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New piracy law is not a magic bullet

THE thud of the Digital Britain bill hitting the statute books yesterday drowned out a collective sigh from the music industry. They shouldn’t be so relieved. Legislating to punish pirates will do nothing to address the massive challenges that record labels face in a digital age.

Forcing internet service providers like TalkTalk to disconnect customers that download music illegally is a sticking plaster solution. Nobody denies that piracy is a huge problem, but much of the blame rests with the record labels themselves.

When customers first developed a taste for sharing music online at the turn of the 21st century, big labels clung to their traditional business model, making no attempt to engage with the sea-change in the way people listened to music.

Eventually, the labels started selling music online through stores like iTunes, but they stuck with the old pricing model: £1.99 for a single and £12.99 for an album. Customers aren’t fools: they know the cost of distributing an MP3 file is negligible compared to a CD, which must be burnt, shipped, and housed in a shop that employs staff and pays rent.

If that wasn’t bad enough, the labels insisted on awful digital rights management (DRM) technology that punished honest consumers, preventing them from playing the same MP3 file on more than a handful of devices. The legal MP3 is less versatile than an old vinyl record, which be listened to on as many turntables as you like. No wonder people continue to download illegal, DRM-free music.

Record companies say their outdated business model must be preserved; without the labels, they say, one of Britain’s best creative industries will die. Such an inflated sense of importance is misplaced. Thanks to MySpace and the X-Factor, it is fans – not label executives – that pick successful acts these days. Record companies are there to provide scale and distribution.

That’s why the Digital Britain Bill is nothing but a stay of execution. Gargantuan record companies will be able to rely on overpriced music sales for a little longer, but the business model is still broken. They should use this short-term reprieve to start fixing it.

david.crow@cityam.com