British MoU Starts Rolling; Sharkey Says No ISP-Level Blanket

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The British music industry and regional ISPs are now moving forward with a Memorandum of Understanding (MoU), one that calls for the delivery of thousands of letters to infringing subscribers.

The letter-writing campaign, announced last week, was forged voluntarily under considerable legislative pressure, including threats of governmental intervention, according to various sources.

But the plan does not include threats of disconnection, or anything resembling a “three-strikes” progression towards account termination.  Other aspects of the MoU include intensified development on legal alternatives, including stores that mimic P2P-style acquisition and sharing.

But according to Feargal Sharkey, chief executive of composer and publisher consortium British Music Rights (BMR), discussions have not included ISP-level levies for unlimited content acquisition, contrary to various reports.  “There was never any discussion of any levy or tax or anything resembling that whatsoever,” Sharkey told Digital Music News in an interview early this morning.  “But we will help to stimulate a functioning market.”

Additionally, Sharkey noted that the various stakeholders are examining technical measures to stop illegal file-swapping.  That process, which involves communications regulator Ofcom, will determine the feasibility of filtering, port-blocking, and other technical interventions.  “We’ll be looking at what technically might be possible,” Sharkey noted.  “But the word ‘disconnection’ has never been part of the discussion.”

But can a few thousand letters save this business?  ISPs are not required to send anything beyond a reminder, a plan that seems to let access providers off the hook.  But Sharkey defended the plan by pointing to a strong psychological deterrent.  “Research indicates that 80 percent would stop [file-sharing] upon receipt of the first letter,” the performer-turned-businessman stated.

But other research released by BMR, in conjunction with the University of Hertfordshire, strongly points to the feasibility of an ISP-level, blanketed access model. The study, published last month, underscores the prevailing access habits of a newer generation of music fans.  “These findings suggest that the typical music consumer would prefer to pay a monthly tariff at a level sufficient to compensate rights owners through their broadband or mobile network provider,” the report indicated.

Despite the suggestion, Sharkey remained uninterested in any ISP-level, blanketed plan that fixes top-line revenues.  The biggest reason, according to Sharkey, is that the broader revenues associated with such an approach remain modest and flat.  “There’s not an awful lot of money, which then has to be divided up,” Sharkey said after drafting a back-of-envelope analysis.  “And anytime you want to grow the industry, you have to lobby the government to increase the levies.  It’s a mind-boggling way to run an industry.”

Report by publisher Paul Resnikoff.