the big brands,” he said. Thus, the responsibility lies with brands to take responsibility, even though there is more work to do for Google in policing how and where ads are served on its network.

“If we manage to drain the swamp so it’s only the dodgy brands and the dodgy agencies that appear on the dodgy sites, I think we’ll have done enough to make sure it’s not a profitable business.” Lowery agreed that this is key.

“We shouldn’t kid ourselves that this is going to make the problem go away…”

Now to Geoff Taylor from the BPI. “I think we’ve all been a bit slow to get to grips with this, perhaps because we were focused on other targets,” he said, while also noting it’s hard to figure out how big a problem this is.

“We shouldn’t kid ourselves – as some of the follow-the-money advocates do – that this is going to make the problem go away,” he said. “There’s lots of people running illegal pharmacies or illegal dating sites or gambling sites who’ll still provide a revenue stream for these sites.”

The BPI is planning to announce a “structured scheme” soon on how to tackle this, having worked with the likes of Google and the IAB. But Taylor questioned whether Google can’t afford to spend “maybe a little bit more” on technologies like ContentID and apply them to a search context.

“It seems to me to be not beyond the technology capability,” he said. ‘They know very well what sites are illegal, because we send them notices, a million a week… yet coming on to search, very often those sites appear at the top of search results. It’s great that the advertising industry is starting to work with us, Google are part of that… but hey, that can’t be where it stops.”

Shemtob asked Bertrand if this isn’t all just “a bit whack-a-mole”, especially with new sites springing up every day. “Is there a sort-of left-hand right-hand issue that Google can maybe work on, if you’re being served these takedowns?” he asked.

Bertrand talked about Google’s announcement last August that when a particular site has had a “high number” of notice-and-takedown requests issued against it, “we’re trying to dampen that in the search results” – Taylor sat up straight with his best I AM PREPARED FOR BATTLE face at this point – “so we are doing a bit of that. I am an optimist, in that search will get better, and be able to serve people with the results exactly that they want, and to do so utterly lawfully as well.”

“Blocking websites, I don’t think is as effective as going after them as a business…”

“I know the complexities can be seen as something to hide behind,” he continued. “It is easier to tell whether something is pornography than whether something is licensed or not… The legal basis for declaring a whole site unlawful in the UK at least still only applies to a relatively small handful of websites.”

Over to Taylor: “Even those guys, you won’t remove!” – referring to The Pirate Bay and others that the courts have ordered ISPs to block in the UK. “If you do a Google search for these, and you got a link for Pirate Bay, if you click on it you’ll get an interstitial telling you this has been blocked, which I’d have thought is a pretty good thing for people to see that,” responded Bertram.

“Blocking websites, I don’t think is as effective as going after them as a business,” he continued, suggesting that blocking Megaupload initially spurred a slight decrease in the levels of piracy, a week later it spawned hundreds of new piracy sites. “The supply that was going to Megaupload had simply shifted to a whole new range of middle-ranking pirate sites… My worry is if we’re going after them one at a time with blocking, you start getting into the whack-a-mole thing.”

Bertram suggested that tackling the big piracy sites needs to be a joint effort, and noted that the police are involved in these efforts in the UK alongside technology firms, the advertising industry and rightsholders.

Bertram said that it’s theoretically possible to have a dynamic list of the 500 top piracy sites, for use by brands when stipulating where their ads should appear – or for legal purposes.

“It’s not Google’s job to go around the web to declare whether sites are legal or illegal, but if Coca-Cola comes to us and says here’s a list of 500 dynamic sites, and we don’t want you to place ads on those… that’s a slightly different thing. It’s almost a marketing thing for the brand.” So it’s a brand deciding where their ads should run – an undesirability index, rather than an illegal index, you could say.

Lowery chimed back in, noting that he uses Google’s Chrome browser to visit a number of dodgy websites in his research, and notices that it often pops up a warning that sites may contain malware.

“We sometimes conflate the search engine Google with the overall internet. Just because Google blocks certain websites, that’s not censorship. Google is a private company, it’s not censoring those websites,” he said. “Either Google is the web, and therefore it’s a public property that belongs to all of us, and we get to tell it what to do. Or it’s a private company. You can’t have it both ways.”

Lowery also noted that “the internet you see is censored all the time… sensibly” when it comes to blocking spam, with private companies – spam-blockers – carrying this out. And he also said it’s important to look at who piracy sites are using for their web hosting. “You could almost go after the hosts and not the individual websites, and then you’re talking about half a dozen is the majority of the traffic,” he said.

“The voice that is missing is the voice of the fan, and the voice of the artist…”

Finally, manager James Barton got to have his say. “How refreshing that finally in 2013 we’re able to have a conversation with members of big tech and big music industry where we can find common ground, and look for a pragmatic solution to the piracy problem,” he said.

“Still slightly missing from this: the conversation surrounding music is between big tech and the big music industry, and the voice that is missing is the voice of the fan, and the voice of the artist… The big next process is educating fans as to why they need to pay, the same as the brands in the damage they are doing to creators when they support these infringing sites.”

Do those brands need to be educated more? Scott said they do know about the debate, partly through a piece of work that the IAB is doing regarding “brand safety”, and the previously-cited project that the BPI has been doing with the City of London police around this area.

The event then moved into a Q&A session for the panel, with the audience posing the questions. The first focused on an advertising partnership between Chevrolet and Grooveshark, where the former appeared to be sponsoring the controversial streaming service, before withdrawing. “That was a direct deal,” said Lowery. “They needed someone to do their HTML5 site, and Chevrolet fell for it.”

The panel agreed that it’s hard to put a firm figure on how much money is being spent on advertising with piracy sites, although Lowery said the scale is illustrated by recent claims by BitTorrent that it’s serving 5bn ads a month through its uTorrent client.

Could the answer be that government has to “save us from ourselves” asked lawyer Tom Frederikse from the audience. “I think everyone at this point in the journey is probably wary of suggesting government is the solution, because they’ve not been brilliant at bringing solutions to this particular area,” said Taylor.

However, he suggested that in the UK, the government should be looking to do more in some areas. “So far, the government has missed the opportunity to look at areas like search, and make the UK the place where consumers can have confidence that if they search, a reputable search engine like Google takes them to legal sites.”

“I can see us going down a route that would actually make the problem worse…”

Taylor also had a pop at Google for its failure to deliver on its promise to downgrade piracy sites in its search results, claiming that the BPI has given a piece of research to both Google and the UK government showing that since the promise, the percentage of illegal sites appearing in the top 10 links for certain search terms has only fallen from 63%  to 61%.

Scott said she thinks self-regulation will continue to be the best strategy, suggesting that government needs to work “in collaboration” with industry. “But first we need to try to address this ourselves… I can see us going down a route that would actually make the problem worse rather than helping.”

Bertram responded to Taylor’s criticism on the search results. “If you look at a Google search ranking five or 10 years ago for Adele, or Aha back in the day… if you searched for the name of the artist, you’d get bad results. And even if you searched for the name of the artist and the song title, you’d get bad results. Today, you’ll get pretty good results, and a lot of those results will be streaming content, or YouTube, or the artist site, or Wikipedia… In the top 10 results, I would expect most of them to be very good.”

So the 63% to 61% change? That’s name of artist, plus song title, plus the word ‘download’ plus the word ‘MP3′. “We don’t do as a good a job with this as we do with the general results, I’d certainly concede that,” said Bertram. But he suggested that these kinds of searches are very much the minority of what people are typing into Google when looking for music.

“I don’t understand why Spotify and Pandora aren’t making a fuss about advertising…”

To flip the debate, could legal music services be doing more with their own advertising capabilities, to attract more of the brand dollars that are flowing towards illegal sites? A lot of the streaming sites seem to use ads more as annoyances – nudging users to upgrade – and many of them aren’t serving any ads on mobile at all. Could they do more?

“I don’t understand why the legitimate music tech space isn’t going after these illegitimate sites that are directly taking money from their pocket,” said Lowery. “I don’t understand why Spotify and Pandora aren’t making a fuss about advertising that they’re producing. I think that their advertising is undervalued. I target our advertising against other bands that our fans like. I do that on Facebook, and it’s highly effective.”

Scott said that the IAB represents Spotify and other streaming services, with a specific audio council that works together to promote best practice – it started a month ago – “it’s going to take a while for them to refine their business models and also to start engaging in different debates. I don’t think we should criticise them for that. I think there’s a lot to be said for the fact that we do have a lot of innovative platforms out there. But we do need to get consumers to use them.”

Is Google negligent in its own backyard when it comes to piracy? For example, the 8m+ results that currently appear when you search for ‘full album’ on YouTube? “Where it can be matched, we do a pretty good job of matching it. It’s a continual race against the people uploading this stuff, who are trying to dodge the algorithms that we’ve developed to match this stuff,” responded Bertram.

“I would think you can find most songs and most music videos on YouTube, but I would hope most of them are licensed.”

“We think we should have an absolute common interest in solving this…”

Bertram shifted the discussion to products that enable people to download videos and/or audio from YouTube, saying Google is taking action against a number of companies on that front. “The most recent company we took action against was Microsoft,” he said, referring to a spat between the two companies about Microsoft’s Windows Phone app for YouTube.

Taylor came back at Bertram on the ‘MP3 download’ question, claiming that the BPI regularly tells Google about the websites that are converting YouTube videos into downloads. “Despite the fact that we’ve had talks with Google and YouTube in the UK and Europe, and in the US, and despite the fact that we can tell you what the names and the IP addresses are, why can’t you just block them? And nothing has happened.”

He clarified that Google has taken action against some tools, but claimed that in many more cases it has taken no action at all. “We think we should have an absolute common interest in solving this.”

Bertram said Google feels the frustration of the music industry in taking action against these sites. “It’s not always easy to identify and take action against them, but we are doing so,” he said.

The panel were asked who should be responsible for collecting data in an organised way in order to spot websites that should not be getting ads. Lowery noted that antitrust laws make it hard in the US for big companies to collaborate on this kind of initiative. “Everybody in the music industry is terrified to collaborate with each other on a blacklist, and hypothetically Coca-Cola won’t share their ‘bad website’ blacklist with Pepsi, for instance.”

Taylor said the system being worked on in the UK, where “to their credit Google and the IAB are working very closely with the music and film industries” will act as a central database of illegal sites – with some independent oversight – and then provide this data to the online advertising networks and middlemen. “I know we’re sometimes tough on Google for the things we don’t think they’re doing, but this is one area where they are doing something positive.”

And the final question: what to do about sites – The Pirate Bay the example given – that are funded by advertising that wouldn’t be touched by any of the measures mentioned tonight.

“This is a first step: let’s nudge people and see what happens,” said Lowery, who talked about his 13 year-old son’s experience getting infested with malware. “What he didn’t realise was that a lot of sites he was visiting were not legitimate,” he said. “They have Chevrolet, and American Express, and Amazon ads and things like that. So are they legitimate?.. That’s an unintended consequence of there being major brands advertising on a site: it looks legitimate to a lot of 13 and 14 year-olds.”