Music Ally

A new report from Ovum claims that if the six largest UK ISPs all launched bundled digital music services this year, they could be generating £103 million in direct revenues by 2013. The report was commissioned by Universal Music Group ‘on behalf of the BPI’.

That figure is apparently based on a ‘medium adoption scenario’ and would equate to 41% of the total retail value of the UK digital music market in 2009. Ovum has also published an ‘accelerated adoption scenario’ suggesting that bundled ISP digital music services could be worth £203 million by 2013.

The report also offers more carrots to ISPs who launch these services, claiming that an ISP with 3.5 million customers could generate indirect value of more than £20 million a year, if its bundled music service cut churn by 10%. The key words in that sentence being ‘could’ and ‘if’ – this is all speculative, and entirely dependent on the nature of such services.

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The BPI and AIM have teamed up to send a letter to BBC director general Mark Thompson criticising the decision – confirmed officially today – to close two of the corporation’s digital radio stations: 6 Music and Asian Music Network.

The letter focuses on the former, saying that 6 Music has a “unique role” in supporting new artists and UK talent, while playing music that doesn’t get airplay on rival commercial stations.

“Although 6 Music’s audience share remains relatively modest, it is the fastest growing of the BBC digital radio channels and its on-demand usage online is high. It clearly has significant potential for further growth,” says the letter, signed by the BPI’s Geoff Taylor and Tony Wadsworth, and AIM’s Alison Wenham.

If we’re honest, though, the way The Asian Music Network gets a short paragraph makes it seem like something of an afterthought – something you could say about the more widespread campaign against the cuts. The full text of the letter follows:

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The war of words between the music industry and certain UK ISPs shows no signs of thawing. With ISPs like TalkTalk and BT having predicted huge costs if they’re forced to introduce anti-piracy measures on their networks, the BPI has commissioned a report from technical consultancy Sweet Consulting that claims to disprove them.

It suggests that technology to identify and notify copyright infringers could cost just £13.85 million in the first year, £9 million in the second, and £3.45 million in the third – 24p per individual ISP subscriber in the third case. A separate report commissioned by the Creative Coalition Campaign has come up with estimated annual running costs of £8.5 million.

Expect a rebuttal from TalkTalk in 5…4…3…2…1…

The BPI has tabled amendments to the UK government’s Digital Economy bill that would introduce US-style DMCA takedown rights, but with no ’safe harbour’ clause, according to The Register. It’s seen documents covering the introduction of a new clause, Section 97B, which it says “would be granted when an ISP had refused to take down infringing material”.

The measures would replace the current bill’s Clause 17, and the BPI has said in a statement: “In light of the ongoing debate on the current draft of Clause 17, we thought it prudent to propose possible alternative approaches, including a straw-man s.97B. However, Clause 17 remains our favoured approach to address forms of online infringement other than P2P filesharing.”

This and other amendments to the bill tabled by supporters of the ISPs are currently being debated in the House of Lords.

The BPI has released figures claiming that while combined album sales in the UK were down 3.5% in 2009, single sales increased by 32.7% with a record of more than 152 million sales – smashing the previous record of 115.1 million, which was set in 2008.

Music Week points out that there were 53 chart weeks in 2009 as opposed to 52 in 2008 – like for like, overall album sales were down 6.8% for 2009 instead. Meanwhile, the BPI says 16.1 million digital albums were sold in 2009 – 12.5% of the overall albums market – while 98% of those 152 million singles sales were digital.

“Music fans are clearly responding to the explosive growth of digital retailers and outlets selling and streaming music in the UK,” says CEO Geoff Taylor.

One in three UK consumers are still downloading music illegally, according to a survey conducted for the BPI by Harris Interactive.

What’s more, it’s not just P2P any more – the survey says that while P2P downloading remained steady this year, illegal downloads from other sources – unlicensed overseas stores, newsgroups, MP3 search engines and Rapidshare-style cyberlockers – grew. BPI boss Geoff Taylor says the findings make it more important than ever that the UK government must bring its anti-piracy measures “into force as quickly as possible”.

Back in October 2008 when we were writing about the increasing popularity of cyberlockers, industry bodies said that P2P was their overwhelming priority. It looks like that’s changing now.

BPI boss Geoff Taylor has welcomed the British government’s plans to toughen up its anti-piracy provisions, including the temporary suspension of persistent infringers’ broadband connections.

“Assuming there is an election in May, then we believe the bill will be in the Queen’s speech and that it should go through,” he tells the Guardian. “Government realised that if you look at a problem of this scale, the measures it was putting forward were not going to be big enough.”

He also hits back at criticism of the new plans: “Government is not talking about disconnecting anyone, the debate is around temporary suspension of internet connections as a last resort.”

However, despite the BPI’s support, the British government is facing criticism over a report by one of its advisory bodies in May, claiming that there were more than seven million illegal file-sharers in the UK. BBC radio show More or Less has been digging into the origins of this figure, tracing it back to a Juniper Research Jupiter Research report by analyst Mark Mulligan, which was privately commissioned by… the BPI.

It’s also picked over the bones of the report’s calculations, suggesting that the real file-sharers figure may be as low as 3.9 million.

(Story updated to include correct analyst firm name)

BPI chief executive Geoff Taylor has penned a column for BBC News Online reflecting on the tenth anniversary of the original Napster, admitting that the music industry should have embraced Napster rather than fought it.

“I, for one, regret that we weren’t faster in figuring out how to create a sustainable model for music on the internet,” he writes (before shifting the blame back to “formidable hurdles” faced in 1999). He also says that “the music business is now widely recognised as leading the creative sector in redefining itself for the digital age”, although cynics may point out that perhaps redefining its licensing models for the digital age needs a bit more work.

Even so, he ends on a positive note: “The invention of Napster and all that has followed may soon deliver its greatest legacy – a renaissance in artist creativity for the digital age.”

BPI boss Geoff Taylor is not impressed with the UK government’s Digital Britain report, which was issued this afternoon. Although he welcomed the prospect of new laws forcing ISPs to reduce file-sharing, he slammed the government’s decision not to implement a three strikes regime to cut off persistent file-sharers, and to instead shift the burden back to rights-owners to sue individual infringers.

“Evidence shows that the Government’s ‘write and then sue’ approach won’t work,” says Taylor. “And Government appears to be anticipating its failure by lining up backstop powers for Ofcom to introduce technical measures later. This digital dithering puts thousands of jobs at risk in a creative sector that the government recognises as the driver of the digital economy.”

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The UK Culture Secretary confirmed today that the Government is preparing legislation to force Internet Service Providers (ISPs) to apply technical measures on the most persistent file sharers. The full announcement will be made in the Government’s Digital Britain report which will be published later this month.

Government Ministers are often prone to appearing at industry events and delivering the usual bland words of comfort but leaving policy completely alone. But Culture Secretary Andy Burnham’s speech this morning to the Making Online Music Pay conference was unusually clear.

Burnham revealed that there would be a new requirement placed upon ISPs to oblige them to notify identified file sharers. But, more significantly, he also confirmed that the Government is now in the process of drafting legislation to back up this obligation by giving reserve powers to the regulatory body Ofcom. These reserve powers would enable Ofcom to ensure that ISPs then applied technical measures against the most persistent file sharers. Burnham characterised the policy as a ‘graduated response’.

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